1971-02-23

ROUTINE PROCEEDINGS


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, on a matter of urgent and pressing necessity I propose to ask the unanimous consent of the House to put a motion under Standing Order 43. The increasing unemployment in the province of Ontario and elsewhere in Canada has precipitated a welfare crisis in the city of Toronto caused by the burden of its own unemployed supplemented by the burden of an escalating influx of unemployed employables. The city of Toronto turns down no welfare applicant. The city of Toronto proposes a shared-cost emergency employment program designed to provide immediate employment. The city proposes that the federal government-


Mr. Speaker:: Order, please. I must interrupt the hon. member immediately. I have pointed out to the House on a number of occasions, particularly at some time in the past week when a rather heated debate arose in connection with the application of Standing Order 43, that hon. members can move motions under Standing Order 43 to bring to the attention of the House matters which they consider to be of urgent importance but that their contribution to the submission of the matter to the House should be limited to the urgency aspect of the matter and that there should be no debate over the substance of the matter raised by the hon. member who proposes such a motion.


Sylvester Perry Ryan: Thank you, Mr. Speaker. I was just coming to the conclusion of my remarks. I thought a few words of preamble were necessary. The city of Toronto has requested an emergency meeting with the Prime Minister to discuss this proposal. I therefore move, seconded by the hon. member for Hillsborough (Mr. Macquarrie):
That this House urges the Prime Minister to meet with the mayor and executive committee of the city of Toronto to discuss the proposed shared-cost emergency employment program and that the government give favourable consideration to sharing the cost of the program so that the plan can be put into effect without delay.


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


Some hon. Members:: Agreed.
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Some hon. Members:: No.


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



LABOUR CONDITIONS


Mr. John Lundrigan (Gander-Twillingaie):: I should like to seek the unanimous consent of the House to move a motion under Standing Order 43 on a matter of urgent and pressing necessity. The matter concerns the announcement today by Massey-Ferguson Limited of the imminent lay-off of 2,750 employees, affecting two Canadian cities.
I move, seconded by the hon. member for Norfolk-Hal-dimand (Mr. Knowles):
That this House regrets that the government has failed to provide an economic and psychological climate conducive to economic growth in Canada, with the consequential result of mushrooming unemployment, and that immediate initiatives be taken to restore confidence in the economy required for growth and development.


Mr. Speaker:: Order, please. Perhaps I should mention that I have some doubt about the type of motion proposed by the hon. member for Gander-Twillingate. It seems to me that the motion is couched in the language of a non-confidence motion, and I doubt whether Standing Order 43 is in our Standing Orders for the purpose of proposing this type of motion. In any event, hon. members have heard the motion suggested by the hon. member for Gander-Twillingate which of course requires unanimous consent. Is there unanimous consent?
Some hon. Members; Agreed.


Some hon. Members:: No.


Mr. Speaker:: Since there is not unanimous consent the motion cannot be put.



ORAL QUESTION PERIOD


Mr. William Knowles (Norfolk-Haldimand):: My question is for the Prime Minister. In view of the fact that Massey-Ferguson Limited of Canada announced today

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that it is laying off 2,750 workers, what steps will the government take to correct the conditions which led to the lay-offs so that the affected men do not become part of the already swollen ranks of the unemployed in Canada?


Right Hon. P. E. Trudeau (Prime Minister):: I will take the question as notice, Mr. Speaker.


William David Knowles: Since Massey-Fer-guson Limited has stated that these lay-offs result from slow sales of finished manufactured products, how does the government plan to correct the conditions in the economic climate of Canada which led to this unfortunate situation?


Mr. Speaker:: I am sure the hon. member realizes that his question is of such a general nature that it should not be asked at this time. If the hon. member could put the question in somewhat more specific terms, perhaps it might be in order, but his question cannot be asked at this time. The hon. member is inviting the government to make a statement of general policy, and this should not be done during the question period.


William David Knowles: Very briefly, my question is: What specific steps will the government take to correct this situation in the city of Brantford?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I think this is the right time for me to answer a question which was raised yesterday by the Prince from Hastings.


Mr. Hees:: On a question of privilege, the minister means Prince Edward-Hastings.


Jean-Luc Pepin: Yes. He mentioned the fact that exports of finished products had not increased last year as rapidly as previously. I grant him that so far as last year is concerned, but a good student of statistics-


Mr. Speaker:: Order, please.


George Harris Hees: Where are your manners?


Mr. Speaker:: It seems to me that the minister is replying in effect to a question which was posed yesterday and, not the one posed a moment ago by the hon. member for Norfolk-Haldimand.



AGRICULTURE


Mr. John Burton (Regina East):: Mr. Speaker, I would like to direct a question to the Minister of Agriculture. Can he now indicate when the final report of the Barber Commission will be available? Can he also indicate whether the government has taken policy decisions or any action with respect to the reports already submitted by the Barber Commission?


Hon. H. A. Olson (Minister of Agriculture):: I would hope very soon, Mr. Speaker. We received the report some time ago. It is now being translated and printed and, as I said before, I do not think it will be very long. I would not like to repeat what I have said many times in the House about the action we have taken respecting earlier interim reports.



USE OF CANADIAN TERRITORY FOR OIL AND GAS PIPELINES FROM ALASKA TO UNITED STATES- FEASIBILITY STUDIES

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, in the absence of the Minister of Energy, Mines and Resources may I direct my question to the Minister of Indian Affairs and Northern Development who may be able to answer it. On February 12, in a speech at Vancouver, the Minister of Energy, Mines and Resources offered the Canadian northland as a land bridge for the transportation of oil and gas from Alaska through Canada to the United States. Has the minister's department made any feasibility studies of the placing of oil and gas pipelines down the Mackenzie River Valley? If so, have such feasibility studies been completed and will they be made available to the general public?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, as everybody
knows, studies are presently conducted in the North as to the possibility of constructing oil or gas pipelines on the permafrost. These studies are not completed yet. We believe it will be probably feasible, but we are not in a position to give a definite answer at this time.


Thomas Clement (Tommy) Douglas: May I
ask the Prime Minister whether the Minister of Energy, Mines and Resources was expressing government policy when he suggested making Canadian territory available for oil and gas pipelines although the feasibility studies and investigation into the ecological consequences of such pipelines have not been completed.


Pierre Elliott Trudeau: Mr. Speaker, obviously the two subjects would have to be related. The minister is a member of the same government as the Minister of Indian Affairs and Northern Development so the two decisions would be correlated.


Thomas Clement (Tommy) Douglas: Then do I take it that the offer of the Minister of Energy, Mines and Resources to have the Canadian northland used as a bridge for the transportation of American oil and gas is conditional upon the feasibility studies being favourable?


Pierre Elliott Trudeau: Mr. Speaker, I do not think we could describe it as an offer in any really legal sense. It was a proposal put forward as one worthy of consideration.
February 23, 1971



INDUSTRY


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, in view of the absence of the Minister of Regional Economic Expansion, I shall put my question to the Prime Minister.
Everyone has heard of the coming closing of the Soge-for plants at Maniwaki and Mont-Laurier. Is the government now studying the matter and is it, in any way, in touch with the Quebec authorities with a view to preventing the closing down of those two plants?


Pierre Elliott Trudeau: Mr. Speaker, I believe that, in the final analysis, those plants came under the General Investment Corporation and, to my mind, it is up to the Quebec government to make decisions in this regard. If they wish to consult the federal government, we are always available.



ACTION TO INCREASE EXPORTS OF MANUFACTURED GOODS

Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, I would like to direct a question to the Minister of Industry, Trade and Commerce. In view of the direct relationship between the export of manufactured goods and the desperate need of employment opportunities in Canada, can the minister indicate if any crash programs or new incentives for Canadian sales were inaugurated on the occasion of the visit of our government representatives to the Singapore Conference and the surrounding countries which do have expanding markets, and can we expect a sharp increase in sales to this most lucrative area?


Jean-Luc Pepin: I could easily say, Mr. Speaker, that most of our programs are based on that line of thinking. For example, when we assist exporters through the Export Development Corporation this is what we have in mind. When we negotiate agreements on science and technology applied to industrial development, this is also what we have in mind. Mr. Speaker, I tried to say a moment ago, and you realize you should have allowed me to make the answer, that the postulate of the question was wrong. The manufactured goods content of our exports has been growing tremendously in recent years. Let me give the figures.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


George Harris Hees: Down, down-watch your manners, Jean-Luc.


Mr. Speaker:: Order, please. It seems to me that the minister is embarking on a statement of a general nature.
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I should think that the minister might wish to make a reply which would be brief, succinct and to the point, but I believe he was doing a little more than that. He may have an opportunity to continue the matter if supplementary questions were put later in the question period.


Harold Warren Danforth: Mr. Speaker, may I ask a supplementary question and make it simple so the minister can answer very briefly. In view of the fact that present sales are not good enough, was anything new initiated at that conference or in that area?


George Harris Hees: Yes or no.


Jean-Luc Pepin: Mr. Speaker, I have answered that. Almost everything we do has that particular purpose. For example, to mention something we are doing now, we are developing an export market strategy which is developing all kinds of things.


Some hon. Members:: Oh, oh!


George Harris Hees: Why not develop some export sales and leave strategy alone?


Jean-Luc Pepin: Mr. Speaker, this is an unfair question, and I suggest that when questions are based on a false assumption they should not be allowed.



SUGGESTED REPEGGING OF CANADIAN DOLLAR TO ASSIST EXPORTERS

George Harris Hees: Mr. Speaker, I should like to direct this question to the Prime Minister. In view of the great difficulties being experienced by exporters today caused by the wide fluctuation of the Canadian dollar, is the government giving consideration to repegging the dollar in the vicinity of, say, 97 cents United States in order to make it easier for our exporters to contract for future orders? They are finding it very difficult to do this today which means that it will be difficult for them to provide employment if they are not able to do so.


Pierre Elliott Trudeau: Obviously there are always difficulties in trading in the international market, Mr. Speaker, but the hon. member does not seem to realize that we had the best trading year by far in our peacetime history last year.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The hon. member is asking if we will consider pegging the dollar. Obviously he knows that this is the type of question on which we cannot announce our intention; it is something we either act on or do not act on. We do not broadcast our intention in advance in order that speculators may make a fast buck at the expense of the hon. member and other citizens of this country.


George Harris Hees: Mr. Speaker, as the Prime Minister obviously believes this is an unimportant matter I should like to ask him if he would be willing to meet in the very near future with a delegation from the Canadian Exporters Association to learn at first hand of these tremendous

February 23, 1971
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difficulties which the fluctuation of the Canadian dollar has caused them in taking orders for the future, and again this is reflected in the employment picture. Would-


Mr. Speaker:: Order, please. I suggest to the hon. member that the first part of his supplementary question was in order but it seems to me that he went on to present an argument. Perhaps we might overlook the latter part of his supplementary question if either the Prime Minister or the Minister of Industry, Trade and Commerce, who seems to be very anxious to resume the floor, might reply.


George Harris Hees: Mr. Speaker, may I appeal for an answer from the Prime Minister? We get nothing from this minister.


Some hon. Members:: Hear, hear!


Jean-Luc Pepin: My comment on that is very simple, Mr. Speaker. Where has the hon. member been for the past year? That is the answer.


Mr. Speaker:: At this point the Chair, subject to returning to the minister and the hon. member later during the question period, will recognize the hon. member for Timiskaming.


George Harris Hees: Mr. Speaker, on a question of privilege-


Jean-Luc Pepin: He is going to tell us where he has been.


George Harris Hees: May I tell laughing boy I have been here watching him run a formerly good department into the ground.


Mr. Speaker:: Order, please. The Chair again recognizes the hon. member for Timiskaming.



NATIONAL DEFENCE


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I should like to direct a question to the Minister of National Defence with reference to the Ontario law which requires tax rental rebates to be paid by the end of December. Will the minister use his good offices to ensure that these tax rebates are made to the armed forces personnel living at Uplands air base?


Hon. Donald S. MacDonald (Minister of National Defence):: Mr. Speaker, I will look into that question right away.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, may I direct a question to the genial and loquacious

Minister of Industry, Trade and Commerce. It relates to the question I asked on Friday in which I referred to the imminent nationalization of Alcan properties by the government of Guyana. Considering recent events in that country, is the minister now in a position to tell the House and the country of the present situation and, in particular, as to what activities or discussions this government has entered into with the government of Guyana?


Jean-Luc Pepin: Mr. Speaker, an announcement was made today to the effect that the Alcan subsidiary had been nationalized by the government of Guyana. We regret that negotiations between the company and the government of Guyana have not been successful. I understand that discussions respecting compensation will now take place. We are keeping in touch with the situation.


Heath Nelson Macquarrie: Mr. Speaker, am I to take it from the minister that the government of Canada and the government of Guyana did not partake of discussions or exchange views on this matter?


Jean-Luc Pepin: Mr. Speaker, I think the Prime Minister and the Secretary of State for External Affairs have said on a number of occasions that it is not a right of the government of Canada to dictate the conduct of the government of Guyana in these matters. We put the case that we expect Canadian companies not to be discriminated against in these matters. That is about the extent of what we can do in these matters. I think the House will agree that this was the proper approach.


Heath Nelson Macquarrie: Mr. Speaker, the minister obviously did not hear me. I talked not about dictation but about discussion. I take it there were no discussions.


Jean-Luc Pepin: Mr. Speaker, on the question raised with respect to Guyana, I would not like to leave the impression that the Canadian government has not made proper representations to the government of Guyana. Conversations were held to that effect. The point I made a moment ago to the effect that we expect the Canadian companies to be properly treated was made in these bilateral conversations.



LABOUR CONDITIONS


Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, I have a question for the Prime Minister. Has the Prime Minister's attention been drawn to a letter to him from the Amherst and District Labour Council which states that practically 50 per cent of the unemployed live in Quebec and the Maritime provinces, takes objection and exception to the comments he makes when
February 23, 1971_______ COMMONS
questioned on unemployment, and requests him to tackle today's problems with today's weapons? If so, what has been his reaction to their request?


Mr. Speaker:: Order, please. The hon. member is asking whether the Prime Minister has received a letter and what has been his reaction. I wonder whether a question simply in those terms is in order. Perhaps the hon. member might find some way to rephrase his question.


Robert Carman Coates: Mr. Speaker, perhaps I could rephrase the question and ask the Prime Minister whether, in his attack on regional economic disparity as it pertains to the Atlantic provinces and Quebec, the battle will be won by spreading disparity throughout the whole nation? If not, what does the government intend to do about this matter?



POST OFFICE


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I have a question I wish to direct to the minister in charge of the Post Office. Is it the intention of the Post Office to further reduce service to businesses in the Vancouver area by cutting out afternoon mail deliveries to business premises?


Mr. Speaker:: Order, please. I am not sure whether this question is of immediate urgency. I certainly do not wish to be difficult, particularly so far as the hon. member is concerned, but this is the type of question which normally ought to be placed on the order paper. The question having been asked, perhaps the minister might be allowed to reply.


Hon. Jean-Pierre Cole (Minister without Portfolio):: Mr. Speaker, I will take the question as notice.



NATIONAL DEFENCE


Mr. Gerard Laprise (Abiiibi):: Mr. Speaker, I want to direct a question to the Minister of National Defence about the U.S. warning system getting out of order last Saturday.
Can the minister say whether Canada has a safe and efficient warning system which can rapidly give the alarm to the people of all Canadian cities, in case of nuclear attack?


Donald Stovel Macdonald: Mr. Speaker, we have not exactly the same system in Canada.
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Gérard Laprise: Mr. Speaker, I want to put a supplementary question.
I did not ask the minister whether we had the same system as the United States but whether we had in Canada a safe and efficient warning system in case of nuclear attack.


Donald Stovel Macdonald: Mr. Speaker, I am quite ready to discuss this matter before the Committee on External Affairs and National Defence when consideration is given to my department's estimates.


David Réal Caouette: Mr. Speaker, I should like to put a question to the hon. Minister of National Defence, as a supplementary to that raised a short while ago by my colleague for Abitibi, regarding the existence or non-existence of an alert system in Canada.
The hon. minister replied that he would be prepared to discuss this matter during the consideration of the departmental votes, but since we might possibly be attacked before we ever get to that stage, would the minister be able to say whether we now have an alert system to warn the people of all Canadian cities?


Donald Stovel Macdonald: Yes, Mr. Speaker. There is some sort of a system but I do not feel that we have time during the question period for a detailed discussion of its operation.


Mr.  R. Gordon L. Fairwealher@Fundy-Royal: A supplementary question. I wish to ask the Minister of National Defence how the accidental false alert disturbed the usual calm that prevails in Canada on Saturdays.


Donald Stovel Macdonald: Mr. Speaker, Canadians remain calm on all days of the week.


An hon. Member:: All except the Prime Minister.



FINANCE


Sylvester Perry Ryan: My question is directed to the Prime Minister. In considering whether or not to repeg the Canadian dollar will the government consider an immediate corporate tax reduction to assist the labour-intensive secondary manufacturing sector of our export industries to become more competitive, produce more and employ more people?


Pierre Elliott Trudeau: Before bringing down the next budget, Mr. Speaker, I am sure the Minister of Finance will want to consider all forms of tax changes.

February 23, 1971
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NATIONAL SECURITY


Mr. Roch La Salle (Jolietie):: Mr. Speaker, I should like to put a question to the Prime Minister.
With reference to the statement made last Sunday by the premier of Quebec that he expected the province would have to pay between $200,000 and $300,000 for the costs of the Armed Forces services in Quebec during the October crisis, I should like to know if the Prime Minister agrees with this statement.


Pierre Elliott Trudeau: I was not
aware of this statement, Mr. Speaker. I shall check and see if that statement was made following our conversations on the subject.



REPLACEMENT OF PUBLIC ORDER (TEMPORARY MEASURES) ACT BY PERMANENT STATUTE

Mr. G. W. Baldwin (Peace River):: I have a supplementary in relation to the question I directed to the Prime Minister yesterday on this subject. I now ask the Prime Minister to state categorically if it is the intention of the government to have a permanent act at the end of April this year to replace the Public Order (Temporary Measures) Act now in effect?


Pierre Elliott Trudeau: Mr. Speaker, this has nothing whatsoever to do with the question just asked. The question which was asked yesterday I answered yesterday.


Gerald William Baldwin: On a point of order, I asked a simple question. Will the Prime Minister give a simple answer or is he afraid to do so?



AGRICULTURE


Mr. A. B. Douglas (Assiniboia):: I have a question for the Minister of Agriculture.


Some hon. Members:: Oh, oh!


Albert B. Douglas: Can the minister report today on who was the successful bidder on the tenders for a large quantity of broilers for export, which tenders were to have been opened yesterday?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker. The successful bidder was-I am trying to find the exact name.


Some hon. Members:: Oh, oh!


Horace Andrew (Bud) Olson: The successful tenderer was a group in the province of Quebec who put together the surplus broilers they had in storage and submitted one tender. If the hon.

member will give me about two minutes I will find the exact name of the group.


Albert B. Douglas: On a point of order, the noise from the other side of the chamber would indicate that members opposite thought I had arranged to ask this question. I did not, Mr. Speaker.


Some hon. Members:: Order!


Mr. Speaker:: Order, please.


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I will assist the minister by stating as a preamble to my question that the successful tender was submitted by Quebec Poultry Processors Incorporated of Montreal. I wish to ask the minister whether he does not think it is ironic that the successful tenderer was the leading figure in creating the broiler surplus in the first place?


Horace Andrew (Bud) Olson: Mr. Speaker,-


Mr. Speaker:: Order, please. I doubt whether the question as asked is in order. It seems to be highly argumentative.



FAMILY ALLOWANCES


Mr. Jack Marshall (Humber-Si. George's-St. Barbe):: My
question is for the Prime Minister. In view of the statement made by the Minister of National Health and Welfare on Saturday that it is his intention to find a more equitable scheme for allotting family allowance than the one outlined in the white paper on income security, will the Prime Minister tell the House whether the minister was expressing a new government policy and whether the family allowance policy stated in the white paper is going to be revised?


Pierre Elliott Trudeau: I will take the question as notice, Mr. Speaker.


Jack Marshall: Since unemployment is swelling welfare costs, will the Prime Minister direct that the date of the federal-provincial conference to be held in June be brought forward so that the present suffering of the poor can be alleviated?


Pierre Elliott Trudeau: Mr. Speaker, I do not direct to bring dates forward. I consult with the provinces on such matters.



TRANSPORT


Mr. S. J. Korchinski (Mackenzie):: My question is for the Minister of Transport. Does the minister intend to allow the railways to increase their tariffs on March 1 on
February 23, 1971

the shipment of cream cans from 44 cents per can to $2.75, an increase of 600 per cent?


Hon. Donald C. Jamieson (Minister of Transport):: As I
have stated repeatedly in the House, Mr. Speaker, I neither allow nor disallow railway freight rate increases or decreases, rare as they may be. If the hon. member will give me the details of this particular tariff item, I will convey his representations to the railways.


Stanley James Korchinski: I have a supplementary question for the Minister of Agriculture. Will the minister, on his own behalf or through the dairy commission, lodge a protest on behalf of the farmers who will surely go out of business with an increase of that magnitude?


Horace Andrew (Bud) Olson: Mr. Speaker, I think that the Minister of Transport is already aware of the protests of a number of the dairy farmers involved.



DISCUSSION OF WESTERN CANADA RAILWAY FREIGHT RATES WITH PROVINCIAL PREMIERS

Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: have a supplementary question for the Minister of Transport. In view of the minister's report to the House earlier this year that negotiations were going on between him and his officials and the premiers of the provinces of western Canada with regard to high freight rates, is he now in a position to report to the House on what progress is being made in this very important area?


Donald Campbell Jamieson: I did
that two or three days ago, Mr. Speaker. Perhaps the hon. member was not present. I indicated that we had made quite a bit of progress in the talks, that we were trying to isolate individual commodities where the freight component of the cost appears to be particularly severe. The officials are examining this matter to see what relief can be achieved. It may be that we can add the commodity to which an hon. member referred to this group.



POLLUTION


Mr. Thomas S. Barnett (Comox-Alberni):: I wish to address my question to the Prime Minister. In light of the expert testimony given publicly at the symposium on mercury which the Royal Society of Canada held last week, is the government considering stricter controls on emissions of mercury into air and water and a stepped-up program of research into means of removing existing deposits of mercury from the beds of streams and lakes in Canada which are already polluted?
Inquiries of the Ministry


Hon. Jack Davis (Minister of Fisheries and Forestry):: A program of that kind is already under way, Mr. Speaker.


Thomas Speakman Barnett: I wish to direct a supplementary question to the President of the Treasury Board who is responsible for the National Research Council. Are the resources of the National Research Council being mobilized in this difficult problem of the removal of mercury deposits from existing polluted stream and lake beds?


Hon. C. M. Drury (President of the Treasury Board):: The resources of the National Research Council are being used for this purpose.



FISHERIES


Mr. Walter C. Carter (St. John's West):: I have a question for the Minister of Fisheries and Forestry. Can the hon. gentleman say what action has been taken by his department to convene an international conference on the conservation of marine resources?


John (Jack) Davis: The fisheries of the North Atlantic come under the scrutiny of the International Commission for Northwest Atlantic Fisheries which is meeting in Halifax in June.



SWORDFISH-ASSISTANCE TO FISHERMEN BECAUSE OF POLLUTION

Mr. Robert McCleave (Halifax-East Hants):: My question is also for the Minister of Fisheries and Forestry. Can the minister say whether a decision has been reached with regard to the problems created by the closure of the swordfishery and whether we shall hear about that decision on motions?


John (Jack) Davis: There have been conversations with the industry and with the provincial government authorities in Nova Scotia. Several proposals have been put forward and we shall shortly be announcing those which are acceptable to both governments.



IMPENDING CLOSURE OF PROCESSING PLANT IN NEWFOUNDLAND

John Howard Lundrigan: May I ask
the Minister of Fisheries whether he has received any indication of the impending closure of a major fish processing plant in the province of Newfoundland and, if so, what action does he propose to take?


John (Jack) Davis: The answer is no, Mr. Speaker. I have not heard of it yet.

February 23, 1971
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UNITED STATES OFFER OF CO-OPERATION IN BUILDING PIPELINE FROM ALASKA DOWN MACKENZIE RIVER VALLEY TO LOWER STATES

Mr. Randolph Harding (Kootenay West):: My question is addressed to the Prime Minister. In the course of the discussions on energy policy between Canada and the United States in Montreal last September did the United States government make an offer to co-operate with Canada in building a multi-billion dollar trans-Canada pipeline from Alaska and the Canadian north to the lower states?


Pierre Elliott Trudeau: I will take notice of the question on behalf of the minister concerned.


Randolph Harding: Since the government is apparently opposed to the transport of oil by sea from Alaska to the state of Washington, is Canada seriously considering acceptance of the United States offer with respect to a pipeline from Alaska and the Canadian north via the Mackenzie route?


Pierre Elliott Trudeau: I know of no such offer having been made.



INDUSTRY


Mr. Louis-Roland Comeau (South Western Nova):: have a question for the Minister of Industry, Trade and Commerce. In view of the difficulties faced by the textile industry I should like to ask whether the textile board has reported to the minister? If so, what is the status of the report and when may we expect action to be taken by the government?


Jean-Luc Pepin: The report has now been received and is being studied.



HOUSING


Mr. P. V. Noble (Grey-Simcoe):: My question is
addressed to the minister in charge of housing. Will the $87 million which has been designated to provide grants for sewage treatment projects be shared provincially on the basis of population or will it be assigned on a first-come, first-served basis regardless of the size or location of the municipalities concerned?


Hon. Robert K. Andras (Minister without Portfolio):: It
will be distributed on neither basis, really. The size of populations as between provinces is not a very good

criterion though it is taken into consideration. We have to consider several factors, including the concentration of population which is more significant in causing waste disposal problems. We also take into account the state of planning and engineering for various projects as it is now, and a whole accumulation of requests which have been received in the past. Generally, we consult with the provinces and an inter governmental, interdepartmental committee studies these matters. Within the provinces we are guided to a large extent by the priorities and requests of the provincial governments. Rightly or wrongly, we do not think that distribution of these grants on the basis of population alone would be wise.



SEWAGE TREATMENT PROJECTS-FINANCIAL ASSISTANCE TO CITIES AND TOWNS ON RIVERS FLOWING INTO LAKE ERIE

Mr. W. M. Howe (Wellingfon-Grey-Dufferin-Walerloo):: In view of the fact that cities and towns in the area through which rivers flow into Lake Erie will require an extra $30 million to provide the equipment necessary to enable them to meet the deadline set by the International Joint Commission, is the government giving consideration to making extra funds available to help such municipalities meet these commitments?


Robert Knight Andras: No
precise decision has been taken, but my colleague who will be heading the department of the environment has been discussing this matter with me and we hope that with the new facilities at his disposal and mine we shall be able to take a much more sophisticated look at problems of this kind in the future.



THE CANADIAN ECONOMY


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Consumer and Corporate Affairs. In view of reports that the Memorial Gardens Association in Toronto which owns some 48 cemeteries in Canada is in the process of selling out to a United States firm based in Texas, will the minister have his department look into this matter in the hope that this transfer of Canadian soil can be prevented, so that Canadians, even if they cannot be protected by the government while they are alive, may be buried in Canadian soil?


Hon. Ron Basford (Minisier of Consumer and Corporate Affairs):: Of course, ownership of the company has nothing to do with ownership of the soil or sovereignty over the soil. I will certainly look into the matter. I have not seen those reports. But I would remind the hon. member that there is nothing in the Combines Investigation Act, to which, I take it, he is asking me to refer, which would per se prevent the acquisition of a Canadian company by foreign owners.
February 23, 1971


Stanley Howard Knowles: May I ask the
minister whether talk of an election this fall arises from the hope that there will still be a place to bury the government in Canada?



EAST COAST OFFSHORE OIL AND GAS RESERVES-TYPE OF DRILLING RIG, COMPANY THAT WILL PERFORM WORK

Mr. Lloyd R. Crouse (South Shore):: My question is for the Minister of Energy, Mines and Resources who, according to the roster, is supposed to be here today. In his absence I will direct it to the Acting Minister. In view of the statement by the Deputy Minister of Energy, Mines and Resources in Nova Scotia that offshore mineral tests indicate there are sufficient oil reserves to last 30 years and double that amount of gas requirements, can the minister tell us whether the new drilling rig to be put in use off the east coast is similar to others already in existence? Can he also say which company will carry out this work?


Donald Campbell Jamieson: shall be glad to take the question as notice for the minister directly concerned who is away today on official business.



PROGRESS ON AGREEMENT WITH ATLANTIC PROVINCES ON OFFSHORE RESOURCES

John Howard Lundrigan: While
questions are being taken as notice may I ask, in view of the prediction by the deputy minister yesterday that oil will be discovered off the east coast within two years, what progress has been made in consultation with the Atlantic provinces in negotiating an agreement concerning offshore resources? Perhaps the minister concerned will tell us when he reports to the House.


Donald Campbell Jamieson: will take that as notice too.



NATIONAL DEFENCE


Mr. Les Benjamin (Regina-Lake Centre):: May I ask the
President of the Treasury Board the following question. In view of the rejection by east coast dockyard workers of the government's wage offer because acceptance would have meant increasing the disparity between rates paid to workers on the east coast compared with those on the west coast, is the government reconsidering its position and will it make an offer which, at least, will not result in increasing the disparity in wages and salaries which presently exists?
Inquiries of the Ministry


Charles Mills (Bud) Drury: am sure the hon. member is aware of my reluctance to conduct collective bargaining on the floor of the House.


Mr. John L. Skoberg (Moose Jaw):: In order to clarify the situation concerning naval dockyard workers' income, will the minister make a statement on motions concerning Treasury Board's policy with respect to the wages of hourly-rated employees in various regions of the country?


Charles Mills (Bud) Drury: If the hon. member feels this situation requires clarification I shall be glad to provide it to him.



AIRPORTS


Mr. A. D. Hales (Wellington):: Mr. Speaker, I have a question for the Minister of Transport. In view of the fact that many months have elapsed since the minister said he would advise the House of the location of the proposed new jumbo airport near Toronto, may I ask whether the hon. gentleman is now in a position to tell us what steps have been taken?


Donald Campbell Jamieson: I can
only report, as I did a few days ago, that I have a communication ready for the new premier of Ontario inviting him to meet with me as soon as he wishes to do so following his installation-I presume that is the word. In short, I am ready to talk with him as soon as he is ready, and I hope that very quickly after that we can reach a decision jointly on how to proceed.



CANADIAN NATIONAL RAILWAYS


Mr. Sleven E. Paproski (Edmonton Centre):: I should like to address a question to the Minister of Transport. Having regard to the fact that bids for improved sick leave arrangements by railway union officials negotiating with the CNR were refused on January 7 and 8 followed by the rejection on January 12 and 13 of proposals concerning job security, does the minister plan to seek the services of a federal conciliation board to resolve this dispute?


Donald Campbell Jamieson: I am
sorry. Would the hon. member be good enough to repeat the question? I assumed it was addressed to the President of the Treasury Board.


Steve Eugene Paproski: Having regard to the fact that bids for improved sick leave arrangements by railway union officials negotiating with the CNR for wage increases and other benefits were refused on January 7 and 8, and since

February 23, 1971
Inquiries of the Ministry
proposals concerning job security were similarly rejected on January 12 and 13, does the minister plan to seek the services of a federal conciliation board to resolve this dispute?


Donald Campbell Jamieson: I do not know whether it is within my competence to do so but I will be glad to take the question as notice and give an answer as soon as I can.


Steve Eugene Paproski: Would you repeat that answer, please?


Some hon. Members:: Oh, oh!



AGRICULTURE


Mr. A. P. Gleave (Saskaioon-Biggar):: Mr. Speaker, I have a question for the Minister of Agriculture. In view of the recently announced program to increase forage production in the Prairie region, which will give added incentive for beef production, will he tell the House whether the government is undertaking to discuss with New Zealand and Australia a mutual agreement in respect of the volume of future imports of beef from those countries into Canada on a quarterly or yearly basis?


Horace Andrew (Bud) Olson: Mr. Speaker, there has been no discussion respecting the imposition or establishment of quotas. Last summer when we had a great deal of difficulty over this problem there were very satisfactory discussions leading to the supply to this market in Canada of the kind of beef these countries have to sell. I think the trading relations have been very satisfactory since.


Mr. R. E. McKinley (Huron):: Mr. Speaker, I have a supplementary question with regard to this same program announced yesterday. Will the minister give consideration to allotting this money to people who operate cow-calf operations because calves and feeders can be used quite readily in eastern Canada but otherwise with all these programs-


Mr. Speaker:: Order, please. This seems to be an argument rather than a question.



GRASSLAND INCENTIVE PROGRAM-REQUEST FOR SIMILAR GRANTS TO QUEBEC MILK PRODUCERS

Roch La Salle: Mr. Speaker, I have a question I wish to direct to the hon. Minister of Agriculture. In view of the policy announced yesterday concerning the raising of livestock in the western provinces, I would like to ask the minister whether he is prepared to recommend the payment of similar grants in the prov-
[Mr. Paproski.)
ince of Quebec to milk producers who are in serious difficulty. In my opinion, such a program would be an excellent way of enabling them to re-direct their production.


Horace Andrew (Bud) Olson: Mr. Speaker, there are programs in respect of forage production and other adjustments of agriculture that are appropriate to various regions. The hon. member is aware of several programs we have designed that are more particularly applicable to regions other than the grain growing part of the Prairies.



EXPORT OF BROILER CHICKENS-NUMBER OF TENDERS AND PRICE

Mark Willson Rose: Mr. Speaker, I wonder whether we could return to the subsidized export question directed to the Minister of Agriculture. Can he tell us now who was the successful tenderer, how many tenders were submitted and what was the subsidized price or accepted price-


Mr. Speaker:: Order, please. It seems to me at least some of this information should be obtained by way of a written question. Perhaps the first part of the question is in order, but it is my impression that the hon. member gave the reply himself a moment ago. In any event, perhaps the minister might be given the opportunity of replying.


Horace Andrew (Bud) Olson: Mr. Speaker, the successful tenderer was the Poultry Processors Association of Quebec Incorporated, and there were nine tenders received. I can give the hon. member any additional information.


Mr. Horner:: What was the volume?


Horace Andrew (Bud) Olson: The volume was three million pounds.


Alfred Pullen Gleave: Mr. Speaker, since broilers do not come under the price stabilization board or the Agricultural Stabilization Act, will the minister tell us now under which particular government policy this program was prepared?


Horace Andrew (Bud) Olson: Yes, under the Agricultural Products Board Act.


Robert Elgin McKinley: I have a supplementary question, Mr. Speaker. As all of these broilers will come from Quebec will the minister give some consideration to obtaining some from Ontario in order to ease the surplus there?


Horace Andrew (Bud) Olson: Mr. Speaker, the tenders were open to processors in all parts of Canada. Quite obviously the successful tenderer was the one who submitted the lowest price.


Mr. Speaker:: Orders of the day.
February 23, 1971



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, February 22, consideration of the motion of Mr. Benson that Bill C-219, to establish the Canada Development Corporation, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs, and the amendment thereto of Mr. Saltsman (p. 3648).
Mr. Speaker:: I understand that the hon. member for Abitibi (Mr. Laprise) had the floor when we adjourned last evening. I gather now that the hon. Parliamentary Secretary to the right hon. the Prime Minister is attempting to gain the floor on a point of order.


Mr. Danson:: No, Mr. Speaker, I am just rising to take part in the debate when my time comes.


Mr. Speaker:: The hon. member's time has not yet come.


Gérard Laprise: Mr. Speaker, at the time of adjournment last night, I was showing how far American businessmen have gone in gaining control over Canadian trade and industries. The bill before us seeking to create the Canadian Development Corporation seems to aim at stopping takeovers of Canadian businesses by American firms.
I was saying that it is not the kind of corporation that would prevent Americans from investing capital in Canada. We know how enterprising American businessmen are and we are aware of the necessity for them to invest their capital.
I am therefore convinced that they will keep on buying existing Canadian businesses or try to contribute, through their capital, to the establishment of others.
The minister has often stated that Canadians show little interest in investing their savings in Canadian companies or in organizing new ones. However, the problem is that Canadians have not much savings to invest. We know that the tax rate is eating away the Canadian workers' income.
Last Saturday, a miner showed me his cheque stub indicating seven different deductions. Now, when a miner earns his living in the bottom of a pit and must pay every fortnight $94 in income tax, it is inconceivable to ask him to invest his savings in the Canadian industry. He is unable to do so. It is the government that takes them away from him.
Northwestern Quebec is faced with the problem of exhausted mineral deposits, which forces certain mines to close down. Gold mines are no longer worth anything, in fact a gravel pit nowadays is worth more than a gold mine.
Canada Development Corporation
It seems that Noranda Mines Limited may build a copper refinery in the province of Quebec within the next few months. Indeed a group of businessmen from northwestern Quebec have associated with a view to inciting the government to support Noranda Mines Limited so that the latter's project may be implemented.
Canadians do not have the capital required to purchase shares and thus help certain companies, such as Noranda Mines Limited or others of that kind, to establish secondary industries in our country.
For its part, the government intends to set up the Canada Development Corporation-which will no doubt become state-owned-to force Canadians to invest in it, under the guise of taxes, because the capital that the government will invest in that Corporation will come from the Consolidated Revenue Fund. That is what I call a socialistic measure.
Mr. Speaker, I think that the government, through grants or tax exemptions, should help Canadian companies start new industries to process locally the basic materials that we find here.
Very recently, the hon. Minister of Energy, Mines and Resources (Mr. Greene) stated that our basic materials should be processed in this country before being exported. I agree entirely with this statement. Besides, the government of Ontario passed an act two or three years ago which compels companies to process basic materials as near as possible to their place of origin, before shipping.
If such a law existed at the federal level, it would benefit Canadian companies and Canadian workers.
The minister stated on January 20, 1971 and I quote:
You will agree with me, I think, that in the years to come, Canada will need a policy designed to attract important foreign capital needed to explore our continental shelf and other mine and energy resources.
Now that statement is inconsistent with the proposed bill of his colleague, the Minister of Finance (Mr. Benson) who personally advocates the establishment of a corporation with the income taxes of individuals, want to interest those who still have savings to invest in that corporation, and that in view of checking the import of American capital.
On the other hand, the Minister of Energy, Mines and Resources says that we should interest Americans to invest more in Canada. So, this is a contradiction. I wonder how we will get out of all this.
In the 11th report of the Standing Committee on External Affairs and National Defence, we can read the following on page 3357:
Non-resident owned firms have received 50.5% of the $368 million in federal grants paid to industry under certain selected programs during the 1965/66-1968/69 fiscal years. Canadian-owned firms received $173 million (48.2%) while non-resident owned firms received $181 million. These grants were made under the following programs: Industrial Research and Development Assistance Program; Automotive Adjustment Assistance Program; Industrial Research for Defence Program; Industry Modernization for Defence Exports Program; Ship Construction Subsidy Program; Development of Industrial Technology Program; Defence Industry Productivity Program.

February 23, 1971
Canada Development Corporation
National defence gets the largest amount; but $181 million were granted foreign enterprise for setting up plants in our country. Not only does Canada invite foreigners to invest here, but it also subsidizes foreign industry that has invested in Canada.
We find, in Jean-Jacque Servan-Schreiber's work The American Challenge an extremely revealing and interesting passage on this subject. We see that what is happening in Canada is also going on in Europe. It seems impossible to escape that state of affairs, at least in our present system. Here is what Jean-Jacques Servan-Schreiber writes, at page 14 of the English edition:
The least-known aspect of American investment in Europe is its means of finance. Financing investments is not a serious problem for American corporations.
With their scope, capabilities, and techniques they have no trouble finding money on the local market to pay for their factories.
During 1965 the Americans invested $4 billion in Europe. This is where the money came from:
-loans from the European capital market.. . and direct credits from European countries-55 per cent;
-subsidies from European governments and internal financing from local earnings-35 per cent;
-direct dollar transfers from the United States-10 per cent.
Thus, nine-tenths of American investment in Europe is financed from European sources. In other words, we pay them to buy us.
We have about the same situation here in Canada. In 1965, we gave them 55.5 per cent of our industrial grants.
On the one hand, a bill to establish a Canadian Development Corporation is introduced as a cure to this situation; on the other hand, everything is being undertaken to attract U.S. investors here because Canadian workers do not have the capital required to buy shares and stocks from companies working on developping our natural resources, our industries, our service companies and our businesses.
I would like to draw to the attention of the House, through the Minister of Finance, the problems involved in the tax reform. When people speak of reform in tax matters, they mainly speak of increases.
In the Finance Minister's White Paper, every means is provided for snuffing out, for destroying small enterprises as it was so aptly said last evening by the hon. member for Edmonton West (Mr. Lambert) in his speech on the bill. And one Mr. M. I. H. Apser said on November 26, 1969 in a speech to the chartered Institute of Secretaries in Vancouver:
Having all the evidence for it, we are deeply convinced of the value and the necessity of these private enterprises within the Canadian economy, not only as a factor which up to now has played an important part in our national welfare and progress, but also as a valuable potential for the post-war years. The surpluses they have accumulated will provide the means of development that the country needs essentially and they will contribute greatly to increase the number of jobs.
A very high percentage of Canadian people depend directly or indirectly on the financial prosperity of private enterprises-
I fully agree with this statement. If one looks at the development of Canada or of any democratic country, one will find that personal initiative has contributed not only to ensure such development, but also to make Canada one of the most industrialized countries of the Western world.
And it is this private enterprise that we are trying to destroy by all kinds of means. On the one hand, there is the radical action of the labour unions. Sometimes, through inconsiderate action, they force industries to merge into combines, thus forcing small industries to close their doors. On the other hand, the government, through its taxation system, does everything to destroy the small industry, the family industry, that has been the strength of Canada over the years.
Nowadays, the family farm does not exist any longer. There is a tendency to vertical integration, to enlarging farms and turning them into companies in order to put an end to individual property and to change farmers into proletarians. And the same trend seems to prevail with regard to other small concerns.
Mr. Asper went on to say:
At the very moment when we are concerned about the investment of foreign capital in Canada and about the foreign ownership of an important part of Canadian resources, the proposals of the white paper would make it still harder for the Canadian people to put money aside, which is the only way for them to make investments in the resources and industries of this country. The editorial writer of the Calgary Herald, on June 18, 1970, proclaimed his support to the declared policy of the Liberal party, which is "to encourage investments by Canadians". Then he added that the government "succeeds so well in emptying the pockets of the taxpayers, individuals and corporations, that a number of Canadians have no more money to invest-they have hardly enough, indeed, to meet their own daily needs". This editorial was entitled: It is necessary to buy Canada back .. . but with what?
With what should we buy Canada back? There is only one solution and people laugh when they hear it, but it is the theory of Social Credit. It is not the first time that we talk about it. We have been preaching it for 30 years. But some economists and politicians in the pay of high finance think it is funny. They will not spare a few moments to examine the situation and they do not want to compromise themselves, because the $2 billion the Canadian government will pay this year in interests on the national debt will not go to miners, loggers, workers or farmers, but to high finance that controls the world. Financiers are not interested in a change of the economic system. They want to keep on skinning the Canadian population.
I believe the remedy would be in the financing system of our public bodies as advocated by the Ralliement Creditiste. Today, every three months or so, the federal government borrows money on the bond market to finance its administration, to balance its budgetary deficit or to reimburse its bonds.
The provincial governments are in the same situation: they must borrow astronomical amounts of money each year to continue to administer as best they can. Municipalities and school boards are also in the same situation.

February 23, 1971

The Ralliement Creditiste is requesting the government to authorize the Bank of Canada to grant interest-free loans to these public bodies. If this proposal were accepted by the government, if the latter allowed municipalities, school boards and provincial governments to borrow from the Bank of Canada to cover their financial requirements, then such public bodies would not have to borrow on the private bond market. Being unable to lend their savings to these public bodies, private investors would then have to look to private enterprise and trade to invest their capital.
I am convinced, Mr. Speaker, that those who have savings, be they insurance companies, or investment and security brokers, would not hide them under mattresses. That is not longer the fashion! So, they would have to look to private enterprise to put their savings to work. Gradually, Canadians would regain control over Canadian industries and businesses now in the hands of foreigners.
That is the solution that I wanted to propose to the House to replace Bill C-219 which, in my view, will not solve anything. This bill will in no way remedy the economic situation now prevailing in Canada.
We have cope with unprecedented unemployment conditions, with the destitution and even extreme poverty of many families which have to rely on welfare allowances. All unemployed who depend on very low pensions, welfare allowances or superannuation cannot suggest to the industry what and how to produce.
The interim report of the Economic Council of Canada tabled in July 1967 states the following, as reported on page 10:
The greatest possible freedom of choice should be preserved for consumers-
How is it possible for social welfare recipients and unemployed to have that freedom of choice?
They have not a penny in their pockets to tell industry what to produce. I quote further:
-so that each individual or household is free to choose the component parts of its way of life or standard of living, within the bounds of the law.
Mr. Speaker, this statement is in perfect agreement with the philosophy of Social Credit.
The report says further:
-Consumer choice should be the ultimate arbiter of which goods and services are produced and continue to be produced.
Mr. Speaker, this is what Social Credit is all about, this is what members of the Ralliement creditiste are asking for: that the individual be given a right to tell industry what it should produce. But the system that the government is proposing, through this bill to create a Canada Development Corporation, as the minister said, is designed to guide Canadian industry and then somehow force consumers to buy again the production, if we allow that.
If the government wants to solve the problem we are facing in Canada, it should cease to take away from Canadian workers the greatest part of their income
Canada Development Corporation through the system of direct and indirect taxation. Then the individual would be able to control production, to invest into Canadian enterprises, into family undertakings which he would be proud to own and manage. Then we would see-as we have seen already-that there are still in Canada people who are able to run a business.
Let us give Canadians the opportunity to prove their ability. Canada will only be better for it, and the Canadian government will have done much to improve the standard of living of Canadians. That is what we would prefer to find in Bill C-219.
The House has under consideration an amendment to give this bill a still more socialist character, but we will object to it besides disagreeing with the measure being debated.


Barnett Jerome Danson: Mr. Speaker, I am delighted to follow the hon. member for Abitibi (Mr. Laprise) in this debate. I am not in favour of the policies suggested as a solution for our problems but we must give full "social credit" to him for putting them forward. The debate relating to this bill is one of the most significant, in many respects, to take place in this House in many years. It is the first time that we have really begun to come to grips with the ownership and control of our industry and our resources.
I use the word "begun" advisedly as I believe it to be the first substantial legislative step to help us "tip toe" through the intricacies of maintaining a substantial inflow of investment capital, still essential in the view of my party to the dynamic growth of our economy, and the imperative of assuming an increasing degree of control over the business and economic decisions which very much affect our sovereignty and our development as a more distinct Canadian social and political entity.
In this debate I wish to pay credit to the Hon. Walter Gordon whose passionate and persistent actions and concern have kept Canadians constantly aware of the abyss into which we are sinking. One may agree or disagree with Mr. Gordon's analysis or proffered solutions but one cannot fail to give him full credit for focusing our attention on this problem, this dilemma, to which we are finally beginning to give concrete attention. He has indeed already proven himself to be a very great and devoted Canadian and I doubt whether he is too concerned whether the solutions arrived at are along the precise lines he might choose as long as they are the result of the considered judgment of reasonable and concerned men and women.
This bill to establish the Canada Development Corporation is only the first step because it deals with only one aspect of the full range of considerations. However it does set up the machinery which might be expanded through the CDC or otherwise to deal with other important aspects. It is designed to establish a government position relating to the future oriented development of Canadian industry. This must be the first priority and

February 23, 1971
Canada Development Corporation the most positive aspect of the entire problem. The bill does not at this stage at least attempt to barge into some uncharted waters-areas which will be more clearly defined when the results of the studies of the Minister of National Revenue (Mr. Gray) are completed. We can then deal more satisfactorily with the whole question of foreign takeovers of Canadian companies and assess the visdom of actually repatriating the control of some key 'acets of our industrial social and economic life.
Like most members in this House and many individuals across the nation I wait with some degree of impatience for these studies to be completed. However we must all be aware that it is far more important that they be broad and deep so that judgments based upon them are more likely to be wise and valid. At the same time we must maintain an appropriate pace as we face ad hoc decisions to periodic crises with varying degrees of satisfaction and questionable fairness to those involved. We must have rational long range policies so that both domestic and foreign investors and entrepreneurs can act with a greater degree of certainty. I believe it was Conrad Hilton, a man whose hotel empire reaches into countries with a myriad of regulations who said that he doesn't care so much just what the ground rules are so long as they are clearly set out and they are not changed on him in mid-stream. Mr. Hilton in many ways personifies the entrepreneurial spirit which motivates so many enterprises.
Business will adapt to reasonable laws and economic climate as well as tax systems knowing that its competitors face the same sets of rules. It can then chart its own operations towards profitable objectives. I know that word profit is a dirty word to some in certain sections of his House-I do not see any NDP members here-but I suggest that they do not appreciate the role that profit plays in maintaining efficiency and producing the essential investment capital for job creating expansion not to mention the motivation. That is a question of particular interest to those who studied these matters in the Committee on Finance Trade and Economic Affairs. I suggest that studies in this area of motivation are overdue. There should also be differentiation between fair or justifiable profit as opposed to that which is clearly exploitive or the result of unfair monopolistic practices.
I was interested in speaking to leaders of governments in the many nations I was privileged to visit when accompanying the Prime Minister to the Commonwealth conference in Singapore. Virtually every country had quite clearcut regulations relating to foreign investment, yet each one clearly welcomed such investment. Its success was largely dependent on the market, which in most cases is substantial in terms of population but small in terms of per capita income, a reverse situation to that of Canada. At the same time it is recognized that, as the standards of living increase in an area where hundreds of millions of people live, the potential for growth is enormous. Wise business, and I hope we only have "wise" business as opposed to "smart alec", is going to gain whatever foothold it can in such markets in concert with local interests.

Another factor in addition to the domestic market is the richness of natural resources. In Indonesia, for instance, there are vast oil reserves to which access is relatively easy. They might not agree with that statement but it is true when you compare the situation in other nations. The quality of the oil is on a par with our Alberta oil, about which they knew everything. In Indonesia, they taught me a great deal about Canadian oil. The uncertainty of other sources of oil, plus the growing Pacific and Asian market, makes these resources sufficiently attractive that major international oil companies are quite prepared to invest their capital and "know-how" and turn over 65 per cent of their interests to Indonesian government corporations in return for nothing more than the 35 per cent they are allowed to retain plus a five year tax holiday. In addition, they are to repatriate or reinvest the profits on their 35 per cent as they see fit.
It is most interesting to see the development in Iran, a country where they manufacture their own automobiles, trucks and buses. It is a small country which we think is undeveloped, but the government is in complete control of the situation and business in that country competes on the export market with foreign licensors, something we should look at in our licence deals. In Iran, investment is welcomed when it participates equally with domestic investment capital. In that country return on investment exceeding 25 per cent is considered normal. I do not know if it is fully justifiable, but I am told that in their case it is normal.
In many cases our tax laws assure Canada of as much return as these nations enjoy as a result of their regulations on ownership. In other words, we do not have the same percentage of ownership but under our tax system we probably end up with as much in the federal coffers as they do as a result of their regulations on foreign ownership. What we must consider is the degree of control that is retained by the host country, and this is one of the prime considerations in this CDC bill.
This bill with which we are dealing, as I said previously, deals primarily with the key area of future development and the management of Canadian enterprises. Unless we are successful in this area and can prove ourselves competent, we will not be competent to deal successfully-by successfully I mean competitively and economically, and with the necessary managerial and entrepreneurial skills-with the question of takeovers. This cannot happen in the hothouse atmosphere of the bureaucracy, with all due respect to the very high standard of the bureaucracy in this country. I am delighted to see the transitional aspect of the CDC emphasized. This allows the CDC to operate with a maximum degree of freedom, largely as a catalyst to bring situations together and as a conduit to funnel the results back into the private sector.
I agree to a limited extent with the hon. member for Waterloo (Mr. Saltsman), who participated earlier in the debate, that there are some areas where profitability is
February 23, 1971

not possible or perhaps even desirable in serving the public interest. This could be the case with a pipeline from western Canada to eastern markets and was the case with our railroads. I think that cost-benefit analysis or economic studies in those days might not have shown much prospect of profitability. But such enterprises can serve as a vital lifeline, almost an umbilical cord, in the total rationale and cohesive development of our nation. I am sure that this question of a pipeline from western Canada to eastern markets will come up, and it has been suggested that if it is economically feasible private enterprise will construct it. There might be some validity to the suggestion that it is a worthwhile undertaking, although it is not yet economically feasible. Such a pipeline might be very important as an "ace in the hole" for Canada in international negotiations, even if no oil is presently flowing through it.
It is also suggested that with such a pipeline consumers in the eastern market would have to pay a cent or a half cent more per gallon for oil in order to support our western oil industry. Mr. Speaker, I suggest that the people in western Canada for many years have been paying a cent per item or per gallon more than the price of the equivalent product elsewhere simply because they are part of Canada and are protecting eastern manufacturers. I do not think it is too much to expect that some time this situation should be reversed. It would do a lot to bind the country together to give us cohesion, and to give us greater development. However, at the moment this is not a consideration because our oil producers cannot produce enough oil to fill the pipelines we have-


Mr. Lambert (Edmonton West):: What is that?


Barnett Jerome Danson: I understand that at the present time, with the reserves available in western Canada and the opening of the American market, we need more pipelines to take the oil out. In fact, the producers in the west cannot start into the American markets that exist at the present time. I should add that this situation relates largely to the area of feeder lines, which is the paramount problem at the present time. My facts may be wrong on this, but this is what some oil people told me the other day. Perhaps they go to a different gas station.


Marcel Joseph Aimé Lambert: The parliamentary secretary goes to gas stations to find that kind of tripe.


Mr. Sallsman:: Mr. Speaker-


Mr. Speaker:: Order, please. Is the hon. member for Waterloo rising for the purpose of asking a question? If so, is the parliamentary secretary prepared to receive a question?


Barnett Jerome Danson: I am sorry, Mr. Speaker, but I wish that the hon. gentleman would save his question until I have finished. I hope I will have enough time at the end of my remarks, and I will be delighted to deal with it then. In fact, I hope he will stay for the rest of my speech.


Max Saltsman: Mr. Speaker-
Canada Development Corporation


Mr. Speaker:: Order, please. Is the hon. member rising on a point of order?


Max Saltsman: On a point of order, Mr. Speaker. I am sure the parliamentary secretary will want to correct the record regarding the oil pipeline which is running somewhat empty because the United States is not taking our oil.


Mr. Speaker:: Order, please. I should correct the hon. member's suggestion that this is a point of order. Perhaps it might be a debating point, and the hon. member may wish to raise it with the parliamentary secretary after he has completed his contribution.


Barnett Jerome Danson: Thank you, Mr. Speaker, for pouring oil on troubled waters.


Max Saltsman: On a point of order, Mr. Speaker-


Barnett Jerome Danson: To return-


Mr. Speaker:: Order, please. I apologize to the parliamentary secretary. The hon. member for Waterloo seeks the floor on a second point of order.


Max Saltsman: If it meets with your approval, Mr. Speaker, I would hope the parliamentary secretary would correct the impression he left about the NDP members in the House of Commons. We are both here to hear his remarks.


Mr. Speaker:: Order, please. That is hardly a point of order.


Barnett Jerome Danson: Thank you, Mr. Speaker. It is certainly nice to see the small rump of the NDP come back into the House when they heard I was speaking.
I should like to return to the question of entrepreneurial and managerial skills which in my opinion are critical to our future development. We Canadians are noted more for our diligence than for our imagination or daring. Perhaps this is due to the fact that we have been able to live and prosper safely and comfortably by leaning on the skills and capital of others. This applies to our economy. It also applies to defence matters as well, and we cannot afford to be too self-righteous about these things.
I am not certain how you develop entrepreneurship. It is largely the result of intuition, competitive experience and many other factors-


Marcel Joseph Aimé Lambert: And the existence of the opportunity.


Barnett Jerome Danson: Taking advantage of the opportunity I guess is entrepreneurship, and seeking the opportunity. But I am confident that entrepreneurship can be encouraged by the CDC which can give Canadian initiative a fighting chance it did not previously enjoy in the face of the juggernaut of massive, multinational corporations, or simply of the branch plant or office having the massive resources of a home office which developed in a market of over 200 million people to the south of us.
Managerial skills, however are a very different matter and one which has received all too little attention in this

February 23, 1971
Canada Development Corporation country. We have some excellent schools of management and business administration but we need more and even better, better in the sense that we must move further into the field of graduate studies. This is particularly important at a time when we are graduating students from the liberal arts and humanities courses of our universities right into limbo. I spoke about this in an earlier debate about a week or two ago. These are well educated young men and women who have nowhere to go, no skills, no direction and no jobs. This is all being done at tremendous cost in human and material resources, and with the growing impatience of the taxpayers. But, Mr. Speaker, this impatience is nothing compared with the frustrations of the graduates themselves, frustrations which could prove explosive unless we come to grips with this problem.
Not long ago we were turning out people with skills, technocrats, but who were not really educated in the broad sense. Today, however, the reverse is true. We must achieve a balance, and a balance is something that is always sought by Liberals.


Steve Eugene Paproski: Tell the Prime Minister that.


Barnett Jerome Danson: Our science graduates and those from our technical schools at least have direction and a degree of skill, sometimes a high degree of skill, with an opportunity for employment. But I think it is terribly important that we do some periodic re-assessment of our educational streams and see just what we are producing. I also think that guidance counsellorship in the high schools needs to be continually up-dated so that we can try and project what changes are taking place about us.
As an example, in this province just a year or two ago there was an immense shortage of teachers. I do not intend any reflection on the teachers but it seemed to many, and I am sure even to teachers as well, that if one could read, write and hopefully spell, one could get a job teaching. Now, it is difficult to get a teaching job even with a graduate degree. My friend, the Hon. Stanley Randall, the Minister of Trade and Development in the Ontario government and the greatest travelling salesman since Willy Loman of Broadway fame, justifies unrestricted foreign investment on, amongst other shaky premises, the fact that 60 per cent of the research and development done in Canada is done by foreign firms while only 26.8 per cent of our corporate assets are foreign owned. I could question those statistics but I will accept them as a further challenge to our own managerial skills, and also to our governments and to our industry to break out into far wider areas so that our inquisitiveness matches our diligence.
I expect that the final report of the Senate Committee on Science Policy will have very specific and constructive recommendations to make in this general area, and I am just as impatient to see this report as the one on foreign ownership. Hopefully, a minister of science will focus attention on this critical aspect of our national development. The report should also help us to more clearly
[Mr. Danson. 1
articulate our national, social, economic and industrial objectives, a vital prerequisite to establishing national policies not only on foreign ownership and investment but on directing our own resources and energies in a manner most beneficial to ourselves in concert with our friends, neighbours and trading partners and, equally important, Mr. Speaker, our future trading partners around the world.
This is another area which I found to be particularly beneficial when I visited southeast Asia recently. Our interest there, of course, was the commonwealth and our aid programs, which I prefer to call development programs. We are developing credibility in those countries; certainly, we are in the commonwealth, in Africa and in Asia and in the Caribbean countries. What we are doing would make any Canadian very proud, indeed. It was a great experience travelling with our Prime Minister and seeing the regard in which Canada and all Canadians are held, as well as the respect and enthusiasm evinced for our Prime Minister. Our motives are not being questioned. We are there because we feel that is the place to be; after all, such a huge percentage of the world's population is there, and we are there as interested human beings. But there is a slight difference. Although we are their friends and although they are developing, those people represent, as I mentioned previously, an enormous potential trading market.
This is really interesting, I submit, because up until now we have depended for our trade upon the markets of our American friends, and I use that word in its full sense, and of the British. To a great extent, we traded with Britain. Now, the British may be slipping into the Eropean market, and we face the prospect of depending on two massive, major trading areas for our future trade. If we spread our wings around the world and establish our credibility, interest and friends, I think the result will be massive markets for us. At this time, as Britain is negotiating to enter the common market, there is an excellent opportunity for Canadians doing business in the United Kingdom today to begin negotiations on the basis of the conditions which will probably prevail and to determine whether or not they can continue dealing in that market. This must be decided.
If we find the formula for working with Britain after it has entered the common market, than I say the same formula will work within the common market itself. We could also use these same techniques for penetrating the common market. I think Canadian businessmen have been a little reticent about dealing with the common market. I have dealt there for 15 years and, certainly, there are problems. I do not think people would be in business if there were no problems for them to solve. There are language barriers and difficulties, but you find a response there that is interesting. Perhaps they have a different way of doing business. If you want to survive in this world, that is something you must get used to.
The third world about which I was speaking is of very great interest to our students. The subject happened to come up in a dinner table conversation the other night with my own children who are very much interested in
February 23, 1971

the third world. My oldest son and daughter-in-law spent most of last year in East Africa, mostly in Tanzania. They want to go back there and devote some years of their life to that part of the world. I give them full credit for that. While talking about Canadian economic conditions, they were also talking about the increasing technology besetting us which will shorten the work week. Productivity, apparently, will not be all that important anymore. The great thing will be, how shall we spend our leisure time. It occurred to me that these same children who were speaking about helping people in the third world war-I beg your pardon; I hope that was not a freudian slip-in the third world perhaps enjoy too much leisure time and are not too productive. In many cases, they are not too happy. That is a value judgment, and perhaps I should not make it lightly.
If our children are as idealistic as I think they are, and if our technology will permit them to work a four day week or work for four years and take one year off, I hope that they will devote their energy to upgrading the lot of the less fortunate in the world rather than sitting back and enjoying themselves in the cocoon, which would soon be broken open and ripped apart if we neglected those people.
I spoke previously of my experience with American businessmen over a period of some 20 years. Much of that time I have spent in the American market. I have found American businessmen to be practical and imaginative people, shrewd and really quite open. They have the same love of country which we have, although they probably wear it on their shoulders a bit more than we do. But if we explain to them, as I have done, that in passing bills like the CDC bill and other measures we are really trying to fulfil our own destiny, to make this a greater country in which to live and a country which will contribute more to society and humanity, they understand. I know that they are willing to understand our concerns and this love of country which we speak about very quietly. They understand our desire to cultivate that which we cherish, because they cherish their own country. Indeed, in many cases, perhaps most cases American businessmen will co-operate with us if we articulate our objectives and provide them with ground rules under which they can function to our mutual profit and fulfilment.
I find this bill, Mr. Speaker, an exciting milestone even in the short period that I have been in Parliament. I am delighted to support this initiative on the part of the Minister of Finance (Mr. Benson) as a major step forward in the enrichment of Canada and of Canadians.


George Harris Hees: Mr. Speaker, the Canada Development Corporation could, if handled properly, perform a useful service in helping Canadians to own and control more of the development of this country. It could do this by providing a vehicle for channelling into the development field a large part of the more than $1 billion of savings which we Canadians invest each year, half in new savings accounts, and the other half in new Canada Savings Bonds. These funds
Canada Development Corporation
are not now available for investment in new ventures because they are controlled by people who do not have confidence in the stock market because they are not familiar with how it operates and, lacking confidence in its operations, are unwilling to entrust their savings to it.
To make investment in the CDC sufficiently attractive to persuade Canadians that they should invest at least part of their savings in it, the government must make such an investment at least as secure and rewarding as the kind of investments which it would seek to replace. In other words, the government would have to guarantee that the security and return on investment are at least as good as the security and return made available by investment in savings accounts and Canada Savings Bonds. If such guarantees are not forthcoming, investment by the public in CDC shares will simply not take place.
If the government guarantees the security and return on investment, I believe that at least half a billion dollars a year could be added to the capital available for investment in new development enterprises, and would make it possible for Canadians to own and control a great deal more of their development. It would do this without impeding in any way the inflow of capital from outside the country which we need, and will continue to need for quite some time, to help us develop our economy at the pace which will maintain employment and our standard of living at the levels at which we have decided we want them to be.
* (3:50 p.m.)
Now, let us have a look at the pressure which the government will have brought to bear on it to buy up Canadian companies which are for sale and appear likely to be taken over by foreign interests. There is no doubt that keeping Canadian companies in Canadian hands is a very desirable objective. However, if in order to do so it is necessary to divert capital which would otherwise be used to promote new Canadian enterprises, we should give the matter careful consideration before deciding to employ our much needed capital in that way.
By using capital to buy a plant which would otherwise continue operation under foreign ownership, we would not provide one additional job, or one additional dollar of tax revenue for this country. The only justification for doing so would be if the operation of such a company under foreign ownership could clearly be demonstrated to be detrimental to the industry or sovereignty of this country. I think it is obvious that, in the overwhelming majority of cases, capital raised by CDC should be channelled into new enterprises.
Let us take a look at the pressure which will be brought to bear on the CDC to bail out companies which, through mismanagement, obsolescence of product, or for other causes are unable to carry on their operations and appear likely to fold up. As soon as the CDC bill passes the House, as the government's majority will ensure that it will, most, and probably all of the Liberal members of this House, will start to be pressured by companies in their ridings to obtain for them CDC financing to keep them operating.

February 23, 1971
Canada Development Corporation
The Minister of Finance (Mr. Benson) will have a parade of Liberal members into his office, each telling him that if these requests are not catered to, the member in question will be defeated in the next election. A turn-down by the minister will lead to an appeal to the national director of the party, who will appeal to the Prime Minister (Mr. Trudeau) on behalf of the member. There is a great likelihood that many of these requests for CDC financing will be met, particularly in ridings that were won by a small majority in the last election.
The result will, of course, be that a great deal of the money which should go into new development will be diverted into bolstering up operations which have been allowed to run down due to obsolescence of product or plant, or for other reasons. If this is allowed to happen, the whole purpose of the CDC will have been destroyed.


Mr. Mahoney:: On a point of order, Mr. Speaker. The hon. member appears to have allowed a Progressive Conservative manual to slip into his notes.


Mr. Speaker:: Order, please.


George Harris Hees: As the hon. member knows, that is not a point of order. I was speaking from experience in this House. For 20 years I have seen the Liberal party work off the simple principle of the pork barrel. The member for Calgary South (Mr. Mahoney) is very familiar indeed with that procedure.


Some hon. Members:: Hear hear!


George Harris Hees: As I as saying before I was so rudely interrupted, Mr. Speaker, the success or failure of the CDC will depend on how the government operates it from the start. It is now up to the minister to tell this House three things: first, how the government intends to offer shares in the corporation so that the public will be persuaded to invest in it; second give a positive assurance that the CDC will not be used to buy back companies which appear to be likely to fall into foreign hands, except where it can be clearly demonstrated that such a company under foreign ownership would be detrimental to the industry or sovereignty of the country.


Mr. Francis:: Will the hon. member permit a question?


Mr. Speaker:: Order, please. I understand the hon. member is seeking the floor for the purpose of asking a question. This can only be done if the hon. member who has the floor at the present time will allow a question.


George Harris Hees: Agreed.


Cyril Lloyd Francis: I would like to know if the speech from which the hon. member is reading is the same one printed in this morning's Globe and Mail as having been delivered in this House yesterday. It reads: "There is a great likelihood-"


Mr. Speaker:: Order, please.


George Harris Hees: Mr. Speaker, it is gratifying to learn of the great interest which all Liberal members have shown in the speech that was delivered to the press yesterday by
[Mr. Hees.l
myself and marked "To be held for delivery in the House of Commons" and which by some chance appeared in this morning's Globe and Mail. It is interesting to learn that the Liberal members all seem to have read this very excellent speech with a great deal of interest. It has been quoted to me today by innumerable Members of Parliament. I wish to advise them that neither I nor other members of the opposition bother reading the trash which is produced on the other side of the House.


Mr. Speaker:: Order, please.


George Harris Hees: It is interesting to see that they are so interested in what we-


Mr. Speaker:: Order, please. Perhaps the hon. member who has the floor has been diverted for a moment from the main thrust of his speech. Perhaps we may now return to the bill before the House.


Mr. Cote (Longueuil):: We already read it.


Mr. Laing:: Throw it in the hopper.


An hon. Member:: Why not table it?


George Harris Hees: I am very flattered to know that all hon. members are sitting up, looking up and listening intently. I hope that for once they are learning something about the economy of this country. I am very glad to be able to carry on this lesson which I am giving to them and which they seem to be receiving very well indeed.
Again, Mr. Speaker, as I was saying before I was so rudely interrupted, the third thing that the Minister of Finance must do is advise the House of the criteria on which CDC financing will be decided. This is very important indeed. Until the answers to these questions are known, it will be impossible for members of this House to make a conscientious and sensible decision on the bill before us.
If the government is really sincere in its expressed wish to increase Canadian ownership and control of this country's development, it can take a very simple step to bring back to Canada and make available for promoting new ventures, a large proportion of the half billion dollars a year which we, as individuals and as corporations, invest each year in other countries. The government can do this if the Minister of Finance, when he introduces the capital gains tax which he has made clear he intends to introduce in the budget this spring, will announce that the tax on capital gains which are realized by investment in Canadian common stocks will be only 50 per cent of the tax on capital gains realized by investment in foreign securities.
I am convinced that such a move will be far more successful in persuading Canadians to invest in Canadian securities than has been the special treatment given to dividends from Canadian common stocks. The reason is that those who invest in common stocks are generally more interested in capital gains than they are in dividends, and the fact that the tax they will pay on capital gains realized from Canadian securities will be only 50 per cent of what they will pay on those realized from
February 23, 1971

foreign securities will be very attractive indeed. If we are able to repatriate a considerable proportion of the capital we now invest in foreign securities, the benefits to Canadian development will be very important.
Now, I would like to deal with the approach of the New Democratic Party to this question as expressed yesterday on behalf of his party by the hon. member for Waterloo (Mr. Saltsman). The hon. member made it very clear that what the NDP envisages is a government corporation which would own and control business operations in much the same way as the provincial government in Saskatchewan did when the present leader of the New Democratic Party in this House was premier of that province.
Several years ago my right hon. friend from Prince Albert outlined to the House the history of the 13 companies which the provincial government of Saskatchewan took over and operated soon after the late CCF government took office. He slated in detail the number of months which each lasted before it folded up, and the losses incurred in each case. The story is one which must not be repeated on the federal scene and is ample warning against adopting the straight socialist proposal put forward by the NDP yesterday.
In conclusion, Mr. Speaker, I urge the Minister of Finance to answer the three questions I have put to him, questions which the government must answer before we are able to judge this proposal in a constructive way. I also urge him to prepare to announce in his budget that the capital gains tax charged on Canadian securities will be only 50 per cent of that charged on investment in other countries, so that hundreds of millions of dollars which we invest each year in foreign securities may be returned to Canada to finance new development in this country.


Mr. Martin P. O'Connell (Parliamentary Secretary to Minister of Regional Economic Expansion):: Mr. Speaker, it gives me a great deal of pleasure to take part in the debate on the second reading of the Canada Development Corporation bill. I think my first words should be "at long last it is here".
This is a proposal of great promise, and one which a great Canadian who sat for a number of years in this House, Mr. Walter Gordon, first promoted in a major way. That was in 1963 and subsequent years. Many features in the measure now before us reflect features of the earlier bill which he promoted. This is particularly true with regard to the point made in the legislation now advanced by the Minister of Finance (Mr. Benson)-that the corporation's operations are to be founded on sound financial principles, reconciled with the national interest, and that Canadian taxpayers will participate in the benefits of dividends received through the corporation.
I am particularly pleased, having been a supporter of Mr. Gordon in this respect for a number of years, to be able to stand in the House of Commons and express my full support for the Canada Development Corporation as proposed by the present Minister of Finance. It is appro-
Canada Development Corporation priate that this corporation should concentrate in areas where Canadian ownership is not likely to come naturally. This gives the corporation very wide scope. The Canadian economy is already penetrated to such an extent by foreign ownership and control that it is extremely difficult, particularly in newer, technically-based industries, to expect Canadian business institutions to possess sufficient financial and research capabilities as would enable them to claim a full role. There is, therefore, a need for institutions based in the public sector to associate with privately-owned industries. There is every reason to require that where a public corporation expects to "go joint account" with business corporations in the private sector it should be governed by the profit motive. In doing so, of course, the profit motive must be reconciled with the national interest-this is laid down in the bill-and with the guidelines which Parliament, in debates of the kind we are conducting this afternoon, will be giving to the corporation.
I am particularly happy that the corporation is not to seek operational control except in cases where it initiates and carries out the entrepreneurial function itself. In the normal course of events, one would expect to find this corporation Unking itself to the business enterprises of Canadian corporations and, indeed, of foreign corporations in joint ventures. In these circumstances it needs to exercise its influence to see that the national interest is in fact being observed in the pursuit of profit, even though it does not exert over-all management control. I am happy to note the observation of the Minister of Finance that the entrepreneurial function will be, for the most part, discharged by others but that it will, if necessary, be discharged by the corporation.
Another important role to be expected of this corporation is that which relates to the international field. I do not believe we can over-emphasize the importance of launching this development corporation into the world. One of the weaknesses in our economy is the fact that many of our companies confine their operations to the domestic market. Indeed, many of them come to Canada in the first place to surmount a tariff barrier or with the intention of producing solely for the domestic market. We need a corporation which is concerned with rationalizing Canadian units of production and forming them, when this is desirable, into larger corporate structures. More important still, such a corporation should be taking them out into the world economy, into the international market. It would be well to lay great stress on this aspect of the corporation's activities. The CDC could play an extremely important role in the international field by testing the Canadian orientation of some of the subsidiaries of United States companies which operate in Canada, making it clear whether they were operating solely as branch plants or as corporations with some degree of autonomy. If these subsidiaries of foreign parents operating in Canada really have a Canadian orientation at heart and if they have the autonomy to operate in world markets, then are they in fact operating in Brazil, Portugal, France, Europe and other countries of the world? Perhaps they really are here to operate only in Canada?

February 23, 1971
Canada Development Corporation Are they subject to market sharing arrangements imposed by the parent company and then restricted to the Canadian market? We do not really know. Guidelines are not enough.
One of the functions of the Canada Development Corporation, as I see it, would be to test the Canadian performance and orientation of subsidiaries in our economy by offering to join with them to go out competitively into world markets. In this way, we could find out whether they will go. If they will not, then we do have a case and we will have to deal with that particular case. We will have an instrument to do so in the Canada Development Corporation. This will be appropriate to our national interests. I think that is a function we ought to be stressing in this debate when we consider the role of the Canada Development Corporation. Let me say as well that there is a gap I see in the economic policy of Canada that can be filled to some extent by the Canada Development Corporation in relation to other policies and programs. I have in mind a small business philosophy, small business programs and a set of small business policies which we require in Canada. I do not think we really have approached this need in a systematic way.
What we frequently have in Canada are many small businesses which, having reached a certain stage in their development, find that they need management, that they need better marketing techniques, that they need kinds of financing that are not available in Canada. Very frequently, particularly in new technological areas, we have companies that proliferate. They emerge on the basis of small pieces of new technology. They have highly skilled people and develop new products which they can get into the market on a limited basis. The soon reach a stage where there is a severe temptation to sell out. Selling out in Canada often means selling out to companies which are based outside this country. In the end, what we are really doing is obliging many Canadians to go abroad to find opportunities to make use of their advanced scientific and technical knowledge in suitable businesses. These people go abroad in order to find the kind of business institutions bared on sufficient technical skills and prospects to match their talents. Therefore, I think the Canada Development Corporation ought to have an orientation which includes support for small technically based businesses of promise.
This has often been referred to as a corporation which would be interested in large Canadian projects and in large enterprises, and I suspect that the emphasis on size is there to protect against being plagued with offers from limping businesses, or with pressures to buy businesses which are in trouble or difficulty. I think we have to grasp the potential for good effect on our economy of support for growing small technically based new companies. I say again, particularly with respect to the most advanced and technical fields, that many of these companies begin on a small scale, and build around some particular aspect of emerging technology. The Canada Development Corporation could at least hope to package up some of these corporations into larger management

units, get them on a sound financial basis and oriented to markets larger than the Canadian market. This will frequently mean taking positions in small companies, helping them come together through mergers and combinations and encouraging them into external fields.
Naturally, the functions of the Canada Development Corporation will have to be related in this respect to the Combines Investigation Act or to competition policy in Canada. I trust that we will be able to so arrange our affairs in respect of combines and mergers that we will not be standing in the way of the coming together of many Canadian corporations so that bigger units may be formed in order to face the facts of economic life in the world economy. I want to stress my hope that the Canada Development Corporation will help us develop a small business program, particularly in the technical fields and related to opportunities in the world.
There is only one other point I might make at this time. We in Canada need an industrial or an economic policy of a kind that we have not yet put together. What we have are many pieces of a large picture. We have the PAIT program and we have a whole series of programs in the Department of Industry Trade and Commerce. We have our regional development programs and policies. We have our merger and competition policies, and now we have the Canada Development Corporation with some particular interest in developing Canadian enterprise. We have an emerging policy in respect of foreign take-overs and foreign investment. All of these are necessary elements of something more comprehensive.
What seems to be lacking, in this respect, and I agree with the hon. member for Etobicoke (Mr. Gillespie) who has expressed this a number of times in the House, is an over-all industrial policy into which these pieces will fit. Surely one of the main elements of that over-all policy would be something to help us select priority areas for the future. Should we be involved in electronics; perhaps we should. Should we focus on the communications industry; I think perhaps we should. Should we be involved in oceanology; we should, indeed, because we have coastlines and waterways with resources unmatched anywhere in the world. Should we be involved in the transportation field, the power field and in the nuclear field? I believe we should but we need a searching look at areas of probable competitive advantage to arrive at priorities.
What I mean by an industrial policy is the arrival at some kind of consensus that pulls together these kinds of fields we think hold the promise of life for future Canadian economic development. We would then concert the efforts of corporations like the Canada Development Corporation with combines policy and all other industrial policies. We will have to husband our resources very carefully and we will therefore have to adopt priorities and fit them into an over-all picture. We have to try to build again a kind of national economic policy of the stature of that which was created nearly one hundred years ago under Sir John A. Macdonald.
That policy known as the National Policy very simply set guidelines that helped to build up a Canadian nation.
February 23, 1971

It was based on railways, tariffs and immigration. There is of course a completely new set of circumstances today, but what I think we have to reach for is an overview leading to a new National Policy. I think the Canada Development Corporation will lead us closer to that particular policy.
This all comes at a time when we can no longer count on the inflows of foreign capital we have counted on in the past. The United States and the United States dollar have come to occupy a place in the world that was formerly occupied by Great Britain and the pound sterling. The United States is going to be obliged to adopt policies in the future with which we are not yet familiar, and in respect of which we now get exemptions because of our extremely close relationship. The U.S. economy can do severe damage to ours if the full force of some of the measures the U.S. may have to adopt in the future to protect the value of the U.S. dollar and to handle their trade balances in the world is applied to Canada.
Now that they have world responsibilities which are new to them, we can no longer afford to be so closely linked to the kind of world policy the United States will have to follow to discharge its world responsibilities. Indeed, these could be very harmful to us. We cannot count on continuing inflows of these dollars or on continued exemptions from general U.S. policies because of our special position. We must have new institutions to generate Canadian savings and put them into the most productive areas of our economy, ensuring also that we have profitable returns from very scarce capital resources. We must, therefore, proceed with haste. There is no time to be lost in launching this particular venture and I return to my opening remarks to state "at long last the CDC is here."


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in rising to speak on this bill in respect of the Canada Development Corporation one can be sure he is speaking to a bill that has been under discussion for ten years. Still, it will create an enormous confrontation before it becomes law. Even if it does, it will be years before it is decided one way or the other what the value of the Corporation is or in what direction it will move.
Every so often Canadian governments decide it is a good idea to become involved in big business. This present entry into business means the government is faced with a dilemma. Will it make policy or will it manage? If the government is to be involved in big business by means of the Canada Development Corporation, will it then be embarking on a policy which will result in the affairs of the country being so arranged that the Canada Development Corporation will be placed in a preferred position?
Mr. Walter Gordon, former Minister of Finance, may take some credit for the fact that his brain child, first suggested in 1961, has now come forward as legislation. There are some who say that the CDC, as envisaged in this legislation, is different from that proposed by Mr. Gordon. A close examination, however, would show that in essence they are the same, with all the disadvantages.
Canada Development Corporation
Mr. Gordon apparently had the idea that the CDC would sponsor and invest in large economic undertakings that would not pay returns for some years in many instances, but which presumably would benefit the country enormously. But the Minister of Finance (Mr. Benson) has stated that his corporation will be profit-oriented, and that the company will have a capitalization of $2 billion which will be put up either directly or indirectly by the Canadian people. Also, it will have the option of acquiring ownership of some presently profitable Crown corporations.
Apparently, Mr. Gordon saw his CDC as acquiring a controlling or substantial interest in Canadian companies, especially those that might have been sold to foreigners or Canadian subsidiaries foreign companies. It is interesting to note that Mr. Gordon and Mr. Melvin Watkins, the arch prototype of the new Canadian neo-nationalism, are both from Toronto and both indicate that the Toronto business interests, with their Montreal and St. Lawrence Valley counterparts, look on their areas as being Canada. Neither one has ever bothered to appreciate the appendages added on by confederation on which they look as areas to be exploited for their benefit in the interests of Canada.
The Minister of Finance claims that his CDC will not aim at buying back companies that have been acquired by non-Canadians, nor will it become a buyer of last resort for companies that are for sale or may be taken over by non-residents. The minister has stated that the CDC will be entirely free of political interference. Yet, at the same time, he also says the government will always be the largest shareholder. One well may ask in all seriousness how can it be expected that there will be no political pressure exerted on the CDC?
Very recently in this very House there was an outcry against the sale of an old, established Canadian publishing company to U.S. interests. Had the CDC been in existence, would there not have been pressure on it to buy up this company to keep it Canadian, profitable or not? And if the CDC had resisted this pressure would it not have come under severe criticism? Its prime purpose, by its very nature, must be to pursue national policies; otherwise, it would have no relevance to the national scheme. It certainly will at all times be urged to invest in business that private enterprise cannot or will not support. How this can be reconciled with profit making must be answered.
Now, the great appeal of the nationalist thinkers, concerned with foreign ownership, is that the CDC, functioning as a buyer of last resort, would actually block the acquisition of control by outside capitalists. The CDC under the new proposal is to provide opportunities of investment for people of small means. It is hoped there will be a rush of people with their $5 bills to invest and to secure a return on their savings. But if the CDC were to buy at the highest price for a political purpose, it would be much more likely to lose money than make it and, as well, the taxpayers, being large shareholders through the government, would lose also.

February 23, 1971
Canada Development Corporation
So, one can see the dilemma of the Minister of Finance and his argument not to become a buyer of last resort and not to be a tool of government policy, but instead to be an instrument for the mobilizing of our savings. The CDC is to be a large-scale source of capital to create major new enterprises, or to strengthen old ones, by means of all sorts of devious ways and with superb management. It will use its funds in concert with other investors to acquire existing companies and to make them more profitable, more competitive and so on, and thus goodness will follow in a nationalistic sense.
But even the former minister, Walter Gordon, on October 7, 1965, said:
The management of the Corporation must be guided in all its investment decisions by the criterion of long-term profitability. The over-riding objective of the CDC must be to satisfy the normal interests of its shareholders.
The bill, as drafted and presented, would seem to create an impression of change, that this company is not to be a Crown corporation and will not have to report to Parliament. I would presume the minister hopes that this subterfuge will make it less subject to political pressure. The idea that the investments shall be carried out by the CDC in the interests of profit making bears a little examination. Everything we do, whether private or public, is considered to be useful and to be profitable. Every investment we make we would hope would come out in the black. The former CCF government in Saskatchewan also hoped its blanket factories, its woodworking factories and its boot factories would be profitable, and no doubt was genuinely unhappy when they did not return a profit and had to be closed. Many times the government's judgment of profitability turns out to be merely hopeful, and many times just wishful thinking.
Because the government will be the largest investor it will certainly be under pressure whether it reports to Parliament or not. There is always constant exhortation at times to come to the aid of a private company, or sometimes even deter it. Just recently we had an example. Quebec has a development corporation. In 1966 it bought the Sogefor veneer plant at Maniwaki at a reported purchase price of $1.5 million. But the veneer plant has not been a success and has been losing money. Apparently, Quebec was ready to sell the firm for $500,000 to a U.S. firm. Local citizens have been up in arms urging Mr. Bourassa to intervene, and the same thing was asked of the minister in charge of Regional Economic Expansion (Mr. Marchand). Ottawa, at the present time, has no responsibility for the problems of Quebec but it would have if there were a CDC.
Then there is the problem of the External Affairs Committee. The committee suggests Canada establish a Canadian ownership and control bureau which would have the duty of safeguarding Canadian interests. Would not this control bureau exert on the CDC considerable pressure to have it intervene in areas that were dear to the hearts of the bureaucrats in the new agency that is still to be bom?
Now what is the purpose of establishing a massive new investment company, distinguished from all the gigantic

mutuals and so on, by massive government participation? We have the explanation that we are not generating enough savings and will be encouraged to do so by the existence of the CDC. In the beginning, at least, the government is to put up $250 million of equity capital which must come from the taxpayers. There could be much better ways in which investors could likely be induced to save, such as by tax cuts; but that avenue has not been favoured very much by the Minister of Finance. Even without the CDC, we find many opportunities for savings listed on all the business pages of every newspaper in the land. But we have consistently, in our new society, reduced the need for saving. After all, everyone who saves does so largely for a specific reason such as a bigger house, a car, the education of his family, for his old age, for sickness or for periods of incapacitation when he might be out of work. But our society has stated that all these things should be looked after as a matter of right. There is no point in saving for hospitalization which is paid for by the government through the taxpayer. The new white paper on unemployment is a form of guaranteed income, and by being made universal it guarantees that the individual, whether or not he makes himself available for work, will have benefits for many months.
Old age pensions and the guaranteed supplement are designed to help those in severe need. The Canada Pension Plan is designed along the same lines. Indeed, those on modest and low salaries could not hope to accumulate nearly the amount of money necessary to provide an income that these benefits provide. It seems doubtful that the many little people who make up the vast majority of our population will bother to bring their $5 forward so that the CDC will have its capital to carry on all the good things that it is supposed to do. People will not likely change their habits so that a great volume of savings can be accumulated if they are required to eat less, to give up new automobiles, new television sets, and so on. Indeed, if there were no new television sets, what would happen to the CBC? It seems unlikely that there would be any increase in the total volume of savings because the dollar cannot be stretched or invested in two places at one time any more than it could in the past.
In the matter of the CDC taking over the very profitable Polymer and the Northern Canada Power Corporation, there seems to be some inconsistency. Polymer has returned, after income tax, profits averaging almost $10 million a year for the past few years. According to the bill, the government will sell Polymer to the CDC at a fair and reasonable price to be agreed upon by the Governor in Council, that is the capital stock of Polymer. In a normal transaction, the seller seeks as high a price as possible, while the buyer seeks the lowest. In this case, the government has the duty to its taxpayers to secure the highest possible price for Polymer, but it is a case of the government negotiating with itself. Even if a private corporation were to bid for Polymer, apparently there is no means provided in the bill for a private interest to buy Polymer since that is to be the exclusive right of the CDC.

February 23, 1971
It is interesting to speculate on what would happen in the case of Home Oil, a subject which the House debated last week at some length. We were told by the Minister of Energy, Mines and Resources (Mr. Greene) that the U.S. owned Ashland made an attractive offer for Mr. Brown's holding and Cygnus. What would happen if the Canada Development Corporation entered a counterbid? By so doing, it would at least maintain the right of sale to the highest bidder. Or would it? Not if Mr. Brown were required to sell only to Canadian interests. In these circumstances, the CDC would only have to set its bid slightly higher than the highest Canadian bid. This would only be in part less satisfactory than being forced to sell to the Canadian bidder. Let us suppose, then, that CDC did offer the highest bid. Is CDC equipped to operate in such a high risk area as oil and gas, exploration and development?
Mr. Brown built up Home Oil by his willingness to take extreme risks. Perhaps he was also lucky. He played for high stakes with his own money and the money of others who knew what the odds were in that highly demanding business. Is CDC prepared to do this, at least in the beginning, with taxpayers' money? It is not likely that it would be prepared to do this. Home Oil, under CDC ownership is not likely to grow. Perhaps it could maintain itself for a while. Most oil companies must either continue to grow or must face slow death. What would this action have done for the Canadian economy? Very little, except to channel resources that could well have been used in more fruitful areas of the Canadian economy.
There seems to be little sense in having this bill clutter up the Order Paper at this time when we have a government reorganization bill that goes a long way toward revamping the whole government process. Furthermore, the superannuation changes in this bill will create a whole new concept in the civil service. There are many other aspects of Canadian life that are important and need attention, not the least of which is whether we have a centralized or a decentralized form of federalism. The CDC makes little sense. If it is aimed at appeasing the economic nationalists within the country, it will be only window dressing.
The CDC cannot hope to begin to cover those areas where activity in foreign takeover might be considered to be disadvantageous to Canada, unless it is aimed at taking over the whole economy. It would be much better if the government, in its handling of foreign capital, confined itself to making policy rather than attempting to manage individual businesses. Rules and regulations for foreign capital would be much more effective and give the government a better over-all perspective and judgment in the national interest. Crown corporations would deal in those areas where these rules and regulations would not apply. So far as economic nationalism is concerned, the CDC will not accomplish what the government hopes it will, even if it were possible to arrive at a consensus.
To those who see the CDC as a means of attracting many small investors, let me say that it seems doubtful
Canada Development Corporation
that it will significantly increase their participation. The way to increase savings is to make a bigger pie. The CDC will do nothing to increase the size of the pie. As I stated previously, the government, through its proposed white paper on taxation and many other ways, has indicated that it does not regard personal savings as being particularly desirable. Instead of setting up the CDC, progressive tax changes would be much more effective in increasing the volume of savings that the Canadian people might generate.
Mr. Speaker, I regard the bill establishing the CDC to be not particularly desirable at this time.


Mr, Doug Rowland (Selkirk):: Mr. Speaker, I feel compelled at the outset to say a few words which I hope will somewhat recast the rather distorted picture of the Saskatchewan economy, as it was under the CCF government, painted by the hon. member for Prince Edward-Hastings (Mr. Hees) and the hon. member for Dauphin (Mr. Ritchie). Each of those hon. members, in remarking upon the technique of public ownership, trotted out the hoary old bogeyman of the Saskatchewan boot factory as proof positive that it does not work. That is about as logical an approach to discrediting public ownership as it would be for me to spend some time citing the numerous private bankruptcies that occur in this country daily and weekly in an attempt to discredit the private sector of the economy. Surely, the point is that taken in total public enterprises in Saskatchewan had provided by 1960 a profit of approximately $22 million to the Saskatchewan people. Surely, the point is that in the 20 years in which Saskatchewan was under the management of a democratic socialist government it changed in character from a "have-not" province, one of the least economically developed in the country, one with some of the greatest social and economic problems, to a province which in 1964 under a new tax sharing agreement was designated as a "have" province.
Let me now turn to the bill creating a Canada Development Corporation which, perhaps better than any other piece of legislation placed before the House in recent years, illustrates the fundamental and irreconcilable differences between the New Democratic Party and the Liberal government. Faced with three economic problems of almost overwhelming proportions, the government has chosen the totally inadequate device of creating yet another private mutual fund to meet them. The problems to which I refer are the rapid and now almost irreversible trend toward foreign ownership of our economy, vast disparities in wealth and economic development as between the various regions of this nation, and our seeming inability to create the jobs necessary to accommodate a rapidly growing labour force and the needs of people being forced out of work by automation.
This government has consistently relied, for purely ideological reasons, I suggest, upon the private sector to discover solutions to the problems, and hence has never advanced beyond indicative planning in its own efforts to solve them. The government has been consistently disappointed by the private sector in each of its efforts, but
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February 23, 1971
Canada Development Corporation
here again in this legislation it expresses its naive and somewhat pathetic hope that its friends and allies in business will, for a change, deliver. I say naive and pathetic because one need only look at the monumental disasters which are the DREE program and the voluntary restraints program of the Prices and Incomes Commission, in order to see that such an approach has never worked and is never likely to work.
The Minister of Finance (Mr. Benson) is presenting us with a bill which will create a private corporation completely beyond the influence of the government, motivated solely by the desire to maximize profits, and through some mental sleight of hand which I am totally incapable of following, suggests to us that this corporation, no different in any essential characteristic from any other Canadian corporation, will somehow accomplish what they have been unable to do, that is to see that the future development of our economy will take place under Canadian auspices, that the economy will be rationalized, and that Canadians will be made full partners in the economic development of the nation and, further, that it will develop a powerful and highly effective entrepreneurship. I predict that the success of this corporation in each of those areas of endeavour will be only marginal because the major purpose of the corporation will be to maximize its profits. Whenever the goal of maximization of profits comes into conflict with another objective, such as ensuring that future development of the Canadian economy takes place under Canadian auspices, profit will win.
In contrast to the government's conception of the Canada Development Corporation as another pool of private capital which it hopes will be employed in the national interest, the New Democratic Party has embraced the concept of a Canada Development Corporation which would be the key element, the key mechanism for implementing the planned development of our economy.
In Bill C-204 my colleague, the hon. member for Waterloo (Mr. Saltsman), has set out the objectives which we consider to be proper for a Canada Development Corporation. Mr. Speaker, I think it might be useful if I read them into the record. In clause 4 of that bill it is stated:
The objects of the corporation are:
(a)	to mobilize private funds and to channel them into investment serving the public interest of Canada as a whole,
(b)	to expand the public sector of the economy where necessary for the growth of the economy, for national planning and for increasing Canada's independence; the Corporation may also enter into consortium arrangements with private concerns where it has or can acquire effective control;
(c)	to act always as an instrument of government planning and development policy and be directly responsible to Parliament through the Minister;
(d)	to stimulate the rationalization and greater specialization of industry in Canada in order to create a more productive economy;
(e)	to be involved in regional development policies with provincial bodies and agencies in order to insure that every part of Canada capable of supporting viable development is extensively involved in the industrial future of this country;

(f)	to promote worker participation plans in enterprises established or assisted by the Corporation, as a model for such plans in industry generally;
(g)	to finance and develop new initiatives in research, scientific and technological developments which will increase the ability of Canadian industry to specialize and compete in world markets;
(h)	to assist companies and individuals to fashion economic opportunity out of inventions and to ensure that Canada derives the benefits therefrom.
In his speech last evening, the hon. member for Waterloo elaborated on each of these objectives and so there is no need for me to do so again here. Suffice it for me to summarize by saying that we conceive of a properly constituted Canada Development Corporation as being the major tool to be employed in correcting regional economic disparities, in repatriating our economy, and in bringing a halt to the export of jobs through the exporting of raw materials by developing secondary industries closely allied to our resource extraction industries. We see a properly constituted Canada Development Corporation as being a replacement for the ineffectual programs of grants in aid to private industry now being employed by the government through DREE and other programs in a fruitless attempt to overcome regional economic disparities.
We also see a properly constituted Canada Development Corporation as being the potential answer to many of the problems with which the Minister of National Revenue (Mr. Gray) must attempt to deal in his long-awaited white paper on foreign ownership. In short, we see a necessity to create a Canada Development Corporation which is financed by the public purse, controlled and directed by the elected representatives of the people of Canada in the interests of all the people of Canada. I have no hesitation in saying this because it is a basic premise of a democratic socialist party that the people of a nation possess the right and the power to agree on the use of their human and material resources through political decision. In this way they determine the nature and the purpose of their existence.
Our major national goals have remained unattained by governments traditionally allied to corporate interests. The major decisions affecting our lives are still being made on the basis of equating the profit of corporations with the good of humanity. Problems such as pollution and foreign ownership must by now have made it manifestly clear that we cannot rely on private enterprise alone to give us an economy designed for Canadian needs and to meet the normal human goals and aspirations which are part of each Canadian.
We say that in order to be worthwhile in any meaningful way, the CDC must be an instrument of public policy capable of responding to direction from the government of Canada. The CDC created in this bill manifestly is not, and I say so for the following reasons: First, the bill specifically states the corporation is not to be an agent of Her Majesty. Second, the bill specifically excludes the corporation from surveillance of Parliament. Third, in the creation of the board of directors the bill permits only a maximum of four directors to be appointed by the
February 23, 1971


Steve Eugene Paproski: Mr. Speaker, I rise to take part in the debate on Bill C-219, an act to establish the Canada Development Corporation. As a taxpayer, the first question is whether or not the Canadian government should be getting involved in this sort of corporation? It is time we took a good, hard look at some of the existing Crown corporations and government projects and asked ourselves whether it is the function of

February 23, 1971
Canada Development Corporation government to get into fields which are better handled by the businessmen or even left alone altogether. For example, it is quite acceptable for the National Film Board to produce documentaries aimed at encouraging tourism in this country, but by what right does the government use public funds to produce nudie flicks and the film called "Neighbours"? It has no more right to do this than it has to start producing dresses for sale.
It should be apparent that, if a project is any good at all, the funds will be forthcoming from the private citizens. Whenever it is necessary to force funds into the project from taxation dollars, it invites the supposition that the project is not viable and is therefore undertaken for one of the following reasons: First, although uneconomic in itself, it is necessary for the over-all requirements of Canada; second, it is being undertaken as a give away by the government as a means of ingratiating itself with sectors of the voting public. The former is fully justified and should be in the form of a non-profit operation designed only to carry out the specific task and not to emerge as a full-blown business enterprise. The latter, under the present government, seems to be unavoidable but still remains unacceptable to the Canadians whose tax dollars are being misused in this way. In brief, the public's money should never be used to bolster competition against the taxpayer himself.
If this policy is not followed, we have the situation, already existing, where the Canadian taxpayer is being forced to supply the capital from his taxes for competing enterprises. It is not unknown for Crown corporations to fail. The unfortunate taxpayers are again required to dip into their pocket to bail them out, knowing full well that they could have made a better job of these enterprises themselves. Clause 2 reads:
The purpose of this act is to establish a corporation that will help develop and maintain strong Canadian controlled and managed corporations in the private sector of the economy and will give Canadians greater opportunities to invest and participate in the economic development of Canada.
The concept of the CDC is sound, provided that it does not compete with the business people of Canada.


Mr. O'Connell:: Mr. Speaker, would the hon. member permit a question?


Mr. Deputy Speaker:: Order, please.


Steve Eugene Paproski: Not in the time I have left now, Mr. Speaker.
The Corporation must not be used as a dumping ground for existing government failures. There will be a tendency, during the clamour and glamour of creating this corporate Sir Galahad who will defend our shares against the invasions of tarnished, blood-sucking, identity-destroying, but badly needed, foreign capital, to slide a couple of the government's duds under the blotter and to hope that they will go unnoticed.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: This must not be allowed to happen, and all the many rules and requirements demanded by the

Minister of Consumer and Corporate Affairs (Mr. Bas-ford) regarding full disclosure by other corporations must apply in their entirety to the CDC. A full scale prospectus must be issued, not only for the purpose of inviting subscription for shares of the corporation but also to let the people of Canada know where the extra money is going to come from, if the capital subscribed is not sufficient to carry out its plans or if the corporation becomes solvent. Again, if government guarantees are contemplated the nature must be fully explained and a statement given as to what government guarantees will be available to other private corporations in similar circumstances.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. 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)-Trade-Development of US markets for Atlantic provinces, products-transportation facilities; the hon. member for Vancouver-Kingsway (Mrs. Maclnnis)-Administration of Justice-federal intervention in action brought by teachers respecting British Columbia Order in Council; the hon. member for Port-neuf (Mr. Godin)-Income Tax-new assessments for 1968 and 1969.
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 and notices of motions.



PRIVATE MEMBERS' PUBLIC BILLS


Richard Russell Southam: that Bill C-28, to amend the Criminal Code (Battered Child) be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, I wish to rise in my place this afternoon to support the principle outlined in my private members' bill, C-28. At this time, Mr. Speaker, may I take the opportunity of personally thanking the seconder, the hon. member for Dauphin (Mr. Ritchie), who is a physician and who fully appreciates the importance of this bill. In view of the importance of this bill, and for


February 23, 1971

the sake of brevity, may I read the amendment and then refer to it at greater length. The bill reads as follows:



BILL C-28

[Stage Direction]
An Act to amend the Criminal Code (Battered Child)
Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
1. The Criminal Code is amended by inserting therein, immediately after section 189 thereof, the following:
'189A. Every one, being a person entitled to engage in the practice of medicine under the laws of a province, who fails to report, within seven clear days of the day he has knowledge of the facts, to the Attorney General of that province any bodily injury to a child which, in his opinion, may have ben caused by maltreatment, is guilty of an offence punishable on summary conviction and is liable to a fine not exceeding five hundred dollars or to imprisonment for a term not exceeding three months or to both fine and imprisonment.'
More and more Canadians, Mr. Speaker, are becoming deeply concerned about the increasing number of children who are being seriously abused and, in many cases, permanently maimed as a result of maltreatment by their parents or guardians. It is in order to rectify this situation to some degree that we should place a deterrent in the law. The bill seeks to amend the Criminal Code to require a member of the medical profession to report to his provincial Attorney General within a week any bodily injury to a child which, in his opinion, may have been caused by maltreatment. In the course of centuries, progress has been made in protecting the interests and well being of children. One can compare the situation today with earlier periods when parents used to wield absolute power over their offspring's life and death.
Despite considerable social and legal progress in the protection of children, the problem of their physical abuse continues to cause serious concern in present day Canadian society. The growing awareness of and the increasing interest in the phenomenon of child abuse on the part of physicians, educators, social workers and lawyers as well as the public at large, must lead to the enactment of legislation requiring medical personnel to report incidents of suspected physical abuse of children to appropriate authorities. Child abuse legislation is essential.
I would like, Mr. Speaker, to outline briefly the purpose of this bill. The purpose of this bill is to require a member of the medical profession to report to his provincial Attorney General within a week any bodily injury to a child which, in his opinion, may have been caused by maltreatment. The provincial Attorney General would then be in a better position to protect children, to lay the appropriate charge and to ensure the future protection of the child and any other children in the custody of a person afflicted with a 'battered child' syndrome.
The objective of reporting legislation is to improve mechanisms for case finding and to assure protective services for the abused child, his siblings and his parents. A secondary purpose will be to obtain a better understanding of the extent and nature of the phenomenon than is possible when only a few selected cases come to
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the notice of health, education, welfare and law-enforcement authorities. In the United States, reporting is mandatory in all but six states, Alaska, Missouri, New Mexico, North Carolina, Texas and Washington. The swift passage of legislation in the 1960's has made it possible to obtain systematic information on the number of legally reported incidents of child abuse throughout the United States. In this way, a study of the causes, distribution and families involved can lead to solutions of this very serious problem.
This bill will become the first step to redress the conditions which still allow child battering to happen time and time again in this country. It is a very sad situation when a battered child re-appears successively three or four times to be treated in hospital without any steps being taken to stop these actions. This is done, not because doctors are not conscientious, but because parents or relatives or authorities who bring the children to a doctor for treatment are not required to return to that doctor they may send them to a new doctor. The lack of a registry of these cases renders checking up very difficult if not impossible.
Commenting on the problem, a Regina doctor had this to say: "People who maltreat children rarely bring the injured child back to the same doctor. The result is that a doctor believes he is dealing with a first instance every time. It is a pity there isn't some way in which information on injured children could be circulated among the medical profession." Clearcut legal procedures which demand that the doctor report the use of physical force is likely to produce the strongest possible reduction in the incidence and prevalence of physical abuse of children. Doctors and hospitals can play a vital role in promoting child safety. The Department of Health and Welfare should meet the provincial authorities so that hospitals can develop procedures for handling suspected cases of abuse. The physician needs and deserves support in this field. This bill affords him exemption from suits since he will be acting according to the law and will encourage reports of cases of abuse.
One may well ask, why do we need a federal bill? Some provinces have enacted legislation protecting persons reporting cases of child battering. This protection exists in Ontario, Alberta and Nova Scotia. But there is a clearcut need for a criminal code provision to provide both uniformity and better protection for both doctors who report and children who are battered. The existence of legislation on child battering can, in itself, be a deterrent. It will deter the cultural attitude permitting the use of physical force in child rearing.
The Canadian Medical Association, along with many other professional associations, has pressed for legislation on this problem. I propose then that the bill being debated today be sent to committee, where representations by experts will demonstrate how essential legislation is on this issue. I believe this to be a worthy and important amendment to the Criminal Code, and I commend this bill for the serious consideration of all hon. members.
[Stage Direction]
February 23, 1971
Criminal Code
Mr. C. Terrence Murphy (Sault Sie. Marie):: Mr. Speaker, I, too, am most sympathetic about the problem raised by the hon. member, the problem that has become known as the battered child syndrome, as well as about some other problems that the bill attempts to solve. The problem of the physical abuse of children is very old. It dates back to the time when the father had the power of life and death over his child, to the time when parents used to sell their children into slavery and to the time when some fathers went so far as to mutilate children purposely so that they might evoke more pity from alms givers. That this problem is still with us despite everything we have done about it is made abundantly clear in an article in Newsweek magazine of June 3, 1968, which reads as follows:
Now that many of the older childhood diseases have been brought under control, pediatricians are paying increasing attention to the battered child.
'More children under 5 die every year from injuries inflicted by a parent or guardian,' reports Dr. Ray E. Heifer of the University of Colorado school of Medicine, 'than from tuberculosis, whooping cough, polio, measles, diabetes, rheumatic fever and appendicitis combined.' Although complete figures aren't available, Heifer estimates that at least 60,000 children are wilfully beaten, burned, smothered and starved every year in the United States.
The difficulty really is this: this type of abuse usually is not deliberate, in the sense that it was deliberate in the old days when a father injured his child in order that its injuries might evoke sympathy from the alms giver. The syndrome, as it is known today, arises from parental inadequacy, immaturity and a lack of ability to cope with the problems of today. These parents are people with problems. They have personality defects. They are neurotic, emotionally disturbed and some are mentally ill. To give an example, I wish to refer to an article on this subject which appeared in the November 7, 1969 edition of Time magazine. I quote:
In a study of 60 families with battered children, University of Colorado Psychiatrists Brandt F. Steele and Carl B. Pollock discovered one characteristic all these parents had in common. As children, they had been battered themselves, either physically or emotionally:
The article continues:
The pattern repeats itself when such children grow up and have children of their own. Overdisciplined and deprived of parental love in their infancy, they look to their own children for what they missed.
Such parents feel in effect that a baby who wets his diapers or hurls his Pablum at the ceiling is demonstrating that they are failures as parents. One young mother went into an all-day fit of hysterics because her young son refused to keep his coat on outdoors. Another told Colorado's investigators: "I have never felt really loved all my life. When the baby was bom, I thought he would love me. When he cried, it meant he didn't love me. So I hit him."
This battering and deviant behaviour is an outer symptom of something wrong mentally or emotionally. Parents who abuse children are people who react violently to their own unmet needs. They need outside help. Who are these adults? Strangely enough, 50 per cent are male and

50 per cent are female. The average age of the mothers is 26 and the average age of the fathers is 30. They are labourers, farmers, blue-collar workers, white-collar workers and top professional people. Some are in poverty, some are relatively wealthy, but most are in between. They live in large metropolitan areas, small towns and rural communities. Education ranges from partial grade school to advanced post-graduate degrees. It is clear that age, race, sex, economic level and occupation sire not in themselves signs of the child abuser.
I wish to refer to a paper prepared by the Children's Division, The American Humane Association, in 1968. I quote:
Early in this decade, the child victim of parental abuse was labeled ''The Battered Child." Much has been written and said about the ''Battered Child Syndrome", that constellation of symptoms which, viewed together, unerringly point to a medical diagnosis of a physically abused child. Thanks to the medical profession the multi-faceted problem of the battered child has been given national recognition as a community problem of high priority order.
In medical conferences at state, regional and national levels and in the many state and local medical journals this has been a topic about which the profession as a whole has expressed great concern. The matter has been given even greater emphasis by pediatricians and roentgenologists in hospitals and clinic settings who are recognizing a responsibility toward the abused child-a responsibility which for too long has been ignored. Their concern stems from the fact that they frequently fail to properly diagnose the "Battered Child Syndrome" for what it is because they accept the glib stories of parents about the injuries resulting from accidental cause.
Numerous articles in medical journals place responsibility on the medical profession for properly identifying and diagnosing these conditions and for alertness to the signs and symptoms which spell physical abuse of children. These articles also express frustration in that when such cases are found, the community is often ill-equipped to fully protect and safeguard the welfare of these children.
I have been speaking about the battering parent. The real object of our affection should naturally be the child. How can we protect a child against this abuse? Studies have indicated that throughout this country and the United States there is no single pattern, but a number of approaches. Children's Aid Societies and children protection services are found in various cities, states and provinces. We try to help the child in other ways, such as through the use of the juvenile courts. Finally, there is the role of the police and the prosecutor, the criminal law, to punish the abuser of children.
The Children's Division of the American Humane Association states that prosecution of parents is least likely to provide proper protection for the child. There are a number of reasons. First, in any prosecution in a criminal court, the Crown or the prosecutor must prove the guilt of the accused beyond a reasonable doubt. In child abuse cases, this is often impossible, because the parent who is going to bat his child is not going to do it on Wellington Street on the Sparks Street Mall. The battering takes place in the privacy of the home. Therefore, obtaining proof which will result in a conviction is most difficult. In most cases where this procedure has been followed, no conviction has been registered. The parent trots out of the courtroom free.
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As a result of this, the hazard to the child is increased. First, the child continues in the custody of the parent who has been acquitted on a charge of battering and is, therefore, available to be battered in the future. Second, there is a bitterness on the part of the parent which is likely to be expressed in brutality toward the child in the future. Third, the parent who has been acquitted of this behaviour sometimes looks upon his acquittal as a licence to continue this behaviour in the future. As a result of these prosecutions, in many cases the state of the child is worse than before the prosecution was instituted.
There is another problem with prosecution as opposed to treating outside the courts. If a parent who is inflicted with this illness, I will call it, knows that if he goes to a doctor, the doctor must report his behaviour to a police agency, it is highly unlikely that the parent will bring the child to a doctor or to any medical person. He knows that he might likely be charged if the child is presented to a doctor. Although the child may need medical treatment, that treatment is not forthcoming because of the fear of the parent.
Prosecution leads to another aspect. Prosecution brings with it punishment. Under our Criminal Code, parents who are guilty of battering or striking their children are subject to penalties, either fines or imprisonment. This type of punishment does not get to the root cause of the battered baby syndrome. The root cause is mental and emotional instability and we shall never get at this by prosecuting the parents. The bill before us would make it compulsory for a doctor, within seven days, to report to the Attorney General of the province any injury to a child which in his opinion might have been caused by maltreatment. [DOT]
With respect, I cannot agree that a doctor should be required to report to the Attorney General. Implicit in this arrangement is the idea that the Attorney General will then take action against the parents; the Attorney General is a prosecutor, an enforcer of the law. To support my position, I should like to quote from a paper prepared by a Dr. Schlesinger, an assistant professor in the School of Social Work at the University of Toronto- or he was in 1964 when this paper was prepared. He states:
Many authorities in human welfare, including doctors, lawyers, judges, social workers and other child care experts, have felt that we need to introduce strict laws to deal with "child cruelty".
Doctors, probably more than any other group, are a prime source for "finding" abused children because children are brought to them for treatment. Doctors are also best qualified to determine whether injuries are the probable result of accident or physical abuse. Therefore, it is necessary that they be legally freed to take responsible action on behalf of abused children, and for reporting these cases to an appropriate agency. That agency will then accept responsibility on behalf of the community to fully protect the child.
Such legislation must be directed to medical practitioners and hospital personnel coming in contact with children for the purpose of examination and treatment of injuries sustained allegedly from accidental or other causes.
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He goes a step further, as I would. Not only doctors but hospital personnel should be required to report such cases.
Our doctors and hospital personnel should have mandatory responsibility for reporting all cases of child injury where medical diagnosis and findings are incompatible with alleged history of how injuries were sustained and the syndrome leads to the inference of "inflicted injuries".
Doctors and hospital staff members reporting cases of suspected inflicted injuries should be made immune to possible civil or criminal action for the disclosure of matters which might be considered confidential because of the doctor-patient relationship.
This is a key point, because in the absence of this immunity I doubt whether any doctor would report. Unfortunately, the federal Parliament cannot confer this immunity from civil prosecution; only the provincial parliaments can do that. The writer of this paper continues:
All reports of cases of suspected inflicted injuries should be made to the public or voluntary Child Welfare service which carries the child protective function in the community.
In other words, Dr. Schlesinger says there should be a mandatory report and that the report should be to child welfare agencies who would then take responsibility for the child in question. And this is what we are trying to do, help the child. Supposedly, and hopefully, these agencies would also direct the parent to the proper medical authority for treatment.
Finally, the doctors or the hospital staff concerned would be protected from any civil or other proceedings which might result from their actions in making a report. I submit that the bill we are considering does not meet these standards. I maintain we should work together to bring pressure on the Minister of National Health and Welfare (Mr. Munro) and on the Minister of Justice (Mr. Turner) to get together with provincial ministers so that in every province there would be legislation making reporting mandatory in such cases, and providing for immunity from civil action. In this way, each province would afford to children the protection which is necessary and which only the province can provide.
As the hon. member stated, there is already some legislation in effect in Canada. In British Columbia there is the Protection of Children Act which requires every person having information of the abandonment, desertion, physical ill-treatment or need for protection of a child to report the information to a Children's Aid Society or to the Superintendent of Child Welfare or his duly appointed representative. This provision applies notwithstanding that the information may be confidential or privileged. The punishment for breaking a provincial statute is a fine not exceeding $500.
In Alberta, there is a child welfare act, section 39(1) of which states:
Every person having information of the abandonment, desertion, physical ill-treatment or need for protection of a child shall report the information to the director or to any supervisor of the Department of Public Welfare or to a municipal welfare director or to a solicitor acting on behalf of the Department of the Attorney General.

February 23, 1971
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In this province alternatives are provided. Further on, the section states that the above provision applies-
-notwithstanding that the information is confidential or privileged, and no action lies against the informant unless the giving of the information is done maliciously or without reasonable and probable cause.
So, the protection to which I have referred has been provided.
In Ontario, there is a section of the Child Welfare Act which provides that every person having information of the abandonment, desertion, physical ill-treatment and so on of a child shall report it to a children's aid society or to a Crown Attorney. Again, an alternative is provided; it is not mandatory to report to a Crown Attorney or to a law enforcement official. Recognition is given to the special role which the social agencies can play.
In Nova Scotia, the act of 1967 contains a similar provision and requires the report to be made to the Children's Aid Society or to a director of that society. Again, in that province, protection is given to the reporter unless the report is made out of malice or without reasonable or probable cause.
So, I am afraid that while I support the principle behind the hon. member's bill, while I support just about everything he said in his presentation, the measure he recommends does not fit the needs of the situation. As I said, we should work together to exert pressure in the proper places to persuade the provinces to take action, as has been done in the United States. The hon. member told us that all but six of the states had passed legislation giving this protection. My information, it may be later, is that 50 of the states plus the District of Columbia and the United States Virgin Islands have all made provision for this kind of mandatory reporting together with the involvement of the social agencies and the statutory immunity which is required.


Some hon. Members:: Hear, hear!


William Gordon Ritchie: I should like to commend this bill to the House. I hope it will be sent to the committee where evidence can be given by interested authorities and brought to bear upon this subject.
In recent years, hospitals, doctors and local authorities have been faced with a situation which appeared to be quite new and unusual. However, this probably has been around since time immemorial but only in recent years has it been catalogued and brought to the attention of society at large. For want of a better phrase it has been called the 'battered baby syndrome'. It is not strictly confined to babies; there are cases involving children up to four and five years of age. With the idea that parental love would take care of children, society has been loth to face up to the possibility that a baby's bruising or fractured bones could have been caused by injury by the parents. This is not an easy fact to accept, especially when one of the parents may well bring in the child for medical aid.
The first clearly identified cases in Great Britain were reported in 1963. The United States have been reporting
[Mr Murphy.]
them since 1946. For some reason, the firstborn in a family seems to set the pattern, and where the firstborn is battered, subsequent children are prone to be battered. In England, the records of the National Society for the prevention of Cruelty to Children indicated there was a 13 to 1 chance that a subsequent child would be injured by the parents. They also reported that parents in the age group of 20 to 30 appeared to have long-standing emotional problems. Many of the fathers had criminal records and were unemployed at the time of the incident. Perhaps unusual is the fact that the families are usually small. To some extent, the violence of the assaults and the infancy of the victims set these cases apart from the older children, although the boundaries cannot be clearly defined. Medical authorities are becoming more on the look-out for these children because, unfortunately, the case of the child who is battered once may well turn up again. The same report gives examples of physicians and hospitals failing to spot the cause of injury and unsatisfactory after-care arrangements being made by many hospitals despite the evidence of reported, unexplained injuries.
The problem of what to do when a physician finds himself in charge of a battered baby is not easy. First, it is difficult to know whether the bruise is the result of a battering or a fall and injury that overtakes small children from time to time. But it is generally considered that doctors have a duty to perform as citizens as well as being medical advisers. In England it is generally considered better to contact the children's department of the local authorities rather than the police.
An analysis of this problem would indicate that it is deep-seated and psychological. Whether or not society may best control this abuse of children through the Criminal Code is debatable. It would seem to be an area where the law, psychology, sociology and medical disciplines are involved. I would like to see this bill sent to committee for further study, and I think action could well be taken in respect of the final suggestion in the bill.


Mr. Warren Allmand (Nolre-Dame-de-Grace):: Mr. Speaker, the matter referred to in this bill, the battered child syndrome, is one of the most widespread social and medical problems in our society, as has been pointed out by my colleague the hon. member for Sault Ste. Marie (Mr. Murphy). Whenever we read stories of child abuse we are deeply touched and often prompted to anger and action.
In recent years there have been several recorded cases of extreme cruelty directed at children by their parents. We often find it difficult to understand how an adult can harm a small child. The hon. member for Sault Ste. Marie rightly pointed out that this is often due to parental inadequacy, emotional disturbance and mental illness. The important matter for us as legislators is the determination of what is the best way of dealing with the problem. The present bill is an attempt to do this. While I support some provisions of the bill, I have serious reservations about others. I have been greatly assisted on this subject by one of my constituents, Mrs. M. A. Smith
February 23, 1971

who is a social worker at the Montreal Children's Hospital. She has provided me with some worth-while information and comments on this whole problem.
My first reservation in respect of the bill is the obligation to report a case of child abuse under the criminal law. I realize that this bill is merely a method by which the hon. member for Qu'Appelle-Moose Mountain (Mr. Southam) can put forward his concern regarding the subject matter and the need for legislation. I submit, however, that what is required is comprehensive law, whether it be national or a series of provincial laws, which will accomplish two things: first, protection of children against abuse and, second, rehabilitation of a family, either the mother or the father or both, responsible for child abuse.
Such law should contain a compulsory reporting procedure. The reporting procedure should go further than that suggested in this bill. The reporting procedure should include nurses, social workers and teachers, in addition to doctors. I understand that some 50 states of the United States have such a reporting law and require nurses, teachers and social workers to report cases of child abuse or battered children, as well as doctors. This is necessary because if you merely require doctors to do the reporting, some parents will not bring their children to doctors. Other people may come to know about the problem, such as the teacher in school, nursery school, kindergarten, social worker or nurse in a clinic. It is necessary that these other categories of persons be obliged to report cases of battered children as well as doctors.
Secondly, such a law must protect a person who in good faith reports the case of a battered child, that is, protection against liability if the facts reported are found to be wrong. As you can well understand, if a nurse, teacher or social worker did not have this protection they might be very hesitant to report the case of a battered child. Thirdly, law on this subject should set out the agency to which the person must report and it must be someone other than the Attorney General. It might be that the Attorney General would delegate an authority. As has been pointed out by the hon. member for Sault Ste. Marie, this could be the Children's Aid Society or, in the province of Quebec, the social welfare court or another group which deals with family problems.
The reason for this is twofold. First of all, the Attorney General is more concerned with punitive procedures than rehabilitation. What we need in a law like this is a method of treating the parents. If the parents are merely convicted or fined, the child may be returned to them and harmed again, or other children may be harmed. If this happens, we have not solved the problem. That is why I do not believe the criminal law is the right vehicle to deal with the problem of battered children.
Reporting of these cases should be to an agency which is able to carry out rehabilitative procedures in respect of the parents. One reason for reporting to other than the Attorney General is that most provincial Attorneys General are too far from localities in which cases of battered
Criminal Code
children occur. Another doubt I have about the reporting procedure as set out in the bill put forward by the hon. member is the requirement to report within seven days. I am not a doctor and I do not know whether a doctor, a teacher or anybody else who might be required to report can carry out a proper investigation within seven days of his knowledge of the injury. Seven days may be sufficient, but that is a question on which I should like more expertise.
In addition to the compulsory reporting procedure, a system of rehabilitation for the family should be set out in law. This is essential. As I said before, the best way to proceed is not through the use of the traditional criminal law. In the last few years such a rehabilitation program has been set up at the Montreal Children's Hospital. Its purpose is to deal with the parents so that the child eventually may be safely returned to the home. The program at the Montreal Children's Hospital is based on a similar program in the United States, at the Colorado medical centre, where much research has been done on this subject and where treatment is provided based on the medical, social, psychological and legal aspects of the problem.
Finally, I believe there is need for a great deal more research, information and statistics in this area. Last year very few cases of this nature were reported in Montreal. I have here the exact number of cases, and it is rather surprising. At the Montreal Children's Hospital only two cases of child abuse were reported each month, but the authorities know this is only the tip of the iceberg. In 1967, there were 6,000 reported cases of child abuse in the United States, and the potential was even higher. In the state of Wisconsin, with the implementation of compulsory reporting, it was found there was a 30 per cent increase in the number of identified cases in one year. Canada is very short of statistical information and research in respect of the battered child problem.
In conclusion, Mr. Speaker, I urge the minister and his parliamentary secretary, who is here today, to take note of this bill and the arguments put forward in the debate and to implement a comprehensive law to deal with the problem. If it can be done at the national level, I urge that a government bill be introduced in this House. If not, I urge the Minister of Justice (Mr. Turner) and the Minister of National Health and Welfare (Mr. Munro) to give leadership to the provinces so that law of this type may be introduced in the whole of Canada.


Mr. Ovide Laflamme (Montmorency):: Mr. Speaker, I have listened with great interest to hon. members' comments on Bill C-28, and particularly in regard to the social unrest which may develop when we have to deal with parents who do not shy away from physical or mental cruelty towards their own children.
Although I fully agree with these ideas and compassionate feelings with regard to these social ills, I wonder if this matter is being dealt with by the competent
3686

February 23, 1971
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authorities and if moreover this bill really seeks to solve the problem.
The bill provides that a doctor must report within seven days on any physical harm inflicted upon a child.
First of all, I would like to point out to my hon. friends who have supported this bill that it is all very good to express compassionate feelings but still one must seek whatever is practical, and feasible.
If we make it an obligation for the doctor to report any physical harm inflicted upon children who have been brought to him for treatment, then we must advise as to whom his report is to be made. And once this report is filed, what will happen next?
It is a well-known fact that according to the Canada Evidence Act, in criminal cases, the doctor or any other person may not bear witness to acts of which they have no knowledge. What else but a mere diagnosis can a doctor report? This, unquestionably, under the Criminal Code does not constitute satisfactory evidence liable to bring about conviction of a person we would like to see charged with a criminal offence.
If we make it compulsory for a doctor in such sympathetic circumstances to report to the Provincial Attorney General a case that comes to his attention in his medical practice, why not put under a similar obligation any person who is aware or has been made aware of any criminal act? Why impose such an obligation on this group in particular? For instance, would a physician be more competent to give evidence about something he has not witnessed than nurses in a hospital, neighbours or other children or other persons who might have been aware of the fact that some parents were inflicting bodily harm upon their children?
Even if the bill were adopted, even if we gave this responsibility to the physician, the problem would not be solved, because the physician, under the Evidence Act, would find it hard in his deposition to incriminate the person who could eventually be charged. The physician will report the case, but, as our laws require that a charge be laid, one must ask who would lay this charge? It would surely not be the physician, because it would be hard for him to make a deposition. He would only give a diagnosis which would in no way be related to the criminal offense. Furthermore, he may make a mistake.
I have read somewhere that, if a physician takes it upon himself to report to a public institution, either the police or the welfare courts, as are to be found in the United States and in Quebec, his responsibility is at an end because he has, in good faith, and in the practice of his profession reported some actions that he suspects were carried out maliciously.
But if he is required by law to report what he believes to be a criminal offence, I think we are going too far and into a field where we shall find no solution.
I would rather believe that it is within the purview of a provincial law-the law on the medical profession since

we are concerned with doctors-that perhaps we could legislate so as to make clearer still the lack of responsibility of a doctor reporting any action which would have come to his knowledge in the discharge of his profession.
Under the Canada Evidence Act, I repeat that it is impossible for a doctor or for any individual unaware of a fact to be a suitable witness. Therefore, if we were to add a section to the Criminal Code, this would obviously be meant to impose punishment on those likely to be found guilty, and this involves court action.
Conviction entails proof of offence. Now, a physician is not likely to give evidence leading to conviction. Here, his position is not made any better than that of any other citizen, not even that of the ambulance driver called upon to carry a child that was battered by his father or mother or, still, his older brother.
I do not believe that this bill, although introduced open-mindedly and designed to redress the occasional deplorable situation in our society, has its proper place in the Criminal Code, any more at least than other indictable offences under the Criminal Code.
If the Criminal Code called upon any individual to report to police the presumably indictable offences of which he was aware, why should we make a special distinction in this case?
Besides, the medical practitioner, as other members of the learned professions, discharges serious responsibilities towards the individual and, according to our law, his profession also enjoys privileges, including secrecy. The matter is extremely important.
Of course, a member of the medical profession, under the law, must, in certain instances, report the treatment he gave a patient. Now, as this privilege derives from civil rather than criminal law, a legislation in that respect under our constitution should logically be enacted by the provincial government concerned.
The doctor must be free from professional secrecy at all costs. A doctor may report certain things and I sincerely believe that in some cases, one would not take offence at seeing a doctor reveal external facts he is aware of, without being considered for all that as an investigator. If he has enough sense of ethics to do so or to ask investigators to enquire, what evidence can he give?
And even if the doctor were required to report directly to the police facts he could be aware of in the course of his practice, he still has the right under provincial legislation to appear before the court if summoned to do so, but to refuse to give evidence, alleging as reason medical ethics that bind him according to the very nature of his duties.
Unless he is really free from professional secrecy and summoned, under the law, not only to appear but also to give evidence on the treatment he would have given to such or such person in such circumstances, here again, and I repeat, it is by means of provincial legislation and not by an amendment to our Criminal Code that we shall be able to really put more teeth in the law, and call the
February 23, 1971

attention of the people on such unfortunate cases that may happen whenever one has to report the battering of children in certain families, battering that may sometimes require emergency care.
While I must commend the sponsor of the bill for his good intentions, I have doubts about the practicality of such a measure. Indeed, if it were accepted and included in the Criminal Code it would be an exceptional provision by indicating that this is a crime completely apart from others and I submit that some provinces, as has been indicated, have proceeded in such cases under provincial legislation. However, such provincial legislation does not stress particularly the role of the doctor. It simply states that any person having information of the abandonment, desertion or physical ill-treatment of a child must report this fact. Then, if there is such an obligation for "any person" in any province, why should we place it chiefly upon the doctor in the Criminal Code?
And if in the past it has not been deemed necessary for individuals to report the commission of criminal offences by their neighbours or relatives, why should we use this principle in this case, namely in the case of doctors which come under provincial legislation and whose medical acts often have considerable legal consequences in civil law, and which can give rise to liability suits. Suppose that a doctor should report something which, in his mind, falls under the provision of this bill. If someone is indicted and later acquitted, this will inevitably give rise to a damage suit against the doctor who made the report. The doctor can only make such a report if the provincial laws concerning the practice of medicine cover such cases.


Mr. Speaker:: Order. The hour appointed for the consideration of private members' business has now expired.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Benson that Bill C-219, to establish the Canada Development Corporation, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs, and the amendment thereto of Mr. Salts-man (p. 3648).
Steve Eugene Paproski: Mr. Speaker, before we rose for the dinner hour I said that the concept of the CDC is sound provided it does not compete with the people of Canada, 23966-22\
Canada Development Corporation
and it must not be used as a dumping ground for government failures. I also said that the many rules and requirements regarding full disclosure by other corporations must apply in their entirety to the CDC.
I realize that the idea of assessing in advance what a plan will cost is brand new to the government. The normal procedure seems to be for it to barrel ahead with some half thought-out scheme, ignoring the cost completely, secure in the knowledge that Mr. Taxpayer is always sitting there waiting to contribute his hard-earned dollars at the drop of a hat. I imagine that one or two people have begun to wonder when they will have to stop paying more and more all the time, but probably most people would prefer to swallow the Minister of Finance's bitter pills rather than the substance which the Prime Minister (Mr. Trudeau) advised the truck drivers to eat.
There was a beautiful instance of the attitude of the government toward costs not long ago at a meeting of the Standing Committee on Finance, Trade and Economic Affairs. The committee was discussing Bill S-2, respecting Statistics Canada. This was at least the second day of discussion and the plan was being examined in great detail. The hon. member for Ontario (Mr. Cafik) asked:
Has anyone any estimates on how much that kind of input work will cost? It seems to me to be pretty costly for the large number of taxpayers in Canada . .. Have you any estimates of cost there?
The reply from the Dominion Statistician, Mr. W. E. Duffett, was:
We have no estimates, but one would have to work the thing out in very considerable detail in order to determine what the cost would be.
Just look, Mr. Speaker, at what this sort of thing means. On the one side you have the Minister of Consumer and Corporate Affairs (Mr. Basford) doing a fine job of protecting the consumers' interests right down to quality, content, advertising and price fixing, and on the other side you have departments selling so-called services to the public but they will not even tell the public what the price is. This is my concern about the CDC. Aside from all the ballyhoo about shareholders' subscriptions, what will it cost the public of Canada now and later? If the government does not know how much is required and where it intends getting the money, this is grossi incompetence and the government should get out of the CDC before it is even started.
If the government does know its cash requirements and proposed sources, and will not release this information, it is guilty of saying to the Canadian taxpayer, "What we do with your money is none of your business, and we'll make you pay anyway." I think that if we can get the CDC to disclose its plans to the Canadian taxpayer so that he can assess whether he wants to be saddled with it in the future, we will have made a great breakthrough so far as the government's attitude to the electorate is concerned.
I suppose it would be too much to hope that the Prime Minister would apply some of the maxims of the Minister

February 23, 1971
Canada Development Corporation of Consumer Affairs regarding disclosure to shareholders and to the public, and start reporting to his shareholders, the people of Canada. The Prime Minister has made no promises to the Canadian voters, but this does not give him a mandate to do everything and anything. The Canadian people did not give him permission to introduce a tinge of socialism into this country under the guise of a just society. In the unlikely event that the Canadian people ever grant this permission, they will still be entitled to ask what it will cost them so they may judge whether they want it and whether they can afford it.
If the Prime Minister's plans are produced piecemeal and on the spur of the moment, each of these plans must have its price tag so that people may decide if they want to buy it. It is hard to believe that a government would operate on the basis of hand-to-mouth planning, but the sloppiness in some government ventures so far seems to indicate that it does. If the wondrous plans which the government continually slaps on the counter for forced consumption by the public are in fact part of an over-all, long-range scheme, the Prime Minister must right now give an honest estimate of the expected cost to the taxpayer over the whole period covered by the scheme, so that the people in their wisdom may evaluate the costs and the benefits and, if they so decide, stop the expenditures before they are committed to expensive schemes which are not desired by the majority of Canadians.
In other words, the Prime Minister must take the trouble to find out what Canadians want and how much they are prepared to pay. But I suggest that this government does not concern itself with the taxpayer and its attitude is: What's another billion?


Mr. Henry Lalulippe (Compton):: Mr. Speaker, it is a great honour for me to participate in the debate on the bill presently before us and which aims at establishing the Canada Development Corporation.
I should like to emphasize the importance of this corporation in Canada and bring out the economic situation of our country, in the light of this gigantic development program proposed by the hon. Minister of Finance (Mr. Benson).
I do not feel that the time has come to create such a development corporation in Canada, because many areas of industry do not operate efficiently. Some industries are only producing at half capacity because they cannot find buyers for their products. I do not think that the establishment of a large corporation, at the expense of other related industries, will settle the problem. I am sure that if we establish large Canadian industrial centres, we will close less important ones and see a great number of industries stop their production or merely go under because the leading industries and finance will drive them to bankruptcy.
We have in the province of Quebec the striking example of the General Investment Corporation. The Quebec
[Mr. Paproski.l
government has made available to the province a broad manufacturing, industrial and financing organization.
At present, Quebec's General Investment Corporation has taken over several large industries and has modernized them by using all available techniques. This form of industrial financing did not increase greatly the number of jobs but it did cause the disappearance of several other industries that provided jobs. Those industries are now faced with overproduction which they cannot sell.
In many sectors, the General Investment Corporation has tremendous surpluses; warehouses are full to capacity. Some industries and some industrial complexes have to be closed because the overproduction cannot be disposed of.
I do not believe we will solve the problem by creating the gigantic financing company which the Minister of Finance wants to set up.
What amazes me the most with the establishment of this super industrial corporation, is the tendency of this government to try everything possible when it comes to financing overproduction while they turn down all the measures aimed at promoting consumption among the people whose purchasing power cannot buy the current production.
Current financing policies, as well as governmental assistance to economic expansion in designated areas, represent attempts at financing the overproduction of industries which cannot find a market for their products because people lack purchasing power.
When you finance new furniture factories in some areas, you only bring about the closing of other plants in neighbouring areas and shift the place of production. When you train new employees, you drive older, skilled and experienced workers into unemployment. The government is closing its eyes not to see that the trouble in our economy is not the lack of production, but the lack of purchasing power for the people to buy this production. The production stays on shelves, in stores, whereas the people who need it but lack money cannot buy it. The government is closing its eyes not to see that production is already sufficient, although 10 per cent of the population is unemployed, and although 60 per cent of the production is designed to meet the requirements of the consumers, who have no purchasing power to buy more goods and services.
Some refuse to see that in 1970, in spite of a production of $84 billion, the people consumed, exported and sold-by every means-only $50 billion, and that only $34 billion were left for future needs and the development of the country.
And above all else, there is this wish to set up a super governmental corporation of two billion dollars to increase national production when it already exceeds the purchasing power of Canadians.
Any production coming from this new Crown corporation will only serve to close down the small and average
February 23, 1971

companies which do not have the advantage of selffinancing, like the large concerns listed on the stock exchange, which benefit from the support of public capital never repayable and never subject to fixed interest rates, which are more and more exempt from federal taxes, with inconspicuous or secret reserves, exaggerated depreciations, disguised by all kinds of accounting devices, with the right to create new capital, under the more or less declared or stolen authorization of our government.
By means of granting similar privileges to private companies, the government itself has finally yielded to the temptation of establishing its own big Crown corporation under the sonorous title of the Canada Development Corporation, the CDC, listed on the stock exchange, with shares at fixed rates for the people and at accruing rates for its preferred shareholders, members of the family compact, of the establishment, untouchable and always respected at first, in the whole national economy.
There now, Mr. Speaker, we have our great government-controlled corporation, set on the same footing as the public exchanges in private enterprise, showing off for our benefit this mixture of unhealthy rivalry between the people's interests, those of private enterprise, competing against sovereign authority, drooping to its own level of economic activity, in order to enjoy the exclusive privileges granted private enterprise, but denied the people, the human being, the family and even the entire nation itself.
Prompted by the example of the larger companies that keep increasing their capitalizations from their yearly income, the government has decided to build up its own reserve of ever-lasting capital by means of taxation on pension funds, to create in the stock exchange its own means of action, in order to enjoy still at the people's expense the exclusive privileges granted to the larger companies in the private sector, at the million or billion dollar levels to be in a better position to compete with the small and the medium bracket enterprises, with the individual and family undertakings which are not burdened with administration costs nor with high salaries to be paid to university graduates.
What a queer parallel. Often did the government blame the larger companies for making extremely large profits, for building up excessively large reserves, for claiming exceedingly high depreciation rates, to disguise their way of creating capital on their published balance sheets.
The government has even been asking the banks lately to abandon one of their six practices, that is the concealment of their hidden reserves, while leaving the five other privileges untouched. They even have the right to create more credit since the new 1967 Bank Act was passed. But the same government is now playing the game of private companies. Instead of calling their privileges into question, of denouncing them and of suppressing them as it had started to do, in the light of the representations of people who have had enough of seeing the profits of big companies accumulate from year to
Canada Development Corporation
year, while they are deprived of their right to live and are unable to use the production they made for themselves first, and not only for these companies or government instruments, the government does not react at all.
The Minister of Finance should backtrack before it is too late. A bill is only a bill. It may be studied, introduced, discussed, and even rejected without humiliation, but after it is passed thanks to a majority government, in spite of a disconcerting opposition and any previous policy, this majority government may very well dig up itself the grave in which the Canadian people will bury it in the next election.
Let us recall Mr. C. D. Howe's famous pipeline. The very strong government of the right hon. Louis Saint-Laurent was its victim. The opposition was against the government's stand in this matter. The majority government did not take that into account, but the people gave its merciless verdict. The Saint-Laurent government was defeated. The hon. C. D. Howe disappeared, and the government subsequently withdrew the $80 million it had invested in a private enterprise.
Today, through Bill C-219 to establish the Canada Development Corporation, in spite of its sonorous title, it is not $80 million that the government wants to invest in private enterprise, but $2 billion to start with.
It is laying it on. This will be the greatest amount of capital ever granted to a Canadian company at its creation.
It would be advisable for the Minister of Finance to think it over some more. His daring is exciting but is it measured and justified? How calculated is the risk he is taking? If the government tampers with the exclusive privileges granted companies with floating capital listed on the Stock Exchange, is it in playing that game that it will protect the interests of the people who are asking for a better distribution of the goods they produce through large companies?
In reading reports every year the Canadian people see that the gap widens constantly between the poor who become poorer and the companies which become increasingly richer, leaving a great proportion of the population destitute with no hope of improving its lot.
Hon. Minister of Finance, I am addressing you-he is not here but I am addressing him just the same-and the others will understand-


Mr. Speaker:: Order. The hon. member should perhaps address the Chair rather than the Minister of Finance.


Henry P. Latulippe: Mr. Speaker, I will continue my remarks, but I have said nearly all I had to say about the Minister of Finance.
We are facing an alternative which, from somersault to somersault, may lead to even greater unrest than what we are experiencing today.
It remains to be hoped that the army of the bold and the courageous will meet the challenges and commit itself to build a prosperous Canada.

February 23, 1971
Canada Development Corporation
In Quebec, together with fortunate Canadians, the canvas of the future that we will be able to describe shall have to be lived by all Canadians, be they federalists, nationalists or others. It must be hoped that they are all willing to work for the prosperity of Canadians, throughout the country.
I think that in future, education will not be used merely to prepare youth for the labour market. Education, I suggest, aims at giving our young people the required tools for thinking so as to allow them to understand the very complex world in which we live.
This is one of the objectives that the government should consider, instead of creating useless corporations such as the one it wants to establish now, because it is not a problem of production that we are bumping against, but indeed a problem of economic balance. Production must equal consumption. The more we shall build and go towards production, the more we shall aggravate the present large unbalance. As a matter of fact, we experience this unbalance in our economic system and we have figures to prove it. I gave some earlier. The surplus of production will reach 34 billion this year and if we do everything to produce more who will buy the products? Where will we be able to sell them and what kind of stability will we assure the Canadian people?
The government must deal with all kinds of problems. It is fine to say: We shall produce and then export. But we must import as much as we export so there will be no change because that is not where the problem lies. If we could produce to help logically the needy countries and if we could secure the required markets before launching those vast organizations or investing this tremendous capital by taking it away from some to give it to a state corporation, if it was possible to export without importing, it would perhaps be a solution.
We have no agreement enabling us to export without importing. Finally, we must balance our trade. When our trade balance with other countries is unfavourable, we know how the serious the consequences can be. If we had merely exported our surpluses in exchange for goods which are not manufactured in the country and which are required by Canadians, we would then be logical. However, it is illogical and hardly imaginable to have more exports than imports.
Therefore we must prepare young people for the world of tomorrow through education. It is necessary that everyone gets his part to play in society so that this society will guarantee everyone the right to live in a logical way, to have his share of the immense progress which science and technology have made possible. That is where the government has to intervene. We must work, we must have recourse to experts in order to find a way to balance our economy which is not balanced at present.
While we may be enjoying life at present we must prepare the future; we must invent it and work it out. When Canadians will know collectively what they want, they work to bring about what they will have planned.

Right now, we know neither what we want nor where we are going by creating such organizations from which we will surely not get the services we expect of them.
We are now witnessing the phenomenon whereby one industry is born causing the disappearance of ten similar industries in the vicinity. Is there really any advantage in encouraging such a situation? The only result is the unemployment of hundreds of trained employees. We must avoid such upsets, while seeking ways to promote production and scientific progress in the field of finance, and this to the advantage of present citizens as well as future generations.
The government sticks its nose where it has no business. But it fails to intervene where it would be necessary, namely in financial institutions, for instance by financing existing industries. The government should rather build highways so as to allow industries to move their products.
I live in an area crossed by an express with six toll stations, while those who travel between Montreal and Ottawa do not have to pay tolls when using expressways. As for ourselves, because we are living far from large centres, we are compelled to pay toll charges on expressways.
We have no highway going to New Brunswick while the government could build one and thus promote contacts with the Atlantic provinces. Instead of this, we will set up giant industries and cram the warehouses with products. Then there will be no outlet and we will have to lay off personnel and ask the government to finance the deficit of these corporations.
For instance, the C.N.R. and a number of other crown corporations are not self-financing and they are always asking for subsidies to balance their budget.
Since private industry is able to balance its budget, it should be allowed to sell its production and make a small and reasonable profit. It works. The government has no reason to poke its nose into its business.
The future of the community should not be conditioned by present difficulties or failures. We must conceive tomorrow's society on the basis of the actual and concrete possibilities of a nation full of talents, resources and of needs to be satisfied. The government should endeavour to meet the wishes of our people who want to live and know their business.
I ask the government to keep on acting as it did until now. I want it to go a little further and to concern itself more with politics but with nonpartisan politics. Once we have reached this objective we shall have done something for this country. We shall recognize the importance of each individual instead of recognizing the giant organizations which have no heart or soul and whose managers are not responsible.
The responsible ones are the human beings who have the right to live. Should an economic policy be suitable for great corporations, it could apply to every individual.
February 23, 1971

to every family. It is the three-meals-per-day-formula, the expense-income, income-expense and profit formula. If a family has no income, it cannot have any expenses or profits. The government is forced to ear-mark 25 per cent of the budget for welfare. And the provinces do the same.
Such a decline cannot be entertained. Welfare benefits are not sufficient to get people out of poverty. They will not enable us to turn out men, to make a strong country, to make of Canadians happy people, people who want to live and have a right to live. We turn out people who are discouraged, rebellious. Such is the way the system operates now. There are causes to such unrest. As long as we do not try to find them, we will witness dreadful catastrophes. There have been some already. It will be worse than in the past if we do not adress ourselves to those causes.
The essential duty of a government consists in looking after the citizens, enabling them to live decently and not merely establishing institutions to compete with them and exploit them, by obliging them to depend on welfare benefits for their living. That is not the way for us to solve the problem.
On this matter, I would still have many things to say. I have here an article which was published in La Presse, on Saturday, January 23, 1971 and which reads as follows:
At the economic level, the true power of a nation is not reflected by its potential production but by its consumption capacity: under such a criterion, the United States would include ten billion Chinese, for the gross national product, despite its name, amounts to the consumption expenses of the nation.
Canada showed the truth of this assumption in 1970: antiinflationary measures introduced by Ottawa led to a reduction of domestic consumption, without altering the production potential. The country grew poorer and unemployment followed.
A reduction of the money supply, as decided by Ottawa, was an all-embracing measure that struck at the consumption centres: Montreal is the country's metropolis.
With a higher population enjoying a higher per capita buying power than Quebec, Ontario recorded in 1970, contrarily to what might be expected, a higher percentage of unemployment increase than our own province: between November 1969 and November 1970 the number of unemployed increased from 143,000 to 168,000 in Quebec and from 82,000 to 126,000 in Ontario.
Unemployment in Canada has its own particular features and factors which combined together in 1970 led to an inacceptable degree of severity.
The New Democratic Party has introduced an amendment to the effect that the government does not go far enough in its action and that it should become the sole owner of this industry. I find it difficult to,support this amendment but we shall not support Bill C-219 either for we believe that the time has not come yet to set up such a corporation at the expense of the Canadian economy.


Mr. Steven Otto (York East):: Mr. Speaker, I have read a great many prospectuses-prospectuses dealing with substantial companies, with companies just in the process of being formed and with companies selling gold bricks
Canada Development Corporation and moose pasture. Among them were some fantastic presentations. But having read the speech of the Minister of Finance (Mr. Benson) in introducing this bill for second reading, I must compliment him upon one of the finest presentations I have yet come across, a presentation which even the most experienced and sophisticated con artist could hardly have dreamed up.
I am not saying for a moment that it is in any way untrue; but it reads so beautifully, "-backed by substantial sources of Canadian capital and managed by skilled, experienced entrepreneurs, to help make possible fuller Canadian participation in the growth and development of Canada." If 1 were a buyer of shares I would rush out quickly to the nearest stock exchange to invest in this new corporation. But, Mr. Speaker, there is a long way to go between a speech and a successful performance.
I shall relate an incident in connection with the Canada Development Corporation which might exemplify what I am talking about. Some time in 1964, when the idea of such a corporation was being touted and considered in this House, I, being a fussy and particular young man decided I would make a search in the corporations branch here in Ottawa. Lo and behold, I found a company had been incorporated in 1962 under the name "Canadian Development Corporation". It was a public company, privately owned, and it had not begun any work. I did not want to buy any shares myself, but some of my friends were negotiating for the purchase of shares in the Canadian Development Corporation. Had they been less scrupulous than they are, they might have been in the market today selling shares in the Canadian Development Corporation just as this bill is going through the House. However, being good Canadians they agreed to my suggestion that should turn the company over to the hon. gentleman who was then Minister of National Revenue. He was surprised to learn of the existence of such a company. Fortunately, he was able to ensure that the owners gave up control of the company, and thus there is no longer the possibility of some sort of gain.
I have read carefully the speech which the minister made yesterday, and I have listened to debates on this subject for about six years. It seems to me that although the purposes are very fine, this enterprise will not necessarily be successful. If it is to be successful, a great deal of thought will be necessary and particular attention must be given to the quality of the administration. The bill itself appears to be a good one; it covers about every point. The potential is great. However, we should review the purposes as defined by the minister-to help develop and maintain strong Canadian-controlled and Canadian-managed corporations in the private sector of the economy. Why should it be necessary to develop and maintain Canadian control?
I want to make a few observations on this point for the sake of hon. members opposite who are so infatuated with the idea of Canadian control. The basis of free enterprise is making a profit. From 20 years of experience I can say that a company exists primarily to make a

February 23, 1971
Canada Development Corporation profit. Control goes to the one most able to control, and it does not really matter who controls the corporation. There has been very popular talk lately about nationalistic control. The fact is that the control is not very important, although it has a bearing on our history. Control should go to the able. This emphasis on Canadian control has been overdone. It is important that our young people have an avenue through which they can express their abilities. It is important that companies exist in Canada so that young executives can obtain training. This is important, because the executive category cannot be trained at universities; they have to be trained almost by apprenticeship.
It is natural that if a foreign company has control it will send its own people to oversee the management of the company. To that extent it is important that we maintain a measure of control or impose guidelines laid down for Canadian companies. This emphasis on control does not bear up under careful scrutiny. What is really needed is policy, and I can see how a Canada Development Corporation can indirectly influence that policy.
Let me refer to an incident where Canadian control might have some bearing. For many years United States companies have acquired vast holdings in the mineral industry in New Brunswick. These involve good deposits with good potential. The same companies also own and operate mines elsewhere in the world. Naturally, they will not close up those mines in order to open up new developments, even though they may be more efficient. This will not be done until the capital investment in other areas is depreciated. For that reason it is advisable to have a policy in Canada under which resources are exploited in accordance with national policy. You do not have to restrict control.
A policy could be set up for the exploitation of minerals, and every other conceivable product, without necessarily adopting the idea of Canadian control-because this does not mean anything. Canadian control means nothing. What we are talking about is control by people with the know-how to make a profit. The object of a corporation is to make a profit. We should examine rather sceptically this constant repetition of "Canadian control". I know it is politically astute to do this now because the public is aware that something is wrong with our economy and the finger is being pointed at control as though that were the issue-but it is not. The real issue involves management and policy as defined in the second part of the purpose of the corporation. The minister has said that the purpose is to give Canadians greater opportunity to invest and participate in the economic development of Canada.
The presumption is that such opportunity does not exist. This is nonsense. Every year Canadians invest approximately $800 million in U.S. corporations. They have the same opportunity to invest in Canadian corporations. Why do they not make this choice? There is a reason: they can get much better protection and value for their longer term investment in the United States than they can in Canada.

Before we move in a hodgepodge manner toward acceptance of the Canada Development Corporation, thinking it will be the panacea for all things, we must examine three structures. One of the reasons that Canadians prefer to invest in the United States rather than in Canada is our horrible tax structure. I use the word "horrible" quite advisedly. The tax structure in Canada does not protect the investor or even give him a fair shake. What we really have here is a group of people who con the Canadian into investing in corporations. Immediately they do so, they are at their own peril. We do not have the protection that is available in the United States.
The only purpose of our stock exchanges and the regulations under which they operate is to entice Canadians to invest money. Once they invest, there is no control and no one knows in what they are investing. The prospectus of a Canadian corporation very often reads like a fairy tale; there is no real examination of intercorporate transfers of shares or the speculation that takes place. In the mining business, for instance, about 11 cents of every dollar is invested in the mine and about 89 disappear in promotion and the games which stock promoters play. According to the manner in which we normally function, once a good enterprise becomes public-at some expense-there is no longer the need to produce; everybody gets on the wagon in order to make a buck. The speculators and the promotional experts share. Every time we have a good company and it goes public, people forget there is a purpose for the company and the shares fluctuate back and forth with no protection for the public.
Compare this with the United States system. Under the United States Federal Commission there is a procedure through which shares can be put out as public issue at a cost very, very much lower than in Canada. There are laws there which give the shareholders protective rights. They can question management and even the salaries of management. It is no wonder that United States corporations have shown a tendency to grow in strength over a long period of time. This does not happen in Canada. We do not have laws to protect our shareholders. Our laws are very simple-the majority of shareholders are protected, and the minority is not. There is no corporate law in Canada that protects the minority shareholder.


An hon. Member:: Join the NDP.


Steven Otto: That is a minority I would not like to join. It is a sort of perpetual minority which I do not think-


An hon. Member:: It couldn't get worse.


Steven Otto: I agree; it couldn't get worse. It is no wonder that Canadians invest in United States corporations. Before the minister goes all-out in putting this measure into force, he should look carefully at the stock jungle we have in Canada. It is no surprise that the sharpies in the business are not worried about this bill. They envisage the lamb and the beaver coming for shearing and they are sharpening their shears. They have had 50 years' experience in this business. With all respect to the minis-
February 23, 1971

ter, his officials and the people who will be appointed to this corporation, let me warn them that they may be at their mercy.
I am inclined to agree with the Minister of Consumer and Corporate Affairs (Mr. Basford) who has already stated that one of the essential things in our corporate and security exchange structure is a complete reformation. If this structure is reformed, there is reason and purpose for the Canada Development Corporation and I hope it will succeed. Again, I think we must reassess our presumption that the reason Canadians have not invested in shares in Canada is because they do not have savings. This is untrue: Canadians are among the highest purchasers of life insurance in the world.


An hon. Member:: And the life insurance companies buy the shares.


Steven Otto: It may be that the life insurance companies buy the shares, but Canadians themselves buy life insurance. If they buy shares at all, they buy penny stocks which they can sell a few days later for a profit. They are advised to buy a couple of shares of salami, and they do so in the hope that they can sell them tomorrow at a profit.


Mr. Bell:: Is salami going up?


Steven Otto: In 1955, when Ford of Canada was owned mostly by Canadians, Ford of Canada had a great advantage. Ford International was owned by Ford of Canada, and Henry Ford made sure that Ford in the United States could not own any part of its shares-so Canadians had it made. The shares were selling for perhaps $50 each. In 1956 the Americans made an offer to all Canadian shareholders on the basis of $75 a share when Ford of Canada was making money and Ford in the United States was losing money. Everybody in Canada sold out and made $25 a share profit. But those shares could not be bought today for love nor money.
Investment does not come from savings; it comes from dividends. It is the money you make as a dividend that you re-invest; it is not the money you have carefully saved. The United States accumulation of capital originated with whaling ships, oil, the slave trade and the spice trade-that was the beginning. Everytime a person receives a dividend cheque he uses that cheque to buy further shares-but it is not his savings. This is really
Canada Development Corporation
the issue. If we want Canadians to invest in Canadian corporations we must remove from their minds the apprehension they have-which is warranted-that they will be taken.
The role of the CDC is to guarantee to a Canadian investor that if he invests $1,000 in certain approved shares, the CDC will insure those shares so that he will not lose money on them. This is done every day in the commercial world, but only in respect of large sums. When the investor sees the stamp of the government of Canada he will buy shares and will eventually get into the habit of buying shares. This is a role for the CDC.
Mr. Speaker, I promised I would not be too long. I believe I have made my point. This is a good bill, but it all depends on how it is administered and who administers it. I believe that if it is properly administered, and if the minister takes into consideration the climate in which he will be dealing and the atmosphere in which he must deal, it could be successful. But if the minister thinks the climate now is ripe, and if he thinks he can be safe with the stock exchanges and the markets as they are today, I am afraid he and all of us will be very disappointed.


Thomas Miller Bell: Mr. Speaker, in view of the winter storm there is some thought, at least on this side of the House, that we call it ten o'clock and adjourn an hour early. This would have the advantage of getting us ready for the prayer breakfast tomorrow. Also, some of us may get home early and find that our wives have not completely shovelled out our driveways. At least it would be a gesture to our staff, who so far as I know are the only public servants in Ottawa who have not had the day off.


Stanley Howard Knowles: There seems to be general approval of this proposition, and we join in that approval.


Cyril Lloyd Francis: I presume this would also include the "late show", so that we would adjourn at this point.


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: I take it there is general agreement that this House adjourn until tomorrow at 2 p.m.


Some hon. Members:: Agreed.
At 9 p.m. the House adjourned, without question put, pursuant to Special Order.

Wednesday, February 24, 1971