1971-11-01

ROUTINE PROCEEDINGS


Mr. Frank Howard (Skeena):: Mr. Speaker, pursuant to Standing Order 43 and because of a matter of urgent and pressing necessity, the imminence of the nuclear bomb test at Amchitka, I seek the permission of the House to move the following motion, seconded by the hon. member for Comox-Alberni (Mr. Barnett):
That this House express its best wishes to the Greenpeace Two, hopes that it and the crew thereof have a safe journey and that the mission upon which the Greenpeace Two is embarked is successful to the end that President Nixon, in the interest of mankind and for humanity's sake will cancel the proposed nuclear bomb test at Amchitka Island.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The motion proposed by the hon. member for Skeena requires the unanimous consent of the House. Is there unanimous agreement?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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



QUESTIONS ON THE ORDER PAPER

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

Mr. Rondeau: 1.	Since its inception, has the Department of Regional Economic Expansion made any grants for tourism or para-industrial projects and, if so, on what criteria are such grants made?
2.	For each grant made (a) what was the amount (b) what were the names of the recipients?


Hon. Jean Marchand (Minister oi Regional Economic Expansion):: 1 and 2. The Department of Regional Economic Expansion has not made any grants for tourism or para-industrial projects. However, during 1970-71, contributions were made to provincial governments for Tourism and Recreation, under	agreements	listed below.
Reimbursements to cover Canada Land Inventory and		
other research costs are not included.		
FRED		
	$	$
Prince Edward Island	707,615.20	
Mactaquac	1,184,613.00	
Northeast New Brunswick	76,501.84	
Lower St. Lawrence, Gaspe	1,025,692.00	
Interlake	454,316.33	
	3,448,738.37	3,448,738.37
Special Areas -		
Quebec		4,626,001.15
ARDA 2 and 3-		
Newfoundland	83,637.20	
Nova Scotia	206,153.22	
New Brunswick	121,347.11	
Quebec	519,680.39	
Ontario	195,837.90	
Manitoba	175,295.96	
Saskatchewan	213,149.29	
Alberta	62,107.03	
	1,577,208.10	1,577,208.10
9,651,947.62


PUBLICIZING OF OPPORTUNITIES FOR YOUTH PROGRAM
Mr. St. Pierre: 1.	How many persons on the staff of Information Canada were assigned to the distribution of announcements of the Opportunities for Youth Program?
2.	Was any agency other than an agnecy in the government service employed for publicizing the announcement of this program and, if so, (a) what agency (b) at what fee (c) for what reason?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: I am informed by Information Canada and the Department of the Secretary of State as follows: 1. Three members of the staff of Information Canada assisted with the initial distribution of the announcements.
2. Yes. (a) A firm of public relations consultants, Carle-ton-Cowan Public Relations, was hired for advisory services by the Department of the Secretary of State in connection with the announcement of the Summer '71 student employment and activities programs, which included the Opportunities for Youth Program, (b) A total of $1,155 was paid to Carleton-Cowan Public Relations to publicize the announcement of the Summer '71 programs,
(c)	In light of the considerable interest which would be

November 1, 1971
Questions
generated by the new programs, additional resources to the existing information services in the Department of the Secretary of State were required to cope with the information and publicity needs of these programs on an urgent basis.


WRITS OF ASSISTANCE (CUSTOMS ACT)
Mr. Howard (Skeena): Since January 1, 1971 have any writs of assistance been issued pursuant to the Customs Act and, if so (a) how many such writs have been issued (b) what is the name and office held by each person to whom a writ was issued (c) on what dates whas each such writ issued?


Hon. lean-Pierre Goyer (Solicitor General):: (a) Eight, (b) Corporal L. R. McKergow, RCMP, Federal Law Enforcement (Ontario); Constable A. C. Moores, RCMP, Federal Law Enforcement (Ontario); Constable J. L. R. LaPer-riere, RCMP, Federal Law Enforcement (Ontario); Corporal J. G. L. Boivin, RCMP, Federal Law Enforcement (Quebec); Constable J. J. G. Bouffard, RCMP, Federal Law Enforcement (Quebec); Constable J. L. G. Dionne, RCMP, Federal Law Enforcement (Quebec); Constable P. M. Laxson, RCMP, Federal Law Enforcement (Quebec); Constable A. R. Lockwood, RCMP, Federal Law Enforcement (Quebec), (c) All eight writs of assistance were issued on May 25,1971.


IMPOSITION OF TARIFF TO PROTECT CANADIAN APPLE INDUSTRY
Mr. Fairweather: Does the government intend to protect the Canadian apple industry by the imposition of a tariff equal to the tariff imposed by the United States on the importation of Canadian apples?


Hon. E. J. Benson (Minister of Finance):: No. Although the Government is studying a full range of possible measures which might be adopted to mitigate the effects of the U.S. economic measures on the Canadian economy once their impact is clearly defined, it does not plan to retaliate against the effects of the U.S. surtax on Canadian exports. Recent reports suggest that the United States will implement the last of its Kennedy Round cuts on January 1, 1972; Canadian fresh apples would then enter the U.S. duty free. The U.S. surtax would not then apply to U.S. imports of fresh apples.


QUEEN'S HONOURS
Mr. Coates: Are all honours awarded by the Queen to outstanding Canadians made on the basis of recommendations from the government and, if not, are awards granted on Her recommendation?


Hon. Gerard Pelletier (Secretary of State):: The Government of Canada does not recommend to Her Majesty the Queen the award of British honours to Canadian citizens. The Order of Canada provides for the recognition of outstanding achievement and merit of high degree. Canadians are eligible, however, to receive certain classes of honours which are bestowed by the Queen on the recommendation of the United Kingdom Government and with the prior consent of the Government of Canada, e.g.
[Mr. Jerome.)
for meritorious service as an employee of a British Government agency in Canada. Certain categories of honours, e.g. the Order of Merit, are the personal gift of the Queen alone and are not subject to recommendation.


OPERATIONS PERFORMED AT WHITEHORSE GENERAL HOSPITAL
Mr. Nielsen: 1.	How many hysterectomies or other similar operations having as their result the sterilization of female patients have been performed at the Whitehorse General Hospital over the past two years?
2.	Of such operations, how many have been performed on Indian patients and how many have been performed on white patients?
3.	In each such case where such operations were performed, was a form of consent signed by the patient and obtained from such patient before such operation?
4.	If such consent signed by such patient was not obtained, what other authority, if any, was obtained for the performance of such operation?
5.	In the case of each operation, what was the name of the doctor performing the operation?


Hon. lohn C. Munro (Minister oi National Health and Welfare):: 1. One hundred and forty. NOTE: Hysterectomies, although they result in sterilization, are usually performed in the course of treatment of benign and malignant tumours and other pathological or functional disorders affecting health.
2.	Twenty seven Indians; 123 others.
3.	Yes.
4.	See question 3.
5.	It is not in the public interest to give such information without consent of the doctors.


PUBLIC SERVICE-POSITION OF CUSTOMS AND EXCISE OFFICER, CHARLOTTETOWN, P.E.I.
Mr. MacLean: 1.	Did the Public Service Commission advertise in July, 1971 for the position of Customs and Excise Officer located in Charlottetown, Prince Edward Island?
2.	What are the duties of this position which require proficiency in both official languages?
3.	What percentage of the population of Prince Edward Island is not proficient in both official languages and was thus disqualified from this position?


Gérard Pelletier: I am
informed by the Public Service Commission as follows: 1. Yes.
2.	"Under general supervision, applies the provisions of Customs and Excise laws and regulations for the prevention of smuggling and other evasions and the collection of revenue; enters and accepts reports covering vessels and aircraft arriving from abroad; examines the baggage of passengers and crew; provides for the return of articles exported in the company of residents visiting abroad; composes reports and correspondence and performs other related duties".
3.	92.5 per cent according to the 1961 Census. The justification in requiring the incumbent of the position to be

Questions
bilingual was, however, to provide service in both official languages to the travelling public as required by the Official Languages Act.
4.	Is legislation drafted simultaneously in both languages or is the French version a translation of the English?
5.	What action is being taken to ensure that legislation respects both legal systems?


PERCENTAGE OF ATTRIBUTABLE COSTS OF MAILINGS PAID FOR BY USERS
Mr. Robinson: What percentage of attributable costs of (a) bulk mailings (b) first class mailings (c) second class mailings (d) air mailings, is paid for by the users?


Hon. Jean-Pierre Cote (Postmaster General):: (a) Bulk mailings are included in the class which applies to the items conveyed; (b) 97 per cent; (c) 38 per cent; (d) air mailings are included in the class which applies to the items conveyed.


Hon. John N. Turner (Minister oi Justice):: 1. In the Legislation Section there are 30 persons employed, exclusive of the jurimetrics division and other services attached to the Section. There are 13 legal officers whose names are: Beseau, P. Boileau, P. Dawson, Mrs. M. du Plessis, R. Geoffrion, R. L. J. Gibson, F. E. Juteau, G. Lindsay, R. F. MacDonald, Miss E. I. Pepper, M. H. Popp, A. H. E. Shepard, M. Ryan, J. W.
2. Messrs. Boileau, du Plessis, Geoffrion and Juteau and Mrs. Dawson have civil law training; Messrs. Beseau, Gibson, Lindsay, Pepper, Popp, Shepard and Ryan and Miss MacDonald have common law training. Mrs. Dawson is trained also in common law.


SUMMER EMPLOYMENT-APPLICATION BY MR. IAN HAYES, VANCOUVER
Mr. Nesbitt: 1.	Was an application for summer employment by Mr. Ian Hayes of Vancouver made to the Public Service Commission on or about March 15,1971?
2.	In response to this application, was any reply ever sent to Mr. Hayes by the Public Service Commission and, if so, on what date was the reply sent?
3.	What was the purport of the reply?


Gérard Pelletier: I am
informed by the Public Service Commission as follows: 1. Yes.
3.	(a) Five, (b) nil, (c) eight.
4.	First drafts are prepared in the Legislation Section in the language in which the instructions are given by the Department primarily concerned with the sponsorship of the legislation. A translation of the first draft is then prepared, which is then sent to officers in the section working in the other language or legal discipline. Subsequent drafts are adapted to both the requirements of the two legal disciplines and two official languages. The draft printed bill is then prepared concurrently in the two language versions. Because of the method used, the French version of a bill is not, nor is it intended to be, a translation of the English version or vice versa.
5.	See question no. 4:
2.	Yes. June 1971.
3.	He was advised that it appeared unlikely that he would be offered employment.


DEPARTMENT OF JUSTICE-LEGAL SECTION
Mr. Fortin: 1.	How many people work in the Legal Section of the Department of Justice and of them, how many are legal officers and what are their names?
2.	Which ones have (a) civil law training (b) common law training?
3.	How many are (a) bilingual (b) unilingual (French) (c) unilingual (English)?


HOUSING IN URBAN CENTRES, 1970
Mr. Orlikow: 1.	How many houses were begun by builders in urban centres in 1970 and of this number, how many were in (a) Halifax (b) Montreal (c) Toronto (d) Hamilton (e) Winnipeg (J) Regina (y) Calgary (h) Edmonton (i) Vancouver?
2.	How many apartment units were begun by builders in urban centres in 1970 and of this number, how many were begun in (a) Halifax (b) Montreal (c) Toronto (d) Hamilton (e) Winnipeg (f) Regina (g) Calgary (h) Edmonton (i) Vancouver?


Hon. Robert K. Andras (Minister of State for Urban Affairs):: Dwelling Starts, by Type of Dwelling, Urban Centres and Selected Metropolitan Areas-Canada, 1970
Area	Single- detached	Semi-detached and Duplex	Row	Apartment	Total
Canada-Urban Centres					
(10,000 + Population)			 40,859	8,993	15,359	85,788	150,999
Selected Metropolitan Areas					
Halifax	
401	162	10	1,700	2,343Montreal	
4,901	1,295	1,935	14,826	23,017Toronto	
3,249	1,862	1,906	23,504	30,521Hamilton	
997	175	727	2,646	4,545Winnipeg	
1,685	767	868	3,341	6,661Regina	
393	4	12	9	418Calgary	
2,865	462	789	2,624	6,740Edmonton	
1,920	162	1,369	2,879	6,330Vancouver	
4,482	350	839	7,766	13,437
November 1, 1971
Questions


REDUCTION IN TAX ON TELEVISION SETS
Mr. Robinson: Will the government ensure that the 15% reduction in tax making for a like reduction in the price of TV sets is passed on to the consumer?


Edgar John Benson: The government does not have a system of price controls. Vendors of television sets announced price reductions immediately following the announcement of the tax removal.


COMBINES INVESTIGATION-ALLEGATIONS RELATIVE TO CARTIER REFINERIES INCORPORATED
Mr. Macdonald (Egmont): Has the Minister of Consumer and Corporate Affairs issued any directive to the Combines Investigation Branch that would serve to either hastne or postpone completion of investigations relative to allegations made by Robin Austin and John Featherstonhaugh, Q.C., in relation to Cartier Refineries Incorporated?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: No.


ANNUAL PENSIONS TO WIDOWS OF FEDERALLY APPOINTED JUDGES
Mr. Kaplan: How many widows of federally appointed judges are currently receiving annual pensions in respect of their spouses' office of less than (a) $2,000 (b) $3,000?


John Napier Turner: (a) nine; (b) 47 for a total of 56.


QUESTION PASSED AS ORDER FOR RETURN
Mr. McQuaid: 1.	Since the coming into effect of the Regional Development Incentives Act, how many applications for assistance from each of the Provinces of Newfoundland, Prince Edward Island, Nova Scotia and New Brunswick were (a) received (b) accepted (c) declined (d) allowed to lapse after approval?
2.	What were (a) the applications accepted from the Province of Prince Edward Island (b) the estimated capital cost of each approved project (c) the type of industry benefited (d) the rate of offer (e) the estimated additional employment to be provided in each case?
3.	Of the applications accepted from Prince Edward Island, how many projects have actually commenced?
4.	What is the total amount paid to date for each of the approved applications from Prince Edward Island?
Return tabled.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, may I ask the Prime Minister whether, in view of the urgency expressed a few weeks ago in the interim report of the Science Council with regard to the development of an industrial strategy and the importance that the council placed upon co-ordination, the government of Canada is placing any proposals with regard to a coordinated industrial development strategy before the Ministers of Finance from the provinces who are meeting with the federal minister in Ottawa?


Right Hon. P. E. Trudeau (Prime Minister):: No, Mr. Speaker, I do not believe such a detailed strategy will be proposed to the Ministers of Finance. The House knows that we appointed a Minister of State for Science and Technology some time ago, and one of his priorities is, indeed, to arrive at some policy formation in this area.


Robert Lorne Stanfield: I am sure the Prime Minister has had an opportunity to study the report. In view of the urgency stressed in it, has the Prime Minister ordered any study of this report and, in particular, has he ordered any study of the tax legislation now before the House in order to determine whether those parts of it that particularly relate to proposals for changes in corporate taxation are relevant to an industrial development strategy under present conditions in this country?


Pierre Elliott Trudeau: Mr. Speaker, this is only one of many reports that have dealt with the subject, both external and internal reports. The House knows that the government has taken various measures to encourage science and technology and the industrial application of science both in our internal operations and through negotiating agreements with other countries, to wit, the recent agreement with the Soviet Union to have exchanges on the industrial application of science. The government has been moving in these fields. We are continuing to determine if there are other ways in which we can continue this movement.


Robert Lorne Stanfield: I asked the Prime Minister whether he had ordered any examination of the appropriateness of the tax reform bill now before the House with regard to an industrial development strategy. Will the Prime Minister consider asking the Minister of Finance, now that the minister is continuing to introduce amendments to the tax bill, to bring in one very far reaching amendment, namely, to drop all of the bill other than those parts concerning personal income tax exemptions and related matters?

November 1, 1971


Pierre Elliott Trudeau: Mr. Speaker, this type of consideration was in our mind when we drew up the taxation reform bill and when we brought in some of the amendments. The Leader of the Opposition will have an occasion to explain his point of view when that part of the bill is reached and discussed in the House. I am saying at this time that we are not proposing to bring in any further amendments.


Hon. George Hees (Prince Edward-Hastings):: I have a supplementary for the Prime Minister following the question asked by the Leader of the Opposition. Is it the intention of the government to have the Minister of State for Science and Technology make a report to the cabinet for study and consideration of action thereon by the government in the same way as the government had the Minister of National Revenue study the question of foreign investment in Canada and report to the cabinet? If that is to be the case, does the government intend to completely ignore the scientific report, as it ignored the report made by the Minister of National Revenue?


Mr. Speaker:: Order, please. The hon. member's question is not asked in a way that would make it acceptable procedurally.



ADMINISTRATION OF JUSTICE


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: want to direct a question to the Minister of Justice. It arises out of the study made by the Canadian Civil Liberties Association and financed by the Ford Foundation. This study shows that almost half of the accused persons whose cases were studied went through their entire trials without a lawyer and that in about a fifth of the cases the accused were kept in jail anywhere from one week to three months before coming to trial. In view of the facts that have come to light as a result of this study, is the minister going to propose any amendments to deal with this state of affairs?


John Napier Turner: Mr. Speaker, I would like to take a look at that report. The newspaper commentaries indicated that the report was limited to five major cities in Canada. I would hope some of the alleged facts might be reversed when the bail reform bill is proclaimed on January 2.


Thomas Clement (Tommy) Douglas: In view of the fact the study showed that a great many persons had been refused permission to telephone from the police station at the time of their arrest and that a great many had given self-incriminating evidence prior to seeing their lawyer, is the minister prepared to introduce legislation which will make it mandatory for an accused person to have legal counsel before a conviction can be registered against that person?


John Napier Turner: I am considering whether the right to counsel ought to be embodied in the Criminal Code. It will be recalled that we were unsuccessful in
Inquiries of the Ministry
having it inserted in the Canadian constitution as a result of the failure to ratify the recommendations of the Victoria conference. At any rate, right to counsel has to be supplemented by legal aid, and I am reviewing that aspect as well.



REQUEST FOR REFERENCE OF CIVIL LIBERTIES ASSOCIATION REPORT TO LAW CONFERENCE OR STANDING COMMITTEE

Mr. John Gilbert (Broadview):: My question is directed to the Minister of Justice. In view of the statement in the report that the courts are insensitive to the problems that face people who come before them, would the minister include this subject of this report on the agenda for the law conference next February so that it can be discussed and relayed to the judges who will be in attendance?


John Napier Turner: I will consider the suggestion, though it might be difficult to carry out at this stage. The primary responsibility for the administration of the courts falls, of course, within the purview of the provincial Attorneys General. It might be that the proper recourse would be to take the matter up with them.


John Gilbert: Would the Minister of Justice refer the subject matter of this report to the Standing Committee on Justice and Legal Affairs so that the committee might study it in depth, invite the persons who prepared the report to appear, and engage in a full discussion on the subject?


John Napier Turner: That is a suggestion worth considering.



FINANCE


Mr. James A. McGrath (St. John's East):: I should like to ask the Prime Minister whether he can tell us who is representing the province of Newfoundland at today's finance ministers' conference in view of the fact that the Minister of Finance for Newfoundland went down to defeat with the Smallwood government in that unknown election to which the Prime Minister referred in Halifax on Saturday when he was asked about the Newfoundland election. I should like to ask the Prime Minister specifically who is representing the province of Newfoundland today at the meeting with the provincial Ministers of Finance in view of the fact that the Minister of Finance for Newfoundland, together with the Smallwood government, went down to defeat last week?


Pierre Elliott Trudeau: Not only did I not refer to an unknown election, but I was not in Halifax on Saturday. The facts are all wrong.


James Aloysius McGrath: May I, without repeating the premise of my original question, which was accurate-it was perhaps last Friday-ask the Prime Minister who certainly knows

November 1, 1971
Inquiries of the Ministry
now that there was an election in Newfoundland last week-


Mr. Speaker:: Order, please. I thought the election was over.


Some hon. Members:: Oh, oh!


Mr. Bell:: It has just started.


James Aloysius McGrath: I apologize, Mr. Speaker, for getting carried away. I should like to ask the Prime Minister to tell us who is representing the province of Newfoundland today at the finance ministers' conference in view of the fact that the Newfoundland Minister of Finance was defeated in last week's provincial election?


Pierre Elliott Trudeau: The premise was still wrong. As to the question itself, I do not know.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Can we be
assured by the Prime Minister that the paving which is going on outside this building is not left over from the Smallwood campaign?


Some hon. Members:: Oh, oh!


Mr. John Lundrigan (Gander-Twillingate):: I am sure there is none left over. It was all used in my riding.


Some hon. Members:: Oh, oh!


John Howard Lundrigan: May I ask the right hon. gentleman to tell us who will be invited from the province of Newfoundland to attend the conference of first ministers to be held later this month?


Pierre Elliott Trudeau: The premier of Newfoundland, Mr. Speaker.


John Howard Lundrigan: Can the Prime Minister tell us who that man is?


Some hon. Members:: Oh, oh!



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I am sure Frank Moores will get the invitation. In welcoming the Toronto Sun to Canadian journalism I wonder whether I could ask the Minister of National Defence a question based on an article which appeared in this new publication this morning indicating that Treasury Board has approved $10 million for the purchase of more CF-5's to replace equipment to be sold to Venezuela. Will this in fact entail the opening up of the production line at Canadair again?


Hon. Donald S. Macdonald (Minister of National Defence):: Mr. Speaker, the discussions with Venezuela are currently in process and I do not think it would assist them or the Canadian aviation industry to indicate at this
(Mr. McGrath.)
point the exact stage the discussions have reached. However, the White Paper on Defence indicated that some of the CF-5 aircraft would be used in an advanced training role and for this purpose the department's budget would be increased so that some of the aircraft now in inventory can be converted. As to whether the existing aircraft will be sold to Venezuela and replacement dual aircraft purchased to put into inventory or whether the existing single aircraft will be converted to duals, this will depend, of course, on the outcome of the proposed sale to Venezuela.


J. Michael Forrestall: Do I gather from the Minister of National Defence that Treasury Board has not yet approved an item of $10 million so that the production line at Canadair might be reopened?


Donald Stovel Macdonald: In view of the fact that at the moment we do not know whether there will be a sale or a conversion of the existing aircraft, because we do not know yet whether the sale will be completed, it is a little difficult for Treasury Board to arrive at any conclusion.


J. Michael Forrestall: May we have some assurance from the Minister of National Defence that a statement will be made by himself, or by his colleague the Minister of Supply and Services or by the Minister of Industry, Trade and Commerce at the conclusion of the negotiations with Venezuela?


Donald Stovel Macdonald: Mr. Speaker, it is the Minister of Industry, Trade and Commerce who is now in the process of negotiating the sale. I am sure that if he brings off an advantageous contract he will not be loath to announce it to the House.


George Harris Hees: A supplementary, Mr. Speaker.


Mr. Speaker:: Order, please. I suggest to hon. members that we should try to limit supplementaries so as to give effect to the very valuable advice given to the Chair last week. The hon. member for Saskatoon-Biggar.



LIFT PROGRAM-REPAYMENT REQUESTS TO FARMERS- REFERENCE TO LEGAL OFFICERS OF GOVERNMENT

Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, may I direct a question to the Minister of Agriculture. In view of the fact that the minister's parliamentary secretary said in the House on October 28 that whether or not prosecutions in regard to the Lift program would be undertaken in individual cases if repayment is not made voluntarily would be determined at a later time and depend upon the circumstances of each case, would the minister inform the House whether the question of overpayments under the Lift program has been referred to the legal department of the government both as to cases pending and as a question of principle?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, there are a variety of reasons why there appear to be overpayments. In some cases the figures in the application do not correspond with the figures in the permit book for the previous year; in other cases the figures do not
November 1, 1971

correspond with the aerial photographs, and so on. Some of these, hopefully, will be settled when further explanation is given either to the farmer or by the farmer to the officer inspecting. These cases are not all exactly the same, but I am sure the hon. member would expect us to collect any overpayments made or, indeed, any payments that were made that were not in accordance with the regulations under the program.


Alfred Pullen Gleave: Mr. Speaker, I have a supplementary question. Without accepting the understanding the minister has attributed to me, I should like to ask whether individual cases of farmers were examined by counsel in the Department of Justice or any other department of government before payment was demanded by letter from these farmers?


Horace Andrew (Bud) Olson: No, Mr. Speaker, not each individual case, although we will be referring some of them to the Department of Justice. The simple answer to the question is that each individual case was not examined by the Department of Justice before we asked for repayment.



ATOMIC ENERGY


Mr. Murray McBride (Lanark-Renfrew-Carleton):: Mr. Speaker, my question for the Prime Minister concerns a reported announcement made by him on Friday that the federal government will make a $95 million loan to Atomic Energy of Canada to rehabilitate the heavy water plant at Glace Bay. Is the government taking this action on the basis of the results of the $300,000 engineering study announced by the Minister of Energy, Mines and Resources on January 29 and, if so, is that report now public?


Pierre Elliott Trudeau: Mr. Speaker, this decision was not based essentially on that report; it was based on a requirement that the country has for heavy water and on an examination of the proposition put to us by Premier Regan to the effect that we can rehabilitate this plant and obtain heavy water from Glace Bay sooner and, hopefully, cheaper than we could by building a completely new plant elsewhere.


Murray Arndell McBride: Mr. Speaker, I have a supplementary question which is also directed to the Prime Minister or the minister answering for the Minister of Energy, Mines and Resources. In the Prime Minister's statement to the House on April 10, 1970, which appears at page 5711 of Hansard, he made federal assistance to Nova Scotia conditional on a satisfactory operator being found. In view of evidence given to a committee of the House at a more recent date that no such operator had been found, I should like to ask whether such an operator has been found and who is it?


Mr. Speaker:: The hon. member for St. John's West.


Mr. Broadbent:: I rise on a question of privilege, Mr. Speaker. Since we now have persistent and dangerously high levels of unemployment, since the rate of closeinquiries of the Ministry
downs in factories in the province of Ontario is at its highest level since 1929, and since some 2,000 auto workers are effectively out of work as of today, I should like to know why neither the Minister of Manpower nor his parliamentary secretary are in the House today when according to the roster system they should be. Perhaps the Prime Minister can answer that.


Pierre Elliott Trudeau: Mr. Speaker, the very simple reason is that the minister is at the federal-provincial conference today dealing with the provinces on the very subject on which the opposition has said we should be dealing with the provinces.


Some hon. Members:: Hear, hear!


Murray Arndell McBride: Mr. Speaker, on a point of order-


Mr. Speaker:: Order, please. The hon. member has asked a question, and I will recognize the hon. member for Oshawa-Whitby in a moment for the purpose of asking a question if he wishes to do so. For the moment the Chair recognizes the hon. member for St. John's West.


Murray Arndell McBride: Mr. Speaker, I rise on a point of order.


An hon. Member:: Oh, sit down!


Mr. Speaker:: I recognize the hon. member on a point of order.


Murray Arndell McBride: My point of order or question of privilege is very simple, Mr. Speaker. Just because those characters on the other side start hollering does not mean that a question is not deserving of an answer.


An hon. Member:: Vice versa.


Mr. McCleave:: Onward Christian Soldiers.



ELECTIONS


Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the right hon. Prime Minister. Will he reassert the rights of Canadians to political self-determination without fear of reprisals from his government? I am prompted to ask this question in light of a statement made by the Minister of Transport last week which contained veiled threats to Newfoundlanders if they did not vote Conservative.


Some hon. Members:: Oh, oh!


An hon. Member:: Explain.


Mr. Speaker:: Is the hon. member rising to ask another question? We really have to move on. I recognize the hon. member for Oshawa-Whitby. Order, please. The Chair will recognize the hon. member for St. John's West to ask a question and then the hon. member for Oshawa-Whitby.


Walter C. Carter: Mr. Speaker, I should like to correct the record. It should have read "if they did not vote Liberal".

November 1, 1971
Inquiries of the Ministry
This is a very important matter, Sir. When a member of this government has stated during an election campaign that it would be unfortunate if Newfoundlanders did not see fit to support his party, I think this affects the democratic rights and the franchise of all Canadians.


Mr. Speaker:: The hon. member for Oshawa-Whitby.



MANPOWER


John Edward Broadbent: Mr. Speaker, my question is for the Prime Minister and I should like to preface it briefly with a comment on his answer. It may be the case-


Mr. Speaker:: Order, please. The hon. member has been recognized for the purpose of asking a question. He raised a question of privilege a moment ago and I am sure did not expect a ruling from the Chair. The matter having been looked at in this way, perhaps the hon. member should be allowed to ask a question.


John Edward Broadbent: Mr. Speaker, my question is addressed to the Prime Minister since the parliamentary secretary is not in the House although he is in the building. What steps is the government taking to deal specifically with the 2,000 auto workers who are being laid off today in the provinces of Ontario and Quebec in terms of retraining them, with their considerable experience in this industry, for other jobs?


Pierre Elliott Trudeau: I will take the question as notice, Mr. Speaker.



CANADIAN NATIONAL RAILWAYS


Right Hon. I. G. Diefenbaker (Prince Albert):: Mr. Speaker, in the absence of the Minister of Transport following Waterloo I should like to direct my question to the Minister of Agriculture. Notice has been given by Canadian National Railways that it intends to remove the station agents at more than 100 stations in Saskatchewan, Alberta and Manitoba, following similar action involving some 285 in the last four years thereby translating these localities into ghost towns as similar experience has shown. As up to the present time the Canadian Transport Commission has not shown any desire to protect the western towns that will suffer as a result, even though the chairman was born in Manitoba and is a former Newfoundlander, would the minister ask the Minister of Transport to have counsel representing the government of Canada appear before the Canadian Transport Commission in order to argue how wrong it would be to grant the orders sought by Canadian National Railways?


Horace Andrew (Bud) Olson: Mr. Speaker, I would be very happy to take that question as notice for the Minister of Transport, but I should like to advise the right hon. gentleman that this process took place in that part of Canada I know best between 1958 and 1962.


John George Diefenbaker: That answer, so-called, does no social credit to the hon. gentleman.


Mr. Speaker:: Order, please. Is the right hon. member rising on a supplementary question?


John George Diefenbaker: A supplementary question, Mr. Speaker.


Mr. Speaker:: I thought that was the supplementary question.


John George Diefenbaker: And also on a question of privilege, Sir. That statement is false. The minister will argue it is not false, but 285 have been closed since 1968 and a large number more are to be closed. Will he give his assurance as a western minister-


Horace Andrew (Bud) Olson: What about those in 1958 to 62?


John George Diefenbaker: -that counsel will be appointed-


Mr. Speaker:: Order, please. The minister is entitled to respond as the Acting Minister of Transport but I suggest to him and to hon. members that the minister is not allowed to respond in his capacity as a western member.


Horace Andrew (Bud) Olson: In taking notice for the Minister of Transport I can assure the right hon. gentleman that they will be given more consideration than they were given about ten years ago.


John George Diefenbaker: That statement is false.


Mr. Speaker:: Order, please. We are running short of time. The hon. member seeks the floor on a supplementary but many members have not yet had an opportunity to direct a question. The hon. member for Lanark-Ren-frew-Carleton asked a question a moment ago and suggested that he did not have an opportunity to hear a reply. My understanding was that no one rose to reply to the supplementary he asked and this is why someone was given an opportunity to ask a subsequent question. Is the hon. member rising on a supplementary?



ATOMIC EMERGY


Murray Arndell McBride: Mr. Speaker, I understand why the opposition is embarrassed on this subject-


Mr. Speaker:: Order, please. The hon. member is not allowed to debate the matter. That ruling applies to the hon. member as it does to all hon. members and I would ask his co-operation.
November 1, 1971


Murray Arndell McBride: Mr. Speaker, my question is directed to the House leader. When does the House leader intend to call Bill C-5 tor third reading so that adequate debate may ensue on this whole sordid and tragic question?


Mr. Speaker:: Order, please. The question as asked is not in order.



PROPOSED TAKEOVER OF SUPERTEST BY BRITISH PETROLEUM-INQUIRY AS TO GOVERNMENT COMMITMENTS

Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is addressed to the Prime Minister because of the absence of the Minister and the Acting Minister of Energy, Mines and Resources. On Thursday night the Parliamentary Secretary to the Minister of Energy, Mines and Resources indicated to the hon. member for Burnaby-Coquitlam that the government had decided not to intervene in the takeover of Supertest by British Petroleum. Would the Prime Minister advise the House whether there have been any undertakings or any commitments by the government of Canada to any of the parties involved, particularly involving Panarctic Oils Limited?


Pierre Elliott Trudeau: No, Mr. Speaker, there have been no undertakings given.



POSSIBLE REVIVAL OF STABILIZATION PLAN

Mr. Gordon Ritchie(Dauphin):: Mr. Speaker, my question is for the Prime Minister. In view of the Prime Minister's interview in which he stated that the federal government had failed to get its message across to the western farmers in the matter of Bill C-244 because of the clever opposition tactics-


Mr. Speaker:: Order, please. Will the hon. member ask the question.


William Gordon Ritchie: Will the government bring back a true stabilization plan in the near future?


Pierre Elliott Trudeau: Well, Mr. Speaker, it is rather late in the game for the opposition to tell us it is now going to support this bill.



NATURAL RESOURCES


Robert Jardine McCleave: Mr. Speaker, my question is for the Prime Minister. May I ask the right hon. gentleman whether the federal government is prepared to negotiate again its original stand on the shar-
Inquiries of the Ministry
ing of revenues from offshore mineral rights with the provinces and, if so, does the federal government recognize exclusive provincial ownership of such rights?


Pierre Elliott Trudeau: Mr. Speaker, since December of 1968,1 believe, we have been prepared to negotiate a settlement with the provinces and we put forward a proposal to the provinces to see if we could achieve some agreement on the matter. Since that time there has been no specific counter-proposal made to us. Indeed, there has been no indication by the opposition that it has a better suggestion for the solution of this problem.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Prime Minister whether he has received no specific proposal from the Premier of Nova Scotia?


Pierre Elliott Trudeau: On the whole problem of the offshore, the answer is no. There has been a discussion between us but there has been no proposal put forward of a firm and final nature.


EXTERNAL AFFAIRS
Frank Howard: Mr. Speaker, I wonder if I might direct a question to the Minister of National Defence. In light of the fact that on a couple of occasions this year the United States Coastguard has invaded Canada's territorial waters in pursuit of fishing vessels, and in light of the peaceful mission of the Greenpeace Two in respect of the Amchitka bomb test, would the minister be prepared to keep the naval forces under his jurisdiction on the alert to assist the Greenpeace Two in case of harassment by United States forces in international waters?


Donald Stovel Macdonald: Mr. Speaker, it would seem to me that those on a ship called Greenpeace would want this matter settled by peaceful rather than by warlike means.



INDUSTRY


Mr. lack Marshall (Humber-St. George's-St. Barbe):: My
question is for the Parliamentary Secretary to the Minister of Finance. In view of the crucial employment situation in the pulp and paper industry and its particular difficulties, is the government considering tax relief measures for the industry and, if so, will the government be taking immediate steps?


Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: Any tax relief measures would have to be announced in the House in the usual way.
9202

November 1, 1971
Inquiries of the Ministry


Jack Marshall: In view of the fact that the Pulp and Paper Association has asked the government to give tax relief of up to one-third on measures for controlling pollution and on investment in expansion, is the government considering this and when will an announcement be made?


Patrick Morgan Mahoney: The government is aware of the pulp and paper industry's representations but any response must await an announcement in the usual way.



SUGGESTED CONVENING OF YOUTH PARLIAMENT

Hon. W. G. Dinsdale (Brandon-Souris):: My question is for the Secretary of State. Was the minister expressing the position of the government in applauding the Committee on Youth report and will legislation based on the report be introduced soon?


Mr. Speaker:: Order, please. The hon. member is well aware that questions referring to statements made outside the House should normally be addressed to the Prime Minister as leader of the government.


Walter Gilbert Dinsdale: May I ask a supplementary question and perhaps make the question legal. In view of the obvious desire on the part of Canadian young people to be involved in devising programs of their own to deal with their problems, would the Secretary of State call together the long delayed youth parliament so that they might engage in this useful exercise?


Gérard Pelletier: Mr. Speaker, the hon. member for Brandon-Souris should know that the young do not wait for governments to take action. Up till now, they themselves have convened some fifteen interprovincial, intermunicipal or intercultural meetings to discuss the report on youth. And this goes on with the support of the youth movements, some of the oldest and most respected in the country, and I believe that the public debate that we wanted is presently taking place without any help from the government.


Walter Gilbert Dinsdale: Would the Secretary of State answer the specific question with respect to the youth parliament? Is the government considering activating this group as was recommended strongly by a parliamentary committee?


Gérard Pelletier: Mr. Speaker, it seems to me that I gave an unequivocally negative answer, but since one has to use the word "no", the answer is "no".



REQUEST FOR STATEMENT ON FUTURE OF OPPORTUNITIES FOR YOUTH PROGRAM

Mr. Lome Nystrom (Yorkton-Melville):: I have a supplementary question for the Secretary of State. Would the minister undertake within the next week or ten days to

make a statement on motions regarding the future of the Opportunities for Youth program and the whole question of summer student employment for the coming year?


Gérard Pelletier: Mr. Speaker, the government intends to make a statement soon. As for saying that it will be forthcoming within a week or two, I cannot make such a commitment at this time.



REQUEST FOR REFERENCE OF REPORT AND OPPORTUNITIES PROGRAM TO COMMITTEE

Mr. Steven E. Paproski (Edmonton Centre):: My supplementary question is for the Secretary of State. In view of the minister's enthusiastic endorsement of the youth report, will he take the necessary steps to refer this report along with the Opportunities for Youth program to the appropriate House committee for further study?


Gérard Pelletier: Mr. Speaker, I think that the matter of submitting various reports to parliamentary committees is one that we should consider carefully. The hon. member knows that some of these reports are worth being considered by a committee; as for others, the committee itself decides that they are not worthy of any consideration. A decision will have to be made in the light of the views of hon. members in this regard.



INDUSTRY


Mr. H. W. Danforth (Kent-Essex):: My question normally would be directed to the Minister of Industry, Trade and Commerce, but in his absence and since it does reflect government policy perhaps I may be allowed to direct it to the Prime Minister. In light of the very serious effect on Canadian employment implied in any modification of the Canada-United States automobile pact, will the government now reconsider its rejection of the Automobile Parts Manufacturers Association's recommendation that assembled vehicles imported into Canada from the United States be required to have a specified portion of Canadian parts content?


Pierre Elliott Trudeau: Mr. Speaker, I will be glad to take that question as notice on behalf of the minister.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: My question is directed to the Secretary of State for External Affairs. It
November 1, 1971

concerns the tragedy which has recently befallen India in the state of Orissa where thousands of citizens of that country have died in a tidal wave. Can he indicate whether the government of this country is showing its concern for a fellow Commonwealth nation by making an immediate grant of assistance to that country?


Hon. Mitchell Sharp (Secretary oi State ior External Affairs):: The matter is under discussion in the department now and I hope I will be able to make an announcement soon one way or the other.



NATIONAL SECURITY


Mr.  R. Gordon L. Fairweather@Fundy-Royal: My question is for the Secretary of State. Is it the position of the minister that the potential danger of broad support for a popular uprising in Quebec is probably greater today than it was a year ago, and will the government provide us with whatever evidence it has that there was broad popular support for an uprising a year ago and, to avoid a supplementary question, what new evidence does the Secretary of State have regarding this year's broad support?


Gérard Pelletier: Mr. Speaker, on the first part-


Mr. Speaker:: Order, please. I have very serious doubts about that kind of question. I would think it should be placed on the order paper because it is so general in nature and also because the hon. member is inviting the minister to express an opinion.



OPPORTUNITIES FOR YOUTH PROGRAM-SIMILAR PROGRAM FOR OLDER PEOPLE

Mr. Barry Mather (Surrey-White Rock):: My question is supplementary to those asked a few moments ago of the Secretary of State in connection with the Opportunities for Youth program. Having in mind the interest in and the need for such a program, can the minister say whether his department or other departments at other levels are giving any consideration to initiating an opportunities for age program on behalf of senior citizens?


Gérard Pelletier: No, not by
my department, Mr. Speaker.


Mr. Speaker:: Perhaps the hon. member for Saskatoon-Biggar might be allowed to ask a supplementary question. He has had difficulties with his supplementary questions this afternoon.
Inquiries of the Ministry



OPPORTUNITIES-FOR YOUTH PROGRAM-AMOUNTS OUTSTANDING IN RESPECT OF PROJECTS

['I should like to thank the hon. gentleman for bringing the case to my attention. I will see what can be done as urgently as possible.']
Alfred Pullen Gleave: I should like to ask the Secretary of State whether there are still amounts outstanding in respect of projects which were undertaken by students and, if so, can he tell the House how much is involved?


Gérard Pelletier: There is certainly no important balance, Mr. Speaker, but I will inquire and give a precise answer to the hon. member.



Mr. A. D. Hales (Wellington):: My question is directed to the Secretary of State for External Affairs. It is based upon a representation that has been made to me by the cousin of Miss Silva Zalmanson who is currently serving a ten year sentence in a labour camp in Russia and who is seriously ill. Part of the representation reads as follows: She is losing her hearing and cannot eat. Life is leaving her not by days but hours.
Would the minister use his good offices and perhaps those of the Red Cross to give urgent medical aid and care to this person?


Mitchell William Sharp: I should like to thank the hon. gentleman for bringing the case to my attention. I will see what can be done as urgently as possible.



NATIONAL DEFENCE


Mr. J. P. Nowlan (Annapolis Valley):: My question is for the Minister of National Defence. Have the long overdue pay increases for the armed services cleared all the administrative hurdles in the Department of National Defence and Treasury Board? Are they to be announced in the near future and, if not, when?


Donald Stovel Macdonald: As the hon. member has put it, consideration of a pay increase has not cleared all the administrative hurdles. I would hope to be able to make an announcement very soon, but I cannot give an exact date.


John Patrick (Pat) Nowlan: In view of the answer I must ask a supplementary question. Can we expect that the next period will reflect these increases. Will the decision be made before then?


Donald Stovel Macdonald: Does the hon. member mean the forthcoming month? If so, that will depend on when the announcement is made.
24372-23J

November 1, 1971
Inquiries of the Ministry



LIFT PROGRAM-REPAYMENT REQUESTS TO FARMERS- POSSIBLE FORGIVENESS IN CERTAIN CASES

Mr. Les Benjamin (Regina Lake Centre):: I have a supplementary question on a matter raised by my colleague the hon. member for Saskatoon-Biggar. In view of the large number of requests for refund of alleged overpayments under Operation Lift and the fact that the administrative costs may amount to more than the overpayments, may I ask the Minister of Agriculture whether consideration will be given to forgiving overpayments of any amounts under $50? Further, where overpayment was caused by Lift officials misreading aerial photographs, can the minister tell the House whether demands for such refunds will be stopped?


Horace Andrew (Bud) Olson: Mr. Speaker, in any case where we find that the photographs were interpreted wrongly, and there is a discussion between the farmer and the officials which brings that to the fore, of course no further action will be taken. We are certainly not attempting to collect money that has been paid out properly.



BAY OF FUNDY TIDES-DISCUSSION BY PRIME MINISTER AND NOVA SCOTIA PREMIER AT HALIFAX MEETING

Mr. Robert C. Coates (Cumberland-Colchester North):: have a question for the right hon. Prime Minister. During his meeting in Halifax with the Premier of Nova Scotia- the three maritime premiers were there-were there any discussions about re-examination of the programming board report on Fundy tidal power? If discussions were held, can the Prime Minister inform the House as to their extent and the results?


Pierre Elliott Trudeau: No, Mr. Speaker, no such discussions took place.



FISHERIES


John Howard Lundrigan: My question is directed to the Prime Minister. Can the Prime Minister tell the House whether any specific proposals were made to the Soviet premier during his recent visit to Canada on the offshore fishery conservation problem?


Pierre Elliott Trudeau: Mr. Speaker, the Minister of the Environment answered this question while the hon. member was in Newfoundland last week.


John Howard Lundrigan: I am asking the Prime Minister whether he himself made any specific proposals and recommendations to the Soviet premier which would help the conser-

vation of fishery resources off the east coast of Canada. If he did, would he be kind enough to table them in the House so that all east coast Canadians can understand what the specific proposals he made were?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member will refer to Hansard he will see what the minister answered.


John Howard Lundrigan: I am not asking what the Minister of Fisheries did; I am asking what the top official of the Canadian people did. Did the Prime Minister make specific proposals or did he not make specific proposals?


An hon. Member:: The answer is obvious.


Mr. Speaker:: Order, please. We have just about reached the end of the question period. We should normally go on to orders of the day but the hon. member for Battleford-Kindersley might be allowed to ask a rapid question. Is the hon. member for Gander-Twillingate rising on a question of privilege? I have just indicated to hon. members that I thought I was extending the question period by allowing the hon. member for Battleford-Kindersley to ask a question, but if that is not the desire of hon. members we will call orders of the day. The hon. member for Gander-Twillingate has asked the same question three times. He may not be satisfied with the reply which was given but as he will appreciate that does not give rise to a question of privilege.


John Howard Lundrigan: Mr. Speaker, my question of privilege is quite simply that the Minister of Fisheries has answered in the House that they got no response. There was no reference to the fisheries problem in the communique. No reference was made to the fisheries problem during the premier's visit. I want to give the Prime Minister the opportunity to tell a lot of east coast Canadians that this is not a bluff. That is what they are saying and I would like him to clear up whether-


Mr. Speaker:: Order, please. The hon. member for Battleford-Kindersley.



ATOMIC ENERGY


Mr. Rod Thomson (Battleford-Kindersley):: I have a question for the right hon. Prime Minister. Will Atomic Energy of Canada Limited be doing the reconstruction in regard to the Glace Bay heavy water plant and will Atomic Energy of Canada Limited be operating the said plant once it is completed?


Pierre Elliott Trudeau: Mr. Speaker, it has not been decided whether we will operate it through Atomic Energy of Canada Limited or whether ACEL will do it through an agent.


Mr. Speaker:: Orders of the day.
November 1, 1971



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, October 29, 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 the amendments to that act-Mr. Benson-Mr. Honey in the chair.
The Chairman:: When the committee rose on Friday, October 29, 1971, Section 6 was before the committee. Sections 4, 5, 6, 7 and 8 had been grouped for the purpose of debate and Sections 4 and 5 were agreed to.
On Clause 1-Section 6-Amounts to be included as income from Office or Employment


Russell Clayton Honey: Shall section 6 carry?


Some hon. Members:: Carried.
Clause 1-Section 6-agreed to.
On clause 1-section 7-agreement to issue shares to employees.


Russell Clayton Honey: The hon. member for Halifax-East Hants.


Robert Jardine McCleave: Mr. Chairman, I just have a question which arises out of the proposal that I presented on Friday that the amendment proposed by the hon. member for Moose Jaw be held over until today. I should like to have an answer for the parliamentary secretary.


Patrick Morgan Mahoney: Mr. Chairman, it was my intention, when we reached section 8, to ask that the amendment be allowed to stand. Hon. members will appreciate that the Minister of Finance is occupied with the provincial treasurers for the next few days, and I should like to give him an opportunity to consider the problem which the hon. member for Moose Jaw and the hon. member for London East have very forcibly brought to our attention.


Robert Jardine McCleave: And others.


Patrick Morgan Mahoney: And others as well.
Clause 1-Section 7-agreed to.
On clause 1-section 8-Deductions allowed.


Russell Clayton Honey: Shall section 8 carry?


Patrick Morgan Mahoney: Mr. Chairman, I should like to request that this section be allowed to stand.


Robert Jardine McCleave: Mr. Chairman, I was the one who originally made the suggestion, but in light of the motion by the hon. member for Moose Jaw supported so ably by the hon. member for London East, I may say that we are perfectly agreeable to letting it stand. However, I just want to make a point about the interest in this debate and the calibre of reporting of this debate that we are getting from our press gallery. There is an article in the Mail Star of Saturday, October 30, by one Dan Turner, that never makes the point the hon. member for Moose Jaw made or the very thoughtful speech that the hon. member for London East made or the point that I made. I think that is
Income Tax Act
lousy reporting, and I think the Canadian public is ill served by this type of reporting on what is perhaps a most fundamental piece of legislation. Certainly, this piece of legislation affects more people in this country than any other legislation of which I am aware. I just want to put that on record. I am distressed and I am disturbed that we cannot get a better report when we provide all the facilities in this place. We are spending tens of thousands of dollars to give better facilities to the press gallery to report to the Canadian people what is going on in this place.
It does not matter to me. My name could be left out of the dispatches because my part was a small one. I am simply saying that since the hon. member for London East, certain members to my left and some of my colleagues were so exercised about the matter I thought the issue could have been postponed for second thought by the government over the weekend. That idea was accepted by the parliamentary secretary, and I give him credit for that.
The hon. member for London East did something that is very very rare around here and anytime it happens it should be commended. The hon. member had the guts to look his own party in the face and say, "Look, you are making a mistake. I was a railway man before I came here and I can tell you that this is the way it is; in order to give these people a break you should adopt the course that the hon. member for Moose Jaw recommended." I think it is disgusting, I think it is disheartening and I hope that the Canadian Press will take a second look at the way it is represented in the press gallery. If it does not-


Some hon. Members:: Where are they?


Robert Jardine McCleave: -something else will take its place.


Russell Clayton Honey: Is it agreed that section 8 with two amendments shall stand?


Mr. Knowles (Winnipeg North Centre):: Yes, Mr. Speaker, that is agreed. In order that we may know what we are talking about, I wonder if that could be identified as the part beginning with the numeral 8 on page 15 and going over to the middle of page 23; in other words, the proposed new section 8 of clause 1. Is it agreed that that is what we are standing, with the two amendments which have been proposed thereto?


Some hon. Members:: Agreed.


Russell Clayton Honey: Hon. members have heard the hon. member for Winnipeg North Centre. He has identified the part that is to be allowed to stand. Does the committee agree that that is what is to be allowed to stand?


Some hon. Members:: Agreed.


Russell Clayton Honey: It is so ordered.
Clause 1-Section 8 stands.


Russell Clayton Honey: Pursuant to the special arrangement made on Friday last, the committee will now proceed to the consideration of a new grouping of sections. As the Chair understands it, the committee is to consider sections 56 to 58 inclusive and sections 60 to 63 inclusive.

November 1, 1971
Income Tax Act
On clause 1-Section 56-Amounts to be included in income for year


Russell Clayton Honey: Shall section 56 carry?


Robert Jardine McCleave: Again, Mr. Chairman, we have agreed to consider seven sections together, and I wish to comment on two of them. Other colleagues of mine will deal with other matters contained in these sections. Of the two to which I specifically wish to refer, the first has to do with the day care provisions and the second with the averaging provisions. Perhaps, before I forget, I ought to say that on Friday afternoon I went to the airport with the hon. member for Vancouver-Kingsway, who is probably the biggest booster in this House of the child care provisions and of certain day care laws that she wishes to see introduced. She will not be back until this evening. When she learned that the sections now being discussed were to come before the committee on Monday afternoon, she asked me to say that she would not be back until Monday evening. She hoped that the day care provisions would not slip through by a fluke and that she may have a chance to make a new speech this evening. I say this, realizing that she is not a member of my party. On the other hand, we did share the same cab on Friday afternoon.


Thomas Miller Bell: Explain.


Stanley Howard Knowles: I trust the hon. member paid the fare.


Robert Jardine McCleave: She went to fly to the sunny west and I went to fly to the gloom, down east, Mr. Chairman.
May I make one or two points with regard to the child care provisions. I suspect that these provisions are nuisance provisions, and that we are really providing for nuisance taxation of those good ladies of the neighbourhood who are going to look after the children while mother or father or both are downtown earning their living. I notice, further, that in this provision the social insurance number is to play a large part with regard to receipts. I suggest to you, Mr. Chairman, that that requirement is an abuse of the use of social insurance numbers as originally introduced in this Parliament. Perhaps hon. members within earshot of my voice will remember the assurance that was given when the social insurance number concept was introduced in Canada. According to my understanding, the number was not to be used for the purposes set forth in this clause. That is, it was not to be used in such a way as to identify somebody with the earning of a particular income. That is one aspect about which I want to ask the parliamentary secretary.
The present President of the Privy Council introduced this concept when he was minister of national health and welfare. Clearly, one or the other of them must answer my question, namely, did Parliament intend when the social insurance number concept was introduced that the number would be used to pin down people with respect to income tax, as now contemplated in the section we are being asked to pass? I am referring particularly to the matter of day care centres. I think that is an important matter. In any event, I make the point that that tax will be a nuisance tax. It is a pin money tax, because here we are talking about people who earn very little income and we are asking them to file income tax returns with respect to [The Chairman.]
the very modest amounts of money that they might earn as babysitters for small children. That, I suggest, is unjust.
Not only is the measure unjust, but it may also tend to defeat existing relationships in this field. If babysitters have to pay some kind of tax, it is obvious that, to meet that extra expense, they will tack on to the babysitting charge what they must pay, so that the cost of looking after small children will go up. This matter also involves Canada Pension Plan payments as well as income tax, since the babysitting service might grow to such proportions that it becomes a business which uses certain facilities. All these things will be involved. Either way, the low income, working mother will lose and the good old babysitter next door will be put to a great deal of nuisance, if I may put it that way. I hope that the parliamentary secretary, who has become a very reasonable fellow as the debate has been progressing and who sees other viewpoints, will take a second look at this section during the adjournment hour.
The other point I wish to deal with concerns the averaging of rising income. One might call these the Gordie Howe provisions. Perhaps, after all, they should not be called that, because Gordie Howe is retired and has gone to whatever sanctuary the Eaton Company can provide. Let us call these the Rusty Staub provisions. Rusty Staub plays in right field for the Montreal Expos. The weakness of this plan, as I see it, is that it only permits the averaging of a rising income, so that while Rusty Staub is in his prime and able to hit ever more home runs and do the brilliant fielding of which he is capable, this measure will bring him some advantage. On the other hand, when Rusty loses the strength of his legs-and I apologize to Mr. Staub for using him as an example, but I think it is better if you pin these things down definitely rather than leaving them up in the air without definite form-and when management starts cutting down on what he receives as take-home pay, this provision will not be to his advantage.
According to my reading of the section, he will not be allowed to average his income so as to offset the tax charged on the non-recurring, large income made in the first years. He would, in short, pay considerably more tax than another taxpayer who has had an identical total income over the five year period. Well, Mr. Chairman, I hope that we manage to strike a blow for those who do not quit when their incomes are on the rise but quit when they find that the game is no longer worth the salary they are paid. I suggest that the issue of averaging is most important; yet we should not confuse rising incomes with increased salaries and emoluments which are bound to be paid as a result of inflation. The day may come when the fellow we are talking about has reached his peak and gone past it. Management may not need to tell him to get out. He himself may know that he cannot bargain for those salaries that he commanded in the best years of his life. The player or actor may still be good enough to take part in his profession. The legs may still be good enough for a game and the acting, though not as good as before, may still be good. The fellow may still carry on for a few more years. I think that fellow also deserves a break. At least he is contributing out of a healthy salary scale. He is contributing more than any rookie who takes his place.
November 1, 1971

We have to recognize that. I make a plea for that particular person.
These are the points I wanted to make with regard to these particular sections. The matter of the taxation of scholarships and the like will be dealt with by another member of my party. Other members will deal with the niceties contained in the other sections. I wanted to put in a plea to take a very careful look at the taxation of the person providing day care. I am not referring to large business. I am referring to a neighbourhood mother who takes a few children into her home and looks after them so that their mothers can go to work. I think we can differentiate between a business proposition and a neighbourhood proposition to earn pin money. I ask the parliamentary secretary to look at that. Then, if we grant an averaging system, we have to grant that those who go up also come down. We must look at that aspect as well.


Stanley Howard Knowles: Mr. Chairman, as the hon. member for Halifax-East Hants has pointed out, these seven sections with which we are now dealing cover a wide range of matters. Therefore, this is hardly the point at which to make a general speech or even one that covers all of the matters. I imagine that each of us who takes the floor will have something to say about some of the items that are included in the seven sections. There are three about which I would like to speak and concerning which I have questions and suggestions to put to the parliamentary secretary.
First, this group of sections includes the provision for taxation of various kinds of pensions. It makes it clear, as it has been from the beginning, that income received as old age security is taxable. However, there is also in this group of sections the provision which makes it unnecessary to regard as taxable the amount received as guaranteed income supplement. At least, I believe this is the place which deals with that point. I am looking at page 129 where the reference to old age security benefits and Canada Pension Plan benefits is followed by the statement that although one must include such benefits, this does not include, and I quote:
the amount of any social assistance payment made on a means or a needs test basis,
1.	by a registered Canadian charitable organization, or
2.	under a prescribed program provided for by an Act of the Parliament of Canada or a law of a province.
I gather that is the legal provision under which money received as a guaranteed income supplement is not to be taxable. If this is somewhere else in the bill as well, perhaps the parliamentary secretary can advise me.


Patrick Morgan Mahoney: On the specific point, Mr. Chairman, I refer the hon. member to section 110(1)(/). Rather than have him look it up, perhaps I can read it.
Deduction for payments of supplement under Old Age Security Act.
(f) the amount of any supplement under the Old Age Security Act or of any similar payment under a law of a province, in respect of which any amount has been included in computing the taxpayer's income for the year by virtue of clause 56(l)(a)(i)(A).
Income Tax Act
The preamble to section 110 is for the purpose of computing the taxable income. I quote:
-there may be deducted from his income for the year such of the following amounts as are applicable.


Stanley Howard Knowles: If there was any doubt, Mr. Chairman, it seems to be doubly clear. It strikes me that it is there in both cases. In any event, the question I wanted to ask about the non-taxable nature of the guaranteed income supplement is as follows: Where in the bill is the provision which the minister announced in his speech to the effect that this would apply for the taxation year 1971?


Patrick Morgan Mahoney: Mr. Chairman, I will find out for the hon. member. Possibly he would like to carry on with his comments on another point. This is in Part IV.


Stanley Howard Knowles: Mr. Chairman, I have turned up something which I cannot find in the bill and which the parliamentary secretary cannot find, at least not yet. I am sure the parliamentary secretary will find it.


Patrick Morgan Mahoney: The parliamentary secretary has found it. I refer the hon. member to clause 71 in Part IV of the bill.


An hon. Member:: What page?


Patrick Morgan Mahoney: I am sorry I cannot help the hon. member there. I am using a different edition than hon. members. It is in Part IV of the bill which is entitled Amendments to the Income Tax Act, 1952.


Stanley Howard Knowles: That is in the clause after we get through clause 1.


Patrick Morgan Mahoney: That is correct.


Mr. Alexander:: I rise on a point of order, Mr. Chairman. Can the parliamentary secretary advise the House from which book he is quoting his facts and figures, where this is available and whether hon. members have this particular book? It seems to be a condensation of the entire matter, an easy reference for those sitting on the other side.


Patrick Morgan Mahoney: The particular clause which the hon. member for Winnipeg North Centre was looking at is on page 702 of the bill. The book I am using is a CCH edition of this bill. The reason I use it is I have to lift it frequently. This is to relieve my bursitis.


Lincoln MacCauley Alexander: I accept that.


Stanley Howard Knowles: Mr. Chairman, we have it confirmed that payments made under the guaranteed income supplement are not taxable. We also have it confirmed that they are not taxable for the year 1971. This is a welcome change that the government has made. It will solve one of the problems created when War Veterans Allowance recipients were pushed, either in whole or in part off the War Veterans Allowance on to the guaranteed supplement.
There still remains a question which many of us have been asking since June 18. It is this: Why has the government not seen fit to make other changes affecting elderly persons likewise effective January 1, 1971? I refer in par-

November 1, 1971
Income Tax Act
ticular, of course, to the increase in the age exemption amount from $500 to $650. I realize that now we are in November the present taxation year is almost over, but even if this bill gets passed this month or some time before Christmas, it will come as a bit of a shock to senior citizens to discover when they make out their income tax returns in April that the returns they make at that time must be on the basis of the old law. It seems to me that just as the government has been willing to make the non-taxability of the guaranteed income supplement apply back to January 1, 1971, it should make the extra exemption retroactive to cover the taxation year 1971.
The second point which comes within the purview of these seven sections is the provision that unemployment insurance benefits paid under the Unemployment Insurance Act, 1971, are taxable. I was a member of the committee which poured over that legislation. I recognize the rationale of granting tax deductibility for payments one makes into the unemployment insurance account and having to pay tax on unemployment insurance benefits if they place one in a taxable bracket, but it does seem to me that this should be put into effect only after things have worked out. Application of the principle should, in my opinion, be postponed. We have already run into a number of anomalies in the Unemployment Insurance Act administration arising mainly from the sudden changeover which took place on June 27 when the new act came into effect. We have come across a great many cases of persons who expected to enjoy a certain benefit but who found they could not obtain that benefit because, for example, they were not unemployed until after June 27. This applies to people who are in receipt of Canada Pension Plan payments, to people who are 70 years of age or older, and so on. This is not directly to the point, Mr. Chairman, but it is related to it. My point is that the sudden change has brought about many anomalies and this is another of them, that people have received less by way of unemployment insurance benefit than they thought they would collect. Some people who believed they would receive payments during the best part of the year got only three weeks. I think it is unfair to add to this unfairness by the application of income tax liability at this point.
I am not now making a plea for cancellation of the decision to apply income tax to unemployment insurance benefits. After all, that battle was fought in the committee. But I am asking the parliamentary secretary to delay the coming into effect of this provision for at least a year until things have sorted themselves out and people in receipt of unemployment insurance benefits are getting them on the basis of a structure which is completely founded on the new act.
I hope I have got my point across. What is happening here is that people are losing out because of the changeover and it is a bit cruel to say that not only should they get less money than they would otherwise have received but that such money as they do get is taxable right away. I would therefore urge that implementation of this part be delayed until at least the end of June, 1972.
The other point on which I should like to comment, among the many subjects to be found in these seven

sections, is the provision for income tax consideration with respect to expenses which a working mother is to be allowed. I might add that if the father is the one who is responsible for the children and has to hire help in looking after them, he is entitled under the terms of the bill to the same assistance as is made available to mothers. The consideration is set out in detail in section 63. As my hon. friend from Vancouver-Kingsway has already pointed out, and as she will do again when she gets back, as announced to us by the hon. member for Halifax-East Hants-and I can confirm it-there are some features of this provision which bear looking into. The hon. member for Halifax-East Hants has called attention to one of them, namely, that though there will be some tax savings to working mothers, because of all the reporting which has to be done, extra taxes may have to be paid by those who do the kind of work which makes it necessary for working mothers to use their services.
Apart from that, it seems to me the principal criticism I have to make with this provision is the standard type of criticism we make with respect to most tax concessions. The proposal is that the taxpayer should get a tax concession in terms of an exemption amounting to a maximum of $500 a child. There is a limit on this. No matter how many children a mother may have the amount cannot be more than $2,000. Then, there is a further limit. A mother cannot claim by way of expenditure on child care an amount greater than two-thirds of her earned income. It is the old story. A working mother with a low income may find that this does not help her much. There is not much point in my saying that a working mother with a high income would probably be better off because a mother with a high income would probably not be out at work.
What is to be granted to these working women, I might point out, is not $500 in cash; it is not $500 off their income tax, or $500 toward the cost of child care. It is simply an exemption of that amount, and by the time one applies a marginal rate of 20 per cent, say, it does not mean as much as it might otherwise have meant. It seems to me this is another case where the tax credit principle would have been far more appropriate. I do not understand why the government continues to resist this tax credit concept as it has done in all cases as far as earned income is concerned. It is true the principle has been applied to investment income in certain cases. Yet a tax credit is a method whereby one can ensure that those in the lower income brackets can get the amounts they need, that, as a matter of fact, they will receive the same amount, if they spend the dollars, as will those in the higher brackets. I do hope that in the study which will yet be given to this proposal some thought might be directed to the application of the tax credit method.
Mr. Chairman, I think that is enough comment on these sections for the time being. We shall be back later.


Mr. Fairweather:: My hon. friend next to me, in his eagerness to hear what I have to say, almost upset the water, Mr. Chairman. I have a serious proposition to put before the parliamentary secretary. I have discussed it briefly with him and he promised to respond to any submission the opposition might make with regard to it. It has to do with the proposed taxation of scholarships, fellowships and bursaries. Research grants, Canada
November 1, 1971

Council grants and similar grants will be taxable, and the cost of equipment, fees, travel, lab charges, etc., will be deductible. In commenting on this section I should like to remind the committee that at present such bursaries and scholarships are exempt from tax. The change in the legislation will mean a reduction in income, particularly for graduate students. The provinces' efforts to maintain graduate schools and to compete with attractive scholarship programs in United States universities will only be weakened. Furthermore, students will be able to obtain United States scholarships tax free. In a country like ours which is not comparatively generous with graduate students in general and with their activities, I suggest with great respect this proposal is a retrograde one. If one goes back to the Carter Commission, one learns that this commission maintained that one of the strategic sources of economic growth is a rapid improvement in the educational quality of the labour force. That is really part of the thrust or one of the many aspects of the report with which we have to deal.
The new legislation we are considering not only imposes an extra burden on young students but also on university professors who are receiving grants to conduct research that is essential to their respective fields. By taxing scholarships, fellowships and bursaries with only a $500 exemption, the minister has completely reversed the direction in which the Carter Commission said that tax reform should move. This proposed change will mean that the provinces' efforts to maintain graduate schools and to compete with attractive scholarship programs in United States universities will be seriously hamstrung. I am making this appeal to all members of this committee, no matter what their political persuasion may be, who have an interest in university and graduate school work and in the essential part that this plays in our country. Fellowships are traditionally granted to Ph.D. level graduate students who are engaged in research.
Sabbatical leave at most universities is granted at about 50 per cent of full salary. This means that through careful planning, with perhaps the addition of a research grant, a teacher may be able to move himself and his family abroad in order to consult resource material essential to his field. I suggest the government has not given sufficient consideration to the hardship its proposal will create for those academics who have planned to spend the academic year 1971-72 on sabbatical leave abroad. In other words, midway through their term-a term that has nothing to do with the enactment of this bill-there is to be a major change in taxation for recipients of bursaries and fellowships. From September to December they are not taxable; from January to the end of their year, to put it very simply, they will be taxable should this bill get the approval of Parliament.
The government plans to implement its proposals for taxation of non-residents on income from a Canadian source a couple of months hence, namely by January 1, 1972. I earnestly suggest that even if the bill cannot be changed now, or if the government does not see the merit of my comments, there should be some transitional arrangements for students who are well along in their sabbatical year or their year of research. For those who
Income Tax Act
have already made their arrangements and are now out of the country or about to leave with grants awarded from six months to a year ago, the action the government is taking will almost certainly result in their having to curtail their stay, and consequently their research, unless additional funds are made available to them. It seems to me paradoxical that a government that is anxious to promote excellence, and which has recently appointed a minister of science and technology to look into this and other elements in this field, should narrow the base, so to speak, of taxing proposals which will have a serious effect on our whole graduate student program.
It seems to me strange that the minister has made transitional periods available for such industries as mining and petroleum, as well as the transitional period for corporation income tax which has been written into the act. Just the other day we had the minister's amendments to the co-operatives and caisse populaire provisions, yet the area concerning me at the moment has apparently been disregarded. I suggest that the graduate program is of equal validity in the argument for flexibility of approach upon the part of the government. A transitional period of at least six months until July 1, 1972 would enable those teachers committed to spending this academic year pursuing research to do so. When I have finished my remarks in a minute or so I hope the parliamentary secretary will be able to state that a transitional period will also be effective for this vital element in our nation's wealth.
The most ridiculous aspect though of the new legislation is that which governs moving expenses as applied to persons undertaking a year of research work outside Canada. An individual is allowed to deduct the cost of moving his family abroad to complete a specific research project. But once the project is completed, the current legislation does not allow this individual to deduct the cost of returning his family to Canada-I am sure there is a mistake here, and if there is I shall be glad to hear the parliamentary secretary admit it-since his research project has been completed and, by law, he is allowed no further deductions. It seems that the minister is not only attempting to discourage students from completing then-education in Canada through his tax on scholarships and bursaries, but he is attempting to keep young Canadians out of their country permanently. I am sure that this cannot be the intention of the minister, despite the rather loose construction of the statute, and I shall be glad to hear that I am wrong on this issue. A man undertaking a year of research work outside the country surely is entitled to deduct the cost of taking and returning his family.
The Official Opposition suggests that this should be clearly stated, in view of the fact there is no relief provided under section 62 for moving expenses. A man is entitled to a one-way cost deduction within Canada if moving to take up new employment, and that is all. Obviously, an academic on research leave does not qualify here since he may not be "a student in full time attendance at an educational institution". The new legislation should be more specific, I suggest, and should include a provision for those on extended research leave to deduct the cost of moving their families; for example, "a scientist, a teacher or other researcher engaged in research which requires
9210

November 1, 1971
Income Tax Act
his continued absence from his normal place of residence".
Under section 56(l)(o) we encounter the problem of matching cash received in the taxation year with expenses incurred in the academic year. I suggest provision should be made in the legislation to permit the holder of a research grant to carry back expenditures in order to match expenses with revenue received in the taxation year. I presume that this is what the department will want to do, but we nevertheless feel that it should be clearly spelled out at this stage of the legislation. In the matter of short-term employment, defined as anything less than the full academic year of any institution, that is summer school, guest lectureships and so on, universities have traditionally not provided a special travel grant. The individual has been defined as having employment status within the second institution and has been ineligible to deduct these travel expenses to and from that institution. A teacher engaged in short-term employment should have the right to deduct the cost of travel to and from his employment.
I hope this point will be clarified quite quickly by the parliamentary secretary, and perhaps the other points I have raised can be cleared up so the whole philosophy, which I should think the government would support enthusiastically, that is the philosophy and importance of not hamstringing our program of graduate research, will not be modified by taxation proposals.


Mr. MacGuigan:: Mr. Chairman, I am very pleased to rise to support the persuasive words the hon. member for Fundy-Royal has just put to us. He has made a general case in respect of professors and students, and, while I would agree with everything he has said, I would add a few other considerations.
It seems to me that the problem in respect of section 56(1), paragraphs (n) and (o) is a classification problem, and is a difficult problem in the academic world itself. I do not know of any sharp distinction which is made in the academic world between concepts such as scholarships, bursaries and fellowships. Even within some universities there seems to be some confusion, and certainly as between universities it would be hard to establish a crystal clear pattern and meaning for them.
It is also important to note that the additional classification which appears in (o), that is, a grant which is to enable one to carry on research or similar work, is not really substantially different or different in kind at all from that of fellowship or scholarship money granted to graduate students across the country. Therefore, it is illogical that in one place you should be allowed more than $500 to be attributed to the expenses one incurs in the pursuit of scholarship or research work, but not in another place.
Therefore I suggest that the words "scholarship, fellowship or bursary" be deleted from paragraph (n) and inserted in paragraph (o). I do not know whether that would leave anything worth retaining in paragraph (n), although I expect that the words "prize for achievement" have a rather different meaning, so that if the parliamentary secretary were disposed to transpose these words

there could be a reason for still retaining paragraph (n). I would strongly urge on him the advisability of using the words "scholarship, fellowship or bursary" in paragraph (o). I also suggest that paragraph (o) might then read, following the words "or in similar work": "or on account of any fellowship, scholarship or bursary". Then, following the word "exceeds" I would suggest the insertion of the additional words "$500 or", which would provide two different methods of dealing with the deduction being claimed. The whole thing would then read:
(o) the amount, if any, by which any grant received by the taxpayer in the year to enable him to carry on research or any similar work or on account of any fellowship, scholarship or bursary, exceeds $500 or the aggregate of expenses incurred by him in the year for the purpose of carrying on the work-
Like the hon. member for Fundy-Royal, I should like to draw the attention of the Parliamentary Secretary to the fact that an injustice is being done to these people in relation to scholarships, fellowships and bursaries this year, or indeed on sabbatical leave during the academic year 1971-72. This year is already in progress and we are proposing, without any transitional period being allowed, to impose this as of January 1.
It may perhaps be thought that this difficulty could be avoided if the granting bodies were prepared to grant the whole of the money before the end of this calendar year. That would certainly avoid the application of the new law. Aside from the fact that universities would probably be reluctant to put themselves in the position of appearing to avoid the payment of tax on part of their faculties by paying earlier, there is also the consideration that many of the granting bodies would certainly not be in a position, for financial or administrative reasons, to advance the date on which they make the second instalment of their funds for the present academic year.
Therefore, just as we have made a transitional period for various business groups under the tax law, I would suggest it would be more than appropriate that there be a transitional period for people involved in this particular field. This is also true of professors on sabbatical leave this year. Although that point arises more properly under section 115,1 believe these people are often geographically far removed from dealing with universities and other granting bodies, and therefore unable to persuade these bodies to pay them the full amount before the end of this year, resolving their problem in that way. Many are probably abroad, and if we enact this legislation just as it is we will place them in a very difficult position this year.
I do not believe there is any great need for me to go through all the other points made by the hon. member for Fundy-Royal. I am in complete agreement with the policy statements and details he has presented. I would merely conclude by urging the parliamentary secretary and, through him, the minister, to give very serious consideration to the points which have been raised.
These young people or young professors who may be taking advantage of the opportunity of furthering their studies, and their own careers as well, by continuing their research are performing a task which is of benefit not only to them but also to the whole country, especially at this time when there are so many cries throughout the country that we should have Canadian professors teaching Canadians. That is not a cause which I thoroughly
November 1, 1971

endorse, and is much overdone from time to time, but we do want to ensure that there is a ready pool of qualified Canadians who could be university professors. We also hope that universities will hire them when their competence and qualifications are equal to those from abroad. If we do not put provisions in our tax laws to ensure this, then the universities and the academic profession in Canada will be the worse for it.


Robert Jardine McCleave: Mr. Chairman, I think I goofed when I spoke earlier about income averaging, which is really not within the group or section with which we are now dealing, so perhaps the parliamentary secretary would be kind enough to forgive me and deal with that during the next round rather than when dealing with this group.


Patrick Morgan Mahoney: Mr. Chairman, I was simply going to respond to the hon. member for Halifax-East Hants on that point by suggesting to him that the parliamentary committee wrestled at considerable length, as did the experts retained by that committee, with the whole problem of downward averaging, but no satisfactory solution to that question was found, nor are we aware of any jurisdiction in which a satisfactory answer to the question could be devised and applied. I am not so sure I would have any different or lengthy explanation when we do come to the appropriate section, so I thought I might as well get that off my chest now.
The hon. member for Halifax-East Hants also raised the question of the administrative burden, if you like, being imposed on recipients of payments from the taxpayer, which the taxpayer proposes to deduct under the child care allowance provisions of this bill. I think at first blush one must agree there is an administrative burden imposed here. I would suggest to the hon. member that the absence of provisions such as those to which he has taken exception would create something more like a barn door than a loophole in the Income Tax Act, particularly bearing in mind that payments under that section are allowed to be made to members of the immediate family of the taxpayer. I think equity among all taxpayers rather demands that, as a general principle, where a taxpayer is allowed to deduct from his taxable income some payment he has made there should be a very good reason for not ensuring that it be included in the taxable income of some other taxpayer. Certainly, I can see the administrative difficulty which would be imposed on individual taxpayers by this provision, but I am afraid I have no alternative that would satisfy what I regard to be the basic requirement of the Income Tax Act that we ensure equity between taxpayers and at the same time avoid imposing this particular burden.
The hon. member mentioned the question of the social insurance number as a matter of principle. It is my understanding that at the time that particular law was brought in the then Prime Minister of Canada gave assurance that Canadians would not be required to produce that number. However, it would appear that the undertaking by the former Prime Minister was prempted by the enactment of section 130(A) of the present Income Tax Act. I would refer the hon. member to that particular section which is reflected in section 237 of the bill before us I believe in
Income Tax Act
identical terms, although I have not compared the two verbatim. Section 130(A) was enacted in the 1966-67 session of Parliament and, as I say, would rather overrule Mr. Pearson's commitment.
The hon. member for Winnipeg North Centre has suggested, not unexpectedly, that other amendments which would increase exemptions and otherwise lighten the tax burden on our older taxpayers should be implemented with retroactive effect for the current tax year. The tax package as presented to the House in Bill C-259 involves a related grouping of exemptions, of deductions, of income inclusions of allowances and so on and it is certainly not beyond the realm of ingenuity of the government, from a legal point of view, to present it piecemeal, but the fact is that it is not the intention of the government to present it in that way.
I do not think the hon. member is entirely justified in relating these various provisions, such as the increase in exemptions to older taxpayers from $500 to $650 and the reduction of age for that from 70 to 65, to the retroactive exclusion of the guaranteed income supplement for the current tax year. As the hon. member pointed out, the anomaly of the inclusion of part of the guaranteed income supplement payment during the current year was the result of amendments relatively recently adopted by Parliament to the old age security act. Certainly, the government did not intend the result from the income tax point of view which occurred, so we are moving quickly to remove that anomaly for this year. However, I think I must regard the other amendments in Bill C-259 as being part of the over-all reform and not subject to piecemeal implementation.
The hon. member also suggested by way of a transitional period at least that the inclusion of unemployment insurance benefits in taxable income should be deferred. I noted he did not suggest that the deduction of unemployment insurance premiums from taxable income be deferred as well. I think those two items go hand in hand. I again perhaps would lump them in the same general area as the earlier discussion about the treatment of senior citizens. This is a tax reform package and there are numerous changes both in deductions, exemptions and items of accretion to wealth which should be included in taxable income.
The hon. member for Fundy-Royal and the hon. member for Windsor-Walkerville dealt with the problem of taxation in respect of scholarships, fellowships, bursaries and research grants. The hon. member for Fundy-Royal as well as the hon. member for Windsor-Walkerville have discussed this with me privately on earlier occasions, although I must say that in speaking to the hon. member for Fundy-Royal I was under the impression that the item we were talking about involved the problem of the professional on sabbatical or otherwise non-resident which really comes up under section 115 rather than under this particular block of clauses with which we are dealing. However, it is a problem of the same nature; at least, it deals with the same group of taxpayers and perhaps it would be appropriate to discuss it here. Section 56 does require that all scholarships, fellowships, bursaries and prizes for achievement in excess of the exemption of $500 be included in income. This $500 exemption is deductible
24372-24!

November 1, 1971
Income Tax Act
from the aggregate of those classes of income. That is a point which must be made clear.
It should also be pointed out that while any items of scholarship, bursary, and so on in excess of $500 must be included in income, students are still able to deduct from their total income their tutition fees and in many cases the moving expenses which are incurred as a result of moving to permit them to use the scholarship at a particular institution. They also have their personal exemption. If we take the example of a single student who reeives a scholarship or bursary, he has his $1,500 personal exemption, he has the standard $100 deduction and he has the special $500 deduction. This brings his total deduction to $2,100. Then, on top of that he has the amount if any he pays in tuition fees to the institution he is attending. I do not think in reality anyone could argue that students who are in receipt of scholarships, bursaries and so on are likely to be impoverished as a result of this decision. The decision here was made as a result of the recommendation of the Commons committee. I think we have to make a distinction. I gather from the hon. member for Windsor-Walker-ville that the institution of higher learning have not yet themselves distinguished between research grants, scholarships and bursaries.
The section regarding research grants contains provisions which basically have been in the law before and which allow a taxpayer on receiving a grant to deduct expenses that are incurred by him. I think representatives of universities and graduate schools whom I have met over the past several months have been fair in admitting that there was a bit of a tax dodge here that was being rather well used in certain quarters in respect of research grants for overseas purposes.
The anomaly, as suggested by the hon. member for Fundy-Royal, of the moving expenses being allowed to a student or other recipient of a research grant carrying on his work outside Canada when he is moving from Canda to wherever he is doing his research but not back, is based on the principle that the deduction of expenses incurred in earning a research grant must be made against the research grant itself. I would expect that if a student-if I may use that term to include not only students but many professors-goes overseas, conducts his research, exhausts the research grant and decides to stay on with his family for holidays, a pretty good question arises as to why the return fare should be a write-off against the research grant. If, on the other hand, his research grant involves work overseas and work back here in Canada to complete its use, the travelling expenses both ways would undoubtedly be allowed. So, I think there is equity in the provision before us.
The hon. member for Windsor-Walkerville raised in specific terms the problem of those who are currently on a sabbatical or otherwise out of the country. This is a genuine problem. Again, it is a problem that I have discussed with the universities and with graduate school representatives. If for no other reason they needed to know several months ago what our intentions were from their own budgeting point of view. The option is open to them to make the funds available to the student for the balance of the term of his arrangement with them before the end of

this calendar year, and if that is done then of course it will not be taxed as provided in the current act. Other than that there are, I am sure, throughout the whole act, through any major change in the income tax legislation, a number of places where persons may be caused some inconvenience and where indeed they incur some cost as a result of major revisions to the income tax laws. Transitional provisions, such as the hon. member for Fundy-Royal noted, have been afforded to many of our industries, to the co-operatives and credit unions most recently by amendments tabled here. But the point of transitional provisions is to relieve some relatively long term problems that may arise as a result of the new provisions, and certainly not to relieve situations which will resolve themselves in a matter of months, as is the case here.
1 think that deals with all of the questions. I am sorry that my response could not have been more favourable, but if I have missed anything, I am sure hon. members will call it to my attention.


Mark R. MacGuigan: May I just say a further word on this subject, Mr. Chairman. It seems to me that in his discussion regarding moving expenses the parliamentary secretary has been somewhat unfair. It may be, of course, that there are some professors who combine their work with a subsequent European holiday, but this is surely not the rule. I do not know whether it happens as often as it does not, but I think a provision could be written into the act which could take that into account. If it was half play and half work, that would be a different situation from the situation of someone who goes to Europe purely for research purposes and returns here having accomplished his research.


Patrick Morgan Mahoney: I suppose I will have to ask the hon. member whether he took his wife and family purely for research purposes, because this is the problem we have in these areas. I do not blame a man, from the point of view of his own family life, wanting to take his family with him when he goes away for that long a trip, but much of the travelling expense that is incurred in these cases would in ordinary circumstances be regarded as personal and not incurred for earning an income.


Mark R. MacGuigan: May I ask the parliamentary secretary whether, if the person did not take his family with him, he could then claim expenses both ways.


Patrick Morgan Mahoney: The Income Tax Act does not envisage in ordinary circumstances, and subject to the special problems mentioned by the hon. member for Moose Jaw, the deduction from taxable income of personal living expenses.


Mr. Knowles (Norfolk-Haldimand):: I would like to say a few words on section 60 and that portion of subsection (e) dealing with exemptions for university students registered at a recognized college or university here in Canada. Many times in the House I have urged that no income tax should be levied on the earnings of students who are willing to finance their own university education. Perhaps this plea has fallen on deaf ears and I have a suggestion to make to the parliamentary secretary. Under subsection
(e), which deals with tuition fees, the student is granted the privilege of deducting from his taxable income the
November 1, 1971

amount of tuition fees, so perhaps we should give him some other basic deductions here.
In some other sections, certain arbitrary amounts are set which the taxpayer may deduct for specific purposes. Perhaps it would be difficult to set an arbitrary amount to help finance the cost of living away from home, such as residence fees, the cost of textbooks and so on. I wonder what the parliamentary secretary would say to doubling the basic exemption for a single person who is forced to live away from home to obtain his education. All members of the House are continually being asked for assistance by students endeavouring to obtain student loans. It seems to me that doubling their basic exemption while they are registered at a recognized university or college might be a means of doing away with a student loan, the means test that goes with it, and all the administrative detail as well as the disappointment in not getting it. It seems to me that to double the basic exemption of a single person, as I suggested, would make it unnecessary for a student to apply for a student loan. In addition, the summer earnings that he makes would, in a large measure, be his own.
Perhaps this would be one way of assisting our young people to obtain a college education. There may be other ways. The parliamentary secretary may have a better way of assisting these people, but I suggest this off the top of my head as one way of doing it, that is to increase the basic exemption. If doubling it would be too much, we could put in some other figure. I think it is rather contradictory for the government, on the one hand, to provide student loans and, on the other hand, to force these same students to pay income tax on the earnings they have made to finance their education away from home. I think we want to look at another way of doing it, and it could be found by increasing exemptions as I have suggested.


Stanley Howard Knowles: I should like to respond briefly to a couple of the comments the parliamentary secretary made a few minutes ago. He seemed to feel that it was difficult to adjust the income tax package in such a way as to provide for the exemption of the $650. for senior citizens to be made retroactive to January 1, 1971. I am grateful to him for having pointed out to me earlier how the bill deals with the matter of making the guaranteed income supplement not taxable for this year. It is simply a matter of section 71 at page 702 being written into the bill. The changed wording is spelled out and subsection (2) reads:
This section is applicable to the 1971 taxation year.
In other words, what it amounts to is that when the government wants to make a change retroactive rather than in the current year, it seems to have no difficulty in doing it. I continue to express my regret that this change has not been made so that when senior citizens are computing their income tax for the year 1971 they will get the benefit of it. As it stands, they will have to wait until they are computing their income tax for 1972, away off in April, 1973. A lot can happen between now and then.
The other subject which I raised on which the parliamentary secretary was generous enough to make comment was unemployment insurance. The ease with which
Income Tax Act
my friend can brush aside these complaints is something to behold. I know there is income tax deductibility for the few cents that people pay into the unemployment insurance account as opposed to the tax that they have to pay on their benefits. It is almost a one horse-one rabbit situation. Apart from that, I regret to say that the parliamentary secretary seemed to miss my point altogether. I was not arguing the rights or wrongs of permanent basis. What I was pointing out was the the sudden change-over on June 27 has produced many anomalies under which people are getting less than they thought they were going to get, despite all the unemployment insurance commission's advertisements that this new act is such a wonderful deal. I suggest that because these anomalies are having this effect it might be reasonable to request that they be softened by not applying income tax to unemployment insurance benefits for at least a year. I am sorry that the parliamentary secretary misunderstood my point.


The Assistant Deputy Chairman:: Is the committee ready for the question? The hon. member for Lambton-Kent.


Mr. McCutcheon:: Mr. Chairman, while we are on section 56, I should like to direct a simple question to the parliamentary secretary and I think it will only take him a moment to reply. Section 56(C)(ii) mentions retiring allowance. If this is a little honorarium received by an employee on retirement, generally a couple of hundred dollars, that is fine but is there a provision whereby executives are able to take advantage of this retiring allowance in order to receive a fat bonus from their employer? May I ask the parliamentary secretary if there is a ceiling on the amount covered by this item?


Patrick Morgan Mahoney: Mr. Chairman, I do not quite understand the purport of the hon. member's question. This is not an exclusion or an exemption from income; this is an amount which must be included when computing income for the taxation year. The retiring allowance must be included in income.
I should point out that the option is there, and as we mentioned when discussing the comment made by the hon. member for Halifax-East Hants earlier, if the lump sum is very large the taxpayer may opt to purchase an annuity. This would effectively spread the taxation over the period that the annuity was payable rather than it having to be paid in the taxation year the lump sum was received. But the amount is taxable; it is not an exclusion, it is not a loophole or break for anybody.


Maclyn (Mac) Thomas McCutcheon: I am pleased to have an explanation from the parliamentary secretary. However, the section says, "but not including" and then goes on, so it is a classic example of how confusing this bill is to people who are not as skilled as the parliamentary secretary. I shall have to take his word for it.


Stanley Howard Knowles: Mr. Chairman, I wonder if the hon. member would like to note that he is perfectly right about the confusion of this bill. But would he also like to note that the phrase which starts with "but not including" is part of paragraph (i) which began on the previous page and ends with line 14 on page 129. Then, we pick up (ii) which is "a retiring allowance" and (iii) which

November 1, 1971
Income Tax Act
is "a death benefit. . and so on. In other words, the paragraph that says "but not including" is just a qualification of (i) but does not qualify (ii) and (iii). Have I made it worse?	^


Maclyn (Mac) Thomas McCutcheon: No, indeed, Mr. Chairman. I thank the hon. member for Winnipeg North Centre for his words of explanation. However, I think I am a reasonably ordinary Canadian with a modest amount of intelligence, and if I cannot understand it a lot of people on Main Street are not going to understand it either.


Stanley Howard Knowles: Don't be so modest!


Gérald Laniel: Is the committee ready for the question? The hon. member for Lambton-Kent.


Maclyn (Mac) Thomas McCutcheon: Mr. Chairman, may I ask the parliamentary secretary another question. On page 131, paragraph (j) reads:
amounts that the taxpayer became entitled to receive in the year upon the disposition of an interest in a life insurance policy, to the extent provided by section 148;
At page 408, section 148 (1) (a) reads:
in respect of any life insurance policy other than an annuity contract, the amount, if any, by which the proceeds of the disposition of an interest in the policy that he became entitled to receive in the year exceeds the adjusted cost basis of the policy to the policyholder as of the time of the disposition;
That is not so terribly confusing but paragraph (b) reads:
in respect of any life insurance policy (other than a policy that is a registered retirement savings plan or that is or is issued pursuant to a registered pension fund or plan)-
This is the point that I am a little concerned about, and maybe I shall have to call again on the hon. member for Winnipeg North Centre:
-all or any part of the insurer's reserves for which vary in amount depending upon the fair market value of a specified group of assets (in this section referred to as a "segregated fund"), such portion of any amount allocated to the policyholder in the year under the policy as was allocated out of gross revenue of the insurer from the segregated fund, other than gross revenue that is a dividend (other than a taxable dividend) received by the insurer on a share of the capital stock of any corporation.
What happens to the policy holder of a mutual company?


Patrick Morgan Mahoney: If any amount is allocated to his credit as a result of the policy he holds in the mutual company, I do not think there is any distinction in this particular case between a mutual company and a shareholder owned company. This refers to amounts that are credited to the policy account of a policyholder and, of course, excludes payments made in respect of a policy that is used to implement a registered retirement savings plan, pension fund, and so on. This is simply an accretion of his assets as a result of the holding of his insurance policy. I admit that this is complicated terminology because of the desire to exclude the retirement savings plan and others like it. I just do not know whether I can explain it any better. This is the amount which becomes the property of the taxpayer

during the taxation year as a result of his owning that insurance policy, and it is therefore included in his income.


Maclyn (Mac) Thomas McCutcheon: I thank the parliamentary secretary. What is the segregated fund? I notice that is mentioned here. According to my experience, there is a reserve fund or a reserve with respect to an insurance policy. There is also the dividend that is declared with respect to participating policies. Many people have said that the dividend is merely the refund of an overcharge on the premium. Frankly, this provision is completely confusing. I do not know who understands it. Certainly, I do not.


Patrick Morgan Mahoney: Mr. Chairman, the taxation of insurance companies is a rather specialized subject at best, and I am sure I will be more prepared to deal with it when we come to section 148, although, as the hon. member notes, this subject is brought in, by reference, here.
I am advised that the segregated fund referred to in subparagraph (b) is a very special sort of arrangement. Not all insurance companies have entered into that arrangement. Some do not have segregated funds. The fund may be referred to in this manner: an insurance company may issue a special class of policy with respect to which it sets up a particular reserve that applies to that class of policy but not to all policies which would be in the general reserve. I am afraid I am not able to answer the hon. member's question in a more satisfactory way. The general rule as to what credits to his account or to his policy account the taxpayer has to add to his income is covered in subparagraphs (a) and (b) and relates to exceptional circumstances.


Marcel Joseph Aimé Lambert: Mr. Chairman, my remarks will be related to life insurance policy proceeds. As my colleague for Lambton-Kent has indicated and as the parliamentary secretary has indicated, this taxation of insurance companies and insurance policies is a new area of taxation and there is a great deal that is hidden. The side note by section 148 merely says, "Subsection 79D(1) modified". That word "modified" is the interesting word. Certainly, there is a considerable spreading out into the field of insurance here. I am wondering what the government's philosophy is in moving in here. Is it doing its best to try to take every dollar it can get and to discourage every form of saving that is made in this country? Canadians as such have a reputation for being strong savers via life insurance. Why the government feels, and I am speaking particularly of this administration, that big brother knows best, I do not know. This administration wants to get every blessed dollar it can and to discourage saving by individuals through life insurance which, in itself, is one of the best sources of domestic investment in this country.
Look at, shall we say, the proportion of Canadians who invest in life insurance and then at the performance of the life insurance companies in investing in Canada; and yet here we are, moving in on people who do not have large incomes and who are not in any privileged position. There is hardly a household today in this country, unless it is a very improvident one, that does not hold some form of life insurance, be it only of some limited kind. It may be only burial insurance. There is some degree of life insurance in almost every household. Yet here we are, as I say, moving
November 1, 1971

in, digging, digging and digging deeper to dissipate and break up the attractiveness of life insurance. And for what purpose? Because big brother government says it wants the money and can spend it better. This is the^ very fundamental philosophy of a government that says, "We need the money and therefore must find it". I say they tax up to their expenditures. I have been saying this for years and years, and that applies particularly to this administration. This process started under the previous administration. They tax right up to their expenditures-


Patrick Morgan Mahoney: On a point of order, Mr. Chairman.


Marcel Joseph Aimé Lambert: -and they always want more money.


Mr. Aiken:: The parliamentary secretary ought to let the hon. member finish his sentence.


Patrick Morgan Mahoney: Mr. Chairman, this is a very eloquent speech. Yet I do not think the hon. member ought to leave the impression that these provisions are new in the amending tax bill. These provisions have been carried forward from the existing Income Tax Act. May I remind the hon. member that subsection 56(l)(f) which the hon. member referred to when originally opening this question is similar to a provision presently in the act. The clause which he is excoriating at the present moment is subsection 79(D) of the present Income Tax Act. So, while the philosophy is good and the speech is great, we are really not talking about changes in the income tax law.


Marcel Joseph Aimé Lambert: Mr. Chairman, that is the type of intervention that comes from the parliamentary secretary. The wording opposite section 148 is, "Subsection 79D(1) modified." If the word "modified" means nothing, take it out. We have seen many areas in which a tax might be modified. There are many things which might slip in under a modification. For instance, you could double a tax as a result of a modification. As I was saying, this administration is moving further and further into the area of taxation of life insurance proceeds and life insurance companies. Surely to goodness it is germane to the thrust of the argument to say what I have said. If the parliamentary secretary wants to say something or argue a point, let him not rise on a point of order, because section 56(j) refers to section 148, and I am talking about section 148. There is no way one can raise a point of order with regard to relevancy of taxation of life insurance proceeds by trying to say this just carries forward an old section of the act. The explanatory note says this is a modification. If the parliamentary secretary wants to embark on how thin his knowledge is, let him indicate precisely in language that can be understood by members how the modification works and how this language is explained. Then, we will agree with him. Let us not take anyone to task about it.


Patrick Morgan Mahoney: Mr. Chairman, in response to-


Marcel Joseph Aimé Lambert: That is all right. I have the floor.


Gérald Laniel: Order.


Patrick Morgan Mahoney: I rise on a point of order, Mr. Chairman. The hon. member has invited a comment. When we are
Income Tax Act
dealing in committee with section 148, I will be very pleased to give detailed answers. However, that section is not among the block of sections before us at the present time.


Gérald Laniel: Order. I doubt whether that is a point of order. The hon. member for Edmonton West has the floor. He should be allowed to continue his remarks.


Marcel Joseph Aimé Lambert: If I have to read the words into the record in order to clarify this point, I will do so. Section 56(l)(j) reads:
Amounts that the taxpayer became entitled to receive in the year upon the disposition of an interest in a life insurance policy, to the extent provided by section 148;
No one is going to ask this committee to pass section 56(l)(j) without a reference to section 148. If we did, when we comment on section 148, we would be faced with the argument that it, had already been approved in principle. I do not normally like to be cranky, but this type of intervention does not help the situation one bit. In any event, I made my point. We are moving further and further into the savings of Canadians by these further extensions of taxation of life insurance. If it started to creep in or earlier budgets, there is nothing wrong with commenting on it today. We must cry "halt" to this sort of thing.
I now wish to move beyond section 56 and again make reference to the child care expenses in section 63. If the parliamentary secretary has already made a reference to this, it will be sufficient. I do not know whether he has had an opportunity of discussing with the minister the proposition I put to him the other day about the limitation of age 21 of a relative to whom a payment may not be made. Many provinces have now adopted age 18 for the adult. It seems ludicrous to exclude from this new proposal persons between the ages of 18 and 21.
In addition, persons age 18 earning $600 a year or more from employment are obligated to pay into the Canada Pension Plan. This is one of those types of operations where contributions may have to be made to the Canada Pension Plan by the employer. At today's rates, it certainly does not take much for a full time child care attendant to earn $600 per annum. I do not know of any householder who can get full care for a child or children for less than $50 a month. If that is the case, the parent who hires the child attendant will have to make a contribution to the Canada Pension Plan, and it is necessary to make such a contribution to the Canada Pension Plan for a person between the ages of 18 and 21. Under the Income Tax Act, for certain relatives between the ages of 18 to 21, as proposed in this bill, a working mother will be disentitled to child care allowance because of the reference in this provision to age 21. If he has not already done so, I urge the parliamentary secretary to discuss this matter with the minister to see if we can bring about a little bit of normalcy or uniformity between the Canada Pension Plan requirement and that part of the Income Tax Act relating to child care allowance.
In addition, we will want to say something when section 74 is before the committee and the related questions with regard to the wife as an employee of her spouse's business. I merely want to mention this again. It is highly inequitable for the wife of a country town doctor or den-

November 1, 1971
Income Tax Act
tist who must act as a nurse-receptionist in the small clinic where her husband and associates work to be precluded from obtaining the child care allowance, although she, has to go into the clinic in order to utilize her skills or it may be required that she work. It may be said by some that this is not necessary for professionals. What about young professionals trying to establish themselves in a rural town? Such professionals do not earn that much money in the early stages.
It is often necessary for the wife of the doctor or dentist to act as receptionist or nurse. The act disallows her to be classified as a separate wage earner. It disallows her the working mother's entitlement under the amendment to the act. This may be even more important in the case of someone who works for a partnership in which her husband is involved, particularly a non-professional business. If people feel professionals earn enough to get along, that is one way of looking at it. However, I know of many instances of carpenters, plasterers, electricians and others where the wife of a partner or possibly the wives of two partners have to work in the business in order to make a go of it. Under the proposed section 63 of the act, they are disentitled. This is wrong. There is thus a discrimination that should not exist.
It is always very interesting when the general public decides the government has done something popular. In this case, the government is alleged to be allowing working mothers to claim child care expenses. However, if you look at the fine print, you will see that the limitations are rather severe. The wording certainly curtails the scope of this provision of the act. Many people feel that they might qualify, but they will be absolutely astounded when they read all the qualifications. I do not know just how much good this will do.
The other matter I want to deal with is moving expenses. I do not know what can of worms this is likely to open or how many regulations will have to be brought in so as to eliminate abuse. Just how far will taxpayers have to go in order to justify their claim that a move results from a change in employment? Suppose it were a technological change? Some of our larger companies keep several operations going within such cities as Toronto and Montreal and staff are often transferred from one plant to another. Or consider some of our major department stores. In my own city of Edmonton, Woodwards, for instance, have a branch near the northern limits of the city, almost on the border of my constituency. They also have a store about nine miles away as the crow flies, in the southern part of the city. Staff are transferred between one store and the other. It could happen that a member of the staff was promoted, say, from assistant buyer to buyer on condition that he move to the other store. If he lived close to his original place of employment he might well decide that he could not put up with going back and forth across the city to work. So he would sell his home and buy another, or rent an apartment much closer to his new place of work. It is nonsense to insist that a man ought to spend an hour or an hour and a half every day travelling to work and back.
But would the cost of moving be deductible in such a case? Or will the regulations insist that in order to qualify

people must move a distance of at least 25 miles? What are the basic requirements to be? This is what we must consider. Are we thinking in terms only of new work, a new job, a fresh start with a new employer? I know there was a good deal of discussion on this point during the committee hearings. Our conclusions were indefinite. It was a subject which seemed to open up, as I say, a can of worms. I hope the parliamentary secretary will tell us precisely what is intended to be done by way of regulations. The wording here reads:
Where a taxpayer has at any time ceased to carry on business or to be employed at the location or locations, as the case may be, in Canada, at which he ordinarily so carried on business or was so employed . .. and commenced to carry on a business or to be employed at another location in Canada-
A man who works in the northern end of Toronto, let us say, could be transferred to new employment, or find new employment in the southern part of the city, 20 or 30 miles away. Why should he not be able to claim moving expenses providing they are not paid for by the employer? These are some of the questions I wish to raise. If the parliamentary secretary has answers, we shall understand the bill a little better than we do at present. And we shall see where we go from there.


William Gordon Ritchie: I should like to speak on clause 61, Mr. Chairman. I am particularly interested in the forward income averaging proposal. To begin, I should like to refer to the minutes of the Senate Banking Committee dated September 29, 1971, at page 3512. Mr. Stephen Smith, a witness before the committee, stated:
The more interesting one, really, is what is usually termed forward averaging. That is the provision in clause 61 which will be of most help to taxpayers who have a very high income in one year. Clause 61 permits the taxpayer to spread his income by taking any amount of his income and buying an income averaging annuity from an institution. He is given a deduction for the premium he pays for the annuity under certain limitations.
Speaking of the way in which the method would function, Mr. Smith said:
The annuity can be issued by any company authorized to carry on that business ... It must be issued for a single lump-sum premium . .. The annuity must be for life and with or without a guaranteed term, which cannot exceed 15 years.
While this might appear to be beneficial at first sight, I submit it has considerable drawbacks. I believe, also, that it is likely to have considerable repercussions upon the Canadian economy. Those who take advantage of this provision must buy an annuity which will pay a fixed amount for the balance of the years during which they live. Funds are tied up indefinitely in this annuity. This may not be a bad idea for persons approaching years of retirement. People aged between 50 and 65 might well wish to take advantage of it. But consider its effect on those of younger years, the restrictions it would impose on those who wish to change their positions, or businesses, who might wish to sell their property and expand their interests, and who need money with which to do it. It seems to me we could devise other types of forward averaging in connection with the so-called voluntary recovery appreciation which did not require taxpayers to put money into an annuity from which they could only draw a fixed amount each year.
It is often said that Canadians are great savers and investors in enterprises which carry no risk, but that they
November 1, 1971

are not good risk-takers and do not sufficiently support entrepreneurs. I would point out that those who are licensed to provide annuities are extremely restricted when it comes to the nature of the stocks and securities in which they can invest. The bulk of their investment is in government bonds and similar securities, so by means of this provision the government is in effect ensuring itself of a lending pool from which it will be in a position to draw funds. I question whether or not this provision is advantageous to the economy as a whole. I think we might well have to provide for alternative forward-averaging whereby the taxpayer would settle his accounts with the government, but within a shorter time than having to take an annuity that would span his whole lifetime. This provision might well affect significantly the pattern of borrowing and investment in Canada. If I am mistaken that the taxpayer must take an annuity for life at a set amount per year, then I shall be glad to hear the parliamentary secretary say so; but as I read the provision this is the only form of forward-averaging available and really locks in an individual for his lifetime. If someone is only 30 or 35, this may not be all that advantageous to the economy as a whole.


Patrick Morgan Mahoney: Mr. Chairman, I believe the hon. member for Dauphin has misunderstood the provisions of this section. May I refer him to the definition of "incomeaveraging annuity contract" which appears at page 148 of the bill and is subsection (4) of section 61. This provision states that such an annuity may indeed be a life annuity, as the hon. member has pointed out, but subparagraph (B) also states it may be an annuity to the individual for a guaranteed term. So, the annuity can be of either type. If an individual chooses to average a lump sum payment over an eight or ten-year period, then he would buy an eight or ten-year endowment annuity. He also has the option, of course, to purchase a life annuity.
While I am on my feet, might I refer to the point raised by the hon. member for Edmonton West? I see he has left the chamber, but since so many points have been raised I should like to mention this one before I forget it. The distance that a person has to move to get moving expenses is 25 miles. The distance is not governed by whether one moves from one community to another. In many of our cities such a distance could be traversed within the boundaries of the metropolitan area.


William Gordon Ritchie: Mr. Chairman, may I ask the parliamentary secretary whether there is a minimum time within which this forward-averaging annuity can be brought forward?


Patrick Morgan Mahoney: I do not think there is a minimum time. If someone had a $50,000 payment and wanted to split it $25,000-$25,000, he could take a two-year annuity. But a taxpayer's own circumstances would dictate the option that he chose.


Mr. Skoberg:: Mr. Chairman, this point has possibly been answered but it relates to section 56. Reference is made on page 129 to a retiring allowance, and I should like the parliamentary secretary to explain whether or not severance pay is included in this provision. There has been considerable anxiety about this on the part of many
Income Tax Act
people working in factories which close down and severance pay has either been negotiated or agreed upon, or in some way allowed. I wonder whether this provision relates in any way to severance pay.


Patrick Morgan Mahoney: Mr. Chairman, ordinarily severance pay is regarded as income under the Income Tax Act, and as such should be included in the computation of income. I am aware that in certain cases special regulations or legislation have been passed, but under the general income tax law this is regarded as income from an employment and is therefore included as taxable income in the year in which it was received. Again, of course, this is subject to the option of forward-averaging which we have just been discussing.


John Leroy Skoberg: Mr. Chairman, I am sure members of the committee are all aware of the problems that may arise with severance pay. When a refinery closes down, any workers who receive severance pay are confronted with the fact that they cannot receive unemployment insurance since this pay is shown as earnings. The whole purpose of severance pay is to give people time to relocate themselves in some other part of Canada. This is a question that has received a lot of attention, particularly during the last two or three years.
According to section 62, which we discussed in this committee last week, in the event that a worker is told by Manpower to apply for a mobility grant for moving expenses, where would he apply? We have all heard of cases of people who have tried to obtain mobility grants under the manpower legislation, and section 62 does give consideration to relocation, moving expenses and so on. Would the parliamentary secretary elaborate on these two areas that are covered by section 62?


Gérald Laniel: Shall section 56 carry?


Some hon. Members:: Carried.


John Leroy Skoberg: Mr. Chairman, I wonder whether the parliamentary secretary would just clarify that point. That was the purpose of asking the question.


Patrick Morgan Mahoney: Mr. Chairman, I am not really in a position to discuss in detail Manpower mobility grants. If the hon. member can point to a section of Bill C-259 which brings them into income, then I will agree with him that these are taxable. If he can point to a section that excludes them from income, then I will agree they are excluded. But I am not entirely clear just what sort of comment the hon. member is expecting from me at this point.


John Leroy Skoberg: Mr. Chairman, I cannot point to a section in this large volume before us. The only point I want to clarify is where the average taxpayer looks for assistance if he wants to relocate himself in some other part of the country. To which piece of government legislation does he look? Does he look to Manpower mobility grants or to section 62? When this question is placed on my desk, I like to be able to answer it. Invariably, of course, I have to telephone a department of government to find out who looks after what. This is the only point I want to clarify at this time.

November 1, 1971
Income Tax Act


Patrick Morgan Mahoney: Mr. Chairman, I think it would be fair to describe this bill generally as an extractive statute. If the hon. member's constituent is desirous of obtaining a grant, he will have to look elsewhere than the Minister of National Revenue.


Gérald Laniel: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The hon. member for Lanark-Ren-frew-Carleton (Mr. McBride)-Atomic energy-Basis for loan to rehabilitate Glace Bay heavy water plant; the hon. member for Saskatoon-Biggar (Mr. Gleave)-Manpower- Reasons for exclusion of reserve Indians from labour force survey-Inclusion in local initiatives program.


Mr. Howe:: Mr. Chairman, on October 14 the Minister of Finance brought in a lot of "mini-budgets" which announced new programs designed to combat the tremendous amount of unemployment expected in Canada during the forthcoming winter. I should like to ask the parliamentary secretary whether there is any involvement of the $25 million program set up for on-the-job training in this legislation we are discussing. Will there be amendments or changes to cover the travelling expenses of those people involved in apprenticeships or on-the-job training which is being initiated? The people who will want to participate should know where they stand and how this will affect their incomes, travelling allowances and things of this nature.


Patrick Morgan Mahoney: The Minister of Manpower and Immigration is in the chamber and the hon. member might like to discuss manpower retraining programs privately with him. I can only say that under section 56(l)(m) of the bill there is a clear indication that moneys paid under that type of plan would be taxable income. That is the extent to which sections 56, 57, 58, 60 and 63 of Bill C-259 allude to the particular matters the hon. member has raised.


William Marvin Howe: It is my understanding that this is a new program being initiated and I am sure those people involved would like to have a clear definition as to how they stand under section 56(l)(m) in respect of income from this new training program. Perhaps the minister in charge of these programs could elucidate a little more on what is to happen to these people and whether they will be involved under this new tax bill.


Patrick Morgan Mahoney: Mr. Chairman, I do not want to appear obtuse, but I did think there was some general disposition to be relevant at this point. I seriously suggest that any discussion of manpower retraining programs at this particular time would not be relevant to the sections under consideration. I am sure the information the hon. member seeks could be obtained privately from the minister who is in the chamber at the moment. We have amendments to the Income Tax Act before us. The provisions in section 56(l)(m) provide that there shall be included in income amounts received by the taxpayer in the year as or on account of an adult training allowance paid to him under the Adult Occupational Training Act. That is about as far

as this particular bill goes in dealing with the subject the hon. member has raised. While I would not for a moment denigrate the remarks he has raised, and indeed I might be much happier discussing them than the bill before us, they are not germane to the present bill.


William Marvin Howe: I feel they are germane to this particular bill because this is a new program announced on October 14, and these income tax matters will certainly have something to do with the incomes of certain individuals in Canada. While we are dealing with this matter a clearer explanation should be given as to what will happen to these people.


John Leroy Skoberg: Mr. Chairman, I might agree with the parliamentary secretary that we are not considering things which come under other departments, but if he will refer to page 131 he will see that adult training allowances under the Adult Occupational Training Act are mentioned in this bill. Perhaps the analogy is not good, but the people of Canada are getting a little fed up with the number of departments of government in which there is no continuity. In this field of retraining we have manpower, labour and now income tax involved. We are trying to find out where these people should go to obtain the assistance to which they are entitled.
The parliamentary secretary suggests we are dealing with income tax matters this afternoon, but included in the bill are some things we want explained. We have a minister in charge of Manpower and Immigration, and perhaps he could give the explanation, but this matter of the Income Tax Act involves manpower mobility grants. These people involved in manpower mobility will be affected by these amendments and they are entitled to find out what they will mean. The parliamentary secretary would naturally suggest they should not go to the Minister of National Revenue or the Minister of Finance for that type of assistance, but perhaps he should indicate the department to which they should go. In all seriousness, I think this is a matter which should be explained to the people in order that they will know whether they are entitled to consideration under the Income Tax Act.
It is my feeling there are too many departments overlapping, all trying to build their own empires. No one in Canada seems to know where he is going or how to get there. Somewhere along the line there should be some continuity of purpose, so the taxpayer who is paying the shot will know which way to go and when.


Mr. Godin:: Mr. Chairman, we could say that they are trying to play a trick on us, since the bill under consideration is against the small wage earner. Indeed, taxes throughout the world have always been paid by the rich or the lucky ones but under section 56, the poor would also be taxed. In my opinion, nobody now is in a worse position than the many unemployed Canadians and I wish to object to that clause, Mr. Chairman. However, before resuming my seat, I would like to ask the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney) if his experts know how many persons will be affected by the new legislation and what amount the government expects to collect through it?
November 1, 1971


Alfred Pullen Gleave: Mr. Speaker, reference is made to bursaries at page 131 of the bill. Do I take it that a person in receipt of a bursary or scholarship is to be taxed to the extent that the value of it exceeds $500?


Patrick Morgan Mahoney: A person in receipt of a scholarship or bursary would be entitled to an extra $500 exemption over and above his personal exemption. The maximum would be either $500 or the actual amount of the scholarship or bursary obtained, if it happened to be less.


Alfred Pullen Gleave: It seems to me there is a conflict of aims or objectives. Obviously, the purpose of governments granting scholarships is to allow students who are non-earners to pursue their studies. If a student is an earner, the government would not be giving any bursary or scholarship. We give bursaries and scholarships at various levels of government in order that people in non-earning positions can continue to study and carry out research. I do not follow the logic of providing that a scholarship will not be taxed up to a value of $500, but only on the rest. A student could not pursue a course of study or hope to accomplish some objective in six to eight months on $500. If the exemption were set at a level which would permit a student to spend a year on his project, then it might make some sense.
It seems to me that this section treats the bursary as income and, therefore, assumes that the bursary is an earning. But it is not really. A bursary should not be regarded as an earning; it should be regarded as a grant given to a student to pursue some research which, in most cases, the provincial or federal government regards as a desirable objective. Or course, some students get grants from private sources, but if it is the opinion of the government that amounts from private sources are excessive, then this might be a reason for seeking to tax part of it in the hands of the private sources. If they think the amounts from government sources are excessive, then the obvious thing to do is to cut down the size of the grant from the government. But to tax above the first $500 of bursaries which are given to students to pursue studies and research does not add up.


Patrick Morgan Mahoney: First, I must apologize to the hon. member for Portneuf for not answering his question immediately. I had to get the figures here. I have no idea of the number of individual taxpayers who might be involved. However, in terms of dollars, an estimate appears in the summary of the tax reform legislation, and I would refer the hon. member to page 64 of the English version. I hope it is the same page in the French version. I refer to the table entitled "Revenue Effect of Personal Income Tax Changes in the First Year of the New System". On the basis of the 1972 incomes, it is anticipated that the inclusion in income of unemployment insurance benefits would result in revenues of $130 million, while the deduction of unemployment insurance premiums paid by employees would result in revenue deductions of $100 million. So, the net figure is an estimated revenue gain of $30 million.
Income Tax Act
So far as the question of the hon. member for Sas-katoon-Biggar is concerned, I did answer it at some length earlier this afternoon when the hon. member was unable to be with us. I shall simply say briefly that the thing to remember here is that this is an additional exemption over and above the $1,500 exemption, over and above the $100 standard deduction, and of course in addition to that students are entitled to deduct from their taxable income the amount of tuition that they paid to an institution. So, leaving aside the tuition completely, no student in receipt of a $500 or more scholarship or bursary would pay tax until his income reaches the amount of $2,100 a year. The $500 is not the level at which students start to be taxed, but it is an additional exemption over and above that which they otherwise have.
I would also take some exception to the hon. member's generalization that scholarships and bursaries are necessarily paid on account of need. Indeed, many are, perhaps most are, but certainly not all, and I think that is a fact to remember. I really feel that most students should not feel hard done by, by having to start to pay income tax at the level of $2,100 net after payment of their tuition fees for the year.


Robert Jardine McCleave: Mr. Chairman, perhaps I should shed some light on the argument that was started by the hon. member for Fundy Royal and which has been followed by others, winding up with the statement we just heard concerning the taxation of scholarships and the like. Having been a member of the committee, I may say that it was our feeling that if you added that to the basic exemption you probably got something that did cover tuition and residence fees of universities. I think that was the reason for it. Even so, I think a number of us did feel that perhaps we should not be so meticulous about bringing every dollar that moved in Canada within the clutches of the tax collector. We felt that there may be good reason for saying that students should have some kind of preferential treatment because we knew that later on, as the major taxpayers in Canada, from the preferred positions in the professions and with preferred income, they would be shouldering a substantial part of our income tax load. Anyway, I think the parliamentary secretary would probably agree with me that after the $500 which was arrived at, adding that to the basic exemption, you get $2,000, and we felt that generally this should be good enough at least to cover the university fees.
I should now like to go to another point, if I may. However, if anyone wants to follow up that line, I would be glad to yield my place for the time being.
Earlier today I made an objection to a story which appeared in the Mail-Star of Halifax on Saturday afternoon written by Dan Turner of the Canadian Press. I do not withdraw a word of the objection that I made to Mr. Turner's report as it was edited and as it appeared in that newspaper. However, he has shown me a report that he had apparently done earlier for the Canadian Press which I thought was eminently fair and which did represent what actually took place on Friday afternoon. I only wish the gentleman had carried that type of reporting forward into the next day. So, I have done him half an injustice, not a complete injustice, and he has done us a half injustice and not complete justice.

November 1, 1971
Income Tax Act
The point about which I wish to talk goes back to the day care or child care centres. First, I should like to ask the parliamentary secretary whether there are any other provisions in this legislation which would promote day care or child care centres in Canada. Are there any other provisions which would make it worthwhile for industry in particular, because we are dealing with people putting themselves in a tax exempt position or being entitled to write off certain deductions, or for government departments for that matter to provide day care centres?


Patrick Morgan Mahoney: I am not aware of any, Mr. Chairman.


Robert Jardine McCleave: I would like to put in a plug for the consideration of such. I think that perhaps we are taking the wrong approach and that we are really trying to tax the pin money of people rather than getting to grips with a pretty big problem. I am pretty sure that when the hon. member for Vancouver-Kingsway gets after all of us tonight on this question of day care and child care centres we will learn much more than I could possibly say now. But I should like to put on record the remarks of the Leader of the Opposition when he spoke on March 16, 1970 at a dinner in Sault Ste Marie, Ontario:
The government could offer incentive for companies to provide day care facilities on their premises. It could act as an example itself by setting up day care centres for its employees.
I think these remarks commend themselves. We are at the dawn of something that is very important.
My other point relates to the particular matter which I raised, namely the mama and papa position, that is the people who run the corner grocery stores or small businesses across Canada. Some of the provisions in the Income Tax Act simply do not give them tax relief. After I left the House on that particular evening, one of my colleagues mentioned a husband and wife who ran a garage under such circumstances-I guess you could call it a mama and papa garage. The wife brought their five children, under the age of six, who were placed in a room in the back part of the garage. They survived, I guess, as best they could through the day while mama attended to the books and so on and while papa attended to the job of dispensing the gasoline, grease, oil and so on.
p:m.)
This is similar to the situation I mentioned the other day where, because the business is not incorporated, such people do not get relief under the provisions of this act. If the business were incorporated I believe section 74 of the act would take effect and there would be no presumption that the woman was earning a separate income on her own. Therefore, obviously, if one looks at page 151 she could not qualify as having an income for a taxation year. I suggest this is one of the technical things which have been overlooked or is something which has been missed. I would hope, since this is part of the story, the parliamentary secretary might indicate that there will be some relief in this direction before we conclude our consideration of the Income Tax Act.


Patrick Morgan Mahoney: Mr. Chairman, the hon. member of course raised this during the discussion on section 109 and section 110. This perhaps is the other side of the coin. Now we have a situation where those in wedlock apparently

have been penalized under the Income Tax Act, while those who choose to go unchurched may have some small benefit accruing to them. The problem has been considered. I believe we would admit in honesty that there are many ways in which marriage imposes a genuine hardship. However, the administrative problems of dealing with payments from husband to wife or from wife to husband as the case may be, where such payments result in a reduction of the over-all tax burden on that particular family, are formidable. Frankly, we have not come up with a solution to the problem that would satisfy the government in trying to achieve the balance of equity principle in the government's dealings with taxpayers and equity among taxpayers themselves to make sure we do not afford any particular group or class of taxpayer an undue opportunity for tax avoidance. If hon. members can come up with any good suggestions that would achieve both these objectives we would certainly be pleased to hear them.


Robert Jardine McCleave: Mr. Chairman, since he frankly granted that the problem does exist, I should like to ask the parliamentary secretary if anybody will be burning the midnight oil over the next few days in an effort to see if something can be done. I know many of us can raise problems but perhaps we do not have sufficient time during the day to come up with exact answers. Granted that the problem exists, is anybody trying to cure it?


Patrick Morgan Mahoney: I am advised that the tax people in the Department of Finance have been burning the midnight oil over this particular problem for many years and are still burning it. I am not saying that the solution will manifest itself in the two or three days left to us to deal with this particular area of the bill.


Stanley Howard Knowles: Maybe they should try it in broad daylight.


John Gilbert: Mr. Chairman, as you know, I have tried without success to persuade the government to exercise its moral and social conscience with regard to raising the exemptions of single individuals and married couples. I have also tried, without success, to change the government's view in respect of allowances for travelling expenses. I shall again try in my very humble way to persuade it to make certain changes in respect of other sections. I would direct the attention of the parliamentary secretary to page 129, of the bill which covers the question of alimony. If I read the section correctly, payments of alimony which have been made pursuant to either a court order or a separation agreement are not taxable income. A question arises in respect of a husband who pays moneys for the support of his wife and children and, because he does not have a court order or a legal separation agreement, cannot claim these moneys for income tax purposes. When I read this section I see the government is still sticking to the principle that there must be either a separation agreement or a court order before this amount is allowed as a deduction to the husband.
I would have thought from experience, and from the representations made by the various groups, the government might have yielded a certain amount and permitted as an exemption that payment by the husband to the wife for the support of herself and the children, even though
November 1, 1971

there is an absence of a court order or a separation agreement. We should keep in mind that in many of these instances where there is absence of either a court order or a separation agreement, the parties are motivated by one of two things. It may be that, because of religious principles, the wife is not motivated to move either for a separation agreement or a court order, or it may be that the husband is hoping for a reconciliation. However, why should he be penalized because, although he is assuming his family responsibilities and is making payments to his wife, he does not have a court order or a separation agreement. This strikes me as being unfair and inequitable. That is the first point I should like the Parliamentary Secretary to explain.
The second point is set forth on page 132 of the bill and is captioned "indirect payments". It reads:
A payment or transfer of property made pursuant to the direction of, or with the concurrence of, a taxpayer to some other person for the benefit of the taxpayer or as a benefit that the taxpayer desired to have conferred on the other person shall be included in computing the taxpayer's income to the extent that it would be if the payment or transfer had been made to him.
Quite frankly, I am not too sure what that means. Perhaps I might give an example. Suppose a husband and wife were separated and the husband was making a nominal payment to the wife but also held with the wife the mortgage on another property. Let us say the mortgage is in the amount of $10,000. As a result of some complaining by the wife that the amount he is paying to her is not sufficient he is persuaded, as a matter of moral social conscience, to transfer his portion of a mortgage to her which he had held jointly with his wife. Would this mean that the $5,000 in respect of the mortgage becomes taxable in the hands of the wife? If it does, there is something unfair about this provision. I may be misinterpreting this section, Mr. Chairman, and if so I would like the parliamentary secretary's assistance.


Patrick Morgan Mahoney: Mr. Chairman, the hon. member for Broadview was in his seat when I responded to the hon. member for Halifax-East Hants on the problem of the reduction of total income to the family unit as a result of payments to one spouse by the other. Without going over that ground again, surely the hon. member will appreciate the problem raised in connection with alimony or maintenance payments by one spouse to the other in the absence of a court order or separation agreement. Some criteria have to be established in order to ensure that such payments are in fact made for the purpose claimed rather than simply as a device to avoid or reduce taxation.
The example which the hon. member cited in his discussion of section 56 (2) might be responded to in the same way. The payments covered by that section do not necessarily limit themselves to gifts as between husband and wife. The section is identical to present section 16 (1) of the Income Tax Act and its purport is to provide that amounts due to the taxpayer do not cease to be his income merely because he directs that they be paid to someone else. Other circumstances may enter into the transaction which would justify his suggesting that this should no longer be his income but that of the person to whom it has been assigned. However, the mere fact of assigning it does not relieve him of the liability for taxation on it.
Income Tax Act


Robert Jardine McCleave: Mr. Chairman, I would ask the parliamentary secretary a question prompted by the question of my friend the hon. member for Broadview. The case is covered where there is a judicial decree or a legal separation drawn up in a law office and signed by both parties and witnessed. I do not see why it would be out of order if you had a simple written statement made by both parties to the effect that a sum of money had been paid during a taxation year for the support of one of the parties and the children residing with that party. This would not really be a written agreement of separation but simply an acknowledgement signed by both parties that one had paid and the other had received. Has that idea been scouted as a feasible way of tackling the problem?
Some people will not go to the expense of getting a divorce. I guess I got myself in trouble the other day by making a plea on behalf of some of them. Some people would go to a lawyer's office although they would not go near a divorce court. They are willing to try and regularize their legal liabilities. Some people prefer a simple way of doing things, just a sort of acknowledgement system. Has this ever been discussed?


Patrick Morgan Mahoney: The section simply provides for a divorce, a judicial separation or a written separation agreement. There is no suggestion in the section of the degree of formality required in the written separation agreement. I think any agreement in writing that did effect a separation and that the parties did in fact substantiate should, if the question were asked, satisfy the Minister of National Revenue. This is a question of interpretation, which I would be glad to present to the Department of National Revenue for an answer. I should again point out that the jurisprudence should be ample here because this section is identical to one in the existing act.


Mr.   De Bane@: I .should like to put a question to the parliamentary secretary. Do I understand from his remarks that the amount paid by the husband to his wife pursuant to the judgment of a tribunal is deductible from his taxable income?


Patrick Morgan Mahoney: That is correct. Of course, it is income in the hands of the party who receives it.


John Gilbert: Mr. Chairman, I should like further enlightenment because I was not satisfied with the answers given by the parliamentary secretary concerning the payment of alimony. We find that democracy has its limitations even though democracy depends on persuasion. It seems that no matter how much you attempt to persuade the government, it falls on deaf ears. It is rather unfortunate that we have run into this low state of democracy.
The other night I said, with all the strength of Horatio when he defended the bridge that fell, that I hoped some hon. members on the other side would come to the defence of some of the cases we have raised and would speak up and speak out in an attempt to persuade the government. This has not been done, and it is most unfortunate.
I direct my question to another provision which is very relevant, that with regard to the allowance of $500 for a child. I have direct knowledge of this problem, and when I read the section which allows $500 it makes me feel ill. As

November 1, 1971
Income Tax Act
an example, there is the problem of a couple I know who have a retarded child. The expenses incurred necessitate that both husband and wife work to make sufficient income to take care of that child and one other. I have been told that they pay $60 a week to a woman who comes in at eight o'clock in the morning, leaves around five o'clock in the afternoon and takes care of the retarded child during the day.
The parents feel that she is underpaid. But $60 a week for 50 weeks amounts to $3,000. It is absolutely necessary that they both work in order to meet the mortgage and other payments incurred in running their household.
As I read this section, it means they will be allowed $500 each year for the $3,000 they pay for the care of this child. There is something morally wrong with this situation, Mr. Chairman. If the government were the least bit conscientious, socially and morally, they would do something about it.
It would be quite easy for the parents to put their retarded child in one of the provincial institutions, but they do not want to do that because they love the child. As the years go by, the attachment of the child to the parents becomes stronger and makes it much more difficult to place the child in an institution. I hope the government is not so callous as to disregard the expenses of a couple who are trying to meet their family responsibilities.
The miserable $500 allowed in circumstances like these is unworthy of any government. The example I have cited could be repeated many times across the country. The parliamentary secretary who used to be the government whip is listening to me attentively. He is a lawyer by profession and I am sure has heard problems like these stated many times.


Stanley Howard Knowles: I do not think he is a lawyer.


John Gilbert: He must have heard of cases of parents accepting their responsibilities for retarded children, keeping the children at home and bringing a person in to look after them during the day. Surely these parents ought to be shown special consideration. What has the Parliamentary Secretary to the Minister of Finance to say about that, Mr. Chairman?


Patrick Morgan Mahoney: Mr. Chairman, I appreciate the vigour with which the hon. member has presented his case and with which he is carrying out his assignment. I will cooperate with him as best I can to make sure we get at least to six o'clock before running out of steam on this section of the debate. However, I do not propose to repeat the remarks made during the debate on sections 109 and 110. The debate lasted for several days and dealt at considerable length with the improved tax treatment of parents of disabled or handicapped children. If the hon. member requires the page references in Hansard, I will be glad to send them over.
He is quite correct in his observation that under this section the limit of deduction for such a child would be $500. However, I think that you cannot, in the circumstances to which he alluded, deal only with this section;

one also should refer to the various deductions that are permitted under section 110.


Mr. Saltsman:: Mr. Chairman, I wonder if the parliamentary secretary would clarify his reference to section 110. I regret that I have not had time to look up those references. He suggested some additional assistance is given under section 110. Could he elaborate on that briefly?


Patrick Morgan Mahoney: I think that would be carrying co-operation from this side a little too far. That section was debated at length and adopted and I suspect the work of the committee might be unduly retarded if we went back and discussed sections we have already adopted. There are 333 sections in this bill and I believe we have now passed six of them. I would much prefer dealing with the sections before the committee now instead of reiterating at considerable length that which has happened.


Max Saltsman: Mr. Chairman, I could have obtained my answer in a shorter time than it took the parliamentary secretary to deliver his little lecture to the committee. However, I think the suggestion of the hon. member for Broadview is very good. We all know of cases where a disabled child has been an enormous burden to its family. There has been enormous hardship, particularly in cases where the family has opted to look after the child instead of placing it in an institution. Sometimes the child is disabled and not necessarily retarded. I ask the parliamentary secretary to consider making the full limit available in special cases involving mentally retarded or physically disabled children. The suggestion makes a great deal of sense.
If the parents of a disabled child could be given that kind of exemption and thereby could look after the child and relieve the public of the heavy expenses of maintaining the child in an institution, everybody would be further ahead. Society generally would be further ahead and the child would adequately be taken care of. We have heard of the many horrors existing in institutions which are not equipped to handle these problems. Often a child's disability calls for a person-to-person attachment. We ought to do as much as we can to encourage families to look after their disabled children.
I am not moving an amendment, for two reasons. One, it might very well be out of order and, two, I want to persuade the government, through the parliamentary secretary, to bring in a substantial improvement in this field. The $500 deduction with regard to services for a child who is being looked after in the home is an improvement over existing legislation. We acknowledge that. However, I do not think it would cost the treasury too much if we were to go the whole way, recognize the special case of disabled people and include in this legislation a provision which recognizes their case.
The government has brought in many amendments. Surely they could bring in another one covering this type of case. Perhaps this section could be stood for a little while to enable the parliamentary secretary to consult the minister and government advisers with a view to improving the bill.


Stanley Howard Knowles: Mr. Chairman, the suggestion just made by the hon. member for Water-
November 1, 1971

loo relates to proposed section 63.1 refer to the suggestion that the section stand. This is also the section on which the hon. member for Vancouver-Kingsway wishes to speak. May I inform the parliamentary secretary that the hon. lady is now in Ottawa; therefore we have not waited for her in vain. I wonder if we have reached the point where all that is left for consideration in this group is further discussion of proposed section 63, and whether sections 56, 57, 58, 60, 61 and 62 could not be called. I have in mind particularly the fact that to sections 57, 58, 60 and 61 there are amendments by the Minister of National Revenue which are not as clear to me as are some parts of this bill.


John Gilbert: Mr. Chairman, you know the old saying, whom the gods would destroy they first make mad.


Robert Jardine McCleave: They make them parliamentary
secretaries.


John Gilbert: The more I read the 707 pages of this bill, the more mad I become. I become mad in the sense that my moral indignation is aroused, and not in the sense that my sanity is affected. Many might say, "Thank goodness for that." When the parliamentary secretary suggested that we on this side were doing a pretty fair job in keeping debate going until six o'clock, I was hurt. For that suggestion to come after my speech of persuasion, the suggestion being that I was carrying the ball so to speak until six o'clock, hurt me, Mr. Chairman.


An hon. Member:: You were not listening to Stanley.


John Gilbert: That hurt me. I hope some members of the government party will be persuaded by my argument to rise in their place and support my suggestion.


An hon. Member:: Six o'clock.


John Gilbert: I think that many government supporters are men of good conscience.


An hon. Member:: Name one.


John Gilbert: They have experience of these things. No doubt they are familiar with cases of parents of retarded children accepting their responsibilities and maintaining the child at home instead of putting it in an institution, thereby increasing very heavily their financial expenditures. The Parliamentary Secretary to the Minister of Justice is a man who appreciates legal problems as well as problems such as I have enunciated. I hope he will speak in favour of my suggestion.
/
I wish the hon. member for Windsor-Walkerville, who deals with constitutional matters in the legal sense, would deal with constitutional matters in the physical and mental sense. In the final analysis they are far more important than the constitutional aspect. The hon. member has done a tremendous job as chairman of our committee. If he would deal with some of the social problems in life rather than the legal problems, he would go down in history. The law is dead unless it is infused with life, and life in itself relates to the social problems that we have. I wish I were very persuasive. I wish I were Ciceronian with regard to my conviction. I wish I had the flare-
Income Tax Act


Mark R. MacGuigan: Would the hon. member permit a question? Would the hon. member distinguish so sharply between law and society if he took into account all the sociological notions of law that most legal scholars, including myself, hold?


John Gilbert: I find this question difficult to answer, Mr. Chairman. One of the problems is that I am so close to my constituents that I appreciate their problems. I did not understand what the hon. member was trying to say.
During the past weekend there was a conference in Ottawa on poverty and the law. From what I hear, it was absolute chaos. The conference was weighted with lawyers. The poor people, those who have all the problems, were restricted with regard to expressing their ideas. The result was chaos. I will come right back to the point.


Russell Clayton Honey: Order. I appreciate that the hon. member will come right back to the point. He is skilled in doing that. I will recognize the hon. member immediately. However, I want to draw to the attention of the committee that the hon. member for Winnipeg North Centre suggested a concrete and useful way in which we could spend the remaining five minutes before six o'clock. Having made that observation, I do not want to deprive the hon. member for Broadview of his time.


Patrick Morgan Mahoney: Mr. Chairman, I regret, for my own sake and perhaps for the sake of the hon. member for Broadview, that I did not get the floor before. I think the hon. member for Winnipeg North Centre made a very practical suggestion. However, I was caught in the eloquence of the hon. member for Broadview: I think transfixed is a better word. If the suggestion made is agreeable to members opposite, I think we can dispose of the matter in that way and immediately call it six o'clock.


Robert Jardine McCleave: That is agreeable to us, Mr. Chairman.


Stanley Howard Knowles: My suggestion is that we call section 56. It can be disposed of, and then we can call 57 and the amendment, and so on. It is understood that we do not go beyond section 62.


Some hon. Members:: Agreed.


Russell Clayton Honey: If that is agreed, the Chair will proceed to put the question to the committee. Shall section 56 carry?


Some hon. Members:: Agreed.
Clause 1, section 56, agreed to.


Russell Clayton Honey: There is an amendment to section 57. This appears at page 8939 of Hansard for October 22. It is quite detailed. Shall the amendment carry?


Stanley Howard Knowles: Will the parliamentary secretary explain it?


Patrick Morgan Mahoney: Mr. Chairman, this amendment is entirely to the French version of section 57. It changes the wording used to refer to a superannuation fund or plan to bring it into conformity with the terminology used elsewhere in the bill in the French version.
Amendment (Mr. Benson) agreed to.
Clause 1, section 57, as amended, agreed to.

November 1, 1971
Income Tax Act


Russell Clayton Honey: There is an amendment to section 58. This appears at page 8939 of Hansard for October 22. Again, it apparently deals with the French version only. Hon. members have had the opportunity to read it.


Stanley Howard Knowles: Is the explanation the same?


Patrick Morgan Mahoney: Yes.
Amendment (Mr. Benson) agreed to.
Clause 1, section 58, as amended, agreed to.


Russell Clayton Honey: Shall section 59 carry?


Some hon. Members:: No.


Stanley Howard Knowles: Section 59 is not before the committee.


Russell Clayton Honey: I beg the pardon of the committee. We then move to section 60. There is an amendment to section 60. This also appears at page 8939 of Hansard for October 22.


Stanley Howard Knowles: Perhaps we should have an explanation of this. It is more than linguistic.


Patrick Morgan Mahoney: Mr. Chairman, the first amendment to section 60 is the amendment to the French version only. Again, it only changes the wording used to describe the registered retirement savings fund or plan to conform with the wording in other parts of the bill. The amendment to section 60, paragraph (j), is a correction to amend the cross-reference from section 146(6) to read 146(5). Finally, the amendment to section 60(n) is an amendment to delete the reference to the old age supplement. This is as a result of the decision to make the old age supplement deductible in computing taxable income. Accordingly, it is not necessary to provide for a deduction of those amounts.
Amendment (Mr. Benson) agreed to.
Clause 1, section 60, as amended, agreed to.


Russell Clayton Honey: We now proceed to section 61. There is one amendment which appears at page 8939 of Hansard and over on to the next page.


Stanley Howard Knowles: Explain.


Patrick Morgan Mahoney: Mr. Chairman, this amendment refers to section 61(2)(a). It is a change of wording in the French version to conform with the terminology used when dealing with superannuation plans or funds in other parts of the bill. The other amendment adds a new paragraph (g) to section 61(2) at page 147. The subsection to be amended describes items of income which may be used to purchase an income averaging annuity. The new paragraph (g) to be added to this amendment will provide for all or part of a prize for achievement in excess of $500. The excess $500 can be deducted. It can be averaged over a number of years by purchasing an income averaging annuity. It recognizes that a prize or achievement may be of substantial amount. If all of such a prize were taxed in one year it might be subject to a high rate of tax. That would be undesirable.


Stanley Howard Knowles: In the printing of this amendment at the top of page 8940 of Hansard there appears the phrase "/500". Is that just a typographical error? Should it read "$500"?


Patrick Morgan Mahoney: Yes, Mr. Chairman, the wording in the last line should read "exceeds $500".
Amendment (Mr. Benson) agreed to.
Clause 1, section 61, as amended, agreed to.


Russell Clayton Honey: The hon. member for Winnipeg North Centre has drawn to the attention of the committee a typographical error. This has been confirmed by the parliamentary secretary and I take it there is an order of the committee that an amendment be made accordingly.


Some hon. Members:: Agreed.


Russell Clayton Honey: Shall section 62 carry?
Clause 1, section 62, agreed to.


Stanley Howard Knowles: Six o'clock.


Russell Clayton Honey: 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: Shall section 62 carry?


Patrick Morgan Mahoney: Mr. Chairman, I understand that section 62 carried before six o'clock and that section 63 is the one we are now dealing with.


Gérald Laniel: Order, please. The reason I called section 62 was that it was not clear that the section had been carried. The hon. member for Winnipeg North Centre called it six o'clock and it was not clear whether it had been carried. If it was carried at six o'clock, then shall section 63 carry?
On clause 1-section 63: Child care expenses.


Mrs. Maclnnis:: Mr. Chairman, I am very glad to have an opportunity of saying something on section 63 because this is a very definite, though small, breakthrough in a very important area, that of child care. I believe this is the first recognition by Parliament that has been given to the need for providing care for the children of working parents and I want to express my appreciation to the government for establishing this beachhead, as it were, in this particular area. I do not think, however, that this is a very big breakthrough, and I shall go on to say why. This is one of the gaping holes that exists in our social security system in this country. I am glad to see that a beginning is being made to plug this hole, though I think much more will have to be done to plug it thoroughly.
As I understand it, this section provides for a deduction of $500 for each child of working parents up to a maximum of four children, which is $2,000, or for two-thirds

November 1, 1971

of the parents' earned income, whichever is the lesser. At the outset I should like to put a question to the parliamentary secretary and he can either answer it now or make a note of it. I should like to know whether this deduction is applied to the total income of both husband and wife if both are working, or is it applied only to the lesser of the two incomes, be the lesser income that of the husband or the wife? Certainly this is not clear as the provision is now drafted.
We have to face the fact that conditions today are such that only a small number of working parents can afford to care for their children while they are away working. This may seem a startling statement to make, but as far back as 1965 when I was doing some door to door campaigning I was amazed at the large number of children who were out on the loose after school, with the front door of their houses locked or with a latch key around their necks and whose parent or parents were away working. This is far from the state of affairs that a good many of us think exists today that is, parents looking after their children at all times during the day. Many people think that if parents are away working, relatives care for the children. But we have now moved almost imperceptibly to the point where there is no one to care for so many of these children, be they relatives or neighbours, unless special arrangements are made.
For a long time many people were worried that there was no federal provision-or any other kind of provision for that matter-to plug the gap that was left when the mother or father, or both, were working away from home during the daytime. To substantiate my statement that only a minority of working parents can afford to take care of their children while they are away, I should like to cite some figures. Admittedly, these are not 1971 figures but they are the latest I could obtain. They were compiled by the women's bureau of the Department of Labour.
According to these figures, in 1966 the median annual earnings of working mothers were $1,783-that is, working mothers with husbands-and $2,856 for widowed, separated and divorced mothers. This last category embraced 10 per cent of the mothers in the working force. I think the figures prove the point I am making, namely, that on these salaries or wages working mothers simply cannot afford to look after their children by paying others to care for them adequately.
The women's bureau also said that 29 per cent of families of working mothers where the husband was present had a combined annual income of less than $6,000 in 1966, and the average combined income for a two-parent family was $7,302. One might suggest that since 1966 wages and salaries have gone up. That is true, but I want to point out that the cost of living has also gone up enormously since that time and that the situation has become even more aggravated.
Proof of what I am saying lies in the fact that when the Royal Commission on the Status of Women was hearing representations and visiting many parts of Canada this was the problem expressed above all others, that is, the urgent need for child care for parents working outside the home, particularly for working mothers. That royal cornincome Tax Act
mission was impressed with the urgency of this matter. I should like to point out the need from another angle.
Again using information supplied by the women's bureau of the Department of Labour, a survey was conducted in April of 1967 which showed there were 540,000 mothers of children under 14 years of age in the labour force. One working mother in every five had children under 14 years of age. This involved more than one million children. The other day I asked the women's bureau to make an estimate of the current figures and they came out with the following: as of July 24 this year, instead of 540,000 mothers in the labour force with children under 14 they estimated there were 678,000 working mothers with children under 14. Almost 20 per cent of the mothers in the labour force have children under 14 years of age.
This is a very serious situation, one which shows that the time is long overdue to help working mothers with child care arrangements. The problem is growing and it is divided into a number of categories. The after school problem is very serious. When we complain about vandalism, juvenile delinquency and all that sort of thing we must realize that a great deal of it is the result of lack of proper and adequate arrangements for children coming home after school when the mother is out working. This would also apply in respect of a father of a single-parent family.
This summer I attended a conference in Ottawa on child care. It was attended by representatives from across Canada. At that time I realized this problem is growing worse by leaps and bounds in every province. I also attended a single-parent conference recently in the city of Ottawa and discovered that in a great many families the father is the only parent to care for the children. This adds to the difficulties.
The problem is most acute and urgent in respect of children under school age. In 1967 there were 357,000 children under six years of age whose mothers were in the labour force, yet less than 3,000 of them had been placed in day nurseries or centres. The need today is much greater and is growing fast. The Royal Commission on the Status of Women said there should be 450,000 places in child care centres provided in the immediate future.
For a few minutes let me refer to the element of cost of child care facilities. Under this income tax bill a deduction of $500 is being allowed per child, up to four children, or a total of $2,000. One hon. member from Toronto indicated the other day that this figure fell far below the actual cost of child care today. I have discussed this cost with child care people and have come to the conclusion that $500 is a very unrealistic figure in relation to the actual cost of child care.
The $500 deduction works out to $10 per five-day week in a 50-week year, or $2 per day. I should like to know if any member of this House knows where you can get child care for $2 a day. If I did know I would be hustling around to get the minimum wage people working on the situation. This is a very low figure which the government is providing. The amount of $2 per day for child care is pretty mean and also represents a violation of the federal minimum wage laws.
The actual minimum for which child care can be provided is $15 per week. This works out to an annual figure

November 1, 1971
Income Tax Act
of $750. There are very few child care centres where you can obtain child care for $750 a year. The actual minimum market figure begins at $20 a week, or $1,000 a year. That is exactly twice the figure provided for child care in this legislation. It would be a very good idea for the government and the Parliamentary Secretary to have another look at this figure. The Canadian Conference on Child Care this summer suggested that even $1,000 per year was a minimum starting figure and that the actual market price was considerably higher.
Let me suggest also that this problem is far too big to leave to private arrangements. I may have to come back to this matter a little later because I see I have just about exhausted my time on the first round, so I will confine myself at this stage to private arrangements. I think the government is thinking in terms of parents making their own child care arrangements with individual baby sitters. That is a very unrealistic situation. Even if the exemption were raised to $1,000, which is far more realistic, this situation would not be good enough.
We have reached a stage when we must consider child care as we consider education. Years ago education was left to parents who had the means to hire private tutors or send their children to private schools. Only the well-to-do could afford that. There were tutors and private schools available for them, but we came to the conclusion in Canada many years ago that this system was not good enough for the people of this country. I think the government will have to go much further than even $1,000 a child. This is a realistic starting figure; it should be at least $1,000 per child per year instead of $500. The government, however, will have to go much further than that. I will leave the matter at this point and return to it later.


Roderick J. (Rod) Thomson: Mr. Chairman, before making a speech I should like to ask a question of the parliamentary secretary. How did the government arrive at the figure of $500 in respect of this exemption? It might be interesting to know how it was arrived at. Is it a ball-park figure, or what?


Patrick Morgan Mahoney: Mr. Chairman, as one unnamed colleague here just mentioned, that is a mysterious process. The process by which these figures are arrived at involves a combination of things that are fed into an assessment of what the revenue impact may be and what objectives one would like to achieve in making changes to the Income Tax Act.
In this particular case the estimated revenue reduction as a result of the child care allowance we are talking about is $50 million a year. In all these figures such as rates, exemptions or any other deduction which may be limited by a top figure, for example, the employment expense allowance, we try to strike a balance between the government's revenue requirements and what we would like to do both politically and equitably for the taxpaying public.


Roderick J. (Rod) Thomson: Mr. Chairman, I should like to make a few comments on this provision. I do not profess to be an authority in this area such as is the hon. member for Vancouver-Kingsway. However, I have spoken to individuals who have had to deal with the problem. I was
(Mrs. MacInnis.J
a little surprised to find out what is being paid to baby sitters these days. It seems to me that the "grandmother figure" who looked after children as I knew the situation does not work for peanuts any more but works for union wages.
One even hears about people putting children through college by looking after someone's youngsters. I was horrified to hear the charges made for looking after children. I suppose this might be fairly natural for a bachelor because he is not accustomed to paying these costs. If one were in the position of being a single parent it would seem to me it would be almost cheaper to get married. Seriously, it seems to me we should consider a larger exemption for people who have to contend with this problem. We already find that within new apartment complexes day care centres are being established. With this type of exemption such centres may be more widespread.
When both parents work they have the problem of providing care for their children. It is logical that some arrangement should be made for the children quite apart from the convenience to the parents. In this connection I am very interested in the welfare of the children. If a single parent should be involved, or if both parents are involved because they must work for economic reasons, I think the child has a claim on society for a proper upbringing. I am quite concerned when I hear of people who are unable to provide an adequate standard of living for their children. In some cases the solution to this problem may mean the provision of baby sitters or day care centres. I think we should consider an increase in the $500 exemption because of the problems which people have.


Marcel Joseph Aimé Lambert: Mr. Chairman, there is one point I wish to raise. I am going to strike out for male liberty in respect of this provision. Many people have been talking about single parents and there has been a suggestion that it is always the mothers of children who are involved. This act does not provide for the father at all except if he should be separated from his wife pursuant to a written separation agreement. This is repeated time and time again in the act. A man can qualify for the child care allowance for his children only if he is no longer married, second, if he is living separate and apart from his wife pursuant to a written agreement or, third, if the wife is certified by a qualified medical practitioner to be a person who by reason of mental or physical infirmity is confined for a period of not less than two weeks to an institution.


Donald MacInnis: How about widowers?


Marcel Joseph Aimé Lambert: The widower is not specifically provided for, nor is the man whose wife decides she wants to play in greener pastures and has left him with children. We know this happens. Perhaps it does not happen quite as often as the case of a husband deserting, but there are many instances in which the wife deserts and leaves the children with the husband.
It seems to me the separation of these parties should be wider than pursuant to a written agreement. The widower, of course, is covered by the provision that he is not married since under these provisions he is not considered to be married. I must say there are many instances in which the wife has deserted the husband and has left the children with him. He would be in no position to negotiate
November 1, 1971

an agreement, nor would there be a compelling reason to do so.
Perhaps a court order should be included. Suppose the parties were separated merely by means of a court order: say, for instance, that the family court decides for the benefit of the children or for other reasons that the husband shall live separate and apart from the wife. If the children are in the custody of the husband, surely to goodness he should be entitled to receive the child care allowance. One provision which might be abused is the deduction referred to in section 63 (l)(b) (iii)(A) where the wife may be confined to bed, there is a certificate that she is so confined for a period of two weeks, and there is need for child care. I think something could be worked out under that provision.
I ask the parliamentary secretary why the benefit is restricted to the taxpayer who is the father of children and who is separated pursuant to a written agreement. I know there might be opportunities for the parties to decide to live apart in order to see if they can get some edge. But surely to goodness where it is proved that the wife has decamped, or where a court has ordered the parties to live apart with the husband having the care and custody of the children that should be sufficient for him to qualify for the child care allowance.


Donald MacInnis: Mr. Chairman, there are three questions that I would like to ask the parliamentary secretary at this point. The first concerns the matter of receipts. What will be the position of full-time university students who work during the summer to earn money to cover university fees and who require day care for their children during the university year? Under the act will they be recognized as parents working in the home?
The next question is, what will be the position with respect to receipts which must be submitted as validation for claims, first in the case of established day care centres? What will be the process for validating these organizations? The second case is with respect to parent co-operatives. What legal entity exists in a parent co-operative, because they would be issuing receipts to themselves?
Having said this I should like to deal with the matter of the receipts. This matter has been one of the more thorny issues among the people with whom I have discussed the question. There is the point of view that it is a pretty good thing to issue receipts because in this way some kind of standard is established. This is why I want to find out from the parliamentary secretary what the validation process will be and generally what the criteria for these receipts will be. It seems to me that if there is child care and receipts are issued for it some kind of standard should be required in connection with the child care. A very dubious benefit will be conferred on the child if we do not have some criteria in this respect.
Another point which I wish to raise is that a number of low income people with whom I have talked would like, to look after children and get paid for doing so under this income tax deduction provision, but they are afraid that if they do so this would interfere with their social assistance and, as a result, their social assistance might be cut.
Income Tax Act
Therefore I took the trouble to contact the Canada Assistance Plan people in the National Health and Welfare department and found out that if you are fortunate enough to live in some provinces you may receive $500 for looking after someone else's children without social assistance being reduced. The provinces wherein one's social assistance would not be reduced are Ontario, Quebec, Newfoundland, Nova Scotia and British Columbia. Nova Scotia is close to the line but it would probably be on the right side of it. In the other provinces social assistance would be affected before you could get $500 for looking after children. This is something which the parliamentary secretary should consider. He should find out whether there is some way in which this matter could be handled by his department in co-operation with the social assistance authorities, because it is a real problem for people on social assistance who want to become engaged in child care work.
There is another point which I should like to mention. When payments are made to people for child care there should be some obligation regarding the quality of child care. I do not know whether the parliamentary secretary would like to answer all those questions at this stage, but I would like to pursue the matter of eligibility and criteria if he would answer them.


Patrick Morgan Mahoney: The question which the hon. member for Vancouver-Kingsway asked first in her first presentation was whether child care allowance was applicable to the total income of the family. The answer is no. As to whether it is applicable to the lower of the two incomes, again the answer is not necessarily, although in practice that would be the usual case.
Section 63 makes it very clear that if the lady in the house is earning an income she is automatically qualified to claim this, but the man in the house has to pass a number of tests in order to be able to claim it, as was alluded to by the hon. member for Edmonton West. Either they are separated or he is not married and is supporting children for one reason or another, being a widower or divorced, or his wife is separated from him pursuant to a written agreement, or his wife is mentally or physically incapacited for a period of time during the year which would permit him to claim this allowance under section 63.
In passing I might refer to the comments of the hon. member for Edmonton West and note that of course in this particular area in almost every circumstance that I could conceive which the hon. member mentioned, the taxpayer would be entitled to claim a full, married exemption on behalf of a dependant other than his wife if the circumstance which he described existed. I would like to look at his comments to see if by any chance we have provided a situation where a man could not claim either the child care deduction or the married exemption on behalf of a dependant other than his wife. However, I do not believe that that situation exists. I think he is entitled to one or the other in those circumstances.


Marcel Joseph Aimé Lambert: What if he puts the children in a boarding school and avails himself of the provisions governing the placing of children in a boarding school, with its limitations? He would be denied that?

November 1, 1971
Income Tax Act


Patrick Morgan Mahoney: I do not think so. Assuming that his wife is not claimed as a dependant, one way or another he would be able to claim the equivalent of a married exemption in respect of one of the children. He would be able to claim the child care allowance up to $15 a week for the boarding school and up to the limit of $500 per child and $2,000 for the family. This is the sort of thing that I would like to pursue with the hon. member over a cup of coffee, when we could get down to the particular section in the bill in some detail. But I believe I am correct in my interpretation.
The questions raised by the hon. member for Vancouv-er-Kingsway in her last presentation regard, first, the university student. The answer is yes, the university student can claim this exemption provided he can say that the child care payments were made for purposes of earning income and not simply for purposes of freeing the parent to attend university.
The exemption during the year is related to the earning of income and I would think that in many cases the working university student, one who works during the off season, would find that he or she could in fact claim at least a good part of this $500 exemption during the period that he or she is earning income. The allowance is not there specifically to allow the university student or any other student to claim the exemption so that he can attend the institution of his choice. It is related to the earning of income.
On the matter of day care services, there is no special restriction on this as far as the co-ops or anything else is concerned. Someone must issue a receipt; that is the whole situation. There should not be any problem about a parent co-op if it is bona fide and if it issues a receipt.
Earlier today we discussed the problem which arises when we propose to allow people to make a deduction from their taxable income in respect of payments made to people living under their own roof, to people within the family unit. In equity to the general body of taxpayers it is felt that some provision should be made to circumscribe and formalize the arrangement whereby a taxpayer can reduce his taxable income by making payments to another person in the family. As the hon. member can appreciate, these payments can be made to other members of the household provided that person is not entitled to be claimed as an exemption by the taxpayer claiming the child care allowance.
Undoubtedly there will be some administrative inconvenience for the taxpayers concerned, but we hope that the benefit of the general allowance, which will be a matter of an additional $50 million left in the hands of the taxpayers for the coming year based on the 1972 income, will outweigh any administrative inconvenience.


Robert Jardine McCleave: Mr. Chairman, the parliamentary secretary mentioned administrative inconvenience. That raised an important question in my mind which I shall pose as briefly as I can. What sort of thrust is there for change in our income tax law within the Department of Finance and also the Department of National Revenue which perhaps has the more immediate responsibility for administering the law?
I ask this question because as we get into a whole new system of reforms it is possible that we may create as many injustices as existed under the old system against which the hon. member for Vancouver-Kingsway and others fought for so long. Earlier today the parliamentary secretary said that people were burning the midnight oil in order to try and solve the problems. Perhaps the problem I chose was an unfortunate one because it has been around for years and has not yet been solved.
We have passed a good many reforms today and I hope that somewhere we get credit for that. I wonder if the parliamentary secretary could tell us how the process of reform works within the administration. Perhaps if we understood that we would feel better about saying "adopte".


Patrick Morgan Mahoney: Mr. Chairman, as a private Member of Parliament I suppose that from time to time I feel as strongly as does the hon. member about the frustrations encountered when making representations to the Department of National Revenue on behalf of constituents whose cases seem transparently equitable at first blush. I must agree that we are into a period where the Department of National Revenue will be called upon to deal with a number of new situations. There are under this bill many new concepts being created for which there is no jurisprudence and no backlog of judicial or administrative decisions for guidance.
Speaking for the minister of the department that establishes tax policy, as opposed to that which administers the tax law, I can only say that we have attempted to achieve in the new tax law and the bill a situation of tax equity, and that applies not only to the relative treatment of different taxpayers but also to the relationship between taxpayer and the Department of National Revenue. We hope and intend that the Department of National Revenue will deal with this new tax bill in a fair, reasonable and realistic way. We expect that they will because we believe they are competent to do so and have the same objectives in mind. This is something which will be proved over a period of time. I can only give a testimonial in advance. I hope I can give the same testimonial three or four years from now.


Robert Jardine McCleave: Could I ask a further question? I understand that a few months ago the Minister of National Revenue had established a group of people from across Canada who would advise him on an informal basis. I know the man from my own area is Professor Edwin Harris. I have complete confidence in him and I am sure the other people were chosen were equal care. I should like to know if it will be the responsibility of that particular group to consider any complaints that we may have about the operation of this new law a year from now when people have had a chance to see whether it has worked well.
How do we get to that group? Do we funnel our inquiries through the minister, or may we direct them in any other way? Will the group be carrying on continuing studies to ensure that we do not have to go through the great exercise in which we have been engaged for ten years and also to ensure that tax reform may come about more quickly in the future?

November 1, 1971


Patrick Morgan Mahoney: If the problem is in the area of administering what this Parliament presents to the Minister of National Revenue to administer, then the avenue suggested by the hon. member of dealing through the minister and his advisory council is correct. On the other hand, if it turns out that we have misconceived here what we thought we were doing, and if a change in the law rather than a change in the method of administering the law is indicated, then representations should be directed to the Minister of Finance.


Marcel Joseph Aimé Lambert: I wonder if the parliamentary secretary could tell us what Solomon-like distinction has been imposed upon blood relationship. At what point does the distinction cease? At page 153, lines 38 to 40, section 63 (3) (a) (iii) (B) reads:
who, during the year, was under 21 years of age and connected with the taxpayer or his spouse by blood relationship, marriage or adoption-
Perhaps there is a definition clause, but I have not been able to find it. Is blood relationship to be limited to immediate family? Is it the niece, nephew, great aunt? Do we get as far as great aunts? With many of my good Chinese friends anybody who is of the same family is known as cousin or auntie. Some of these relatives are joined by marriage. Why, in those shorter periods when the spouse is confined to hospital, shall we say, for an illness, is the sister-in-law being eliminated? I ought to mention a younger sister-in-law. She may be the most convenient and logical person to hire as a baby sitter; she knows the children. Yet the act seems to insist that one should get an outsider. Why is there this elimination?
I know some people say, "You will get your mother-inlaw in to look after the children and she should not be entitled to qualify as a satisfactory child care attendant." I am just wondering why you should eliminate, say, a sister-in-law, the wife's aunt, or other persons bearing a similar relationship. I should be interested to know what is the thinking of Solomon in this connection.


Stanley Howard Knowles: And here speaks Solomon.


Patrick Morgan Mahoney: Mr. Chairman, I will not attempt to answer the first part of the hon. member's question except to this extent: I refer him to section 251. If after perusing that rather lengthy section that deals with arms-length transactions, the definition of arms-length and the definition of persons related by blood relationships he is still in some doubt as to the clarity of the section, I would be glad to answer. These matters are defined in section 251.


Marcel Joseph Aimé Lambert: But, Mr. Chairman, the term arms-length connotes a different relationship and serves another purpose. An arms-length transaction is a business transaction and implies a business relationship. Here we are talking about child care allowance. Are we to lay down lines as to blood relationships?


An hon. Member:: Is the hon. member talking of anyone in this House?
Income Tax Act


Marcel Joseph Aimé Lambert: No, I am not talking of anyone in this House. It is remarkable that language like this should be used because there are such things as kissing cousins, and so on. They bear a second cousin relationship, which is a blood relationship and comes within the banned limits so far as marriage is concerned. Why would there be that sort of restriction with regard to the child care allowance?


Patrick Morgan Mahoney: Mr. Chairman, I am sorry the hon. member wants to debate this question before looking at section 251 which deals with arms-length transactions. Actually, I am sorry that I said what I did because obviously my remarks led the hon. member to misunderstand what I said. The section also defines a number of other relationships, including those he mentioned and about which he asked a specific question. As I said earlier, I could read subsection 6 of section 251 which defines blood relationships for the purposes of the Income Tax Act, if that would help. However, the hon. member may wish to look at it himself. If he has some particular questions about the section, he could raise them now.
On the question of a sister-in-law and her eligibility for payment in respect of the child care allowance, I do not think that under section 63(3)(a) there would be any real problem so long as it is clear that the relative, be it a sister-in-law or otherwise, is not a person whom the taxpayer claiming the deduction is also claiming an exemption for under the Income Tax Act. I think the payment could be made to anyone who is actually performing the service.
The only problem arises when payment is made to someone who during the year was under 21 and who is connected with the taxpayer by blood relationship, adoption or marriage- in short, who is a person whom the taxpayer might claim as an exemption or claim an exemption in respect of for the year. I do not think there is any real problem so long as it is not a person with respect to whom the taxpayer was entitled to claim an exemption.


Donald MacInnis: Mr. Chairman, I do not think we should leave discussion of this section without mentioning that, important though this provision is, if this is the government's whole program in regard to child care-and there is no indication that there is to be anything more-it is not adequate at all. We have gone past the stage when many people can provide through their own means for adequate child care arrangements. The commission appointed by the government went deeply into this matter and suggested that we cannot get by in this regard unless the federal government takes the initiative in providing for proper child care in co-operation with the other two levels of government. The federal government should take the initiative, it is recommended.
I raise this matter at the present time because there seems to be no other clause in the bill under which I can discuss it. The omission I refer to should be included in one of the sections. May I ask the parliamentary secretary if consideration is being given to the idea of a child care program in which the federal government will assume, not only the 50 per cent of operating costs allowed with respect to child care centres under the Canada Assistance Plan but also the 70 per cent of capital costs in connection with such projects for the initial seven-year period as

November 1, 1971
Income Tax Act
recommended by the Royal Commission on the Status of Women. It suggested that the federal government's assumption of such charges is essential in the matter of child care.
I hope we are not just talking about the idea of baby parking, or about the aunt, grandmother, niece or other relative looking after the baby while the mother is working. I hope we are talking about modern knowledge as to how young children of under school age must be treated and dealt with to enable them to develop fully. Modern thinking and teaching on this subject says that we need day care centres for working mothers in a variety of locations. In some cases we need them in the community, in others in the factory and in some cases in homes where there will be adequate training, proper supervision, and so on.
I do not think we should get the idea that the $500 deduction from income tax contemplated in the section will do much to provide an adequate child care program across this country. It will not. Even if this provision led people to look after their children from the financial point of view, it still would not provide what is required for children or for the development of children across this country. It will not provide for Canada the sort of thing that is being provided in many countries of the world where children are taught under expert guidance, with helpers in child care centres so that growth, development and habit formation are promoted.
I know that much of what I have just said is not directly relevant to this section. It is, however, extremely relevant to child care. In my opinion, before this session ends the government ought to let us know that it is going ahead with a child care program across this country which will include a provision such as this one relating to the deduction of income tax and which will also enable the provinces and municipalities to set up day care centres where children of working mothers or working parents can be looked after. I think that is what the government ought to be considering at this time.


Patrick Morgan Mahoney: Mr. Chairman, I suppose that the adequacy and timing of any particular government program is always open to criticism. As to who was right and who was wrong, that is something the historians will be better able to judge than those of us who are on the scene right now. I agree with the hon. member and appreciate her concession that this is indeed a significant step forward and a significant breakthrough. Hopefully, I feel it will be more adequate than she evidently feels it will be. Of course, that remains to be proved.
In response to the general proposition that the hon. member has posed regarding day care centres, whether I agree with her or not is rather irrelevant. Today we are talking about the Income Tax Act-concessions, deductions, exemptions and allowances, that may be made under that act. In the context of Bill C-259 we are not talking about whatever positive initiatives the federal government could or should be taking with regard to the establishment of this type of program in Canada.
I respectfully invite the hon. member to direct her ire, interest or whatever it may be to the Minister of National

Health and Welfare when he is next in the House. All I can talk about is income, deductions from it and the tax that is imposed on the balance. In that context we have taken a very significant and meaningful step forward in terms of child care allowance and recognition of the fact of the working mother in our society.


Mr. Harkness:: Mr. Chairman, I was somewhat disturbed by reading section 58. I hope I am in order in discussing the section. I understand we are dealing with this group of sections. It came to my attention only a short while ago. If I understand the section correctly, it seems that it is in effect a repudiation of contracts entered into in the 1920s and 1930s.


Gérald Laniel: Order. I bring to the attention of the hon. member that section 58 has already been accepted. If his remarks, although related to section 58, are relevant to section 63 which the committee is now studying, they are in order. The group of sections put to the committee was open to discussion. Now that these sections have been accepted, I wonder whether the committee would gain anything by reopening the study of section 58 because a decision has already been rendered.


Patrick Morgan Mahoney: Mr. Chairman, I am inclined to agree with your ruling. However, if the hon. member has a special concern I might be able to answer rather quickly and assure him that section 58 does not represent an amendment to the Income Tax Act as it exists. This section is identical to the present section 78. Accordingly, whatever concern he may be expressing does not arise from any change in the law as contemplated by this bill.


John Gilbert: Mr. Chairman, the clause under discussion can be best described as a mini-care provision for children, brought forth by a mini-minded government. When one looks at the contents of the provision, a miserable $500 for child care, one realizes the inadequacy of the amount. The parliamentary secretary stretched out his chest to its full extent when he said this program would cost the government $50 million on the basis of a $500 exemption. I remind him that the cost of refitting the Bonaventure was $18 million and the cost of building the elite Arts Centre in Ottawa was $46 million. I remind the parliamentary secretary that our budget for national defence each year is almost $2 billion. The miserable $50 million that he claims the government will lose as a result of the $500 exemption is really small potatoes compared to the total picture.
I am very happy that the Minister of Justice is in the chamber this evening. He will appreciate the impact of this miserable $500 allowance for child care. He knows the best type of law we can implement is preventive law. When young children are left unattended after school, they get into real trouble. This is when they develop into delinquents, graduate into young offenders and, finally, criminals in the full sense. The blame rightly can be placed on parents who do not have the money to take care of their children during working hours. To allow only $500 to working parents who require the money they earn to keep the family together is shortchanging them. It is developing a situation that can work hardship with regard to the children and the problems they have.
November 1, 1971

I hope the Minister of Justice, in his rosy, persuasive way will recommend to the parliamentary secretary the suggestion of the hon. member for Vancouver-Kingsway that the minimum amount should be at least $1,000. This amounts to $20 a week, or $4 a day for child care services. The hon. member pointed out that $500 a year amounts to $2 a day for child care purposes. If we are going to save money on crime prevention and increase the prestige and reputation of the Minister of Justice in this very important field, he will see what I am driving at with regard to child care services. I hope he will persuade the likeable Parliamentary Secretary to the Minister of Finance that the appropriate amendment to make the allowance $1,000 should be brought forth.
What is $100 million when we take into account some of the larger problems we face with our young people? The Minister of Justice had a very difficult time trying to justify the Public Order (Temporary Measures) Act. I hope he will see that young people, not only in the province of Quebec but in every province of Canada are given proper child care so that they can develop into good, decent young Canadians. Although I do not speak with the eloquence of the Minister of Justice when he is in full flight, I speak with humility and, I hope, persuasiveness. I hope he will persuade the parliamentary secretary that the minimum amount should be $1,000.


Mr.   Bose@: Mr. Chairman, when I rise to speak I always have the assistance of those people who are not in the House but are drinking coffee behind the curtain. I would like to echo the remarks of the hon. member for Vancouver-Kingsway and the fact that this exemption is a step in the right direction. However, I think it is a timid step. The hon. member for Norfolk-Haldimand said it is a short step. My hon. friend from Broadview said he was humble, and I agree that he is humble. Some people say he has every right to be humble. He says he is the most humble person in the House of Commons.


An hon. Member:: What has that to do with the bill?


Mr. Rose:: The only thing he is arrogant about is his humility. I support the contention of my hon. friend from Vancouver-Kingsway on the basis of the exemption of $500 per child. It is a step in the direction of providing some assistance for parents who are working, and I think increasingly in our society in order to earn a decent income both parents must be out of the home.
That is one of the glaring failures of our economy. The stresses in our society which result from this kind of situation are something I do not think we can tolerate much longer. If they are required to work to maintain the middle-class standard we often see displayed on television, we must do something about the casualties of their union, the children.
My hon. friend from Broadview mentioned the Minister of Justice. The Minister of Justice has just attended a session in Ottawa called Poverty and the Law. It pointed out, among other things, that among the unemployed poor and also the working poor there is not equal access to justice in our society and there is developing in our legal system a specialized association to deal with this particular problem which is a poverty problem.
Income Tax Act
Now the parliamentary secretary can snigger. I do not know whether he is concerned about this. I looked him up in the Parliamentary Guide before I came down here. The Parliamentary Guide says the parliamentary secretary has all the assets of a Chamber of Commerce man par excellence. He even mentioned this. Here is a man who is on the board of directors of many interesting establishment corporations and he has been very successful in his business life. I am not envious of this. It is suggested here that there is something immoral about this particular parliamentary secretary because he has made a lot of money. I do not agree with that.


Russell Clayton Honey: Order. The hon. member may be able to convince the Chair that he is being relevant to the section under discussion. I invite him to do so.


Mark Willson Rose: Thank you, Mr. Chairman. Perhaps the only thing relevant about my last few remarks is that it might be said they were relevant to attacking the parliamentary secretary. I will desist, however, because if you look over his words in the last few days and in the last week and note his responses to some of the questions, and read them back to him, where he failed to answer a lot of serious questions which have been raised and ran around and hid, I think the Hansard will attack him and I do not need to continue on that line.
My contention is that there is a great need for day care centres which will not necessarily be aided and abetted by the incentive offered. In my own constituency we have a number of kindergartens and day care centres. I will tell you who goes to them. It is not the children of the working poor and of the unemployed. The children who go there are the children of doctors and business and professional men who can afford to send their children there, not because their wives are working but because they would prefer to go somewhere else.
What we need is a system which would allow the children of these people who have to be absent from home the kind of enrichment all of us know, especially our Minister of the Environment, the kind of enrichment which is provided to young children by these day care centres properly organized and properly led by trained teachers, which is not available to people who do not have the kind of affluent background which can provide the experience so necessary to learning.
I would say that compared with the affluent in our society the working poor and their children suffer almost as great a cultural gap, and that affects their learning, as exists between the working poor and our native people. This is how serious it is. If I may be free to enlarge on that topic for a moment I would like to say this, because it happens to be a field in which I have at least some professional competence. In our society, learning is largely verbal learning or learning through the printed word. Children from homes with little in the way of written material, little in the way of cultural enrichment do not have the background which is necessary for them to succeed in the verbal skills which are required in order to succeed in school.
By the time they reach grade three they get what is known as an IQ test which is based on verbal learning. When they receive this, because they do not have the background they are labelled with a low IQ for life. As

November 1, 1971
Income Tax Act
they move through the grades, the gap widens. We are denying a whole segment of our society, because they lack those particular skills, the kind of advancement which is available to the parliamentary secretary and to the hon. member for Fraser Valley West.
When I argue for the development of day care centres and properly run kindergartens, if you like, or playschools, I want them to be available to families or children who really need them, because there is a cycle in poverty, a cycle in being on welfare and the only way in which we can break this cycle is to develop the kind of aptitude which can best help a child who comes from a home which is economically disadvantaged. We should provide such help for the children who really need it.
So I am in agreement with my hon. friend from Van-couver-Kingsway and my hon. friend from Broadview that we should establish a system which will not leave a child in the hands of the poorly trained girl next door or the kindly grandma but will develop through income tax exemptions a system which is well run and which would be led by well trained people.
By God, we have many people in our society, well trained ones, who are not doing anything. It is not that we do not have jobs for them today. That is not the point. The main point I should like to make is that the $500 exemption is not enough. The average person who is earning $5,000 a year or below spends $500 on putting his child in an adequately run school. I think it should be raised at least to $1,000 because the future of our leadership, the future of our whole society, democracy, if you like-if I do not sound too pretentious, presumptuous or anything else-depends upon an electorate which is intelligent and has an equal opportunity in society.


Russell Clayton Honey: Shall section 63 carry?


Some hon. Members:: Carried.


Mark Willson Rose: On division.


Russell Clayton Honey: Before I put the question, as hon. members of the committee know there is an amendment to section 63, moved by the Minister of National Revenue on behalf of the Minister of Finance, which appears in Hansard for October 22 at page 8940. Hon. members have had an opportunity to look at this amendment so I should put the question first on the amendment. Shall the amendment to section 63 carry?


Stanley Howard Knowles: Would the parliamentary secretary explain it?


Patrick Morgan Mahoney: Mr. Chairman, the amendment to section 63(2)(a), on page 152 of the bill, is in connection with deduction of expenses for child care where the taxpayer claiming the deduction is a man. As the bill to be amended reads at the present time, it permits a man to deduct child care expenses in circumstances where his wife was confined throughout a period of not less than two weeks to bed, to a wheel-chair or as a patient in a hospital, asylum or similar institution, but the provision does not permit a man to deduct child care expenses where his wife is likely to be for a long-continued period of indefinite duration incapable of caring for children. The amendment will
(Mr. Rose.]
correct this deficiency in the wording and the words to be added appear in paragraph (B), at line 41 on page 151.
Amendment (Mr. Benson) agreed to.
Clause 1, section 63, as amended, agreed to.


Russell Clayton Honey: It is the understanding of the Chair that pursuant to special arrangement made last Friday, the committee will now move to the consideration of a grouping of sections 117 to 120 inclusive, together with sections 146,147 and 204. Shall section 117 carry?
On clause 1-Section 117: 1972 rates.


Robert Jardine McCleave: Mr. Chairman, earlier today I inadvertently stumbled into this field. I took advantage of one of the small sub-sub-sub-clauses to section 56 or 57 which dealt with income tax averaging, but I will not continue those remarks. They dealt with the problem of why one would take advantage of certain circumstances when one's income was on the rise but not when one's income was on the fall. I used the name of a hockey player, and perhaps I should have not done so because Mr. Gordie Howe, the man I referred to, always had a rise in income until he saw he was at the end of the trail and rather sensibly decided to get out before he started to go backward. For the rest of the day I have frantically tried to think of other sporting figures who did not follow the sensible example of Mr. Howe but stayed on until it was too late for them, but oddly enough I could not think of any specific examples though I have read about dozens in the world of baseball.
In any event, the problem we are faced with is that the averaging provisions that have been presented to us were spawned in a time of inflation, and perhaps this is why the government has presented these averaging provisions in the bill. The parliamentary secretary said, and I think rightly, that the House of Commons committee struggled with the question of downward averaging but simply could not come up with an acceptable formula. That is true, but this does not mean that we cannot come up with an acceptable formula though it does mean that no one yet has. I think we will do an injustice if we pass this on to the ballplayer or sporting figure or the artist we are trying to help, people who are going over the hill and find themselves going down the down staircase instead of up the up staircase.
That philosophical observation out of the way, I hope we will yet come up with a better formula. After all, Joseph in Egypt was able to mingle seven fat years with seven lean years and come up with something that averaged itself out, and perhaps this is the sort of example we should follow. Having said that, may I ask the parliamentary secretary why section 117(8) is now being struck out? It appears on page 312 and was new. It is now being discarded.


Patrick Morgan Mahoney: Mr. Chairman, I agree with my hon. friend from Halifax-East Hants. We regret that we have not been able to find a suitable way to deal with downward averaging. It was said earlier today that this was a problem that the parliamentary committee dealt with at length and neither it nor its advisers were able to find an answer. Nor were we able to locate any other jurisdiction that had been able to resolve the problem satisfactorily. This does not mean that we ought not to continue the
November 1, 1971

search. I quite agree that we should and I can assure the hon. member that we shall.
The provisions in section 117 are the rate schedules that tie in very distinctly with the exemption schedule discussed under section 109 a number of days ago. I think it should be noted that they do carry out the commitment, over the period between the taxing years 1972 and 1976, that the Minister of Finance gave to reduce the rate of personal income tax on the first $500 of taxable income from the 17 per cent that will be in effect next year down to a 6 per cent level in 1976. This, of course, is one of the provisions that executes the government's undertaking that the tax reform measures now before the House will not be measures of tax increase in disguise.


Stanley Howard Knowles: Mr. Chairman, as the parliamentary secretary indicated a moment ago, section 117 sets out the rate schedule. In other words, it specifies the rate at which each taxpayer will have to pay tax on the first $500 of his income, then on the next $1,000 of his income, and so on up as far as it goes. The parliamentary secretary has already pointed out that built into section 117 is an arrangement whereby these rates make at least a modest decline over the period of the next few years.
However, I should like to come straight to the point of my intervention at this juncture. We are not satisfied with many things about this rate structure. As hon. members are aware, we do not accept the philosophy of the government that has resulted in a reduction of the rate on the top increment, bearing in mind that at the same time the government is doing away with federal estate tax and also bringing in a capital gains tax that is applied to only 50 per cent of income that is defined as a capital gain.
However, our concern throughout this debate on the income tax legislation has been and continues to be for those in the lower income brackets. We further contend, bearing in mind what you have ruled from the chair we can do, that there should be a reduction in the rate of tax applied to the first $500 of taxable income.
Possibly, I am making a mistake I made once before by giving my procedural points before moving the amendment I have drafted, but I think you and I, Sir, will agree that the ground has been pretty well cleared. You have made it clear that there are certain types of amendments you and those associated with you at the table feel you cannot accept. On the other hand, you have made it clear that if a private member moves an amendment to reduce a rate of tax and if that reduction is across the board- and you will recognize, Sir, I am using your own words- and if there is no transfer of the incidence from one group of taxpayers to another, Your Honour feels that type of amendment is acceptable.
You made that statement to one of my friends in the Social Credit Party when he sought to move one of that group's amendments. You made it again when the hon. member for Regina East moved an amendment to reduce the figure having to do with income tax deductibility in respect of medical expenses. Then again on Friday of last week, when I made another unsuccessful attempt to move an amendment having to do with another feature of the
Income Tax Act
tax bill Your Honour said to me that if it were a reduction in the rate, if it were applicable across the board to all taxpayers, Your Honour would, of course, accept it.
I hope you appreciate how easy I am making your chore in this instance. I have already said that apart from any thoughts we might have about the rates of tax in the upper brackets, about the estate tax, the capital gains tax and so on, we think that the tax payable on the first $500 of taxable income should be a lot less than it is. As long as the exemption level is where it is we think there should not be any tax at all in that bracket. Of course, we cannot raise the exemption levels. We have tried and we have been ruled out of order in our attempts.
I submit it does fall to us that we have the right to move that the rate of 17 per cent which is specified in line 30 on page 305 be reduced to a lesser figure, and that is what I propose to do. Once I move to reduce that figure of 17 per cent to a lesser percentage that, of course, results in the necessity of making a reduction of the same number of dollars in each of the succeeding paragraphs.
If Your Honour is now looking at page 306 you will see that on that page each paragraph starts with an amount which represents the aggregate income tax up to that point and then indicates the rate of tax on the next increment. I have no intention of proposing any juggling of the rates or any attempt to increase the rate at one level to make up for it at another. I am proposing exactly what Your Honour has said is our right, namely, that there be a decrease in the rate on the first $500 of taxable income. Having moved for a reduction in the rate on that first $500, I then propose that the same number of dollars which that reduction produces for everyone in that first category be taken off each of the other figures all the way up from paragraph (b) to paragraph (m).
Having described my amendment, the moving of it is a mere formality. I have it here and I admit that it is in my own handwriting, but I have several copies of it and I trust it is legible. I move:
That Bill C-259 be amended, at pages 305 and 306, by changing the figure "17 per cent", in line 30 on page 305, to the figure "2 per cent", and consequentially by reducing the amount at the beginning of each of the paragraphs (b) to (m), both inclusive, on page 306, by $75.
I could have written that amendment in a longer form by taking each of the paragraphs on page 306 and actually saying that the $85 in paragraph (b) be reduced to $10, and that the $175 in paragraph (c) be reduced to $100 and so on down the page. But rather than produce such a long and wordy amendment I thought it would say the same thing if I simply said in my amendment that the amount at the beginning of each paragraph on page 306 be reduced by $75.
As Your Honour realizes, the effect of this amendment is one that is clearly across the board. It reduces by 15 percentage points the rate of taxation on the first $500 of every taxpayer's taxable income, whether he is a taxpayer who has only $500 of taxable income or whether he has $100,000, or what have you. The amount of reduction, by the same token, becomes the same for the person in the upper brackets as it is for the person in the lower brackets, namely, 15 percentage points of the first $500-in other words, $75 across the board. There is no cumulative effect to it and there is no increase in the reduction for
9234

November 1, 1971
Income Tax Act
those in the upper brackets. There is just as much of a reduction for the $500 person as there is for the millionaire, and I point out again that there is no shift of the incidence. I might mention that there are none of the things that Your Honour found procedurally wrong in some of the previous amendments. Therefore I have the pleasure of presenting this amendment and perhaps I might read it again. It is:
That Bill C-259 be amended, at pages 305 and 306, by changing the figure "17 per cent", in line 30 on page 305, to the figure "2 per cent", and consequentially by reducing the amount at the beginning of each of the paragraphs (b) to (m), both inclusive, on page 306, by $75.


Russell Clayton Honey: The hon. member for Winnipeg North Centre has urged some very persuasive arguments and authorities on the Chair and I am inclined to agree with him. Some of the observations the Chair made previously may have been obiter, nevertheless I think the hon. member is correct in his argument that under our rules a private member can move a motion to effect an across the board change reduction in rates of taxation as long as they do not affect the incidence of taxation. I am prepared to accept the motion unless there are arguments that would dissuade me.


Marcel Joseph Aimé Lambert: Mr. Chairman, of course it is a very interesting move the hon. member has made here. In fact he has done what the government has refused to do. He has applied a form of tax credit which would be the kind of flexibility a government could move into if the income tax were fixed in amounts in relation to the brackets and not the percentages, and if there were changes to be made in particular brackets then the particular credits could be made.
As Your Honour has indicated, the amendment is acceptable to the Chair. I would suggest the Chair look at subsections (2), (3) and (4). I have never heard of negative income tax being accepted in this House, and the acceptance of this amendment would result in some most interesting circumstances as a result of the further subsections which apply to tax in the years 1973, 1974 and 1975. There would be negative income taxes in the low income brackets. That is a matter for the Chair to ponder.
I would point out that we are looking at only the rates of the federal tax, but there is a little thing called the provincial tax which goes with this. These schedules, on the basis of subsection 1(a), give the tax for the year 1972. They indicate the tax rate on the income in the bracket and then, of course, we have the combined federal tax and the 30 per cent provincial tax. The schedules as shown in the act indicate the federal rate for 1972 and also the combined federal-provincial rate on the assumption that the provinces will levy a tax equal to 30 per cent of the federal tax rate. For instance, in the first bracket it would be 17 per cent plus 30 per cent of 17 per cent, or a total of
22.1	per cent.
This will effect some change in the federal share of the income tax but, of course, it will have no direct result on the quantum of the provincial tax, which is something many people have failed to recognize. I want to indicate that the House committee which studied the proposals on the white paper came down with some very definite

recommendations concerning the level of tax on the federal side which is generally accepted in these proposals.
Much has been said about the tax being lowered to 50 per cent or less at the $60,000 level. But if you throw in the 30 per cent provincial income tax the total levy goes up to 61 per cent. For instance, at $60,000 the federal tax at the beginning of the bracket is $21,795. The federal tax rate on the income in the bracket will be 47 per cent, but combined with the provincial tax this means that those over $60,000 will be taxed at 61.1 per cent. That is the flat rate right now. The province of Manitoba goes as high as 39 per cent. So it will be 39 per cent of 47 per cent. That will add up to a fair amount, much higher than it is in, say, the province of Ontario.
But let us look at the middle income group, the group between $9,000 and $14,000.1 might point out that many of the friends of the hon. member to my left are in that group. One does not have to go very far today to get in the bracket of $11,000 to $14,000. First-class constables and firemen, in some areas, are in this bracket. This applies to first-class constables in a number of cities in this country. Then there are members of the Royal Canadian Mounted Police as well as others. The total tax rate in the bracket between $11,000 and $14,000 will be 40 per cent. Now we will see who starts screaming at the levels of income tax as a result of these changes which are proposed.
I also wish to point out something else. There has been a significant change in structuring federal personal taxation. Under the existing system the federal rates imposed contain room for an abatement in respect of provincial taxes, and in addition there are imposed separate taxes for old age security and social development. All these things are being lumped together. They are being called a new standard federal rate which does not provide for standard provincial abatement. Any tax levied by the provinces will be in addition to the federal rates. The only specific exception in the bill is a deduction of 3 per cent of the portion of tax otherwise payable that is related to income earned in a province providing schooling allowances. That means the province of Quebec.
It also seems likely that further abatements may be made on a basis similar to that under the established programs, the Interim Arrangements Act, for provinces opting out of certain shared federal-provincial programs. It is possible, but we will see what comes out of the conferences this week and early in November. At present Quebec is the only province which has so opted and an abatement of 19 per cent of the tax otherwise payable applies in respect of Quebec income.
At the present time a 28 per cent standard abatement is allowed. I spoke of a 30 per cent abatement for illustrative purposes but that does not mean the provinces are bound in any way by this, because whereas at the present time there is a 28 per cent standard abatement, Manitoba actually levies a 39 per cent tax and Quebec levies its own personal tax.
Therefore we must come to the conclusion that these rates are in themselves exceedingly high. As a matter of fact, when you consider that an individual who earns $60,000 pays $28,000 income tax on the $60,000-that is, right at the start-he pays just under 50 per cent on
November 1, 1971

average. Remember, when we say a 61 per cent tax rate on income in the bracket, that is a marginal rate and in actual fact the total tax is just under 50 per cent.
If one were to take the income group between, say, $9,000 and $14,000 and figured out for them the average tax payable, one would see that a person who is earning about $10,000 would be paying about 25 per cent of his income in income tax, right across the board. Add to that his sales taxes, his customs duties and his share of other taxes-I will put aside any question of property tax-and we will see just how much tax the individual is paying.
We are complaining about the quantum of money that is taken from the individual because somebody has made it popular and it has now grown into the philosophy that Big Brother government knows better.


An hon. Member:: Hear, hear!


Marcel Joseph Aimé Lambert: Big Brother government is motivated by my hon friend and his pals. They know better how to do item I am talking about the average individual who should be able to decide far more than he does how he earns and how he spends his money. Of course, I can take the hon. member's argument all the way and say, "Take everything away from the individual, give it to the government and let the government spend everything or keep it."


Leslie Gordon Benjamin: Who said that?


Marcel Joseph Aimé Lambert: That is an extension of the argument. If Big Brother government knows better how to spend the money, then it is logical to pursue it all the way through and to give the government all the money so it can be spent to the best advantage. If the hon. member's argument has any strength whatsoever, surely that is the natural conclusion. It seems to me that in many instances that philosophy underlies most of their stands.


Leslie Gordon Benjamin: Are you for or against it? Make up your mind.


Marcel Joseph Aimé Lambert: I am not particularly in favour of this amendment.


An hon. Member:: You are against the people.


Marcel Joseph Aimé Lambert: I know the hon. member has made up his mind and therefore anything anybody else says is superfluous. He has the humility of the man who has made up his mind and will brook no other views.


Leslie Gordon Benjamin: Let us have some humility from you, Marcel.


Marcel Joseph Aimé Lambert: That is all I want to say about this particular subject. We note the changes that are to follow. The amendment does cause a problem there. Possibly the hon. member for Winnipeg North Centre has further amendments which will follow, but he has not indicated them.


Stanley Howard Knowles: Does the hon. member realize that if this amendment carries, it follows that there should be amendments to the other subsections and I shall have them at that time?
Proceedings on Adjournment Motion


Marcel Joseph Aimé Lambert: It does not necessarily follow, but in any event that is the position with regard to these items.


Max Saltsman: Mr. Chairman, for the last couple of days we have been trying to impress upon the Canadian public the advantage of a tax credit system as against the exemption system and tonight, in a very bold, dramatic and highly intelligent amendment the hon. member for Winnipeg North Centre has shown how it should be done. The value of the amendment before us enables us to grant tax relief to those in the lower income brackets without accelerating the process and providing substantially more advantage and relief to those in the higher income brackets.
It is very difficult to demonstrate the value of the tax credit system as against the exemption system in the normal course of trying to explain it, but this amendment illustrates how it can be done. While the government has had difficulty in trying to figure out an intelligent approach to providing relief for those in the lower brackets of the income tax level, the hon. member has shown them the way, I hope they will seize his torch and accept the amendment before the House.
May I call it ten o'clock, Mr. Chairman?


Russell Clayton Honey: Is there agreement that the committee call it ten o'clock?


Some hon. Members:: Agreed.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Murray Arndell McBride: Mr. Speaker, my curiosity about Deuterium of Canada and its hitherto ill-fortuned heavy water plant in Glace Bay, Nova Scocia, is one of long standing. The events leading up to the present tragic situation tell a story of bungled industrial development.
When the regional development committee of this House heard evidence on Bill C-5, entitled "An act to authorize the making of a grant to the province of Nova Scotia for the purpose of providing assistance to Deuterium of Canada Limited"-which, by the way, still stands as item No. 10 on today's order paper-some most disconcerting information was revealed.
I should like to quote from the record of the proceedings of that committee under the date of December 1, 1970. The following was an exchange between the witness from the Department of Regional Economic Expansion and myself:


Murray Arndell McBride: Would it be accurate, Mr. Chairman, to say then that no part of this grant will be forthcoming until the province
9236

November 1, 1971
Proceedings on Adjournment Motion
has given evidence that they do in fact have a satisfactory operator?


Mr. O'Connell:: Oh, that is absolutely the case ...


Murray Arndell McBride: April 1 is roughly seven months ago. There was no satisfactory operator then, and there is no satisfactory operator now. You assume that there will be in the reasonably near future?


Martin Patrick O'Connell: Yes, I think there is virtually a final decision on a consortium to rehabilitate the plant.
I went on to talk about further statements that had been made as to whether or not this was a useful purpose for directing public funds, and I said:
You said that there was no way whereby expenditures could get out of hand in a $5 million grant. It would seem to me that if a $5 million grant or a $500 grant is given for a purpose and the purpose for which it is given is not realized, the expenditure is out of hand. I was using it in that context.
I then spoke about the whole situation having been mismanaged, and so on, and continued:
Someone here has just cited that you need a lot of faith in the citizens. Is that the best answer we have here this morning, that we need a lot of faith in the people in Nova Scotia? Because if we do have a lot of faith in the people in Nova Scotia, it has not been justified by the performance of the people in Nova Scotia who were in charge of this project hitherto.
Then came the most damning statement of all when Mr. O'Connell replied:
Mr. Chairman, the history of the plant is one of misfortune.


An hon. Member:: That is the understatement of the year.


Murray Arndell McBride: Mr. Speaker, I should like to expand on the questions I directed to the Prime Minister (Mr. Trudeau) this afternoon. First, did the results of the $300,000 engineering study announced in this House by the Minister of Energy, Mines and Resources (Mr. Greene) on January 29, 1971, at page 2887 of Hansard state that for $95 million, heavy water would in fact be produced? When will the results of that study be made public?
Second, what is the target date for full production and how much will be produced-


An hon. Member:: Never.


Murray Arndell McBride: -when the plant is in full production? Three, since the Prime Minister's statement on April 10, 1970, and the statement of the Parliamentary Secretary to the Minister of Regional Economic Expansion on December 1, 1970, both gave to this House or a committee of this House the assurance that a satisfactory operator would be found prior to any federal moneys being forthcoming, has such an operator been found and who is or who are the persons taking on this vital position?
Four, in view of the fact that eight years ago the then government of Nova Scotia, under the man who is at present Leader of the Opposition (Mr. Stanfield), entered into an agreement to produce heavy water by 1966 in a plant that would cost $35 million, while in fact the plant is still idle at a reported cost of $120 million, what assurance can the government provide to this House and to the nation that the plant will go into production, and will the $95 million now announced make it viable?

Five, is Industrial Estates Limited, the Crown agency established by the provincial government of the now Leader of the Opposition now completely removed from any management decisions, and will AECL now be fully in control and will the federal government pick up and take over?
Six, would it not be more economical to abandon this project and start over again?


Leslie Gordon Benjamin: In Saskatchewan.


Murray Arndell McBride: Are we not, in fact, throwing good money after bad, especially in light of the Prime Minister's statement at page 5711 of Hansard where he said:
I should like to emphasize that, according to information made available by the province, there will still be on annual shortfall a capital and interest recovery in the neighbourhood of $5 million to $6 million during the life of the new contract.
That would refer to the 12 J-year contract mentioned previously in the Prime Minister's statement. Mr. Speaker, there is a parallel tragedy here which I think ought to be laid before the House tonight. That is the failure of the Official Opposition to bring any critical eye to bear on the whole operation for fear, I presume, of bringing public attention to bear on a project founded with great fanfare by the Leader of the Opposition.


Donald MacInnis: Why aren't you honest enough to get your facts right?


Murray Arndell McBride: Mr. Speaker, if it be true that one of the responsibilities of all members of this House is to be the watchdog on the expenditure of public moneys-and surely it must be-then I would, with great respect, submit-


Donald MacInnis: Respect? You are not even being honest about it.


Murray Arndell McBride: -that when the opposition is prevented from doing this fundamental task then other members of the House must take it up.


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


Donald MacInnis: Why can't you be honest about it, McBride?


Mr. Marcel Prud'homme (Parliamentary Secretary to Minister of Manpower and Immigration):: I shall try to give an honest answer in three minutes, Mr. Speaker. The decision to rehabilitate the Glace Bay plant owes much to the initiative of Premier Regan. The previous Nova Scotia government had sought federal financial assistance but wanted to retain control of the rehabilitation program; the federal government had replied that it would only be prepared to provide such assistance if the province assigned responsibility for the operation of the plant to a concern in whose competence federal authorities would have confidence.
Premier Regan has now proposed that Atomic Energy of Canada Limited should take on responsibility for both the rehabilitation and the operation of the plant until such time as the earnings from production have repaid the federal costs. This proposal was attractive to the federal
November 1, 1971

government but before replying an up to date estimate was required in order to determine whether the rehabilitation of the plant was technically feasible and, if so, at what cost and on what time scale. This was the engineering survey assigned to AECL as announced in January, 1971. AECL concluded that the plant could be rehabilitated and that this could be done more quickly and at less cost than would be involved in building a new plant at some other site.
Further study was nevertheless required in order to determine whether by the time the plant could be rehabilitated there would still be a continuing requirement for its production of heavy water. This additional point has now been thoroughly investigated and it has been established that there will be a continuing requirement for the output of the plant.
During his recent visit to Halifax the Prime Minister Mr. Trudeau, was in a position to announce that agreement had been reached. AECL will acquire a leasehold interest in the Glace Bay plant and will assume full responsibility for its reconstruction and eventual operation. The necessary funds will be lent by the federal government to AECL, to be repaid with interest out of sales of heavy water once the plant is in production. The lease of the plant to AECL will terminate upon completion of that repayment.
I am delighted, Mr. Speaker, that this long standing monument to the incompetence of a previous Nova Scotia government is now being renovated, for the betterment of all Canadians. Additionally, some 300 to 400 job opportunities will be opened for Nova Scotians in the course of the work which will commence by the end of this month.



MANPOWER-REASONS FOR EXCLUSION OF RESERVE INDIANS FROM LABOUR FORCE SURVEY-INCLUSION IN LOCAL INITIATIVES PROGRAM

Alfred Pullen Gleave: Mr. Speaker, although we raise these matters in the adjournment debate, the ministers responsible are not in their places. Apparently this debate is not considered important enough for them. The other day I asked the Mnister of Manpower and Immigration (Mr. Lang) in the House whether he would consider including Indians living on reserves in the labour force survey. I might say that in my constituency there are reserves and some of their members are seeking work.
It is well known that Indians on reserves, as well as inmates of penitentiaries, are presently excluded from the count of employed and unemployed persons. This exclusion is not only discriminatory, it is also incomprehensible because the federal government is allegedly trying to bring our native peoples up to the standards of well-being enjoyed by Canadians generally. I say "generally" because a large number of Canadians are out of work.
The money the federal government has been spending in its drive to help the native population may or may not have been well spent. But on looking at the standard of living of the Indian population one cannot claim that this venture has been successful by any stretch of the imagination. Of course, one can say that only on the basis of impressions and observations, because we do not know how many people on the reserves are employed or unem-
Proceedings on Adjournment Motion
ployed and looking for jobs. So as a result of the policy which has been followed all we can do is make an educated guess.
That is one reason why I urge the Minister of Manpower and Immigration and his colleague, the Minister of Industry, Trade and Commerce (Mr. Pepin) who is responsible for Statistics Canada, to include Indian reserves in the labour force survey or to find enough facts by other means so as to give us a reasonably accurate picture of the situation of our native labour force. I have also asked the Minister of Manpower and Immigration to use his influence in extending the coverage of the labour force survey to the Yukon and Northwest Territories. The minister, probably by error on his part, assured the House that this extension was carried out on August 14 of this year. This has not yet been done.
I appeal to the Minister of Manpower and Immigration to consider seriously these suggestions. After all, the people of the territories have every right to be treated as other Canadians and members of the Canadian labour force. They should not be treated as members of a colony set apart from the settled parts of Canada. On reflection, I find that I am addressing myself to the wrong person. The Minister of Manpower and Immigration has so many responsibilities that adding to his burdens might be the last straw. It might drive him around the bend. His duties cover the vast field of manpower and the difficult field of immigration. He is also responsible for the Canadian Wheat Board. To top it all, he is in charge of the Public Service Staff Relations Act.


Leslie Gordon Benjamin: He is the loser.


Alfred Pullen Gleave: It shows how fouled up he is. I cannot honestly claim that his performance in any of these areas has been outstandingly successful.


An hon. Member:: He is from Saskatchewan.


Alfred Pullen Gleave: You may not regard us very highly. That is a typical attitude of the people from Ontario. You have had it so long it fits you like a mantle. We are the colonists, the people outside the pale. That is where you fit.
The federal government is in desperation trying to reduce the growing number of unemployed Canadians. These efforts are not primarily directed toward creation of jobs and toward combating unemployment. The battle is a battle against unemployment statistics. You are not concerned about the reality. You want to dispel the thing that exists.


Murray Arndell McBride: Who made you the judge?


Mr. Perrault:: Keep it non-political over there.


Alfred Pullen Gleave: Non-political? You are kidding. The other day the Parliamentary Secretary to the Minister of Manpower and Immigration (Mr. Prud'homme) informed the House that in the fiscal year 1970-71 the Department placed 344,846 people in training. The figure for the current year will doubtless be higher. Two weeks ago the Minister of Finance (Mr. Benson) announced that an additional 35 million would be spent on training, which means

November 1, 1971
Proceedings on Adjournment Motion
that the number of trainees this year will increase by 30,000 to 35,000.
The attempts by the department to equate referrals to training replacements is simply scandalous. The unemployed person knows well that training in itself does not give him a job. He knows as much as the Economic Council of Canada that the manpower training program absorbs many thousands of unemployed people so that the unemployment count becomes, however slightly, more respectable and more in tune with the Minister of Finance's outrageous and ridiculous unemployment forecast.
More seriously, the Prime Minister-very elegantly I have to admit-is implying that our unemployed people are pretending to be searching for jobs when enumerated by Statistics Canada. We know that the Prime Minister has a rather elitist view of the unemployed. We know that he would prefer to send all unemployed women, whatever their qualifications may be, to jobs as waitresses and chambermaids. We know that, of all people, the Minister of Labour (Mr. Mackasey) and the Prime Minister gave up in desperation their long professed goal of full employment. It now appears that the Minister of Manpower, whose prime responsibility should be to place people in jobs; and he has at his disposal over 8,000 bureaucrats-


The Acting Speaker (Mr. Boulanger):: Order, please.


Marcel Prud'homme: Mr. Speaker, I am sure the hon. member will be very satisfied with my answer. In his answer to the hon. member's question on October 25, the Minister of Manpower and Immigration (Mr. Lang) stated that his department was giving consideration to the manner in which applications for the Local Initiatives Program would be received from Indians living on reservations. I can tell the hon. member that in so far as Indian band councils are concerned, they may obtain applications from Canada Manpower centres and submit them to the regional offices of the Department of Manpower and Immigration. Every effort will be made to
ensure that band councils receive information and application forms because we are fully conscious of the need for such groups to participate.
In addition, groups of individuals living on reservations may apply for a grant under the organizations and private groups aspect of the Local Initiatives Program should they have a project which meets the necessary criteria. They would obtain application forms from their local Canada Manpower offices and submit applications to their respective regional offices of the Department of Manpower and Immigration.
As hon. members know, Indian reservations were originally excluded from the labour force sample because it was felt that participation in the labour force by Indians on reservations-


Alfred Pullen Gleave: On a point of order, Mr. Speaker.


Marcel Prud'homme: There is no point of order.


The Acting Speaker (Mr. Boulanger):: The hon. member knows the rules. Would he kindly resume his seat?


Alfred Pullen Gleave: I only wish to point out, Mr. Speaker-


The Acting Speaker (Mr. Boulanger):: Would the hon. member please resume his seat?


Alfred Pullen Gleave: The parliamentary secretary should use the terms "reserves", not "reservations". If he does not know that, he should not be there. "Reservation" is an American term.


Marcel Prud'homme: -because it was felt that participation in the labour force by Indians on reservations was somewhat different from similar activities on the part of other members of the population. For example, on some of the reservations economic activity consisted of hunting, fishing and other seasonal and irregular activities. Consequently, the survey procedures and questions used in the labour force survey appeared to be unsuitable. This seems to be less the case today and consequently consideration is being to the inclusion of these persons in the regular labour force survey.
Motion agreed to and the House adjourned att 10.20 p.m.

Tuesday. November 2, 1971