1971-10-07

[Stage Direction]
Seventh report of Standing Committee on Public Accounts-Mr. Hales.

Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I should like to present a motion to the House concerning the scarcity of doctors. I rise pursuant to the terms of Standing Order 43 to ask the unanimous consent of the House to propose this motion in connection with a matter of urgent and pressing necessity.
Canada has reached a crisis which, unless federal and provincial governments act more quickly than they have, will escalate to tragic proportions on a national scale. This crisis has been caused by Canada's failure to train enough doctors to meet the increasing surgical and medical needs of Canadians. Last year Canada trained 1,152 doctors to our high Canadian standards, but had to import 1,113, many of them not trained to our standards.
The Minister of National Health and Welfare told the House yesterday it is not clear that the provision of additional funds for medical schools for Canadian students is the right solution. Perhaps not, but in the name of those countless Canadians who, now and in the future, will suffer from this indecision, let us make an end to it.
I therefore propose to move, seconded by the hon. member for Perth-Wilmot (Mr. Monteith):
That the matter of the increasing shortage of doctors who are trained to Canadian standards be referred to the Standing Committee on Health, Welfare and Social Affairs with an instruction to inquire into the matter as quickly as is consistent with a thorough study and, from time to time, report back short-term and longterm solutions.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Simcoe North. Under the terms of Standing Order 43 this motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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



PENITENTIARIES


Hon. lean-Pierre Goyer (Solicitor General):: Mr. Speaker, I would like to inform the House of Commons on the present situation of the federal penitentiary system, which pertains to persons convicted of sentences of two years or more, give an outline of our policy and explain the reforms that were undertaken a few months ago by the Penitentiary Service, and other reforms that are planned for the future.
I will start with some figures on the present situation.
First of all, as far as expenses are concerned, the government must spend about $10,400 a year to keep an inmate in an institution while it costs only $415 to the government if an inmate is on parole.
During the last month of June, 5,257 offenders were on parole across Canada. A study carried out by the National Parole Board of 2,663 inmates on parole showed that 2,078 or 78 per cent had a job. They earned, for that month only, nearly $857,000. On the basis of such results and of money earned by the same persons for a whole year, this adds up to more than 10 million dollars and their income tax, both federal and provincial, has been estimated at nearly 1.3 million dollars.
Let us take a look now at the social angle. In Canada, close to one million persons have a criminal record. Each year, on average, 3,750 persons are admitted in our 36 federal institutions. At the present time, there are 7,270 inmates in our institutions, whose average age is 35 years and 80 per cent of them are recidivists.
These few figures point to the obvious conclusion that rehabilitation of offenders remains one of the major problems of our times. The present situation results from the fact that protection of society has received more emphasis than the rehabilitation of inmates.
For too long a time now, our punishment oriented society has cultivated the state of mind that demands that offenders, whatever their age and whatever the offense, be placed behind bars. Even nowadays, too many Canadians object to looking at offenders as members of our society and seem to disregard the fact that the correctional process aims at making the offender a useful and law abiding citizen, and not any more an individual alienated from society and in conflict with it.
Consequently, we have decided from now on to stress the rehabilitation of individuals rather than protection of society.
8504

October 7, 1971
Minister's Statement on Penitentiaries
Criminologists, psychologists, psychiatrists and senior officers with a long experience of the correctional field are agreed on the fact that at least 80 per cent of our inmates can be rehabilitated.
Therefore, a policy must be established concerning those 80 per cent, that is, the larger part of our inmates, rather than a punitive policy intended to meet the needs of a minority. We will undoubtedly have to keep on protecting society against dangerous criminals, but we will also take into consideration the fact that most inmates do not belong to such a category.
Reforms are undertaken on the basis of two essential principles. Firstly, an inmate is always a citizen who, sooner or later, will return to a normal life in our society and, as such, is basically entitled to have his human dignity, of course, but also his rights as a citizen respected by us to the largest possible extent. Secondly, in order for the rehabilitation to be as successful as possible, we must take advantage of participation from the community, both inside and outside our institutions, so as to have within our institutions a way of life that is as similar as possible to the normal life of citizens.
With such principles, we hope to change in our institutions the climate of tension that results from useless coercion, obsolete policies, and to create in the old-style institutions a more relaxed atmosphere more conducive to the rehabilitation of individual inmates.
We have therefore endeavoured to liberalize the system. On the one hand, we have closed the maximum security section in St. Vincent de Paul Penitentiary and we have transferred most of the inmates of the old Kingston Penitentiary to Millhaven.
We have suspended all work for the construction of the new Mission Correctional Centre in British Columbia and appointed a task force whose terms of reference are specifically to assess the entire problem of maximum security institutions and to report to me at the end of October.
At the present time, we anticipate the creation of a greater number of pre-release centres. We also are working towards providing for visits by the inmate's family under conditions which are to comply more fully with the requirements for privacy, especially in the case of maximum security institutions.
In other institutions, we are considering the possibility of allowing the inmates to go out, following the adoption of a leave system which will be along lines similar to the "military leave of absence" system; such leave is to be periodical and regular and provided on the basis of merit. Already, in Warkworth institution, some inmates hold a regular job in a local industry; they therefore leave the institution daily.
On the other hand, we have already instituted a Permanent Advisory Committee of eight psychiatrists to help us improve mental health conditions for the inmates who are ill and to study shortcomings in the present system. We expect a first report from this group some time during the month of November 1971.
I would also like to announce the forthcoming arrival within our medical services of a permanent advisor on nursing. Moreover, a meeting is to be held in October, grouping all the medical doctors who are working in

penitentiaries at the present time, in order to determine the inmates' medical requirements and to review the services provided for them so as to operate on a rational basis.
We have promoted the creation of inmate committees within the institutions. Elections have taken place within all 36 institutions and each one of the committees has held at least one meeting. The idea of inmate committees was enthusiastically received by the inmates. These committees will make it possible to establish more satisfactory co-operation between the inmates and correctional staff in order to gain better knowledge of the inmates' problems.
In another field, we have relaxed the regulations governing communications of inmates with Members of Parliament and the Commissioner of Penitentiaries. For a few months now, letters addressed to Members of Parliament or the Commissioner are not being opened or censored by the institutional authorities.
Quite recently, we brought the inmates' haircuts more up to date and provided the inmates with clothing which is similar to that worn in the outside community, especially clothing worn for leisure. We have also abolished the humiliating custom of identification numbers on clothing.
Within the same perspective, we intend to give increasing application to the "living unit concept" which we have been testing successfully within some of our institutions. This is a matter of reorganizing a normal community on a small scale: a limited number of inmates are grouped within the same wing and they share the same premises with the Correctional Officers who are in charge of the group. We are, in fact, carrying on a kind of group therapy. The result will be that the inmate will no longer be depersonalized, a frequent occurrence under the old system.
We are also proposing to establish the cafeteria system within our institutions to replace the system of meals eaten within the cells, a practice which added to the dehumanizing character of prison life.
And among the most significant of proposed reforms, I would like to point out the new concept of work and industry within the penitentiaries. It is a well-known fact already that the organization of industries within our institutions at the present time tends to promote unsound production habits. The efficiency rate for our inmates is assessed roughly at one third that of a normal worker. In order to cope with this problem, we have put into practice two projects on an experimental basis.
At the William Head minimum security institution on Vancouver Island, a regular wage will be paid for the construction of a building required by the institution. The inmates will be required to comply with the same requirements as those in force in private industry with regard to working hours and productive capacity. Instead of the present daily allowance which varies from .55 cents to .85 cents, the inmates will receive the federal minimum wage, which will make it possible for them to pay for their room and board in the institution, to pay for their clothing, to help support their family, to save money for their eventual release from prison, to pay their taxes and to be eligible for payments under unemployment insurance and workmen's compensation acts. Once released, an inmate may
October 7, 1971

be less inclined to rob a bank: on the contrary, he will already have a bank account. He may even, as in the case of other workers, receive unemployment insurance payments during the period required for finding some employment.
In Drumheller, Alberta, we have already gone one step further: the inmates are fully responsible for the construction, the organization and the operation of a golf practice range. And the money derived from the income of this business is entirely invested into a trust fund for inmates. This pilot project, in which we have a good deal of hope, will show that it is possible to allow the inmates themselves to assume responsibilities and thus to act as they would within a normal community.
Another important project in the field of correctional education is presently being implemented. Last September, the St. Lawrence Community College of Kingston extended its campus in order to include the Collins Bay Penitentiary. The institution will therefore be integrated into the campus and the inmates will be able to follow the same programs, have the same teachers and receive the same degrees as the college's fulltime students. This will improve the structure of educational programs as well as the turnover of teachers. The inmate will thus have contacts with a larger number of persons from the outside and this will facilitate his eventual re-integration into society.
The Canadian Penitentiary Service is involved in yet another research project in co-operation with the Donner Foundation of Toronto and the University of Victoria. In a year's time, we want to have determined the effects of correctional education in order to assess inmates' activities following their release.
However, it will be impossible to achieve these reforms if we do not have a highly qualified staff at our disposal. We want to expand our vocational staff-criminologists, sociologists, psychologists, correctional technicians, etc.- in order to increase the ratio between professionals and inmates. We have vast reserves at our disposal, since already the junior colleges, the colleges and the universities offer technical and vocational courses in the correctional field.
We also want to provide our employees with every opportunity of retraining themselves.


Mr. Hees:: For heaven's sake, he has two more pages!


Mr. Speaker:: Order, please.


George Harris Hees: On a point of order, Mr. Speaker, is there no limit on the length of time the minister can take? I think he is trying to talk himself out.


Mr. Speaker:: Order, please. The hon. member knows that under the standing orders no time limit is imposed in respect of a statement made on motions by a minister. The limitation of time applies only to the replies made by spokesmen on behalf of the opposition parties. There may be some unfairness to this. I have in the past expressed the view and made the suggestion to ministers that perhaps some thought should be given to making statements
Minister's Statement on Penitentiaries
on motions shorter rather than longer, and I would hope ministers would take this into consideration. If a minister makes a statement which takes 20 or 25 minutes I believe in such a case the House and the Chair must be prepared to hear longer comments by spokesmen on behalf of the opposition parties. It may be that when we are considering a matter as important as that now being dealt with by the minister we would want to devote more time to the subject. I do think, however, that there should be an effort made by ministers making statements on motions to present them within reasonable time limits.


Jean-Pierre Goyer: Mr. Speaker-


Mr. Speaker:: I apologize for interrupting the hon. minister.

Is the hon. member rising on a point of order?


Mr. MacInnis:: On a point of order, Mr. Speaker, considering the fact that the minister obviously has three or four more pages to read, what about the rule that forbids the reading of speeches in the House?


Mr. Speaker:: The hon. member knows, of course, that that rule does not apply to statements on motions.


Jean-Pierre Goyer: We have great confidence in our personnel and we will give them both the educational and the monetary facilities to enable them to undertake retraining.
So that all may have a better understanding of the new policies, the heads and officials of our institutions will also be given the opportunity of improving their training. The administrative and organizational structures will be updated and we will emphasize further regionalization.
All the reforms pertaining to our correctional officials and personnel are conceived in a spirit of consultation which we intend to further develop. To that effect we will increase the meetings so as to ensure continuous communications.
A third major element in the implementation of these reforms is the citizens' involvement. The program which the members of our society have to set up in order to foster the ex-offender's rehabilitation is an important one. We have undertaken long-term studies on community relations to improve the planning of the programs in which citizens, employers, voluntary agencies and professionals are involved with us; and we have also encouraged Canadian employers, as well as our own departments, to employ parolees and ex-offenders.
As our society becomes better acquainted with the problems of crime and rehabilitation of offenders and as citizens realize both the economic and social advantages of a rehabilitation program, a major part of the challenge that faces us will have been met.
Our reforms will perhaps be criticized for being too liberal or for omitting to protect society against dangerous criminals.
Indeed, this new rehabilitation policy will probably demand much striving and involve some risks, but we cannot maintain a system which in itself can cause even more obvious dangers.

October 7, 1971
Minister's Statement on Penitentiaries
We are conscious of the fact that some of our inmates are dangerous and we do intend to protect society against them.
Finally, Mr. Speaker, I would like to remind hon. members that these are objectives towards which we strive and we realize that it will take time before the fundamental changes are implemented.
Bearing this in mind we intend to develop a mechanism for consultation with the provinces in order to improve greatly the Canadian penitentiary system.


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, this is an important subject because we are dealing with a class of people in Canada, if they might be categorized in that way, who do not have the right to exercise their franchise. They are the only class of Canadians, apart from the judiciary who are independent of our democratic institutions, who have all the qualifications but who, because they happen to run afoul of the law, are incarcerated and cannot really speak in this place or in a community through the ballot box.
The minister presented a lengthy statement. He has taken almost thirty minutes. I will try to keep my speech short but there are some things that I think should be answered. I repeat that if any subject is important in this House this one is, and we discuss many subjects at length. The fact is that there are approximately 7,000 or 8,000 people right now in the penitentiaries of Canada, some of whom are young men and women who do not have the right to express themselves through the ballot box.
I have read carefully during the lunch hour the nine page statement of the Solicitor General with reference to penal reform and corrections. Many of the items contained in the report have been recommended by this party. I hope this statement involves not a question of propaganda, not a question of words but is rather an indication of some action to relieve the situation.
The minister says that reforms are undertaken on the basis of two essential principles. One, he says, is that the inmate is always a citizen who sooner or later will return to a normal life in our society and is basically entitled to retain his human dignity and have his rights as a citizen respected by us to the largest extent. First of all, I want to congratulate the minister for realizing at last that crime is not just a sordid happening but rather a result of human behaviour brought about by our economic and social conditions which we have failed to change.


Some hon. Members:: Hear, Hear!


Eldon Mattison Woolliams: For years we have pushed for and supported a system of penal reform. We have pushed and fought for a more modern idea of institutions. We have fought against the unnecessary use of maximum security institutions where the lock, the key and isolation were the letter of rehabilitation and retribution was the reason for punishment.
During my 27 years of experience at the bar and in my time as a member of the House of Commons I have visited most of the penal institutions in the country. If institutions are to be used at all, Mr. Speaker, and I have questioned

that throughout my career, I point out that we in this party have fought for the use of more medium and minimum security institutions which would better serve the average incarcerated person who has been convicted of a crime for which the code by law requires the imposition of a lengthy prison sentence.
We have fought for an extension of the concept of parole under which persons could be granted wider and more humane privileges, that would permit persons in penitentiaries to attend outside educational institutions instead of remaining confined in prisons where loneliness and crime prevail, remaining in institutions which are merely crime factories manufacturing more criminals rather than dealing with persons who could and can be rehabilitated. We have fought for a wider system of parole under which a person could either remain in custody overnight and by day attend the ordinary schools in the community or be given freedom to remain out on parole during the period when he is acquiring training and education to prepare him to return to society.
We have asked for more psychologists and psychiatrists. There are not enough psychologists and psychiatrists serving penal institutions. There should be greater availability for persons convicted to obtain this kind of technical psychological psychiatry, to make certain they receive the emotional and mental treatment necessary for their rehabilitation.
I hope the minister realizes that crime is not only the fault of the prisoner but the fault of society as well. Everyone is born as clean as a white piece of paper. It is society that creates the environment which leads to crime. I respect the minister's enlightened views in this field, but in light of the discovery yesterday that employees of Statistics Canada are to be fingerprinted and photographed for security reasons I wonder whether his views will be translated into action.
This is a complex problem. On the one hand we find that the minister is imposing restrictions on Canadians, and on the other hand that he is stressing the rehabilitation of the individual rather than the protection of society. It is not clear to me which priority is uppermost in the minister's mind. It is also not clear to me why there should even be a conflict between the two.
The Solicitor General (Mr. Goyer) has pointed out that at least 80 per cent of the inmates of penal institutions can be rehabilitated. But the important statistic is that which shows that 80 per cent of those people who have been incarcerated in prisons are returned to those same institutions for committing other crimes.
I put this on the highest level, Mr. Speaker, because we are dealing with a matter which is above politics. We need reforms. All of this appears to be contained in the minister's statement. But is it a matter of words or a matter of action? Can the 7,000 or 8,000 prisoners in Canada turn over tonight in their little cots in the loneliness of their cells and say: Something is going to be done for us; things will be better for us in the future. We must be prepared to spend money on reform. It is all right to talk, but we must be prepared to spend money if we are actually to get reform.
Prisons create for the individual an atmosphere of fear, of violence, in which the problems created by lack of
October 7, 1971

education, lack of help for physical and mental illness, and the prevalence of drugs, homosexuality and so on, combine to unsettle the most stable individual. Prisons create the starkest possible segregation from the community. Months or years are spent in a prison environment, followed by sudden release and full personal responsibility. We could not devise a more traumatic social experience.
For those who make up our crime problem, penitence has little meaning. By and large their lives are so empty, they are so full of frustration and despair, they are so sick in mind and body, and their entire life experience, providing them grist for thought, is so totally lacking in charity that contemplation is more likely to cause anger at society's sins rather than remorse for what they themselves have done.
At the beginning of these remarks, Mr. Speaker, I said that I had visited many penitentiaries, both as a Member of Parliament and as a counsel. I have seen the terror, the emotion on the faces of young people incarcerated as late as 1968 after having been sentenced to five years for trafficking in, being in possession of or using non-medical drugs such as marijuana.
We can only rehabilitate the convicted if the law is reformed to bring it in line with the 1971 concept of what is expected in a highly complex, technological age. Political and economic reforms must come now. Above all, those who have been given the privilege to govern must respect and obey the law themselves. The flouting of the law by the government will do more to encourage crime in society than any other factor.
I would like to read a newspaper clipping I received this morning which was sent to me by somebody in my home town. I do not know who sent it to me, but it reads:
The University of Calgary called yesterday for 400 volunteers to take part in its research project on the non-medical use of marijuana. The two-year project, financed by a $100,000 grant from the federal government, will be an attempt to determine the physical and mental effects of marijuana smoking under controlled test conditions.
The point I am making here is that young men attending our universities and colleges are charged under the Narcotics Act for doing the very thing that the government will now be paying other young people to do. There cannot be one law for one section of the population and another law for another section. That is what I mean by flouting the law. You must have respect for law and order if you are going to try to prevent crime.
The social and economic changes about which I am talking include the development of a creative society in which all young persons will have an opportunity to succeed. Last year thousands of young people in universities were turned down and failed simply because of a matter of a decimal point in their marks. Thousands were denied the right to study medicine; thousands were denied the right to study accounting; thousands were denied the right to study law, pharmacy or other professions, and thousands of others were denied the right to be trained in some skill simply because we do not have enough institutions for all our young people. These young people are being denied by a system of human computerization. Somebody makes a differentiation of .06 in their academic marks and that is sufficient to set them apart from
Minister's Statement on Penitentiaries
somebody else. The time to start reforming our institutions is now in order to give all our young people a chance and remove their frustrations.
Having said that, Mr. Speaker, I wish to read one short excerpt from a book which I think everybody should read, "Crime in America", written by Ramsey Clark, the former Attorney General of the United States. In it he writes:
If rehabilitation is the goal, only the indeterminate sentence will be used.
In other words, what he is saying is that under a modern, streamlined criminal code a judge could make more use of indeterminate sentences, because what judge knows how a man or woman will react six months, one year, or five years after their appearance in court? Indeterminate sentences would be one way by which young people would have a chance to become rehabilitated and attend educational institutions. That would be a starting point in reform.
I have been speaking for just ten minutes, Mr. Speaker, while the minister spoke for 30 minutes. I want to repeat that this is the most important matter raised this session in reference to human dignity and the quality of life of the individual. The minister is a young man and I congratulate him on many of the views he holds. I hope he will translate his words into action in order to relieve the terrible frustrations of the convicted and to change our prisons from factories of crime to factories of rehabilitation and prevention of crime.


Mr. lohn Gilbert (Broadview):: Mr. Speaker, I would like to preface my remarks by thanking the minister for sending us a copy of his statement in sufficient time so that we could make an adequate reply.
The minister has brought to his new portfolio a great deal of vigour and concern with regard to the problems of the penitentiaries. But, Mr. Speaker, I hesitate to congratulate him because his government is the one responsible for not implementing reforms many years ago in order to develop an adequate penology system. When one looks at our prisons today I think we are fortunate that we have only experienced the incidents at Kingston and Dorchester within recent times.
Another reason why I hesitate to congratulate the minister is that for most of his reforms no definite period of time for implementation is given. For example, in his statement the minister said, "We anticipate the creation of a greater number of release centres", "we are considering the adoption of a leave system", "we intend to give increasing application to the living unit concept", "we are proposing a cafeteria system". Such words as "anticipate", "considering", "intend to give increasing application" and "proposing" are not sufficient. When the reforms are definitely implemented we in the New Democratic Party will be the first to commend the minister. At this time, however, we are not prepared to congratulate him on a mere statement on motions in the House which only sets forth indefinite future actions.
I had the privilege of travelling with the Standing Committee on Justice and Legal Affairs when it crossed the country visiting different institutions such as St. Vincent de Paul, Prince Albert, New Westminster, Archambault,

October 7, 1971
Minister's Statement on Penitentiaries
the new Millhaven and others. Whether the institutions are new or old certain things are common to all. First, there is too much stone and steel in the construction, giving one a feeling of separation and rejection. Many of the institutions are too large, indicating a depersonalization of the inmates. Many of them are located too far from major cities, thereby denying inmates proper treatment facilities and personnel and making their reorientation within the community very difficult upon release. We found that there is an excessive use of prisons in Canada. It is only now that the minister has said that the parole system is of great value. May I suggest to the Solicitor General that we should start at the probation service stage. If this were improved within the court system, perhaps the large populations at present in the prisons would not be necessary.
Another thing we found was a too heavy concentration on maximum security prisons across the country. I am delighted that the minister told us that he has halted construction of the Mission Correction Centre. In Canada maximum security prisons are populated to the extent of 35 per cent whereas in Great Britain the figure is 15 per cent. Something must, therefore, be basically wrong with regard to classifying the inmates in institutions.
We also found that the classification centres are not adequate to diagnose the problems of inmates and set forth a proper treatment and evaluation program. The industrial training courses are also inadequate and do not equip inmates to accept their responsibilities within the community upon release. Finally, we were struck by the absence of a team approach by the staff and the inmates of the institutions.
The Ouimet report set forth two principles with regard to prisoners. The first requirement was custody of the inmate for the period of his sentence subject to remission and/or parole. The second requirement was to prepare the individual for permanent return to the community so he could live as a law-abiding and contributing citizen. Our prisons in the past have not achieved these goals nor are they doing so at present. This is one of the reasons for the high rate of recidivism. In the past, control was through containment rather than through involvement. If these reforms are fully implemented we may find a change in the emphasis with regard to prisoners.
May I add, Mr. Speaker, that some changes are still necessary. For example, the design, size and function of prisons must be blended toward preparing individuals for their return to society as law-abiding citizens. Prison programs and services must also provide adequate training and treatment both within and without the institutions. The best example of this need is the absence of treatment for many of the drug addicts within society today. Mat-squi is the only centre where treatment is available. I am sure the Solicitor General looks forward to the day when treatment centres for addicts will be closely attached to the prisons.
I thought the minister showed a particular interest in inmate committees. I am sure one of the reasons for so much trouble in prisons in the past was the absence of any participation by inmates with regard to conditions of discipline and treatment. If the minister is really serious about inmate committees I would recommend to him that some of those inmate committees appear before the

Standing Committee on Justice and Legal Affairs when the estimates come before it in order to set forth their ideas on what a prison should contain with regard to design, size and programs regarding their treatment.
In fairness, Mr. Speaker, I think the reforms are a step in the right direction and we shall await their implementation and evaluation. Finally, I suggest to the minister that, if he does not want to see prisons in the future populated with young people, he withdraw the Young Offenders Act and replace it with modern penology concepts. This would be the greatest contribution the minister could make to this Parliament.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, more than ever we can truthfully say that we live in a mad world and are governed by the most outstanding of the mad.
Seeking to correct the effects of causes one is unwilling to change is, in my opinion, just standing still, which is absolutely no way to solve a problem which does call for a solution, but an intelligent one.
Rehabilitation of offenders, according to the Solicitor General's statement, has become more important than the protection of society. The Solicitor General does not, for instance, mention that there are causes for our having offenders and criminals, stemming from within society itself. Therefore, so long as we tolerate those causes, poverty in the midst of affluence, and insecurity, we evidently will have criminals to cope with. To try to rehabiliate them in hostile society is the solution the Solicitor General has to offer. Indeed, according to his statements, unemployed and welfare recipients would be better protected in jail than if they were free.
Please note that I am for the rehabilitation of prisoners, but in a society that will allow it, which is impossible in the present system. We want them to be rehabilitated. We now promise them university degrees or CEGEP diplomas. Therefore, our young people of 18, 19 or 20 years of age, who are honest and anxious to complete their studies and graduate will have no other choice but to commit an offence, be sentenced to prison where they will be sure to get a university degree or CEGEP diploma.
Mr. Speaker,-we agree on emphasizing rehabilitation but, as I say, as long as we tolerate insecurity among prisoners-and the government very well knows it-they will be incited to return to prison and that, on several occasions.
Mr. Speaker, it does not seem to me a step in the right direction. That might please the prisoner, but once he is released, if he is rehabilitated he will be returned to society where he has no place. What purpose will be served by prison or penitentiary reforms? Let us begin by reforming what must be reformed in Canada: the economic system, which allows the eventual prisoners to remain in society and take part in its activities. But no, the government prefers to come to grips with problems caused by the present situation, and not with the causes themselves.
Mr. Speaker, the minister told us that it costs $10,400 yearly to keep an individual behind bars. In my opinion it would cost less to provide for his needs or give him a job
October 7, 1971

when he is free and before he commits a crime. Furthermore this would encourage young people to abstain from committing criminal acts which send them behind bars.
Mr. Speaker, it seems to us that the psychiatrists, the psychologists and the sociologists mentioned by the minister should be used not only to study the behaviour of prisoners but also the behaviour of the government.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is for the Prime Minister. It relates to the serious decline in the development of our manufacturing industry, particularly in the technological areas, which the Science Council says dates from mid-1968 and which just happens to be the time my right hon. friend assumed control of the affairs of this country. Does the Prime Minister now intend to have the government prepare and develop an over-all industrial strategy as recommended by the Science Council?


Hon. Alastair Gillespie (Minister of State for Science and Technology):: Mr. Speaker, perhaps I might reply to the Leader of the Opposition and observe that the Science Council is an entirely independent organization, independent in the sense that it is a Crown corporation. It decides what studies it will undertake and what studies it will publish. As the minister responsible for the Science Council, I shall be most interested in examining the proposals set forth in the report alluded to by the Leader of the Opposition.


Robert Lorne Stanfield: Mr. Speaker, the minister's answer goes directly to the main consideration to which the Science Council called attention. In light of the minister's answer I would again like to direct a question to the Prime Minister. In view of the urgency of the situation which prompted the Science Council to develop and prepare an interim report and in view of the emphasis placed by the Science Council upon the lack of co-ordination within government services, will the Prime Minister undertake to follow through on one of the major recommendations in this interim report of the Science Council and name without delay a central point in government that will have a mandate to effect such co-ordination?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the government has been following a concerted industrial development policy to strengthen our secondary and processing industries. A good deal of attention has been directed to the high technology sectors. Continuing attention is given within the department of Industry, Trade and Commerce and other relevant departments to the development of programs and policies to strengthen Canadian industry and to achieve more effective co-operation between indus-
Inquiries of the Ministry
try and government. The interim report of the council constitutes a most useful input into this continuing process.


Robert Lorne Stanfield: I am sure, Mr. Speaker, we are all interested to know how amused the Prime Minister is by the sad state of industry in Canada. I have one final supplementary question.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Just be patient. In view of the council's observation that the relationship between industry and government is by no means good enough and that this goes to the very root of the problem, I ask the Prime Minister whether he intends to do something to improve this situation rather than simply deliver lectures about the contributions of the Phoenicians?



FISCAL POLICY TO STIMULATE MANUFACTURING RATHER THAN EXTRACTING SECTOR-NEW POLICY FOR REGIONAL DEVELOPMENT INCENTIVE GRANTS

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: May I direct a supplementary question to the Minister of Finance. In view of the fact the Science Council points out that the growth of manufacturing has been marking time since 1968 and there are 120,000 fewer jobs than expected, is the minister planning to announce any fiscal policy that will help stimulate the manufacturing sector rather than the extraction sector of the economy which has been paying out only a small percentage of its profits in taxes?


Hon. E. I. Benson (Minister of Finance):: Without accepting the premise of the question or the conclusion, Mr. Speaker, I simply say that our present fiscal policies, including those which are presently before the House, if we ever get them passed, will be of great benefit to the manufacturing industry in Canada and, indeed, include tax decreases for the general corporations which pay corporate income tax. I hope we can get on with them very quickly.


Thomas Clement (Tommy) Douglas: May I direct a further supplementary question to the Prime Minister. In view of the fact that the council found that the work of the Department of Regional Economic Expansion was lacking in co-ordination and that many of its grants to foreign companies were squeezing out Canadian enterprises, I ask the Prime Minister if the government intends to evaluate this finding of the Science Council and to announce any new policy under which the Department of Regional Economic Expansion will operate?


Pierre Elliott Trudeau: Mr. Speaker, I have not read the report which I understand was only made public yesterday. I am afraid I cannot comment on the report itself. If the hon. member is reflecting its considered judgment on that department, I would say that it sounds a bit wild to me, but I will certainly consider what they have to say and see if there is perhaps not a context which makes it a little less brutal than the member has put it in his question.
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October 7, 1971
Inquiries of the Ministry



TAX INCENTIVE PLAN TO ENCOURAGE GREATER PRODUCTIVITY

George Harris Hees: Mr. Speaker, I have a supplementary question for the Minister of Finance. As the new chairman of the Economic Council of Canada stated recently that "Canadian productivity must be improved if Canadian products are to remain competitive", does the government intend to introduce a tax incentive plan in the near future to encourage greater productivity in Canadian industry, or does it have some other plan in mind for bringing about this very necessary and desirable objective?


Edgar John Benson: Mr. Speaker, I think the Canadian environment generally encourages productivity in Canadian industry. One of the problems we have presently is that the gross national product is growing very rapidly but productivity is also growing, so not as much employment is being created as would normally occur through this size increase in the gross national product.


George Harris Hees: Does the minister intend to make a speech in the very near future to Canadian industry telling Canadian industry that it never had it so good and that the government intends to do absolutely nothing to improve productivity in this country?


Mr. Speaker:: Order, please.


Edgar John Benson: You keep making the same speech each day.


George Harris Hees: I want an answer to a very important question.



CHANGES IN REGIONAL DEVELOPMENT INCENTIVE POLICIES TO ACHIEVE GREATER PLANNING AND CO-ORDINATION

Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is directed to the Minister of Regional Economic Expansion. In light of the Science Council of Canada's recent call for a new industrial strategy for Canada to promote the growth of manufacturing, and a series of resolutions passed by the Chamber of Commerce at its meeting in Quebec two weeks ago also calling for a new industrial strategy, can the minister tell the House whether his department will now change its incentive policies in such a way as to make possible a greater degree of planning and co-ordination?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, I started reading the report. It is highly interesting; some of the views expressed there certainly deserve very close consideration. However, there are also some extremely serious omissions in this report, and once I have had time to study it in depth, I may be able to discuss it.


James Aloysius McGrath: May I ask the minister whether, in light of the specific remarks directed at his department in the

report, and in light of the statements made by other groups in the country, an examination is now taking place of the whole concept of regional industrial incentives under the minister's jurisdiction with a view to greater planning and co-ordination being exercised?


Jean Marchand: Mr. Speaker, it is not as a result of mere criticism that we hear or read somewhere that we must change our policy. It must be determined whether criticism is warranted; we consider it very seriously. That program did not come about out of thin air, but it has been brought forward by Parliament. It may have some deficiencies; we are prepared to correct them, but not merely on account of pressures or press statements.



SUGGESTED RECONSIDERATION OF INCENTIVE GRANTS TO FOREIGN-OWNED COMPANIES

Mr. John Burton (Regina East):: I should like to address a supplementary question to the Minister of Regional Economic Expansion. In light of the findings of the Science Council of Canada and similar criticisms which have been made concerning grants to foreign-owned companies, is the government now reconsidering its policy with respect to making regional industrial incentive grants to such companies?


Jean Marchand: Mr. Speaker, I have said several times in the House that the mandate of the department was to fight against regional disparity and not to define the policy of the Canadian government about foreign investments. I look after investment in underdeveloped areas and the other problem will undoubtedly be dealt with in a different manner in the House of Commons.


Mr. Speaker:: The Chair will recognize the hon. member for Edmonton Centre for a last supplementary on this subject and then go to the next subject.



CONSTRUCTION INDUSTRY-AVOIDANCE OF USE AS ECONOMIC REGULATOR

Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I wish to direct my supplementary question to the Prime Minister or to the new Minister of State for Science and Technology or to the Minister of State for Urban Affairs. Does the government intend to use a little imagination when studying the call by the Science Council of Canada that the government cease using the construction industry as an economic regulator and begin helping to revitalize the construction sector?


Hon. Robert K. Andras (Minister of State for Urban Affairs):: I think the support given to the residential construction industry over the last two or three years is an indication that we are taking that kind of suggestion very seriously. I think that particular comment was a bit passe.
October 7, 1971


Steve Eugene Paproski: Is the government preparing a new construction policy which will separate the housing sector from the government's economic stabilization strategy and, if so, when will a statement be made?


Robert Knight Andras: The indication this year is that we can expect in excess of 220,000 housing starts.


Mr. Speaker:: Order, please.



STABILIZATION BILL-FURTHER CONSULTATIONS WITH FARM ORGANIZATIONS ON INCLUSION OF COST OF PRODUCTION FORMULA

Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, may I ask the minister in charge of the Wheat Board this question. In view of the statement by the president of the Saskatchewan Wheat Pool on October 4 that the pool will accept the stabilization plan if an adequate inflation formula is built in right now, does the minister intend to hold further consultations with the prairie farm organizations to see whether some mutually acceptable formula can be worked out?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: In all the discussions with the Saskatchewan Wheat Pool and a number of other farm organizations it was impossible to see any suggestions they were making which were merely for improvements in the plan itself, as distinct from the legislation, without the addition of large amounts of money. In other words, even their suggestion with regard to an inflation factor was not designed to improve the plan within a given financial range but was designed to increase that range. I am having further discussions with the organizations to find out whether they have any further technical suggestions or improvements to the plan to put forward, but I have no reason to believe this will be the case.


Alfred Pullen Gleave: Have any studies been made by the minister or by the department in an effort to ascertain what would be the cost of including a cost of production formula in the plan or arrangements for taking inflation into account?


Otto Emil Lang: A whole range of matters which were suggested at different times in the course of discussions concerning the plan were examined, as I have indicated to the House many times. Most of the cost of production formulas were either unworkable or difficult to justify in principle, in the sense that they would give a guaranteed annual income to one group in the country without such protection being available to others. An examination was made in some detail into a variety of these measures.


Mr. S. J. Korchinski (Mackenzie):: Would the minister be prepared to accept any plan which would allow for treasury payments at least equivalent to those made under the program which is to be dropped?


Otto Emil Lang: The whole package of proposals with which we came forward in October, and in respect of which
Inquiries of the Ministry
certain implementation has taken place, enlarges the commitment of the treasury to the farmers in the grain area.



SPLITTING OF STABILIZATION BILL TO PERMIT ACREAGE PAYMENTS PENDING FURTHER CONSULTATIONS

Mr. Lome Nystrom (Yorkton-Melville):: Is the government now considering splitting Bill C-244 in order that the $100 million acreage payment can go out to farmers and further consultations can then take place concerning the stabilization bill itself?


Otto Emil Lang: There was at no time any suggestion about splitting the bill. It was at all times presented as a substitution of one set of measures for another with the indicated financial exigencies that this would involve. The recommendation makes clear exactly the extent to which the government's contribution to the grain farming area would be increased by the present measure.



THE CANADIAN ECONOMY


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, I wish to direct a question to the Prime Minister. For two weeks the Prime Minister has stated that the government does not yet have any reason to believe that the United States has decided to alter fundamentally its economic relationship with Canada. Yesterday the Secretary of State for External Affairs said the government was now undertaking a fundamental review of Canada's economic relations with the United States. Is this review under way because the government now believes the United States position has been fundamentally altered and, if so, has the government received any new information on the basis of which it has reached a conclusion concerning United States intentions with regard to the 10 per cent surcharge?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Since the question relates to a statement I made, perhaps I might be allowed to reply. I made it clear in the statement I made on television that we are undertaking a fundamental reassessment of our economic relations with the United States because it appears to us that the United States may be in the process of changing its fundamental policies. One of the difficulties is, of course, to know for certain at the present time whether this change has in fact taken place. We hope it has not, but I think the hon. member will agree we should be prepared.


John Howard Lundrigan: May I rephrase my question to the Prime Minister a little differently? Is this decision to undertake this fundamental review based on any new information received since the Prime Minister stated more than a week ago on "Encounter" that any review would have to follow clarification of United States intentions?
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October 7, 1971
Inquiries of the Ministry


Mitchell William Sharp: I think it is clear from the answer I gave that the government is undertaking this fundamental review in anticipation of a possible change in United States policy. We are not yet certain what that policy will be. Perhaps the hon. member knows and will help us.


John Howard Lundrigan: I have one final supplementary, Mr. Speaker. I should like to ask the Secretary of State for External Affairs whether the government is really reviewing our economic relations with the United States at the moment or whether, in light of recent travels to Washington, it is making a fundamental review of our diplomatic practices and approaches in relation to the United States and other countries?


Mitchell William Sharp: No, Mr. Speaker. I think our diplomatic approaches are proceeding normally. However, I am sure the hon. member would agree that any government in charge of affairs in Canada today would be thinking about the possible changes that might occur in the policies of the United States which would affect us, and I believe we should be preparing for that contingency.


Robert Lorne Stanfield: supplementary question, Mr. Speaker. May I ask the Secretary of State for External Affairs whether relations between Ottawa and Washington have deteriorated to the point that it is now no longer possible for this government to find out what the economic plans of the United States administration are in relation to Canada?


Mitchell William Sharp: Mr. Speaker, the present policies of the United States toward the rest of the world, including Canada, are only too plain. What we do not know is how temporary they are. Perhaps my learned friend would like to-


Mr. Speaker:: Order, please.



UNITED STATES IMPORT SURTAX-SUGGESTION THAT PRIME MINISTER WRITE OR TELEPHONE PRESIDENT NIXON

George Harris Hees: Mr. Speaker, I have a question that is supplementary to a previous question and which I will address to the Prime Minister. Is it not obvious now from the answers given by the Secretary of State for External Affairs to a previous question that either a telephone call or a letter from the Prime Minister to President Nixon, asking what the plans of the United States are regarding the surtax and what Canada must do if the surtax is to be relaxed, is long overdue and that such a call or letter should be undertaken now?


Mr. Speaker:: Order, please.



EFFECT OF UNITED STATES ECONOMIC MEASURES- PURPOSE OF POSSIBLE WINTER WORKS PROGRAM-UNEMPLOYMENT PROJECTIONS

['Yes, Mr. Speaker. Like the hon. member I have been following these developments. I am not quite certain it would be useful to follow up the representations that we have made, but I can assure the hon. member that the matter is under consideration.']
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a question related to the questions posed to the

Secretary of State for External Affairs regarding the effect of United States economic policies on our employment situation this winter. While the government seems prepared to introduce a winter works program, can the Prime Minister inform the House whether such direct job programs will be part of a new package of economic policies to achieve full employment, or will it simply be intended to keep unemployment stable between 6 and 7 per cent for the next eight to 12 months?


Pierre Elliott Trudeau: Mr. Speaker, any package that we might want to announce would be intended to achieve the best possible performance from the economy.


Lincoln MacCauley Alexander: Is the Prime Minister going to spell out the level of unemployment with which the provinces will have to deal this winter, and which will not be reduced by further government employment programs, whether financed by the federal government alone or in conjunction with the provincial governments, and, if so, when?


Pierre Elliott Trudeau: Mr. Speaker, I have always said that we would let the House know as soon as we are prepared to make a statement on this subject.


Lincoln MacCauley Alexander: A further supplementary, Mr. Speaker.


Mr. Speaker:: Order, please. I would suggest to hon. members that if we are going to have three or four supple-mentaries on every subject we will be running short of time and be unable to cover many topics. I will allow a final supplementary to the hon. member for Hamilton West and then I will recognize the hon. member for Frazer Valley West.


Lincoln MacCauley Alexander: You are extremely charitable this afternoon, Sir. I have one final supplementary question. I know that the government is involved with plans dealing with the unemployment situation this winter and that the government must have some projection of the rate of unemployment with which we will be faced and the targets the government is trying to reach in order to alleviate that rate. Is the Prime Minister in a position to advise the House what these projections and targets are at this date?


Pierre Elliott Trudeau: Mr. Speaker, stated in general terms, I said it was the best performance possible of the economy, but I do not see any possibility of giving specific statistics with any sort of certainty and precision.



Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. In view of the fact that the minister met with his United States counterpart, Secretary Rogers, in New York last week, and since their discussions undoubtedly included the forthcoming nuclear test on Amchitka and Canada's opposition to it, has the minister anything to report directly to the House on this very important subject?
October 7, 1971


Mitchell William Sharp: Mr. Speaker, when I met Secretary Rogers I did, as the hon. member has said, raise this question and express the very serious concern not only of the Canadian government but of the Canadian Parliament and people, particularly on the west coast. He replied that the President was very well aware of these views, that indeed he had recently been to Alaska where he had encountered the views of those in Alaska who were opposed to the test. So I can assure the House that Canada's views and the views of this House are very well known to the United States administration.


Mark Willson Rose: Since thousands of students in Vancouver peacefully demonstrated yesterday against the horror of nuclear warfare, does the government now plan to take any further initiatives in opposition to such tests in the Aleutians or anywhere else in the world where they occur?


Mitchell William Sharp: Mr. Speaker, I think it would have been helpful if we could have had the unanimous views of the House.


Some hon. Members:: Hear, hear!


Mitchell William Sharp: However, I regret that an attempt was made to introduce some extraneous matters and our effort failed.


Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I have a question for the Secretary of State for External Affairs somewhat related to the one asked by my colleague from Fraser Valley West. Having in mind the statement made by the United States Secretary of the Interior which would indicate the almost certainty of Alaskan oil being shipped via the north Pacific and along the British Columbia coast, with all the ecological perils that that entails, is the Secretary of State for External Affairs aware of this developing situation and is he considering any further and stronger steps in opposition to it?


Mitchell William Sharp: Yes, Mr. Speaker. Like the hon. member I have been following these developments. I am not quite certain it would be useful to follow up the representations that we have made, but I can assure the hon. member that the matter is under consideration.



INDUSTRY


Mr. John Roberts (York-Simcoe):: Mr. Speaker, I have a question for the Acting Minister of Energy, Mines and Resources. Would the minister tell the House whether the
Inquiries of the Ministry
government is considering any intervention to ensure that Supertest is not taken over by British Petroleum?


Otto Emil Lang: Mr. Speaker, we were made aware of these negotiations from an early date and are reviewing the matter, but we have nothing more to say on the question at this time.



INQUIRY AS TO FINAL REPORT OF LE DAIN COMMISSION

Philip Bernard Rynard: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare. In view of the fact that one year and four months have gone by since the Le Dain commission's interim report was published, and the Minister of National Health and Welfare at that time pledged that Canada would not sign the new United Nations convention on psychotropic substances until a debate had been held on the Le Dain report, would the minister inform the House when the final report of the Le Dain commission will be published?


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, the latest word I had was that the Chairman of the commission has indicated that we might expect the final report some time in December.



ADMINISTRATION OF JUSTICE


Eldon Mattison Woolliams: Mr. Speaker, I have a question for the Minister of National Health and Welfare. Perhaps I should direct it to the Attorney General of Canada since it is in his field. Is the minister anticipating placing a moratorium on the incarceration of people convicted of possession of marijuana or use of marijuana, particularly when the government is putting up $100,000 to be spent by a university in conducting experiments to find out the effects of the drug on human beings?


John Carr Munro: Mr. Speaker, I think that answer would more appropriately come from the Minister of Justice, but I would point out to the hon. member, as he is probably aware, that the number of incarcerations resulting from charges brought against persons for possession of marijuana is very small indeed.


Eldon Mattison Woolliams: Mr. Speaker, the Minister of National Health and Welfare said the number of incarcerations is small. Let me put this to him. Has he taken into consideration the fact that by this experimentation he is really soliciting Canadians to break the law as it now stands?

October 7, 1971
Inquiries of the Ministry


Mr. Speaker:: Order, please. I suggest that the hon. member's question is in the form of an argument.



HEROIN-PROGRAMS TO DEAL WITH ADDICTS

Philip Bernard Rynard: Mr. Speaker, I should like to ask the minister whether he is aware of the fact that between 20,000 and 30,000 Canadians are now using heroin and that many experts feel that Canada is on the verge of a real crisis? Is the government now going to take any new initiatives in co-operation with the provinces to deal with this most dangerous practice even before the Le Dain report on the non-medical use of drugs is presented?


John Carr Munro: Yes, Mr. Speaker. We are in touch with the provinces on an ongoing basis. We are advising them of the cost-sharing arrangements under the medicare and hospitalization plans and have indicated that many addicts qualify under the Canada Assistance Plan. To the degree that the provinces wish to take advantage of these cost-sharing arrangements, more adequate facilities can be provided not only to assist heroin addicts but in the form of preventative programs to more adequately take care of the problem. We also expect to have this matter on the agenda of the next health ministers conference.



PUBLIC SERVICE


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, in view of the large number of employees in the Department of Public Works who are being transferred to the territorial governments or municipalities in the Northwest Territories and the Yukon, the responsibility for which rests upon this government, I should like to ask the minister whether discussions are being held with those agencies and with the employees concerned to assure that their rights in connection with pensions and working conditions will be protected when the transfer is made?


Hon. Arthur Laing (Minister of Public Works):: Mr. Speaker, the information I have is that the employees themselves were consulted from the beginning, and I would be surprised if the situation was otherwise. I will make inquiries to see if that is the case.



FISHERIES


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, in view of the fact the government of Iceland has announced it will issue new regulations before September 1, 1972, giving Iceland exclusive fisheries jurisdiction over its con-

tinental shelf, which is approximately 50 to 70 miles from its coast, will the Secretary of State for External Affairs indicate whether it is the government's intention to introduce similar legislation claiming fisheries jurisdiction over the Canadian continental shelf in order to establish proper conservation and utilization methods for the preservation of our fisheries resources?


Mitchell William Sharp: Mr. Speaker, I doubt that we will introduce such legislation but we will certainly be pursuing a proposal to a similar effect at the projected law of the sea conference. I think it would be desirable to get international agreement.



LAW OF THE SEA CONFERENCE AGENDA-MANAGEMENT OF FISHING RESOURCES

John Howard Lundrigan: Mr. Speaker, would the Secretary of State for External Affairs indicate whether an agenda has been agreed to for the law of the sea conference which is to take place in 1973, and what priority Canada has given to the management of fisheries resources on that agenda?


Mitchell William Sharp: Mr. Speaker, discussions have been going on at the preparatory commission, but we have not yet obtained full agreement. As to the second part of the question, I will have to take it as notice because there are many important matters we will be pressing at the law of the sea conference.



ROYAL CANADIAN MOUNTED POLICE


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I direct my question to the Solicitor General who was last week going to look at the script of the CBC "Midweek" program dealing with a former young informer named Eadie. Does he intend to repudiate certain statements made by the father and son, and if not before the Standing Committee on Justice and Legal Affairs will he do so at ten o'clock as my guest?


Jean-Pierre Goyer: Mr. Speaker, I thank the hon. member for his invitation, but I read the script of September 30. I think that it adds nothing new to the allegations made on September 8, which I specifically refuted before the House on September 17. [English]


Robert Jardine McCleave: Ten o'clock, Mr. Speaker.



STATISTICS CANADA


Mr. Kenneth Robinson (Toronto-Lakeshore):: Mr. Speaker, I have a question for the Minister of Industry, Trade
October 7, 1971

and Commerce. In his absence I will direct it to his Parliamentary Secretary. Today the Globe and Mail indicates that employees of Statistics Canada are to be fingerprinted by the RCMP.


Some hon. Members:: Shame!


William Kenneth Robinson: Will the parliamentary secretary advise whether that is correct and, if so, what is the purpose for which these fingerprints are being taken?


Mr. Speaker:: Order, please. As the hon. member knows, he cannot ask a minister or a parliamentary secretary to deny or confirm a press report, but perhaps we might assume that the question was asked directly.


Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, Statistics Canada has a very serious responsibility in respect to confidentiality of information in its care and in line with a review of security provisions it is going to issue new identity cards to its employees. The new cards will include the name and a picture of the employee but will not include the fingerprints of the employee. The RCMP is not involved in any way.



AGRICULTURE


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, I should like to address my question to the Minister of Agriculture. It relates to the continuing deterioration of commercial corn prices in Canada. Is it the minister's intention to make an early statement on motions about government policy in this respect, and will he include in this statement an indication of whether the government has made an assessment of the total production of corn in eastern Canada and the availability of storage, or will our harvest operation find our eastern elevators filled with western barley and United States corn?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I have answered similar questions earlier to the effect that I have had a number of conversations with representatives of the corn industry, both here in Ottawa and in the corn growing areas. We are looking at this matter on an urgent basis and as soon as there is an announcement to be made I will make it.



CONSUMER AFFAIRS


Mr. A. D. Hales (Wellington):: Mr. Speaker, in view of the far-reaching effect the packaging and labelling bill will have on business and industry generally, will the Minister of Consumer and Corporate Affairs advise the House why this bill has not been proclaimed?
Inquiries of the Ministry


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, it has not been proclaimed because we are drafting the regulations. In the process of doing that we are consulting with industries to avoid any undue disruption of practices. We also want the regulations to be of maximum assistance to the consumer because the packaging and labelling legislation represents a major advance for consumers in regard to packaging and labelling in Canada.



VETERANS AFFAIRS


Mr. Thomas M. Bell (Saint ]ohn-Lancaster):: Mr. Speaker, I have a question for the Minister of Veterans Affairs related to the renewed discussions on the possible transfer of the Lancaster DVA hospital from the federal government to the province of New Brunswick. As far as the minister is responsible, will he give a personal guarantee that the jobs of federal employees will be protected in respect of wages, salaries and other conditions?


Hon. lean-Eudes Dube (Minister of Veterans Affairs):: Yes, Mr. Speaker. I wish to assure the hon. member that as far as I am concerned we will make every effort to protect all our employees and make sure they work under the same conditions in the future as they have in the past.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the Minister of Veterans Affairs whether the employees concerned are being consulted in respect of these matters?


Jean-Eudes Dubé: Yes, Mr. Speaker. Officials of my department have been in consultation with officials of the unions of these employees. At the present time we are discussing the matter with officials of the province of New Brunswick, but before anything is finalized all parties concerned will have been duly consulted.



REGIONAL ECONOMIC EXPANSION


David Réal Caouette: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion.
Following his recent visit to St. Romuald, has the minister received at least some token of gratitude from the Golden Eagle Company, because the government granted a $5,000,000 subsidy to that company as well as a tax exemption of the same order? Has the minister had any news from that firm since the day he was refused the right to speak?


Jean Marchand: Mr. Speaker, I have read in the newspapers

October 7, 1971
Inquiries of the Ministry
that the vice-president of the company apologized for the incident in St. Romuald. Again I want to repeat, Mr. Speaker, that it is not because I did not speak, but because the Canadian government's contribution was not recognized.


EXTERNAL AFFAIRS
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, in view of changes that have recently taken place in our relations with Taiwan and in light of the expulsion of a number of Canadian students from that country, is the Canadian government taking any retaliatory action against students in this country from Taiwan or Taipei?


Mitchell William Sharp: No, Mr. Speaker.


William Arnold Peters: In view of this being a political retaliation rather than the result of anything the students may have done, is it not in the interest of the Canadian government to retaliate?


Mr. Speaker:: Order, please.



UNITED NATIONS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to ask the Secretary of State for External Affairs if it has yet been decided how the Canadian delegation will vote on the Albanian resolution in respect of the seating of China in the United Nations General Assembly? If so, what is the determination in respect of the vote?


Mitchell William Sharp: The Canadian government will vote in favour of the Albanian resolution and will vote against all procedural motions which would prevent the United Nations taking a clear decision on the matter.



URBAN AFFAIRS


Mr. Norman A. Cafik (Ontario):: Mr. Speaker, I have a question for the Minister of State responsible for Urban Affairs. Has the minister given his approval to the rehabilitation project announced in the Montreal Gazette this morning for the city of Montreal?


Robert Knight Andras: Mr. Speaker, I was surprised and disappointed to see this news. I was surprised since I have not had an opportunity to examine the proposal, let alone approve it, and I was disappointed because this type of premature release makes it difficult to continue negotiations in good faith.


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I want to put a supplementary question to the Minister of State for Urban Affairs. In view of the report that the city of Montreal is getting multi-million dollar assistance from Ottawa for urban renewal, can the minister say whether the government plans to extend this program to other cities in Canada?


Robert Knight Andras: Mr. Speaker, I just denied the fact that such authority has been granted the city of Montreal.



REGIONAL ECONOMIC EXPANSION


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, this question is for the Minister of Regional Economic Expansion. Would the minister indicate whether or not the formality of the signing of the DREE agreement between the federal authority and the province of Nova Scotia has as yet taken place? If it has, would the minister be in a position to indicate at what stage some of the supplementary requests in respect of that agreement are?


Jean Marchand: Is it possible, Mr. Speaker, to know to what agreement the hon. gentleman is referring?


Robert Jardine McCleave: Have you that many with Nova Scotia?


Jean Marchand: We have an agreement in respect of highways; we have an agreement in respect of the ARDA program; we have many agreements with the government.


J. Michael Forrestall: About two weeks ago the Premier of Nova Scotia indicated, according to a headline in a daily newspaper, that agreement had been reached with the federal authority under the DREE program. This is a basic agreement covering many areas, particularly those areas in the designated metropolitan growth centres.


Jean Marchand: I suggest that the hon. member re-read the article and tell me exactly what program he is referring to.


Mr. Speaker:: The hon. member for Athabasca.


J. Michael Forrestall: I rise on a question of privilege, Mr. Speaker. On three separate occasions not only I but all Nova Scotians have learned of basic agreements between this authority and the provincial authorities before they have been announced in the House. Either somebody is very badly confused or somebody is lying. I do not accuse
October 7, 1971

the minister of that, but I have very serious doubts about the veracity of the Premier of Nova Scotia.


Mr. Speaker:: That is, of course, hardly a question of privilege, I suggest to the hon. member. The Chair will recognize the hon. member for Vancouver-Kingsway after the hon. member for Athabasca.



INDIAN AFFAIRS


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question was for the Prime Minister, but since he works only part time and has left the House I shall direct it to the Acting Prime Minister. Was the Minister of Indian Affairs and Northern Development stating a new government policy of confrontation rather than consultation when he said on television last night that the Indian people in northeastern Alberta are trying to blackmail the government in order to achieve their social aims?


Mitchell William Sharp: Mr. Speaker, the Prime Minister is absent from the House for the purpose of attending a meeting with the Prime Minister of Malaysia. At the moment, I will only say I will bring this question to the attention of the Prime Minister, but I doubt very much whether what the hon. gentleman has said reflects the views of the minister.


Paul Yewchuk: Mr. Speaker, I have a supplementary for the Acting Prime Minister. In view of the fact that the Minister of Indian Affairs and Northern Development has not been able to settle the problem in northeastern Alberta in a satisfactory manner, does the Prime Minister himself contemplate any assistance in this area?



BUSINESS OF THE HOUSE


Mr. Baldwin:: Mr. Speaker, may I ask the government House leader about the business for today, tomorrow and next week so far as it can be foreseen?


Mr. MacEachen:: Mr. Speaker, the business for today will be a return to the tax bill-


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: -to be continued tomorrow. Perhaps I should say a word in respect of Bill C-244. I will be continuing discussions with the opposition parties in connection with Bill C-244. In this connection I should like to advise the House that unless satisfactory arrangements with the opposition parties can be concluded by Tuesday next which would bring about an end next week to the debate on Bill C-244, the government will not proceed further with this bill at this session and will make payment on Tuesday to the Canadian Wheat Board under the Temporary Wheat Reserves Act. I hope to be meeting with
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my opposite numbers later in the day and probably we can discuss the matter further.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: Mr. Speaker, I might ask the minister whether he does not think it would help the situation if he would muzzle some of his colleagues, both of high as well as low degree but rather than do that I will ask him instead if he will consult with his colleague, the minister answering for the Wheat Board, concerning the extent to which the government is prepared to consider the very reasonable proposition I put forward yesterday afternoon in debate which now appears to have some support from this side of the House as well as from the prairie provinces.


Mr. Speaker:: Order, please. I suggest to the hon. member that that question is hardly in order at this time. The question period has expired. I believe the question asked by the hon. member had reference to the order of business of the House and I think we should not pursue the question period at this time.


Stanley Howard Knowles: On a point of order, Mr. Speaker, since this is the one point in the week when there is an announcement about coming House business and in view of the fact that the minister has said he will be meeting those of us who are his opposite numbers with regard to Bill C-244, may I express the hope that when he meets with us he will come with a statement of the changes the government might be prepared to make.


Mr. Speaker:: Order, please. Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, October 1, consideration of the motion of Mr. Gray (for Mr. Benson) that Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, be read the second time and referred to the committee of the whole, and the amendment thereto of Mr. Lambert (Edmonton West)(p. 7763).
Mr. lames Hugh Faulkner (Parliamentary Secretary to the Secretary of State):: Mr. Speaker, I am very glad to be able to participate in this debate, particularly to deal with the amendment moved by the hon. member for Edmonton West (Mr. Lambert). I should like to begin by dealing with the wording of the amendment and making some comments on it. The amendment expresses deep concern and cites three particular problems: unacceptable levels of inflation, persisting unemployment, and a stagnant industry. All of us are concerned about the problem of unemployment, and I plan later in my remarks to deal specifically with that problem. But the motion deals with what it describes as unacceptable levels of inflation.

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It is interesting to take a look at the record with respect to inflation. If we look at last year and at the performance this year up to April 1971, and compare our position with that of other developed countries, some revealing statistics become available. What was the inflation rate of the United States in 1970? It was 5.9 per cent. What was it up to April 1971? It was 4.6 per cent. What was the inflation rate in Japan in 1970? It was 7.7 per cent. What was it up to April 1971? It was 5.6 per cent. Germany in 1970 had an inflation rate of 3.8 per cent and up to April 1971 it had an inflation rate of 4.6 per cent. In France, the inflation rate in 1970 was 5.3 per cent, and up to April 1971 it was 5 per cent. In the United Kingdom, the inflation rate was 6.4 per cent in 1970, and under the Conservative government up to April 1971 they had the impressive inflation rate of 8.8 per cent. What was the Canadian inflation rate about which the hon. member for Edmonton West (Mr. Lambert) is complaining during this period? In 1970 our inflation rate was 2.4 per cent, considerably lower than that of any industrialized country, and in 1971 we had the more impressive record, considerably lower than that of any other industrialized country. Yet, the hon. member for Edmonton West moved a motion to deny second reading, alleging unacceptable levels of inflation without ever mentioning the statistical evidence.
He then goes on to speak about a stagnant economy. This is a political charge which is unsupported in his argument and unsupported by facts. What are the facts? First, the Canadian economy has been expanding at accelerating rates since the first quarter of 1970. Second, during the first half of 1971 the real increase in the nation's output of goods and services was 6.2 per cent at an annual rate. This is almost double the growth rate for 1970 as a whole. Third, the increase in the gross national product in the second quarter of the year at an annual rate of 8.9 per cent was the largest quarterly increase in two years. Fourth, demand for goods and services by business people in Canada is now advancing, with consumers taking the lead. The increase in consumer expenditure during the second quarter of this year was 4.3 per cent, the largest quarterly rise in many years. Even so, inventories are low, and this is a good omen for the expansion of output, particularly in Canadian manufacturing. Fifth, housing starts in the second quarter of the year amounted to 225,000 at an annual rate, and in August the rate was up to 243,000, indicating a record number of starts for 1971 as a whole. Sixth, total capital investment rose by 5.7 per cent in the second quarter, and business capital expenditures by 6 per cent. The mid-year survey of investment was recently revised upward by 2 per cent to 11 per cent. Seventh, increases in productivity have been high, but in spite of that the economy has produced 245,000 jobs in the past 12 months. These facts make a mockery of that part of the motion which alleges economic stagnation and, I suggest, seriously calls into question the credibility of the hon. member for Edmonton West.
But the motion goes further. The Conservatives declined to give second reading because proposals in Bill C-259 fail to provide sufficient stimulus. The motion indicates the need for, first, appropriate tax cuts, second, incentives, and third, exemptions. Everyone who has read Bill C-259 knows that it contains proposals for all three. One would reasonably expect, if the opposition intend to

stop progress on Bill C-259 as they are doing by moving the reasoned amendment before us which, as everyone knows, would effectively kill the bill if carried, that they would have some solid reasons for doing so and, more important, equally solid proposals to put forward as alternatives.
I urge you reluctantly, Mr. Speaker, and other members of the House to scour the turgid prose of the hon. member for Edmonton West for any single substantial proposal that would even begin to accomplish what the motion seeks to commend. None can be found and, what is worse, an examination of the remarks of the leader of that party a day later on September 14 in the House of Commons reveals they are equally barren of substantive proposals. One can only conclude, being as generous as possible, that the opposition is not credible and is less than candid with the Canadian people. If they have serious reasons for moving the reasoned amendment, then we should know them.


An hon. Member:: Nonsense.


James Hugh Faulkner: The hon. member for Athabasca (Mr. Yewchuk) is rarely present in the House and he is trying to make up for lost time with interjections which I hope will be recorded because they are all we ever hear from him.
We should know what proposals opposition members intend to make in fairly precise terms dealing with tax cuts, incentives and exemptions. The speeches that have been made by the Leader of the Opposition (Mr. Stanfield) and the financial spokesman for that party, the hon. member for Edmonton West, have been barren of such precision. Instead, we have been flogged with attacks of all kinds to fudge the clear absence of plans or serious thought on the part of the opposition.
My position is that this Parliament should address itself seriously to the present proposals for tax reform before it. The protracted period of public discussion which preceded this bill has inevitably contributed to a sense of uncertainty among Canadians and Canadian business people. This Parliament has a responsibility to end this uncertainty and to establish tax guidelines for citizens and business alike and to do so quickly. To delay a decision unnecessarily would be to undermine the momentum which the economy has been gathering since early this year.
The motion speaks about unemployment. I want to say a few words about this as it relates to tax reform. But before I do so, let me make some general observations about the situation which we face. On August 15 the president of the United States announced a program designed primarily to remedy that country's deteriorating balance of payments position. Accepting the premise that something had to be done about the hemorrhaging that was taking place in that country, what is being sought by the U.S. administration is an adjustment or a set of adjustments with all countries sharing some of the load. Personally, I am not satisfied that the approach which the American administration is proposing is either equitable or appropriate. A working party of GATT officials referring to the surcharge alone described it as illegal and inappropriate and urged its removal within a short time. What is disturbing is that some-and I stress the word "some"-of these arbitrary measures proposed by the pre-
October 7, 1971

sident witness the most prosperous and powerful economy of the world seeking to use its economic strength to force the cost of adjustment onto less powerful and often less affluent trading partners. Operating from strength may impress some, but in my view it does nothing to build confidence and stability into the precarious structures governing international trade and transactions developed since Bretton Woods, 1945.
The temptation is to retaliate, and many have urged this course. It is to the credit of those involved, including the Prime Minister (Mr. Trudeau), the Minister of Finance (Mr. Benson), and Minister of Industry, Trade and Commerce (Mr. Pepin), and many others from other countries that so far they have resisted that course. They have recognized, and I suggest rightly, that such an approach could only compound the present problems, precipitate further protectionist actions, produce further retaliation in turn, compartmentalize trade, and generally contribute to the scuttling of the considerable efforts since 1945 to build order and confidence into international trading. Our task now must be to protect what progress we have made since 1945 and to try to use the present impasse to make further steps to improve upon the present order. In fairness, I think it must be recognized that the United States in presenting its proposals has legitimate grievances and does face serious problems.
Having said that, we as Canadians must approach the discussion of adjustments with certain things clearly understood. In the first place, Mr. Speaker, it is the U.S.A. which seeks the adjustments. The Americans, and we all admit to this readily, are both our friends and allies, but they are also tough and single-minded people. Let me remind the House of what General MacNaughton said some years ago about Americans, people he regarded as friends. There is nothing in what I am about to quote which is unfriendly. It is simply an analysis. He said:
There is nothing in our experience to date which indicates any change in the vigor with which our American friends pursue objectives which they deem in their national interest, however much this may hurt a neighbour who has unwittingly made a careless bargain in other circumstances.
This I would add, in my judgment, is equally true of other countries that will be involved in the negotiations surrounding the process of adjustment. Secondly, the United States has complained about severe and enduring trade barriers. We also have an interest in the adjustment of trade barriers. For six years I have condemned the fact that whereas Canada has been open hunting for offshore suppliers of heavy electrical generating and power transforming equipment, our people have systematically and blatantly been excluded from foreign markets, not including the United States, because of foreign trade barriers.
At another level, dealing with tariff adjustments and specifically related to Canada-U.S. arrangements, I have also condemned the fact that whereas we let U.S.-made bulk milk coolers into this country duty free, the United States has consistently refused to provide us with equal treatment. These may seem to be somewhat narrowly drawn examples but, Mr. Speaker, I represent people whose livelihood is threatened by these inequities. The point I wish to make is that as we enter into international
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discussions on adjustments that have to be made, we should be clear in our own minds what we want, clear about our strategy in pursuit of our long-term national interest, and determined not to make all the concessions.
Our record in respect both to our exchange rate, particularly vis-a-vis the U.S.A., and the absence of trade barriers vis-a-vis imports from other countries, has been excellent. We should therefore bargain firmly and from strength. Without wishing to be sanctimonious, I can say that our record within this area has been superb, and we can legitimately expect some concessions from other countries, including the U.S.A.
Let me look at one U.S. proposal with which I believe they should not proceed. Probably the most ominous and threatening of the proposals of the American administration is the proposal to allow U.S. companies to establish international domestic sales corporations to encourage American manufacturing firms to export from the United States. Secretary of the Treasury, John Connally, on September 8, in a statement before the House Ways and Means Committee argued for the DISC proposal in the following terms:
In general it is designed to provide the same type of U.S. tax treatment for U.S. companies engaged in exporting as is presently available if they manufacture abroad through foreign subsidiaries. The DISC proposal is designed to create and preserve more jobs in the United States by causing a healthy expansion in U.S. exports, and by making it as attractive from a tax standpoint for U.S. companies to produce goods in the United States for export to world markets as it is for them to build their factories in foreign countries and produce abroad.
The purpose is clear. The intention is commendable, but in my view the instrument is totally unacceptable. In my view the DISC proposal goes beyond the proposals other countries have developed to support their export drives. If it is passed by Congress it will provide American manufacturers involved in the export market with tax advantages not available to any of their trading partners, and will seriously aggravate trade relations between the U.S. and other countries.
The Washington Journal of September 30 had an interesting comment to make in this regard:
U.S. authorities who try to justify such activities (i.e. DISC) insist that other nations give incentives to exporters. They do. But such things are partly a matter of degree and few nations have gone as far as the original DISC proposal would have gone towards an outright exemption from income taxes. The U.S. already is inviting retaliation from its trading partners for its 10 per cent surcharge on imports and it is not likely that tense trade relations can withstand much further aggravation.
My comment is Amen.
From a Canadian point of view the potential impact of DISC will be extremely serious. For areas of the country like the one I represent, dominated by secondary manufacturing	industries-mostly	U.S.	subsidiaries-the
impact could lead to a sizeable number of orders being transferred to U.S. plants so as to take advantage of DISC tax provisions. This would lead to serious lay-offs in Peterborough, and in other parts of Canada.
The government of Canada has stated firmly and repeatedly its opposition to this proposal. It goes beyond what we believe to be a reasonable solution to very real American problems, and violates the spirit and the letter of GATT. Canada's position should not be to try to devel-

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op, through amendments to our present tax law, our own DISC, as some have been suggesting. The answer to DISC is not more DISCs developed in a spirit of retaliation. For a variety of reasons, most of which are obvious, these would be impractical.
It is important that we persist with our present strategy which is to seek changes in existing trade barriers around the world, changes in artificial exchange rates, and further strengthening of those institutions whose role it is to support international trade. The best long-term answer to America's present difficulties does not lie in instruments like DISC but in a more rational, open, and fair trading order. This will be to Canada's long-term advantage as well.
I want to turn away now from the question of what our response should be to threats to employment from outside the country to an examination of some of the moves we might make internally to ensure high levels of employment, adequate growth, industrial competitiveness, and a tolerable level of inflation. Back in February of this year I warned the House that the challenge to the Canadian economy was a global one. At the time I felt, and feel even more strongly today, that there is a need for consultation among leaders of the trade union movement, business and government, to formulate the broad lines of a national strategy.
In the past we have all gone more or less our separate ways, loosely harnessed by laws developed in parliament, with consultation taking place either in the heated atmosphere of the bargaining table or rather sporadically and inconclusively at ad hoc meetings.
I do not want to exaggerate the importance of a national strategy, or pretend that differences that exist between government priorities, business priorities and labour priorities can be simply and easily reconciled by some form of national body. In this business it is always a matter of degree, and to that extent I feel a more systematic and continuing format for national consultation among the three elements I have mentioned could provide a degree of improvement.
Today the Science Council has made a report available which argues strongly in favour of an industrial strategy. I have not read it, but I have seen the news report of it. In part let me say that I agree with the need for an industrial strategy, and agree strongly. If, however, the news report is correct I am somewhat disappointed that the council was unable to come up with any specific policy suggestions. I also feel that it is somewhat simplistic to argue that the state of attitude between government and business is a serious deterrent to the evolution of such a strategy.
On both sides there are very realistic and hard-headed people who are prepared to work together even where the climate is frigid. Leaving that aside, I still think it is important to look at some of the positive suggestions made in the report, and to ask ourselves how we can realize some of these important recommendations. One of the most important factual observations made by the council is that the manufacturing sector of our economy is not growing rapidly enough. It is not growing rapidly enough to meet our national needs and it certainly is not growing rapidly enough to absorb the skilled engineers,

scientists, technologists which are emerging from our schools, colleges, and universities. As I pointed out to the House a few days ago, we have the fastest growing labour force in the industrial world. It is imperative, therefore, that serious and urgent consideration be given to the depressing fact that our manufacturing sector is not moving fast enough.
The Council also recommends that priority be given to industries with a high degree of technology-industries with a capacity to innovate, to compete, and to survive in an increasingly competitive commercial world. I share this view. I think it is important to recognize that the Department of Industry, Trade and Commerce has in fact developed a variety of programs to support this sector of our economy. If these have inadequacies, I would have thought the council should have explored them in some detail.
The broad point though is that this country risks, in the short term, yielding to the temptation of living off its resources. Many of us have been concerned about this and have argued against it. The hon. member for Duvernay (Mr. Kierans) has made a most eloquent plea for a neutral tax system which would stop discriminating against the manufacturing sector in deference to the resource based industries. In reference to changes in the tax law, I believe these views must be given new and urgent consideration. I frankly believe there is a consensus across this country that any industrial strategy should give the highest priority to processing more of our raw materials in this country. This not only provides greater employment possibilities but creates the openings which are necessary to absorb the people we are training in our manpower centres, schools and colleges. It is clearly also the long-term direction for an economy such as ours. Another feature of our national strategy must be a statement by the government on the matter of foreign ownership of our resources and industries. I see this as an integral part of our strategy and one which is acquiring increasing importance.
So, Mr. Speaker, I see the ingredients of a national strategy involving several parts. One is the establishment of a systematic and continuing framework for consultation between representatives of business, labour, and management on national economic goals. Amongst those goals which I detect are supported by a general consensus across the country are continuing adjustments in our tax law and government programs encouraging the secondary manufacturing sector of the Canadian economy in undertaking more processing of our raw materials here in Canada. Another is supporting and improving efforts to strengthen the pool of management skills available to this country, both on the business side and on the labour side. We need a policy on foreign ownership which will clearly dismiss from the minds of those critics of this priority, the silly notion that we are talking about excluding foreign capital from Canada in an absolute way. We should have a policy which will, amongst other things, simply regulate the form in which foreign capital comes in, where it locates and the purposes it serves. There is a depressing degree of nonsense being said on both sides of this question. Probably I might be accused of contributing to it, but I assure you, Mr. Speaker, it is unintentional.
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Finally, I believe we must continue the important and successful efforts at trade diversification which this government has undertaken in the past. If some hon. members want to dismiss the trips made by ministers as junkets, they are free to do so but I believe the trip by the Prime Minister (Mr. Trudeau) to the Soviet Union and the trip by the Minister of Industry, Trade and Commerce (Mr. Pepin) to the People's Republic of China to be positive and constructive and in the national interest. Indeed, in light of some of our present difficulties I would say that developments and contacts in both the U.S.S.R. and China hold out important possibilities for this country. These seem to me to be the sort of considerations and directions which may in the long term contribute to solving the economic problem of unemployment.
In conclusion, Mr. Speaker, I say, as I said in the beginning, the amendment before us is nothing more than a superficial political manoeuvre. The bill attempts to delay and stop Bill C-259 which offers substantial benefits to Canada and Canadians. We are not promising Utopia, or the millennium; we are not saying that with Bill C-259 tax changes in Canada have come to an end. Not at all, we say this is a major reform, a major improvement and should be passed without any unnecessary delay.


Mr. S. Perry Ryan (Spadina):: With respect to the motion of the Minister of Finance (Mr. Benson) for second reading of Bill C-259, Mr. Speaker, I rise to speak to the amendment moved by the hon. member for Edmonton West (Mr. Lambert). In view of the gloomy outlook for the Canadian economy, I asked the Prime Minister (Mr. Trudeau) during the question period two weeks ago to consider changing the government's legislative priorities by bringing in tax cuts, the family income security plan and the Canada Assistance Plan reforms now instead of possibly six months from now. He replied politely enough, "Not at this time", but gave the impression that there was no urgency about the gravity of the economic picture in Canada but only urgency for this bill. Where is the government's sense of timing? And why is it that to obtain some minor overdue benefits for the people this government always insists upon imposing major burdens in the same package, burdens that are questionable and must be questioned? Being the authors of the economic misfortunes of this country and their own misfortunes, one would think that the Prime Minister and his supergroup would seize the opportunity to redeem themselves, even at this late date, by giving priority to these imperative and humane measures over Bill C-259.
Bill C-259 is palliative to some and punitive to others, but will do nothing to pull this country out of the economic swamp into which this government has steered it, both domestically and internationally. The ill-conceived and immature initiatives that have emanated from the government since the Liberal party became the "Mad Monk" party have poisoned our economic relations with the U.S. and have poisoned and threatened our collective security arrangements with the western alliance. Today we had an announcement from the Secretary of State for External Affairs (Mr. Sharp) that we were going to shamefully follow the lead of Albania by supporting the resolution which will pitch Taiwan out of the United Nations and set a horrible precedent for the future. It will spell the breakincome Tax Act
up of the United Nations for sure. Shame on the minister and shame on the country. The minister was not always in favour of that.


Mitchell William Sharp: Always.


Sylvester Perry Ryan: I do not know what has converted him to such a position now.


Mitchell William Sharp: There is no question of chucking anybody out and you know that.


Sylvester Perry Ryan: Let me quote from an article in the Valley Messenger of Alhambra, California of August 5 last at page A, headed "Trudeau's Independent Line Costing Canada". It reads:
In 1968, Trudeau inherited an economy from Lester Pearson that had some important things going for it. One of these was that Ottawa had influence in Washington and at European Common Market headquarters in Brussels as a result of Canada's team play in the western alliance, particularly in the North Atlantic Treaty Organization, the North American Air Defence Command and the United Nations.
And further, from the same article:
Tragically for the unemployed, Canada is no longer represented by a government that can negotiate advantageously with this country's largest export market. The breakdown in rapport comes while the United States is going through an extremely protectionist phase which can, under the circumstances, only be detrimental to the Canadian economy.
Either supergroup, or the Prime Minister have consistently ignored warnings from Washington that the United States would react if Canada kept on provoking her. Now that reaction has come in the form of the American refusal to exempt Canada, her best customer, from the 10 per cent surcharge. Furthermore, it is unlikely that this present government will be able to obtain any relief from their DISC and investment tax credit proposals when they become law.
.10 p.m.)
The only sane way out of our economic dilemma is for this country to replace the present anti-American government with a pro-Canadian government led by the hon. Leader of the Official Opposition (Mr. Stanfield), who is the only leader of any political grouping in this House who would be able to obtain the exemptions and considerations we need to protect our vast market with the United States.
This bill will give long overdue exemptions to some by shifting the tax burden to the middle income brackets. It will not help the economy now when the need is so great, nor over the bleak winter we face. It will, however, cause a great deal of consternation and confusion for many moons to come. Tax experts across the country have studied this bill all summer and have concluded that much of its content is murky. It is doubtful that the men in the finance department, who wrote the sections that form the whole, understand the monster to which they have given birth. Many interested organizations across the country have asked for more time to digest this monumental bill. The Canadian Chamber of Commerce in its submission on tax reform dated September, 1971, puts it this way:
Turning to Bill C-259 itself, the Executive Council regrets, despite its concern about removing the uncertainty as quickly as

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possible, that more time has not been provided for study of the tax reform bill by taxpayers and their advisers.
Why is the government not giving the Canadian people this time by dividing the bill so that its exemptions and benefits may help individual Canadians in the lower brackets now, and so that its confused aspects may be digested and straightened out before they become law and not afterwards? Consider for a moment the small business incentive that the government has included in the bill. While the legislation provides a low rate of corporate tax for small businesses it has replaced the former rule, which was relatively simple and easy to comprehend, with new criteria which only high-priced legal and accounting advisers will be able to understand. The same situation applies to a majority of the provisions of Bill C-259. The government, with this bill and its verbose authors, seems to be determined to create an impression of efficiency. Rather, it will create litigation and a high demand situation for expensive tax advisers. I seriously question that these results should be the major by-products of a so-called Canadian tax reform bill.
At a time when jobs in Canadian industry are threatened not only by this government, but by the likely withdrawal of American markets and investments, the government is giving priority to passing this tax bill which does not provide sufficient incentives for the Canadian economy to expand on its own initiative. Moreover, the government is compounding the American actions, which this government did much to invite, by introducing in this tax bill measures designed to discourage Canadians from investing in their own economy. It is obvious that much Canadian money now abroad will not be repatriated. Rather it will be re-invested in jurisdictions where there is no capital gains tax, or a more favourable one. Much domestic money will seek to follow. The prospect of the withdrawal of both American and Canadian investments in this country and resulting unemployment should cause this government to pause for reflection before proceeding with certain aspects of this bill.
Many Canadians actually welcomed the idea of the introduction of a capital gains tax in Canada, not those who invested in stocks but those who invested in other areas, such as land and mortgages. They took it for granted that the rate would be no higher than the American rate of 25 per cent, if as high as that, and that any investment capital gain made outside of one's principal business would henceforth be taxed at the capital gain rate and all investors would therefore know where they stood in advance of accepting the risk. The investor's principal business at the time of investment alone would attract tax at the personal rate. This is the way it should be, but apparently it is not the way it is to be. This government wants to take all the joy out of life for Canadians with ambition.
Astonishingly enough, but perhaps not unexpectedly, the fact is that the government has failed to explain to the Canadian people exactly what a capital gain is. What definition there is consists of definition by exception, and that makes for an even greater ball of wax than before the proposed change. The present unjust common law precedents are often arbitrarily, unsatisfactorily and unevenly applied. They have been the cause of continuous and bitter litigation and are not specifically removed or dis-

placed by this bill. There has been no attempt to change this unfair situation by presenting to this House an adequate definition.
Let me quote from A Review of Canadian Tax Reform by Riddell, Stead & Co., Chartered Accountants:
The Bill does not introduce a capital gains tax as such but is so structured as to include in income "taxable capital gains" (one-half of most capital gains) and to permit the deduction of "allowable capital losses" (subject to specific limitations, one-half of certain capital losses). The expression "capital gains" is defined only by exception-they are gains on dispositions of property other than those that would otherwise be included in computing income, and other than those from the disposition of goodwill or nothings, mining or oil properties and rights, and life insurance policies. "Capital losses" are similarly defined but the exclusions are extended to losses on depreciable property which are dealt with under the capital cost allowance rules. Because income is not specifically defined either, the differences of opinion between taxpayer and tax collector as to the nature of the gain will continue, diminished in intensity only by the fact that what is at stake has been reduced from the difference between full tax rates and zero to the difference between full and half tax rates.
And what about the longtime Canadian taxpayer who in his declining years wants to settle in a more southerly clime? He is not going to be too happy about the provisions of clause 48 of this bill. I do not want to get into the provisions of this clause at the moment, but certainly it should be either reformed or tossed out before the bill is studied in the committee of the whole.
I would like to say a few words about the parsimonious tax reform the government has provided in the bill in relation to child-care expenses. I could not agree more with the member for Fundy-Royal (Mr. Fairweather) when he said that the exemptions are not large enough.
To begin with, the government has restricted the deduction for child-care expenses to $500 per child, and a maximum of $2,000 per family, or two-thirds of family income, whichever is the lesser. To me, it is incomprehensible to find a maximum set in this respect. This is surely one area in which payments are made solely for the purpose of earning income. Surely, the group which most needs encouragement and help is the group which includes working mothers, particularly those who are obliged to go out to work to help maintain large families. Furthermore, $500 will not provide day care for a child for a year in any urban or suburban area in this country. The minimum rate in Ottawa is $20 for a five-day week and it is likely higher in the larger cities. But, say it is $20. The deduction should be doubled. I say that the proposed deduction is unrealistic, parsimonious and inadequate. Since babysitters will be required to give receipts and become liable to pay income tax in the future, it is likely they will increase their charges by way of compensation or, as an alternative, withdraw their services.
Furthermore, the people who provide most child care services are either relatives or neighbours. The government has decided that the proposed deduction shall not be available in cases where services are provided by dependants of the taxpayer or relatives under 21. Mr. Speaker, as long as the payment is actually made and the services are actually performed, why should a person under 21, who is a relative, be discriminated against? I trust this unfair situation will be remedied at a later stage.
October 7, 1971

Another provision of this bill which reminds me of the days of the six-buck boys is that section which deals with the employment expense deduction. It is a miserable provision and is openly discriminatory. It provides that an employee shall be allowed to deduct either 3 per cent of his income or $150, whichever is higher, in order to cover the cost of clothing or special tools required for his work. What happens to the garage mechanic, or carpenter, Mr. Speaker, who likes to own his own tools and, in many cases, is required to own his tools to obtain employment? The sum of $150 is clearly inadequate in this day and age when a motor mechanic pays $4,000 for a set of good tools.
A doctor writes off the entire cost of his tools and equipment. A lawyer writes off the entire cost of his library. Why then does the government not intend to allow employees the same right? Does the government not trust employees to produce an honest accounting of employment expenses? The government has claimed that the employment expense deduction will redress the position of wage-earners with respect to employment expenses vis-a-vis taxpayers in business or in the professions. But it will not meet the need. Take the case of the motor mechanic. I am advised that even an apprentice looking for his first job must have $500 worth of tools and that a full-fledged mechanic is expected to bring to his job about $4,000 worth of tools. The wear and tear on this equipment is great and with new technology new tools are constantly required. Furthermore, losses due to theft, mysterious disappearance and borrowings are high.
I am advised by my insurance agent that a mechanic seeking to insure $4,000 worth of tools must pay an annual premium of $120, with a deductible of $25 with respect to theft, vandalism and malicious damage. So it is clear that in this case, and there are many similar cases, the proposed exemption barely covers the cost of an employee's insurance premium on tools. If the government wishes to remove this inequity from the tax system, why does it not place the employee on the same footing with the doctor or lawyer? Why does it not allow employees the same privilege-the privilege of deducting unlimited expenses provided receipts are produced? This is what must be done in all conscience, Mr. Speaker, if the government wishes sincerely to put even one equitable plank in the platform of its just society.
Mr. Speaker, I could go much further in my remarks concerning various other features and in my general observations about the bill before us, but I think I have already demonstrated my lack of enthusiasm for much of its content and its timing. Certainly, there is no real tax reform in Bill C-259. It will not resolve our current and future problems of inflation, unemployment and idle factories. It continues the over-taxation of the people of this country and gives no incentive to honest effort. Its tax exemptions are overdue and miserly ones. The amendment is correct when it states that the bill is not calculated to materially improve business and labour conditions in Canada, now or in the foreseeable future.
Have we not watched and waited long enough for the better things to come, only to find that the "better things" seem always to appear in the form of increased inflation, staggering unemployment and the burden of taxation which is causing even many of those who have jobs to go under, a scandalous situation for a country with the
Income Tax Act
resource wealth of Canada. Your Honour may share my view that we are being led down the garden path in international affairs and down the drain at home.
In conclusion may I say that the very medieval size of the printed bill as tabled makes one mindful of the Domesday Book. Certainly, it is too long, and those who deal with it will suffer from indigestion. In the meantime, the tax jungle of the federal government is more impenetrable than ever, with the reactive legislation of the provinces still to follow.


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, debate has been interrupted on several occasions since the House resumed sitting on September 7 and began its consideration of the measure before us, Bill C-259, which constitutes the Liberal government's response to the demand for tax reform in Canada.
I have listened with great interest to speeches made not only today but on earlier occasions when various members of all parties represented in this House took part in the debate. It seems to me the type of basic tax reform which was recommended in the Carter report five or six years ago finds no expression in the bill before us and that no attempt has been made to set up a tax framework which most Canadians hoped would bring justice, equity and economic growth. The government appears completely dominated by big business interests. If these proposals pass without major amendment, it is obvious that the present tax system with its many anomalies and injustices will remain basically unchanged. This was not the desire of the Carter Commission or of most of the economists who had hoped the bill before us would contain major improvements.
[DOT] <4:30 p.m.)
The Carter royal commission on taxation was set up by the Conservative government to look into the tax framework of Canada and to report on the distribution of the burdens among taxpayers resulting from existing rates, exemptions, relief and allowances provided by the personal and corporation income tax laws. It was also to look into the effects of the tax system on employment, living standards, savings and investments, industrial productivity, economic stability and growth.
The Carter royal commission started out its investigation feeling that Canada's tax system was a good one, and reasonably just. Several years later, after an exhaustive study which cost $3.5 million, the commission found that Canada had an unfair tax system. It found that billions of dollars of income were escaping tax altogether or enjoying tax privileges which lightened the tax burden. It made a large number of recommendations which would have brought about a far more equitable system of taxation in our country. Unfortunately, in the tax bill before us most of these recommendations have been ignored by the present Liberal government.
In the last election the slogan of this government was "the just society". To date we are farther from that goal than when this government was elected in June, 1968. Many of the major economic problems facing Canadians have been compounded by the foolish and weak economic policies of this government. One of the prime examples is that of the terrible unemployment situation which faces

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Income Tax Act
the nation today. Unemployment was deliberately encouraged by this government last year in an effort to fight inflation and it has taken its toll of Canadian society in the misery and hopelessness which it has created among Canadians, both young and old.
Just as the government failed to deal adequately with unemployment, we find in the tax measures before us another example of its failure to meet the challenge of setting up a just and equitable tax structure in Canada. If we are ever to reach the goal of the just society, it must certainly be based on a system of taxation which is just and equitable. The legislation before us proposes some needed changes, but cannot possibly be classed as a tax reform measure. It can never be the foundation upon which a just society can be based.
The Carter report dealt in detail with the privileged resource industries, and showed how they were avoiding paying their just share of the tax load in Canada. The report called for a redistribution of the tax burden so that wealthy individuals and corporations would pay their fair share. The result would have been that in 1966, $523 million more in corporation taxes would have been paid to the federal government, and $271 million of this would have come from foreign investors.
It was not only Carter who drew to the attention of the government the inequities in our Canadian tax system. This was also done in an excellent speech by the hon. member for Duvernay (Mr. Kierans) to the Canadian Economics Association last June. He was a Liberal cabinet minister in this administration until he resigned his portfolio just over four months ago, apparently because the government had no intention of changing either its economic policies or its taxation policies as announced in the recent budget last June. An examination of some of the tables which the hon. member for Duvernay used in his speech will give a very clear indication of the unjust system of taxation which currently exists in Canada. This should be a clear warning to Canadians that present government policies have been designed to benefit big business and that measures must be adopted to rectify this situation. We do not find these changes in the legislation currently before us.
The following figures come from a comparison of "book profits" before taxes and taxable income, and the hon. member for Duvernay indicates that it is aggregated for the 1965 to 1968 period. We find that over this period those industries in the mineral-fuels business showed book profits of $795 million. But of this total amount only $45 million was classed as taxable income. This means that taxes were levied on only 5.7 per cent of the total book profits of those companies engaged in the mineral-fuels industry, which includes, of course, our gas and oil resources.
In the metal mining industry we find that the book profits amounted to $1,707 million. Of this amount only $222 million was classed as taxable income. Again this shows that only 13 per cent of the total book profit were taxable, and in this particular case $1,485 million of book profits were tax free. I must point out in passing that over two-thirds of the metal mining industry and the mineral-fuels industry, is foreign-owned and controlled.

In other types of mining the table shows there were book profits of $374 million. Of this amount some $120 million was classed as taxable income, amounting to 32 per cent of the total book profits shown.
In the manufacturing industry there was some $12,745 million in book profits. Of this amount some $8,052 million was classed as taxable income. Here we find 63 per cent of the total book profits being taxed by the government.
In the construction industry there was some $993 million of book profits, and of this total some $643 million was classed as taxable income. This works out to 65 per cent of the total book profits shown by the construction industry.
In the wholesale trade there was some $2,066 million of book profits. Here we find that the taxable income amounted to $1,082 million. This means that 87 per cent of the book profits listed in the wholesale trade industry was taxable.
In the retail trade there was $1,620 million of book profits. Here the taxable income amounted to $1,445 million, which was 90 per cent of the total. It is interesting to note that in the retail trade most of the business belongs to Canadians.
We have every right to question this government's taxation policies when the major inequities which I have just outlined exist in our tax structure. It is ridiculous for the retail trade to be paying on 90 per cent of their book profits when the mineral-fuels industry, which is dominated almost completely by foreign interests, pays on only 5.7 per cent of its book profits. I should like to quote a paragraph of the speech by the hon. member for Duvernay which sums up the situation very concisely:
If foreign ownership dominates the mining and petroleum industries, our tax system has clearly invited this concentration. We have not only extended a warm invitation to foreign capital- but we have told it where to go. If you invest in the service industries, we say, you will have to pay taxes on 87 per cent or 90 per cent of your profits. On the other hand, in metal mining you will only have to pay on 13 per cent and in petroleum on 5.7 per cent of your profits. The invitation says in effect-"Come and gut us".
There was another interesting section of the speech by the hon. member for Duvernay last June which I intend to read. It deals with investment incentives. Again, I intend to quote from the speech so there will be no misunderstanding. The part I wish to quote will be found at page 11:
Investment incentives (depreciation, depletion, 3 year exempt mining income) apply precisely in those industries where foreign ownership is most concentrated, i.e. mining, petroleum and manufacturing. The sources of funds for American subsidiaries in Canada in 1968 amounted to $2,611 million (U.S. Survey of Current Business). Funds from the United States amounted to $127 million or less than 5 per cent. Within Canada was provided $1,027 million in net income, $864 million in depreciation and $539 million from Canadian financial institutions. Legislation to inhibit further inflows would be useless. Our tax laws are such that increasing ownership, takeovers and control of Canadian firms can be entirely financed from within our own economy.
There was another interesting table used by the hon. member for Duvernay last June which I feel bears repetition. In this particular table he was dealing with book
October 7, 1971

profits and taxable income by the size of the corporation. It is for the year 1968 and gives the total in millions of dollars for all industries in certain classes. In those industries where the book profit is less than one million dollars per year, we find that taxes were levied on 76 per cent of the total book profit. In those industries where the book profits ranged from one million dollars to $5 million per year, taxes were levied on 70 per cent of their book profits. In the class where book profits ranged from $5 million to $25 million per year, we find taxes were levied on 64 per cent of their total book profits. When we get into the class over $25 million of book profits per year, we find that taxes were levied on only 47 per cent of the total book profits. It is quite obvious that our tax legislation is heavily weighted in favour of the larger corporation. The larger the corporation, the more exemption it gets and the less tax it pays.
I am quite certain that the majority of Canadians object to this discriminatory type of taxation which exists, and this is the reason Carter called for major tax reform. This is the reason the NDP is calling for major tax reform. We are not getting it in the bill which is currently before us, and it is time that Canadians insisted that major changes be made. I am convinced, however, that as long as the present administration is in power there is little hope for any adjustment being made.
A number of members have spoken about foreign ownership and the need for the processing of more of our own resources within Canadian borders, but precious little has been done about it by this administration. There is really no incentive in the tax measure currently before the House to bring this about. What has been the result? A short time ago the United States government put a 10 per cent surcharge on manufactured goods which come from our nation. It is very anxious to get the raw material which Canada can supply the basic industries established in that country. There is no doubt about it, the drive is to make Canada a supplier of raw materials for all time and at the same time have Canada as a huge market for manufactured goods to be produced south of the border. I as a Canadian protest very strongly this type of economic policy.
The reason we are in this bind today is the result of economic policies of not only this but past governments, governments of the same make and structure, which for years and years have not come out with policies which stress more fabricating of our raw materials within the confines of our borders. This would give jobs to Canadian young people. This is one of the reasons that over a period of years we have had increasing unemployment. I suggest it is high time we as a nation, and particularly the government, sat down and took into consideration the problems facing our economy, due particularly to this aspect. We should certainly be doing something about it.


James Hugh Faulkner: That is exactly what we are doing.


Randolph Harding: That is not exactly what you are doing.


James Hugh Faulkner: That is exactly what we are doing.


Randolph Harding: I could quote many instances of raw materials leaving this country in ever-increasing quantities, and no appreciable steps have been taken by this
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government to change that situation. I do not think they will ever take any steps to remedy the situation.


James Hugh Faulkner: Which ones should we not be exporting?


Randolph Harding: I can mention one of our raw materials which should be manufactured in Canada, since my friend asks me. I come from the province of British Columbia where we produce hundreds of thousands of pounds of copper concentrates, and every pound is being shipped out of the province to Japan and the United States. We could have thousands of additional jobs if the provincial and federal governments had enough gumption to insist that a lot of these products be at least partially manufactured in the country of origin. That is one example, and I could name plenty more. I think this is a field to which the federal government should give encouragement in respect of manufacturing within the confines of a province and within the borders of Canada.
If I may I should now like to deal briefly with some other provisions in the tax bill. As I mentioned earlier, there are to be some increased exemptions for individuals. These certainly are welcome, but it seems to me that those in the lower income groups, including old age pensioners, veterans and so on, will not benefit too much from this legislation. There is no doubt there will be some tax relief, but every year that goes by-and this year is no different from other years-we see a 5 per cent increase in inflation which further erodes the purchasing power of the dollar and harms immensely those individuals on fixed incomes. It would seem that governments in this day and age should logically set standards of income which would reflect the minimum requirements of our citizens. These minimum requirements should be tax exempt.
If an individual requires $2,000 or $2,500 in order to get along in a year-and this is the minimum requirement set by those who understand the needs of these people and who have studied the situation-then it is idiocy to have income tax charged on any amount below that level. We suggest, for example, that the exemptions in this bill, welcome as they are, do not go nearly far enough. Single people should be exempt in the sum of at least $2,500 and married people should be exempt in an amount double that, or $5,000. It is bad enough to have inflation erode the spending power of these people on fixed incomes without asking them to pay taxes on income which they desperately need in order to sustain life or to at least have a little comfort in their old age.
In the bill before us, we also run into a number of other problems. I shall not deal with these at length this afternoon because I am sure that when this bill is discussed in the committee some major amendments will be moved in respect of one or two points which I shall mention now. These deal with the co-operatives and credit unions. We have received numerous briefs and letters from co-operative movements all across this nation, and from credit union organizations, because they would be adversely affected by this legislation. There is no doubt that in some instances credit unions and co-operatives will be affected so adversely that they will probably have to go out of business. If there has ever been a movement in Canada which has been good for the little people-the little

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Manpower Retraining Programs
farmer, the little individual and the humble wage earner- it has been the credit union and co-operative movement. Does the government now intend to get out the knife?
The government has already given concessions to big business. The Liberal party is a big business party; it always has been and always will be. Now, I wonder whether the government has the knife out in an attempt to eliminate these co-operative organizations and credit union organizations which have done so much to build up many of our towns, our businesses and our individuals in centres from one end of the country to the other. I suggest that this aspect of the bill be examined very closely by members in all parties, and that major amendments be offered in this regard. We cannot allow the credit union movement or co-operative movement to go down the drain because some individuals on the cabinet benches are blind to the needs of the co-operatives and credit unions in Canada.


Mr. Prud'homme:: We agree with you.


Randolph Harding: Good; I am very pleased to hear it. The time is very close to five o'clock and I shall again be speaking on several aspects of the bill when it comes back to the House, so I shall not go into further detail at this time. However, I trust that in this debate other aspects of the legislation will be discussed thoroughly by members of this House.


Mr. Roch La Salle (Joliette):: Mr. Speaker, since it is now 4:58 p.m., I wonder if I could call it five o'clock considering we should now proceed to private members' business as listed in the order paper, and continue my comments at eight o'clock. In fact, if I speak now, I will use the two last minutes, because I intend to talk about the amendment.


The Acting Speaker (Mr. Laniel):: Hon. members have heard the suggestion of the hon. member for Joliette. Is it the pleasure of the House to call it five o'clock?


Some hon. Members:: Agreed.


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



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Simcoe-North (Mr. Rynard)-Health-Canadian Medical Association request for expansion of facilities to train doctors-Government action; the hon. member for Fraser Valley-West (Mr. Rose)-Fruit-Request by British Columbia growers for export assistance-Legislation to protect against dumping of agricultural products; the hon. member for Dartmouth-Halifax East (Mr. Forrestall)-Natural

Resources-Offshore mineral rights-federal position respecting Sable Island.


The Acting Speaker (Mr. Laniel):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate have passed Bill S-2, to incorporate United Bank of Canada, to which the concurrence of this House is desired.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions (papers), private bills and public bills.



PRIVATE MEMBERS' MOTIONS FOR PAPERS


David Orlikow: That an order of the House do issue for a copy of the report by the task force in the Department of Manpower and Immigration which recommended a 52-week limit for all federal government manpower retraining programs.
He said: I do not suppose that in the history of the Canadian government there has been a department established which has grown in scope as quickly as the Department of Manpower and Immigration. The number of people working for the department and the amount of money spent have shown a spectacular increase in every year since the department has been established. In answer to a question put on the order paper some time ago-an answer which was tabled about a week ago-we were told that the number of people who are finding jobs as a result of being referred to the jobs by the department has been dropping each year since the department has been established. We were also told that the number of people who found jobs last year as a result of being referred to the employer by the Department of Manpower and Immigration was substantially smaller than the number of people who were able to find jobs in the last year in which the old national employment service was acting as a job placement agency.
At the same time, the number of people who are working for the department has increased in almost geometric progression. The figures given in answer to my question, which of course I do not have with me today, indicate that the cost of placing a person in a job under the old national employment service came to about $26 per person. The cost last year for the Department of Manpower and Immigration, if one only uses the number of people who are employed by the department in the placement field and the salary which they receive, has increased more than
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tenfold. It cost in the neighbourhood of $26 per job placement under the national employment service and now it costs something in the neighbourhood of $270 to $280.
I will not discuss today whether the department is doing a better job than did the national employment service or whether they are doing a good job, although I would say to members of the government and to whoever is replying for the minister that it is a disturbing thing to me to see the proliferation of private employment agencies, each one of which, quite legitimately in our free enterprise system, receives a pretty substantial fee either from the employer who is looking for an employee or from the employee who gets the job for fitting the person looking for a job to the job vacancy. It seems to me that there is something wrong, that the Department of Manpower and Immigration which has been charged by the government with finding jobs or helping people who are out of work to find jobs, is not doing the job which it should do. If it did, these private employment agencies would not be proliferating in every city in Canada.
However, the subject of my motion today is not the employment side of the Department of Manpower and Immigration but rather the training side. We embarked, as of 1966, on a very elaborate and very expensive program of manpower training. We were certainly advised to do so by labour, by industry and by the Economic Council of Canada. Hon. members will remember that the first two or three reports of the Economic Council came down very heavily on the side of a comprehensive manpower training policy to upgrade the skills and the education of the Canadian workforce. Hon. members will note that in many parts of Canada, particularly in rural areas, in the 1940's and 1950's a large number of people left school at grades five, six or seven, and it is very difficult for people with that kind of education to get jobs because most jobs which are available increasingly require the kind of skills which these people do not possess.
However, the last report of the Economic Council, which came out just a couple of weeks ago, made a very interesting point, namely, that in no country in the world is as much job training done in special institutions as it is in Canada as compared to training on the job, as it is in Sweden and many other countries. So, we have embarked on a very comprehensive program of job training but one which is also very expensive. It is not my intention today to discuss the details of whether or not our job training program is a success. That I think we can do best when the estimates of the department are before the appropriate parliamentary committee. But there are some very interesting questions which need to be asked.
If the government has decided, and Members of Parliament from all parties have agreed, that a substantial part of job training and skill upgrading shall be done under government auspices and in training institutions financed if not actually operated by the Department of Manpower and Immigration, then we have a right to study whether it is being done in the best way possible. We have a right to study whether the courses which are given are designed to fit the needs of the 1970's or 1980's or whether in fact, as so many people have complained, they have been designed to fit the needs of the 1950's and 1960's which no longer exist. As a result, many people take a manpower training course, complete it, cannot get a job, go back and
Manpower Retraining Programs
take another training course. The department should look into the question of whether there is in fact a substantial number of people who have not had just one training course but three or four opportunities for job training. Some of the courses offered by the department in some of the institutions in Canada take longer than a year.
I remember one of my constituents speaking to me at considerable length and in great detail. He was a man with a number of years of experience in a business in which he has been fairly successful, but the nature of our economy and the fact that we are permitting a large importation of clothing from such places as Taiwan, Hong Kong, Japan and Mainland China have had a drastic effect on the clothing industry. This constituent of mine decided, therefore, to enter another field of endeavour. He chose a hotel management course in the community college at Winnipeg. The course offered by that institution is a two-year course, and yet under either the act or the regulations there is a limit on the time for which the department will pay retraining allowances to people taking courses under the manpower retraining program. That limit is 52 weeks. This problem was raised when the act was originally being discussed in the House. It was also raised in committee. There have been a number of changes in that ministry since then, but I believe it was the present President of the Privy Council (Mr. MacEac-hen), when he was in charge of that department, who told me that the government was studying the question of whether the 52 week limit should be continued. It has also been brought to our attention that the department assigned a task force to study the question.
If the government has information which can help Members of Parliament, representatives of the press, radio and T.V. media, as well as the general public to understand the reasons the government has adopted a policy, the government should do everything possible to make that information available. I happen to think that it is a mistake to limit these allowances to a 52-week period. I am the first to admit that I am not an expert in this field but I believe it would be much more sensible if the government had a flexible policy. If a course lasts six weeks a person should get the allowance for six weeks; if it lasts six months he should get the allowance for six months; if it lasts one year he should get the allowance for a year, and if it last 18 months he should get the allowance for 18 months.
The whole point of manpower retraining is that a person should get the training required to do a job. If a person wants to take a course which lasts two years, what sense is there in permitting him to start it if, at the end of the first year, the government says it will not continue his training allowances? In all probability he will have to stop taking the course, and he will not be qualified to hold a job in that field. The department has a responsibility in this connection because before a person starts a course it must determine if there is a reasonable chance that he will get a job when he completes the course. There are very few people taking manpower training programs who do not need the allowances.
Let me assure whoever replies on behalf of the government that if the report of the task force were made availa-

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ble to me and my colleagues, and we found it to be well researched and the argument for limiting allowances to 52 weeks to be substantiated, then we would no longer raise this question. I find it incomprehensible that the government should refuse to make this document public. I know it will be said that it is an interdepartmental document. But, Mr. Speaker, this is a government which has often talked about participatory democracy. It should live up to that slogan.
We have established Information Canada, which is spending I do not know how many millions of dollars to tell the people of Canada the things that they want to know. I urge the government to adopt a policy under which virtually every government document and study, except those dealing with personnel matters and security, is made available, not just to Members of Parliament but also to the media representatives and to the ordinary citizens.


Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, perhaps I should first deal with the request of the honorable member for the product'on of a report. The department informs me that there is not a precise and definite document on the subject in which the hon. member is interested. It has a series of memoranda and notes that were prepared by individuals in the department who were brought together to study a number of aspects related to the adult education and occupational training program, including the question of the 52-weeks limitation. Therefore, if a document is not produced it is because the departmental officials are not able to find a definite document, the document to which the hon. member refers.
We are grateful to the hon. member for raising this subject. We know that his interest in and knowledge of it extends over some years. When discussing the departmental estimates in April, 1970, the hon. member raised this question and drew attention to the weaknesses that he saw in this type of limitation. The hon. member is quite right in saying that the 52-weeks limitation is spelled out in the act. This is an act which was passed in 1967. I have not been able to find in the records of the votes taken on second or third reading of that bill, any vote recorded in opposition to it. At that time the hon. member for Winnipeg North (Mr. Orlikow) was a member of this House of Commons. Probably this clause escaped his attention but that does not mean he should not now question the validity of it, having experienced a number of incidents several times at each level.
The requirements of this provision ought to be put on record again, as this might help to clarify the restrictions that are presently imposed. First, it has to be said that no course may exceed 52 weeks in duration; that is fact. Second, it has to be remembered that successive periods of basic training for skill development courses may not exceed 52 weeks in total. Third, successive skill courses may not exceed 52 weeks in total. Finally, basic training for skill development and subsequent skill training may not exceed 104 weeks in total. This means that a potential trainee could enter training for a maximum of 52 weeks and, having completed this training, he could enter the skill training for another maximum of 52 weeks for a total of 104 weeks.
Certainly a year ago these limitations might have caused some hardship to potential trainees. Even within the 52-week period, the person with limited education might not find it possible to develop his educational level from say Grade I to Grade VIII or whatever is required for the subsequent training. At the same time, a limitation of this kind has advantages because it puts pressure on the federal government to have a close look at the existing methodology of training adults. In other words, it promotes the incentive to find methods for achieving greater results within the 52-week limitation. Over the years, as the hon. member is aware, the department has taken several steps.
First of all, it has endeavoured to improve methods of training adults. Here we are dealing with mature people unaccustomed to the school environment, and there is a need to develop a new methodology to permit upgrading in a shorter time. The department also provided the incentive for experimentation with new methods. In this respect, the work of some of the New Start agencies has been extremely helpful as they have pioneered in the area of adult training with techniques and methods hitherto unknown which have permitted those interested in manpower training to evaluate the results of the experiments and make the new techniques available.
Having improved the methodology and experimented with new techniques and their application, one can perhaps still criticize the department. This, of course, would be fair except for the fact that there is a limitation on how the department may spend its allocation of funds for training. Ninety per cent of what was allocated in previous years to provincial institutions for the training of adults has to be made available in the subsequent year. This leaves a very limited amount available for experimentation, but nevertheless it is being done. A few weeks ago the Minister of Manpower and Immigration (Mr. Lang) attended the inauguration of a teacher training course in Prince Albert made possible as a result of New Start endeavours, and which will introduce new techniques for the teaching of adults. This is a classic example of a visible effort on the part of the department within the restrictions imposed by the government and approved by this Parliament to achieve greater results in a shorter time.
Surely, anyone in this chamber tonight knows, Mr. Speaker, that while the educational system for youngsters is structured according to certain traditional lines, it is quite a different thing when it comes to the training of adults. Surely, there is no human element which should hamper the acceleration of training techniques and methods which would raise people with limited education to higher levels in a short time. We must keep in mind of course that there are economic considerations. If no restrictions are imposed, it could mean that at the end of any fiscal year fewer people would be trained for the same amount of money. Some people could be left out because some others were receiving training for three or four years as the hon. member is suggesting should be done.
This does not mean there is no merit in his submission. He referred to a hotel management course in Winnipeg which required two years to complete in which potential trainees could not enroll because of this limitation. I suggest that this is the exception rather than the rule, Mr. 
October 7, 1971

Speaker. Since its inception the main effort of the Department of Manpower and Immigration has been directed toward the upgrading of large numbers of individuals with a low level of education who needed a fast educational push in order to qualify for skill training which would place them in the various openings in various regions.
It is not out of the question that in years to come, having completed this phase of general upgrading and movement of some segment of the labour force from the non-skilled or semi-skilled into the skilled, that we would see the desirability of adopting some of the hon. member's suggestions such as providing for longer term training. It must be kept in mind of course that there has to be an occupational tie-in. The program was meant for the purpose of training people so that they could find employment and not just for the purpose of providing a general education.
At has already been stated before the Standing Committee on Labour, Manpower and Immigration, the average type of skilled development training is far shorter than 52 weeks. Once the training is completed, the trainee is permitted to move on, if approved by the counsellor, to the type of skilled training that will bring him closer to the kind of employment or occupation for which he is looking.
The hon. member made a number of other remarks that deserve attention. He quite rightly criticized the proliferation of private employment agencies, a criticism that is not shared by everyone. There has been a proliferation in this area over the years. I remind the hon. member that the matter of private employment agencies is under the jurisdiction of provincial governments. It is for the provincial governments to regulate their operations and even their existence.


David Orlikow: Will the hon. member permit a question?


Mr. Caccia:: I will be completing my remarks very shortly. The existence of private agencies tends to indicate that there is in the department a basic general role to be performed in the training and placement of a large majority of Canadians. The private agencies are skimming off the top people with the type of education which means they can be easily placed in another job. Within a short period the agency earns its commission as these people move rapidly from one sector of the work force to another.
All that one can do at this point is bring to the attention of employers who are paying the agency fee that basically they are being taxed twice. They are being taxed once when they provide the funds which permit the opening and retention of 390 Canada Manpower centres across the nation and, second, when they turn to a private agency for a specific placement. Of course, in the kind of free enterprise society in which we live the employer is free to make his choice. This is probably one of the reasons for the proliferation of private employment agencies. It seems to indicate there are certain sectors where the private agency is quicker in its provision of services.


The Acting Speaker (Mr. Boulanger):: The hon. member for Winnipeg North (Mr. Orlikow) wishes to ask a question?
Manpower Retraining Programs


David Orlikow: Yes, Mr. Speaker. I thought I made it clear that I was not suggesting any prohibition of private employment agencies. Could the hon. member, who I presume has spoken on behalf of the minister, tell the House whether the department has made any inquiries or conducted any investigation to find out whether the rapid expansion of private employment agencies indicates that the 390 Manpower centres are not doing the job as well as they might. The employers and employees of Canada would like to feel that the department, which uses a great deal of the taxpayers' money, is doing the job which is necessary.


Charles L. Caccia: Mr. Speaker, one could reply by saying that the 390 Manpower offices are active in placing the vast majority of Canadians who need their services, people who are unskilled, semi-skilled and skilled. The private agencies reflect only a modest percentage of service to the total labour force.


Mr. Charles Turner (London East):: The hon. member for Winnipeg North (Mr. Orlikow) has been making a great many requests for the production of papers, but in his request for a copy of the report of the so-called task force of 1968 under the Department of Manpower and Immigration he is in error when he states that it recommended a 52-week limit for all federal government manpower training programs. I am sure he realizes that the 52-week limit was established by section 2(d) of the Adult Occupational Training Act which provides as follows:
Occupational training course means a course of occupational training which provides not more than 52 weeks of full-time instruction or 1,820 hours of part-time instruction.
When the proposed legislation was being debated on March 3, 1967, Hon. Jean Marchand, then Minister of Manpower and Immigration, said:
We want to provide a second chance to people who need it most. These are the men and women who missed the chance to acquire a skill during their youth or whose skill has been made obsolete by technological change. They are the people whose whole lives can be changed, dramatically in many cases, by giving them the occupational training they need.
Occupational training will be provided in course of 12 months or less. The experience of the last six years has shown what can be accomplished in this way. But it has also shown that many mature adults lack the basic arithmetic, scientific and linguistic facility they need to learn a new occupation. The provinces have developed accelerated courses to provide adults with this background material, and the program will pay for any such basic training that is needed for an occupational skill. To put it another way, our concern is with skills, but when people must have basic background to learn the skills, the program will meet both necessary parts of the total cost.
The provinces have built up extensive systems for providing the type of training adults need. We wish to make use of these facilities and we will pay the provinces for training the adults we refer to their courses.
I think, Mr. Speaker, from what I have just read that it is quite evident that the members of the House were kept fully informed of the plans of this government with regard to the occupational training for adults program. During the same debate the hon. member for Winnipeg North said:
I am sure the broad general principles enunciated by the minister will be welcomed by every member of the House and by every person who has looked at the problem in respect of full employment and manpower training and retraining in our complex socie-

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Manpower Retraining Programs
ty. Having said that we greet the general principles warmly, I must say that if one compares what the minister said today with the results of past programs he will realize the tremendous distance we must cover in the next year or two to implement the things about which the minister spoke.
We welcome the announcement of the minister that training allowances will be paid by the government to people taking training and that this will in no way jeopardize unemployment insurance benefit. We also welcome the announcement that one hundred per cent of bills for retraining of students will be paid by the government. This is precisely what I suggested during an earlier debate in relation to tax arrangements, namely that the federal government should accept its responsibilities to help those people who come from or live in "have not" provinces.
I am sure it is evident that we have come a long way since 1967 and that the training program is doing a good job for persons who need occupational training. The so-called task force of October, 1968, was really a meeting of representatives from the field offices with headquarters staff of the programs branch, manpower division, to review their experience with the operation of the Canada Manpower training program and recommend improvements in procedures and regulations. I am sure members realize that it is good business practice to obtain the views of those responsible for delivering services to the public in all parts of the country.
Regional representatives attending the 1968 meeting in Ottawa came from Halifax, Montreal, Toronto, Winnipeg and Vancouver. From this gathering of experienced men we were able to gain much and to improve the program in many ways. The representatives at these meetings were certainly aware of the 52-week limit on training but did not recommend an extension; then simply recognized that the courses were limited to 52 weeks by the legislation. During the fiscal year 1969-70, 300,332 Canadians benefited from the various training courses offered by the program. This would seem to indicate that the 52-week limit does not seriously affect individuals wishing to acquire new skills.
Under the Adult Occupational Training Act the department purchases training services, primarily from provincial schools but also from private training institutions and from industry. It works closely with provincial authorities and educators in developing and putting into effect training courses suited to the needs of the labour market. During 1969-70 the department purchased more than 15 million training days at a cost of $115 million. The total expenditures for training during 1969-70 were nearly $250 million, compared to $190 million during 1968-69 and $105 million during 1967-68.
The types of training offered by the Canada Manpower training program include upgrading courses, the acquisition of new skills, language training for immigrants, apprenticeship and training in industry. To qualify for training, workers must be one year older than the schoolleaving age in their province of residence and must not have attended school on a regular basis during the previous 12 months. Full-time trainees who have been members of the labour force for a three-year period, or those who have one or more dependants as described in the adult occupational training regulations, qualify for training allowances.

Manpower training is an increasingly important and effective tool of national economic policy. It improves the efficiency of the labour market by providing suitable people to fill vacancies promptly. It provides industry with needed skilled workers and it enables Canadians to adjust to economic change and take advantage of emerging employment opportunities throughout Canada. It spurs economic growth and productivity. In times of heavy unemployment such as we have been experiencing, the program is particularly effective since by training idle workers production is not lost and the training allowances usually replace other forms of transfer payments; workers trained in such slack periods form a pool of skilled workers who serve as an essential base and springboard for the next wave of economic expansion. Because many adults lack the basic preparation for entry to skilled training it is necessary to provide upgrading in key academic subjects such as mathematics, science, reading and communicative skills. However, formal, full academic courses are not purchased under the program.
Some of those who feel the 52-week limit should be increased are of the opinion that the federal government should take over the provincial responsibility for education and provide workers with regular secondary school education. They forget that the Canada Manpower training program is an economic measure designed to meet the needs of the labour market. It was never intended that the program would take over education and provide regular school courses.
Apprentice training is an important part of the training program, providing support for the classroom portion of apprentice training programs operated by the provinces. Language training is provided for immigrants who cannot find employment or make reasonable use of their skills because they cannot communicate in English or French.
As an incentive to industry to establish training programs for their workers, to provide broader, more transferable training and encourage industry to hire unemployed workers, the Canada Manpower training program provides support to training-in-industry programs. All the types of occupational training I have mentioned are limited to a duration of 52 weeks. It is only in the area of basic training for skill development that there seems to be a demand for training of longer duration. This is because people generally want the program to provide regular academic subjects for which, of course, the program is not designed.
It has been the experience in some provinces that by using modern methods of training, a great number of grade levels in mathematics, science and communication skills can be covered in a 52-week period. The majority of skill courses require a grade ten level education for admission and it seems that the vast majority of those who are referred to basic training for skill development are able to reach the required level within the 52-week limit. They then proceed to skill courses where they may receive a further 52 weeks of training.
The time limit on training was, of course, covered in the discussions as were all other aspects of the program. However, the purpose of the meetings was not to make decisions but to make recommendations for the consideration of management. As a result of the meetings a number of suggestions were made and put into effect.
October 7, 1971

Others required amendments to the regulations, and I am told that the recent amendment to allow a man to claim his common-law wife as a dependant for allowance purposes if the relationship has existed for one year is a direct result of the meeting. I also understand that other recommended changes will be made when the Adult Occupational Training Act is amended.
The papers prepared on the Canada Manpower training program during the meetings of October, 1968, were developed for the internal use of the department in improving the operation of the program. They are considered to be internal working documents and it is for this reason the motion is opposed. It is, as I mentioned earlier, good business practice to make use of the knowledge and experience of staff members. This is particularly true of an extensive program such as the Canada Manpower training program which brings an essential service to the various regions of the country with their differing conditions and needs.


Mr. Maurice Dupras (Labelle):: Mr. Speaker, Canada is often regarded as a country of manifold opportunities, and in fact this impression proves to be right. There is no need to recall all the elements which gave us this reputation; nevertheless, it is in order to remember some developments.
Mr. Speaker, Canada has a labour force showing the largest increase in size, quality, strength, and I was going to say with much more education and training. All these are essential if our country is to maintain this reputation and go on progressing.
Canadian youth has understood this need; young people today are pursuing their studies beyond the college level.
For instance, in 1965 50 per cent of the workers 45 years of age or over had not finished primary school. On the other hand, 80 per cent of students between 20 and 24 years had completed their education beyond primary school.

It is accepted, then, that the younger age group possess, on the average, higher educational qualifications than, let us say, their parents. While this is all well and good and a tremendous asset to Canada, we must remember that the increase in educational standards may leave the older worker behind.
A second factor in the economic sector which affects the Canadian worker is the rapid level of change and technological improvement occurring in industry. In order to keep abreast of rapid industrial change and the demand for skilled young people, the Canadian worker finds that he must be relatively skilled. Now, if one is a young person without adult family responsibilities, it is a relatively simple task to adequately prepare himself or herself to enter the labour market.
But let us consider the very real dilemma facing the older worker who comes up against this problem. Think for a moment of this situation. An individual has been working for about ten years at a relatively unskilled job and he finds his skills are redundant. Technological advance demands that he must improve his present skills
Manpower Retraining Programs
in order to continue in his job. If he is supporting a family, then his position is particularly difficult; he cannot satisfactorily attend a full-time educational course and provide for his dependents as well. The alternatives facing this worker are few. He may attempt to find other employment, perhaps at a much lower salary, or he may apply for training under the auspices of the Canada Manpower training program.
There is where the individual approaches the Canada Manpower centre for assistance and advice. He may, along with more than 1,100,000 others who have benefited from this program, spend up to 52 or 104 weeks-depending on his needs-in vocational studies. If he lacks basic educational skills he may take an upgrading course for a maximum of 52 weeks before proceeding on to a program of occupational training, again for a maximum of 52 weeks. If he supports dependants or has been a member of the labour force for at least three years, the trainee is eligible for a living allowance during the period he attends courses.
A follow-up survey of graduates in the training program by the Department of Manpower and Immigration has shown that individuals who have studied under the Canada Manpower training program are indeed improving their prospects of employment. Trainees completing a full-time training course are surveyed as to the success of their studies in real terms. Preliminary results show that the average trainee earns 15 per cent higher wages within three months of completing the course. This is understating the gain to trainees because many of them were limited in employment prospects before training, and also it does not reflect the full earning potential of the new occupation.
The improvement in employment prospects may be even more significant than the wage increases. Well over half the trainees in the follow-up survey were unemployed when they applied for training. Seventy per cent of these were fully employed three months after completing the training course. Over 90 per cent of those with jobs before taking the training course were back at work within the survey period. According to the follow-up survey, roughly 80 per cent of graduates from skilled and educational upgrading courses found employment after training, while only 40 per cent had jobs previously.
For the benefit of hon. members who are unfamiliar with all aspects of the Canada Manpower training program I will briefly summarize its working structure and major objectives. The Canada Manpower training program was introduced in 1967 to attempt to meet the training needs of adults in the labour force. The program offers upgrading vocational training and retraining courses, it provides for the acquisition of new skills, specialized training and, in the case of upgrading, the basic knowledge necessary to begin occupational training. The program also covers language training for immigrants, apprenticeship and training-in-industry.
In order to qualify for training, applicants must be one year older than the school leaving age in their province of residence and not have attended school for the preceding 12 months. Training allowances for those who attend fulltime courses are available if they have been members of the labour force for a three-year period or have one or more dependants.

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According to a departmental survey, the program is reaching established members of the labour force who have been working for ten or more years. The average trainee is 27 and is usually married with dependants. A substantial portion of the program continues to serve younger people whose formal training has been insufficient to make them competitive in the labour market.
The aims and objectives of the Canada Manpower training program may be categorized as both long- and shortterm. In the area of short-term objectives we can include making the individual more employable through the acquisition of new skills, accelerating growth in traditionally slow growth areas and facilitating manpower mobility. Long-term objectives include ensuring an adequate supply of productive manpower to meet the requirements of the economy and narrow the gap between its potential and actual performance, and maintaining and improving the competitive position of Canada in relation to other countries.
The success of the program may be gauged in financial terms. Preliminary estimates of a cost-benefit study of the over-all effectiveness of the program confirm a ratio of benefits to costs of approximately $2 to $3 for every $1 of real investment in the program. I think it may be stated that from modest beginnings four years ago when it was introduced to meet a developing need in the economy, the Canada Manpower training program has become a major instrument in adapting to new technology, overcoming regional disparity and providing new income for the disadvantaged.


The Acting Speaker (Mr. Boulanger):: Order. The time allotted to private members' business having expired, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Gray (for Mr. Benson) that Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, be read the second time and referred to the committee of the whole, and the amendment thereto of Mr. Lambert (Edmonton West) (p. 7763).
Roch La Salle: I think I am just on time, Mr. Speaker.
I would like to discuss Bill C-259 and the amendment dealing with unemployment, inflation and industrial

development. This bill is nevertheless of prime importance in Canadian life.
The white paper which was tabled a year ago, discussed and attacked by some people is nevertheless valuable. Tabling such a white paper was a good idea indeed. This allowed groups and associations to discuss it and submit the necessary amendments.
Later on, many representations were made, and the government studied the required changes in depth. Those were also interpreted variously by the members. Some briefs accused the government of having backtracked, but the white paper allowed organizations to make representations. This procedure should be followed again in the future: it gives the opportunity of suggesting ideas as well as improvements.
Bill C-259 differs widely from the white paper. This proves that the government tried to offer the public a policy to be discussed. The changes in Bill C-259 prove that the government was willing to take into consideration quite a number of the representations made, which is all to its credit. We have before us an amendment dealing with the problems of inflation and unemployment. It definitely has some merit. It cannot be said that all policies introduced by the government over the past three years have had the results anticipated. Nevertheless, it is inaccurate to blame it all on the government. In all honesty, I repeat that because of the difficult economic situation the government failed to achieve the desired results.
Must I repeat here that if the Canadian government bears sole responsibility for our economic problems heads of state throughout the world have not fared better with administration, since the economic difficulties are world wide.
We have every reason in the world to make, in this House, as many constructive suggestions as possible, not in order to embarrass the government, as some take pleasure in doing, but to help it. Such is the role of every member in this House. If we performed the task assigned to us by our constituents, we would achieve much more concrete and beneficial results for society.
Bill C-259 contains good solutions. For instance, the personal exemption which has been increased from $1,000 to $1,500 for single taxpayers, and from $2,000 to $2,850 for married people. Need I point out to the ministers that, with the high cost of living, I would have wished, of course, like many others, that these exemptions be increased at least to $5,000 in the case of married people. We all recognize, Mr. Speaker, that a salary of $100 a week is not unduly high nowadays, considering the cost of living.
I must also give recognition to the government's efforts. Judging by the statement made by the Minister of Finance (Mr. Benson) a few months ago, this bill is supposed to be of great value. I feel that the good will shown by the government is significant. Of course, we must continue to ask for more and to do better. I do not want to limit myself to criticism nor to discuss every clause of this bill. It has not lacked publicity and most hon. members are well aware of its effects.
October 7, 1971

Some amendments are very beneficial to Canadians, considering that some 800,000 of them will not have to pay any taxes and that close to 3 million taxpayers as well as industrialists will be granted great benefits.
This amendment does not give much consideration to the concrete results that will follow from the standpoint of unemployment and inflation. I would like to take this opportunity, Mr. Speaker, to remind the government that there are, nevertheless, excellent suggestions which may be made by hon. members and which take into account the interests and needs of each riding.
I had the privilege and, I might say, the good idea of organizing an information meeting in my riding not too long ago. That has enabled me to get better acquainted with the interests and needs of my constituents who in turn had the responsibility, in the various workshops, of making suggestions that I was to submit to the government.
These resolutions take into account the needs of all Canadians, and I would like to tell the House about them.
The government should pay particular attention to these resolutions which, I think, could eliminate unemployment to which the amendment refers. I think I remain within the purport of the amendment in making these comments for the government's particular consideration.
I will take agriculture as an example. Several persons of influence in my riding have asked me to make representations to the government urging them to establish a social climate which would improve the position of Canadians.
Farmers did not hesitate in asking me-and this is very sensible-to demand of the Minister of Agriculture (Mr. Olson) a policy which could be established jointly with the provinces and which would guarantee free assistance to schools and hostels.
If the government is responsible for the health of Canadians, I am convinced that such a step would be of benefit to child health as well as to dairy producers who, last year, met with great difficulties.
I know that the Minister of Agriculture has often agreed to the demands of the milk producers, and I know also that the experiment launched three years ago in the United States to provide free milk in schools and hostels has been a great success. They have doubled the budget for that measure. Indeed thus we protect the health of the children and encourage consumption, which is really important for milk producers.
We know very well that because of the reduction of quotas quite a number of milk producers had to leave their farms. The government ought to take measures in order to ensure the survival of family farms. This is a way to make sure that milk producers get a higher income and at the same time to grant essential guarantees for the health of children.
As for the housing field, a resolution has been unanimously endorsed and I know that the removal of the~ll per cent tax on building materials has been widely discussed.
Needless to say, Mr. Speaker, my constituents are not indifferent to the results of that policy. Bill C-259 includes some important amendments which have been suggested, but it is also important to consider the possibility of
Income Tax Act
removing the 11 per cent tax. If we sincerely wish to give a new impetus to construction, it is quite advisable to consider the removal of the tax. Several members have already raised the matter. I had the opportunity of discussing it and asking the government to grant special consideration to that policy. We have reached the point where we must seriously consider the removal of that tax, according to various unions and organizations of employers. It would be a way to spur the economy by enabling future owners to take advantage of reduced prices.
I repeat my request and ask the government to give special consideration to that policy.
It seems that the government is seeking various solutions, but it seems to me very simple and much more beneficial to take certain steps about housing. That would be a ready means to get people to become homeowners, and the repeal of the 11 per cent sales tax would also increase sales of building materials.
It is important for the government to convene as soon as possible all unions and builders in order to initiate a program to bring about an agreement with unions, employers, building materials dealers, and builders as well. In my opinion, if Parliament were to convene such a meeting which would go by the name of "New start in housing", it would allow the government to set up criteria and I think that it would be useful if they invited all parties concerned in housing to draw a comprehensive program for the next two or three years.
The government could on the one hand offer almost unlimited credit opportunities and would be entitled on the other hand to request particularly from labour unions some undertakings of their own such as a salary freeze.
Discontinuance of the right to strike could also be discussed together with a price freeze on building materials in order that future owners could really benefit from the removal of this 11 per cent tax.
I am sure that should the government hold such a meeting and offer unlimited credit opportunities, it would be very difficult for unions as well as for building contractors to oppose such a measure once a new start in housing is being considered.
I believe that this meeting should take place as soon as possible and I am convinced that it would enable many citizens to buy their own house at reduced interest rates. These unlimited credit opportunities would furthermore entitle us to demand from unions and building contractors that they make certain concessions to reciprocate the government's good faith.
I would like to take this opportunity to draw the government's attention on public projects in which municipalities are interested. We know quite well that the winter works program was dropped a little over a year ago. It no doubt gave way to abuse. However, we clearly recognize that the municipalities are facing financial problems. The government would be taking proper action in setting up at the earliest possible moment a policy to make a better selection of utility projects as far as the municipalities are concerned.
As to pollution, Mr. Speaker, the government should without hesitation set up a policy that would allow any

miss the opportunity to require of the government that it pay special attention to various suggestions coming not only from me, but also from resolutions passed at a meeting that represented the opinion of thousands of Canadians.
I venture to believe that the government will give consideration to the suggestions I have tried to bring forward in the House. I support this fiscal reform which, viewed as inadequate by some hon. members, is still a step toward a society with a little more justice. Who could refuse support to legislation aiming for a more just society some of it involving an improvement within the present economic context?


Mr. Robert P. Kaplan (Don Valley):: Mr. Speaker, Canada has had a brief romance with the concept of a neutral income tax system. This proposal was the recommendation of the Carter commission, a system in which a buck would be a buck to the tax gatherer and special treatment and special incentives would be removed. Such a system assumes that the best allocater of resources is the free market and that any cushioning of its effects by the tax system wrongly distorts economic decision-making. Carter acknowledged a place for subsidies and stimulative grants but he felt the tax system should not be used for that purpose.
That neutral concept of taxation has been abandoned in the bill before us. It has been abandoned in favour of a non-neutral system, a system which will stimulate growth, stimulate savings and capital formation, stimulate construction and plant expansion, stimulate regional development and stimulate Canadian ownership of our economy.
But, Mr. Speaker, this bill was conceived and designed on certain assumptions about the Canadian economy. I suggest that one of the most fundamental was our economic relationship with the United States, a relationship on which a substantial capital flow and an even more important commodity exchange is based. If this fundamental relationship of Canada and the United States were changed and we had a neutral tax system, that would be one thing and we could perhaps ignore the Canada-U.S. relationship. But with a non-neutral system, with biases reinforcing certain of our traditional relationships with the United States, we would have to reassess the whole tax system to see how these built-in biases are affected by the changes in the fundamental assumptions. These are the problems I would like to discuss tonight.
Canada-U.S. relationships fit into a pattern-a big, powerful country coexisting with a small one. History is full of cases of great powers coexisting with small neighbours, and there are other such cases in the world today. I think what is unique about Canada's relationship with the United States in this type of context has been the historic, fundamental decency of American policy toward us, which has meant for Canada absolute, if sometimes grudging, autonomy. Our independent view of international affairs is shown as we trade with Cuba, exchange ambassadors with China, condemn atomic testing and the war in Viet Nam and harbour American deserters and draft-dodgers. Contrast this kind of relationship with how China would react if its military deserters were welcomed
Income Tax Act
in Afghanistan, or with how the Soviet Union would regard an application by Sweden to enter NATO.
In the economic sphere as well, our independence is visible. The American policy has not impeded Canadians in their aspirations to develop a high standard of living and an urban life style. The American investment in Canada by manufacturing companies and access to the American market for Canadian manufactures, have brought us real economic benefits. This attitude of partnership of a great power to its small neighbour has also benefited the United States. It has been proved that there is more to gain for its own people from the prosperity of its neighbours than from the bleeding process of empires past. In our secure and comfortable relationship, Canada has abandoned its traditional policy of fostering local industries behind tariff protection and has challenged Canadians to meet world competition in our own domestic markets. In this pursuit we have become America's best customer by far.
But the surcharge of August 15 and the prospect of far ranging U.S. tax subsidies to manufactured exports force Canadians to reconsider our relations with the United States. For this purpose it is immaterial whether the unilateral American act implies a new era, so far as the Americans are concerned, in their relations with Canada as such, or whether the Americans merely regard Canada's industrial prosperity as a pawn in their negotiations with third countries. In either case, our economic future is in peril.
I believe that the United States seems to have taken a narrow view of world trade. It seems to be labouring under an extremely static concept. For example, Secretary Connally has called for a shift of certain volumes of trade, measured in billions of dollars, from each of the countries with whom the United States does business, back to American production. This demonstrates a belief, I submit, that world trade is something like the children's game of trading marbles. Each child brings so many marbles to the table, and after the game some have more and some have less. The total number, however, does not change.
Mr. Speaker, world trade is not like a game of marbles; it is a dynamic, not a static thing. Total volumes are not fixed or predetermined. At the end of a successful round of world trade there is more in the aggregate than there was at the beginning. The process is creative; it generates expansion and wealth and can increase every player's prosperity. Everyone can win in trade. That does not happen in a game of marbles.
This is the dynamic approach the world had going for it in the Kennedy round. The United States should surely see, if it is seeking to use its economic power to take some or all of our marbles away, that it faces the risk, if Canada submits to such a policy, that the Canadian player who has contributed so much to the total process will be weakened or driven out of the game. Who would gain in such a process? Our first mission, therefore, is to clarify the United States concept of world trade and Canada's first place in it. What is the American concept? At the moment I believe their view of world trade is uncrystallized. I do not think there is a clear American consensus of what it
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Income Tax Act
means and where it will be. As a country which is vitally interested in this concept, I submit that Canada and Canadians should seek to play a part in the American policy formative process.
We all know that representations have been made by our government to that of the United States. But there are other initiatives which should be followed. Two weeks ago, for example, some distinguished American Congressmen, members of the Mills committee on ways and means, visited Canada with the NATO delegation. They expressed interest in exchanging views on these issues with our House of Commons Standing Committee on Finance, Trade and Economic Affairs. This American initiative should be welcomed and followed up by our committee as rapidly as possible.
I submit there is a special role for United States subsidiaries which carry on business in Canada. To develop this point I should like to say a word about the implications of American ownership of so much of our economy. Many Canadians see our present problems and the American influence over us as deriving from American ownership. I have given considerable thought to the issue of economic sovereignty, as have all hon. members. I agree it is an issue which deserves high priority. However, I see it mainly as a political issue, one of identity or of psychology but not economic.
The fact of foreign ownership as such plays no part in our economic problems, in our problems of unemployment, economic growth, inflation, regional disparity, poverty, monetary stability or any other of our economic problems. Such corporations are generally just as good and valuable citizens as are Canadian firms. I have yet to hear an argument which says that foreign ownership harms our economy, putting aside the non-economic aspect, which of course could be the subject of another speech.
The great American influence over us, I submit, is not in their ownership of our resources and factories but in the fact that they are our biggest customer and, like any customer, they always have the right to shop elsewhere or manufacture at home the goods we export. In this respect Canada's position is like that of Japan and West Germany vis-a-vis the United States. Japan and West Germany are two great economies. No one could claim that they are in any sense owned by the United States; nevertheless, they have been dramatically affected by President Nixon's unilateral initiative.
In Japan for example, the value of stocks trading on the Japanese stock market has declined 20 per cent since August 15. During the same period in Canada the stock market has been virtually unaffected. The Japanese have also been forced to revalue the yen, moving it upward by 6 per cent. Japanese businessmen, like those in Canada, must be going to the government saying, "We want our currency devalued vis-a-vis the United States". But the Japanese government is in no better position to respond positively than is our own. And ownership has nothing to do with it. However great and independent these world traders are, the fact remains that the United States is their best customer too, because the United States is everybody's best customer due to its huge consumption. None the less, as a country with the greatest trade contact with

the United States there is no doubt that Canada has been the most affected.
Yet, although the American ownership of our economy is more a political than an economic concern, it has an economic dimension. That economic dimension has only become apparent, at any rate to me, since August 15. That is this: most of the American firms operating here also operate in the United States, often integrated on a continental basis. On the other hand, most Canadian firms do not operate in the United States and have no plant or equipment there. This is simply because the United States has a more mature economy.
The implication of this difference is that when incentives appear in the United States, like the DISC program, the Buy American program and the surcharge-which are all incentives to transfer manufacturing operations to the United States-United States subsidiaries in Canada are in a much more flexible position to take advantage of them. They are free to go where they will make the most money. Of course, Canadian firms are free to move to the United States and seek the benefit of these incentives. However, with Canadian firms there is the inertia factor deriving from the fact that moving to the United States requires a new kind of internal policy.
Let me, therefore, toss the question in the air: What are the Americans and other foreign firms in Canada doing to preserve their Canadian manufacturing operations? We all know one thing they are doing-they are coming to Ottawa for grants under the employment support bill designed to maintain employment against measures like the surcharge. They should be entitled to these grants on the same basis as other businesses. But what are these firms doing and saying in Washington? They are, after all, in a unique position to advocate free trade there. These huge international U.S. firms are the inventors of the concept that international movement of trade is a dynamic force increasing world prosperity.
Are these firms speaking for free trade in Washington as other good Canadian corporate citizens would if they had the chance? Are they pressing their case, or are they moving back home? Are they converting or preparing to convert their Canadian factories to distribution centres and warehouses for American-made goods? I do not know the answer, Mr. Speaker, but I would like to know it.
If we learn that the United States does intend a new economic relationship with Canada, with protectionist tax subsidies both for domestic production like the measure passed in the House of Representatives this afternoon, and for exports like the DISC program which passed the House of Representatives last Tuesday, if their plans are to return industry to the United States and gear our economy by market pressures, to the extent that we permit, into a conduit of raw material to United States population centres, it is very clear to me that the tax bill before us will need revision. We will need measures modelled on the American method.
Canada has its own industrial prosperity to protect. If the Americans want to reduce world trade to a game of marbles, in so far as possible Canada must adjust. Our tax act will have to be used to stimulate manufacturing, employment and exports in a way which has never before
October 7, 1971

been necessary or, for that matter, which has never before been desirable. We will need a Buy Canada policy both at government level and in the private sector. These are the challenges we will have to face if our investigation proves that American intentions are what they appear to be.
Another proposal which has been made in this House is that we retaliate against the American measures by imposing an export tax on all of the resources which are exported to the United States. This measure is proposed on a false premise. I refer to the remark which the hon. member for York South (Mr. Lewis) made a few days ago. He said we should have an export tax; we should go to Washington, not on our knees, and say to the Americans that they desperately need our oil, natural gas and other resources of which they are short. It is true that the United States has a considerable reliance on Canadian resources, but I submit there is no such dependence. There is a big difference between dependence and reliance.


Some hon. Members:: Hear, hear!


Robert Phillip Kaplan: I wish to refer to some of these resources. Pulp and paper are referred to as commodities which the United States desperately need from us. The fact is that American pulp and paper are substantially cheaper than the Canadian product. I suppose the reason for this is our climate. The fact remains that Americans are into Canadian pulp and paper, probably because of union problems.
Second, people say that Americans desperately need our oil. How true is that? The fact is that oil from the Middle East comes to the United States at times at $1.50 a barrel less than Canadian oil exported to that country.
Why do the Americans buy our oil at $1.50 a barrel more than they pay for oil from the Middle East? They buy it because it is important for them to maintain what they call an uninterruptable supply. If by our policies we indicate that our export of oil depends on their good behaviour, on our terms, I do not think we will have that protected market for very long. I do not think we will have that subsidy for very long. In any event, production of oil in the United States itself is only a matter of cost. At $3 or $3.10 a barrel they could be converting shale and tar sands to oil. They have no enormous dependence on Canadian oil: they have a reliance but not a dependence. What about natural gas? There is one thing you cannot get from the Middle East.


An hon. Member:: Get it from the NDP.


Robert Phillip Kaplan: In my house I use natural gas for heating. I am delighted to do that. However, if I could save a cent per unit I would transfer to oil. There is no major business in the country that is not equipped to use either oil or natural gas as fuel. They make their decision entirely on the basis of cost. Of course, if we were to cut off the United States supply of natural gas on Christmas eve or something like that, we might really be able to get them- but to argue that natural gas is a resource which is absolutely required and comes only from Canada is ridiculous.
The last resource I will itemize is nickel. I think I have covered all the main categories. It has been suggested that we could cut off the whole supply of nickel to the United States. That used to be true, but a lot of nickel is now
Income Tax Act
being produced in other parts of the world. Another thing the advocates of an export tax do not realize is that our nickel production depends on the volume we sell. If we do not have big customers abroad for Canadian nickel, we cannot be in the nickel business. To withhold our nickel would contribute to cutting our economic throat.
I sincerely hope the government will not be sucked in by arguments, however politically attractive they might be, that we should retaliate with an export tax. We have to assess what the Americans intend to do with regard to us and our power of coping with the situation. We should direct ourselves accordingly.


Mr. D. R. Gundlock (Lethbridge):: Mr. Speaker, the hon. member for Don Valley (Mr. Kaplan) opened his speech by referring to a romance that our country has apparently had with other countries of the world, particularly our friendly neighbour to the south. After listening to many of the debates concerning Bill C-259 and the amendment before us, I am reminded that the Canadian people have had a rather short-lived romance with the Liberal party. We have spent some years listening to the Prime Minister (Mr. Trudeau) promising us that the just society was just around the corner. We have spent some years listening to the Prime Minister, the leader of the Liberal party, telling us that the just society is here.


James Hugh Faulkner: He never said that.


Deane Roscoe Gundlock: I will say something about that later. The debates that I have heard in this House have not suggested in any way, shape or form that the just society has arrived. As a matter of fact, it is probably the other way around: it is going around the corner at a very rapid pace in a way that is discouraging to the economy of this country and to the people of Canada. The hon. member for Peterborough (Mr. Faulkner) said earlier in this debate that opposition members never have anything important to suggest.


James Hugh Faulkner: Hear, hear!


Deane Roscoe Gundlock: I am glad to hear the member saying "Hear, hear". I point out to this House and the Canadian people that the strong suggestions and feelings that have been voiced here, particularly since last September, have not come from members of the opposition alone. In fact, some of the strongest pleas have come from the government benches.


Mr. Mahoney:: That is true; most of the strong voices come from here.


Deane Roscoe Gundlock: This is in spite of the fact that certain members, including the Prime Minister, think opposition members do not suggest very much. They say our suggestions are not worth much. I remind this House and the Canadian people that when we reach such unanimity these suggestions must be listened to.
I see no better measure to try to improve the economic affairs of the country, particularly since the action of the United States, than a tax bill, especially one which is supposed to be so far reaching. I fail to see any change in this measure at a time in Canadian history when changes

October 7, 1971
Income Tax Act
are so badly needed. One would expect some visible effort on the part of the government to improve the economy. Time and time again hon. members have drawn attention to the kind of provisions which are needed, but so far I find no indication that the Minister of Finance (Mr. Benson) is even listening.
The Prime Minister (Mr. Trudeau) is reported in today's Ottawa Journal as having something in mind to improve the employment situation. I point out that it has been suggested in this House over and over again, not only by members of the opposition but by members of all parties, that this type of action is badly needed. It is comforting to learn that after all these years of great suffering by millions of people, the Prime Minister at last has something up his sleeve which might create jobs. I was glad to note this, with its indication that after years of listening to talk about an improved society and the just society, the government is at last beginning to think about it.
As a member of the opposition, I suppose if I were very selfish I would say I am glad I have had a small share in bringing this matter to the attention of the Prime Minister and that he in turn has thought sufficient of it to bring it to the attention of the press. So we have some hope, at least, of a new society-one, perhaps, where people can work and save and enjoy a decent standard of living.
The amendment should be supported. My purpose in rising is to do just that and, as I said earlier, to call the attention of the Canadian people to the fact that there have been strong pleas-again, I emphasize, from all sides of the House-that the Minister of Finance reconsider certain provisions in the bill before us if not the bill in its entirety.
It should be borne in mind that our relationship with the United States has changed since this bill first saw the light of day. In this new situation I believe the minister should revise his thinking or at least withdraw the bill for a time so he may take a second look at it. This would also enable him to pay more attention to what has been said in this House on the subject.
Many hon. members have called for the establishment of certain priorities. In light of the changed conditions which are now apparent, priorities should be fixed which would offer a solid economic course for this country to take. Most business people, most of us here in the Commons as representatives of the people, and nearly all our leading economists have advised the government and the people in general that our economic course is simply one of opportunism, of drifting aimlessly about. It must come to a halt. This type of drifting is getting the country into a terrible situation.
Here we are, a beautiful country-as someone said the other day-and certainly a rich one, abundant in both natural and human resources. There is no country in the world which is any richer, and certainly we possess the knowledge required to govern us on an even, economic course. Yet what has happened to us? The government says, and quite rightly so, that it has a mandate from the people. However, I am not sure that Canadians would be proud of those who have their mandate if they had heard some of the debate on this tax bill.
One of my purposes in speaking tonight is to call attention to what others in the House have been saying. The

intentions of members taking part in these discussions have been good. My hon. friend from Malpeque (Mr. MacLean) spoke on this subject the other day. He drew attention to what President Nixon had to say. There is no question that President Nixon is a world leader and is a popular leader of perhaps the richest country in the world. As reported at page 8355 of Hansard, the President of the United States, whose words were quoted by the hon. member for Malpeque, in his address to the U.S. Congress said:
I ordered a $4.7 billion cut in federal spending, to allow for tax cuts to create new jobs.
That is a forthright statement to the country, and judging from what has happened since then I presume his country accepted it. That statement was made on September 9. We often hear it said that our economy is so closely tied to that of the United States that we cannot control our economy. I do not agree with that premise in any way, shape or form. In the first place, I do not think we need to be tied so closely to the United States economy, particularly in view of the richness and vastness of Canada and its resources. This is why to my mind the amendment moved by my colleague from Edmonton West (Mr. Lambert) to Bill C-259 should receive the support of all of us.
The President of the United States continued:
X ask the Congress to consider as its first priority, before all other business, the enactment of three tax proposals that are essential to the new prosperity. These three measures will create 500,000 new jobs in the coming year.
First, I urge the Congress to remove the 7 per cent excise tax on automobiles, so that the more than eight million people in this country who will buy new American-built cars in the next year will save an average of $200 each. This is a sales tax, paid by the consumer. Its removal will stimulate sales, and every 100,000 additional automobiles sold will mean 25,000 additional jobs for America's workers.
The President speaks very plainly. The tax bill that we are discussing is, for all practical purposes, several years old. Since last August we are in a completely new economic ball game, yet we are being asked to consider legislation that is behind the times. The Minister of Finance is doing nothing to meet the new situation. I am aware of no change in or amendment to the bill, and no suggestion has been made by the Minister of Finance or the Prime Minister that the bill will be changed in any way, shape or form. Quite frankly, I think we are in danger of getting ourselves into a worse position, though it is bad enough now.
The Prime Minister has said in this House on many occasions that Members of Parliament are not worth a hill of beans. Each member of this House represents anywhere from 25,000 to 125,000 people, and when he rises to his feet and almost begs and pleads with the government to do something to alleviate the economic situation, you cannot tell me that MPs do not amount to anything. Some of the members of this House are the hardest working bunch of people I have ever met.
I have made reference to some remarks of the hon. member for Malpeque. The hon. member for Vancouver-Kingsway (Mrs. Maclnnis) also had something to say about the economic situation in Canada. She outlined who were the people who will be affected by this measure and she made a good, honest speech on behalf of the people
October 7, 1971

she represented. She said, as reported at page 8356 of Hansard:
The result is that this tax bill continues to widen the gap between the "haves" and "have nots" in this country. It increases the comfortable insulation of the top 20 per cent of our population who enjoy 40 per cent of the good things of this world, and of Canada in particular, and makes more acute the humiliating poverty of the lowest 20 per cent who try hard to cling to their portion of only 7 per cent of the national income. Their position has not changed very much or, if at all, only for the worse.
I heartily concur with that.
Somewhere in between are the middle 60 per cent who are trying to climb the slippery slope to security while those at the bottom of the slope are sliding to the ragged edge of poverty.
That is part of what the hon. member for Vancouver-Kingsway had to say, and I agree with her. She then went on to explain how the elderly people would be affected by the provisions of this bill and asked what would be done for them. I wish the Minister of Finance were in his seat so he could answer that question.
What is being done under this tax bill to help the unemployed? What is being done to help those on fixed incomes? What is happening to those who have been on fixed incomes for the past five or six years? Last February a situation was brought to my attention. It involved a lady 82 years of age. She is a widow of a former captain in the Ottawa fire department. He retired after 42 years' service and went on pension. When he died, this elderly lady was left with only $133.61 per month because his pension lapsed. Her rent was $117.50 per month. This left her with $16.11 per month for food and clothing. What will this tax bill do for people like her? I was glad to learn recently that as a result of efforts of the Ontario finance corporation she is now living in a new apartment and paying rent of only $37.70 per month.
I cannot see anything in this tax bill that will offer any relief to people of this kind. We must have tax incentives. Members on all sides of the House have advocated the removal of the 11 per cent sales tax on building materials. This may be a small item but it would relieve situations such as the one to which I have referred. Even members of the Prime Minister's party have supported this suggestion. But this will not be done through Bill C-259. That is why I support our amendment.
This tax reform measure first came to our attention in the form of a government white paper. I suggest it was not worth the paper it was printed on. That is the situation with which we are now faced. Many things have happened since the introduction of that white paper. We have higher unemployment, higher prices, lower seasonally adjusted manufacturing shipments, lower seasonally adjusted new orders, additional seasonally adjusted unfilled orders and higher seasonally adjusted inventories. That is what has happened in our industries-and it is not the result of the recently imposed surtax on U.S. imports. As a result of that surtax I am sure we can expect more readjustments. Canadian people, such as members of this House, are aware that the government has sent a number of people to Washington to negotiate in respect of this surcharge. I do not suppose they have accomplished anything. They might just as well have stayed at home.
Division


Lincoln MacCauley Alexander: They should have picked up the telephone.


Deane Roscoe Gundlock: They should have picked up the telephone, for all the good they did. The lack of action by the government is very discouraging. We had to wait for the hon. member for Edmonton West to bring forth an amendment to this bill in order to do something constructive.
The support the Minister of Finance thinks he has for this bill is not really support: his supporters are simply saying that there should be reform which will be of benefit to the people of this country, without suggesting any specific reforms.


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


Some hon. Members:: Question.


Mr. Deputy Speaker:: The question is on the amendment of the hon. member for Edmonton West (Mr. Lambert) to the main motion of the Minister of Finance (Mr. Benson). All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
NAYS Messrs:
Allmand
Andras
Badanai
Barrett
Bichard
Benson
Blair
Borrie
Boulanger
Breau
Caccia
Cafik
Clermont
Comtois
Corbin
Corriveau
Cote (Richelieu)
Cullen
Danson
Deachman
Deakon
De Bane
Drury
Dubi
Dupras
Faulkner
Forget
Foster
Francis
Gendron
Gibson
Goyer
Guay (St. Boniface) Guilbault Hogarth Hopkins
Howard (Okanagan Boundary) Hymmen Isabelle Jamieson Jerome Kaplan Lachance Lajoie Langlois Laniel
Leblanc (Laurier) LeBlanc (Rimouski) Lefebvre Legault
Lessard (LaSalle) Lessard
(Lac-Saint-Jean) L'Heureux Loiselle MacEachen MacGuigan Mackasey McNulty Mahoney Major Marceau Marchand
(Kamloops-Cariboo)
Murphy
O'Connell
Olson
Osier
Otto
Portelance
Pringle
Prud'homme
Reid
Richard
Richardson
Robinson
Rochon
Roy (Laval)
Serre
Smith
(Northumberland-
Miramichi)
Smith
(Saint-Jean) Stafford
Stewart (Okanagan-
Kootenay)
St. Pierre Thomas
(Maisonneuve-
Rosemont)
Trudel
Turner
(London East)
Wahn
Walker
Watson
Weatherhead
Whelan
Whiting
Yanakis-92.
Mr. Deputy Speaker:: I declare the amendment lost. Is the House ready for the question on the main motion?


Mr. McQuaid:: Mr. Speaker, may I call it ten o'clock?



HEALTH-CANADIAN MEDICAL ASSOCIATION REQUEST FOR EXPANSION OF FACILITIES TO TRAIN DOCTORS- GOVERNMENT ACTION

Philip Bernard Rynard: Mr. Speaker, yesterday during the question period I raised the question of medical manpower-


Mr. Deputy Speaker:: Order, please. The Chair has difficulty hearing the hon. member for Simcoe North (Mr. Rynard). Would hon. members please keep their conversations quiet or conduct them behind the curtains in order that we may proceed with the "late show."


Philip Bernard Rynard: Mr. Speaker, yesterday when I raised the question of medical manpower there was not sufficient time to deal with it adequately. First there is the shortage of established doctors, second the complete inadequacy of new doctors and, third, the moral issue.
Medicare was set up by a Liberal government and became the law of the land. It then became the responsibility of Parliament to see that the necessary doctors were provided. To put it mildly, there has been no real attempt to carry out these provisions. The profession is today unable to cope with the increasing medical demand of not only an increasing population but of an aging population, necessitating more chronic care. People are paying for medicare and feel they have a right to medical attention. This has put a very severe strain on the medical profession.
There should have been an increase, as recommended in the Hall commission report, instead of four years later graduating, in 1969, just over 1,000 doctors, importing just over 1,000 from foreign countries and refusing to provide the facilities required to train the necessary doctors needed to keep pace with our growing population and demand. In 1961 there was in Canada one doctor for every 50 persons. That ratio has dropped and we now rank twentieth in the world in doctor-population ratio.
In both rural and urban centres there is an increased shortage of doctors and lack of hospital space. As a joint program with national medicare, money was to be set aside, called the health resources fund. A fund of $500 million dollars was to provide the facilities, build the schools for training doctors and paramedical personnel. About the first thing this government did was to cut the health resources grant. This was patently dishonest and unfair to the Canadian people, cutting the services that they are now getting, and it was unfair to the doctors who are expected to pick up the overtaxed load of patient service. The emergency departments of hospitals are being overtaxed.
Because of the scarcity of doctors and their overload of patients, the sick find difficulty in securing appointments. Many people are forced to go to emergency departments of hospitals that were never meant to treat anything but
October 7, 1971

emergencies. A large proportion of these cases are routine cases that ordinarily could be seen in the doctor's office if there were sufficient medical manpower. Instead of their serving the purposes they were designed for-to treat real emergencies, accidents and those acutely ill-they are being used to treat routine cases, often at the expense of those who are more seriously injured or sick.
This is a deteriorating situation across Canada today. To blame the doctor or the public for this situation is grossly unfair. People today move freely from place to place; they find themselves in a new city, needing a doctor. But most doctors are taking no further patients. Their only recourse is the emergency department of a hospital. I do not want to indicate that there is no blame attached to the medical profession or the general public, but the crux of the problem rests squarely on the shoulders of the government. There will be complete deterioration in medicare if a solution to the problem is not discovered.
The basic problem is one of the production of doctors. To say they are in short supply is an understatement. I do not believe that the government understands the situation, in view of statements made by responsible ministers such as, "The so-called doctor shortage is a myth". To say that the creation of an effective assistant and the production of allied health workers will solve the problem is not a statement of fact. We need about 2,000 physicians per year to maintain our current level of physicians to population. This would just cover doctors who retire, die or emigrate: we do nothing about those who go into administration, research or education.
Canadians are today losing their lives because of the shortage of medical manpower. They are unable to receive the necessary service in the required time. This brings me to the moral issue of the importation of foreign doctors. In 1967 we guaduated 923 and we imported 1,212. In 1968 we graduated 1,016 and we imported 1,277. In 1969 we graduated 1,017 and we imported 1,347. Last year we graduated 1,152 and we imported 1,113. Many of those imported come from foreign countries whose poverty is extreme, who have a doctor-population ratio of one to
5,000	or more and who badly need trained personnel in their own country. Furthermore, the majority of them do not have the high standards of education that we have in Canada.
Over 600 Canadian students last year had the basic qualifications to get into medical school and were rejected because there was no place for them. At the same time there were students accepted for medical school in other parts of the world, many of whom were not as well qualified as the 600 we rejected, and in a few years they will be emigrating to Canada to fill physicians' shoes which should have been filled by Canadian men and women whom were unable to train. Many other students wanted to enter medical school, but were rejected because they were not grade A or grade B students.
I think surveys that have been made in Canada and the United States show that grades obtained in high school have little relevance to the doctor who is turned out some years later. Indeed, many of those with lower grades have shown that they are better clinical men when they get out in practice.
Proceedings on Adjournment Motion [Translation]


The Acting Speaker (Mr. Boulanger):: Order. I regret to interrupt the hon. member, but the time allotted to him is up.


Philip Bernard Rynard: Mr. Speaker, I do not think my time elapsed. I was held up at the start.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Boulanger):: The hon. member is quite right. If the House agrees, we should give him a minute or so more. Is it agreed?


Some hon. Members:: Agreed.


Philip Bernard Rynard: Dr. J. F. McCreary, Dean of Medicine at the University of British Columbia, deplored the waste of time and energy employed in selecting 60 students from 540 applicants and asks the very pertinent question: Is the ability to pass an examination any measure whatsoever whether or not a student will become a good physician? In fact, it has little or no bearing.
Therefore, I again come back to the moral issue: Is it right to take doctors from other countries? They are accusing us of doing it-see the article in the Ottawa Citizen of Tuesday, September 14, 1971, entitled, "Canada is stealing too many doctors". Dr. Matthew A. C. Beau-brun, of Jamaica, put the finger on Canada as the No 1 cause of their area's medical shortcomings.
We are in a crisis. The federal government is entirely responsible for the production of doctors. We brought in national medicare to enlarge the funds and put the facilities in gear for faster training, with more medical schools and enrolment of enough Canadian boys and girls to meet our medical requirements in the future. This must be done. I suggest to this government that they are derelict in their duty in this regard and that this matter should be referred at once to the Standing Committee on Health, Welfare and Social Services.


Mr. Andre Ouellet (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I would like to point out in the first place your recent promotion to the chair and to congratulate you for that honour which reflects on you and your constituents. I wish you a long term of office and the best luck for the years to come.


Some hon. Members:: Hear, hear!


André Ouellet: In reply to the hon. member, I wish to say that the Minister of National Health and Welfare (Mr. Munro) has already stated that in Canada the ratio of physicians to the number of inhabitants is one of the highest in the world. This ratio is even higher than that in developed countries such as Sweden, France, New Zealand, Great Britain and Japan.


Philip Bernard Rynard: That is incorrect.


André Ouellet: Mr. Speaker, I think that the hon. member has been allowed even more than his allotted time, and I
8542

October 7, 1971
Proceedings on Adjournment Motion
hope he will leave me at least the few minutes at my disposal to answer him.
The Royal Commission on Health Services has recommanded a ratio of one doctor for about 650 people. In 1968, there was one doctor for 740 people, and now there is one for 683. I hope that the hon. member will note the continuing improvement in that field. The increasing number of graduates in medicine together with the immigrant doctors will surely contribute to improve the situation, and the ratio recommended by the Commission will soon be reached.
In conclusion I would like to say that the efforts of the government are designed not only to alleviate the alleged lack of doctors, but also to improve medical services so that all Canadians receive good care. Indeed, since 1966, the government has already spent $216,000,000 to meet all those needs.


The Acting Speaker (Mr. Boulanger):: Order, please. I regret to interrupt the Parliamentary Secretary, but his time has ended.



FRUIT-REQUEST BY BRITISH COLUMBIA GROWERS FOR EXPORT ASSISTANCE-LEGISLATION TO PROTECT AGAINST DUMPING OF AGRICULTURAL PRODUCTS

Mark Willson Rose: Mr. Speaker, in contrast to the serious national problem posed by the hon. member for Simcoe North (Mr. Rynard) concerning the shortage of doctors in Canada and the effect of this shortage on the nation's health, my intervention tonight, dealing with the problems of the Okanagan apple industry and the strawberry industry in the Fraser Valley, may seem minuscule. However, I put forward my representations to the government on the basis of the old adage that an apple a day keeps the doctor away.


Some hon. Members:: Oh, oh!


Mark Willson Rose: My intervention tonight comes hard on the heels of the rejection by this House of an amendment put forward by my party designed to include Canadian agricultural exports within the scope of Bill C-262.1 know that members of the Official Opposition who are constantly concerned about the problems of Canadian agriculture, and who provide a great deal of flak in connection with this matter, voted against this amendment to include agriculture within the scope of the bill. This is known as a parenthetical aside. Other speakers have spoken on the pre-eminence of agriculture in the total area of Canadian exports. Indeed, the hon. member for Regina East (Mr. Burton) pointed out that United States imports from Canada amounted to 15 per cent of the total not covered by the particular bill we were discussing, which was concerned with aid to industrial production in Canada because of the United States surcharge. That measure was Bill C-262.
It can be pointed out that processed agricultural products could be assisted by Bill C-262. It seems to me we need to assist certain raw products such as wheat and rye as much as certain processed products such as Wheaties and rye whisky.
[Mr. Oueilet.J
My remarks tonight stem specifically from a question I put to the Minister of Industry, Trade and Commerce (Mr. Pepin) on September 17. As reported in Hansard at page 7948,1 asked the minister the following question:
In view of the difficulties faced by the Canadian apple industry as a result of the U.S. surcharge and also a poor apple crop this year, has the government yet made a decision on the request by the British Columbia Tree Fruit Growers for $64,000 in export assistance similar to that contemplated for industries in Bill C-262?
I received a reply from the minister which is known as a "nuthin'" answer-spelled "in'", not "ing"-to the effect that he would look into it. This was a month ago and I have not heard the result of his looking into it. I asked, further, whether, since Canadian agricultural products- not only apples and strawberries but vegetables as well- were constantly being threatened by dumped imports or foreign offers at distress prices, the government was preparing legislation that could be applied instantly to protect Canadian producers of agricultural products. The minister replied, rather self-righteously-as I think he had to-that when this was done by other countries it was difficult for Canadians to do the same thing because we have, of course, opted for fewer trade barriers as a method of increasing general trade in the world.
I have no quarrel with that, but I would point out that my party also favours a general lowering of artificial trade barriers erected between countries. Competition is fine, provided the competitors are evenly matched. I think we would all agree that when Montreal plays Toronto, the fight is even. But when the fight is between the Chicago Black Hawks of the NHL, with all their resources and capital, and the Kelowna Packers, in the Allan Cup it is obvious the strength is not evenly matched. This uneven competition exists in the agricultural field today, not only seasonally but in terms of production.
May I take a moment or two to give some of the background to the question I have raised. In the Okanagan we have experienced two years of low returns. The apple crops are poor this year. Banks are tightening credit. Fresh apples exported to the United States have been affected by the surcharge to the tune of an extra $66,000. We probably exchange about a million boxes each a year. There has been a large crop of pears in California, and as a result of this large crop, distress offers have lowered prices of these products. The price in the Okanagan is about $1.50 a box.
United States prunes are offered at 2 cents a pound, which does not even cover the picking cost. When we come to apple pies-and what can be more American, or shall I say North American, than apple pie-most of the apples in the pies in British Columbia come from China and Japan. Even our own public institutions, such as Woodlands School for the Retarded, import United States apples constantly, though the Premier himself comes from the centre of the apple growing area, Kelowna.
The United States has always maintained, despite the GATT agreement, the two cents surcharge or tariff against Canadian apples, while we have ceased to do the same. I think we need instant machinery to deal with threats like this to our agricultural stability. We have been talking for the past month, about certain measures to protect wheat and various grains, but I know of no similar measures to protect potatoes.
October 7, 1971

I see Your Honour is anxiously looking at me, but I would invite you to take a rest since I did not commence so soon as the previous speaker. However, I promise I will end my remarks almost immediately. I therefore ask the government to consider measures to remedy the instability of Canadian agricultural markets. Apple concentrates are being imported from Europe. The Department of Agriculture is making a study of the situation, but this has not been completed. Let us give an optimistic report to those engaged in the agricultural industry of British Columbia.


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I see that my hon. colleague for Calgary South (Mr. Mahoney) would have liked to reply to the hon. member for Fraser Valley West (Mr. Rose), because I think that, coming from that part of the country, he might have been in a position to specify certain points. But since the hon. member has said at the beginning of his remarks that if every Canadian-and I think he was right-ate one apple a day, the services of those among our good colleagues who are doctors would perhaps not be required. On this, I perfectly agree with the hon. member, because this would mean an average annual consumption of 8 billion apples.
The hon. member for Fraser Valley West (Mr. Rose) has raised the question of assistance to agricultural producer groups and others on unprocessed agricultural products, similar to the assistance provided under the employment support bill. Members will appreciate that handlers of processed agricultural products, like others, have available to them the provisions of the employment support bill.
As the minister announced in this House last week, similar assistance will be available in respect of unprocessed agricultural products under the provisions of the Agricultural Stabilization Act. The Agricultural Stabilization Board has been authorized to develop programs on a commodity-by-commodity basis and the minister has solicited applications from producer and agricultural products distributor groups for assistance under the program.
The hon. member has raised the question of the apple industry. Departmental officials have met with officers of the Horticultural Council and plans are under way for a wider meeting with apple industry representatives to consider possible programs that will mitigate the effect of the surtax. I should also add that apples represent one of the items in respect of which the United States has announced that the tariff would be reduced to zero on January 1, 1972. If the planned Kennedy round reduction proceeds, the surtax should also be removed at that time since, the surtax is not designed to apply to items for which there is no tariff.



NATURAL RESOURCES-OFFSHORE MINERAL RIGHTS- FEDERAL POSITION RESPECTING SABLE ISLAND

J. Michael Forrestall: Mr. Speaker, I do not want to disappoint the parliamentary secretary by saying I hope he does not talk about apples,
Proceedings on Adjournment Motion
because I shall be talking about oil, a commodity a little closer to his soul. I am talking about the essential rights of Nova Scotians. I am very much aware that the question of jurisdiction over Sable Island and its offshore mineral rights are inseparable. I do not seek to debate the whole situation but only the first aspect of the question dealing with the jurisdiction of Sable Island.
The Prime Minister's decision not to discuss the rights of the province of Nova Scotia to the territory of Sable Island, I suggest to the parliamentary secretary and to the House, is obviously a political one, made in a political context as the result of a recent Supreme Court decision. But I feel strongly that the people of Nova Scotia have a right to be heard in this House and by the government on the question of jurisdiction. On that basis alone a political decision has been taken by this government.
The Supreme Court decision of 1967, based on an historical analysis of offshore rights, which ruled that British Columbia should have control only of the lands with which it entered confederation, makes a good case for the federal government concerning mineral rights off the shores of Nova Scotia. That is not disputed in any arguments we are raising. Indeed, one knows very well that if the controversy again comes before the Supreme Court, that court must be guided by the precedent which has been established.
However, it is a rather narrow attitude to apply this legal precedent directly without listening to the special case of Sable Island and the people of Nova Scotia. It is true that the BNA Act lists Sable Island as property of the federal government in connection with lighthouses, piers and beacons-but only in that connection. Could the BNA Act provision be construed in the sense that the federal government owns only Sable Island's lighthouses, piers, and so on, and not the land itself? On the other hand, if it is the case that all of Sable Island is under federal authority, why did this authority not form a council to administer the island, as is the case in the Northwest Territories, rather than leave it to work things out for itself? I suggest to the parliamentary secretary that he not take that suggestion too lightly, although I do not expect him to deal with it tonight.
Furthermore, Nova Scotia and New Brunswick entered confederation under the terms that they would each maintain their boundary limits. I think this is clear. I believe that jurisdictionally it takes precedence over the other subsection, and this is a point of argument which will be raised. So far as Nova Scotia is concerned, this includes Sable Island. Indeed, by the Treaty of Utrecht of 1713, Sable Island was ceded to Acadia, a territory which includes present-day Nova Scotia.
Prior to confederation there was no doubt that the province of Nova Scotia owned Sable Island, and there should be no doubt today-at least, no political doubt. The province has recognized the rights of the inhabitants of Sable Island by allowing them to vote, for example in the provincial election of just about a year ago, as constituents of a county of the province in which I happen to live. Although I am not absolutely certain, I believe there was an opportunity for the people working on the island to vote by way of proxy as long ago as five years.
24319-52;

October 7, 1971
Proceedings on Adjournment Motion
The Boundaries Extention Act of 1912 also supports the case of ownership, by the province of Nova Scotia, of Sable Island. Indeed, by this act vast northern areas, as hon. members know, which were well established federal domain since 1869, were turned over to the provinces of Quebec, Ontario and Manitoba without compensation to the people of Canada. The same procedure was applied a few years later in respect of Alberta and Saskatchewan, and more recently Newfoundland. I simply ask the parliamentary secretary, why should Nova Scotia be turned down? As Mr. E. D. Haliburton of that province points out in an article in the Mail Star:
The right of the three provinces of Quebec, Ontario and Manitoba to this northern territory is clearly analogous to the claims of the Atlantic provinces for offshore mineral rights. Our claim comes late because until recently such offshore mineral rights were not known to have value.
In the same vein, Professor Chester Martin maintains that in all former British possessions, Crown property was really the property of the community. In Canada, not only did the British colonial authorities recognize the right of local or colonial responsible governments to exercise full administrative control of these Crown lands and of the public domain, but the BNA Act, section 109, also stipulates that the beneficial control-this is important- of the public domain is vested in the several provinces. In light of such arguments and in view of the aspirations of the people of Nova Scotia, I cannot but reiterate the position taken by the leader of my party last evening in Montreal, when he said:
The royalties on offshore oil should go to the contiguous provinces. This question should not be settled on a strict point of law. The tradition of equity in this country should govern, and the equitable solution is to make the royalties available to the contiguous province.
There are several questions which remain on this issue, and they will be raised until the problem is resolved.


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


Patrick Morgan Mahoney: Mr. Speaker, much has been said about the benefits to the Atlantic provinces of the offshore search for oil. That search will be stimulated and those benefits made more certain by the recent discovery on Sable Island. By the end of this year the petroleum industry will have spent about $130 million in the oil hunt off Canada's east coast. To date, 24 wells have been drilled. Assuming that all the work required to maintain presently outstanding permits is in fact done, the industry will, over a period of years, spend about one and three quarter billion dollars, half of which will be injected directly into the economies of the Atlantic provinces. During the current year, about $60 million will be spent on petroleum exploration off the east coast. Announced and tentative programs indicate at least double that activity next year. The Sable Island discovery may well accelerate these programs.
In this vast context, the question of whether or not Sable Island is part of Nova Scotia which is amenable to decision by the courts really begs the main issue. In late 1968 the federal government made an offer to the provinces which would have settled the division of revenues from offshore mineral rights, including those derived from Sable Island. The Prime Minister (Mr. Trudeau) again discussed this offer with the Premier of Nova Scotia a couple of months ago. It is well known that the question is not yet resolved. We hope that the Sable Island discovery will impart a sense of urgency heretofore absent in so far as some of the provincial governments are concerned.
Motion agreed to and the House adjourned at 10.33 p.m.

Friday. October 8. 1971