1971-06-22

Mr. Speaker:: 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-14, an act respecting the construction of an international highway bridge between Fort Frances, Ontario, and International Falls, Minnesota, to which the concurrence of this House is desired.



ROUTINE PROCEEDINGS


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


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I have the honour to table in the two official languages a report entitled "Proposals for a New Business Corporations Law for Canada".



INDUSTRY


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, under Standing Order 41(2), I should like to table, in both official languages, a Textile and Clothing Board report on an inquiry respecting cotton and polyester oblique cotton yarns, as well as a press release on the same subject containing the decision made by the government.



BUSINESS OF THE HOUSE


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, in accordance with the rules I would like to advise that the budget debate will commence today and will continue on each of the sitting days until and including June 30. May I also take this opportunity to refer to item 76 on today's order paper, Bill C-244, respecting the stabilization of prairie grain sale proceeds. Under the normal rules it would not normally be possible to call that bill until tomorrow, but in accordance with prior understandings I suggest it might be possible to waive that condition and call the bill this evening at eight o'clock for the report stage.


Mr. G. W. Baldwin (Peace River):: That would be acceptable, Mr. Speaker. The agreement might well include the waiving of the rules to permit the opposition to proceed with the very good amendments it is offering at the report stage. I think that both these suggestions would be acceptable.


Mr. Knowles (Winnipeg North Centre):: Agreed.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is agreed and so ordered.



PROCEDURE AND ORGANIZATION


Mr. J. M. Forrestall (for Mr. McCleave) moved: that the eighth report of the Standing Committee on Procedure and Organization, presented to the House on Friday, June 11, be concurred in.


Allan Joseph MacEachen: Mr. Speaker, I have some difficulty in connection with this motion at the moment because I understand it was not intended to move concurrence in the eighth report of the Standing Committee on Procedure and Organization unless there were general agreement on the question of authorizing radio broadcasting of the proceedings of the House in the final days of the session before the summer recess. I am not certain as to what the attitude is in the other parties but I do know there are

June 22, 1971
Labour Conditions
reservations on this side of the House with respect to the details.
I also believe that if the debate were allowed to continue there would be considerable discussion on the motion at the present time. I would remind the House that any discussion which might take place today on this motion, if it were extensive, would remove the possibility of proceeding with the budget debate at an early stage.
I have some difficulty in reaching a conclusion as to what is the right thing to do, but believing that the right thing is to continue as early as possible with the budget debate and to observe the understanding which I believe was reached in the Standing Committee on Procedure and Organization, I would suggest that the debate on this motion be adjourned at the present time.


Mr. Speaker:: Before we proceed further with what appears to be a point of order raised by the President of the Privy Council, I might say that the Chair assumed that the hon. member was proposing the motion with the knowledge and the consent of the President of the Privy Council, and it was on that basis that I proceeded to put the motion. Perhaps the Chair might be reassured now in this regard.


J. Michael Forrestall: If I might reassure Your Honour, what I intended to do, perhaps in an attempt to second guess the Chair, was to make sure that Your Honour stood the motion, not proceed with it.


Mr. Speaker:: Everyone seems to agree that the motion should stand, and the motion will stand.
Motion stands.



LABOUR CONDITIONS


Stanley Howard Knowles: Mr. Speaker, now that we have had two instances of the House giving unanimous consent to certain requests, I hope the mood will continue as I ask for unanimous consent to present a motion under the terms of Standing Order 43. In that confidence I move, seconded by the hon. member for Vancouver East (Mr. Winch):
That Mr. Simon Riesman, the Deputy Minister of Finance, be called before the Standing Committee on Finance, Trade and Economic Affairs to explain his assertion that an unemployment level of 5 per cent of the labour force is acceptable.


Mr. Speaker:: The House has heard the proposed motion. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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



MOTION TO ADJOURN UNDER S.O. 26 YOUTH STUDY OF CULTURE BY DEPARTMENT OF NATIONAL HEALTH AND WELFARE-AVAILABILITY OF INFORMATION TO OTHER GOVERNMENT AGENCIES

Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the broad implications of a program being undertaken by the Department of National Health and Welfare in which young people are being paid to obtain secretly information on other young people, and the serious questions raised by the availability of this information to other government agencies, particularly the RCMP.


Mr. Speaker:: The hon. member for Winnipeg North has given notice of his intention to propose this motion to the House under the terms of Standing Order 26. I have given the matter serious consideration but I cannot come to the conclusion that it is of such urgency that the business agreed to for today, that is, consideration of the budget proposals, should be set aside for the purpose of discussing the subject matter raised by the hon. member's proposed motion. For that reason I suggest to hon. members that the Chair cannot put the motion at this time.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: should like to ask the Acting Prime Minister whether the government has had an opportunity to reach a decision with regard to the package of constitutional proposals brought back from Victoria and, if so, whether the decision of the government of Canada is favourable?


Hon. Mitchell Sharp (Acting Prime Minister):: The
matter is still under discussion in cabinet, Mr. Speaker.


Robert Lorne Stanfield: Can the Acting Prime Minister advise the House what procedure the government has in mind to handle this package so far as Westminster is concerned? Is it the intention to bring the British North America Act, the constitution, home in its present state and then have these amendments made in Canada or is it the intention to have it changed by the British parliament to incorporate these proposals and then bring it back?


Mitchell William Sharp: Mr. Speaker, I would suggest that this question should be asked of the Minister of Justice for a

June 22, 1971

definitive answer when he is in the House because I do believe it is important that all the details should be understood.


Robert Lorne Stanfield: Mr. Speaker, I asked the question because I think it is important that they be understood.


Gerald William Baldwin: I have a supplementary question, Mr. Speaker. Would the Acting Prime Minister ask his colleague the Minister of Justice to make a full and definitive statement on the procedure to be followed so that the House and the country will know whether we are going to amend the British North America Act in this country by incorporating the proposals contained in the charter or whether this is going to be done in the United Kingdom, in the hope that the veil of secrecy will be torn aside which covers this matter at this time?


Mitchell William Sharp: I do not think there is any veil of secrecy surrounding this matter, Mr. Speaker. I am sure the Minister of Justice would be very happy to answer all these questions.



PROPOSED CHARTER-REQUEST FOR STATEMENT ON INTEGRATION OF FEDERAL AND PROVINCIAL SOCIAL SECURITY PROGRAMS

Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Acting Prime Minister a question I directed to the Prime Minister last week and to the Acting Prime Minister yesterday. Are we going to have a statement, and if so when, from the Minister of National Health and Welfare on the proposals of this government with regard to the integration of federal and provincial social programs? These appear to be at least related to the Victoria package and are equally a matter of great importance to the people of this country. Can the Acting Prime Minister give me an assurance today that we will get this information or is the government going to continue to withhold this information from Parliament and the people of Canada?


Mitchell William Sharp: As soon as decisions are made in cabinet about such programs which have been the subject of a white paper but on which final decisions have not been made, it would be the intention of the Minister of National Health and Welfare to make a statement to the House.


Stanley Howard Knowles: Mr. Speaker, my supplementary question relates to the second question asked by the Leader of the Opposition. In view of the deep concern in the country over social policy in light of things that seem to have taken place since the white paper on income security was tabled some months ago, will the Acting Prime Minister do his best to get his colleague the Minister of National Health and Welfare to make a statement in the House before we rise on June 30?


Mr. Speaker:: I see the hon. member for Winnipeg North Centre indicating that he expected a reply from
Inquiries of the Ministry
the minister. My interpretation of his question was that he was making a suggestion to the minister to the effect that he should make representations to his colleague, and I would not think that should require a reply.


Stanley Howard Knowles: With deep respect, Mr. Speaker, may I assume that the Acting Prime Minister was saying yes?


Mitchell William Sharp: Mr. Speaker, it is not necessary to press this upon my colleague the Minister of National Health and Welfare. As soon as decisions are made I am sure he will be most anxious to reveal them.



PROPOSED CHARTER-CONSULTATION WITH SPECIAL JOINT COMMITTEE

Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I should like to put a question to the Acting Prime Minister.
As Parliament has set up a Joint Committee on the constitution composed of members of the various political parties, and as this committee travelled across Canada to find out what the citizens think of the constitutional changes, can the Acting Prime Minister tell us whether the cabinet will consult that committee before announcing any decision whatsoever on that important matter?


Mitchell William Sharp: Mr. Speaker, the hon. gentleman knows the procedure agreed to by the first ministers, including the Prime Minister of Canada, on the package of proposals embodied in a charter. These are now before cabinets in all parts of the country for decision by the governments as to whether they go along with these proposals. After that is done, and if the answers are favourable, then the proposals will be brought before the respective legislatures and the Parliament of Canada by the governments.


Martial Asselin: Mr. Speaker, I have a supplementary question.
Since this morning's newspapers reported that a serious movement was being organized in Quebec against the Victoria proposal, will the Acting Prime Minister suggest to the chairman of the Joint Committee on the Constitution to invite representatives of the movement as witnesses so that their views will be known?


Mitchell William Sharp: Mr. Speaker, as the hon. member knows, the governments have to make up their minds before June 28 whether they are prepared to recommend this package of proposals to their respective legislatures. I think that any other procedure coming in between would only hamper what we all hope will be a favourable outcome.

June 22, 1971
Inquiries of the Ministry



PROPOSED CHARTER-FEDERAL PROPOSALS RESPECTING SOCIAL SECURITY PROGRAMS

Robert Lorne Stanfield: Mr. Speaker, is it not correct that associated with the package of constitutional reforms which has been disclosed to Parliament and the people of Canada there was also a package proposal by the federal government on the administrative or policy level regarding expanded shared-cost social programs? Is it not correct that such a proposal was put forward as part of this package? If that is so-I ask this not in an argumentative way-but should Parliament not know what the whole package is? I ask my hon. friend quite sincerely whether there is any reason to withhold that part of the package?


Mitchell William Sharp: Mr. Speaker, all that is before the government of Canada and the governments of the provinces is the charter as approved at the Victoria conference for consideration by the governments concerned. There is in addition to that, of course, a policy on social welfare that is under discussion in the government of Canada, as the Minister of National Health and Welfare outlined in a paper he put forward for discussion. We have not as yet made any definite decisions in this field. That is the situation as it now exists.



ACCEPTANCE OF PROPOSED CHARTER BY PROVINCIAL GOVERNMENTS

Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, would the Acting Prime Minister advise the House whether any province in addition to Ontario has accepted the charter to date?


Mitchell William Sharp: I have not heard any word other than I have noted with satisfaction that the government of Ontario has accepted the package and will recommend it to its legislature.



STUDY OF CULTURE BY DEPARTMENT OF NATIONAL HEALTH AND WELFARE-AVAILABILITY OF INFORMATION TO OTHER GOVERNMENT AGENCIES

David Orlikow: Mr. Speaker, in the absence of the Minister of National Health and Welfare yesterday and today I should like to direct a question to the Acting Prime Minister. Is the government aware of a project being undertaken by the Department of National Health and Welfare called Youth Culture Study 1971 in which 200 young people are being asked to secretly collect highly personal information about other young people and for which they are being paid $87.50 a week?


Mitchell William Sharp: Mr. Speaker, I will pass that question along to my colleague who will answer as soon as he is in the House.


David Orlikow: I have a supplementary, Mr. Speaker. Would the Acting Prime Minister ask the Minister of National Health and Welfare to tell the House when he reports whether the information being collected in this study is to be made available to other government agencies, particularly the RCMP, as is the case with data on citizen's groups collected by the Department of National Health and Welfare?


Mitchell William Sharp: Mr. Speaker, I am sure my colleague will read all this in Hansard tomorrow and do his best to satisfy my hon. friend.


David Orlikow: Mr. Speaker, may I ask one final supplementary. Will the Acting Prime Minister discuss with the minister whether the minister will make a statement on motions telling the House what the purpose of this study is and why information on the political and sexual attitudes of young persons is being collected and stored by the Department of National Health and Welfare?


Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a supplementary. Would the Acting Prime Minister also ask his colleague to tell the House when he makes his statement exactly how these investigators are selected?



HOUSING


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to direct a question to the Minister without Portfolio responsible for housing.
The Minister of Finance announced in his budget that the 12 per cent sales tax on anti-pollution equipment would be repealed. Could the minister indicate whether that abatement will apply to home heating units?


Mitchell William Sharp: Mr. Speaker, it seems to me, since the budget debate is continuing today, that all these questions can be answered by the Minister of Finance or any other ministers who are concerned.



THE CENSUS


Mr. A. D. Hales (Wellington):: Mr. Speaker, I should like to direct a question to the Minister of Industry, Trade and Commerce who is responsible for the census. Does the minister propose to make a statement with regard to the observations of the commissioner of official languages that the 1971 census violated the Official Languages Act?


Jean-Luc Pepin: No, Mr. Speaker, but I would be very keen to answer questions in the House.

June 22, 1971


Alfred Dryden Hales: Mr. Speaker, I should like to ask the minister it it is a fact that there were insufficient bilingual census forms available?


Jean-Luc Pepin: Mr. Speaker, the only thing I can say in that regard is that the Dominion Bureau of Statistics and the minister did their very best to ensure that everybody would be given questionnaires in their own language. The opinion of Canada Statistics now is that 99 per cent of the Canadian people received forms in their preferred language at the time of the initial distribution, and the one per cent or even decimal of one per cent of those who did not had a choice of three ways to get the census questionnaire in their own language. They could use the telephone answering system. The call-back system also gave them the opportunity to have the questionnaire changed from one language to the other. I said in the House that we had no intention of prosecuting people who did not answer the questionnaire because it was not in their own language.


Mr. Speaker:: Order, please. I think I should interrupt the minister. A moment ago he indicated that he did not propose to make a statement. I would hope he would not make a statement now because I am sure he would then expect spokesmen for the opposition parties to make their statements in reply. It might be better if he would simply answer a series of questions.


Alfred Dryden Hales: Mr. Speaker, from the minister's statement it is plain there was an insufficient number of forms available. Why was this the case? I know he said one per cent but that represents a lot of people. Why were sufficient forms not available?


Jean-Luc Pepin: It is less than one per cent, as I said, Mr. Speaker. There was no scarcity of questionnaires in either language. It is just that the census takers were instructed to follow a certain procedure, and it is quite possible that in some instances, because of the circumstances, the householder not being present and that sort of thing, there were a number of mistakes, and I have already made apologies for that. It is extremely difficult to carry out an operation where six million householders have to be contacted-


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: Is
it the position of the minister that the commissioner was wrong in complaining that the Official Languages Act had been violated and that the Dominion Bureau of Statistics under the minister had not exercised proper precautions with regard-


Mr. Speaker:: Order, please. I would not think that that question is in order. I certainly want to be fair to the Leader of the Opposition-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Perhaps the Chair might be given an opportunity to express the suggestion to the Leader of the Opposition that when he asks the minister whether the minister is of the opinion that the official
Inquiries of the Ministry
languages commissioner was wrong the question is not in order. I suggest to hon. members that a question asked in those terms is not in order. Perhaps the Leader of the Opposition might like to ask the question in other terms.


Robert Lorne Stanfield: I will ask the minister whether the commissioner was wrong in making the charge through the Speaker to the House that the Official Languages Act had been violated and that the Dominion Bureau of Statistics had not exercised proper precautions to make certain that the act would be complied with in conducting the census?


Jean-Luc Pepin: I suggest that the hon. member is old enough to draw his own conclusions. The commissioner said, first of all, that prosecution should not take place in these instances, and I had already said that in the House. He recommended a change in procedure, and we are analysing his ideas and will be in contact with him to receive any future views he might have on the subject. He also suggested that there should be a bilingual questionnaire. This possibility had been looked into in preparation for the census. It had been tested, and it was found at the time that this was not the best approach. This will be reviewed in due course.


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: I rise on a point of order, Mr. Speaker. I asked the minister a simple question, I did not ask him for a speech.


Mr. Speaker:: I suggest to hon. members that this is what is wrong. When we have this type of question we get that type of answer. It is just as simple as that.


Some hon. Members:: Hear, hear!


Mr. Bell:: The minister started it.


Mr. Speaker:: When argumentative questions are put, argumentative replies are given, and both are wrong. I am quite willing to admit that. I tried to bring to the attention of both the questioner and the responder that we are getting into a debate, and this is not what we should do at this time. There might be an opportunity to debate the matter. I am quite in agreement with the suggestion that the reply made by the minister was argument and debate.


Robert Lorne Stanfield: Mr. Speaker, I am simply trying to ascertain whether it is the position of the minister that the complaint of the commissioner is wrong. I hope that is not an argumentative question.


Jean-Luc Pepin: Mr. Speaker, the answer is simple-


Mr. Speaker:: Order, please. The hon. member for Hamilton West.


Lincoln MacCauley Alexander: Notwithstanding the answers given by the minister-and it seems strange that the report was received from the commissioner yesterday-would the minister advise the House whether he has had an opportunity to formulate a reply

June 22, 1971
Inquiries of the Ministry
to the allegations and, if so, would he kindly table it for the edification of members and the people of Canada?


Jean-Luc Pepin: I might do so, Mr. Speaker, and I will consider tabling it.


Mr. James A. McGrath (St. John's East):: May I ask the
minister whether he would be prepared to examine the method of the appointment of census takers so that he may be able to satisfy the House that patronage did not take priority over bilingualism?


Gerald William Baldwin: Look at the minister blush.


Jean-Luc Pepin: I am open to suggestions on the subject.


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is addressed to the Acting Prime Minister in his capacity as Secretary of State for External Affairs. In view of the fact that the Secretary General of the United Nations, the Secretary of State of the United States, and the British delegation spokesman at the United Nations have all deplored the incident on Friday, June 11, in the Strait of Bab El-Mandeb in which a Liberian tanker was attacked by bazooka fire from a small boat, will the government of Canada also publicly express its abhorrence of such acts of violence against international shipping?


Mitchell William Sharp: I should like to take that question as notice, Mr. Speaker.



STATUTORY INSTRUMENTS


Gerald William Baldwin: Mr. Speaker, I would like to ask the government House leader a question about which we have had some discussion. When will the minister be able to indicate to the House that the government has settled on the terms of reference of the new committee of scrutiny under the Statutory Instruments Act so that the committee will be able to deal with the innumerable cases of government by proclamation, regulation and Order in Council which now form the main basis of government?


Allan Joseph MacEachen: Without admitting all the baggage that the hon. member brought into his question, I can assure him I am hopeful that I can get the notice of motion on the order paper before the end of this part of the session. It is being examined by various people in the government and I hope it will be put on the order paper soon.



INDUSTRY


Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I should like to address a question to the Minister of Transport. In view of the fact that Canada's aerospace industry put on an impressive display of Canadian capability at the Paris air show and as the two Canadian companies responsible for the development of the STOL aircraft in Canada have been refused further backing for this program by their parent companies, is the government prepared to support the STOL aircraft industry in Canada with substantial financial assistance so that the edge we have in the industry may be maintained and used to our advantage?


Hon. Donald C. Jamieson (Minister of Transport):: The
premise of a good deal of the question is not necessarily correct in all of its parts but, in so far as supporting the STOL program is concerned, at the present time, as the hon. member knows, we have some $60 million in one particular design and at least half of that amount in another. I think that is evidence of our ongoing support. What is in question is whether or not we should go on supporting parent companies which do not seem to give too much of a hoot whether or not the project goes ahead. We will try to find a better solution than that.



PUBLIC SERVICE


J. Michael Forrestall: Mr. Speaker, my question is for the President of the Treasury Board. Can the minister indicate, now that we are coming to the end of the present session, whether or not he and his officials are prepared to overcome the continuing disparity which exists for employees in the nursing profession within the government service in the Atlantic region as opposed to those in the service elsewhere in Canada?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I think the hon. gentleman is aware that negotiations on a satisfactory basis, I hope, are continuing.


J. Michael Forrestall: I will discuss the matter in the adjournment debate.
tfc Hs



PROPOSED TAPS TANKER ROUTE-OPPOSITION EXPRESSED BY MINISTER OF THE ENVIRONMENT-GOVERNMENT POLICY

['Mr. Speaker, the hon. gentleman has told me a most interesting bit of news and I will have it investigated.']
Mr. Thomas S. Barnett (Comox-Alberni):: My question is directed to the Acting Prime Minister. Was the Minister of the Environment stating government policy when in a speech, reported to have been delivered by his parliamentary secretary on his behalf in Edmonton, he expressed his opposition to the use of the Strait of Georgia and the Strait of Juan de Fuca by large bulk oil tankers?

June 22, 1971


Mitchell William Sharp: Mr. Speaker, as I understand that in what the Minister of the Environment said, he was simply reiterating what both he and I said to the United States government when we met the U.S. Secretary of State on this question. We are opposed to the movement of bulk tankers carrying oil through those narrow waters.


Thomas Speakman Barnett: May I ask the Acting Prime Minister whether in light of this statement he would be prepared to introduce or support the introduction of a motion in the House in order that the House might have an opportunity of expressing its views on this question?


Mitchell William Sharp: Mr. Speaker, there is a report from the Special Committee on Environmental Pollution which goes quite a long way to support this position and which would be very useful to the government if it could receive quick and unanimous approval.


Robert Lorne Stanfield: Mr. Speaker, I would like to ask the Acting Prime Minister whether the statement by the Minister of the Environment means the government has approved in principle a land route through the Canadian north for the delivery of Alaskan oil by this method to the American mid-west?


Mitchell William Sharp: No, Mr. Speaker. As far as I know there is no relationship between these two matters.



Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, 1 would like to ask the Acting Prime Minister if the government is giving consideration to increasing at an early date its $2 million contribution to the East Pakistan refugees, which now works out at about 30 cents per person for these suffering people?


Mitchell William Sharp: Mr. Speaker, the government is considering the whole question of further help to the refugees and also looking at the question of whether there can be some humanitarian relief in East Pakistan itself. I would remind the hon. member that proportionately Canada is one of the most generous contributors in this field.


Alfred Dryden Hales: Mr. Speaker, may I ask the Acting Prime Minister if the government has reviewed and come to a decision on the offer of Canadian graduate nurses to go to Pakistan on a voluntary basis?


Mitchell William Sharp: Mr. Speaker, I answered a similar question put by the hon. member for Simcoe North, and I suggest the hon. member should look at my reply which deals definitively with the matter.
Inquiries of the Ministry


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, in light of the difficulties about Pakistan, I wonder what progress is being made by the international community on a formula agreed to by nations so that aid-medicine, food, and other necessities-can be provided to innocent victims of civil war or war of other varieties?


Mitchell William Sharp: Mr. Speaker, as the House is aware, we did make considerable progress in international discussions relating to help for civilians who are innocent victims both of civil insurrection or other causes not encompassed within the meaning of war. We are continuing to press this matter with vigour, but at least it looks as though there is going to be an amendment to the rules.


Francis Andrew Brewin: Mr. Speaker, I believe the Secretary of State for External Affairs told the House some days ago that he proposed to report at some stage on the efforts to bring about a political settlement of the dispute in Pakistan and also in regard to the question of further extension of development aid in Pakistan. Will he be making that statement soon?


Mitchell William Sharp: Mr. Speaker, I would like to make the statement as soon as possible. Unfortunately events abroad are not developing in such a way that I think it would be possible to make it within the next day or two, although I had hoped that might be possible. I have now received a report from the consortium which has looked at the question of aid to East Pakistan, and it has said humanitarian aid is of the highest priority. The donors generally were prepared to provide such aid to Pakistan but reserved their position regarding the provision of development aid.


Mr. W. M. Howe (Wellinglon-Grey-Dufferin-Waierloo):: Mr. Speaker, I wonder if the minister, in co-ordination with the Department of National Health and Welfare, has made available to these people any of the mobile hospital units that are kept in mothballs by that department?
Hon. Mitchell Sharp (Secretary of State for External
Affairs): Mr. Speaker, we have been trying to respond to the priorities established in India. As I think I reported to the House, we did provide some planes and they took some ambulances provided by the government of Ontario. However, we will look at this suggestion in light of the priorities established on the spot.

June 22, 1971
Inquiries of the Ministry DRUGS


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I would like to direct a question to the Acting Prime Minister about the case of the farmer just outside Toronto who is growing marijuana and who allegedly is selling around $1,000 worth a week to the colleges in that area. Has any action been taken in this case, and what assurance can be given that it will not occur again?


Mitchell William Sharp: Mr. Speaker, the hon. gentleman has told me a most interesting bit of news and I will have it investigated.



HARBOURS


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I wish to direct a question to the Minister of Transport. Since the termination date of December 31, 1969, of the temporary lease arrangement between the National Harbours Board and the province of British Columbia respecting Roberts Bank, has there been a permanent agreement concluded between the government of Canada and the government of British Columbia with regard to this area?


Donald Campbell Jamieson: Mr. Speaker, I think I could tell the hon. member that we have what could be described as an agreement in principle. It does involve some legislation, both in this House and the British Columbia Legislature, with regard to the state of the railways running on to Roberts Bank. I will be going to British Columbia in a couple of weeks and I hope we can resolve in a sense the last aspects of the matter at that time.


Mark Willson Rose: Has the original agreement, as provided under its terms, been extended or at the moment has the federal government no agreement or contract with the province of British Columbia to protect the substantial investment on the federal government's part in that area?


Donald Campbell Jamieson: I do not believe I could answer that question in the time you would allow, Mr. Speaker, other than to say I am satisfied that the position of the federal government is protected. In April, 1970, there was an exchange of letters with the government of British Columbia setting out the procedures that were going to be followed.


Mark Willson Rose: As a further supplementary, Mr. Speaker, may I hope that what the minister has told us works out because I would not like to think that this would be another example-


Mr. Speaker:: Order, please. That is not a supplementary question.



INDUSTRY


Thomas Miller Bell: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce. Has the minister knowledge that on budget night the Minister of Finance was in receipt of the information just released to us today that the seasonally adjusted index of industrial production decreased by .8 per cent and that all divisions shared in that decline?


Jean-Luc Pepin: I will speak on that in a few minutes, Mr. Speaker.


Thomas Miller Bell: Would the minister check into this because if the minister did have this knowledge it is a case of deception that the House should look into.
$ ^ $



TRANSPORT


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I wish to direct a question to the Minister of Transport. In view of the concern of the public travelling between northwestern Newfoundland and Labrador can the minister indicate when we can expect the resumption of service between those two points?


Donald Campbell Jamieson: Mr. Speaker, my understanding is that it was to have been resumed a few days ago, a week or two ago. Apparently the ship inspection has taken longer than anticipated, but I have asked that it be speeded up and that the vessel be put in operation as soon as the inspection can be completed.



POLLUTION


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I have a question for the hon. Minister of Indian Affairs and Northern Development.
Since that department has on its staff engineers who have specialized in the Northwest Territories, conducting experiences in order to find ways and means for Americans to take possession of their petroleum resources through the Prudhoe Bay pipeline, and since the Committee on Environment pollution has been trying to solve the problem for the past few months, can the hon. minister tell us whether he will authorize his experts to appear before our committee in order to report to us on their experience?

June 22, 1971


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am not aware of officials of my department or of other departments having refused to respond to House of Commons orders when called upon to appear and explain their techniques or their studies.


Léonel Beaudoin: Mr. Speaker, may I put a supplementary question to the minister?
Will he tell the House whether he has received a request from the committee and whether he intends to call these officials before the committee?


Joseph Jacques Jean Chrétien: I did not but sometimes the requests are addressed directly to the officials. At any rate, I will study the matter if I receive such a request.



AGRICULTURE


Mr. Jack Murla (Lisgar):: Mr. Speaker, may I direct a question to the Minister of Agriculture. As the federal government has instituted a federal egg buying program to help egg producers in Manitoba and Ontario because of the very depressed prices that egg producers are receiving, between 10 cents and 14 cents per dozen, can the minister say what plans the government has for the rest of the summer and the fall in this connection?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I cannot go into all that in replying to a question but I can advise the House that in the last two weeks we have bought 21,600 cases in six provinces. The announcement indicated that we would continue this program for about six to eight weeks but that it would be terminated then unless there was some action by the industry and by provincial governments in those areas where they have power to reduce the surplus in order that producers will not overproduce again and prices will not fall after the program has been completed.



HOGS-FINANCIAL ASSISTANCE BECAUSE OF DEPRESSED PRICES

Mr. A. P. Gleave (Saskaloon-Biggar):: Mr. Speaker, has the Minister of Agriculture any plans afoot to relieve the very desperate situation that faces hog producers as to price levels?


Horace Andrew (Bud) Olson: Mr. Speaker, that kind of program would not be implemented immediately but we are obligated under the Agricultural Stabilization Act to support the price of hogs at 80 per cent of the 10-year average. For some time it has been below that average, and I would recommend to the producers that they retain the grading certificates. If there is to be a payment they will need these certificates to make a claim for a deficiency payment.
Inquiries of the Ministry


Alfred Pullen Gleave: A supplementary question, Mr. Speaker. In his calculations regarding price support, would the minister take into account that portion of the act which lays upon the government some responsibility to consider costs of production?


Horace Andrew (Bud) Olson: Mr. Speaker, what we shall be taking into account is 80 per cent of the national weighted average over the last ten years. That works out to $24.14 per hundredweight, and this, of course, will be the basis on which we will look at the matter.



HARBOURS


Mr. Frank Howard (Skeena):: Mr. Speaker, my question is supplementary to that of my colleague from Fraser Valley West which was directed to the Minister of Transport. I understood the minister in his earlier response to my colleague for Fraser Valley West to say that he is going to British Columbia within a couple of weeks, which is an admirable thing for him to do. During his trip to British Columbia will he be meeting with the premier or other officials of the province to discuss harbour development at the port of Prince Rupert, to which the minister referred some time ago?


Donald Campbell Jamieson: The
answer is yes, Mr. Speaker. 1 believe it is the No. 1 item on the agenda and I hope that at that time I can make some favourable proposals which will be acceptable to British Columbia.


Frank Howard: What is the date of that meeting?


Donald Campbell Jamieson: Mr. Speaker, I hope I am not anticipating the exchange of wires with the Premier of British Columbia. I believe the date we have suggested is around July 18 or 19.



FISHERIES


Mr. John Lundrigan (Gander-Twillingale):: Mr. Speaker, I wish to direct a question to the minister responsible for fisheries in anticipation of his visit to the east coast of Canada next week. Has the government now made any formal representations to the Soviet Union following the informal discussions held by the leaders of both countries several weeks ago? If so, did the representations include a request to restrict Russian fishing activity on Hamilton Inlet bank, the chief spawning ground for the Labrador fishery?


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, no such representation has been made in recent weeks.

June 22, 1971
Inquiries of the Ministry


John Howard Lundrigan: Can the minister indicate when the government plans to make this type of representation?


John (Jack) Davis: After my visit to Newfoundland, Mr. Speaker.



HOUSING


Lincoln MacCauley Alexander: Mr. Speaker, may I direct a question to the future minister of state responsible for housing and urban affairs. As any further impediment to the housebuilding industry would be disastrous, can the minister advise the House whether the government is considering seriously raising to 12 per cent the building materials sales tax?


Hon. Robert K. Andras (Minister without Portfolio):: Not to my knowledge, Mr. Speaker.


Lincoln MacCauley Alexander: A supplementary question, Mr. Speaker. In light of that, I hope and trust that the minister will use his good influence in order to advise the Minister of Finance to be more responsible.


Mr. Speaker:: Order, please.



WATER RESOURCES


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, I have a question for the Minister of the Environment. Was the Minister of the Environment in his Edmonton speech expressing government policy when he criticized the planning that went into the Bennett Dam on the Peace River, which has resulted in much ecological damage to the Mackenzie River Delta?


John (Jack) Davis: Mr. Speaker-


Mr. Speaker:: Order, please. The hon. member who asked the question knows that questions relating to ministerial speeches outside the House can only be directed to the Prime Minister or Acting Prime Minister in the form of inquiries as to whether those speeches represent government policy.


Randolph Harding: Mr. Speaker, may I direct the question to the Acting Prime Minister? Shall I repeat it?


Mitchell William Sharp: Yes.


Randolph Harding: Mr. Speaker, was the Minister of the Environment in his Edmonton speech expressing government policy when he criticized the planning that went into the Bennett Dam on the Peace River, which has resulted in much ecological damage to the Mackenzie River Delta?


Mitchell William Sharp: Mr. Speaker, I think the minister was expressing a view. It is not a matter of government policy whether a provincial government has mismanaged affairs. However, he may have a view on the subject.


Gerald William Baldwin: How about the federal government?


Randolph Harding: Mr. Speaker, may I direct my supplementary to the Minister of the Environment. Is the minister planning on introducing amendments to the Navigable Waters Protection Act which will force all Crown corporations to be subject to the provisions of the act and to ensure that adequate surveys are carried out before any dam construction commences?


John (Jack) Davis: Mr. Speaker, the Navigable Waters Protection Act comes under the Minister of Transport.


Mr. Lambert (Edmonton West):: A supplementary question, Mr. Speaker-


Mr. Speaker:: Order, please. The question period
expired a few moments ago, and I am sure the hon. member for Edmonton West is anxious to proceed with the next order of business.


Marcel Joseph Aimé Lambert: Mr. Speaker, I am also interested, unless the time has expired, in something that affects my province a great deal.


Mr. Speaker:: Order, please. I must suggest to the hon. member that the question period expired about three minutes ago. Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, June 18, consideration of the motion of Hon. E. J. Benson (Minister of Finance) that this House approves in general the budgetary policy of the government.
Marcel Joseph Aimé Lambert: Mr. Speaker, perhaps I can get my thoughts on the record now. During the question period I wanted to ask the Secretary of State for External Affairs whether his predecessor had not weighed the requirements of the Navigable Waters Protection Act in his indecent haste to get the consent of the Premier of British Columbia to the Columbia Treaty negotiations. The answer would be very interesting.
With regard to the matter at hand, I wish first to raise a matter of procedure because I think this is the first time this situation has presented itself to the House and to Your Honour in this particular way. I refer to the revision of the Standing Order respecting the business of ways and means which went into effect in January, 1969, and which, I say to Your Honour for Your Honour's consideration, may have restricted the presentation of
[Mr Davis.]
June 22, 1971

budget motions under Standing Order 60 to one a session. This is the effect of the new procedure in light of the Commons convention that the House will not consider again a question which the House has voted upon in that session. The convention of course is the basic application of the wider rule against repetition which is essential to the progress of business in the House.
Prior to January, 1969, Standing Order 58(1) and (2) read as follows-I apologize to Your Honour but I must detail this case.


Mr. Speaker:: I take it that the hon. member is now raising a point of order and will allow other hon. members to speak to the point of order so that the Chair can take the matter into consideration.


Marcel Joseph Aimé Lambert: That is without question, Mr. Speaker. Under the old Standing Orders, Standing Order 58 (1) read:
When an order of the day is called for the House to go into Committee of Ways and Means, Mr. Speaker shall leave the Chair without question put, but the provisions of this section shall not apply when the said order is called for the purpose of enabling a Minister of the Crown to make the budget presentation.
Subsection (2) read as follows:
(2) The proceedings on the order of the day resuming debate on the motion "That Mr. Speaker do now leave the Chair" for the House to resolve itself into Committee of Ways and Means (Budget) and on any amendments proposed thereto shall not exceed six sitting days.
noon)
These provisions were replaced by the present Standing Order 60 which provides in part:
(2)	An Order of the Day for the consideration of a Ways and Means motion or motions shall be designated at the request of a Minister rising in his place in the House.
(3)	When such an order is designated for the purpose of enabling a Minister of the Crown to make a budget presentation, a motion "That this House approves in general the budgetary policy of the Government" shall be proposed.
I put it to Your Honour that the former motion under 58 (1) and (2) was a procedural motion which related only to the question of in what manner the House should organize itself on business for a particular sitting day. The motion, therefore, can be repeated on other sitting days throughout the session without repeating a question already decided. Indeed, the word "now" points up the fact that the House was making a present decision and was not deciding on how the House would sit on a day in the past or the future.
The new motion, however, is non-procedural and proposes a question that once accepted or rejected would apply under the general rule throughout the session. The first session of the 28th Parliament, the present Parliament, saw two budget presentations. The motion on the first budget was on October 22, 1968, under the old rule and was in the terms that Mr. Speaker do now leave the Chair for the house to go into the committee of ways and means.
In January, 1969, the new rule took effect. On the second budget, therefore, on June 3, 1969, the motion was
The Budget-Hon. Mr. Lambert that this House approves in general the budgetary policy of the government. In this transitional period there was no repetition of the question. In the second session of this Parliament the question was only put once, March 12, 1970. In the third session, the present session, the question was put on December 3, 1970, and approval of budgetary policies was given on February 11, 1971.
The Commons has always honoured the rule against repetition of the same question in the same session. This is confirmed by the continued need for the exception to the rule with respect to legislation. This is a most important part. In legislation we provide for it under the Interpretation Act. Section 34 (2) of the act reads:
An Act may be amended or repealed by an Act passed in the same session of Parliament.
I suggest, Mr. Speaker, it is an exception to the rule. This is a statutory rule of procedure that is applicable to both Houses of Parliament. It is by way of written exception with respect to legislation only to the rule which is unwritten in this House, but in the other place rule 47 is very specific on this point. It reads:
(1) A motion shall not be made which is the same in substance as any question which, during the same session, has been resolved in the affirmative or negative, unless the order, resolution, or other decision on such question has been rescinded as hereinafter provided.
There is a provision in the set of rules for revision. It is interesting to note that the other place confirmed in its revision of its rules rule 47 on August 1, 1969. Although the rule is unwritten in the House of Commons, it is recognized by reference to the method of rescinding a vote. The final prohibition in Standing Order 35 reads as follows:
No member may reflect upon any vote of the House, except for the purpose of moving that such vote be rescinded.
I have more notes on this matter, but the point I want to make is that it should be noted this is the first time that this House is discussing a second budget during one session on the basis of a substantive motion being made a second time. Why I am so concerned about this is to protect the position of members of the opposition now and in the future if this is to continue to be our rule. It may be only pointing up an anomaly in the revised rules to protect the position of hon. members in the House so that they shall not be disqualified in their amendments on the basis that the amendment now proposed or a substantial portion thereof would be the same as the one decided on the occasion of the last budget.
If the government is permitted under the rules to bring forward during the same session a motion dealing with the same matter, in other words, the budgetary proposals of the government twice in the same session either for approval or contrary vote, the opposition must be in the same position. The point I am making may be said to be academic or hypothetical, but I want to stake out the position at this time and draw to Your Honour's attention a point that Your Honour may wish to have referred to the Standing Committee on Procedure and Organization whenever the rules are revised for clarification. It seems

June 22, 1971
The Budget-Hon. Mr. Lambert
there is a distinct anomaly at the present time. In any event, I am putting forward the argument. I do not think it is going to affect me in my motion, but it is definitely there. This being the first occasion that we face this particular situation, it must be raised now; otherwise we might be deemed to acquiesce in a practice which frankly is somewhat paradoxical.


Mr. Speaker:: I wonder whether it is necessary for the minister to comment on the statement made by the hon. member for Edmonton West. Of course I do not want to deprive the minister of his right to comment. I am the one who initially suggested that there should be an opportunity for all members to comment on the point of order which has been raised. Perhaps we might spend most of the day on the point of order raised by the hon. member for Edmonton West, if this is what hon. members would like to discuss. On second thought, perhaps I should invite hon. members to discuss this matter from a procedural standpoint for the time being if there are comments to be made on the point raised by the hon. member for Edmonton West.
My original thought was that perhaps the matter had been raised in a rather academic way by the hon. member as a caution to the Chair and to the House. It was suggested by the hon. member that the matter should be taken under advisement by the Chair. Even with that, I do not want to deprive hon. members of their right to make comments on the point of order raised by the hon. member. The Chair will recognize the Minister of Finance.


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, I would simply like to say that this is another historic occasion when the opposition finds the budget so good that they do not want to debate it.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Edgar John Benson: We have introduced a budget into the House of Commons. It must be the right of the government to introduce legislation or a budget from time to time and have it considered by the House of Commons even if the opposition does not want to consider it.


Mr. Speaker:: Order, please. We are now discussing a point of order.


Mr. Lamberl (Edmonlon West):: I wish the minister would.


Mr. Speaker:: The Chair will recognize the hon.
member for Winnipeg North Centre and then the hon. member for Peace River.


Stanley Howard Knowles: Mr. Speaker, I was interested when I saw the Minister of Finance seeking to get to his feet to take part in this procedural discussion and I wondered what he would have to say. Obviously he missed the point of the procedural question completely.


Robert Lorne Stanfield: What else is new?
[Mr. Lambert (Edmonton West) .1


Stanley Howard Knowles: Mr. Speaker, I will only be a few moments. I recognize, as does the hon. member for Edmonton West, that the point he has raised is somewhat hypothetical, but there are times when the entering of a caveat is necessary.
As I understand it, the position taken by the hon. member for Edmonton West is a relatively simple and straightforward one. If it is possible under Standing Order 60 (3) to move for the second time in the same session the same motion, namely, that this House approves in general the budgetary policy of the government, then it should also be possible for amendments to that motion to be moved, if necessary, using the same language as was used on an earlier occasion. I think that is the whole point of the procedural question which has been raised.
For my part, I must say that the rules do seem to make it possible to have two budgets in the same session. The minister missed the point completely. He thought we were trying to avoid this debate. It may well be that we, by proposing amendments, made certain criticisms at the time of the last budget which we will desire to make again. If this does turn out to be the case-and Your Honour will realize that we cannot put our amendments into final form until we know what the hon. member speaking for the official opposition intends to propose-if we have to refer to the same subjects as we did in the previous debate, I suggest our amendments be looked upon as being in order, because although they would be amendments to the same words of the earlier motion it would in effect be a new motion.
Granted, the House might have mistakenly approved of the government's budgetary policy the last time the motion was debated, but we still have the right to point to its deficiencies at this time. As Your Honour says, it is a hypothetical proposition but I believe the point is well taken and I should like to sign my name to the same caveat.


Mr. Speaker:: The minister has already spoken on the point of order. If he has a new point of order he may rise, but first we shall try to consider the point which is before us.


Gerald William Baldwin: I wish to speak to the point of order which my hon. friend from Edmonton West dealt with. I subscribe to his sentiments. He has said what I would have said at greater length, probably. I would simply point out that this situation could occur quite frequently when we have a mobile catastrophe for a minister of finance.


Mr. Speaker:: Perhaps before I hear the Minister of Finance on a new point of order I should express a few thoughts in connection with the point of order raised by the hon. member for Edmonton West. I have not departed one iota from my original view that the point of order, while it may be valid, is still hypothetical.
The hon. member is suggesting that if and when an amendment is proposed later, an amendment which may
June 22, 1971

be the same as one made in connection with a previous motion under Standing Order 60(3), it should be accepted because the government is allowed to make two similar motions in the same session. That may be so, but the matter is still entirely hypothetical at this time. If the hon. member had raised the question whether it is competent for the government to present a second budget during the same session the Chair would have had to make a ruling on that point. But that is not the point raised by the hon. member for Edmonton West. This having been said, I believe there is no real disagreement between the hon. member for Edmonton West, the hon. member for Winnipeg North Centre and the Chair. A caveat has been entered and it will be considered if and when the kind of amendment referred to is proposed in due course either in connection with this budget or in connection with a third budget which might come before the House during the same session.


Stanley Howard Knowles: Are things as bad as that?


Edgar John Benson: On a point of order, Mr. Speaker, I would simply like to say we have presented a new budget with new ideas but we expect the same old criticism from the opposition.


Mr. Speaker:: That is hardly a new point of order.


Marcel Joseph Aimé Lambert: Mr. Speaker, it is always interesting to hear the Minister of Finance (Mr. Benson) dealing with points of procedure. He is so far off base he is just about the same as when he is dealing with financial matters of the country. In any event, we have raised the point at the first opportunity. Your Honour has interpreted rightly what we are doing.
I should like to make a brief reference to the remarks I made the other day as to how to judge this budget presentation, how to divide it. First of all, it seems to me we heard a great long presentation with regard to tax changes. I shall not call them tax reforms, I shall call them tax changes. I shall get into the reasoning a little later. I would say that the really important part as far as the country is concerned at the present time was the economic review and the proposals of the government, whether monetary or fiscal, to get the economy moving. Those were the important things. What we saw was a reversal of that emphasis; we saw all sorts of gimmicks, and some of them are very gimmicky. Some which appear to be very palatable things for the general taxpaying public were trotted out at great length in the tax change section which occupies by far the longest portion of the budgetary proposals. The minister was using, shall we say, a certain amount of political acumen in so doing, because I would say we were seeing some sort of a shell game and the Canadian public knows it. We know very well the reputation of the white paper. I recall the hurrahs with which hon. members opposite greeted the white paper. How beautiful it was, the white paper. But since then, of course, they have changed their minds. The other night all they did was applaud when
The Budget-Hon. Mr. Lambert
the minister indicated the various steps in the retreat from Moscow.
The minister remembers as well as I do the speech he delivered in Edmonton to the Chamber of Commerce. The white paper was almost deified, but the minister always added a little bit at the end. He said; Oh well, this is all very good indeed, but we are reasonable people and we shall listen. All right. Fine. But it is the same thing as the former Secretary of State, when she was Minister of National Health and Welfare, with version No.l of the Canadian Pension Plan. It was the best of all possible plans and the critics were nuts. I am using polite language, though the hon. lady of the day did not always use polite language in describing her critics.
But this was essentially the position taken by hon. members opposite. Those who mounted campaigns against this plan were treated as candidates for institutions for the mentally unstable. This is a fact. I am sure if we wanted to put on a sound track all of the pronouncements of the hon. member for Hamilton-Wentworth (Mr. Gibson) we would wonder whether he should now be in that institution for the mentally unstable as a result of shaking his brains so often in the flip-flops he has gone through on this thing. This is just a matter of record. We saw these changes. In some ways there is a great deal of relief today about the measures proposed by the Minister of Finance. One of my colleagues said that it is as if a man who expected to be told that he had lung cancer was told that he does have it, but only in one lung. Therefore the relief is great but in some ways the ultimate outcome is always fatal.
I am going to deal with the tax changes in the sequence adopted by the minister and not in what I think is the order of importance as far as the public is concerned. People are confused; many cannot differentiate between the changes in the 1971 budget and those which will come into effect from 1972 onwards. I am not going to criticize the proposals in detail but some of them do not come into effect until about 1976. There is quite a time spread; I am not going to criticize this but let us look at what will and what may affect people. I think this was done deliberately to confuse the issues and draw attention away from the deficiences in the remainder of the budget. Consider the statement of the hon. member for Ottawa West (Mr. Francis) and that of the hon. member for Lanark-Renfrew-Carleton (Mr. McBride), both of whom are not here-


An hon. Member:: Where are they?


Mr. Gibson:: Mr. Speaker-


An hon. Member:: Oh, sit down!


An hon. Member:: Hoot, hoot!


Mr. Deputy Speaker:: Order, please. The hon. member for Hamilton-Wentworth is rising on a point of order.


Colin David Gibson: Mr. Speaker, the hon. member for Edmonton West has castigated some of our members for not

June 22, 1971
The Budget-Hon. Mr. Lambert being here. A lot of them are on committees and for that reason are not here. I am sure they would all-


Mr. Deputy Speaker:: Order, please.


Stanley Howard Knowles: Are 140 of
them on committees?


Mr. Deputy Speaker:: Order, please. The hon. member for Edmonton West.


Marcel Joseph Aimé Lambert: The hon. member has a certain nickname around here and frankly it comes from being trigger-happy. I was actually mentioning the names of those hon. members to say that I would not read from Hansard extracts of what they said in the House because they are not now present. I was going to extend them that courtesy. There are no committees sitting at the present time.


An hon. Member:: He doesn't know that.


Marcel Joseph Aimé Lambert: It does not matter but because they are not here I was not going to read what they said. The hon. member should turn to matters more serious and let us have points of order only when they are required.
Now let us look at the background of tax reform. 1 should like to comment on some of the statements I have heard on the air and read in the press during the last few days. We have had some what I call "airy-fairy" statements to the effect that this is not really tax reform, that it is to be dismissed. I think I have heard more nonsense at other times in the past, but I cannot remember when. Some people say that after ten years this is the most that was produced. Certainly it is ten years since the Carter commission was established to look at the matter of reform of the whole tax system and, to its credit, that is what it did. It made references to estate tax, gift tax, sales tax, excise tax, income tax and the responsibilities of sharing between the federal government and the provinces. So far we have seen changes in estate tax and gift tax and two years ago the House exercised itself a great deal on that. We now have some changes in regard to income tax but frankly I was disappointed when the minister indicated that he was not doing anything yet about the sales or excise taxes which are the consumption taxes.
When looking at tax reform we are looking at the total package of taxes that have to be paid by John Q. Citizen. If the minister persists in saying that we are not going to look at excise tax and those other taxes until some indefinite date in the future, then I say he is falling down on the job of tax reform. It is nonsense to tell an old age pensioner who now pays tax about the removal of tax on a portion of the guaranteed income supplement and that he will not pay any income tax at all. Some did not pay any at all before.


An hon. Member:: They did.


Marcel Joseph Aimé Lambert: Not in all cases. The hon. member is off the beam there.


Colin David Gibson: No, he is not; he is right.


Marcel Joseph Aimé Lambert: It depends on age. If the hon. member for Hamilton-Wentworth knew what was in the act he would know that after age 70 they do not pay. For those people who did not pay tax there is obviously no relief in the change. That means that we have to look at the sales tax in order to give them some relief on the basis of their ability to pay.


An hon. Member:: None.


Marcel Joseph Aimé Lambert: This is part of it. What
relief can be given them on their share of municipal taxes?


An hon. Member:: Absolutely none.


Marcel Joseph Aimé Lambert: That also is part of the ability to pay. If we are to use the principle of tax equity being ability to pay then we must look at all sectors of tax, and that is what I say tax reform is. Other people say that this was a puny answer to tax reform and that tax reform is limited to income tax. In other words, some people think that you can have equity between taxpayers. That is impossible in this country and anyone who suggests otherwise is not aware of our financial and economic requirements. It is absolute nonsense to talk about equity between taxpayers or within the income tax system. There are discriminations all along the line and some have even been introduced now. For instance, unemployment insurance benefits will be taxed on the principle that this is a form of income. But why stop there and not tax strike pay? If unemployment insurance benefits are equivalent to salary, surely strike pay is as well. There is discrimination here, but I do not hear any of the great advocates of equity speak on these things.
Many of the critics do not know what it is to labour to put together a business, to worry about payrolls, about financing inventories and the possibility of going broke and so on. Most of them merely draw a salary from somewhere and let somebody else worry about the money coming in. I would love to see some of these people who talk about equity and absolute neutrality among taxpayers go out and try to even run a corner peanut stand. We would then have our answer.
There is another point in so far as the tax system is concerned and that is that academics-tax experts, economists, chartered accountants, you name them-can each and every one set up some sort of a tax system. They can argue until they are blue in the face and close to suffering apoplexy. That is another tongue twister. They suffer terribly if one suggests that equity is no go. The people to whom it is to apply will not accept it. That is the same sort of underlying philosophy on which you can devise a tax system, provided it is clear that those people who are going to be taxed accept it. We do not live in that kind of a country and I hope we never do.
The people of this country will decide what kind of a tax system they are going to have. We have a classic

June 22, 1971

example of this as a result of the proposals for tax change contained in the white paper. I dismiss entirely any suggestion that the ordinary individual did not have an opportunity to make himself heard and that the government only heard from trade associations and big businesses. One simply had to go away from Ottawa and receive representations from tenants' associations and ordinary individuals to know this. The hon. members who accompanied me on the western tour well know what individual prospectors had to say. They were standing there not just as stouthearted citizens but as individual men who were against the whole tax system. They made their voices heard.
We had some of the government members on the committee who made statements that had they made them months earlier would have caused them to be shot at dawn. Their political futures would have been completely sacrificed because they said a dozen times, "No, over my dead body will these proposals go through". It was interesting to see that they were joining the opposition in criticizing the white paper proposals. These members came forward and ultimately boiled down these proposals to a House of Commons report.


An hon. Member:: How did the Tories vote?


Marcel Joseph Aimé Lambert: They were always on the side of the people on this one. The hon. member would have known the trend and the thrust of opposition members' representations, questions and points of view had he been a member of that committee.
The Canadian people said loudly and clearly they would accept a tax system which treated fairly those who supply the energy, the ability and the determination to make this country go. In other words, the people we call the doers of this country were not going to be sacrificed on the altar of some so-called tax equity. Some people may object to me using the word "nonsense" but it seems to me to be nonsense and impossible to in any way support the suggestion that we shall have social justice in this country and all the social benefit programs we require in order to fight and eliminate poverty if at the beginning we kill the economy. This is where there is fundamental disagreement and this is where we part company with the government. This is precisely where there is a division of opinion.
Our first priority must be to maintain and encourage economic growth and then these other things will follow. The white paper puts equity as between taxpayers as the first principle. That is the first underlying principle in so many of these things, but that has now been changed. I do not suggest it has been changed completely but we will eventually see how far this change has gone. The proposals are complex and the language is difficult. We will have to wait to see how the practitioners, the tax lawyers, the tax accountants and businessmen themselves react. It is strange, but individuals have an uncanny understanding of how complex proposals affect them and how they are going to change their decisions. There are many people who are not tax experts but are sound financial analysts. Some of them are engineers; I know of
The Budget-Hon. Mr. Lambert a university professor in chemical engineering who falls into this category. Many of them are better able than 90 per cent of the people on the minister's staff to understand this field. The man to whom I referred has been very successful in this avocation. There are many people like that and we want to hear what they have to say in respect of the tax proposals.
I commend the minister on his timing. From here on in he is going to talk to the provinces. He knows now, if he did not know before, that it is absolutely essential to get their agreement. If he does not have that agreement the whole system will not work. After all, in respect of income tax there is joint jurisdiction. There is no way the federal government is going to set its own pattern in respect of income tax on a unilateral basis with the hope that we will avoid falling back into a tax jungle. There are no two ways about it, because some provincial administrations may simply say to the Minister of Finance, as Ontario was wont to do last year when it proposed a counter plan! "You do what you want, but we are going to do as we see fit". As a result the Canadian economy and the taxpayer would suffer. Whose fault is it? Is it uniquely the fault of the province or must it be shared by the federal government?
As a result of the decision of the federal government we have a part to play in the approval or disapproval of these proposals. I say we are back on the right track in recognizing the importance of maintaining the growth of the economy. Do the changes provide for this recognition? I suggest they do to a limited degree only by the removal of taxpayers from the tax rolls. We are told some 750,000 people will be removed from the tax rolls. Some of these will be removed because of this year's limited provision in relation to those earning less than $500 taxable income who will be reduced to zero in so far as tax liability is concerned. Others who, because of an increment in the guaranteed income supplement, found themselves in a taxable bracket will also be removed.
Of course I find any suggestion by the government that it is really doing anything by removing the surtax to be the most laughable joke.


Colin David Gibson: Isn't it a help?


Marcel Joseph Aimé Lambert: Did it not hurt a bit to reimpose it in December?


Colin David Gibson: Is it not helping now?


Marcel Joseph Aimé Lambert: Oh, I see. It helps now. You broke the man's arm last month and so now you put it in a splint. That is really helping the economy. Let us look at the history of the surtax. It was proposed in late December, 1967. The government was defeated on third reading with regard to the surtax and then it was brought back in on the basis of the present Minister of Finance standing in his place in February of 1968 and saying, "mea culpa, mea culpa, mea maxima culpa, we have cut back on expenses, we have our computers and we can guarantee we will now balance the budget". The
commons Debates
June 22, 1971
The Budget-Hon. Mr. Lambert
siren songs of certain members of the treasury benches beguiled certain people on my left here to recant-


An hon. Member:: On your far left.


Marcel Joseph Aimé Lambert: On my far left and one or two on my immediate left. They recanted on their position concerning whether or not the government could be defeated. That was how life was maintained. Of course, then we had the continuing comedy of the government proposing a substitute motion and having Mr. Speaker throw it out because it was contrary to the rules. That was a real effort too. Talk about the old chug-a-lug car starting to get going! It was a sad example of an administration which did not know where it was going. In any event it automatically got the surtax on. Then following the extension last year in March the Minister of Finance candidly admitted he was not providing for it and that it was going to die on December 31. When this was pointed out to him he said, "so be it, that was our intention". After December it was going to be allowed to die. The purpose for the tax no longer existed. It had been put on as an anti-inflationary instrument in the first place-that is what they said it was-in late December and early February, 1968. The hon. member was not here at that time but there was a financial crisis, there was a run on the dollar. There was a real bind on at that time.
This was one of the conditions imposed by the financial authorities in taking steps to curb inflation. It was a very belated recognition of the problem of inflation by the present Secretary of State for External Affairs (Mr. Sharp) who was then Minister of Finance, because we had been pooh-poohed all along the line about the problems of inflation. So this came on as an anti-inflation measure. Last year in March it was going to be allowed to die but then at the same time the minister was proposing some consumer credit controls. I do not know what foot he had where on what side of what line because on the one hand he was indicating there was no longer the pressure from inflation since the anti-inflationary surtax was being allowed to die and yet there were these so-called consumer credit controls that were due to come on in June of 1970.
But somehow or other the minister then started to tell us that the government took certain measures of a monetary and fiscal nature to start relaxing the economy. Why propose consumer credit controls? Whom were they trying to fool? We know they never came in, although they have always been in the background. Even last January and February when the voluntary price restraints expired, whatever restraints there were, and when we had some price changes, did not the Minister of Consumer and Corporate Affairs (Mr. Basford) say that they had some compulsory wage and price controls they might have to consider? The Secretary of State for External Affairs not long ago said in the House that he is satisfied that this Parliament has the constitutional authority to impose mandatory wage and price controls. But what have we in the budget? We have the minister increasing consumer purchases. There are measures there designed strictly in the field of consumer purchases of the big ticket items. This is to stimulate the economy.

What sort of schizophrenia is the minister suffering from?
Last year until July we had consumer credit controls to restrict the sale of big ticket items. That was supposed to be anti-inflationary. Then the anti-inflationary tax was supposed to die. Then last December there was a quick budget to impose it. Why? No longer anti-inflationary, merely revenue producing.


Robert Lorne Stanfield: Inflation was licked.


Marcel Joseph Aimé Lambert: The Leader of the Opposition is quite right because the Prime Minister said in the House or in the confines of the House that they had the problem of inflation licked. Now all of a sudden it is no longer needed for revenue. Apparently inflation is out of the way again.


Robert Lorne Stanfield: Unemployment is licked too.


Marcel Joseph Aimé Lambert: And we are going to get the surtax taken off. In December we needed the $320 million in revenue the surtax would produce, but apparently we do not need it now. So what is this? Are we back into a policy to encourage the consumer to buy? Is the consumer to be encouraged to go out and spend? If that is so, what about wage and price controls? Where are they? Were they just some stick the Minister of Consumer and Corporate Affairs likes to trot out periodically to show the dignity of his position and that his department exists?
What sort of backwards, forwards and sideways action are we getting from the government in dealing with the economy? Are we now going to have more red convertible loans? Are we to see the encouragement of individuals to buy small hovercraft and all these other big ticket items? Is the Canadian public to be encouraged to go on a spending spree in order to crank up the economy? After all, in December the budget was supposed to be one, as the Minister said, for stimulation of the economy. I will admit that the reimposition of the 3 per cent surtax was a bit of a paradox to an economic stimulus budget because the minister indicated the government had a shelf of public works projects they were setting up. Certain projects were being dusted off with a great deal of fanfare. It was mostly dust and little spending.
The government said that more money would be injected into housing, that loans would be made to the provinces which had particularly high unemployment indices. This was to be a government go it alone. There was no encouragement for business or for the individual to help stimulate the economy last December, in other words, to encourage employment. It is even more than schizophrenia as between inflation and unemployment and the government's participation in the economy in direct action without the partnership of provinces, of business or of individuals.
Where are we today with regard to this? Why is the 3 per cent surtax being taken off? I hope we have seen the
June 22, 1971

end of it because it has had a sad, sad history. There is to be the removal of the 15 per cent excise tax on a certain type of electronic equipment. It is not exactly the type of equipment that will be bought by the lower income groups. They are not the people who will get the benefit of it. Incidentally, the hon. member for Grenville-Carleton (Mr. Blair) should talk to some of the electronic retailers in his constituency about the minister's claim that the removal of the 15 per cent tax on a $500 television set will mean a saving of $75. Of course that is a lot of nonsense because it does not operate that way. The 15 per cent will be removed at the manufacturers' level. When the instrument comes into the country, it may cost around $200 or $250, I would say about $200, so that actually the tax was $30, not $75. But the hon. member's constituents will also tell him that they have to absorb the cut, the same as mine.
I would think that likely Westinghouse is happy about it. They have recovered from their distributors and their retailers. They are not the ones who are facing the loss. It is the retailer and the wholesaler who have the goods in their warehouse or in their stockroom, not Westing-house who have not yet sold it, because they have not paid on anything that is in their warehouse. I apologize to Westinghouse for using their name as an example, but it is the same for all of them. Until the goods move away from the manufacturer's warehouse, no tax is paid and therefore he does not have any investment in tax paying. But the wholesaler and the retailer have had to pay, and there is no refund. Let us not talk about a $75 saving on $500 television sets. The saving will be at a much lower level.
Let us hope, however, that this action helps the electronics industry. The Lord only knows that it requires assistance, but I am wondering if it is not too late because so many of them are now having the components manufactured abroad and some of them do not even assemble in this country. They market under their particular brand name, but I will not go into the various national manufacturers who only act as distributors for, let us say, a Japanese manufacturer. That is all there is to it. They commission the manufacturer abroad and they act as distributors here. What this will do will not stimulate employment here in Canada. All it means is that the sales of a distributor or a retailer may be increased. There might be more people induced to open up an electronic equipment business, but the ultimate gain in employment will be in Japan, in Europe or elsewhere. Frankly, our Canadian electronics industry in Canada has suffered some mortal blows, and no assistance was given to them in the past. I read that this action comes rather late in the day, one minute to midnight with regard to a lot of them.
The same may be said of some of the customs changes for the petrochemical industry. That is a sad story, and yet we will now wait until there are massive lay-offs where we are told that whole sections of plants are being phased out. Product research laboratories, such as at Chemcell in Edmonton, are disorganized and 125 highly skilled people who have been working 15 to 17 years for this company were put out on the street.
The Budget-Hon. Mr. Lambert
Let us look at this situation. The minister and the government have a lot to answer for with regard to their treatment of the heavy chemical industry in this country. The Minister of Industry, Trade and Commerce (Mr. Pepin) knows of the strictures, the cautions, the warnings and the pleadings that were directed toward him in particular and toward his predecessor with regard to the Kennedy round negotiations and the effects these would have on the heavy chemical industry. Then, to compound the difficulties, somewhat less than two years ago, in order to combat inflation and to keep prices down, the phased reductions in duties on heavy chemicals were all telescoped in the complete advance of the Kennedy round concessions. It was bad enough to phase these things out over four or five years, but to have them happen within two years has been too much. Then, of course, so many of these plants which depend to the extent of 70 per cent or 75 per cent of their production on the export market were hit last June with the freeing of the dollar, and an automatic price increase of 7 per cent to 8 per cent has proved too much for them.
The minister and his officials will have to give an accounting to the House and to the country with regard to their treatment of that industry. They cannot say that there were loans and that they were going to do this and that. The net result can only be the closing of plants and the deferral of the construction of new plants. That is where the crunch comes. May I call it one o'clock, Mr. Speaker.


Mr. Deputy Speaker:: It being one o'clock I leave the chair to resume the same at two o'clock.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Marcel Joseph Aimé Lambert: Mr. Speaker, I
should like to turn from the impact of the previous budgetary exercises and of this one on particular industries, to deal briefly with some of the tax proposals to determine whether they actually do recognize the maintenance and growth of the economy as the first priority. There is no way in which I can deal with all of the provisions with regard to tax both in the, shall we say, 1971 economic budget and the tax changes to come, but in any event I would like to make reference to some particular ones.
I think everybody welcomes the increase in personal exemptions to $1,500. I would have preferred to see a system of tax credits because I think it would be more flexible and could do greater justice when one wanted to make the necessary adjustments without having such rather widesweeping changes.
Subject to the fine print, and to the regulations which will apply, I think that the child care allowances will help in certain areas. Some of the disabilities that were contained in the white paper have been removed. I sup-

June 22, 1971
The Budget-Hon. Mr. Lambert pose some people will say that the workers' allowance is not enough, and others will say it is unfair because it discriminates against the sell-employed who have the same expenses in that respect as individuals who work for a salary. That is a point that will be argued by my colleagues.
With regard to the capital gains tax proposal, I am wondering how our friends to the left will react, bearing in mind that tomorrow their supporters are facing a general election in the province of Saskatchewan. We know that at the time the white paper was issued there was a great difference of opinion within that particular group with regard to capital gains tax, and particularly its impact on family farms, ranches, and so forth. As I say, it will be interesting to see which way they go this time, whether those who want a really heavy 100 per cent capital gains tax will say it should be applied to family farms.
We were all delighted to see that the princ:pal residence has been exempted from this proposal. In the first place, if applied in that way it was going to be a real nuisance operation and, as I have said, a tax system has to be accepted by the public. The Canadian public certainly spoke loud and clear in opposition to the imposition of a capital gains tax against the principal residence. True, we have certain conditions now proposed with regard to expropriation, and there are certain other provisions in this field There are certain roll-over provisions. Then, there is the matter of personal property. I think some difficulties have been removed by the fact the amount has been raised to $1,000.
There is one difficulty about the capital gains tax. It still is there and will always be there. The difficulty is that the tax does not take into account the effects of inflation. If inflation continues at the rate which has been prevalent this year and was prevalent prior to last year, and so on, we shall see a great penalty imposed on individuals.
There is one area where I feel that the imposition of the capital gains tax is an error. As a matter of fact, the trade-off between taxes, that is, the elimination of estate taxes and the imposition of the capital gains tax, is not to the advantage at all of a certain group of people. The people for whom this means another tax on top of other taxes are the farmers and ranchers, particularly those who live in provinces where the removal of the estate tax is meaningless. For instance, it is meaningless for the federal government or the government of Canada to say anything about removing the estate tax in Quebec, because that province at all times has reserved unto itself succession duties. You are not giving the farmers of Quebec anything, but you are imposing a capital gains tax on them. To a lesser degree, you are not giving anything to the farmers and ranchers of Alberta or Saskatchewan, because they were getting a refund in any event, to a limited degree. However, you are still imposing a capital gains tax, with certain limits, up to $1,000 per annum, being available at the option of the farmer.

However, there are no two ways about it; the tax is still there. My colleagues from western constituencies will be talking about the effect of the capital gains tax on farmers at much greater length. They are concerned about this.


An hon. Member:: Mr. Speaker-


Marcel Joseph Aimé Lambert: Mr. Speaker, I will finish my speech, and the parliamentary secretary will have every opportunity to reply.


Colin David Gibson: Will the hon. member not permit a question?


Marcel Joseph Aimé Lambert: It is my right to decide whether or not I will answer a question. With regard to farm machinery, there will be a problem, particularly-


Mr. Mahoney:: Does the hon. member suggest that the budget treats farmers differently from other taxpayers in this respect?


Marcel Joseph Aimé Lambert: I will assert here, on behalf of my party, that in the committee we endeavoured to move an amendment which would have exempted from capital gains tax farmlands being sold or given or passed on for bona fide farming purposes. That was the position we took, and that is the position government members on the committee voted down, although the vote was fairly close. We were outvoted on that occasion. It is a matter of record that that motion was turned down. It was one of the few that we advanced that the committee turned down. It is also interesting to note that we were joined in that motion by members of the New Democratic Party who again realize the effect (hat this is having on farm ownership and on farmers. I am quite prepared to recognize the particular situation that applies with regard to farmers and the capital gains tax.
So many people seem to think that millions are made by speculators in land sales. One of the arguments that was used popularly to justify the capital gains tax, and I heard a great deal of tripe during the argument, was that the tax would catch the unearned millions made on land speculation. Of course, people making those statements do not know what the income tax law is. Very little land is sold that is not subject to income tax rates, because it only takes one venture, or what is deemed to be a venture, to attract the tax. The law reports are full of cases, and no reasonable and reliable lawyer will ever tell a man that he can get away with anything like that. Some people have been surprised because they thought that by doing something quite legitimate they obtained a windfall, and it turned out that it was not so.


An hon. Member:: That would be held to be a venture.


Marcel Joseph Aimé Lambert: That would be held to be a venture, and quite rightly so. Even speculations in which people buy a house and hold it for five years because the property might suddenly be needed by an oil company for a service station are caught. All these things are caught. Therefore, it is not the land holder in the city
June 22, 1971

who will be caught by this tax. We feel that the bona fide farmer and the disposition of land for a bona fide farming operation should be exempt from the capital gains tax. Of course, if the land is sold for a subdivision or if it is sold for speculative purposes, then, certainly I think it should attract capital gains tax. That is what the tax is for.


Mr. Ryan:: The tax would be less on a speculation.


Marcel Joseph Aimé Lambert: As a matter of fact, my colleague, the hon. member for Spadina (Mr. Ryan), says that the capital gains tax will mean that speculators will pay less tax than at present because they would be caught at marginal rates, and for many the tax will be less than it would have been in the past.
We have heard a great deal about the number of people being removed from tax rolls. I think that there will be an upward movement within the tax brackets as a result of inflation. In any event, I refer hon. members to the tables relating to the summary of the 1971 tax reform legislation. They will see that there is a reduction for some. Most of the recovery is to come from the lower middle income groups. I will refer hon. members, first, to Tables 1 and 2, and in particular to the last column on each page.
If we look at the present schedules of rates applicable to taxable income under Table 1, we shall see that from zero to $1,000, the average rate is 14.8 per cent. Under the new rates, the rate from zero to $500 will be 22.1 per cent and from $500 to $1,000 it will be 23.4 per cent. Actually, until you get to $14,000 the new rates are higher than they were previously. After $14,000 the rates drop. It is between the areas of $500 to $1,000 taxable income and $14,000 taxable income that the real impact is going to come. That is where the greatest number of taxpayers are; that is where the rate is highest and that is where the crunch will come for those who are being exempt. I suggest that members of the House and people outside should place themselves in these brackets to see where they fit and what their rate of tax is to be, then the answer will be simply and readily understood. I am referring to Table 2 in the 1971 summary of the tax changes.
I do not want to talk about changes in respect of small businesses. Some of my colleagues will look after that. The same applies to mining and petroleum. May I say, in this regard, that the government has seen the wisdom of the recommendations in the House of Commons Committee report with regard to mining and petroleum. There are some changes. The minister had indicated to the industries concerned that he was making major departures from his white paper position. Of course, I think the minister recognized that those two industries occupy a particular position in the Canadian economy. To those people who suggest that the mining industry and the petroleum industry enjoy a special or a favoured position in Canada I say, no, they do not. Their position is different from that of other industries. Yet, when it comes to competing with mining and petroleum industries abroad, where the real competition is, we know that these indus-
The Budget-Hon. Mr. Lambert
tries in this country are not in a special position. Lots of items are relevant in competition, such as the tax system of the country, the financial position of the company, the quality of ore, the distance it has to be moved to markets and the transportation available. All of these must be considered. These are conditions we must keep in mind.
It is the cost of the end product being sold to the customer that counts. All else is just one part of the factors of competition. Some suggest that these industries were favoured because they were given three year tax holidays and special depreciation allowances. Of course they were; they had to be there, because when you deal with those industries you must not consider them vis-a-vis other types of Canadian industries but vis-a-vis similar other industries outside the country. That is where the competition comes from. That is a simple answer.
I think perhaps with the changes that are made now, subject to some hidden details that are not apparent to us at the present time, I am reasonably satisfied with those changes. That is all I am going to say about taxes at the present time.
I want to come back to the burden of my speech, the main thrust of it. That is, the economic aspects of the budget. We talked about the elimination of the surtax and the encouragement of consumer spending. I would have liked to have heard the minister say something about the future of the Prices and Incomes Commission. We know the present legislation provides for the termination of the Prices and Incomes Commission as of December 31, but is it the government's intention, yes or no, to let that position stand? Is the Prices and Incomes Commission going to be replaced by another body, particularly if wage and price controls are as the minister, the Minister of Consumer and Corporate Affairs (Mr. Basford) and the Secretary of State for External Affairs (Mr. Sharp) spoke about a few weeks ago. What is the intention with regard to the Prices and Incomes Commission? I think it would have been right to have the minister examine what that body did with regard to control of inflation. The minister owed it to the country, and the Prices and Incomes Commission, to indicate what the government thinks of the operation and the effectiveness of the Prices and Incomes Commission.
The minister should have spoken in greater detail about the movement of interest rates. He did not indicate that the average of long-term interest rates troughed near the end of January and they have now moved nearly three quarters of a point above their low. If one examines the charts put out by the Bank of Canada every week, he will see this movement. As far as I am concerned, this is one of the circumstances that gives me the greatest unease at the present time. This indicates that people have not accepted the fact that inflation is supposed to have been mastered. It is going to have such an effect all the way down the line. It is the average rate on these government loans that establishes the rates for Central Mortgage and Housing Corporation loans, farm improve-

June 22, 1971
The Budget-Hon. Mr. Lambert ment loans and farm credit loans. All of them are predicated on this particular group of government obligations.
As I have said, since the end of January we have seen a climb-back of three-quarters of one per cent, which is a lot. It is a big movement. At the present time, I cannot see why there should be a reversal of that trend. After all we have seen, and this is a very uncomfortable indicator, one of the biggest banks in the United States and two other banks, not among the largest but still among the group of fairly big operations, increase their prime rate. It is going to take a little more pressure in the United States for a movement upwards of interest rates. We will then see a consequent movement here. Unfortunately, this is one of the factors that one must pause to look at. I had hoped the minister would have given us his observations in this field on the basis of the economic review he made the other night, rather than playing with figures in the field of consumer price indices.
The minister played around with figures on unemployment. The government plays around with figures and words; seasonally adjusted, not seasonally adjusted, downward trends, monthly aberrations. They do not mean a darn thing. It means that there are still over
600,000	people in this country who are not gainfully employed and are seeking work. This is an exceedingly high percentage. Let us take a look at some of the circumstances of these people who are unemployed. In 1970, unemployment recorded the highest sustained levels for any year in the last decade. This government has fought the inflation of 1968-69 and that fight has resulted in an unemployment rate in 1970 which was twice that recommended by the Economic Council of Canada as being permissible if the economy were operating at full potential.
The particular consequences of massive unemployment are that different regions of the economy carry disproportionately large amounts of the unemployment burden. The "traditional" have-not regions in Canada continue to suffer unemployment rates which are twice the national average. However, a more sinister trend has emerged. The provinces of Ontario and British Columbia, long the most prosperous and most affluent areas in Canada, are now suffering unemployment rates from which they had been relatively free since the depression decade of the 1930's.
The increase in Canadian output, corrected for price change, was only 3.3 per cent for the year 1970. In December, 1970, the Minister of Finance expressed optimism that both employment and output would move ahead strongly in 1971. He did the same thing the other night. The first quarter figures for 1971 show little reason for this optimism. An increase of only .6 per cent in gross national product for the first quarter of 1971 stood out in sharp contrast to the fourth quarter 1970 increases of 1.5 per cent, the figure on which the government based its optimism. How can the minister possibly justify his estimate of the other night that the gross national product would move up by 9 per cent this year? This is incredible and unbelievable.

Canadian domestic output has shown very few signs of recovery. This morning the hon. member for Saint John-Lancaster (Mr. Bell) indicated that the indices of industrial output had actually declined according to the last figures published. If automobile industries are excluded from the aggregate calculations, real domestic product actually declined for the first quarter of 1971. The average rate of growth of domestic output for 1970 was 2.9 per cent, much lower than it should be if we are to keep up our position with our trading partners.
The strong sectors of the Canadian economy continue to be those most directly affected by overt government policy. The external sector continued to enjoy a surplus on current account. This surplus was in part due to a reduced rate of price increase, which has helped some exports, and in part, to a reduced rate of growth in imports resulting from reduced Canadian incomes. The construction industry showed some strength in the first quarter of 1971, but that was not difficult to do because there had been such fantastic doldrums in the industry for the 18 months prior to that. This only comes as a result of direct government intervention.
In 1970 Canada had the highest rate of unemployment of any country in the western world. In addition, our rate of growth was the second lowest in the western world. The government's monetary and fiscal policies have been the direct cause for Canada's current economic malaise. The government completely miscalculated the extent of the slow-down that they generated in 1969. This is coupled with a lagging and sluggish American economy, despite warnings from the Economic Council of Canada and because of a lock-in that the government had undertaken on foreign exchange reserves. This, coupled with a lagging and sluggish American economy not foreseen by the Minister of Finance (Mr. Benson) has made the present policies inappropriate for a sustained, vigorous return to high employment.
It is obvious from the last two budget addresses that the Minister of Finance has not understood the extent of the recession of 1969-70 and what that should imply for a recovery program. The minister fully intended to allow the Canadian economy to ride the coat-tails of a forecasted, but as yet unrealized, economic recovery in the United States. Because that failed in the United States, it failed here. Accordingly, the policies proposed by the minister have not worked.
The federal government, and only the federal government, claims to know best how to bring the economy out of recession. The budget of December of last year was a perfect example of this and frankly there is little here to suggest that the government has decided to act otherwise. As a result, the government has not attempted a partnership for recovery with the private sector and other levels of government. There has been no massive movement on an expansionary basis to get the economy really moving. The government has been content selectively to increase its own expenditures and hope that the United States economy and the presumed underlying strength of the
June 22, 1971

Canadian economy would be enough to generate a return to full employment.
As the economy enters the second quarter of 1971, the errors of the minister's forecast and the inappropriateness of the government's policies are obvious to everyone but the members of the Trudeau administration. Members of the Official Opposition have consistently pressed the government to found its recovery program on as broad a base as possible. Economic recovery is impossible without the active assistance of the private sector and other levels of government. The extent of the recovery needed is too large to enable the federal government by itself to guarantee success. Business confidence must be restored and the provinces and the municipalities must not be saddled with the increased burdens which have resulted from federal policies.
Tax cuts have been proposed in this budget but, frankly, they are a pale effort. Tax cuts now to increase private spending and, in addition, forthright tax reforms to ensure that recovery is not aborted would restore lost business confidence. Increased emergency assistance to the other levels of government, especially in the welfare area, would materially assist the provinces. We have seen the provinces unable to meet the legitimate demands of many municipal governments which are faced with skyrocketing welfare costs. I admit some of those costs are the result of pie-in-the-sky rules, some open doors where all that is necessary is to stand up and breathe and say you want welfare and you can get it. That is what has happened in many municipalities. They are having to rethink their positions. Yet people are there. There is a real problem and the federal government is doing nothing to assist the provinces to meet these demands.
If the tax cuts and emergency assistance had been forthcoming in 1970 when the problems we are facing today were abuilding we would not be faced with the acute situation in which we find ourselves now. This is the same thing. The Pearson administration and, in its early days, the Trudeau administration, stuck their heads into the sand with regard to inflation. Then, they took emergency action far too drastic. The net result is that we have been witnessing a sort of yo-yo operation or a fast movement up and down and it is just not working.
There are a number of other things I should like to say but I think I have been able to indicate that the government has not dealt with the problem of inflation. The minister had a lot to say in his budget speech with regard to the progress which had been made in fighting inflation. He mentioned that inflation was running at the rate of only 1.5 per cent in 1970. But all I have to do is to go to the Bank of Canada statistics report for the month of May of this year to find out just how true this is. I will admit that as between June of 1970 and December of 1970 there is a spread of approximately 1.6 points in the cost of living index. But this does not indicate that there had been a further spread of eight tenths of one point during the course, there had been an upward course and then a downward trend, and if we look through the budgetary exercises which we have before us we find that in January 1969 the index stood at 122.6 while in
The Budget-Mr. Saltsman
January 1970 it stood at 128.2. In other words, there had been an increase of 5.6 points. This is not a percentage. It is 5.6 points and as of January 1971 the index stood at 130.3, and in mid-April it was standing at 132.2 and if my memory serves me right, it is now over 133.
The Minister of Finance and the Prime Minister (Mr. Trudeau) thought inflation was licked. The cost of living was being mastered on the basis of the evening out effect due to the supermarket war. The supermarkets took it in the neck. We know very well what happened in the third of 1970 to the operating records of the major supermarket chains in Canada. That is where the losses went. This is where the government was led down the path. As a matter of fact the highest point reached by the food index was 131.9 in August of 1970. In December the figure had dropped to 125.6. It was back, at the end of April, to 129.1 and in May it moved back to 130. So, food prices are almost back to the level they had reached last August. On the other hand, the costs of shelter, transportation, clothing and all the other items which go into the scale have increased, and will continue to increase.
All I can see is an increase in that cost of living index. Last year it was at one and a half points but right now it is over five points per annum. Regardless of what the minister says, it is almost as bad as it was in 1969. I do not enjoy that, Mr. Speaker, as my colleagues and I feel it as much as anybody else. But I insist that government policies are predicated on the fact that they say inflation has been licked; I say it has not. We will see who is right.
I would have had a great deal more to say about unemployment, Mr. Speaker, but I am going to bring my remarks to an end at this time and therefore I will move, seconded by the hon. member for Mackenzie (Mr. Korchinski):
That the motion be amended by deleting all the words after "that" and substituting therefor:
"That the government's budget fails to contain sufficient tax reductions and other economic incentives to promote a dynamic expansion of the Canadian economy now troubled by rising inflation and high unemployment and its tax reform provisions not only fail to compensate for the above deficiencies but they do not provide for the sustained expansion of Canada's economic growth and activity as well as the elimination of poverty and the maintenance of necessary social benefit programs".


Mr. Max Saltsman (Waterloo):: This is one budget, Mr. Speaker, that if not deliberately confused certainly is confused in the sense that it combines two major elements, tax changes and fiscal policy. We cannot discuss one without the other, particularly if we look back to some of the figures with which we have to deal. We find that in the Carter commission report on taxation and even the white paper, these predictions and figures were based on a relatively balanced budget position. The present tax provisions are based on a deficit position which means that all the things that Carter said were possible, and that the white paper said were possible, in terms of tax benefits to the people should be increased because of the deficit position of the present budget. It simply means
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June 22, 1971
The Budget-Mr. Saltsman
that the government is not trying to effect any kind of balance and is using the deficit itself to provide some of the tax benefits in the budget.
While there may be some joy in the Liberal party backbenches, and considerable joy in Bay Street, I want to say that there is very little pleasure in this budget for the ordinary man or woman in this country. The Minister of Finance (Mr. Benson) has been far more concerned about making the Liberal party safe in Bay Street, and making Canada safe for tax consultants, than he has been about bringing genuine tax reform or, for that matter, assisting those who need tax relief.
In our view the minister has failed to provide adequate stimulation to take into account the high level of unemployment that exists in the country. While we acknowledge that he is moving in the direction that is necessary-he has provided for a deficit-we do not think that deficit is of sufficient magnitude to restore this country to full employment this year or next year. The minister has not given answers to the question of what he considers an acceptable rate of unemployment. When everybody who seeks a job has a job that does not mean anything, but he refuses to give any figures on what the government projection of full employment is.
It would appear that somewhere in the closed ranks of the Liberal party and the bureaucracy of this country, they have hit upon the figure of 5 per cent unemployment and the measures in this budget are designed to move the economy to this figure over the next two years. The figure is totally unacceptable, Mr. Speaker. There can be no acceptance of a policy that plans for 5 per cent unemployment. It is ridiculous, particularly when the Economic Council of Canada in its examination of this problem said that the highest rate of acceptable unemployment in Canada should be no greater than 3 per cent.
It is our view that the budget should have provided fiscal incentives of one kind or another to move the economy to a full employment position with an unemployment rate no greater than 3 per cent. The government has totally failed to do this, and has betrayed all those people who hoped for tax reform. There is no tax reform in this budget, Mr. Speaker; there are some changes and we will deal with those, but on the whole we think this budget is a failure of the greatest dimensions.


Some hon. Members:: Right.


Max Saltsman: At first blush, some good measures are contained in the budget. Exemptions have been increased; there have been increased benefits for people on old age pension and provisions made for baby sitting expenses. It may be that the euphoria of this is the kind of relief a man gets from banging his head against the wall-it feels good when he stops. The initial impact of this budget may be that it provides some good things and therefore the Liberal party has pulled it off again. In the short term, however, when people have had an opportunity to examine the inflated and exaggerated claims and relate this budget to their own lives to see whether they are better off than before, they will come to realize

that the budget offers very little to the ordinary citizen of this country.
I did not say it had very little for everyone, because it has a tremendous amount for people in business who make their income from capital gains or from investment. This is a juggler's budget. It is the kind of performance in which you throw a bunch of items in the air. You are not always sure which item is following which item and the whole thing gets very confusing, but you shuffle from one to the other. This is the kind of thing which people in the Liberal party suggest is a miracle. They suggest it is not costing the government very much money to provide all the good things it is doing. There may be some genuine miracles, but I do not think this is one of them. I do not think the Liberal party is in a position to give something for nothing without shuffling things.
It is interesting to look at how this shuffling has been done. Let us examine page 64 of the summary of the tax reform legislation where there is a reference to the revenue effect of personal income tax changes in the first year of the new system. We find the government has increased basic exemptions, and there are figures indicating those increases. We find the good things done for the ordinary people are offset by a number of other things. The goverment is going to get $30 million more than it pays out in terms of deductions for unemployment insurance as against what it collects by classifying the benefits received as income. If we look at item No. 9, we see the inclusion in income of medical premiums paid on the employee's behalf by the employer. The government picks up $80 million on that item, which is almost the same amount it cost the government to increase basic exemptions. Who has been benefiting from the inclusion of medicare premiums? I suggest the people who have benefited have been the working people of this country, so the government is taking the money out of one pocket and putting it in another. It is doing this little juggling act in the hope it will not be noticed.
Item No. 11 refers to other expense deductions and other items included in income. In this case we find the government picks up $65 million in 1972. Let us consider what this amount of $65 million comprises. It consists of adult training allowances to the extent of $20 million. Who benefits from adult training allowances, the rich? This item also consists of armed forces changes to the extent of $15 million. When I asked about this I was told it referred entirely to the "general" category. We have a lot of generals in the armed forces, but I did not think we had $15 million worth. I am sure that applies to many more people than just generals. Further down the list we see a reference to additional interest paid by co-ops, caisses populaires and credit unions to the tune of $5 million. A little further down we see fellowships, scholarships, bursaries and grants. The government picks up another $5 million from that. This is how it is providing the benefits it is giving.
Let us contrast this with what the white paper and the Carter Commission suggested. I know there will be gov-
June 22, 1971

ernment members speaking after I have finished and I hope they will reply to my questions. I have not found any reference to the medicare premiums paid on behalf of employees which relate to the $80 million in that white paper. This is something that has been sneaked in; it is new and did not appear before. Let us not refer to the modest tax reforms but go back to the original tax reforms in the white paper. Table 16 on page 96 of the proposals for tax reform is very interesting. I am being careful to note these references, because I want hon. members opposite to say something about these things when they speak.
In this table we are dealing with revenue effects of corporation income tax changes on the 1969 income tax position. In the first year, presumably 1970, the government intended to get $205 million extra revenue from increased taxes on corporations, which included the elimination of the low rate corporate tax, capital gains and the cancellation of the deductions on other things. Because my time is short I hope I will be excused for not reading all these items.
In the fifth year the government planned on getting $560 million through increased taxes on corporations, and this was after watering down the Carter proposals. Let us refer to the maroon coloured volume at page 63 where exactly the same kind of calculation has been made. It refers to revenue effects of corporation income tax changes in the first year of the new system. Instead of the $205 million the government intended to get from corporations under the white paper proposals it is now projecting $20 million. This results from the government backing off from the proposals of the white paper. In 1972, we find the projection has increased to an amount of $30 million.
What has happened has been that the benefits the government has been handing out, and the significant changes between the white paper and the budget, will almost entirely be to the benefit of the corporate sector with almost nothing to the benefit of the individual. In fact, the benefits to the individual are being projected as costing the government $370 million in 1972 as compared to $290 million, which is only a small portion of the deficit. In other words, if the budget were in balance, on the same basis as the calculation made in the Carter Commission Report and the white paper in respect of the reform of taxation, there would have been no benefits to individual taxpayers.
The only reason there are benefits is that the government has decided on some degree of expansion by deriving these benefits from the deficit. That is pretty fancy juggling, and the minister has not gone out of his way to explain the source of this money. This also explains the miracle of these increased benefits not costing the government any money. The government is doing many things to create a miracle. It is taking the money from one group of working people and giving it to another group of working people, so the government figure as to the number of people who will be paying less taxes has to be taken with a grain of salt. They are paying less, but when you calculate what has been taken away and what has been given, you find that many are worse off.
The Budget-Mr. Saltsman
Let me make it clear that I do not quarrel with the inclusion of these various things in the tax base, whether it be unemployment insurance, deductions for medicare, armed forces changes, adult retraining or fellowships and scholarships, because if you are to have a comprehensive tax base these have to be included. We knew this but we did not like it. Most of the people forced into this tax position are those with relatively low incomes. Our objection is based on the fact that, if you are going to have a comprehensive tax system which takes in these things, it should also take in capital gains and the profits of mining and oil companies as well. It is not fair or right to put into a comprehensive base only the incomes of the ordinary working people, without also including the benefits and improvements to the corporate sector. This is what is being hidden in the government's proposals.
I say it is a shocking and shameful thing this government has done. They may get away with it for a week or two, but the public is not stupid. The public will see this little juggling act that has been performed. Let us see what might have been done had we followed some of the recommendations of Carter. The Carter Report would have provided substantial tax relief on a much smaller base. The Carter Commission intended to decrease by more than 15 per cent the taxes of 3,124,818 Canadians. Not one million, but three million people would have had their taxes decreased by more than 15 per cent. There would have been 2,963,000 for whom the decreases would have been between 15 per cent and one per cent. In other words, almost six million Canadians would have had substantial tax relief and less than 631,000 Canadians would have had their taxes increased, and those would have been Canadians in the upper income bracket who could have assumed an increase in taxes. That is the difference.
So, what the government is giving is infinitely less than the people are entitled to get because there is no such thing as a tax avoidance. You cannot give back to the corporations $5 million which you intended to take from them and say that the other people who are not in the corporate sector are well off. There is no such thing as tax avoidance, as Carter pointed out. To the extent that some people in our society do not pay their full share of taxes others have to pay it. In this case it is the corporate sector that is not paying its full share. It is those who get their incomes from capital gains, from mining and from oil who are not paying their full share. The ones who have no choice but to pay their full share are the wage and salary earners of this country. I am not speaking only of those in the $4,000 bracket. I am speaking also of those in the area of $11,000, $12,000 and $14,000. The real dividing line in this country is not between the people who are getting $10,000 or $15,000 and those who are getting $4,000. There is some division there, yes, but the real point is whether in fact you get your income from wages and salaries or whether you get it from speculative investments. That is the dividing line. These are the two classes in our country.
24171-38J

June 22, 1971
The Budget-Mr. Saltsman
There is a tremendous difference in respect of how one is treated and how the other is treated. Let us turn to our maroon booklet again, at page 17. I might say I appreciate the opportunity the government gave us to have an extra two hours in advance to take a look at this book and have some of the federal civil servants available to us to answer some questions. During the time we were locked up, I asked a question regarding the taxes that would apply to those who receive their income from wages and salaries as against those who receive their income from dividends. I asked what the difference is. Well, at first there was a fair amount of hedging concerning whether in fact this calculation could be made. Finally, the calculation was made and I should like to place it on the record. It is not my calculation. It is a calculation made by some of the people in the government. I believe I understood them correctly and I think these are fair figures. If we look at the figure for the taxable income bracket of $5,000 to $7,000-and we agreed to take it on the $6,000 basis-if your income is from wages and salaries your tax at the lowest end of the bracket, at the beginning of the bracket, is $1,280.50. However, if you are receiving your income from dividends, because of the 33J per cent tax credit, your taxes are $200. This is a considerable difference.
How can we talk about a fair tax system when we distort it in this particular way? Is a man who must work with his hands or a man who gets his income directly from work either in the form of wages or salary less fortunate in this nation than the man who has been left some money or who has some money invested and does not have to do anything more than just collect the dividend cheques? Is the man on wages and salary less valuable to this country than the other? Is he to be punished because he works rather than because he is rich? This is the only basis for having this kind of a change. Let us go to the man in the $11,000 to $14,000 bracket. We took the figure of $12,000 in order to make the deduction because they said it was difficult to do it in any other way. In this bracket the man on a salary of $12,000 would have to pay in taxes $3,230.50. If he is receiving the same amount in the form of dividends his tax is $2,000 less. When the government talks about providing incentive to people in this country, I ask where is the incentive for someone to work when he sees that by working he pays a full share of taxes while the man who gets his income not from work but from some investment or from some savings, his or someone else's, gets off pretty lightly.
I do not believe a man would be very happy about working hard under these circumstances. I do not think there would be any joy in my heart about paying taxes in that type of situation. That is the kind of budget and the kind of taxation system that is being continued. I am sure government members will say they are surprised the hon. member for Waterloo would make such a statement because after all is he not interested in doing something about foreign ownership. They would say the reason we have this 33J per cent dividend tax credit is to encourage Canadians to invest in Canadian corporations. They would say this has been done because we want to
do something about foreign ownership and they would suggest that the hon. member for Waterloo should agree. What nonsense! You do not have to give away the moon in order to do something about foreign ownership. Perhaps they do not know it, but they have the power to legislate, as has every other country in the world, in respect of foreign ownership. It is not necessary to distort the tax system because you have a problem in respect of foreign ownership. Sure, we have a problem, but this is not the way to solve it.
Furthermore, Mr. Speaker, we have had a tax credit for dividends for a long time now. During the period in which we have had this tax credit we have sold out faster, faster and faster. The truth is it has not worked. No incentive or inducement in respect of taxes has in fact worked. People who say our tax system involves too heavy a burden forget that we place a lighter burden on the investor in Canada than does any single country in the world, including the United States. Up until this moment, we did not even have a capital gains tax. You know what the effect of this light burden on taxation on our entrepreneurs has been? It has provided them with a marvellous incentive to sell out. The absence of a capital gains tax, and even now the half capital gains tax, makes it more profitable to sell a business and get your money tax-free than to run it and pay taxes. If we wanted to design a system to sell out the country we could not have done a better job. The whole system which has been designed to discourage foreign ownership and to encourage Canadians who would be able to handle the business perhaps even better than the foreign owners, did not work out.
The present changes are continuing the same pattern. Let me show you how inconsistent this government is in the area of investment. After all, the dividend tax credit applies to all Canadian companies. Obviously, the government came to the conclusion that when it came to investment companies, even this very considerable bribe would not prove to be effective. So, what did they do? They wrote into the legislation that 90 per cent of the investment must be Canadian and only 10 per cent in foreign corporations. It does not take more than two sentences to say that, and it is going to work. The same thing was done with the Bank Act. There is ample precedent for legislating against foreign ownership in those cases where we think foreign ownership remains a problem. In my view there is no justification for distorting the tax system, thus making it inequitable, unjust and unfair to the ordinary people of this country by giving these concessions to encourage Canadian ownership. In our experience, it does not work.
As I said earlier, it is difficult to separate the tax changes from the fiscal measures in this budget. It has been obvious for a long time that more stimulation of the economy was required. The government has acknowledged this. Last year they ran a deficit; this year they are projecting another deficit. Some people say that it is inflationary. They forget that yesterday they were worried about unemployment. We still think that unemploy-

June 22, 1971

ment is the number one problem, not inflation. We can cope with inflation. There is no answer for unemployment. When people are out of work, they are out of work. The only question is: is the degree of stimulation adequate? We do not think it is. The calculations of the Economic Council of Canada indicate that we need a growth rate somewhat in excess of 9 per cent or 10 per cent. The figure of 9 per cent has been used as the projected growth rate for next year, but the government fails to tell us that they are also anticipating a price increase of around 4J per cent which brings our growth rate down to about 5 per cent, which is little more than keeping us where we are now. Our labour force increases at the fastest rate in the whole world, so a growth rate of 5 per cent really means we are standing still. Therefore, the stimulation is not adequate.
The second problem, as we see it, is that the government is still hung up on this matter of business confidence. One wonders how long it will take them to learn. I have not been here that long but as long as I have been here I have heard one minister of finance after another use the same phrase. Whether the problem was inflation, whether it was unemployment, whether we were talking about old age pensions or about a guaranteed annual income, there was one phrase that kept cropping up, and that was business confidence. There is some kind of mystery called "business confidence". It is like the ancient gods having to be placated lest they destroy this nation. When we had inflation and the government brought in restrictive measures on the ordinary people, the former minister of finance, the hon. member for Eglinton (Mr. Sharp) said at the time that it was necessary to restore business confidence, to placate the gods. Now that we have high unemployment and we are talking about stimulating the economy, the government brings in measures, most of which are designed as tax relief for business, thus refusing to make business pay its fair share of the taxes.
Why is this being done? It is because we have to restore business profits. If you give money to people to spend, the government believes there will not be any business confidence. All the articles I have read-and I have tried to be as unbiased as it is possible for a politician to be-take issue with this whole matter of business confidence. The argument is that the businessman invests because you give him benefits, you give him goodies. If you do not bribe him and give him goodies, he will not invest. On that basis, a country such as India should offer him all kinds of goodies, then we would see whether all businessmen would flock to India. They will not do so for a good reason, namely, that there is no purchasing power in India. The businessman will invest where he thinks there are buyers and customers, and no inducements in the world would get him to invest if he did not see customers for his products. Therefore, the key to investment opportunity, the answer to getting a country going-and I am not the only one who says this-is to stimulate the consumer purchasing power, to get money to those people who are in a position to buy.
In an immature and primitive economy, saving is everything, so perhaps in the name of saving you can do
The Budget-Mr. Saltsman
terrible things, such as depriving people of equity, because you have to build up a pool of capital. But that is not true in Canada. There is more money in the banks here than we have ever had. Our level of savings is the highest in the world. Our problem is not a shortage of capital, our problem is not one of having to stimulate the business community or bowing to the god of business confidence. Our problem is to get the people back to work by giving money to people who buy goods and services, thus employing those who are now unemployed.
This is an argument that I was very pleased to see taken up by the hon. member for Duvernay (Mr. Kier-ans). I hope that he will come back to this House and say some of the things he has been saying outside the House. He is a man of great courage. He is not a socialist by any stretch of the imagination. He is a Liberal in the true sense. But he is an intelligent man-that is the difference-and he is an honest man. You can see now why he had to walk out of the government. He saw the concept of equity being rejected. He could see the handwriting on the wall. When the Prime Minister (Mr. Trudeau) was questioned about the resignation from cabinet of the hon. member for Duvernay, he said that he should have stayed because perhaps he could have had some influence on the government. What hope is there of anyone having any influence on that government, except the bagman of their own party? He is the one who has the influence on that side, and the bagman has decided that we have to restore business confidence; we have to give business back all their traditional goodies; we have to make the world safe for the tax dodgers; we have to make this country safe for the people who are getting special benefits, and we have to reassure this minority their privileges will remain intact. After all, we must bow down to business confidence.
So, the record of failure, whether it was that of the hon. member for Eglinton or that of the present Minister of Finance (Mr. Benson), is now being continued. But perhaps putting forward technical arguments at this time is a little beside the point, because I think that this budget will have the wrong effect. Perhaps what we have to examine is the politics of the situation because in some ways this has been the most political of all political budgets. I will not say that politics has no place in the House of Commons because that is what it is all about. I am just saying that the government has carried politics beyond the point of its quaint decency. They have been sitting there like cats that have swallowed canaries. They are puffed up, they are so pleased with themselves. They think they have pulled a coup and undercut the opposition who will have not a thing to say. They have razzle-dazzled us; they have given something to the old age pensioners and increased income tax exemptions. They think we will have nothing bad to say about this budget.


Patrick Morgan Mahoney: If you have run out of material, move your amendment now.


Max Saltsman: I hope the hon. member will not be offended, but in the light of the record of that government any suggestion coming from that side should be taken with a grain of salt, as experience would indicate.

June 22, 1971
The Budget-Mr. Saltsman
You did a bad enough job running your own house, so don't give us instructions on what we are supposed to do.
I do not know what government members really thought about this thing, but the indications are that they are very pleased with themselves. In my view the government has made the worst political blunder of its career, and it will backfire. Members of the government have done two things. They have underestimated the intelligence of the Canadian people. They think that by throwing them a few goodies they can bribe them, that the Canadian people are all 12 years old. They are not all 12 years old, and they see through this scheme.
The other thing members of the government have done must be placed in its proper context. The search for tax reform goes back over nine years, to 1962 when the Diefenbaker government appointed the Carter Commission. There was an undercurrent of opinion throughout the country at that time. We realized we had a bad tax system that needed reform. During the intervening nine years a lot of the impetus for tax reform has been subdued. This resulted from the fact that at one stage the Carter Commission was sitting, and at another stage we had the white paper which the House of Commons was going to examine. Then, at a third stage, we had the committee report on the white paper. And while many people waited for the outcome, there was silence. But, Mr. Speaker, anyone in this country who had any feeling for tax reform, after Friday, must feel a personal sense of betrayal. Tax reform has gone down the drain, and those people will not be silent.
The very people we called in as advisers to the committee will not be silent. The hundreds of people who worked for Carter will not be silent. Some of them may go along with these proposals. There were some dissenting voices on the Carter Commission, but the vast majority who looked to the government for significant tax reform will have to start the struggle all over again. The Minister of Finance (Mr. Benson) has performed a great juggling act. But the balls he is throwing in the air are made of lead, and they are going to drop on his delicate toes because they cannot be kept in the air.
I understand, Mr. Speaker, that my time is running out, so I wonder if I may read my amendment. Therefore, I move-


Mr. Deputy Speaker:: Order, please. The hon. member is correct. His time has just expired. I was just about to rise to my feet. I know hon. members will want to give the hon. member an opportunity to read his amendment.


Max Saltsman: Thank you, Mr. Speaker, and may I express my appreciation to hon. members. Therefore, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the amendment be amended (a) by deleting the words "other economic incentives to promote a dynamic expansion of the Canadian economy now troubled by rising inflation and high unemployment" and by substituting therefor the words "other measures specifically designed to reduce unemployment to less than 3%;" (b) by changing the words "its tax reform provisions"
to the words "its tax changes"; and (c) by adding at the end of the proposed amendment the following words:
"and they do not provide for significant tax reform measures such as those outlined in the Report of the Royal Commission on Taxation, including full capital gains tax, the removal of special privileges to resource industries, equal tax treatment for wage and salary earners and self-employed persons, a system of tax credits rather than exemptions, and equal taxation on ail sources of income."


Mr. Kaplan:: On a point of order, Mr. Speaker-


Mr. Deputy Speaker:: Order, please. If hon. members would permit the Chair just a moment to look at the amendment, then I will see the hon. member on his point of order. The hon. member for Don Valley (Mr. Kaplan).


Robert Phillip Kaplan: I wonder if hon. members might permit me to ask, and the hon. member for Waterloo (Mr. Saltsman) to answer, a brief question?


Mr. Deputy Speaker:: If the hon. member for Waterloo is to answer a question it would have to be with unanimous consent. Is there such unanimous consent?


Thomas Miller Bell: No, Mr. Speaker. I think I should explain. This is a big and controversial budget. All hon. members must be given their exact time, no more and no less. If we make exceptions now, desirable as they may be at the moment, we will get into an awful mess later.


Max Saltsman: On the point of order-


Mr. Deputy Speaker:: Order, please. There was no unanimous consent.
The initial inclination of the Chair would be to accept the subamendment. However, I have just some slight reservations with respect to the latter part of it where the hon. member for Waterloo has spelled out in some detail his reasons for not feeling that there are any significant tax reform measures. The only concern I have is whether or not his amendment goes beyond the four corners of the original amendment which, as I read it, contains a criticism that the budget's tax reform provisions fail to compensate for certain deficiencies. If hon. members would like to assist the Chan- on that point, or on others if they wish to make them, I will be pleased to hear them.


Stanley Howard Knowles: Mr. Speaker, I appreciate your difficulty. I can only say it is the same difficulty we had when we were confronted with the lengthy amendment moved by the hon. member for Edmonton West (Mr. Lambert). However, we felt that there were points we were entitled to make provided we stayed within the rule of relevancy.
I gather that Your Honour has no quarrel with part (a) of our amendment which rewords the reference to unemployment. I also gather that you have no quarrel with part (b) of our amendment which changes the phrase "its tax reform provisions" to the more exact phrase "its tax changes." Now, when we come to part (c) I ask Your Honour to note that in the amendment moved by the hon. member for Edmonton West there are these words

June 22, 1971

"but that they do not provide for the sustained expansion of Canada's economic growth" as well as for certain other things.
What we are trying to do is simply to add to the list of things that the tax changes do not provide. The amendment already suggests that the tax changes do not provide for "the sustained expansion of Canada's economic growth and activity as well as the elimination of poverty and the maintenance of necessary social benefit programs." We go on and add some things that we say those tax changes or tax reform provisions, whatever they might be called, do not provide. We suggest that this is within the general framework or within the general structure of the amendment. I realize that Your Honour is asking whether our part (c) proposes completely new ideas that should be the subject of a substantive motion. I am prepared to admit that there is a border line which we are straddling, but I suggest that at least in the structure of the amendment we have simply added to the list of deficiencies in the tax changes already suggested by the Progressive Conservative amendment. I hope Your Honour's initial inclination will prevail and that you will decide to allow the subamendment.


Mr. Deputy Speaker:: The Chair had indicated when the subamendment was put by the hon. member for Waterloo (Mr. Saltsman) that my initial reaction was to accept it. I had a slight reservation, and I think I said that the delineation in (c) of the various matters with respect to which the hon. member complained and which were not in the budget in connection with tax reform or tax changes might go a bit beyond the wording of the original motion. The hon. member for Winnipeg North Centre (Mr. Knowles) as usual has been helpful to the Chair, and I have no reason to change or reverse my initial inclination. Actually, the hon. member for Winnipeg North Centre is the only hon. member who has argued and helped me to make my decision. I think the subamendment is in order and the Chair is prepared to allow the subamendment.


Marcel Joseph Aimé Lambert: Mr. Speaker, that is quite a tail to tack on the amendment.


Mr. Rene Matte (Champlain):: Mr. Speaker, we heard with much interest the speech of the Minister of Finance (Mr. Benson) and we have devoted some time to consider and analyse it.
At first sight, we thought that the government had somewhat understood the message which we have been stressing for years and that it was finally ready to grant a tax relief to Canadian taxpayers. We even thought as many others that the budget had a certain pre-election taste.
Mr. Speaker, there is in that budget several points which I would like to raise. I do not only want to make a negative criticism, but a really constructive appraisal which we hope will finally be accepted by the government.
The Budget-Mr. Matte
Mr. Speaker, first we note that for a gross national product of $84,468 million in 1970, the government had revenues of $28,465 million, which means that the taxes paid by Canadians amount to 33 per cent of the gross national product.
Mr. Speaker, I mention these figures because hon. members know very well that we of the Social Credit Party have for years advocated other resources, other means of sharing in the development of our country without necessarily resorting to taxation.
Therefore may I be permitted to remark in particular that the basic exemption increase from $1,000 to $1,500 for single people and from $2,000 to $2,850 for married people may be interpreted in various ways. To say that one million Canadian taxpayers are exempted from income tax is to admit that we are accepting the presence in our midst of more than a million Canadians who cannot have a decent standard of living. No one in this House can maintain that today in 1971 it is possible for an individual to live decently on $1,500 a year.
Mr. Speaker, I would like to quote as an example the hypothetical case of an individual earning $3,000 and to show you that for a decent living he needs all his income. Yet the first cut in that $3,000 income goes to the government which, with its fiscal tentacles, will collect $304 from him.
How can manage an individual now earning $3,000? Let us figure for him a small budget, Mr. Speaker. Room and board will cost him about $25 a week, that is $1,300 a year, and clothing, from $500 to $700. Today, a car is not a luxury; without one, one must obviously ride buses, trains, etc. Consequently, I include a minimum of $500 for transportation and travelling expenses. If we add the cost of telephone service and insurance, we get a total of $2,900. And that is a minimum, because I do not include recreation or comfort.
And then, the Canadian taxpayer is told that he is living in a rich country, a country where life is pleasant. That is false, especially if one attempts to establish a minimal budget. In fact, anyone who succeeds in making ends meet with a salary of less than $3,000 is a wizard because he depends on his parents or has managed through all sorts of means not to pay room and board. But this is not normal, because any individual should be able to live freely and independently with minimum security.
And when people agree to a basic exemption set at $1,500, I think it is ridiculous since tax exemptions should be in proportion to the minimum necessities of life nowadays, that is between $2,500 and $3,000. This is where the non taxable minimum income ought to have been set.
Mr. Speaker, when we speak of a married person, the case is even more pathetic. For instance, a married couple with two children under 16 years of age and an income of $5,000 will have to pay $302 in taxes. If we evaluate rent and family maintenance at $1,200, food at $2,080, clothing at $1,000, transportation expenses at $500,

June 22, 1971
The Budget-Mr. Matte
telephone and insurance at $600, we obtain an amount of $5,380. No recreation, no minimum comfort, only what is decent! This explains why a great many Canadian taxpayers get into debts-they cannot make ends meet. Yet the government first levies $302 from this wage earner.
Now, in 1971, Mr. Speaker, married people should have an exemption of at least $5,000 just to be able to keep up.
For the 4,700,000 taxpayers who will be getting a rebate of 1 per cent, that is a few cents a day, again I say that will not change much in their lives. The 2 million Canadians who will have to pay an increase of 1 per cent will not get much. More will come out of their pockets. The same goes for the 1,300,000 other taxpayers who will have to pay a substantial increase. All in all one can say that, in certain respects, the budget is a piece of bluff. I shall single out the various points of the budget indicating that it contains a lot of negative features-the three-year tax exemption that co-operatives, caisses populaires and credit unions enjoyed is out. These institutions will be paying taxes. Retraining allowances will be taxed and so will unemployment insurance benefits, employer contributions to medicare programs, university scholarships, allowances to textile and clothing workers.
Sales tax on construction materials has not been abolished and everybody knows to what extent this tax is unfair and how it interferes with the normal development of housing in this country.
The most destitute classes of our society will still have to pay taxes, and particularly the families with incomes of $5,000 or less.
There is no provision for increasing the income of older people who will have to get along with starvation pensions.
There is no provision in the budget for boosting overall demand and urge employers to hire additional workers to spur production; then, the rate of unemployment will keep soaring up.
Consumer and government indebtedness will increase at a rapid pace. The sharks running our banking system will get richer, fraudulently and at the expense of the Canadian community. I do insist on this point and intend to prove without the shadow of a doubt that the indebtedness of the Canadian population, forced upon it by our present taxation system, only benefits the bankers. There could be but one justification for taxes: if everyone were working, production would be insufficient to answer the needs of the whole population because of excessive consumption.
In fact, the expediency of the whole taxation system rests on two principles: first, that the poor would become richer while making the rich poorer; second, that there is justification for supporting a regime of accumulating wealth while at the same time arbitrarily confiscating part of this wealth. This last proposal is equivalent to stating that the aim of a hockey team is scoring more goals, but that goals above a certain number will be disallowed.
There is confusion between money and true wealth. Let us first consider the original assertion to the effect
that the poor are poor, the less poor are not so poor and the poor would become richer. It is the result of equating money with actual wealth. It is alleged in the first place that absolute equality exists between actual wealth and money, and that if somebody has much money in comparison with his neighbour, the community's standard of living will rise should the rich man be taxed even though his neighbour who is poor does not receive all that money, which is mostly the case.
This argument is obviously absurd if it is applied for example to those people who own Cadillacs. If one should believe that all Cadillac owners should be taxed because of their standard of living, it does not entail in the least that people who do not own a car or who drive a Volkswagen would be able to acquire a Cadillac; it only means that fewer Cadillacs will be manufactured. It would certainly be advantageous if the production system could be geared to absorb elsewhere that part of the labour force engaged in the manufacture of Cadillac cars and have them produce real and desirable wealth.
We see that this is precisely what happens in wartime, when the production of luxury items stops. But in wartime, we have no unemployment, no problems of unsalable production surpluses. But under the present financial system, preventing the sale of Cadillac automobiles would result in increased unemployment, and full employment is the best way to keep the people in bondage.
All these arguments are based on the premise that the production of real wealth-that is, of things that can be bought for money-is completely separate from the production of money to buy them, and that by taxing everyone but bankers, we increase the power of the money makers' trust.
Fortunately it is no longer necessary today to expand on that point since it is not discussed any longer in financial and economic circles. It is stated in Volume 15 of the Encyclopaedia Britannica that:
Banks make loans by creating credit. They create means of payment out of nothing.
Or again according to the president of the Midland Bank:
The monetary mass in circulation varies through the action of the banks.
Since our civilization is based on money and that without it nobody can do nor buy anything, this situation obviously puts everybody at the mercy of banks, in every respect, and an increase in taxes, by decreasing the amount of money available to taxpayers, tightens the bonds with which banks enslave us.
So the first thing that we must clearly see, without investigating the destination of taxes, is that heavy taxes with which we are directly burdened favour banks operating within the banking system.
But a brief analysis of what is done with taxes makes us realize that part of them helps pay interests on the national debt and the other part-the biggest-is used to

June 22, 1971

make social allowances to those impoverished by the system.
After the World War I, the total national debt in Canada was approximately $1,500 million. In 1960, it had reached $12 billion and in 1971, $24 billion, constantly increasing. Probably 80 per cent of the debt was created by the system mentioned earlier, that is by money created from nothing by banks and loaned to the country for the purchase of bonds, treasury notes and other securities.
Mr. Speaker, I would like to make an analysis and give evidence of the state of affairs shown in the budget papers the Minister of Finance presented on last June 18, particularly Table 58, on page 126, as follows:
Deficit of the Federal Government
1961-62	$791 million
1962-63	692 million
1963-64	619 million
1964-65	38 million
1965-66	39 million
1966-67	422 million
1967-68	795 million
1968-69	576 million
1969-70	393 million
1970-71	370 million
1971-72	750 million
This means that the net debt, as at March 31, 1970, of $16,943 million increased to $17,360 million the following year for a gross deficit of $42,965,500,000.
The net debt, Mr. Speaker, over the period between 1967 and 1971, increased by $421 million in 1967, $794 million in 1968, $576 million in 1969, $392 million in 1970 and $417 million in 1971.
Mr. Speaker, let us stop and consider for a moment- and that is the main point that I should like to make in this outline-the interest of this debt which cost $1,880 million in 1970-71, that is $5,150,684 per day and which has increased to $2,030 million in 1971-72, that is $5,561,643 per day.
It is not true, Mr. Speaker, that this interest goes to individuals. Half of it is paid to the banking system. One can find a proof of this on page 56 of the Budget Papers, especially in Table 14, "Distribution of .Government of Canada Debt", and I quote:
1.	Treasury bills	(Millions of dollars)
Banking system	 1,381
General public	 549
2.	Market issues
Banking system	 4,421
General public	 6,937
4. Total government of Canada debt
Banking system	 5,802
General public	 11,080
Mr. Speaker, what is implied in this table? It shows that in 1960, the banking system held $1,381 billion in treasury bills and that this amount had jumped to $3,366 billion in 1970, a difference of $1,985 billion.
On the other hand, individuals held $549 million in treasury bills in 1960 and the figure had gone down to $218 million in 1970,	a	decrease	of	$331	million. If	welook at the issues on	the	bond	market,	we	notice	the
The Budget-Mr. Matte
same trend. In 1960 there were only $4,421 million in bonds within the banking system. That amount has increased by $3,148 million in 1970 and attained $7,569 million.
However in 1970 the general public held only $6,184 million in Canada bonds, a decrease of $753 million within ten years. ,
Indeed the public, which had $3 billion in savings bonds, now has $7 billion.
On the whole however, Canadians held $11,080 million in public securities in 1960 as compared with $13,804 million in 1970.
On the other hand, the banking system, which held only $5,802 million of the public debt now holds $10,935 million an increase of $5,133 million.
Which means, Mr. Speaker, that within 10 years the banking system doubled it assets in Canadian bonds and treasury bonds, and now holds more than 40 per cent of the debt, while it had only about 34 per cent.
It also means that out of the $2 billion Canadian taxpayers will pay in interest this year, the banking system will get more than $800 million, profits drawn out of nothing of about $2,500,000 a day for Canadian bankers.
The minister himself admits it as can be seen on page 56 of the Budget Papers, and I quote:
During the past decade, of the $7.9 billion raised by the issue of Government of Canada securities, the banking system, that is the Bank of Canada and the chartered banks, absorbed all the marketable bonds and Treasury bills issued as well as a reduction of over $1 billion in holdings of all others.
Mr. Speaker, that is what the minister said. In other words, the banking system benefits from the billions of dollars paid every year by Canadian taxpayers for debt service.
To say it more clearly, it means that since banks create money or their means of payment out of nothing, except by means of accounts and cheques they draw upon themselves, it enables them to buy treasury bonds and Canada savings bonds with pieces of paper which do not cost them anything. And all the taxes and surtaxes we are paying are used and will be used more and more to pay ever higher annual amounts in tribute money to the banks and to increase the discretionary and totalitarian power they have on the life of everyone, on the life of institutions and governments whatever they may be.
If the Canada oonds, the treasury bonds and other securities bought by the banks had all been credited to the Canadian public since 1960, nearly $10 billion, as the hon. Minister of Finance said, would have been capitalized in the name of the Canadian taxpayers. However, if all the securities had not been registered in the name of the banks since confederation, the national debt would not exist and the national assets of Canadians would be over $42 billion rather than a $42 billion debt. Moreover, instead of paying taxes to reimburse banks and pay them $2 billion in interest each year, Canadians would be paid annual dividends.
Mr. Speaker, we could switch from liabilities of $42 billion to assets of $42 billion and this would bring

June 22, 1971
The Budget-Mr. Pepin
about true changes. We would be nearer this ideal we all want-a just society.
Our problems will not be solved with mathematical aerobatics. It is not by taking more from Peter under the pretense of giving some relief to Paul that our problems of unemployment and production will be solved.
Therefore, there would no longer be socializing taxes, punitive taxes, tyrannical taxes as under our current financial system but dividends that would be distributed to the people under a creditiste system.
Mr. Speaker, we are looking forward to the day when a Minister of Finance will have the honour of announcing in his budget speech to the Canadian people that instead of liabilities we finally have assets. At that time, it will be the end of a system under which most Canadian workers are suffering not only to make ends meet- since they do not meet-but just to live in indecent poverty in a profusely rich country.
Mr. Speaker, the day a Minister of Finance makes such an announcement, I believe that an important step will have been taken, that is providing security to the Canadian taxpayers with personal freedom for each and everyone.


Jean-Luc Pepin: Mr. Speaker, "Grasp all, lose all." Therefore, I intend to leave to others the task of showing the meaning of the tax reform for senior citizens, workers, women, artists and other strata of society.
I also leave to others the task of showing the contribution of this tax reform and this budget to the implementation of the ideals of the just society, by way of a more equitable distribution of the tax burden. I believe that a decision providing that one million people will fortunately be removed from the tax rolls should be considered as prima facie evidence that a true reform has been initiated.
The member for Waterloo (Mr. Saltsman) suggested that the word "change" be substituted to the word "reform." As people say in Drummondville, he is being "Chinois" or splitting hairs. The Petit Larousse which I have here defines the word "reforme" as follows:
Changement opere en vue d'une amelioration
The real difference from the semantic point of view is between "reform" and "revolution." This is "reform" and not "revolution" and this is perhaps what my friend regrets.
I will merely indicate today how that tax reform and the budget will contribute to industrial and especially to manufacturing development. My task is easier since industrialists have very well received the tax reform and the budget. I have read comments going from "better than anticipated" to "constructive", "good for the modest business concern", etc.
My theme is simple, Mr. Speaker. The tax reform and the budget obviously favour expansion. They strengthen already existing economic trends they constitute an incentive to industrial activity which is rather dull these
days, I must admit, and this in three ways. First, in leaving more money in potential buyers' pocketbook; secondly, in providing incentives to industries: first general incentives, and then incentives specially designed for certain industries which experience particular difficulties at the present time.
Mr. Speaker, as always I have listened to my hon. friend from Waterloo with the greatest interest. The public at times asks members if there is a fundamental difference between political parties. I always reply affirmatively and the hon. member for Waterloo has given evidence of it today. In fact he has adopted with regard to those questions an ideological position which is characteristic of his party. Were I not myself a former professor, I would say an "academic" position, dividing things into categories, into black and white. For instance, it is to be noted that, for him, this is a fight against unemployment over and above all else. The idea of fighting unemployment and inflation at the same time seems totally foreign to his thinking; that is the kind of simplification that is often found in the party to which the hon. member for Waterloo belongs.
The way he speaks about those who have contributed to the preparation of the Carter report is worth noting. All those who have remained faithful to Carter are the good guys, those who have not are the bad guys. One should note also the way he speaks of the former Minister of Communications, the hon. member for Duvernay (Mr. Kierans). When the latter was a member of the cabinet, he was not too bright; but as soon as he left the cabinet, he suddenly became positively brilliant. Everything he says now is gospel truth.
If a Liberal member remains on the government side he is a devil; if he leaves it he is a saint. Such simplification is extraordinary and when I hear it I am always surprised even if I have been sitting in the House for eight years. Really there is no limits to my astonishment.


Marcel Joseph Aimé Lambert: You should know better.


Jean-Luc Pepin: The hon. member for Edmonton West tells me I should know better at my age. Maybe he is right. But this is not my main topic.
The hon. member for Waterloo told us this afternoon: You know, all these stories about investors' psychology, the importance of a favourable climate for investors, it is for simpletons. It is not serious.
Note, Mr. Speaker, that fine books have been written on psychology for salesmen, buyers, workers and others.
Why would there not be also a psychology of the investor, of the manufacturer? Why should he not have a right to his own psychology? And all those psychologies, Mr. Speaker, are sometimes mysterious. Why do businessmen think at times in such or such a way? I do wonder now and then. Why at certain times are they so pusillanimous? It does surprise me indeed. Still I will not deny that there is a psychology of the investor, of the businessman, even though I cannot understand it quite well.

June 22, 1971

There is, for instance a tourist psychology. It is always said that there are two freemen in this society: the investor and the tourist who are always able to go elsewhere. If they are not satisfied with the circumstances prevailing in a given country, if they are not satisfied with the social, political, economic or psychological climate, they go elsewhere. How can one explain this in detail? One would really have to be Freud or Count Keyserling or else Andre Siegfried to do it, but one cannot deny that there is a tourist psychology.
When I went to Ireland a few months ago, my life was not in any danger, at least not in the south. Yet, I was told that a number of people had cancelled their trip to Southern Ireland. This seems to me difficult to understand, to justify, but it is a fact.
When I was a student in Paris, as soon as bad news appeared in the press, the 5,000 Canadians who were there at that time would rush to the Canadian embassy to make reservations to return home. Why did they do it? I would not know.
Mr. Speaker, I am trying to explain that it is not in denying the existence of the investor psychology and the importance of the psychology of investments that we will contribute in any way to solve the problems connected with economic development in Canada.
So I say right at the start what I had planned to say in conclusion. What seems greatly important to me in the present budget, in the reform announced by the hon. Minister of Finance (Mr. Benson), is precisely that psychological switch, that change in atmosphere, the effort to regain the confidence of the Canadian people and particularly of industry.
No matter whether the hon. member for Waterloo may consider it to be madness, consider it to be unjustified, it will remain a fact and to my mind an important one.
Reducing personal income tax, reducing corporation taxes, retaining lower interest rates for small businesses, switching from a surplus budget to a deficit budget, all these are factors which will contribute to psychological change.
And besides the psychology of owners and investors, Mr. Speaker, there is also the psychology of the workers, and from that point of view I believe the changes provided for by the budget and the tax reform, to fulfill some claims originating with the labour force, and which have been submitted for some time with respect, for instance, to the possibility of deducting baby-sitting charges, moving costs, as well as expenses involved in the purchase of tools, will certainly help improve workers' motivation in the industrial sector.
I said a short while ago, Mr. Speaker, that the economy was already picking-up at the time the Minister of Finance was delivering his budget statement and announcing the different aspects of the taxation reform. Time does not allow me to develop this topic but it is evidenced by the increase in the demand for goods and services and in actual purchases. During the first quarter of 1971, consumer expenditures went up by 6 per cent as
The Budget-Mr. Pepin
compared with the fourth quarter of last year and by 18 per cent in the case of durable goods.
Here is another example: a revival in housing construction. In this area, the increase amounted to 22 per cent for the first quarter of this year as compared with the fourth quarter of last year. This goes to show that our economy was already on the move and well stimulated.
But the question is, was it enough? Obviously, the hon. Minister of Finance and the government of Canada thought that it was not. As the Minister of Industry, Trade and Commerce, I can only realize that for the past year industrial production has not been exuberant, if I may use this expression. The boiling point is far from being reached, Mr. Speaker. And to be convinced of this, one need only read current statistics concerning industrial production, particularly in the manufacturing sector, which represents three quarters of industrial production. Speaking generally, because I have details in my notes, one can say that there has been no change, except for a slight decrease in industrial and manufacturing production, particularly since early 1970.
I am not at all in agreement with the rather crude interpretation of this index made by some members of the opposition. In fact, close scrutiny reveals that there was regression in some sectors but that most others reported growth. I am not denying that as a whole the situation is unusually stable, so to speak.
I should like to quote now from an analysis of industrial output which shows that 8 of the 12 sub-groups of the non-durable industry moved upward in April. The main decline was in the non-durable group and occurred in the paper and allied industries like printing and publishing. In the durable group, manufacturing, six of the eight sub-groups moved upward in April with wood products, electrical products and the non-metallic mineral products industries showing significant gains.
The general impression is then one of no buoyancy, but of good growth within these different sectors of manufacturing. My conclusion was very straightforward. Things were not moving fast enough. As the hon. member for Edmonton West (Mr. Lambert) said this afternoon, the national product was rising by 4 per cent which was too low to give us the employment we needed. This is why the Minister of Finance (Mr. Benson) announced the budgetary changes, and they are quite justified.

I need not single out those changes but the increase in purchasing power-if you put together the three items mentioned in the budget-amounts to $135 million, for which the taxpayers will not have to go to their pockets until the end of the year. Of course, this is also a substantial incentive.
From an industrial point of view, the reduction in corporate income tax, the repeal of the corporate surtax of 3 per cent and the gradual decrease in the corporate

June 22, 1971
The Budget-Mr. Pepin
tax rate down to 46 per cent in 1976 are all part of another incentive. In short, these measures will give the companies an opportunity of investing more, a better opportunity of setting up the industrial equipment necessary to the development of our country.

Capital expenditures in manufacturing the last two years, for 1969 and 1970, had been very high, accounting for the 20 per cent increase in each year over the previous one. For 1971, however, the capital spending intention in that sector had been low, indicating as a matter of fact a reduction of 6 per cent. So we all hope the budget and tax reforms will contribute to the strengthening of the investment aspect of manufacturing.

Mr. Speaker, I would like to state very briefly that taxation, although a most important factor for industrial development, is not the only one. I have much respect for the Minister of Finance and the important programs he has set up for the industrial growth of the country, but I would not like to give him all the credit. Far from it. Two other factors are also of prime importance. The first is related to the state of our exports and the second to the importance of the programs which governments-and especially the federal government, to mention only one today-have devised and continue to improve in support of industrial development and rationalization.
And I still say, Mr. Speaker-and you know it-that one of the main tasks of the Minister of Industry, Trade and Commerce is to act as a go-between in attempting to stimulate industrial development through the whole spectrum of programs available to him.
Thus, as far as world trade is concerned, Canada is now in a position that I would consider as very satisfactory. As you know, our exports have increased by 2.4 per cent during the first five months of this year and imports have gone up by 3 per cent. Therefore, if that situation continues we will have a relatively considerable-not to say fantastic-surplus at the end of the year. At present, exports exceed imports by $992 million as compared with $1,004 million last year. Thus, it may be seen that the gap is not very wide.
The hon. member for Prince Edward-Hastings (Mr. Hees), my official critic, was recommending the other day that Canada should engage now in a sort of get-off-your-seat campaign with which he has become associated in the minds of Canadians. In the present circumstances that would not be warranted. It would give us a shortterm gain in all probability, but it might endanger us by forcing up abnormally the value of the Canadian dollar. The government has taken the position that a more refined, a more sophisticated approach is needed in the present circumstances. It seems to us that efforts leading to the development of technology, to the development of new and better products in Canada, to the opening of
specific markets for specific goods, to the invention of new techniques of marketing, would have a much more lasting effect for our country than the sort of approach the hon. member for Prince Edward-Hastings recommended. It seems to me

and I would like to have more time to speak about this-that more attention should be given to the tremendous improvement in the trade and industrial support program of the Department of Industry, Trade and Commerce.
You have heard, for example, about the PEP program, the productivity enhancement program. It has nothing to do with Pepin. As a matter of fact the plan was conceived before I even appeared on the scene!


Mr. Gilbert:: It is corporate welfare.


Jean-Luc Pepin: No. All these programs-and I might refer to the machinery program, to the shipbuilding program, to the textile program and so on-are all together a rather sophisticated approach to the problem of developing in Canada an improved manufacturing capacity in order that our industry will be fully competitive internationally and will not have to use protectionism in order to survive. This is my objective, and the objective of the government: to make Canadian industry as productive, as efficient and as modern as possible and to develop the programs needed in order to accomplish this objective. This is what we are doing now and I can assure you that we will do more and more of that.
So these programs are in place to supplement the fiscal stimulus given by the Minister of Finance in the budget, and will directly encourage the development of new business in areas where opportunity exists, but where such forms of assistance are required.
On this subject I wish to compliment my colleague, the Minister of Finance, for having continued the selective approach that he had adopted on a previous occasion, in the December budget in particular, by taking a very specific approach to some problems of certain sectors of the Canadian industrial spectrum. What he has done for the forestry sector, for the electronic sector, for the petrochemical sector, for the pulp and paper industry in his budget has been very well received by the different companies and of course by the working force in these industries.
The hon. member for Edmonton West (Mr. Lambert) gave us the impression that the government, in doing this, was claiming it had solved the problems of these industries. This is not so. For example, the petrochemical industry in Canada is having much greater problems than can be solved by the measure announced by the Minister of Finance. What was done in the budget-and I do not have time to repeat it-was a move in the right direction and indicated to the companies that the government is interested in seeing them develop projects. But, of course, the solution of their problem calls for much broader measures than the amendment of tariff items.
I welcome back the hon. member for Edmonton West. The main problem in the petrochemical industry is the


June 22, 1971
need of having in Canada plants that would be big enough to be internationally competitive. Of course, it is a question of availability of raw materials at world prices and also the availability of adequate markets. Access is a decision that is in the hands of foreign governments, of the United States government in particular. We can ask and make suggestions, but we certainly cannot impose on foreign governments changes in their import policies in the area of petrochemicals.
But again the arrogance the hon. member for Edmonton West was talking about was not in the mind of the Minister of Finance and was not in my mind when he made the announcement to which I referred. Of course some people will say about this budget either that it is too much-I have not heard much of that today-or too little. The latter is the main line at the moment. It seems to me that all the measures taken together in the budget and in the tax reform proposals can create more purchasing power in the hands of Canadians and can create a better financial position for entrepreneurs, that they are getting the right "mix", of financial policies.
However, again it is a question of judgment and a question of analyzing what could be the consequence of too much and what might be the consequence of too little. So the budget is an exercise in balance. I suggest the whole of politics is really an exercise in balance. So far as I am concerned as Minister of Industry, Trade and Commerce, I hope, and repeat, that this budget will restore the climate of confidence, notwithstanding what the hon. member for Waterloo (Mr. Saltsman) said on the subject. I was very pleased by what the president of Noranda said on television the other night. He said that, of course, everything was not perfect in the budget from his point of view, but that he was particularly pleased to see that the government had taken advice and had considered the views expressed by the different categories of people, business in particular, in coming to its conclusions. Well, a lot of people in industry were not quite sure that would be so. I would like them to realize they were wrong. I would like to convince them that in the future on the occasion of exercises like white papers, whatever colour they may be, they should take a more constructive approach to the matter, and should take less of a doubting-Thomas type of attitude to the whole process of participatory democracy.
At least the illustration has been made that this kind of exercise is profitable. I do not think we will ever have in Canada the sort of co-operation between industry and government that there is, for example, in Japan. There are some differences in culture which make this impossible in Canada. I suggest, however, that unless we develop a much better co-operation between government and industry in Canada, not only on the business side but also on the labour side, at the end of the day we will find this country will be one of the very few that has not gone a good distance in that direction and we will stand to be economically damaged for not having done so. So, I suggest that among the many positive effects of the tax reform, we have this one, which makes it easier for indus-
The Budget-Mr. Forrestall
try and government to work together more and more intimately and constructively. I suggest this needs to take place and so far as I am concerned I rejoice in the fact that we have now a much better co-operation between government and industry than ever existed in the past. Thank you, Mr. Speaker.


J. Michael Forrestall: The
minister who has just taken his seat has spoken well and truly about the hopes and aspirations of his department. It would be rather interesting to go through some of the schedules to the customs tariff and take a look at some of the things that have been done, but I will not take the time of the House to do that. Very obviously, I would imagine, whatever was done was done directly at the request of his department. The minister knows that this budget does not go far enough, and he has known that for a long time. The intent and purpose of the principal amendment to this motion is to say that, so it does not criticize what has been done. It states very simply and forthrightly that the budget fails to contain a sufficient level of tax reductions and other incentives to promote what is required in Canada, that is a dynamic expansion of our economy which right now is deeply troubled by the continuing and rising inflation and what seems to be an almost perpetual unacceptably high rate of unemployment.
I am a little disappointed that the minister, did not take the opportunity to tell us one or two things that I think we have to know, that the business community and Canadian taxpayers in general have to know, if we are to extend to the government the degree of confidence that they think we should on the basis of what is already in front of us. I have no fault to find with the budget so far as it has gone. I caution the government that they are under the illusion they have gone far enough. Indeed, that is what it is, an illusion. We all welcome the relief to the lower income families in Canada for whom it is very difficult to pay even $5 or $10 in income tax a year, but I suggest many of the people who have been stricken off the tax rolls are people who were not paying any tax in any event, such as working fathers with large families.
As the minister and the government know so well, some segments of the economy have been so depressed for extended periods of time that the principal breadwinners receive such meagre incomes from employment that they still appear on the welfare rolls of our cities. The budget does nothing to create an atmosphere in which our economy can expand, and through this expansionary process absorb the unacceptably high unemployment that remains with us. This is the country's number one problem, and it has been the number one problem for a long time.
The government confused inflation with other factors that were working in our economy. They should at least have had the fortitude to stand up and admit it. There is another more basic word that appeals to me. For example, there is nothing in this budget to indicate, to myself in any event,-and I admit that it will have to be looked

June 22, 1971
The Budget-Mr. Forrestall
at in some depth-a realization of the necessity of putting more money into the economy. This budget should be considered in the same way as the white paper on tax reform had to be looked at for loopholes and for gimmicks before it was thrown out. I think this budget will have to face the same fate because, as I said, it does not even begin to provide the massive injection into the economy of consumer dollars, dollars in the pockets of people that are required to stimulate the manufacturing sector.
This budget is insufficient. It does not attempt to go nearly far enough with respect to providing the wide ranging base upon which the government, if it had chosen to do so, could have gone ahead hand in hand with industry in bringing the economy back to a level acceptable to the majority of Canadians. This level is not spelled out clearly enough by the minister when he merely indicates that it is the desire and the hope of the government to provide employment opportunities for anybody who wants to work. That is like paying lip service to mother love. It is an excuse for laziness and ineptness, and an excuse for having so badly misjudged the economy of this country that at the last moment the minister had to reach into his desk and bring out one of three envelopes. But he did not bring out the right one. If he thought it was the right one, he should have taken another look at it before he stood in his place the other night and delivered it to us because it will come back to haunt him and the government.
The budget does nothing with respect to tax reform. Tax changes and gimmicks, welcome as they are, are not tax reform. The entire nation noted the forcefulness with which the minister defended his principles with respect to the equitable distribution of moneys and tax reform. People from one end of the country to the other have listened to him. Frankly, I did not expect him to go as far as he did in abandoning the principles that he and the government so stoutly defended for so many months. But he did take a new course. I do not think the new course will take him where he feels he wants to go. I should like to quote briefly from an editorial comment which was written immediately following the budget, and it must be taken in that context. It appeared in the Chronicle-Herald of Saturday, June 19, 1971, and it reads as follows:
While Mr. Benson must be given credit for having finally seen the dangers and drawbacks of his former taxation philosophy, he should hardly expect to receive excessive praise and gratitude now that he has been persuaded, by a massive force of expert opinion,-
Not the least of which was led by the Leader of the Opposition (Mr. Stanfield).
-not to introduce a tax system that would have had the most harmful effects on the Canadian economy.
It is regrettable that the people of this country will, for the time being, be lulled into a false sense of security. If I have anything to say today in this budget debate, may I point out that it is a subterfuge, a camouflage, a hiding from the Canadian people of the true facts of the plight of our economy. I suggested earlier that it has not even put us on the road to the type of reform and the type of
investment that is required. If the government honestly believes it has gone far enough, then I will ask it to listen to the words that will be directed to it during the next five or six days, hopefully from its own side of the House as well as from the opposition side. I hope it will listen, and accept one of the clear messages that will be left with it, namely, that it simply did not go far enough.
For more than a year, the leader of my party has spoken clearly in support of substantial reductions in personal and corporate taxes, indeed reductions to the amount of 6 per cent. I ask government supporters how close does the present tax relief come to that level? I point out that that is a minimum level to which we could have gone, or to which we should have gone if we were serious about getting Canadians back into full employment.
A report recently released indicated that low income people pay out more in direct and indirect taxes than do people with higher incomes. This may have triggered the government to do what it did. It saw the necessity for action, but did not see beyond the immediate problem to the much broader problem. I think the government reacted to that report, and to it only. I think the government reacted to the thousands of letters it must have been getting over the last year complaining about the immorality of some of the taxation principles and practices for which it was responsible. Of course, the government had to change some of these. God in heaven alone knows why some members of the government were not shot by some of the irate taxpayers who are spread out from one end of the country to the other.
It is difficult enough for these low income people to live, without bearing the iniquitous taxes they had to live with during the past year. So, the Minister of Finance has made a change there. The Minister of Finance has done nothing to put the type of money into the economy that is required if we are to get on with the job. He has made tax changes, but that is not reform. There is no way it can be construed as reform. I wonder if anybody on the government side will have the courage to tell us why there was a total abandonment of the principles of tax reform as set forth in the Carter Commission Report? I wonder if any of them will bother to deal with that. I wonder if all they do will be to stand up and pat one another on the back for the tremendous job they have done for low income people.
As a matter of fact, I wonder if government supporters will have the courage to tell low income people that what they have done is just for the next few months, and that in January they will let them know what their fate will be for the next year. There is a phrase that goes with that attitude, too. We have no assurance, other than the minister's word, on what is going to happen after January, 1972. We have his platitudes, his pious hopes and dreams. We have listened to them for the last two or three years and they have not been very accurate. I suggest to the people of Canada that there is no reason for putting any faith in what is said on the floor of this

June 22, 1971

House until they see those statements translated into action. Indeed, 99 per cent of the taxpayers will not have the vaguest idea where they are headed when they get their income tax forms next year. It will only be the year after that that they will know.
There is no assurance that the surtax won't be reimposed. Who is going to pay for all these goodies? The only other alternative-and mind you it isn't a bad one-is not to spend any more than you collect. That is not a bad principle, but we have departed from it. However, that is a common sin, and I should not accuse the government alone of it. The government has attempted to mislead Canadians by suggesting that the cuts made in taxes for low income people constitute tax reform. Just before he sat down the minister indicated that the removal of people from the tax rolls is tax reform. I wonder, is it tax reform? Are you reforming somebody's tax position when he wasn't paying any tax, or just a handful of dollars a year? How does a parent with a large number of children, employed full-time, pay income tax? The philosophy of what members of the government are trying to tell us is wrong, and if it is not wrong then they are being dishonest. Neither the opposition nor the Canadian people will be persuaded by this type of rhetoric. It will be fine for a while. There is a little bit of something for everybody, but it will be interesting to see what happens over the next year or two with respect to this particular package that is in front of us. From what the minister says, I gather that this is the path he is going to follow as long as he happens to remain in office, which is not going to be very much longer, Mr. Speaker.
I want to talk about the impact of massive unemployment on our lives. I want to talk about its consequences in Canada. I want to indicate this to hon. gentlemen who are in the House now, because very obviously they are not aware of it. Very obviously, they are not concerned. The whole approach of the government has been that it will do anything to cut back on inflation, and that it will deal with unemployment later, that the American economy will bounce back up and drag us up with it. I do not think that has happened. I think the minister realizes that.
Massive unemployment has particular consequences for the different economic sectors of Canada. We place a disproportionate burden on certain regions of Canada when we allow massive unemployment to take place. I do not say we allow it to take place maliciously, but we do allow it to take place for various causes, and this gives me concern. In December, 1970, the Minister of Finance expressed optimism that both employment and output would move ahead strongly in 1971. The first quarter figures for 1971 show very little reason for that optimism. In fact an increase of only .6 per cent in the gross national product in the first quarter of 1971 stands out in my mind as being in sharp contrast to the fourth quarter increase of 1.5 per cent in 1970, on which figure the government made its fatal error, expressing optimism for the future.
Domestic output has shown very few signs of recovery in spite of the minister's actions. If you remove the
The Budget-Mr. Forrestall
automobile industry from the statistics which the minister is attempting to put in front of us, if you exclude it from the aggregate calculations on which the minister based his comments, then the real domestic product declined in the first quarter of 1971. That happens to be a fact. They don't build that many cars in Ecum Secum. They don't build too many in North Bay either. They don't build them in southwestern Nova Scotia. That is where the unemployment is. It is morally wrong for the minister to stand up and continually tell us that things are all right. The average rate of growth in 1970 was only 2.9 per cent.
In 1970, Canada's rate of unemployment was the highest in the western world. That is a fact. In addition, this country had the second lowest rate of over-all growth among countries of the western world. These two facts may indicate to the Canadian people the panic with which the Minister of Finance approached the subject, because he recognized those two problems. It is too bad that he did not recognize their impact on our community. The government completely miscalculated the extent of the slowdown that it generated deliberately in 1969. That slowdown, I suggest, has made the policies of the government most inappropriate and totally unacceptable, because we wish to return to a vigorous economy blessed with high employment, and I do not mean the 4 per cent or 5 per cent being bandied around by the government. I am referring to an unemployment rate that is substantially below 3 per cent. My hon. friends to my left have spoken about this. Why should that not be possible in a country like Canada?
How many people can you blame for unemployment. We have blamed it on labour; we have blamed it on business; we have said that there are too many women working; we have blamed it on high school kids and, lastly, we have even blamed it on the Canadian weather. After all, this is the government's responsibility and not anybody else's. As our economy enters the second quarter of 1971, the errors of the minister's forecast and the inappropriateness of the government's policy are obvious to everyone except the Minister of Finance. I say that assuming he was the one who led his colleagues to adopting the present budget. We, in this party, have consistently pressed the government to base its recovery program on as broad a base as possible. The extent of the recovery needed is too large for the federal government, by itself, to guarantee any continuing success. Business confidence must be restored to that level which the budget introduced the other night failed to restore it. You can talk all you want about the little bump in the charts or the upturn of the past week. Businessmen I have talked to are still chock-full of concern.
If these tax cuts, and if this emergency assistance had been forthcoming when requested by the Leader of the Opposition (Mr. Stanfield), by the financial community, by institutional groups and by others in the country in early 1970 or late in 1969, the Minister of Finance might have found himself in an entirely different position with

June 22, 1971
The Budget-Mr. Forrestall
respect to the budget that has now been put before the Canadian people. I say that because the high rate of unemployment continues to be the major economic problem in this country. High regional unemployment rates continue to plague the government's regional development strategy. It is axiomatic that full employment is a prerequisite to a viable regional development policy. Until the Minister of Finance and the Minister of Regional Economic Expansion (Mr. Marchand) get together, it is unlikely that Canada's regions will receive any of the benefits which prosperity has brought to some parts of our country.
The region from which I come, the Atlantic region, increased its employment prospects at about the same rate as it increased its labour force. Thus, the new jobs created by the various regional programs did nothing more than keep the unemployment rate from getting worse. There is very little comfort in that and the Minister of Finance and the Minister of Regional Economic Expansion dare not expect much praise for that situation. The unemployment rate in the Atlantic provinces averaged, on a seasonally adjusted basis-and I wish some day that someone in the House could tell me exactly what that means-7.6 per cent for 1970. The rate was 8 per cent for Quebec, 7.8 per cent for British Columbia, 4.5 per cent for the prairies and 4.4 per cent for Ontario. In the Atlantic region, there were little pockets of unemployment where between 25 and 30 per cent of breadwinners were out of work. For that type of situation, this budget does absolutely nothing. Our economy will not recover until these regional pockets of unemployment are cured. They will not be cured until this government recognizes that you can only fool some of the people part of the time. Although the people of Canada and particularly our labouring people welcome what has been done, they will soon realize that the government's measures take them only part of the way down the road. It is the younger portion of the labour force which has most heavily felt and borne the brunt of the total misunderstanding and miscalculation of the government.
There are other hallmarks to show we are in the midst of a recession and of a protracted period of unemployment. We know that the number of Canadians who have been unemployed for more than four months has increased. The increase has been almost in the order of
100,000	over the past 10 or 12 months. This ought to give the government serious concern. It must know that merely tinkering with the present tax levels will not bring about the type of explosion in the economy that is required over the next six or eight months if we are to avoid a winter of unemployment that will be worse than the one we have gone through. Unemployment affects all members of our community. It hits everybody. It has hit the employer himself, as we have pointed out to the Minister of Finance. Not only workers, who make up a large proportion of our unemployed lists, are affected but business leaders, too, have found themselves out of work. By presenting this budget, the government has taken a lazy step in the direction of curing that problem.
I suggest, Mr. Speaker, that the government has also placed an undue and unfair burden on the shoulders of
the municipalities of this country. The ten provincial governments together are projecting deficit budgets for the coming year and their combined deficits will be in excess of $1 billion. This can only be interpreted as an attempt on the part of the provinces to stimulate their economies, because somewhere in their ranks are people who are aware of the necessity for getting the economy going again. It is obvious from these simple facts that the provincial governments are being saddled with the burden of recovery. In the face of a hesitant federal government, the provinces have to strain their own meagre resources and use their borrowing powers to the fullest possible extent.
The government's approach, Mr. Speaker, to the equitable distribution of income tax is lamentable. It is regrettable that they back-tracked. It is regrettable that they cannot recognize that perhaps a little inflation may be the price for full employment in Canada, and perhaps that is the price all Canadians would like to pay. I cannot go all the way down the line with my friends to my left, although their subamendment is such that one would almost have to be against motherhood before not going along with it. Suffice it to say that the government has not, in this budget, done those things which will provide this country with an expanding economy and a dynamic recovery rate. It will not produce the type of economy which will put our people back to work. An expanding economy is the only thing that will put them back to work.


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



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: Order, please. It is my duty at this time 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 Winnipeg North Centre (Mr. Knowles)- Canadian Pacific Railway-Suggested pension increases for employees who retired before 1956; the hon. member for Dartmouth-Halifax (Mr. Forrestall)-Public Service-Provision of national salary scale for nurses.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Benson that this House approve in general the budgetary policy of the government.

June 22, 1971
Robert Phillip Kaplan: Mr. Speaker, after spending 2 to 2J years on the difficult problem of tax reform in Canada I find it difficult to sit with a straight face and listen to members of the Conservative party say, as the hon. member for Dartmouth-Halifax East (Mr. Forrestall) has said, that we have done little and we have gone only part way down the road to tax reform. I would ask them where the rest of the road to tax reform goes. We have received submissions from royal commissions, a white paper from the government, a thousand briefs from across the country and briefs from the provincial governments. What do we have from the Conservatives?
After listening to the interventions of members of the Conservative party I gather that they look upon tax reform as a three-pronged affair. Prong No. 1 is a 6 per cent tax reduction, not progressive but across the board. Prong No. 2 is tax credits instead of tax exemptions. I would like to deal with that point because I think it is one of the biggest red herrings I have seen in the past three years. Prong No. 3 is the elimination of the 11 per cent sales tax on building materials. I gather this package is the Conservative solution to the problems of tax reform in Canada. I would be happy to hear from members of that party if I am not correct about their views on where the government should be going on tax reform. I have not heard it yet.
I was very interested to hear the hon. member for Edmonton West (Mr. Lambert) reject equity as a relevant consideration in tax reform. He said equity is an entirely subjective matter; the important consideration in tax reform is the question of growth; equity will come if you concentrate everything on growth. Many people said that to our committee. I believe in economic growth, Mr. Speaker: I do not think we can have equity if we do not have economic growth. But there is a very important distinction. I would like to take a moment to expand on that distinction. We have the example in the United States of an economy which is showing tremendous growth, yet when we look at it we observe that a great many people are being excluded by that growth. Growth allows more people to find work but growth does not take care of everybody in society.
There are many people who live outside the economy. There are the aged, the handicapped, the single parents and the very young. These people and their problems, which are handled by government pensions, subsidies and assistance of one kind or another, do not directly benefit from economic growth. The only way they can benefit is by redistribution. We have to face the fact that however much of a free enterpriser you are, however much you believe in the free market and in seeing the economy grow, at some point you have to recognize the needs of the people who are outside the economy. I think this budget has done that.
This budget has not rejected the principles of tax reform and, in particular, it has not rejected the important consideration of equity. I would like to illustrate this point with the case of a couple who are 67 years old. Until last Friday they were entitled to an exemption of $2,000. When this tax reform package is implemented, in
The Budget-Mr. Kaplan
addition to the $2,000 they will be entitled to $850 more as a personal exemption for both and to another $1,300 which is the new exemption to which they are entitled to age 65. If they were to receive the guaranteed income supplement they would be entitled to another $1,140. The total of these exemptions, including the $2,000 to which they were entitled before last Friday, is $5,290 a year before they have to start paying income tax.
I think that hon. members must admit that this budget has gone a long way, if not as far as it can go, through tax reform to recognize the needs of the elderly. Until last Friday the tax at the bottom end of the income scale was 17 per cent. When the proposals of the budget are fully implemented the rate will be reduced to 6 per cent. That is $55 off the tax of our lowest income earners, from one proposal; and there are others. The hon. member for Dartmouth-Halifax East referred to this proposal as a mere handful of dollars a year-nothing, really. I believe that tax saving represents something substantial to the people at this income level. In addition, their exemption is increased by $500, and if they are employed in an occupation for which they draw a salary they receive a further exemption of $150. The tax value to people at the bottom of the income scale is at least $100 for a single person and more for a married person. So that there, at the bottom of the income scale, is relief of over $150 a year.


John Gilbert: Three dollars a week. Big deal!


Robert Phillip Kaplan: Can I answer the question at the end of my remarks, Mr. Speaker? I did not quite hear it.


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member is aware of the rule that he does not have to accept a question. I do not think the hon. member should even consider questions from members who do not rise to ask them. We should abide by this rule.


Robert Phillip Kaplan: Thank you, Mr. Speaker. I accept your ruling. The hon. member for Waterloo (Mr. Saltsman) referred to the Carter report. He told the Canadian people how much they had lost through the nonimplementation of that report. The hon. member knows perfectly well that the Carter report could not be implemented today even if there were a government that had the will to do so, simply because the public sector has grown to such an extent since the report was first introduced that we could not afford to provide government services if it were given effect. If every proposal in the Carter report were implemented it would be an impossible position from the point of view of government revenue, and I mean government at all levels. In any event, the Carter report only recommended an individual exemption of $1,000. In this budget a $1,500 exemption is recommended.
To conclude on the question of poverty, under this budget we will by no means eliminate poverty. However, I suggest that the government has done everything it can in the way of tax reform with respect to poverty. The problem of poverty is one for those who do not pay taxes. What we have done is to assure that virtually no

I must say as a lawyer who formerly did tax work that one important goal has not been achieved. That is the goal of simplicity. I would very much like to have seen a tax law which could be written on the back of an envelope, or a tax law which any citizen of this country could understand-a law which could be explained to anyone. Well, that objective has not been achieved. We are still very far from it.
In my opinion, the tax law which Canadians will face, commencing next year, will be one of far greater complexity than the one we know today. Some of the old chestnuts like the distinction between capital gains and income, which is responsible for over half the income tax cases heard in the courts, will be preserved. In addition to these there will be a whole raft of new cases on the question of tax-free reorganization and whether a sale of stock is a capital gains sale or whether it merely amounts to a tax-free reorganization. In the United States, one-third of all tax cases and something over one-third of all the pages of their income tax act deal with this problem. We are taking on this problem in the Canadian law so we shall be facing something very much more complicated.
Much as I regret these complications, Mr. Speaker, I think it better to have a complicated law which responds to the needs of a complex society, one with many different interests, situations and problems than it is to have one Draconian system on the one hand or to see huge discretion given to the Minister of National Revenue and his officials which would permit the legislation to be very much shorter. I am looking forward to a long and interesting tax law.
In my opinion, Mr. Speaker, this budget is pro-Canadian. I listened to the hon. member for Waterloo question whether tax measures are the way in which to assure Canadian ownership of the economy. I have as many doubts, perhaps, as he does. But he should remember that his own party grappled with this question at its last national convention, the Wafflers on the one side and the bagmen of the NDP on the other. They tried to wrestle with the problem of how to deal with foreign ownership and did not come to a solution.
They referred the matter to a committee to look into it. They are not ready to tell us from across this House what is the right thing to do. So if we try a number of tax measures, some of which will obviously be beneficial toward attaining the goal of Canadian ownership, I do not think they should fault us. They have no better ideas. What is proposed which is dramatic and important is that interest payments in carrying shares in Canadian takeovers shall be deductible. They have never been before, and so the Americans have had a competitive advantage.
[DOT] (b:20p.m.)
The small business incentive only works for Canadian taxpayers. When a Canadian proposes to sell out to an American, all of that tax has to be repa d to the government, so there is a disincentive there. Surely this will have a positive effect. Pension funds are required to devote 90 per cent of their resources to Canadian invest-
The Budget-Mr. Schumacher ment. This is an important improvement and one which will surely provide Canadian capital for Canadian investment.
The estate tax measure was argued for in committee as one which would affect Canadian ownership. I would like to consider that proposal further because at the moment I believe in an estate tax for large estates. However, we were told that it takes more than one generation to build up a business, and I know this is true. If we want to see important Canadian businesses built, they will have to be allowed a run at it as American companies were in the days when that economy was at the stage of development we are at now. The measure is proposed in that spirit. It is one which I hope provincial governments will note and one which I hope will bear fruit.
The capital gains tax at half rate is another measure along this line. I have given some negative reasons for it, but there is the positive reason that to favour capital has a stimulating effect on capital formation. This, of course, is most desirable.
It is important to note that taxes have never before been reformed in this manner. I think Parliament should be grateful and should acknowledge that the Minister of Finance paid careful attention to the work and the report of the House committee which considered tax reform. It was an all-party committee which travelled across the country. We worked together and met with and heard from thousands of taxpayers and the provincial governments. The proposals show that the work we did was taken into consideration, and I think the minister deserves a tribute for this recognition.


Some hon. Members:: Hear, hear!


Robert Phillip Kaplan: At lunch time today I met with a group of students from my constituency, Mr. Speaker. They asked about the credibility of the opposition and asked, "How can you take it seriously when a party in the House always has the responsibility to oppose even when something is good? How can they always be expected to oppose and still be believed?"


Mr. Ricard:: You are making your own story right now.


Robert Phillip Kaplan: I assure the hon. member that I am not. I told them that perhaps they were not taking into consideration certain important factors, one of which is that you can always oppose. If it is good you can oppose it for being too late, for being too little, for not going far enough. However, after listening to the interventions from across the floor I am beginning to wonder whether these students were not right.


Mr. Stan Schumacher (Palliser):: Mr. Speaker, we are faced with a budget which indicates that the government has not left the philosophy of taxing and spending. We have another increase in spending, and the taxing situation has gone along with it although it has been somewhat modified by planning for a three-quarter billion dollar deficit. This is a continuation of the philosophy

June 22, 1971
The Budget-Mr. Schumacher
that the government knows best; that it has a monopoly on all knowledge of what is right.
I suggest, Mr. Speaker, that the so-called tax reductions are window-dressing. No matter what anyone says, spending is up and the bill must be paid sooner or later. The increased exemptions are welcome, but are they real? What about new taxes that have been imposed outside the income tax field? What about the new unemployment insurance tax, for that is all it can be called? It is certainly a complete departure from the principle of insurance in the unemployment field as we have had it since the program was established 30 years ago. It is a further intrusion into the field of welfare. The salaried worker will welcome the increased exemptions but will question the increased deductions due to the unemployment insurance measure.
I would like to follow up that point. People who have not been subject to the provisions of the Unemployment Insurance Act will now be faced with a payroll deduction. I am thinking primarily of teachers. The cost of their participation in this program will have to be passed on to the real property owner in the provinces. In Alberta, the implementation of this unemployment insurance measure will probably mean that in Calgary and Edmonton the number of teachers hired will be reduced by 60. If this is the result in only two cities, I do not think anybody can deny that a great burden will be shifted from income tax to real property taxpayers. Unfortunately, a great number of property owners are senior citizens to whom my friend the hon. member for Don Valley (Mr. Kaplan) referred in such glowing terms. Here we have another example of the shell game in this approach to taxation, Mr. Speaker.
As I mentioned at the outset, we are being presented with an inflationary $750 million deficit. If the economy is on course, as the Minsiter of Finance says it is, then why does it require this type of stimulation in order to achieve his aims? Why not make a real tax cut tied to reduced government spending, if he wants to keep money flowing around the country, instead of the "big brother" attitude of keeping taxes high and going into a deficit position, making further price increases inevitable? Why does he not try to stabilize the situation and free more money for the individual to spend? This great deficit cannot help but produce higher interest rates in the very near future.
What we see here is a typical overreaction by the government, which cannot help but spur inflation. Just the other day, before a Senate committee which was discussing the economy, evidence was given to the effect that all the government seems to do is overreact, and when we get into a situation of high unemployment they bring in crash programs to solve the problem which only bring us back to the cycle of inflation. They then overreact by fighting the problem of inflation and produce unemployment. We cannot seem to get levelled out, and certainly there is no evidence the government has adopted a levelling-out process in this budget. There is doubt as to whether we have been presented with a tax reform budget by the government, to be effective commencing
next year, even after nine years spent in searching for an acceptable policy and the expenditure of millions upon millions of dollars in the process.
I would be the last to urge that measures which conjure up their idea of tax reform in the minds of Liberals and the NDP should be adopted as real reform. It appears that most of the media is misleading us again about tax changes by saying the white paper proposals on tax reform were in fact rejected by the minister's current proposals. I suggest the media is incorrect in this view. Let me refer to an article by John Marshall which appeared at page 25 of the Toronto Telegram for June 19. It reads:
More than 50 specific white paper proposals have been adopted by the government.
About 30 have been adopted in principle but have had already-sweet elements sugar-coated even more into great ballot bait.
And the most radical proposals-the ones that aroused organized assaults of full-page advertising, demonstrations, vitriolic briefs-have been drastically watered down with the milk of treasurer's kindness.
Still, a capital gains tax (pending debate and vote) will exist. But it's only half as onerous as that proposed in the white paper kite flown by the Trudeau government in the windy wake of the earlier Carter commission buck-is-a-buek-is-a-buck radicalism.
A white paper suggestion of a totally new integrated system to deal with the double taxation of corporate income has disappeared into just a modification of existing legislation.
I suggest this is an indication that some 80 recommendations in the white paper have been accepted in one form or another.


An hon. Member:: Why don't you read the Vancouver Sun? It adopts a different point of view.


Stanley Stanford Schumacher: That may well be, but I am suggesting the media in this country is misleading us. As far as I am concerned, the Marshall article is the appropriate approach to the problem. Unless the parliamentary secretary intends to say how many proposals were adopted or rejected, I think I will accept that article. I suggest the basic proposals have been adopted in some form or another. In that connection I say this is a trait of this government: Get your foot in the door by sweetening everything up, have the principle adopted, then once the camel's nose is under the tent wait for further events in order to bring your real ambitions to fruition.
What the government has done is get the capital gains tax principle accepted. On behalf of my constituents I object to this so-called tax reform budget because of the capital gains tax. This type of tax may be appropriate for mature economies such as those found in western Europe. It might be appropriate if Canada consisted only of the golden triangle of Montreal, Ottawa and Toronto. It seems to me that this so-called reform package received its inspiration from this area alone.
It appears that the capital gains tax proposal is designed to replace the estate and gift tax, thereby interfering with the provincial field by the ordering their

June 22, 1971

priorities. In Alberta it means the abolition of estate tax rebates. In this connection it must be admitted that the proceeds from the proposed new capital gains tax will be divided among the federal and provincial government because it will be distributed under the income tax sharing agreements. There probably will be no way in which the provinces could rebate the proceeds of the new capital gains tax to its citizens if it felt this was socially acceptable, because it will be mixed up with income tax. As a practical result, small businesses will no longer be able to pass on the assets of the business to members of the family.
In the area I represent, most small businesses are in the form of farms. Under the provisions of the existing legislation, estate and gift tax exemptions were allowed whereby in the case of farms there could be a once in a lifetime gift of $10,000 to a child engaged in farming and annual exemptions of $2,000 to anyone whether a relative or not. With the abolition of that tax there will not be any exemption.
If somebody wishes to set in process a means by which his business can be passed on to a member of his family, the capital gains tax will be required at the outset. This provision can only be described as a concerted attack on capital. It does not require a genius to realize what happens when a person starts living on capital. The same principle applies to an individual as well as to a country.
What we have here is a proposal by the government of Canada to start living on its capital. This can only lead to a decrease in the rate of our growth. Speaking specifically about the proposed capital gains tax, there should not be a limited size to the parcel of land on which the principal residence is located. Using the farm context again, the principal's residence is located-in my area at least-on what would be 160 acres or a quarter section. I cannot see why this one-acre parcel principle was adopted if it was not to appeal to a great number of people residing in the metropolitan areas of this country. This is an indication of gross discrimination against people living in our rural areas.
The application of the recapture of depreciation principle as far as farmers are concerned is also a retrograde step. This is one of the tools by which farmers in this country have been able to mechanize and become efficient. If other policies do not change, and there is no indication they will, our farmers can only be encouraged to become inefficient by using old, outdated machinery. They will be discouraged from attempting to buy better equipment. I strongly urge the government to try and understand that this has been a prime reason why farmers in this country have been able to survive the cost-price squeeze into which they have been forced by government policy. If this defence is to be taken away, I can only suggest that farmers are in for tough times ahead.
It would seem to me that a major aim of this government is to give the farmers a tough time. A recent document produced by the Department of Agriculture
The Budget-Mr. Schumacher recommends that the family farm population of this country be reduced to 150,000 from the present 400,000 families. I suggest this is just another tool of the government to bring about that undesirable result.
I might refer to the fact that these tax reform policies interfere with the provincial order of priorities. I pointed out that the fiscal measures of this government have interfered with the field of education, which is a provincial matter, and how the capital gains tax proposal will interfere with provincial priorities in that area. This leads me to make a few comments about the constitutional process in this country.
I should like to use the opportunity of speaking on the budget to comment on the Victoria conference. On the face of it there would not appear to have been very much of importance accomplished at that conference. At least, that is how it has been interpreted to the public. But I suggest some very important decisions were taken at the conference which will affect the lives of everybody in this country in the ensuing years.
I bebeve it incumbent upon all members of this House to participate in debating the matter of constitutional review. It would seem that the idea was sold just prior to and during the conference that progress had to be made on the Victoria formula because otherwise the whole country would collapse. It would seem that the provincial Premiers were mesmerized or hypnotized on this basis and were talked into thinking they were the new fathers of confederation. I would hope we would not have to rely on the provincial Premiers as fathers of some new confederation, because they certainly do not compare in stature to the original founders of our country. In my view, that conference was dominated by the federal government. If this process is to continue, I do not see how the country can stay together very much longer. I believe one of the problems we face in this regard is that there has been too much centralization and too much dictation by the federal government to the provinces.
Apart from the loss of national symbols as indicated by the so-called charter of Victoria with which we have been presented, and the fact that we are to have a completely different form of government in this country if this charter is adopted because of the entrenchment of so-called basic rights in a new Constitution, I think we must realize that this country has operated on the basis of the supremacy of Parliament, but that if we are to adopt the principle of entrenchment in a new Constitution then there will be no supremacy of Parliament in Canada and we will have a totally different type of government. This will produce government by lawyers rather than a group of elected representatives because we will find many references of matters to the Supreme Court in order to interpret what is in the Constitution.
I suggest that this can only have negative implications in respect of the future. I would also suggest that the Victoria amending formula is not fair. It is unacceptable to me that certain areas of this country should have a perpetual veto in respect of future changes to our Constitution no matter what happens to their population,

June 22, 1971
The Budget-Mr. Schumacher whereas other areas may have perhaps a passing or temporary veto or no veto at all.
So far as I am concerned, the Victoria conference has indicated that the provinces have really atrophied, that the process of centralization in Canada has continued far too long and that we now find most of the provinces in a position where they cannot say what really should be done for or by their people. We find areas of the country such as Atlantic Canada in which those with authority seem to feel they cannot say "boo" for fear they will lose some money from the federal government. They are under real economic blackmail or domination.
I suggest that the Premier of Newfoundland probably is certifiable and has no right to be speaking for the people of his province. We find that the Premier of Nova Scotia is a grandstander who makes noise just for the sake of making noise and is not seriously interested in his province. We find that the Premier of New Brunswick is primarily looking for hand-outs from Ottawa and is willing to do anything Ottawa suggests so long as he receives a dollar here and there, and is not really thinking of the future welfare of his people. The province of Prince Edward Island does not say anything. We find that the province of Quebec is represented by a Premier who is totally swayed by the Prime Minister of this country. I had hoped for great things from the Premier of Quebec in assisting to protect provincial rights in this country. We find, however, that during the conference he appeared to be in agony.
I think it is interesting to note the type of things which go on in this country. We find that Marine Industries Limited gets millions upon millions of dollars from the government of Canada to build ships for France. That company is closely related to the Premier of Quebec. Here we have an example of federal tax money taken from people all over the country being used to influence the Premier of that provicne. I hope that between now and June 28 the people of Quebec can bring some pressure to bear on that man so he will buck himself up to the point where he will speak up on behalf of the people of his province.
Then we find that the great province of Ontario is led by a group of fat cats. There is no other way to describe them. They will have some answering to do to their people in the long run, because the only impression that could be gathered of the Ontario delegation was that it was composed of people who were very smug and really did not give a thought to what was going on because they believe that in the long run they will be able to control this government. They have not been concerned enough about the problem of the division of power.
I believe there was mention in the newspaper I referred to earlier that the Premier believes there is a great deal in this conference for the province of Ontario. I suppose he believes there is, but I do not think he went to the conference properly prepared. I do not think the proper staff work was done by any of the provinces represented at the conference. Moving westward, we have the province of Manitoba which I suppose is most sympathetically inclined toward the ultimate aims and ambitions of the present government of Canada, but the
representatives of that province did not have very much to say. They did not make any contribution, and the Premier left early.
Then we have the province of Saskatchewan. The Premier of that province did not even attend the conference; instead he sent as his representative the Attorney general who is looking for an appointment as a federal court judge. He, of course, would not say anything to the federal government. The province of Alberta has a tired, old administration which is stumbling toward defeat.
I may as well tell the facts as they are. The Premier of Alberta appeared only to be concerned about language rights and as soon as some concession was obtained on language rights he shut up and would not say a word. Then we find the province of B.C. led by what I consider to be the brightest Premier there, but he is still a great egotist. He obtained a few things, he says. He will be consulted on the appointment of Supreme Court judges with an unofficial promise of a judge from B.C. He thought it was a great victory and was willing to sell-out for that.
All I can suggest is that we have quite a few small-minded Premiers at the head of provincial governments in Canada and they are completely under the domination of the federal government. Who does the work? The federal government goes there with a delegation of 20 or so, whereas each province has only four, five or six officials. Who does all the drafting? It is all done by the secretariat under the domination of the federal government. This is not confederation. It is a great abuse of the principle of federalism.
I hope that between now and June 28 everybody will not be mesmerized. I see Ontario has jumped to the bait as early as it could, being the first to go along with it. I hope that the province of Quebec will be instrumental in rallying the rest of the provinces to what should be the proper role of the provinces in this country, because if we go along the road toward centralism, the way we have been going, and have this confirmed in a new Constitution I am fearful about the future of this country.


Mr. D. Gordon Blair (Grenville-Carleton):: Mr. Speaker, the budget debate is for all of us an opportunity not only to speak on the budget but to speak on matters of general concern to our constituents. In the few minutes remaining I propose to make some comments about an important matter affecting not only my constituency but all parts of Canada. It was a matter of great regret to me that the study of the bilingual policy of the government undertaken by the Standing Committee on Miscellaneous Estimates did not result in an assessment of that policy and a report to this House on its operation. I regard this as unfortunate.
I raise this matter not in order to inflame feelings or to cause difficulties where difficulties do not exist, but rather because it is a serious problem which will not be solved by people overlooking it. We cannot be like ostriches with our heads in the sand believing that the problem is not serious. The problem of which I speak has

June 22, 1971

arisen as a result of the manner in which the bilingual policy has been applied. It has caused great unrest, great apprehension and-this is not too strong a word-great fear in the public service.
As we all know, the problem is that for many years the public service was predominantly English speaking. The attempt, which all parties in this House supported and which I support, to create a bilingual public service, one which is more bilingual than it is at present, one which will afford greater opportunities to all people in this country, is important. But the object can be defeated if the means for accomplishing it are improper.
Very briefly, it is my hope that as a result of the discussions which have taken place, and the serious study which has been given to this matter, the government will review the policy and its application with a view to avoiding the difficulties which otherwise might lie ahead. First and foremost, regard must be given to the pledges given by two Prime Ministers that the operation of this policy would not prejudice the careers of public servants who entered the service before the policy was effected.
I think that we should give much greater emphasis to a person's willingness to learn the other of our official languages. We should be glad that the government has announced, as did the President of the Treasury Board (Mr. Drury), that departments are now required to undertake pre-planning so that there will be designation well in advance of positions which are to become bilingual. We should be concerned about the operation of the language schools to be sure that people who enter these schools are given an opportunity by their departments to complete the course. I think, also, that we should be concerned about increasing the opportunity to learn the second language to all echelons and all ranges in the public service, so that those who now occupy lower positions in the service will not feel, as they do at present, that they are precluded.
My suggestion is that the operation of the bilingual policy requires to be reviewed. It is the duty of this House to take cognizance of the difficulties that have arisen and I make these suggestions in the hope that they will contribute to better administration of the policy in the future.
May I call it six o'clock, Mr. Speaker?


Mr. Gervais:: Mr. Speaker, on a point of order.


The Acting Speaker (Mr. Laniel):: Order. The hon. member raising a point of order?


Paul Mullins Gervais: Yes, Mr. Speaker.
With the consent of the House I would like to revert to the tabling of committee reports.


The Acting Speaker (Mr. Laniel):: Order. The hon. member for Sherbrooke is requesting the consent of the House for reverting to the tabling of committee reports, as the hon. member wishes to submit a report.
Is the House granting unanimous consent for the tabling of the hon. member's report?


Some hon. Members:: Agreed.
Prairie Grain Stabilization Act



ROUTINE PROCEEDINGS


[Stage Direction]
Eight and ninth reports of Standing Committee on Justice and Legal Affairs-Mr. Gervais.
[Editor's note: For text of above reports, see today's Votes and Proceedings.]
The Acting Speaker (Mr. Laniel):: It being six o'clock it is my duty to interrupt this debate pursuant to order of the House made June 16, 1971. I do now leave the Chair until 8 p.m., at which time the House will proceed to another government order.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House proceeded to the consideration of Bill C-244, respecting the stabilization of prairie grain sale proceeds and to repeal or amend certain related statutes, as reported (with amendments) from the Standing Committee on Agriculture.
Mr. Speaker:: Order, please. I understand that that there have been consultations regarding the possible grouping of the numerous motions which stand under this order of business and the Chair would be prepared now to indicate the suggestions to the House. They are as follows: Motions Nos. 1 and 2 would be grouped for debate and the vote on motion No. 1 would dispose of motion No. 2. Motions Nos. 3, 4 and 5 would be grouped for the purpose of debate and the vote on motion No. 3 would dispose of motions Nos. 4 and 5. Motion No. 6 would be considered and disposed of separately. Motion Nos. 7 and 10 would be grouped for debate and the vote on motion No. 7 would dispose of motion No. 10.
Motions Nos. 8 and 9 are identical. It is suggested, therefore, that they be grouped for debate and the vote on motion No. 8 would dispose of motion No. 9. Motions Nos. 11 and 12 might be grouped for debate and the vote on motion No. 11 would dispose of motion No. 12. It is suggested that motion No. 13 be considered and disposed of separately.
So far as motion No. 14 is concerned, the Chair has serious doubt as to its acceptability from a procedural standpoint, although when it is reached the Chair will be

June 22, 1971
Prairie Grain Stabilization Act prepared to hear argument on that point. I would suggest that motions Nos. 15 and 16 be grouped for debate and voted upon separately.
I think the Chair should add at this point that it has serious doubts as to the procedural aspect of a number of these motions but feels that perhaps the House would expect it to take into account the fact that these motions were put on the order paper late, that the bill was reported only yesterday and it is by consent that it is called today. So we have very special circumstances which I suggest to hon. members should be taken into account.
To study all these motions from the procedural standpoint would have required the Chair to spend much more time than has been available for that purpose, which would have meant that perhaps the bill could not have been considered this evening. If serious arguments were made as to the procedural aspects of some of these motions and the Chair had to reserve judgment on them, I am not sure when we could get back to considering the bill. For all these reasons I would urge hon. members not to be difficult from the procedural standpoint, and the Chair is prepared to proceed on this basis. If it is felt as we proceed with the debate that we should argue the procedural aspects of some of these motions, I will consider it my duty to hear hon. members on such points.


Mr. Lang:: Mr. Speaker, I was prepared to comment on a number of these motions and to say they were out of order principally because many of them offend our rules by being beyond the scope of the recommendation. I listened carefully to Your Honour, however, and I am conscious that we shall need a spirit of co-operation if we are to pass this bill and make as much progress as possible.
I wish, however, to raise objection to motion No. 14, to which Your Honour referred, because there is real doubt about it. I also wish to record my view that motions Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 12, 14 and 15 offend the recommendation. I simply want to record the point that in many cases the effect of these amendments would be to put a charge upon the stabilization fund, and a careful reading of the bill will show that this will be a charge upon the consolidated revenue fund.
I do not think, in view of the comments of Your Honour, that I will say more at this stage. I wish it to be known that in connection with any such amendments which might be put in normal circumstances I would want to press this point.


Stanley Howard Knowles: Mr. Speaker, when the minister responsible for the Wheat Board was listing the motions about which he had some doubt, I wonder why he forgot No. 16. Merely because it stands in his name does not make it in order, does it?


An hon. Member:: To him it does.


Stanley Howard Knowles: Seriously, without arguing the points that the minister put forward,
may I say on behalf of my colleagues-I am speaking particularly on the amendments that are in the name of members of my party-that we believe the groupings Your Honour has made are reasonable. We are quite prepared to accept them and to confine our debate within the limits determined by those groupings. When we get to motion No. 14 we can deal with the procedural point. I suppose I should admit that it may take me a couple of days to think up good arguments for it, but I shall try.
The only suggestion I wish to make is that if this schedule is pursued it could lead to nine recorded votes taken consecutively. I see a querulous look on the face of the official of this House who has to call those votes. Perhaps when we have five or six stored up we might take a rest and record a few votes at that point. Of course, that decision cannot be made until it is determined whether we have to force recorded votes. It may be that the minister will accept some of these motions in the spirit of co-operation to which he referred a moment ago.


Mr. Speaker:: The Chair will therefore put motions No. 1 and 2. First we will take motion No. 1. The Hon. member for Saskatoon-Biggar (Mr. Gleave) moves:
That Bill C-244, an act respecting the stabilization of prairie grain sale proceeds and to repeal or amend certain related statutes, be amended by adding the following to paragraph (c) of subclause (1) of clause 2 after the word "producer" in line 18 at page 1: "and after the deduction of the increased costs of production and including stabilization payments, if any;"
Next we will take motion No. 2. The hon. member for Saskatoon-Biggar moves:
That Bill C-244, an act respecting the stabilization of prairie grain sale proceeds and to repeal or amend certain related statutes, be amended by deleting the words "amount that is ninety per cent of the" (a) from paragraph (a) of subclause (1) of clause 3 at lines 31 and 32 at page 2 (b) from paragraph (b) of subclause 1 of clause 3 at lines 4 and 5 at page 3.


Alfred Pullen Gleave: Mr. Speaker, I think the amendments set out very well what is lacking in this bill and our attempt to correct it. We want to persuade the government to come to terms with the economic situation facing the grain farmer. The economic conditions which the farmer is facing are of continuing inflat.on which, translated into simple terms, means that his costs have been increasing.
We think that a plan which looks back at a record of returns averaged over five years but which ignores altogether increased costs which farmers have faced in recent year, together with declining income, and which fails to take into account the probability that he will be facing increased costs in the years ahead, falls far short of discharging the responsibility which the government and we as legislators must bear.
In this connection it has been stated by the Minister of Agriculture (Mr. Olson) that farmers face a period of rather severe adjustment. Some of them will have to leave the land because of economic pressures being exerted on them. In addition to creating plans for retraining and retirement we must, surely, devise plans which consider the farmer who is on the land and producing. We must include within this program an econom-

June 22, 1971

ic plan that considers farmers who remain on the land and makes sure that they are in a sound economic position. If we do not have that kind of plan we can only look for continued attribution, for continued economic and financial pressure on the farmer who is on the land, and for continued hardship and difficult conditions for him. If we had a fully active economy ready to absorb those who leave the land or who are prepared to leave the land, I suppose there would be an alternative course for farmers to take. But these are not present-day conditions and therefore we cannot look with equanimity on any program connected with grain which fails to take into account the pressure being applied to the farmer. It would, of course, be some small consolation to the farmer if he knew that if he were turfed out because of pressure on prices he could find another job. It would be some consolation but that situation does not exist. For this reason we must examine the bill very closely to see what it purports to do for the farmer. We must also take into account the economic conditions in which we live wherein we have administered prices for many of the commodities which the farmer buys.
When representatives of the government of Manitoba appeared before the committee they presented a brief which dealt at length with the increased costs of production which the farmer has to bear. Perhaps it did not receive the attention it deserved, but those of us who are farmers and make our living off the land thought it was important. In connection with my amendment I wish to draw to the attention of the House some of the statements made by representatives of the Manitoba government as to the probable effects on the farmer and what he may reasonably hope to receive from this bill in terms of stabilization of the agricultural industry and, more important, the point at which it is stabilized. It would be small comfort for a person who has an annual income of $2,000 to be guaranteed that he will receive that amount forever. He probably would not stand up and cheer loudly.
In his statement to the Standing Committee on Agriculture, the Hon. Sam Uskiw said:
Because Bill C-244 does not have a preamble stating its objectives, we have to fall back on statements made by the hon. Otto Lang on the purposes of the stabilization plan. In the statement released by Mr. Lang on October 29, 1970, the purpose of the plan was said to be "To counteract sharp swings in farm cash receipts from grains and oilseeds" based, apparently, on the assumption that "At any level of total receipts the adequacy of cashflow will be improved by stability from year to year."
In a pamphlet entitled "Prairie Grains Policy" signed by Mr. Lang and mailed to prairie farmers the statement is made that, "we could level out the boom and bust cycles to help farmers plan their investments over a longer term."
Finally, in the statement tabled by Mr. Lang in the House of Commons on March 15, 1971, it is said that "the proposed policies would stabilize farm cash receipts from grain at 4 per cent above the average revenue from the marketplace."
From these statements it may be concluded that stabilization is sought after as an end in itself, although the claim is made that stabilization will allow the individual farmer to plan his investment over a longer term, and that the plan will achieve 24171-39
Prairie Grain Stabilization Act
stabilization "at 4 per cent above the average revenue from the marketplace".
The minister goes on to discuss stabilization and the circumstances of some groups and individuals who benefit from stabilization. There are, indeed, people in our society who benefit from stabilization and the minister mentioned some of them. He said:
For example, stability of income is the hallmark of the old age pensioners, widows, welfare recipients and many workers in the service industries. But it is not so very long ago that the Prime Minister of Canada-


Mr. Speaker:: Order, please. I must interrupt the hon. member. I am wondering whether the speech which the hon. member is making is one which would normally be made, if it has not already been made by a number of hon. members, on second reading and which may be made later on third reading. I suggest to hon. members that we should not have a general debate on each of the 16 motions which will be coming up for debate. An effort should be made by all hon. members to limit their speeches as much as possible to the motion which is before the House.


Alfred Pullen Gleave: Thank you, Mr. Speaker, I am trying to do that, although somewhat ineffectively. I think that the opinions of governments, although only one was given by a representative of the Prairie provinces, and farm organizations should be brought to the attention of the House. I am quoting from this document because the representative of the Manitoba government was the only person who made a strong case for a net income approach in any plan designed to aid the farmer, particularly the grain farmer in western Canada. I draw to Your Honour's attention the phrase in motion No. 1 which reads:
"and after the deduction of the increased costs of production, and including stabilization payments, if any;"
In other words, this amendment refers specifically to the costs of production and seeks to have those costs considered in the bill. The representative of the government of Manitoba was the only provincial government witness who appeared before the committee. That government brought forward a detailed plan of how costs of production can be brought into a plan to work for the benefit of prairie farmers. The limiting factor in this bill is that it does not take into account present or future production costs. When the minister appeared before the committee I asked him specifically if farm production costs had been taken into account when this plan was being considered. His reply was, "How do you know anything about this? Two farmers will give two different opinions as to actual costs of production."
I pointed out to the minister that in the province of Alberta a very exhaustive study was undertaken and published with regard to production costs for grain in that area. I pointed out to the minister, too, that in Saskatchewan there were farm management groups which over the years had made exhaustive studies of production costs in the province and published them regularly under the auspices of the Department of

June 22, 1971
Prairie Grain Stabilization Act
Agriculture; that in the province of Manitoba similar studies had been made and published under the imprint of the Department of Agriculture of that province. The answer given by the minister was really that no attempt had been made to relate what this bill purports to do to the actual costs of production-in other words, to the actual need of the farmer. This is why I quote at some length from the document to which I have referred.
The Manitoba government goes on to refer to this bill. It says that one characteristic of a moving average such as is used in the bill is that it declines when the figures which form the base decline. The document goes on at some length to show what happens. It reads:
Let us examine the claim that the plan will achieve stabilization at 4 per cent above the average revenue from the market place. On July 31, 1968, the five-year average as defined in section 3(1) (a) was $1,028 million. On the basis of the guaranteed deliveries announced by Mr. Lang last March, the total value of marketings in the 1971-72 crop year will be between $800 million and $950 million depending on prices. If prices are weak, the stabilization account could be called upon to make a payment of $100 million. If prices hold up well, sales will be just sufficient to equal the five-year moving average.
This is what would happen if no cost of production factor is taken into account. One of the objectives claimed for the bill is that it will help farmers plan their investment. The Manitoba submission sets out what would happen to a farmer's income as a result of a plan of this kind. A farmer with average sales worth $10,000 would probably move down to sales averaging $6,660 over a period of years. The submission reads:
However, if you consider the level of gross receipts upon which a farmer has to plan in the 1970s and compare them with his receipts in the 1960s you will probably understand that for purposes of investment the only sound decision the farmer can make is to invest nothing at all.
This is a serious statement but, again, it ties in with the amendment which has been proposed. The amendment says, in effect, that if we are to be realistic we must take into account production costs in the industry and increased production costs which will probably arise in the future, otherwise it is no doubt true that the farmer will make a decision to invest nothing at all. If he does make such a decision the agricultural industry will rapidly decline.
I do not know what the minister's long-term objectives are but at some point, if one can judge by the bill which has been brought into the House, he will tell us that his long-term objective is continued poverty for the grain farmer. That is the only projection one can make on the basis of the bill before us. The Manitoba document says that had a plan similar to the one now proposed been operative from 1926 onward, there would have been no payments between 1934 and 1954. In other words, in the depth of the depression from 1934 to 1940 there would have been no payments made at all under the plan as drafted here. The reason is fairly obvious: the plan does not take into account increased costs, or the cost of production, and it cannot take into account declining prices because it is too rigid and is not tied to yearly fluctuations.
The document from which I quote shows extensive graphs which I am sure have been available to the minister. He could have looked at them. The document says:
The base upon which prairie grain receipts will be stabilized in the first five years of the plan will be about 65 per cent of the average of the late 1960s (about 70 per cent of 90 per cent of total receipts in that period).
Mr. Speaker, I may be forgiven for quoting so extensively from the Manitoba document because we were not provided with any adequate material by the minister. We asked for it. We received a single sheet with some figures spread across it. I am reminded of the reeve of a municipality who used to attend conventions at which he always had an uproarious time. When he returned, his colleagues would ask him for a report. He would fish copies of the local paper out of his club bag, place them on the table and say: "Read them".


Mr. Whelan:: That is about the size of what some of you people would do.


Mr. Peters:: Protect us against that, Mr. Speaker, whatever it may be.


Alfred Pullen Gleave: I say again, and I say it to the hon. member across the way, that the amount of information as to the statistical basis of this plan which was given to the committee was insignificant. It was an insult to the farmers.


Eugene Whelan: But you benefited from it.


Alfred Pullen Gleave: The hon. member has to be kidding. It was a born loser, and I can only extend my sincere sympathy to these poor people. Except for the possibility of a payment at the end of the 1971-72 crop year it is virtually certain that no more payments will be called for during the remainder of 1970. Sometimes I wonder whether the stabilization plan was an afterthought, the government having decided that certain programs, such as the Temporary Wheat Reserves Act and PFAA, should be withdrawn. I also wonder whether the government thought that since farmers were going to get such a shock, the government would have to dream up something.
Ever since this legislation has been presented to this House we have been in the unfortunate position of trying to change, to repair, to adjust and to modify the plan which in its basic approach and principles is unworkable and unjustifiable. According to the farmers of Manitoba it follows that a plan that takes into account gross receipts only cannot and should not be called an income stabilization plan.
If I may get back to the amendment that is before the House, to most economists income is what is left after deduction of expenses. It is the difference between the gross return and the cost of producing what you have

June 22, 1971

sold. However, this plan proposes to treat gross return to the farmer as his income. The farmer is being told that the plan will stabilize his income and that it will do so by comparing one year's gross receipts with another year's.
If the plan had used net receipts as its basis, as the Manitoba plan requested of the government, then it could claim to be an income plan. But it does not do so. It leaves some very wide gaps between actual cost of production and what the farmer may receive for his grain. This is its basic shortcoming. We are moving these amendments in order to try to meet such shortcomings, but it is very difficult to get them accepted. The programs being eliminated by this legislation are ones that use as a basis the farmer's net income. This was the case with the Temporary Wheat Reserves Act which saved the farmer a certain amount of money that he will now have to pay in terms of storage.
The Temporary Wheat Reserves Act was put through the House by the late C. D. Howe. I do not suppose that many people would regard C. D. Howe as a Santa Claus, but he brought in a program that he and the government of the day thought was needed in order to meet a situation then existing, one which was not very different from the situations we have experienced from time to time since where there has been a slowdown in grain sales and we have had to carry a fair amount of grain. During the committee hearings, since no figures were provided by the department we sought to draw some from the witnesses who appeared before us in regard to what it would cost to store grain. I recall one witness saying that it would probably cost the farmer a minimum of ten cents per bushel for storage as a result of the elimination of the Temporary Wheat Reserves Act, a program that has been in effect for some 15 years.
Since no other program is being put in its place, we do not know what machinery the government is going to use in order to ensure adequate amounts of grain are in store in order to meet market demand. No undertaking has been given by any government agency that this grain will be kept in store. Pressure will be put upon the Wheat Board to store the least amount of grain possible and undoubtedly there will be times when the Wheat Board will be caught, as a result of such pressure, without sufficient grain in storage. If some kind of storage program had replaced the Temporary Wheat Reserves Act, this over-all plan might have been more acceptable.
The same situation arises in connection with PFAA. Under the net income and cost of production aspects of the program it is planned to set a 2 per cent levy on the farmer's total income, and this at a time when it is well known that the farmer's net income is being subjected to a great deal of pressure. Indeed, as a farmer he is under a great deal of pressure. Part of this 2 per cent levy the farmer may have refunded to him at a future time, depending upon the government's contribution. I suggest it is strange that we should make a 2 per cent levy on an industry that from all accounts has been placed in a difficult financial position. This would amount to a fair sum of money if the net income of the farmer- 24171-39i
Prairie Grain Stabilization Act


Mr. Deputy Speaker:: Order, please. I do not want unnecessarily to interrupt the hon. member, but it seems to me that the Chair has a responsibility here. If I am in error, I know the hon. member will be able to point out the error to the Chair. With respect, he is talking generally about the plan. The two motions that are under review deal with the section that interprets grain sales proceeds and also refers to the determination of prairie grain stabilization payments. In view of this, I do not think the hon. member should range as far as he has.


Alfred Pullen Gleave: When I am talking about the 2 per cent which it is proposed be taken off the gross sales, this inevitably relates to the net income of the farmer and his costs of production. It also relates to how well he can meet those costs of production. If you take 2 per cent off his gross and it amounts to 8 or 10 per cent of his net, which I suspect would be the case in situations where there is a net income, this will adversely affect his production costs because the amount which is being taken away from him could be used to pay taxes which are and have been an increasing factor: they could be used to pay for his depreciation on machinery and for replacement of machinery and to pay gas and oil bills.
The 2 per cent which this bill proposes to take away from the farmer could be used for all these things. It is to be placed in a stabilization fund where it will be out of reach except in years when the two lines on the graph happen to meet. When the two lines of the gross production graph for the previous five years and for the production of one particular year happen to cross, then some of the 2 per cent which has been taken away from the farmer will come back to him. In the meantime, however, he will be bearing the production costs and by the time the lines of the graph meet he may not still be on the farm.
I am always prepared to take whatever admonition may come from the Chair, but this deduction is relevant to the farmer's production costs and, more than that, it is relevant to his very existence. Two briefs were presented to the committee, one by the Federation of Agriculture and another by the National Farmers Union, both of which bear heavily on this point.
It is for this reason my amendment stands on the order paper. When these organizations presented their opinions to the committee they raised these matters. I have attempted to put them in a form acceptable to the House so that we may place before hon. members the point of view presented by the National Farmers Union and the Federation of Agriculture. They had quite a lot to say about this matter. On page 12 of its brief, the National Farmers Union had this to say:
Bill C-244 is industry and market oriented. Philosophically it embraces the concept of volume marketings at whatever price is attainable. In this sense there is no price or income stabilization for the individual producer. Bill C-244 contains no compensating provision to the farmer to offset rising production costs. This is a requirement for income stabilization.

June 22, 1971
Prairie Grain Stabilization Act
This is precisely what we say. In amendment No. 1 we find these words:
-"and after the deduction of the increased costs of production, and including stabilization payments, if any;"
The amendment contains the words "including stabilization payments", which refer to the payments farmers would have to make under this 2 per cent deduction.
The budget contains a provision in respect of companies manufacturing television sets and like appliances. These companies had complained bitterly over the last few months that they were in difficulty. We did not tell them to give us 2 per cent of their gross and that we would throw in 4 per cent in order to get them on wheels. Not at all. In the budget we said we will remove the excise tax. We did not tell them that by some means or other they would survive some day, that they should go and find an export market and compete with the subsidized industries of other countries. That is what we are saying to the farmers. One of the briefs refers to a price of $1.90 for wheat and the bill says that farmers can meet this competition on their own.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but I must do so to advise him
that his time has expired.


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I wish to add my support to the mover of this amendment. I feel that perhaps of all the amendments before the House at the report stage, this one should receive most attention because it relates to what is perhaps the crux of the bill, although this opinion may not coincide with that of some hon. members.
I am very conscious of the cost of production factor. That factor is not included in this so-called stabilization bill.
When participating in this debate previously I said that I believed the principle inherent in the bill, which this amendment seeks to change, is that the income of farmers will be stabilized at the poverty level. I say "poverty level" because no union in this country has ever bargained with management on the ground that wages should be maintained on the basis of the previous five years. Every union which makes representations to management, and every management which seeks to improve its position by way of pricing or efficiency always has a forward look. This is the only bill, in this case pertaining to grain producers, where we take a backward look. We look back as though the cost of production does not apply to producers of grain and as though inflation does not apply to them. They, somehow, are expected to pull a rabbit out of the hat and keep producing in an industry which brings in a great deal of foreign capital to this country while a backward look is being taken so far as pricing is concerned.
In the over-all deduction factor which the government suggests will apply to the producer the 2 per cent works out to a much higher figure. The previous speaker said that the 2 per cent might be considered on the basis of 8
per cent of net income. Up until now the government had suggested that 4 per cent would represent 16 per cent of net income, and that may be applicable. This only applies from the year 1934 until 1950 and from then it would not apply. The argument that 16 per cent is applicable would be invalid for those 16 years. One must wait 16 years before it is valid.
Not only is the cost of production going to increase, not only is inflation going to affect the producer but this plan has been formulated in an attempt by the government to sell the producer on one thing. I have in mind the suggestion from the other side of the House that $100 million will be put into the hands of producers before any other demands are made. This suggestion does not appeal to me. It does not satisfy the immediate need of farmers to meet continuing increases in the cost of production.
This amendment takes squarely into consideration the problems facing producers. It is based on life in our rural areas as it now is. It considers these factors on the basis of reality. If the plan is deficient in that regard, it is incumbent upon the committee which studied the situation to introduce an amendment. We have had representations from across Canada in the form of letters which indicate a need for extra help in dealing with this difficulty. Many producers have looked at the bill and wondered whether it is acceptable. They have decided these proposals are not sufficient to meet their requirements. They will not be induced to accept a plan which may have immediate salvation through an immediate injection of money in the economy, because they realize the government is taking money from one pocket and putting it into another. They know that the only advantage to be gained has political overtones and that when pressures are brought to bear something else will come forward.
We now have an opportunity to improve the bill. This can be done by acceptance of the amendment before us. The amendment has been considered by the committee and the House. The imperfections of the bill have been weighed and a sincere attempt has been made to place the agricultural industry in the same position as other industries. No industry can survive on the basis of past performance. Industries must seek out new markets in order to increase their income. People in industry know that labour and production costs increase. How can industry be expected to survive in view of our tax situation? In face of all the competition which exists, surely the government does not expect the agricultural industry to accept that this is a stabilization program. It does not take very much of a mathematician or one experienced in farming to understand this.
In all the years I have been farming I have attempted to increase efficiency of production to the point where I have been working around the clock, using every method available to reach that goal. I imagine every other producer has done the same. There is no way my farming operation or any other can survive if farmers must continue to obtain income stabilization on the basis of 15 or 20 years' farming, keeping in mind the farm economy of 20 years ago. No workingman could be expected to survive under these conditions. No pensioner in this
[Mr. Gleave.l
June 22, 1971

country could expect to survive under those conditions.
This is precisely the situation with which we are faced. There will be years when income will not be at the same level as the previous year, yet farmers cannot even attempt to catch up with the average income in urban communities. Not only can they not catch up but the increased cost of production will decrease their average income. In the absence of an acceptable formula, the proposals suggested in the bill are unacceptable. The suggestion continued in the amendment before us is valid and I urge the government to adopt it and show that they appreciate the needs of western grain growers.


William Arnold Peters: Mr. Speaker, on June 2, 1968, in the city of Winnipeg the Prime Minister (Mr. Trudeau) outlined the need for economic improvement in western Canada. When he outlined this program he was not particularly interested in grain sales generally; he was interested in the income from grain sales on the basis of individual producers. He said at that time:
Variations in world cereal supply-demand give rise to year to year fluctuation in Canadian grain sales and farm income. These fluctuations create difficulties for grain farmers in making forward^ operational plans. To meet this problem, the government will immediately involve all interested parties in the development of a self-sustaining program of income protection for western cereal producers. Various alternative systems are possible, and farm leaders have suggested several variations. The basic-concept is a program under which farmers could be provided with minimum income assurance against declines in prices or marketings.
The Prime Minister went on to say:
Resolution of this problem will be sought in sufficient time to bring in legislation to permit implementation of a program early in 1969 should it be required.
The purpose of the amendment is to create such a program. The purpose of motion No. 1 is to change the proposition that the government has put before us for stabilizing grain sales in general to stabilizing grain sales income per farmer.
As my hon. friend said, everyone knows that if a labour union is bargaining for its employees, it looks forward rather than backward in setting the contract. In looking forward I am sure that no union would negotiate on the basis of the total amount of money which accrues to the local in a given category, but would be interested in providing sufficient income to each individual to maintain his standard of living, taking into consideration the expectations and the history of cost of production increases and cost of living increases.
We are not doing that under this bill. What we are doing is taking all grains and putting them in one pot. We are saying that if the total sale value of all the grains that are designated in this bill-that is, the major six grains in western Canada-is higher than 90 per cent of the value in the past five years, then no money will be paid out. If it is lower in a given area, then there will be compensation.
Prairie Grain Stabilization Act
The farmers in western Canada are saying that the grain producing industry is in serious difficulty. They are saying that the grain industry is in difficulty for a number of reasons. Farmers in western Canada have mechanized their farms at great expense. This government has allowed them to borrow large sums of money for the consolidation of farm units, including a large interest payment on the consolidation loan. The government has assisted them in buying machinery and in the sale of their commodities. They have reached the stage at which they have to meet the costs, and they have a limitation in the number of bushels per acre which they can produce although this has increased radically in the past 20 years. They are now faced with the proposition outlined by the government that if they accept this bill they will be tied to the gross proceeds of the sale of the six major grains in western Canada.
If farmers find themselves in a difficult situation and decide to keep some of their land in forage and some in summerfallow and that to keep up their gross sales they have to produce wheat, they know that their costs will go up considerably. At the same time they will be able to produce by increasing the volume and the gross sale value of the commodity which they have. This will inevitably result in a situation that the Liberal government has been trying to achieve for years, that is, to consolidate the farm force until it is no longer a political force, to divide it into small numbers on large acreages so that it is no longer a problem to the party. This will be the inevitable result of this program unless amendment No. 1 is accepted.
If the amendment is accepted it will relate the actual increase in the cost of production of a given commodity and the contribution that will be available on that amount. We hear of farmers in western Canada averaging an $800, $900 or $1,000 a year net income. This is difficult for an easterner to understand. Some old age pensioners have been living on that amount of money and have been paying income tax on it. It may be that farmers in western Canada would be able to survive on it, but it seems to me that if they do not take in their costs of production, if their net income is so low and we are asking them to make a contribution on their gross income, money that they may never get, they will not be able to survive.
One of my colleagues tells me he has 1966 grain still in the barn and he is not sure what its grade is or what its value is. He has no foreseeable opportunity of selling it. The amount of contribution coming out of the proceeds of his grain sales bears no relationship at all to the amount of money that he will have to pay. It seems to me that if the Prime Minister was right in saying that we should be able to work out a stabilization program which would take into consideration farm income, then this program should be geared to the net proceeds of grain sales in western Canada. If a farmer decides what he wants to sell his grain for, then there might be an argument for gross sales. We would then be operating under a capitalist system where the strong would survive and the weak would disappear. Perhaps that is the
June 22, 1971

Prairie Grain Stabilization Act
philosophy of some people, but it certainly does not take into consideration the position put forward by the Prime Minister. The Prime Minister was referring to the net income of farmers in western Canada and the fact that their net return, the money they have left over after everything is paid, is much lower than the average in Canada and that a program should be worked out to take care of this situation.
We have other subsidization programs. The Minister of Agriculture (Mr. Olson) spoke today about another stabilization program. That program is certainly nothing to write home about, either. We talk about 80 per cent of the average price over a five-year period. If a commodity drops below 80 per cent, then the government subsidizes it up to that price. This is the difference. In all our other programs we subsidize up to a certain price, but in the arrangement that we have for grain we do not subsidize to a price but suggest that we subsidize to the gross sale value.
This means that volume will be the factor, because the domestic price is set by the government and the price for the bulk of our sales of wheat is set by international trade. On occasion sales may be slow on the international market, a market where demand need not be very great, where competition may be very tough and where subsidization is a factor in the price of other countries' products, so that we may not be able to unload any wheat, barley, oats or any of the other three commodities covered by this bill. In fact, it may be impossible for us to unload any grain unless we take a cut in the price.
If no Canadian cereal grains were being sold on the international market, this would cause serious economic difficulties for the country. Therefore we are often in a position where we are willing to take a cut in price. In that situation the farmer gets much less, and obviously as a result his net grain sale proceeds will be considerably lower even though total grain sales of the six designated commodities may be higher than in the previous year. Once grain is delivered to the Wheat Board and is in the system there is no way whereby the farmer can decide that he should not sell it at a given price on the international market. Through this Crown agency the country has a responsibility to dispose of the commodity at the best price it can obtain.
I am sure the government is not going to brag too much about the difficulties which to some extent it created for itself in its negotiations with the United States in an effort to arrive at an international wheat agreement. The United States authorities decided that they would sell their cereals at whatever price they could get. They started dumping their cereals throughout the world and Canada, being subservient in the economic field, found itself in the position of having to compete with bargain basement prices and had to cut its price. As a result, the farmers' income was cut. If we were still operating under an international wheat agreement-such an agreement over the years has been a stabilizing force in maintaining a regularized price for this commodity-it would be pos-

sible for the government to carry large hold-overs of grain and not be compelled to sell at a time when the price was not right. Recently we made some export sales but I think the minister would be ashamed to stand up in this House and indicate the price at which those sales were made. We made them because we had to get the grain out of the system.
Last year we were faced with a $79 million storage payment. Of course, farmers were compensated for that in their final payments, but the point to remember is that farmers are continually faced with factors over which they have no control. A farmer does not have control over a number of factors and these may not necessarily be the responsibility of the government. One factor over which he does not have any control is the weather. If he suffers partial destruction of a crop, then obviously his costs of production increase greatly and his net sales are reduced accordingly .
The government tried an experiment last year. It spent something like $60 million to reduce the number of acres in wheat production. Its spokesmen went across the country proclaiming how wonderful was that program. But I think it is safe to say that when the individual farmer put his land into forage, then $10 per acre that he received did not cover his costs. He still had to pay tractor costs, gasoline costs, labour costs and other fixed costs. In my opinion, for the past several years the government has been embarking on programs detrimental to the income of individual farmers. To stabilize a program that does not take this factor into consideration is totally unacceptable to the farm community.
Those of us in this party who for years have been interested in the farm population look at the matter from a totally different point of view. Many people are concerned about the industry. We feel that the key to the industry comprises the rural communities, the farmer and his family and we think these are much more important than introducing mechanized farm operations.
Obviously, this program is oriented to volume and not to price. Some five, six or seven years ago farmers were saying that if they could get $2 a bushel for wheat they could make ends meet. I am sure that their costs of production have increased by 5 per cent or 10 per cent a year in the interim, comparable to the rising costs faced by all Canadians. Taking this fact into account, it is obvious that at least $2 per bushel would be necessary to establish a stable income for farmers.
I do not believe the government will accept the amendment which we are are proposing. The government is oriented entirely to the grain industry, just the same as it is oriented to the broiler industry and the hog industry. It does not give a damn about the individual farmer. If we go along with this approach, a lot of individual farmers will fall by the wayside. We are suggesting a fundamental change, but I am sure the government will not agree because it does not care about the farmers.
We have grouped two amendments for debate, Mr. Speaker, and I am never too sure about how to talk on
June 22, 1971

two amendments that are not directly related to each other. Speaking on the second motion, what we are interested in-as has been indicated, the motion may not produce this result-is maintaining 100 per cent of the average and not 90 per cent. We do not want the leeway that 90 per cent of the average would allow. We are interested in establishing and maintaining 100 per cent of the average, and that should apply in all instances where there is a reduction in income and benefit should be paid. The hon. member for Mackenzie (Mr. Korchinski) pointed out-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but I must do so to advise him that his time has expired.


Some hon. Members:: Carry on.


Mr. Deputy Speaker:: The hon. member may proceed if there is unanimous consent. Is there such consent?


Some hon. Members:: Agreed.


William Arnold Peters: I will not speak any more on this subject, Mr. Speaker, thank you.


Otto Emil Lang: Mr. Speaker, I am sure we should all have been glad to hear the hon. member for Timiskaming (Mr. Peters) complete his remarks. We know how much of his speech was left because we have heard it about three times already in committee. Most of the motions on the order paper, including the ones we are now dealing with, were fully dealt with and disposed of in committee. They are back at the report stage before the House.
The first motion, dealing with the deduction of increased costs of production would, as was clearly indicated in committee, make the stabilization fund completely unworkable. I hope that is not what hon. members had in mind in putting it forward. The stabilization found could represent in the future an extremely important form of income assistance to the prairie farmer. Accordingly, I urge hon. members to support the bill and make sure that it gains swift passage, and not to support amendments such as this which would be impossible to apply because there is no possibility of an accurate determination.
The second motion would be a departure from the basic principle involved in the stabilization plan. The plan relates to 90 per cent of grain production, not because it is 90 per cent of every farmer's production but, rather, because by excluding the production of very large farmers above a certain limit the amount of grain left within the plan would be 90 per cent and that is consistent with our position. It is a motion which I would urge hon. members to oppose.
It is important that we move forward with this extremely important legislation. I think we started this evening in a co-operative spirit. In order that we may make further progress, I should like to move, seconded by the hon. member for Calgary South (Mr. Mahoney):
That this sitting continue beyond ten o'clock for the purpose of completing the report stage of Bill C-244, or until 12 o'clock.
Prairie Grain Stabilization Act


William Arnold Peters: That is not what we consented to.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. Since we gave unanimous consent for this matter to be dealt with tonight, whereas by the rules it would not be possible to deal with it until tomorrow, I ask whether it is in order, under such conditions, for the minister to move this kind of motion.


Otto Emil Lang: Mr. Speaker, on the point of order I think clearly, that it is in order under the rules since we are proceeding with our regular business. If we are to go back into the history of unanimous consent we ought to remember that on Friday of last week a procedural technicality under which the hon. member for Timiskaming (Mr. Peters) refused to allow us to proceed caused the difficulty in the first place. I think it is clear that the motion may be moved. There is nothing in the rules limiting the right to move such a motion when the business of the House is being considered.


Mr. Horner:: Mr. Speaker, on this point may I ask for clarification and an interpretation of what the minister requires. If we finish the report stage, will votes be called on the 16 motions before the House? Would they be called tonight? I ask this question because a number of hon. members are not present; they were not aware that the matter would be dealt with by voting tonight, because votes are normally deferred to a later date. Could the minister say how the votes will be handled on these motions, or will they be deferred to a later date?


Mr. Deputy Speaker:: Order, please. Before the minister responds I suggest to the House that the Chair should decide the point of order raised by the hon. member for Winnipeg North Centre (Mr. Knowles). If it is not in order to proceed with the motion moved by the minister in charge of the Canadian Wheat Board, then of course further discussion would not be necessary.
The Chair understands the point of order raised by the hon. member for Winnipeg North Centre and has listened to the minister responsible for the Canadian Wheat Board. If other hon. members want to assist the Chair to determine the regularity of the minister's moving the motion, in view of the fact that the House is now dealing with the bill on the basis of unanimous consent, the Chair will hear hon. members. Otherwise the Chair is prepared to rule on the point.


An hon. Member:: Make your ruling, Mr. Speaker.


Horace Andrew (Bud) Olson: Mr. Speaker, without question the minister has the right to bring forward the motion. Speaking strictly from a procedural point of view, may I say that the House gave unanimous consent to proceeding with this matter tonight, with no qualifications. I appeal to hon. members to support the minister responsible for the Wheat Board in this respect.


Some hon. Members:: Oh, oh!


Mr. Deputy Speaker:: Order, please. The Chair invited only comments on the point of order. The minister knows

June 22, 1971
Prairie Grain Stabilization Act that it the motion of the minister responsible for the Wheat Board is in order, it is not debatable.


Stanley Howard Knowles: Mr. Speaker, in a technical way I suppose it might be argued that since unanimous consent has been given, anything goes from now on. But I think it should be clear and it should be known that when there were discussions about having this debate on Tuesday night, and those discussions took place last Friday and again yesterday, they referred only to two hours of debate on Tuesday night.


John (Jack) Henry Horner: Mr. Speaker-


Mr. Deputy Speaker:: Order, please. The Chair would like to make a ruling on the point of order raised by the hon. member for Winnipeg North Centre. The Chair permitted the hon. member some latitude in speaking again, which perhaps should not have been allowed. I thought he might wish to elaborate on the original point of order. I am prepared to make my ruling. On the other hand, if the hon. member for Crowfoot (Mr. Horner) wishes to clarify the matter, I will hear him.


John (Jack) Henry Horner: No, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Winnipeg North Centre raised the point of order regarding whether, in view of the fact that we are now proceeding on the basis of unanimous consent, the motion of the minister responsible for the Canadian Wheat Board can be put to the House and is in order. I thank him for his suggestions and I thank the Minister of Agriculture (Mr. Olson) for his remarks. It seems to me, however, that once unanimous consent has been given everything must flow from that. Consent was not given conditionally; there were no qualifications to it, as I understand.
It therefore seems to me that the business of the House has proceeded or flowed from that unanimous consent. The unanimous consent secured the necessary time and therefore the Standing Orders do in fact apply to the proceedings that we are now engaged in as a result of that unanimous agreement. I therefore think that the motion is properly before the House.
Hon. members are familiar with the provision of Standing Order 6 (5). Because this is not a matter that hon. members deal with very often, the motion having been put I will read Standing Order 6 (5) (b):
When Mr. Speaker puts the question on such motion, he shall ask those members who object to rise in their places. If ten or more members then rise, the motion shall be deemed to have been withdrawn, otherwise, the motion shall have been adopted.
Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.
And more than ten members having risen:


Mr. Deputy Speaker:: The motion is deemed to have been withdrawn.


Some hon. Members:: Poor farmers!


Mr. Deputy Speaker:: Is the House ready for the question on motion No. 1? The hon. member for Battle River (Mr. Downey).


Mr. Cliff Downey (Battle River):: Mr. Speaker, it is unfortunate that the minister had to resort to the method he just used to try to limit debate on this subject when many members were not expecting it. When you look at the intent and the very wording of the bill, you see that it is a stabilization plan. It talks of stabilizing agriculture, the income from which has been at a disastrously low level over the past few years. When an hon. member used the term "stabilizing poverty" earlier in the debate, he was in truth very accurate.
Motion No. 1 gets at the nitty-gritty of the problem. It is probably the most important of the 16 amendments before us. The fact that there may be built into the stabilization program an escalation clause such as there is for industry, labour and many other areas of the economy that will allow incomes to increase as production costs increase, is one of the most pressing necessities that is facing agriculture today. The fact that this has not been the case has led to the situation where the costs of agricultural production have risen astronomically. In the past 20 years they have doubled, redoubled, doubled and redoubled again, yet the price to the producer remains the same. This is like going to labour in our industrial plants and saying that we will see that their income rises but they will have to work faster and faster and faster. This is what the agricultural segment of our economy has been asked to do. It has been asked to work harder, scheme more and invest more capital and not to ask for any more for their product because that is unreasonable.
A few moments ago the minister commented on remarks made by hon. members. Referring to the first amendments, he said it would make the stabilization fund totally unworkable. This reminds me of the situation that existed when the marketing bill, C-176, was being considered. Many members of the committee agreed with quality controls but they seemed useless in light of the fact that the same board was not allowed to impose import controls. This was one of our major problems. Amendments were moved and suggestions made that we give the marketing board power to impose import controls. A similar amendment was drafted with regard to the textiles bill, but it was rejected. It was said that it was out of order and unworkable. This shows the double standard of this government. There is a double standard when agriculture is placed alongside many other segments of our economy.
It is interesting to note the tenor of the mail which members have received. The $100 million payment the minister was going to use to blackmail people to accept his stabilized poverty program has not been going too well.


An hon. Member:: The bribe.
June 22, 1971


Cliff Downey: Yes, the bride. The minister thought he might get the bill through before this was realized, but the mail indicates differently. I do not recall receiving one letter asking me to support this stabilization program. There are piles of letters that indicate the opposite. People have seen through this program in record time. They know what a stabilized income based on today's costs will mean to them. It will mean disaster. They also realize that regardless whether the stabilization program goes through, on July 1 there will be a payment of something like $60 million to the federal treasury under the Temporary Wheat Reserves Act. If PFAA is not discontinued there will be payments amounting to $6 million or $8 million. The government knows that this year they will not be net losers to a very great extent.
With regard to the allowance to be built into the program for escalating costs, I wish to quote from a U.S. publication, the Kiplinger Washington Letter, a business council. This is what they say will happen to prices within the next year:
A quick look at prices of things that are daily necessities:
Food is headed higher. .. perhaps 5 per cent above last year, well over what the government had expected earlier. Labor, transportation, packaging are the main reasons... they all cost more and make up 60 per cent of food prices-
The new autos will cost more too next fall... $150-$200 more ... mostly for rising labour and materials costs and for added safety items-
And tires will cost more next month, an average of around 3 per cent, starting July 1. Perhaps up again by 3 per cent in fall. Buy now if you can.
All these are indicators of what will happen to prices in the months ahead.
Reminder on credit, borrowing: Do it NOW if you will need money in near future. There's plenty of money available. And interest rates are lower than they will be if you wait... they're poised to rise further. Lenders are itching to raise them. So why not beat them to the punch?
That is what the advisers in Washington are telling their customers they should be doing. In the face of our experience in agriculture over the past years, experience which has shown us that a three-plow tractor which in 1940 sold for $1,200 may well now cost $4,000 today, it is sheer suicide to speak of any plan which purports to stabilize agriculture in its present state without taking into consideration the substance of what is contained in the amendment, in other words, without providing for increases in production costs built into the program.
It is hard for me to understand that a minister coming from a western area, supposedly aware of the difficulties confronting agriculture, should shy away from these facts. I do not know whether the phrase "shy away" is the right one. Is he being influenced by his cabinet colleagues? I cannot understand why, ignoring the lessons of the past, he comes forward to say that building an escalator clause into the scheme would make the fund unworkable. What a sorry state we are in when we find thinking of this sort among western representatives in the House of Commons!
Prairie Grain Stabilization Act
The position of many of the farm organizations has been stated. The Union Farmer reads:
The National Farmers Union today demanded changes in the prairie grains stabilization act to include provisions for protecting farmers from rising costs and declining incomes.
That is exactly what is sought in the amendment. I suggest to the minister that this is not a policy put forward by politicians alone but by representatives of the farmers who are most directly aware of the farm situation. I do not intend to speak any further today. The case has been very well put forward and I know there are other speakers who wish to present their views. If the minister has any ears at all he will be able to get the message loud and strong, whether from the people who represent agricultural constituencies in this House or directly from the farm organizations. I am sure they send mail to him as they do to us.


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, speaking to the amendment we have put forward in connection with this bill I cannot but look across the way and see there the two western twins from the Prairies who are supposed to be defending the interests of the farmers- the Minister of Agriculture (Mr. Olson) and the Minister in charge of the Canadian Wheat Board (Mr. Lang). Last week the minister in charge of the Wheat Board announced a payment amounting to about 7 cents and the next day cheques were in the mail. That is about the most efficient service the farmers have ever received.


Some hon. Members:: Hear, hear!


Otto Emil Lang: It was the same day.


John Leroy Skoberg: At the same time I point out that the Minister of Agriculture has done nothing for two years about the cost of farm machinery even though the eminent Dr. Barber has recommended that there should be an investigation under the Combines Investigation Act.


Horace Andrew (Bud) Olson: Stick to the facts. That is not true.


John Leroy Skoberg: The Minister of Consumer and Corporate Affairs (Mr. Basford) is in the House tonight and it appears that neither he nor the Minister of Agriculture are the slightest bit interested in preventing increased costs of production due to the inflated prices of farm machinery.


An hon. Member:: Nonsense.


John Leroy Skoberg: I hear one of the more vociferous people across the way say "Nonsense". Dr. Barber was not talking nonsense when he suggested an investigation should be carried out under the Combines Investigation Act. But the Liberal government and the minister responsible in this area show no concern about initiating an inquiry of the kind recommended.
It is ironic that the minister in charge of the Wheat Board, who seems to be in a great hurry to have this legislation passed, should tell us there are still inquiries going on into the cost of transportation, something which
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June 22, 1971
Proceedings on Adjournment Motion is directly related to this legislation since it involves increased costs to the farmer. No matter how you look at it, it is clear the minister is not concerned about the family farm in the west. He and his colleague would do their utmost to co-ordinate the small farms into more efficient holdings. In the words of the Financial Post, this would mean the exodus of thousands of small farmers from the west. The writer in the Financial Post was certainly not parroting speeches he had heard in this House, speeches pointing out this was exactly what the implementation of the stabilization plan would mean.
As I look across the way and see the two ministers sitting together, it occurs to me that they are the ones who will have to accept responsibility.


An hon. Member:: Ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr, Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, on Friday, June 18, as reported in Hansard at pages 6865 and 6866, I addressed a question to the Minister of Transport (Mr. Jamieson) regarding the pension increases recently announced by the Canadian Pacific Railway. In particular I made a comparison, brief though it was, between the pension increases announced by the CPR and those put into effect a few months ago by the CNR and I asked the Minister of Transport to make the strongest possible representations to the CPR that the pension increases provided to its retired employees might at least be brought into line with those awarded to retired employees of the Canadian National.
The Minister of Transport, as he so often does, reminded me that when he deals with the Canadian Pacific Railway he has to indulge in entreaty rather than in laying down the law. But it seems to me that, even though the Canadian Pacific Railway is a privately-owned organization, it has a definite responsibility not only to the country but to its own employees.
It has taken a long struggle to establish the principle that retired employees should not be expected to live the rest of their days on a fixed pension; that just as others get increases as they go along, so should pensioners get increases from time to time. This principle has been established in a number of areas. It is now the case that retired public servants of the federal government have their pensions increased every year. If the cost of living increase has been 2 per cent or more in the previous year, the pension increase is 2 per cent each year.

We also won an increase in the pensions of retired CNR employees. This has not yet been made a permanent feature for those who retire from now on, but certainly all of those who retired prior to 1970 received an increase in their pensions equal to 2 per cent for each year of their retirement. Once we had won these improvements it was only natural that we should put all the pressure we could on the CPR to follow suit, and a while ago the CPR did announce that effective July 1, 1971, certain increases would be put into effect.
We welcomed the announcement because we dared to hope that it would be somewhat along the lines of the arrangements made by the Canadian National Railways. But we find that there are some serious shortcomings. In the first place, even for pensioners who retired since 1956 the amount of increase for retired CPR employees is less than that of retired CNR employees and considerably less than that of retired public servants.
Let me give the House some figures in this regard. In the case of a person who retired in 1956 from the federal public service, the increase in his pension in 1970 was 31.58 per cent. In the case of a CNR employee who retired at the same time the increase was 28 per cent. The difference is that although 2 per cent per year applies in both cases, in the case of the public servant there is a compounding that does not apply in the case of the employee of the Canadian National Railways. The CPR employee who retired at the same period received only a 20 per cent increase in that portion of his pension that he earned between 1956 and 1965, plus a smaller amount of the pension earned since that time. The total increase is thus less than 20 per cent of his entire pension, and this falls far short of the 28 per cent that is enjoyed by a CNR employee who retired in 1956.
Let me go back one year. The cruellest part of this whole CPR arrangement is that for those who retired prior to 1956, or for their widows, there is no increase at all. Let me express this in figures. The retired public servant who left the civil service in 1955 received in 1970 an increase of 34.65 per cent. A CNR employee who retired in 1955 received in 1970 an increase of 30 per cent. A CPR employee who retired in 1955 received no increase at all, and if he has died there is no increase for his widow.
I see you on the edge of your seat, Mr. Speaker. I hope I have made my main point, namely, that this is not fair but is cruel, particularly to those who retired previous to 1956, and I hope the government will continue to put pressure on the Canadian Pacific Railway to do the right thing for these retired employees and for their widows.


Patrick Morgan Mahoney: Mr. Speaker, the Minister of Transport (Mr. Jamieson) has asked me to assure the hon. member that in response to his original question he appreciate the problem. The CPR operates outside the direct control of the government. This is a matter which the CPR must decide in negotiation with the employees and also as a matter of decent corporate policy. The minister will certainly bring the hon. member's views to the attention of representatives of the CPR.
June 22, 1971



PUBLIC SERVICE-PROVISION OF NATIONAL SALARY SCALE FOR NURSES

J. Michael Forrestall: Mr. Speaker, at the outset of my remarks I am not sure that I am making them to someone in possession of knowledge in respect of treasury board activities who can speak on what I consider to be a fairly serious situation. This situation has existed for four or five years. The symptoms of the problem are so apparent that the government could find nothing unique in them.
The purport of the question I asked today was whether a treasury board official could indicate when nurses certified in the federal service in the Atlantic region, particularly the Halifax-Yarmouth area would receive parity with their fellow workers. The question of parity, which exists from one end of Canada to the other, is one which has plagued us in the Atlantic region, particularly in respect of the Department of National Defence, for more years than I would care to remember. It is one about which this government does not seem to care two hoots in hell.
I should like to put on record a particular statement in order that the parliamentary secretary might properly refer the difficulty faced by constituents who are my responsibility to the appropriate minister, the President of the Treasury Board (Mr. Drury). Let me quote a letter sent to a number of Members of Parliament. It has reference to correspondence going back to 1968. The letter is dated May 27, 1971. It is addressed to myself and is signed by several nurses. It reads:
Dear Sir:
We, the undersigned occupational health nurses, medical services, Department of National Health and Welfare, Halifax-Dartmouth area wish to register the following protest.
We are most disturbed by the continuation of the regional differential for the nurse I group; the only classification so treated in the entire federal service. The education and experience requirements for this position are the same the country over, and yet we are discriminated against in this area. In fact, the salaries paid to nursing orderlies in some areas of Canada threatens to surpass ours. This situation would be similar to that of paying the nurse I group more than the medical officers.
If one is to believe the DBS releases, we are living in one of the highest cost of living areas in the country. Couple this with
Proceedings on Adjournment Motion
the fact that we are the lowest paid of our classification in Canada, and you can imagine the state of our staff morale. The much flaunted "just society" is not just in practical application.
The Professional Institute has recently gone to arbitration regarding our new contract. Any assistance you may render will be greatly appreciated.
I would appreciate it if the parliamentary secretary would give tonight something other than the usual answer, that consideration is in progress-because consideration has been in progress for about four years. These professional people are entitled to an answer, some explanation or assurance that action is under way to correct this situation.
They want to know where the arbitration has bogged down, and whose fault it is. These nurses are entitled to an answer to their immediate problem. I hope in the two or three minutes available to him, the parliamentary secretary will be kind enough to indicate whether there is any change in the attitude of the federal government in relation to parity between the east and west coasts.


Patrick Morgan Mahoney: Mr. Speaker, the President of the Treasury Board (Mr. Drury) has asked me to advise the hon. member that it has been the board's position that zone pay systems ensure that fair and competitive local rates of pay apply to its employees. It has been demonstrated that there is relatively little mobility among those nurses on zone pay rates and the board therefore feels that zone pay rates are entirely appropriate.
Negotiations between the nurses group, which comprises 2,014 nurses, and the treasury board commenced on January 14, 1971. On May 21, 1971, the group applied for arbitration. Hearings will begin on August 3, 1971. Since the question of pay rates will be dealt with by the arbitration tribunal it would be inappropriate for the minister to comment further.
Motion agreed to and the House adjourned at 10.15 p.m.
7265

Wednesday, June 23, 1971