1971-12-10

TABLING OF EXTRACT FROM MINUTES OF MEETING OF COMMISSIONERS OF INTERNAL ECONOMY

Mr. Speaker:: I have the honour to lay on the table an extract from the minutes of a meeting of the Commissioners of Internal Economy.



PRIVILEGE


Mr. Colin D. Gibson (Hamilton-Wentworth):: Mr. Speaker, I rise on a question of privilege. On page 10332 of yesterday's Hansard in the second column, on the right-hand side, there is this statement by


an hon. member:: "That is not a good name." I respectfully disassociate myself from that statement. If I had heard it I would have rebutted it immediately. The name of the Leader of the Opposition is a good name.



MR. BALDWIN-AVAILABILITY OF REPRINTED INCOME TAX BILL

Mr. G. W. Baldwin (Peace River):: On a question of privilege, Mr. Speaker, may I be permitted to say that, with the arrival on our desks of the newly reprinted Bill C-259, I want to pay our respects to the staff for the job they did in having it reprinted. I only wish it were in a better cause, Mr. Speaker.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, I trust that when the hon. member mentioned staff he was including the employees of the printing bureau.


Gerald William Baldwin: Yes, naturally.



ROUTINE PROCEEDINGS


Hon. Allan J. MacEachen (President of the Privy Council) moved:: That the extract from the minutes of a meeting of the Commissioners of Internal Economy laid upon the table be concurred in.


[Stage Direction]
Motion agreed to.


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I wish to inform the House that my ministry proposes on a permanent basis to double its annual program in the field of providing assistance for the construction and operation of municipal airports, beginning in the next fiscal year.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: The present $1 million annual allocation will be increased to $2 million and this increase will allow us to provide assistance to eligible applicants who, because of lack of funds, would not have been able to expect federal assistance for some time. Indeed, because the present demand is so great it is the intent of the government to ask Parliament to appropriate an additional $1 million for the next fiscal year which will, in effect, triple the program for that year only to $3 million.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: Under the new policy, airports will be grouped into two main categories-national and community. This will more properly reflect the responsibility for their operation and development.
The level of assistance provided to the airports within these groupings will be determined basically by an airport traffic demand index which will measure the relative importance of airports on the basis of passenger flow, cargo and mail handled, rather than by the previous system of simply using the number of aircraft movements at an airport.
Airports in the national category will be classified as primary, secondary, Arctic or satellite airports. Community airports will be classified as feeder, local industrial, intermediate local, small local or remote according to their traffic index.
The present increase from $1 million to $2 million, and hopefully and additional increase of $1 million in funds for 1972-73 for this program, will make it possible to aid a greater number of airports deserving assistance than was previously feasible. In the long run, it will be a benefit to both municipalities and the aviation industry. It is also felt that the implementation of this new policy of assistance will encourage municipalities to continue the operation of national secondary airports. It will also encourage greater participation of others in the financing of airports and this will be in keeping with the ministry's objective that the cost of such facilities should be borne, to the greatest extent practicable, by the users and other direct beneficiaries of these facilities.

December 10, 1971
Assistance to Airports
I would like to add, Mr. Speaker, that based on the assumption that all the members of the House are interested in transportation matters, particularly in their own constituencies, I have instructed my officials to ensure that all Members of Parliament are to be provided immediately with a fact sheet which explains, in some detail, the various aspects of this new program.


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I thank the minister for his courtesy in providing us with a copy of his statement and the fact sheet we are to receive. Three thoughts immediately come to mind as a result of this statement.
First, there should be a review in the Standing Committee on Transport and Communications of the role Air Canada is playing with regard to the development of airport policy. I say this because we have heard that several abandonments are proposed by Air Canada, and one wonders whether Air Canada is playing the abandonment game learned from big brother, the Canadian National Railways. We also have to tie in the role of Canadian Pacific, the regional carriers and the local carriers as a result of this stepped-up policy dealing with municipal airports.
The second thought is that this action in some measure should satisfy the desire of small communities to be part of the aviation age, especially those, if you will pardon the expression, being jettisoned by the railroads. The meeting in Wingham this past summer should prove to the minister the point I make there.
The final thought that comes to mind as a result of this morning's statement is that there should be more research and development into short-flight aircraft, STOL aircraft and air buses, not only in relation to what the minister has outlined this morning but in relation to the development of more municipal airports as such and putting the smaller communities of Canada on the air map.
There is also an unexpected side benefit which should flow from this policy. I have often spoken about the problems that are arising in Canada with the development of the megalopolis between Montreal and Milwaukee, an area of the continent that will soon-within decades- have a greater population density than the area between Boston and Washington. I say "soon" because that is a word the government will recognize. There is a need for small airports and aircraft that are able to land in a very short space within that region.


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, we in our party also wish to thank the Minister of Transport (Mr. Jamieson) for supplying us with the statement he has made this morning. He is to be congratulated on this announcement.
At the same time, all members recognize the financial problems of municipal governments in providing mass transportation movement in so far as air traffic and other forms of transportation are concerned. The hon. member who just spoke indicated some of the concerns in the Boston area. I had the opportunity of being with him less than two weeks ago when we personally contacted and had interviews with some of the transportation people in the United States in an exchange of views arranged

through the Speaker's office. The type of problems they have can be considered analogous to the problems here.
There is no question that the new policy announced today will and should be of benefit to many of the smaller communities. One question we must ask is whether seaplane bases are included. Seaplane bases are an important part of our transportation system. We must also ask whether the communities will be consulted. Because of a lack of funds the definition of eligible applicants must be clarified. We will need clarification of the classification of the various problems with regard to some Public Service employees.
We also have to find out whether this action is part of an over-all mass transportation plan which takes into consideration all the modes of transportation that we have today. Many small communities are in the position of not being able to attract industry because, fortunately or unfortunately, industry does gravitate to those areas where good transportation is available. This is the situation in Canada and in North America today. Many industries gravitate to areas where there is good transportation while other areas which are really in need of industry cannot obtain it.
I notice that on the second page of his statement the minister talks about an increase from $1 million to $2 million and, hopefully, an additional increase of $1 million in funds for 1972-73 to support this program. We must ask again whether there is some significance attached to the year, 1972-73.
We welcome the announcement made today. We are glad that local municipalities are now to have an opportunity to participate in bringing about some of the development of which they have been sorely in need. The need for financial assistance to small communities is one of which we are all aware. I trust we shall not spend our entire time talking in terms of air transportation but that we shall direct our attention also to securing an entirely integrated transport system for the benefit of Canadians.


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, first of all, I would like to thank the hon. Minister of Transport (Mr. Jamieson) for the very appropriate statement he made today, and congratulate him for having doubled grants in order to hasten the implementation of the financial assistance program concerning the construction and operation of national and community airports.
I add further that municipalities will be the first to benefit by the measure. Needless to say that the assistance was absolutely necessary. I congratulate at the minister for having realized that and taken action.
In my area of Lotbiniere, it happened this week that municipalities such as Plessisville, Princeville, Victoria-ville, Arthabaska, Warwick and Daveluyville got together, precisely to put under way the program the minister announced today, with the co-operation and support of the Department of Transport.
I want to congratulate the minister for putting at the disposal of the municipalities the funds necessary to stimulate regional development and thus obtain the infrastructure essential for their industrialization and development.
December 10, 1971

In concluding my remarks, I want to thank the Minister of Transport for his kindness and fast action when he is asked information on projects undertaken in various constituencies. He is one of the best in providing us with answers quickly and he does it as objectively and honestly as possible. He is to be congratulated for.that.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I wish to direct a question to the Prime Minister.
I do so having regard to the optimism he expressed about world currency adjustments being worked out in December or January and recognizing, of course, the right of any country to set the value of its own currency asserted by the Minister of Finance. Has Canada received any assurance from the United States that the United States will not insist upon a further upward valuation of the Canadian dollar in relation to the United States dollar as part of the general adjustment which the United States is seeking in the valuation of other currencies in relation to the United States dollar?


Right Hon. P. E. Trudeau (Prime Minister):: I cannot speak in any detail with respect to the meetings the Minister of Finance had with Secretary Connally, but as to the over-all position taken by the United States government I should not like to say they have committed themselves not to expect, or hope for, or ask for, an upward valuation of the Canadian dollar. As is normal with these meetings, I feel quite free to say publicly what the Canadian position was. As the Minister of Finance has repeatedly said, our position is that we do not want to have the Canadian dollar valued upwards in exchange for anything. As far as the United States position is concerned, I should not like to speak with any authority and say what they are committed to.
a m.)


Robert Lorne Stanfield: Mr. Speaker, I asked the question in view of the optimism expressed by the Prime Minister. Along the same line may I ask him whether Canada has received any assurances from countries other than the United States that are associated, for example, with the International Monetary Fund that they accept the view that has been put forward by the Minister of Finance that a further upward valuation of the Canadian dollar ought not to be required as part of any general realignment, in view of the fact that an upward movement of the Canadian dollar has already taken place during the past year? Have other countries that will be involved in this general settlement accepted the Canadian position?


Pierre Elliott Trudeau: Mr. Speaker, I am afraid my answer to this question about other countries must be along the
Inquiries of the Ministry
same lines as my answer about the United States position. The position summed up by the Leader of the Opposition is the position we have taken. Our upward revaluation began much earlier, in June, 1970, long before the Nixon measures, and therefore our position is that the other countries should not press Canada to take its dollar to any specific higher value.
Here again, as in the case of the United States, I cannot in any way commit other governments to an acceptance of the Canadian position. We have pressed it and we hope that they have understood our arguments with sympathy. We feel that some have responded or reacted more sympathetically than others, but I cannot say with any firmness that any other country will do such and so, any more than we would want any other country to say publicly what Canada should do when all this is over.



RELATIONSHIP OF POSSIBLE CANADIAN DOLLAR


Robert Lorne Stanfield: Mr. Speaker, I am simply trying to find what ground the Prime Minister might have had for his optimism. May I ask the Minister of Industry, Trade and Commerce whether the government or the minister himself has received from or made any proposal to his United States counterpart to the effect that the auto pact and/or other subjects of United States irritation would be modified in return for an agreement or understanding between the two countries as to an acceptable rate of exchange between the Canadian dollar and the United States dollar? For example, has an agreement been suggested that the Canadian dollar be permitted to remain at 2 per cent below the United States dollar, as suggested yesterday by an adviser to the United States President?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I do not know exactly what Mr. Rinfret's relationship is to the United States government. In one paper I'm told he is referred to as an adviser to the Canadian government. He has no such status. He was present at the dinner the other night in Washington; that is the extent of my knowlege of the gentleman. He is a very imaginative economist. The answer to the question is that there is no relationship whatsoever between our discussions on the auto pact and currency realignment with the United States dollar or any other currency.



POST OFFICE


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, my question is directed to the Postmaster General and arises out of the press conference held yesterday announcing the study by Professor Vanderberg. May I ask the minister whether he was invited by the letter carriers to discuss the report with them prior to the press conference yesterday? If so, did he accept? If not, will the minister now assure

December 10, 1971
Inquiries of the Ministry
the House that he will meet with the union to discuss this report?


Hon. Jean-Pierre Cote (Postmaster General):: The Union of Postal Workers has not invited me to discuss the brief. The first I heard about it was when it was handed in at my office yesterday morning prior to the press conference.


Mark Willson Rose: In view of the allegation contained in the report that the Post Office violated certain parts of the collective agreement, will the minister make a statement on motions clearly outlining government policy regarding the attitude of postal management to the relevant clauses of the agreement, which was attacked by Professor Van-derberg, and as well outline in his statement the attitude of postal management to the decision of the adjudicator, Mr. Arthurs, regarding casuals?


Joseph Julien Jean-Pierre Côté: Mr. Speaker, concerning Mr. Arthurs' decision, I believe that he had a meeting yesterday with the Public Service Staff Relations Board.
Now, Mr. Speaker, concerning the report, I do not want to challenge the integrity of the professor. He himself said he was a layman in that field and I believe he could have produced a much more objective report if he had met my officials before preparing it.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, in view of the Postmaster General's recent statement of commitment to the consultative process and the continuing decline in the morale of the postal employees, will he meet with the union officials to consider the brief during this period of pre-Christmas euphoria in a sincere effort to improve mutual understanding prior to the negotiations for a new agreement which get under way next year?


Joseph Julien Jean-Pierre Côté: Mr. Speaker, we are always prepared to meet with union representatives to discuss any subject. I can say that, in the last 12 months, we have had discussions with representatives of the Union of Postal Workers more than 40 times and on more than 50 subjects, not including the meetings that were held at the level of deputy ministers, assistant deputy ministers and of the minister himself.


Walter Gilbert Dinsdale: Mr. Speaker, do I take it from the Postmaster General's remarks that he will meet to discuss this specific brief, which is an attempt to build a bridge over troubled waters?


Joseph Julien Jean-Pierre Côté: Mr. Speaker, should I be asked for a meeting to discuss this report, it would be advisable that I myself have made a thorough study of it beforehand. I will certainly let the Union know what we think of this report and of the errors to be found in it.


Mr. Speaker:: Order, please. I note that there are a number of hon. members who wish to ask supplemental

ies on this subject. We will return to it later; for the moment the Chair will recognize the hon. member for Richmond.



AGRICULTURE


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to put a question to the Minister of Agriculture.
In view of the fact that the last time the government bought turkeys to alleviate hunger in various countries their purchase did much to eliminate surpluses of that product in Canada, can the minister tell us whether the government intend to make further purchases in order to assist the producers' association which again this year is experiencing surpluses?


Hon. H. A. Olson (Minister oi Agriculture):: Mr. Speaker, there has been a significant improvement in the returns to producers from the sale of turkeys since we introduced this program. We do not have any current plans for an addition to that program.


Mr. R. E. McKinley (Huron):: As a supplementary question, Mr. Speaker, can the Minister of Agriculture advise us with respect to the parts of Canada from which these turkeys were purchased?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker, I can give all the details respecting that. I do not have them with me now but I would be very happy to supply them.


Mr. Speaker:: Before going to the next question the Chair will recognize the hon. member for York South who has indicated he has a supplementary to the previous question.



POST OFFICE


Mr. David Lewis (York South):: Mr. Speaker, I wish to direct a supplementary question to the Postmaster General. In view of the problems that have existed in the Post Office for some years in respect of labour relations, and in view of what I am sure is the very earnest attempt he is making to improve the morale of employees, will he give consideration to making the introduction of technological change in the Post Office at least subject to the requirements suggested in the bill to amend the Canada Labour (Standards) Code so that there may be discussions with the unions concerned before automation is introduced by management?
December 10, 1971

[ Translation]


Joseph Julien Jean-Pierre Côté: Mr. Speaker. we must say in the first place that in a department such as mine with over 50,000 employees, there will always be some problems. We have to try in the public interest to settle them as soon as possible, but there will always be some.
As for automation and mechanization at the Post Office Department, clause 31.05 of the last collective agreement provided that 90 days after the signature of the agreement, a committee made up of labour representatives and officials of the department would be organized. We have asked the labour representatives to come and meet us in order to establish that committee as soon as possible, but we have never obtained any answer in that connection,


Mr. Speaker:: Order, please. The Chair will recognize one last supplementary by the hon. member for York South. Then we will have to go to the next question. I will recognize immediately thereafter the hon. member for Parry Sound-Muskoka.


David Lewis: Mr. Speaker, following up on the question and answer, may I ask the Postmaster General whether, in view of all the problems involved in such a large labour force, he would reconsider the notion that every post office has to be automated, for example, in a province like Newfoundland where the Department of Regional Economic Expansion is trying to create jobs and where the post office automation reduces the number of jobs very considerably?


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


Joseph Julien Jean-Pierre Côté: Mr. Speaker, I must point out that this is one of the erroneous assertions which are contained in the report made by the director involved. Automating all post offices is certainly out of question.


Mr. Speaker:: Order, please. I believe we are getting into the realm of debate at this point. The hon. member for Parry Sound-Muskoka.



POLLUTION


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the Minister of Transport. In view of a report released yesterday by the Niagara regional health unit concerning the dumping of human waste into the Welland Canal by foreign ships, does the government propose to take any action to prevent such discharges?


Donald Campbell Jamieson: Very definitely, yes. I thank the hon. member for giving me notice because I can tell him I spoke to our officials on
Inquiries of the Ministry
this matter and no recent incidents have been reported to them. If such incidents can be verified there exist strict laws against this type of pollution. If anyone has evidence of such incidents I would be grateful if they would pass it along to me. I am told there may be one on the way.


Gordon Harvey Aiken: Mr. Speaker, it is my understanding there are at present no regulations of the department which prevent the dumping of human sewage into Canadian waters. Does the minister intend to proceed with the passing of regulations under the Canada Shipping Act in order to eliminate such discharges?


Donald Campbell Jamieson: Yes, Mr. Speaker. I think the hon. member would agree, when he speaks about Canadian waters, that this excludes the canal. We do have very strict regulations, with regard to the canal sections of the waterways. However, there are no regulations for the Great Lakes themselves. We are examining this in the hope that we can put regulations into effect.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I have a question for the Acting Secretary of State for External Affairs. On November 29 the minister told me in the House that the government was advising nationals in both East and West Pakistan to be prepared to move. Can he indicate when the Canadian government first took practical steps to remove nationals from East and West Pakistan and can he further indicate how many Canadians are known to be in Dacca and Islamabad and what the plans and prospects are for their safe evacuation?


Mr. Paul St. Pierre (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, the movement to send planes into Islamabad and Karachi airports was taken two or three days ago. Preparations were made. Canadian nationals were told orally approximately two weeks ago that it might be wise for them to prepare to leave. There are figures available concerning the number removed last night from Karachi which I could give to the hon. gentleman. There were 241 passengers including 65 Canadians, 59 Germans, 31 Americans, 18 Netherlanders and 15 British.


Heath Nelson Macquarrie: Mr. Speaker, on this very important matter I would ask the parliamentary secretary if he can advise what steps are being taken in respect of Canadian nationals in Dacca where the situation is very serious, and how many Canadians are still in the Karachi, West Pakistan area and when will they be evacuated?


Paul St. Pierre: In respect of Dacca, as the hon. gentleman knows, there have been two attempts to send a Canadian Hercules aircraft there under United Nations auspices. Both attempts have been turned back, the second time by gunfire which exploded near the Canadian aircraft over the Bay of Bengal. It is hoped that arrangements will be made for this plane to land safely and remove a few Canadians. There are approximately 40 in East Pakistan. Many are missionaries. The latest infor-

December 10, 1971
Inquiries of the Ministry
mation we have is that many do not wish to be removed but some Canadians do wish to be removed from Dacca. It is also hoped that the Canadian Air Force 707 will be able to proceed safely to Islamabad to remove Canadians there. I do not have the number of Canadians in Islamabad, Mr. Speaker.


Mr. H. W. Danforth (Kent Essex):: Mr. Speaker, I should like to direct my question to the Minister of Industry, Trade and Commerce. The minister indicated in answer to a previous question by my leader that there was no relationship in dealing with the auto pact and the Canadian currency problem. Since it is known that there were negotiations on the auto pact while the governmental representatives were in Washington, will the minister now indicate if concessions were not indeed made with regard to the Canadian safeguards, or will we have to wait for a government announcement after the conclusion of the meetings of the ten Ministers of Finance?


Jean-Luc Pepin: Mr. Speaker, I think in all honesty I can say that, no conclusions having been reached, no concessions have been made. I said very frankly the other day that the automobile agreement was part of the discussions with the United States. I said we were trying to find a balanced package of irritants and that this negotiation was still going on, but it is not related to the removal of the surcharge, nor is it related to the evaluation of the Canadian dollar.


Harold Warren Danforth: Since the minister has continually maintained to the House that there have been continuing discussions between United States officials and Canadian officials on this very important matter, can the minister indicate when in his opinion a conclusion will be reached concerning this specific problem that is of interest to so many workers in this country?


Jean-Luc Pepin: Mr. Speaker, I could not say because this conversation is going on now. When the conclusion is reached I shall announce it in the proper way and I will defend it also.


Robert Lorne Stanfield: Mr. Speaker, the minister has spoken on a number of occasions about a balanced package of irritants. Would it be more correct to say now that there are two separate packages of irritants, one being currency levels and that sort of thing. If there are two packages of irritants, what irritants are included in the same package as the auto pact and are being discussed within the limits of that pact?


Jean-Luc Pepin: Mr. Speaker, if one wanted to be terribly clever one could suggest there are indeed three areas. There is the package of international negotiations, in which the Minister of Finance is deeply involved, having to do with currency and trade matters in general. There is a more restricted discussion on irritants between Canada and the United States on so-called irritants. I indicated the other day quite simply what some of the irritants were. The main United States and the main Canadian irritants are well known. Third, there is the discussion of the automobile agreement which is outside the second package I have indicated. All these things will be brought together sooner or later and will be announced in the proper manner.


Mr. Speaker:: Order, please. I have to remind hon. members that we seem to be engaging in a debate on some of these questions. The questions and the answers are long and if we continue in' this way we will spend most of the question period in mini-debates. I suggest that perhaps we should try to limit the length of the questions and answers.


Robert Lorne Stanfield: Mr. Speaker, I do not want a lecture in philosophy or anything of that sort from the minister. I just want to know from him whether the auto pact is completely distinct from these other irritants of which the minister has spoken. Is there no other irritant that is being discussed in the context of or in association with the auto pact?	.


Jean-Luc Pepin: I think it is the hon. member who is being the philosopher this morning. To me the number of packages is not too important. It is well known that the main U.S. irritants are the automobile agreement, the defence-sharing agreement and the tourist allowances. This is well known; it is all over the press it is no secret. It is known also that we, Canadians also have a number of irritants. They have to do with-


Mr. Speaker:: Order, please. I have to interrupt the minister. It seems to me that day after day we have the same questions and the same answers which take up so much of the question period.


Mr. Lincoln M. Alexander (Hamilton West):: My supplementary question will be short and it follows the course of the questioning of the Leader of the Opposition. Because of the interest of the province of Ontario, can the minister advise whether officials and representatives of that province will be taken into the minister's confidence continually, particularly before any definite decision is reached, in order that the minister may have the wisdom of the province of Ontario on this very important matter?


Jean-Luc Pepin: Yes, we have the wisdom of the government of Ontario through the premier of Ontario who sent a telegram which, incidentally, was misquoted by the hon. member on one occasion in the House, and I have also had
December 10, 1971

a phone call with Mr. Grossman, the Minister of Industry. One of his officials also met one of my officials to discuss this subject in depth a few days ago. So the contact is very intimate on this matter between the government of Ontario and the federal government of Canada.



TRANSPORT


Mr. Andrew Brewin (Greenwood):: My question is for the
Minister of Transport. In light of the importance of the billion-dollar Metro Centre development project initiated by the railways and in light of the federal government's concern with certain aspects of the problem such as transportation, housing and pollution, has the government set up a federal intergovernmental committee to work with the local authorities and with the provincial government in respect of the problems arising out of this development?


Donald Campbell Jamieson: I am
not sure that I could call it a formal working party, either intergovernmental or interdepartmental, but I can assure the hon. member that in so far as the transportation aspects of the project are concerned we have been consulting constantly with parties to the project. In addition, we are prepared to discuss our role with any group that may wish to do so.


Francis Andrew Brewin: Has the minister or his department undertaken, either themselves or through a consultant, a study of the transportation needs of the Toronto centre region, and when is it expected that the study will be completed?


Donald Campbell Jamieson: I would guess-and this is just a guess- that there are at least six such studies under federal auspices under way at present, each one relating to a different aspect of metropolitan Toronto transportation. Perhaps the most recent one, which will give the hon. member an example, is the co-operative effort with the provincial and municipal governments with regard to a more effective utilization of existing railway lines into the city for commuter traffic.



AIRPORTS


Mr.   Gaetan-J. Serre@Nickel Belt: I have a question for the Minister of Transport. Following the minister's statement this morning regarding financial assistance to municipally operated airports, I would like to refer to a question I asked in September regarding the construction of a new terminal building at Sudbury. Can the minister tell us whether his department is prepared to offer financial assistance or to call tenders for the construction of such a terminal in Sudbury?
Inquiries of the Ministry


Mr. Speaker:: Order, please. I suggest to hon. members that if we start asking questions about the construction of terminals in too many cities across the country we will get into trouble. The minister may reply briefly, but I see other members to my left who are anxious to ask similar questions and we will probably spend the rest of the question period in deciding whether terminal buildings will be constructed.


Donald Campbell Jamieson: Mr. Speaker, in these circumstances, and because the hon. member did ask for this information before, may I say that this actual project does not come completely within the announcement I made this morning. It was already scheduled before, but this will help the municipality and my estimate is that tenders will be called in 1972.



ACQUISITION OF MUNICIPAL FACILITIES BY DEPARTMENT OF TRANSPORT

Lincoln MacCauley Alexander: I have a supplementary question regarding the statement made by the minister concerning assistance to municipalities. Does the statement include any effort on the part of the Department of Transport to take over airports in municipalities, because I think the minister's statement really involved peanuts in terms of money, and I am wondering whether in fact there is any room-


Mr. Speaker:: Order, please. The minister may attempt to reply briefly to the hon. member's statement.


Donald Campbell Jamieson: If the
hon. gentleman has in mind Hamilton airport, it is in a different category. We are talking with them all the time and I am sure we will be giving considerably more than peanuts in that case as in many others.


Mr. Speaker:: Order, please.



AGRICULTURE


Léonel Beaudoin: Mr. Speaker, I should like to put a question to the Minister of Agriculture.
Since Canada is now purchasing butter from the United States and our dairy producers have to pay a fine when they exceed their production quotas, could the minister say whether his department is considering any measures in order to remedy this situation?


Horace Andrew (Bud) Olson: Mr. Speaker, several weeks ago there were discussions between the Canadian Dairy Commission and the milk marketing authorities in those provinces which have market-sharing quotas to see if we could achieve greater Canadian production.


Mr. Romuald Rodrigue (Beauce):: May I ask a supplementary, Mr. Speaker?

December 10, 1971
Inquiries of the Ministry
Would the Minister of Agriculture be prepared to recommend to the Canadian Dairy Commission that it increase eligible quotas for dairy producers?


Horace Andrew (Bud) Olson: That is one possibility that we are considering, Mr. Speaker.



POST OFFICE


Mr. Craig Stewart (Marquette):: My question is for the
Postmaster General. The department announced that to improve service, post office lobbies would be open 24 hours for boxholders, but because of vandalism some lobbies are now being closed during evening hours. What action is the department planning in order to have 24-hour service resumed, and has the department considered installing cameras in lobbies to eliminate vandalism?
Hon. ]ean-Pierre Cote (Postmaster General): I will take that question as notice.



TRANSPORT


Mr. Lome Nystrom (Yorkton-Melville):: My question is for the Minister of Transport or some other minister to whom it may pertain. In view of experiments in various parts of Canada with liquefied natural gas as automobile fuel in an attempt to cut down environmental pollution, can the minister say whether or not his department is involved in any of these experiments and, if not, is it considering any type of assistance to experiments in this area?


Donald Campbell Jamieson: think that all I can do, with your indulgence, Mr. Speaker, would be to say yes, we are involved in these experiments through the transport development agency. If my hon. friend would like to see the tomes that have been written on the subject I would be very glad to make them available to him.



TOBACCO-PROSPECT OF SALES TO CHINA AND JAPAN FOLLOWING MISSION

Mr. William Knowles (Norfolk-Haldimand):: My question is for the Minister of Industry, Trade and Commerce. In view of the fact the minister sent a representative of his department with a trade mission from the Ontario Flue-cured Tobacco Growers Marketing Board to China and Japan in an effort to sell tobacco, has that representative reported to his department and, if so, what are the prospects of a market in that area?


Jean-Luc Pepin: The information I have, Mr. Speaker, is that this promotional effort is continuing and there are no concrete results to be announced yet.


William David Knowles: In pursuing this matter further is the minister arranging a meeting now or soon with representatives of the marketing board in order to follow up any possible ways of promoting the sale of Canadian tobacco in the Orient?


Jean-Luc Pepin: If the hon. member has in mind a meeting between the minister and the group, I might say that I have had a number of these in the past. I am not aware that the group has requested one now but if they have I shall do my best to meet them.



INDIAN AFFAIRS


Gerald William Baldwin: Mr. Speaker, some time ago I asked the Minister of Indian Affairs and Northern Development if the government intended to intervene in a pending appeal to the Supreme Court of Canada involving the Alberta case of Regina v. Cardinal and the upsetting by the appellate division of the decision of two previous courts. Does the government intend to intervene in this case to support the traditional treaty rights of the Indians and to oppose the existing judgment of the appellate division of Alberta? Does the government also intend to help finance the costs of the Indian who is appealing?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, this matter has not been brought to my attention. I will make inquiries and give the hon. member a reply next week.


Gerald William Baldwin: I should like to ask a brief supplementary, Mr. Speaker. In considering this matter will the minister bear in mind that the appellant is named Cardinal and is closely related to one of the leaders of the Indian movement in the province of Alberta?


Joseph Jacques Jean Chrétien: Mr. Speaker, I will inform the hon. member, but this fact will in no way influence my decision.



HIGHWAYS


Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the most important but rather neglected Minister of Public Works.
December 10, 1971


An hon. Member:: Senator Laing.


An hon. Member:: Governor Laing.


Erik Nielsen: Can the minister advise the House on the progress being made in the negotiations going on with officials of the United States with respect to the paving of the Alaska highway and, if those negotiations are not making progress, is the Canadian government considering lowering the amount they have proposed as the share to be contributed by the United States in the cost-sharing proposal?


Hon. Arthur Laing (Minister of Public Works):: Mr. Speaker, we have had two meetings with our American counterparts. As I have reported to the House already, although I think probably when the hon. member was not here-


Mr. Mahoney:: That is not hard to do.


Arthur Laing: -the second meeting was not very helpful to us. I think a report is being made to the President of the United States on which he might make an announcement before the end of this month. I think the term "paving of the Alaska highway" is incorrect; we are talking about improvement of the Alaska highway. We are still hopeful that the Americans will accept part of the burden they are placing upon us, because 70 per cent of the traffic is theirs.



AIRPORTS


Mr. lames A. McGrath (St. John's East):: I have a question for the Minister of Transport arising out of his announcement in the House today regarding aid to municipal airports. What program or policy does he intend to implement to provide aid for the building of airstrips in remote or rural parts of Canada where municipalities do not exist? I am thinking of an announcement the minister made in Newfoundland at an economic conference in which he indicated that such aid would be forthcoming to help build airstrips and I should like to know what policy he intends to implement?


Donald Campbell Jamieson: Mr. Speaker, when the hon. gentleman gets the criteria on sharing which I think will be in the mail boxes of all members today or distributed in some way, I think he will see that this situation has been covered and that these airstrips will come under the classification of remote airstrips and we will be able to help with them.


EXTERNAL AFFAIRS
[Stage Direction]
Mr. Randolph Harding (Kootenay West) Mr. Speaker, I have a question for the Minister of Industry, Trade and
Inquiries of the Ministry
Commerce. Would the minister inform the House whether, during the recent discussions in Washington with United States cabinet members, he included in the list of irritants Canadian opposition to the increased volume of oil tanker shipments along the west coast and especially in the Strait of Juan de Fuca which will result from the construction of the TAPS pipeline?
Jean-Luc Pepin: That is not specifically a trade matter, Mr. Speaker, and consequently was not included in the discussions on trade.



THE CANADIAN ECONOMY


Mr. Lloyd R. Crouse (South Shore):: I have a question for the Minister of Industry, Trade and Commerce. In light of the promise made last winter by the chairman of the Prices and Incomes Commission that research studies on the causes of inflation would be made public by the end of 1971, can the minister assure the House that these findings will be made available to the House before the Christmas recess?


Jean-Luc Pepin: I shall bring this to the attention of the minister who reports to the House for the commission, Mr. Speaker.



MAINTENANCE OF EQUITABLE EXPORTS TO UNITED


Mr. Jack McIntosh (Swift Current-Maple Creek):: should like to direct my question to the right hon. Prime Minister. In light of the current reduction in Canadian exports of grain to European Common Market countries, is it the intention of the Prime Minister to impress upon Mr. Heath during his visit to Canada next week the importance of maintaining equitable grain exports to these countries and, in particular, to the United Kingdom, or will that subject be left off the agenda altogether?


Pierre Elliott Trudeau: An agenda has not been set out for this meeting, Mr. Speaker, but this type of representation has been made to Britain and to the European members of the Common Market on various occasions by the Minister of Industry, Trade and Commerce and by the Secretary of State for External Affairs. I am sure Prime Minister Heath and myself will be talking about Britain's entry into the Common Market and so on. He will probably want to point out to Canada that this is the year in which we have had the largest export of grain in our history.
Inquiries of the Ministry

December 10, 1971



INDUSTRY


André-Gilles Fortin: Mr. Speaker, I would like to ask a question to the Minister of Trade and Commerce.
Recently "Les jutes de Victoriaville" shut down because of too many Japanese imports, as everybody knows. The minister is familiar with this industry and I would like to ask him if he has already made an inquiry or if he intends to make one in order to find the real causes. Is he contemplating any measure to help this industry?


Jean-Luc Pepin: Mr. Speaker, I would be very pleased to accommodate the hon. member and to make the inquiry suggested if it has not already been made.



ATOMIC ENERGY


Mr. Maurice Foster (Algoma):: I have a question for the Minister of Industry, Trade and Commerce, Mr. Speaker. In light of the policy proposal statement of the United States Atomic Energy Commission to continue the embargo on the enrichment of Canadian uranium for the United States market, has the Canadian government made representations to that agency inasmuch as the deadline is December 13, next Monday?


Jean-Luc Pepin: Mr. Speaker, I was informed that this had been done but I shall have to check to see when it was done and where it was directed. I am not sure if it was directed to the government of the United States or to the commission itself, but I might remind the hon. member that our opposition to the de facto uranium embargo has been repeatedly expressed to the United States government.


Maurice Brydon Foster: Mr. Speaker, would the Minister of Industry, Trade and Commerce make public the representations that have been made to the United States government?


Jean-Luc Pepin: I will look into that possibility, Mr. Speaker.



INQUIRY OF THE MINISTRY

Mr. Thomas M. Bell (Saint John-Lancaster):: Mr. Speaker, I should like to ask the Prime Minister if the reason for yesterday's Senate appointments was to balance any possible dissidence in the other place over the tax reform bill, particularly in view of the recent bravado?


Mr. Speaker:: Order, please.



TRANSPORT


Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: have a question for the Minister of Transport which I have been pressing for some time now. In light of the review of the excessively high freight rates presently existing in the prairie provinces that has been going on for over a year between the minister and his officials and officials of the prairie governments, is the minister in a position now or when will he be in a position to advise the House what action is to be taken with respect to this very serious matter?


Donald Campbell Jamieson: Mr. Speaker, the study with regard to the three provinces is moving along quite well. I believe I mentioned earlier that we had completed discussions with Saskatchewan and we have had representations from Manitoba. As the hon. member knows, there is a new government in Alberta and Messrs. Peacock and Dickie were here to see me three weeks ago. They want to review the material that has been achieved to date and put in a submission from Alberta.


EXTERNAL AFFAIRS
Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, my question is supplementary to that asked by the hon. member for Kootenay West. I should like to ask the right hon. Prime Minister whether on his recent trip to Washington he discussed in any way the Canadian concern about the proposed Alaska pipeline and west coast tanker service with the President of the United States and, if so, whether the President gave any indication that as the head of that country he was prepared to take measures to protect the Canadian environment and property?


Pierre Elliott Trudeau: No, Mr. Speaker, we did not discuss it.


Mr. Speaker:: Orders of the day.


Thomas Speakman Barnett: Was there any indication with regard to the pipeline-


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



GOVERNMENT ORDERS


Hon. E. J. Benson (Minister of Finance) moved: that Bill C-259, to amend the Income Tax Act and to make certain

December 10, 1971

provisions and alterations in the statute law related to or consequential upon the amendments to that act, be read the third time and do pass.
He said: Mr. Speaker,-


Gerald William Baldwin: This is the second book of Ben.


Edgar John Benson: -in moving third reading of this bill, I would like to pay tribute and say thanks to several persons: first of all, to members of all parties who were in the House Wednesday evening and who went without dinner to vote on the clauses and subclauses of this bill.


Gerald William Baldwin: I could not have held my dinner down.


Edgar John Benson: Secondly, may I thank all members of all parties who served on the Standing Committee on Finance, Trade and Economic Affairs and worked during the hot summer of 1970 turning out its report. The recommendations in that report formed the basis for the contents of Bill C-259.


Some hon. Members:: Hear, hear!


Edgar John Benson: Thirdly, I wish to thank those hon. members of this House, except the Tory members, who spent the summer of 1971 getting an understanding of this bill.


Gerald William Baldwin: That is rank discrimination.


Mr. Paproski:: The minister had better not say that in the next election campaign.


Lincoln MacCauley Alexander: Just wait until the Senate is through with you.


Some hon. Members:: Oh, oh.


Edgar John Benson: Next, Mr. Speaker, 1 wish to pay tribute to the members of the Senate Committee on Banking, Trade and Commerce who submitted a comprehensive report in the fall of 1970. About 50 of the measures contained in the legislation are the same or similar to the recommendations of that committee. That committee has also held hearings this fall while the bill has been in the committee of the whole in this House, and it has issued two reports which will be given serious study by the government. Next, I pay tribute to the government House leader and the House leaders of other parties who in September worked out a reasonable way for debating this lengthy and complex bill during the committee stage.


Gerald William Baldwin: Up to a point.


Edgar John Benson: Next, I pay tribute to those public servants in the Departments of Finance, National Revenue and Justice who over the past several years have worked long into the night and on weekends to bring about tax reform. Finally,-


Steve Eugene Paproski: Is this the minister's swan song?


Edgar John Benson: Finally, I pay tribute to my parliamentary secretary, the hon. member for Calgary South (Mr. Mahoney) who has been the pilot for this bill in the House.


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


Edgar John Benson: I had hoped to spend more time than I have in the House during the committee stage of the bill but the events of August made this impossible. I am fortunate that there has been such a steady hand around to rely upon.


Some hon. Members:: Hear, hear!


Edgar John Benson: I should also like to pay tribute to the hon. member for Gatineau (Mr. Clermont), the Parliamentary Secretary to President of the Treasury Board.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: Is this a mutual admiration society?


Edgar John Benson: And I should like to pay tribute to the hon. member for Edmonton Centre (Mr. Paproski) and send him over a pair of scissors.


Gerald William Baldwin: He might think that they have come from a member of an execution squad.


Edgar John Benson: I should like at this time, Mr. Speaker, to deal at some length with the proposal put forward by the Progressive Conservative party in a press release issued on November 14 to split the tax bill. The Conservative party's behaviour on tax reform from the beginning has been such that one might be forgiven for not taking such a proposal seriously. Hon. members will recall that when the white paper on tax reform was published, the Leader of the Opposition (Mr. Stanfield) raced across the country saying the government was planning to ram its contents through Parliament.


Gordon Harvey Aiken: Well, it did.


Edgar John Benson: He also said that I should not be believed when I said repeatedly that there would be changes. The Conservative party declined to vote either for or against the report on tax reform prepared by the Standing Committee on Finance, Trade and Economic Affairs.


Mr. Lambert (Edmonton West):: You are a liar. You are wrong. That is not so. I will tell you what happened.


Edgar John Benson: You abstained. The hon. member's party refused to vote for or against.


Marcel Joseph Aimé Lambert: That is hot air.


Edgar John Benson: At the same time, the Leader of the Opposition gloated about the Commons report and claimed victory over the government. Last February 18 he said:
That committee adopted about 80 per cent of the criticisms I had been making. There are still defects in the House of Commons report, but the concern now, of course, is how much of that report the Government will accept.
That is the report upon which the Conservative party did not vote. They took no part in the voting.


Marcel Joseph Aimé Lambert: This debate will take a lot longer if you go on like that.


Edgar John Benson: In other words, only a few months ago the Leader of the Opposition was not worried about the things he is claiming to be worried about today. He was worried about whether the government would adopt the Commons report.

December 10, 1971
Income Tax Act
As hon. members know, the government adopted the House of Commons report and went further. At the time of the budget debate in June, the Leader of the Opposition said:
We accept these changes and in association with others accept a considerable proportion of credit for having brought forward the suggestions and for having brought about the changes.
These are the changes upon which the Conservative party did not vote.


Some hon. Members:: Oh, oh.


Steve Eugene Paproski: What choice did we have?


Edgar John Benson: Now, the Leader of the Opposition is asking that the bill be split. He is asking, in effect, that the portions of tax reform on which the most time and effort were expended be postponed indefinitely. So, perhaps one might be pardoned for taking the latest proposal with a grain of salt. Nevertheless, I did examine the proposal put forward in the Conservative press release of November 24. That proposal was reflected in the amendment moved here on Wednesday afternoon last.
The first question I asked myself was, what is to be achieved by that suggestion? Would it simply mean more debate? Would it make it likely that major portions of the unproclaimed parts of the bill would be voted down when a resolution was moved to implement them?


Gerald William Baldwin: On a point of order, Mr. Speaker, of course we are delighted to hear this.


Edgar John Benson: That is fine.


Gerald William Baldwin: We wish we could have heard the minister earlier on this subject. The minister has been around this place long enough, and he has been in cabinet long enough, to know that he cannot comment on the decision that the House has taken, a wrong decision in this case.


Edgar John Benson: I am not commenting on the decision; I was commenting on a proposition. I asked myself, Mr. Speaker, as I said whether it would simply mean more debate and whether it would be likely that major portions of the unproclaimed parts of the bill would be voted down when a resolution was moved to implement them. Also, would it mean that there would be further amendments to the major portion of the bill that was unproclaimed. Well, it would not mean more debate now, for the press release says that if the bill were split, Parliament could turn to other matters.
The proposal calls for more federal-provincial consultation. I doubt, Mr. Speaker, whether there has ever been an issue on which there has been more intergovernmental consultation.


Gerald William Baldwin: Abortive consultation.


Edgar John Benson: It was a principal item on the agenda of several meetings of ministers of finance and first ministers and was discussed thoroughly on each occasion. The provinces had a profound effect on the legislation.


Gerald William Baldwin: That is not what they say. According to them, that is not correct.


Edgar John Benson: It is doubtful if eleven governments could agree on everything in a bill of this size, no matter how often they were to meet.


Gerald William Baldwin: That is not correct.


Edgar John Benson: But the provinces are sufficiently satisfied to renew the tax collection agreements.


Gordon Harvey Aiken: What else could they do?


Edgar John Benson: The federal government has been responsive to the problems that the provinces will have in adapting to the new system, and responsive to their requests for change in the future. For instance, we have offered to collect death duties for a three year period for those provinces wishing to join in a common scheme. We extended the revenue guarantee from three to five years.


Gerald William Baldwin: You made it too expensive to die.


Edgar John Benson: We did that to remove the uneasiness felt by some provinces. They felt that they might suffer financially. On the question of tax credits, we have promised to consider positively any schemes the provinces wish to put forward. The press release also says that a delay would allow Parliament and the government to consider more fully the relevance of so-called "questionable sections" in the present Canadian economic context. This presumably refers to those parts of the bill dealing with international income. As hon. members know, the bulk of these provisions do not come into effect until 1976, and none of the important changes come into effect until 1973. Therefore, there is plenty of time to make changes if circumstances warrant.
I should also say that following the announcement of measures to deal with the U.S. economic problems in August, the government did re-examine this bill. It decided that as a long-term tax reform, this measure is appropriate. If particular actions by the United States warrant specific actions, this government will not hesitate to take them.


Some hon. Members:: Hear, hear!


Edgar John Benson: The Conservative party also thinks that splitting this measure would provide an opportunity to clarify the legislation. I think that adoption of the Conservative proposal would actually frustrate the process of clarifying the bill. The only way the imperfections in this legislation will come to light is through the actual experience of taxpayers and their advisers reading and using the new act in relation to particular transactions and situations.
They will not have time to do this if we thrust upon the business community what the Conservative party is proposing. If part of the bill were suspended for several months into 1972, many taxpayers, particularly in the business community, would simply not know how to behave. They would not Know whether there are further amendments coming which could reach back and affect transactions taking place between January 1 and the date of the tabling of an amendment. They would not know

December 10, 1971

whether to assess their position under the 1948 Income Tax Act or under the 1972 reform bill.
By the end of this coming January, there will be about 15,000 corporations which will have completed their 1972 fiscal years, and by the end of this coming February this number will be close to 30,000. Would these companies report their income on the old or the new system if the Conservative proposal were adopted? Similarly, there are thousands of partnerships with year-ends ending early in 1972 which would face the same problem.
During the so-called hiatus period, difficult problems of administration and compliance could arise. For example, would it be open to taxpayers to assert that they have no "liability" in respect of a transaction or an event because the bill has not been put into effect. Of course, this could have arisen on a small scale many times when budgets were announced and the legislation was not approved until months later. But the difference here is that the country has never faced a budget proposal of such an order of magnitude. Every taxpayer is affected, and every section of the existing act is affected.
I will provide the House with specific examples of the kind of uncertainty that would arise had the particular amendment proposed by the Conservative party passed. How does one deal with interest paid by a corporation to purchase shares of a corporation during the hiatus period? Has a taxpayer who has disposed of capital property during the hiatus period realized a capital gain subject to tax? Under which rules does a corporation operate during the hiatus period with regard to its surplus accounts, that is, the old or the new rules relating to corporate distributions? With regard to taxpayers making payments to non-residents, for example, withholding tax, which rules apply? Under Bill C-259 there are a number of transactions, particularly in the corporate sector, which require that forms or elections be filed with the Department of National Revenue. If the bill is not proclaimed, the forms will not be available and, therefore, how can a corporation conduct its business?
I think that these examples should be more than sufficient to illustrate the confusion that we would rain down upon the business community. To create this kind of confusion in present economic circumstances would not only be irresponsible but dangerous to the Canadian economy, particularly at this time.


Some hon. Members:: Hear, hear!


Edgar John Benson: Last spring the Leader of the Opposition spoke of the uncertainty that was present in the business community because the tax legislation had not been produced. I believe that the June budget was welcomed, not just for its contents but because finally businessmen would know where they stood.
The national accounts for the third quarter show that real GNP, corrected for price factors, advanced at a seasonally adjusted annual rate of 6.6 per cent in the third quarter.


Some hon. Members:: Hear, hear!


Edgar John Benson: This compares to the United States where the figure was 3.9 per cent. Our economy is growing. But we have the fastest growing labour force in the western
Income Tax Act
world and unemployment is still too high. I do not want to thrust upon the business community a proposal like this that would divert their attention from the most important job at hand, creating job opportunities for Canadians.


Some hon. Members:: Hear, hear!


Edgar John Benson: There are a number of areas that the government is actively studying at this time, and I want to take this opportunity to give the House some indication of our present thinking. As I have said on a number of previous occasions, there will undoubtedly be a number of important amendments introduced next year and I think it only fair that people should be aware of the general direction of our planning.


Gerald William Baldwin: Does the Senate have a copy of that?


Edgar John Benson: If they read Hansard. I have had numerous representations concerning the deemed realization of a capital gain on the gift or bequest of property other than cash to charities and other tax exempt organizations such as museums and art galleries. I am concerned and sympathetic about this issue, but it raises two problems.
First is the possible abuse of the tax system similar to that experienced in the United States for many years. Ultimately the U.S. treasury was forced to enact complicated anti-avoidance legislation in 1969 to curtail the abuses by charitable organizations. I would not like to see a comparable situation develop in Canada. Second is the problem of equity as it relates to the taxpayer who wishes to transfer property as opposed to the taxpayer making a cash gift. The former individual is transferring "tax paid" cash; the latter is avoiding his potential capital gains tax liability.
Inasmuch as capital gains will accrue slowly after the start of the new system, I believe that we have some time to look further at this problem and at ways to permit tax free gifts to tax exempt organizations, and yet to avoid the U.S. experience. I am hopeful that we will soon find an answer to this problem. Many members of employees' profit sharing plans are troubled by the proposed treatment of distributions of property in specie, where such property has an accrued gain. Under the proposed rules, the capital gain is deemed to be realized. It has been argued that in the case of an employee's profit sharing plan, there should be a tax free "roll-out" of accrued but unrealized capital gains.
I am in general agreement with this suggestion, but in previous attempts to deal with this problem we have encountered severe administrative problems. However, I am confident that we will be able to solve the administrative problems early next year. Again, I believe that the situation can stand over until next year because of the slow maturation of capital gains.
There are two points in relation to a deferred profit sharing plan which we are examining closely and I expect to be able to propose amendments early next year. First, amounts standing to the credit of an employee on January 1, 1972, as opposed to amounts vested, should be eligible for averaging under Section 36 of the old act, and I believe that they should and will be in the future. Second, an employee who takes advantage of the Section 36 averaging under the former act should not be precluded from

December 10, 1971
Income Tax Act
taking advantage of the new forms of averaging in respect of current contributions. As the bill now reads, if a taxpayer who is leaving the country and is therefore subject to deemed realization of his capital property elects to defer payment until he actually disposes of his property, he is subject to tax in the year of disposal on his world income as if he were a resident in Canada. I hope we shall be able to work out a different rule with less harsh consequences next year.
As I said in the House on October 13, we have received a number of representations relating to the passive income provisions-that is foreign accrual property income-and it is clear that some changes in this area should be made before the provisions take effect. They start in 1973 and go on to 1976.1 said at that time:
However, we have concluded that it would be premature to introduce changes at this time before all the representations have been received and given the study they require.
There are two particular points I wish to make about this matter. First, we are re-examining the de minimis rule which at present excludes only $500 of income, and we hope to develop a more appropriate rule. Second, many taxpayers have expressed concern that rental income, interest income and capital gains on property used in connection with an active business will be subject to the foreign accrual property income rules. The bill is quite clear on this point, namely, that such income will not be treated as foreign accrual property income if it is earned in connection with the carrying on of an active business. I want to reassure the House on this point. Frankly, people are misreading the bill in this connection and those who urge that the term "active business income" be precisely defined are arguing against their own best interests. If the term is defined, it is bound to be defined narrowly. As it now stands, there is room for the taxpayer to argue about specific factual situations.
Finally, I want to refer to the many representations I have received in connection with a relaxation of the rules relating to roll-overs and corporate reorganizations. This is a very complex area, and I have instructed my department to carefully review the proposed rules under Bill C-259 to see if they can be extended without undue prejudice to the system as a whole. I am hopeful that early next year we will have some positive steps to recommend to the House in this area, after we have had a general study of the matter and have seen the present rules in operation.
Mr. Speaker, I think we have achieved a good deal from the decade-long debate on tax reform. For example, there are increased exemptions and improved deductions for wage and salary earners and retired persons. For the first time we will have a capital gains tax. The taxation of corporations and their shareholders has been improved. We have retained substantial incentives for the mining and petroleum industries but directed the incentives toward benefitting Canadians more. There are improvements in the taxation of business and property income. There is, I believe, a general consensus in the country that this represents a good reform. This was reflected by the voting here on Wednesday evening. Out of 293 potential votes, there were only 29 standing votes and on most of these there was at least one opposition party voting with
[Mr. Benson.J
the government. On only six votes was the government standing alone.


Marcel Joseph Aimé Lambert: Absolutely ridiculous.


Edgar John Benson: We will now have one of the best tax systems in the western world. As soon as everybody starts working within it, we can make it even better.


Marcel Joseph Aimé Lambert: Mr. Speaker, one would hope that the minister might remain so that he could hear some comments on what I would call the most fatuous speech we have ever heard. One would be tempted to reply in kind, but I would say that all the hon. gentleman's preliminary remarks with regard to the conclusions of the finance committee in 1970 were deliberately wrong.


Colin David Gibson: Oh, come on.


Marcel Joseph Aimé Lambert: If he wishes also to include during that time the wholesale platooning through the committee of Liberal backbenchers who had attended very few sittings and who were assigned to vote, and who voted upon the recommendations of the committee-we could point thqm out-


Patrick Morgan Mahoney: Read the record.


Marcel Joseph Aimé Lambert: We could do that. We could go through the record and see who were the ones who were on the committee and who were not. I say this, too, as far as this so-called highlighting-


Colin David Gibson: It was highlighting.


Marcel Joseph Aimé Lambert: The hon. member for Hamilton Wentworth (Mr. Gibson) usually makes those noises from that great vacuum which exists between his ears.


An hon. Member:: Ear, ear.


Marcel Joseph Aimé Lambert: He not only makes them against the rules, but he-


Colin David Gibson: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. Laniel):: The hon. member for Hamilton-Wentworth rises on a point of order.


Colin David Gibson: It ill becomes the hon. member to make the statement he did. He has nothing from the neck up.


Marcel Joseph Aimé Lambert: We have always understood the great contribution made to our debates by that hon. member.
I will say this for the edification of the minister who likes to highlight this business of the final vote in the committee. Let him recall that all the opposition members associated with me on the finance committee in connection with that report came from distant parts of the country. The final vote came toward the end of the week when they had to be in their constituencies.


Some hon. Members:: Oh.


Marcel Joseph Aimé Lambert: Alright; this is fine. The minister lives in central Canada, and only central Canadians from the Liberal party were on the committee.
December 10, 1971


Edgar John Benson: The Liberals stayed but the hon. member did not vote.


Gerald William Baldwin: On the same point of order, Mr. Speaker, we all know that the government members are here because the Prime Minister told them to be here.


An hon. Member:: What did Stanfield tell you?


The Acting Speaker (Mr. Laniel):: Order. The hon. member for Edmonton West should be allowed to make his speech. Some of his remarks may be objected to by other members, but those members can take the floor later during the debate and make their views known.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: I will just tell the minister that if he had known there were so many central Canadian members taking part in the final vote, members who had no other interest but to be at that final vote, he would also have known that the members of our group were catching aircraft at the noon hour on that very day.


Some hon. Members:: Shame.


Marcel Joseph Aimé Lambert: Alright; all those catcalls come from members across the way who sit in their comfortable pews.


Mr. Francis:: We are in the House of Commons.


Marcel Joseph Aimé Lambert: Oh, yes. That remark comes from the hon. member for Ottawa West (Mr. Francis). If you wish to avoid these situations, you will have to arrange the flight times of communicating flights out of Ottawa. Don't start talking about the difficulties of travel to people who come from the far reaches of the country.


Patrick Morgan Mahoney: You were there.


Marcel Joseph Aimé Lambert: I abstained because I knew very well that the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney) would say that we all voted in favour of the blessed report. There are lots of things in the report I do not like, and in using my right to abstain I exercised the same right as other hon. members who voted either yes or no. I exercised a far wiser option than those members who came into the committee simply because they were asked to and voted on something they knew nothing about. They were the blessed sheep who were trotted in here. The final part of the committee hearings was a travesty.
If the minister wants to get into this kind of debate, then we will answer him in kind. So far as his interpretation of the amendment that I put forward last Wednesday is concerned, which was, as indicated earlier, the subject matter of discussion between the House leaders, the minister has given a deliberate distortion of its effect. The President of the Privy Council (Mr. MacEachen) knows the interpretation to be put upon it. There is no such thing as an effective date of January 1, 1972. On the other hand, all these so-called difficulties that were trotted out by the Minister of Finance arise simply from his failure to read and to understand the amendment. The effective date in law can only mean the date of the proclamation, not
Income Tax Act
January 1, 1972. It is only the minister's insistence on January 1, 1972 that makes him say what he said.


Colin David Gibson: Next point.


Marcel Joseph Aimé Lambert: I hope that the hon. member is going to have something to say in this debate, too. The minister insists that in its vote on Wednesday night the committee of the whole gave approval to much of the bill. There is no way that we were going to insist on a standing vote on every clause. The minister should include all those clauses on which "on division" was called, all those on which there had been prior votes. There were some 130-odd sections that had been called prior thereto, and some of the votes on those had been on division. The minister's words result from the glibness of some speech writer who thought that he was going to make some sort of political hay out of a voting situation the other night that was unparalleled in the history of this House. If the opposition had insisted on a standing vote on each clause on which there was to be a division, the committee would have been here until three o'clock in the morning.


An hon. Member:: What is wrong with that?


Marcel Joseph Aimé Lambert: We are not saying that it would have hurt government members any more than it would have hurt members of the opposition. The point is that it is traditional to call "on division" as an indication of opposition.
The minister tried to give the impression that there were only 29 occasions during this evening when there was a formal division, that on six of those occasions the opposition were together, and that this shows that the bill had the uniform approval of the committee of the whole. As a matter of fact, the minister has not got the support of the country in rejecting the amendment moved by the Leader of the Opposition (Mr. Stanfield) on clause 1. The great majority of newspapers that back the Liberal party are opposed to the minister's position.


Mr. Haidasz:: They are Conservative editorial writers.


Marcel Joseph Aimé Lambert: No, they are newspapers that normally support the Liberal party; yet each and every one of them condemned the government for using the guillotine. They also insist that there should have been a division of the bill. The minister should see the amount of mail I am getting now from people who insist even yet that the bill be divided, but not in the sort of bogus way the minister has suggested.
Let me read the motion so we can see what its effect will be. It is not January 1, 1972 that is to be the effective date; the effective date is the date of the proclamation.


Edgar John Benson: It is the date of the tax changes.


Marcel Joseph Aimé Lambert: The minister reminds me of a former Secretary of State, the lady member from Niagara Falls, and of the attitude she took when she presented the first version of the Canada Pension Plan. It was the most perfect plan in the world and anyone who criticized it was foolish. As a matter of fact, to use her own term, they were stupid. Nevertheless, the plan went through four revisions. The same can be said of this tax

December 10, 1971
Income Tax Act
bill. The white paper was lauded by the minister as representing the ultimate in forward, progressive tax thinking.


Mr. Drury:: That is just what this bill is.


Marcel Joseph Aimé Lambert: The President of the Treasury Board (Mr. Drury) should have heard the speeches which the minister made in various parts of the country. I saw him on television declare that this white paper was going to produce the greatest tax system in the world, with all these provisions in regard to integration, the taxing of Canadian corporations, and so on. The greatest benefit to mankind was to be the absolute neutrality of the tax system. Various government members sat around in a claque singing hosannas to the Minister of Finance. Then, the white paper ran into difficulties and all was changed. I was surprised to hear the Minister of State in charge of scientific affairs (Mr. Gillespie), for one, say that this was a great tax proposal.


Colin David Gibson: Hear, hear!


Marcel Joseph Aimé Lambert: I am talking about the white paper, not the bill. The hon. member for Don Valley (Mr. Kaplan) was another one who said the same thing. When the final committee report came out, how they clutched it to their breasts.


Colin David Gibson: We had an open mind about it.


Marcel Joseph Aimé Lambert: If they had an open mind, then the hon. member has a closed one. It was almost pathetic to see this reversal of attitude on the part of government members. They had been opposing other members, and even witnesses, who were criticizing the white paper. Some of them were quite openly hostile to such witnesses. It was great to see their performance, and then this complete reversal. As soon as the government spoke, why, there was a great change. It was almost like what happened at Pentecost when the Apostles were touched with a flame, with the spirit. My, Mr. Speaker, how those members were converted, and how this thing then became so good.
And the same has happened again, Mr. Speaker. Every time there has been a change made to Bill C-259 we have had nothing but a clacking of desks, and so forth, as though a new miracle were being performed. That happened even this morning with the penultimate, in fact not only penultimate but the after-the-post-mortem changes announced by the Minister of Finance (Mr. Benson). Frankly, Mr. Speaker, they are a cheap bribe to the Senate.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: If the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney) will only take time to read some of the Senate committee recommendations, he will see that the changes announced this morning are what I call a cheap bribe. They are tossing the senators a few crumbs. We will see what the Senate's attitude is going to be. Senators have told me, "This is one time we are going to stand." I hope that they will demonstrate how and where they stand with regard
to their recommendations. This will either prove their credibility or otherwise. Here I am talking about Liberal Senators who comprised the majority on the Senate Banking, Trade and Commerce Committee, and who drafted its recommendations.
The Senate Committee did a good job. I heard from the public, which is more than the Minister of Finance did, and more than members of our committee or of our House did. It heard from the public in detail in regard to the bill. I openly invite Senators to stand by their recommendations. We will see just how much weight those gentlemen carry with the Minister of Finance and his colleagues. It seems to me there is a great potential here. They will either do a service to the country, or a great disservice to themselves and the country. Senators are up against the crunch, and we will have to see if they knuckle down because there is the prospect of a Christmas vacation, or because of what I call these cheap bribes offered with regard to a few paltry provisions in the bill.
One of the reasons we were dissatisfied and voted against the bill was the complete inability of any member in the opposition to get definitive answers on many of the points that they raised. The representatives of the government just sat there and hunkered down. Certainly, once the guillotine was introduced no definitive answers were given to any of the legitimate representations made by opposition members on points raised by the public with them through letters, telegrams and phone calls.
There was no serious examination of the effect of certain sections. I will give a classic example of what I am talking about. I refer to my objections to the effect in law of section 239(2), and the effect in law of section 221(2) with regard to the retroactive effect of regulations. Government members all voted for this, and there was no answer to my objections. I know that the Liberal caucus was divided on this matter. Many members told me that they had not realized the implications of the bill until I had mentioned the effect of these sections. None of them realized, and still do not appear to realize, that under section 243 there cannot be any suspension of a sentence. All must go to jail if they are sentenced to jail. No judge at any time can suspend sentence.
But a judge can suspend sentence for armed robbery in appropriate cases. A judge can suspend sentence for indecent assault in appropriate cases. Sentences can be suspended all the way through the Criminal Code, but for any offence under the Income Tax Act, if the authorities choose to proceed by way of indictment and a person is convicted the judge has no option but to sentence him to jail. If any members opposite realized the salutory effect of a conviction and sentence to imprisonment, with the sentence suspended, they would also realize that section 243 is barbarous. It belongs to a past age.
Oh, Mr. Speaker, we heard the great hosannas sung by government members in support of the Solicitor General (Mr. Goyer) and the Attorney General of Canada (Mr. Turner) when they introduced amendments to the law concerning bail and the wiping out of records. Those government members and their hosannas are hollow and hypocritical if they maintain that posture and yet vote for section 243. But, Mr. Speaker, they voted for it, not knowing what on earth it was all about. One of my colleagues says they didn't even read it.

D e cember 10, 1971

A judge will not have power to suspend sentence. Yet there are supposed to be great, enlightened reforms in this bill. Did we get any answers on that subject? None at all. The Parliamentary Secretary to the Minister of Finance just hunkered down on Wednesday when he returned to the House, and we could not get any answers from his replacement. Then, they wonder why we react in this way.
We got no answers with regard to the attitude of the provinces at the very last meeting between the federal government and the provinces. Mr. Speaker, eight provinces have entered into agreements, expiring in 1972, with regard to the collection of taxes on a common basis. But the Minister of Finance deliberately omitted reference to the province of Ontario and to the province of Quebec with regard to corporation tax and with regard to a personal income tax in the province of Quebec. Those two provinces account for two-thirds of the taxpayers in Canada, yet the federal government says to them, "Amend your legislation right now; conform!" As I have pointed out time and time again this is supreme arrogance on the part of the federal government which has only joint jurisdiction in the field of income tax. The provinces have equal jurisdiction with it.
I see that the parliamentary secretary is making notes. I hope he will reply and tell us what advice is going to be given to corporations in the provinces of Ontario and Quebec with regard to their differing systems. Of course, he may only be signing Christmas cards.


David Lewis: That is what he is doing. It is the right time of the year.


Marcel Joseph Aimé Lambert: What about representations from the resource industries; what answer has been given to them? The answer is, tough luck boys, you are going to take it. My colleagues intend to develop this aspect to a much greater extent. One of the areas of concern in this House related to the elimination of the basic herd concept. The debate was merely adjourned in order to pass on to something else, I suppose because the heat was becoming uncomfortable. We saw the restoration and retention of the basic herd concept after the Liberal caucus got its lashes last Thursday following their defeat in the House. The basic herd trooped in here. They stood up and voted, no matter what the vote was on. They voted straightforwardly. One hon. member, however, when it came to the question of prospectors and grubstak-ers, one of the members from northern Ontario, had the courage to stand by the conviction he expressed at previous meetings of the Committee on Finance in this regard. He voted against the proposal. I would have liked to have seen a few others have the courage of their convictions in respect of that particular point.
The questions about the basic herd concept have not been answered. Perhaps we will get some answers in respect of this and some explanation why the government insists on completely misunderstanding the concept of agriculture in this country. Perhaps the government will explain why it insists on the elimination of this principle which is fundamental to the operation of a farm, as well as its insistence that farm land which continues to be used for farm purposes shall be subject to capital gains tax. We
Income Tax Act moved amendments. They were voted down against a solid opposition stand in favour of exempting land which continued to be used for farm purposes. This displays an urban orientation, an urbanized philosophy in complete disregard of a very important segment of the Canadian population and a very important segment of the Canadian economy. But, oh no, these farmers are to be put through the tax wringer. The screw is to be applied that much harder. We can say the same thing about corporations. More money is to be taken from the corporations but their revenues are not to be increased. Yet, they will have to compete on an equal basis against even tougher competition from abroad.
Bill C-259 was prepared and conceived in rather different conditions. Economic conditions in the world, and as they would affect Canada, were not in existence when Bill C-259 was conceived. There was no idea that Britain would vote to enter the European Common Market. There was no idea that Britain would get into the Common Market. This will affect Canada in the future. I invite the Minister of Industry, Trade and Commerce (Mr. Pepin) to put his mind to the effect this taxation and the legislation his colleague is going to bring in, the Competition Act, will have on the input by his department in encouraging Canadian business. We have the left hand moving one way and the left hand just pulling it back.


Stanley Howard Knowles: You have your hands mixed up.


Marcel Joseph Aimé Lambert: One hand going forward and the left hand pulling it back. They are all left-handed. On the basis of what I have said, I am going to move an amendment, seconded by the hon. member for Perth (Mr. Monteith).
That Bill C-259, an act to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, be not now read a third time but be referred back to Committee of the Whole with an instruction that the committee has power to so amend the bill as to affirm that farmers occupy a special position in the economic structure of Canada and to this end to consider, in particular, the advisability of amending sections 29 and 39 as set forth in clause 1 of the bill, together with related or consequential provisions, in such manner as to continue recognition of a farmer's basic herd as a capital asset and to permit land, together with any other capital property, which is used by a person in a farming activity to be transferred by him, either during his lifetime or on his death, without being subject to capital gains treatment under the deemed realization provisions of the bill where the transferee uses such land and property to continue farming within the meaning of this act.
I have put forward versions of this amendment in English and in French.
Hon. Allan ]. MacEachen (President of the Privy Council): Mr. Speaker, I should like to examine the amendment that is being proposed by the hon. member for Edmonton West (Mr. Lambert) and to make the argument concerning its regularity after I have examined it.


Stanley Howard Knowles: One o'clock.


Cyril Lloyd Francis: On a point of order, Mr. Speaker, as I understand the motion it was seconded by the hon. member for Perth. I do not think a member who is not in the House can second a motion.
24725-27.',

December 10, 1971
Income Tax Act


Marcel Joseph Aimé Lambert: The hon. member was in the House. Shall we say, if it affects the sensibilities of the hon. member for Ottawa West, that I will have the hon. member for Parry Sound-Muskoka second it.


The Acting Speaker (Mr. Laniel):: The Chair would also like to consider the amendment. It being one o'clock I now leave the chair. The House will meet again at two o'clock.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
The Acting Speaker (Mr. Laniel):: Just before the House rose at one o'clock, the hon. member for Edmonton West (Mr. Lambert) moved an amendment, and it is my intention at this time, following the request of the government House Leader who wanted to look at this amendment during the lunch hour, to read the amendment to the House for the benefit of hon. members from whom I will invite comments as to the procedural acceptability of the amendment.


Allan Joseph MacEachen: Mr. Speaker, as I indicated before the recess, I have some reservations about the regularity of this amendment, especially that part of the amendment which asks that the bill be referred back to the committee of the whole with an instruction that the committee have power to so amend the bill as to affirm that farmers occupy a special position in the economic structure of Canada. I believe that it might be appropriate for the hon. member to ask that the bill be referred back to the committee of the whole with the request that the committee consider the advisability of amending sections 29 and 39 as set forth in clause 1 of the bill, but it seems to me that the insertion of the general principles that are contained in the present amendment goes beyond what is possible at the third reading stage.
There are a number of references in the fourth edition of Beauchesne which bear directly on this point, especially citations 415 and 418. At the bottom of page 287, the last paragraph of citation 415 reads as follows:
(4) On the third reading of a bill, an amendment to refer back to the committee of the whole must not tend to change the principle approved on the second reading.
The second sentence of citation 418 on the next page reads:
All amendments which may be moved on a second reading of a bill may be moved on the third reading with the restriction that they cannot deal with any matter which is not contained in the bill.
It seems to me that an amendment which asks the House to make a decision on the special position of agriculture is dealing with a matter which is not contained explicitly within the provisions of the bill. It may be, and certainly is, a totally desirable objective, but the place to have that principle asserted is not in an amendment at this stage of the bill.
So I would suggest that while it is possible to refer the bill back to the committee of the whole on third reading to reconsider or examine certain aspects of the bill, and
certain clauses, and to reconsider any particular subsection, I believe that in this particular part of the amendment there is an assertion of a principle which goes beyond what is possible on the third reading stage.


Gerald William Baldwin: Mr. Speaker, there are several reasons for the amendment being in order. First, may I cite to Your Honour the fact that the hon. member for Edmonton West (Mr. Lambert) offered the amendment but there are other equally valid reasons. To deal with the point raised by the President of the Privy Council (Mr. MacEachen), I would point out that it is possible for reasoned amendments to be offered on third reading. I am not suggesting that this is a reasoned amendment, but if we are inhibited from suggesting that there is a principle involved-if it can ever be said that there is a principle in a tax bill to start with-then it is competent for hon. members seeking to amend to come within the grounds of a reasoned amendment.
In May's 17th edition, at page 571, the author deals with the various types of amendments which may be moved on third reading. He refers to putting off third reading through the use of a reasoned amendment against the bill now being read a third time. At page 572, he goes on to say:
As the debate on the third reading should be confined to the contents of the bill, reasoned amendments which raise matters not included in the provisions of the bill are not permissible.
That is the rule in Beauchesne which has been enlarged and is cited by my friend. Here, we have a bill affecting great numbers of people of various classes throughout this country. There was proof of this when the House leaders got together to try and arrange an orderly discussion of this bill. The subject matter was divided into clauses dealing with various groups and classes relating to one specific area, one particular group in the community who would be affected. There was no other way available to us.
The operative parts of the amendment read:
-with an instruction that the committee have power to so amend the bill as to affirm that farmers occupy a special position-
And it goes on:
-and to this end to consider, in particular, the advisability of amending sections 29 and 39-
As a basis for the review which the amendment asks the committee to engage in, there has been inserted the need to amend sections 29 and 39. But there is a certain purpose behind that, Mr. Speaker. If the government House leader, representing the government view, finds it offensive that the committee should have regard for the fact that farmers "occupy a special position in the economic structure of Canada" then, with reluctance, I would be prepared to delete that part. What the House is saying to the committee is this: "Because in our view, and it should be your view, farmers do occupy a special position you should therefore review clauses 29 and 39 in the hope that they may be amended to make the special position of the farmers more solidly fixed through this legislation". If it is a matter of curing any defects, I think we might be able to eliminate those words but I think it would be unfair and improper to eliminate those which are not the opera-
[Mr Francis.]
December 10, 1971

tive words but which would come within the proposition of a reasoned amendment.
As to the rest of it, Mr. Speaker, we are dealing with a tax bill and a tax bill has no principle. This tax bill, however, has even less principle, and I firmly reject my desire to make a long speech about that, but will say that within the special meaning assigned by the rules of this House to principles, there is no principle involved. This act is entitled:
An act to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act.
Then, we go through most of the Income Tax Act, which is an amending act 707 pages long.


David Lewis: It is 739.


Gerald William Baldwin: All right, it is 739; I accept the reasoned amendment of my friend, the hon. member for York South (Mr. Lewis). We discover that it deals with almost every conceivable activity of society in Canada. The committee very seriously dealt with the bill according to groups and classes as had been suggested by the House leaders. What we are asking now is that we try to keep our debate on third reading in general conformity with what was done in committee. My friends to the left could ask that the bill be sent back to committee so that it could deal with special clauses and we could ask for the same thing. But surely, it would be idle to do so. We have taken the two clauses which have a special relationship to the agricultural industry in our opinion and have asked that the committee reconsider these, then report back to the House with recommendations. That is the classic and recognized manner in which, on third reading, this bill can be sent back to the committee.
I conclude on this note, Mr. Speaker, that when we consider the ramifications of this bill and the extent to which our Standing Orders and the precedents and practices under them were adjusted to meet the extraordinary circumstances of this bill, I do not believe that the President of the Privy Council had his heart in this objection. I think he realized, as I do, that we are now engaged in a debate which may and probably will last for some days. If there is to be an orderly and intelligent debate, then we must follow the pattern laid down in committee of the whole. This may call for some flexibility in the manner in which the Chair examines amendments from time to time in so far as Standing Orders and precedents are concerned. Without that freedom and flexibility in dealing with a bill of this kind, and unless we are able to take a particular clause or section and say that we will refer it back to the committee for review, possible alteration or recommendation, the House may need to consider this bill for a long time.
Answering those who say that some of these things may have been discussed, I say, yes. Nevertheless, this is a particular method which has been devised in the mother of parliaments and accepted here. We shall be able to obtain recorded votes on areas that have been voted on in committee. Hon. members of the House will be able to have their names entered in the records of the House to indicate their position on any one of these subject areas. I
Income Tax Act
am sure that hon. members on the other side of the House would, for different reasons, also like to be recorded as being in favour of certain parts of the bill which we might, incidentally, challenge in this particular procedure. If that is not done the opportunity for members of this House to embark on fair, full and informed discussion may be impaired, seriously inhibited, and almost crippled. If the opportunity for hon. members to be counted in a recorded division of the House on this type of amendment is not to be made available, and if this type of amendment is not found acceptable, then I say we are in a very poor position so far as future debate on third reading is concerned.
Before sitting down, may I make another comment. If members on the government side feel unhappy about the words in the motion, "farmers occupy a special position in the economic structure of Canada," let me say, and although my friend from Edmonton West (Mr. Lambert) is not here I think I will have his consent, that I would be quite happy to take those words out of the motion. I think I have made our position quite clear on it.
Hon. Allan ]. MacEachen (President of the Privy Council): Mr. Speaker, speaking on this suggested amendment or change in the motion, certainly, I would waive any procedural objections in view of what my hon. friend has said about proceeding with this bill in committee of the whole. If we were to delete, following the words, "that the committee have power to so amend" the words "the bill as to affirm that farmers occupy a special position in the economic structure of Canada and to this end to consider, in particular, the advisability of amending," the motion would read in part, "that the committee have power to so amend sections 29 and 39," and so on. That would focus the debate on these two clauses and would not put hon. members in the position that if they voted against changes in sections 29 and 39 or voted against the proposition that there be a reference back to consider sections 29 and 39, they would at the same time be voting against a declaration that farmers occupy a special position in the economic structure of Canada. That is exactly what we would be forced to do if the amendment were put in its present form. That is a declaration of principle which we would support if it stood on its own, in a separate place. However, since it has been put in here and because of its effect on this clause, we would have to vote against the clause as a whole. If my hon. friend will do as he suggests, I will certainly waive any procedural objection.


Gerald William Baldwin: I will do that. However, the President of the Privy Council could move to exclude those words from this declaration.


Allan Joseph MacEachen: No, thank you.


The Acting Speaker (Mr. Laniel):: Before recognizing the hon. member for Winnipeg North Centre, I will try to be clear about what words are to be deleted. If the hon. member for Peace River and his party agree to delete certain words, I am sure that this will limit the procedural debate.


Gerald William Baldwin: Mr. Speaker, if the President of the Privy Council feels that the words in question are the words which debar him from accepting this motion as one which

December 10, 1971
10366______________________________
Income Tax Act
it is desirable to debate I will, although with great reluctance, ask for those words to be deleted.


Stanley Howard Knowles: Mr. Speaker, enough has been said, and enough agreement has been reached, to make it unnecessary for me to enter into the argument. If I had spoken earlier, I would have suggested something along the line of the solution that seems to have emerged. Now that there is discussion over the precise words in the amendment that are to be deleted, may I, for simplicity's sake, suggest that we begin at the end of line 5 of the typewritten text in English and delete the words, "to so" and so on. Incidentally, that would enable us to get rid of the split infinitive.


An hon. Member:: Purist.


Stanley Howard Knowles: I suggest that we delete the words, "to so amend the bill as to affirm that farmers occupy a special position in the economic structure of Canada and to this end." Let us take out that phrase, even though it is a good one and we like it. However, we are now thinking procedurally.


Gerald William Baldwin: I will remember that.


Stanley Howard Knowles: That part of the amendment would then read, "with an instruction that the committee have power to consider, in particular, the advisability of amending sections 29 and 39", and so on. That way we would not need to take out a word here and there and put in some other words somewhere else. I hope that that is in line with the sense of what the hon. member for Peace River (Mr. Baldwin) and the President of the Privy Council (Mr. MacEachen) have been saying.
While I am on my feet, may I say that we find nothing procedurally offensive in the motion before us, although for procedural purposes it will be better if that deletion is made. But may I make it clear that although we do not object procedurally to the amendment, there is something at the end of it which we want to qualify and, when our turn comes, we shall move an amendment to the amendment. My main purpose in rising was to suggest to my fellow House leaders the words that might be deleted.


Gerald William Baldwin: If the Chair has looked at the amendment, perhaps it is acceptable. The hon. member for Edmonton West is not here, as I said, and I am sure that he would be as sad as any parent whose child is emasculated if he were here. However, what is left will still be an effective vehicle for debating this particular area. We could still carry on some discussion and, hopefully, divide the House, which might be in favour of this issue.


Allan Joseph MacEachen: Mr. Speaker, I quite agree with the solution suggested by the hon. member for Winnipeg North Centre and wish to say again that I have no objection whatever to the substance of those words being deleted. This is purely a procedural move. That must be clearly understood, despite the delicacy of the comments made by the hon. member for Peace River.


Gerald William Baldwin: We will remember this. The minister is against the farmers.


The Acting Speaker (Mr. Laniel):: Order, please. I thank hon. members for expressing their opinion on this motion.

The agreement that has been reached really makes it much easier for the Chair to accept the motion, and I have no alternative but to put the motion at this time. I wonder, however, if I should not ask the consent of the House to make the correction to the motion for, although the motion was not moved before one o'clock, it was read. Is it agreed that the correction suggested by the hon. members who participated in the procedural debate shall be made and incorporated in the motion?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Laniel):: The hon. member for Edmonton West (Mr. Lambert) moves as follows:
That Bill C-259, An Act to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that Act, be not now read a third time but be referred back to Committee of the Whole with an instruction that the Committee have power to consider, in particular, the advisability of amending sections 29 and 39 as set forth in clause 1 of the Bill, together with related or consequential provisions, in such manner as to continue recognition of a farmer's basic herd as a capital asset and to permit land, together with any other capital property, which is used by a person in a farming activity to be transferred by him, either during his lifetime or on his death, without being subject to capital gains treatment under the deemed realization provisions of the Bill where the transferee uses such land and property to continue farming within the meaning of this Act.


Mr. John Burton (Regina East):: Mr. Speaker, today as I listened to the Minister of Finance (Mr. Benson) when he was making his comments on the introduction of third reading of Bill C-259, I did so with a good deal of amusement at the front the Minister of Finance was trying to put up. He was trying to make out "Well, we have come through that battle. We crossed over those hurdles. Now, we are in the final stage of the battle and pretty soon the fight will be all over." You could almost hear the sigh of relief with respect to the over-all situation being uttered when the minister was making his remarks. I suppose he is justified in issuing a sigh of relief when he has a weapon such as rule 75C to get him over some of the hurdles he has encountered in dealing with the massive document now before us.
Some of the minister's comments on the votes taken last Wednesday night were nothing short of fatuous. The Minister of Finance attempted to make out that there were only a limited number of standing votes that had to be decided by the committee on Wednesday night. He tried to suggest this was some kind of justification for the government's decision to invoke rule 75C to close off the committee stage of debate. This completely begs the issue.
Many sections of the bill deal with mechanical aspects of the tax system. They are consequential upon the basic decisions which are involved. I will give one example. We in this party took a stand on the policy with regard to the question of capital gains. This is contained in section 38. Numerous sections following section 38 of clause 1 deal with the mechanics of taxing capital gains and with some of the consequences that flow from a decision to impose a form of taxation on capital gains. The members of this party saw little to quarrel with in connection with the mechanics involved and some of the consequential features. Therefore, there was not much to argue about. Our main argument had to do with the basic inadequacy of the
December 10, 1971

December 10, 1971
Income Tax Act
not, however, approve a proposal which simply suggested we should split the bill and allow one part to come into effect immediately and another part to take effect later after a resolution of the House of Commons.
As for the assertion that no one understands the bill, I cannot accept it. I agree that there are many points which have yet to be cleared up, areas of doubt which affect many people throughout the country. I had occasion to take up one such point with the Minister of Finance last week when I happened to see him. It concerned the situation which automobile salesmen will face; income will, in fact, be imputed to them, and this is likely to give rise to real difficulties for them. The Minister of Finance acknowledged that this was so and told me he would have something to say about this aspect later on, when he would try to deal with the difficulties which had been foreseen. Nevertheless, the basic issues involved in this legislation are clear and they can be understood by the Canadian people. Those who assert that no one understands the bill, or can possibly understand the bill, are doing a disservice to the people of this country and are not helping to bring about any form of equitable tax system.


Some hon. Members:: Hear, hear!


John Stratford Burton: Again, I acknowledge the validity of some of the arguments which were put forward by members of the official opposition. I appreciate the stand taken by a number of Conservative members with regard to the proposal to tax co-operatives and credit unions. It is true there is some confusion when it comes to ascertaining just where the Conservative party stands on this subject, particularly having regard to the remarks made last September by the hon. member for Edmonton West (Mr. Lambert). But there were other members of the Conservative party who made comments during the debate which were very much in conflict with those expressed by the official spokesman for their party.
Then again, in dealing with some of the farm issues which arose during consideration of the bill, members of the Conservative party put forward valid arguments. A number of technical points were put forward for consideration and the arguments used with respect to them were often well-founded. In any case, they were justified in raising them. But I should like to ask this question: where was the main thrust of the Tory party's attack? I think it is quite clear the Tory party did not like the idea of a capital gains tax. If I am wrong, let us hear them say so. They did not want the concessions to the corporations or to the mining industry, or to the resource industry generally, or to the oil and gas companies, to be changed. If anything, they wished to see even greater concessions made in this direction than are made at the present time.
They did agree, however, with one proposal in the bill when they left no doubt as to their support of the provision to repeal the Estate Tax Act. All this indicates opposition to anything which might bring about a redistribution of wealth in Canada, or affect the centres from which economic power is exercised and controlled. As I said earlier, some of the technical points raised by members of the Official Opposition were valid enough, but a good many were of concern only to corporations and those in receipt of high incomes.
By its stand in the House of Commons, the Tory party demonstrated that it stood firmly against any change which would bring about a redistribution of income and wealth resulting in any meaningful shift in the exercise of economic power. I should like to make clear some of the New Democratic Party's basic objections to this bill. I should like to enumerate eight basic objections to the bill before the House at the third reading stage.
First, we object to the continuation of the special privileges given to corporations. A general look at the picture reveals that a lot of tinkering and agonizing was done about setting up a system based on the principle of integration, but now we are left with the same old dividend tax credit which has been increased from 20 per cent to 33 per cent. True, there have been some adjustments and changes made and perhaps the difference is not as wide as it may seem, but no basic change has been made in the method by which the government treats the corporations of this country. The special privileges these corporations have enjoyed for a long time are untouched. Similarly, we see that the capital cost allowance structure is left much as it is at the present time.
The second basic objection that we have has to do with the special concessions for the mining industry and for some of the resource industries, such as oil, gas and so on. We feel that these proposals are iniquitous, that they have the effect of distorting the economy and result in the type of development of Canada's economy that is not in the best interests of the nation as a whole. We suggest that they have the effect of helping foreign corporations who already have a high degree of control over the Canadian economy. We suggest that a continuation of this policy brings with it a greater level of unemployment for Canadians, and that it is contrary to the claim made in support of this type of concession in the past that it helps to create jobs for Canadians. If a different emphasis were placed on Canada's development, I suggest we would find a happier economic situation than we have today.
We also have to keep in mind that one of the principles contained in the Carter report was the establishment of a neutral tax system. The report opted for the principle of neutrality. That was thoroughly in keeping with a classical capitalist concept, that the tax system should be structured in such a way that in itself, and by itself, it did not influence the course of economic affairs. It is clear that the government has not opted for this principle of neutrality since it has continued the special concessions for the mining and resource industries. Once having made the decision not to stay with the principle of neutrality, the question was the extent to which we were going to weight the tax system. I suggest the evidence is clear that the decision the government has made to continue the special concessions for mining industries is a decision that is not in the best interests of Canada and will result in unemployment, misery and hardship for many thousands of Canadians.

December 10, 1971

The third basic objection that we have to this legislation is that it eliminates the taxation of inherited wealth. We are thoroughly in opposition to this principle. We feel it is absolutely essential, if we are to have any sort of just society at all, to tax inherited wealth. We also feel that this is an area that can best be handled and dealt with by the federal government rather than the provinces. The question remains as to just how inherited wealth is taxed and what sort of system should be set up. This question is a debatable one. We have to deal with conflicts that may arise with other elements of the tax system, and deal with these conflicts on their merits. But we feel on principle there must be some form of taxation of inherited wealth, and on this the New Democratic Party takes a firm stand. We feel the government of Canada, and all those who support them including members of the official opposition, are doing a disservice to the Canadian people by repealing the Estate Tax Act.
Four, we feel the provisions brought forward by the government to tax capital gains are inadequate. This was an area where the gap in our tax system was just too glaring to be overlooked. The government simply could not bypass it, so they threw in a half capital gains tax. I suggest this will still distort the economy since it allows for profit taking through capital gains.
Five, I suggest that the tax system proposed by Bill C-259 discriminates against working people in Canada. I cite two examples. First of all, there is the limiting of employment expenses to $150, while at the same time many other people have no limit on expenses. It is a case of no holds barred for businessmen and corporations when it comes to claiming expenses associated with their employment and with earning a living. But as far as the workers are concerned, those on a wage are held to a limit of $150. Similarly with child care expenses. Here again a limitation is placed upon expenses which I suggest will work a hardship, even though some improvement in the situation has been made by the government.
The sixth objection that we have to the tax system is that it discriminates against the lower income groups. It is true there has been some increase in the basic exemptions, but I suggest the changes are minimal. They are the very least that the government can get away with. These are the crumbs that the government has thrown to the people of Canada to make them forget the gigantic concessions that are given to other sectors of the Canadian economy.
The proposed tax exemptions will be of greater benefit to people in the upper income brackets than to those who are near the basic exemption level. This is why this party proposed a tax credits system to replace the present exemptions. It is true that the starting point of such a tax system can be set at any point and bring about the same result, but I suggest that a tax credits system would have brought about more flexibility and made it possible to introduce changes in the future that would be more equitable and of more assistance to the great bulk of the Canadian population. We also object to the top limits that are placed on the rate schedule and to the fact that it starts off at too high a rate for those people in the lower income brackets. We feel that this part of the bill is also unacceptable and, of course, we moved some amend-
Income Tax Act
ments in this particular regard during the committee stage.
Seven, we feel there are a variety of special concessions in the bill that are given injustifiably to various sectors of the Canadian economy. In particular, there are the provisions dealing with advertising. No limit is placed on the deduction of advertising and other selling costs in carrying on a business. This is a concession of particular value to the large business interests of this country and gives them a greater advantage than small businesses. I feel this concession is unjustified and adds to the cost of living and of doing business in Canada.


David Lewis: It also distorts values.


John Stratford Burton: It distorts values, as my leader quite correctly says. In addition to that I point to the fact that while there is a provision in the bill which has the effect of restricting the deductibility of advertising expenses in periodicals to Canadian magazines and publications, there is a special exemption for Time magazine and Reader's Digest which certainly are not Canadian. This is a special exemption to two powerful interest groups, and we feel it is thoroughly unjustified.
Eighth, I suggest that the bill discriminates against farmers. This matter has been dealt with at some length in the committee. The government proposes to do away with the basic herd concept, and we feel this is not justified. We recognize that there are some problems in dealing with the basic herd concept and that changes are needed, but to do away with the concept which enables a farmer to take a portion of his cattle herd into his capital assets, without providing some substitute, is not justified. As I say, it discriminates against farmers. It shows lack of understanding by the government of what farming is all about.
There is a similar problem with respect to capital gains tax as it affects farmers. Special recognition is needed of the way in which such a tax will affect farmers. There must be recognition of the special requirements of farming and agriculture. There are many aspects of this subject that I could go into at length, but I will deal with just one small element. The fact that a farmer contributes his unpaid labour toward the capital improvements he makes on his farm presents the situation in which he does not receive any compensation for that unpaid labour until he sells his assets. This presents a special situation that needs to be taken into account.
Because the bill fails to correct the basic inadequacies and deficiencies of the tax system, we in the NDP intend to oppose it on third reading unless some of the motions for referral back to committee which may be moved during the course of this debate result in overcoming the problems that I have outlined. But on the basis of the attitude taken by the government I do not see this happening before the conclusion of debate on third reading.
Earlier today an amendment was moved by the hon. member for Edmonton West (Mr. Lambert) which was the subject of procedural discussion and which has now been ruled in order. It deals with two basic problems in the bill concerning farmers, first the problem of the basic herd and, second, the problem of capital gains on farmland. As
10370

December 10, 1971
Income Tax Act
I indicated, we are sympathetic to the proposal to make changes in the bill which take into account the problems which farmers will face as a consequence of the legislation. But there is one aspect of the amendment as proposed, concerning the way in which capital gains on farmlands will work, that gives us concern. Our concern is about the part of the amendment which reads:
-to permit land, together with any other capital property, which is used by a person in a farming activity to be transferred by him, either during his lifetime or on his death, without being subject to capital gains treatment under the deemed realization provisions of the bill where the transferee uses such land and property to continue farming within the meaning of this act.
We feel this still leaves the problem which was suggested during committee consideration, in that it may lend itself to greater speculation by non-farmers or by people who really do not make the major portion of their living from farming. It may lend itself to greater speculative activity in farming, and the door is still open for corporations which are not bona fide farmers to engage in farming activities and to take advantage of this provision. Thus, we would like to move an amendment to the amendment which would have the effect of making clear just what persons we are referring to who could take advantage of the proposal put forward by the official opposition. Therefore, I move, seconded by the hon. member for Battleford-Kindersley (Mr. Thomson):
That the amendment be amended by deleting the words "in a" where they appear between the word "person" and the words "farming activity" and by substituting therefor the following words:
"who is a bona fide farmer and whose principal source of income is from"
The latter part of the amendment would then read as follows:
-and to permit land, together with any other capital property, which is used by a person who is a bona fide farmer and whose principal source of income is from farming activity to be transferred by him, either during his lifetime or on his death-
We feel this is essential if the amendment is to be adequate. In conclusion, Mr. Speaker, I reiterate that while we in the NDP feel there has been some tidying up of various provisions in the legislation and there are some things with which we can agree, or at least feel are steps in the right direction, in terms of the basic issues involved-and I have enumerated eight basic questions- we feel that the government's response to the need for tax reform has been totally inadequate and in many cases totally absent. For these reasons we cannot support the bill on third reading.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker-


Mr. Speaker:: Order. Would the hon. member for Shefford please contain his impatience. We are as anxious to hear him as he is to speak, but we must now consider the amendment moved by the hon. member for Regina East (Mr. Burton).

The amendment appears to be in order and can be put to the House. It is moved by the hon. member for Regina East (Mr. Burton), seconded by the hon. member for Battleford-Kindersley (Mr. Thomson):
IMr. Burton.]
That the amendment be amended by deleting the words "in a" where they appear between the word "person" and the words "farming activity" and by substituting therefor the following words:
"who is a bona fide farmer and whose principal source of income is from"
The main amendment, and I will not read it completely, would then read:
-which is used by a person who is a bona fide farmer and whose principal source of income is from farming activity to be transferred by him, either during his lifetime or on his death-


Gilbert F. Rondeau: Mr. Speaker, we are at the third reading stage of this important bill on which I had the opportunity to express our views in this House.
Two years ago at least we had been given the white paper. Now that the second reading motion and amendments have been bulldozed through, we begin the last stage of this important bill.
Some people like the bill, some don't. It pleases the people who claim to be socialists and take more away from the individual in order to give the proceeds of taxes to the state. That is why we can realize that there are members who, like the previous speaker, think that this bill does not go far enough in certain fields, and should push socialism even more. In that respect, he is not far from the ruling party which is identifying itself more and more with the socialist philosophy.
This bill is a disappointment to Canadians as a whole, to people with initiative, to those who believe in private enterprise, that is the builders, the labourers, the large number of Canadian citizens who have developed their country.
This bill brings about general disappointment, and we are most unhappy that it will drastically change the economic structure of our country.
As some people have already mentioned, in particular the hon. member who had the floor before me, this bill would redistribute income among our citizens, that is tax those who still have income, in order to let the state have it and dispose of it according to legislation it might introduce.
We of the Social Credit party, are not in favour of the redistribution of income, and this on principle, for we do not believe that social injustice or economic problems can be solved through redistribution of income in Canada. We recommend distribution of overproduction resulting through increased purchasing power. Therefore the Social Credit party proposes a set of principles to redistribute wealth, but without taking anything away from those who have money.
This bill sanctions the principle which the Prime Minister of Canada (Mr. Trudeau) put forward some ten years ago, when he declared himself totally in favour of socialist measures. For instance, when he wrote in Cite Libre that more should be taken from the individual in the form of taxation it was a recognition of the individual's right to own property since he must pay taxes to the state. And if communist members happened to be in the House today,
December 10, 1971

how would they vote? Would they be for or against this bill?
We just have to consider their principles or refer to countries which experienced them or which are still living under a communist regime. We just have to go through Karl Marx's manifesto to find that the first two foes which must be destroyed before setting up a communist system are capital and profit.
Now, which two elements are most affected by Bill C-259? Capital and profit. By all means available to them the designers of this socialist project that-is Bill C-259- have directed their attacks against income and capital.
Doubtless if communists members could vote here they would forthwith vote with the government because this principle is 100 per cent in line with the principle of elimination of capital and profit.
This is why we feel confused when this government is trying to make us believe that this will spell relief for some 700,000 taxpayers who can no longer afford paying taxes. However, under this bill a single person earning $3,900 per year will have to pay even more taxes than before.
In fact, the bill is quite in agreement with Karl Marx's doctrine and with the socialist principles which tend to destroy capital, initiative and profit.
I understand that some Liberal members who might still believe in free enterprise but who actually aim at its destruction by legislation might find it unpleasant to be part of a steamrolling process to implement such a socialist measure.
Mr. Speaker, middle class income earners will have to pay more taxes. Small corporations will also be affected together with professionals who will be taxed in future, not on the actual amount of fees received, but on income, that is on accounts receivable. They would have to pay taxes therefore on amounts not yet received. The young professional will certainly be affected, having run into debts to open his practice, and at the same time paying taxes on outstanding income.
Entertainment expenses will not be deductible as such. I know there were abuses in this area. Large companies had luxury yachts and residences in the south. Cutting down those expenses in such a drastic way and restricting the use of credit cards and contributions to social clubs and so on will do considerable harm to the Canadian industry.
A lot has been said against the taxpayer being forced to keep a complete file on all his assets. On valuation day the taxpayer will have to figure out the market value of all property valued at more than $500, and this includes cars, houses, cottages, boats, investments. Everything will have to be there. If he makes a profit on a sale, he will be taxed on the gains realized. A new valuation of his assets will have to be done every five years.
Of course this would mean a lot more work for chartered accountants. But I shall come back to this a little later. From now on, chartered accountants will no longer be specialists or management consultants but public servants who will have to spend their time fighting with other public servants here in Ottawa to have their clients' records accepted.
Income Tax Act
Under the new valuation, capital gains on investments which still appear on the balance sheet, that is on assets which have not been sold, will be taxable. Perhaps shares will have to be sold to pay that tax and thus majority stockholders of businesses might stand to loose control.
The capital gains tax is contested in many circles and for many reasons. Some people do not accept the principle. Others denounce the fact that the benefits on the sale of assets is taxed at 50 per cent in some cases and at 25 per cent in others. They say this is discrimination. This capital gains tax would yield additional revenues of approximately $450 million for the state. Once capital gains are taxed in Canada, we will see the economic growth of the country decrease by as much.
One of the recommendations of the bill now become law is also very unfair. I am speaking of the provision whereby the taxpayer must pay tax on non-realized capital gains and whereby shareholders must sell their shares at a loss and often lose control over their business.
Small businesses, and there are many of in Canada, will see their taxes go up. Indeed, the progressive cancellation of the preferential tax on the $35,000 profit will harm countless small enterprises in Canada. That new burden will be heavy and will also harm the self-financing of private enterprise and companies.
The amendment moved by the official opposition is also aimed at reducing taxes on capital gains on cattle, on farmers' basic herd and I quote:
-as to continue recognition of a farmer's basic herd as a capital asset and to permit land, together with any other capital property, which is used by a person in a farming activity to be transferred by him, either during his lifetime or on his death, without being subject to capital gain treatment-
Mr. Speaker, we know very well that quite often the basic herds are built up through the assistance of the wife and sons who work without pay and who are the main factors of the increased value of the basic herd. However, the government will automatically tax their assessment of the herd or the capital gain before the wife or sons are paid for their services.
This is why we entirely approve the amendment presented by the Progressive Conservative Party and we regret that the government has not taken into account, in this case as in others, the representations coming from all sources. If there is a bill in Canada which has given rise to dissatisfaction and protests, it is the one now under consideration. However, the government did not accept those recommendations.
On November 1, 1971, the Canadian Cattlemen's Association made a submission to the government echoing the ideas set forth in the amendment proposed by the official opposition. And on page 10 of that submission, we can see why the Canadian Cattlemen's Association made those recommendations:
The Breeding Herd as a Capital Asset.
A matter of particular concern is the proposal to phase out the basic herd provision and to no longer recognize a breeding herd as a capital asset. We believe this to be a most serious error but one that is understandable on the basis that the basic herd provisions
24725-28.'.

December 10, 1971
Income Tax Act
have not heretofore been codified in the statutes. We believe that the tax authorities have erroneously assumed that the basic herd provision has been nothing more than an arbitrary concession to farmers, a concession that they believe is timely now to discontinue. We most emphatically disagree.
It is evident that the purpose of the basic herd has either been misunderstood or not understood at all; for the stated justification for phasing out the provision on the basis that the introduction of a capital gains tax reduces the need for the basic herd provision is invalid and misses the main point and purpose for which the basic herd provision was originally established.

Mr. Speaker, if only the government had taken care to read the recommendations which have been made by people concerned! But no, it seems that they did not listen to anyone, at least judging from the content of the amendments which have been introduced. They showed little regard for the recommendations which have been coming from all sides. And we could even see that the bill was reprinted before the debate on the motion for third reading. This is an unspeakable insult to democracy and to the Canadian Parliament.
This morning, the Minister of Finance (Mr. Benson) seemed to imply that no member of the opposition had either understodd the bill or considered it. Perhaps several persons did not understand the bill, including certain members on the government side.
In my view, those who are in a better position than any others to understand the proposal and study it are those who, in the future, will have the largest number of income tax returns to fill or of balance sheets to prepare, that is the chartered accountants.
For the benefit of my colleagues, I shall read the editorial of the November issue of the journal published by the Canadian Institute of Chartered Accountants. The hon. member for Laurier (Mr. Leblanc) told us yesterday that we had not understood the bill at all.


Mr. Leblanc (Laurier):: That is true.


Gilbert F. Rondeau: He is a chartered accountant.


Fernand-E. Leblanc: It is true, you have not understood anything.


Gilbert F. Rondeau: The hon. member for Outremont (Mr. Noel) said that we had not understood anything about the bill. I would suggest to him that he repeat that to his colleagues. They are the ones who should be more familiar with taxation and legislation. Now, according to the Liberals, they have not understood the bill. It seems the Liberals are the only ones to be blessed with the Holy Ghost's inspiration permitting them to understand taxation.
The editorial in the journal of the Canadian Institute of Chartered Accountants reads as follows:



ON THE BRINK OF FISCAL DISASTER

[Stage Direction]
If the government intended to take taxpayers by surprise they seem to have succeeded. Our participation in the CICA course on tax reform has left us flabbergasted. Let us say first that the course was very well introduced; excellent lecturers who were quite sharp and often witty; showing of graphs and unremitting attention on the part of the participants. On the whole, those responsible for organizing the course on such short notice (they
[Mr. Rondeau.J
sometimes had to work around the clock) did an excellent job. But the meanders of the legislation make one get vestige-
Fernand-E. Leblanc: -vertigo.


Gilbert F. Rondeau: -vertigo. The hon. member for Laurier does not know what "vertigo" means but in the future his company will learn about fiscal "vestige", and I quote:
Even if it has often been said, it should be recalled that first impressions of relative simplicity have been replaced by incredulity as experts dig more deeply into the legislation. Moreover, complexity is not so much in connection with large corporations or international matters, aspects the public traditionnally links with complexity. For instance, the provisions of the bill relating to small businesses are strewn with snares. Chartered accountants who serve small businessmen, like those who serve the more important ones, must absorb in record time a mass of information, at least if present plans are to become effective on the scheduled date.
We can be sure that with this government, these plans will "become effective on the scheduled date", with a steamroller. I continue the quotation:
It might very well be that the computing and the special forms, once they are well understood-
This is pure speculation-
-will be easily established, but the real difficulty is to plan one's own business in terms of the laws that will be promulgated, and to understand in depth the fiscal incidence of all eventualities before the letter.
If all chartered accountants engaged in supplying tax advice, whether employed by industry or practicing their profession within a chartered accountant's firm, should drop everything and dedicate themselves entirely to a depth study of the new legislation and accompanying regulations, it is a moot point whether that would be enough to supply all taxpayers with prior advice.
And the hon. member for Laurier seeks to convince us that he is smarter than all the members of the Chartered Accountants Association who state that even on a fulltime basis they are unable to supply prior advice.
It has long been an established legal fact (with the exception of the Department of National Revenue as concerns the difference between tax evasion and tax avoidance) that taxpayers are entitled to organize their own affairs in such a way as to reduce their fiscal load to a minimum. The revenue officials should respect that principle all the more as between June 18 and December 31, 1971 there is not enough time to assimilate-
The hon. member for Laurier is more clever than that; he is more clever than all the chartered accountants of Canada.
-the legislation and to take appropriate measures.
-I would rather trust the Chartered Accountants Association than a single accountant who has to follow the steam-roller.


Fernand-E. Leblanc: I am a chartered accountant!
The time limit is even more hindering if one considers the technical changes which have been made. If the tax reform is introduced in good faith-and we are prepared to believe it is- proclamation of the act should be deferred until people have had time to grasp the meaning of it and to act accordingly.
Chartered accountants suggest that passage of the bill be deferred in order to give people time to grasp the meaning of it and to "act accordingly". But the government is not interested in grasping the meaning of it. In fact, all they are interested in is getting into the taxpayers' pockets, and this cannot wait.
December 10, 1971

There are many people who maintain that such delay would have farm more serious consequences for the country than are likely to affect those who are not ready for this change. If this is the government's view, then a moratorium should be applied on the strict implementation of rules in order to give everybody a chance to become familiar with them. Parliament should demand that the Department of National Revenue be lenient for, say, a year, especially as regards implementation of punitive measures. Even if this suggestion raises the bogeyman of the minister's discretionary power, there is no doubt that equity demands that account be taken of the circumstances in which people whose affairs cannot be arranged before the act comes into force find themselves.
And the last paragraph is quite important, Mr. Speaker. It reads as follows:
Without wanting to be cynical, let us suggest in concluding that all members of Parliament should take the CICA's course on tax reform before passing the tax reform bill.
Mr. Speaker, that was the subject of the editirial published by the Canadian Institute of Chartered Accountants in November 1971 and this is why, with all these protests and recommendations from experts, it would have been wise for the government not to be in such a hurry to pick our pockets and to make a mess of our fiscal and economic system.


Mr. Ross Whicher (Bruce):: Mr. Speaker, I have listened with a great deal of attention to the speeches today. I think many members have given us food for thought and have presented the views of their parties on this bill in a very emphatic way. I should particularly like to compliment the hon, member for Regina East (Mr. Burton), who unfortunately is not in the House at the moment. I think he made an excellent case for his party, one with which I do not agree but nevertheless he did it well. However, he ended by saying that he and his party could not agree with and would not support the bill now before us. I wish to direct my remarks to this point because in my opinion Canada cannot benefit if many of the aims of the bill are eliminated.
It is an undeniable fact, Mr. Speaker, that since confederation Canada has had in power more Liberal governments than governments of any other party, and the reason is simply that they have brought the greatest good to the greatest number of people.


Some hon. Members:: Hear, hear!


Ross Mackenzie Whicher: With respect, I suggest to the hon. member for Regina East and to members of other parties who say they will not vote for this bill that they are denying the people of Canada something that perhaps should have been given to them many years ago but for the first time in history is being given to them by this government which was elected 3 5 years ago.
The hon. member for Regina East had eight or nine objections to the bill and gave them as reasons why his party will not support it. He did not give one reason why they should support it, and I suggest that there are many. He says that this bill is against Canada and against the Canadian taxpayer. In all sincerity I ask him and hon. members to my immediate left, what about the 750,000 people who, for the first time in history, next year will not
Income Tax Act
have to submit a tax form to the Department of National Revenue? Is this discrimination against them?


Harold Warren Danforth: They will be back on.


Ross Mackenzie Whicher: My friend says that they will be back on. They will only be back on if Canada has the misfortune to allow the people to my left to form the next government. As things stand at the moment they will not be back on, Mr. Speaker. The government has said that every old age pensioner in Canada with means in excess of $80 a month will from now on not have to file an income tax return. There are 1,700,000 old age pensioners in Canada and over one million have benefits in addition to the $80 a month. Neither they nor, where it applies, their wives will have to file an income tax return, starting next year. I suggest this benefits not only the old age pensioner but the whole of Canada.
My hon. friend from Regina East and members of the Creditiste and Conservative parties have forgotten about these people. They have also forgotten about small business. My friends in the Conservative Party day after day cry, "What is going to happen to people who in the past have made $35,000 a year?" Because they are incorporated they are now paying tax of 21 per cent and, according to the white paper, will in future be in the same category as International Nickel, the Royal Bank of Canada and Canadian Pacific Railway. They cried and said, "You terrible people are going to tax the little man in the shoe store, the little dairy operator, the little incorporated farmer, the same as Canadian Pacific Railway, if he happens to have made $35,000 in a year." This is what happened, Mr. Speaker. Not only did the Minister of Finance (Mr. Benson) in his wisdom make changes to proposals contained in the white paper on tax reform; he gave the incorporated, small businessmen a fair deal and changed the amount from $35,000 to $50,000.


An hon. Member:: After a million letters of protest.


Ross Mackenzie Whicher: The Leader of the Opposition (Mr. Stanfield) went across this country from Newfoundland to Victoria and said it is simply not fair for small businesses to pay tax at 50 cents on the dollar which the big corporations in Canada pay. The fact is that they will not pay the same rate of tax as the big corporations. They will not begin paying those rates at $36,000. The profit figure has been increased to $50,000. If my friends to the left are fair they will admit to the people of Canada, as will some of our newspaper friends who in my opinion have sold a very dismal picture to Canadians, that there are many good points in this bill. Our newspaper friends in particular seem to have forgotten the good points; they have tried to sell points that may be bad.
The fact is, and perhaps I am exaggerating slightly, that old age pensioners who get an allowance on top of their $80 will not have to pay tax under the provisions of this bill. Small corporations or family corporations which formerly paid the full rate of tax after reaching the $35,000 level of profit will not pay that tax until they have reached $50,000 net profit each and every year.
My hon. friend from Regina East spoke of too little in the way of allowances being given to parents. Perhaps the

December 10, 1971
Income Tax Act
government has not been as generous as it should be in this area. As I remember, if the wife is working and the family must pay for a baby sitter or child care, the allowance available will be $500 per child, up to a maximum of $2,000 per family. We know that this is not enough. I ask, how much was it in the Diefenbaker years? It was not one five-cent piece. To be fair, let me ask, what was it in the Pearson years? The allowance was not one five-cent piece. How much will it be in the Trudeau years? The allowance will be $500 per child, for a maximum of $2,000 per family. This situation is a lot better than it was. My friends are not fair when they suggest that these are simply a few peanuts being rolled across the table for the good of the people of Canada. These peanuts spell dollars and cents and the parents of Canada will appreciate them.
My hon. friend also suggested that we are not doing enough for the workmen of Canada. Let me remind him that they are entitled to deduct $150 per year to help pay for clothing and other expenses connected with work. My hon. friend mentioned the aged. I agree that they are not being paid enough. They were not getting enough money 25 years ago when the old age pensioners of Canada received only $40 a month. That was not enough, although it was given to them by a Liberal government. I submit, however, that we have done a reasonable job in bringing up the level from $40 to $167.50 a month, I think it is, for single people in certain cases and to $260 a month for a married couple. We have come a long way in this area and we have come a long way in granting deductions to people who work in factories and elsewhere. But this is only a beginning.


Some hon. Members:: Hear, hear!


Ross Mackenzie Whicher: I ask you, Mr. Speaker, who started it?


Some hon. Members:: We did.


Ross Mackenzie Whicher: The Minister of Finance started it, with the Prime Minister (Mr. Trudeau). In this way we are just beginning to implement what the Prime Minister has described as the just society.


Some hon. Members:: Hear, hear!


Ross Mackenzie Whicher: I heard the hon. member for Regina East, to whom I have already referred and who tried to present his opinions in a realistic fashion, kick about the fact that capital gains will not be taxed at the same rate as income. He suggested that anyone earning $5,000 through a capital gain should be taxed in the same way as the man who makes $5,000 from his work. There are many who will agree with him. If a person makes money on the stock market, that is money he gets. There is no difference between that money and the money he gets through working as a plumber, electrician, farmer, politician or what-have-you. However, the fact is that this time last year not one nickel by way of capital gains tax was being charged against anybody in Canada, not even against people who might have made half a million dollars on the stock market. I therefore say that this is a step in the right direction. We took the first step; it was not taken by any previous government.


Some hon. Members:: Hear, hear!


Ross Mackenzie Whicher: My hon. friend from Regina East, who unfortunately is not here now-he was kind enough to tell me that he had to leave and I appreciate his telling me- criticized the government because, as he alleges, under this legislation we have been giving special privileges to corporations and are taxing the little people too much. Let me set him straight. In Canada there are many people who do not pay any tax. As a result of this bill-and this cannot be denied-three-quarters of a million extra people will not pay taxes. So you cannot tell me that we are not giving consideration to little people.
Let us look at the situation for a minute. As a free enterpriser I am sick and tired of hearing people blaming the corporations for this and that. They only blame the corporations because corporations do not have a vote. Only people can vote. On the other hand, corporations make a great deal of money in Canada and elsewhere in the world. They pay great amounts of tax. This is one thing I want to impress on all members of the House: corporations in Canada pay more taxes than corporations in any other country. Therefore, it is simply not fair when my NDP friends suggest that we have given special privileges and concessions to corporations in Canada. They pay tax of 52 cents on every dollar, Mr. Speaker.
Although my friends to the left may talk about the banking interests and the interests of companies like International Nickel, Canadian Pacific Railway and other multinational corporations in Canada, I remind them that 52 cents of every dollar they make goes either to the department of revenue in the province of Ontario or to the Department of National Revenue in Ottawa. I think that for once someone should stand up and say that corporations are paying their way in Canada, more so than in the United States and even more so than they did under the former socialist government in England. When that government was in power a few years ago, the corporate tax was 35 per cent. In England they paid 35 cents on every dollar earned, whereas in Canada they pay 52 cents. Certainly that is so in Ontario.
My hon. friends complained about concessions to the mining industry. I am not a professional in the fields of mining, gas and oil and there is much about these industries that I do not know. However, I do know one thing. Even if a mine employs only a few people, it is better for the economy of Canada if that mine is open rather than closed. I suggest that many mines, oil wells and gas wells are operating in Canada as a result of sensible concessions given to them which enable them to employ Canadian labour. Their workers eat Canadian wheat, pay Canadian taxes and enjoy the Canadian way of life.
The hon. member said other things. For example, he is against taxing inherited wealth. I admit this caused me some concern. On the other hand, in the past few years many Canadians have left this country because of our succession duties and estate taxes. I am worried about firms such as the T. Eaton Company. In my opinion this firm belongs to a great Canadian family. They have done a wonderful job in Canada and have made a great deal of money. Their great financial resources are primarily in stores situated right across Canada. They employ more
December 10, 1971

Canadian labour than any other company with the exception of the Canadian Pacific Railway Company.
What would happen if the head of this great corporation should die? What would happen if they were stuck with even a 25 per cent succession duty? Obviously, the Department of National Revenue would not take the goods in the T. Eaton stores. They would demand hard cash. How would they get this cash? I suggest that after you reach a certain peak that cash has to come by selling-out. How do you sell-out, Mr. Speaker? We talked about this yesterday. In many instances you have to sell to American interests in order to pay inheritance taxes. For this reason I am very pleased that we have taken at least one step to eliminate this huge tax. It is not just Eaton's who will not in future pay inheritance taxes on succession duties. The Canadian farmer will not have to pay any estate tax. This is one of the examples my friends to the left have given us for the past two years when talking about farmers, family farms, and so on.
How can a father leave a family farm to a son when he has to pay succession duties and so on? He will now have to pay a capital gains tax. I suggest hon. members to my left do not fully appreciate the feeling of free enterprise in the Canadian agricultural industry. They are quite willing to pay a capital gains tax. You do not pay unless you are going to make money. Every hon. member to my left would be glad to pay $25,000 in capital gains tax tomorrow morning because they would know perfectly well that if they were paying $25,000 they would be making $100,000. What kind of nonsense is it when they say they are against all taxes such as this? This type of tax is imposed in every western country. The farmers of western Canada will accept their responsibility, the same as everybody else.
I could go on about these things, but I remind hon. members to my left that when they vote against this bill, as they undoubtedly will, they will be voting against increased exemptions. Every member to my left has said, if not in this House then in letters to constituents, that the exemptions are not high enough and the Liberal government has only paltry feelings for the poor of this country when it raises the exemption from $1,000 to $1,500.1 say to them that $1,500 is a lot better than $1,000 or $1,200. This government has taken the initiative to bring this about.
When these members vote against the bill they will be voting against increased exemptions and a capital gains tax that is in every other western country. In my opinion it should have been introduced in this country many years ago. Ninety-eight per cent of the people are for a capital gains tax. When my friends to the left vote against it they will be insulting the intelligence of almost every Canadian. When members vote against this bill they will be voting against exemptions for parents. This should have taken place many years ago. It is being started by the government and is embodied in this bill. It deserves our support. Members who vote against the bill will be voting against exemptions for workers, plumbers, electricians, members of the United Automobile Workers, thousands of workers for the New Democratic Party, farmers, clergymen, teachers and, in fact, everyone else. These people are to be allowed only $150 a year but it is much better than nothing.
Environmental Affairs
In conclusion, I emphasize the fact that we started the old age pension at $40 a month. This was started by a Liberal government. I agree that $40 a month was not enough and neither is $137.50 for a single person and $260 for a married couple. Over the years we have increased these benefits and in the future we will increase them. I urge all hon. members to forget about their party loyalty in this regard and, for once, vote for the people of Canada.


Some hon. Members:: Hear, hear!


The Deputy Speaker:: Order, please. It being four o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely public bills, notices of motions and private bills.



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Tom H. Goode (Burnaby-Richmond-Delta) moved: that Bill C-49, respecting environmental control, be read the second time and referred to the Special Committee on Environmental Pollution.
He said: Mr. Speaker, in October we observed Canadian Environment Week for the first time. Scarcely more than one year ago it was just a dream of many active and aware citizens of Burnaby-Richmond-Delta who saw the potential of such a week and the impact which could be created by focusing the environmental concerns of the total population of this country within a specific timeframe. That dream became a reality on March 30 of this year when Bill C-25 received royal assent. The credit for the passage of Bill C-25 lies not with me but with all the members of this House and of the Senate.
Last March, Mr. Speaker, when we passed Bill C-25, we gave the lie to the detractors of this chamber who claim that we are always putting petty, partisan disagreements ahead of the needs of this country. I reject such charges, Mr. Speaker, for in the consideration of Bill C-25 the House of Commons put aside party labels, put aside personal differences in a spirit of co-operation which demonstrated clearly that the struggle against pollution is one of the priority concerns of members from every corner of this House. In that same spirit of co-operation, and as part of that same anti-pollution struggle, I ask the House to give favourable consideration to the bill before us this afternoon.
Bill C-49 seeks to establish an Environmental Control Council of Canada which would have the responsibility of recommending minimum anti-pollution standards and generally advising on the methods and means of improving Canada's environment. Hon. members will note that this bill closely resembles the Economic Council of

December 10, 1971
Environmental Affairs
Canada Act which was passed in 1963. This resemblance is intentional. I feel that there is need for an independent council to provide the kind of advice in environmental terms that the Economic Council does in economic terms. The environmental council, like the Economic Council, would be non-governmental in nature. The latest annual report of the Economic Council of Canada contains a section describing the origin of the council. Within it is the following statement:
-there was also a growing awareness that efforts to deal with these problems on an ad hoc basis, with attention focussed mainly on short-term considerations, could result in the continuation, recurrence or perhaps even intensification, of some of these problems in the future.
The problems referred to are, of course, economic but I suggest that a similar danger exists today with respect to environmental problems and that the same statement could express the basis for the establishment of an Environmental Control Council of Canada.
As a planning body, the Economic Council has set out an average growth-path for the Canadian economy which it regards as a feasible and desirable target at which to aim. It uses this target growth-path as a means of judging current economic performance. Similarly, the environmental control council would develop long-range plans to improve the quality of the environment. It would advise and recommend to the government minimum standards for air, water and land quality in order, in the words of the bill, "that Canada may enjoy a high and consistent rate of pollution free air, water and land." Among other things, the guidelines and projections of the environmental council would be valuable as benchmarks against which to measure our progress in the war against pollution.
The primary function of the Economic Council is in the field of research. The need for reliable knowledge and intensive study into the area of economics was felt by many persons, in particular senior economic policymakers and administrators. The council has more than adequately supplied this need. Likewise, research into the complex problems of environmental management and control would be a primary role of the environmental control council.
The urgent need for research to discover solutions to our pollution problems cannot be disputed. No restrictions would be placed upon the council's power to initiate whatever research projects it deemed necessary. The environmental council would study how technological change may affect Canada's environment as a whole. It would be in a position to initiate discussions with labour, management and consumers aimed at exploring in depth the consequences of and cures for industrial pollution.
The Economic Council of Canada has become an instrument of public information and instruction. Its annual review, which receives extensive coverage by the mass media, serves to broaden the understanding by Canadians of the greater economic issues facing our country. This is good because it must be recognized that economic policy cannot be far in advance of general public understanding. Thus, the positive role of instructor adopted by the Economic Council has played an important part in raising the level of understanding of those of us who are not economists.
In similar manner, Mr. Speaker, the environmental control council, providing accurate, unbiased and therefore credible information on the present and future state of our environment, could be of immense service. As in the realm of economics, before progressive environmental legislation can be enacted we as a people must be fully informed and aware of the situation in order that we may appreciate, accept and support necessary antipollution controls.
In my view there is always a place for independent evaluation of existing governmental policies and practices. An over-all view is necessary because of the natural tendency of those who have been involved in the creation and administration of policy to lose the ability to assess objectively the effectiveness of those policies. They tend to become blind to the need for new departures. The Economic Council has sought to satisfy such a need in the area of economic policy. An environmental council would do the same in the field of ecology. Being independent, the environmental council would be in a position to freely criticize government policy, should this be necessary, and bring new views concerning general or particular policies and programs to the attention of those who must bear the ultimate political responsibility for them.
Indeed, under the terms of this bill the council would be required to seek maximum consultation with both senior levels of government. Too often in the past, technical difficulties over governmental jurisdictions have hindered the implementation of environmental control legislation. It would be my hope that the council would help to replace this tunnel-vision with a bridge of co-operation.
The time has come, Mr. Speaker, to establish an environmental council in Canada. In fact, the time is overdue. Over a year has passed since I introduced this bill. During that time a number of individuals and organizations have called for the establishment of such a council. Among these have been the Conference on Ecology and Responsibility, the Canadian Wildlife Federation and the Science Council of Canada. Unfortunately, the only positive step to date has been the announcement of the pending appointment of an environmental advisory council to brief the Minister of the Environment (Mr. Davis). As the bulletin of the Canadian Wildlife Federation points out, no matter what merits this private advisory council might possess, "it would be no substitute for an independent environmental council studying issues much broader than the responsibilities of any one department of government and reporting publicly on its findings and recommendations."
In recommending to the government the creation of an environmental council, the Science Council of Canada in its report "This land is their land" has this to say:
A major step in planning for the future would be the creation of a non-political organization sponsored by the government which would have, as its basic role, the provision to the public of facts about their environment upon which they may base adequate value judgments. The cost of sacrificing even immediate material welfare for a quality environment may not be high, but if it is, Canadians deserve to have the facts and a chance to make their choice-
An independent Crown corporation, with a directorate representative of environmental interests and a small professional staff, is suggested. A suitable name for such an organization might be an Environmental Council of Canada. It would conduct and pub-

December 10, 1971

lish studies and forecasts of environmental problems in Canada, and make analytical reviews of environmental questions which are the subject of public interest. It should strive to become a major source of informed opinion on environmental problems.
The council should be a valuable adviser to government. Ideally, it should stimulate particular ministries to an appreciation of the interrelationship between resource uses and the necessity for considering problems in a larger context; it should draw attention to gaps in the support for environmentally-oriented research; it should provide the inspiration and leverage for new kinds of activities in government departments.
I submit, Mr. Speaker, that Bill C-49 fits the description given by the Science Council, that the need for an Environmental Control Council of Canada has been demonstrated and that the time to act is now. Bill C-49 is not perfect. Neither was Bill C-25, yet we were able to hammer out the problems in committee and come up with a bill which was a credit to the people of Canada. We have done it before, we can do it again. Let us send the bill to committee and get to work.


Gordon Harvey Aiken: Mr. Speaker, the hon. member who introduced this bill suggested that at times it is possible for the members of this House to set aside political and partisan considerations and work together. I believe there is one subject on which this is possible, and that is pollution control. I have no hesitation whatever in saying that I give this particular bill my absolute support; the idea behind it is a good one.
One of the reasons I feel bound to support the bill is that I proposed a similar bill some time ago. It did not have the same title. In my bill I referred to the environmental council of Canada, but it is so close to the hon. member's idea that the difference in name is inconsequential. At that time, September of 1970, when I made a report to the spokesman of our party on environmental matters I felt that one of the things that was missing in pollution control structures in Canada was the very type of body the hon. member is proposing in his bill. No one is here to accuse anybody else in regard to who stole whose ideas. Ideas often develop concurrently and I think it is to the credit of all hon. members that they do.
There is no doubt that all hon. members of the House are concerned with environmental pollution and how to meet it. But the structures for doing so has been one of the problems on which we have fallen short in the past. All the ideas that from time to time have been suggested have been handed around from one department to another. We now have a department that concerns itself primarily with environmental matters, a government department that is merely concerned with co-ordination as such. What is missing from this structure at the moment is the establishment of some type of independent body that can come to conclusions, similar to the way the Economic Council of Canada operates. Such a structure, I think, is good and would be very useful in the present set-up.
I have to voice some reservation though, not about the bill but about the way pollution control is carried out. A pollution control council, a governmental body, does not necessarily mean that we will move ahead in this regard. An environmental control council or an environmental council of Canada would help and advise, but we cannot take any pride in setting up another body of government
Environmental Affairs
because in some cases governmental bodies can hold us back just as much as they can move us ahead. For example, if there is too much red tape or if there are too many bodies that concern themselves with pollution control, this can hold us back. I do not suggest that this bill would hold us back rather than move us forward. The problem at the moment is that despite the fact that we have had during the last two years several bills dealing with pollution control that have begun to set up structures to meet the problem, we have not yet moved ahead to the point where I feel the government is giving priority to dealing with pollution control over and above the mere setting up of pollution control structures.
We now have a Department of the Environment. We have a Minister of the Environment (Mr. Davis) and we have a deputy minister of the environment. I believe that the minister and the deputy minister, as well as the members of the House, are concerned about environmental control and would not hesitate to use what powers they have. The problem is that no money is being provided. I can think of half a dozen areas where pollution control ideas have been put forward but the money to put them into effect has not been forthcoming. At the moment there is a great need for a broadly expanded system of air pollution monitoring in Canada. There has been a monitoring system set up under the general supervision of the Department of the Environment which has carried on the work formerly done by the Department of National Health and Welfare and by some provincial organizations.
We have an across-Canada structure, but it is still very deficient in scope and falls far short of what we actually need. So do the standards. We have not yet set up sufficient national standards in order to determine whether or not our air is being polluted, in what areas and in what manner. Here at least is one area in which money could be used to good purpose. I asked the Minister of the Environment about this particular problem on at least two occasions and he informed me that there are a couple of additional monitoring stations being built. However, these are merely an attempt to keep pace with the rate at which pollution generally has been increasing.
So while I support entirely the hon. member's proposition that we set up an environmental council, whether it be called an environmental control council or something similar, these structures in themselves do not move us necessarily forward in the field of pollution control; they merely give us the ability to act. In order to carry out that action we need money and the will to take initiative. To illustrate even further the non-partisan or non-political approach that there seems to be to environmental questions, the national meeting of the Progressive Conservative party, held this week in Ottawa, adopted a resolution which is also very close to the provisions in the bill the hon. member has introduced. In a paper entitled "A program for pollution control," under the heading "Government structures" it is stated:
The first requirement of an effective national program of pollution control is complete and accurate information about the extent of the present deterioration of the environment in all parts of Canada. In addition, a comprehensive inventory of the natural resources of Canada is required, and quality standards for each major resource should be established.

December 10, 1971
Environmental Affairs
Then, after stating the National Research Council has been doing valuable work in this area and setting out what is further required, the paper reads in part:
Associated with the action force should be an Environmental Council of Canada similar in composition and purpose to the Science Council of Canada, to advise the Canadian government and Parliament and the Canadian public about particular environmental matters and to recommend on a continuing basis both specific short-term and long-term measures for pollution abatement. The council should be composed of private citizens and members of groups outside of government, and might involve citizens' anti-pollution groups, the universities, industry, labour and conservation bodies.
This sounds so close to the speech made by the hon. member who has sponsored this bill that I wonder where he got his wording. The proposals are identical, and I am inclined to think that whoever speaks next for the NDP will take a similar approach to the problem. The idea that has been put forward seems to have the unanimous support of the House. That is about all I want to say on the bill, Mr. Speaker.
Still lacking in the government is any appearance of giving pollution control a national priority. I admit that the Department of the Environment has been established. There have been amendments to the Shipping Act which are helpful. The Canada Water Act, which was not worth very much, was enacted and there has been other legislation brought forward. The structures are appearing, but the will to act has not yet come forward.
The government has been absorbed in economic problems. It has been absorbed in the massive tax bill that we are presently discussing. It has been absorbed in so many other things that the Department of the Environment and environmental matters seem to have been neglected. I will not say they are completely ignored because I am sure the Minister of the Environment is sincere in his efforts. Yet to my mind we have not yet seen any exhibition of a feeling that the government is taking the lead. Rather, the government has exhibited a feeling of holding the fort in case of being accused of doing nothing.
We have switched structures around and made different people responsible for different things. We have brought in legislation that appears to be beneficial but we are still dragging our feet on so many things. We passed the Shipping Act months ago but the regulations under it have still not been promulgated. I admit that they pose a problem. At the time it seemed to me, and it still seems to me, that the government rushed the bill through in order to give the appearance of being concerned, without knowing what regulations it would adopt. The implementation of the bill has been ineffective, as a result, and in fact has been found to be impractical in some cases.
I support the idea of a council, if it will help, but I ask that the government give some leadership in its priorities, that it show us that it really means what it says when it utters the same cliches as everybody else, that we have to do something about pollution in Canada. We have not seen this yet. Nevertheless, in spite of the fact that this bill if implemented will add one more structure, it might be a structure that would prod the government in the same manner as the Economic Council of Canada. If it will do that, if it will be one more voice that will keep prodding and prodding for action on pollution control and will keep on presenting ideas, then I certainly support it.
[Mr. Aiken.J


Mr. Ralph Stewart (Cochrane):: Mr. Speaker, I welcome the opportunity to rise in this debate on a subject as lofty as pollution control. I commend the hon. member for Burnaby-Richmond-Delta (Mr. Goode) for introducing his bill. The opportunity of speaking on a subject like pollution control is always a welcome one for any of us here because it is like motherhood, everyone is in favour of it, although these days I do not know if the analogy is good because there are so many people who are trying to downgrade even motherhood, what with the doing away of innocent babes in the wombs of mothers, and so on, that is advocated. In the result, I wonder if motherhood is still the lofty thing it used to be. In any event, in the case of pollution certainly it is on everyone's lips and we are all in favour of controlling pollution.
Although I have a great deal of respect and admiration for my colleague, I am afraid I cannot agree with the details of the bill. I think I understand what he is trying to do with it and I commend him for that, but I think that establishing a council for environmental control is not the answer. We are establishing all kinds of councils. We have more bureaucracy than we need in this country, and the more groups we establish, I think the less effective we are likely to be.
As it is now, we have a federal Department of the Environment which has many people working on this problem. We have a department of the environment in each of the provinces. We have the council of resource and environmental ministers which meets periodically and discusses these matters. Therefore there is co-operation and co-ordination among the provinces. Also, we have a number of citizens' groups which have been dealing with the subject.
First, Mr. Speaker, I believe pollution control is not a question of one government or another but must be a co-operative venture among all levels of government, municipal, provincial and federal. Further, I believe that it has to be on a worldwide scale, not only in one country. Therefore I was glad to have the opportunity of assisting at a conference in Bonn a few months ago with the parliamentary secretary to the minister where we discussed the question of pollution.
I wonder if the public, which is very concerned about pollution, is always fully aware of the actual situation. Unfortunately, some things are exaggerated in this regard. Once in a while the imagination of the public is caught up in such a thing as pollution, so we must have great, dramatic stories brought forth. There is no denying that pollution is one of the most important problems in the modern world. However, if we are to analyse the problem properly I do not think we can be emotional about it because emotionalism in this case will cloud the over-all picture.
In my part of the country, northern Ontario, we have seen the question of pollution being overdone. We have had programs on the CBC which discussed pollution in northwestern Ontario, for example, where pulp and paper mills were accused of being dreadful culprits, and chemical plants were polluting rivers and lakes. According to the way it was described, if anyone in northern Ontario were to eat a fish pulled out of a river or lake up there, that person would be sure to die of mercury poisoning.
December 10, 1971

This is the kind of attitude taken and the kind of feeling left in the minds of viewers.
I wonder whether it really helps when we go to that extreme. Certainly in northern Ontario our whole economy is dependent upon industries such as pulp and paper. The contribution of these companies to the development of the north is tremendous. I believe they have done everything they can to keep up with the times and try to correct the faults which exist in their plants regarding pollution of lakes, rivers and the air. The expansion and modernization of these plants and their efforts to control pollution effectively cost a great deal of money.
In this case I believe there should be help from government if they are to succeed. There are many old mills in northern Ontario, unlike the situation in western Canada. This poses a real problem. I think at this point the federal government has not done a great deal in a tangible way to help the pulp and paper industry generally. In the past few days, if I remember correctly, I read a news report which stated that the federal government will take new measures in order to help the pulp and paper industry. This is very good news, particularly for the people of northern Ontario who are so dependent on this industry. I would support any move that would allow these companies to go ahead and put in the changes necessary to clean up the pollution created in the lakes and in the air.
I believe the forest products industry in Canada is one of the most important of all our industries. It is time the federal government examined this industry and helped it in any way possible. In my constituency there is the Abiti-bi Paper Company and the Spruce Falls Pulp and Paper Company. These people have spent a great deal of money over the past few years in an effort to put in pollution-abatement equipment. In the past ten years the Abitibi Paper Company has spent nearly $18 million in its pollution-abatement policy. This I believe is significant. When a company spends that kind of money, particularly when the market is the way it is these days, I believe it should expect some help from the government.
One subject of pollution which interests me particularly is that of recycling. I have spent a considerable amount of time examining this question, especially the recycling of garbage. I believe there should be more research by the government in this respect. I think there should be more co-ordination among governments. I notice that in Canadian universities in the past number of years a major study has been made of this subject. Governments of other countries are undertaking similar studies, but there does not seem to be any co-ordination. In other words, there is duplication and triplication of effort. If anything is to be done at the forthcoming meeting at Stockholm in June, it seems to me there should be a desire on the part of the nations of the world to get together in their research so that we do not have the same kind of research going on in various countries.
I think one of the main causes of pollution is the evergrowing amount of refuse, or garbage if you like, both domestic and industrial. Eventually, refuse disposal systems will have to be based on the principle of recycling; that is to say, we will have to imitate nature and re-use everything that we now throw away. On earth we have
Environmental Affairs
our own thin envelope of soil, water and air. We have plants and animals and an environment that is constantly being reshaped and renewed by nature. It is an endless cycle of birth, growth, death and decay. It is constantly renewing itself by means of its carbon atoms, its oxygen, its nitrogen and its phosphorous compounds. There is no such thing as waste in this cycle; the natural earthly scheme is a process of self-cleansing.
It is up to man to imitate this cycling nature, but as our numbers grow we thoughtlessly sow the seeds of our own destruction by defiling the world we live in. Advancements in technology are not to blame, but human indifference is; and we seem to continue to ignore the fact that in the end we shall have to pay for our shortsightedness. With careful study and better management we should be able to add to the quality of our environment. We can stop downgrading our resources and instead put the accent on renewability. This will mean taking a broader approach to industrial development, town planning and the use of leisure time.
This business of pollution needs monitoring on a worldwide scale. We need co-ordination among all levels of government in our country, but there also must be cooperation among the nations of the world if we are to succeed. Pollutants are no respecters of man-made boundaries. They travel across continents with the winds. They are flushed into the sea and go to the other end of the world. They can be discharged in central Canada and found in whales in Hudson Bay.
If we can keep our pollutants to ourselves and everyone else does likewise, we will serve the best interests of mankind. Our fight against pollution is twofold. We must clean up the present mess, of course, and we must prevent further pollution. We have to keep our poisons, and so on, inside our own fences. However, I do not believe the answer is to form another council. If there is anything we do not need it is more bureaucracy. I think the problem is well before us and is well understood.
The governments of the world are coming more and more to realize the importance of the problem and to work together toward its solution. We have pollution conferences here and there. A conference of worldwide interest is the one to be held in Stockholm in June, to which Canada undoubtedly will be making an important contribution.


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, Bill C-49 before us this afternoon is an interesting piece of legislation. I can say at the outset that our group has every intention of endorsing the principle of the legislation, which is the setting up of an environmental council. I must say, however, I was rather amused by the opening remarks of the sponsor of the bill. He spoke about the groups in this House uniting on this subject and foregoing partisanship when we consider the need for this council.
I would like to ask the hon. member through you, Mr. Speaker, where he was many months ago when a motion to establish an environmental council was first moved by our group in this House. It was moved in the committee where discussion took place. I cannot recall the sponsor of this legislation giving the members of our group any support in our drive to have an environmental council of Canada set up along the very lines which he is suggesting

December 10, 1971
Environmental Affairs
in the legislation we are debating. It seems to me that this partisanship should have been considered many months ago when the basic issue was before the committee and the House. The government should have been pressured at that time to bring in legislation to establish such a council.
There is no doubt that an independent environmental council would be a tremendous asset so far as environmental problems in Canada are concerned, and I disagree with the previous speaker who said that we do not need this type of council. We do need it desperately, for the following reasons. We have the Economic Council of Canada. I know that on many occasions the government has been extremely unhappy with the reports that council has put out to the public. It is supposed to be a council divorced from government, a council that will examine very closely every aspect of the economic activity of this nation and then put them in a report to let Canadians know where, in the opinion of the council, we should be going and where the government is getting off the track.
Just as we have a council in the economic field, we need one in the environmental field. The same type of individual is needed, people who will carry out a close scrutiny of all the problems of pollution of the environment which affect our nation. Then, without any political pressure at all, they would give a report to the Canadian nation which would give us guidance as to where we should be going and what we should be doing, and which would suggest methods of meeting the increasing environmental problems which are causing so much distress not only in Canada but all over the world. I appeal to the government seriously to consider this suggestion in the bill. It is a suggestion that has been made on numerous occasions in the House, namely, to set up a council such as this- because if any nation in the world needs guidance in environmental problems, it is ours.
I should like briefly to point out several fields where I believe we are deficient in dealing with pollution and environmental problems so far as our nation is concerned. We have to a great degree fragmented our approach to the pollution problem. We have divided the authority for pollution problems among a number of departments. It is true that we have set up a co-ordinating committee, but in the past we have found that it has not been working. Too many departments ignore the over-all need for environmental protection, and as a consequence the regulations and laws which were laid down many years ago have not been enforced by the various departments, for a variety of reasons. For example, someone in charge of shipping is faced with a problem dealing with the environment. If the action necessary to deal with the pollution problem would upset the economic aspect of shipping, there is a tendency for the department to forget all about it. The same thing applies to fisheries and forestry, to the mining industry and to other departments. This is why an over-all environmental council is desperately needed. It is needed to give Canada a broad picture of what our environmental problems are, how we should deal with them and what changes we should make interdepartmentally to achieve the goal which, I presume, would be outlined by this council.
I would point out very briefly two or three of the major aspects of the environmental problem which I feel have
been almost totally neglected by this government. We talk of dealing with pollution problems and environmental problems in a piecemeal method, yet there is no doubt that there are three factors which we cannot separate. One of them is the development of natural resources. Another is population and pollution. They are intertwined; you cannot separate them. For example, what have we done about population and our urban problems? It has been pointed out by experts in every field that we are getting into more and more trouble so far as urban development is concerned. This is part of the population problem facing our nation. Next to nothing is being done by this government or by any individual in it in this respect. We are not getting the guidance or the direction that is needed. We are just going along, hoping that these problems will solve themselves eventually.


Mr. Corbin:: How can you say that?


Randolph Harding: If you do not know that and you are interested in this problem, then I want to tell you that very little has been given to the House in the way of direction to solve these problems.


Eymard G. Corbin: We have done more than any government in 100 years.


Some hon. Members:: Hear, hear!


Randolph Harding: Let me tell the hon. member that more pollution and more environmental problems are facing us than have faced any government in the past 100 years. I have no hesitation in saying that there are all kinds of pollution problems facing us, such as mine effluent flowing into rivers, and nothing is being done to rectify it by the department concerned. I can give the House all kinds of examples. The point I am making is that this council could point out to the government and to the departments concerned that, for example, things are going wrong in the north or in some other section of Canada, and it could suggest changes.
The government is trying to give a false impression to the Canadian people, namely, that we are really driving on all these issues while in reality we are only touching the top and moving very gradually, and not too effectively, in our efforts to clean them up. No one is saying that all these steps should be taken at once.
My friend, the hon. member for Parry Sound-Muskoka (Mr. Aiken), spoke about national standards. We do not have them in Canada. This should be another objective of the council. We do not want pollution havens in British Columbia, in Newfoundland or in any other province of Canada. Unless we adopt national standards, this will happen. We need an unbiased council to point out these things to the government and to urge governments at the provincial level to get together and prepare a program which would solve most of the jurisdictional and other problems which face us in this field.
I do not want to talk out this bill. As I indicated before, our party is in favour of the principle of setting up an environmental control council. We would like to see it completely divorced from the government, and independent. This is the only way we will get a real alternative to the approaches of the various political parties and the government of the day. We desperately need this, Mr. Speaker.
(Mr. Harding.]
December 10, 1971

I shall now resume my seat, but as the sponsor of the bill indicated in his opening remarks I hope we will see the House unified on this problem, without any more partisanship. This is a good idea, and the bill could be passed by the House this afternoon and sent to committee. However, I am afraid that it will be axed by the hon. friends of the sponsor. I hope this will not happen, but we shall see in the next ten minutes.


Mr. Jack Cullen (Sarnia-Lambton):: Mr. Speaker, I hoped that the hon. member who just spoke would not again come up with the old party line of partisan politics which creeps into every speech and address they make. Some members may be opposed to this measure, but not just because they are Liberals. In fact the hon. member for Cochrane (Mr. Stewart) and I do not believe that this is a good idea. I do not think it is a particularly good idea just now. Surely this points up our personal point of view on this bill, not the political one.
I talked to the sponsor of the bill earlier. He assured me that there was a typographical error in clause 11 and that it was his intention to make a change. I assume this will be done when the bill gets to committee. Clause 11 deals with organization. Mr. Speaker, I think there is a group of people who print bills and say automatically that head offices shall be in the city of Ottawa. As expressed to me, the hon. member's intention was that the head office of this particular council should be located in Burnaby. Because the amendment was not made I would like to advance an argument on behalf of Sarnia. It is a beautiful community with a miniscule amount of pollution and it has successfully combated most of its big problems. It is approachable by land, sea and air.


An hon. Member:: By sea?


Jack Sydney George (Bud) Cullen: The Seaway. I would welcome the hon. member to Sarnia, as he welcomed me to Cape Breton. But he did not tell me that he had arranged a hurricane this summer so that I could not make the trip. However, I will make it next year.
Mr. Speaker, Sarnia, Burnaby or even Edmonton could serve as the headquarters of this council. In Sarnia we have not only the provincial-federal jurisdictional problem but also the international problem of America-Canada. I am happy to say that this problem is being recognized and just this week we learned from the Department of Transport that studies are being carried on by American and Canadian authorities on the problem of the Great Lakes. This type of council could look into that problem.
The hon. member for Parry Sound-Muskoka (Mr. Aiken) indicated that as far as shipping is concerned we have good law with which to curb pollution, but such law is not effective if the guilty parties cannot be established. At the moment these studies are attempting to establish who dumped bilgewater into the Great Lakes and destroyed the beautiful beaches of Lake Huron.
I am opposed to this council at the moment because I think the Department of the Environment should be given an opportunity to prove that it means what it says. The government has indicated that this minister has the
Environmental Affairs
responsibility of looking after the environment in Canada so far as federal jurisdiction and power are concerned. It is my submission that if the council suggested in the hon. member's bill is appointed, it will dilute the power of the Minister of the Environment (Mr. Davis), but what is more important-and I think the opposition should be aware of this-is that it will dilute his responsibility for the environment.
I do not think a true analogy can be drawn between this council and the Economic Council. In this area, if someone raised the question I think the minister could say, "This is something that should be studied by the environmental council, and they have not had an opportunity to do that because they have been working in another area". That would give him an opportunity to avoid his responsibility.
I agree with the hon. member for Cochrane who has said that we have too many structures. We know where the water and air and land is polluted, and we know where there is too much noise. We do not need another council to point to that kind of pollution. Mr. Speaker, I would worry about the appointment of a council such as this. Aside from diluting the power of the minister, it would go a long way toward diluting his responsibility.
I am surprised that the opposition would support the establishment of such a council at a time when the government has accepted its responsibility. I was also surprised when the hon. member for Parry Sound-Muskoka said that the government had not shown leadership. He can only say that because he does not acknowledge or recognize the wonderful actions taken by this government. There was an interjection by the Parliamentary Secretary to the Minister of the Environment (Mr. Corbin) that this government has done more to counter pollution than any government in the past 100 years.
It is very easy to say that the clean water bill is there but it does not do anything, and that the clean air bill is there but nothing has been done. When the Conservatives were in power I do not think they had heard of pollution other than was exemplified in some of the speeches made in this House, which I read in the newspapers when I was an ordinary citizen of this country.
I am opposed to the council being established at this time, Mr. Speaker. I think when the minister has seen to his responsibility, if we then get into areas which are more sophisticated as far as policy is concerned we might need an environmental council such as is suggested by the hon. member for Burnaby-Richmond-Delta (Mr. Goode) in his bill. By then we would have the expertise gained from several years of trying to solve the problem and could form an environmental council composed of individuals with sophistication and knowledge of the problem.


Steve Eugene Paproski: And form a new government.


Jack Sydney George (Bud) Cullen: It will only be a new Liberal government.


Mr. Speaker:: Order, please. The hour assigned for the consideration of private members' business has expired. This House stands adjourned until Monday, December 13, at two o'clock p.m.
At five o'clock the House adjourned, without question put, pursuant to Standing Order.

Monday. December 13, 1971