1971-12-03

BUSINESS OF THE HOUSE


Mr. W. G. Baldwin (Peace River):: Mr. Speaker, I rise briefly on a point of order to say publicly in the House what I have already told the government House leader privately, that because of circumstances I no longer intend to participate in meetings of House leaders in connection with Bill C-259 and the operation of the modified closure, guillotine, bulldozer rule in that respect.
Because of the interpretation of the rule which is that it is not necessary to go behind the statement made in the House by the minister. I do not impugn his veracity at all, but in the circumstances, unless there is in fact a united position taken by the three opposition parties as to the need to hold up part of the bill for reasonable debate and discussion, the whole proceedings become farcical. For that reason, with respect to this bill and the operation of rule 75 I do not intend to participate, nor will there be a representative of this party.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to say a word on the point of order raised by the hon. member for Peace River (Mr. Baldwin). It does seem to me that, even though we are now under closure in respect of the committee stage of this bill-and our position on that is well known-it is useful to organize such time as we have.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: I therefore regret the decision of my good friend not to attend our meetings. Maybe he could indicate his wishes to me and I could speak on his behalf. At any rate, I hope we shall find a way to use to the best possible advantage such time as has been left by the government for consideration of Bill C-259 in the Committee of the Whole stage.



ROUTINE PROCEEDINGS


[Stage Direction]
Eighth report of Standing Committee on Miscellaneous Estimates, in the two official languages-Mr. Leblanc (Laurier)
[Editor's Note: For text of above report, see today's Votes and Proceedings.]


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, I should like to make a short statement on seals. I should like to describe the agreement negotiated with Norway and I should also like to say a word about the phasing out of the traditional fishing practices of European countries from Canada's territorial sea and new fishing zones.
As hon. members know, we have been pushing our fisheries' limits seaward. We have drawn baselines and fishery closing lines across the mouths of our major bays and inlets. We have also extended our territorial waters 12 miles beyond these lines.
In the eyes of some long-distance fishing nations this policy is expansionist in the extreme. For our part, we believe that these moves are well-founded and essential for the sound management of the fish and marine animals which live near our shores.
In recent months negotiations have been conducted with Norway, Denmark, the United Kingdom, France, Spain and Portugal. They have culminated, or will shortly culminate, in agreements which will not only recognize Canada's jurisdiction in these areas off our coast but will also see the progressive elimination of traditional foreign-based fishing operations in the Gulf of St. Lawrence and in our territorial sea along the Atlantic coast.
This is a major accomplishment. Not only have we acted on our own initiative by drawing fisheries lines authorized by Parliament but we are also getting other nations to formally admit that these lines exist and that the waters inside them are within Canada's fisheries jurisdiction.
The hon. member for Gander-Twillingate (Mr. Lundri-gan) is concerned about Norwegian fishermen continuing to take seals along certain stretches of our coast off Labrador and northeastern Newfoundland. I would point out to him that the seal herds in the North Atlantic are often found far out at sea. The only way in which we can ensure that the total stock of seals-both in national and international waters-is well managed is to have an agree ment in respect of them as a whole and share the catch with other participating countries, in this particular case with Norway only.
Under our new agreement Canada and Norway are setting up a joint commission on sealing. This commission, manned by some of the world's top experts on conservation, will set quotas. These quotas will apply to the entire herd in the North Atlantic, offshore, and occasionally near our shores. The quotas they recommend to

December 3, 1971
Fisheries and Sealing Agreement
Canada and Norway may be similar to the amounts of the catch in recent years or may be zero. The numbers remain to be seen. But Canadians are now guaranteed two things. One is the perpetual protection of the seal herd in the North Atlantic. The other is a fair division of the commercial catch. This will depend on the recommendations made by this group of international experts.
The hon. member says that Norwegian fishermen will be, in his words, "invited in to within three miles of our shores." He says this as if it is something new. Foreign nationals, including Norwegians and Russians, for many, many years have been coming close to our shores to take seals. The only difference now is that Norwegians will come only when there is a proven surplus of seals and the take will have to be shared in any case with Canadians.
I should mention the special position, the privileged position in a sense, of our small inshore fishermen. They are in a special category. They have first claim on any quota which may be declared as surplus to the basic seal stock in the whole of the North Atlantic. The number of longliners operated by inshore fishermen off the northeast coast of Newfoundland has been increasing. Presumably the take of these small inshore fishermen will be guaranteed under the new agreement with Norway.
Finally, Mr. Speaker, hon. members opposite claim that our new agreement with Norway, like the other agreements with other European countries being phased out of our fishing waters, should be debated in this House before it is ratified by the government. Presumably they realize, also, that to follow this procedure would be to depart from normal Canadian and British parliamentary practice. It would be to adopt United States practice. It would be to adopt a procedure which is characteristic of the U.S. presidential system. I doubt very much whether hon. members opposite would want that to happen.


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, I am disappointed the minister did not see fit to provide an advance copy of his statement until two or three minutes ago. First of all, in respect of his concluding remarks about having the matter debated in the House of Commons may I say that the fact the government is not willing to place this matter before us does not surprise me. They never would have placed the present arrangement before the Canadian people except for moves by a number of members in the House of Commons in the last couple of days.
As far back as 1963 the Canadian government started talking about imposing a 12-mile limit, called a territorial sea, and baselines drawn from headland to headland on the Atlantic coast. Recently we have had the application of the 12-mile limit and more recently have had the Gulf of St. Lawrence closed off as a completely exclusive Canadian fishing zone.
Hon. members have heard from day to day for the past year from the Secretary of State for External Affairs (Mr. Sharp), every time we have raised questions about conservation problems on the Atlantic coast, about the great achievement of having made the gulf an exclusive, Canadian fishing zone a body of water that is completely Canadian. Now we have received the treaty between Canada and Norway which trades off the rights of the sealers on the northeast coast of Newfoundland in an
effort, the minister tells us, to phase Norway out of the Gulf of St. Lawrence in the next three years. I believe, if I read the exchange of notes correctly, it says that Norway must be out of there by 1975.
In order to do that we are establishing a principle which has never been agreed to by any nation since the seven years war when the defeated nation was forced to give up certain territorial rights. In order to do that we are permitting Norway to violate our territorial seas by nine miles on the northeastern coast of Newfoundland and to actually come within three miles of Canadian territory on the southern part of the northeastern coast of Newfoundland in Notre Dame Bay. This will mean that the Norwegian sealing fleet or any kind of vessel in part of Notre Dame Bay can actually be nine miles inside Canada's nearest land, Fogo Island, which is 12 miles off the coast. It means that the 5,000 people there who have engaged in the seal fishery will have to compete with the great Norwegian sealing fleet nine miles inward from their island.
The minister mentions that traditionally the seals are out to sea in international waters. We have asked the government of Canada if they would enforce the 12-mile limit which would prevent Norway from being encouraged to take the gamble of sending their fleet across the Atlantic because the minister knows well, if he knows anything about the sealing industry, that for many years the seals-this is why a special treaty was arranged-have come within the 12-mile limit and frequently right up to the shores of Canada. If the government of Canada were to enforce the 12-mile limit on Norway in regard to sealing it would make it impossible for Norway to take the gamble. They would have to stay home with their ships. In the last decade they have taken in excess of 100,000 seals a year. They are the biggest harvesters of seals in the world. This agreement would permit Canada to continue its harvest at the present quota and allow the herd to flourish and grow. This move is an anti-conservation move and a treacherous move toward the people on the Atlantic coast.
The fundamental question which has to be raised is what will we trade off to other nations that we are trying to get out of the Gulf of St. Lawrence? What are we going to trade off to these other nations that have no fishing rights in the gulf? What will we do with France in the matter of St. Pierre and Miquelon? What are we prepared to trade there? The government might revert to the time before the seven years war when it comes to that particular trading.
We have been encouraging the government for purposes of conservation to push our territorial sea beyond the 12-mile limit and to follow the lead of Iceland and other countries by extending our jurisdiction over marine resources. If we accept this agreement it will mean that no other move will be made by the government to extend our territorial seas to protect marine resources. This is a devastating precedent. The principle is fundamental for all Canadians and I feel that this action cannot be agreed to by Canada. The matter should be referred to Parliament and referred immediately to the Standing Committees on Fisheries and Forestry and External Affairs and National Defence. If the Canadian government has any interest in
[Mr. Davis.1
December 3, 1971

Newfoundland and its role in Confederation it will have to revise its present position.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker-


An hon. Member:: Take off your parka.


An hon. Member:: Don't flounder.


Francis Andrew Brewin: -this subject is of such vital importance to the people of the Maritimes and particularly to our fishing industry that I regret that the members of our party who are particularly expert in this matter are not available to answer the minister's statement. However, as one who has been interested in some aspects of this matter, namely, those that affect the development of international law, I do make bold to make a few brief comments on the matter.
We in this party have all been in favour of the extension of the territorial waters of Canada. We think this is essential in this modern age not only to conserve fishing resources but in order to preserve the rights of Canadian fishermen but also to deal with the very grave problems of the pollution of our waters. In so far as this agreement recognizes our right to extend control beyond three miles from our shores, we welcome it.
There is great concern across Canada with respect to the problem of seals. It has aroused the consciences of many people. We are concerned that sealing practices should be humane, but over and above that we are more particularly concerned that in the conservation of wildlife there be no extinction of these species.
It appears to us that the agreement the minister has announced in his statement on the setting up a joint commission on sealing is a forward step. We hope this joint commission on sealing will make its major responsibility the conservation of seals and the enactment of humane practices in regard to sealing.
I admire, as I think all members of our party do, the energy with which the hon. member for Gander-Twillin-gate (Mr. Lundrigan) has expressed his concern about the right of Norwegian fishermen, conceded in this agreement, to come within three miles of our shores. But we do take some comfort from the fact that, as the Minister of Fisheries (Mr. Davis) said, this is not a new development but something that has been happening in the past. We believe that if this was necessary in order to secure adequate international control of sealing, then perhaps it was a necessary concession.
We will observe developments in regard to this commission with a great deal of interest. We note the statement that eminent conservationists are to be members of the commission. We hope they will be in fact a majority of the commission, and that there will be no special interests represented on it but that those who are truly concerned with the conservation of this great national resource will be the effective majority on the commission.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, my situation is similar to that of the hon. member for Greenwood (Mr. Brewin). At the Noranda mine at Lake Dufault,
Fisheries and Sealing Agreement
in my area, there is no problem like the one raised this morning by the minister.
I understand however that experts who advise the government, who are conversant with the matter of Canadian territorial waters, have this important problem under active consideration. The hon. members from the Maritimes are deeply concerned about this problem, as much as the hon. members from the Prairies are concerned about the wheat problem.
Now, Mr. Speaker, I leave it to the better judgment of the experts who advise the government and of the minister responsible to find solutions to protect the resources of this country for the benefit of Canadians. I cannot be more concerned about that matter because I am not familiar with it, but I believe that with the advice of experts advising the government our resources will be protected for the benefit of all the citizens of Canada.



AGREEMENT WITH NORWAY ON SEALING-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

John Howard Lundrigan: Mr. Speaker,
I ask leave to move a motion under Standing Order 43 not only because of the urgency of the particular matter before the House but especially after having noted the lack of concern on the part of members of two other parties in the House, or perhaps a lack of understanding on their part that is not their fault. Because of the implications of the treaty between Canada and Norway, which permits the latter to violate our territorial seas, and because of its long-term implications I would like to move, seconded by my colleagues from the Atlantic region, if that can be collectively done, Mr. Speaker-


Mr. Speaker:: Order, please. Would the hon. member please put the motion in proper form?


John Howard Lundrigan: -seconded by my colleague the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall):
That this whole matter be referred to the Standing Committee on Fisheries and External Affairs.


Mr. Speaker:: The motion proposed by the hon. member under the terms of Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


An hon. Member:: Who said no?



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: I rise under Standing Order 43 to ask the unanimous consent of

December 3, 1971
Inquiries of the Ministry
the House to move a motion of urgent and pressing necessity involving the defence production-sharing agreement between Canada and the United States. I do so in view of the fact that the imbalance of payments is a little more accurately described as being $404 million and not in excess of $500 million and that this imbalance is due mainly to the situation created by the Viet Nam war and therefore is not a matter of shared continental defence priorities to which the agreements of 1963-


Mr. Speaker:: Order, please. The hon. member is making a speech. He knows that under Standing Order 43 and the practice of the House he should indicate what the motion is and the Chair will inquire whether there is unanimous consent.


J. Michael Forrestall: I move, seconded by the hon. member for Hillsborough (Mr. Macquarrie):
That the whole question of the defence-sharing program between Canada and the United States be referred to the Standing Committee on External Affairs and National Defence and that the members of the committee be able to study any document, understanding, written or oral, pertaining to this particular defencesharing arrangement.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Dartmouth-Halifax East. [Translation]
Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Since there is no unanimous consent, the motion cannot be put.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: have a question for the Prime Minister relating to the DISC program. In view of the answers the Prime Minister has previously given with regard to this program and in view of the apparent decision now reached by the Senate-House conference committee in Washington with regard to the DISC proposals, has the government any plans to assist Canadian industry to compete with export industries in the United States when the DISC program goes into effect there?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, we have been studying contingency programs for several months now. I am not aware when the DISC program will go into effect, but if it does and we have reason to announce anything we will do it at that time.


Robert Lorne Stanfield: I have a supplementary for the Prime Minister or the Minister of Industry, Trade and Commerce. Is the government going to canvass industry in Canada and the provincial governments with a view to obtaining an accurate forecast of what the probable effects of the United States DISC program will be on Canadian export industries before the possible storm actually descends upon us?


Pierre Elliott Trudeau: As far as governments are concerned, Mr. Speaker, the whole matter was on the agenda of the federal-provincial conference a few weeks ago and the governments were invited to make their views known to the federal government. As far as industries are concerned, perhaps the Minister of Industry, Trade and Commerce could reply.


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Just to say, Mr. Speaker, that it is terribly difficult to know, first of all, what will come out of Congress by way of the DISC program; second, if the President is going to agree with what comes out of Congress and, third, what use will be made of it by the different companies in the United States, and a few other elements of uncertainty. In these circumstances it is impossible to give any scientific assessment of what the effect of the DISC program will be on Canadian industry. Besides, of course, it would vary greatly from one industry to another.


Robert Lorne Stanfield: No doubt it will vary, Mr. Speaker. I should like to ask the Prime Minister whether he intends to take this matter up with President Nixon when he meets him next Monday, specifically the DISC program in the form it now seems to have been approved by the joint Senate and House of Representatives committee? Does the Prime Minister intend to take this matter up and to press the Canadian point of view? Also, will the Prime Minister be able to take with him forecasts as to the effect of the DISC program if it implemented in the form that has been approved by the joint Congressional committee.


Pierre Elliott Trudeau: With regard to the last part of the question concerning forecasts, I believe the Minister of Industry, Trade and Commerce has indicated what the answer to that is. As to taking up the matter itself, I am sure we will be discussing bilateral economic relations between the two countries although, in line with what the Minister of Industry, Trade and Commerce has just said, I do not know if the President will want to take me into his confidence and tell me what he is going to do with the DISC program that emerges from Congress, or whether he will express his veto.


Mr. Max Saltsman (Waterloo):: Has the Prime Minister been able to indicate to the American government, the President or his representatives the damage that will be caused to manufacturing in Canada by the introduction of the DISC program?


Pierre Elliott Trudeau: Mr. Speaker, I do not know if I understood the hon. member well. If the hon. member is asking about the extent of the damage which might be caused, then in so far as that question is not hypothetical it has just been
December 3, UT71

answered by the Minister of Industry, Trade and Commerce.


Robert Lorne Stanfield: He said he did not know.


Pierre Elliott Trudeau: He said that we cannot make at this time any precise assessment because this is based on a series of hypothetical actions by a foreign government.


Max Saltsman: Mr. Speaker, the right hon. gentleman's answer leaves me in some doubt as to how the Canadian government can bargain with the United States when we cannot tell them in any reasonable way what the effects of the DISC program will be.


Mr. Speaker:: Order, please. Would the hon. member please ask his supplementary. I believe he has been recognized for that purpose.


Max Saltsman: Mr. Speaker, may I then ask if the Prime Minister, before meeting with the President, intends to have some assessment made of what the potential damage to the Canadian manufacturing industry will be so he can indicate that to the President?


Jean-Luc Pepin: Mr. Speaker, I will try to answer this question by repeating what I just s.aid. It is terribly difficult to know what will come out of the United States Congress by way of a DISC program. One day we read in the papers that President Nixon is threatening to veto the tax bill. Today we read in the same papers that the employment tax credit may not go through-


Mr. Speaker:: Order, please.


Jean-Luc Pepin: -that it might not become law.


Mr. Speaker:: Order, please.


Gerald William Baldwin: Mr. Speaker, will the Prime Minister tell the House if the government's plans in this regard to assist Canadian exporters will be presented as amendments to amendments to the tax bill through the usual rubber stamp process?


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for York South. There are a number of supplementaries to be asked but I think that in fairness we should complete the first round of questioning, after which I will return to the hon. member for Calgary North and the hon. member for Fundy-Royal.



INDUSTRY


Mr. David Lewis (York South):: Mr. Speaker, I have a question for the Prime Minister. In view of press reports quoting the Prime Minister as saying last night in Toronto that Canada's economy is booming, may I ask whether he is aware that Consolidated Bathurst in Bathurst, New Brunswick, is laying off 450 mill workers and is closing down its woods operations with the expectation that there will be 1,400 people out of work in that small community?
Inquiries of the Ministry
What steps is the government taking to save that community from the disastrous situation into which it is now plunging?


Pierre Elliott Trudeau: Mr. Speaker, we have been in communication with the New Brunswick government. I have spoken to the Premier myself. The Minister of Regional Economic Expansion or the Minister of Manpower and Immigration-I am not sure which. We sent an official down who is there now and who is trying to assist in finding ways to combat this unemployment.


David Lewis: May I ask the Prime Minister whether, when he spoke to a black tie dinner of Canadians of Italian origin in Toronto last night, he tried to find out how many new Canadians of Italian origin in Toronto are out of work and expect to be unemployed this winter?


Mr. Speaker:: Order, please.


Mr. Herb Breau (Gloucester):: Mr. Speaker, I should like to put a supplementary question to the Prime Minister in connection with the lay-offs at the Consolidated Bathurst Limited.
Could he assure us that the Department of Manpower and Immigration will speed up the manpower services at the local office of the Consolidated Bathurst Limited, in order to lessen as much as possible the social inconvenience suffered by those families?


Pierre Elliott Trudeau: Yes, Mr. Speaker, the question is quite relevant and I have obtained the assurance that an official is already on the spot to look after that matter.



PULP AND PAPER-ASSISTANCE TO NEW BRUNSWICK IN MAKING SURVEY

Mr. Thomas A. Bell (Saint John-Lancaster):: Mr. Speaker, my question is supplementary to the first question asked by the hon. member for York South. May I ask the Prime Minister whether, in addition to what he has said the government is doing and particularly in view of Premier Hatfield having shown great leadership in going ahead with a survey of the pulp and paper industry-


Mr. Speaker:: Order, please. I wonder whether the hon. member is now asking a question. I have the impression that latest supplementaries have been more in the form of debate than supplementary questions. If the hon. member has a question by way of supplementary inquiry, he should ask it now.


Thomas Miller Bell: Mr. Speaker, I was thrown off track by the reference to Italians. I should like to get back to New Brunswick and to the original question. Since the province of New Brunswick is making a full survey of the pulp and paper industry will the federal government, in a particular way, offer its good services in connection with this whole matter?


Pierre Elliott Trudeau: Mr. Speaker, I am sorry the hon. member was cut off when he was telling us how Premier Hatfield was showing leadership.

December 3, 1971
Inquiries of the Ministry


Mr. Speaker:: Order, please. The right hon. Prime Minister will be recognized for the purpose of replying to the latter part of the question asked by the hon. member for Saint John-Lancaster.


Thomas Miller Bell: Mr. Speaker, the Prime Minister came all the way back from Toronto; surely we all want to hear what __the Prime Minister has to say on every occasion.


Some hon. Members:: Hear, hear!


Mr. Hees:: Get the feathers out of your mouth, Pierre.


Pierre Elliott Trudeau: It is very nice to be made welcome by members of all parties on my return.


Some hon. Members:: Hear, hear!


George Harris Hees: Feathers and all.


David Lewis: Do not read too much into such comments.


Pierre Elliott Trudeau: Mr. Speaker, the feathers I had were from a hat. The horse feathers are on the other side.


An hon. Member:: Horse feathers?


Pierre Elliott Trudeau: Perhaps I should say donkey feathers. The question can be answered by reminding the House that we are having a meeting on Monday morning with representatives of the pulp and paper industry and we hope to come to grips with many of these questions.


Gerald William Baldwin: After that kind of answer, you might as well go back to Toronto.


Mr. Speaker:: Order, please. A number of hon. members are seeking to ask supplementary questions. I am not sure whether they are supplementary to previous questions. I think we should complete the first round of questioning by recognizing the hon. member for Temiscamingue and then we will try to sort out all those supplementaries.



INQUIRY RESPECTING COMMERCIAL AGREEMENTS WITH ALGERIA-INTEREST RATE ON LOANS

David Réal Caouette: Mr. Speaker, I have a question for the hon. Minister of Industry, Trade and Commerce.
Since his recent visit in Algeria, have trade agreements been entered into with Algeria for the exchange of products?


Jean-Luc Pepin: Mr. Speaker, if the hon. member is thinking in terms of private exchanges, there have been some; I could not mention all of them here. If he is thinking in terms of public exchanges, there have been agreements indeed. The Export Development Corporation, which had already committed $50 million for certain projects in Algeria has allocated another $10 million for a short-term loan with a banking agency of the Algerian government. And Mr. Aiken, the president of the company, told me when I went to Algiers that he was willing to finance
|Mr. Trudeau.]
exports to Algeria, to the extent of some $100 million, provided interesting projects were submitted to him.


David Réal Caouette: A supplementary question, Mr. Speaker.
Can the minister tell us at what rate of interest those loans of $50, $60 or even $100 million will be granted?


Jean-Luc Pepin: At the normal commercial rate, Mr. Speaker. There are no subsidies with regard to the rates of interest, except, of course, in the case of CIDA projets; these are special in that they represent assistance to underdeveloped countries.



STATISTICS


Mr. Speaker:: The hon. member for Fundy-Royal on a supplementary.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: My question might stand on its own, Mr. Speaker, but it flows from earlier questions on the matter of DISC and so on. I have given the minister notice, short notice, but notice. Are Statistics Canada and the Department of Commerce of the United States working on an urgent basis on developing some agreed-on formula for reporting statistics, particularly financial data, so that the differences in things like balances of payments, which now amount to several hundreds of millions of dollars, will at least be subject to a common denominator in statistical data?


Jean-Luc Pepin: Such difficulties are not confined to relations between Canada and the United States; the problem exists all over the world because of the difficulty in establishing such statistics. As a matter of fact our two countries have been working on it for a number of years and, during his recent visit to Ottawa, Mr. Stans, American Secretary of Commerce, suggested that special efforts be made in that regard. Since then, we have sent one of our experts to Washington and he is presently attempting to clear the ground with his American counterpart.


Mr. Fairweather:: A supplementary question.


Mr. Speaker:: Order, please. I might mention that for the moment perhaps this should be the last supplementary on this point. I will then recognize the hon. member for St. John's East.


Robert Gordon Lee Fairweather: Do the United States and Canada now agree on the totals of their respective balances of payments?


Jean-Luc Pepin: Mr. Speaker, our present way of dealing with conflicts is to put the point of view of Statistics Canada on
December 3, 1971

one side of the page and on the other, that of the Secretary of State for Commerce of the United States.
* # *



GOVERNMENT AGENCIES


Mr. James A. McGrath (St. John's East):: Mr. Speaker, in the absence of the Minister of Finance I will direct my question to the Prime Minister. In view of what appears to be a tendency on the part of the Canadian investment community to invest Canadian risk capital in American ventures in Canada, an example of which was the sale by the chairman of the Canada Development Corporation of his firm to American interests prior to his appointment, is the Prime Minister willing to refer this matter to the Standing Committee on Finance, Trade and Economic Affairs so that the committee may have an opportunity to examine the chairman and the board of directors with regard to their views on investment and other important economic matters so vital to Canada?


Pierre Elliott Trudeau: Mr. Speaker, I will gladly ask the House leaders to consider this matter when they have begun to talk to each other once again.


Gerald William Baldwin: I rise on a point of order, Mr. Speaker. As usual, the Prime Minister is as usual at the south pole when I am at the north pole. I referred only to Bill C-259 on which the government is employing its bulldozing tactics.



REQUEST FOR COMMITTEE EXAMINATION OF MAJOR APPOINTEES AS TO ATTITUDES AND VIEWPOINTS

James Aloysius McGrath: I have a supplementary question for the Prime Minister. Since government agencies such as the CDC have such a tremendous influence on the economy and investment in Canada, would the Prime Minister agree to a system whereby major appointees to agencies such as the CDC might come before a standing committee of the House to be examined as to their attitudes and viewpoints?


An hon. Member:: And conflicts of interest.


Pierre Elliott Trudeau: Mr. Speaker, that would be a step toward the presidential system and everyone knows I am against the presidential system.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Will the hon. member for Mackenzie resume his seat? I have noticed him. I have also noticed that he is getting very impatient. He will be recognized in a moment but unfortunately not now. I have to recognize the hon. member for St. John's East first.


James Aloysius McGrath: Because of the growing tendency by Parliament to delegate authority and tremendous powers to
Inquiries of the Ministry
agencies such as the CDC-and it is only in these cases that it would be relevant-surely the Prime Minister would be prepared, without departing from our customs or our system, to consider referring these appointees to a standing committee of the House, such as the Standing Committee on Finance, so they may be examined with regard to their views on economic matters and any possible conflict of interest that might exist?


Pierre Elliott Trudeau: Mr. Speaker, that is a very searching observation. I certainly agree there is a growing tendency of seeing power exercised by administrative bodies in all our societies. The corrective I am concerned with now is less that of having Parliament exercise an overview of that authority but to make sure that the executive of government itself has some input into this power as exercised by the administrative bodies.


James Aloysius McGrath: Thank you, Mr. President.



TRANSPORT


Mr. S. J. Korchinski (Mackenzie):: Thank you, Mr. Speaker. My frustration tends to make me understand Your Honour's frustration. I want to direct my question to the Minister of Transport. On several occasions I have asked the minister whether he would take up the question of flashers on railway engines. He said he would take it under advisement and suggested that the railways perhaps should consider them. Since then, unfortunately, I have lost several friends. I want to ask the question: when in hell are we going to start with this?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I am afraid I cannot answer that either in the same kind of language or otherwise. In the first instance, it is a matter for the railways. What I undertake to do for the hon. member, in addition to having conveyed his questions to the railways, is to determine if the CTC can perhaps incorporate the use of flashing lights as part of their current study of the whole question of railway safety. I will see that this question is passed on to them immediately.



THE CANADIAN ECONOMY


Mr. John Burton (Regina East):: I wish to direct a question to the Prime Minister. In view of the right hon. member's statement to the House on Wednesday that the government's position on foreign owenership is known to the government, will the Prime Minister consider making the government's position and policy known to the House and the public of Canada before his meeting and discussions with President Nixon next Monday?

December 3, 1971
Inquiries of the Ministry


Pierre Elliott Trudeau: As the House is aware, Mr. Speaker, we did consider this alternative, but I announced to the House and I believe the Minister of National Revenue also made the point that we found it advisable to have the government's policy statement appear at the same time as the background material, which we will do.


John Stratford Burton: In view of the importance of this subject to the people of Canada, will the Prime Minister consider making his position known to the public before Monday and then proceeding with the publication of background studies at the earliest possible date, recognizing the technical difficulties involved?


Pierre Elliott Trudeau: We have considered that point, Mr. Speaker. We took another position mainly because there is such misinformed discussion on this whole subject of foreign ownership that we wanted the policy statement and background material to appear at the same time.


EXTERNAL AFFAIRS
Mr. Steven E. Paproski (Edmonton Centre):: I have a supplementary question to that of my leader. It is with regard to the Prime Minister's visit with Mr. Nixon.


Mr. Speaker:: Order, please. I am not sure how the hon. member is asking the question. Perhaps I got up a little too soon. I got the impression he was asking a question of his leader.


Steve Eugene Paproski: My question is supplementary to a question asked by my leader. Does the Prime Minister plan to discuss the appointment of a new Secretary General of the United Nations and is it true that the Prime Minister favours the appointment of Issofou S. Djirmahoye of Niger as the successor to U Thant?


Mr. Speaker:: I am not sure whether the question is in order. I must say that the purport of the question escapes me so it would be difficult for me to make a ruling on it.


Mr. Eldon M. Woolliams (Calgary North):: I have a supplementary question. In view of the fact that several members, starting with the Leader of the Opposition, have asked questions of the Prime Minister as to what discussions will take place with the President of the United States, will the Prime Minister now tell us, as this will be the last opportunity for us to ask him, if he has a program of the items he will discuss with the President and what priorities in that program he will be discussing?


Pierre Elliott Trudeau: Mr. Speaker, I am afraid I cannot give those details at this time, mainly because I do not have them.


Eldon Mattison Woolliams: Mr. Speaker, would the Prime Minister consider as one of the priorities that he will discuss with the President of the United States the subject of energy, in light of the fact that before a standing committee this morning it was admitted by the Energy Board that reserves in the Arctic were not taken into consideration when the board vetoed the four applications for licences to export natural gas to the United States?


Pierre Elliott Trudeau: Yes, Mr. Speaker.



PROVINCIAL AFFAIRS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Prime Minister. I ask him whether or not there has been any communication between the government of Canada and the Lieutenant Governor of Newfoundland in connection with the situation created by the action of the premier of that province in hanging on to office having been defeated at the polls?


Pierre Elliott Trudeau: I do not
know, Mr. Speaker, if there has been any communication by any minister. As for myself, I know I have not communicated and therefore I would assume that the Governor General would not have communicated with the Lieutenant Governor. I will inquire as regards other ministers.


John George Diefenbaker: Mr. Speaker, the Governor General would have nothing to do with it so we can exclude him. I ask the Prime Minister, having regard to the pirouettes that Mr. Smallwood has been dancing with constitutional practice, whether the government or the Prime Minister would direct to the Lieutenant Governor of the province of Newfoundland his constitutional responsibilities, that Lieutenant Governor owing his appointment, of course, to the government of Canada?


Pierre Elliott Trudeau: Mr. Speaker, it seems to me a rather shaky constitutional doctrine, but I will certainly look into the matter. If indeed I have the authority to direct a Lieutenant Governor of a province to do certain things, perhaps I will avail myself of that opportunity.


John George Diefenbaker: Mr. Speaker, I did not direct him to do that: I said, let him know what the constitutional practice is.


Stanley Howard Knowles: Mr. Speaker, may I direct a supplementary question to the Prime Minister. In view of the fact that Lieutenant Governors are appointed by the Governor General and hold office subject to his pleasure, and in view of the fact that the Governor General acts on the advice of his ministers, may I ask the Prime Minister whether he intends to have a discussion with the Governor General as to what advice he might give?


Pierre Elliott Trudeau: Mr. Speaker, is the question related to the previous one about advice that the Governor General might give to the Lieutenant Governor?
(Mr. Burton.]
December 3, 1971


Stanley Howard Knowles: Yes, that is correct.


Pierre Elliott Trudeau: Mr. Speaker, I do not share the hon. member's view that that is the correct constitutional position, and I am glad to be supported by the right hon. gentleman from Prince Albert who said that the Governor General has nothing to do with it.


Stanley Howard Knowles: Has either of the right hon. gentlemen read the constitution lately? .


James Aloysius McGrath: A supplementary question, Mr. Speaker.


Mr. Speaker:: Order, please. I will recognize the hon. member for St. John's East on a last supplementary, but I must bring to the attention of hon. members the fact that we will soon be running short of time and there are quite a few members who have not had an opportunity to ask a question. If we spend too much time on supplementaries and I have to make too many observations, we will run out of time.


James Aloysius McGrath: Mr. Speaker, I have a supplementary question for the Minister of Transport. Has the minister been consulted on this matter either by the Premier of Newfoundland or the Lieutenant Governor?


Donald Campbell Jamieson: Mr. Speaker, perhaps you had not realized it but, with all deference, I think this question is not within my competence. However, the answer is no.


Mr. Speaker:: Order, please.



BANKRUPTCIES


Mr. Henry Latulippe (Compton):: Mr. Speaker, I wish to put a question to the hon. Minister of Consumer and Corporate Affairs.
In view of the increasing number of bankruptcies in Canada and the considerable loss of tax revenues they represent for the government, which amounted to $190,173.01 for the last twelve months, could the hon. minister say whether the Bankruptcy Branch succeeded in preventing many bankruptcies or whether it published reports?
[-English.}


Hon.   Ron. Basford@Minister of Consumer and Corporate Affairs: Mr. Speaker, there was a report tabled earlier this year proposing revisions to the Bankruptcy Act. This is being studied and representations are being received.



AIRPORTS


Mr. Stanley Haidasz (Parkdale):: Mr. Speaker, I should like to ask the Minister of Transport whether any extraor-
Inquiries of the Ministry
dinary steps have been taken to expedite the completion of the second terminal at the Toronto International Airport, and can the minister inform the House when we may expect a decision on the site for a second airport for Toronto and the neighbouring area?


Donald Campbell Jamieson: Mr. Speaker, as to the first question, the situation is that we have changed the contract with the contracting company to employ a very substantial additional number of workers and increase the pace of the work over the winter. This will have the double objective of getting more people to work and getting the first section of the terminal open by April and the full terminal open by June. In regard to the second question, the answer is the same as I gave a week ago.
May I have the indulgence of the House to add to an answer I gave a few moments ago to the hon. member for Mackenzie, Mr. Speaker?


Mr. Speaker:: Perhaps we might return to that question in a moment. The Chair will recognize the hon. member for Egmont.



AIR TRANSPORT


Mr. David MacDonald (Egmont):: Mr. Speaker, my question is also for the Minister of Transport. In view of the recent decision to review the situation in regard to suspending Eastern Provincial Airlines service to Summer-side in light of EPA once again carrying air mail, and since there is a very short period of time here, I wonder whether or not the minister would request Eastern Provincial to continue its service since the original suspension date was for early in January. Second, has the minister conferred with Eastern Provincial officials and considered with them the possibility of continuing service under these new circumstances?


Donald Campbell Jamieson: Mr. Speaker, I have done neither because I am in the awkward position, as the hon. member knows, of having been advised formally that I will be receiving an appeal from the decision of the CTC. In view of those circumstances it would not be proper for me to consult with the parties in advance of receiving the appeal. Given these new circumstances, I will look into the matter and see what I can do to accommodate the hon. member.



INDUSTRY


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. Two days ago it was denied in the House that the Secretary of State for External Affairs had said there

December 3, 1971
Inquiries of the Ministry
was an agreement involving suspension oi the safeguards in the auto pact between Canada and the United States for two years. My question for the minister is: Has such an agreement been reached, and is the position being put forward by the government of Canada to the United States one that would involve a suspension of the safeguards in the auto pact for two years?


Jean-Luc Pepin: There is no such agreement, Mr. Speaker. I do not know what the Secretary of State for External Affairs could have said to lead to that interpretation, but there is no agreement on the auto pact between Canada and the United States at this time. If there should be an agreement it will be announced in the proper way.


John Edward Broadbent: Mr. Speaker, I suspect that the minister misheard my question. Is the government proposing to the United States-I did not ask whether it had reached an agreement with the United States-a suspension of the safeguards in the auto pact for a two-year period?


Jean-Luc Pepin: Mr. Speaker, what our position will be on this matter is not to be announced this morning.


Mr. A. D. Hales (Wellington):: Mr. Speaker, I have a supplementary question for the Minister of Industry, Trade and Commerce. Following his meeting yesterday with mayors of Ontario cities-Kitchener, St. Catharines and others-who are very concerned about removal of the safeguards in the auto pact, can the minister advise the House whether he sent the mayors home with the assurance that the safeguards will be maintained?


Jean-Luc Pepin: I have not yet learned to read faces, Mr. Speaker.



CANADA-U.S. AUTO PACT-REQUEST FOR SUBMISSION OF PROPOSALS TO PARLIAMENT BEFORE FINAL DECISION TAKEN

Max Saltsman: I have a supplementary question for the Minister of Industry, Trade and Commerce. Will he assure the House that no agreement will be made or final decision taken until he brings the proposals to Parliament?


Jean-Luc Pepin: Mr. Speaker, I said something to that effect on May 21, 1970,1 think it was.



CANADA-U.S. AUTO PACT-CONCESSIONS SOUGHT BY CANADA FOR REMOVAL OF SAFEGUARDS

George Harris Hees: A supplementary question, Mr. Speaker.


Mr. Speaker:: Order, please. We are running short of time but I will recognize the hon. member for Prince Edward-Hastings on a supplementary.


George Harris Hees: Would the minister advise the House what concessions the Canadian government is trying to persuade the United States government to give in payment for removal of the safeguards in the auto pact, which it is obviously trying to do?


Jean-Luc Pepin: Mr. Speaker, the position on that is that the United States has a number of minor "irritants" with Canada on the auto pact for example and similarly we have a number of minor "irritants" as far as the United States is concerned. We will try to solve as many as possible during subsequent days.
noon)



CANADA-U.S. AUTO PACT-PRESSURE BY UNITED STATES FOR REMOVAL OF TAX ON VEHICLES IMPORTED INTO CANADA BY INDIVIDUALS

Mr. S. Perry Ryan (Spadina):: I have a supplementary for the Minister of Industry, Trade and Commerce. Are United States officials pressing Canada to remove the 15 per cent tax imposed on vehicles imported by individuals into Canada from the United States and, if so, what is the position taken by the government?


Jean-Luc Pepin: This is part of the discussion in connection with the automotive agreement. The United States officials think that the safeguards, including the ratio, the Canadian value added and the tariffs were temporary. We say that the tariffs, at least, were a permanent feature of the agreement. This is part of the discussion which is going on between the two governments. Any reaching of a conclusion will be announced in the proper way. I was referring a moment ago to the answer I gave in May, 1970, when I said I would take the House into my confidence before finalizing anything on the auto agreement with the United States.


Max Saltsman: May I ask the minister to clarify what he means by taking the House into his confidence? Does he mean that no final decision will be made until approval has been given by the House?


Jean-Luc Pepin: No, Mr. Speaker. I remember vividly I said no to that question. The hon. member commented, at the same time, "How frank can the minister be?". I did not say that I would ask for approval of the House. I said I would take the House into my confidence, but a decision would not be conditional on the approval of the House.


Mr. Speaker:: Order, please.


Sylvester Perry Ryan: Is the government determined to maintain the embargo against the importation of used cars into Canada by individual Canadians?


Jean-Luc Pepin: That is one of the positions which will presumably be taken by the United States negotiators. They feel that the tariff and embargo on the flow of used cars between Canada and the United States is not necessary. That is not the position I take.



INDUSTRIAL DEVELOPMENT BANK


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Minister of Finance. In his absence perhaps I
December 3, 1971

can direct it to his parliamentary secretary. It relates to a question asked about two weeks ago in the House by my hon. friend from Wellington. It had to do with the interest rates charged by the Industrial Development Bank. Will the government take steps to ensure that interest rates charged by the Industrial Development Bank are at least brought into line with those charged on comparable loans by commercial banks so that the IDB can carry out the duties it was intended to carry out?


Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: I will be glad to look into the matter and report to the hon. member later.


EXTERNAL AFFAIRS
Mr. Erik Nielsen (Yukon):: Mr. Speaker, my question is really supplementary to a previous question addressed to the Prime Minister concerning his forthcoming visit with President Nixon. It has to do with the paving of the Alaska highway. In view of the large number of jobs such a project would create, and in view of the fact that negotiations have been going on between Canada and the United States concerning the paving of the highway and that the Canadian government has made a proposal to the United States with regard to it, would the Prime Minister place this matter on the agenda in the hope that an agreement can finally be reached between the two countries concerning a cost-sharing program for the paving of this highway?


Pierre Elliott Trudeau: I thank the hon. member for the suggestion. I will certainly consider it.



INDUSTRY


Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I have a question for the right hon. Prime Minister. I consider it to be urgent and important in view of the increasing rumours about a sale of La Prevoyance insurance company to American interests. Since the Canadian Development Corporation now has a Board of Directors, does the Prime Minister intend to call on that government agency to prevent the sale of that Quebec insurance company to a foreign concern?


Pierre Elliott Trudeau: Mr. Speaker, I have had an opportunity of discussing the matter with the Minister of Finance. He has explained that as the company involved is incorporated under provincial legislation the federal government itself cannot intervene as it does in the case of insurance companies incorporated
Inquiries of the Ministry
under federal legislation. In this case, then, it would rather be the responsibility of provincial authorities.
As to the second part of the question, concerning the Canada Development Corporation, I must say I am rather surprised that the hon. member would already want the government to interfere and tell this Corporation how to operate. This was not our purpose in establishing the Canada Development Corporation. However, I will consider the hon. member's suggestion.


Georges-J. Valade: Mr. Speaker, I have a supplementary.
I would like to ask the Prime Minister whether this new government agency has a duty to try and invest in Canadian companies in order to prevent their falling into foreign hands. If this is the case, can the agency prevent this sale, and can they themselves see to the interests or to the purchase of La Prevoyance?


Pierre Elliott Trudeau: Mr. Speaker, this is one of the objectives of the Canada Development Corporation, and just in case they might not be aware of the possibility suggested by the hon. member, maybe the government could bring this matter to their attention.



TRANSPORT


Mr. J. H. Horner (Crowfoot):: Mr. Speaker, I should like to direct a question to the Minister of Transport. Is the minister carrying out an investigation into the movement of cattle by rail from western Canada to eastern Canada and, if he is, will he consider referring the whole matter to the Transport Committee. We could then call representatives of the railways before us and inquire into the difficulties which have arisen this fall particularly and which have been very detrimental to the movement of feeder cattle.


Donald Campbell Jamieson: think that makes sense, Mr. Speaker. I did it with regard to the grain movement, and I see no reason the railways should not be asked to give an explanation with regard to cattle. I am looking into the specific matter raised yesterday by the hon. member for Meadow Lake.
% ^ $



NATIONAL DEFENCE


Mr. Doug Rowland (Selkirk):: Mr. Speaker, I wish to direct this question to the Minister of National Defence. It arises out of a news release concerning a joint strategic air command exercise which is to take place over eastern Canada and the United States on December 7 and 8. The news release indicates that some of the fighter aircraft may achieve supersonic speeds and that residents may

December 3, 1971
Inquiries of the Ministry
hear sonic booms. Has a procedure been established for compensation for any damage that may be done?


Hon. Donald S. Macdonald (Minister of National Defence):: There will be no special procedure instituted. There has, however, been an ongoing policy in this regard which would provide compensation.



INQUIRY AS TO POSSIBLE CHANGE IN CANADA'S NATO COMMITMENT

J. Michael Forrestall: Mr. Speaker, my question is for the Minister of National Defence. Since he is about to depart for talks in Europe, can the hon. gentleman indicate to the House whether or not he will carry with him any specific instructions from the government to change any of the basic positions which Canada now assumes within NATO?


Donald Stovel Macdonald: Mr. Speaker, it will be a matter of confirming with the other NATO states the increase in our NATO contribution indicated in the white paper.


Mr. Speaker:: Order, please. I should indicate that we have reached the end of the question period, although we might try to recognize a few hon. members who have been trying for a few days to ask questions. The hon. member for Nickel Belt.



WILDLIFE


Mr.   Gaetan-J. Serre@Nickel Belt: Thank you, Mr. Speaker. I have a question for the very able Minister of the Environment. Can the minister tell us when he expects to introduce a new Canadian wildlife act and can he indicate whether there will be provisions for assistance, financial and otherwise, for bird sanctuaries or wildlife refuges which, if properly assisted, could contribute greatly to the conservation of our wildlife and the education of our people in conservation?


John (Jack) Davis: Mr. Speaker, I hope it will be possible to introduce an act along those lines at the next session of Parliament.


Mr. Speaker:: Perhaps we should not have a supplementary on this matter which really does not appear to be too urgent. The question itself could have waited for 24 hours or 48 hours. We have reached the end of the question period.



TRANSPORT


Stanley James Korchinski: Mr. Speaker, I wonder if the Minister of Transport might be permitted to com-

plete the answer he was trying to provide me when he indicated he had some further information.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


Donald Campbell Jamieson: Mr. Speaker, I merely wanted to update the answer and say that the Canadian Transport Commission, since the question was asked this morning, has advised me in fact that they have had consultations during the last month with Canadian National and Canadian Pacific with a view to getting the most appropriate kind of flasher. It is not a question of whether it should or should not be used. It is a question of the most appropriate one. I will have a full report within a couple of days.


Mr. Speaker:: Orders of the day. Is the minister rising on a point of order?
*	* sic



BUSINESS OF THE HOUSE


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, I should like to adivse the House that next week we will have the last opposition day. At the moment it is planned to call it on Thursday of next week.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, December 2, consideration in committee of Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon amendments to that act-Mr. Benson-Mr. Laniel in the chair.
The Deputy Chairman:: It is the understanding of the Chair that the committee will resume consideration of the sections dealing with capital gains. The group of sections as listed at page 9251 of Hansard for November 2, 1971 includes sections 38 to 55 inclusive, sections 3, 9, 71, 73, 85, 87, 88, 89, 96 and 111. Section 9 of this group was adopted on November 2, 1971.
On Clause 1-section 38-Meaning of taxable capital gain and allowable capital loss.


Gérald Laniel: Shall section 38 carry?


John (Jack) Henry Horner: Mr. Chairman, in rising to speak in this debate, I wish first of all to quote from Hansard the remarks of the President of the Privy Council, as recorded at page 10,077:
December 3, 1971

We have attempted to maintain a flexible attitude toward the bill. We have listened to the representations made in the country and in the committee with respect, for example, to the taxation of co-operatives and credit unions. I am happy to state that when we go into the committee we will be moving a series of major amendments-
Since the government has invoked closure, I hope that the remaining four days will not be completely wasted in discussions about matters of little value or use. I hope the government has a flexible mind and will consider certain changes in respect of the application of the capital gains provisions, such as sections 29 and 39, which apply to the agriculture industry. As recorded at page 9442 of Hansard, I posed a question to the parliamentary secretary-


Gérald Laniel: Order, please. The hon. member for Winnipeg North Centre is rising on a point of order.


Stanley Howard Knowles: Mr. Chairman, I rise on a point of order I had thought of raising earlier. In view of the reference just made by the hon. member for Crowfoot, I think it should be raised. I believe it was understood that the debate today would include, not only capital gains in general, but more particularly capital gains as related to farmers. I thought sections 28, 29, 30 and 31 were also in the general area we are discussing. The hon. member for Crowfoot has just mentioned one of them. I agree with him, but it struck me that we should have this understood. In other words, are we discussing today the principle of capital gains generally or are we discussing the farm situation and capital gains as it applies thereto and the whole question of the basic herd. I thought it was to be a farm day.


Mr. Benson:: Mr. Chairman, we are quite willing to discuss both.


Stanley Howard Knowles: Then, Mr. Chairman, perhaps you would identify clauses 28, 29, 30 and 31, because we agree with the Minister of Finance that the discussion is on both capital gains generally and farm problems as well.


Edgar John Benson: It is quite agreeable to the government.


Gérald Laniel: In that case, does the committee agree that I invite discussion also on sections 28, 29, 30 and 31 dealing with farming which was also considered on November 9, 1971. I wonder if the committee would wish the Chair, when putting these questions if we ever reach that proceeding, to put them at the end of the list I have already given.


Some hon. Members:: Agreed.


John (Jack) Henry Horner: Mr. Chairman, I was just about to read from page 9,442 of Hansard where I put a question to the Parliamentary Secretary to the Minister of Finance. I shall not read the whole question. I dealt with the subject matter of the introduction of capital gains and how it applied to the basic herd. I said:
Regarding the change in the basic herd concept, could the parliamentary secretary indicate whether I am correct in assuming that this provision was brought about because of the introduction of the capital gains tax?
The parliamentary secretary replied:
Yes, Mr. Chairman. It is the view of the government that with the
Income Tax Act
introduction of a capital gains tax the need for the basic herd is greatly reduced or eliminated.
On those particular days, November 8 and 9, we dealt with this matter at length. The government was good enough to accept the suggestion we made on November 9 that section 29 should be allowed to stand until they reconsidered our suggestion. I would like to think that in the intervening time they have reconsidered their position. I pointed out that, in essence, there is a capital gains tax in the United States but they still have the basic herd concept, the capital asset concept. This proves conclusively to me that, with the introduction of the capital gains tax, it may still be useful to the agriculture and livestock industries to maintain the basic herd concept. If our competitors in the country to the south of us are maintaining it, and we are all in the North American market, we should have the same privilege here in Canada.
Much has been said in this House about the agriculture industry and the plight of the farmers, but I find that more and more words of concern for the agriculture industry fall upon deaf ears. Farmers today are the forgotten part of our society. I suppose that this has come about partly because farmers have cried wolf too long and too often, and governments of one stripe or another have become more or less immune to those cries and have rejected them. Surely, we must concern ourselves with the major employer in Canada, namely, the agriculture industry. I was reading a publication recently in which it was said that a dollar spent in agriculture has the greatest multiplying factor in the creation of jobs, more than in any other industry. I notice that my remark caught the ear of the Minister of Industry, Trade and Commerce, and I am glad it did because he knows about the multiplying factor of dollars spent in industries in the creation of jobs in our society. Surely, it has been known for a long time that if you give the farmer a dollar he will spend it on machinery, and this creates opportunities and jobs for Canadians which we really need.
So, as much as the government would like to say, to heck with the farmer and his problems, we should concern ourselves with him if we want to create jobs and opportunities for the other segments of our society. It has been said many times that the farmer lives poor and dies rich. Why is this so? It has often been said also that farming is not a way of life, it is a business. To me, the farming industry is still a way of life. A farmer owns his land and works on it. He does not keep track of the hours he spends on farming. Sometimes he works ten hours a day, then goes out after supper and works for another five or six hours fixing something in the yard or some machinery in the shop. He does not count how many dollars he receives per hour, and in many instances these extra hours which he spends working on the farm go into maintaining the farm and increasing its wealth as an establishment, increasing the value of the farmstead. He does not reap the value of that farmstead until he passes it on to someone else.
I remember going to visit a well known farmer in the Ottawa district. He had two big pictures hanging on the wall of his living room. One showed the farm when he first bought it and the other one was of the farm after he had had it for 20 years. There was a tremendous difference between the two pictures. The farmhouse and barn

December 3, 1971
Income Tax Act
were dilapidated when he bought them. In 20 years, he had improved the farmstead immensely. All this takes extra time and labour by the farmer and his entire family. They all do it willingly, and they do not count the number of dollars per hour. But when the capital gains tax is applied against that farmland, the farmer must somehow or other account for the great improvement in the value of the farm and explain why he should not pay tax on it. It seems to me that it is a rather cruel piece of tax legislation which says that you have a $1,000 exemption per year if you are living on the land, but it does not apply if you are not living on the land.
Many farmers throughout Canada have had to move into town in order to be in close proximity to the schools or universities which their children attend. Many farmers want their children to have a good education. They leave the farm for what they consider to be a temporary period, and they go back to it every weekend or in the summer. Sometimes the husband is on the farm every day, but he is not living there. Since he is not living on the farm, when he dies or when he wishes to pass on the farm to the next generation, he will not receive the $1,000 exemption. I wonder if the minister could tell us how many dollars the government hopes to acquire from the removal of the $1,000 exemption in such cases where the farmer is not living on the land.


Edgar John Benson: First of all, I should like to say that what the hon. member said is not correct. If the farmer moves into town and, as my hon. friend said, he spends the summer on the farm and has a home there, that can be his residence; he can opt that that is his residence and thus obtain the $1,000 exemption.


John (Jack) Henry Horner: I am pleased that the minister has clarified the position. However, there is still the question of the improvements that he has made to the farm and whether or not he will stay on the farm. It depends on whether he wishes to divide up the farm. There may be more than one child in the family and the farmer may want to divide the farm among three or four children. It is very difficult for some people to understand that every member of the family makes a contribution to the increased value of the farm, and each one should receive some benefit from this growth. Many a farm boy has contributed much work in building up the farm, but when his father and mother die he cannot acquire any portion of that farmland without the capital gains tax being applied.
There is one other question which I wish to put to the minister, and I sincerely hope he will take an interest in this problem. We had the report of the Barber Commission on the prices of farm machinery. The commission turned out 11 or 12 volumes and spent $3 million studying the matter. This tax bill will do more to increase the price of farm machinery than anything else. The Barber Commission report has not contributed to lowering it. The Barber Commission studied the contributing factors to increase in the price of farm machinery, but this tax bill will cause a rapid rise in those prices because in this tax bill the minister will tax that portion the cost of machinery which is fully depreciated, but which will be regained on resale or trade-in. What amount of money does the minister hope to gain by not exempting from the capital gains tax farm machinery which the farmer may sell and
(Mr. Horner.]
which is fully depreciated? The amount would be infinitesimal; it would be a very small portion of the money that the government is spending.
I hope that in the next four days the minister will consider this important matter because many farmers trade in their farm machinery, such as a combine or a tractor when it is fully depreciated. If he trades it in today, the value he receives is considered a capital gain and he does not have to pay income tax on it. I see the parliamentary secretary frowning at me. I wonder if he will rise to correct me, because this is a very important point that many farmers will learn to their regret after this bill passes. At that stage they will not have this privilege, if they are depreciating their machinery at the 15 per cent rather than the 33 per cent rate.
I agree that under the 33 per cent rate today they do have to consider it a capital gain, but under the 15 per cent rate deduction plan they do not have to consider it a capital gain, and do not have to consider it as income. If the parliamentary secretary would allow that privilege to continue I know that farmers all across Canada would appreciate it very much because they believe that the cost of farm machinery has gone up far too much in recent years. I know that the parliamentary secretary is eager to answer. If he can correct me on this, I will be glad to hear him.


Gerald William Baldwin: On a point of order, Mr. Chairman, just before the parliamentary secretary rises, and I may say we will be glad to listen to him, I want to mention that we are happy to see, as was mentioned by the hon. member for Calgary North, so many members on the government side of the House for a change.


Edgar John Benson: Where are your members?


Gerald William Baldwin: But, Mr. Chairman-


Gérald Laniel: Order, please.


Edgar John Benson: There are only seven Tories in the House.


Gérald Laniel: Order, please. The hon. member for Peace River is speaking on a point of order, and I hope hon. members will allow the Chair to hear him.


Gerald William Baldwin: That is the very point I wanted to make. With great respect, Mr. Chairman, I would ask you to remind hon. members that this is not the place for a social hour. This is a place to gather to listen to the words that are being addressed to the Chair. I suggest that the Prime Minister and others who are here might do well to pay attention to the pearls of wisdom which are being cast by the hon. member for Crowfoot.


Edgar John Benson: On the point of order, Mr. Chairman, I would say to the seven Conservatives in the House that anybody who cannot hear the hon. member for Crowfoot speaking above any kind of noise in the House must be deaf.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: This is a real test.
December 3, 1971


Patrick Morgan Mahoney: Mr. Chairman, I think the poor attendance of the Official Opposition here today is a pretty clear indication of the genuine interest they have in the bill, and perhaps indicates that the time to terminate the debate has indeed arrived, since only seven of them appear to be with us.


John (Jack) Henry Horner: On another point of order, Mr. Chairman, this petty bickering that the minister and his parliamentary secretary are indulging in does nothing for the debate, but I advise them to do their counting just a little more accurately. There are more than seven members of the Official Opposition in the house.


Mr. Gibson:: Where are they?


Edgar John Benson: Seven.


John (Jack) Henry Horner: Just be a little more accurate, boys.


Gérald Laniel: Order, please. These points of order and arguments not related to the bill do not help the work of the committee. I would invite hon. members to come back to the various sections that are before the committee at this time.


Patrick Morgan Mahoney: Mr. Chairman, I must apologize to the hon. member for Crowfoot. There are indeed eight Tories in the House. Now, with respect to the question that I was rising to answer when the hon. member for Peace River opened this riposte with his point of order, the hon. member for Crowfoot seems to be trying to leave the impression that a capital gain is realized when a farmer disposes of an item of farm equipment. This is no more true of a farmer disposing of an asset than it is of anybody else disposing of an asset.
The gain is the increase in value, the increase over what the item cost him, or what its base cost was, in the case of an item held at the beginning of the tax system. The gain is the increase that he receives over what it cost him, when he disposes of it. It is not the purchase price itself. I would suggest that in the case of farm equipment it would be a rare and unique piece of equipment that could be disposed of for more than it cost, and therefore capital gains will not arise in a practical sense on the disposition of items of farm equipment.
What the hon. member is confusing for a realized capital gain is recapture of depreciation, which is an income, not a capital gains item. But again, when the farmer stays in business presumably he will be acquiring additional assets of the same class as time goes on, and these recaptures of depreciation, with farmers as with other types of businessmen, generally speaking will be rolled along and absorbed in increased depreciation claims. It is only at the time that the farmer goes out of business, and disposes of all items of the assets of that particular class, that in fact the recaptured depreciation would be final and would come into taxable income, and the tax would be payable in respect of it.


John (Jack) Henry Horner: Mr. Chairman, the minister and the parliamentary secretary were 16 per cent out in their counting of members in the House, and I think that the parliamentary secretary is about 16 per cent out in counting how income tax is equated by the agriculture industry. If we just had a few more people with a little basic experience
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in the House, then perhaps the application of the law would be better understood. If I could use the example of the income tax inspectors who come around and visit my place regularly-


Patrick Morgan Mahoney: I don't blame them.


John (Jack) Henry Horner: Apparently you and your department have "sicked" them on to me from time to time.


Some hon. Members:: Oh, oh!


John (Jack) Henry Horner: But I might add that the last time they visited my farm they saved me some money. In fact, they were not able to find out where I owed them any.


Gerald William Baldwin: To their regret.


John (Jack) Henry Horner: Much to their regret and disappointment. Anybody who has been in the business of selling and buying farm machinery knows that this question comes up regularly. Recaptured depreciation is perhaps the correct term, and it has to be accounted as income. Whether or not you continue to buy tractors does not really matter if you made that income. Apparently the parliamentary secretary never had a net worth statement taken out on his operation. Maybe he has good friends in the department-


Patrick Morgan Mahoney: I have no net worth.


John (Jack) Henry Horner: You have very little net worth as a Member of Parliament, and as a listener to this debate, or you would know more about the importance of net worth for a specific year to the agricultural industry.
I want to return to the subject of the basic herd. Surely, the parliamentary secretary will agree that the American cattle producer is permitted to use the basic herd concept. Mr. Chairman, we went all through this on November 9, and the parliamentary secretary finally agreed that it was two years instead of 12 months that the cattle had to be retained before they could be considered as capital assets. Now, we see the provinces of Ontario and Quebec encouraging farmers to go into the livestock industry. Although agriculture may be looked upon as the problem child in the Canadian economy, the one portion of it that has been relatively sound has been the livestock industry. Why has it been sound? It is because we have been able to compete in the North American market. Surely, the parliamentary secretary would like to think that he would allow Canadian livestock men to continue competing in the years ahead. We have placed ourselves in a very poor competitive position with Australia in the livestock industry and in an equally poor position with regard to the export of cattle to Europe, Great Britain and even Japan. Australia has the advantage of us there. If we wish to maintain our ability to provide meat and meat products to the United States, we must place our farmers in a better competitive position in comparison with farmers there.
The disallowance of the basic herd concept is one more thing that will increase taxes for the Canadian farmer, but there are few methods for increasing the price and lowering the cost of production. No matter where taxes are applied, they contribute to the cost of producing any-

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thing. This bill will increase taxes to the agriculture industry on three basic inputs in the cost of production, the cost of cattle, machinery and land but will do nothing to increase the price the farmer will receive for his product.
It seems to me that the parliamentary secretary is confused about the recaptured depreciation concept for farm machinery. I should be glad to discuss this with him and show him how it works. I should also be glad to discuss the concept of the basic herd and how it appplies to the cattle industry. I suggest, too, that the capital gains tax should not be applied to farm lands used for bona fide agriculture. In relation to the total tax bill, these three items do not amount to much in dollar value and I would urge the minister and his parliamentary secretary to give them some serious consideration in the next four days. Perhaps a conference of interested people could be held and certain changes suggested.


Patrick Morgan Mahoney: You would attend such a meeting?


John (Jack) Henry Horner: I would attend.


Gérald Laniel: The hon. member for
Assiniboia.


Some hon. Members:: Hear, hear!


Mr. Knight:: Mr. Chairman, it is a real pleasure to have an opportunity to express the views of Assiniboia in terms of this legislation which contains tax proposals that affect them. During the by-election, very grave concern was expressed to me as a candidate by many farmers on the question of capital gains in relation to farming. This capital gains tax has been reviewed and revamped in respect of its effect upon corporations ever since it was first suggested. May I take this opportunity to call upon the government to seriously consider changing the capital gains tax provision in regard to its effect upon the farmers of Canada. There are a number of ways it will restrict the ability of the farmer to make a reasonable income or to retire with dignity. May I suggest at least three areas where it does not take the farmers' situation into consideration.
There is the problem of the farmer who sells his property and buys another. I think an amendment should be accepted in this area. Then, there is the question of transfer of land within the family, when another member of the family is going to carry on farming. I think this transfer should be exempt from capital gains tax. No consideration is given to the immense amount of labour that is put into the family farm. The farmer works hard, but this is not considered when he retires and faces capital gains.
The Conservative party proposed an amendment to this particular section of the Income Tax Act which I suggest lacks application to the exact problem before us now. The amendment suggests a situation whereby western lands, or farm lands in general, are open to speculation and purchase by corporate interests. If the amendment were accepted as it stands, then the only area free of capital gains would be farm land. In such circumstances, it would be in the interests of the corporations to purchase land. Therefore, Mr. Chairman, I suggest that the government should give serious consideration to the amendment to that amendment as proposed by the hon. member for Regina East.

I should like to review that amendment because of its importance to the farmers of western Canada. The amendment of the hon. member for Regina East reads: That the amendment be amended by adding the following after the word "act":
"under the following circumstances:
1.	when farm property is transferred by sale, gift or legacy to a spouse or a son or daughter or a spouse thereof when the minister is of the opinion that it is the intention of the recipient of the property to continue farming.
In that case, there should be exemption from the capital gains tax.
2.	when a farmer sells farm land and uses the proceeds to purchase other farm land provided that the said farmer satisfies the minister that he intends to continue farming and that his usual principal source of income is from farming.
In that particular case, the proceeds of the sale should be exempt from capital gains tax.
3.	any instance when a bona fide farmer on the sale of farm land is not allowed to invest the capital gain therefrom in a registered retirement savings plan which will result in the farmer concerned being taxed only on benefits received from the said plan as they are received; and"
I believe that should be accepted by the Minister of Finance as well.
Another aspect of this bill that concerns me is the way in which the government intends to evaluate land for capital gains. Reading through Hansard, one assumes that they are going to use the fair market value approach. But I do not believe, however, that this would be the best means of evaluation because fair market value, in a sense, is controlled by how much urban use is made of farm land and how much speculation is going on. The fair market value is affected by the fact that the farmer may buy an extra quarter section or half section of land at inflated prices in order to make his economic unit viable. In our society, the value of farm land is very often very volatile. I believe that the fair market value system, as used in connection with the capital gains tax, is an unreasonable system and an unreasonable method.
In conclusion, Mr. Chairman, may I say that I hope the government will consider the amendment proposed by the hon. member for Regina East. I believe the constituents of Assiniboia on November 8 told the government in no uncertain terms that they expect to see a change in the attitude of the government towards western agriculture.


Stanley James Korchinski: Mr. Chairman, may I first congratulate the hon. member for Assiniboia upon the way he handled himself in what I believe was his first speech in this chamber. He spoke on behalf of his constituents and on behalf of farmers in western Canada. If I may be allowed to digress, I cannot help thinking of the time when I made my first speech and I can assure you that, as I listened to the hon. member, my thoughts went back to that time. I blush when I think of my first attempts at speaking. I congratulate the hon. member upon his endeavour and wish him well.


Some hon. Members:: Hear, hear!
December 3. 197 1


Stanley James Korchinski: Not only do I wish him well; I hope he can understand that there are other points of view in this committee. Be that as it may, I was glad to hear the hon. member, freshly arrived here as a representative of a farming area, point out that farming communities are not entirely enamoured on the capital gains philosophy, a philosophy that his party has been espousing for a good many years. I am one who thinks that certain industries in this country are not quite ready to enjoy the luxury of paying a capital gains tax. I do not think the government can say that the country has reached that great a level of prosperity which would enable all segments of society to pay a capital gains tax, come hell or high water.
The government's policies seem to make little sense. On the one hand, it slaps on a tax which is restrictive and which will increase the costs of certain business operations and, on the other hand, it turns around and, with good intentions, attempts to pass legislation designed to assist certain industries. There is a conflict here, just as when the Minister of National Health and Welfare, on the one hand, tells us to quit smoking and the Department of Agriculture, on the other hand, provides grants for the improvement of tobacco strains. That is exactly how confusing government policies are today. On the one hand, the Minister of Finance slaps on a capital gains tax and, on the other, the Minister of Agriculture works well into the night trying to develop policies to help agriculture. The minister responsible for the Wheat Board may also be working on policies that are intended to improve Canadian agriculture.
It seems to me that these policies make little sense at this time. The government is trying to rationalize its position while at the same time slapping on taxes wholesale that will affect the agriculture industry. Why is it taxing agriculture on the one hand when, on the other hand, we must spend millions of dollars in trying to bail out that industry? It seems to me that not much revenue is to be garnered from a capital gains tax applying to agriculture. Think of the confusion that these policies create. It is certain that the industry will suffer. For years to come, every dealer in agricultural products and farm machinery will be confused. He will not know how the capital gains tax will affect him and will wonder about his position. You can rest assured, Mr. Chairman, that the farmer will not benefit in all this. First of all, the dealers are already in trouble. If they were not, one could say that they could bear the brunt of the capital gains tax. However, they are not in that position. One need only note how many dealers have gone out of business, have lost their shirts, so to speak, to see that I am correct in what I say.
The capital gains tax will be in the minds of farmers and dealers when they get together. You can almost hear the farmer saying to the dealer, "Before we make a deal, let us figure out exactly how the capital gains tax will operate. Let us see what the situation will be with regard to this deal." I think every dealer will be confused, and the farmers will not be any better off. I wish the department would set up some sort of zenith number which people could call to determine exactly their position with regard to capital gains taxes or other federal taxes. It would be of great help if the dealer and the farmer, when sitting down to make a deal, knew they could call some sort of zenith number, for example, and ask the department what the
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tax position with regard to the deal will be. The Department of National Revenue will rake in many millions of dollars. Surely, it could provide some free service of that type.
It should not be necessary for farmers to consult lawyers, because the lawyers will want to argue with other lawyers who adopt an opposite viewpoint. Surely, it should not be necessary for farmers to resolve these problems by going to court. Must they resolve their differences this way? Is there no obligation on the department to help?


Gérald Laniel: Order, please. It being one o'clock, I do now leave the chair.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2 p.m.
Gérald Laniel: Order, please. When the committee rose at one o'clock, the hon. member for Mackenzie had the floor.
Mr. II_.t-hix.oki. Mr. Chairman, a few minutes ago a member of the government side uttered a comment about where all my friends were. I can only say that anyone who can get the Prime Minister to listen to him-


Pierre Elliott Trudeau: I am not going to listen to you. I am just here.


Stanley James Korchinski: -has at least 95 per cent of the Liberal party listening to him. Therefore, it does not really matter how many are here on my side. What is really important is that the message gets through to the Prime Minister. Yesterday the right hon. member for Prince Albert invited the Prime Minister to attend some of the important sessions of the House for a change. I am glad that the Prime Minister gave up the handshaking, kissing and glad-handing in Toronto to attend a session of the House of Commons. This is a rare occasion. It is evident that the Prime Minister takes this matter seriously. Never before have we seen the Prime Minister pay so much attention as he is paying to this question of closure. He is wondering how it is going to affect everyone here. He is beginning to worry about it. I am glad to see him here because, for once, he has been able to hear the message, as it was expressed a few minutes ago by the hon. member for Assiniboia.
I want to be able to speak to the Prime Minister. I would not even dare to try to get an appointment with him. There is no way you can get through to him on the question of the capital gains tax as it affects farms. Over the years he has uttered a few expressions which indicate that he could not care less what happens to the diminishing number of farms. In his speech, the hon. member for Crowfoot referred to an occasion in western Canada when the Prime Minister said "Why should I sell your wheat?" That statement reflects the attitude he has toward farming. However, there is hope at this time. It is a kind of deathbed repentence; I can feel it coming. All of a sudden, the Prime Minister is realizing that there is anoth-

December 3, 1971
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er side to the story. Why is it that the Gallup poll indicates his popularity is slipping?


Gérald Laniel: Order, please. I regret having to interrupt the hon. member, but it is my responsibility to remind him that the committee is presently studying a number of clauses dealing with capital gains. I allowed the hon. member to make a few remarks which I thought were introductory to the deliberations of the committee this afternoon. However, if I allow him more time on this, I am not really assuming my responsibility. I invite the hon. member to come as quickly as possible to the clauses under consideration at this time.


Stanley Howard Knowles: Mr. Chairman, is it not true that the clauses before us also include references to the basic herd? That is what we see opposite us today.


Some hon. Members:: Oh, oh!


Stanley James Korchinski: Mr. Chairman, I hope you will excuse me if I seem over-exuberant but it is not often I have the chance to speak to the Prime Minister. It is a rare occasion indeed when the Prime Minister listens to farming problems; in fact, I think this must be the first occasion he has done so.
May I point out to the Prime Minister, and to the rest of his supporters who have come so obediently to the committee at his request following the government's recent defeat in committee, that there are certain aspects of the bill that are unacceptable to the farming community. For example, the capital gains tax. Land is purchased at a nominal price with the purpose in mind of improving it. Some of the land is Crown land. The moment the land is improved it increases in value. As a result, if the sum of $1,000 had been paid for the land, with the added improvements a capital gain is realized if the land is sold. My point is that the amount spent on improving the land should be deductible over a period of years for income tax purposes, and the deductions should begin when the capital gain is recorded.
This would be one way for the government to express its faith in the agricultural community, instead of the agricultural community looking to the government for assistance for ever and a day. It would show the farmers that the government is willing to leave the agriculture industry in their hands, but that if they found themselves in need of assistance then government policies could be geared toward providing that assistance. Instead of this the government is imposing a tax on the industry, which is really asking the industry to turn against itself. Every young farmer, knowing the price his father paid for the land is going to wonder just what price the department is going to set. If the amount were tied to the assessed value, a fraction of the amount should be negotiable and then the young farmer would know where he stood. Many fathers pass their farms to their sons and continue to work on the farm, in some cases free of charge, so that the farming operation can continue. Now, the government is going to impose a capital gains tax, and this is the kind of government policy that is a deterrent to the continuation of farming operations.
|Mr. Korchinski.J
It is true that the business community must know exactly where it stands at this particular time. But so must the agricultural community. Business is not simply a case of the corner store or the man who owns a factory; business is making a buck. And if a buck can be made, tax should be collected on it. What farmers dearly want is to make a buck, and on that buck they will pay as much tax as is properly due. Farmers have never asked to be relieved from their fair share of taxation. On the other hand, neither do the farmers want additional taxes imposed on them at this time. I think we have just as much need for assistance as those industries that have been given assistance to meet the 10 per cent surcharge imposed by the United States President. The government acted wisely and did give industry special consideration under the circumstances, but my point today is that the agriculture industry is depressed and should also receive special consideration. If the government is able to solve our problems, then we will pay every bit of tax due, with interest.
I see the parliamentary secretary smiling again as though he comes from another part of the world. I cannot understand his attitude, and I do not know whether he intends to be funny or laughs simply because he has nothing to say. Speculation in the agriculture industry is quite common because if a farm proves at all profitable its value increases. Actually, the value of farms fluctuates up and down depending on the year, but the biggest increase in value is in years of inflation. There was a time when one could buy land for $10 a quarter, but that is no longer the case. This was not land bought for speculation purposes; that was about all it was worth. You could not make more money from the land today than you could in previous days.
Land today is not necessarily worth more, but it is easier to get credit today, unlike previous years, and it takes you 25 or 30 years to pay for land purchased today. That does not make the land any more productive. It does not make the land worth any more. Inflation may mean we have to spend extra money but it does not necessarily mean there are really any gains realized from the sale of that land. How should we get around this difficulty? I believe there should be some provision for depreciation, related to the inflation rate. This would take care of one problem.


Gérald Laniel: Order. I regret to interrupt the hon. member but the time allotted to him has expired. Unless he is given unanimous consent he cannot continue. Does the committee agree to allow the hon. member to continue his remarks?


Some hon. Members:: Agreed.


Stanley James Korchinski: I shall be very brief. I do not wish to impose upon the committee. I have had a few years of experience in the municipal field. We looked at the assessment of properties and tried to relate the productivity of lands to their assessed value. I believe the department should announce at this time that there will at least be some relationship between the assessed value and the sum at which the land would finally be valued on a particular date. At least, those affected would then know where to start. If there were any disagreement, the matter would no
December 3, 1971

doubt be taken to court eventually, but I do not think each and every individual should have the responsibility of arguing the assessment of every item of land or property on the assumption that the matter would ultimately be decided in the courts, because in no way would decisions be handed down within a reasonable length of time.
I make one further appeal. I was very sincere in my suggestion that the department should set up a unit composed of officials who would be prepared to advise rather than give firm legal opinions, people who would be prepared to assess property in order that those concerned would at least know the department's point of view. I hope something can be worked out along these lines, taking account of the fact that this is a new tax bill and that many questions will arise from it. Some of these questions could be answered during a simple and credible conversation, without the necessity of litigation or hiring lawyers who themselves might not know the correct answer. I may hold one opinion and the lawyer may hold another. The department may hold yet another point of view. If my opinion coincided with that of the department, I would at least be in a position to say I was on the right track. If my proposal were adopted, we would at least get some advice from the government during the transitional period.


John Stratford Burton: Mr. Chairman, there are several points I want to raise with the govermment, and with the parliamentary secretary in particular, arising from the discussion of the subject which took place on the last occasion this group of sections was before us. First, I wanted to raise once again the question of the basic herd concept. When this subject was last before the committee, the parliamentary secretary asked, on behalf of the government, that section 29 be stood. This was agreed to by the House so that the government might give further consideration to this question. I presume hon. gentlemen opposite have now had time for further reflection and for consultation with interested organizations and individuals. It would be very useful if the government would make a statement apprising the committee just where they now stand on this question in the light of the undertaking given to the committee that they would give it further consideration.
We have, of course, objected to the government's proposal to abandon the basic herd concept. But we are not necessarily making a case in favour of the present regulations and legislation. We are not necessarily making a case for the status quo. We recognize that there may be certain difficulties in this area and that changes may be warranted. It should also be recognized in all fairness that the abandonment of the basic herd concept, in the absence of any new concept, will present difficulty to most farmers. I am sure the government recognizes that many farm organizations and many who are interested in farm affairs, are greatly concerned about this question. I think we should hear from the government at this point. Even though we are operating under a four-day closure rule it is important that we should get answers to some of the questions which have been posed in previous sittings of the committee when we were operating on the basis of free and unlimited discussion. I hope the government will not produce trite answers, but answers showing there has
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been analysis in depth of the rural problems to which attention has been called.
For example, there are the specific questions I raised with respect to farm accounting. In particular, there was some discussion about the advantages of cash accounting as opposed to accrual accounting. I call attention to the difficulties which could be encountered by farmers engaged in mixed grain and cattle production. Their grain operation, at least in western Canada, is such that they have no control over marketing or deliveries. It is left to others to determine when a farmer may deliver his grain. We are not objecting to the quota system applying to western grain deliveries, but this is the situation and is one which has to be taken into account in the framing of tax laws. It has been recognized quite properly in the tax legislation that a farmer may stay on a cash accounting basis if he wishes and we are in favour of a provision of this sort. But a problem remains with regard to those who are engaged both in grain and in cattle operations.
The effect of the new law, especially of section 29, may be to force farmers to change over to an accrual system of accounting, not because they are required to do so by law, but in practice, taking into account economic and financial considerations. I asked specifically about farmers engaged in more than one line of activity. Would they have an opportunity to account for one part of their operations on a cash basis and for another on an accrual basis? The parliamentary secretary replied that they could not, because if they were allowed to do so the accounting picture would be unduly complicated. Has the parliamentary secretary given further consideration to this question since that time and, if so, what are his conclusions?
Another matter I raised with the parliamentary secretary had to do with the question of the transitional period for those farmers who may decide, of their own volition, to switch from cash accounting to accrual accounting. Here, there is the problem that there are no transitional rules for such cases. There are transitional rules for professional and other groups who are required to change over from a cash accounting basis to an accrual accounting basis. However, there are no such rules for farmers or, I understand, for fishermen. Has the government given this matter further consideration? When this matter was last up the government was to take a look at it. We would like to hear what the government intends to do in this regard.
There is another matter I should like to raise. I think it must be recognized that there have been a good many discussions on this question. The Parliamentary Secretary to the Minister of Finance no doubt is aware of a letter, a copy of which I received, from the Canadian Cattlemen's Association dated November 12. It poses some rather difficult problems which should be cleared up in the committee. First of all, the letter from Mr. Charles A. Gracey, manager of the Canadian Cattlemen's Association, thanks the parliamentary secretary for the reception given their representations and then continues:
We are, of course, hopeful that several recommendations will receive the most serious consideration.
10138

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In that connection I was disturbed, Mr. Mahoney, when sitting in the Gallery on Tuesday afternoon I listened to the exchange between yourself and Mr. John Burton of Regina East pertaining to Mr. Burton's representation that a transitional period from cash to accrual accounting should be granted to farmers. I was astounded at your response. First of all to the effect that in view of the fact that farmers were not being forced to switch from cash to accrual accounting, there was therefore no need for a transitional period. Secondly, you argued that you had received no representations in this respect. I was deeply disturbed and confused at these remarks, Mr. Mahoney, because not many hours earlier we had discussed this very point with you in your office and I had the clear impression at that time that irregardless of whether you agreed with our recommendation in this respect you did fully understand the recommendation and the reason for which we made it. I therefore want to register with you bur very great concern at this apparent inconsistency on your part and to urge you to bear our recommendations in mind as this legislation moves through the appropriate channels.
Well, Mr. Chairman, no doubt there has been further correspondence on this matter.


Patrick Morgan Mahoney: I rise on a point of order, Mr. Chairman. In view of the fact that Mr. Gracey supplied the hon. member with a copy of the letter he wrote me, perhaps he has supplied him with a copy of my answer. If so, I wonder if the hon. member would read it into the record also.


John Stratford Burton: Mr. Chairman, Mr. Gracey did not supply me with the answer. I thought that the parliamentary secretary would have done this himself, because the copy of the letter I received made it quite clear that a copy was being sent to me. Therefore, the parliamentary secretary might have supplied me with a copy of his answer. I have no doubt there have been further discussions between Mr. Gracey and the parliamentary secretary. Indeed, there may have been some confusion. In checking the Hansard record, it would seem that there may have been some confusion between two points under discussion, namely, the matter of the transitional rules and the question of whether farmers could have both a cash accounting system for part of their operations and an accrual accounting system for the other part of their operations. There may have been some confusion there and I am prepared to acknowledge that on the basis of the record before us. But it seems to me that this evidence of misunderstanding demonstrates the need for further discussion on some of these questions.
It is my understanding that, in fact, this organization and some others have made representations that the government should allow the present system to continue in operation for a year until a new system could be worked out which would be more satisfactory to all concerned. This would appear to be a reasonable proposal. It does not mean that we would be accepting on a permanent basis, as part of the framework of this new law, the old approach to the basic herd, but certainly it would allow for a transitional period. I believe there is some justification for allowing the necessary time in which to work out a new plan that would be acceptable, and which would take into account the problems faced by some people.
There is just one matter I wish to raise which has to do with our proposals for taking into account some of the special problems faced by farmers with regard to the application of the capital gains tax. We in this party have made clear we are in favour of the basic principle of a

capital gains tax. In fact, we feel the basic concept should have gone further than it has. We also recognize that for some groups in this country there are special problems which arise from the nature of the occupations in which they are engaged. More attention in respect of the application of this tax should be given to the problems of people operating essentially on a small business basis. This includes farmers as the largest single group in this category, if I am correct.
Thus, when this subject was before the Committee in the middle of November, I moved on behalf of the New Democratic Party an amendment to a Conservative proposal which it seems to me would be reasonable and would provide for the taking into account of some of the problems faced by farmers. In fact, there would be a provision whereby we could deal with the problems involved with transfers of land within the family, whether by sale or by legacy. Second, there would be a provision for a roll-over and, thirdly, there would be a provision in respect of farmers whose savings fund at the time of retirement is their farm. There would be some provision for this situation. I should like to ask the government whether it has, in fact, given any further consideration to the situation facing farmers as a result of the imposition of the capital gains tax and whether we might have some reason to hope for a response from the government by way of suitable amendments that would give adequate recognition to this special situation.


Mr. Mazankowski:: Mr. Chairman, I am indeed delighted to participate in the debate on this aspect of the bill before us, particularly in the presence of so many distinguished members on the opposite side. It is even better than the question period. I hope this is an indication of the genuine concern hon. members have for this particular portion of the bill-


An hon. Member:: There is not anyone on your front bench.


Donald Frank Mazankowski: I can look after you any time. If you want to stand up and make a speech, I would welcome your participation. On the other hand, if you are not prepared to speak perhaps you would sit back and listen because you might learn something.
I hope the presence of so many hon. members today is an indication of the fact that they are genuinely interested in this debate.


Gérald Laniel: Order. I would ask hon. members to keep order, and let the hon. member who has the floor speak so that I can hear what he is saying.


Donald Frank Mazankowski: That you very much, Mr. Chairman. I would have thought that their line of behaviour would have been discussed at their latest caucus meeting. Nevertheless, I do hope that hon. members opposite will pay heed to the submissions that are made by members on this side of the House as they relate to the future of the agriculture industry and the impact that this measure will have.
There is no question in my mind that those who were responsible for the drafting of this bill were rather far
December 3, 1971

removed from the realities of the business of farming. I believe they have taken a theoretical and academic approach to the whole business of farming, and have failed to recognize that there is something unique in farming. It is a way of life. I do not say for one moment that it can be looked upon as just another kind of business. It is an industry which is largely dependent upon the success of the export markets, and that has its ups and downs as a result of the vagaries of the weather. In most cases, the reward for the labours of those engaged in farming is the appreciation of their investment.
This was very clearly outlined in the brief that was submitted on behalf of the Canadian Cattlemen's Association to the minister, and which pointed out the high investment and low returns in farming. I will quote the following statement from the brief of November 1, 1971:
It has long been recognized that the ratio of investment to returns in agriculture is extremely high. Not only is this a characteristic of agriculture but the problem is further compounded by a moderately high risk factor associated with the vagaries of climate and markets.
Indeed the low returns to agriculture are evident in the fact that banks are reluctant to extend long term credit to farmers and hence the need for and use of the government administered Farm Credit Corporation.
Thus, it is obvious that in a high cost, moderate risk, low return industry the effects of capital gains taxes would be more disruptive and burdensome than they would be in a low investment, high return business such, for example, as is common among the professions.
Another recognition of this fact is to be found in the report of the Senate Committee on Banking, Trade and Commerce dated November 4, which also sets out in very clear and categorical phraseology the fact that it is their view that farmers occupy a special position in the economic structure of this country. It goes on to say:
Over the years, this sector of the economy has become increasingly subjected to pressures which have led to a profound change ir. the nature and use of farm lands. Your Committee is concerned by this trend and believes that measures should be taken to reverse it.
We are in a situation where the business of farming will be treated like any other business, without cognizance being taken of the fact that there is something unique about farming and that we must work toward preserving that lifestyle. This measure has failed to recognize the fact that there has been a decline in the rural population with a consequent deterioration of rural communities. I believe that it would be very unwise for us to stand idly by and allow this government to bring in measures which would adversely affect the family enterprise. We should be working in the opposite direction. We should be encouraging rather than discouraging this type of activity, which is so basic and so fundamental to the economic and social well-being of our nation.
Combined with this tax proposal, we have many other legislative measures which do nothing more than speed up the process of rationalization and of moving people off the farms and into the cities. I should like to quote from a speech made by the Minister of Agriculture, as reported in the Vancouver Sun of December 2. This is the direction in which the government is moving. It is substantiated by the bills with which we have dealt, this bill included. The article reads as follows:
Income Tax Act
Details are being worked out to take inefficient or marginal farmers out of the agricultural scene, federal Agriculture Minister H. A. Olson told the 38th annual convention of the B.C. Federation of Agriculture here Wednesday.
He said that agriculture today is so complex and world competition is so keen that it is for the good of the nation that such a program be available.
On the other hand, the spokesman for the B.C. Federation of Agriculture said the following in his opening address, as reported by the Vancouver Sun:
-during 1971, producers were as efficient as ever, crops were not too bad, farmers worked harder than ever-"and yet we seem to be going broke faster than perhaps ever before''.
The question I want to ask is, who will decide who is efficient and who is inefficient. Certainly, it seems to me that with the lack of incentive in this proposal the industry will find that there will be nothing more than a speeding up of this process which is now well under way.
Another point that concerns me is the fact that this bill is so complicated and confusing. We are being subjected to a form of coercion in that this measure is being stuffed down our throats. The Liberal leader in the province of Alberta has said, and it has been said more than once, that the new system is so complex the average businessman will have to spend a considerable amount of time with his lawyer and accountant. In fact, one observer has suggested that the name of the new income tax act should be more appropriately "an act to provide financial relief to needy lawyers and accountants".
The capital gains provisions in the bill have been outlined by the hon. member for Crowfoot and the hon. member for Mackenzie. I wonder whether the parliamentary secretary, or indeed the Minister of Finance, have any figures to indicate just what they will mean in terms of revenue to the federal treasury when the capital gains tax, as it relates to farmers, is enacted. I wonder whether it is significant in terms of revenue, and whether the matter of administration has been taken into consideration. I wonder whether consideration has been given to the disruptive effect which these provisions will have in the future on the family farm operation.
I believe that unless all three of those factors have been taken into consideration in a realistic way, the capital gains provisions relating to farmers might very well need a reappraisal. If the revenue that is derived from this is rather insignificant, then the disruptive effect that the measure will have on the future of farming, and on the handing down of land from father to son, would not be worth the administrative difficulties, the harassment and confusion that are about to be created as a result of this measure. I hope that the Minister of Finance or the parliamentary secretary will shed some light on this matter.
The other point on which I hope the minister might comment, and which was touched on briefly by the hon. member for Crowfoot this morning, relates to the tax on the sale of depreciated farm machinery. I think the present provisions in the Income Tax Act have been acceptable to farmers in enabling them to maintain a modern line of farm machinery. This had important side effects because, as is well known, one dollar spent on agriculture yields a multiplier effect of $7. I believe the hon. member for Brant will confirm that as a result of current pressure on the agriculture industry, the manufacture and sale of
24725-13.1

December 3, 1971
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farm machinery have been slowed down. I believe that this measure not only will affect farmers directly but will also affect further sales of farm machinery. It will affect the dealers, and the manufacturers of farm machinery in this country. I point out, Mr. Chairman, that a royal commission strongly urged that we encourage the manufacture of farm machinery in Canada.
Again, for the life of me, I cannot see, in view of what appears will be an insignificant amount of revenue, why we are going to disrupt the manner in which farm machinery depreciation and recapture have been managed. The impact of the new provision will be widespread. I hope some consideration will be given by the government to relieving farmers of the extra burden which is going to be imposed on them through these provisions.
I would now like to quote from a letter which I received from an income tax accountant in the city of Lloydmin-ster, Saskatchewan. He draws attention to the very severe impact on the net income position of farmers that will result from the termination of the provisions for depreciation that exist in the present act. Here, I quote from the Itter sent to me by Mr. Fred Lonsdale:
The group of taxpayers whom we represent mainly are middle income people who own property. In the long term I can envisage their tax load increasing sharply. This in particular applies to farmers through the elimination of Part XVII straight line depreciation through recapture of depreciation except that such recapture is subject to 100 per cent taxation whereas capital gains are only 50 per cent.
I note that the parliamentary secretary and the hon. member for Crowfoot had an exchange over the question of whether this was capital gains or income, and judging from Mr. Lonsdale's observations the recapture of depreciation will be taken in as income in the particular year involved. His letter continues:
There is a further loss even to those farmers presently on the diminishing balance Part XI system in that they will in the future be subject to a capital gains tax where equipment is sold in excess of cost-this is quite common where farmers trade up equipment.
That is contrary to the observation made by the parliamentary secretary in his exchange with the hon. member for Crowfoot earlier today. I hope that the parliamentary secretary will be in a position to comment on these provisions before the debate concludes.
The other matter I wish to touch on is that of the basic herd, a subject which has been debated fairly extensively by others, including the hon. member for Crowfoot. I know the hon. member for Wetaskiwin is also going to deal with it. The Senate Banking, Trade and Commerce Committee has recognized the special significance of the farm industry and categorically stated that the basic herd concept should continue for the benefit of farmers and ranchers engaged in this occupation. Very succinctly, in its report at page 47:7, it states:
Your committee recommends that provision be made in the proposed legislation for the continued recognition of a farmer's permanent herd as a "basic herd" and, therefore, as a capital asset.
I believe this is very important. Again, I do not think a huge amount of revenue will be derived from the repeal of this provision, and certainly its repeal will result in a considerable amount of confusion and re-organization on the part of farmers and ranchers.
I wish to comment briefly on the observation made by the hon. member for Mackenzie, who suggested that because of the complexity of the tax bill the department might make a zenith number available which taxpayers could call in order to get accurate information without going to the expense of hiring tax accountants and tax lawyers. I think the suggestion is a good one. I note that the Department of Agriculture is doing something like this right now. The other day I dialed a number and heard the Minister of Agriculture give a great spiel about the agricultural policies of the government. If he can provide this sort of service for political propaganda, certainly it should be provided to disseminate facts and explanations with regard to this bill.
In closing, Mr. Chairman, I wish to comment briefly on the position of hon. members to my left. They seem to be waffling somewhat in their position with respect to capital gains. Originally, they said the tax bill did not go far enough, and they maintained that they alone spoke for the farmers. But if we look at their philosophy, we find that they do believe in the concept of capital gains and of estate and gift taxes. As a matter of fact, I believe that the government's of Saskatchewan and Manitoba are in the throes of preparing legislation to impose estate tax as soon as this measure has been passed. Yet members of the NDP in this House sanctimoniously say that they alone are speaking for the preservation of the family farm. That is not in accord with the facts. Members of the NDP cannot have it both ways. On the one hand, they cannot say that the bill does not go far enough, then say they are defending the small family farm and want to see it passed on from generation to generation. I think they should stick to the basic philosophy which they expound so vividly on the hustings, the dissolution of all capital assets on death. If they did so we would know better where they stand, and so would the farmers.


Mr. McBride:: Mr. Chairman, it does my heart good, as a private member of this House who has been heavily involved in agriculture, to hear the very distinguished member for Vegreville tearing strips off the people to his left along the lines that he is afraid they are being too sanctimonious when they imply that they, and they alone, are protecting agriculture and the family farm and that they alone believe the rural way of life to be of value to our nation. These are precisely the kind of words that we have uttered over and over again in agriculture committees of this House-and we want to reiterate today that it is also sanctimonious nonsense for the hon. member for Vegreville or any other member of the House to imply that all the concerns about agriculture are to be found in the ranks of the opposition parties and none over here.


An hon. Member:: We have not seen it.


Murray Arndell McBride: If my participation this afternoon achieves no other purpose, I hope it makes clear that within the Liberal Party and with members such as myself there is a very deep and abiding concern for the welfare of rural Canada, and we are in a position to use the influence we have to attempt to create policies to help rural Canada.


An hon. Member:: Like closure!


Murray Arndell McBride: The hon. member for Swift Current is speaking, as he does, from his seat. I was very impressed, Mr. Chairman, to hear on the CBC this morning-
[Mr. Mazankowski.J
December 3, 1971


Mr. McIntosh:: Mr. Chairman-


Murray Arndell McBride: -that the hon. member for Winnipeg North Centre-


Gérald Laniel: Order. The hon. member for Swift Current-Maple Creek.


John (Jack) McIntosh: Mr. Chairman, the hon. member made reference to me. I did not utter a word. If he cannot get his constituencies right-


An hon. Member:: He can't see, either.


John (Jack) McIntosh: -how can he speak on this tax bill?


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: Ask for divine guidance.


Murray Arndell McBride: It was the kind of comment, with all due respect to the hon. member for Swift Current-Maple Creek, that I have learned to expect from him and might have led me to believe that he said what in fact one of his colleagues said.
I was absolutely amazed this morning to hear on the CBC that the hon. member for Winnipeg North Centre, who is a most distinguished gentleman, was suggesting to the nation and to the House that this government had created ill-will by deciding that there ought to be a day, after the proverbial 40 days and 40 nights, when we come to vote on this tax bill. This was absolutely astounding, perhaps not to him because he is from the city of Winnipeg, but certainly to members who sit behind him and at least masquerade in this House as representing agricultural interests. We heard the distinguished new member from Assiniboia speak this morning, but anybody who knows anything about a riding like Assiniboia must be keenly and bitterly aware that it was his own party that sabotaged Bill C-244.


Some hon. Members:: Oh, oh!


John (Jack) Henry Horner: You sabotaged it.


Murray Arndell McBride: If you want to talk about closure or cutting off debate, you might better suggest that the hon. member for Winnipeg North Centre ought to have a black mask and a broad axe, because that is the kind of activity he has perpetrated on the agricultural industry by masquerading his party as acting for the farmer when in fact it killed the grain stabilization bill.
Why did they do it? As the hon. member for Yorkton-Melville, who is not here this afternoon explained to me one day, it is because it did not contain what I would describe as a guaranteed income for farmers. It might be a fine thing to have a guaranteed income for Canada, but when you say it is the government that is bringing closure into the House and destroying good will I ask you, Mr. Chairman, where is the good will when measures like Bill C-176, the national farm marketing legislation, and Bill C-244, the stabilization bill, are being sabotaged and killed by the opposition to prevent some forward steps in agricultural legislation in this country?


Some hon. Members:: Hear, hear!
Income Tax Act


Gérald Laniel: Order. The hon. member for Winnipeg North Centre on a point of order.


Stanley Howard Knowles: Would the hon. member permit a question?


Murray Arndell McBride: I will, as soon as I finish my remarks, with great delight. The point for all of us to remember is that our real concern ought not to be whether we on this side of the House make the New Democratic Party or its very distinguished House leader pleased, happy and positive toward us, members like the hon. member for Vegreville and the hon. member for Crowfoot, or even a man as distinguished-and I am glad to see him here this afternoon-as the right hon. member for Prince Albert: the point is we ought to be doing something for Canadian agriculture. That is what the aim should be. It is not whether we are making other Members of Parliament think we are very nice little boys-


An hon. Member:: You are not.


Murray Arndell McBride: -or, since the hon. member for Vancouv-er-Kingsway is here, boys and girls-she is a girl, a very young lady. But we ought to be getting on with the work.


Patrick Morgan Mahoney: Hear, hear!


Murray Arndell McBride: The section before us is of considerable concern, especially when we hear what the media say in agricultural communities such as the one I represent. It should be clearly pointed out that there is provided an opportunity for a farmer to decide that he will take a deduction in a capital gain on his property of $1,000 a year for his residence-his home-and an acre surrounding it or, alternatively, a deduction or removal from going into capital gains of $1,000 for each year that he lives on the farm. In common with many other members, I represent an agricultural area which is not wealthy and it is a very rare situation when you find a farm increasing in value at a rate greater than $1,000 a year. Another point is that when, and if, it increases in value at a rate greater than $1,000 a year, it does not become taxable at 100 per cent- which is the implication you usually hear-but it becomes taxable only at half rate.
It is also extremely important to point out that amendments have been brought in and consideration is being given to enable those who have a farm unit which would increase at a rate greater than $1,000 a year, and therefore would become liable for capital gains tax, to pay this tax over a period of five years. This is true, of course, when a death occurs. In the case of an ordinary gain-say if the farm is sold out of the family-then you have the other five year averaging provision already available to farmers.
However, Mr. Chairman, there are one or two questions I want to put to the parliamentary secretary and upon which he might comment a little later. In areas like Ontario, especially eastern Ontario you frequently have a farm unit made up of a 100-acre lot in one location, another some miles away and a third some miles away again-so that you have three different segments in the one operation-obviously the farmer cannot live in three places. The question is, should we take the bill before us to mean that he has the exemption of $1,000 only on the

Decernber 3, 1971
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100 acres where he in fact resides and has no capital gain exemption applicable to the other two 100-acre units, or ought we to assume that it applies to all three together?
In addition, what happens when a man who owns three different 100-acre units decides to sell one unit which, because it may be near an urban area or for some other reason, has risen rapidly in value? What does he do? Do the exemptions apply to him or, under the section to which I have referred, would any exemptions be applicable?
I also want to refer to the dialogue on farm implements that we have heard today. The likelihood is pretty remote that farm implements will increase in value as the years go on, and not decrease. I suppose that if some historical significance could be attributed to certain of these implements, they could increase in value.
I now want to direct the attention of the parliamentary secretary to a problem that has frequently been discussed with farmers in my area and with those who are in the beef-raising industry. If the bill is to encourage farmers to move from a cash to an accrual form of accounting, I believe it follows that arrangements will have to be made for some transitional period-


Gérald Laniel: Order, please. I regret to interrupt the hon. member but I would point out that there are hon. members in the aisle who are carrying on some kind of caucus. I do not think that is proper.


Murray Arndell McBride: Mr. Chairman, I do not know whether the plural of caucus is "cauci". Be that as it may, may I return to what I was saying before you so charitably interrupted me. I think we must provide an opportunity for the tax that will become payable when the individual farmer shifts from the cash to the accrual basis to be paid over a period of time. It is all right for the new farmer just entering the business. He can adopt the new system and it will be easier for him. He will just be starting out and he can abide by the new rules as he goes along. Most beef producers say that they do not really care which system is adopted. They say, "We are happy to pay under the accrual system if that is what you prefer but we cannot, all of a sudden, bear the cost in one year of an incredibly heavy tax burden which a changeover would require. They have a good point. I hope the parliamentary secretary will consider it and address himself to it as the debate goes on.
In conclusion, Mr. Chairman, may I repeat that the vast majority of farmers in eastern Ontario, certainly in northern Ontario and many parts of Quebec and the Mari-times-and it is well to remember that much agricultural production in Canada is in areas other than the Prairies- will, because of the exemptions built into this bill, not pay any capital gains tax. There will be no hindrance with regard to the transfer of land from one generation to the other. I hear groans from the other side of the chamber. They are mostly western groans, mostly prairie groans coming from people who do not know, as do the people of eastern Canada, what poverty in agriculture means.


Some hon. Members:: Hear, hear!
|Mr. McBride.]


Murray Arndell McBride: People say to me over and over again, "Murray, why do you do so much for the western farmer? What about the eastern farmer? Why do nearly all farm bills in this House concern themselves with the problem of western agriculture only?" One of my colleagues says that the people in Quebec say the same thing. I have been to ridings in western Canada. One night I had the privilege of meeting 1,250 farmers in Prince Albert. When I pointed this fact out to them they said, "Nobody has ever told us this. We thought that only in western Canada were there difficulties in the agricultural industry." I explained that Canada is a nation spread out over many thousands of miles and has within it about 9,900 so-called forgotten corners. I am sure every member of this chamber has heard constituents saying, "Why are we in the forgotten area? Why is our industry a forgotten industry?" and so on. I think we ought to look at the nation over-all. I see the hon. member for Annapolis Valley behind the curtains. Certainly his area comes into the category I have mentioned.


John (Jack) Henry Horner: Mr. Chairman, will the hon. member permit a question?


Murray Arndell McBride: I will be happy to, perhaps after the hon. member for Winnipeg North Centre has asked his question. I suggest that, as representatives, the members of the House must first and foremost be interested in their own constituencies. Yet would we not have a sad government and a sad governmental process, as made evident in this House, if hon. members were interested only in their own areas and were not prepared to take seriously the concerns of the people of other areas of Canada? I say to the committee, as one who has long been interested in agriculture, that the day has long gone when we could assume that the only concerns in agriculture have to do with prairie agriculture. I can just imagine some bright member saying, "That was spoken with eastern arrogance." That is nonsense.


An hon. Member:: It is not, on the opposition side of the House.


Murray Arndell McBride: Recently I had the privilege of meeting certain farmers in western Canada. Every farmer I met in Assiniboia constituency said to me, "We conclude that the government itself did not believe in the grain stabilization bill or it would have passed it. That is why we lost confidence in you. You should have used closure, but you did not." That, of course, was a different ball game to the one in which we are now engaged. The farmers of this nation want strong, decisive action. They want us to put through the bill we are considering and not to shilly-shally around with wishy-washy proposals and endless talk on issues which have been kicking around for months and, as in the case of this bill, for several years.
On that count, Mr. Chairman, I think it is good for the nation that we have set some parameters, so to speak, to this debate and that we are prepared to move forward and consider the issues at hand. I was interested to note that most of the speeches today seemed more relevant, more cogent and more concise than they have been hitherto.
December 3, 1971


Gérald Laniel: Is the hon. member for Winnipeg North Centre rising on a point of order?


Stanley Howard Knowles: I was rising, not exactly on a point of order, Mr. Chairman, but to ask the hon. member a question or two.


Some hon. Members:: Agreed.


Stanley Howard Knowles: First, may I express to him my sympathy. He has had difficulty in speaking this afternoon. The hon. member for Lanark-Renfrew-Carleton is a pretty faithful member of the Friday afternoon club. He is usually here and he speaks often at this time of the week. As a rule it is fairly easy to speak on Friday afternoons because not many hon. members are present. This afternoon he had to talk above the babble on the other side of the House.


Edgar John Benson: To say nothing of the four NDP members.


An hon. Member:: Where is your babble?


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: The solid phalanx of Liberal members and all these cabinet ministers on a Friday afternoon almost frighten us.


Gérald Laniel: Order, please. The hon. member for Winnipeg North Centre, who knows the rules so well, rose to ask a question. I think he ought to ask his question.


Murray Arndell McBride: Mr. Chairman, could we not hear from the hon. member for Crowfoot first?


Stanley Howard Knowles: Mr. Chairman, when I first came here I knew how to ask questions directly. However, the longer I have been here the greater have grown the preambles to questions, and I thought I would try a preamble myself. In the course of his speech he suggested that Bill C-244 was a fine bill and he accused us of killing it. If Bill C-244 was such a wonderful bill, and since it is still on the order paper, why does not the hon. member persuade the government to come forward with it again; or is it the case that the provincial election in Saskatchewan and the by-election in Assiniboia gave the government the answer?


Murray Arndell McBride: The point I was making is extremely valid. It is simply that the argument of the hon. member for Winnipeg North Centre could be boiled down to the simple fact that the grains bill had no guaranteed annual income in it. That is a phony argument against the bill. It was meant to mislead. It was effective. I do not criticize his colleague. He was successful in winning the constituency on that basis. However, it is despicable when a member with the experience and national reputation of the hon. member for Winnipeg North Centre-I say that with all due respect-goes on the CBC network and says that the government is creating ill-will when his own party uses a more deadly form of closure than this government ever did.


Gerald William Baldwin: On a point of order, Mr. Chairman-
Income Tax Act


Gérald Laniel: Order, please. Is the hon. member for Peace River rising on a question of privilege?


Gerald William Baldwin: On a point of order, Mr. Chairman. In my usual desire to be helpful I note that today, for the first Friday in three years, we have more than two cabinet ministers in the House.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Gerald William Baldwin: Because we have no answers to questions asked-


Gérald Laniel: Order, please.


Gerald William Baldwin: -I ask leave for there to be a supplementary question period-


Gérald Laniel: Order, please.


Gerald William Baldwin: -from now until four o'clock.


Gérald Laniel: Order, please. The Chair did not hear one word said by the hon. member.


Gerald William Baldwin: Having made my preliminary point, Mr. Chairman, I was going to ask for unanimous consent to have a supplementary question period, as there are 17 ministers present, in order to get answers to questions which we have not been able to get all week.


Some hon. Members:: Hear, hear!


Mr. Moore:: Mr. Chairman, after listening to the hon. member for Lanark-Renfrew-Carleton preaching to his colleagues as if it were Sunday morning, perhaps I will be excused if I come back to the bill in question. I was not sure whether it was a debate, a question period or both.


Some hon. Members:: Oh, oh!


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


Murray Arndell McBride: Yes, Mr. Chairman. I do not object to personal reflections being made by the very distinguished hon. member for Wetaskiwin, but the fact remains that the nation must know there is a religious zeal for agriculture in the Liberals ranks.


Some hon. Members:: Hear, hear!


Harry Andrew Moore: I am sorry, Mr. Chairman, I missed the point.


Steve Eugene Paproski: There was no point.


Harry Andrew Moore: I did not get the connection. After some of the bills mentioned by the hon. member, I am not even sure what bill we are now discussing.


Some hon. Members:: Order.


Harry Andrew Moore: I wish to take a few minutes to deal with a small but very important part of this bill. That is the basic herd aspect with regard to dairy farmers. I wish to point out to the previous speaker that I am talking about dairy farmers in every part of Canada, not just western

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Canada. They are all affected, even those in the Renfrew area. I understand from what has just been said that this is an area of poverty.


An hon. Member:: They have no member to represent them.


Harry Andrew Moore: This is the message I got. This is one of the largest groups of farmers in the country. Under this legislation I feel that this group will be shafted, if not ignored. Many dairy farmers are forced to retire earlier than other farmers. This is a very important point. There are different reasons for this early retirement. One reason is that they are forced to retire because of recent government dairy policies. The second reason is unavailability of help. Third, the physical strain on the operator precludes him from carrying on his operations into old age. Therefore, he is very much affected by this legislation.
Some dairy operators are on rented land. When this is the case, their only equity is the dairy herd. On having to disperse his herd, he does not have anything left but the proceeds of the dispersal sale. This refers to a basic herd. If he has no basic herd, the whole amount obtained from the sale is taxed. In other cases a dairy farmer may have to sell his herd but continue to live on the land. The basic herd at least enables him to hold on to the full proceeds from the operation of the herd. That is basic in the case of a herd dispersal. The dairy farmer, to a great extent than other farmers, can reclaim little from the huge investment he has in dairy buildings and equipment. What does he have left from his years of labour? He has much less left if he cannot take advantage of the basic herd. Every farmer who has a herd dispersal sale is faced with the fact that much of the proceeds go to the government that year.
Further to what my colleague, the hon. member for Vegreville, said concerning the Senate committee report, the House of Commons committee report on the white paper proposals stated that since taxation was recommended on a capital basis this necessitates retention of the basic herd concept. As we are hearing speeches of compassion for the farmers, even at this late date, from members on the government side, possibly they can be urged to show some compassion for the man who has worked long hours for many years with little hope of return.


Patrick Morgan Mahoney: Mr. Chairman, I have been asked a number of specific questions. I apologize to the hon. member for Swift Current-Maple Creek, but I would like to get these answers on the record before private members' hour. I shall not be too long.


John (Jack) McIntosh: Why not get answers to my questions on the record also?


Patrick Morgan Mahoney: If I am not too long, and you are not too long, perhaps we will. If the hon. member has some specific questions I will certainly yield the floor to him.
In his opening remarks the hon. member for Regina East suggested that I had asked to have section 29 stood in order to permit the government to give further consideration to it. If the hon. member checks the record he will find that I agreed to a suggestion by the hon. member for Crowfoot to that effect. Indeed, the matter has been thoroughly reconsidered. The government feels that its origi-
(Mr. Moore.]
nal decision was correct, namely, that the concept of the basic herd is of little or no use in the future, with the institution of the capital gains system.
The hon. member reiterated the argument of cash basis versus accrual basis for accounting purposes, and suggested that somehow or other something in the bill forces farmers and ranchers to convert from the cash to the accrual system notwithstanding the provision in the bill that they can continue to account on a cash basis.
Again, this is not a conclusion that we accept as valid. It is true that it might be good business for a farmer or rancher to switch to the accrual method of accounting because in that way he would pay his tax on a more even basis over his lifetime and not encounter a fairly large lump sum tax liability in the year he discontinued his farming operations. However, that is the choice that he has. I do not think total tax liability would be significantly altered by this provision. Most taxpayers seem to feel that there is some advantage in deferring taxation for as long as they can. Again I must say that we cannot accept the premise that there is any forcing of farmers or ranchers to switch from cash to accrual accounting. Indeed, the bill specifically provides that they can continue on the cash basis.
This leads me to the hon. member's third point, the question of transitional provisions. We have provided for transitional rules to cover professional people who are obliged under the new bill to covert from a cash to an accrual basis, and it does seem appropriate that transitional rules be provided where a taxpayer is forced to change his accounting method. However, in the case of farmers or ranchers such a change is purely voluntary, so the provision of transitional rules would not seem appropriate.
The hon. member read from a letter Mr. Gracey wrote to me. I think the hon. member will appreciate that I have not had, nor am I likely to have, an opportunity to leave the chamber to obtain a copy of my reply to that letter. However, I will take the opportunity in the debate next week to put on the record my reply to that letter. The hon. member was remarkably clairvoyant in divining the nature of my reply in his subsequent remarks.
The hon. member for Vegreville raised the question of the revenue derived from the application of the capital gains tax on farmers. The revenue estimates declared by the department do not break down as between particular professions, undertakings or occupations, but it is estimated that the capital gains revenue in the first year of the new system will amount to about $80 million. Against that is a revenue loss of about $65 million resulting from the federal estate and gift tax abandonment. The net amount of tax therefore expected to be gained from that combination of measures is $15 million. I do not think the farmers' share of that increase is likely to be the make or break item in the decision made by a particular farmer. It would work out to about 70 cents for each Canadian and I think as such it will not be a determining factor in any decision that a farmer, rancher or anybody else may make in regard to continuing in his chosen profession.
The item of recapture was also raised by the hon. member for Vegreville. In view of the time and desire of
December 3, 1971

other hon. members to take part in the debate, I do not think it would be useful to repeat remarks I made in response to the same question raised earlier by the hon, member for Crowfoot. With regard to information services, the hon. member for Vegreville raised a very valid and good point. I am advised that the Minister of National Revenue spoke in Vancouver recently about his department's program. In the very near future he will be making an even more complete statement on the intentions of his department.
In this connection I can only say that I hope not too many Canadian taxpayers will be panicked into retaining professional tax advisers if they have not needed them up to now. The Department of National Revenue does intend to render every assistance to Canadian taxpayers. Indeed,
I think most Canadian taxpayers will find that if they have not needed professional tax advisers hitherto under the present system, there will be no reason for them to need them under the new system. I realize, of course, that a number of people sometimes use scare tactics in order to drum up business in anticipation of valuation day, and so on. I can only say that I hope our taxpayers will wait and see what information and assistance is available to them from the Department of National Revenue before spending their money on that kind of service.
The hon. member for Lanark-Renfrew-Carleton raised the question of the farmer who owns three separate parcels of land and resides on one of them. The $1,000 per annum deduction from capital gains in lieu of the exclusion of place of residence applies only to the parcel of land on which the residence is located. If the hon. member would refer to section 40(2)(c) on page 100 of the bill, I think he will see that that is very clear.


John (Jack) McIntosh: Mr. Chairman, I had intended to speak generally about the capital gains tax, and so on, but in view of the remarks made by the hon. member for Lanark-Renfrew-Carleton and those of the parliamentary secretary perhaps I can deal for a moment with two specific recommendations put forward on this side of the House by members of all opposition parties. These two specific points are the basic herd and capital gains made from farming.
In referring to these two items the hon. member for Lanark-Renfrew-Carleton said that every time a member on this side of the House-at least, this was the implication-criticized not only this bill but Bill C-244, and I suppose he also included Bills C-197 and C-176, he was doing so for purposes of political expediency. We have on many occasions said that we are concerned with all farmers in Canada, not just farmers in western Canada, as he implied. We from western Canada have no axe to grind about the treatment afforded farmers in eastern Canada by the government. We hope that they will get a square deal. In fact, they are entitled to a square deal.


An hon. Member:: And they are not getting one.


John (Jack) McIntosh: As one of my colleagues says, they have not been getting a square deal. I was very surprised to hear the hon. member say that he spoke to about 1,200 farmers in the Prince Albert area recently, not one of whom spoke in favour of any measures for eastern agriculture. I do not want to say that the hon. member is
Income Tax Act
lying, but I would say that that is not the truth. He should realize that most of these farmers' ancestors came from eastern Canada and so these farmers are very interested in what happens in Ontario and Quebec.
The hon. member also said he had been speaking during the last two months in the riding of Assiniboia. I can speak with some authority on that riding since it was formerly part of my riding. For example, the ancestors of farmers in the Strasbourg and Duval areas came from Quebec, and I am sure they did not tell him what he alleges they said. Perhaps this will convince the hon. member that we from western Canada do not speak about problems only from our particular region. We are Canadians.
I would like to issue a challenge to the hon. member who said that every time we get up in the House to speak we do so for purpose of political expediency. I would ask him this question! If some body in Parliament which was favourable to the government were to make certain recommendations, would he accept them? I refer to the two recommendations made by the Senate committee with reference to the subjects we are discussing. As hon. members know, the other place is composed principally of appointees, followers of the present government. It is certainly composed, to the extent of 80 per cent, of followers of the hon. member's party. If we say nothing further from this side with regard to basic herds and capital gains on farmland, would the hon. member try to persuade the Minister of Finance, the parliamentary secretary-


An hon. Member:: And the Prime Minister.


John (Jack) McIntosh: Never mind the Prime Minister. I want to be clear in this regard. Would he disregard what we have said and accept these representations made by a body composed to the extent of 80 per cent of members sympathetic to his own party? The parliamentary secretary said the basic herd concept was not a good idea for farmers and ranchers, and I suppose he will be saying the same thing about our representations having to do with capital gains. If the proposal does not affect the government's financial picture one way or the other, why not give these people what they want and what they feel is good for them?
The Senate committee asked that provision be made for the continued recognition of a farmer's permanent herd as a capital asset, rather than treating it as inventory or stock in trade as proposed in the measure before us. Everyone who has anything to do with farming knows that the basic herd is the production machine of the ranch or farm. It is the production machine which provides the calves year after year. Why cannot it be treated in the same manner as other productive machinery is treated? This is what farmers are asking. I do not know whether it is good government ought to do, and we in the opposition agree with them.
The Senate committee also recommended consideration be given to extending the roll-over provisions to permit land together with any other capital property which is used by an individual in a farming activity to be transferred, either during lifetime or on death, to descendants without being subject to capital gains treatment under the
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December 3, 1971
Income Tax Act
deemed realization provisions. On the issue of capital gains and farmland the committee took the view that farmers occupy a special position in the economic structure of this country. That is true. Over the years this sector of the economy has become increasingly subjected to pressures which have led to a profound change in the nature and use of farmland. The committee was concerned by this trend and believes that measures should be taken to reverse it.
I ask the hon. member for Lanark-Renfrew-Carleton whether he accepts this, whether he will go to the parliamentary secretary and ask him to make this concession to the people of our country who are calling for it. It is not asking very much. I suggest to the hon. member from Renfrew that he consider this point carefully because we are asking this not only for the farmers and ranchers of western Canada but for the livestock producers in eastern Canada and, indeed, all over Canada.
I was surprised to hear the hon. member talk about good will in reference to Bill C-259. I ask him where the good will was when he rose in the House a couple of days ago and referred to meetings which the Minister of Agriculture held with the provincial ministers of agriculture on the subject of national marketing boards. He implied in his question-I do not know whether it was a planted question or not, but I have my suspicions-that all the provincial departments of agriculture were now in favour of a national marketing board. Why did the hon. member ask that question? The agreement which was made at that time-and he knew it when he asked the question-was only in respect of poultry. I know that Saskatchewan, Alberta and Manitoba are not in favour of a national marketing board in the sphere of agricultural production, if the hon. member wants good will from this side of the House he should extend a helping hand from his side.


Steve Eugene Paproski: It is better to give than to receive, especially around Christmas.


John (Jack) McIntosh: Storage Facilities for Fish



PRIVATE MEMBERS' MOTIONS

[Stage Direction]
consideration. This is the reason the Senate committee recommended that the government give this group special consideration. We ask for it only on those two items. The parliamentary secretary said it would not make any difference. If the farmers are asking for it, and if it does not make any difference to the government, then why not give the people what they are asking for? This is all we ask.
Stanley Howard Knowles: Mr. Chairman, since it is almost four o'clock, and while the government House leader is still here-and many other cabinet ministers-may I ask the government House leader a question about Monday. In particular, will the government by Monday be ready to introduce its amendments to the income tax bill in respect of co-operatives and credit unions? If the answer to that is yes, will we take those sections of the bill when we deal with this legislation on Monday?


Allan Joseph MacEachen: Mr. Chairman, the answer to both questions is yes. The amendments will be ready and we would like to move them on Monday.


Gerald William Baldwin: The hon. member for Peace River heard the answer and he assumes, of course, that when this bill is first discussed in committee of the whole on Monday there will be requests made, and if the amendment in respect of co-operatives is available and a request is made at that time, of course we will be prepared to consider it. Apart from that, Mr. Chairman, and apart from any agreements made on the floor of the House, I would assume that when we resume committee of the whole consideration we will proceed in the normal, traditional way, starting at the top and working our way down to the bottom.


The Chairman:: Order, please. Is it the wish of the committee that it be called four o'clock.


Some hon. Members:: Agreed.
Progress reported.


Mr. Deputy Speaker:: 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, public bills, private bills. There will difficulty conducting private members' hour if hon! members move about the chamber and carry on conversations. I have difficulty hearing the Clerk Assistant.


Mr. Deachman:: Mr. Speaker, I understand that during private members' hour today there is disposition to take up item No. 4 on the order paper, appearing at page 8 and standing in the name of the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), and that the subject matter of item No. 6, although not the motion itself, be open for debate.


Mr. Speaker:: Hon. members have heard the suggestion of the hon. member for Vancouver Quadra (Mr. Deachman). Is it the pleasure of the House to proceed on that basis?


Some hon. Members:: Agreed.



FISHERIES


[Stage Direction]
The House resumed, from Monday, November 23, 1970, consideration of the motion of the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall):
That in the opinion of this House, the government should consider the advisability of providing loans and grants to encourage the building and improvement of fishing facilities along the Atlantic coastlines for the better collection and storage of all marketable species of fish.
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, I am very happy to rise and support the motion put before the House by my colleague, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), on November 23, 1970. At that time the motion was talked out. I hope the motion will have more success today. It is not my intention to speak for too long because I know other members wish to speak on the motion, and I am sure the House will wish to vote on it before we adjourn.
I suspect the situation which motivated my colleague in placing this resolution on the order paper is similar to that which exists in most parts of Newfoundland and, I suspect, in most parts of eastern Canada. Fishermen in the Atlantic area, especially in Newfoundland, are severely handicapped by virtue of the fact that they do not have adequate facilities to exploit the fishing industry and to derive from it a living which they could make very successful if these facilities were provided.
I can think of situations in my riding of St. John's West where fishermen are required to operate under conditions that are antiquated. I make numerous requests to the Minister of Public Works (Mr. Laing) and the Minister of the Environment and Fisheries (Mr. Davis). It seems that these two ministers are hung-up on the old question as to which comes first, the chicken or the egg, because if you ask for a breakwater, cold storage equipment or wharves the Minister of Fisheries will report back to his colleague, the Minister of Public Works, that there are not enough Lffiishermen in the area to warrant the expenditure.
Of course, the minister does not explain to his colleague that there are few fishermen fishing in that area, due largely to the fact that there are not enough facilities to encourage them to make a successful living from fishing. I can think of instances, again in my own riding, when I requested a mechanical hoist to enable fishermen to remove fish from their boats and place them on the deck of the wharf. These devices cost perhaps $1,000 or $2,000, but certainly it is a very insignificant amount of money considering the huge sums that are being spent almost daily on projects that are certainly less worthy than some of those I have put forward to the two ministers.
It is regrettable, also, that in this day and age when many millions of people are starving, we have thousands of tons of high protein food such as herring and other species from the sea being dumped almost daily in Newfoundland because of the absence of proper cold storage
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December 3, 1971
Storage Facilities for Fish
facilities. If the government were to assess the situation and then set about to install cold storage and other facilities, there are a large number of species of fish in the waters around our shores that could be economically exploited to the advantage of fishermen who depend on fisheries for their livelihood.
That is why I am proud to support the resolution of my colleague. I feel that if cold storage and other facilities were provided, fishermen would be encouraged to develop other species of fish. I can think of several species off the shores of my riding, such as shrimp, that are there in abundance but are not being properly exploited because of lack of proper facilities and wherewithal on the part of fishermen which would enable them to develop economically that aspect of the fishing industry.
Obviously, there is also need for other facilities. I realize the the motion deals primarily with cold storage facilities, but other facilities are also badly needed. I refer to haul-out facilities for people with boats, slipways to make it easy for fishermen to pull in their boats from the ocean in periods of rough weather, breakwaters, wharves, mechanical hoists on wharves, harbour facilities, dredging, cold storage facilities and additional bait storage facilities. These facilities are badly needed in the Atlantic area and in Newfoundland to enable fishermen to ply their trade and increase their income which in many cases is below the poverty line.
I do not intend to take up any more time of the House because I know other hon. members want to take part in the debate, and I am sure the House will want to vote on the resolution before we adjourn. I strongly urge the House to approve the resolution of my colleague, because it means so much to a large number of Canadians who are struggling to make a living and are not given too much encouragement to stay in the fishing industry so far as assistance by the federal government is concerned.


Mr. Albert Bechard (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, first of all I wish to thank the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) who has provided us, this afternoon, with the opportunity of dealing with a subject that is of vital interest to Canadians who depend on fisheries for their livelihood. Such opportunities are only offered during the throne speech debate and the budget debate.
It can readily be seen, Mr. Speaker, that such a debate is of the highest interest to me because of the population pattern in my riding and its geographic location. In fact, the people of Bonaventure-which includes since 1968 the Magdalen Islands-rely heavily on fishing for their livelihood. However, I should say in all honesty that the Magdalen Islands are more closely related to this industry than other parts of my riding. This is why my comments, though motivated in part by what I would call the continental part of the Bonaventure-Magdalen Islands riding, will stress mostly the importance of harbour, storage, cold storage and other facilities for the people of the Magdalen Islands.
I think it is important to point out that the jurisdiction over fisheries in the province of Quebec is shared by both
[Mr. Carter.!
levels of government but a great deal of administrative and other decisions are taken by the authorities of the province of Quebec, the federal government having nothing to do with them. However, I think that co-operation between the two levels of government has always been honest and sustained. The fact remains that the Canadian government is taking positive and beneficial steps for the Quebec fishermen. It does so very successfully, and even more for those who earn their living from that occupation, at sea, at the factory and in business.
Hon. members, particularly those from the province of Quebec, will recall that in the early 1960's under ARDA, which was passed by the Canadian government, an economic study financed by both federal and provincial governments was undertaken by the government of the province of Quebec in the pilot area of the lower St. Lawrence, of the Gaspe region and the Magdalen Islands.
The organization responsible for that study was the Bureau d'amenagement de l'Est du Quebec known as BAEQ. The study was to determine the economic possibilities of the pilot area in various sectors: industry, agriculture, fisheries, culture, etc., in order to raise the economic standard of that area and indirectly to improve the well-being of the population because the economy was progressing at a much slower pace than anywhere else in the province of Quebec and in Canada.
Following that long and costly study, a voluminous report was submitted in 1966 by the BAEQ study group to both governments, particularly to the government that had established it, namely the government of the province of Quebec. The Quebec government and the federal government followed up this report with the signature, in May 1968, of an agreement on the development of the pilot area making available to it the amount of $268 million, $212 million of which was provided by the federal government.
Everyone knows the problems that we faced in the implementation of that program. Among other things, it provided for the centralization of endeavours in many sectors in order, as it was said, to ensure more efficiency, better organization and higher production, as well as a higher revenue for those involved in the various industrial sectors of the pilot area.
For my part, I agree with the approach set forth in the BAEQ report. In fact, Mr. Speaker, such a policy, if well implemented, cannot but benefit those directly concerned, in this instance, the fishermen.
Of course, governments cannot do more than allows the budget voted by Parliament. Now, in the past, because of the large number of wharves and seaports-and this was easy to understand considering the means of transportation available to fishermen-the government had to rely on its yearly appropriations to make repairs or improvements in many places, in order to maintain good harbour facilities for the benefit of fishermen. But because of that sprinkling of public funds here and there the fishermen did not always have the necessary facilities.
That is why nowadays, considering the new transportation means, it seems normal to wish to centralize such harbour facilities so as to provide fishermen with the fishing wharves and ramps they need, where their boats will always be safe even in bad weather.
December 3, 1971

It is on account of that centralization that only eight seaports or fish landing wharves were left in the Magdalen Islands out of the great number existing before. The Canadian government built a $5 million main seaport in Cap-aux-Meules, in the Magdalen Islands, which is now completed; incidentally, I am told that the people of the Magdalen Islands had been asking for that seaport for more than sixty years.
It is also according to that centralizing concept that a more modest seaport is being built in the Grande-Entree, again in the Magdalen Islands, which will meet the needs of the fishermen in the area. It will cost about half a million dollars.
Plans and specifications have also been ready since the Spring of 1970 for the building of port facilities in l'Etang-du-Nord, again in the Magdalen Islands, but these facilities which unfortunately could not be built in spite of the plans made by the Public Works authorities for this year, may be developed in the Spring of 1972. The same type of development has long been overdue in the area between Etang-des-Caps and l'Anse-a-la-Cabane, but as early as next year we hope to undertake such construction.
After all, Mr. Speaker, if we want better cold storages and modern plants, we must first build facilities where the fishermen can send their fish. The fisherman's trade, as everyone knows, is a tough trade. The fisherman who sails out in the small hours of the morning must often face a very rough sea and he works hard the whole day. But if he has to drag his fishing boat and deliver his fish to inadequate facilities, he will soon get discouraged and more and more people will go on welfare. That is why I ask the federal government to speed up the building program of port facilities for those fishermen and I request it mainly to listen not only to the member who knows and should know his constituents' problems but also, since there are local and regional agencies, the officials of the Department of Public Works. The government should carefully pay attention to the proposals from these local agencies because the engineers from the federal Department of Public Works are always in the field and are aware of the fishermen's needs as does the member for Bovaventure-Iles-de-la Madeleine. I have already emphasized to senior officials in the Department of Public Works that it was not from their office in Confederation Heights that they can be aware of the needs of the fishermen in Bonaventure-Iles-de-la-Madeleine.
In this connection, I wish to state what the federal government has been doing for several years to improve the fishermen's lot. A considerale amount of work has been done in the Paspebiac harbour in the last few years, in the mainland area of my constituency, and a contract in excess of half a million dollars has been awarded by the Department of Public Works for extending the wharf there.
But only the offshore fisherman benefits by all these important projects. What about the inland fishermen who meet, as I said a few moments ago, around Magdalen Islands? The Federal-Provincial Committee on Fisheries has decided, in the framework of the development of the territory, to keep eight wharves only for unloading fish. In the Bonaventure area which is on the mainland, it has
Storage Facilities for Fish
decided to keep three only on a distance from 125 to 140 miles. But the inland fishermen, the small fishermen who do not have those magnificent trawlers built with the generous aid of the Canadian government, what facilities will they have since the existing wharves are deteriorating due to a centralization policy? This policy is undoubtedly very good but it must not be forgotten that there will be inland fishing as long as there is fish and lobster in Chaleur Bay and in other Canadian waters.
Consequently, it is not normal that the coastal fishermen should be neglected, they who spent considerable amounts of money on their fishing gear and that they should be forced to travel a distance of 50 miles to find shelter and dispose of their catch.
Obviously, hon. members do not know every community in the riding of Bonaventure. Some of my colleagues, who live near Bonaventure, know the Gaspe Peninsula for having toured it briefly. They know, for instance, that between Gascons-is that not a pretty name-and Paspebiac, a distance of some 50 miles, there are no ports and no wharves to accommodate the coastal fishermen.


Mr. Andre Ouellet (Parliamentary Secretary to Minister of National Health and Welfare):: What a shame!


Albert Béchard: I agree with the Parliamentary secretary to the Minister of National Health and Welfare (Mr. Ouellet) that it is a shame.
This is why I recently met those fishermen who told me that they would never agree on the site where such facilities should be built. If ever the time comes, they have decided to leave the choice of the site to the engineer of the Department of Public Works whom they trust.
Between Paspebiac and Carleton, which are 50 miles apart, there are no harbour facilities for the fishermen. We ask the Department of Public Works to repair the wharves, but they always answer: "According to the area development plan, only three wharves have been kept in the constituency and, consequently, it is useless to go against that policy.
In Ruisseau-Leblanc where there is a very nice wharf which would render great services to inshore fishermen and keep several families off welfare, a resourceful citizen, as are all my constituents, has built a plant to handle the catch of inshore fishermen and to process it for marketing purposes.
With the help of the government, if this wharf could be kept in good condition, if at least Ruisseau-Leblanc were made into a seaport and included with those that the federal-provincial committee has decided to maintain, this plant, in two or three years, would provide jobs to some fifteen persons, apart from the fishermen who could supply this plant and, as I was saying a moment ago, prevent many families from being compelled to their great shame, to live on welfare payments.
In the Magdalen Islands, the same situation prevails. A certain community which is called Fatima-a famous name-and which was endowed with a beautiful seaport, has been struck off the map. Fishermen are there today without any port facilities and they keep asking for them. So, the Department of Public Works as well as the Department of Regional Economic Expansion and the federal-provincial committee should wake up some day and

December 3, 1971
Storage Facilities for Fish
implement the suggestions made by the hon. member for Bonaventure and the fishermen of the Magdalen Islands.


An hon. Member:: That is right!


Albert Béchard: Mr. Speaker, I think I have said enough a short while ago about what the various federal departments have done to assist the fishing industry. A lot has been done, but there is still a lot to do.
There is also the part played by the Department of Regional Economic Expansion for the development of fisheries which awarded grants to industry in the designated areas. Other plants like the one at Ruisseau-Leblanc, which I mentioned earlier, could themselves make good use of such grants.
Again in the Magdalen Islands, in order to help families who until now had been living on social welfare during a good part of the year, we built a plant last year at Grande-Entree, with the co-operation of the Department of Regional Economic Expansion, and this plant was awarded a $40,000 or $60,000 grant. As soon as it went into operation, its manager, who is also the mayor of Grande-Entree and who took the initiative of establishing it told me: "I had to go as far as Havre-aux-Maisons to recruit workers". He had to hire people 60 and 65 years old because no one else was available. He had to hire people 60 and 65 years of age because no other workers were available since most families had been living on welfare until then, that means they were sponging off society.
That is what the government did to help fishermen of that small village of Grande-Entree in Magdalen Islands.
Assistance to shipbuilding is also worth mentioning. As recently as last year, thanks to the federal government, two very big trawlers were launched at Sorel shipyards for a company operating at Cap-aux-Meules in Magdalen Islands. I was told this fall that the two boats made miraculous catches last summer and we paid 35 per cent of their construction cost or about $1 million. That amount represents the contribution of the federal govern-meent to help the fishing industry in Magdalen Islands.
As I said, Mr. Speaker, the fisheries problem is one of the most important ones in this part of the country, and in my riding in particular. I think the federal programs implemented at this time are and will be very beneficial if the government is willing to listen to the local people who are prepared to accept centralization but, who want at the same time the little fishermen to be able to make a living. To do this, the small fishermen not only those of Bonaven-ture-Iles-de-la-Madeleine but also in Humber-St. George's-St. Barbe as well as Newfoundland, in short, all Canadian fishermen, must be able to continue to live from that industry where it is difficult to earn a livelihood, I must admit.
However, the fishermen who have intestinal forti-dude,-those I know, at least,-want to earn their livelihood and not depend on social welfare. They want society, the Canadian government to which they pay taxes, to give them, in return, the facilities that will enable them to ply their trade and provide honorably and honestly for their families.


J. Michael Forrestall: Mr. Speaker, it is a strange situation when one finds himself
IMr. Bechard.]
rising to speak to a motion in which he has already spoken. I gather that under the arrangement made earlier we are discussing the motion of my friend, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), but with the permission of the House I shall direct my remarks more along the lines of the motion which is included in this debate. If this is objectionable to anyone, I hope he will say so now.
With the help of the library I shall do something which I rarely do, that is, refer to notes because I think this matter should be put on the record very extensively. I am very pleased to see in the House the Minister of the Environment (Mr. Davis). Problems of the sea are a major part of his responsibility and he is very much aware of them.
The economic, social, cultural or other goals sought by a society determine the value of scientific enterprise in any field. The Science Council of Canada undertook to identify a set of goals indicative of the aspirations of Canadians, the factors or elements basic to the attainment of each goal, the contributions of science and technology to such attainment and conditions favouring the technological effort. For example, one element in national prosperity is the reduction of regional economic disparities; and technological contribution might be the development and application of new marine technology in existing or new industries, or sound programs for the optimum use and conservation of ocean resources.
Freedom and security for the nation and its people are dependent upon the development of necessary military technology, particularly in this age of atomic submarines and the deployment of missiles throughout the inner space of the ocean. An element in world peace is the limination of hunger. By means of advanced technology, the ocean could be a more productive source of foods, particularly of proteins, which are deficient in many areas of the world. Exploitation of the mineral and chemical resources of the ocean could benefit the economies of some developing nations as well as those countries which possess the advanced technology to effect such recovery. Certainly, the global character of marine science would make it a useful instrument of foreign policy and foreign aid. Oceanography, marine and undersea technology is an area to which the Science Council proposed to give future consideration after major programs were started in space, in water resources management and in some other important fields in Canadian life.
Perhaps the pace of technological development is hastening consideration of Canada's future in oceanography, which may in the near future lead to a more definitive statement of national objectives relative to the ocean. It has been more than a year since the Science Council of Canada made known in its report to the nation its views. Not the least alarming fact in this connection is that there has been no useful or meaningful progress along the lines recommended in reports that have been before us for a considerable period. The Committee on Marine Science and Technology reported in 1970 on organization for the formation and implementation of national marine policy, the need for a major program in marine science and technology, some major projects, facilities, manpower needs and the scale of marine science and technology
December 3, 1971

expenditures. In order to achieve a balanced program, the committee suggested that the formulation of national policy be assisted by a widely representative national board on marine activity which would make recommendations to the minister responsible for science policy. I ask the minister where that board is and whether its members have been named.
Implementation and co-ordination of policy in marine science and technology would be the responsibility of departments with marine interests, the Canadian Committee on Oceanography and a Canadian ocean development corporation. I ask the minister, before he leaves the chamber, what has happened to that development corporation.
I do not ask my question rhetorically; it is an important matter. This Crown corporation would be responsible for organizing marine development and innovation projects in industry, for the rapid establishment of a solid technological base and for the promotion of marketing products and services at home and abroad. Marine environmental problems would be kept under review by the proposed environmental council reporting directly to the office of the Prime Minister. In consideration of the challenges and opportunities existing in our ocean frontier, the committee stated that a major, national program in marine science and technology is needed.
With regard to technology and industry, the committee drew attention to the need for effective promotion by the government, promotion which has been totally absent during the past year. The committee said:
Marine technology is about to enter an era of rapid growth. Its development requires close attention to ensure an orderly growth with a substantial Canadian participation. Here is an area that can benefit the investor and provide meanginful employment to skilled Canadians, if we are willing to accept the challenge. If Canada does not act, others will try and they will reap the benefits.
Canadians have been active in the areas off our coasts for some time, and the technological capability necessary to support our coastal fisheries maritime forces and scientific activities offshore does exist, but mainly in government and university laboratories. Unfortunately this expertise has not found its way into industry.
That expertise does not exist outside of government or the university laboratory because the government has failed to heed one of the essential recommendations of that report and get on with the job of promoting the development of the ocean and establishing a development corporation. In other words, the government has failed to recognize that the greatest resource available to Canadians is not necessarily found on the land but, in all likelihood, may be found in the sea. That is the policy the government has failed to implement.
The administration of that policy would be the responsibility of the proposed Canadian ocean development corporation of which we have heard virtually nothing. I spoke one year ago about the scale of expenditure in connection with this and I want to enlarge upon those remarks. I referred to expenditures in the order of $300 million in 1980 when I spoke on November 30, 1970.1 dealt with the question of costs and I think it is worth repeating what I said. As recorded on page 1600 of Hansard for November 30, 1970,1 said in part:
What about the cost factor? That is clearly set out in the report of the Science Council. They call for an escalation in expenditure
Storage Facilities for Fish
so that by the 1980's our investment will be in the order of $300 million. I support this proposal. Surprisingly enough, the figures that I worked out one year ago differ from the figures of the Science Council with respect to 1980 by only $15 million. One of the things we must be concerned about, if we are to accept this proposition after careful study, is this: we must make sure that the build-up, if it does take place, will be sustained. I imagine that the Science Council would support this idea, although it does not particularly deal with it in its report.
I am alarmed because the government has seen fit to deal with this matter only in the last ten or 12 months. The United States of America, the United Kingdom and a dozen other countries around the world have already made extremely important and significant progress in this area. In many instances other countries have made significantly greater progress than Canada in an extensive examination of the resources of the sea and the relation between those resources and national goals. I quote briefly from the report made to the President of the United States by the commission on marine science, engineering and resources, as follows:
The nation's stake in the uses of the sea is synonymous with the promise and threat of tomorrow. The promise lies in the economic opportunities the sea offers, in the great stimulus to business, industry, and employment that new and expanded sea-related industries can produce. The promise lies also in expanding the nation's horizons, in strengthening its international position and peaceful collaboration among nations, and in the possibility that action today will permit man to make a start toward ultimate control of his planetary environment. The promise lies in making available new reserves of important minerals and in ensuring new sources of food.
The threat lies in the potential destruction of large parts of the coastal environment and in the further deterioration of economically important ports, recreational facilities, coastal shellfisheries, and fisheries on the high seas. There is the threat inherent in any failure by the nation to utilize successfully its fair share of a major planetary resource; the United States simply cannot afford less than its best effort to utilize the global sea. Finally, there is the threat that unbridled international competition for the sea's resources may provoke conflict.
A time of decision is here. Multiple pressures force the nation to turn to the sea, and multiple opportunities await the seaward turning.
Those words are prophetic. The government, with all its interdepartmental committees, cabinet committees and various ways of dealing with the business of the nation, has had one year to ponder this problem. Surely it has had sufficient time to give us some word about the ocean development corporation, the relationship between the Atlantic Ocean, the Arctic Ocean, the Pacific Ocean, Hudson Bay, the Gulf of St. Lawrence, the resources of these waters in terms of fish and the tremendous mineral content, the resources that are on the seabed and under the surface. Now that we are well launched into the 1970s, surely now is the time for a statement on national goals with respect to the sea. It is to this matter that I direct my remarks.
It is regrettable that with only 15 or 20 minutes remaining in today's sitting no speaker on the government side has directed himself to this important concept of awareness and utilization in the fullest sense of the resources that lie off our coasts.


Mr. Ray Perrault (Parliamentary Secretary to Minister ol Labour):: Mr. Speaker, implicit in the resolution advanced

December 3, 1971
Storage Facilities for Fish
by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) is the suggestion that the government has in some way failed in its responsibility to the fishing community of the east coast. The resolution suggests there should be far more government involvement in measures to assist that industry. I cannot help but comment paradoxically, the party which is today talking about poor government participation has been saying, non-stop for 38 solid days, that the government should interfere less in the lives of Canadians, should reduce taxes, the government is too big, wants larger government expenditures for the areas they represent. The philosophy they enunciate in the House is completely by the board on those occasions.
I have visited the Maritimes. I was impressed by what I saw. I refuse to believe that the gloom, doom and the disaster gang who represent certain maritime provinces in this House of Commons represent the spirit of Newfoundland. No province faced with the challenges which have confronted Newfoundland, New Brunswick, Nova Scotia and Prince Edward Island could possibly have been built into a great province with the spirit that pervades the House from the other side of this assembly. There are problems in the Atlantic provinces, just as there are in other provinces of Canada. However, when are we going to hear the Newfoundlanders in this assembly tell us that during the past year the average price per pound of fish on the east coast has been the highest in history? When are we going to hear that kind of information? Instead we hear the-


Mr. Deputy Speaker:: Order, please. The hon. member for Gander-Twilingate (Mr. Lundrigan) is rising on a point of order.


John Howard Lundrigan: My point of order is very simple, Mr. Speaker. The hon. member for Burnaby-Seymour (Mr. Perrault)-


Raymond J. Perrault: That is not a point of order, Mr. Speaker.


Mr. Deputy Speaker:: Order, please. That question is within the Speaker's jurisdiction to determine. I cannot make a determination until I hear the point of order.


John Howard Lundrigan: Mr. Speaker, the hon. member for Burnaby-Seymour is not permitted by the rules of the House to read the notes which the Minister of Fisheries (Mr. Davis) gave him during his ten-minute break.


Mr. Deputy Speaker:: Order, please. The hon. member for Gander-Twillingate has just confirmed that it is not a point of order.


Raymond J. Perrault: Mr. Speaker, I hope the St. John's press makes careful note of the deliberate attempts by certain Newfoundland representatives here to prevent the facts being placed on the record.


Some hon. Members:: Hear, hear!


Raymond J. Perrault: I hope they consider the bona fides of the group which makes up the government of this country. Why cry the blues when the fishing industry in the Maritimes is, happily, the highest in history during this year?


Thomas Miller Bell: Highest what?
(Mr. Perrault.]


Raymond J. Perrault: The sad, sad talk that you get from that corner of the House does not inspire one ounce of confidence in those people we are trying to inspire to invest their money in the fishing industry of that area. Happily, many of the investors who have come in such large numbers to the industry in the past two or three years have not listened to the doom and gloom of opposition members in the House.
The present minister responsible for fisheries, and the government of Canada, have acted decisively and effectively to assist the fisheries in the maritime provinces. When the right hon. member for Prince Albert (Mr. Die-fenbaker) was Prime Minister of Canada he did not advance one single measure on behalf of the fisheries of Canada in five long, doleful years as leader of the government. This is incredible.


James Aloysius McGrath: I rise on a point of order, Mr. Speaker. I know the hon. member and I know that he is well informed. Consequently, I can only come to the conclusion that he is deliberately misleading the House, because the statement he just made is not true.


Mr. Deputy Speaker:: That point, of course, is a matter of argument.


Raymond J. Perrault: Mr. Speaker, I am simply contrasting the performance of that group when they were in government with what has been done on this side of the House. In five months, more than five important fisheries measures have been advanced by this minister and this government. This morning there was reference from the opposition members to the plight of baby seals. Another member from the great province of Newfoundland was spreading gloom and doom. The fact is that when the people opposite formed the government they did not bring in one single measure to conserve the seal stocks of Canada.
If the invasion of the Russian and Norwegian fleets had been allowed to continue in 1971, we would not be talking about a limitation of the seal fishery or the seal catch. We would be looking at pictures of those species of seals on lithographs as well as passenger pigeons and dodo birds. This is what would have happened if those policies had continued. Yet we hear criticism of the Minister of Fisheries (Mr. Davis). Opposition members talk about inaction. The three-mile limit has been in effect in Canada almost from the time of Confucius. What did these people do about the three-mile limit? Not a single thing. They did not even make decent speeches on the subject,


James Aloysius McGrath: Would the hon. member permit a
question?


Raymond J. Perrault: I will permit a question when I have completed my remarks.


James Aloysius McGrath: It will be too late then; you will have talked out the resolution.


Raymond J. Perrault: In a spirit of democracy I will permit a question at the end. When we hear talk about the great concern for the fisheries on the east coast from these people, in contrast with the performance when they were in government, this must be the greatest conversion since St. Paul was blinded on the road to Damascus. When they had their chance, their policy was one of benign action.
December 3, 1971

The passionate opposition refused to initiate any substantial action on behalf of the fishing industry when they were in office.


James Aloysius McGrath: That is not true and the hon. member knows it. He should not continue to mislead the House.


Raymond J. Perrault: They tell us we are not doing well enough.


John Howard Lundrigan: I am one of the most broadminded members in the House of Commons and I do not want to restrict-


Mr. Deputy Speaker:: Order, please. The hon. member should state his point of order.


John Howard Lundrigan: Quite simply, Mr. Speaker, the motion before the House does not have anything to do with the topic which the hon. member is discussing.


Raymond J. Perrault: If there is one thing that hon. members opposite have yet to learn, it is when to sit down. Let me put some of it on the record.


J. Michael Forrestall: Some of what?


Raymond J. Perrault: Some of the assistance that has been given to east coast fishermen. The government is fully aware of the need for facilities of the type referred to in the hon. member's motion and has been actively supporting this approach over a period of many years. Despite the many accomplishments of the past it is fully recognized that in many areas, especially the more isolated ones, there is need for facilities that will enable fishermen to sell and obtain income from all the species which they now land and for which a demand exists. That there is a demand is admitted by the department.
Programs already undertaken by the fisheries services of the environment department have introduced fishermen to many new types of gear and larger, more mobile boats. This has in turn increased the proportion of their catch which is made up of species other than cod which fishermen cannot process themselves and which must therefore be transported to a plant where more sophisticated processing equipment such as freezers is available.


James Aloysius McGrath: A point of order, Mr. Speaker.


Mr. Deputy Speaker:: Order. The hon. member for St. John's East (Mr. McGrath) on a point of order.


James Aloysius McGrath: I think the hon. member has an obligation to the House to identify the document from which he is reading.


Raymond J. Perrault: Unlike some of the speeches made by the hon. member, I am presenting to the House facts in the form of extended notes to make sure that they are absolutely accurate. At the same time, the demand in the market for species other than cod has increased a great deal during the past decade. Resulting from this we have been bringing into production species and product forms hitherto not generally processed in Newfoundland.
Already many steps have been taken to provide collection facilities to enable these species to be delivered to the nearest plant having facilities to process them. There are
Storage Facilities for Fish
many so-called community stages and fresh fish collection centres scattered around the coastline. While initially the community stage program was intended for the production and storage of salted fish, some of these have now in fact been upgraded and altered so as to enable them to become collection centres where all species can be assembled, sorted and held prior to being transported to a processing plant.


John Howard Lundrigan: Would the hon. member permit a question?


Mr. Deputy Speaker:: Order, please. The hon. member has indicated that he will not accept a question until he has concluded his remarks.


Raymond J. Perrault: In addition, many of the fishermen in my hon. friend's riding can obtain loans through the Fisheries Improvement Loans Act to construct new shore facilities or improve existing ones as well as to obtain new boats, gear and other seagoing facilities. Under the program of the Department of Regional Economic Expansion there are a number of sources of financial assistance-


Mr. Marshall:: A point of order, Mr. Speaker.


Mr. Deputy Speaker:: Order, please. The hon. member is seeking the floor on a point of order.


Jack Marshall: May I point out to the hon. member that under the Fisheries Improvement Loans Act three loans were granted in Newfoundland last year.


Mr. Deputy Speaker:: Order, please. The hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) is raising a matter of argument, not a point of order.


John Howard Lundrigan: A point of order, Mr. Speaker.


Mr. Deputy Speaker:: I do not know how a point of order can arise when the parliamentary secretary has not spoken since the previous point of order was raised.


John Howard Lundrigan: Then I raise a question of privilege.


Mr. Deputy Speaker:: The hon. member for Gander-Twillingate on a question of privilege.


John Howard Lundrigan: The hon. member for Burnaby-Seymour (Mr. Perrault), like all hon. members, has a responsibility to present the facts. The community stage program was discontinued years ago.


Mr. Deputy Speaker:: Order, please.


James Aloysius McGrath: He is deliberately misleading the House.


Mr. Deputy Speaker:: Order, please. Hon. members must observe the rules of the House. The parliamentary secretary has the floor.


Raymond J. Perrault: Another thing I have found out about Newfoundland is that the people there believe in democracy. That is another reason-


Some hon. Members:: Oh, oh!


James Aloysius McGrath: The Liberal party of Newfoundland does not believe in democracy.

December 3, 1971
Storage Facilities for Fish


Raymond J. Perrault: The Regional Development Incentives Act has enabled many fish plant operators to improve and expand their facilities. It has also provided the means whereby new processing facilities have been built in more marginal areas where fish is available but in quantities which made their viability uncertain without this assistance. Through these programs more fishermen than ever before are now able to dispose of all the species which they catch.
Aside from this we must not overlook the fact that already located throughout Newfoundland are many well equipped fish processing plants. Indeed, at this time the processing capacity is probably greater than the actual requirement. As a result of this situation, most of these plants have continued to extend their systems and facilities for collecting fish from outlying settlements.
Some of the opposition members from Newfoundland are terrified of democracy. It is interesting to hear their reactions to it.


James Aloysius McGrath: We have reason to be terrified of democracy with the Liberal government we have in Newfoundland.


Raymond J. Perrault: Using ARDA funds, the government of Newfoundland and Labrador is also providing a number of facilities of the type the hon. member is referring to in his motion. While I have referred to a number of ways in which solutions to the problem are being found-and found enthusiastically and optimistically, not in the mood of gloom, doom and disaster that we have listened to this afternoon-nevertheless this is not to suggest that there is
not a continuing need for improved fishing facilities. This government will continue to improve the program, hopefully with the co-operation of some of the doomster opposition members on the other side of the House. To this end the fisheries division of the Department of the Environment is constantly reviewing the situation and formulating new plans with a view to providing better facilities in areas still not adequately serviced.
Under a whole range of government programs, not only has a substantial amount of the DREE budget gone to the Atlantic provinces to provide new fish plants, herring reduction plants; it has also assisted in the re-establishment of centres and communities. One third of the cost of every fishing boat, except for the fleets that are limited by law, has been provided by the federal government which has been under unfair assault on this matter for so long. In addition to this, the government has financed water supply systems for new and existing plants.


James Aloysius McGrath: Question. Don't talk it out.


Raymond J. Perrault: Why don't these Newfoundland members, who claim to be so objective in their political views, stand up and give vocal and public support to some of the measures brought in by the government?


Mr. Deputy Speaker:: Order, please. The hour provided for the consideration of private members' business has now expired. It being five o'clock p.m. this House stands adjourned until Monday next at two o'clock p.m., pursuant to Standing Order 2(1).
At five o'clock the House adjourned, without question put, pursuant to Standing Order.



Monday, December 6. 1971