1971-02-26

PRIVILEGE


Mr. G. W. Baldwin (Peace River):: I rise on a question of privilege in respect of which I have given notice to Your Honour. It deals with the immoderate and intemperate charges levied by the Prime Minister against the opposition parties yesterday, charges which were quite improper and untrue. Your Honour will have noted that there has been filed with you under the pertinent rule a notice from each of the House Leaders of the opposition parties. When necessary we can disagree with each other, but when this institution is threatened by the kind of statements which were made yesterday our approach is that of people who are concerned about what happens to Parliament.
My question of privilege deals with statements made by the Prime Minister in French to French students. I have only a rough translation of a rough statement. I propose to read some of them to Your Honour and then, before I conclude, to cite authorities which indicate that these are in fact infringements upon this House. These are some of the statements he made:
They-
Referring to the opposition.
-try to stop the government programs by following the clock. They say-
I do not know whether or not the Prime Minister adopts this statement.
-parliament is rotten because they sit for weeks and don't pass any bills, preventing the government from passing all the laws and measures that are important-


Some hon. Members:: Hear, hear!


Gerald William Baldwin: -gabbing for two weeks on government reorganization. They are blocking other things. The tactic of the opposition is to stop the government from doing anything.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: These statements are slanderous per se.


Some hon. Members:: Oh, oh!


An hon. Member:: No, they are truthful.


Gerald William Baldwin: Certainly they contain a strong innuendo, which no one can mistake, that the opposition parties and their members are guilty of abusing their parliamentary functions and acting with impropriety in the discharge of their duties.


Some hon. Members:: Shame!


Gerald William Baldwin: Mr. Speaker, no member of this House, not even a Prime Minister who is suffering from unfounded delusions of grandeur, can make these charges and not expect to be called to account for them. I think the right hon. gentleman must school himself to accept the discipline of the rules of this House, as other hon. members do.
These statements are scurrilous and slanderous. In any event, they are riddled with distortions, half truths and perversions of the facts. Bills are passed and have been passed in this House, and any examination of the record will show that. Let us examine the record. Today's order paper contains only nine government measures; as a result of arrangements made, two of them will probably be passed today, leaving seven measures outstanding on the order paper. That is a fact which the Prime Minister ought to have known before he made these statements.
A statement was made yesterday about the Public Order (Temporary Measures) Act. Shortly before the final passage of that Act, some of us conducted an examination of the time spent on it. Examination of the record indicated that government members had taken more time on that bill than any other party.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: The Prime Minister has seen fit to level his charges primarily in respect of the government organization bill. I will not go back into the history of that bill and Your Honour's decision with respect to its omnibus nature. But let it be known that less than four hours were taken on second reading. Approximately 20 hours, or four days, were spent on the environmental aspect of the bill, which could be brought to a conclusion at any minute, as the government knows, by a certain procedure. Less than six hours were spent in dealing with the question of ministers of state. One hour was spent in dealing with the Department of Energy, Mines and Resources, one hour was spent in dealing with the Department of the Postmaster General, and so on. When one examines clearly and honestly the time that has been spent on this bill which has been improperly brought before the House-when I say "improperly" I am not

February 26, 1971
Handling of House Business
reflecting on Your Honour's decision but on the decision made by the government to bring it in-one will see that not that much time has been spent on it by the House.


Mr. Woolliams:: It is just a salary raise for the Liberals.


Gerald William Baldwin: Mr. Speaker, the House Leaders attempt as best they can to deal with difficult problems and operate through the usual channels to try to facilitate the business of the House. I will not go into the details of the meetings of House Leaders. Nevertheless, discussions took place not so long ago, and I will be corroborated in this statement by the House Leaders of the other parties, with regard to ways and means of working out a timetable and schedule and, if necessary, a possible House order with regard to the government organization bill. In light of the statements made by the right hon. gentleman, how can meetings of this type possibly continue to function? In view of the Prime Minister's statements, how can it be reasonably expected that members of the opposition parties will try to work out a form of timetable and a reasonable schedule for dealing with an important matter of this kind?
If the Prime Minister spent more time here he would realize that when legislation is introduced which in part or in whole is obnoxious and repugnant to the opposition parties, those parties would be derelict in their duty if they did not oppose that legislation vigorously, actively and, if necessary, to the point of arousing public opinion. If the representations of public opinion which I see, hear and read about in respect of the government organization bill are accurate, then I submit that the Prime Minister is very much in error if he thinks that there is a great demand on the part of the people of this country for passage of the government organization bill.


Eldon Mattison Woolliams: The Liberals want to increase their own salaries.


Gerald William Baldwin: I do not intend to say any more. I simply want to quote to Your Honour from Erskine May's Parliamentary Practice, Seventeenth Edition, pages 118 and 119:
-breach of privilege by speaking words defamatory of either House or its proceedings,-
Anagolous to the publication of libels upon either House is the publication of false or perverted, or of partial and injurious reports of debates or proceedings of either House or committees of either House-
At page 119, there is a list of cases, which are well-known to Your Honour, in proof of this comment. There is a repetition at page 124:
Analogous to molestation of members on account of their behaviour in Parliament are speeches and writings reflecting upon their conduct as members.
Anything which constitutes a contempt in a court of law must be considered as a breach of the privileges of the House. I am not going to make a motion, Mr. Speaker. I think Your Honour has ruled in the past that while matters of this kind raise a proper point of privilege,
they are not points of privilege which can be the subject of a motion. However, I submit to Your Honour and to hon. members that the kind of conduct of the Prime Minister yesterday, whether committed on bad advice, in ignorance or bad temper, is not the kind of conduct which is conducive to the passage of legislation in this House and to the good conduct of the proceedings of this institution.


Some hon. Members:: Hear, hear!


Mr. Speaker:: As indicated by the hon. member for Peace River, similar notices were filed with the Chair by the hon. member for Winnipeg North Centre and the hon. member for Lotbiniere. Rather than having three separate and extended debates on the same subject, it might be more appropriate if we heard as briefly as possible from the hon. members who have filed similar notices, the hon. member for Winnipeg North Centre and the hon. member for Lotbiniere.


Mr. Stanley Knowles (Winnipeg North Centre):: As
already indicated by Your Honour, I gave you notice this morning under Standing Order 17(2) that I wished to raise a question of privilege. I do so in concert with the hon. member for Peace River (Mr. Baldwin) and the hon. member for Lotbiniere (Mr. Fortin). I indicated in my notice to Your Honour that the point of privilege that prompts me to rise to my feet is the fact that statements made outside the House of Commons by the Prime Minister (Mr. Trudeau) have the effect of interfering with my role as one of the House Leaders and of interfering with the role of the four House Leaders collectively, and therefore these statements are damaging to the progress of business in the House of Commons.
I do not rise in anger, or with any thought of trying to return blow for blow or to castigate the other side, but to make an earnest plea. I make this plea on behalf of Parliament. I believe that this is a tremendous institution and that it can continue to do a job for the people of Canada. My plea is that it be permitted to do so without remarks of contempt and derision that destroy the good will necessary for the work of this House of Commons. As I have already said, and I shall endeavour to stick to my statement, I do not wish to return blow for blow or to castigate the Prime Minister, but I do make a plea to him to make a real effort to understand this place and to give it an opportunity to function as I believe it can.
I have said that the nub of my question of privilege is that statements such as were made outside the House yesterday constitute an interference with the work of the House which has been entrusted to the four House Leaders. I point out that this very morning, when we get past the question period, the report stage and third reading of two separate bills will be called. One has to do with the Canada-Jamaica tax agreement and the other has to do with crop insurance. In both these cases we reached agreement yesterday that there would be no debate at

February 26, 1971

these final stages. I hope and believe that hon. members behind us on this side of the House will stay with this agreement. It has not been made an order of the House; it is one of those gentlemen's agreements which has been made on the basis of good will. But it is extremely difficult for the House Leaders to go among their backbenchers and get agreement on this sort of thing when statements about the opposition are made such as were made yesterday by the Prime Minister.
Not only did we reach agreement about what we should do this morning, but two days ago we reached agreement that the report stage and third reading of the CNR financing bill would be put through without debate. Again, last Friday we reached an agreement on the floor of the House that even though a point of order had been raised in connection with the ambient air bill upon which a ruling had to be made, the debate should nevertheless be concluded and when Your Honour had given your ruling, as you did on Wednesday, there would be no further debate.
The fact is that the four House Leaders are getting along well. We have good relations. We exercise good will. It just so happens that the Government House Leader is not here today, but if he were here and felt free to speak I believe he would agree with us that what has taken place constitutes an interference with the job which has been assigned to us.
My plea to the Prime Minister is that he cease and desist from making remarks, such as those he made yesterday and has made a number of times, showing contempt and derision, for such remarks destroy good will and slow down the work of Parliament. May I say in passing that when the Prime Minister talks about delay and obstructionism he does not know the meaning of those words-he has not been here long enough. The kind of delay and obstruction which took place in the past just does not take place today. In fact, under today's rules it cannot take place.
When the Prime Minister says that the government must do something about the rules, I remind him that four times since the Liberals came back into power in 1963 they have changed the rules on the basis of government majorities. The rules are the way they want them, so why this talk about further changes in the rules, further streamlining of Parliament? Hon. members opposite have got the rules they want. Indeed, they said they had tricked us into passing some they did not really care about. But my point is, that the charge of obstructionism comes from one who, I am afraid, does not sense the spirit of this institution and does not understand it. I say that this institution has served the country well for over a hundred years and it can and will continue to do so. But it becomes very difficult when the gentleman who happens to be the Prime Minister of Canada treats this place with contempt and derision as he does far too often. I did not think of those words; they are the words he himself used when describing what happened in a certain incident a while ago. What is hard on this Parliament is not delay, not obstruction, not debate, not critical
Handling of House Business
examination of government proposals; what is hard on this Parliament is treating it with contempt.
I recognize that there are no precise Standing Orders or citations that deal with this kind of situation and I realize why there are not. This sort of thing is not expected from hon. members. But there are citations on pages 98 and 99 of Beauchesne's Fourth Edition which say, as the hon. member for Peace River pointed out, that anything that would be a contempt of court has to be so treated in the House of Commons as well. There should not be disorderly, contemptuous or insolent language or behaviour, or other disturbing conduct. I think these propositions are axiomatic. But if this Parliament is to get along there has to be good will, and I believe we can have it and go forward on that basis.
I hope the House will agree that I have kept to the mood in which I said I rose. I am not standing here to return blows. I am standing here on behalf of the Parliament of Canada, the people's Parliament, pleading that there be a cessation of contempt and derision, that Parliament be allowed to do its job. If it is allowed to do so, I believe we shall continue to serve the best interests of the people of Canada.


Mr. Speaker:: As I suggested a moment ago, I should recognize the hon. member for Lotbiniere (Mr. Fortin) who has given the Chair the same notice as the hon. members who have just spoken. The hon. member for Lotbiniere has the floor.


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I have taken cognizance of statements made yesterday by the Prime Minister (Mr. Trudeau) to a group of students from the universities of Montreal and Quebec. I subsequently met these students myself and was able to see the results of the Prime Minister's shattering and insidious statements about Parliament. I felt it was my duty to joint our efforts with those of the leaders of the two other opposition parties in order to show "the other side of the coin" in an attempt to restore Parliament's prestige in the eyes of the Canadian people.
In his speech to a group of students yesterday, the Prime Minister seized the opportunity not only to minimize the part played by the opposition, but also to launch a regular attack on the latter's position with regard to legislative measures. That could be considered as a political manoeuvre, but, and this is more serious, he stated that the opposition had no valid part to play and that it hindered good government.
To support his contentions, the Prime Minister quoted doubtful Parliamentary statistics, as is shown by those mentioned by the hon. member for Peace River (Mr. Baldwin). He quoted those figures which gave only one side of the picture, stating that, if Parliament's work is not progressing more rapidly, the fault lies with the opposition whose only purpose is to create obstacles and to "get" the government through attrition.

February 26, 1971
Handling of House Business
He went further still, stating that the opposition should not study legislative proposals with such care, but should do its best to have them adopted as quickly as possible; in short that the opposition should be content to speak without saying anything.
Mr. Speaker, that is really too much. The present government is looking for a scapegoat because of its failure. It is looking for excuses for its lack of success and, by attacking dishonestly and insidiously the members of the opposition, it is achieving two definite goals. And that is serious and it is for that basic reason that I am in agreement with the other House leaders.
First, the government blames the opposition for its own failure so that the Canadian people will forget what goes on here.
Then, it tries to subdue Parliament, as that is the ultimate result it wants to achieve under the pretext of efficiency, and says so itself.
Mr. Speaker, as regards efficiency, one may recall a long debate which took place in the House. The government has devised a new type of bill: the omnibus bill, the package deal, in which dozens of proposals are included. And always for the sake of efficiency, the opposition is requested to adopt the whole bill in one shot.
Well, the opposition's role is precisely to keep an eye on legislation and to co-operate with the government in defending the interests of the Canadian people.
Mr. Speaker, if, sometimes, it may seem to the Prime Minister that the passing of legislations is delayed in the House, this is in direct consequence of the attitude of the government regarding Standing Orders, of its way of operating at the parliamentary level, which puts the opposition in an impossible situation.
If, furthermore, Parliament cannot be protected by Standing Orders after having been placed in an impossible situation as was said by the other House leaders, then, Parliament is downgraded. It loses its meaning, and the role of the member of Parliament is minimized to such an extent that he becomes a mere number, an individual who draws his pay cheque at the end of the month.
Mr. Speaker, we have an important role to play in this House and if the Prime Minister is irked by certain delays, he is to blame for that situation which compels us sometimes not to delay consideration of a bill, but to study it thoroughly, because it is too complex.
By his irresponsible statements which probably he does not mean really, the Prime Minister tramples down-this is serious and this is why we are protesting today-the essential and vital role of the opposition in every parliamentary system and especially in ours. In doing so, he finds an excuse to increase his control on the supreme institution of Parliament. He wilfully attempts to depreciate the Canadian parliamentary institutions.
Mr. Speaker, we are convinced that the present Prime Minister sets us back twenty years at the parliamentary level. That is the most serious matter and the basis of my
question of privilege. The Prime Minister is undertaking a drive to run down the Canadian Parliament. This is a much too serious matter to let it go without protest.
I conclude now by endorsing the comments of the hon. members for Winnipeg North Centre an Peace River (Messrs. Knowles and Baldwin). The Prime Minister may think that Parliament is at his service, but he is wrong. The Canadian government is serving all Canadians without exception and I would like to point something before resuming my seat: the opposition is the conscience of the government. The Prime Minister's statements, unfortunate and big with consequences, indicate that he would like to be rid of his conscience but we shall not be overcome. We are here to defend the Canadian population, in spite of the Prime Minister!


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I have little inclination to deal with the accusations which have just been made. I would say though, if it lightens your task, that I stand by the substance of everything I have been reported as having said.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I say that I stand by the substance because there may be some points of detail which would bear correction. I think it would be easier for you, Sir, to judge whether I did hold Parliament in contempt if you knew the circumstances in which this exchange took place.
When I left the House of Commons I was asked to meet a group of students from the province of Quebec, and I gladly did so. I think it is fair to say that I was met at the outset with a slight amount of hostility.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: As soon as I began to talk about our parliamentary system I was met with laughs of derision, Mr. Speaker, by people who apparently do not hold this institution in very high regard. The first question they asked me had to do with the use of the question period. They could not get over how stupid the opposition was-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -in its use of the question period. My answer to them was a defence of the institution. It was to indicate that even though the question period may not have been used all that successfully in their presence, it was an extraordinarily important institution because every day it permitted the opposition in the name of the country to question the government about its acts and sometimes to discover injustices or disorders in governmental conduct. The whole tenor of my exchange with them was one of defending this institution.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I do not mind admitting that I agreed with them that the opposition was not using the period

February 26, 1971

very skilfully and intelligently, and I did not mind agreeing with them that I could understand that they thought this place was falling into decadence because we spend days and weeks debating points rather than bringing debates to a conclusion by a vote, as the democratic system wants.
In this sense, Sir, I was pleading the excellence of the institution to them while conceding that it was not always well used. Perhaps I was biased in not saying that the government itself is perhaps also guilty of some misuse. The point I am making is borne out, I believe, by the hon. member for Lotbiniere (Mr. Fortin), who met with them later and who said, in his words, that he was able to see the results of our exchange. I do not think he would believe that I convinced them in a very few minutes that Parliament was a place of nonsense. He must assume that they came here with a lot of these prejudices in mind, and that I did not take these prejudices out of their minds in the few minutes I met with them surely cannot be ascribed to me. I think his own testimony, on which he seems to be accusing me, was on the contrary-


An hon. Member:: He is breaking the rules now.


Mr. Speaker:: Order, please. I apologize to the right hon. Prime Minister for interrupting, but it seems to me that the right hon. gentleman should be allowed to make a statement as other hon. members were allowed to do.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: That is about what I wanted to say, Mr. Speaker. I certainly can understand why the opposition was misled because apparently they read reports of the exchange but of course they missed the beginning of the exchange and they missed the context in which it took place.
I might say that I read the report in Le Devoir by a French reporter who was there. There was a slight bit more of the context, but I am quite sure he missed the beginning too.
This being said, I am a little bit surprised that all the opposition parties went to the extent of giving you notice, Sir, that I had treated this place with contempt and derision, without even having looked at the complete circumstances in which the exchange happened. If I were that touchy there might be a question of privilege I might raise. Indeed, there might be one in respect of something I understand the Leader of the Opposition (Mr. Stanfield) said about me, that I never open my mouth here except to mouth obscenities, or something to that effect. My comment, Sir, is that this may be a point of debate, but I do not want to raise a question of privilege on this kind of matter and I am really surprised that the opposition is wasting the time of the House doing so.


Mr. Speaker:: Order, please. I do not think hon. members would want to pursue the matter further. The hon.
Handling of House Business
members who raised this question by way of privilege indicated that they did not wish to propose or submit a motion for further consideration by the House. The hon. members who spoke in the course of this brief debate know the rules as well as I do and realize that in the absence of grounds for putting a motion there is no ruling required by the Chair. I would suggest only that perhaps the speeches made by the hon. members of the opposition and the reply made by the Prime Minister might help somewhat to clarify the situation and clear the air.
I should like to suggest one thought. To my way of thinking, Parliament is the kind of institution that can function only with good will between individuals and between parliamentary groups. It seems to me there has been good will among individuals in this House and between House Leaders; that has been pointed out by one or two of the hon. gentlemen who have spoken. To the extent that there has been co-operation, understanding and good will among the parliamentary representatives of the House, we have made progress during this and previous sessions. I should think that if an effort were made by all of us there will be an even greater measure of good will and even greater progress for the benefit of the institution.


Some hon. Members:: Hear, hear!


Mr. Maclnnis:: Mr. Speaker, I rise on a point of order in order to receive from you, Sir, a clarification of the rules of the House. Is it permissible for members in the future to refer to other hon. members as "he" and so on as the Prime Minister has just done?


Pierre Elliott Trudeau: Let us have a ruling on that.



ROUTINE PROCEEDINGS


[Stage Direction]
Third report of Standing Committee on Health, Welfare and Social Affairs-Mr. LeBlanc (Rimouski).
[Editor's Note: For text of above report see today's Votes and Proceedings.]


Hon. Donald S. Macdonald (Minister of National Defence):: Mr. Speaker, pursuant to Standing Order 41(2) I should like to lay on the table of the House in both official languages a document with regard to the plan to increase bilingualism in the Canadian Armed Forces.
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February 26, 1971

Canadian National Railways MAIN ESTIMATES, 1971-72



REFERENCE OF VOTE L10 AND VOTE 5 TO STANDING COMMITTEES

Donald Stovel Macdonald: Mr. Speaker, pursuant to Standing Order 59 I should like to move, seconded by the Minister without Portfolio from Longueuil (Mr. C6te):
That the following items in the estimates of sums required for the service of Canada for the year ending March 31, 1972, be referred to the following standing committees:
To the Standing Committee on Health, Welfare and Social Affairs vote L10 relating to Central Mortgage and Housing Corporation.
To the Standing Committee on National Resources and Public Works vote 5 relating to the Department of Public Works.
I should explain that it is my understanding that this now completes reference of the estimates to the committees in accordance with discussions which I believe have taken place.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order: Government Notices of Motions: February 24, 1971-The President of the Privy Council:
That the question of the financial structure of the Canadian National Railways be referred to the Standing Committee on Transport and Communications.
Mr. Speaker:: Pursuant to Section 2 of Standing Order 21 this Government Notice of Motion is transferred to and ordered for consideration under government orders at the next sitting of the House.


Stanley Howard Knowles: On a point of order, Mr. Speaker, I believe there would be unanimous agreement to pass this motion now without debate.


Mr. Speaker:: Is this the wish of the House?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: That the question of the financial structure of the Canadian National Railways be referred to the Standing Committee on Transport and Communications.


[Stage Direction]
Motion agreed to.


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of the document just tabled by the Minister of National Defence setting out the directions in respect of bilingualism in the Department of National Defence, now that government policy has been defined in the military services are the same levels of bilingualism to be attempted for civilian employees in other federal departments and Crown corporations?


Pierre Elliott Trudeau: Well, Mr. Speaker, the idea of bilingual units or unilingual units in various sections of the government service has been explained to the House on previous occasions. I believe that all the Department of National Defence is doing is applying this idea to its own department but in a way, of course, which is particular to it and cannot be transposed identically to other parts of the government.


John Patrick (Pat) Nowlan: Mr. Speaker, from the Prime Minister's answer are we then to understand that there will be different degrees of bilingualism within different departments of the federal service?


Pierre Elliott Trudeau: Mr. Speaker, I am not aware of what the member is referring to when he talks of different degrees of bilingualism. Some people can speak better than others, yes.


John Patrick (Pat) Nowlan: I quite appreciate that some people can speak better than others and that some are better at pantomine than others. That really was not the question. The document which has been tabled sets out different levels of bilingualism for the services and I am attempting to find out if the levels of 40 per cent and 35 per cent for the different ranks within the services in 1976 and 60 per cent and 55 per cent in 1980 are to be the levels that are to be attempted in other federal departments and Crown corporations. That was what I was trying to say.


Pierre Elliott Trudeau: Mr. Speaker, this document refers to the Department of National Defence and it has particular application, as I just answered. There is no indication that these percentages will be applied elsewhere. If some system of percentages is to apply it will be announced in due course. On the application of these it would be preferable if the hon. member would ask the Minister of National Defence who is better briefed than I am on what goes on in his department.



ARMED FORCES POLICY-METHOD OF ATTAINING PERCENTAGE LEVELS

John Patrick (Pat) Nowlan: Mr. Speaker, without debating with the Prime Minister whether there
February 26, 1971

will be a special status within federal departments and different levels of bilingualism within departments, I should like to ask the Minister of National Defence this question. In view of the present complement of 10 per cent bilingual personnel in the officer class and approximately 20 per cent in the non-commissioned class, will the attainment of percentages of bilingualism of 40 per cent and 35 per cent by 1976 in those classes and 60 per cent and 55 per cent by 1980 be achieved by freezing recruitment in the Anglophone area and stimulating recruitment in the Francophone area?


Donald Stovel Macdonald: Mr. Speaker, if the hon. member had read the document in full he would have noted there is a very extensive section devoted to the acceleration of language training for both language groups. Perhaps I might indicate to him that the dates set forth are in effect target dates, that the principle still applies that no one not qualified will be promoted, and that, indeed, the overriding factor of importance is the effectiveness of the force. If it should be found that effectiveness would be impaired by these target dates, of course they would have to be moved along. Having said that, I emphasize that we will make every effort to give effective language training to every member of the department who wishes to take it.



ARMED FORCES POLICY-EFFECT ON PROMOTION OF ENGLISH-SPEAKING PERSONNEL

Hon. D. S. Harkness (Calgary Centre):: Mr. Speaker, I should like to ask the Minister of National Defence if this policy is part of a move to reduce the numbers in the forces by discriminating against promotion so far as English-speaking personnel are concerned, officers and NCO's who have not been brought up to speak French, do not find it possible to do so, and therefore in effect will be forced to retire or stay at the same ranks they have now for the rest of their service?


Donald Stovel Macdonald: Mr. Speaker, I would think no one approaching this question of bilingualism either in the forces or elsewhere could regard the proposals set out as representing any form of discrimination whatsoever. They apply to both language groups.



APPLICATION OF ARMED FORCES POLICY TO FRANCOPHONE PERSONNEL THROUGHOUT CANADA

Mr. Louis Roland Comeau (South Western Nova):: Mr. Speaker, I should like to put a supplementary question to the Minister of National Defence.
I have not read the document in question. Do those changes apply to all French-speaking Canadians, that is to those who do not necessarily live in the province of Quebec?


Donald Stovel Macdonald: Yes, Mr. Speaker, they apply to all the
Inquiries of the Ministry
Armed forces, throughout Canada. We intend to make certain changes with regard to the Francophones in Edmonton, for instance, to give them the opportunity to speak their mother tongue in Edmonton and elsewhere.


Mr. Roch La Salle (Jolieite):: Mr. Speaker-


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


Roch La Salle: Yes, Mr. Speaker.
I would like to ask the hon. minister whether this new policy will from now on enable the whole population of Quebec to hear command given in French in the army?


Donald Stovel Macdonald: Mr. Speaker, allow me to assure the hon. member and this House that there really is nothing new with this policy. It had been suggested by my predecessor. The idea is to make sure that in and outside the province of Quebec, where French-speaking divisions are concerned, all commands will be given in French and all the business of the units will be conducted in this language.


Eldon Mattison Woolliams: I would like to ask the Minister of National Defence whether the aims and objectives of the Canadian defence forces are to protect the security of the nation or to become a cultural pool for Canadians?


Donald Stovel Macdonald: Mr. Speaker, may I point out to the hon. member that certain French-speaking units, particularly those based at Valcartier, protected the security of Canada very well last October and November-


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: -and the policy of bilingualism put forward here is to assure that that same loyalty and opportunity will exist in the forces in the future.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The hon. member for Nanaimo-Cowi-chan-The Islands.


Eldon Mattison Woolliams: I would think the hon. member for Calgary South would have something to say about that. He has to fight the next election.


Mr. Speaker:: Order, please. I wonder if we might change the subject now. The hon. member for Nanaimo-Cowichan-The Islands.


Eldon Mattison Woolliams: Go and say that in Calgary.


Mr. Speaker:: Order, please.
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February 26, 1971
inquiries of the Ministry BUSINESS OF THE HOUSE



REMARKS BY PRIME MINISTER OUTSIDE HOUSE CONCERNING OPPOSITION-REQUEST FOR STATEMENT

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, since the Prime Minister has been critical of the way in which the business of the House has been conducted, particularly the role of the opposition, and since this criticism has been made outside the House, would the Prime Minister be prepared on motions on Monday to lay before the House any criticisms he has regarding the conduct of the business of the House in order that they may be answered, rather than being made outside the House where they cannot be replied to?


Pierre Elliott Trudeau: Mr. Speaker, it is my impression that the answers were given this morning even though the criticisms have never been made.


Thomas Clement (Tommy) Douglas: Since the main reason for the Prime Minister's criticism is the alleged delay in the passage of the government organization bill which is in his name, would the Prime Minister be prepared to facilitate the passage of that legislation by being present in Committee of the Whole, particularly when we are dealing with those sections of that legislation which have to do with his office particularly? I am referring to the appointment of ministers of state and additional parliamentary secretaries.


Pierre Elliott Trudeau: Mr. Speaker, if some agreement could be reached whereby an arrangement on the use of time could be agreed to by the whole House and if my presence here would permit that to happen, I would gladly be present to explain why we think it is the business of the executive to reorganize itself in a way in which it could deal more expeditiously with the affairs of the nation.


Thomas Clement (Tommy) Douglas: I thank the Prime Minister for agreeing to attend the House.


Some hon. Members:: Oh, oh!



INTRODUCTION OF AMENDMENTS TO UNEMPLOYMENT INSURANCE ACT

Thomas Clement (Tommy) Douglas: Since the House can only deal with legislation that is placed before it, how soon can we expect the amendments to the Unemployment Insurance Act, which the Prime Minister said a few days ago would be presented in a matter of days? We are still waiting for that legislation. How soon can we expect that legislation so that we can get on with this very important matter?


Pierre Elliott Trudeau: Mr. Speaker, if the leader of the NDP is prepared to work out an arrangement whereby all legislation, including the bill he asks about, could be passed in a normal amount of time
between now and the end of this part of the session, I would gladly give him that indication. We have a lot of matters to deal with, including the bill he suggests, but there is no point in putting it on the order paper if the opposition is going to continue, as it has given us notice, to stall on the government organization bill forever.


Thomas Clement (Tommy) Douglas: On a
point of order, Mr. Speaker, I think it is quite apparent from the rules of the House that the government can put any legislation it wants on the order paper so that members have adequate time to examine and study it. What is happening in the House at the moment does not preclude the government in any way, shape or form from bringing down legislation.


Pierre Elliott Trudeau: On the same point of order, Mr. Speaker-


Mr. Speaker:: Order, please. May I suggest to the Prime Minister, and to the hon. member who just rose on a point of order, that it seems to me we are reviving the question of privilege upon which we spent some time at the opening of proceedings. I doubt whether we should take more time on that subject, at the moment in any event. It might be revived on some other occasion, but I suggest not during the question period this morning.



CRIMINAL CODE


Mr. Henry Laiulippe (Compton):: Mr. Speaker, may I ask the hon. Minister of Justice a question concerning the special day of April 25, organized by the Canadian Catholic Conference of Bishops.
Will the government co-operate with the religious authorities to ensure the success of this day organized to fight abortion, which was legalized by this Parliament?


Hon. John N. Turner (Minister of Justice):: Mr. Speaker, I read last night the announcement from the Catholic bishops of Canada in this connection and I have nothing to say about it for the time being.


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, can the Minister of Justice inform us when we are to have the two-day debate on abortion in the House?


John Napier Turner: I have been in consultation with the House Leader about that, Mr. Speaker, and he will bring the matter forward in the House at an appropriate time. I think that the hon. lady may be going farther than we have in suggesting how many days we ought to debate it. I hope that will be a matter for the Government House Leader and the House Leaders of the other parties to decide.

February 26, 1971



ADMINISTRATION OF JUSTICE


Eldon Mattison Woolliams: Mr. Speaker, I would like to direct a question to the Minister of Justice; I gave him notice. It has reference to the American hijacker who, by means of threatening violence, diverted a Western Airlines Boeing 737 to Vancouver, which was flying from San Francisco to Seattle. What course of action is the Department of Justice planning and, if the American authorities seek extradition of the accused, will the minister and his department co-operate in this regard? Further, is the person in question in custody?


Mr. Speaker:: Order. I have the impression that the question has hypothetical overtones, but perhaps the minister might find some way to give some information that might be helpful to the hon. member and to the House.


John Napier Turner: I would be glad to deal with the question so far as the rules permit, Mr. Speaker. I received a preliminary report concerning the hijacking yesterday of a Northwest Airlines Boeing 737 while on a flight from San Francisco to Seattle. The flight terminated at Vancouver International Airport, and an individual is now in custody. A number of questions arise which may have to be determined as soon as I have an opportunity for a full examination of the facts and the opportunity to consult my appropriate colleagues in the cabinet.
The hon. gentleman mentioned the possibility of extradition. At the moment there has been no request for extradition by the United States government. I might say that the other alternatives I will have to consider are whether or not to consent to prosecution under section 5A of the Criminal Code. The government will also have to consider the possibility of deportation. But I think I can assure the hon. member and members of the House that this matter will be given immediate and careful consideration by the government.


Eldon Mattison Woolliams: Since this is a serious international problem and as there is a tremendous amount of commercial air travel between the United States and Canada, could the minister advise us whether he has had a chance to look into whether this crime of hijacking, to use a colloquialism, is covered by the extradition agreement between Canada and the United States?


John Napier Turner: That is one of the factors that will have to be taken into consideration. I hope the hon. member will not ask me for a legal opinion.



POLLUTION


Mr. Robert C. Coates (Cumberland-Colchester North):: have a question for the Minister of Energy, Mines and
Inquiries of the Ministry
Resources. Yesterday in the Nova Scotia legislature the report prepared by the Department of Energy, Mines and Resources on the Springhill mine dump fire was tabled, outlining ways and means of extinguishing that fire. Would the minister be willing to meet with the Nova Scotia Minister of Mines, who is also the minister responsible for pollution control, to determine what action might be taken by both the federal and provincial governments which would result in extinguishing the mine dump fire at the earliest possible date in view of the statement made in the report that the fire "is becoming an increasing hazard to the town environment"?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: I believe the hon. member asked a similar question yesterday and I had my officials check into the matter. I am instructed that they received a copy of the proposal by Home Town Construction Ltd. only yesterday, Thursday, and they are currently studying its contents in relation to the technical report they have already prepared on the fire at Springhill. As yet they are not aware whether the Nova Scotia government has received a copy of this proposal. We would give an opinion on its merits to the provincial government based on our findings, but so far we have received no such request from the government of Nova Scotia. May I add that in all matters dealing with the Springhill dump fire my officers are in contact with the Department of Mines of Nova Scotia.


Robert Carman Coates: May I say for the minister's information that I am referring to a report that was forwarded to the Deputy Minister of Mines of Nova Scotia by T. E. Tibbetts of the coal and peat resources evaluation section of his department which relates to the examination of the mine dump fire conducted by his department for the Department of Mines of Nova Scotia. What I am now asking the minister is whether, on the basis of this report, he would be willing to meet with the Minister of Mines for Nova Scotia to determine how action can best be taken to extinguish the mine dump fire.


John James Greene: I am not sure how our report relates to the Home Town Construction Limited report.


Robert Carman Coates: It does not.


John James Greene: But I would be very pleased, as the hon. member suggests, to meet the mines minister from Nova Scotia if this would be of help.


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: My question is for the Prime Minister. I would like to preface it by saying that there appears to be intense diplomatic activity within the Commonwealth with regard to the future of the study group on security in the Indian Ocean arising out of the proposed British arms sales to South Africa-

February 26, 1971
Inquiries of the Ministry


Mr. Speaker:: Order, please. I suggest to the hon. member that he should put his question.


Francis Andrew Brewin: I was just coming to it, Mr. Speaker. What action or leadership is the Canadian government taking in this crisis which may affect the future existence of the Commonwealth?


Pierre Elliott Trudeau: We are
pursuing the action which we began in Singapore and which did not meet with the approval of the opposition. None the less, it is the action we are pursuing.


Francis Andrew Brewin: I wonder if the Prime Minister could tell us what action he was pursuing that was not approved by the opposition.


Pierre Elliott Trudeau: The hon. member might read the statement that the leader of his party made when I returned from Singapore.



INDUSTRY


Mr. Robert Muir (Cape Breion-The Sydneys):: My question is for the Minister of Energy, Mines and Resources. In view of the serious unemployment problem in Nova Scotia, will the minister advise the House what reply has been given to the request of that province's mines minister for a $2 million grant over a two-year period to continue the operation of the McBean mine in Pictou county?


John James Greene: I have had meetings with both the mines minister and the premier in regard to the McBean mine. The subsidy program is, of course, expiring. The coffers of the subsidy program are empty. We are considering their suggestion at present but as yet have no answer for them.
While I am on my feet-


Mr. Speaker:: Order, please. I wonder if the minister might allow the hon. member a supplementary question. Perhaps after that he will be given the floor for the purpose of answering a prior question.


Robert Muir: May I ask the minister how long it will take, how many weeks or months, before a decision has been reached by the cabinet with regard to this request for a grant by the Nova Scotia mines minister, Mr. Sullivan?


John James Greene: I cannot put a definite date on it but I can assure my hon. friend that my department is working on it very actively, and we will have a recommendation one way or another as soon as possible.



SUGGESTED FEASIBILITY STUDY OF ECONOMICS OF BUILDING PIPELINE FROM WEST TO SERVE EASTERN CANADA

John James Greene: Mr. Speaker, I should like to answer a question put by the hon. member for Calgary North. He has been most patient in waiting for an answer, for which I thank him.
In response to his question may I say that the government does not envisage embarking, either alone or with outside help, on any special study of the economic feasibility of a pipeline from western Canada to markets east of Ontario. The National Energy Board is, however, keeping itself fully informed as to the factors bearing on such a project. I expect the board to be able to advise the government as to security factors bearing on oil supply to eastern Canada and on the relative competitive position of western Canadian oil in these eastern markets. The board will be in a position to give prompt consideration to any application from the private sector for the construction of such a line.


Eldon Mattison Woolliams: I thank the minister for his full answer, but it was not quite an answer to my question. I wonder whether he would reconsider it in these terms. I appreciate the function of the National Energy Board, but I am asking whether, in order to get an economic feasibility study of the building of a pipeline, he would set up a task force rather than leave it to free enterprise or the importers of crude petroleum who are also the ones who would bring it from the Prairies and the Arctic? What I want is an independent study, separate and apart from free enterprise.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: Come over here, Eldon.


John James Greene: I am shocked and dismayed to find that my hon. friend has joined his colleagues in the New Democratic Party in this view.


Eldon Mattison Woolliams: Answer the question.


John James Greene: To date we are satisfied that the present system is in the best interests both of the producers in the west and of the eastern consumers. We are going to abide by the present procedures as we think they are more satisfactory than those of the New Democratic Party.


Thomas Clement (Tommy) Douglas: Since we have had conflicting answers about whether or not there has been a feasibility study on extending the pipeline to Montreal, who is conducting such a study and whether it is completed, can the minister now give us a definitive answer? Has a feasibility study been made and,

February 26, 1971

if so, by whom? Has it been made by the National Energy Board, is it completed, and would the government be prepared to make it available?


John James Greene: I do not believe a feasibility study as such has been made in recent years or since the Borden report, but certainly the National Energy Board has the economic facts and figures under constant review. This gives them a very adequate idea from time to time of the economics of such a pipeline, so that if an application is made, they can give an informed decision in respect of such an application. But there is no total, complete and recent feasibility study as such.


Thomas Clement (Tommy) Douglas: May I
ask the minister if these studies which have been conducted by the National Energy Board indicate that the extension of the pipeline to Montreal would be economic and in the best interests of Canada?


John James Greene: The information I have is that even with the recent increase in world prices of oil it does not appear that a pipeline could be built to bring western oil into the Montreal market without increasing consumer prices for the Montreal consumers.


Eldon Mattison Woolliams: May I ask a further supplementary question, Mr. Speaker?


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Edmonton-Strathcona. I should bring to the attention of hon. members the fact that once again we are nearing the end of the question period, and if we have seven or eight supplementary questions to three or four questions it will be almost impossible to take care of the entire question period. For the moment, the Chair will recognize the hon. member for Edmonton-Strathcona.


Mr. Hu Harries (Edmonton-Strathcona):: Mr. Speaker, could the minister tell us whether there has been any specific reference to the Energy Board to examine alternative ways of serving the Montreal market and, more specifically, has the Energy Board provided any figures? If so, could he say what those figures are which indicate that there would at this time be a price increase if western oil were serving the Montreal market?


John James Greene: Mr. Speaker, this is a very difficult question to answer during the question period since it requires a very comprehensive economic study. To the best of my knowledge and information, from the very comprehensive day to day information gathered and studied by the National Energy Board it appears that, of the various ways that are possible, the present system whereby the eastern market is served by offshore oil is the most economic for Canada. The eastern consumer has a good break and we are replacing our own oil resources with offshore oil, which is more economical than our own oil.
Inquiries of the Ministry


Mr. Speaker:: Order, please. I suggest that the debate might be terminated at this stage, and that we might move to another part of the country.


Hu Harries: Mr. Speaker, will the Minister of Energy, Mines and Resources table a summary of the figures which have resulted from the continuing study by the National Energy Board of the Montreal supplied market.


John James Greene: Mr. Speaker, I will be glad to consider that question and give the hon. member an answer at a later date.



SUGGESTED REMOVAL OF MINISTERIAL ROSTER ATTENDANCE SYSTEM

Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the Prime Minister and is really supplementary to a previous question. Inasmuch as criticism has been levelled at Parliament, and especially at the conduct of the opposition during the question period, and since we are being hindered in the question period by the roster system, would the Prime Minister agree to allow ministers to attend the House and to dispense with the roster system?



FISHERIES


Mr. James A. McGrath (St. John's East):: Mr. Speaker, may I direct a question to the Minister of Fisheries and Forestry. Is he in a position to tell the House what action he took yesterday with respect to the imposition of a 12-mile limit off the south coast of Newfoundland to deal with the minor incident, to use his words, that occurred? Also, is he prepared to revise the answer he gave yesterday with respect to this alleged minor incident?


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, there is no revision. We made sure that the foreign vessels would not be coming within 12 miles of the coast.


James Aloysius McGrath: Mr. Speaker, may I ask whether the minister took steps yesterday, by way of an announcement through the press, to state that the government has now defined our 12-mile limit within the sinuosity of the coast, as opposed to the straight baseline system, on the south coast of Newfoundland?


John (Jack) Davis: Mr. Speaker, there was no announcement to the press. However, we have communicated with all the skippers of all the trawlers in the Gulf of St. Lawrence.
Inquiries of the Ministry VETERANS AFFAIRS

February 26, 1971



LACK OF PROVISION IN ESTIMATES FOR DISABILITY PENSION AND ALLOWANCE INCREASES

Stanley Howard Knowles: Mr. Speaker, may I direct my question to the President of the Treasury Board. On February 17, the day on which he tabled the 1971-72 estimates, he took notice of my question regarding the means by which increases in veterans disability pensions and veterans allowances are to be put into effect. Can he now say whether this will be by legislation, by estimates, by $1 items, or how this will be done?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, the provision for the variety of measures to which the hon. gentleman has referred arises by legislation. This is achieved in some instances through the appropriation process and in others through statutes which provide for the payments being made without the necessity of any appropriation bill. It is partly the one and partly the other.


Stanley Howard Knowles: Mr. Speaker, can the minister not tell us in what precise way those two things are being dealt with? It makes all the difference in the world whether we bring in measures to deal with them or whether they are just there as estimates that do not come before the House.


Charles Mills (Bud) Drury: Mr. Speaker, I think the hon. gentleman will have an opportunity in the standing committee, when the estimates of the Minister of Veterans Affairs come before it, to deal with, as he puts it, or to inquire into these particular aspects.


Stanley Howard Knowles: But we shall not have that opportunity on the floor of the House.



INQUIRY AS TO REFORM OF RULES

Mr. Murray McBride (Lanark-Renfrew-Carlelon):: Mr. Speaker, may I direct a question to the Acting House Leader. In view of the action by the hon. member for Joliette, who withdrew from the agricultural committee in disgust yesterday because of the filibuster and unmerited obstruction of the opposition-


Some hon. Members:: Order!


Murray Arndell McBride: -does the government plan to recommend a reform of the rules of the House to prevent such obstruction?


Mr. Speaker:: Order, please. The hon. member is asking a question about proceedings in a committee. I think he knows very well, and I think that most hon. members know, that such questions are not in order.



THE CENSUS


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. Since this is census year, and since I believe he is in charge of the taking of the census, can he inform the House when he expects to announce the composition of the census organization and the appointment of a chief census commissioner?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I think it is generally known that there will be a census in Canada in 1971. If more information is needed, I will obtain it and satisfy my hon. friend.


Robert Norman Thompson: Mr. Speaker, am I to gather that there is no intention of taking a census this year?


Jean-Luc Pepin: Mr. Speaker, I thought it was generally known in Canada that there would be a census in 1971. If there are further announcements to make, we shall make them. If my hon. friend wants more information, as usual I will do my best to please him.


Douglas Scott Harkness: The census must be taken, according to the law.


Robert Norman Thompson: 

INCOME TAX


Mr. John Burton (Regina East):: Mr, Speaker, I wish to direct a question to the Acting Prime Minister in the absence of the Prime Minister who has just left the House. In view of some of the concerns that have been expressed about the business of the House, and since the Parliamentary Secretary to the Minister of Finance has indicated that the income tax legislation to be submitted this spring will be considerably different from the white paper, could the Acting Prime Minister, whoever he now is, inform the House when this legislation will be brought before the House and if every step will be taken to ensure that it is introduced as soon as possible?


Charles Mills (Bud) Drury: Mr. Speaker, I think the Minister of Finance has made it quite clear that the legislation will be brought forward as soon as practicable and, further, that the House will have ample opportunity to consider it.

February 26, 1971



NON-MEDICAL USE-POLICY STATEMENT-APPLICATION OF CRIMINAL CODE

Louis-Roland Comeau: Mr. Speaker, may I direct a question to the Minister of Justice. In view of the latest report put out this week by the Department of National Health and Welfare on transient youth and the very wide disparity between the law and the official and unofficial policies of the government regarding drugs-and I am not being critical-may I ask when we can expect a policy statement by the Minister of Justice on this issue?


John Napier Turner: Mr. Speaker, the government is reviewing the entire question of the non-medical use of soft drugs and is of course awaiting the final report of the Le Dain Commission.


Louis-Roland Comeau: Mr. Speaker, has the minister consulted with provincial and municipal authorities, especially with the provincial Attorneys General, to discuss how they are to apply the drug sections of the Criminal Code, particularly in view of the latest report published by the Department of National Health and Welfare?


John Napier Turner: Mr. Speaker, that question was brought to my attention by the hon. member for Simcoe East yesterday, and I am looking at it.



HOUSING


Mr. John Gilbert (Broadview):: Mr. Speaker, my question is directed to the hardworking minister in charge of housing. In view of the report yesterday from the Canadian Council on Social Development which indicates that housing ought to be considered as a social problem rather than as a business or an industry, and that the government should accept an over-all responsibility for both the production and distribution of housing throughout Canada, will the government accept this philosophy and its responsibility with regard to the production and distribution of homes throughout the country?


Hon. Robert K. Andras (Minister without Portfolio):: Mr. Speaker, as always, I am very much in favour of motherhood too.


John Gilbert: Mr. Speaker, I wonder if the minister is also in favour of housing.
*	*	<5



AIR TRANSPORT


Mr. Thomas M. Bell (Saint John-Lancasier):: Mr. Speaker, my question is for the Minister of Transport.
Inquiries of the Ministry
With regard to the proposed fare increase by Air Canada and Canadian Pacific Airlines on March 6, will the government ask the Canadian Transport Commission to intervene directly and immediately in this proposed fare increase?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I do not believe it is necessary for the government to direct the Canadian Transport Commission. The arrangement is that such tariffs are filed with the CTC. There is then provision for anyone who objects to file such objection. I think the procedure is well established.


Thomas Miller Bell: Since, according to today's paper, there is some indefiniteness about whether they will intervene and since they have never intervened on previous increases, would the minister or any member of the government who may run into Mr. Pickersgill at the Rideau Club over the weekend ask him to get going on this matter?


Mr. Speaker:: Order, please.



PROPOSED FLOODING OF SKAGIT RIVER VALLEY-APPROVAL BY INTERNATIONAL JOINT COMMISSION OF AGREEMENT FOR COMPENSATION OF CANADIAN INTERESTS

['Mr. Speaker, I believe the hon. member for Gander-Twillingate asked a similar question which I undertook to answer. Meetings are being held on a continuing basis with the provinces on this matter. The latest of these occurred earlier this month with the premier of Nova Scotia. These are difficult negotiations, but I believe that favourable progress is being made. I am hopeful that we can achieve a resolution of this longstanding and difficult problem.']
Mr. Mark Rose (Fraser Valley West):: In the absence of the Secretary of State for External Affairs, I will direct my question with regard to the Skagit valley flooding to either the Minister of Fisheries and Forestry or the Minister of Energy, Mines and Resources. It is alleged at the present time that the applicant, Seattle Power and Light, does not have any right on Canadian soil because no agreement for compensation of Canadian interests has been approved by the International Joint Commission. Can the minister advise whether there has been IJC approval? If he cannot, will he investigate this matter and reply later?


Mr. Speaker:: While the matter is being considered by the ministers, the hon. member for Hillsborough might ask his question.
[Later:l


John James Greene: With respect to the question of the hon. member for Fraser Valley West, I will take it as notice and make inquiries of the International Joint Commission to see if there is any answer.



Mr. Heath Macquarrie (Hillsborough):: I wish to direct a question to the Minister of Industry, Trade and Com-

February 26, 1971
Inquiries of the Ministry
merce with regard to the nationalization of the Alcan property by the government of Guyana, a matter in which he has shown a great deal of insouciance. Can the minister advise what the government is currently doing with regard to this discriminatory action on the part of the Guyanese government?


Jean-Luc Pepin: I am surprised at the use of the word "enthusiasm". I do not know exactly on which side he puts one on in this matter. I have shown great "interest". That is the proper word. Discussions are now going on between Alcan and the Guyanese government as to what would be adequate compensation for the nationalization which was announced last week.


Heath Nelson Macquarrie: The word was insouciance, Mr. Speaker, not enthusiasm. What is the government of Canada doing with reference to the government of Guyana in connection with this takeover of property which is important to many Canadians?


Jean-Luc Pepin: The representations I talked about last week which have been made to the Guyanese government with respect to nationalization itself still apply.


John James Greene: Mr. Speaker, I should like to answer the question asked by the hon. member for South Shore with respect to offshore drilling rigs. My information is that the rig is similar to others already in use. The new Sedco I drilling rig has been built by South Eastern Commonwealth Drilling Company of Calgary and Dallas, to be contracted to Amoco Canada Petroleum Company and Imperial Oil Limited. The rig was built at Halifax shipyards. A third unit of this type is currently under construction for later operation by Mobil Oil Canada Limited.


Walter C. Carter: I have a supplementary question for the Minister of Energy, Mines and Resources. Can the minister advise what progress he has made in negotiations with the four Atlantic provinces with regard to offshore resources and whether he expects an agreement to be reached shortly?


John James Greene: Mr. Speaker, I believe the hon. member for Gander-Twillingate asked a similar question which I undertook to answer. Meetings are being held on a continuing basis with the provinces on this matter. The latest of these occurred earlier this month with the premier of Nova Scotia. These are difficult negotiations, but I believe that favourable progress is being made. I am hopeful that we can achieve a resolution of this longstanding and difficult problem.



ATOMIC ENERGY


Mr. Rod Thomson (Battleford-Kindersley):: I have a question for the Minister of Industry, Trade and Commerce. In view of the starting up of the atomic energy plant at Pickering, does the minister have anything new to report on the possible sale of an atomic energy plant to Australia?


John James Greene: Mr. Speaker, I believe this matter falls under my jurisdiction. I have nothing to report at the present time. I believe there is no official position on the part of Australia as to what it will do. As soon as there is anything official, I will undertake to report the matter to the House.


Mr. Speaker:: Orders of the day. Perhaps with the consent of the House the hon. member for Comox-Alber-ni and the hon. member for Cape Breton-East Richmond might be given the opportunity to ask supplementaries.



NEGOTIATIONS WITH BRITISH COLUMBIA RESPECTING OFFSHORE RESOURCES

Mr. Thomas S. Barnett (Comox-Alberni):: I have a supplementary question for the Minister of Energy, Mines and Resources arising out of the negotiations with the provinces with regard to drilling rights. Are there any current negotiations going on with the province of British Columbia on this subject?


John James Greene: There are no current negotiations going on at the ministerial level with British Columbia. I believe officials are still discussing the matter. However, in all fairness, I think that the position of the government of British Columbia on this subject has been made rather firm. Of course, there is a decision of the Supreme Court of Canada on a reference specifically with regard to British Columbia.



ATOMIC ENERGY


Donald MacInnis: have a supplementary question for the Minister of

February 26, 1971

Energy, Mines and Resources. When reporting on the possible sale to Australia, will the minister also report to the House on the success of any other sales of atomic reactors and what the profit picture is as far as the Canadian government is concerned?


John James Greene: Mr. Speaker, that is a more abstruse and lengthy question. We will certainly be glad to answer such questions when the estimates of Atomic Energy of Canada Limited are before the committee, at which time I think I might be able to go into the entire subject more usefully.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-217, to implement an agreement for the avoidance of double taxation with respect to income tax between Canada and Jamaica, as reported (without amendment) from the Standing Committee on Finance, Trade and Economic Affairs.
Donald Stovel Macdonald: that Bill C-217, to implement an agreement for the avoidance of double taxation with respect to income tax between Canada and Jamaica, as reported (without amendment) from the Standing Committee of Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Donald Stovel Macdonald: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.



CROP INSURANCE ACT


[Stage Direction]
The House proceeded to the consideration of Bill C-185, to amend the Crop Insurance Act, as reported (without amendment) from the Standing Committee on Agriculture.
Donald Stovel Macdonald: that Bill C-185, to amend the Crop Insurance Act, as reported (without amendment) from the Standing Committee on Agriculture, be concurred in.
Canada Development Corporation


[Stage Direction]
Motion agreed to.
Donald Stovel Macdonald: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.


Thomas Miller Bell: On a point of order, Mr. Speaker. May I just say that this demonstrates what can be done by friendliness, co-operation and good will. It does not mean that we are scared of the Prime Minister (Mr. Trudeau).


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: I wish to thank the hon. member and his colleagues for their change of heart.



CANADA DEVELOPMENT CORPORATION


[Stage Direction]
The House resumed, from Wednesday, February 24, 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).
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, the bill before the House, Bill C-219, purports to be an important initiative on the part of the government to deal with some of our basic economic difficulties. During the past few weeks there has been growing concern in all parts of Canada about the economic trends which seem to be taking us away from the objectives set out by the Economic Council and by spokesmen for a government which just over two years ago, during the 1968 election campaign, suggested they would produce an administration which would deal with some of the fundamental economic problems in Canada.
I have read the bill carefully, and followed the debate thus far. I have listened to the Minister of Finance (Mr. Benson) and to spokesmen on the other side of the House but I can find no hope at all in terms of the bill that it will deal with the fundamental economic ills which are causing such concern at the moment. As a matter of fact, the minister himself, in his explanation inside and outside the House, went to great pains to indicate that the legislation will not deal, for example, with the one great question under discussion at the moment in the media and elsewhere, the question of Canadian economic nationalism. He claims it will have nothing to do with "buying back Canada" and ensuring greater control by Canadians over their own economic destiny. Then again, the minister took great pains to point out that it will have no immediate effect on the incidence of unemployment, underdevelopment and the lack of adequate productivity which are major issues

February 26, 1971
Canada Development Corporation
before Parliament and the nation at the present time. It is only possible to conclude in the light of this analysis that the Canada Development Corporation, as outlined in this bill, was designed more as a political gesture than as a measure likely to have a real economic impact.
Having made this assertion, I should proceed to back it up with concrete evidence. In the first instance, far too many of the legislative initiatives of the government are put forward on the basis of their political impact rather than on the basis of their potential benefit to the economy.


Jean-Luc Pepin: Perish the thought!


Walter Gilbert Dinsdale: Because the issue of Canadian economic nationalism is of great concern at the moment, suddenly, after eight years of equivocation, delay and hesitancy, this bill is brought before the House and is being pushed to the completion of the second reading stage. There are many other matters of much greater concern which Parliament would be delighted to deal with if the government would only place the items on the Order Paper and bring them forward for debate. Instead, we are presented with a phony bill which has been talked about by the last two Liberal governments and which, on the admission of the Minister of Finance himself, will do nothing to end the continuing takeover by foreign interests of the Canadian economy.
Spokesmen for the government have pointed out that there is a difference of opinion among various opposition groups as to the effect and significance of Bill C-219. Members of the NDP have criticized the bill because it does not go far enough in meeting the objectives which spokesmen for that party have often put forward. I believe it was the NDP, or its predecessor the CCF party, which first put forward the notion of a development corporation which would give the government sufficient economic power to enable it to operate with considerable effect in the business and industrial world. The criticism offered by the NDP is that the bill would have no significance in this regard. In other words, they are saying it is a shame, full of sound and fury but signifying nothing. On the other hand, spokesmen for the official opposition have been saying that the CDC, instead of assisting in industrial and economic development, will actually have a negative effect. This has been the main concern of spokesmen from the group to which I belong.
It was the Liberal party which first put the notion of a development corporation specifically into the Speech from the Throne back in 1963. At that time the Honourable Walter Gordon was minister of finance. He came to Parliament full of hope and optimism about the brave new world which would be established by his budget proposals, and particularly by the economic enterprise which he described as the Canada Development Corporation. We all know what happened to his budget proposals. This was the ill-starred budget which paved the way for some of the major economic troubles which have beset us to an increasing extent all through the latter part of the decade of the sixties. Indeed, it was the
budget chiefly responsible for the runaway inflation, the control of which is still the keynote of the present government's economic policy.
Though the proposition was first put forward formally in 1963 by the former minister of finance, it had been talked about by other Canadian politicians. The Honourable Alvin Hamilton was a leading proponent of the Canada Development Corporation. This was when he was minister of northern affairs and national resources. His idea was to make it possible for Canadians to become involved in the real process of economic development in Canada. Our rich Canadian resources in the underdeveloped parts of this country, which include a large segment of northern Canada, should be developed in the best interests of Canadians in all parts of the country.
It is interesting to note that the government has almost stumbled into an acknowledgement that the role of the CDC is northern oriented, that this is where the action should be. In bringing together the Canada Development Corporation, the organization is largely going to be based, in the early stages of its operations, on three Crown corporations whose activities are largely carried on in northern Canada. I refer to the Northern Transportation Company, Eldorado and Panarctic. The only other major corporation that will become involved in the early stages of the CDC is the Polymer Corporation. Perhaps it is not quite appropriate to describe this corporation as exclusively concerned with the processing and manufacturing of synthetic rubber, because it has now diversified its operations and is reaching out to many other enterprises both inside and outside Canada.
I think it is significant that there is an implicit recognition on the part of government of the necessity for having Canadians more closely involved in developing our resource-based industries in as much as it has based the CDC on these three northern enterprises. Unfortunately, however, there is nothing in the bill to make it possible for Canadians to participate. Indeed, the Canadian participation regulations which were forthcoming irr the sixties, before the Liberals returned to office in 1963, were more effective in bringing about real involvement in resource development at the grass roots level than the present proposals in this legislation. These regulations recognized that exploration is of the utmost importance in any potential development of our northern resources, and as a result there was no restriction at the exploration level. In fact, foreign sources of capital were encouraged. Exploration is a rugged task and a highly risky financial operation, and companies were encouraged to explore wherever interest could be found.
However, after discovery of resources it did become necessary under the Canadian participation regulations for these companies immediately to Canadianize their operations, primarily by making at least 51 per cent of their shares available on Canadian stock exchanges. This is a more realistic approach to the basic necessity for

February 26, 1971

resource development in Canada than any of the provisions in Bill C-219. The very fact that the government has included this northern orientation in the Crown corporations brought under the umbrella of the CDC, is, as I say, implicit recognition of this fact.
Actually, if we are going to deal with the fundamental economic problems that a corporation of this kind is supposed to become concerned with, we have to move in quite radically different directions. Some of these fundamental problems relate to underdevelopment in western Canada and the Maritime provinces. I see nothing in the proposed legislation that will encourage Canadian resource and manufacturing development in areas where this is urgently needed. As a matter of fact, as far as the north is concerned, instead of continuing the initiatives that were taken in the early 1960's the government has tended to discourage this sort of activity by cancelling roads to resources programs. One area where governments can play a useful role in encouraging initiative on the part of private enterprise is in providing the infrastructure-the roads, railways and all facilities necessary-to enable private enterprise to develop Canada's resource potential. But instead of this we find the government tending to back away from its fundamental responsibilities. When the CDC is established it will be highly profit oriented. It will only develop areas where the profit potential is extremely high, and therefore the question of dealing with risk ventures will not be assisted by any manner or means.
This leads me to the discussion that took place in the House earlier today. There has been some criticism that the opposition is less than co-operative with the government in its legislative proposals and initiatives. This criticism has come from the Member of Parliament who holds the highest office in the land, the Prime Minister (Mr. Trudeau), the Queen's first minister. I think our discussion of the CDC at this stage makes it possible to put the record in perspective.
Why are we concerning ourselves at this time with a bill which offers absolutely no chance of dealing with the fundamental economic issues facing Canada? Why are we dealing with this issue when we should be debating, for example, amendments to the Unemployment Insurance Act? This is a matter of vital importance in view of the critical and growing unemployment situation in Canada. Why is a bill of this kind taking precedence over the implementation of the recommendations contained in the white paper on tax reform? Parliament has been waiting for many months now for the Minister of Finance (Mr. Benson) to bring down his proposed legislation based on the long and extensive discussion of his white paper proposals. Why is priority given to this bill, which is window dressing, political posturing, a bill designed to create the impression that the government is doing something to cope with fundamental economic problems when actually it does nothing significant at all?
I am sure if the government put amendments before us-
Canada Development Corporation


Murray Arndell McBride: Mr. Speaker, would the hon. member permit a question? Does he also consider the marketing bill, which has been held up for about a year now, to be window dressing?


Mr. Deputy Speaker:: Order, please. It seems to the Chair that the question asked by the hon. member can only lead us further away from the bill now under consideration.


Walter Gilbert Dinsdale: Mr. Speaker, the hon. member has asked a question and I am very pleased to reply to it. If the agricultural products marketing bill goes through-


Mr. Deputy Speaker:: Order, please. The Chair has indicated that the question as asked is irrelevant to the bill now under discussion. If the hon. member for Bran-don-Souris (Mr. Dinsdale) answers the question, he will lead this debate away from the subject matter of the measure now before the House. With all respect, I would ask him to bear that in mind.


Walter Gilbert Dinsdale: With great respect, Mr. Speaker, I was just making the point that there were other legislative items which should be given greater priority than the Canada Development Corporation. Obviously, the hon. member thinks the agricultural marketing bill is one item of government legislation which should have greater priority.


Murray Arndell McBride: Mr. Speaker, I rise on a point of order.


Mr. Deputy Speaker:: Order, please. Again, the Chair must say that the question asked by the hon. member for Lanark-Renfrew-Carleton (Mr. McBride) is irrelevant to the subject matter now being debated I suggest that the hon. member for Brandon-Souris should continue his remarks.


Walter Gilbert Dinsdale: Thank you, Mr. Speaker. I shall follow your directions and carry on with the theme of my remarks. I presume the hon. member was merely trying to introduce a red herring to the discussion.


Murray Arndell McBride: Mr. Speaker, I rise on a point of order.


Mr. Deputy Speaker:: Order, please. I understand the hon. member is rising on a point of order.


Murray Arndell McBride: Mr. Speaker, in no sense did I introduce a red herring. The hon. member for Brandon-Souris suggested there were other more important bills before the House.


An hon. Member:: Leave it until Sunday.


Murray Arndell McBride: I suggest that the opposition has prevented many of these bills from coming before the House.


Mr. Deputy Speaker:: Order, please. The Chair has been carefully following the remarks of the hon. member for Brandon-Souris and feels they have been related to the bill now before us. I suggest to the hon. member for Lanark-Renfrew-Carleton (Mr. McBride) that his initial question could only lead the House to a renewed debate

February 26, 1971
Canada Development Corporation on legislation which is now pending. I feel the remarks of the hon. member for Brandon-Souris were in order.


Walter Gilbert Dinsdale: Thank you, Mr. Speaker. After this diversionary tactic on the part of the hon. member, I should like to again refer to legislative issues that are fundamental to this House of Commons. The Prime Minister has complained about the way the opposition handles the business of the House. Perhaps members opposite do not understand our practices and procedures, or how Parliament works. Fairly recently we-


Murray Arndell McBride: Mr. Speaker, surely the hon. member is lecturing the House, with some knowledge of its procedures, in an arrogant fashion, hardly befitting a distinguished parliamentarian like himself.


Walter Gilbert Dinsdale: Mr. Speaker, I did not ask the hon. member to interrupt. I did have the floor and I yielded to the hon. member. Perhaps we should get on with the debate because time is at a premium today.


Mr. Mahoney:: That is an interesting observation.


Jean-Luc Pepin: I wish I had said that.


Walter Gilbert Dinsdale: Let me come back to the point I was endeavouring to make. We would be delighted if this government would come to grips with the problem instead of shadow boxing. It should tackle the real issues of concern in Canada. We must do something on an emergency basis to stimulate the economy of Canada. The unemployment situation has been discussed in season and out of season, but this government has continually treated the matter with marked disdain. We must deal with unemployment problems as they exist today. We have some 700,000 people unemployed. There are a great number of companies going into bankruptcy. The DREE program of the Department of Regional Economic Expansion is not having the desired effect because it is being used for political purposes. There is a lack of co-ordination in that we have several departments of government working at odds with each other.
Just before one o'clock I should like to give the House an illustration of what is happening at this time. In 1969 the government adopted, as one of its major initiatives, the concept of bringing down the high cost of drugs in Canada. This is a basic financial issue.


Mr. Deputy Speaker:: There has been some discussion among hon. members about relevancy. I think the hon. member who now has the floor is beginning to wander a bit too far.


Walter Gilbert Dinsdale: With all due respect, Mr. Speaker, we are at the second reading stage of this bill. During all my experience in this House hon. members have never been restricted in their attempts to deal with the implications of government legislation, or in their efforts to place these measures in proper perspective. If we are to be confined to very narrow limits of debate at this stage, this will amount to a further infringement of the rights of private members. It is my understanding that at the second reading stage our discussions can range-


Mr. Deputy Speaker:: Order, please. The Chair was in no way attempting to restrict the hon. member. His rights are the same as those enjoyed by all other members of the House. During the second reading consideration of a measure, the Chair suggests that hon. members must relate their remarks to the subject matter of the bill before the House. I have listened carefully to the hon. member's remarks and it seemed to me the hon. member was beginning to deal with other aspects of government policy, specifically government's policy in attempting to reduce the price of drugs. That seems to me to be irrelevant to the bill under consideration.


An hon. Member:: Let's call it one o'clock.


Walter Gilbert Dinsdale: Mr. Speaker, my time has almost expired. I was referring to the fact that the Canada Development Corporation-


Patrick Morgan Mahoney: Tell us about Red River Valley.


Walter Gilbert Dinsdale: Mr. Speaker, the hon. member for Calgary, whatever he is, ought to be a spokesman for western Canada.


An hon. Member:: He is.


Walter Gilbert Dinsdale: He carries on like a trained seal, going along with everything this government does.


Mr. Deachman:: You don't see any trained seals on the Prairies.


Some hon. Members:: Oh, oh.


Walter Gilbert Dinsdale: He will not give the slightest-


Mr. Deputy Speaker:: Order, please. It being one o'clock I do now leave the Chair.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Walter Gilbert Dinsdale: Mr. Speaker, when the House rose at one o'clock, I was just concluding my remarks. I was interrupted quite often, so I trust the Chair will be lenient and allow me to bring my observations to a conclusion. As a matter of fact, I was in full flight when the recess was called by the Chair.
The main point I wish to bring out, as we pursue this important subject of ways and means to stimulate the Canadian economy, to get it out of the doldrums into which it has descended because of the maladministration of this government is that we should not dabble in window dressing tactics such as those employed in the bill which is before us but rather should get to the root of our economic problems. The time has long past for the government to abandon its ad hoc approach to our economic problems. Now, when an issue comes up it is

February 26, 1971

widely discussed because of the impact of the media. It is possible to get public involvement in an issue within a relatively short space of time because of the instantaneous impact of the electronic means of communication. The government, as a result, instead of pursuing the even tenor of its way, mapping out its economic development program on a long-term, rational basis, is lured off the track in pursuit of will-o'-the wisps. I feel that is the best description that can be appied to the present proposals of the government to establish the Canada Development Corporation.
It is an old idea. It is an idea that has broad support from the Canadian financial community, and from many members of the House of Commons. It appeals to Canadians because it is anticipated that through government initiative of this kind the ordinary man in the street can become directly involved, even if only on a limited financial scale, in the development of his country's rich resources. But this measure does nothing to make that possible. Instead, it rims at cross purposes to some programs already initiated by the government. This is characteristic of the government's approach to economic matters.
This bill is a political sham. It is window dressing, designed to remove the pressure caused by the concern widely felt in favour of Canadian economic nationalism. It is a diversionary tactic which the government hopes will conceal its responsibility for our critical unemployment situation, and for the declining economy in the underdeveloped areas of the country. The reaction of some government backbenchers to the remarks I was making before one o'clock would indicate that they are sensitive in this regard. I strongly suggest that they quit playing politics at this time and deal with the real problems of Canada.


John Stratford Burton: Mr. Speaker, having examined the inadequacies of this bill respecting the establishment of the Canada Development Corporation, it was ironic to read a report in this morning's press, referred to earlier today, telling of the Prime Minister's (Mr. Trudeau) criticisms of the operations of the House of Commons. He was very critical of the work done by the opposition, and in one of his statements said that nine times out of ten during the daily question period the opposition missed their mark. I think the Prime Minister would perform a much better service for the people of Canada if he ensured that more of the legislation presented by the government was on the mark and dealt with the problems of the people. Certainly, the government has fanned badly, and indeed fanned totally by attempting to deal with some of our economic problems through the provisions of this bill.
When we are discussing this proposal to establish a Canada Development Corporation we are, in effect, considering Canada's future. At present we have a combination of social, cultural, political and economic problems, the resolution of which will have an impact on Canada's future. The fact is that many of us want to see a national identity established in Canada based on moral and ethical standards that take account of social concerns and
Canada Development Corporation sensitivities, as well as national aspirations and international considerations. In establishing such a national identity, it is necessary that we instal a sense of the principle of equity in our affairs and that we reject the manner in which the economic system has operated, as evidenced by present disparities and inequities. It seems to me that the Liberal party has a record in this connection of which it should not be proud.
For a long time the Liberal party has been committed to the principle of continentalism, of tying Canada closer to the United States, and of merging our economies together. We have no objection to normal economic relations with the United States. We want to have friendly relations with the United States. Very often the economic relations we have make good sense for the people of both nations, and when that is the case we want to promote the activities in question. But we must consider the direction in which our economy is moving now.
While the immediate implications of this bill will be primarily economic, it has wider implications in the national sense. Canada was established as a nation through the hard work of its people, despite formidable obstacles, but in recent years there has been abdication of responsibility by the government to maintain our Canadian nationhood or identity in such a way that we can develop our resources in the best interests of all Canadians.
It has also to be said that Canadian business has failed. For a long time it had operated under an umbrella of protection, behind various trade and tariff barriers. A rational case could be made for that type of development during the infancy stages of our nation, but we have left those stages behind us. Some time during the past 20 or 30 years Canadian businessmen made a basic decision which has had profound implications for all of us. Many of them, not all, decided to cast their lot in with larger American business concerns. They no longer considered the national interest. They did not think that their prosperity and power derived from political decisions taken by Canadian leaders and by the Canadian people in earlier times. They were no longer willing to pay their debt to Canadian society. They were only interested in the almighty buck, and they sold out the interests of the Canadian people and of the Canadian nation. What we have before us in the Canada Development Corporation will be another mark of failure. I suggest that there are inconsistencies and conflicts in the manner in which it has been set up which will make it impossible for the corporation to further the interests of the Canadian people.
I found the remarks of the Minister of Finance (Mr. Benson) of particular interest when he introduced this bill at second reading. First, he indicated his own confusion and then said that all of the opposition parties seemed to be in favour of the Canada Development Corporation yet against it at the same time. He completely missed the point, Mr. Speaker. Some of us are talking about a Canada Development Corporation different from that presented to us at this session, namely the one which

February 26, 1971
Canada Development Corporation
was first proposed by Walter Gordon when he was a member of this House.
The minister also stated that the government believes there is a role for the new institution. He suggested that one of its purposes is to help make possible fuller participation in the growth and development of Canada. This is typical of the wishy-washy statements made by Liberal spokesmen from time to time. The minister then took note of some of the new developments on the international economic scene by stating:
Business and industry have entered a new period of internationalism which makes it desirable that there be a number of Canadian controlled corporations with headquarters in Canada and with the kind of institutional strength and management capabilities to compete successfully in Canadian and international markets.
I think we need to examine the implications of this statement, Mr. Speaker. The minister has correctly noted the growth of a new phenomenon, the multinational corporation. We know that this type of institution is playing an ever-increasing role on the economic scene but the minister seems to suggest that Canada should get into the action by doing the same type of thing. I am not at all sure that this would serve our own best interests in the long run, as I doubt whether we could compete in that sort of elite market given our comparative geographic and economic conditions.


Jean-Luc Pepin: That remains to be demonstrated.


John Stratford Burton: The minister acknowledged that Canadians are asking why they cannot participate more fully in their own resource and industrial development and in the growth of strong Canadian based corporations with extensive international operations. He correctly pointed to the concern of the Canadian people on this score, but I feel he has totally missed the mark in the bill that he is now asking us to pass.


An hon. Member:: What is the mark?


John Stratford Burton: Be patient and you will find out.


Mr. Orlikow:: It is not obscene language, that is for sure.


An hon. Member:: You don't want multinational corporations and you don't want-


John Stratford Burton: All we hear are loud noises from people who are not prepared to listen, who are not prepared to learn, but simply-


The Acting Speaker (Mr. Richard):: Order, please. The hon. member for Regina East has the floor. Although we are not very numerous hon. members are making much more noise than a full House. The Chair suggests that hon. members should listen attentively unless they have sufficient cause to interrupt the hon. member for Regina East.


John Stratford Burton: Thank you, Mr. Speaker-


Mr. Osier:: On a point of privilege, Mr. Speaker. The problem is that we have been listening attentively and we cannot understand what the hon. member says. All we are asking-


Mr. Crouse:: That is not a point of order.


The Acting Speaker (Mr. Richard):: Order, please. I will deal with one point of order at a time. I think this is a continuation of the same kind of argument we have had sotto voce but louder this time.


John Stratford Burton: Mr. Speaker, I am not sure there is any hope that some hon. members opposite will be able to understand, but I am sure that the Canadian people will understand.


Walter Gilbert Dinsdale: Trained seals!


John Stratford Burton: The Minister of Finance outlined what he considered to be some of the purposes of the Canada Development Corporation. The first was to help develop and maintain strong Canadian controlled and Canadian managed corporations in the private sector of the economy and, second, to give Canadians greater opportunity to invest and participate in the economic development of Canada. It is quite clear that the Canada Development Corporation is going to assist the private sector of the economy. I have always acknowledged that there is a role to be played by the private sector in economic development and activity, but what we have here is a public agency apparently designed to serve the interests of the people of Canada but which instead will encourage and help the private sector. These conflicts may be beyond the understanding of some Liberal members, but I suggest that the Canadian people will see them very clearly.
It seems to me, Mr. Speaker-


Mr. Anderson:: Waffle on.


John Stratford Burton: -that there are other problems in connection with the Canada Development Corporation which should be examined. The minister stated that the first objective would be to make investment in the equity of existing enterprises and also assistance in the expansion of existing ones. It remains to be seen how this can be done; much of it will be dependent upon policy to be developed after the corporation is formed. The minister stated it is expected that CDC investment in a corporation would normally be large enough, either alone or in combination with other Canadian investors, to ensure Canadian control. I would like to see more evidence of this than has been forthcoming. The minister indicated something of the approach to be used by the Canada Development Corporation when he said:
Ideally, many of its actions and Investments will be in response to proposals made to It by others.
What that sentence really means, Mr. Speaker, is that the CDC is simply to react to plans and proposals placed before it, presumably by the private sector or by others. On the basis of the minister's statement, the CDC is not going to take the initiative in terms of influencing the course of economic development in this country. It seems
February 26, 1971

to me this sentence indicates quite clearly that the corporation is simply going to react to proposals and plans presented by others, to say "This is a good idea and that is not such a good idea." This leaves a great deal to be desired and I shall elaborate on it in a few moments if some hon. members opposite will just have patience.
We have to take account of the fact that the Canada Development Corporation will only have a very small percentage of public equity. The figure of 10 per cent has been mentioned. I see this as one of the problems for this corporation, Mr. Speaker, the small percentage of public participation. By "public" I mean through the hands of the government which, after all, has final responsibility for the over-all direction and development of the economy.
The minister stated that the management of the corporation will at all times be fully aware of the need to earn a competitive rate of return on invested capital fully commensurate with the risks involved. He also stated:
The CDC cannot and must not be expected to make investments which do not meet its criteria for profitability. The national interest and the profit motive are not always compatible, but there is a broad area over which they are or can be in harmony.
With the latter statement I have no quarrel. There can be times, and there will be times, when those two objectives and those two interests can be harmonized. It seems to me, however, that at other times there will be some very difficult and serious conflicts of interest. Mr. Speaker, what is the situation with respect to one of the corporations which it is proposed to have taken over by Canada Development Corporation, namely, Panarctic Oils. A considerable amount of federal money has been placed into the Panarctic Oils operation, and for good reason. I think it is a wise, public investment. However, for the present and for some considerable time in the future, I suggest that it will not be a profitable venture. Actually, in terms of the profit considerations which will apply to this corporation, it would be impossible to establish a Canada Development Corporation which had a major interest in Panarctic Oils and, thereby, give to the latter the type of protection that is needed in the best long run interests of Canada.
It seems to me we must recognize that there is a very real problem when we look at Canada Development Corporation from the viewpoint of profit on the one hand, while, on the other hand, we are concerned about the public interest. At times these interests are compatible. But I am sure it will be recognized by all concerned that there may be times when a Canada Development Corporation, properly structured in the form of a Crown corporation as is proposed in the amendment moved by my colleague the hon. member for Waterloo (Mr. Saltsman), would consider working either by itself or in conjunction with other agencies, which might be provincial governments, local community organizations, local governments or, in some cases, even private interests, on projects which might be in the best interest of the corporation or in the best interests of Canada, to develop an
Canada Development Corporation
enterprise which would not produce a return in the form of dividends to shareholders but which, from the viewpoint of the benefits to the Canadian people, would certainly be a worthwhile venture. It seems to me it is recognized in many quarters that we must go beyond the old profit and loss approach, which is really what is involved when one looks at the balance sheet of any corporation. One must look at it from the wider standpoint of the total costs involved and of the total benefits involved, if we are to see wise decision making in future. As well, it seems to me, Mr. Speaker, that we must keep in mind the very great difficulties which are involved in terms of the constitutional structure that we have in Canada. We, after all, are a federal state and there are difficulties in carrying on any type of central, co-ordinating planning of the economy at the federal level, because of the divided jurisdiction which exists in Canada.
After all, Mr. Speaker, the provinces, and very rightly so, have their own interests to consider. They have their own responsibilities. This is the structure which has been laid down for us in the constitution, a great portion of Which will remain, despite any amendments which may eventually be made to the constitution. It seems to me that a properly constructed Canada Development Corporation could play a very important role in terms of giving the federal government the type of tool that it needs to direct the course of the development of the economy, and to ensure that this will be of benefit to the Canadian people.
It seems to me that other problems must be taken into account as well. I have already noted that the Canada Development Corporation, as it is proposed, is based on the profit motive; that is a prime goal, as admitted and stated by the Minister of Finance. It seems to me that it is structured on this basis and, certainly, that will be a very great impediment from the start. Second, the Corporation will not be responsible to the government or to Parliament. Third, we shall have a sell-out of certain corporations to private investors. That, really, is what will be involved. This will create some very real problems. Some of these Crown corporations, such as Polymer, Eldorado, and the Northern Transportation Company, have been very profitable. Actually, they have produced a good rate of return on the original investment, and I am very happy that they have done so. Possibly, they will continue to do so in future, but that may not necessarily be the case. It may be that at some time in the future one or other of these corporations will need, for the sake of the public interest to carry on their operations in a way which may be designed to meet their costs, but no more than that. Such a corporation may even have to be subsidized because of certain considerations affecting the public interest. The fact that Canada Development Corporation is to be controlled as a private corporation, with the government retaining only about a 10 per cent interest, will pose a very great problem, especially if the corporation is to do the job conceived for it.
It seems to me that there is one other aspect of the considerations involving Canada Development Corporation that hon. members ought to consider today. For
February 26, 1971

Canada Development Corporation some time now we have had a regional development program in Canada which the government has been touting as its great weapon in the attempt to promote some greater degree of equity in terms of economic wealth and power as between one region and another in Canada. The federal government has been spending a great deal of money on this program. It was revealed last fall in the House that some three quarters of a billion dollars, I believe, had been spent by the federal government over a period of years through a number of programs involving incentive grants and assistance to private industry, in an attempt to bolster the economy of the various regions of Canada. Of course, there have been numerous problems in administering these programs effectively and in ensuring that they would reach the objectives set out for them.
The federal government has, over the last couple of years, introduced its latest regional development program. The government claimed, actually, that they had looked at some of the mistakes made in some of the earlier programs that had been introduced. A great deal of money is being spent on the program now. I notice, for example, that the program of the Department of Regional Economic Expansion for the year 1971-72 will involve something over $400 million. Another $37 million, or $40 million, is to be voted to the Cape Breton Development Corporation. Some of these expenditures are very worthwhile and I think that they can be justified, Mr. Speaker. Nevertheless, this is a very large program. I think it might also be noted that a large amount of this program consists of incentive grants to private industry and to private entrepreneurs.
I am interested to note that even some of the Liberal backbenchers are becoming concerned about this matter. It was with a great deal of interest that I noted a report in the Edmonton Journal of February 19, concerning the hon. member for Edmonton-Strathcona (Mr. Harries). The report reads in part:
The federal government should stop immediately its industrial incentive grant program except in very special areas, says Liberal MP Hu Harries.


David Orlikow: The hon. member for Edmonton-Strathcona is not in the chamber.


John Stratford Burton: The report went on to state that the grants should be available only to areas where there is "clearly a technological opportunity accompanied by a high and continuing rate of unemployment." As well, the hon. member is reported to have said that the current incentive program is turning out to be the same as the last federal incentive program which, when completed, was "roundly criticized". Then, the hon. member went on to say this:
The incentive grant represented 'a windfall profit to the shareholders' of Imperial Oil, which is more than 70 per cent owned by Standard Oil of New Jersey,-
That is what a Liberal member is reported to have said. I commend the hon. member for his frankness and honesty in expressing his doubts about this program, the manner in which it is being operated and its effectiveness. We need to examine the inadequacies of the program of the Department of Regional Economic Expansion.
On another occasion, I outlined what I considered to be some of the weaknesses of the government's program; that is the give-away nature of the grants and the subsidization, of industry. As the hon. member for Edmonton-Strathcona stated, in many cases the decision to give an incentive grant did not change the basic decision about whether to set up an industry. In fact, in many cases the decision had already been made. It is difficult to define in any precise way, but I think many people suspect that many of the grants were given to firms which, in fact, intended to go ahead with the project in any case and the provision of an incentive grant did not affect that basic decision. I am not suggesting that there is not a need for a great deal of expenditure on a regional development program to remove the regional disparities in Canada. I think it is recognized in all parts of the House that there is a very great need.
We need a recasting and redirection of the regional development program in order to ensure that the public interest is met. Here again, we run into conflict with the manner in which the government regards the profit motive. They consider that the profit motive is still the prime thing to take into account. However, there are many cases today where investments are justified in terms of the services provided, facilities established, products provided at a reasonable cost and where the profit consideration should not be the prime consideration.
The relevance of what I have been saying concerning the need for a recasting of the regional development program is that we have a golden opportunity through the Canada Development Corporation to provide the necessary redirection for the program. In fact, if the Canada Development Corporation were constituted as a Crown or public corporation, it could be made the instrument through which a large part of economic development program in various regions could be carried out.
There are other programs that still need to be carried on in terms of developing the infrastructure of many communities and areas of Canada which are not directly related to the establishment of new facilities for the production of goods or services. Nevertheless, I think the Canada Development Corporation, if properly constituted as a Crown corporation, could in fact do the job that all would like to see done, namely ensuring that we have a sound regional development program which will remove regional disparities in Canada, result in a greater degree of equity of wealth and economic power in the various regions of Canada and provide a better balance for the Canadian nation. I suggest that this could be much more adequately accomplished through a Crown or public corporation whose primary concern would be the public interest rather than the profit motive.
As the hon. member for Waterloo (Mr. Saltsman) and others in this party have pointed out, there will be occasions when it will be desirable for the Canada Development Corporation, as a Crown corporation, to work in concert with private or public concerns. They would establish an undertaking, concern or operation which

February 26, 1971

would produce a profit, and it should be designed on that basis. That should certainly be one of the approaches used whenever it is considered to be the best one for a particular problem. However, it seems that the government is locking itself in the present structure which it is proposing for the Canada Development Corporation. As the corporation is to be constituted, the first, second and last objective will be to produce a profit.
One of the concerns that has resulted in this legislation being placed before the House is that we have a very real problem in Canada today in terms of the high degree of foreign ownership that exists in the Canadian economy. I do not need to quote figures this afternoon indicating the percentages of various sectors of the Canadian economy which are controlled by foreign interests, whether American or others. This process has gone so far down the road that we now have United States economists and other officials admitting that Canada is now being bought out with its own money. This is demonstrated in a recent study published by the United States department of commerce. It shows that 94 per cent of the capital generated by United States corporations in Canada in 1968 was generated through profits, retained earnings, depreciation or the raising of loan capital within Canada. It is quite likely that today the figure is closer to 100 per cent. This indicates how far we have gone.
This situation has developed because of the absence of a government policy on this question. We have been promised such a policy for weeks and months. There is increasing concern about this matter. The rate of takeover of Canadian concerns by foreign controlled companies is increasing. On a number of occasions in this House I, and other members, have asked whether we would have an interim policy until the government decides on a final policy. The Prime Minister (Mr. Trudeau) shrugs it off. I see no reason why we cannot have a moratorium on any further takeovers until such time as the government is able to decide on a policy which it can present to this House and the people of Canada. Instead, we find the Prime Minister engaged in some rather devious attempts to lead the Canadian people off the trail of the power issue.
When speaking in Regina recently the Prime Minister attempted to suggest it was just those fellows from Toronto, Watkins, Gordon and others, who are concerned about this matter. He stated there is a problem in some of the lesser developed regions in Canada, such as the Atlantic provinces, Quebec and parts of western Canada, but we would not have as high a rate of development if we were to place restrictions on foreign ownership. Perhaps that would happen; I acknowledge there is a problem. This could possibly happen with a Liberal government and its typical lack of policies for dealing with some of these problems.


Edmund Boyd Osler: What would your answer be?


John Stratford Burton: I have been attempting to suggest it. The Canada Development Corporation, as a Crown corporation, would be one of the major instruments to be used in
Canada Development Corporation
a sound regional developmental policy in Canada. It would safeguard the public interest in developing the lesser developed regions of Canada.
I find that even a few Liberals are becoming concerned about what is happening. I note an article which appeared in the Ottawa Citizen of February 17. In substance, it is a report of an interview with Mr. Walter Gordon, a former minister of finance. Since parts of it are relevant to the debate today, I should like to quote from it. The article is by Duart Farquharson, and reads:
Former Liberal finance minister Walter Gordon is having second thoughts about the Trudeau government's evolving position on economic nationalism following an attack on him by the Prime Minister in Regina.
"I think I know where he stands," Mr. Gordon told Southam News Services in an interview Tuesday. "Either he has changed his mind, or I'm a very surprised person."


An hon. Member:: I hope he changed his mind.


John Stratford Burton: Mr. Gordon then goes on to refer to some of the remarks made by the Prime Minister when he spoke in Regina. According to the writer of this article, a tape of Mr. Trudeau's remarks in Regina has him saying this about economic nationalism, in part:
There is this constant tradeoff between those parts of Canada which are already fairly developed like the central provinces, and particularly Ontario.
And that's where you find the Melville Watkins and the Walter Gordons who think that enough is enough and they don't want any more foreign capital to develop their province, but they don't always realize that other parts of Canada have not developed that far and therefore they would not mind a little bit of foreign capital if it means there is more technological progress and higher standards of living and so on.


Jean-Luc Pepin: And what's wrong with that?


John Stratford Burton: The fact is the Prime Minister (Mr. Trudeau) is attempting to play one part of the country off against the others.


Some hon. Members:: Oh.


John Stratford Burton: The first question which should be asked of the Prime Minister, this man who has made such a pitch concerning Canadian unity, is: what has been the result to date of the faith he places in private enterprise to do a job which has led to the type of inequity which exists in the Canadian economy today? If the Prime Minister were to rely on the absence of policy we have known in the past, there would be problems. He has totally failed to recognize the basic point that the Canada Development Corporation could be used as a major instrument for ensuring an adequate degree of development in all regions of Canada.


Robert Norman Thompson: Mr. Speaker, on an important issue such as this, it is a tragedy that the sole representative of the financial side of the government present today should be the Minister of Industry, Trade and Commerce (Mr. Pepin).


An hon. Member:: What's wrong with him?

February 26, 1971
Canada Development Corporation


Robert Norman Thompson: There is nothing wrong with him at all.


Some hon. Members:: Hear, hear!


Robert Norman Thompson: Except that he is supporting a piece of legislation which I do not think is characteristic of him at all. I recall back in the early days, before he or I were members of this House, we did on occasion discuss some of the things this country needs. I wish we could go back to the old days because I think we might have better legislation than we have now.


Jean-Luc Pepin: But you have changed so much since then.


Robert Norman Thompson: If you listen carefully to what I have to say, you will find I have not changed at all.


The Acting Speaker (Mr. Richard):: Order. Will the hon. member please address the Chair.


Robert Norman Thompson: Yes, Mr. Speaker. I was merely reminiscing over days in the past, and on a beautiful Friday afternoon when spring seems to be heavy in the air, there is a great temptation to get into a personal digression.
This proposal to establish a Canada Development Corporation has appeared in practically every Speech from the Throne I have heard. It has been the subject of debate in every session during which I have been a member of this House. It now appears to me it would have been far better had the government resorted to one of the contraceptive devices well known to governments and forgotten about the idea altogether. I say this because I do not believe the CDC as proposed here will meet the needs of Canada. I recognize there probably is a legitimate place in the economy for a Canadian development corporation, provided it is geared to sound principles, provided it could do for the private sector of the economy some of the things which the private sector finds difficult, and provided it would really assist in the expansion of our industrial development while at the same time helping retain a larger percentage of ownership in Canadian hands.
I go back to 1965. The Hon. Walter Gordon was at that time minister of finance and he was the one who first enunciated the basic concept of a Canadian Development Corporation in any detail. In a speech on June 3 to the Canadian Textile Institute in St. Adele, he had this to say:
The purpose of the Canada Development Corporation will be:
1)	To initiate the development or expansion of large-scale new enterprises in Canada. If the Canada Development Corporation had been in existence some years ago, it might have participated in such things as the Trans-Canada Pipe Lines, the development of the Canadian oil and gas industry, the tar sands of Alberta, Saskatchewan potash. Labrador iron, the integration of certain sections of our forest industries, and so on.
2)	To acquire a controlling or a substantial minority interest in existing Canadian enterprises which otherwise might have to be sold to outsiders.
3)	Where suitable opportunities occur, to purchase Canadian businesses or resources now held by non-residents and to provide an additional source of funds where non-resident owners want to bring in substantial Canadian partnership in their enterprises here.
I wish the piece of legislation before us would bring about these objectives which were enunciated six years ago by the former minister of finance. If this bill were doing these very things, I would support it because I believe all three of the issues which Mr. Gordon defined are critical issues as far as the development of our industry is concerned. But I do not see this legislation having such an effect. It is a much paler, watered down version of Mr. Gordon's vision at that time and as far as I can see it will not attain the objectives he had in mind. This is not only my belief. As far as I can see, those who are experts in this field share this view.
During its entire economic history, Canada has not been able to provide sufficient capital to meet all its demands for growth capital. Canada has therefore relied, and continues to rely, heavily upon the financial resources of other countries, chiefly the United States. Yet it is not the lack of capital alone which has brought about this situation; it has been the investment climate in Canada, or the lack of a climate which has not been attractive to Canadian capital. As a result, capital has been attracted from the countries where the laws governing the investment of that capital offer more encouragement to investment and incentive than we have been able to provide for our own investors in Canada.
* (3:00p.m.)
The idea of such a government-sponsored catalyst to sustain Canadian-owned enterprise and to encourage Canadian investment in Canadian enterprise is certainly not new, but the terms of reference and the basis on which the government is proposing to do this are, I think, completely inadequate on the one hand and wrong on the other.
If a Canada Development Corporation is to accomplish a worth-while purpose, it would not just have the objective of buying back Canada; it would also encourage the investment of Canadian capital in Canadian enterprise. Apart from the money being held today in funds belonging to insurance companies, mutual funds and other types of corporate financial institutions, there is more than $12 billion in the savings accounts of Canadians. In addition to that, an increasing amount of Canadian savings is being invested in the United States, very often in the type of speculative stock that does not, in the long run, bring about the return that people expect. The tragedy of the situation is that we are not using this source of capital which we have at our disposal: this is where the problem lies.
Look at the situation in Japan. Japan has not only developed a viable economy where the growth of the gross national product has been nearly double ours during the last 20 years; it has also put vast amounts of money into development in Canada and elsewhere. Where has this money come from? It has not come from the United States, from Switzerland or from France. This money has been generated inside Japan. The Japanese have effectively used their own capital, the banking system and the Bank of Japan to generate this capital.
I should like to know why we cannot do something like this. Why does not the government bring in legislation to

February 26, 1971

encourage the generation of capital from Canadian sources both from the point of view of national pride and sound investment? I suggest that as presently constituted, the CDC could lead to disaster. Certainly I do not see it reaching any of the objectives that are so important. In fact, the whole concept as presented is just a shadow of what was once talked about five, six, seven or eight years ago by the government. Tragically, this version of the CDC will practise economic nationalism only when it is profitable to do so. Tragically, also, it will not increase in any appreciable way the amount of capital that Canada's development needs. It is said that initially the government will be the sole shareholder of the Canada Development Corporation. If the CDC is to be the kind of organization in which the Canadian people have confidence, why does it not encourage investment by individual Canadians right from the beginning? Why is it necessary that all the directors of the CDC be, initially, government appointees even though the bill stipulates that the government will eventually appoint only four of the 18 to 21 directors? If that proposition is sound later, why is it not sound at the beginning?
I note that the legislation provides that until the government's share in the CDC drops below 50 per cent- which is not going to happen in a hurry-the Deputy Minister of Finance, and Industry, Trade and Commerce will sit in on the deliberations of the board as ex-offico members. The government is continually complaining that the opposition does nothing but criticize.


Mr. Whicher:: That is right.


Robert Norman Thompson: Well, my hon. friend, listen for a little while and I will give you some humble suggestions about how the Canada Development Corporation might have been brought into being on a more satisfactory basis.
If the government believes that such a corporation is necessary-and six years ago Mr. Gordon defined its objectives-I contend that right from the beginning it should have made the corporation one in which individual Canadians could share. Let it be a corporation in which not only those who have amassed wealth can invest; let the Canadian people at large buy a $10 share, 10 $10 shares, or 100 $10 shares, and buy them for their own good. While immediate returns might not be as profitable as investing their money in a dead type of investment such as Canada bonds, nevertheless within a short time the investment could produce returns directly to the investors as well as to the benefit of the nation.
If the government is convinced that this is a sound proposition, why does it not hold a competition and recruit 20 of the best men in industry who know and are experienced in development investment and finance? There are tremendous talents available. Men from private industry should head this organization, since it is supposed to be a private corporation. Why does the government not get out of its way and let it function as a private corporation, if it is meant to be such? Instead of that, even before the bill has passed the House a civil servant is mooted as the one who will head the corporation. I am not in any way criticizing the individual concerned, but the civil service is the wrong place to recruit
Canada Development Corporation the head of this corporation. He should be taken straight out of the industry.


Jean-Luc Pepin: That is where he came from.


Robert Norman Thompson: If that is so, he should be supported by men who are not in the government service at the present time.


Jean-Luc Pepin: What is wrong with having both?


Robert Norman Thompson: Somehow or another I cannot trust government appointments made in this way. Either government pork-barrelling or Liberal party patronizing will be the criterion behind such appointments. I think we should try to convince the Canadian people that this is a genuine private organization; that the government does not exercise patronage by appointing the directors of the board. If one thing is certain, it is that the holders of perpetual bonds who invested their money in good faith, with government encouragement, will not be investing in the CDC. These people have been denied the right to redeem those bonds at par and have lost not only their capital investment but the benefits accruing therefrom, benefits that have gone to someone else down through the years since these perpetual bonds were put on the market just prior to the beginning of the last war.
I also think that this corporation should move its base of operations as far away from Ottawa as possible. I would not mind if the government established it in Calgary South. The hon. member for Calgary South (Mr. Mahoney) has had a lot to say about tax reform. He needs a little support in the next election if he is going to be here to assist in developing the tax reform policies that the government is talking about. I would be even happier if the CDC were based in Vancouver-but at least get it away from Ottawa. Let private investment, initiative and enterprise get behind it, if it is to be what the government says it will be. But I submit the government has no intention of letting this come about.


Grant Deachman: Mr. Speaker, would the hon. member permit a question? I wonder whether I hear him aright. Did he say the headquarters should be in Vancouver? I just want him to confirm that that is what is in his mind.


Robert Norman Thompson: I think that would be a very good idea, Mr. Speaker. I should like better to see it based in Alberta, but you could put another 500 or 600 miles between it and Ottawa by basing it in Vancouver, and that would be good.
I believe the hon. member for Esquimalt-Saanich (Mr. Anderson), that great ecologist and gentleman who is the authority on how to transport oil from the northland, is suggesting that we should establish the headquarters in Esquimalt or Victoria.


David Anderson: Mr. Speaker, I should like to say, for the record, that this was not my proposal. I did not suggest that the headquarters should be situated in Esquimalt. I suggested that if the Canada Development

February 26, 1971
Canada Development Corporation
Corporation is to be effective, it should be located closer to some of the larger financial centres of this country.


Robert Norman Thompson: Mr. Speaker, that remark shows the illiteracy of the hon. gentleman so far as the financial situation in Canada is concerned. My province and your province would get along a great deal better if they did not have to depend on the sort of financial backing given the west by Bay Street-


An hon. Member:: Oh, sit down!


Mr. Deputy Speaker:: Order, please. It is obvious that the hon. member for Red Deer (Mr. Thompson) does not want to accept a question.


David Anderson: Mr. Speaker, I am not rising to ask a question but to raise a point of order. I should like it clarified whether Vancouver is primarily an acceptable financial centre and Esquimalt is not. If the hon. member has reason to suggest that the headquarters of the CDC should be located in Esquimalt, I would be happy to go along with it because, after all, that is my home area.


Mr. Deputy Speaker:: Order, please.


Robert Norman Thompson: Mr. Speaker, I suggest that the hon. member's point of order is not legitimate. If he wants to know the reason for my suggestion, let me say that it is not really because Esquimalt might be the most appropriate area for locating these headquarters but I had in mind that we should move the headquarters as far away from Ottawa and the central government as possible. Vancouver would be a very good location. The further away from Ottawa we can establish the headquarters, the better off it will be.
These points involve some of the proposals which have been made in respect of the establishment of the Canada Development Corporation, many of which have received the complete support of members in this part of the House. We do not have this kind of policy. In fact, the whole concept of the government in respect of this measure is abortive. I think the measure has value in that it would bring about a denationalization of some corporations. Some of these corporations have operated reasonably well during the years, but others are in difficulty, particularly those concerned with development of the north. I have in mind the development of northern power and transportation. Perhaps in this respect the government does have a role to play in making sure that funds are available for the development of industries and resources in the north. If we do not make these funds available, perhaps we should not be entitled to the potential of the north.
I am convinced, from the pattern indicated in legislation and speeches, that the government will try to convince Canadians that they control the CDC. It has been suggested that the government will encourage insurance companies and the holders of large sources of capital to invest in this corporation. I think it would be far better to let individual Canadians participate.
If there, is a surplus in the Canada Pension Plan, such funds could be used for the development and expansion
of our economy. In this way we could create many more jobs and provide Canadians with a greater share in the development of Canada. More and more we must understand that the right to a living through one's work is a diminishing thing. We must recognize that the right of involvement or ownership on the part of individuals is diminishing. Yet man can only earn his living as a result of the fruits of his labour, the fruits of his capital or through a combination of both. I think a combination of these two principles could very well be the key to private investment as far as the individual Canadian is concerned. We should encourage the widest possible investment and ownership and participation, particularly in common or equity shares, on the part of Canadians in Canadian companies. This can be done not only through a viable form of the Canada Development Corporation but in many other ways.
Throughout the world Canada is noted for its great natural resource potential, only partially developed at the present time. Little is made of the fact that Canadians own very little of this great potential. If a country which claims to be maintaining the second highest standard of living in the world drifts into a situation such as we have in Canada, this is difficult to explain. There are causes for this national problem, and these causes are basically of our own making; we cannot blame somebody else for them. Canadian tax laws are contrary to the development by Canadians of these resources. These tax laws could be remedied very quickly, yet we have gone on for years ignoring this vital problem. When we do discuss it, the outcome is the type of recommendation that will further discourage Canadians from investing in their own resource development.
The advantage of United States companies often makes it impossible for a Canadian company to exist or to take over another Canadian company. This is a result of the difference between our tax laws and those of the United States. If a United States company borrows $10 million from a United States bank to purchase a company in Canada, the interest on the loan is not taxable. This tax concession alone is such a deterrent to a Canadian company that often it will not entertain a project which the United States company considers to be a good investment.
In many areas of our resource industries there would be very little difference in the amount of tax collected if the advantage were given to companies to operate in these remote places. Therefore, tax concessions should be given to this type of development in order to encourage Canadian investors.
Another tragic development which has taken place in Canada during the past 20 years has been the changing structure of our financial machinery. Our decentralized financial organizations have now assembled in the central parts of Canada and are under the kind of control which is not really interested in the investment of money for the development of our natural resources. This has made it impossible for the private Canadian entrepreneur to carry on exploration and development. This leaves them open to only one recourse-that is, to sell to larger, often foreign-companies, or give up the project altogether.

February 26, 1971

If the history of Canadian development could be recorded from the aspect of what the private entrepreneur has done in finding resources and the ingenuity used in developing various types of industries, it would be most impressive. However, not having the capital available for completion, the private entrepreneur has had to sell out. This is indeed a very sad chapter in Canadian history.
This is why most of our industrial development is controlled by people outside of Canada. Far better than developing a Canada Development Corporation, the government should amend its tax restrictions and inhibitions. In this way there would be a far more desirable climate for development. Canada's economy does not need just a little alleviation, $1 billion or $2 billion-it needs a complete change. We should buy up companies now in existence. Canada does not need silk gloves or punitive legislation; it needs a tax structure that will create a climate to encourage the investment of our money and savings in our country.
I recall the Prime Minister (Mr. Trudeau), when he first was elected, talking about his objectives. He spoke about creating an economic climate in which Canadian companies could gain strength and vision in respect of new development and competition with multinational companies. Unfortunately, the suggested tax reform measures are still a matter for debate. We were told last night by the parliamentary secretary that these reforms will be brought in by the end of next month.
The policies of the government have accomplished the reverse of what should have been the goal. I do not think we will ever know the extent of the negative reaction the white paper on tax reform has had in the development of this country, or even in respect of the income from taxation which the government received last year. Certainly we have not gone forward with expansion in proportion to our potential. The government talks about the opposition not making suggestions. Rather than creating a Canada Development Corporation, about which I have made several suggestions, the government would have been better advised to reform the tax laws and produce more incentives.
The government would have been better advised had it reformed its tax laws to produce more incentives and eliminated the idea of a capital gains tax. I do not disagree with the principle of a capital gains tax in an industrialized nation. One day it will be necessary in Canada, but all it would do today is take more money out of circulation which should be going back into development investment. We are not yet prepared for such a luxury, we should know that because of the economic situation we face today.
There is another area which should be a very important part of tax reform policy and with which we should be dealing rather than the Canada Development Corporation. I refer to the elimination of the inheritance tax. We do not believe in double taxation. We believe that once a dollar has been taxed, what remains belongs to the individual. Every dollar on which a tax has been paid
Canada Development Corporation should be left free for investment. It is said that this money falls to the generations who have not earned it; but a person can only eat and consume so much. The balance should go back to the individual Canadian investor to build up this country. This is what made Canada strong in the first instance. But now we are waffling!


Mr. Deputy Speaker:: Order, please. The hon. member for Okanagan Boundary (Mr. Howard) is rising to ask whether the hon. member will permit a question.


Robert Norman Thompson: I have been very generous about questions and I will be pleased to receive a question from the hon. member for Okanagan Boundary (Mr. Howard).


Mr. Howard (Okanagan Boundary):: Mr. Speaker, the hon. member said they are opposed to the inheritance tax. Is he stating the position of the Conservative party- that it is opposed to an inheritance tax in Canada?


Robert Norman Thompson: I was careful to say that tax should be eliminated in respect of all forms of money on which tax has already been paid. Some forms of earnings have not been taxed in the course of normal taxation. I think that type of money should be taxed. But the inheritance tax, as it is now, in many instances is a form of double taxation because it is a tax on money that has already been taxed. I think that form of inheritance tax should be eliminated.
There is another point on which I should like to make a positive suggestion. Instead of having the Canada Development Corporation, it would be much better if the government would provide the framework for a consortium of finance companies, whether they be insurance companies, investment funds or whatever, to come together in order to make available individual and company loans to Canadians through existing financial institutions, to make it possible for them to buy newly-issued common stocks of publicly-listed Canadian companies. There is a precedent for this: we have insured house mortgages to assist home ownership, and farm improvement loans to help farmers. There is no reason why the government should not provide this type of security for much less money than will be involved in the Canada Development Corporation, leaving the incentive where it should be.
Another sound policy in respect of correcting the problem the Minister of Finance (Mr. Benson) said the Canada Development Corporation is supposed to correct would be to amend the Income Tax Act and exempt from corporation income tax the new common stocks that companies issue to finance their corporate expansions, provided that all earnings, less depreciation and other approved allowances-pro rata to the new common stocks-were paid out to the new stockholders. This would enable the new stockholders who have borrowed money to buy stocks to repay their loans and the interest thereon from the earnings of the stocks rather than from their own pockets. This is basically what is done in the United States and it is what makes it possible for the Japanese economy to generate the capital that it has.

February 26, 1971
Canada Development Corporation
Do not let anyone say this is impossible. The Japanese economy-now the most dynamic in the world-has been expanding for the last 20 years or more at an average rate of more than 9 per cent per year and, a year ago, at 13 per cent. Every bit of this has been financed by credit internally and through a government policy which has encouraged incentive and used the banking system in the proper way. This could be done in Canada. The objective of such a policy is that our people, hopefully, would be able to buy back what already has slipped out of our hands. The objective of such a policy is to develop our resources so that Canadians will be the ones involved and so that their money is being used.
The economic situation is not very wholesome at the present time. The unemployment situation is tragic. As one economist said the other day, we probably have lost 200,000 jobs because of the wrong policy to deal with inflation. The policy the government is following will in my opinion continue to make the rich richer and the poor poorer. This will mean that those of us in between will continue to support both segments of the economy. That is the tragedy of the Canadian economic situation at the present time. The concept of a Canada Development Corporation, while it may have some legitimacy, should be very different in pattern and form than it is, for reasons which I have already mentioned. More important than a Canada Development Corporation, even on that basis, is the necessity to correct some of our national inequities and to amend our Income Tax Act in such a way that more incentive is given to Canadians not only as individuals but as Canadian corporations.
If such a policy were being followed, there would be no need for a Canada Development Corporation. I do not think the Canada Development Corporation will be able to "buy back" Canada. The best it will be able to do is denationalize some companies that have been Crown corporations. It will not provide the capital to bring about the expansion and new development that is needed. The Canada Development Corporation might help some companies to find a way to survive, but the basic policy will not be conducive to encouraging companies to take the risk necessary to provide the economy with the type of basic growth that is necessary.
Therefore I believe we now have a situation in which the government, perhaps with good intentions, is missing the boat and is really not providing the legislation we need to meet the objectives which it says the Canada Development Corporation is supposed to meet. That is why I find it very difficult to support this type of legislation. I do not say this happily. I would support any sound proposition that would help our economy go forward and improve the economic situation.
Again, the responsibility must fall on the government, which for some reason has lost its vision, has been confused and has been silent in respect of the daring that is necessary if we are to adopt new and better policies than we have in the past.


David Orlikow: Mr. Speaker, we are today debating a proposal which the Liberal party first suggested eight years ago. Yet in the eight years in

which we have had Liberal governments this concept has never been brought forward until now. It would be interesting for the Canadian people and hon. members to ask themselves why this bill was put in cold storage for eight years. The reasons are obvious. The Liberal party has been, and continues to be, the major exponent of economic continentalism. Then why has it taken this bill out of cold storage? It is because the government realizes that a large number of the Canadian people are concerned about the increasing domination by foreign corporations, mainly American corporations, of the most important sectors of the Canadian economy.
This is not a matter which was brought forward only by members of the New Democratic Party. After all, it was a Liberal government which hired Professor Watkins to make a study and put forward recommendations about what ought to be done.


An hon. Member:: But turned them down.


David Orlikow: And, of course, turned them down until now. In fact, the Liberal government has ignored this question until now. The reason it is bringing the bill forward at this time is that the Liberal party recognizes, as I said, that the Canadian people are becoming increasingly concerned about foreign domination and control; about the fact that the oil industry, the natural gas industry, the auto industry and the mining industry are almost wholly dominated by United States corporations.
Why are Liberal members so touchy about this question? Why does the hon. member for Winnipeg South Centre (Mr. Osier), who comes from one of the foremost and most respected families in Winnipeg, heckle the hon. member for Regina East (Mr. Burton) when he is making his speech? Why is he feeling so touchy about this question?


Edmund Boyd Osler: On a question of privilege, Mr. Speaker, I would like to impress upon the hon. member that the heckling did not deal with the principle of foreign ownership. It was because in my interpretation the hon. member misquoted the Prime Minister's thrust. The Prime Minister's thrust was for controls on capital, controls that might or might not be necessary, and not whether capital as such was a good or a bad thing.


Mr. Deputy Speaker:: Order. This is a point of debate; it is hardly a question of privilege.


David Orlikow: The hon. member for Winnipeg South Centre rises on a spurious question of privilege. But it is good to see him rise to his feet because he did not have the courtesy to rise while the hon. member for Regina East was speaking. He skulked in his seat and interjected.


Edmund Boyd Osler: On a further question of privilege, Mr. Speaker, it will probably take until Monday to prove who is right but I think Hansard will prove that I did rise on a question of privilege at some stage during the speech by the hon. member's colleague.
February 26, 1971


David Orlikow: Mr. Speaker, I was here and I saw what happened. The hon. member may have risen on one occasion, but he interjected eight or ten times. While I am on my feet may I say to the hon. member that I was surprised at some of his language. I represent a working class, ethnic constituency. We know something about rough language in my constituency, but I would not, in this House or in public, use the kind of language which the hon. member for Winnipeg South Centre used yesterday-the kind of language which the CBC reported but refused, I suppose for reasons of delicacy, to quote.


Edmund Boyd Osler: You will find that CTV quoted it verbatim.


David Anderson: I am sure all the little old ladies will like your speech.


David Orlikow: The hon. member for Esquimalt-Saanich (Mr. Anderson) can rise whenever he wants to speak, instead of interjecting from his seat. What the government is proposing in this bill is nothing more than the establishment of another mutual fund, and Canada already has more than enough mutual funds. We already have Power Corporation, CP Investments, Investors Syndicate and Argus Corporation. People who have money to invest can invest it in those corporations.
The way that the minister proposes to establish the CDC will make it something that we do not really need. It will serve no useful function. But even that is not enough for the minister. I quote from the press release he put out on January 25, which states in part:
-the bill specifically directs CDC to invest for profit in the best interest of the shareholders.-
If its major purpose is to make a profit, the corporation is doomed to failure in fulfilling its most important functions before it comes into existence. It will be a failure because it will serve no useful purpose in meeting the needs of the Canadian people to slow down and prevent further takeovers of Canadian companies by foreign corporations. As proposed by the government, the CDC will be a failure because it completely avoids governmental responsibility in the field of industrial development. This is because the government is committed to a corporation which must make a profit. It is the desire for profit, a legitimate desire on the part of private companies, which has encouraged company after company owned by Canadians to sell out to foreign investors. The need for private profit has not provided an answer to the needs of Canadian national development or to the need of the survival of a Canadian identity.
Since the minister has ruled out the CDC buying back foreign owned corporations, since he has ruled out using the CDC as a method of preventing further takeovers, and since he will not use the corporation as a prime tool to control foreign ownership, what useful purpose will the corporation fulfil? I suggest it will perform no useful purpose except the political purpose of making Canadians believe something is being done which will meet their needs, when in fact nothing of importance will be done.
I have already indicated that what the government is proposing is the establishment of another holding compa-
Canada Development Corporation ny, another mutual fund like the many which we already have. There is nothing here that will help further Canadian independence. If profit is the primary purpose of the CDC, the corporation will not be prepared to buy a Canadian company which is being taken over by foreign interests. If profit is the sole or major criterion, the CDC cannot take over a company which is not making money. A good example of this is the steel mill at Sydney, formerly owned by Dosco.
Under Dosco the steel mill was losing money. Each year it was becoming more obsolete and less able to compete with Stelco at Hamilton, or with Algoma at the Sault. It was losing so much money that there was no alternative to closing it, with the consequent loss of several thousand jobs, except for the government to take it over. What has happened since then? Lo and behold, under government management-which according to so many hon. members and so many newspapers is inefficient and does not know how to operate business enterprises-suddenly the steel mill at Sydney is doing more business than it ever did before. Suddenly workers are fully employed. Suddenly there is enough money and enough business.
The steel corporation, now publicly owned, can look forward to getting money to modernize so that it can produce steel even cheaper and more efficiently than before. When privately owned, the corporation was in poor shape and had Dosco wanted to dispose of the steel mill the Canada Development Corporation could not have taken it over. But that is the kind of thing that will happen as a result of the blind faith of the Minister of Finance that the major role of CDC is to make a profit. According to the minister, three-quarters of a million dollars will be invested in the Canada Development Corporation in a period of three years. That money will belong to the people of Canada as a whole, but the profits will go to only 7 or 10 per cent of the Canadian people who can afford to invest in it. For the other 90 to 93 per cent of Canadian people who cannot afford to invest except through the $750 million of their tax money which the government will plow into it, there will be no profit.
The minister proposes that existing Crown corporations such as Polymer Corporation Limited, Panarctic Oils Limited, Eldorado Nuclear Limited and Northern Transportation Company Limited be sold to the Canada Development Corporation. This means that these companies, which have been performing an extremely useful social and economic function for all the people of Canada, will be transferred to the few who can afford to invest in the Canada Development Corporation. That corporation will use as its nucleus the tax revenue of $750 million to be given to it over the next three years. This money will come from all Canadians, but only those who have invested in the corporation will benefit.
This situation might be tolerated if the purpose of the corporation were to fulfil social needs and to bring economic benefits to the people of Canada as a whole. If the corporation is being established to help create jobs or
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February 26, 1971
Canada Development Corporation
industries for which there is a social need, if it is aimed at helping to provide work in fields where private enterprise has been reluctant to enter because of low profit margins, or if its aim is to prevent the takeover of Canadian industry by foreign companies, then I could see the reason for the Canada Development Corporation. As envisioned by the government and outlined by the Minister of Finance, the Canada Development Corporation will serve none of these purposes.
The government's plan to mix public and private funds means that profit will become the main purpose of the corporation. Indeed, unless it makes a profit private capital will not be interested. Why should a private investor put money in a company which is not going to maximize the return on that money? Why not invest in Canadian Pacific Investments, Argus Corporation, Investors Syndicate or Power Corporation? I am not being critical of these companies, because the aim of free enterprise is to make as much money as possible for its shareholders, but if an investor is faced with a choice, why should he invest in something like the Canada Development Corporation which has the purpose of helping develop a slow-growth region of the Maritimes, eastern Quebec or Manitoba?
There will be constant pressure on those who run the Canada Development Corporation to ensure maximum profit, Mr. Speaker. I suggest that maximum profit is not necessarily the same thing as serving the best interests of the Canadian people. Indeed, these two things are often in conflict. Despite a massive input of public funds, the need to make profit means that the corporation will not be able to invest where companies sell out or close because of losses.
Just a few months ago Dunlop closed a plant in Toronto, with the loss of about 500 jobs. Could the Canada Development Corporation, which must think about profit, have taken over that plant? Of course not. Could it take over some of the textile plants in the province of Quebec which already have abnormally high unemployment? Of course not. They were not making money, so the Canada Development Corporation could not enter into the picture. Because in the view of the government the corporation has to make a profit, and the way to do that is to give it control of successful, publicly-owned companies, the government proposes that it take over some companies which have been successful.
Polymer Corporation Limited has been mentioned. This is one of the most successful public or private corporations in Canada and has consistently made a profit. The government also proposes to sell enough of Panarctic Oils Limited so that the people of Canada will lose control of it. Panarctic Oils is a company with tremendous oil reserves which could be used for the benefit of all the Canadian people.
It is proposed that Eldorado Nuclear Corporation, which has a glowing future, will be sold to the Canada Development Corporation. It is also proposed that Northern Transportation Corporation is to be sold to the
[Mr. Orlikow.l
Canada Development Corporation. Mr. Speaker, Northern Transportation Corporation plays a tremendously important role for Canadians who live in the north country. The cost of living in the north country is formidable. The difficulties of moving about in the north country are forbidding: they are tremendous.
I suggest that in the interests of the people of the north and of the Canadian people as a whole, at times the Northern Transportation Corporation ought not to show a profit. Indeed, there may well be times when Northern Transportation Corporation ought to be run at a loss, to meet the needs of the people of the north. Yet it is proposed that this corporation, which is so vital to the people of northern Canada and to those of the Arctic region, is to be transferred to Canada Development Corporation, the prime purpose of which is the making of profit. How stupid a proposal that is! The proposal will make the lives of the people of the north country even more difficult than they are at present.
According to the minister, Canada Development Corporation will be restricted to dealing with companies with an equity of at least $1 million. That will effectively freeze-out those people who most need the assistance of such a corporation. It will freeze out small Canadian companies and those Canadians with a good idea but who need capital to develop it. It will freeze out those kinds of free enterprises that members on the government side supposedly are so much concerned about. It will freeze out people who play such an important role in the life of this country and in developing this country according to the free enterprise tenets of the Liberal government.
The Minister of Finance says that this important, new government corporation will be prohibited from investing money in precisely those companies and those individuals who need its help the most. What is proposed is exactly the opposite. The company will be prepared to invest money in large corporations. Mr. Speaker, we are already doing too much for large corporations. In the past five years we have turned over to large corporations, mainly through the Department of Regional Economic Expansion, $750 million in the form of outright grants, loans, incentive grants and research grants. Now the government proposes that those who have shall obtain more.
These large, and usually foreign-owned, corporations are already getting from Canadian sources over 90 per cent of the money which they need for expansion, through retained earnings, capital cost allowances and borrowings in the Canadian market. Now the government proposes to subsidize these giants of industry further through Canada Development Corporation. Studies have demonstrated pretty conclusively that many Canadian industries, and certainly large Canadian industries, do not lack finances. The studies show that there is a lack of knowledge of modern and sophisticated management, business techniques and leadership. What is needed is not more money but more government leadership, direction and co-ordination.
We of the New Democratic Party have been critical of this bill as it is proposed by the Minister of Finance. We have been critical for the reasons I have indicated. We are critical because the bill will do nothing to meet the
February 26, 1971

needs of the Canadian people. We propose that all financing for Canada Development Corporation should be out of public funds and that there should be no mix of public and private investment, as proposed in this bill. We say that, Mr. Speaker, because we believe that all Canadians ought to benefit from investment in Canada Development Corporation, not just the 10 per cent who have the money to invest in it.
We propose that all financial institutions should be required to invest a percentage of the Canadian savings which they control in Canada Development Corporation. The banks, insurance companies, mutual funds and pension funds control money obtained in various and legitimate ways from the Canadian people. It seems to us logical and equitable that they should be directed by the Canadian people, through the government, to invest a substantial part of the money which they control in Canada Development Corporation, which ought to be a 100 per cent publicly-owned and publicly-financed corporation.
Also, Mr. Speaker, we suggest that mass government handouts of money to private industry should be stopped. The labyrinth of agencies which has grown up in recent years, whose purpose is the handing out of money to private industry, should be done away with. The funding of industry by government-and I would include provincial governments, although we have no direct control over them-should be rationalized. The funds should be allocated for incentive purposes through Canada Development Corporation. As I said a few minutes ago, during the past five years the government has given to the private industrial sector of Canada in the form of government grants, subsidies and incentive grants, over $750 million. About 60 per cent of this money has gone to foreign-owned corporations which already control the most important functions of Canadian industry and commerce. We suggest that one way of stopping that kind of handout would be in consolidating all the giving and borrowing through the Canada Development Corporation.
The corporation ought to be controlled completely by the Canadian people, so that all the profits would go back to the Canadian people and the corporation could help in developing the industries of Canada and provide jobs for Canadians. In that way the corporation would help to bring industry and jobs to the slow-growth areas of Canada and it would not concentrate-as the government obviously, directly and clearly wishes in this bill-on the making of profits which would go, not to all the Canadian people but to the small percentage who already have most of all that Canadians own.
The Acting Speakar (Mr. Richard): Order, please. Is the House ready for the question?


Stanley Howard Knowles: Four o'clock, Mr. Speaker.


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


Mr. Francis:: Mr. Speaker, I understand that if a vote is to be taken, it will be taken when this item of business is
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called on Monday. I believe there is agreement to that effect.


Stanley Howard Knowles: Mr. Speaker, the understanding was that if this debate ended before four o'clock and a vote were called, the vote would be deferred until Monday. But the debate did not end before four o'clock.


An hon. Member:: You have another week.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Richard):: Order, please. It being four o'clock, the House will now proceed to the consideration of private members' business as listed on today's Order Paper, namely, notices of motions.


Patrick Morgan Mahoney: Mr. Speaker, I believe there is unanimous disposition to proceed immediately to item No. 17, in the name of the hon. member for Parkdale (Mr. Hai-dasz), and to permit the preceding items to stand and retain their place on the Order Paper.


The Acting Speaker (Mr. Richard):: Does the House agree unanimously to the hon. member's suggestion?


Some hon. Members:: Agreed.



PRIVATE MEMBERS' MOTIONS


Mr. Stanley Haidasz (Parkdale) moved:: That, in the opinion of this House, the government should give consideration to the feasibility of allowing residential taxes on owner-occupied homes and rental payments of accommodation by tenants to be deductible from federal personal income tax up to a maximum allowable of $500 each year.
He said: Mr. Speaker, I welcome this opportunity to again introduce in the House a motion designed to relieve the overburdened Canadian taxpayer. In reintroducing this motion I hope to bring to the attention of the federal government, and especially to the attention of the Minister of Finance (Mr. Benson), the urgent need to ease the great burden of the Canadian taxpayer who is not only heavily taxed but is in some cases the victim of double taxation. It is my opinion, which I believe is shared by many people, that those who dwell in owner-occupied homes and tenants in rooming-houses and apartment buildings deserve favourable consideration by the Minister of Finance.
The federal government has a stake in the provision of adequate housing for its citizens, the creation of incentives to increase employment and lending money to municipalities which must provide many services to their residents. Since the federal government involvement in
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February 26, 1971
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our cities is limited by the Constitution, provincial governments are mostly responsible for land use planning, regional economic planning and education.
Unfortunately, the provincial governments have not yet produced adequate policies and programs to relieve the financial burden of our municipalities. These services and other problems have been left mostly to the local municipalities, which are limited in their power to raise money in order to keep abreast of the demand for more services brought about by increased industrialization and growing population. Therefore, we are subjected to increased municipal taxes every year. Cities especially are very pressed to provide more services for their residents and find it most difficult to finance their projects.
In his inaugural address to the city of Toronto in January, 1970, the mayor of Toronto stated as follows:
If there was one message which came through loud and clear during the last municipal election in Toronto, it was the appeal from home owners of this city that they cannot afford to pay higher taxes.
Among other things, he also stated he was most disappointed to see no mention in the governments' white paper on tax reform dealing with the resolution that was considered by the Federation of Mayors and Municipalities which called for a provision to allow municipality taxes to be deducted from individual taxable income. Such a provision is allowed in the United States and it prevents the present injustice forcing a home owner to pay tax on a tax. A person paying property tax is in effect paying a double tax. The hard earned money with which Canadians pay their property taxes has already been taxed to death by the provincial governments of the federal government.
Many tax experts have described the municipal residential taxes as inequitable and regressive, bearing heavily upon those who can least afford them. At the present time, property taxes paid by businessmen are deductible. Property taxes paid by apartment owners are also deductible. Property taxes on single family-owned homes rented to tenants are also deductible for the owners. Furthermore, an apartment building owner can take advantage of the corporate tax law and deduct his operating expenses, mortgage interest costs and municipal taxes, whereas dwellers of owner-occupied homes and tenants in boarding houses and apartment buildings do not get any such relief in computing their federal income tax. Not only are cities plagued with rising costs to meet the demands for more services, increased welfare payments and public works to provide jobs, but the ordinary citizen has been hard pressed with rising taxes at the federal, provincial and especially the municipal level.
Property owners will be faced in 1971 with higher real estate taxes due to the increased cost of education and welfare programs. The heavy load placed on property and business taxpayers, which amounts to approximately 77 per cent of all municipal revenue, produces many unhappy results. Observers point, for example, to the case of older people with limited retirement income who denied themselves in earlier years in order to pay for mortgaged homes. Now they find themselves faced with
heavier and heavier tax bills. We often hear government spokesmen say that older people would be better off in apartments. However, I maintain that they have not much choice: many have to stay in their own homes and struggle with increasing taxes and maintenance costs. Moreover, a rise in taxes often brings an even larger increase in apartment rents. As costs soar, renters feel an increasing pinch. For every $5 rise in taxes, they dole out approximately $7 to $10 more for rent.
Whether the answer to the municipalities' dilemma is tax sharing, a shift of responsibilities, or both, is still a very hazy question. Many progressive provincial and federal leaders agree that the municipality, and thus hard-pressed property owner, should be in line for a new and fairer deal. I think it is a well known fact that real estate taxes in Canada are probably higher in proportion to income than in other advanced countries. Even the Carter Commission on Taxation described the municipal real estate tax as regressive and bearing heavily upon those who can afford it least.
Heading the resolutions of the convention of mayors and councillors of Canadian municipalities, it is obvious there is growing concern for and great dissatisfaction with the senior levels of government for not giving municipal taxation the attention it deserves. The rumblings of discontent are also growing louder each day in all sectors of Canadian society. I therefore believe it is imperative that the Minister of Finance, along with his provincial counterparts, give this matter serious and, I hope, favourable consideration.
By supporting this motion hon. members will make it possible not only for residents of owner-occupied homes but also for people who live in boarding houses and apartments to claim an exemption in their personal income tax. This will ease the intolerable load of taxation which is now a crushing burden on the taxpayers of Canada. Today, Mr. Speaker, is an opportunity for all members of the House to rally behind this motion so that the government will be forced to reduce federal income taxes. That is why I have brought this motion to the attention of the House, and once again I urge all hon. members to support it wholeheartedly.


Mr. Mac T. McCutcheon (Lamblon-Keni):: Mr. Speaker, I have no hesitation whatever in rising to support the motion of the hon. member for Parkdale (Mr. Haidasz). I compliment him on bringing it forward and I agree with virtually everything he has said. In my humble opinion, this is a most worth-while and humanitarian move.
Even at this late date I welcome the hon. member's conversion. It has taken a little while for him to be converted. Speaking of conversions, Paul on the road to Tarsus-


Stanley Howard Knowles: Damascus.


Maclyn (Mac) Thomas McCutcheon: I am sorry; I stand to be corrected.


Murray Arndell McBride: The Tories are all on the wrong road.


An hon. Member:: Naturally. He was blind.

February 26, 1971


Mr. McCulcheon:: Mr. Speaker, you will have to protect me from the interjections of some of these people. He was blind for three days, but he saw the light instantaneously.
Let us get back to something which some members of this House will understand better. A kitten gets to see after three days, but for the hon. member who moved the motion it has taken six years to progress this far. I have here a piece of paper dated October, 1965, which reads:
Home Owners and Municipal Taxes: Up to $500 will be allowable as a deduction for income tax purposes. This will give the federal government an immediate share in the cost of education by easing the burden of property taxes. It will also encourage home ownership, an important part of Progressive Conservative policy for the 1965 general election. Diefenbaker.
I point out to hon. members that this program was not a howling success, as history will attest. I throw this out as a word of caution to the hon. member for Parkdale. However, I am personally encouraged because, who knows, after the progress the hon. member has made he may even join his former colleague from Toronto who saw the light a little earlier. Seriously, though, this concept is an excellent one and I think it should be followed through. Increased savings could be generated and these could be used to help our country in some way. How much ought to go into such a development fund, I do not know. But the government could encourage the program by appropriate incentive tax moves. Like the hon. member for Parkdale, I urge the government to accept this worth-while suggestion. Let us pass the motion forthwith.


Winona Grace MacInnis: Mr. Speaker, like those who have already spoken, I want to express general support for the intent of the motion because I think the hon. member for Parkdale (Mr. Hai-dasz) has been picking away for quite a few years trying to solve through this motion the problems of the hard pressed city taxpayer.
We know in this House that over the years the problems of the cities have been increasing by geometric progression. They have been piling up higher and higher and, as the hon. member for Parkdale said, the kind of services and the number of services now required of city administrations is very great indeed. It is only a very short time since in its fullness the whole idea of pollution control and the ramifications of that were added to the other matters which our cities have to consider and, of course, the last few months have been a terrific increase in the welfare burden due to the large degree of unemployment we have been experiencing.
I take issue with the hon. member for Lambton-Kent (Mr. McCutcheon) to some extent. I want to point out that whether or not the conversion of the hon. member for Parkdale took place on the road to Damascus, Tarsus or any other place, he did not see the light in three days or even in six years in one flash. It has taken a long time.


An hon. Member:: He is a slow growth type.
Income Tax Deductions


Donald MacInnis: Yes, it is very slow growth. This bill is improving. I do not know whether, like wine, it is improving with age or whether it is improving with the age of the hon. member or what, but it is improving. I remember speaking on this bill when the hon. member had it directed completely to owner-occupied homes. This afternoon we see, and this is greatly in his favour, that he does not have a closed mind. When he began considering it, he realized that people were paying rent as tenants. I do not know whether he would include boarding houses in his measure. Yes, he would: he certainly mentioned it in one of the papers he read from. However, these people also are paying taxes very heavily. So this is the first change the hon. member has made, and I think this change is a very good one and the resolution is improving when he speaks of the feasibility of allowing residential taxes not only on owner-occupied homes but on rental payment for accommodation by tenants to be deducted from personal income tax.
Then he adds the ceiling of a maximum allowable, for income tax purposes, of $500 each year. I believe the idea of a ceiling is all right, but I think he has the ceiling in the wrong place. This is why I am hoping that the conversion by next year, unless the government accepts the motion this time, will have that ceiling in another place. You see, the ceiling of the $500 would be deductible by anybody who owned a home and lived in it, or a renter-occupied home, or any kind of rented accommodation.
I think we have to provide a ceiling having reference to the income of the people living there, instead of a ceiling in reference to the kind of accommodation wherein they live. This kind of ceiling would give equal protection to the owner of a $50,000 home and to the tenant who pays $150 a month in rent. It would give equal protection to the owner of a $50,000 home and to people in my riding who perhaps paid $5,000 years ago for their home and are now elderly people with very little to go on in the way of resources. They would not get nearly as much benefit relatively by being able to deduct from their income tax up to the $500 ceiling as some other people would.
I urge the hon. member, if the motion he has moved is not adopted today, to look at its terms and consider placing a ceiling on people according to the income they have. I think it would be better to afford protection to people in direct proportion to the extent of their burden of taxation. Like the two other hon. members who have spoken, I do not think one can overemphasize the need for this sort of measure at the present time. Our cities are finding the going very tough financially. I do not think this proposal would in itself provide a new and fair deal for the hard pressed home owners and tenants, but I think it would be very useful if the hon. member considered the ceiling I have suggested.
What is really required is a reallocation of the tax revenues among federal, provincial and municipal authorities. It is a fact that today the municipalities have

February 26, 1971
Income Tax Deductions
a much greater responsibility in meeting the needs of people than they had a few years ago. Consequently, the federal and provincial governments must apportion greater revenue according to greater responsibility. The federal government cannot escape coming to a new revenue-sharing agreement with the provincial governments, who in turn, if they are to be fair to the municipalities, must come to better tax-sharing arrangements with the municipalities. In the province of Bri'ish Columbia, and I believe in the province of Ontario, the provincial authorities, in lieu of making a new tax-sharing agreement, have been giving home owners a grant. That is good as far as it goes, and certainly no one would care to tamper with any arrangement that helps home owners. But it is open to the same objection I have to the motion proposed by the hon. member for Parkdale, namely, that it helps everyone on a flat-rate basis regardless of income. This is why I consider it an emergency measure only.
I noted that the hon. member for Parkdale quoted the resolution of the Federation of Mayors and Municipalities which proposed that city and municipal taxes be deducted from taxable income. If this proposal were adopted, then a sliding scale would be in effect that would be in accord with people's income and ability to pay. The last point I wish to make is that I do not think the federal government can escape taking another look at its white paper on tax reform and deciding to implement, to a far greater degree than I suspect is the government's intention, the principles of the Carter report, which state that a dollar of income is a dollar of income, no matter where it comes from or how it was earned; that people ought to be taxed all the way up the scale without regard to the way in which they earn their living or obtain their income.
With these reservations, and particularly the one I have expressed with regard to the ceiling, we would wholeheartedly support this measure so long as it gave relief to people according to need. Certainly this change would improve the proposal greatly. If the hon. member for Parkdale gets a shot at this another year, then I have no doubt that with these modifications the motion would have the blessing of every member of the House.


Murray Arndell McBride: Mr. Speaker, it is a delight to take part in this debate for at least two main reasons. The first is because of, I believe it is accurate to say, the universal admiration of the House for the hon. member for Parkdale (Mr. Haidasz) and our awareness that he is an individual with a very deep humanitarian concern, something that this notice of motion bears out. I draw the attention of the House once more to the wording of the motion, which reads as follows:
-the government should give consideration to the feasibility of allowing residential taxes on owner-occupied homes and rental payments of accommodation by tenants to be deductible from federal personal income tax up to a maximum allowable of $500 each year.
The second reason that I am delighted to speak on this important notice of motion was also articulated very well
by the hon. member for Vancouver-Kingsway (Mrs. Maclnnis) as well as the hon. member for Parkdale, namely, that the motion deals with the tax burden that falls upon the municipalities in this country. A study of the statistics relating to the tax load assumed by municipalities makes this increasing burden obvious.
I am delighted to see the hon. member for Coast-Chil-cotin (Mr. St. Pierre) in the chamber. With great respect,
I should like to draw the attention of the members of the House interested in this subject to a speech that he made some months ago wherein he demonstrated very capably with facts, research and statistics that the area of government among the three levels, federal, provincial and municipal, which was expanding the most was the provincial level and the one locked in a corner on this question was municipal government. I am not going to go into this because it is all in Hansard, but it is a speech that I would highly recommend to anybody interested in this motion; indeed, in the whole question of how better to help the municipalities.
The motion recommends to the House a kind of direct tax deduction up to a maximum of $500 a year. The directness is admirable in some ways, but it also has weaknesses. One of the attractions to me is that it means those on lowest income will, in a sense, get the most help. It may well be that a $500 diminution of taxable income-no, it is not taxable income, and that is an important point. What it is is an actual reduction of payable tax, at least as I read the hon. member's notice of motion. It is an actual reduction in the amount of tax that is in fact paid, not a reduction in taxable income. This, in particular, would help those who had only a small amount of tax to pay and might indeed remove them from the tax roll altogether. To an extent, I suppose it presumes that all of us are hoping that when the tax reform legislation is brought before the House very shortly in the life of this Parliament, it will accomplish something like this.
Since I realize others wish to speak I shall come straight to my main point, and it is this. How do we relieve the tax burden that falls on the elderly and on the poor? We relieve the tax burden on the elderly and the poor by revising our tax system to give them a smaller share of the tax burden. I should like to bear upon the good graces of the House for a few moments this afternoon to quote but a few sentences from a letter I received dealing exactly with the topic now before us. It is from a constituent of mine. I am sure many members, especially those who have been members for many years, will have thicker files than I have on this subject, though my own file is quite thick. Let me just put on Hansard a sentence or two of this letter:
As you know I am a widow over 80 years old, living alone, own a small property and find it very difficult right now with price of living going higher, to manage on my bond interest and pension. I hesitate to cash in on the savings which my husband and I had laid aside for our old age which if I have much medical or nursing care wouldn't last long. My school tax alone in 1970 was $134.95. It just doesn't seem fair to be paying so much,

February 26, 1971

when you have no one connected with school. We had to pay ourselves when our family went; no buses picking them up.
You mentioned in one report that a couple should have $255 supplement to live on. Did you not take into consideration the many things that a couple can have with the same outlay as one.
This widow goes on to talk about other things concerning the old age pension plan which do not bear directly on this motion. I certainly intend to leave the impression with the House that the education tax load, and the manner in which it is imposed in respect of owners of residential property, is unfair to elderly people; it creates an extremely hard burden. These are considerations we should take very seriously. How do we help to adjust the tax load on people like this widow and poor people in our communities? The hon. member for Parkdale suggests a direct gift, a donation or a reduction of $500 from the tax which has to be paid. I suggest this would be a stopgap measure.
The hon. member for Vancouver-Kingsway recommended this temporary stopgap measure. I assume that the hon. member for Parkdale was putting this suggestion forth in some measure out of disparity. The statistics which have been pointed out this afternoon indicate that these difficulties existed some six years ago. The point is that if this matter was urgent six years ago, it is urgent now. Tax reform is something we have been fiddling around with in this country for roughly a decade. This is something I hope we can deal with in the House very soon. The House should send this matter to committee for consideration. I hope this will take place shortly and that we will have a tax reform bill before us in the near future.
I confess I have some doubt that the proposed method of taxation is completely fair. Many people invest money in homes. Many people are tenants. Everyone has to live somewhere. We all benefit in some way or another from tax reforms. If we take the example of an apartment building housing 100 tenants, with the suggested rebate of $500 we would have $50,000 going to these people who may or may not need it.
The main reason I rose this afternoon was not to quibble over minor points. I wanted to commend hon. members who are concerned about this difficulty. I hope that some way can be found for municipalities such as Carleton Place, in my own constituency, to establish a stronger tax base for the purpose of building necessary things such as new sewer systems. Areas like Carleton Place are inhabited to a great extent by elderly people. They have, as the hon. member from Toronto has said, already paid their taxes for the purpose of educating their children. They require some relief. I appeal to the Minister of Finance (Mr. Benson), through his very capable parliamentary secretary who is in the House this afternoon, to take some action to revive the property-oriented tax load on Canadians. For this reason I support the motion.


Mr. Allen B. Sulatycky (Rocky Mountain):: Mr. Speaker, the hon. member for Parkdale (Mr. Haidasz) has made a very interesting proposal. It is a proposal in respect of
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which I find some difficulty because I represent a group of citizens in this country who are in a unique position in so far as their municipal government is concerned. Their municipal government happens to be the federal government. I am speaking of the citizens who live in the towns of Banff and Jasper.
The hon. member for Parkdale I know is very well aware of the problems which exist in so far as municipal matters are concerned in these town sites. He was the parliamentary secretary to the minister responsible for the department which administers the affairs of these areas. The difficulty I find is in the wording of this notice of motion. It provides for the reduction of residential taxes on owner-occupied homes or rental payments for accommodation by tenants.
I am interested in the people who live in the towns of Banff and Jasper. All the land in these areas is owned by the federal government and leased to the people who live there. At one time the rental in these areas was very nominal but recently it has increased by a very substantial amount. Some rentals in respect of very modest residences, of a value of about $15,000, run as high as $2,800. I am referring to the taxes on the land only, rather than on improvements.
In addition to this, the occupants of this land have to pay the usual school taxes. If this notice of motion is accepted, these people will be allowed to deduct a proportion of this amount. Nevertheless, they would not be able to deduct about half the taxes that people living in other parts of Canada are allowed to deduct. It is in this sense that I suggest the 7,000 or 8,000 people who live in these areas, many of them not by choice, will be put into an iniquitous position.
At the present time the people who live in these areas lack many of the ordinary rights and privileges enjoyed by other people in this democracy. These people cannot elect municipal councils. They do not have any say about the disposal of the moneys they pay in land rental. This money is equivalent to a tax by the Department of Indian Affairs and Northern Development. That department refuses to consider this as real property tax and defines it as land rental. Because of this, I submit that if this notice of motion were adopted the Department of National Revenue would have to rule that the money received from these residents is not, in effect, rental payment for accommodation of tenants but another form of rental, by the Department of Indian Affairs and Northern Development. Therefore, these people would be further prejudiced and not placed in a position of greater equality in respect of other citizens of Canada.
On the other hand, it may well be that the adoption of the notice of motion, or the adoption of at least some semblance of it, by the government would bring this matter to a head and would result in the people in these townsites being treated in a way more akin to the way in which the ordinary citizens of Canada are treated, in that if the government would recognize that the money being

February 26, 1971
Income Tax Deductions
demanded from the residents of Banff and Jasper are in fact taxes on their homes, they would have a claim to representative government at a local level. They would have a claim to municipal government, which is now denied them because they are told there are no taxes involved and therefore they are not faced with the obligations faced by citizens in other municipalities.
Mr. Speaker, I hope I have pointed out why, even if this were a government bill, I would be inclined to oppose it notwithstanding the fact that it would benefit many people in Canada. I believe that unless special provision is made it would increase the inequality and the unfair treatment that is meted out to citizens of Canada who live in the townsites of Banff and Jasper.


Mr. Joseph-Philippe Guay (St. Boniface):: Mr. Speaker, first of all, I would like to congratulate the hon. member for Parkdale (Mr. Haidasz) for introducing a second time the motion under study.

I certainly agree with the hon. member, Mr. Speaker, to the extent that I would support any relief given to a property owner at the local level. I believe consideration should be given to a change in taxation policy so that everyone would be treated equally and there would be no discrimination. One of the greatest problems the municipalities face in respect of financing is that they are the collectors with regard to the annual costs of school boards. I had also hoped that provincial governments, at least the government of my province of Manitoba, would eliminate the responsibility the municipalities have of being collectors for school boards. In so doing I would also hope that they would show the people who are paying the taxes where the real costs are, so that they would have a better idea where their money goes.
The municipalities must provide services. They require money to meet their budgets and at the same time they must collect taxes for school purposes. To that end, the province of Manitoba made an attempt to relieve property owners. This means that the provincial government of Manitoba realized the position in which the property owners are placed and that there is a problem. A few years ago they thought that by placing a 4 per cent utility tax on telephones, gas, heating, electricity, and so on, they could solve the problem in greater part. However, when they imposed this 4 per cent tax on utilities they found it gave them enough money to give a $50 rebate to every property owner in the province of Manitoba. Then the municipalities in turn made representations to the provincial government and said that this was not enough. The provincial government realized the municipalities were right and decided to implement something else. They thought a 5 per cent sales tax, which we did not have previously in Manitoba, would solve the problem.
While the 5 per cent sales tax was implemented to solve the education problem, something funny happened down our way. The 4 per cent tax on utilities remained
there, the $50 rebate was eliminated and we were faced with a 5 per cent sales tax over and above that. The property owners really do not benefit because the school costs and everything else are still climbing. At the same time, the provincial government felt it should change the name of the 5 per cent sales tax so that instead of being the 5 per cent sales tax for educational purposes it would be a multipurpose tax. So I presume, like many others in the municipal field, that this money is really not being used for the benefit of the property owners.
I should like to refer to the submission made to the Royal Commission on Taxation by the Canadian Federation of Mayors and Municipalities in 1964. I believe it is just as good today as it was then. I shall only quote a portion of it, as follows:
One of the most severe limitations on municipal use of the property tax arises from a feature of our federal income tax law. In effect, Canadian property owners are subject to double taxation on that portion of their income, used to pay municipal taxes. By contrast, in the United States, all payments made on municipal taxes may be deducted from personal income in computing taxable income. The Canadian taxpayer is subject to double taxation on the amount which he pays in property taxes as well as on amounts paid in other municipal taxes.
It is only by allowing such an exemption that municipalities can be given full use of the property tax field. Quantitatively, this restriction on the use of the property tax is a severe one. A simple calculation will show that, by allowing deduction of municipal taxes from income, the federal government would enable municipalities to have access to substantially greater revenue from the property tax.
I for one would certainly support this to the end that it would relieve the municipalities in respect of education costs and place the responsibility on the provincial governments.


Mr. Tom H. Goode (Burnaby-Richmond-Delia):: Mr. Speaker, I would like to compliment the hon. member for Parkdale (Mr. Haidasz) for bringing this important and interesting issue before the House once more. It seems that this motion has two objects. One is to help the citizen with his problems in financing his dwelling and the second is to bring about a more equitable Income Tax Act or a reformed tax act. While I am sympathetic to both goals, I am not positive that this motion is the best way of accomplishing these ends.
I agree fully that many Canadians are having difficulty in financing their housing. They are having difficulty with their mortgage payments and their residential and school taxes. But, as I said, I doubt whether this type of motion will best help these people. It would appear that the most just solution to the financial problems of persons on limited income is income tax reform and, as many hon. members opposite may have heard, legislation will be presented in the House to that end as early as May. I take for granted that opposition members will co-operate to the fullest to see that the reform legislation passes all stages of the Commons process at maximum speed.

February 26, 1971

Mr. Speaker, in my opinion there is one outstanding omission in the hon. member's motion. No reference has been made to deduction of mortgage interest from income tax payments. It would appear to me that interest costs are even more of a burden to the home owner than property taxes. Even for the most modest home, interest rates in recent years have skyrocketed to take a major percentage of the workingman's income. Consequently, I suggest that this additional question be discussed by hon. members.
May I discuss one of the major items in this motion, and that is the limitation to $500 of the amount of municipal tax to be deducted. First may I suggest that this figure may no longer be adequate. Municipal taxes have increased to the point that in 1971 a figure of $1,000 would be more in tune with present-day costs, although I agree that there must be a limit to the amount to be deducted in order to assist those in our society who need help the most. For example, those who have $100,000 and $75,000 homes would receive much larger deductions than those who have $20,000 and $25,000 homes. I would not think it fair to have a measure to help people with their housing costs based on individual value, as is the case with residential taxes.
I feel that if we want to help people with housing there are better methods than merely allowing income tax deduction for property taxes. Indeed, the present program of placing federal housing funds into low and medium-cost rental projects is placing the funds in an area where they are most needed. Builders and developers are responding as they never did before to the government's program of priorities for middle and low-income families. In my own riding of Burnaby-Richmond-Delta, over $40 million was invested in 1970 by Central Mortgage and Housing Corporation in developments as prompted by such well known builders as Westsea Construction, Burger Construction, Inter-Continental Holdings, Ed Sully Development and Dawson Housing. These men, in conjunction with CMHC, have built excellent complete developments to serve my community.
In conclusion, Mr. Speaker I compliment the hon. member for Parkdale, but I must add that although the intent of the motion is an excellent one, nevertheless I would encourage the minister responsible for housing to increase and expand the present policy with respect to low and middle-income housing.


Patrick Morgan Mahoney: Mr. Speaker, it had not been my intention to intervene in this debate. However, it seems to me that in his very admirable presentation of the motion the hon. member for Parkdale (Mr. Haidasz) overlooked one item that should be of considerable concern to this House in deciding whether or not to vote in favour of the motion and to make the recommendation to the government that a tax rebate be given to both home owner taxpayers and renter taxpayers. I refer to revenues so far as the federal treasury is concerned.
No statistics have been advanced to indicate the number of householders in Canada. I am sure they are
Income Tax Deductions
available, but I do not have them here. However, in the 1968 income tax year, as disclosed by the 1970 edition of "Taxation Statistics", slightly under seven million persons in Canada paid personal income tax. The average tax paid by those taxpayers was $727. Assuming, for the sake of argument, that half of those taxpayers were householders, either tenants or owners, the loss of revenue to the treasury would be something in the order of $2.5 billion. If a third of these taxpayers were householders the loss to the treasury would be something in the order of $1.5 billion.	.
The federal government, through transfer payments to the provinces, shares many of the costs of municipal governments through hospitalization, education grants and so on, and has to have revenues that filter down to the municipal level and benefit municipal governments. I think that the proponents of this suggestion should be prepared to come forward and indicate to the federal government just where they would expect taxes to be increased, or new taxes to be levied, in order to make up the $1.5 billion to $2.5 billion that would be rebated to taxpayers.
Home owners at present have an important tax concession in that they do not have to include in income the benefit they receive in the form of living accommodation. For example, if a taxpayer invests $20,000, $25,000 or $30,000 in bonds he has to account for the interest on those bonds as income and pay tax upon it. But if he invests $20,000, $25,000 or $30,000 in a home he does not have to pay any income tax at all on the benefit he gains from that type of investment.
The proposal to allow home owners to deduct property taxes from their income tax-and again I think the distinction is very important-which the hon. member is proposing is a tax credit. It is not a deduction from taxable income but a deduction from tax, or a tax credit or rebate. This would give the home owner taxpayer a further benefit that taxpayers who do not enjoy that status do not receive. The proposal to allow those who rent living accommodation to deduct a similar amount would help prevent this group falling still further behind the positon of taxpayers who are home owners-


The Acting Speaker (Mr. Richard):: Order. The hour provided for the consideration of private members' business has now expired.



BUSINESS OF THE HOUSE

Thomas Miller Bell: Mr. Speaker, I realize this question may not be answered definitely, but can someone on the government side advise what the business will be for Monday, so we can have the weekend to think about it?
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February 26, 1971
Business of the House


Cyril Lloyd Francis: Mr. Speaker, I believe the business of the House for next week will be as announced by the President of the Privy Council, recorded at page 3742 of Hansard.


The Acting Speaker (Mr. Richard):: It being five o'clock p.m., this House stands adjourned until Monday next at 2 p.m., pursuant to Standing Order. I wish all patient and loyal hon. members an enjoyable week-end, and in line
with the thoughts expressed by some hon. members during the recent debate and in the spirit of the Lenten season, perhaps we should count our blessings and resolve to share a little more with those who are less fortunate than we are.
At five o'clock the House adjourned, without question put, pursuant to Standing Order.

Monday, March 1, 1971