1971-12-06

FIFTIETH ANNIVERSARY OF ELECTION OF LATE J.S. WOODSWORTH

Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, pursuant to notice which I gave to Your Honour this morning, and as a matter of privilege, I should like to draw the attention of the House to the significance of this day in Canada's history. It was on December 6, 1921, exactly 50 years ago today, that the late J. S. Woodsworth was first elected to the Parliament of Canada. We in this party are of course deeply conscious of our debt to him for what he did for our movement. I think it might also be said that few men have made a mark on the history of this country such as that made by the former member for Winnipeg North Centre, whom I had the honour to succeed when he died in 1942.
I believe members of the House might be interested in knowing that his widow, Mrs. Lucy Woodsworth, now 97 years of age, is resident in Ottawa at St. Vincent hospital. It may well be that members would like our greetings to be extended to her on this occasion. If so, I know of no one more qualified to do that than the daughter of Mr. and Mrs. Woodsworth, the distinguished member for Van-couver-Kingsway (Mrs. Maclnnis).


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, I know that I speak for all members of the House when I express the government's profound regret that open war has broken out on the subcontinent of India.
General hostilities erupted between India and Pakistan last Friday. Each government has accused the other of having started this latest stage in their tense confrontation which began some eight months ago. Reports of the fighting are contradictory. It seems fairly clear that neither side has yet heavily committed its forces on the western front; in and around East Pakistan, however, Indian forces are exerting considerable efforts to gain territory. India has recognized the provisonal government of Bangla Desh.
An emergency session of the United Nations Security Council was called Saturday evening on the initiative of nine of its members to consider the deteriorating situation. It met again on Sunday and will meet also this afternoon. A number of resolutions have been presented but no consensus is yet in sight. Our ambassador at the United Nations is in close touch with events there and is keeping us informed. It is our hope that the Security Council will find enough common ground to be able to act decisively. In the absence of such action, it will be necessary to consider what the General Assembly could achieve.
The safety of Canadian citizens on the subcontinent has been very much in our minds this weekend. In India, there are some 1,100 Canadians registered with the High Commission in Delhi. More than a month ago, those living near the border with Pakistan were advised to consider moving to a safer location. In East Pakistan there are 40. In the early hours of this morning, at the request of the Secretary General of the United Nations, a Canadian Armed Forces C-130 aircraft was diverted to Dacca to help in the evacuation of United Nations personnel. It was intended that it should also be available to any Canadians who might not have left earlier, Commonwealth citizens and other nationals. Although a local ceasefire had been arranged by the United Nations with the Pakistani, Indian and Mukti Bahini forces which would permit the aircraft to land at Dacca, that airport was attacked at precisely the hour our aircraft was to begin its approach to the area. The aircraft returned to Bangkok safely. We trust that with renewed assurances of another local ceasefire, we shall have better success tomorrow.
In West Pakistan, where 270 Canadians are registered at the High Commission in Islamabad, those responsible on the spot have not yet concluded that action is necessary. Some time ago Canadians in the Lahore area were advised to consider moving, and it was suggested to those in Karachi that they should be prepared to leave at short notice. Yesterday nine Canadians arrived in Teheran on a commercial flight from Karachi; their families have been informed. There have been reports that other commercial flights have followed.
From the beginning Canada has been in touch with the governments of India and Pakistan at the highest levels. To the government of India we have urged patience and restraint in a situation of great difficulty. To the government of Pakistan we have stressed the urgent necessity of speeding up of a return to civilian and representative government, particularly in East Pakistan. We have been among the most concerned and engaged in the great world humanitarian effort to succor the refugees, and have latterly been directing our efforts to increased assistance to India to help relieve the burden on its budget and

December 6, 1971
External Affairs
development program which the pressure of so many extra people represents.


Mr. Heath Macquarrie (Hillsborough):: It is needless to say, Mr. Speaker, that it was with heavy heart that I listened to the minister's statement. I know that I share with him and all hon. members a profound sense of sorrow at the developments which we have been learning about in recent days and hours in the Indian subcontinent.
We are, of course, particularly concerned about the welfare, safety and security of our own nationals in the area. I am particularly distressed that certain hostile actions have been taken at times, not only in the place mentioned by the minister but at other evacuation points, when the innocent and proper removal of civilians was being undertaken. It is deplorable and regrettable. I hope we will not have further reports of such unfortunate incidents.
The whole question in recent months has not brought forth much reason for optimism. For a long time we should all have seen the gathering clouds over the Indian subcontinent, and should have been prepared for the prospects of the kind of warfare which is being waged by these two countries at the present time. For months there has been tragedy in the subcontinent. Now, with the opening of hostilities, the tragedy has been widened and broadened and given more painful dimensions, and who knows how horrendous might be the situation if this continues.
It is all the more painful, I think, because these are friendly states of the Commonwealth. We feared the situation and we wondered. The burden which India had to bear was a terribly heavy one. Yet, while neither a pacifist nor a dove, I can never believe that a warlike solution today is in fact a solution to problems of this kind. Perhaps the world has not taken sufficient note of the dimensions of the problem. Perhaps the international community should have moved more quickly. Now it is too late to pass judgment on the past.
I am sure everyone here is disturbed about the seeming incapacity so far of the Security Council to take effective action, indeed, Sir, to take any action on this terrible, awful conflict involving so many people and with the grim potentiality of involving so many more. The Security Council, having met hour after hour, seems to end with the use of the veto and in futility. Whether it will be necessary to move from the Security Council to the General Assembly through the technique of the "uniting for peace resolution", as it was once called, we do not know. I would hope the minister might tell us more about the Canadian government's point of view on that. I hope he will also be able to tell us more about what the Canadian nation and the Canadian delegation are prepared to do.
I thank him for this statement. I realize there is not much he can say at this time, but I hope that in the future he will keep the House and the country informed. I can assure him that all of my colleagues, and I am sure all Canadians of decent outlook and concern for the peace of the world, will support the Canadian government in any measure which it can take to help roll back the frontiers of hatred and bring about as quickly as possible that which surely is of the essence today, the cessation of hostilities through a ceasefire.


Mr. David Lewis (York South):: Mr. Speaker, it is unnecessary to assure the Secretary of State for External Affairs that we appreciate the efforts the government has obviously taken to assure the safety of Canadian nationals in the area referred to. It is also unnecessary, I think, to say to him that we appreciate fully the difficulties of the situation and the fact that the contribution which Canada is able to make in the solution of the political and military problem is necessarily limited.
I want to underline in my comments on the minister's statement the seriousness of the war not only for the people directly concerned, the people of India and Pakistan and the people of East Pakistan, but for the future peace of the world. The failure of the Security Council to arrive at any consensus, Mr. Speaker, is not accidental; it is due to the fact that the Soviet Union has launched itself on one side and Mainland China has launched itself on the opposite side and the United States of America is trying to make up its mind precisely where it belongs. It is the ranging on opposite sides by these big powers that makes it impossible for the Security Council to reach any solution to the problem and makes the war so dangerous to the future peace of the world.
I say through you, Mr. Speaker-and I hope not presumptuously to the people concerned on this subcontinent-that if the war continues very long and attracts the forces of perhaps China on one side and the Soviet Union on the other, or accelerated military assistance from one side or the other or both, then obviously world war will come a step closer and the danger of nuclear destruction will become as serious as it has ever been since the end of the last war. Therefore, Mr. Speaker, without wanting to be dramatic about the subject I think the Canadian government ought to consider very seriously whether the matter should be left very much longer with the Security Council in view of the futility which has resulted from that or whether it should be taken to the General Assembly where the veto does not exist and perhaps the international world might take some steps to advance peace in the area.
I think it is important to remember that this outbreak of war is the result of many years of conflict and was particularly sharpened by the shortsightedness of American policy in 1958 or so when the Indian declaration of nonalignment suggested to Mr. Dulles and his associates in Washington that Pakistan ought to be militarily strengthened. It ought also to be remembered that the war has occurred because of the completely indefensible step taken by Mr. Yahya Khan, the head of the government in West Pakistan, against the Awami League, which had won all of the seats in East Pakistan and some in West Pakistan in a democratic election in that country. Mr. Yahya had refused to permit Sheik Mujib to become the head of government of all Pakistan as the election required him to do. Instead, he has imposed a military government and has outlawed the Awami League and imprisoned not only Sheik Mujib but others as well. In our anxiety to have the war ended by a ceasefire-all members of my party in the House are as anxious to see that as any other member or any other citizen of Canada-we should not fail to remember what Yahya Khan has done to the democratic process in Pakistan and to the people of East Pakistan and no step
December 6, 1971

Questions
should be taken at the expense of the freedom and the future of the people of East Pakistan.
May I also say a word which I imagine is unnecessary but which I feel ought to be put on record. This war ought in no way to interfere with the assistance given, and which must be continued, to India to deal with the eight to ten million East Pakistani refugees now in India who require succour and aid. I am sure the Secretary of State for External Affairs will agree that Canada will in no way reduce its determination to continue its assistance to the refugees, and I hope our influence will be used so that other countries in the world will not cease or reduce their aid.
All of us in this House hope that some solution may be found to this war, perhaps a temporary ceasefire to be followed by a political solution that will recognize the rights and the freedom of the people of East Pakistan and, indeed, of West Pakistan as well, and that the military junta, to use a South American term for an Asiatic government, that now seeks to control all Pakistan will be dispossessed of its power by the free democratic process of the Pakistani people.


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, we were aghast at hearing, over the past few days, the news concerning the war between India and Pakistan. I believe few Canadians have any hope of immediate settlement of that war, at least so long as the issue remains in the hands of the Security Council.
Last night again, I was listening to news on television coming to us from New York, where the aristocracy of the world boldly plays politics on the occasion of such serious conflicts as the one opposing India and Pakistan. So long as powers like Communist China and Russia will be providing the two parties involved with arms, there is little hope that peace may be restored in that part of the world. Furthermore, so long as wars will supply major markets for arms manufacturers, notwithstanding the United States, embargo on shipments of arms to India, nations will lie at the mercy of warfaring countries. It is an open secret, Mr. Speaker, that major international arms manufacturers need no permission for their arms.
I believe the government and the Secretary of State for External Affairs (Mr. Sharp) share our pessimism judging by the very important security measures that have been taken in order to ensure the evacuation of Canadians living in that part of the world.
Mr. Speaker, when such conflicts arise we should let the countries concerned, in this case Pakistan, settle them. The world would then be better off.



QUESTIONS ON THE ORDER PAPER

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. McQuaid: How many people working for the Department of Indian Affairs and Northern Development were transferred or have left the Department or the Public Service in the past two years?


Mr. Judd Buchanan (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Approximately 3,000 people per year. The above figure includes casuals and employees who have transferred to the Northwest Territories Government.


INCENTIVE GRANT TO CHOICELAND DEHYDRATES LTD., SASKATCHEWAN
Mr. Mazankowski: 1.	Was an industrial incentive grant awarded to Choiceland Dehydrates Ltd. of Saskatchewan and, if so, what amount was awarded?
2.	What were the dates of application to and approval by the Department of Regional Economic Expansion?
3.	Was an extension for the grant requested and, if so, for what reason?
4.	What was the date of the application for an extension?
5.	On what date was approval of the extension granted?
6.	Who are the principal shareholders and directors of this company?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: 1. Yes, an offer of $85,000 was made and accepted.
2.	(a) December 29, 1969; (b) April 9, 1970.
3.	Yes an extension was requested because of unforeseen delays in gas line construction by the Saskatchewan Power Corporation.
4.	March 30, 1971.
5.	April 14, 1971.
6.	Information provided by business firms in the course of government investigation of proposals is on a confidential basis.


OPERATION COMPULEX
Mr. Robinson: 1.	When will operation "COMPULEX" be completed?
2.	What is the anticipated cost of this pilot study?
3.	Will the cost be borne solely by the government?
4.	Are computers to be utilized in the study?
5.	Is it proposed in the terms of reference that data banks be considered for the use of the public and/or professions?


Hon. John N. Turner (Minister of Justice):: 1. It is estimated that Operation COMPULEX will be completed by March 31, 1972.

December 6, 1971
Questions
2.	The anticipated cost of this study is approximately $125,000.
3.	The cost of the Study will be borne solely by the government.
4.	Computers will be utilized in the Study solely for the purpose of compilation of results.
5.	Data banks are being considered in the Study for the use of the public and profession.


RECIDIVIST RATE OF MALES ADMITTED TO PENITENTIARIES
Mr. Orlikow: What was the recidivist rate of males admitted to each Canadian penitentiary in 1970?
Males Admitted by Penitentiary by Previous Commitments*-1970
Males	No	With	Number of Previous Commitments*Total	Previous	Previous Admis-	Commit- Commit-	OverPenitentiaries	sions	ment	ment	1	2	3	4	5	6-10	11-15	16-20	20Newfoundland	43	14	29	15	4	3	2	2	2	1	Dorchester	444	110	334	95	87	53	35	25	31	10	3	-St. Vincent de Paul	1,279	386	893	250	177	156	81	58	128	32	6	5Kingston	1,128	176	952	175	131	142	129	90	209	46	20	10Manitoba	426	123	303	66	54	47	31	26	61	8	5	5Saskatchewan	44.5	66	379	61	59	43	51	32	98	24	7	4Drumheller	137	34	103	23	20	15	15	11	16	3	-	-British Columbia	548	95	453	78	67	61	43	39	106	41	9	9Total Males	4,450	1,004	3,446	758	599	520	387	283	651	165	50	33



Mr. Orlikow: What was the recidivist rate of males admitted to each Canadian penitentiary in 1970?


Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: To answer this question, Statistics Canada has defined the term "recidivism" to mean any previous commitment to a penitentiary or other adult correctional institution. The attached table shows the number of males admitted to each Canadian penitentiary for the year 1970 by the number of previous commitments to a penitentiary or other adult correctional institution.
Previous commitments to a penitentiary or other adult correctional institution.


WHITEHORSE, Y.T.-TRANSFER OF PUBLIC WORKS EMPLOYEES
Mr. Orlikow: 1.	How many meetings have been held between the Department of Public Works and the City of Whitehorse concerning the transfer of certain Department of Public Works employees to that City?
2.	How many meetings have been held between the Department of Public Works and Officials of the Territorial Government concerning the transfer of employees in the Department of Public Works (highway maintenance crews) to the Territorial Government?
3.	Have any meetings been held with the group mentioned in part one and/or their Union representatives and (a) if so, how many (b) if not, for what reason?
4.	Have any meetings been held with the group referred to in part two and/or their Union representatives and (a) if so, how many (b) if not, for what reason?
5.	If such meetings have not been held, will the government give the assurance that all negotiations will be held in abeyance until such meetings are held with the employees affected and/or their Union representatives?
6.	Have arrangements been worked out between the Department of Public Works and the City of Whitehorse in connection with the transfer of employees of the Department to the City of Whitehorse in regard to the transfer of accrued sick leave, special leave and the type of pension plan to which the transferred employees will be entitled and, if so, were these arrangements arrived at after discussions between representatives of the Department of Public Works and the City of Whitehorse and were representatives of the employees affected involved in the discussions and, if arrangements have not been completed, will representatives be consulted before agreements have been reached?


Hon. Arthur Laing (Minister of Public Works):: 1. Three exploratory meetings were held between the Department of Public Works and the City of Whitehorse concerning the proposed transfer of firefighting and water treatment functions to that City. The matter is still under consideration.
2.	Four meetings were held between the Department of Public Works and Officials of the Yukon Territorial Government in connection with the transfer of employees of the Department of Public Works to the Territorial Government.
3.	Yes, (a) Two meetings have been held with the employees affected and their representatives, (b) Not applicable.
4.	Yes. One meeting was held between the Department of Public Works and executive officers of the Public Service Alliance of Canada. Four meetings were held with representatives of the Public Service Alliance of Canada Component representing the Department of Public Works employees affected.
5.	Not applicable.
6.	No arrangements have been made regarding the transfer of accrued benefits for the Department of Public Works employees who will be taken on strength by the City of Whitehorse. Negotiations are, however, continuing towards the possibility of entering into a reciprocal arrangement with regard to superannuation. Neither the employees who might be affected not their union representatives were involved in discussions with the City of
December 6, 1971

Whitehorse. Employees and their union representatives will be consulted prior to any possible reciprocal arrangement being entered into concerning superannuation.


WATERLOO, ONTARIO-UNEMPLOYMENT INSURANCE COMMISSION OFFICE
Mr. Hales: 1.	What was the amount spent by the Unemployment Insurance Commission and by the Public Works Department on the Unemployment Insurance Commission office in Waterloo, Ontario, for each of the past five years?
2.	For what purposes were those amounts expended?


Mr. J. A. Jerome (Parliamentary Secretary to President oi the Privy Council):: 1 and 2. By U.I.C.
Fiscal year
1967-68	-	Open landscaping	1968-69	-	(a) loose-lay rug	$ 9,5381969-70	$14,238	(b) plants	4001970-71	-	(c) screens	4,3001971-Sept. 1971	-	Total	$14,238By the Department of Public Works.	Fiscal Year	Rent	Miscellaneous	Total1967-68 (from Oct. 1, 1967)	$17,955	$ -	$17,9551968-69	37,338	411	37,7491969-70	39,153	23	39,1761970-71	42,767	1,210	43,9771971-72 (to Sept. 30, 1971)	21,745	124	21,869


NUMBER OF PUBLIC SERVANTS OF RETIREMENT AGE STILL WORKING
Mr. Mather: Is there an estimate of the number of public servants of retirement age who are still working and, if so, what is the number?


Hon. C. M. Drury (President of the Treasury Board):: It is
estimated that there are 700 public servants of retirement age who are still working.


INDIAN AFFAIRS AND NORTHERN DEVELOPMENT-EDUCATION BRANCH
Mr. Orlikow: 1.	Is there a curriculum section in the Education Branch of the Department of Indian Affairs and Northern Development and, if so (a) how many people are employed in such section (b) what are the qualifications of each (c) how long has each been with the section?
2.	How many books have been written for use in the North since the section was established?
3.	What liaison is there between the section and the teachers in the field who are in close touch with the actual learning problems of Indian and Eskimo students?


J. Judd Buchanan: 1. No,
the schools follow the prescribed provincial curricula. The Branch supplements these curricula through supporting the development of culturally oriented instructional
Questions
materials and programs of cultural enrichment, (a) and (b) The Education Branch employs a Curriculum Coordinator who is a former teacher and specialist and has a Bachelor's degree, (c) Seven years.
2.	From 1956 and until January 1970 when the Government of the Northwest Territories assumed responsibilities for Education, in the North, the Department produced special materials numbering 67 titles for use in northern schools.
3.	Liaison is maintained through school visits, participation in conferences, workshops, orientation courses and correspondence.


COLOMBO PLAN
Mr. Robinson: Is it the intention of the government to extend the Colombo Plan beyond 1971?


Mitchell William Sharp: At the Colombo Plan Conference held in Victoria, Canada, in 1969, the Consultative Committee of Ministers agreed to an extension of the Colombo Plan for a period of five years from July 1971 to June 1976 and approved the recommendation that the Consultative Committee continue to meet annually with consideration of a further extension to take place in 1974. This decision was concurred in by Canada by the Secretary of State for External Affairs who acted as Chairman of the Consultative Committee at the 1969 Conference.


RE-CYCLING OF METALS
Mr. MacRae: As a conservation measure, which government departments are re-cycling metals?


Mr. Eymard Corbin (Parliamentary Secretary to Minister of the Environment):: None, however the Department of the Environment is initiating a program for solid waste management, which will encourage and assist the development of methods to re-cycle valuable materials including metals and glass.


RE CYCLING OF GLASS
Mr. MacRae: As a conservation measure, which government departments are re-cycling glass?


Eymard G. Corbin: See reply to question numbered 2,082.


INDIAN ECONOMIC DEVELOPMENT FUND-MARITIMES REGIONAL ADVISORY BOARD
Mr. Corbin: 1.	What are the names and addresses of the members on the Maritimes Regional Advisory Board for the Indian Economic Development Fund and, on what date was each appointed?
2.	(a) How many meetings has the Board held (b) at what locations (c) on what dates (d) were all members present?

December 6, 1971
changed. In general, trades formerly assigned to Pay Fields 3 and 4 are now assigned to Pay Field A; trades formerly assigned to Pay Fields 5 and 6 are now assigned to Pay Field B. Pay Field C contains all trades formerly assigned to Pay Field 7 and one trade formerly assigned to Pay Field 6.


NATIONAL DEFENCE-RENTAL INCREASES FOR MARRIED OR SINGLE QUARTERS
Mr. Forrestall: Will there be rental increases before the end of 1972 for residents of CAF married or single quarters and, if so (a) at what locations (b) by what amounts?


Mr. Jack Cullen (Parliamentary Secretary to Minister of National Defence):: Attention is directed to Hansard dated June 11, 1969, page 9987, and April 6, 1970, pages 5492-3. The next scheduled adjustment of charges for married quarters is April 1, 1972. The present Weighted National Average System of charges for married quarters is currently under study, to determine whether some revisions are required to the present system or whether an alternate system should be developed. Should a new system be introduced there could be adjustments to charges for April 1, 1972, but at this time it is not possible to quote dollar values. In so far as single quarters are concerned, there have been no revisions made since the new Canadian Armed Forces Pay System was introduced in 1966. The subject has been under review for some time and it is possible some increases will be effected during 1972.


NATIONAL DEFENCE- -PAY AND ALLOWANCES, CRITERIA FOR RAISE
Mr. Forrestall: 1.	With respect to the 38 trades for which counterpart trades were identified in the Public Service, were any of these Public Service counterparts tied to the principle of area prevailing rates in determining new pay levels for the CAF?
2.	With respect to the remaining 52 trades in the CAF for which there are no identifiable Public Service counterparts, was the principle of prevailing rates followed and, if not, what were the standards used to determine the new pay structures?
Questions
3.	How many applications for funds, by project, were reviewed and, of these (a) how many were approved (b) how many were rejected (c) how many projects were completed?
4.	What was the assessment of the Department of Indian Affairs and Northern Development of the programme for the Maritimes?
5.	(a) What is the name of the business services manager under the Fund for the Maritimes (b) how was he appointed (c) who authorized the appointment (d) on what date (e) for what term?


J. Judd Buchanan: 1-4. The Maritimes Regional Advisory Board of the Indian Economic Development Fund has not yet been appointed, therefore, answers to Parts 1 to 4 of this question are not available.
5. (a) Mr. M. D. Hanly; (b) following a national competition conducted by the Public Service Commission; (c) Public Service Commission; (d) August 9, 1971; (e) on a continuing basis.


HISTORIC SITES-GOVERNMENT HOUSE, CHARLOTTETOWN, P.E.I.
Mr. Macquarrie: 1.	What designation has been given to Government House, Charlottetown by the National Historic Sites Service?
2.	What restoration or other work is planned for this structure?
3.	Have any other residences of lieutenant-governors been so designated and, if so, what are the dates of such designation?


J. Judd Buchanan: 1. Old
Government House, Charlottetown, Prince Edward Island, has been declared of national historic and architectural importance and will be commemorated by a plaque of the Historic Sites and Monuments Board of Canada.
2.	None.
3.	Yes. (a) Old Government House, Frederiction, New
Brunswick, in 1958;	(b) Governor's Cottage, Sorel,
Quebec, in 1957; (c) Old Government House, Regina, Saskatchewan, in 1968.


NATIONAL DEFENCE-PAY AND ALLOWANCE TRADE CATEGORIES
Mr. Forrestall: With respect to CAF pay raises, what are the three new trade categories and which ones have been deleted?


Jack Sydney George (Bud) Cullen: During 1971, a joint Treasury Board-/Department of National Defence evaluation team reevaluated all military trades as part of a regular biennial review, and the results of the evaluation led to an appreciation that three pay fields were to be desired over the existing five. Therefore, effective 1 October, 1971, each of the 90 Canadian Forces Trades, formerly assigned to a pay field in a five pay field system, was reassigned to one of three pay fields in a three pay field system. In the former system the pay fields were known as Pay Fields Three to Seven inclusive, while in the current system the pay fields are known as Pay Field A, B and C. There has not been a cancellation of pay fields but rather a melding of five into three, i.e. the number of trades has not


Jack Sydney George (Bud) Cullen: 1. The 38 counterpart occupations in the Public Service, which were used in the determination of the revised rates of pay in the CAF, included both those that are paid on a national rate (such as technicians) and those that are paid on a zone pay basis (such as trades in the General Labour and Trades Group). Where the counterpart Public Service trade was one paid at a zone rate, the military population in each applicable pay zone was used to calculate a national weighted average rate for that trade. These weighted average rates were then combined with the national rates of the other Public Service occupations to produce pay field rates of pay at the Corporal rank (Pay Level 5A). Pay rates for pay levels above and below Pay Level 5A were then established, using the Corporal (5A) as the benchmark, to achieve an appropriate series of pay differentials between the various ranks.
2. Prevailing rates were not considered for the remaining 52 trades, constituting 40 per cent of the military population at the Corporal level, as there are no Public

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Questions
Service counterparts. An evaluation team made up of members from the Department of National Defence and Treasury Board, ranked all military trades using a point evaluation system based on skill and knowledge required for each trade. The pay rates determined from the matches that were made provided the salary range into which all 90 trades fell according to the point scores they received.


NATIONAL DEFENCE-PAY AND ALLOWANCES, CORPORAL TRADESMEN
Mr. Forrestall: With respect to the 1,100 Corporal-Tradesmen who have been "re-allocated to a lower pay category" and as a result "will receive little or no pay increase" (a) what are the seven trades (b) by environment, what is the percentage distribution (c) was the principle of area prevailing rates used to determine that these men were overpaid and, if so, is it government policy to apply the principle of prevailing rates to part or all of the CAF with respect to pay levels (d) on what date will their pay levels be reviewed (e) on what date were they last awarded a pay increase?


Jack Sydney George (Bud) Cullen: (a) and (b) Weaponman Surface, 100 per cent Sea; Weaponman Underwater, 100 per cent Sea; Firecontrolman, 99 per cent Sea, 1 per cent Air; Air Traffic Controller, .5 per cent Sea, 8 per cent Land, 91.5 per cent Air; Radioman (Sea), 100 per cent Sea; Radar Plotter (Sea), 98.8 per cent Sea, .8 per cent Land, .4 per cent Air; Sonarman (Sea), 100 per cent Sea.
(c)	No, the principle of area prevailing rates was not used to determine that these men were overpaid. The pay categories or payfields for the seven trades along with the
remaining 83 trades in the military were determined by an evaluation team, comprising members of the Department of National Defence and Treasury Board, who ranked all military trades on a point evaluation system based on the skill and knowledge requirements for each trade. The CAF Trade Specifications call for higher trade skills and knowledge for the above-noted trades at the ranks of Sergeant and above. Consequently, these tradesmen were assigned to a higher pay category (i.e. pay field). On the other hand, lower trade skills and knowledge are required for Corporal and below and, therefore, the tradesmen in question were assigned to a lower pay field.
(d)	Pay categories (payfields) will be upgraded upon promotion to Sergeant (Pay level 6A) for the seven trades. However, Canadian Force Headquarters continually reviews trade specifications for all military trades to assess their validity according to current military requirements and a possible restructuring of certain trades could result.
(e)	There were last awarded a general pay increase on October 1, 1970.


NATIONAL DEFENCE-NUMBER KILLED SINCE KOREAN WAR
Mr. Robinson: How many Canadian Forces personnel have been killed, wounded etc., since the Korean War and what were the causes of the casualties?


Jack Sydney George (Bud) Cullen: MORTALITY STATISTICS Canadian Forces
January 1, 1954-November 20, 1971 Inclusive
Cause Groups	1954	1955	1956	1957	1958	1959	1960	1961	1962	1963	1964	1965	1966	1967	1968	1969	1970	1971*	Total81	83	85	76	75	85	77	97	78	77	62	78	65	63	65	42	72	59	1,32054	50	60	60	63	68	69	71	76	80	78	94	85	67	96	82	66	75	1,29485	68	60	57	42	31	29	21	13	24	13	32	17	24	12	19	15	14	57634	23	17	15	18	12	9	12	14	24	18	16	19	13	27	26	19	14	33011	15	14	6	16	13	18	15	18	14	12	13	12	16	18	13	5	11	240Drowning	20	24	10	21	13	18	16	11	11	8	7	11	10	1	5	4	13	8	211Total	285	263	246	235	227	227	218	227	210	227	190	244	208	184	223	186	190	181	3,971
*Up to November 20, 1971.
|-Explosion aboard HMCS NIPIGON, 1965.
Parachute drop accidents Petawawa, 1968.
Explosion aboard HMCS KOOTENAY, 1969.
Accidents caused by firearms Accidental Poisonings, etc.


MONTMAGNY, QUEBEC-PASCAL-TACHE MONUMENT
Mr. Lambert (Bellechasse): Has the federal government contributed to the building of the Pascal-Tache monument in Montmagny and, if so (a) what was the amount (b) what department or agency was involved?


IMPLEMENTATION OF LAW TO TAX SCHOLARSHIPS AND BURSARIES
Mr. Woolliams: Is it still the government's intention to implement the law to tax scholarships and bursaries awarded to Canadian students attending universities and colleges in Canada and elsewhere?


J. Judd Buchanan: 1. Yes. (a) $22,962. (b) National and Historic Parks Branch,


Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: At present there is no law taxing scholarships and bursaries in Canada. Bill C-259, now under considera-

December 6, 1971
Inquiries of the Ministry
tion by the committee of the whole House, would require that the amount by which the aggregate of scholarships, fellowships and bursaries received by an individual in a year exceeds $500 must be included in his income.


QUESTION PASSED AS ORDER FOR RETURN
Mr. McGrath: Since the inception of the Regional Development Incentives Act, what was the distribution of industries in accordance with the Standard Industrial Classification Manual within each province?
Return tabled.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I wish to ask the Secretary of State for External Affairs whether he has tentatively come to any conclusion as to how long the question of the fighting between India and Pakistan should be left with the Security Council to settle? Has the government of Canada taken any tentative position as to when the matter should be raised in the General Assembly of the United Nations?


Mitchell William Sharp: Mr. Speaker, I think the Security Council should be seized of the matter as long as there is some hope that they can reach an agreed resolution. I am sure the hon. member will agree that would be the best possible outcome. Reference of the matter to the General Assembly is not likely to produce results that will help in settling the dispute.


Robert Lorne Stanfield: Are the minister and his department conferring with other countries about the general question as to how long the matter should be left with the Security Council, in other words, how long the matter should be simply left in the hands of the great powers and other countries represented on the Security Council? Is the Secretary of State for External Affairs actively conferring on this point?


Mitchell William Sharp: Mr. Speaker, when I was in Washington on Friday this was one of the subjects I discussed with the Secretary of State of the United States. That was before the discussion had begun. He laid before me his view that what was important now was a ceasefire. As the hon. members know, so far his efforts to get agreement on that have been aborted. Many other efforts have been made. While I am pessimistic, as I think anyone must be, I for one have not yet reached the point where I would want the Security Council to throw in the sponge. I repeat that a discussion in the United Nations General Assembly is not the same as getting an agreed resolution from the Security Council. To have a general discussion in the

United Nations, as we know from many previous occasions, is more likely to exacerbate than resolve the difficulties.


Robert Lorne Stanfield: Has any effort been made within the Commonwealth to formulate a concerted approach to bring about pressure for a ceasefire?


Mitchell William Sharp: Before hostilities broke out, Mr. Speaker, several efforts were made by various members of the Commonwealth to offer their good offices but they were rejected. I do not think the prospects now are as good as they were then. In my view, efforts within the Commonwealth are likely to be met with very great difficulty. At the moment, I do not think either side is disposed to do anything but continue the hostilities that unfortunately have begun.


Right Hon. J. G. Diefenbaker (Prince Albert):: My supplementary arises out of the last question asked by the Leader of the Opposition. In view of the fact that to all intents and purposes the Security Council appears to have become emasculated as a result of the division of opinion between the U.S.S.R. and Communist China, I ask the minister whether he will give consideration, because of Canada's peculiarly favourable position as a nation highly regarded in both India and Pakistan, to asking these nations to send representatives to Ottawa to meet here with representatives of the government of Canada? A similar course was taken in 1905 by the President of the United States, President Roosevelt, at the time of the Russo-Japanese war. Would the minister consider doing this, because certainly we have a large volume of good will in those countries and no one could suggest we have any interest there other than an interest in world peace?


Mitchell William Sharp: I thank the right hon. gentleman for his suggestion. I would point out to him that the Prime Minister of Canada has been in frequent consultation both with Mrs. Gandhi and with President Yahyah Khan; we have done our best to give counsel to both sides. I believe these overtures have been met with sympathetic understanding, but they have not produced the kind of results we would like to see. I do not think the kind of initiative suggested by the right hon. gentleman would be any more successful.


John George Diefenbaker: If this suggestion, or anything like it, has not been tried, would the hon. gentleman not think that every possible means should be exhausted in an effort to prevent what is now happening over there which can develop into the potential of a world war?


Mitchell William Sharp: I can assure the right hon. gentleman that we shall do everything that is reasonable-even, indeed, things which may appear to be unreasonable-if it appears that anything can be done to help bring these hostilities to an end. But I would be misleading the House if I were to suggest that initiatives by us along the lines
December 6, 1971

suggested by the right hon. gentleman had any chance of success, because I do not think so.


Mr. Lome Nystrom (Yorkton-Melville):: Can the Secretary of State for External Affairs give the House any new information on the status of the relief organizations engaged in bringing relief into the area now that fighting has begun on a major scale?


Mitchell William Sharp: Perhaps I might make one or two comments. In East Pakistan conditions are such that to all intents and purposes relief operations have ceased. I have received no reports of any new interruption in India itself, and we are hopeful that the refugees can continue to get the assistance which has been provided and which has been promised.


Mr.. R. N. Thompson (Red Deer):: In view of the fact that India this morning declared its intention to officially recognize the new state of Bangla Desh, and in light of reports that both India and Russia are attempting to persuade friendly states to extend similar recognition, may I ask whether the government of Canada is considering its own position in this regard?


Mitchell William Sharp: We have not been formally requested to give recognition to Bangla Desh but in any event it is not our intention to do so.


Heath Nelson Macquarrie: Is the government taking any steps to make ready a contribution toward a peacekeeping force should the services of such a force be sought in this very difficult situation?


Mitchell William Sharp: The Canadian government would not, of course, refuse to contribute to a peacekeeping force. It is our hope that hostilities can be brought to an end, and I have no doubt that if they were an observer team of some kind would be needed. I can say on behalf of the Canadian government that in principle we would be prepared to participate.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Humber-St. George's-St. Barbe on a last supplementary. If it is not supplementary, the Chair will recognize the hon. member for York South.



LABOUR CONDITIONS


David Lewis: Mr. Speaker, I should like to ask a domestic question of the Minister of Regional
Inquiries of the Ministry
Economic Expansion. Can the minister inform the House what his department has done in connection with the lay-offs at Consolidated Bathurst in Bathurst, New Brunswick, whether a team has gone there, whether any discussions have taken place and whether the lay-offs will be postponed or carried out as indicated?


Jean Marchand: Mr. Speaker, as soon as we heard the news, my colleague the Minister of Veterans Affairs contacted me. I spoke to the Premier of New Brunswick, Mr. Hatfield, who was supposed to go to Bathurst; I do not know whether he did.
As for me, I sent a high ranking official of my department, accompanied by a representative of the Department of Industry, Trade and Commerce, in order to see what can be done right now to assist the people who are being laid off.


David Lewis: Can the minister inform the House when these officials went to Bathurst?


Jean Marchand: I think it was on Friday. I am not sure whether it was Thursday or Friday.


David Lewis: Has the minister yet received a report from officials of his department?


Jean Marchand: Not yet, Mr. Speaker. As soon as I receive one, I shall be pleased to disclose its content to my hon. friend.



LAY-OFFS BY CONSOLIDATED BATHURST LIMITED-NOTIFICATION TO MANPOWER DEPARTMENT

David Lewis: May I address a supplementary question to the Minister of Manpower and Immigration. Has the hon. gentleman's department been involved in these lay-offs at Bathurst, New Brunswick, when did the minister receive notice of such lay-offs, and does his department have any kind of general plan to encourage manufacturers and others to notify his department of proposed lay-offs ahead of the date upon which they are announced?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: In addition to the requirements about lay-offs under various laws which lead to our being informed, we encourage all manufacturers and business people to let us know as soon as possible about any potential lay-offs. In this particular case, officials of the Department of Manpower and Immigration have been holding discussions with company and union representatives during the past year, and as a result of that preparation it is likely that a manpower incentive agreement may be entered into perhaps this week.

December 6, 1971
Inquiries of the Ministry REGIONAL ECONOMIC EXPANSION



POSSIBLE MEETING BETWEEN MINISTER AND ATLANTIC PROVINCES PREMIERS

Mr. lames A. McGrath (St. John's East):: Bearing in mind the impending lay-offs at Consolidated Bathurst and other lay-offs in the Atlantic provinces, which are aggravating an already seriously spiralling unemployment situation, may I ask the Minister of Regional Economic Expansion whether he proposes to meet with the premiers of the four Atlantic provinces prior to his meeting with the members of the Atlantic Development Council in January?


Jean Marchand: No date has yet been set with regard to this matter, Mr. Speaker.


Mr. Speaker:: The Chair has recognized the hon. member for Abitibi.


Mr. Speaker:: The hon. member for Abitibi. Order, please. Is the hon. member for St. John's East rising on a point of order?


James Aloysius McGrath: Yes, Mr. Speaker. I asked the minister whether he proposed to meet with the premiers of the four Atlantic provinces, bearing in mind the lay-offs at Bathurst and other impending lay-offs in the Atlantic provinces. I should like to know specifically whether the minister does intend to meet with the premiers before the end of the year.


Mr. Speaker:: Order, please. That is not a point of order. [.Later;]


James Aloysius McGrath: Mr. Speaker, at page 10117 of Hansard of Thursday, December 2, the minister's parliamentary secretary on the adjournment motion in reply to my question indicated that the minister would be meeting with members of the Atlantic Development Council in January. My question at this time more specifically is, does the minister intend to meet with the premiers of the four Atlantic provinces in view of the serious escalating unemployment situation in that area?



MANPOWER


Gérard Laprise: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
The minister announced some time ago that $35 million had been earmarked for a consultation program with business leaders, labour unions representatives and provincial authorities in order to increase the assistance to manpower training. Can the minister tell us whether arrangements have been finalized and if this amount, in

part or in whole, is available at this time to finance vocational training in agriculture?


Jean Marchand: Mr. Speaker, I already met with the three Maritime premiers of a few months ago. We agreed on principle that it might be desirable that we meet from time to time-without, however, any date being set. But I certainly would not call a meeting with the four Atlantic premiers every time a plant closes down or lays off some of its employees.


Otto Emil Lang: The $35 million for the training program is really divided into two parts. Fifteen million dollars is supplementary to the regular training programs. Negotiations with the provinces for the placement of these funds, and of additional people in training, are well under way. The $20 million for on-the-job training has received a very good response from companies across the country and we are in a position almost immediately to begin entering into agreements with companies in connection with these on-the-job training programs.



FAMILY INCOME SECURITY


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In view of the fact the Premier of Quebec has indicated that his government and the government of Canada have settled administrative problems concerning family allowances, will the minister confirm this agreement and tell us when he will be making a statement to the House?


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, discussions are still going on between officials of the federal government and the government of Quebec regarding the administrative arrangements, and no specific conclusions have been arrived at yet.


Jack Marshall: Mr. Speaker, in view of the fact that so many hardships are being caused to the poverty-stricken, would the minister indicate if any action is being taken to update May 1, 1972 as the date for the increase in benefits under family allowances?


John Carr Munro: Mr. Speaker, it is quite clear now, with all the time that has been taken by the opposition on the tax bill, that it is very unlikely-


Some hon. Members:: Oh, oh!


An hon. Member:: We had closure. Didn't you hear about it?
December 6, 1971


John Carr Munro: -that we would have got to the family allowance legislation in any event at this session.


Jack Marshall: Mr. Speaker, I would promise the Minister of National Health and Welfare that if he would proceed with Bill C-264 we would pass it in one or two days.



THE CANADIAN ECONOMY


Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Acting Prime Minister. As the latest report of the Economic Council of Canada states that business investment in Canada is now running about 12 per cent below what is necessary for the country to attain its economic objectives and to get unemployment down to a reasonable level, is the government taking steps to correct this situation and, if so, will the Acting Prime Minister mention what those steps are?


Mr. Speaker:: Order, please. I suggest this is a very general question which normally ought to be answered by a general statement on motions. Perhaps the Acting Prime Minister can reply briefly, but I suggest to hon. members that we should try to keep questions short and have brief replies because I have a suspicion there are many aspiring questioners this afternoon.


Mitchell William Sharp: Mr. Speaker, if I may attempt a brief reply, the government has been very gratified at the very great increase in business activity in recent months.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


George Harris Hees: Mr. Speaker, obviously the Economic Council of Canada has not heard about these things which have been brought to the attention of the government. As I take it from the minister's answer that the government is taking steps, does the government have any reason to feel confident that these steps will reduce the present high level of unemployment to the 3.8 per cent level which the Economic Council considers to be economically acceptable?


Mitchell William Sharp: Mr. Speaker, I cannot answer as to unemployment. What we have noticed, and I hope the hon. member has too, is the very substantial increase in employment. There has been about as large and as rapid an increase in employment as we have ever seen and I hope it goes up still more.


George Harris Hees: Unemployment is rising.


Mr. Speaker:: Order, please. The Chair recognizes the hon. member for Lisgar.
Inquiries of the Ministry GRAIN



ABILITY OF TRANSPORTATION SYSTEM TO HANDLE MOVEMENT-TURNING DOWN OF SALES

Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct my question to the minister responsible for the Wheat Board. In the past few weeks we have seen a fairly good movement of grain out of western Canada. I should like to ask him if the transportation system has now reached its uppermost physical limit in so far as the movement of grain is concerned?


Otto Emil Lang: Mr. Speaker, I am glad to observe that the hon. member has noticed the record movement of grain. He is about a year late.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Otto Emil Lang: It is somewhat a speculative matter to determine what the absolute maximum of our carrying and handling capacity is. The Wheat Board and various other officials with whom I have been in contact have put the figure between 750 million bushels and 800 million bushels. It now looks as though we may be selling into that range and of course having another record year this year.


Jack Burnett Murta: Mr. Speaker, I should like to ask the minister responsible for the Wheat Board whether or not it is a fact that in the past few weeks at least there have been grain sales turned down by the Wheat Board because of the fact we have not got adequate transportation facilities to move the grain?


Otto Emil Lang: Well, the Wheat Board is still selling grain. It is true that in certain specific weeks or months they have sold to such an extent that they could not book for those particular times, but our buyers are usually able to adjust their purchases. It is of course true that, as our sales effort reaches the limit of 750 million bushels or 800 million bushels, we will be faced with the question of additional facilities and this government is facing up to the matter now.


Mr. Speaker:: Order, please. Would hon. members kindly resume their seats. I notice there are four or five members seeking to ask supplementaries. I shall return to this subject in a moment, but as I suggested a moment ago we should make an effort to try to move on as quickly and as effectively as we can this afternoon. I recognize the importance of the matter just raised and will return to it in a moment. However, at this time the Chair will recognize the hon. member for Nanaimo-Cowichan-The Islands.



PROPOSED TRANS-ALASKA PIPELINE SYSTEM-INDICATION OF INTENTION TO PROCEED-NATURE OF DISCUSSIONS BETWEEN PRIME MINISTER AND PRESIDENT NIXON

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Acting Prime

December 6, 1971
Inquiries of the Ministry
Minister. Arising out of the statement by the United States Secretary of the Interior to the effect that a permit will probably be issued before the end of January to proceed with the trans-Alaska pipeline system, I want to ask the Acting Prime Minister if this was a subject of discussion with Secretary of State Rogers when he met him a few days ago and whether there is any indication that the United States government intends to reverse its decision in respect of the construction of the TAPS program?


Mitchell William Sharp: Mr. Speaker, I also noted the statement by the Secretary of the Interior. It is only partially quoted by the hon. member. However that may be, I did not have occasion to talk with Mr. Rogers about this subject.


Thomas Clement (Tommy) Douglas: Mr. Speaker, on Friday in answer to a question from the hon. member for Calgary North the Prime Minister indicated that energy would be a subject for discussion with the President of the United States whom he is meeting with today. Can the Acting Prime Minister tell the House who asked that the subject be put on the agenda and whether or not the discussion on energy matters will deal with the TAPS program or whether it will deal with bringing gas from the Arctic down to the United States through Canadian territory?


Mitchell William Sharp: I think the House will have to await the return of the Prime Minister on both questions. I am not certain whether the subject arose on the initiative of the Canadian government or the United States government. Of course it has been a subject of discussion now for a considerable length of time. To hear what happened between the President and the Prime Minister we will have to wait until there is a report to the House.



NATURAL GAS-REQUEST FOR COMMISSION TO DETERMINE PROVEN RESERVES IN ARCTIC AND ELSEWHERE

Mr. Eldon M. Woolliams (Calgary North):: This may be a related or a supplementary question, Mr. Speaker, and I direct it to the Acting Minister of Energy, Mines and Resources, the minister responsible for the Wheat Board, who has appeared before the committee. In the Standing Committee on Miscellaneous Estimates the chairman of the National Energy Board stated that the proven reserves of natural gas in the Arctic and elsewhere in Canada were not taken into consideration in determining the decision to turn down the four licences for export of natural gas. In view of that fact, would the minister now consider appointing a board or commission to determine the quantitative factor as to the proven reserves in the Arctic and in other places, which is so necessary to come to an equitable and economic decision?


Otto Emil Lang: I should think that the course of conduct recommended by the hon. member is unnecessary. In his testimony before the committee the chairman of the National Energy Board made it clear that as soon as the gas reserves in any part of Canada are sufficiently established to be taken into account in their calculations of available supply, that will be done, and in those circum-
[Mr. Douglas
stances further consideration can be given by the National Energy Board to the adequacy of supply for ourselves. Therefore there was complete attention to the available gas supply in Canada by the Energy Board in the course of its most recent deliberations.


Eldon Mattison Woolliams: I have a further supplementary question, Mr. Speaker.


Mr. Speaker:: The Chair will recognize the hon. member for Calgary North on a further supplementary question and then recognize the hon. member for Bellechasse.


Eldon Mattison Woolliams: Would the minister make certain that the information regarding proven reserves in the Arctic will be placed before the board, as the chairman of the board said that if they had additional evidence they would review the decision to turn down the export of natural gas from western Canada?


Otto Emil Lang: The full facts available were indeed before the board and, as the Chairman of the National Energy Board said before the committee, none of the parties arguing before the board thought it appropriate to attempt to establish northern reserves on the basis of the facts yet available.



MANPOWER


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I wish to put a question to the Minister of Manpower and Immigration.
Could he tell us whether a project presented under the local initiatives program to repair heavily damaged retaining walls on the St. Lawrence river would meet the criteria established by the Department of Manpower and Immigration and would be considered acceptable?


Mr. Speaker:: Order. I doubt very much that the question as put is in order. It seems to me that such a question should normally be placed on the Order Paper, but the minister could perhaps briefly answer it.


Otto Emil Lang: I cannot really comment on the specific proposal. Renovations and repairs, if carried out by an appropriate organization, certainly come within the general criteria, but I have to have more details to give a more specific answer.


Mr. Baldwin:: How about renovating the cabinet?


Joseph Adrien Henri Lambert: Mr. Speaker, I should like to put a supplementary question.
I would not want to force the minister into making comments. I am merely asking whether a project of that type would meet the criteria adopted, and could be accepted?
December 6, 1971


Otto Emil Lang: I do not see anything in what the hon. member has said that would rule it out. Therefore I would encourage him to let me see a more concrete application.



GOVERNMENT ADMINISTRATION


Robert Lorne Stanfield: My
question is directed to the Acting Prime Minister. It is now several weeks since confidential cabinet documents were leaked or came into unauthorized hands. Is the Acting Prime Minister now able to say whether the government has completed its investigation into how this happened? Has the inquiry been completed and, if so, is the government going to make a statement as to what has been ascertained?


Mitchell William Sharp: It is my
understanding that inquiries are still continuing.


Robert Lorne Stanfield: May I ask a supplementary question about this matter which I am sure is of great concern to the government but also of great concern to the Canadian people. Will the government make a statement to the House as to what measures have been taken with regard to the inquiry and also indicating when the House may expect a full statement on the results and on what has taken place, or does the government just hope that everyone will forget about the whole thing?


Mitchell William Sharp: If we wanted to forget about the whole thing we would not be continuing our inquiries.


Mr. Speaker:: Order, please. Again I suggest to hon. members that we should move on. I will recognize the hon. member for Yukon and then the hon. member for Ontario.


Mr. Erik Nielsen (Yukon):: My supplementary question is to the Acting Prime Minister. Can he inform the House whether the loss of the cabinet document with respect to the Gray report as well as the loss of the cabinet document which apparently escaped with respect to the Department of Indian Affairs and Northern Development are being investigated by the RCMP, or are these losses being investigated simply by departmental sources?


Mitchell William Sharp: The RCMP have not been brought in to conduct the investigation.


Some hon. Members:: Oh, oh!


George Harris Hees: For a good reason, because you do not want to be found out.


Erik Nielsen: Can the Acting Prime Minister inform the House whether the special security force of the Solicitor General is being used to conduct these investigations and, if not, how are the inquiries being conducted?


Mitchell William Sharp: They are being conducted in the customary way, that is, within each department.
Inquiries of the Ministry MANPOWER



LOCAL INITIATIVES PROGRAM-POSSIBLE LOWERING OF MAN-MONTH REQUIREMENT

Mr. Norman A. Cafik (Ontario):: I have a question for the Minister of Manpower and Immigration. In view of previous representations that have been made to him by myself, and I presume by others in respect of lowering the man-month requirement for local incentive programs so that this program may be more accessible to small municipalities, has the minister decided whether any change will be made in this requirement so that they too can be assisted by this excellent program?


Otto Emil Lang: I have been watching the flow of applications and now begin to believe that it may be possible to accept applications with a lower minimum. This matter is now being reviewed in a final way and the decision should be known very shortly.



SECRETARY OF STATE


Mr. W. B. Nesbitt (Oxford):: I have a question for the Secretary of State. Has the Department of the Secretary of State given funds to a person or persons to undertake a study on survival in the Canadian wilderness? If so, can the Secretary of State say how much money is involved and why such a study should be undertaken by the Department of the Secretary of State?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I suggest respectfully to the hon. member that normally this question should be placed on the order paper. Perhaps the hon. member might like to rephrase the question.


Wallace Bickford (Wally) Nesbitt: I will rephrase the question and direct it to the Acting Prime Minister. Perhaps he might be more aware. Is it the position of the government that the government's economic policies will force all of us to learn wilderness survival?



EXTERNAL AFFAIRS


Mr. Robert McCleave (Halifax-East Hants):: My question is very pedestrian after the previous one. It is directed to the Secretary of State for External Affairs and arises from one I asked him some days ago. He was to look into the question of having Canadian instead of New York brokers handle our external aid shipments and also having foreign-going freighters under tlG>
Canadian flag and registry carry such shipments.

December 6, 1971
Inquiries of the Ministry


Mitchell William Sharp: I am glad the hon. gentleman has finally asked the question. I have had the answer here for a number of days.
The policy of permitting Canadian funds to be used for ocean shipping is relatively new and to date has only been applied to a few countries. However, in so far as gifts or grants are concerned, the policy is to pass all work possible to Canadian brokers or Canadian forwarders. Further, where the schedules, rates and availability of Canadian-owned shipping companies permit, contracts are awarded to such shipping companies.
minister considering this request, and when does he expect that a full statement will be forthcoming on the inquiry requested?


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, I am not sure if I am the appropriate minister to answer a question on railway pensions. However, I do know it is in the best interests of the railway workers that this matter be handled through the recognized union leaders rather than through well-meaning groups active outside of the traditional lines of communication and negotiation through which negotiations are usually carried on by elected representatives of the railway workers.


CANADIAN BROADCASTING CORPORATION
Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my question is directed to the Secretary of State. When will the Canadian Broadcasting Corporation be announcing whether or not it intends to become a prime tenant and user of the planned Metro Centre in Toronto?


Hon. Gerard Pelletier (Secretary of State):: Mr. Speaker, as usual, I shall ask the Corporation to supply the answer to the hon. member.


Sylvester Perry Ryan: Mr. Speaker, I wish to direct a supplementary question to the minister. Since the CBC English network operations are scattered all over Metro Toronto, is it the intention of the CBC to locate these in one place, that is, in Metro Centre, or in another location in Toronto?


Mr. Speaker:: Order, please. I would think this kind of question should be placed on the order paper, but since it has been asked the minister might be allowed to reply briefly and quickly.


Gérard Pelletier: Mr. Speaker, I must say that I am aware of the works which are under way in Vancouver. As for the intentions of the CBC with regard to consolidation of its services in Toronto, I know that such a step is contemplated, but I would have to inquire from the CBC in order to be able to provide the hon. member with the details he has asked for.


ALLEGED STATEMENT BY MINISTER CONCERNING POSSIBLE DROP IN EXPORTS IN 1972-73
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I wish to direct a question to the minister responsible for the Wheat Board. I would like to ask him whether, when he spoke to the pool delegates in Regina and made the statement that exports of wheat could drop to 500 million bushels in 1972-73 and, if this happened, it would have the effect of requiring an additional $200 million or $300 million in cash for payments to farmers under the agricultural stabilization program-


Mr. Speaker:: Order, please. Would the hon. member kindly resume his seat? Perhaps the hon. member might like to rephrase the question. He knows that in relation to statements made outside the House questions have to be directed to the Prime Minister or Acting Prime Minister inquiring whether the statements represent government policy. Perhaps the hon. member might ask the question directly of the minister concerned.


Stanley James Korchinski: Based on that statement, could I ask the minister whether that prediction was made on the basis of knowledge he has within his department or whether it was intended as coercion of the members of the wheat pool-


Mr. Speaker:: Order, please.


FISHERIES
[Stage Direction]
* *
*

Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, my question to the Minister of Labour has to do with a wire that I understand the hon. gentleman received in his office this morning requesting him to look into the problems of railway pensions. In the interests of labour-management and, incidentally, grain shipping stability is the


LOBSTER FISHERMEN-REQUEST FOR CHANGE IN REGULATIONS TO CUT LOSSES FROM STORMS
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct a question to the Minister of Fisheries. In view of the fact that lobster catches since the beginning of the season have been about half those landed last year in Nova Scotia, due in part to serious storms which raged along the coast, would the minister give consideration to changing the present regulations so that licensed lobster fishermen may haul their traps on Sunday, if bad weather makes that necessary, in order to cut down on losses of their equipment?
December 6, 1971


Hon. Jack Davis (Minister of Fisheries):: We will always give consideration to a reasonable recommendation, Mr. Speaker.


CAPE BRETON DEVELOPMENT CORPORATION
Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I wish to direct a question to the Minister of Regional Economic Expansion. In view of the fact that Devco last week announced its intention to comply partially with section 18(a)(2) of the act, would the minister issue instructions to the Devco authorities to comply not only partially with this section of the act but to carry out its provisions fully?


Jean Marchand: Mr. Speaker, what happened last week at Devco is that benefits to be paid out to the miners have been improved, but there has been no change in principle and Section 18A has not been misinterpreted.


Donald MacInnis: I rise on a point of order-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Perhaps the hon. member might be allowed to indicate what his point of order is. I think there are only two minutes left before the end of the question period, so perhaps the hon. member might indicate as quickly as possible what the point of order is.


Donald MacInnis: Mr. Speaker, my point of order arises out of the minister's statement that there has been no change in policy. My point is that there has been no policy and that the act, which made it mandatory on Devco authorities to carry out the law of this land, has not been put into force by the Devco authorities. In fact, this is why we are now rid of the three original administrators of that Crown corporation. I contend that the minister should impress upon the new administrators that the act which Parliament passed in 1967 should be fully carried out for the benefit of the miners who are suffering now and who are waiting for an opportunity to fight the government in court.


Mr. Speaker:: The hon. member has made a debating point. I do not think I have to rule on whether or not it is a point of order. The Chair will recognize the hon. member for Winnipeg North Centre.


Donald MacInnis: Mr. Speaker-


Mr. Speaker:: Order, please. We will hear the hon. member on his further point of order and then I will have to call orders of the day.


Donald MacInnis: My point of order on this occasion is only to get guidance from the Chair and to ask the Chair whether or not, when legislation passed by this Parliament in 1967 is not carried out by the responsible persons,
Inquiries of the Ministry
it constitutes a point of order when the minister rises and says that there has been no change of policy?


Mr. Speaker:: I would tend to reply in the negative. The hon. member for Winnipeg North Centre.


LABOUR CONDITIONS
Stanley Howard Knowles: Mr. Speaker, may I direct a question either to the Acting Prime Minister or to the government House leader. In view of the fact that Statistics Canada has announced that it is going to issue its employment and unemployment figures a bit earlier than has been the practice, and in view of the fact that this announcement will be made tomorrow, could arrangements be made for the Minister of Finance to be here tomorrow to answer questions on this matter?


Mitchell William Sharp: Mr. Speaker, the Minister of Finance is with the Prime Minister in Washington. I believe that the whole party is expected to return before the question period tomorrow, and I am sure the Minister of Finance would want to be here if he can be.


Mr. Speaker:: Order, please. Before the Chair calls orders of the day I believe the hon. member for Edmonton West has a point of order.


Mr. Lambert (Edmonton West):: Mr. Speaker, I wish to revert to a point of order that has arisen in connection with Bill C-259. This bill has been fraught with difficulties from the very day of its inception. You may recall that when I first spoke on this bill on second reading there had to be prepared a curative motion because of the difficulty that arose in that Bill C-259 departed in major ways from the ways and means motion that had been adopted by the House.
What concerns me now is that we have some 150 or more amendments before the House, and there is a question as to whether any of them are valid. I would put this matter to Your Honour for consideration because I think it is very urgent. There is no question that the point of order is hypothetical or anticipatory because amendments have been adopted by the committee, and again I would put it to you that there may be a question as to their validity.
I am concerned primarily with the special order on the bill which was adopted by the House on September 28. You will recall that after some difficulty, after the motion had been made and Your Honour had given it a good deal of thought, you did make a ruling on it, because I had pointed out that Bill C-259 differed from the ways and means motion and therefore was not properly before the House. I further raised the question-even when the hurdles were overcome-since the ways and means motion was in the form of a bill whether a committee or any member thereof could amend or reject any provision of a

December 6, 1971
Inquiries of the Ministry
bill based upon the ways and means motion, since any such amendment or rejection would vary a question already decided upon by the House in June following on the adoption of the general budgetary resolutions. Those amendments would therefore be out of order.
May I refer to what Your Honour said at that time, and I quote:
If the House of Commons accepts this procedure and adopts as part of the ways and means resolution a draft bill, I do not see how any amendment can be adopted or suggested to the House at any time thereafter either by the government or the opposition, because the objection can be very well made at any time an amendment is made by the government, the opposition, a member of the opposition or any individual member of the House that this amendment is not in keeping or in accordance with the terms of the ways and means resolution. It will not be, of course, because it is different from the draft bill which has been submitted.
I think the House got itself into a bit of a bind and difficulty by following this procedure. I think it should be for the House to find a way out of it. For the moment, I suggest to hon. members that we proceed with the bill before us.
Then, Your Honour suggested that perhaps the House leaders should meet and find a solution. That excerpt is from Hansard of September 13, 1971. On September 28, at about five minutes to six, the Parliamentary Secretary to the President of the Privy Council put the following motion to the House:
That, notwithstanding the terms of the ways and means motion upon which Bill C-259 was introduced, this House deems that the said bill was properly introduced within the terms of Standing Order 60, provided that the form of the said ways and means motion shall not be accepted as a precedent in any future case;
That appears at page 8249 of Hansard. I have no quarrel with the first paragraph; the second paragraph is the one that is deficient. It reads as follows:
And that it shall be an instruction to the committee of the whole on the said bill that the admissibility of any proposed amendments thereto shall be governed by the bill as read a second time, and shall not be limited by the said ways and means motion although all other procedures relating to financial or tax measures shall apply.
I refer primarily to the mandatory nature of those two paragraphs. I point out to Your Honour that Nay's Parliamentary Practice, 17th edition, at page 536 contains the following statement:
Before the committee, to which a bill has been committed, commences its consideration of the bill, an instruction may be given to such committee, the purpose of which is either to empower the committee to do something which it could not otherwise do, or to define the course of action which it must follow. The first type of instruction is called permissive, the second mandatory.
Instructions may be given not only to a committee of the whole House, but to any other committee. An instruction to a committee of the whole House can only be moved in the permissive form.-
That is why I say that the word "shall" cannot appear in that particular motion made by the parliamentary secretary. The reason I am raising this particular point is that I think we can cure it but it must be posted in the same way Your Honour posted the flag on the procedure that was used in June with regard to the bill. This type of operation must not be repeated, and I am suggesting that what has been done on this occasion must not be repeated. In effect the instruction to the committee on Bill C-259 is that the committee must, with regard to the admissibility of

amendments, follow the substance of the bill and ignore the ways and means resolution. There is no doubt that the instruction is mandatory and should be declared out of order.
Further, a second rule applying to instructions to a committee of the whole is that the instruction is invalid if its effect would be to widen the powers of the committee beyond the ways and means resolution which governs the bill. I refer again to May's 17th edition at page 541, where we consider instructions to the committee. I shall not quote the whole of subparagraph 5 which indicates that you cannot extend the powers of the committee. I do not want to go further on that particular point.
The third point to which I wish to direct Your Honour's attention is contained in Redlich, "The Procedure of the House of Commons", Volume II, at page 197. The instruction to the committee was not made an order of the day; it was merely a motion which stayed under "motions" and it is a fact the chairman of the committee did not incorporate into the record of the proceedings of the committee the direction from the House, even though the direction from the House may be deficient on other points. It was not done in the committee. All I am pointing out is what should be done properly. The motion of the parliamentary secretary should have been made an order of the day so that it would have been referred directly to the chairman and then he would have read it in committee.
I know this is a long, difficult point of order, and that it is perhaps a refinement, so to that extent I apologize to the House. But having raised the first point of order on second reading which clarified the procedures, Mr. Speaker, I thought that again it was incumbent to do it at this time. After all, the minister is going to come forward at some time with other changes in the Income Tax Act following the type of mini-budget of October 14, again for a first time practice, so I think it is incumbent that we have correct procedures and guidelines with regard to these new rules. Now is the time to straighten this out, although it appears to be rather nitpicking, so that in future we can be guided by what Your Honour has said on the previous point and, I would submit, on consideration of what I have raised this afternoon when Your Honour is ready to indicate again the guidelines for the future conduct of the House within the meaning of Standing Order 60.


Mr. Speaker:: The point made by the hon. member for Edmonton West (Mr. Lambert) is most interesting. It follows the discussion which took place in the House some weeks ago when the hon. member had risen on a point of order. It is as a result of the ruling which had been made by the Chair at the time that discussion took place among the House leaders and it was agreed that there should be an order to try to correct the procedural difficulty which had been raised. The hon. member suggests now that perhaps we went further than we might have or could have gone, and suggests that perhaps we had no right to do what we did. I am not quite prepared at this moment to accept the suggestion. I would rather think that the House can, by its order, do practically anything in keeping with the kind of instruction the hon. member referred to, that is, the kind of instruction referred to in the citation of May's quoted by the hon. member is not the same kind of
December 6, 1971

instruction as that which is in the part of the special order of the House. However, I am not prepared at this time to make a ruling in general or a ruling in theory or in principle on the subject.
My understanding of the point made by the hon. member is that he feels we should not establish a precedent by which we should be guided at all times in the future. He is raising a point which he said himself is the red signal flag which indicates the danger of a practice which has been adopted in this instance. He may be quite right, and I shall closely read Hansard tomorrow, or perhaps later today for the statement made by the hon. member. I shall study it very closely and perhaps in due course I will be in a position to indicate to the hon. member what my conclusions are.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, December 3, consideration in committee of Bill C-259, to amend the Income Tax Act and to make certain' provisions and alterations in the statute law related to or consequential upon amendments to that act-Mr. Benson-Mr. Honey in the chair.
The Chairman:: It is the understanding of the Chair that the committee will resume consideration of sections 135, 136 and 137 dealing with credit unions and co-operatives. An amendment was proposed by the Minister of National Revenue to section 135 and a subamendment by the hon. member for Regina East, as indicated on page 9682 of Hansard for November 18, 1971. Shall the subamendment moved in connection with section 135 carry?


Gerald William Baldwin: Mr. Chairman, I rise on a point of order. Heretofore we have proceeded in a reasonably orderly discussion of the various subject matters listed under the various sections of the bill. On Friday, it is true, the government House leader said, in response to a question asked by the hon. member for Winnipeg North Centre, that we would proceed to consider the sections relating to co-operatives and credit unions. Referring to this matter I said on Friday, as recorded at page 10147 of Hansard, that I assumed, of course:
-that when this bill is first discussed in committee of the whole on Monday there will be a requests made, and if the amendment in respect of co-operatives is available and a request is made at that time, of course we will be prepared to consider it.
Other amendments may be proposed. Perhaps the government House leader or the parliamentary secretary will bring forward another amendment in this respect. Perhaps the government House leader will bring forward an amendment along lines he has previously indicated. His suggestion sounds reasonable in many respects. All the same, with all due respect to the Chair and to the government, I think we should follow the procedures we have adopted in the past. The amendments should be tabled at this time so that we, on this side of the committee, will have a reasonable period to consider them, say until
Income Tax Act
tomorrow afternoon, which would not be too long. Perhaps they will be accceptable as they are or perhaps we will bring forward suggestions to improve them further. I do not know. I think, in all seriousness, that if the government proposes to follow the suggestion put forward on Friday and introduce these important amendments, those amendments ought at this time to be tabled and not moved, so that we might have a reasonable period in which to consider them. If we have finished considering them before tomorrow, I will indicate that in the committee.
I submit, however, that we should be given at least until tomorrow afternoon. It is important for us to see them, and for us to make suggestions, if necessary, as to how such amendments could be improved. I think this is very important. An exceptionally important meeting is going on in another part of the city. Many hon. members of this House are attending that. At that meeting decisions will be made which will influence the course of the next government of this country after the next election.


James Alexander Jerome: Not very much.


Gerald William Baldwin: Many hon. members of the House who are deeply concerned about these matters, and who made speeches as a result of which the government was persuaded to abandon its rather intransigent position and adopt some of the changes suggested with respect to the sections we are dealing with are not here at this time. Those hon. members should have a chance to be heard. Reasonable opportunity should be given for them to consider any amendments. If we reach any decision with respect to the amendments before tomorrow, I will advise the government House leader accordingly. I therefore suggest that there is no agreement for us to consider immediately, at this time, these particular sections.
I do not want to argue as to what the government's attitude is and as to whether they are entitled to adopt this or that procedure. I am merely saying that, barring agreements to the contrary, we must deal with the bill section by section and in the time allotted to us by virtue of the guillotine motion, deal with as many sections as possible until a quarter to six on Wednesday. We will be perfectly happy if the government tables the amendments in question so that we may know what they are. That practice was followed in the past. We will know by tomorrow, or perhaps before tomorrow, whether they are acceptable. In the meantime, I feel that we should proceed with the orderly discussion of the bill from the top, as it were, and work our way down.


Stanley Howard Knowles: Mr. Chairman, may I say at the outset I take no objection to the idea that the committee of the whole be given 24 hours to look at the amendments respecting co-operatives and credit unions which the government is now prepared to move. That would be reasonable, even if there were not another meeting in another part of the city to which reference has been made. I imagine that any amendments implementing the principles that the President of Privy Council referred to last week would be quite complicated. The proposition that members of the committee should have a chance to look at those amendments is entirely reasonable. That means we could discuss something else today and deal

December 6, 1971
Income Tax Act
with this matter tomorrow, despite the fact that we agreed on Friday that we would consider only these sections today.


Gerald William Baldwin: There was no such agreement on our part.


Stanley Howard Knowles: I hope it is not nitpicking, to use a phrase my friend from Edmonton West used a while ago, when I suggest that there is no provision for tabling anything in committee of the whole. Tabling can only be done in the House. It is possible to put motions on Hansard, in committee of the whole, without moving them formally, but they cannot be tabled. Up to now, all amendments which have been proposed from the government side have not only been read, but have been permitted to be moved at that time-


Marcel Joseph Aimé Lambert: No, no, surely that is not correct.


Stanley Howard Knowles: Oh, no; just a minute. What I said is correct. You could go back over Hansard and see places where amendments were read and moved-admittedly perhaps not at the moment they were read-but they were moved within a day or so, well in advance of the time when they were to be discussed. Any suggestion that the moving of these amendments should be held off indefinitely is hardly a suggestion one can accept at this time.
If the President of the Privy Council is going to introduce these amendments, and I think that he will be co-operative in this regard, I think he should be permitted to read them first. I hope the committee will give its consent for them to be moved. Let me say at once that I think the committee will have to give that consent, because there are other amendments before us at the moment. The Minister of National Revenue has moved an amendment to section 135, and the hon. member for Regina East has moved a subamendment. After we have heard what it is that the President of the Privy Council proposes to move in place of those amendments, the chances are that we will be willing to have those amendments withdrawn. Really, I am trying to say two things: one, yes, it is appropriate for the decision on this to be left until tomorrow and, two, I think we should get the material on the record and go as far as we can at this point, so that we know what we are doing. If we are satisfied about the new amendments, I hope the committee will consent today to the withdrawal of the old ones so that we will be in a position to act on the new amendments tomorrow in accordance with the will of the committee.


Gerald William Baldwin: Mr. Chairman, may I raise a point of order before my friend for Edmonton West pursues this matter. Of course, I agree with my friend for Winnipeg North Centre that the amendments cannot be tabled in committee of the whole. I was using the same expression used by the Minister of Finance, and it is always a mistake to follow his wording. An interval has elapsed, of course, between when amendments were put on Hansard and when they were moved.
With respect, there was no agreement whatsoever so far as this party was concerned and so far as I was concerned on Friday. We did not agree to the calling of the sections dealing with co-operatives. I think I suggested that we

would wait until the amendments were introduced. I think we should look at these amendments, after which we could proceed from that point. I will now defer to my friend from Edmonton West. I wanted to make my position abundantly clear.


Marcel Joseph Aimé Lambert: Without wanting to quibble about this particular point, Mr. Chairman, I was surprised there was consent that section 135 be brought on today. That was not my information. There were other clauses outstanding which the government indicated it wished to defer. On Thursday, the Parliamentary Secretary to the President of the Privy Council asked whether I would agree to defer consideration of the so-called administrative clauses because the answers from the Department of Justice were not yet ready. This is the point. It was a case of not considering certain points because the answers were not forthcoming. Further, the department had not made up its mind with regard to an amendment I put forward.
I find it difficult to understand why anyone would consider moving an amendment today which may or may not be admissible because there are before the committee an amendment and a subamendment, both duly moved. I do not know the intentions of the government or how the amendments that may be proposed will be carried out. There is no clearly enunciated indication of what the amendments may cover.
The amendment to subsection (3) covers half a page. The deletion which the subamendment of the hon. member for Regina East would effect covers at least a page and a half of text, three subitems. If they are still before the committee, it is not possible for any minister of the Crown to make another motion proposing some different type of amendment. I think the answer is if the government, merely for purposes of information, will read into the record the nature of the amendments they propose, we could then compare them with the amendments of the hon. member for Regina East. I think they have the same general thrust. At least, that is what I am led to believe. Tomorrow, Wednesday or whatever time may be chosen, we could then make up our mind, agree to them and someone could move them. We should not prejudge the issue. I do not think the hon. member for Regina East would be prepared to withdraw his subamendment. I certainly would not consent to it. The committee is now seized with the subamendment. It requires unanimous consent to withdraw. I do not think that would be possible.
There is only one way to proceed, namely that we accept the reading into the record the amendment that might be proposed to that section by the government. We would defer consideration to a later time and revert to the ordinary course of considering the bill without the gentleman's agreement that we had before.


Joseph Adrien Henri Lambert: Mr. Chairman, I believe we are a little concerned about sections 135, 136 and 137, which have already been dealt with and to which definite amendments have been proposed.
December 6, 1971

However, on Thursday when bringing forward the motion for closure, the government announced its intention to present further amendments to these sections and if I understood correctly what was said at the time those amendments would tend to abolish the tax on capital utilized.
At any rate, in order to permit a thorough study of these sections, as well as of amendments and proposed amendments to be brought forward, I believe that within the rules of procedure a method should be found whereby hon. members could take cognizance of these future amendments as early as possible. As the previous speaker said, they might very well contain major changes to previous amendments. That would greatly facilitate the discussion and perhaps allow to proceed more rapidly.
I therefore agree with the remarks that have been made in that regard and I think that we should know the contents of the amendments as soon as possible. Otherwise, it would be better to deal with another subject, which could only help the proceedings of the House.


Mr. Burton:: Mr. Chairman, my colleague, the hon. member for Winnipeg North Centre, has suggested a sensible and acceptable course of action in dealing with the new government proposal which the government wishes to place before the committee. As I understand the proposals referred to previously by the President of the Privy Council, they will in fact carry out and put into effect the principle of the subamendment which I proposed in an earlier sitting of the committee, namely to do away with the capital employed concept as it applied to co-operatives and credit unions in the bill now before us. No doubt there will be other consequential amendments that will accompany it. Also, there will be some provision for the alternative which the government is proposing.
On that basis, and on the basis of carrying out its stated intentions of doing away with the capital employed concept and coming up with an acceptable alternative at an appropriate time, I am prepared to ask the committee for leave to withdraw the amendment which I proposed.


Mr. MacEachen:: Mr. Chairman, I realize quite well that in order for the government to propose amendments, when the sections are called it will be necessary to have the consent of the committee in order to withdraw the amendment of the hon. member for Regina East and also the amendments that have been previously moved by the government* That is acceptable.


David Lewis: Or vote them down.


Allan Joseph MacEachen: As the leader of the New Democratic Party says, if there is no readiness to give unanimous consent to withdraw these amendments, it is open to the committee to defeat them and make possible the submission of new amendments. I am also aware of the fact that in order to move the amendments, the Chair must put the committee in a position to deal with a number of sections; section 135, section 137 and later clauses 57 and 58.
It is quite possible that, within the circumstances of the present situation, procedural difficulty could frustrate totally the moving and the carrying of these amendments. In wishing to make these amendments, it is obvious that
Income Tax Act
the government is really in the hands of the committee. If it wishes, the committee can prevent these amendments from being put now or at a later date. I am quite clear on that in my own mind.
What I suggest, and I think this is in accord with suggestions that have been made, particularly by the hon. member for Edmonton West, is that we might call one of these subsections. I could give a statement of the nature of the amendment and attempt to outline as clearly as possible the nature of the amendment. This will allow the committee to consider the content and allow me to move the amendment tomorrow. That is the proposal I have at the moment. For procedural reasons, I am reluctant to table these amendments now in the absence of an opportunity to move them. I believe, however, that what I would say in a statement would provide the committee with more information than it would get if members started looking at the actual wording of the amendments, which are complicated.


Marcel Joseph Aimé Lambert: We are on clause 1. Go ahead.


Gerald William Baldwin: There is no desire on our part to frustrate the minister. What he has announced is reasonable and logical. If he were to make one of his interesting speeches he could certainly outline, as part of it, the type of amendments he proposes to introduce. I do not think we have any objection on that score. I hear some voices in the wilderness over there. I hope those hon. members will take part in the debate and cease to operate their self-imposed closure. If the minister would agree to make such a statement we would have an idea of what the amendments contain and, certainly no later than tomorrow, he would be able to proceed along the lines he has indicated. In the meantime, we have a fair amount of the bill to digest.


Allan Joseph MacEachen: What I shall do is this. I shall outline as clearly as I can the content of the amendments and then, after that, if we think something else is necessary, we can decide what course to take.
Last week I announced that the government would introduce relieving amendments for co-operatives, credit unions and caisses populaires. I would now like to explain the nature of these amendments in more detail. I shall deal first with co-operatives.
Under the present act, the patronage dividends of a co-operative could not reduce its income below 3 per cent of capital employed. With the introduction of Bill C-259 an attempt was made to re-examine the appropriate tax treatment of co-operatives. Bill C-259, and the several amendments to C-259 which the government has previously moved, reflect a new percentage limit, a new definition of capital employed and other transitional and long term rules designed to establish an appropriate level of taxation for co-operatives.
During this period, the government has continued to communicate with the co-operative movement. Representatives of that industry and many members on both sides of this House have argued persuasively that the "capital employed" concept is inappropriate in the case of the
December 6, 1971
Income Tax Act
co-operatives and that, with the introduction of general tax reform, a new and better system should be developed. Rather than modifying the old system-a system which was inappropriate to start with-the government was urged to seek a new and more appropriate method which would recognize that a co-operative is a group of people who have organized to help themselves.
The government has decided to abandon the notion of "capital employed" and henceforth co-operatives will no longer be taxed on income from business with members which is distributed to members in the form of patronage dividends.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Therefore, the limit on deductibility of patronage dividends will be removed. In its place, the government proposes that there be a withholding tax at the rate of 15 per cent on patronage dividends in excess of $100 paid to a member in any year. The withholding tax would, of course, be refundable to the extent it exceeded a taxpayer's tax liability.
This new approach will have the following results. Recipients of patronage dividends will be treated as before: if the patronage dividend relates to the recipient's business it will be included in his income for tax purposes. In other circumstances, it will not be taxed. The withholding of tax by the co-operative will permit the government to administer the system efficiently and yet obtain the appropriate result depending on the character of the patronage dividend in the hands of the recipient. This change will provide substantial relief to co-operatives concerned about their treatment under the new Act.
I should like now to deal with Credit Unions and Caisses Populaires. The main concern expressed by credit unions and caisses populaires involves the reserves they must set aside under provincial statutes. It has been pointed out that these mandatory reserves exceed the reserves allowed against income for tax purposes, and that they are unlike the ordinary surplus of a corporation in that they cannot be distributed to members. Credit unions and caisses populaires argued that they could not obtain the same enjoyment of the small business deductions as other corporations which were not subject to provincial regulations. As a result, small credit unions and caisses populaires felt subject to the high rate of corporate tax prematurely.
In response to this argument, the government will introduce an amendment the effect of which will be to tax the income of a credit union or caisse populaire at the rate of 25 per cent as long as the reserves in excess of those allowed against income do not exceed 5 per cent of deposits and share capital. This will be accomplised by an adjustment of the small business deduction. As I understand it from my discussions, this amendment will provide the last remaining goal sought by the credit union movement.
This special right to use an effective corporate tax rate of 25 per cent might not in itself be sufficient for small credit unions or caisses populaires which would need a reserve in excess of 5 per cent of financial stability. Accordingly, the small business deduction available to other corporations will continue to apply so that a credit

union or caisse populaire can build up $300,000 of reserves out of income taxed at 25 per cent whether or not such reserves exceed 5 per cent of deposits and share capital.
The right to build up 5 per cent reserves will, of course, only apply to increases in those reserves after 1971. Transitionally, the credit union or caisse populaire will be considered to have reserves equal to the lesser of the maximum 5 per cent of deposits and share capital or the actual reserves measured by taking assets at their value for tax purposes. Thus, if the actual opening reserves are less than 5 per cent they may be built up to 5 per cent out of income taxed at 25 per cent in the future. If the actual opening reserves are greater than 5 per cent, the fact that such extra reserves have been accumulated in the past will not affect the right of the credit union to use a 25 per cent rate in the future. The government believes that in this way credit unions and caisses populaires will be able to obtain the appropriate entitlement to the small business deduction and thereby enjoy the benefit of a 25 per cent rate of tax on an appropriate amount of income.
Finally, as a consequence of abandoning the notion of capital employed for co-operatives, the government does not believe it to be appropriate to retain this concept for credit unions and caisses populaires. Therefore, the government proposes that the limit on interest rebates related to capital employed be deleted. This is something they did not ask for. They are getting it as a throw-away.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: I believe the statement I have made reflects accurately the proposals which have been transformed into the series of amendments which I hope to move. Frankly, I have no objection to making these amendments available, although I would prefer to do so when I have an opportunity to move them. In any case, it would be the intent of the amendments to carry into law the proposals contained in this statement. If hon. members can show in the committee that indeed the amendments do not have that effect, we would be happy to make sure they do.


Gerald William Baldwin: Mr. Chairman, I have listened to the minister, and what he states seems to be an acceptable program so far as we are concerned. In the light of what he has said, I would have no objection to the amendments being formally moved at this time, provided of coiirse, that the hon. member for Regina East, as a condition precedent, would withdraw his amendment. I assume he will do so. The hon. member for Edmonton West and the rest of us will probably agree to that. I think, however, it should be understood that we would have an opportunity to examine the amendments, discuss them, and that debate would be postponed. It may well be that it would be postponed until tomorrow or earlier, but I shall keep in touch with my colleagues, the House leaders. We might finish this section much sooner than was originally contemplated. In light of what the minister has said, I would hope that these amendments would now be formally moved and that we would move on to some other subject matter contained in this bill for the rest of the afternoon.
December 6, 1971

Income Tax Act
On Clause 1-Section 135: Income
Deduction in computing
That section 135 as set forth in clause 1 of the said Bill be amended


John Stratford Burton: Mr. Chairman, in light of the statement made by the President of the Privy Council, I would ask leave of the committee to withdraw the subamendment to the amendment which I moved on November 18.


Some hon. Members:: Hear, hear!


Russell Clayton Honey: Does the committee grant leave to the hon. member for Regina East as requested?
(a)	by striking out lines 32 to 44 on page 355 and lines 1 to 4 on page 356 and substituting the following:
'Amount to be
deducted or
withheld
from
payment to customer
(3) Where at any particular time in a calendar year and after 1971 a payment pursuant to an allocation in proportion to patronage is made by a taxpayer to a person resident in Canada, the taxpayer shall, notwithstanding any agreement or any law to the contrary, deduct or withhold therefrom an amount equal to 15% of the lesser of the amount of the payment and the amount, if any, by which


Some hon. Members:: Agreed.


Russell Clayton Honey: So ordered.
Amendment (Mr. Burton) withdrawn.


Stanley Howard Knowles: Mr. Chairman, I presume that someone over there has authority to ask for the withdrawal of the amendment moved by the Minister of National Revenue. We shall consent to that withdrawal as well.
(a)	the aggregate of the amount of the payment and the amounts of all other payments pursuant to allocations in proportion to patronage made by the taxpayer to that person in the calendar year and before the particular time
exceeds
(b)	$100,
and forthwith remit that amount to the Receiver General of Canada on behalf of that person on account of that person's tax under this Part.'


Allan Joseph MacEachen: Mr. Chairman, I was rising to ask the consent of the committee to withdraw, as the hon. member for Regina East has, the amendment moved on October 22, I believe, to this particular section by the Minister of National Revenue.
I wish to thank the hon. member for Peace River and the hon. member for Winnipeg North Centre for making it possible for us to get along with the work and to move these amendments today, with the understanding that the discussion can be withheld until a later time or a later hour.
(b)	by striking out lines 20 to 47 on page 357 and lines 1 to 23 on page 358 and by relettering paragraphs (g) and (h) on page 358 as paragraphs (/) and (g), respectively.
(c)	by striking out lines 33 to 48 on page 359 and lines 1 to 9 on page 360 and substituting the following:
'Amount of payment to customer
(6) For greater certainty the amount of any payment pursuant to an allocation in proportion to patronage is the amount thereof determined before deducting any amount required by subsection (3) to be deducted or withheld from that payment.
While I have the attention of all hon. members, I should mention there is one other amendment that is not related to the co-operatives and credit unions which I should like to move under the same privilege. The amendment is to section 172 and relates to the right of appeal of an applicant who is deemed to have been refused registration as a charity and so on. I would move that after I have moved the credit union and co-operatives amendments, and on the same basis, if the committee is agreeable.


Some hon. Members:: Agreed.


Russell Clayton Honey: The committee has heard the President of the Privy Council. So that the committee knows what it is dealing with, the amendment referred to by the minister was moved by the Minister of National Revenue on October 22, 1971 and appears at page 8953 of Hansard. It states, "that section 135, as set forth in clause 1", and so on. Is it the wish of the committee that the minister shall have consent to withdraw the amendment.


Some hon. Members:: Agreed.
Amendment (Mr. Gray) withdrawn.
Payment to Customer to be included in income
(7) Where a payment pursuant to an allocation in proportion to patronage (other than an allocation in resect of consumer goods or services) has been received by a taxpayer, the amount of the payment shall be included in computing the recipient's income for the taxation year in which the payment was received and, without restricting the generality of the foregoing, where a certificate of indebtedness or a share was issued to a person pursuant to an allocation in proportion to patronage, the amount of the payment by virtue of the issue thereof shall be included in computing the recipient's income for the taxation year in which the certificate or share was received and not in computing his income for the year in which the indebtedness was subsequently discharged or the share was redeemed.'


Stanley Howard Knowles: Mr. Chairman, this amendment is lengthy and perhaps there is another one which is equally lengthy. I wonder if the minister could be given the consent of the committee to place the whole text of these amendments in Hansard as if they had been read.


Allan Joseph MacEachen: Mr. Chairman, I move:


Some hon. Members:: Agreed.

December 6, 1971
Income Tax Act


Allan Joseph MacEachen: Mr. Chairman, I thank the members of the committee, through you, for allowing me to present these amendments.


Russell Clayton Honey: Order, please. I do not want to interrupt the minister, but perhaps we should deal with this matter. Is it agreed that the amendments be printed in Hansard as read?


Some hon. Members:: Agreed.
On Clause 1-Section 137: Deductions in computing Income.


Allan Joseph MacEachen: Mr. Chairman, I should like now to move an amendment to section 137. However, there were, I understand, amendments moved on October 22 and October 29, 1971 which I should like to have withdrawn with the consent of the committee.


Joseph Adrien Henri Lambert: Mr. Chairman, may I ask if it would be possible to get the French version of the amendments?


Marcel Joseph Aimé Lambert: You have it.


Joseph Adrien Henri Lambert: No, I do not.


Patrick Morgan Mahoney: Mr. Chairman, I think if the hon. member will look a little deeper into the pile of papers delivered to him, he will find that everything he has in English he also has in French.


Russell Clayton Honey: Order, please. The President of the Privy Council has asked leave to withdraw two amendments to section 137. I should identify them for the purpose of the record. The first was moved on October 22, 1971 by the Minister of National Revenue and appears at pages 8953 and 8954 of Hansard. It is an amendment that section 137 as set forth in the bill be amended. Is it the wish of the committee to give consent to the minister to withdraw the amendment?


Some hon. Members:: Agreed.
Amendment (Mr. Gray) withdrawn.


Russell Clayton Honey: The second amendment was moved by the Minister of National Defence on October 28, 1971 and is recorded in Votes and Proceedings for that day at page 2. The amendment asks that section 137 be further amended. Is it the wish of the committee to grant leave to the President of the Privy Council to withdraw the amendment.


Some hon. Members:: Agreed.
Amendment (Mr. Gray) withdrawn.


Allan Joseph MacEachen: I move:

That section 137 as set forth in clause 1 of the said Bill be amended
(a)	by striking out the heading immediately preceding section 137 on page 361. and substituting the following:
'Credit Unions and Savings and Credit Unions'
(b)	by striking out lines 1 and 2 on page 361 and substituting the following:
'Deductions 137. (1) In computing the income for a taxation in	year of a credit union or a savings and credit union
computing (jn this referrecj to as a "credit union")*, income *	....-... 1 -
(c)	by striking out lines 35 to 42 on page 361 and lines 1 to 29 on page 362 and substituting the following:
'Additional
deduction
Amount deemed deductible under s. 125
Amount paid in respect of members' share deemed paid as interest
(3)	There may be deducted from the tax otherwise payable under this Part for a taxation year by a corporation that was. throughout the year, a credit union, an amount equal to 25% of the lesser of
(a)	the amount, if any. by which
(i)	the corporation's taxable income for the year
exceeds
(ii)	the least of the amounts determined under paragraphs 125(1) (a) to (d) in respect of the corporation for the year, and
(b)	the amount, if any, by which
(i)	4/3 of the corporation's maximum cumulative reserve at the end of the year
exceeds
(ii)	the aggregate of the corporation's preferred-rate amount (within the meaning assigned by paragraph 189(4) (c)) at the end of the immediately preceding taxation year and the amount determined under subparagraph (a) (ii),
except that in applying this subsection for a taxation year after the 1972 taxation year, the reference in this subsection to "25%" shall be read as a reference to "24% " for the 1973 taxation year, 23% for the 1974 taxation year. "22%'' for the 1975 taxation year, and "21%" for the 1976 and subsequent taxation years.
(4)	For the purposes of this Act, any amount deductible or any deduction under subsection (3) from the tax otherwise payable by a credit union under this Part for a taxation year shall be deemed to be an amount deductible or a deduction, as the case may be, under section 125 from that tax.
(4.1) For the purposes of this Act, any annual or other periodic amount paid or payable by a credit union to a member thereof in respect of his share in the credit union, other than any such amount paid or payable as or on account of capital, shall be deemed to have been paid or payable, as the case may be, by the credit union as interest and, when received by the member, to have been received by him as interest.
Member's (5) Where a payment has been received by a income	taxpayer from a credit union in a taxation year in
respect of an allocation in proportion to borrowing, the amount thereof shall, if the money so borrowed was used by the taxpayer for the purpose of earning income from a business or property (otherwise than to acquire property the income from which would be exempt or to acquire a life insurance policy), be included in computing the taxpayer's income for the year.'
December 6, 1971

(d)	by striking out lines 32 to 34 on page 362 and substituting the following:
'for a taxation year means an amount credited by a credit union to a person who was a member of the credit union in the year on terms that the'
(e)	by striking out lines 8 to 45 on page 363 and lines 1 to 38 on page 364 and substituting the following:
[DOT] "Credit	(b) "credit union" means a corporation, associaunion"	tion or federation incorporated or organized as a
credit union or cooperative credit society if
(i)	it derived its revenues primarily from
(A)	loans made to, or cashing cheques for, members,
(B)	bonds of, or guaranteed by, the Government of Canada or a province, or a Canadian municipality, or bonds of a municipal or public body performing a function of government in Canada,
(C)	bonds of a corporation, commission or association not less than 90% of the shares or capital of which was owned by the Government of Canada or a province or by a municipality in Canada, or
(D)	loans made to a cooperative credit society of which it is a member, or
(ii)	the members thereof were corporation or associations
(A)	incorporated or organized as credit unions, substantially all of which derived their revenues primarily from loans made to members or from bonds of, or guaranteed by, the Government of Canada or of a province,
(B)	incorporated, organized or registered under, or governed by a law of Canada or a province with respect to cooperatives, or
(C)	incorporated or organized for charitable purposes,
or were corporations or associations no part of the income of which was payable to, or otherwise available for the personal benefit of, any shareholder or member thereof;
(c) "maximum cumulative reserve" of a credit union at the end of any particular taxation year means an amount equal to 5% of the aggregate of amounts each of which is
(i) the amount of any debt owing by the credit union to a member thereof or of any other obligation of the credit union to pay an amount to a member thereof, that was outstanding at the end of the year, including, for greater certainty, the amount of any deposit standing to the credit of a member of the credit union in the records of the credit union, but excluding, for greater certainty, any share in the credit union of any member thereof, or (ii) the amount, as of the end of the year, of any share in the credit union of any member thereof; and
"Member" (d) "member" of a credit union means a person who is entitled as a member or shareholder to full voting rights in the conduct of the affairs of the credit union,'
Income Tax Act


John Stratford Burton: May I ask the President of the Privy Council a question before he proceeds to the next stage? Do I understand from what he has said that the amendment to section 136 which was moved on October 22 is still allowed to stand?


Allan Joseph MacEachen: I am not proposing any change to section 136 at the moment.
The next amendment which is related to this batch of amendments is to clause 57 on page 685. Do I have the consent of the committee to have clause 57 called to make this amendment?


Russell Clayton Honey: Shall section 135 stand?


Marcel Joseph Aimé Lambert: Mr. Chairman, if we consider clause 57 at this point, we would be jumping with seven league boots. It must be remembered we would be moving from clause 1 to clause 57 of the bill. This has not happened before. Up to this point the movement has been within clause 1. What the minister is now proposing is either a transitional or a consequential amendment, but this is an entirely separate clause and it is a departure from the practice of the past to read amendments to that they would be before the committee and they could be acted on before the guillotine falls. I hope that the same reciprocity will be given by government members to any member of the opposition who might wish to move an amendment some distance down the road so that it could be dealt with before the guillotine falls, otherwise we will be operating on a one way street. I hope that the principle of two way streets is recognized.


Stanley Howard Knowles: The hon.
member for Edmonton West is quite correct in pointing out that what the President of the Privy Council is now seeking to do is to propose amendments to clauses way beyond clause 1, namely clauses 57 and 58. However, since those amendments-and we have now seen copies of them-are related to, and consequential upon, the amendments to sections 135 and 137 of clause 1, I hope that the committee will give that consent. At the same time, I support the suggestion of the hon. member for Edmonton West that if consent is given from this side for amendments to be introduced at this stage to other clauses of the bill, the same kind of consent will be given by the other side to the introduction of amendments. Perhaps we could have a House leader's meeting to get this sorted out.


Marcel Joseph Aimé Lambert: There is one further point. Before the minister can move such an amendment, if we consult an up to date copy of the bill we will see that it contains an amendment which has already been put forward to the clause and which should now be withdrawn.


Allan Joseph MacEachen: I quite agree with the hon. member for Edmonton West. There is an amendment that was moved to clause 57 which should be withdrawn, and I would like to have the consent of the committee to withdraw the amendment.


Russell Clayton Honey: Before I put the question I will have to ask the consent of the committee to standing section 135.


Some hon. Members:: Agreed.
"Maximum
cumulative
reserve"
10178

December 6, 1971
Income Tax Act
On Clause 57: Specified personal corporations.


Russell Clayton Honey: The committee has heard the request of the President of the Privy Council for leave to withdraw the amendment now standing to clause 57 in the name of Ss 51(1) the hon. member for Rosedale moved on October 29, 1971.	not
Shall the minister have consent to withdraw the	applicable
amendment?
and the aggregate determined under paragraph (e) is the tax under Part I of the amended Act payable by the corporation for its 1972 taxation year.
(2)	Subsection 51(1) does not apply for the purpose of determining the tax payable by co-operative corporation (within the meaning assigned by section 136 of the amended Act) for its 1972 taxation year.


Some hon. Members:: Agreed.
Amendment (Mr. Macdonald, Rosedale) withdrawn. Mr. MacEachen: I move:
"Amount
taxable''
defined
(3)	In this section, "amount taxable'' of a corporation for its 1972 taxation year has, subject to subsection 51(2), the meaning assigned by Division E of Part I of the amended Act.'
That the said Bill be amended by adding, immediately after clause 57 on page 689, the following clause:
'Co-operative
corporations
57.1 (1) Where a co-operative corporation (within the meaning assigned by section 136 of the amended Act) has a taxation year part of which is before and part of which is after the commencement of 1972, the tax payable by it under Part I of the amended Act for the year shall be determined by the following rules:
(a)	determine the tax under Part I of the amended Act that, but for this subsection, would be payable by it for its 1972 taxation year on its amount taxable for its 1972 taxation year;
(b)	determine that proportion of the amount determined under paragraph (a) that the number of days in that portion of its 1972 taxation year that is in 1972 is of the number of days in the whole taxation year;
(c)	determine the aggregate of the taxes that, but for this subsection, would be payable by the corporation for its 1972 taxation year
(i) under Part I of the former Act, and
(ii) under subsection 24(5) of the Old Age Security Act as it read before being amended by section 3
on the assumptions that
(iii)	its amount taxable for its 1972 year were computed as if
(A)	subsections 75(3) and (5a) and paragraph (75(4)(b) of the former Act were applicable, and
(B)	the references in subsection 75(3) and paragraph 75(4) (b) of the former Act to section 27 of that Act and to paragraph (k) of subsection (1) of section 62 of that Act were references to section 111 and to paragraph 137(6)(b), respectively, of the amended Act, and
(iv)	Division E of Part I of the former Act and subsections 24(5) and (6) of the Old Age Security Act as it read before being amended by section 3 were applicable to its 1972 taxation year;
(d)	determine that proportion of the aggregate determined under paragraph (c) that the number of days in that portion of its 1972 taxation vear that is in 1971 is of the number of days in the whole taxation year;
(e)	determine the aggregate of the amounts determined under paragraphs (b) and (d) in respect of the corporation;


Russell Clayton Honey: Shall clause 57 stand?


Some hon. Members:: Agreed.
On clause 58: Credit Unions.


Allan Joseph MacEachen: May we now call clause 58, Mr. Chairman? May I have the consent of the committee to withdraw the amendment to this clause moved on October 29, 1971?


Russell Clayton Honey: Is it the wish of the committee to give consent to the minister to withdraw the amendment moved by the hon. member for Rosedale on October 29, 1971?


Some hon. Members:: Agreed.
Amendment (Mr. Macdonald, Rosedale) withdrawn.


Allan Joseph MacEachen: I move:
That clause 58 of the said Bill be amended
(a)	by striking out lines 20 and 21 on page 690 and substituting the following:
'the product obtained when the number of full taxation years in the period'
(b)	by striking out lines 35 and 36 on page 690 and substituting the following:
'of such improvement or addition, as the case may be, exceeded JlOjOOO),'
(c)	by striking out lines 30 to 49 on page 691 and lines 1 to 27 on page 692 and substituting the following:
'Deemed	(2) For the purposes of paragraph 137(1) (c) of
deductions the amended Act, a credit union shall be deemed to have deducted, in computing its income for its 1971 taxation year
(a)	under paragraph 137(1) (a) thereof, the maximum amount determined in prescribed manner that would have been claimable by the credit union under that paragraph as a reserve in respect of property described therein in computing its income for its 1971 taxation year if section 137 of the amended Act had been applicable to that year, and
(b)	under paragraph 137(1) (b) thereof, the maximum amount determined in prescribed manner that would have been claimable by the credit union under that paragraph as a reserve in re-
[The Chairman.]
December 6, 1971

Special rule applicable to 1972 taxation year
Additional deduction for 1973 to 1976 taxation years
Determination of maximum cumulative reserve at end of taxation year
spect of debts described therein in computing its income for its 1971 taxation year if section 137 of the amended Act had been applicable to that year,
except that where the amount of the credit union's 1971 reserve is less than the aggregate of the amounts described in paragraphs (a) and (b), it shall be deemed to have deducted in computing its income for its 1971 taxation year,
(c)	under paragraph 137(1) (a) of the amended Act, such portion of its 1971 reserve as it may claim, not exceeding the amount described in paragraph (a), and
(d)	under paragraph 137(1) (b) of the amended Act., such portion of the amount, if any, by which its 1971 reserve exceeds the amount determined under paragraph (c), as does not exceed the amount described in paragraph (b).
(3) Where a credit union has a taxation year part of which is before and part of which is after the commencement of 1972, the tax payable by it under Part I of the amended Act for that taxation year is that proportion of the tax otherwise payable by it under that Part for the taxation year that the number of days in that portion of the taxation year that is in 1972 is of the number of days in the whole taxation year, and subsection 51(1) does not apply for the purpose of determining the tax payable by it for that taxation year.
(3.1)	For the purposes of subsection 137(3) of the amended Act, where a credit union has a taxation year (in this section referred to as the "particular taxation year") part of which is before and part of which is after the commencement of any of the calendar years 1973, 1974, 1975 and 1976 (in this section referred to as the "particular calendar year"), the percentage referred to in subsection 137(3) of the amended Act for the particular taxation year is the percentage equal to the aggregate of
(a)	that proportion of the percentage so referred to for the particular taxation year that the number of days in that portion of the particular taxation year that is in the particular calendar year, is of the number of days in the whole of the particular taxation year, and
(b)	that proportion of the percentage so referred to for the taxation year immediately preceding the particular taxation year that the number of days in that portion of the particular taxation year that is in the calendar year immediately preceding the particular calendar year, is of the number of days in the particular taxation year.
(3.2)	Notwithstanding paragraph 137(6) (c) of the amended Act, for the purposes of section 137 of the amended Act a credit union's maximum cumulative reserve at the end of any particular year is the amount, if any, by which its maximum cumulative reserve at that time, determined under paragraph 137(6) (c) of the amended Act without regard to this subsection, exceeds the lesser of
(a)	its maximum cumulative reserve, determined under paragraph 137 (6) (c) of the amended Act without regard to this subsection, at the end of its 1971 taxation year, and
(b)	the amount, if any, by which its 1971 reserve exceeds the aggregate of the amounts deemed by subsection (2) to have been deducted by it in computing its income for its 1971 taxation year.'
Income Tax Act
(d) by adding, immediately after subclause (4) on page 692, the following subclause:
'Amount of non-capital loss
(4.1) The amount, if any, by which
(a)	the aggregate of amounts each of which is the amount, as of the commencement of the credit union's 1972 taxation year, of any share in the credit union of any member thereof,
exceeds
(b)	the amount that would be the credit union's 1971 reserve if paragraph (5) (c) were read without reference to subparagraph (vi) thereof
shall, for the purposes of section 111 of the amended Act, be deemed to have been the credit union's noncapital loss for its 1971 taxation year, and, for greater certainty, section 37 does not apply for the purpose of computing a credit union's taxable income for any taxation year.'
(e) by striking out lines 13 to 23 on page 693 and substituting the following:
' "1971 reserve"
(c) "1971 reserve" of a credit union means the amount, if any, by which the aggregate of amounts each of which is
(i)	the amount of any money of the credit union on hand at the commencement of its 1972 taxation year,
(ii)	an amount in respect of any property described in paragraph (1) (a) or (b), equal to the amount at which it is required by those paragraphs to be valued at the commencement of its 1972 taxation year,
(iii)	an amount in respect of depreciable property of a prescribed class owned by the credit union on the first day of its 1972 taxation year, equal to the amount determined under paragraph (1) (d) to be the undepreciated capital cost thereof to the credit union as of that day, or
(iv)	an amount in respect of any capital property (other than depreciable property) owned by the credit union at the commencement of its 1972 taxation year, equal to its cost to the credit union computed without reference to the provisions of section 26,
exceeds the aggregate of amounts each of which is
(v)	the amount of any debt owing by the credit union or of any other obligation of the credit union to pay an amount, that was outstanding at the commencement of its 1972 taxation year, excluding, for greater certainty, any share in the credit union of any member thereof, or
(vi)	the amount, as of the commencement of the credit union's 1972 taxation year, of any share in the credit union of any member thereof.'
I thank members of the committee for their readiness to allow me to move amendments to clauses 57 and 58.1 wish to assure the hon. member for Edmonton West that I will extend the same courtesy to him, if not in the length of the amendments at least in the number, at the appropriate moment.
Now may I ask the committee if we could return to clause 1 and I will put the amendment with respect to the appeal right for the registration of a charity, that is section 172. But first I need to have the consent of the committee to go back to clause 1.

December 6, 1971
Income Tax Act


Mr. Aiken:: This is the section on which the parliamentary secretary had undertaken to come up with the proposed amendment some time ago. I would like to suggest that after this amendment is produced we could proceed with consideration of it as well as the remainder of the administration sections which were stood over last week.


Patrick Morgan Mahoney: Mr. Chairman, if the questions to be considered at this time are ones that are primarily the responsibility of the Department of Justice rather than of the Department of Finance, I would be in entire agreement to proceed with these sections, provided we have time to get the appropriate officials on the floor.


Russell Clayton Honey: Shall section 58 stand?


Some hon. members:: Stand.


Russell Clayton Honey: Shall the committee consider clause 1, section 172?


Some hon. Members:: Agreed.
On clause 1: section 172-Appeal.


Allan Joseph MacEachen: Mr. Chairman, I should like to move:
That section 172 as set forth in clause 1 of the said Bill be further amended by adding, immediately after subsection (3) on page 446, the following subsection:
(4) For the purposes of subsection (3), the Minister shall be deemed to have refused
(a)	to register an applicant for registration as a registered Canadian charitable organization or registered Canadian amateur athletic association.
(b)	to accept for registration for the purposes of this Act any retirement savings plan or profit sharing plan, or
(c)	to issue a certificate of exemption under subsection 212(14),
where he has not notified the applicant for registration or for the certificate, as the case may be, of his disposition of the application within 180 days after the filing of the application with him, and, in any such case, an appeal from such refusal to the Federal Court of Appeal pursuant to subsection (3) may, notwithstanding anything in subsection 180(1), be instituted under section 180 at any time by filing a notice of appeal in the Court.'


Russell Clayton Honey: Order. The committee now has before it clause 1, section 172, with an amendment thereto by the President of the Privy Council.


Gordon Harvey Aiken: Mr. Chairman, this amendment is very close to the one I suggested. If I am not mistaken I have a formal amendment before the committee on this matter, and when it comes to the point of the question being put I am prepared to withdraw my amendment in favour of the one that the government has put forward.
In large part, the amendment now before us meets the objection I raised. The fundamental problem here is that if the minister made no decision on an application for registration of a charitable organization, or of some other organization, there would be no ground for appeal because an appeal could only arise as the result of a
[Mr. MacEachen.)
refusal. In this particular case, the applicant would be completely frustrated in his desire to come to a decision. My suggestion was that a time limit should be imposed during which the minister must make a decision, and if he did not he would be deemed to have refused the application so that an appeal could be allowed. In large part the proposed amendment covers this point.
The only point I should like to raise, and my colleague from Edmonton West raised it when we discussed the section earlier, is that sometimes when an outside limit is established it becomes the accepted norm in the department. The officials feel they have six months to consider the application and do not concern themselves with it until the six months have passed. I sincerely hope that the effect of this amendment will not be for the departmental officials to consider that they have six months in which to consider the application. I hope that the parliamentary secretary can assure the committee that the maximum time within which the minister must reply will not become the minimum time. Aside from that general principle, and subject to certain comments which my colleague from Edmonton West may have, the amendment generally meets the proposal I made.


Russell Clayton Honey: Order. Just before I see the hon. member for Edmonton West, I thank the hon. member for Parry Sound-Muskoka for drawing the attention of the Chair to the fact that there is an amendment to section 172 in his name. The committee has moved so quickly this afternoon that our "ticker" is a little behind. In any event, it might be a good idea if I ask for the consent of the committee, as requested by the hon. member for Parry Sound-Muskoka, that he be permitted to withdraw his amendment to section 172. Is that agreed?


Some hon. Members:: Agreed.
Amendment (Mr. Aiken) withdrawn.


Marcel Joseph Aimé Lambert: Mr. Chairman, I think my colleague from Parry Sound-Muskoka has indicated the general thrust of my remarks. They are a repetition of what I indicated the other night in considering this particular point. With all due respect to the Canadian Bar and my colleague, I felt that 180 days or six months was far too long a period to give the minister to refuse to an application of a Canadian charitable association for registration or to register a Canadian amateur athletic association or to give notice that he proposed to revoke its registration or that he would refuse to accept for registration any retirement savings plan.
As my colleague indicated, it is an old axiom around here that any indicated maximum of time becomes, in practice, a minimum of time. Therefore, it behooves anyone who is going to apply for registration of a Canadian charitable or athletic association to get the application in at least six months ahead of the time when it wants the registration. It seems to me patently wrong to say that it is going to take more than three months to investigate a charitable association to determine why it should or should not be registered, in addition to which if there is a subscription fund to be registered on behalf of the charity or particular commission, that it should be necessary to
'Deemed
refusal
to
register
December 6, 1971

apply six months ahead of the time for registration. I am thinking of those people who have had experience with fund drives on behalf of charities and amateur athletic associations. Frankly, I fail to see the reason for the limitation of six months; it seems to me that 90 days would be more than adequate.
In the case of refusal to register a retirement savings plan, I think if it is going to take the Minister of National Revenue six months to make up his mind about the plan, then he places it in jeopardy in so far as the employees applying for it are concerned. Life does not proceed that slowly. I should like to have the advise of the parliamentary secretary or some officials from the Department of Justice, the Department of National Revenue or the Department of Finance on why 180 days was chosen rather than 90 days. I know it is a matter of choice.


Patrick Morgan Mahoney: I agree with the point that the hon. member has made, but in my experience people who apply for registration of charitable institutions usually want the registration granted yesterday rather than tomorrow.


Marcel Joseph Aimé Lambert: Sometimes it is
necessary.


Patrick Morgan Mahoney: This is quite true, but I think from a practical point of view the hon. member will appreciate that once it is decided to make an application these people do put the heat on the Department of National Revenue. I hope that no practical problem such as he anticipates will arise, but it is certainly something that we will observe. I shall bring the comments of the hon. member to the specific attention of the Minister of National Revenue. It is not intended that this be the outer limit, and I am sure the Department will operate in the way the provision is intended rather than use the 180 day time limit as a reason for being dilatory in processing these registration applications.


The Deputy Chairman:: Shall the amendment carry?


Some hon. Members:: Agreed.
Amendment (Mr. MacEachen) agreed to.


Gérald Laniel: Shall section 225 carry?


Marcel Joseph Aimé Lambert: Have we considered section 173?


Gérald Laniel: Is the committee ready for the question on section 172?


Gordon Harvey Aiken: Mr. Chairman, I merely rise to say that we have accepted the amendment and we can now proceed to accept the section.


Gérald Laniel: Shall section 172 as amended carry?


Some hon. Members:: Agreed.
Clause 1, section 172, as amended, agreed to.
On clause 1-Section 225-Seizure of Chattels.


Marcel Joseph Aimé Lambert: Mr. Chairman, if my memory serves me right, there are some other sections under which the same sort of notice is given. I think
Income Tax Act
perhaps section 168 is one. Briefly, I should like to know at what time the period of notice starts to run, when one says ten days notice by registered mail addressed to the recipient. Is this from the date of registration or the date of receipt of the document of notice?


Patrick Morgan Mahoney: From the date of mailing, Mr. Chairman.


Marcel Joseph Aimé Lambert: This is what I was afraid of. That is good for Ottawa, Montreal and Toronto. It is too bad the Postmaster General is not in the House. There is an increase in the number of cabinet ministers sitting in the House this afternoon, and this may be a salutary lesson from last week.


John (Jack) Davis: Sedentary.


Marcel Joseph Aimé Lambert: The Minister of the Environment may call it sedentary, but he may improve his knowledge of the income tax laws by sitting here. This is the only way cabinet members will be able to do it, because they certainly did not know what was in it before. Why should the person in British Columbia, Newfoundland or some other point to which it may take between three and five days to send a letter be penalized, whereas the person in Toronto, Montreal, Ottawa or other point close to the capital have an advantage because he gets his mail delivered quickly. I point out to the officials concerned that mail leaving Ottawa on Wednesday, and very definitely mail going out on Thursday, very often is not delivered in certain areas until Tuesday morning.


An hon. Member:: That happens in Hull.


Marcel Joseph Aimé Lambert: I am told that this happens in Hull. I give the benefit of reasonable doubt, shall we say, to the post office with regard to reasonable performance. The parliamentary secretary knows that these delays occur in Calgary. Mail which arrives in Calgary on Friday afternoon will not be delivered on Saturday or Sunday. Because of the accumulation of mail in the post office, it will not be sorted and delivered on Monday. One must wait until Tuesday. What on earth prevents notice beginning from the date of receipt of that notice by the recipient? What prevents that? Would that not bring justice in this regard right across the country?
You know, Mr. Chairman, I have often complained in the past about what I call the capital city syndrome which applies to people who sit in comfortable pews. They only worry for two or three days about the delivery of letters and then they can go to their lawyers. They have the time to do it. Do not let anyone say to me or to any member representing one of the farther reaches of the country, "A person can go to a judge and get leave to open the case." Do you know just how much it costs to do that? Such suggestions are even worse than Marie Antoinette saying, "If they cannot get bread, let them eat cake." I defy anyone to make an application to a judge, either of the federal court or of the Supreme Court, for less than $250. That is the cost of such an ex parte application. One has to retain an Ottawa representative, and there must be an appearance at the Supreme Court or at the federal court level in order to obtain leave to extend the period. That will cost $250. I have had experience of this with respect

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to the Immigration Appeal Board, and I say it is a damnable shame to fix the time in such a way.
Let us consider what happens if there is an Air Canada strike. I should like to see the employees of Air Canada who were responsible for a damn fool strike pick up the tab for two people who are faced with a deportation order. They had to apply for leave to appeal to the Supreme Court of Canada. They had to obtain the transcript of the hearing before the Immigration Appeal Board and a copy of the order. All these materials had to be shipped by pony express, so called, across Canada. May I say that that cost over $300 extra for these poor chaps, simply because the Immigration Appeal Board Act says that the period for appeal shall be ten days after the making of the order and the publishing of it in Ottawa.
We are now considering the same sort of thing. Why on earth do we always see this sort of capital city syndrome with regard to certain statutes. Why cannot administrative people be more accommodating and get up off their sterns, to put it frankly, and accommodate the citizen who is being affected, so that no matter whether a citizen lives in Lillooet, British Columbia, or Come-by-Chance, Newfoundland, he shall have ten days' notice, just as the person living in Montreal, Toronto, Hamilton or Ottawa does. I think it is downright unjust to draft statutes this way. To those who say to members representing districts some distance from Ottawa, "Oh, but you people always scream; you are cry babies," I say, if you go to the court for relief the individual concerned must pay the additional cost. I do not see why that should happen. I should like to hear the parliamentary secretary tell me what justification there is for continuing this unjustice that requires the period of the notice to run from the date of the mailing of the notice. The date of receipt is ignored.


Gordon Harvey Aiken: Mr. Chairman, I waited for a moment to see if the parliamentary secretary would come forward with an amendment. I am prepared to move one if he is not so prepared. My amendment would be similar to one that was accepted previously. In that case, the requirement for ten days notice was altered to 30 days' notice. In this case, we are considering a serious penalty involving the right to seize personal chattels ten days after notice has been mailed by registered mail. For the reasons that my colleague has enumerated, I think it would be sensible to increase the period involved to 30 days, so that the person concerned can go to the bank and get the money for paying up his arrears, if that is what he wants to do. Surely, the ten day provision in this section is not less unfair than the ten day provision was in the previous section that was amended. In that case, a person had to launch an appeal within ten days of the mailing of the notice in Ottawa. In both cases, I submit, the ten day period would be unreasonable, and in one case an amendment was accepted.
If the government agrees with me, I will sit down. If not, I am prepared to move an amendment to alter the period in section 225 to 30 days. The parliamentary secretary indicates that I should proceed with my amendment. I will do so, Mr. Chairman.
I move:
That section 225 of clause 1 be amended at page 532 by striking out the figure 10 in line 22 and by substituting the figure 30.


Patrick Morgan Mahoney: Mr. Chairman, we have no objection at all to this amendment. I feel that measuring time from the date of mailing is the only practical solution; otherwise, we shall be involved in all manner of disputes as to when a particular letter is delivered, when it gets into the hands of the person concerned, if it ever gets there, and that sort of thing, or whether somebody else signed for the registered letter, and so on and so forth. That sort of problem is constantly encountered in the service of documents by mail.
However, the 30-day period should give ample protection to people in all parts of the country; taxpayers will be able to receive their notices in time and react to them, if they choose to do so. I think the hon. member's amendment is quite reasonable. I would not, however, agree with the hon. member for Edmonton West that it would be practical, however desirable it might be in theory, to depart from the time of mailing as the time from which we shall measure the beginning of the period in question.


Marcel Joseph Aimé Lambert: Mr. Chairman, I think this amendment will go a long way towards meeting the objections that I have. However, the parliamentary secretary's practice of law must not involve much litigation. After all, most of the service of documents of the courts in his city is done by double registered mail. Certainly on matters of much greater import than this, such as a foreclosure, the documentation is always served by double registered mail. That is the only way. It never causes any particular inconvenience.
I have always found it very difficult to understand the so-called administrative difficulties in the Department of Justice. The provincial authorities have had a reasonably happy experience with double registered mail. This must mean that the people in the federal Department of Justice do not have any faith in the Post Office and that is why they turn down the idea of double registered mail. I know some of them will privately agree that they do not have any faith in it, but publicly they have to put on a much better face than that. By making the period 30-days, there is sufficient latitude and I am quite satisfied there is. I thank the parliamentary secretary for accepting this proposal, albeit I think it an imperfect solution.


Gerald William Baldwin: Mr. Chairman, I had been about to make some comments on this when I heard my hon. friend's amendment. I am inclined to go along with it. The parliamentary secretary need not worry about there being any division. I want to ask the parliamentary secretary if there have been any judicial decisions on existing sections of either the Income Tax Act or comparable legislation where the courts, having been requested, have given a decision as to what, in their opinion, is the meaning of 10 days notice by registered mail. The parliamentary secretary said this is what the department deems it to be. I have no doubt that this is their intention. Are there judicial decisions which have been given? The parliamentary secretary is now being briefed on this, so I will not repeat what I said.
December 6, 1971


Patrick Morgan Mahoney: On the specific point, Mr. Chairman, I am instructed that the Interpretation Act provides for this matter and the date of mailing is not included in the time period. The day immediately following the day of mailing is day one.


Gerald William Baldwin: The date of receipt counts, but the date of mailing does not.


Patrick Morgan Mahoney: That is right.
Amendment (Mr. Aiken) agreed to.
Clause 1, section 225, as amended, agreed to.


Marcel Joseph Aimé Lambert: In section 225(2) we have a further 10-day period for the keeping of goods after seizure. I wonder what the experience has been there. I am looking to the departmental officials to tell us whether they have encountered difficulties or criticisms in the courts from the rather short period because, if memory serves me correctly, I believe that under provincial statute seizures must be retained for longer than 10 days. The charges for storage and so on are the debtor's or the taxpayer's expense. Dealing with the outer reaches, is 10 days frankly adequate from the taxpayers' point of view?


Patrick Morgan Mahoney: Mr. Chairman, the 10-day period here is the period during which the property is kept at the cost or expense of the taxpayer. At the end of that period, of course, the Crown is at liberty to proceed to the public auction. However, any costs or expenses incurred in retaining the seized chattel beyond the 10-day period is at the expense of the taxpayer. The length of time does not seem to be inappropriate. At this particular point, the taxpayer is very well aware of what is happening and has certainly had every opportunity to avail himself of whatever legal recourse he chooses. The limitation of 10 days is basically to assure that the taxpayers costs are not run up, as well as to give a decent period of time for him to take whatever action he needs to take, if he wants to redeem the goods.


Gérald Laniel: The question asked by the hon. member for Edmonton West did not re-open the discussion on section 225 which was adopted as amended. We will now go to section 231.
On clause 1-section 231: Investigations.


Marcel Joseph Aimé Lambert: Just a minute, Mr. Chairman. You are going a little fast.


Gérald Laniel: The hon. member for Edmonton West said the Chair goes too fast. The Chair is trying to follow the directions of the committee which flow from the agreement accepted earlier.


Gordon Harvey Aiken: Mr. Chairman, I am just rising to hold the fort for the hon. member for Edmonton West. Section 231 is one of the sections the hon. member asked to have stood at the last hearing. I believe he referred particularly to subsections (2) and (15), and perhaps other subsections.
I have some comments on these two subsections. The first comment relates to subsection (2) which requires the minister, within 120 days from the date of seizure of documents, records and papers, to return them to the person from whom they were seized. This is a long period of time to hold documents when copies can be made in a few minutes of any documents which may be relevant to a
Income Tax Act
prosecution. This provision could result in a tremendous loss to a person who had documents seized, particularly if he were trying to carry on a business and the documents seized were essential to his business. It comes to a halt. Not only can he not defend himself on the charges that may be brought against him because his documents have all been seized, but in the meantime he may go out of business. It seems that 120 days is an unreasonable length of time to hold these documents.
At this time I should like also to refer to subsection (15) of section 231 which reads:
Any person whose affairs are investigated in the course of an inquiry authorized under subsection (7) is entitled to be present and to be represented by counsel throughout the inquiry unless the hearing officer appointed under subsection (8) in relation to the inquiry, on application by the minister or a person giving evidence, orders otherwise in relation to the whole or any part of the inquiry on the ground that the presence of the person and his counsel, or either of them, would be prejudicial to the effective conduct of the inquiry.
I do not see how one could consider the presence of a person who is being investigated as prejudicial to the inquiry. I think it should be a basic right which should not be taken away by the person holding the inquiry. I can see no reason why a person so charged should not be present. If the department believes there are such circumstances, I would be pleased to hear an explanation. But the exception might then become the rule. Whoever is appointed to hold the board of inquiry might feel that the person whose affairs are being investigated would become a nuisance if he were allowed to be present. He might ask too many questions, raise too many points of order, and so on. As I say, I can see no justification on grounds of fairness for excluding from the hearing the person whose affairs are under investigation, or his counsel.


Marcel Joseph Aimé Lambert: Mr. Chairman, I raised one or two questions on Tuesday last with regard to section 231 and the parliamentary secretary who was conducting the bill suggested we should stand the section.
I have been looking at the record. I think I did refer to section 231. We are again on 231(3). Notice is given or a demand is made by registered letter, and no specified period is set out, I want to know what is the period that is related to registered letters in matters of this kind. We were just looking at notice by way of registered letter and the period there was ten days. We are again getting a demand by way of registered letter and what is the time that is allowed by practice because there is no stated time under 231(3). If a registered letter is satisfactory to establish that a demand has been made in this particular case, why was a registered letter not administratively possible to use as I had suggested under section 225? It seems to me that in one case this is all right, but in the other case administratively it would be difficult. Frankly, I think before the courts one is faced with the same problem, proof of notice. If merely the mailing of a registered letter is sufficient to establish notice, I find that very difficult to understand.


Patrick Morgan Mahoney: If there is a customary or common period, I will find out and let the hon. member know in a few moments.
With regard to the question raised by the hon. member for Parry Sound-Muskoka, there is no doubt that to have

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records tied up for 120 days can be a great inconvenience to a taxpayer. However, the taxpayer does have full right of inspection during the period. It is the practice to permit him to make copies and extracts. I believe the hon. member's recollection of the laws of evidence will confirm my statement that original documents are most desirable as evidence when they are available, and that copies would not be as satisfactory in the case of the department deciding to proceed. From a practical point of view of any taxpayer going out of business as a result of this procedure, if the hon. member has any example of a taxpayer going out of business as a result of this procedure to cite in support of his speculation we should like to hear about it.
With regard to his statement that he cannot imagine circumstances in which a person should be excluded from a hearing under section 231(15) I would point out that this refers to inquiries authorized under subsection (7) for any purpose related to the administration or enforcement of the act. These are not simply inquiries into a taxpayers' affairs with a view to determining possible tax evasion or tax due on unreported revenue. This could involve situations where officials of the department have been bribed, or offered bribes. It could involve many aspects of the administration or maladministration of the act and, in circumstances of that sort, it might very well be necessary to undertake a closed inquiry. The hon. member will appreciate that any prosecutions would proceed in court after the result of the inquiry had been made known. In other circumstances, the taxpayer involved might be an employer. Evidence might be needed from his employees and there might be a possibility of intimidation. In the circumstances, the inquiry officer might decide that the taxpayer being investigated should not be present in order that the interests of justice might best be served.
What we are considering here is a new subsection. Previously, these investigations were all held without the person being investigated having the right to attend the inquiry. There are many situations involving the administration of the act in which an inquiry might be necessary, and at which the person being investigated ought not to be present.


Gérald Laniel: Perhaps at this time, pursuant to Standing Order 40, I should inform hon. members of the questions to be raised tonight at the time of the adjournment. They are as follows: the hon. member for Fraser Valley East-Airports-Hawkesbury-Action to remove possible safety hazard created by Canadian National Railways; the hon. member for Nanaimo-Cowi-chan-The Islands-Finance-Special development loan program-suggested increase in British Columbia allocation-amendment of formula; the hon. member for Fron-tenac-Lennox and Addington-Administration of Justice-Granting of parole to Nelles kidnappers-refusal to return licence to person convicted of impaired driving.


Gerald William Baldwin: Mr. Chairman, the parliamentary secretary has taken a very interesting position. I can understand that there is a distinction to be made between a departmental investigation involving, possibly, issues such as bribery, intimidation and so on and other cases involving taxpayers directly, but I would have thought such cases could have been brought outside the scope of

subsection (7). The subsection is a new one, as is subsection (8) and subsection (15). This involves the consideration of who will be the hearing officers. Will they be from the public service? Will they be departmental people? If so, I agree thoroughly with my hon. friend from Parry Sound-Muskoka. I think it is altogether improper and unethical to give a judicial function to a government employee. Then, within the judicial capacity given by this section, the government official who is the hearing officer could, completely within his own discretion, refuse to allow the person whose affairs are being investigated in the course of an inquiry to be present and represented by counsel.
Now, quite obviously if the people whose conduct is being investigated, that may be allright. However, I believe there should be some distinction made here between people in that category and taxpayers. I think it should be quite plain there is no intention by this subsection to say to taxpayers that they cannot be present and cannot be represented by counsel because the hearing officer so decides. The parliamentary secretary has said that the intent is to make this distinction, and I gather from him that he feels there will not be a situation where a taxpayer in respect of whom an investigation is being conducted by a hearing officer will, in fact, be excluded or in fact not be allowed to be represented by counsel.
I think it is a matter of wording this so the plain distinction is drawn between two types of persons whose affairs are being investigated. It should be made absolutely plain in so far as taxpayers are concerned that when their affairs are being investigated that there is the right of appearance by counsel or personal appearance. I think possibly the parliamentary secretary might consider it in that light.


Patrick Morgan Mahoney: Mr. Chairman, I should point out that under subsection 8 the hearing officer is appointed by the tax review board on application by the minister. It would be contemplated that, in the ordinary course of events in the investigation of a taxpayer's affairs, this would be an independent person and not an officer of the department. I find it difficult to imagine the circumstances under which the tax review board would agree that that type of investigation could be appropriately carried out by an officer of the Department of National Revenue who in essence is one of the parties to the dispute. I think we can and should rely on the tax review board to see that it appoints appropriate people as these inquiry officers.


Gordon Harvey Aiken: Mr. Chairman, in view of what the parliamentary secretary has said, and in view of the other arguments presented, I would make a suggestion to see how the government would react to it. I believe it would meet both points which have been raised. The parliamentary secretary has said there may be parts of an inquiry which do not relate directly to an individual or a certain person and it might be felt that he should not be present. However, if a person is to be excluded from such a hearing, I believe the grounds should be clear and that the onus should be on the hearing officer to establish that nothing will proceed in the absence of that person which affects him. I am wondering if it would be acceptable if all
December 6, 1971

the words after the word "inquiry" in line five were deleted and the words "so far as it relates to such person" substituted. In that case a hearing officer would have to determine whether or not the proceedings or the portion of the proceedings then going forward related to such a person, and the onus would be on the hearing officer- and also to guide himself during the absence of such person-not to deal with the rights of such a person under inquiry in his absence. I think such an amendment would alleviate the possibility which concerns us at the moment. I am throwing out this suggestion.
I repeat that everything after the word "inquiry" in line five should be deleted and that the words "so far as it relates to such person" be substituted. I should like to hear the reaction of the government on that proposal, because I think it would meet the problem which has been posed in respect of parts of an inquiry which do not relate to the person concerned but which relate to some departmental practice or procedure.


Patrick Morgan Mahoney: That is quite true, Mr. Chairman, but the hon. member's amendment would nullify the whole section because at the point at which it involves the departmental practice or procedure, presumably the person being investigated is the departmental officer who is alleged to have been corrupt or corrupted. I think that the hon. member should realize that unless the inquiry were to take account of irrelevant or extraneous matters, the person investigated would inevitably be affected.


Gordon Harvey Aiken: Then you have destroyed your whole argument that there is any point at which the evidence would be irrelevant. If as the parliamentary secretary says every part of the inquiry would relate to such a person, then why should he be excluded? I thought his argument was the other way around.


Patrick Morgan Mahoney: No, Mr. Chairman. I think Judge Hoffman could outline situations for the hon. member where it would be essential that the party be excluded for good reason in order to effectively carry out the hearings. These things do happen. They have happened in our own country in cases some of which are still sub judice and which we cannot discuss. However, there are special circumstances in which it might be advisable, in the interest of justice, that the person be present or be represented by counsel. I have outlined some of these before. I have to go back to the fact that this is an inquiry officer appointed by the Tax Review Board and not an officer from the Department of National Revenue who is making this decision. The decision can be made only on application either by the minister or by some witness who is appearing before the inquiry. It is not one that the inquiry officer can institute. So I believe there are built-in checks. I believe we have indicated the policy desired that these people be present or represented wherever possible. I have also pointed out that these are administrative proceedings. This is an inquiry.
What happens in the judicial sense will depend on the resolution of that inquiry and will be disposed of in the ordinary courts of the land, in the Tax Review Board and so on. Frankly, my sense of justice is not offended by this provision. I think it is a very positive and new provision in the bill which will give rights which heretofore have not
Income Tax Act
been enjoyed by taxpayers. I think perhaps it is overdue, but I do not believe this particular subsection offends any basic principle of justice.


Marcel Joseph Aimé Lambert: Mr. Chairman, I find it rather difficult to follow the parliamentary secretary at this point. As he said this is a new section. I cannot say that I am satisfied that the administrative practices under this section have been good because there have been no administrative practices under this particular section. On the other hand, I must say that I complimented the President of the Treasury Board the other day, and through him the government, for introducing the concept that the person involved could either be present or be represented by counsel when his affairs are being examined. Naturally, I did not say anything about the proviso. After all, the right that is being recognized is new. Then, there is the proviso according to which, the parliamentary secretary tells us, the minister must apply. But to whom must he apply in order to exclude the taxpayer and or his counsel? The hearing officer is appointed by the minister himself.


Patrick Morgan Mahoney: By the Tax Review Board.


Marcel Joseph Aimé Lambert: If the parliamentary secretary will look at subsections (7) and (8) he will see that the person who may be appointed a hearing officer may or may not be an employee of the Department of National Revenue. The person appointed is subject to confirmation by an order of the Tax Review Board.


Patrick Morgan Mahoney: May I clarify this? Under subsection (7), the person appointed to conduct an inquiry may or may not be an officer of the department. He is analogous to the prosecuting attorney, if you like. Then, the hearing officer before whom the inquiry is conducted is appointed under subsection (8), and he is analagous to the judge, if I may make that analogy. He is the one who is appointed by the Tax Review Board. So, there are two different people.


Gerald William Baldwin: Does the parliamentary secretary not contemplate that on the application to the Tax Review Board the minister will nominate a person and that when he applies, by means of whatever procedure would be adopted, he would say to the Tax Review Board "I am requesting the appointment of a hearing officer and I suggest such-and-such a person." I am not suggesting that this will be the course pursued, but I would like the parliamentary secretary to say that there is no intent on the part of the department for the minister to nominate the hearing officer.
Secondly, while the parliamentary secretary is considering that, let me refer to the point raised by the hon. member for Parry Sound-Muskoka. While I realize that any commitments or statements made in this House are not binding in a court of law, nevertheless perhaps the parliamentary secretary might indicate that it is the intent of the government, in dealing with subsection (15) and its implementation, not to deprive a taxpayer whose affairs are being investigated of the right to be present and represented by counsel. Is he able to give that reassurance that that is the intent and the practice which will be observed so far as the department is concerned.

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Patrick Morgan Mahoney: May I say on the first point that I think the Tax Review Board would be most reluctant to appoint an officer of the Department of National Revenue as the hearing officer in an investigation involving a dispute between a taxpayer and the department. I can visualize circumstances where the subject matter of the inquiry is departmental administration rather than a dispute between a taxpayer and the department where it might be appropriate, although I think that a competent, independent person would be more appropriate in almost any case.
On the second point, I cannot give the assurance for the simple reason that the inquiry officer will have to decide under subsection (15) that:
-the presence of the person and his counsel, or either of them, would be prejudicial to the effective conduct of the inquiry.
I do not have the imagination to be able to say that that would not occur in the case of an inquiry into the affairs of a taxpayer. I hope it would not occur often. The intent is that the person be allowed to be present or to be represented by counsel in all cases, and only when it is prejudicial to the inquiry does the presiding officer who is appointed by the Tax Review Board come to be called upon to make the decision to exclude the person. But circumstances might very well dictate to him that the ends of justice and the purpose of the inquiry would be best served by excluding him. That is why the option is there for the officer to make that ruling.


Gerald William Baldwin: To sum it up then, there are no guidelines. The hearing officer has the power, without any direction from the statute, to exclude on his own discretion a taxpayer and or his counsel from an inquiry.


Marcel Joseph Aimé Lambert: It was very interesting to hear the observations of the parliamentary secretary and to hear him say that he did not think the special hearing officer would be an employee of the Department of National Revenue. It should not be too strange if the practice were adopted, because under the Immigration Act when a prospective immigrant to this country who wishes to be landed is examined by an immigration officer as to his qualifications for being landed and is then turned down, the appeal is by way of a special inquiry under a special inquiry officer who may be a fellow employee of the Department of Manpower and Immigration, in the same blessed branch, and who is asked to rule upon a prior decision of his colleague. That is why there are 7,500 cases before the Immigration Appeal Board now. I hope that at the appropriate time the appropriate minister may make the necessary changes in this respect. This is why there is this built-in abuse where one man is asked to rule on a prior decision of his colleague. This is what we find when we read the transcripts. I am not discussing the Immigration Act and the practices thereunder, but what I am saying is that this can happen within the realm of government administration and it is conceivable that certain officers of the Department of National Revenue could be recommended as special hearing officers. There is nothing to prevent this.


Gerald William Baldwin: I admire the confidence of the parliamentary secretary. Let me say that many things are done in this House which have a different impact outside the House than was contemplated. I can recall the early days

of my practice of law in Peace River. At that time under the Fisheries Act-it may still be there for all I know and I am sorry the Minister of Fisheries has left the House-an enforcement officer of the Department of Fisheries could investigate alleged infractions against the Fisheries Act, lay a charge, appear as the justice of the peace, and try the case. The parliamentary secretary smiles.
I remember raising this point during the course of a dispute before the officer of the Fisheries Department who thought he had every right to do this. He was indignant that I would suggest it was not the thing to do, and finally I had to proceed by way of certiorari and have the conviction quashed. But I am quite convinced that when the House of Commons was discussing this particular clause some minister attempted to sooth the doubts and anxieties of members of the opposition by saying, "This does not mean anything. No one would operate in this way under it." But the facts of life are that when these powers are given, officials act under them and injustices do occur.
I am not going to say any more. I did contemplate moving an amendment. The government seems to be in a very flexible position today regarding amendments but I will not try my luck. When one considers the extent to which these provisions will be reflected in actual practice, one can see there is ample scope for grave injustices. I repeat that injustices will occur, and before too long a period has elapsed these sections will have to be amended along the lines that we have suggested. Certainly after the next election, when we form the government, we will do it if it has not been done before then.


Patrick Morgan Mahoney: Mr. Chairman, I certainly do not want to filibuster this worthy section, but I would not wish to see the debate on this particular point terminate with any aspersions directed towards the Tax Review Board, which is a judicial body, and which is the body charged with appointing this person who conducts the inquiry, the hearing officer. I am confident that this board can be expected to exercise its powers of appointment as well as its powers in other respects in a judicial fashion. I have every confidence that this is a very progressive step and will not be abused.


Gerald William Baldwin: So far as I can see this step is far more conservative than progressive. No one is casting aspersions on the Tax Review Board, but it is my experience through long professional life of having to combat people engaged in the administration of government that, for what they deem to be good and sufficient purposes and reasons, they have no objection to utilizing all the scope of ambiguously worded sections of this kind, which grant great powers, and that under those conditions injustices occur.
I will leave it at that, Mr. Chairman. I think the parliamentary secretary is wrong. I think the situation is much different from what he contemplates, and I prophesy that these powers will be abused. We have done our job as a responsible opposition. We have directed the attention of the committee to the dangers which exist. Having done that, and having filed our caveat, if the government insists
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on passage of these provisions without any amendment then the responsibility rests on it.


Mark Willson Rose: Mr. Chairman, I think there is a very important principle involved here. That is why I wish to support the position taken by the hon. member for Edmonton West and the hon. member for Peace River. All of us can recall that when Department of Veterans Affairs legislation was being debated here some months ago, one of the important principles then established was that of a separate and distinct appellate division. It was the feeling that if the person called upon to conduct a review was, in effect, the same person or administrative body that made the decision in the first place, then the kind of problem mentioned by the hon. member for Peace River had a greater chance to arise, and discrimination could occur.
On behalf of a number of my constituents I have made requests for review boards to various ministries, including National Health and Welfare, Manpower and Immigration, National Defence and others. In most cases I have found that an independent review takes place, but in others I had a strong suspicion that the review was conducted by the people, or friends of the people who made the decision in the first place, and that they were content to defend the original decision. The reason for the existence of any appellate court is to provide an open and fresh look at a particular problem. I think this is best achieved if the party first involved in the decision making is not connected with the review.


Gérald Laniel: Is the committee ready for the question?


Gordon Harvey Aiken: Mr. Chairman, I do not know if the parliamentary secretary wishes to reply to the hon. member who has just spoken, but if not we could proceed with the voting.


Gérald Laniel: Shall section 231 carry?


Some hon. Members:: On division.
Clause 1, section 231 agreed to.


Gérald Laniel: Shall section 239 carry? There is an amendment from the hon. member for Edmonton West.


Gordon Harvey Aiken: On a point of order, Mr. Chairman, have we passed section 235? I thought it had been stood.


Gérald Laniel: We just passed 231.


Gordon Harvey Aiken: Are we now proceeding to 235 or 239?


Gérald Laniel: We are on 239 and, as I said, there is an amendment from the hon. member for Edmonton West.


Gordon Harvey Aiken: Mr. Chairman, I do not believe that 235 has been passed. I think it has been stood.


Gérald Laniel: I understood section 235 had been passed. I said we just passed 231. Shall 235 pass then?
On clause 1-section 235: Penalty for failure to make returns.
Income Tax Act


Marcel Joseph Aimé Lambert: Mr. Chairman, section 235 is tied in with section 239, and I want to hear the reply to my amendment to section 239. Actually 235 is the present counterpart to 239 (2), because 235 says it is an offence under the act to fail to file a return under certain subsections, and 235(2) sets out other circumstances under which a person who fails to act in accordance with regulations passed under authority of "paragraph 221" may be prosecuted.
First of all, what about the regulations? Are they ready? I see looks of surprise among some of the officials. If they had been present last week they would know whereof I speak, because at that time I questioned whether certain regulations were ready since they have just as much import with regard to the administration of the act as do the statutory provisions.
Section 235 is a classic example. It is conceivable that these are merely a carry forward of section 129(1)(2) of the present act and that there are regulations in existence with regard to them. As I have pointed out again and again, however, this is a new act. All is on the table, including the regulations. I want to know if it is proposed to make any new regulations, or are they to be the same as heretofore in regard to section 235?
I spoke about sections 235 and 239. Under section 235, for instance, it is an offence to fail to file a return, and it may be very important that returns are consistently not made following demands-as an open defiance of the act and perhaps a suppression of revenues-but the penalty provided is on summary conviction. Mr. Chairman, there is another provision which says that there can be another penalty. Section 239(1) lays out another type of penalty for non-compliance with the act. Subsection (2) says that anything that is in non-compliance of the act under subsection (1) may be the subject of an indictment. So an offence under section 235 could prove to be indictable.
I ask why the indictment procedure is upheld in some cases and not in others. As I said already in reference to section 239 (2), it is completely contrary to any sense of justice for a minister or official to decide that a man shall go to jail. That is the effect of section 239 (2) which I shall argue in due course. I have made my preliminary argument with regard to section 235. I have some preliminary questions in that respect, but the real thrust of what I want to get at is section 239 (2).


Gordon Harvey Aiken: Mr. Chairman, there is one thing that particularly bothers me about the combination of sections 221 (2), 235 and 239. Under section 221 (2), to which we raised objection but on which we were overruled, regulations under the act shall, if the regulation so provides, be effective with reference to a period before it was published. We already have that on the books; the section has been passed. It seems to me that it meant that if there is a prosecution under section 235, which we are now considering, for failing to make a return as and, when required by regulation-under section 221-a person can be charged with committing an offence which did not exist at the time he committed it. In other words, the regulation can be backdated: it could be published on September 30, effective the previous June 30.

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What would happen to a person who on July 30 failed to comply with a regulation which was not then promulgated or published? Under the combination of these three clauses he could be found guilty under section 235 and sent to jail for two months under section 239 for failing to comply with a provision under section 221 which did not exist at the time he breached it. This seems to me the most ridiculous part of the Income Tax Act that we have before us.
It is all very well to say that the Department of National Revenue would never do such a thing. I do not suppose anybody would intentionally do it, but I think it behooves members of this House to make sure that such a situation cannot happen and that we are passing sensible laws. This is an example of the most senseless group of sections I have ever seen. Section 221 was not well drafted, in view of sections 235 and 239; but I am afraid we cannot go back to section 221 as it has been passed. We cannot go back to section 221 (2) and I suppose I should not be reflecting on the vote, and I am not, any more than to say that since it has been accepted it has left us in a ridiculous situation with regard to sections 235 and 239.
Section 239 gives the minister the right to proceed by way of indictment against a person for failing to file a return under section 235. He proceeds by way of indictment and the penalty is a minimum of two months in jail. Section 235 specifically mentions regulations under section 221 which can be promulgated and become effective before they are even published or made known to the public. Ignorance of the law is no excuse-but surely ignorance of a law which does not at that time exist, ignorance of a law which at that time is not known to the public, has not been promulgated and has not been published, should be a defence. Yet that is not the way in which this combination of sections has been drawn. From the beginning we objected to the absolute right of the minister to proceed by way of indictment under section 235 particularly, which can be nothing more than failure to file a return.
To carry the argument further, the offence could amount to nothing more than failure to file a return in the prescribed form. If the regulation is introduced on September 30, to be effective on July 30, there is no way that a person could comply with it. But he could be sent to jail for two months for non-compliance. If my reasoning is wrong, I should like to have it corrected.
I have looked at this matter in connection with sections 239 and 221. I do not see how the department can justify section 239(2) in concert with section 235-the section we are considering-unless 239 is amended in the manner proposed by the hon. member for Edmonton West. If accepted, the question of sentence would be left to the presiding judge, and the minister merely on his own authority would not be permitted to proceed by way of indictment. The judge would have to determine the circumstances of the case in sentencing. Frankly, I am not even prepared to go that far. There are some judges whom I would not trust, either. I will not name them, but I would not trust them any more than I would trust the government. I have appeared before them.

If the present provisions of the bill become law, judges will have no option but to convict. I can almost hear a judge saying to an accused, "I know that this is a ridiculous situation, but I am required by the law to convict you and send you to jail for two months for failing to file a return, which requirement did not exist at the time you were supposed to file the return." What can a judge do? He will have no option but to enforce a ridiculous provision in the law. I will say no more until the parliamentary secretary tells me that there is something wrong with my argument and that what I have suggested cannot take place.


Patrick Morgan Mahoney: I do not believe, Mr. Chairman, that it is within the power of the Governor in Council by regulation to create retroactive criminal consequences. I think the hon. member contemplates that this might happen. I am advised that that is beyond the power of the Governor in Council and that the courts would not uphold such regulations.


Gordon Harvey Aiken: Then why did we pass section 221(2) which provides:
No regulation made under this act has effect until it has been published in the Canada Gazette but, when so published, a regulation shall, if it so provides, be effective with reference to a period before it was published.


Patrick Morgan Mahoney: Mr. Chairman, it is contemplated that there will be necessity for numerous regulations to have retroactive effect after this act has been implemented, in order to make sure that there is no punitive impact on taxpayers as a result of the transitional period. It is anticipated that these retroactive regulations will be relieving in nature. It is certainly not contemplated that punitive regulations will be passed. Indeed, as I indicated earlier, such punitive regulations would not be legal if they were passed.
We recognize the necessity for relieving regulations. For example, let us consider the instance, raised earlier and debated at some length, involving the B.C. teachers and the credit union-a matter in which the hon. member for Edmonton West took great interest. In that case it would be necessary to pass a regulation that would be retroactive to budget day so that the type of investment these people have been making will be a qualified investment for the purposes of their pension plan. That is the sort of thing that is contemplated.


Gordon Harvey Aiken: I appreciate what the intention may be, but regardless of all these fine intentions the act specifies that regulations can be published and be effective prior to the publication date. The situation I alluded to could arise. What I am trying to do is to include a provision, either under section 235 which we are now considering, or section 239 which will prevent the suggested situation from arising and which the parliamentary secretary says is not likely to happen. If in the future section 221 is deemed to be illegal, or if regulations passed under that section are found to be illegal, why should we pass such regulations now? Why should we not include in the bill a saving provision?
The parliamentary secretary has suggested that we must pass retroactive regulations now because they will all be retroactive to the date on which the bill will become
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effective. I am objecting to passing regulations which will not be in existence at the time of a prosecution. I think we should make sure, either by amendment to section 235 or to section 239, that such situation cannot arise. The parliamentary secretary has suggested that you cannot legally pass retroactive criminal legislation. I do not agree with him. Talking off the top of my head, I suggest that we often pass criminal retroactive legislation.


An hon. Member:: That is how the public order bill worked.


Gordon Harvey Aiken: Yes. When we passed the Public Order (Temporary Measures) Act it was to be effective on a date prior to its implementation. I also cite the War Measures Act. That act was invoked by order in council and Parliament approved it some days later. It could not have been approved in a form different from that in which it was proposed.
I have given two examples but I can think of many others to show that we have passed criminal legislation and dated it back, so to speak. That is why section 239(2) is so dangerous. It gives the minister the right to proceed by way of indictment in the sort of situation to which I have alluded. I cannot understand why that should be done. We have not yet dealt with section 239, but since we are dealing with these matters perhaps the parliamentary secretary would reassure us concerning the amendment to section 239 which the hon. member for Edmonton West has moved. Is he prepared to accept this or a simiar amendment? If he is, some of the dangers I have outlined may be eliminated.


Marcel Joseph Aimé Lambert: Mr. Chairman, notwithstanding all the pious hopes of the parliamentary secretary and protestations regarding the good behaviour in future of the administrative people, I think that what the parliamentary secretary said is, frankly, fatuous. The parliamentary secretary said that no government or administration would make retroactive legislation that has a penal effect. Then what in the blazes is he talking about in section 235? Section 235 provides:
Every person who has failed to make a return as and when required by regulation under subsection 215(4), by regulation under section 221-
It does not say section 221(1) or 221(2); it says section 221. That means all the section.
-or by subsection 227(2) is liable to a penalty of $10 a day for each day of default but not exceeding in all $2,500.
In other words, the regulations under section 221 can, and specifically do, create an offence under the act. Section 235(2) provides:
Every person who fails to comply with a regulation made under paragraph 221 (l)(e)-
Section 221(l)(e) provides:
-required to make an information return to supply a copy of the information return or of a prescribed portion thereof to the person or persons in respect of whose income the information return or portion thereof relates.
In other words, it is with regard to his employees. If he fails to do that, he can be fined $10 a day up to a maximum of $2,500. That is non-compliance with the act. As I
Income Tax Act
have said, anything which is made an offence under section 235 is ipso facto an offence under section 239(1). Under section 239(1) there is full authority to proceed against the individual by way of indictment. As the hon. member for Parry Sound-Muskoka said, the net result is a regulation and it is spelled out in section 235. Any kind of regulation can be made with a retroactive effect requiring compliance. Within the neutral period there could be noncompliance. This then becomes an offence under the law, with the consequences I have pointed out.
Let no one say we are stretching things. If there is not to be any offence created, and if it is not the intention to use the section for that purpose, it is not required within the law. That is simple. Therefore, why this confusion? I want the parliamentary secretary to tell us that what we are suggesting cannot in fact happen. He can say that he does not think it will happen. But it is very possible it can. The language is clear. It is absolutely possible for it to happen. Therefore, it should not be in the act.


Gordon Harvey Aiken: Mr. Chairman, I wish we could get some assurance on this section before we pass it. I am not ready to let section 235 pass until we know where we are going on section 239. We have not yet had an answer. It is almost six o'clock. Perhaps the parliamentary secretary would like to consider the position over the dinner hour. This is a serious point. It is the basis of the whole administration and enforcement section of the Income Tax Act.
All the other things are there, the whole 700 pages, but the administration and enforcement of it are contained within the three sections we are now considering. We would be irresponsible if we permitted this section to be passed into law without a good deal more assurance than we now have. Either section 235 or section 239(2) requires amendment. If the government clearly states it does not intend that any prosecution shall proceed under a regulation which is promulgated subsequent to an alleged offence having been committed, all they have to do is write it into the income tax bill and we will be happy.
May I call it six o'clock, Mr. Chairman?


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


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Gérald Laniel: When the committee rose at six o'clock we were discussing section 235.


Gordon Harvey Aiken: I rise merely to ask the parliamentary secretary whether the government has anything to offer the committee with regard to the problems we raised this afternoon in connection with sections 235, 221 and 239(2).


Patrick Morgan Mahoney: I wish I could satisfy the hon. member better than I am sure I shall be able to do. First, I must take some exception to the suggestion he made before dinner that I had not responded to his questions earlier. I believe I did respond, though I can understand that he

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might not be satisfied with the answers I gave. But that is another question. We are dealing here with an area of the bill which, frankly, does not lend itself to the provision of the happy answers I might otherwise be able to supply. Experience of enforcement indicates that we require these sections very much unchanged.
We have no amendments to put forward, neither have any amendments been forthcoming from elsewhere that we are prepared to accept. This is the sort of thing the hon. member for Edmonton West, in his previous position of parliamentary secretary to the Minister of National Revenue, no doubt had to live with. I am sure at that time he presented to his minister many suggestions as to how the sections might be improved. The fact is that the sections before us are a carryover from the existing act. We feel that in the practical sense, in their practical application, there is little room for inequity. If there is, we shall be prepared to move and act accordingly.
Section 221 is not a new section and it is not a punitive section; it is one which is referred to in section 235. A number of the provisions in that section are new. They have been made in anticipation that regulations will be required to relieve taxpayers of unfair burdens during the transitional period. It is for this reason that we anticipate that regulations will be passed having a retroactive effect.
I realize that hon. members opposite can argue that regulations might be passed which would impose a burden of some description upon taxpayers on a retroactive basis. They can argue this in theory but in practice I do not think the courts would uphold any regulation which imposed a burden on taxpayers retroactively because, essentially, that would be the imposition of a tax, which is the prerogative of Parliament, and not of the Governor in Council. Again, I regret that my response is not likely to satisfy the hon. member for Parry Sound-Muskoka or the hon. member for Edmonton West.


Marcel Joseph Aimé Lambert: In that case, I suggest to the hon. gentleman that he look at the implications. He may say these are carryovers and have never given rise to any problems. But it is only in the past session that the House approved the Statutory Instruments Act. It would be an extremely interesting situation if the committee which will be set up at some time to review statutory instruments were to find that the effect of a regulation was totally unfair, though the minister might have been relying on the authority given him by the House to impose such a regulation.
This is the difficulty. Allowance has been made in section 221(2) for retroactive regulations. During the currency of the existing act there has been no such thing as the Statutory Instruments Act. The parliamentary secretary should remember what the Minister of Justice said when that act was passed-that orders in council or regulations would be subject to screening by the committee, and to adverse recommendations, if they applied with retroactive effect.
How does Parliament square-up a recommendation from a committee of the House which says that this regulation is bad in so far as it is retroactive. Yet the House has authorized retroactive regulations in this legislation. I
cannot square this up at all. I know the House has given approval to section 221(2), but the effect comes home in section 235 because that section speaks of section 221 and provides a penalty for an offence under any regulation passed pursuant to the whole of section 221.
I wonder whether the parliamentary secretary would be prepared to accept a proviso to section 235 in respect of section 221. As my colleague from Parry Sound-Muskoka indicated, there is good reason for section 221(2) in order to give effect to the provision that no regulation shall be effective until it has been published in the Canada Gazette, and to that part we say "Amen." We agree with that, but we do not agree that under section 235 there can be a penalty imposed on a taxpayer under the retroactive effect of section 221(2).
I am wondering whether we might insert a proviso within section 235 which would clearly eliminate any question of penalty. I admit the regulation would have to be effective, but there should be no penalty for an offence committed under a regulation before its publication, regardless of the effective date of the regulation. This is the point which bothers us in respect of this section. Is the parliamentary secretary prepared to accept an amendment? We would have to sit down and arrive at some careful wording here. However, that is the idea we want to get across. We want to eliminate any question of a penalty under the retroactive portion of the regulation.


Gerald William Baldwin: Mr. Chairman, while the parliamentary secretary is considering these weighty words I wish to reinforce what my hon. friend from Edmonton West has said. I sat on the statutory instruments committee. Before the bill came into the House a lengthy report was tabled by the committee and accepted. Everyone spoke glowing words about it and said what a wonderful report it was. It was unanimous. There was complete agreement on all sides of the House.
I suggest one of the essentials upon which the committee founded its report was that regulations should not have a retroactive effect. I was not in the House when section 221(2) was passed. My friends were here and of course made their comments about it. I am sure had I been here I would have spoken very strongly indeed, because here we have a report from the committee on statutory instruments, which sat for some time, received a lot of guidance had the benefit of the experience of the United Kingdom and Australia and finally brought in a report saying unanimously that regulations must not be retroactive in effect.
Here we have the case of Parliament going one way in respect of a report of the committee of the House, and the government going in the opposite direction by ignoring it and trying to pass two trains on one track. This section has been passed and nothing can be done about it. However, there will be an opportunity for the scrutiny committee to do something. Perhaps the parliamentary secretary would try to light a little fire under the appropriate part of the anatomy of his respective ministers in order to get the committee set up.
I would feel a little safer and worry less about the taxpayers of this country if there were in effect today a parliamentary scrutiny committee charged with examining regulations passed and which, under the terms of the

December 6, 1971

Statutory Instruments Act and pursuant to the very definite mandate given by the committee to this House, would look at a number of things including whether or not regulations passed should have a retroactive effect. I know there are ministers in the cabinet, some members on the government side-I except a lot of people here, but not all of them-and people in the administrative services who are very anxious about what will happen when this committee is created, in respect of the sins of omission and commission which have been discreetly covered over but are contained in regulations, amendments to regulations, orders in council and amendments to orders in council which rarely, if ever, see the light of day. A lot of people are concerned whether a committee will ever be established under the Statutory Instruments Act to look into this matter about which my hon. friend from Edmonton West has spoken.
I see the Acting Prime Minister sitting over there. I do not wish to provoke him into debate. He has been very patient in listening to me and my hon. friends, and I hope he is learning something. But I should like him to stand up and say that before this session ends the government will establish a joint committee under the Statutory Instruments Act so that when we come to situations where regulations are passed pursuant to Bill C-259 which have a retroactive effect and under which retroactively people can be punished, fined or sent to jail, there will be a scrutiny committee to pay attention to governmental misdemeanours and, I hope, challenge the government and bring the matter back to Parliament for debate and reconsideration. That is the purpose of such a committee.
For months I have been attempting to get this committee established. We are prepared to deliver our list of nominees to this committee. An additional reason now is the bill before the House and the regulations which permit the government to do these things. These things might be done for the very best of reasons, but it is iniquitous, wrong and vicious to have a situation where a government can by regulation put people in a position where they will be punished by fine and/or imprisonment for having committed an offence prior to the enactment of the regulation. For this reason, if the government is not prepared to change this provision and accept the reasoned and logical arguments of my friends, I hope they will recognize the problem and be prepared to expedite the establishment of the statutory instruments committee for the purpose of looking at the problems created by this section.


Patrick Morgan Mahoney: First, I do understand that the Statutory Instruments Act has been proclaimed and will become operative on the first of next year. Therefore, any regulations that are likely to be passed under the act will be passed subsequent to the Statutory Instruments Act coming into force, and there is no reason of which I am aware to think that the regulations passed under this act will not be subject to the scrutiny that the hon. member for Peace River has indicated.
Second, we are most reluctant to concede that there is an opportunity under this bill to pass punitive regulations with retroactive effect, and for that reason we have no amendment to propose, However, I say very sincerely to the hon. member for Edmonton West and the hon.
Income Tax Act
member for Parry Sound-Muskoka that if they have an amendment to propose to this section which would improve the position from their point of view and solve the problem as they see it, we will certainly look at it very seriously.
However, it is our position that any regulations passed under this legislation that would have a punitive effect on any taxpayer retroactively would be ultra vires of the delegated authority given under this bill. I want to make that very clear. That is the reason we do not want, by any amendment that we might offer, to imply that such regulations could indeed have any force and effect. However, I will await with interest any amendment proposed by hon. members and we will certainly consider it seriously. I think hon. members have acknowledged in their general comments that this is a complex problem. I would not be prepared to see their amendment voted on immediately it is proposed, but we will certainly look at it seriously and if it is not acceptable to the government we will have a reasoned argument for rejecting it.


Marcel Joseph Aimé Lambert: I accept that there can be a need for section 221 (2), but where I do not want it to have effect is in a punitive section such as section 235 which we are considering. Therefore, I suggest on reflection that notwithstanding the fact that the road to Hades is paved with good intentions-and I know these are all good intentions of the parliamentary secretary-the punitive feature in a regulation would not be ultra vires of the fact; it would not impose an additional tax but it could be justified on the basis of the existence of section 221 (2) which gives full power to pass a retroactive regulation- and Parliament has consciously made a decision on that matter. Therefore, with regard to section 235 I move:
That subsection 235 (1) at page 547 be amended by deleting in line 22 the figures 221 and substituting therefor 221 (1).
Under section 221 there is all the power and specification of the type of regulation that can be made. Under section 235 there would be no penalty or retroactive feature because 221 (2) gives retroactive effect to a regulation. I know this will require some study but I make this motion, if it is accepted by the Chair, for consideration by departmental officials at the appropriate time.


Gérald Laniel: Hon. members have heard the motion.


Patrick Morgan Mahoney: Certainly, we take no procedural objection to this amendment and unless there is further comment on the section we ask that it be stood overnight to permit the law officers to consider it and to give any legal advise that may be desirable.


Gérald Laniel: Is it agreed that section 235 and the amendment be stood at this time?


Some hon. Members:: Agreed.
Clause 1, section 235, stood.


Gérald Laniel: The committee will now proceed with section 239, on which there is an amendment by the hon. member for Edmonton West.
On clause 1-section 239: Offences.

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Marcel Joseph Aimé Lambert: I do not think I need add much more on this section because we argued it at great length the other night and we argued it at considerable length this afternoon. However, I wish to reiterate some points for the great number of hon. members who are in the committee tonight. We are appreciative of the fact that the lash seems to have been imposed with effect last Thursday, and that gracing the House tonight are more cabinet members than we had during the question period. They are gainfully employed this evening.
I do not think there is one hon. member across the way who would want to be in the position of the minister who has to decide whether a taxpayer shall go to jail. The Minister of Justice, as Attorney General for Canada, has the right to do that under section 239 (2) because non-compliance with the act within the terms of the section is a matter of fact. Wilfully refusing to file a return demands a great number of actions under section 239. These are matters of fact. There is no question that there may be other than a finding of guilty or a plea of guilty, yet by the minister proceeding through the indictment route there is a mandatory jail sentence.
I put this case to anybody who has had any connection with the Department of National Revenue or the Department of Justice. Some time ago I had three years' connection with one of those departments. At that time it was the Minister of National Revenue who decided these matters, not the Attorney General. As soon as it became apparent to a taxpayer that the government was likely to proceed by the indictment route, you could bet your bottom dollar that the next morning a friend of a friend of a friend of the taxpayer was on the telephone to the minister, putting the pressure on him not to go by the indictment route because the individual involved would have to go to jail. I defy any member opposite to say he wants to be put in the position of a minister who is under pressure to decide whether a particular non-compliance with the act must result in the defaulting taxpayer going to jail.
My amendment would provide for proceeding by way of summary conviction with the judge, usually a provincial judge in these cases, having the power to impose a sentence of up to five years imprisonment, which is what is provided in section 239 (2). Already under section 239(1) the judge has power to impose a fine or jail sentence, or both, but the limit is two years. Surely to goodness it is elementary justice that there is only one instrument to sentence a man to jail, and that is sentence after a court hearing, by a properly constituted judge from whom there is an appeal. Under the indictment procedure there is a mandatory jail sentence and there can be no appeal except as to the length of sentence.
Is the Income Tax Act to be that tough? In many respects it is tougher than the Criminal Code. Is that the kind of law we are asked to pass in this so-called enlightened day, when the Minister of Justice and his colleague the Solicitor General are talking about a more enlightened correctional policy and a more enlightened administration of justice? It is said that we in Canada are sending too many people to jail, yet in this instance we are being asked to provide a mandatory jail sentence for a taxpayer.
[The Deputy Chairman.]
The quantum of the fine must also be considered. Section 239(l)(f) provides for "a fine of not less than 25 per cent and not more than double the amount of the tax" involved, and there is also the possibility of a sentence of up to two years in jail. I provide in my amendment for an option of up to five years in jail, which is the penalty provided for in 239(2), where presumably in the past there was a special penalty reserved for the really bad boys. Why does the minister have to make the decision that a man shall go to jail? Why is it he or his officials who decide, by choosing the compulsory imprisonment route? I object to that.


Stanley Howard Knowles: Mr. Chairman, if one stays around here a while he learns a lot of law, but I confess I have been finding the learning process in relation to this section a bit slow. I am not going to say anything to show my ignorance or to underline my difficulty, but I wish some of the lawyers in the House-and we have scads of them here tonight-would give a serious answer to the contention put forward by the hon. member for Edmonton West.
I confess that as I read the section it seems to me there still has to be a conviction by a court. In other words, it is the court that sends somebody to jail. Yet the hon. member for Edmonton West, who is a distinguished member of the Bar, has said a good many times that the way the act is set up it is the minister who decides that someone shall go to jail. If he is right, this is pretty bad. If he is not right, then I wish some of the distinguished members of the Bar on the other side would explain it. I am not trying to resolve the issue; I am just saying that as a neophyte in this area I would like to know what this argument is all about.


Patrick Morgan Mahoney: Mr. Chairman, I think the hon. member for Edmonton West is both overdramatizing and oversim-plying the situation. It is not the Minister of Justice who decides whether someone will go to jail: that is a determination made by the courts.
What does happen is that the Minister of justice may determine in this particular case, as I understand he can in some others, that the matter is of such a serious nature that it should proceed by indictment rather than by summary conviction before a magistrate; in other words, that it must proceed by indictment to the Supreme Court. At that point the court must still decide, on the evidence presented to it, whether an offence has been committed and whether a conviction is warranted. Once the court decides that, then certainly this section does come into operation: it does provide a minimum penalty of two months' imprisonment. But it is not the Minister of Justice who determines whether a person is guilty or innocent, or what the penalty will be. That decision is the decision of the court.


Gerald William Baldwin: Mr. Chairman, in any criminal offence there are two elements. First, there is the question of guilt, and on it the minister can have no concern. That is for the court to determine. The second element in any criminal offence is that of punishment. In the kind of society in which we live, the question of punishment really becomes of equal importance-and sometimes even more important, particularly in tax laws-than the question of guilt.
December 6, 1971

Here we have a minister of the Crown making a judicial determination.
The minister of the Crown may say, "In my opinion and in my administrative capacity I have decided that the offence this person is to be charged with is so serious that it warrants a penalty of so many months or years in jail." That is a judicial determination. No minister and no administrative official should have that power. I agree that in evaluating whether the gravity of the offence and the surrounding circumstances warrant a man's going to jail is something that should be determined by a court. However, in this case the court has no alternative; the man must be sent to jail as a result of an administrative decision by the minister. I think that is a very simple point and I hope my friend from Winnipeg North Centre sees that distinction.
I saw that the hon. member for High Park, who is a lawyer of no mean distinction, was quite interested in this question and I would be glad to hear his opinion on it. I am sure he has the welfare of the ordinary person at heart and I think he will agree with me. I know that at one time he had some ideas about the right of a minister to make decisions of this kind. He might be willing to agree with me now or when a vote is called.


Mr. Macdonald (Rosedale):: Would the hon. member permit a question?


Gerald William Baldwin: Yes.


Donald Stovel Macdonald: It is widespread practice under the Criminal Code, and it was at the time the hon. member's party formed the government, that you have this choice of proceeding by way of indictment or summary conviction. Is the hon. member suggesting that this choice ought to be taken out of the criminal statutes?


Gerald William Baldwin: Each one to be considered on its merits. When this government brings before us the Criminal Code for general review, I think we will eliminate a lot of this problem.


Donald Stovel Macdonald: In all cases?


Gerald William Baldwin: No, but in many cases. It should not be an administrative decision. If there were ever any ground for it, it certainly should not be a Liberal government that has to make the decision.


Some hon. Members:: Oh, oh!


Donald Stovel Macdonald: What the hon. member is saying is that with regard to some offences under the Criminal Code he would leave the choice in there, but for middle-class crimes such as income tax the hon. gentleman does not want his friends to go to jail.


Gerald William Baldwin: Does the hon. gentleman not recognize that with regard to punitive sections, so far as tax penalties go there is a difference. The rigid liquor control laws failed at one time in some parts of Canada for that very same reason-these alternatives were not given. We often find that when the state is involved and is worried about its revenues, it would much rather send a man to jail for
Income Tax Act
five years than impose a penalty more in line with that imposed for a similar criminal offence. This is a red herring, and the Minister of National Defence is a man of red herrings: he holds that distinction.


Some hon. Members:: Oh, oh!


Gerald William Baldwin: This is a red herring, and it is a very ancient one because it smells mouldy.


Mr. Gibson:: Would the hon. member permit a question?


Gerald William Baldwin: Yes, if it is a better question than the one asked by the Minister of National Defence.


Gérald Laniel: Is the hon. member for Hamil-ton-Wentworth rising on a point of order?


Colin David Gibson: I wonder if my friend would permit a question.


Gerald William Baldwin: I hope it is a better one than the last.


Colin David Gibson: Without trying to score a debating point, and with respect, I wonder if my hon. friend is familiar with the decision of the Ontario Court of Appeal which recently decided an issue of this kind under the Bill of Rights. The discretion of the Crown was challenged because the Attorney General, through the Crown Attorney, was given the choice of proceeding by way of indictment or summary conviction in the case of Regina v. Smyth, who is now deceased. In that case the Court of Appeal came to the conclusion that despite the fact there was a more severe penalty by indictment than by summary conviction, the Crown had always had discretion to choose which form of prosecution it would use. I wonder if my friend is aware of that? If he had read that case he might have a different view.


Gerald William Baldwin: That was a judicial interpretation. The judges were saying what the law was, but I am saying what the law should be. I think it is time we got away from the position where we are putting rights of this kind in the hands of ministers of the Crown.
I go back to what my friend the Minister of National Defence said. There may be some circumstances under the Criminal Code where this discretion is necessary, but very few. I should like to see a complete review of the Criminal Code so that this improper discretion would be eliminated. This authority should not rest with administrative officials. If we have courts, if we have judges, if we have juries and give this right to them, we should not leave it in the hands of a minister. I would not want to see it in the hands of a minister who formed part of a Progressive Conservative government any more than I would want to see it in the hands of a minister who formed part of the Liberal government. I say nothing about my friends to the left because they will never form a government, so I do not need to worry about that.


Some hon. Members:: Oh, oh!


Gérald Laniel: Order, please.


Gerald William Baldwin: Hon. members may laugh at this, but the time is coming when the people of this country will look askance at this kind of authority being given to a government to exercise its discretion. It is wrong and I think it is

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time we stopped it. I am glad my hon. friend from Edmonton West raised this question and that we have a chance to make these points. I do not know whether we will have any amendments, but I suggest to my friends on the other side that they should look very seriously at this as a matter of principle as well as with respect to this particular issue.


Gérald Laniel: Does the hon. member for High Park wish to ask a question?


Mr. Deakon:: Mr. Chairman, with all due respect to the hon. member for Peace River and the hon. member for Hamilton-Wentworth, I still ask, why does the Crown have the authority to choose which way we will proceed? It is wrong because that is imposing one law on one group of citizens and another law on another group. I agree with the hon. member for Peace River in this regard.


Patrick Morgan Mahoney: That is the best argument I have heard today.


Mr. MacKay:: Mr. Chairman, it seems to me that we are getting into a philosophical question. I listened to some of the comments and would suggest that what we are doing in some instances is putting this income tax legislation above the Criminal Code. That is what troubles me. I wish to give only one example in this generally related group of sections. Section 243 says, "notwithstanding the Criminal Code or any other statute". It seems to me that this is a bad thing.
Another point along the same lines has been advanced from time to time by other hon. members, including the hon. member for High Park. I agree with his philosophy. In section 244 there is another example. Any criminal lawyer knows that there are certain defences open to an accused when an information is defective on its face. In this income tax legislation we see again that it does not make any difference how deficient, negligent or inappropriate an information may be, or how it is drawn-there is no way an accused can have the benefit of counsel pointing this out, under section 244.1 realize that we are talking about section 239 but it is all part of the same question.
It seems to me that we are getting into a situation where we are putting this proposed Income Tax Act above the Criminal Code. I think this is a fundamental matter and I do not think it is in the best interests of Canadians to have an act which is dictatorial and coercive to the extent this act appears to be, and above the Criminal Code.


Stanley Howard Knowles: Mr. Chairman, I confess I am still thinking out loud and pursuing my study of the law. The remarks which have been made recently remind me that the criminal law of Canada is not, as I have been told a number of times, confined to the Criminal Code. As I understand it, a person stealing a loaf of bread or a few dollars is dealt with under the Criminal Code. It could be that here we may deal with people who defraud the country, that is the people of Canada and the treasury, of thousands of dollars because they make false entries, destroy records and do that kind of thing. Is not that kind of thing as much a crime as stealing a loaf of bread, stealing clothes from a store or stealing a few dollars?


Mr. Guay (St. Boniface):: We are with you, Stanley.


Patrick Morgan Mahoney: We are presenting a united front.


Stanley Howard Knowles: Since the parliamentary secretary a moment ago, after the hon. member for High Park had spoken, said that was the best argument he had heard from the other side, I am beginning to wonder if I am on the wrong track.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: My friend from St. Boniface says I am on the right track, and that makes me wonder. Mind you, it is confusing seeing that phalanx of Liberals on the other side of the House. I think my friend from Edmonton West and others who have adopted his view raised something we should not overlook, the placing of dictatorial power in the hands of ministers. I do not know where my friends of the Conservative party were when we were complaining about the crackdown on some people who had broken the Unemployment Insurance Act. We felt that just as much effort should be made to make sure people get what they are entitled to as to catch people who commit an offence. Here we are dealing with very much wealthier people, with people who can save a great deal by defrauding the treasury.


An hon. Member:: In many instances they are small businessmen.


Stanley Howard Knowles: The hon.
member says that in many instances they are small businessmen. Often, they are even smaller than that. From my reading of section 239, there is a long list of pretty serious crimes for which you could be penalized-crimes like false entries, deception, the burning and destroying of records and wilfully doing everything possible to avoid paying what is owing to the people of Canada.


An hon. Member:: And destroying ballots.


Stanley Howard Knowles: Destroying ballots? It is in Newfoundland where they destroy ballots. All these crimes I have enumerated are pretty serious crimes. There seems to be a choice as to penalties that will be imposed if this law is broken. If someone is convicted, he is liable, on summary conviction, to pay a fine of not less than 25 per cent and not more than 200 per cent of the tax that was sought to be evaded. If a little fellow is involved and the amount of tax is small, perhaps no great sum will be levied, even though he has committed a serious crime.
However, as I see it, in cases where there is a wholesale defrauding of the public treasury that runs to thousands or millions of dollars, it is proper for the law to say that in such cases action can be taken by way of indictment. I said when I began that I was trying to learn what this is all about. I have been listening to the hon. member for Edmonton West and those on the other side and I am glad that my questions have produced comments both ways. It seems to me that we must provide for penalties and for people to be taken to court for the crime of defrauding the treasury of Canada, in the same way as we have made provision for those who have stolen a few things from a store and I gather that that is what this section provides.

December 6, 1971


Marcel Joseph Aimé Lambert: Mr. Chairman, it
appears that some hon. members have not read section 239(1). The Minister of National Defence has suggested that we are trying to protect the big fellow. I did not know he was interested in law of this kind since I understood he is more interested in international law, as he told a gathering of people the other day. I suggest to hon. members, and particularly to the hon. member for Winnipeg North Centre and the hon. member for Winnipeg North who is sitting with him, that section 239(l)(a) deals with the little fellow who has been moonlighting and fails to disclose that he earned money on the side. That is not a big fellow. The section provides:
Every person who has
(a)	made, or participated in, assented to or acquiesced in the making of, false or deceptive statements in a return-
Those last words refer to an understatement of income. A return like that would be a deceptive return. I do not care what the source of the income may be. The offence may be a failure to disclose dividends-and some think that failing to disclose them is all right, unless you are caught. If you are, the law will deal with you. It could be that a farmer has understated his returns from the sale of cattle, wheat or what-have-you from his farm, or that a small businessman has understated his sales or overstated his costs, that is, his purchases, has understated his inventories or has two sets of books with regard to receivables. That would be an offence under subsection (1). Subparagraph (b) of subsection (1) provides:
(b)	to evade payment of a tax imposed by this act, destroyed, altered, mutilated, secreted or otherwise disposed of the records or books of account of a taxpayer-
This refers to a man who may have altered his payroll accounts. He might be a small contractor and he might have padded his payroll account in order to inflate his expenses. That is an offence under the act. Or the man may have-
(c)	made, or assented to or acquiesced in the making of, false or deceptive entries, or omitted, or assented to or acquiesced in the omission, to enter a material particular, in records or books of account of a taxpayer-
Of course, he is the taxpayer. Again, the same sort of thing is involved-payroll padding, record falsification, inventory inflation and doing all sorts of other things to your records. Are these offences necessarily the prerogative of the middle-class or the well-to-do? That is what the Minister of National Defence suggested. I suggest to him that the number of prosecutions or threats of prosecution under section 239 will fall more on the smaller categories of taxpayer because they are far more numerous than the well-to-do. The penalty for the offence is a fine of not less than 25 per cent of the tax sought to be evaded and not more than 200 per cent of the amount of that tax. That penalty is imposed on summary conviction plus, if necessary-


Mr. Leblanc (Laurier):: Mr. Chairman, I rise on a point of order.


Gérald Laniel: The hon. member for Laurier (Mr. Leblanc) on a point of order.
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Fernand-E. Leblanc: Mr. Chairman, it may not be a point of order, but I would like to ask a question to the hon. member for Edmonton West (Mr. Lambert), if he allows me to do so.


Marcel Joseph Aimé Lambert: Yes, Mr. Chairman.


Gérald Laniel: The hon. member knows that he does not have to rise on a point of order, but with the permission of the hon. member for Edmonton West (Mr. Lambert), he may ask him a question.


Marcel Joseph Aimé Lambert: Agreed, Mr. Chairman.


Fernand-E. Leblanc: If the hon. member for Edmonton West is willing to answer my question, I would like to obtain some explanations.
I did not completely understand a while ago, when he pointed out that a 200 per cent penalty was levied and I would like him to repeat his statement, so that I may try to understand how he can arrive at 200 per cent, because section 239(1) reads as follows:
(f) a fine of not less than 25 per cent and not more than double the amount of the tax-
Now, I find it hard to understand how the hon. member can arrive at 200 per cent.


Marcel Joseph Aimé Lambert: It seems to me that the explanation-

-that the explanation be clear enough. Doubtless, taxes must be paid. The hon. member is aware of this. One must, first, pay the tax. Furthermore, following a summary conviction, a magistrate may impose a fine of at least 25 per cent and at most double the amount of the tax. Double, as I see it, is 200 per cent! One hundred per cent of the tax is the whole tax and double the tax is 200 per cent.
So-

-double the amount of the tax that was sought to be evaded. If the tax that was sought to be evaded was $1,000, the fine could be $2,000. The tax is also recoverable there. In all, the total penalty to the taxpayer would be $3,000. He would have to pay the tax he sought to evade. They would collect that. Then there is a fine of double the amount of the tax, 200 per cent, in addition to which there can be imprisonment of up to two years. However, for all the offences listed under subsection (1) discretion lies with the Attorney General of Canada, because line 3 of page 550 reads:
-at the election of the Attorney General of Canada, be prosecuted upon indictment and, if convicted-
The proof would be the same as it would before a magistrate. However, if a man had altered the books and in the investigation admitted that he had done so, there is no question that he would be found guilty. The evidence will be there. He must then go to jail for at least two months. There is a maximum of five years. If you want to read further, go to section 243, which clearly states:
Notwithstanding the Criminal Code or any other statute or law in force on the 30th day of June, 1948, the court has in any

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prosecution or proceeding under this act, no power to impose less than the minimum fine or imprisonment fixed by this act and the court has no power to suspend sentence.
That means there is a mandatory jail sentence; the man has to go to jail. It is that to which I object. There might be a little more consideration of this matter. If it is agreeable, I suggest that we stand this section and go on to others. We are at a bit of an impasse, and we might make some progress on other sections. If we stand section 239 perhaps it would be as well to stand section 243.


Patrick Morgan Mahoney: Agreed, Mr. Chairman.


Gérald Laniel: Is it agreed that sections 239 and 243 be stood at this time?


Some hon. Members:: Agreed.
Clause 1, sections 239 and 243 stood.
Clause 1, section 240, agreed to.
On clause 1-section 241: Communication of Information.


Gérald Laniel: I do not wish to press the committee, but I hope hon. members will find their way through these sections which may have implications.


Gerald William Baldwin: I wish to ask the parliamentary secretary a question about section 241. It is an interesting section on which we had varying legal decisions some time ago as to the communication of information and the extent to which a criminal or civil court might call upon officials to give evidence. These are just repetitions of sections which are in existence.
In light of those decisions, can the parliamentary secretary give us an indication of the present position in case we want to make alternative suggestions? I admit I have not read recent decisions regarding officials of the department being called upon by the courts to provide information in either criminal or civil cases. We would like to know the facts.


Patrick Morgan Mahoney: Mr. Chairman, officials of the Department of National Revenue have absolute privilege in civil cases. With regard to criminal cases there is an exception which is embodied in subsection (3). Other acts have been changed throughout the years to make provision for the kind of evidence that can be called into court. In civil cases, the privilege provided by subsections (1) and (2) of section 241 is absolute. The hon. member will note that in subsection (3) there is an exception that deals with criminal cases and with cases of a criminal nature relating to the administration of this particular act.


Gerald William Baldwin: It must be related to the Parliament of Canada.


Patrick Morgan Mahoney: It must be related to federal offences, not provincial offences.


Marcel Joseph Aimé Lambert: I am wondering whether section 241(l)(a) has been related to some of the other acts which are in force. I have in mind especially the new Statistics Canada Act under which powers are granted to certain officials of Statistics Canada to examine income

tax returns in order to compile statistics. There may be other statutes under which similar powers are given-the Corporations and Labour Unions Returns Act, for instance. The governing words in the bill before us are "except as authorized by this act," meaning the Income Tax Act. There appears to be a very strict limitation on the officials of the Department of National Revenue preventing their communicating any information obtained on behalf of the minister. We read here:
Except as authorized by this section, no official or authorized person shall . .. knowingly communicate or knowingly allow to be communicated to any person any information obtained by or on behalf of the minister for the purposes of this act.
That is a very sweeping restriction designed to secure secrecy of information. Then we come to subsection (2) which provides:
Notwithstanding any other act or law no official or authorized person shall be required to give evidence in connection with any legal proceedings.
That is a limitation. However, subsection (3) says that notwithstanding what is said in subsections (1) and (2) this restriction does not apply in the case of criminal proceedings. A further exception is made in subsection (4). An official or authorized person may communicate information in the course of his duties to other official or authorized persons in connection with the administration or enforcement of the act, that is to say, the Income Tax Act. Then, under subsection (6) provision is made for an appeal from an order of a court requiring an official or authorized person to give evidence, and so on. There is provision for stays of orders, offences are described and penalties proposed for officials of the department who wrongfully disclose information in their possession and, finally, there is a subsection which deals with definitions. Here we find definitions of "officials", "authorized persons," and so forth.
Knowing that the Statistics Canada Act which was dis-cuseed in this session of Parliament includes specific provision for information to be given, I am somewhat surprised that the section does not appear to authorize employees of the ministry of national revenue to communicate this information. There is no doubt that officials of Statistics Canada are allowed access to information from income tax returns and to examine them as a class. This is one exception to the limitations imposed on communication, and there may be others, in which case the section before us may have to be amended. In any case, there are too many "notwithstandings" in it, and even so it may be that the language used is too restrictive to enable the purposes which Parliament has approved to be carried out.


Patrick Morgan Mahoney: Perhaps I might elaborate on the answer I gave earlier to the hon. member for Peace River and point out that the privilege attached to information here extends even to civil courts. That type of evidence cannot be given in civil appeals concerning income tax assessments, and so on, even though the Minister of National Revenue may be a party to the case. The privilege is absolute in relation to what officials may disclose.
As to the specific point raised by the hon. member for Edmonton West, I think that if all the provisions of subsection (4) were compressed they would read something like this, "An official or authorized person may communi-
December 6, 1971

cate or allow to be communicated information obtained under this act to any person otherwise legally entitled to receive it." The Statistics Canada Act does authorize officials of Statistics Canada to receive for their particular purposes the type of information that is referred to.


Gerald William Baldwin: Is an authorized person defined in the interpretation section?


Patrick Morgan Mahoney: The definition appears in the Statistics Canada Act.


Gerald William Baldwin: Is there a definition in the interpretation subsection relating to section 241?


Marcel Joseph Aimé Lambert: I think the present language does not cover the situation. For the purposes of clarity it might have been better and more helpful to the lay person, or even for those who are trying to examine this legislation, if it had been spelled out in the bill before us and an authorized person described. There is nothing in the Income Tax Act which tells us clearly who is a person legally entitled to this information.
Is a lawyer who is advising a client obliged to comb all the Statutes of Canada in order to find out who is authorized to get this information? We know that certain people from the Department of Justice would be legally entitled to have access to this information. I would hope the minister might agree to putting a better definition into the Income Tax Act itself. Otherwise we are doing a disservice to the public who must rely on this legislation.
The parliamentary secretary says the information can be given to those who are legally entitled to have access to it. But who are these people? We do not know. It is necessary to look at some other act or at a number of other acts in order to find out. I confess I do not think it is helpful at all.


Russell Clayton Honey: Shall section 241 carry?


Marcel Joseph Aimé Lambert: I wonder whether the parliamentary secretary and the officials would make a distinct note of this so that in due course we might have an amendment to clarify this point, or are we to rely on the jargon of the income tax department or the Income Tax Act in order to enlighten the public?


Patrick Morgan Mahoney: We will certainly consider the suggestion. I am not sure it would achieve the simplification of the Income Tax Act which members opposite have been advocating with some considerable force in the past few days, but certainly it is a serious suggestion and we will give it consideration.
Clause 1, section 241 agreed to.
On clause 1-section 242: Officers, etc., of corporations.


Marcel Joseph Aimé Lambert: I have one or two comments on this section, Mr. Chairman. In case people are not aware of this particular provision-and there is indication that the Minister of National Defence is not aware of it-any directors of companies, whether large or small, if they participate in or acquiesce to the falsification of corporate records, and presumably these are the so-called privileged class, notwithstanding whether the corporation
Income Tax Act
has been prosecuted or not are liable to be charged with an offence. They would follow the fate, shall we say, of section 239. So if you are a single individual or a director of a company, and there has been non-compliance with the act-an attempt to evade or defraud-it matters little because the penalties will be the same.
Clause 1, section 242 agreed to.


Russell Clayton Honey: The Chair understands section 243 has been stood.
On clause 1-section 244: Information or complaint.


Russell Clayton Honey: There is an amendment to this section by the Minister of National Revenue.


Gordon Harvey Aiken: Mr. Chairman, has the amendment been put? Frankly, I do not know where it fits into section 244. I wonder whether we might be enlightened on this.


Gerald William Baldwin: Could the amendment be read?


Patrick Morgan Mahoney: It might be, but not by me. The amendment is to the French version of the text only and is to ensure that the wording of subsection 18 of section 244 conforms to the wording in the subsection 17 in the French version.
Amendment (Mr. Gray) agreed to.


Russell Clayton Honey: Shall section 244 as amended carry?


Marcel Joseph Aimé Lambert: Mr. Chairman, I want to reiterate the point made by my colleague from Central Nova that while there are certain procedures under the Criminal Code whereby an individual is protected if there are difficulties in respect of deficiencies in the charges or whatever procedure has been laid out for laying a charge, under the Income Tax Act one can be almost as loose as a goose, to use a trite phrase: however, I believe it puts the point across.
No information or complaint can be called in question for lack of authority of the informant or complainant except by the minister or the one acting on behalf of Her Majesty. In other words, the dice are loaded. If the taxpayer has been charged under an improperly filed information or an incomplete information, that matters not; he cannot challenge it. The only one who can challenge the type of information is the Crown. The taxpayer has the dice loaded against him. Why is it that a taxpayer under these circumstances should be less than a citizen appearing in a criminal court? The parliamentary secretary might like to explain that. Why should a taxpayer be placed in this position?
The taxpayers are the citizens of this country. They are not a group of people who are to be pushed, bullied, plucked, shorn or the subject of slipshod procedures or injustices. We already know that in so much of this act in the past the onus has always been on the taxpayers. A taxpayer had to prove that he was not guilty or that he did not have to pay the tax. Some changes should be made in the administration in this regard. I hope this will be the case.
Just who are the taxpayers of this country? They are the constituents of all hon. members, including the minister and the parliamentary secretary. Yet when it comes to paying income tax, every citizen is supposed to be deemed

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to be something less than a whole individual. Why does that have to be the situation under the Income Tax Act? The stature of the individual is recognized in other statutes and he knows his rights. But under the Income Tax Act his rights are diminished.
What is so holy about income tax that this should be the situation. On whose behalf is this act? Is there something sacrosanct in respect of the government or the Crown or the provinces with regard to income tax vis-a-vis the citizen? Why do they not hold a gun to his head and empty his wallet? Most people feel they do this anyway. Under the Criminal Code, certain standards are applied concerning the rights of the individual. However, when it comes to the Income Tax Act these rights disappear very quickly.


An hon. Member:: Why should they?


Marcel Joseph Aimé Lambert: I do not know why. It seems to me there is an entirely wrong philosophy about this. I do not know why the citizen should be any less under the Income Tax Act than he is under the Criminal Code or under any other statutes which establish his responsibility to the state. But in so far as the Income Tax Act is concerned he counts for less than a human being.


Colin David Gibson: Mr. Chairman, I do not often agree with the hon. member for Edmonton West, but I think that some of the things he said tonight reflect my feelings.


Gerald William Baldwin: The hon. member for Edmonton West is usually right.


Colin David Gibson: I did not hear the snide comment of the hon. member for Peace River who is sitting there reading the newspaper in the front row.


Gerald William Baldwin: Mr. Chairman, I rise on a point of order. The hon. member said I was reading the newspaper. He knows I never read newspapers in the House, particularly if he is speaking. I was reading my own speech. I find it is a good speech and I wish it had been a little longer.


Colin David Gibson: If so, I withdraw my comments. But I agree with the hon. member for Edmonton West who has pointed out with some force some of the inequities in the penalty provisions of the Income Tax Act, particularly some of the almost vicious and cruel limitations on the judge or magistrate to reduce the fine and to allow a suspended sentence. I can remember cases I fought where rather weak characters appeared in court after having made some bad mistakes as a result of a disaster in the family and who, through desperation, had fallen afoul of the law. The judge had said, "I wish I could give a less severe sentence".
I do not see, as the hon. member for Edmonton West said, why we cannot relax the regulations and give discretion to judges to take the sting out of some of these vicious fines which are often more severe than the fines imposed by vicious loan companies. I think there is much merit in what he said.


Gordon Harvey Aiken: Section 244, which is very long, is an important section of the bill and most of it is in the original act. But I think comment should be made about a couple of the subsections. Anyone who has tried to defend a person

charged under the Income Tax Act has found that the procedures under section 244 weigh very heavily in favour of the Crown. The methods of proof are very easy for the Crown but difficult for defence counsel to meet. I do not say that that is necessarily bad. I will point out one particular section on which I would like to have an explanation.
The first few subsections permit the Crown to prove their case against an individual for failure to file, or for a similar offence, by affidavit. Under this section it is sufficient for them to file an affidavit which purports to have been signed by a person who purports to be an official in the minister's office in charge of the records. It has always been difficult for a defendant to prove the negative. The Crown has proven that a notice was mailed out to an individual and that according to the records of the department there was no reply. These two pieces of information added together automatically make the person guilty. Some clerk or secretary in the minister's office signs an affidavit that he is in charge of the records and that according to the records a person was given registered notice on a certain date, but that according to the records there was no response. Under the act that person is guilty of failure to file.
I see that subsection (18) of section 244 seems to give the taxpayer something of a break. I do not have the original act with me, but the note shows that subsection (18) is former section 136 (15) modified. I should like to have it clarified for my own satisfaction in what manner this previous situation has been modified. It seems to me that where formerly the taxpayer was deemed to be guilty, now at least he has a chance of going before a magistrate and saying that he mailed a return and can show a copy of it. The magistrate can then accept the fact that he has filed a return. Yet subsection (18) seems to deal only with proceedings under division J of part I, and I am wondering whether this might raise a defence for the accused person to counteract the heavy onus that is laid on him in the earlier subsections of section 244.
I hope I have made myself clear. I hope that under this amendment the taxpayer will be given a break, and if he is, I think it is a good amendment.


Patrick Morgan Mahoney: The modification to the section about which the hon. member has inquired is a deletion of the reference to division I in the original act. That is the only change to the section.


Gordon Harvey Aiken: Therefore my hopes have been dashed and the taxpayer does not get a break.


Patrick Morgan Mahoney: I should explain to the hon. member that under the revision the old divisions I and J are combined and are found entirely in division J of the bill. So there is no change despite the modification.


Gordon Harvey Aiken: I thank the parliamentary secretary for that answer. I had hoped there had been an improvement in the situation. This leaves me with the comment that the procedure set out in section 244 is heavily weighted against the accused person. There are many people who have received notice to file a return. They mail it not by registered mail and then the department claims they never received it. The person claims that he did mail it but
December 6, 1971

it must have gone astray. In many cases this is considered to be a lot of hot air by magistrates, but in some cases magistrates and provincial judges are inclined to accept the excuse. I do not think we can hope for a further amendment on this. So far as I know, judges and magistrates have been reasonable. If a person comes along with any excuse at all, in most cases they hesitate to convict.
I should like to go back for a moment to subsection (4) of section 244 which relates to limitations of prosecutions. There is a five-year limitation under this section, which I think is reasonable. But the part which seems unreasonable to me is the exception, which provides:
An information or complaint. . . may be laid . . . within one year from the day on which evidence, sufficient in the opinion of the minister to justify a prosecution for the offence, came to his knowledge-
It seems to me that according to this provision there is no limitation on the time in which a charge can be laid. I would like to ask the parliamentary secretary if there are any cases in which this section has been used, where prosecutions were brought after five years by reason of certain facts coming to the attention of the minister and, if there are such cases on record, were they anything other than cases considered to be straight fraud?


Gerald William Baldwin: While the parliamentary secretary is thinking about that question, on the same section he might answer a point that came to my mind when I read it. Is the knowledge of the officials of the minister deemed to be constructive knowledge of the minister? In other words, let us assume the officials in the department had knowledge which in their opinion justified prosecution but the minister was not acquainted with it. As a lawyer, the parliamentary secretary will realize what I mean. Is the constructive information in the hands of the department presumed to be information within the knowledge of the minister, and does the time of one year run from then?


Patrick Morgan Mahoney: Mr. Chairman, the minister, of course, has constructive knowledge of anything his officials have knowledge of, and that is the date from which the time runs, not from the time it necessarily comes to the personal attention of the minister.
I am afraid there is no real answer to the question raised by the hon. member for Parry Sound-Muskoka. The section says exactly what it does say. It is possible that prosecutions could arise other than in cases of fraud or misrepresentation, although I am not aware of any charges having been laid after the five-year period.


Russell Clayton Honey: Shall section 244 as amended carry?


Elmer MacIntosh MacKay: I would like to ask the parliamentary secretary this question: Is not the effect of subsection (4) simply to say that the minister has knowledge when he says he has knowledge because, by the language implicit in that subsection, there is no way in which the minister's certificate can be disputed? If that is the case, why have it in there?


Patrick Morgan Mahoney: If it were not in there, certainly his certificate could be disputed. That is why it is there.
Income Tax Act


Elmer MacIntosh MacKay: Should there not be some equitable way in which such a certificate could be disputed? There may be a very real possibility that the minister would not have knowledge within the ambit of the intent of the section. If it is absolutely impossible ever to dispute the minister's certificate, what is the point of this?


Gordon Harvey Aiken: Mr. Chairman, I rise on a point of order. If there is no more debate on section 244, I see no reason why it should not be passed and, if it is passed, we have completed this group of sections and would have to proceed to a new part of the bill. I understand that the Minister of Transport has a statement to make. May I suggest as a matter of procedure that after we have completed section 244 we should revert to motions for the minister to make his statement and for hon. members to reply to it?


Patrick Morgan Mahoney: That procedure is quite acceptable, Mr. Chairman. However, there was one question that the hon. member for Parry Sound-Muskoka asked earlier today with regard to section 231 and I now have the information for him. I may add that I understand that tomorrow we will start to deal with the co-ops and credit unions, and when that subject has been exhausted we will go where the good Lord takes us around the rest of Bill C-259.


John Stratford Burton: May I ask the parliamentary secretary if it is his intention tomorrow just to deal with sections 135, 136 and 137, or will we also be dealing with sections 56 and 58?


Patrick Morgan Mahoney: It would seem sensible to me that we should deal with 57-1 and 58 as well as sections 135, 136 and 137.


Stanley Howard Knowles: Agreed.


Russell Clayton Honey: Shall section 244 as amended carry?


Marcel Joseph Aimé Lambert: On division.
Clause 1, section 244, as amended, agreed to.


Mr. lamieson:: Mr. Chairman, I understand there is agreement among all parties to allow us to revert to motions for a brief moment because of a statement I would like to make.


Patrick Morgan Mahoney: Before we do that I have one bit of information that I promised the hon. member for Parry Sound-Muskoka. Under section 231 I am advised by the Department of National Revenue that normally they will allow a 30-day period. However, sometimes they specify either 45 or 60 days if it is expected that the matter is very complex. Thirty days seems to be the minimum.


Russell Clayton Honey: Is it the wish of the committee that in accordance with the suggestion of the Minister of Transport I should rise, report progress and request leave to sit again at the next sitting of the House?


Some hon. Members:: Agreed.
Progress reported.

December 6, 1971
Automobile Safety



ROUTINE PROCEEDINGS


Donald Campbell Jamieson: Mr. Speaker, I was advised late this afternoon, too late for a statement on motions today, with regard to a communication which my office received from General Motors of Canada. I feel it is important that this announcement be made immediately and that it be made in the House.
I want to recommend that all Canadian owners of vehicles involved in the current recall campaign of General Motors of Canada return their vehicles to authorized dealers for inspection and installation of an engine movement restraining device. The notification by General Motors of Canada involves Canadian owners of approximately 600,000 1965 through 1969 regular size Chevrolets and Novas as well as 1967 through 1969 Camaros and certain light trucks, which include some GMC models with similar V8 engines. No Chevelles, Corvettes or six-cylinder models are included in the company's campaign.
I note that General Motors Corporation agreed to initiate this campaign as a result of intensive investigations in the United States and Canada by the company and by officials of the U.S. Department of Transport and of our own ministry of transport. General Motors plans to begin notifying owners by mail as soon as current owners' names can be obtained from Canadian vehicle registration records and as soon as parts can be produced and delivered to dealers.
At very low speeds and heavy throttle, engine-mount failure might result in lifting of the engine and consequent interference with the throttle mechanism. Symptoms of this condition may include momentary sticking of the accelerator pedal, possible transmission shift to neutral, and interference between the engine fan and radiator or fan shroud which would result in a loud noise. Throttle interference could contribute to an accident.
General Motors of Canada have advised me that the engine movement restraining devices should be available at Chevrolet dealerships in the latter part of February. I also note that only in rare instances does engine lift involve the throttle and become a problem following engine-mount separation. I advise that if vehicle operation should be affected by engine-mount separation, the driver should turn off the ignition key and brake the vehicle to a stop. I particularly urge Canadian owners of affected vehicles who have already experienced engine-mount failure to have their vehicles checked and ensure that the restraining devices are installed as soon as available.
I should like to add that I appreciate the co-operation of General Motors in carrying out this program in our country and the fact that they have moved voluntarily.


Mr. Mac T. McCutcheon (Lambton-Kent):: I should like to take the opportunity of thanking the minister for his announcement and his interest. This announcement rein-[The Chairman.]
forces my belief that most large corporations are interested in the welfare of their customers. Had they not been, I submit they would not have become large corporations notwithstanding the continual sniping from certain consumer advocates and advisers. Notifying 600,000 customers by mail has meant a sizeable expenditure for General Motors. In any event, with a view to safety one can take comfort from the fact that the defect is likely to be a minimal cause of accidents.
I commend the minister and the corporation, and heartily endorse the recommendation that customers avail themselves of this service.


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, I should first like to thank the minister for at least making the statement in the House and not to the press outside the Chamber. I think he is to be commended for that. As we look at the models involved we are speaking about a period from 1965 to 1969. This further points out that we must have a militant and imaginative department to look after the consumer. If we are concerned about consumer protection, we should be moving in the direction of safety regulations.
When you look at the statement made, General Motors is telling us that we have been riding around on a bomb since 1965. I wonder how many cases have come to light where the driver has been charged with responsibility when in fact it was a defect of mechanism. I think it is good that General Motors is recalling these cars. At the same time I would urge the minister to set up strong safety regulations for some type of testing by the department. The consumer in this country is entitled to good protection and this can only be assured through safety regulations. We know that some of our regulations are imported from the United States. We may have added some, but we must take this duty upon ourselves and the government must assure the consumer that safety is a prime concern.


Mr. Romuald Rodrigue (Beauce):: Mr. Speaker, may I be allowed to sincerely congratulate the minister who took the initiative of advising the Canadian people of what General Motors has revealed to him today.
I myself learned this morning the decision of General Motors to recall over 6 million vehicles in North America, over 600,000 of them in Canada. To my mind, this was a gratifying decision because it will protect the consumer to a certain extent.
It will also give this large company the opportunity to check its production methods so that, in the future, it might spare its customers the inconveniences they are now experiencing.
I therefore urge the minister to continue warning people against problems as serious as those the purchasers of General Motors vehicles are now up against.
Adding my voice to that of the minister, I urge Canadians to take advantage of the services offered by General Motors for the correction of the mechanical defects that might crop up.


Gordon Harvey Aiken: Ten o'clock.
December 6, 1971


Mr. Deputy Speaker:: Is it the wish of hon. members that the Chair call it ten o'clock.


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Jerry Pringle (Fraser Valley East):: Mr. Speaker, a matter was brought to my attention recently by the Canadian aircraft owners and pilots association which prompted me to question the Minister of Transport (Mr. Jamieson) regarding aircraft operation safety at Hawkes-bury airport. As a pilot of some years standing, I am perhaps more receptive to representations from the flying fraternity than those who have never been involved in making decisions from an operator's viewpoint. In this particular instance I feel that the members of a certain flying organization have been dealt with somewhat arbitrarily and I would like to present their side of the case.
The Montreal Soaring Council has operated for more than 15 years out of an airfield located at Hawkesbury, Ontario. This location was chosen, as airports must be, with regard to wind factor, suitable terrain, existing obstructions, etc., all viewed necessarily with safety of the operation as a prime factor. The Hawkesbury location has proved admirable in this respect and over 4,700 flights have already been logged in 1971. With increasing use of the existing licensed runway, expansion is of immediate concern and additional runways have already been planned for construction during 1972 and 1973.
In August of this year the Montreal Soaring Council was approached by officials of the CNR and informed that a spur line of the railway was proposed to cross the southern section of their property, which would have the effect of rendering useless for flying purposes one-third of their airfield. The CNR at this point had already spent considerable time and money on the preliminary stages of the project which was initiated without consultation with the organization owning the property involved. The CNR, as a Crown corporation, does have the authority to take such action under the provisions of the Expropriation Act and the CNR Act. Unlike the CPR, they are not obliged to approach the Canadian Transport Commission prior to construction of a new railway line. When the line is completed, they must then apply to the CTC for an order to operate the line which is by this time completed. But until then no notification of any sort is required. It is not my intention at this time to dispute the provisions of the acts in question but only to point out that inevitably instances arise which might indicate that the authority bestowed by Parliament is being used without proper regard for the rights of individuals and, in this instance, of aviation safety.
Proceedings on Adjournment Motion
Although prior discussions between the Department of Transport and CNR officials resulted in their agreement that the area of operation remaining after the disposal of the property in question could still be fully licensed under DOT regulations, provision for expansion has not been made, considering the present growth rate of 20 per cent per annum. In addition-this is a most important point and one which is not covered under existing DOT regulations-no separate regulations now exist which govern airfields used by soaring craft as opposed to powered craft. This means that even though an airfield might meet minimum licensing requirements for powered aircraft, those minimum requirements would not necessarily be adequate when applied to soaring craft. There is no indication whatsoever that any consideration was given by the CNR or DOT in their discussions to this most important aspect of the operation.
A glider port such as the Hawkesbury facility must not be compared to an airfield used exclusively by normal power aircraft. For example, a towing aircraft has a slower rate of climb and, with a glider in tow, the angle of take-off must be shallower. The same holds true for landing approaches. There, obstruction clearance limits become more stringent due to the presence of the tow-line dangling behind the tug. Also, since when soaring conditions suddenly wane many sailplanes must land at once, a large operating area is obviously required. Other technical factors are involved. In the interests of brevity I will not list them point by point. I have the material in hand and will be happy to turn it over to the minister or any member of his department who will take the time to peruse it.
The Montreal Soaring Council does not wish to obstruct in any way the task of CNR in building a spur line which has been planned to serve an industrial site a few miles distant and which will prove to be of benefit to property owners and municipalities in the area. The council would be only too willing to co-operate with CNR in selecting a site which would be mutually agreeable to both parties. They would be equally willing to sell CNR such property as would be necessary to construct the line. The Montreal Soaring Council believes that such a site already exists a few hundred feet south of the proposed CNR site. An abandoned Canadian Northern Railway roadbed parallels the highway and the power lines on the southern boundary of the airfield.
Relocation of the rail line to this site, which is a feasible engineering undertaking, would minimize the disruption of the existing facilities of the airfield and allow for future installations to proceed as planned. The spur line could still service those industrial areas, present and future, for which it was intended. It is true that certain sites on the other side of the presently proposed line would not be reached by the route suggested by the Montreal Soaring Council, but that property is owned by the council and it has no intention of selling that particular piece of land for industrial development.
The council feels that the Hawkesbury airfield is a valuable asset to the area. Existing and proposed industries in the immediate vicinity can only benefit from an active, well maintained airfield in the area. A rail line site

December 6, 1971
Proceedings on Adjournment Motion
is available a short distance from where it has been planned at present. I urge the minister to give earnest consideration to requesting Canadian National Railways to reconsider the route of the spur line and for the company to arrange a meeting with the Montreal Soaring Council in order that the problem may be resolved on a mutually agreeable basis. The Montreal Soaring Council is anxious to co-operate.


Mr. Gerard Duquet (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I thank the hon. member for Fraser Valley East (Mr. Pringle) for the opportunity of providing some information to the House respecting the operation of Hawkesbury airport and the effect on its operation of the construction of a spur line by Canadian National Railways. This line will provide access to the Industrial Fasteners Limited wire rod mill at Longueuil, Ontario, and will be approximately 4.44 miles long. The authority for the expropriation is contained in sections 15, 16 and 17 of the CNR act.
The hon. member has referred to a possible aviation safety hazard as a result of the construction of this line. I want to assure him that officials of the ministry of transport have made a very thorough assessment of this proposed spur line with respect to Department of Transport standards for airports. Their results indicate that no aviation safety hazard will be created. In addition, I understand that a very useful meeting was held on September 16 between the railway and representatives of the Montreal Soaring Council. CN plans were discussed in detail and a full understanding was reached. The exact location of the line was studied at length by CN before the final one was chosen, and serious consideration was given to alternate routes.
I know of the hon. member's personal interest in the aviation community and all members are, of course, intensely interested in safety. That is why I am pleased to give these assurances with respect to the operation of aircraft at Hawkesbury.



FINANCE-SPECIAL DEVELOPMENT LOAN PROGRAM-SUGGESTED INCREASE IN BRITISH COLUMBIA ALLOCATION-AMENDMENT OF FORMULA

Thomas Clement (Tommy) Douglas: Mr. Speaker, ever since the Minister of Finance (Mr. Benson) made his announcement regarding the special loan fund on October 14, I have been critical of the allocation of that $160 million fund as between the various provinces. On November 24 the Minister of Finance sent me a letter setting forth some of the statistics. He wrote: Since the allocation of each provincial share is based largely on its relative share of unemployment, the changes in shares from last year's program to the present program are more readily illustrated by examining the share of unemployment by province. The following table shows the proportion of unemployment in the various provinces to Canada's total for the period June to September, with comparisons with last year.
I ask the House to look at the comparisons. The percentage of the total unemployed in the province of Newfoundland last year was 3 per cent compared to 3.4 per cent this year. The money they will be allocated out of this fund has gone up from $6.8 million to $7.5 million. Prince Edward Island was .4 per cent last year. It is the same this

year. It received $1 million last year and will receive $1 million this year. Nova Scotia had 3.1 per cent of the unemployed last year and 4 per cent this year. Its share of the loan fund has gone up from $4.3 million to $7.4 million. New Brunswick had 3.4 per cent last year and 3.4 per cent this year, exactly the same. However, its allocation has gone up from $5.4 million to $9 million.
Quebec has dropped from 36.6 per cent to 36.3 per cent. Its allocation has dropped from $70.3 million to $63.2 million. Ontario's share of the unemployment went up from 26.1 per cent to 28.8 per cent. Its allocation has gone up from $17 million to $26.5 million. Manitoba went up from 4.1 per cent of the unemployment to 4.4 per cent. Its allocation has gone up from $8.6 million to $9 million.
Saskatchewan was 3.1 per cent last year and 2.5 per cent this year. They did not receive anything last year but will receive $6.9 million this year. Alberta had 5.3 per cent of the unemployment last year. It went down to 5.2 per cent this year. Its allocation went up from $6.8 million to $8.5 million. British Columbia had 14.9 per cent of the unemployed last year. It has dropped this year to 11.6 per cent. Its allocation has dropped from $39.8 million last year to $21 million this year.
There are two extenuating circumstances which the minister pointed out in his letter. British Columbia received $2.8 million of the Saskatchewan funds which Saskatchewan did not use. Even that is $37 million last year compared to $21 million this year. Also, the minister has tabled a formula setting forth the very complicated basis upon which this allocation was resolved. After looking it over I am convinced it has created more anomalies that it has solved.
It is significant that the province of British Columbia, where unemployment in this period this year is a little over 20 per cent less than last year, has had its allocation cut by almost 50 per cent. I am not complaining about what any province is getting. I am simply pointing out that this is a very arbitrary and discriminatory way in which to divide the $160 million between the provinces. I recognize that at this late date the government cannot start to notify the provinces that it has changed the allocation. But what the government could do was what it did last year when it found there were inequities. An additional amount was made available; the government stepped up its original $150 million to $160 million so as to iron out some of the inequities. I urge the government to increase the total amount of the fund so that some of the inequities which are self-evident when one examines the figures I have just quoted may be straightened out and no province is subjected to any sense of discrimination.
Two weeks ago, the province of British Columbia had already used up the entire $21 million despite the fact that neither of the two larger cities, Vancouver and Victoria, had yet made application. My own constituency, one of the municipalities which was very quick to get started on this project, put in proposals for a sewage program but found it was too late and had to take its place on a waiting list. This meant it had to ask the citizens in a referendum to approve going ahead with the sewage project despite the fact that it does not know what the cost will be
December 6, 1971

because it is not known whether any benefit will be received from the special loan development fund.
I urge the government to seriously consider increasing the amount of the special loan fund above the $160 million at which it is fixed at the present time. I do not know any program which would help to put people to work more rapidly and which would at the same time provide greater social benefits. Should whatever government which is in office repeat the program next year, I hope it will be done six months ahead of time and that a decision to proceed will no longer be left until fall. I would have thought that after the experience of last year, when the announcement came much too late for effective use to be made of the scheme, the government would have acted promptly this year so that measures could be taken by the municipalities to make good use of the funds available.


Patrick Morgan Mahoney: The government will certainly take seriously, as it always does, the representations which the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) has made. I have a fair amount of paper before me in anticipation of questions I thought might arise in the course of the hon. member's remarks I believe he has made a serious representation and one which is very worth while, but basically there are no questions which appear to require answering so I can only undertake to bring the hon. gentleman's remarks to the attention of the Minister of Finance (Mr. Benson) immediately.


Thomas Clement (Tommy) Douglas: Thank you.



ADMINISTRATION OF JUSTICE-GRANTING OF PAROLE TO NELLES KIDNAPPERS-REFUSAL TO RETURN LICENCE TO PERSON CONVICTED OF IMPAIRED DRIVING

Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, I rise to protest what I believe to be a gross maladministration of justice and a disparate and disproportionate application of the granting of parole by the National Parole Board. On Tuesday, November 23, I put a question to the Solicitor General (Mr. Goyer) as follows:
Can the Solicitor General explain to me and to the House why the parole board is granting parole to the convicted criminal kidnappers in the notorious Nelles case in 1969, after only one-sixth of their sentences have been served, while the same parole board will not grant the return of a driving licence to a penitent constituent of mine?
I am sure Your Honour understands exactly why I raised this question. I suppose I could just as well have directed my inquiry to the Minister of Justice (Mr. Turner). I do not think it requires a lengthy answer. By asking my question tonight I am simply bringing justice, as it is administered today, into perspective. Canadians are not satisfied with what is going on.
I think the House and the people of Canada deserve an explanation from the Solicitor General, from the Minister of Justice, and especially from the organization known as the National Parole Board. The people of Canada demand to know why Mr. Street and his board have granted parole to most of the gang of criminal kidnappers in the notorious Nelles case after only an average of one-sixth of their sentences have been served. And if Mr. Street and
Proceedings on Adjournment Motion
company are to be that lenient with these convicted persons, why can they not be fair and grant a poor youth in my constituency the return of his driving licence which was taken away for two years for a conviction of impairment?
Now, when he and his parents ask for its return, after he has learned his lesson, they are given a terse, curt "no". I point out that it is said that none of the Nelles case men had a previous record. Neither had my constituent who lost his driving licence. He has served well over half of the penalty in being deprived of his driving licence.
Many people do not know that if one is convicted of impaired driving-which is classed as a criminal offence, rightfully-the parole board has, truthfully speaking, the keys of one's car. That is all right. I am not kicking about that, Mr. Speaker. It is perfectly proper that this authority hold that right. But when the parole board uses such disparity and disproportionate judgment as I have just outlined in these two cases it is time the truth was known and it is time it gave reasons for such judgment.
I demand full revelation for the House and the people of Canada of the judgment and record of parole of this high-class gang of criminals in the Nelles case. I demand that the Attorney General smarten up and look into this matter. Or is he pursuing the policy as outlined in his recent statement where he said that this government is more interested in rehabilitation of criminals than in the protection of persons and property?
While I am on the subject, Mr. Speaker, I want to point out to you and the House that according to the Toronto Star of November 27, the man who shot and killed a gasoline filling station attendant, David Seedhouse, last month in Weston, Ontario, had been paroled from prison only last July after serving two years of a six-year term for gas station robberies. The National Parole Board paroled him under these lenient terms, and less than four months later this man committed a brutal murder, shooting down defenceless David Seedhouse who did not have a chance. I want an explanation for these two cases from Mr. Street and his board, and I demand that the Solicitor General sees that the House gets an explanation.
In these times of trouble, especially when one takes into account the terrible circumstances of lawlessness that prevail in our permissive society under this Trudeau government, if a vestige of the hoped for just society is to survive we must pay more attention to the keeping of law and order and to the punishment of criminals and transgressors in a manner consistent with the sentences that the courts of justice are handing down. Is there any justice in sentencing a man who makes a practice of robbing service stations at gunpoint to a deserved six years and then having the parole board let him out in two years to pave the way for him to commit capital murder four months later? The answer the Canadian people give to that question is an unequivocal "No."
That is why I say I am bringing justice into perspective here tonight when I say to the Attorney General for God's sake, if he is going to allow the paroling of all the Nelles gang, in the name of justice return to my young constituent his driving privileges. If we can get this done, I will give the parole board my constituent's name. I do not mention it here tonight as a matter of courtesy because I
24725-17J

December 6, 1971
Proceedings on Adjournment Motion
do not wish to embarrass him and his family. I hope, Mr. Speaker, that my request this evening will receive an early and favourable response from the Attorney General and his department. I remind him that the people of Canada are awaiting an explanation.


Mr. Douglas A. Hogarth (Parliamentary Secretary to Solicitor General):: As the hon. member knows, individual decisions pertaining to the granting of parole are made by the National Parole Board. This applies to all persons in custody of the federal government. As the hon. member further knows, the parole board is a quasi judicial body vested with certain powers under the Parole Act, and the whole concept of granting these powers to a board is based upon the premise that such matters should not be the subject of political interference, political influence or political decision. Accordingly, in so far as such decisions are concerned, the Solicitor General (Mr. Goyer) even though he may from time to time, as the hon. member has done here tonight, question an individual case, he is not only reluctant to interfere but indeed he cannot.
Explanations as to why parole is given in any one individual case would take much more than the three minutes that I have. The files are elaborate and the reasons are equally elaborate. In any event, it is impossible and not in the interest of justice, I suggest, to balance one case against another. There is no reason, because a kidnapper is paroled in Toronto, for a young man in the hon. member's constituency to have his driver's licence reinstated, nor is there any reason, because the young man
should not have his driver's licence reinstated, for the kidnappers in Toronto to be kept in jail. There is no correlation between the two cases. Careful consideration must be given to each case.
The Solicitor General is quite satisfied that although from time to time apparent errors are made, such as would appear in the case of the filling station attendant who was shot, nonetheless the parole board has given careful consideration in each instance. The Solicitor General is prepared to admit that parole is a very difficult matter. In modern penology, where the risks are between the protection of the public and the rehabilitation of an individual, those risks are equal. The parole board will, hopefully, come down in favour of the individual, giving him the benefit of the doubt as being a rehabilitated citizen. Sometimes this does not always work but it is found that in most cases it does, and although the hon. member has suggested a few failures there are many thousands of successes that go unheralded and unheard of in this great country.
I direct the hon. member's consideration to an article that appeared in the Vancouver Sun last Saturday dealing directly with this point. In any event, if the hon. member wishes to have his views further known, on December 15 the Senate judicial committee is commencing an inquiry into parole policy and the parole board, as well as how the Solicitor General's functions relate to this board. He is certainly welcome to appear there and to present such views as he has presented this evening.
Motion agreed to and the House adjourned at 10.25 p.m.

Tuesday, December 7, 1971.