1971-11-22

NEW MEMBER

Mr. Speaker:: I have the honour to inform the House that the Clerk of the House has received from the Chief Electoral Officer a certificate of the election and return of William Knight, Esquire, member for the electoral district of Assiniboia.
*



NEW MEMBER INTRODUCED

[Stage Direction]
William Knight, Esquire, member for the electoral district of Assiniboia, introduced by Mr. Stanley Knowles and Mr. Lome Nystrom.


Mr. David MacDonald (Egmont):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask the unanimous consent of the House to move a motion of urgent and pressing necessity.
In so far as there has been an announcement by the Quebec Minister of Education in the Quebec National Assembly to the effect that new criteria have been agreed to relative to Opportunity for Youth projects in that province, and as the Secretary of State (Mr. Pelletier) has not informed the House of Commons of this agreement, I move, seconded by the hon. member for Lambton-Kent (Mr. McCutcheon):
That this House do direct the Secretary of State to appear before a special committee on youth established by this House for the purpose of discussing:
a)	any agreements reached with the province of Quebec concerning the Opportunities for Youth Program;
b)	the as yet unpublished evaluation of last year's Opportunities for Youth program;
c)	the task force report on youth;
d)	the planning that should be under way now for summer, 1972. Mr. Speaker: Is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: The motion cannot be put.
24372-57$



LABOUR CONDITIONS


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I rise under the provisions of Standing Order 43 which provides that in cases of urgent and pressing necessity a motion may be made if unanimous consent is given by the House. The matter of urgent and pressing necessity is the report that the government intends to employ a new method of counting unemployed persons.
Mr. Speaker, if vigorous action is to be taken to find work for those unemployed, nothing should be done to obscure or minimize the total of those needing jobs at this critical time. Consequently I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Standing Committee on Labour, Manpower and Immigration be asked to make a full study and report on any alternative proposals for totalling those out of work before the government sets about juggling the jobless.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not.
*



INDIAN AFFAIRS


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise to request the unanimous consent of the House, under Standing Order 43, to propose a motion on a matter of urgent and pressing necessity. This matter is the confrontation that has developed between the government and the Indian Association of Alberta over the implementation of a cabinet policy to consider the pilot stage of a cultural-educational centre for the Indians of Alberta in order to partially relieve the grievous and distressful conditions, especially in education, that have existed for some time among the Indian peoples of Alberta. I would therefore move, seconded by the hon. member for the Yukon (Mr. Nielsen):
That the Standing Committee on Indian Affairs and Northern Development inquire into the cabinet policy of the 29 July 1971 set out in a cabinet document titled "The Cabinet Committee on Social Policy-Record of Committee decision-Native Cultural-Educational Centres", and signed by D. J. Leach, Supervisor of Cabinet Documents, together with a letter to the president of the Indian Association of Alberta, signed by the Assistant Deputy Minister, Indian and Eskimo Affairs, and dated August 26, 1971; a telegram dated October 6, 1971, signed by the president of the

November 22, 1971
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2.	What was the amount and who gave the authorization?
Indian Association of Alberta and addressed to the secretary of the Prime Minister, among others; a telegram from the principal secretary of the Prime Minister to the said president dated 7 October 1971 and a telegram in reply from the president to the principal secretary of the same date; and that the committee report its findings to the House as quickly as possible together with its recommendations on the steps that must be taken to repair the breakdown in communications between the government and the Indians of Alberta.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not. The hon. member for Comox-Alberni.


Mr. Barnett:: Mr. Speaker, the hon. member for Athabasca has anticipated my motion. Inasmuch as there was not unanimous consent for his motion, I see little purpose in attempting to move mine.



QUESTIONS ON THE ORDER PAPER

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

Mr. Paproski: 1.	Under contract No. CR-67-2789 awarded January 31, 1968 for an addition to Animal Breeding Bldg., how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Hon. Arthur Laing (Minister of Public Works):: 1.
Thirty-eight.
2.	Net addition to the contract authorized by the Department was $15,020.89.
3.	Twenty change orders resulted from unforeseen job conditions; nine change orders resulted from revised client requirements after contract award; one change order involved requirements to meet fire regulations; one change order was due to rock conditions not being as shown on documents resulting in additional excavation; five change orders resulted from changes in Department of Public Works requirements subsequent to contract award; one change order was to ensure the safety of employees and one change order was required to comply with Ontario Hydro safety codes.


PUBLIC WORKS-RECONSTRUCTION CHAUDIERE CROSSING, BRONSON CHANNEL BRIDGE, OTTAWA
Mr. Paproski: 1.	Under contract No. CR-67-2785 awarded February 2, 1968 to reconstruct Chaudiere Crossing, Bronson Channel Bridge, how many extras and change orders were authorized by the government?

3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1. Six.
2.	Net addition to the contract authorized by the Department was $33,730.
3.	Two change orders resulted from undetermined conditions on channel bed requiring removal of overburden and protecting services encountered; one change order was to comply with the request of the City of Ottawa affecting approaches and sidewalks; three change orders were required as a result of a change in requirements subsequent to contract award.



PUBLIC WORKS-POWER SUPPLY TO NATIONAL REVENUE HEADQUARTERS AND DATA CENTRE, OTTAWA

["The hon. member for Skeena has filed the notice required under Standing Order 26. The hon. member suggests that there should be a suspension of the scheduled work of the House for the purpose of considering a decision which he states was taken in July last and subsequently withdrawn by ministerial decision.\nThese decisions are said to relate to the establishment of cultural-educational facilities as proposed by the Indian Association of Alberta in 1970. All this may be of national importance and of national interest, but I am quite convinced that it is not a situation which should be considered by the House under the terms of Standing Order 26. It may well be that the matter should be discussed by the House, but I would think other opportunities should be available to hon. members to discuss the matter, as suggested by Standing Order 26. What I am suggesting to the hon. member and to hon. members who are interested in this very important matter, as indicated by the motion made under Standing Order 43 earlier this day, is that there should be other opportunities to debate this matter and that in any event it should not be considered at this time by way of an emergency debate. I therefore regret that the hon. member's motion cannot be put at this time."]
Arthur Laing: 1. Four.
2.	Net addition to the contract authorized by the Department was $22,428.21.
3.	Two change orders resulted from unforeseen job conditions; one change order for relocation of powerline by Ottawa Hydro was due to the provisional cash allowance allocated under contract being underestimated; one change order resulted from change in Department of Public Works requirements subsequent to the receipt of tender.



Mr. Paproski: 1.	Under contract No. 8C-01576 awarded June 5, 1968 to replace roofs, on A, B & C Bldgs, at Cartier Square, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1. None.
2 and 3. Not applicable.


PUBLIC WORKS-RENOVATIONS, PHASE 5, GOVERNMENT PRINTING BUREAU
Mr. Paproski: 1.	Under contract No. 8C-01656 awarded April 25, 1968, for renovations, phase 5, Government Printing Bureau, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition, of the extras?


Arthur Laing: 1. Three.

November 22, 1971

2.	Net addition to the contract authorized by the Department was $4,668.
3.	Three change orders resulted from unforeseen job conditions.
PUBLIC WORKS-CONSTRUCTION OF V/STOL WIND TUNNEL, UPLANDS


Mr. Paproski: 1.	Under contract No. 8C-00920 awarded April 9, 1968 to construct V/STOL Wind Tunnel at Uplands, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1.
Thirty-nine.
2.	Net addition to the contract authorized by the Department was $30,798.19.
3.	Nineteen change orders resulted from unforeseen job conditions; six change orders resulted from changes in Client Department's requirements; four change orders involved changes to ensure safety requirements; eight change orders were the result of changes in Department of Public Works requirements subsequent to the award of the contract and two change orders were for temporary power supply to test trial specialized equipment to ensure proper operation.


PUBLIC WORKS-ALTERATIONS TO FOREST PRODUCTS LABORATORY
Mr. Paproski: 1.	Under contract No. CR-67-2784 awarded February 12,1968 for alterations to Forest Products Lab., how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1.
Twenty-two.
2.	Net addition to the contract authorized by the Department was $13,674.65.
3.	Thirteen change orders resulted from unforeseen job conditions; seven change orders resulted from a change in the Client Department's requirements; one change order involved requirements to meet fire regulations; one change order was due to unstable soil conditions and increased excavation.


OPPORTUNITIES FOR YOUTH-HIRING OF CARLETON-COWAN ADVERTISING
Mr. Nystrom: Was Carleton-Cowan Advertising hired to disseminate information on Opportunities for Youth and, if so (a) for what reasons (b) what fee was paid to the advertising agency?


Hon. Gerard Pelletier (Secretary of State):: Yes. (a) Carleton-Cowan Public Relations was hired to supplement Information Services of the Department of the
Questions
Secretary of State in connection with the increased volume of work arising out of the Summer '71 student employment and activities programmes, which included the Opportunities for Youth programme, (b) $50,000 in fees paid for seven months' service.


PUBLIC WORKS-RENOVATIONS TO PLANT RESEARCH INSTITUTE GREENHOUSES, CENTRAL EXPERIMENTAL FARM, OTTAWA
Mr. Paproski: 1.	Under contract No. CR-67-2767 awarded September 22, 1967 for renovations to Plant Research Institute Greenhouses, C.E. Farm, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1. Two.
2.	Net addition to the contract authorized by the Department was $1,561.66.
3.	One change order was the result of a change in client requirements; the other change order required charges for performance, labour and material payment bonds omitted during contract negotiations.


PUBLIC WORKS-SANITARY SEWER CONNECTION AT RIDEAU FALLS LABORATORY, NRC, OTTAWA
Mr. Paproski: 1.	Under contract No. CR-67-2766 awarded November 1,1967 for a sanitary sewer connection at Rideau Falls lab., NRC, Sussex Drive, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1. Six.
2.	Net addition to the contract authorized by the Department was $3,107.89.
3.	Five change orders resulted from unforeseen job conditions and one change order resulted from additional requirement by Client Department.


PUBLIC WORKS-ALTERATIONS TO PUBLIC SERVICE LANGUAGE CENTRE
Mr. Paproski: 1.	Under contract No. CR-67-2775 awarded January 3, 1968 for alterations to the Public Service Language Centre, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1.
Seventeen.
2.	Net addition to the contract authorized by the Department was $77,314.59.
3.	Six change orders resulted from unforeseen job conditions; seven change orders undertaken to meet fire

November 22, 1971
Questions
regulations and Dominion Fire Commissioner's requirements; three change orders resulted from changes in Client Department's requirements; one change order was for waterline connections by City of Hull due to provisional cash allowance allocated under contract being underestimated, and one change order resulted in Department of Public Works change in requirement subsequent to contract award.


PUBLIC WORKS-CONSTRUCTION OF POULTRY LEUKOSIS HOUSE, GREENBELT FARM
Mr. Paproski: 1.	Under contract No. CR-67-2776 awarded December 28, 1967 to construct Poultry Leukosis House, Greenbelt Farm, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1. Twenty.
2.	Net addition to the contract authorized by the Department was $12,191.89.
3.	Five change orders resulted from unforeseen job conditions; six change orders resulted from changes in Client Department's requirements; three change orders resulting from unstable soil conditions encountered during construction required the excavation and replacement of unsuitable material to ensure proper site conditions; four change orders to meet Hydro requirements and powerline relocation undetermined at the time of tendering; two change orders resulting from changes in Department of Public Works requirements subsequent to the award of a contract.


PUBLIC WORKS-RENOVATION OF OLD DOMINION ARCHIVES BUILDING
Mr. Paproski: 1.	Under contract No. CR-67-2 awarded November 23, 1967 to renovate the old Dominion Archives Building, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1. Five.
2.	Net addition to the contract authorized by the Department was $20,738.29.
3.	One change order was the result of unforeseen job conditions; one change order was the result of a change in Client requirements and three change orders were the result of changes in Department of Public Works requirements subsequent to the award of a contract.


PUBLIC WORKS-CONSTRUCTION OF BUILDINGS 2B, 2D, 2AC AND 55, GREENBELT FARM
Mr. Paproski: 1.	Under contract No. CR-67-2762 awarded November 3, 1967 to construct Bldgs. 2B, 2D, 2AC and 55, Greenbelt Farm, how many extras and change orders were authorized by the government?
2.	What was the amount and who gave the authorization?
3.	What was the reason for the substitution, deletion or addition of the extras?


Arthur Laing: 1.
Nineteen.
2.	Net addition to the contract authorized by the Department was $11,367.56.
3.	Six change orders resulted from unforeseen job conditions; ten change orders resulted from revised Client Department's requirements; two change orders resulted from Department of Public Works change in requirements subsequent to contract award and one change order was issued to revise the amount of an earlier change order.


*CBC-FORMATION OF MULTI-LANGUAGE CLUSTER GROUPS
Mr. Fairweather: Will CBC form multi-language cluster groups within its existing structures for the production of television and radio programming in languages other than French and English?


Gérard Pelletier: I am
informed by the Canadian Broadcasting Corporation as follows: While the CBC is studying how best it can improve its services in radio and television with respect to broadcasting in languages other than English and French, it does not consider that it would be either necessary or desirable to create "multi-language cluster groups" within the existing structures of the corporation for this purpose.


GOVERNMENT ACTION TO OFFSET EFFECTS OF 10 PER CENT SURCHARGE
Mr. Matte: Has the Prime Minister considered the possibility of increasing the purchasing power of the Canadian consumer through a social dividend and compensated discount applicable to the purchase of Canadian products in order to fight the harmful effects of the 10 per cent surtax imposed by the Government of the United States?


Mr. Barnett J. Danson (Parliamentary Secretary to Prime Minister):: The government has considered a wide range of possible ways of offsetting the harmful effects of the 10 per cent surcharge. Specific measures were presented by the government to parliament immediately after the imposition of the surcharge including Bill 262, an Act to Support Employment in Canada. This bill received Royal Assent on October 14. In addition, on October 14 the government announced a comprehensive program designed to ensure the continued expansion of the Canadian economy and to reduce unemployment.


APPOINTMENT OF JUDGE O. J. GODIN TO CITIZENSHIP COURT
Mr. Coates: 1.	On what date was Judge O. J. Godin appointed to a citizenship court, at what salary and for what area?
2.	(a) On what basis was the appointment made (b) was Mr. Godin a Member of Parliament and, if so, for what period of time?

November 22, 1971

3.	(a) What did Mr. Godin receive in salary and expenses during the past fiscal year (b) has the government provided him with staff and, if so (i) what are the names of the staff members (ii) what are their responsibilities (iii) what is each staff member's annual salary?
4.	(a) How many visits has Mr. Godin made to Ottawa to meet with officials of the Citizenship Branch of the Department of the Secretary of State (b) for what reasons were these visits made (c) was Mr. Godin paid expenses for these trips and, if so, what was the amount for each trip?


Gérard Pelletier: 1. On March 8, 1966, the Governor in Council, pursuant to the Canadian Citizenship Act, designated Mr. O. J. Godin to act as a Court for the purposes of the Act for a period of seven years at a salary of $14,000 per annum. This Court handles citizenship applications from Sudbury, North Bay, Sault-Ste-Marie, Elliot Lake, Blind River, Chapleau, Parry Sound and surrounding areas.
2.	(a) Mr. Godin was appointed by the Governor in Council; (b) Mr. Godin was a member of Parliament from 1958 to 1965.
3.	(a) Mr. Godin's salary is within the range $16,068- $18,260. He received $1,143 in travel expenses; (b) The Citizenship Court Office located in Sudbury is staffed by four members of the Public Service. Their responsibilities include assistance for Mr. Godin in his handling of applications by aliens for citizenship and to receive and process all other types of application for citizenship or proof thereof. Names, titles and salary ranges are as follows: Mr. R. W. Sowerby, Regional Administrator & Clerk of the Court, $9,867-$11,211; Mr. G. C. A. Berthelot, Deputy Regional Administrator and Clerk of the Court, $7,276-$9,094; Mrs. F. M. Mikstas, Citizenship Examiner, $7,139-$7,846; Mrs. L. May, Stenographer-Typist, $5,234-$5,751.
4.	According to departmental records, Mr. Godin has made five visits to Ottawa to discuss Citizenship matters for which he was reimbursed travel expenses. The amounts in each case were $162, $97, $129.40, $120.91 and $140.50.


INTERPRETATION OF PROVISIONS CITIZENSHIP ACT BY JUDGES OF CITIZENSHIP COURT
Mr. Coates: 1.	Is a judge of a citizenship court allowed any discretion in interpreting the provisions of the Citizenship Act when processing citizenship applications from British subjects and aliens and, if so (a) to what extent (b) on what authority?
2.	Is the government aware of any misinterpretation of any section of the Citizenship Act as it applies to British subjects and aliens by any judge of any citizenship court and, if so (a) what court misinterpreted the act (b) what judge rendered the decision (c) what action was taken by government to rectify the situation?
3.	In conservation or briefings of judges by officials of the Citizenship Branch of the Department of the Secretary of State, has any judge challenged the act or any sections of the act pertaining to British subjects and aliens and, if so (a) which judge (b) from which citizenship court (c) what decision was rendered by the Department?


Gérard Pelletier: 1. The minister may, in his discretion, grant citizenship to an alien who
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satisfies a citizenship court with respect to the statutory qualifications. The court is required to interpret and apply those portions of the Citizenship Act and Regulations which relate to this type of applicant. No jurisdiction arises in a Court in connection with an application for citizenship by a British subject unless, in the opinion of the minister, there is a doubt as to whether the applicant possesses the required qualifications and the minister refers the case to a Court. If a referral occurs, the application is then heard by a Court as in the case of an alien application.
2.	So far as it is possible to determine, no.
3.	Mr. O. J. Godin has alleged that certain sections of the Citizenship Act give preferential treatment to British subjects. The act does permit British subjects to make application for citizenship direct to the minister instead of through a Court. The act is being administered by the department according to its provisions.


TIRE LABELLING AND GRADING
Mr. Mather: Is consideration being given to require tire manufacturers to grade and label their products so that the buyer will be able to purchase a tire more suitable to his requirements and, if so, (a) will action be considered to establish a quality grading system with uniform tests by which all passenger car tires will be measured (b) will such quality grading cover the areas of high speed performance, endurance, road hazard resistance and uniformity and balance?


Mr. Gerard Duquet (Parliamentary Secretary to Minister of Transport):: The Motor Vehicle Safety Branch of the Department of Transport is now studying such proposals to determine whether they achieve the intended purpose of serving to inform purchasers of tires as to the characteristics of the various grades. When this review has been completed the Department will prepare recommendations on the use of such a system in Canada.


HEALTH CARE FOR TREATY INDIANS
Mr. Yewchuck: 1.	Are Treaty Indians who are employed full-time obliged to pay premiums for health care and, if so, for what reason?
2.	For each province, how many Treaty Indians employed fulltime are (a) contributing (b) not contributing to provincial health plans?


Hon. lohn C. Munro (Minister of National Health and Welfare):: 1. Yes, except where low annual income makes then exempt and except in the provinces of Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Quebec and Northwest Territories where no premium is levied and until the end of the year in the Yukon when the Medical Care Plan comes into effect. Provincial laws of general application in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario require such payments.
2. (a) No statistics available; (b) no statistics available.

November 22, 1971
Questions


CAPE BRETON-EXPENDITURES FOR IMPROVEMENT OF COAL MINES
Mr. Douglas: 1.	What were the total expenditures by the Cape Breton Development Corporation for the improvement of coal mines in Cape Breton?
2.	What amount has been spent per mine or pit since the commencement of this programme?
Hon. ]ean Marchand (Minister oi Regional Economic Expansion): 1. Expenditures to December 31, 1970, were $13,650,000.
2. Of this, $6,888,000 was spent on four existing mines, $4,527,000 for coke ovens, and $2,220,000 towards the development of the new Lingan mine.


&quot;SYMPHONIE&quot; SATELLITE PROJECT
Mr. Macquarrie: 1.	Is the government making any financial contribution toward the "Symphonie" satellite project and, if so, what amount?
2.	What discussions have been held with representatives of the Government of France on this project?
3.	Has the government been informed of the participation of any Canadian province in the construction of the satellite or in its use thereafter and, if so, when?
4.	Is it the view of the government that telecommunications by satellite is within the jurisdiction of the federal government?
5.	Have any discussions been held between officials of Telesat Canada and/or the Department of Communications with the Government of Quebec regarding that Province's participation in any phase of the "Symphonie" project?
2.	The government has on a number of occasions informed France of the jurisdiction of the federal government in the area of satellite communications and of Canada's desire for mutually advantageous cooperation in space communications generally.
3.	The government has not been informed of the participation of any province in the construction or use of the Symphonie system. Information has, however, been forwarded last July by the Department of Communications of Quebec to my department indicating that the government of that province is studying the possibilities of making use of the satellite.
4.	Yes.
5.	I have been informed by Telesat Canada that there have been no discussions between officials of that corporation and the Government of Quebec in that connection. There have been informal exchanges between officials of the Department of Communications and Quebec.


CANADA MANPOWER TRAINING PROGRAM-LANGUAGE TRAINING
Mr. Orlikow: 1.	How many new Canadians in each province took courses in "Special English" under the provisions of the Manpower Training Act in each month in 1970?
2.	How many new Canadians in each province took courses in "Special English" under the provisions of the Technical-Vocational Training Assistance Act in each month in the year 1970?
[Translation]	Hon. Otto E. Lang (Minister of Manpower and Immigra-


Hon. Robert Stanbury (Minister of Communications):: 1. tion):
No.
1. The following is the number of adults referred for language training (English or French) during each month of 1970.
Province	Jan.	Feb.	Mar.	Apr.	May	June	July	Aug.	Sept.	Oct.	Nov.	Dec.Newfoundland	
Prince Edward	. -	-	-	-	-	-	-	-	-	-	-	-Island	-	-	-	-	-	-	-	-	-	-	-	-Nova Scotia	. 4	7	4	20	5	10	10	10	6	14	11	2New Brunswick	. 	-	-	-	-	-	-	-	-	-	-	-Quebec	561	317	387	327	184	407	301	273	401	466	483	270Ontario	735	1,058	790	812	747	540	499	526	911	991	413	16Manitoba	32	-	-	48	-	32	-	-	33	-	92	-Saskatchewan	. 2	6	5	-	7	7	1	4	7	3	16	6Alberta	
Northwest	63	51	76	61	21	31	-	15	31	15	111	32Territories	-	-	-	-	-	-	-	-	-	-	-	-British Columbia	185	58	107	57	69	106	49	54	130	178	213	10Yukon Territory.. .	. 9	-	-	-	-	-	-	-	-	32	-	
Canada		1,591	1,497	1,369	1,325	1,033	1,133	860	882	1,519	1,699	1,339	336
2. None. The Technical and Vocational Training Assistance Act expired AGRICULTURAL RESEARCH


Mr. Orlikow: 1.	What amount was spent on agricultural research by the government in the past year in (a) Department of Agriculture facilities (b) the National Research Council (c) University Faculties of Agriculture?
2.	What amount will be spent in the coming year for agricultural research in each of the above categories?
March, 1967.
Mr. ]. A. Jerome (Parliamentary Secretary to President of the Privy Council): I am informed by the Department of Agriculture and the National Research Council as follows: 1. (a) $49,587,000; (b) 1970-71, $1,218,000; 1971-72, $1,115,000 (estimated).
Note: Subsequent to answering Question No. 1,432 in March 1970, the basis for reporting the general area of application of science was changed to include amounts for oriented basic research. Figures comparable to those

November 22, 1971

above for previous years are as follows: 1968-69, $1,195,000; 1969-70, $1,038,000.
(c) Unknown but the following amounts were awarded by NRC to grantees who indicated that the purpose of their research was agriculture: 1970-71, $1,500,000; 1971-72, $1,700,000 (estimated); $800,000 by the Department of Agriculture.
2. (a) $55,739,000 (estimated), (b) See column for 1971-72 in 1 (b) and 1 (c) above, (c) $800,000 (estimated).


WABUSH AIRPORT, LABRADOR
Mr. Robinson: 1.	Has any land been acquired or is any being acquired for the expansion of Wabush Airport in Labrador and, if so, how many acres?
2.	How many acres of land are presently utilized by Wabush Airport?
3.	Are the facilities at Wabush Airport to be increased for international air traffic stopovers?


Gérard Duquet: 1. Negotiations are currently underway between the Ministry of Transport and Wabush Iron Co. Limited for transfer to the Federal Crown of additional lands required for the longer term development and zoning protection of Wabush Airport. Actual acreage to be acquired has not yet been established.
2.	Actual acreage required for all types of airport use still under negotiation (Question 1). However, runways, taxi-ways and apron (aircraft movement areas) comprise approximately 86 acres.
3.	No. Facilities currently being expanded to serve domestic needs.


AIR CANADA-PROVISION OF SPECIAL SEATING AREAS FOR NON-SMOKERS
Mr. Noble: Has, or will, the government request Air Canada to provide separate seating areas on Air Canada planes for non-smokers?


Gérard Duquet: On a voluntary basis in April 1971, when Air Canada introduced the Boeing 747 provisions were made for a cabin section (Cabin "D") to be designated for non-smokers. Also, on September 1, 1971, Air Canada introduced no-smoking areas on all types of aircraft which are at present in use on all routes.


STUDENT SUMMER EMPLOYMENT
Mr. Orlikow: 1.	What number of high school and university students were registered with Canada Manpower Offices for summer employment in the months of May, June, July and August for the year 1971?
2.	Of this number, how many were placed for employment and how many was the Department unable to place for employment in each of the above months for the year 1971?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: 1. The numbers of high school students registered with Canada Manpower Centres for summer employment in the months of May, June, July and August for the year
Questions
1971, are: May, 64,229; June, 71,608; July, 59,043; August, 28,170; Statistics for University students are not compiled separately from those of Post-Secondary students. In addition to University students, this classification includes Community College and Technical Institute students. The numbers of Post-Secondary students registered with Canada Manpower Centres for summer employment in the months of May, June, July and August for the year 1971, are: May, 71,061; June, 36,489; July, 22,391;
2. The number of confirmed placements of students in employment during May, June, July and August of 1971, was: High School Students: May, 1,768; June, 14,274; July, 25,061; August, 15,635. Post-Secondary Students: May, 21,737; June, 30,267; July, 16,484; August, 9,494. The number of students placed and the number not placed cannot be accurately determined because a large number of students do not report the results of their referrals to the Canada Manpower Centre.


PUBLIC SERVANTS-DISPLAY OF POLITICAL POSTERS ON PERSONAL PROPERTY
Mr. Burton: Are public servants prohibited from displaying or allowing to be displayed a political poster on their personal property and, if so, under what authority?


Gérard Pelletier: I am
informed by the Public Service Commission as follows: Section 32 of the Public Service Employment Act provides that: Public servants may attend political meetings and may contribute money for the funds of a candidate for election or money for the funds of a political party. In addition, an employee may seek nomination as a candidate and be a candidate for election in a federal, provincial or territorial election, provided he is granted leave of absence without pay by the Public Service Commission for such purpose. This section of the act, however, prohibits employees from engaging in any other type of work for, on behalf of or against a candidate for election or a political party.


OPPORTUNITIES FOR YOUTH PROGRAM-CONTRACT ISSUED TO &quot;THE PRAIRIES FIRE&quot; REGINA
Mr. Gleave: 1.	On what date was a contract issued to the publication The Prairie Fire in Regina under the Opportunities for Youth Program?
2.	On what date was the contract revoked?
3.	What were the reasons given for revoking the contract?
4.	Were any expenses submitted by the publishers or editors of The Prairie Fire to the Opportunity for Youth Program?
5.	Were any amounts paid to the editors or publishers in respect of the contract and, if so, what amounts were paid?


Gérard Pelletier: 1. Under the Opportunities for Youth Program a contract was issued to the publication "Prairie Fire" of Regina on May 1, 1971.
2. The contract was revoked as of June 28, 1971.
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November 22, 1971
Questions
3.	The reason for revoking the contract was because the recipients became engaged in using funds for purposes beyond those mutually agreed upon in the contract.
4.	Yes, expenses were submitted by the project members to Opportunities for Youth.
5.	Yes, the amount paid to the project "Prairie Fire" was $5,159.47.


NEWSTART PROGRAMS
Mr. Robinson: 1.	What was the total amount spent for NewStart Programs in 1969, 1970 and 1971?
2.	How many projects were there under the NewStart Programs and where was each located?


Hon. lean Marchand (Minister of Regional Economic Expansion):: 1. April 1, 1968-March 31, 1969, $3,634,987-April 1, 1969-March 31, 1970, $6,025,418; April 1, 1970-March 31, 1971, $5,257,399; total: $14,917,804.
2. There were six NewStart projects with headquarters in the following communities: Lac la Biche, Alberta; Prince Albert, Saskatchewan; The Pas, Manitoba; Richibucto, New Brunswick; Montague, Prince Edward Island; Yarmouth, Nova Scotia.


CANADIAN PENSION COMMISSION
Mr. McCleave: 
WAGE-PRICE REVIEW BOARD
Mr. Robinson: Will the government consider the advisability of providing a wage-price review board as a means to fight inflation?


Hon. E. J. Benson (Minister of Finance):: The government is considering a number of alternatives. Should the government decide to introduce a wage-price review board, it would be announced in the usual manner.


CANADIAN DAIRY COMMISSION INVENTORIES
Mr. Rodrigue: 1.	To date, what are the inventories of the Canadian Dairy Commission for (a) butter (b) powdered milk (c) cheese?
2.	What is the inventory of any other government agency for these products?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: I am informed by the Canadian Dairy Commission and Statistics Canada as follows: 1. Inventories as at November 5, 1971 were: (a) Butter- 52,799,256 lbs.; (b) Powdered Milk-13,167,741 lbs.; (c) Cheese-Nil.
2. Information not available.

November 22, 1971


MOTION TO ADJOURN UNDER S.O. 26 INDIAN AFFAIRS ALBERTA-PROPOSED CULTURAL-EDUCATIONAL CENTRE
Mr. Frank Howard (Skeena):: Mr. Speaker, I rise for the purpose of proposing a motion under Standing Order 26.1 ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the decision by the Cabinet Committee on Social Policy, being a confidential document of cabinet which was leaked, confirmed on July 29, 1971, that since the Indian Association of Alberta in March, 1970, was the first to present a proposal for a cultural-educational centre, the pilot stage of that proposal be the first to be considered for approval by the standing subcommittee; and the subsequent decision to proceed with that pilot stage which was disapproved and cancelled by the Minister of Indian Affairs and Northern Development, thus destroying the effectiveness of the organization of the Indian people in Alberta and their participation in ongoing programs.


Mr. Speaker:: The hon. member for Skeena has filed the notice required under Standing Order 26. The hon. member suggests that there should be a suspension of the scheduled work of the House for the purpose of considering a decision which he states was taken in July last and subsequently withdrawn by ministerial decision.
These decisions are said to relate to the establishment of cultural-educational facilities as proposed by the Indian Association of Alberta in 1970. All this may be of national importance and of national interest, but I am quite convinced that it is not a situation which should be considered by the House under the terms of Standing Order 26. It may well be that the matter should be discussed by the House, but I would think other opportunities should be available to hon. members to discuss the matter, as suggested by Standing Order 26. What I am suggesting to the hon. member and to hon. members who are interested in this very important matter, as indicated by the motion made under Standing Order 43 earlier this day, is that there should be other opportunities to debate this matter and that in any event it should not be considered at this time by way of an emergency debate. I therefore regret that the hon. member's motion cannot be put at this time.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: should like to ask the Prime Minister whether the Cabinet Committee on Social Policy did decide in the month of
Inquiries of the Ministry
July in principle that the Department of the Secretary of State and the Department of Indian Affairs and Northern Development be authorized to establish jointly a five-year renewable financing program for the support of native cultural-educational centres, as appears to be the content of what purports to be a copy of a record of the committee's decision? Was such a decision made and, if so, is there any particular reason why it has not been announced in the House?


Right Hon. P. E. Trudeau (Prime Minister):: I think the House will agree that it is not proper for any minister or for myself to refer to discussions in cabinet and decisions taken in cabinet until such time as the government wishes to make such an announcement.


Robert Lorne Stanfield: Do I understand that the Prime Minister refuses to confirm or deny that what purports to be a record of the decision is in fact a record of such a decision?


Pierre Elliott Trudeau: Do I understand that the Leader of the Opposition disagrees with this stance under the constitutional law?


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: When is a leak not a leak, Mr. Speaker?


Some hon. Members:: Oh, oh!


An hon. Member:: Heavy water leaks.


Mr. Nesbitt:: You guys had better hire a plumber.


Mr. Speaker:: Order, please. Perhaps the Leader of the Opposition might be given an opportunity to ask his supplementary question.


Robert Lorne Stanfield: Mr. Speaker, in view of the announced intention of the Indian Association of Alberta to discontinue involvement with the federal government in any programs in areas such as education and others in which it had been participating and the serious effect this may have on future progress in working out problems associated with the native peoples in that province, indeed in the whole of Canada, does the Prime Minister intend to propose any particular measures with a view to repairing this breakdown in co-operation and communication between the government and this important association of Indian people?


Pierre Elliott Trudeau: Mr. Speaker, the minister responsible for Indian affairs has always indicated willingness to consult and co-operate with the Indian people to a degree which I believe is unequalled compared with any previous time. If an association wants to go out of existence there is, of course, nothing the government can do about it. But we stand ready at all times to discuss our Indian policies with the Indians, with the opposition, indeed with anyone at all.



EDUCATION-REQUEST FOR INQUIRY BY STANDING COMMITTEE

Frank Howard: Mr. Speaker, I have a supplementary question. Not only because of the particu-
24372-58}

November 22, 1971
Inquiries of the Ministry
lar situation relating to the education of Indian children in Alberta but elsewhere as well, would the Prime Minister and the government be prepared to put a motion on the order paper to have this subject matter examined in public by the Standing Committee on Indian Affairs and Northern Development?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member is referring to a motion in this session he probably knows that the session is well advanced. The House is very busy meeting in committee of the whole, and it has been the policy of the government to avoid parliamentary committee meetings as much as possible when the House is in committee of the whole so that we may be able to make progress with the business before the House. However, this does not mean that the minister is not prepared to discuss his policies when they come before the House, or to answer questions. The minister will be in the House tomorrow, and I believe the next day also, and will be willing to answer any questions on this subject.


Frank Howard: Mr. Speaker, inasmuch as there has been almost a complete breakdown in communication between the minister and the Indian people, in view of their reluctance to proceed any further in their dealings with him, and in view of the fact that there was a well established and fine relationship existing when the minister presently in charge of housing was responsible for Indian affairs, would the Prime Minister consider making some switches in portfolids to get things back on the track?


Mr. Speaker:: Order, please.



ALBERTA-PROPOSED CULTURAL-EDUCATIONAL CENTRE-EFFECT OF STUDENTS' STRIKE ON PROVISION OF FUNDS

Paul Yewchuk: Mr. Speaker, I wish to direct a supplementary question to the Prime Minister. Can the Prime Minister assure the House that action on the decision arrived at on July 29 will in no way be affected by the dispute over educational facilities in Alberta at this time?


Pierre Elliott Trudeau: What decision is the hon. member referring to, Mr. Speaker? I did not understand his question.


Paul Yewchuk: I will rephrase the question. Can the Prime minister assure the House that the decision by the government to grant funds for the purpose of establishing an Indian educational and cultural centre in Alberta will not be affected by the fact that there is a strike being staged by Indian students in northeastern Alberta?


Pierre Elliott Trudeau: There was no decision to hold a conference. I do not know what the hon. member is referring to.


Paul Yewchuk: My reference was to the fact that the Indian Association has not received funds which were supposed to be forthcoming for this centre. As a supplementary question, have the RCMP been called in to investigate this new leak of July 29, and not last week's leak about a cabinet decision on foreign investment?


Pierre Elliott Trudeau: Now that I understand the previous question, Mr. Speaker, all I can say is that obviously the government cannot give funds to everyone in Canada who requests funds, but the record of the present government and of the minister in this regard is pretty good. I believe he doubled, during his mandate of three years, the amount of funds available to Indians over amounts that had been available to them before. So there is no lack of funds; there is a great deal of funds-


Mr. Speaker:: Order, please. Perhaps we might return to this question in a moment. We will be running short of time. I see that the Leader of the Opposition wants to pursue the matter. He will be recognized after we have finished the first round of questions. The hon. member for Brant.
*



LABOUR CONDITIONS


Mr. Derek Blackburn (Brant):: Mr. Speaker, in view of the fact the hon. member for Stormont-Dundas is unable to ask a question in his capacity as Speaker during the question period-


Mr. Speaker:: Order, please. Would the hon. member kindly resume his seat. If the hon. member has a question to ask he should ask it directly. As Speaker I take exception to the preamble to the hon. member's question. He should ask the question directly.


Derek Nigel Ernest Blackburn: My question is directed to the Minister of Finance. Would the Minister of Finance inform the House whether the government has any plans for the 225 men to be laid off at the Courtauld plant in Cornwall on December 3?


Edgar John Benson: Mr. Speaker, I think this question should be addressed to the Minister of Manpower and Immigration.


An hon. Member:: What good would that do?
*



REGIONAL ECONOMIC EXPANSION


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I have a question for the hon. Minister of Regional Economic Expansion.
In view of the substantial federal grants the Golden Eagle Oil Company has received from the federal government for its Saint-Romuald plant, can the minister tell us whether he knows that no Canadian company or firm has been able to sell steel or paint to this company because it uses government grants to make all its purchases in England?
November 22, 1971


Mr. Speaker:: Order. I seriously doubt whether the hon. member's question is in order. If the minister can reply briefly, I shall allow him to do so but it seems to me that such a question could normally be placed on the order paper.


Hon. lean Marchand (Minister oi Regional Economic Expansion):: The reply will be very brief, Mr. Speaker. The fact is that Golden Eagle obtained a grant under the former system, with no conditions attached. Under the new act, there is a fundamental requirement that materials be purchased in Canada, when available.
*



INDIAN AFFAIRS


Robert Lorne Stanfield: have a question for the right hon. Prime Minister arising out of his statement a moment ago with regard to the proposed educational centre in Alberta that the government does not have funds to support every proposition. May I ask the Prime Minister whether this is an appropriate answer in view of the confirmation by cabinet on July 29 of the assertion that "the first to present a proposal for a cultural-educational centre" was the Indian Association of Alberta and that a pilot stage of that proposal would be the first to be considered for approval by the standing subcommittee? Why has this matter not been proceeded with and is it a fact that a condition precedent to going forward with it is settlement of the school dispute in northeastern Alberta with the co-operation of the Indian Association? In other words, is the settlement of that dispute in fact holding up this proposal that the cabinet did in fact approve?


Pierre Elliott Trudeau: Mr. Speaker, the question is based on what the Leader of the Opposition says is a cabinet document. I repeat that I will not discuss what went on in cabinet and what decisions may or may not have been taken there on the substance of an issue. Of course the government has money to assist Indians. I have just said that the Minister of Indian Affairs and Northern Development doubled the amount of assistance to Indians over the past two and a half or three years, so there is money available. I am just saying we cannot give it to everybody all the time right away, and if an association wants to will itself out of existence and do it on television it is perfectly free to do so. It will not exert pressure on the government in that way, however.
*



POST OFFICE


Hon. W. G. Dinsdale (Brandon-Souris):: I have a question for the Parliamentary Secretary to the Postmaster
Inquiries of the Ministry
General. In the absence of the Postmaster General can the parliamentary secretary report to the House on the current negotiations under way to avoid disruption of Christmas mail service, and in particular can he indicate whether agreement has been reached to resolve the problem of the hiring of casuals?


Mr. Gerald Richard Cobbe (Parliamentary Secretary to Postmaster General):: Mr. Speaker, to my knowledge the discussions are still taking place. When official decisions are made I am sure the House will be totally informed by the minister.


Walter Gilbert Dinsdale: In view of the urgency of the matter can the right hon. Prime Minister assure the House that the Postmaster General will make a statement on motions so that the growing anxiety in the country with respect to Christmas mail delivery may be allayed?


Pierre Elliott Trudeau: Mr. Speaker, I certainly will communicate that request to the minister. I believe he is to be in the House tomorrow. I will ask him to give very urgent consideration to that request.
*



EXTERNAL AFFAIRS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. It is further to a question addressed to the Prime Minister on Friday. Can the minister advise whether the government has now learned of the Chinese nuclear explosion? If so, can he advise if such information came from the government of China, our own monitoring devices or from the governments of other countries?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, we have been getting information from a number of sources confirming that there was a nuclear explosion. Some of this information came from monitoring and seismic devices we have in Canada. Other information came from other countries. None of it came directly from the Chinese government.
*


LIFT PROGRAM-REQUESTS TO FARMERS FOR REPAYMENT-POSSIBLE COURT ACTION
Mr. Jack Murta (Lisgar):: Mr. Speaker, may I direct a question to the Parliamentary Secretary to the Minister of Agriculture. Is the government asking some 4,168 western farmers to refund some of the money they were paid under the Lift program, and is the minister going to publish exactly how much money is involved in total?


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, as was said in reply to a

November 22, 1971
Inquiries of the Ministry
question on the same subject the other day, we have information on how many refunds there have been up to now. We have given the figures regarding those who have already paid back the money. We have also given figures regarding those who have replied and explained what took place and we have settled those files. I suppose that within a few weeks more files will be settled to the satisfaction of all people.


Jack Burnett Murta: With regard to the ones that are outstanding, is the government preparing any form of court action against the farmers concerned in this matter? If so, will a statement be made to the House to this effect?


Marcel Lessard: Mr. Speaker, I suppose if moneys are owing to the government and those moneys are not repaid by the people involved, some action will have to be taken. I hope all hon. members will agree with us when we suggest that some action will have to be taken to recover those funds.
*


NATURAL GAS-GOVERNMENT INTERVENTION TO ASSURE FAIR PRICE TO WESTERN CANADA PRODUCERS AND TO CONSUMERS EAST OF ALBERTA
Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, my question is for the Prime Minister. Since Friday's gas export ruling of the National Energy Board confirms the near-monopoly position of Trans-Canada Pipe Lines Limited as a wholesale purchaser of natural gas for consumption outside British Columbia and Alberta, can the Prime Minister indicate if the government is presently considering intervening in the pricing process of the industry to assure a fair return to western Canada's gas producers as well as a fair price to consumers east of Alberta?


Pierre Elliott Trudeau: Mr. Speaker, I will have to take notice of the question. I will be glad to refer it to the Minister of Energy, Mines and Resources for a reply.


Patrick Morgan Mahoney: In view of the circumstances already cited, will action by the government of Alberta to manipulate the price of natural gas in order to protect producers and provincial revenues from the Trans-Canada Pipe Line monopoly without regard to prices to be charged to consumers be acceptable to the government?


Mr. Speaker:: Order, please. That question sounds more like an argument than a question.


CONSULTATION WITH ALBERTA RESPECTING NEGOTIATIONS WITH UNITED STATES
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, may I direct a supplementary question to the Prime Minister. In light of statements made by the Premier of Alberta this weekend and in light of renewed energy negotiations with the United States, will the government agree to ongoing consultations with Alberta on the energy talks under

way with the United States? If so, when will such consultations with Aiberta begin?


Pierre Elliott Trudeau: Mr. Speaker, I told the Premier of Alberta when I met him a week or two ago that we would welcome any input from the Alberta government into our information on our policies.


An hon. Member:: You met him last week.


Pierre Elliott Trudeau: I had a meeting with him before last week but the hon. member was not aware of it.


RECONSIDERATION BY NATIONAL ENERGY BOARD OF REFUSAL OF NATURAL GAS EXPORT APPLICATIONS
Mr. Erik Nielsen (Yukon):: Mr. Speaker, my supplementary question is for the Prime Minister. As requested by the government of Alberta, will the government of Canada request the National Energy Board to reconsider its refusal to allow further exports of natural gas at this time?


Pierre Elliott Trudeau: Mr. Speaker, my understanding of the law is that the government is not in a position to ask the National Energy Board to reconsider its refusal. The matter comes before the Governor in Council only when an order for export is approved. When it is denied the government, under the statute as set up, cannot intervene to exercise pressure on the board, which is independent.
*


INDUSTRY
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister. In view of reports that appeared during the weekend, may I ask if it is the government's intention to provide additional aid to private industry to the tune of $190 million? If so, will the details of such a plan be made known to the House this week?


An hon. Member:: Raise your right hand!


Pierre Elliott Trudeau: Additional aid to what, Mr. Speaker?


Stanley Howard Knowles: Additional to the $80 million already provided to private industry.


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member is referring to the GAAP program-I believe the story in the newspapers referred to that-the hon. member should consult the estimates and he will see that we have nothing in mind in that regard. The minister will be able to explain it when his estimates come before the House.


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my supplementary question is for the Prime Minister. Has the government approved a further $158 million assistance plan for Canadian manufacturers who have been hurt by the U.S. import surcharge or other American protective mea-
November 22, 1971

sures? If so, when will an official announcement be made?


Pierre Elliott Trudeau: Mr. Speaker, I believe this is the same question in another form and my answer is the same. The government has some intentions. They are expressed in the supplementary estimates which were tabled a few days ago. The minister will gladly explain their intent at greater length when he defends his estimates.


Robert Lorne Stanfield: have a supplementary question, Mr. Speaker. In view of the Prime Minister's statement about the minister being prepared to answer questions when his estimates are before the House, will the Prime Minister assure us that those estimates will be before the House during the present session and that the minister concerned will answer questions in defending his estimates before the House during the present session?


Pierre Elliott Trudeau: Mr. Speaker, if the Leader of the Opposition is anxious to have this particular subject discussed he could, of course, use one of the opposition days to do that.


Robert Lorne Stanfield: The Prime Minister should read the rules again.


PUBLIC SERVICE
Mr. Roland Godin (Portneuf):: Mr. Speaker, I have a question for the Secretary of State.
In answer to a question that I asked him some time ago, the Secretary of State said that he would investigate and tell the House how many unilingual translators from France, hired by the Bureau for translations, were now taking intensive courses to improve their knowledge of English. Could he tell us now how many such persons are taking those courses?


Mr. Speaker:: May I suggest to the hon. member that such a question should normally be put on the order paper. The hon. member is asking for strictly statistical information. In general, such questions should be put on the order paper. The hon. member states that the question has already been asked and that the minister has agreed to give the required information. Considering the circumstances and if the figures are immediately available, the minister may answer the question. Otherwise, it should be put on the order paper.


Gérard Pelletier: Mr. Speaker, unfortunately, the hon. member was too long in coming back to his question. I have had the answer with precise figures in the folder in front of me for many weeks; but I note that it has now disrppeared. I shall therefore answer the question if it is put on the order paper.
Inquiries of the Ministry


REGIONAL ECONOMIC EXPANSION
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I wish to direct a question to the Minister of Regional Economic Expansion. In view of statements made by the Prime Minister of Quebec to the effect that government policies have been ineffective in that province in ending regional disparities, does the minister intend to meet with the Prime Minister of Quebec to discuss this very important matter?


Jean Marchand: Mr. Speaker, I called the Prime Minister of Quebec this morning and he told me he had never said that. He said he was referring to taxes and not to the regional program which he supports entirely.


James Aloysius McGrath: Does the minister intend to meet with or call the premiers of the four Atlantic provinces, as requested in the report of the Atlantic Development Council, to discuss criticisms aimed at his policies in the Atlantic provinces?


Jean Marchand: Mr. Speaker, I met with them last week and all of them were very happy with what we were doing in Nova Scotia, in New Brunswick, in P.E.I. and in Newfoundland.


Mr. Speaker:: Does the hon. member for Temiscamingue wish to put a supplementary question?


David Réal Caouette: Yes, Mr. Speaker and I note that at least the Minister of Regional Expansion is pleased.
Can the minister say whether before earmaking any funds for economic expansion purposes-whether in Quebec or in the Maritimes-he communicates with the authorities of that province?


Jean Marchand: Yes, Mr. Speaker. We have set up offices in each province and every step is taken in co-operation with provincial authorities.


RE-EVALUATION OF POLICIES IN LIGHT OF CRITICISMS
James Aloysius McGrath: I have a supplementary question, Mr. Speaker. Notwithstanding the answer given by the minister to the House, in light of the unanimous criticisms aimed at his policies by all the agencies involved, including agencies under his jurisdiction such as the Atlantic Development Council and the Canadian Council on Rural Development, does the minister intend to re-evaluate the effectiveness of the present DREE policies in ending regional disparity?


Jean Marchand: Mr. Speaker, I absolutely refuse to answer a question the premises of which are false-

November 22, 1971
Inquiries of the Ministry


James Aloysius McGrath: A supplementary question.


Mr. Speaker:: Order, please. We are running short of time. The hon. member has had two supplementaries and we have had other supplementaries on the same subject.


UNEMPLOYMENT INSURANCE
Thomas Speakman Barnett: My question is for the Minister of Labour. It arises out of a full page advertisement in Weekend magazine glamourizing the provisions of the new Unemployment Insurance Act and asking citizens to drop in or telephone the nearest Unemployment Insurance Commission office. In light of this invitation, will the minister suggest or advise the commission to establish Zenith telephone numbers so that those people who may be 200, 300 or 400 miles away from the nearest office may be able to have the same facility of access as those living in urban centres?


Hon. Bryce Mackasey (Minister of Labour):: We have this type of operation in many parts of Canada, Mr. Speaker. Whether or not it should be expanded is another question. I will take notice of the hon. member's representation. If he can be more specific, we will see whether this would be useful in particular areas.


SUGGESTED RE-ESTABLISHMENT OF OFFICE IN YUKON
Erik Nielsen: Assuming that the advertisement is an invitation to all Canadians to avail themselves of the services of the unemployment insurance offices, I ask the minister whether he will consider re-establishing in the Yukon a functioning unemployment insurance office to which the citizens there could have access?


Bryce Stuart Mackasey: I will inquire from the commission and see if such a suggestion is realistic. If it is, I will be glad to do it.


CANADIAN BROADCASTING CORPORATION
Mr. Norman A. Cafik (Ontario):: I have a question for the Secretary of State. In view of the educational and historic value and the excellent quality of the CBC series, "The Tenth Decade", will the minister see that prints of this series are made available for distribution to schools across Canada?


Some hon. Members:: Hear, hear!


Gérard Pelletier: Mr. Speaker, I believe the distribution of magnetoscopic picture tapes poses a number of technical problems, as well as a

number of problems with regard to labour contracts signed with the authors and artists. However, I have had the opportunity of discussing this matter with the management of the CBC but these talks are not yet completed.


Mr. Speaker:: I believe the hon. member for Ontario has a supplementary to his previous question.


Norman Augustine Cafik: Yes, Mr. Speaker. In his discussions with the CBC and the parties involved will the Secretary of State commit himself to at least approaching those who may have royalty rights and other residual rights in the production to see if they would be willing to waive them for the educational benefit of the people of this country?


Gérard Pelletier: This is worth considering, Mr. Speaker.


REASSESSMENT OF USE OF DDT AGAIN IN LIGHT OF FINDING BY RUSSIAN SCIENTISTS
Wallace Bickford (Wally) Nesbitt: My question is to the Minister of National Health and Welfare. Because of reports over the weekend from the Soviet Union that Russian scientists have now discovered that the chemical commonly known as DDT is broken down by micro-organisms commonly found everywhere in the earth, will the minister have his department reassess whether DDT may again become available for use in Canada?


John Carr Munro: I doubt whether that would be the finding of the department, Mr. Speaker, but I would be pleased to have them look at the matter again.



ADMINISTRATION OF JUSTICE


Mr. Robert C. Coates (Cumberland-Colchester North):: My question is for the Minister of Justice. Is the minister satisfied with the legislation presently in effect with regard to the granting of pardons to persons who were formerly found guilty of indictable offences and, if not, does he plan to introduce legislation to amend the present law?


Mr. Speaker:: Order, please. The second part of the question would be in order. The hon. member knows I have often taken exception to questions which simply invite a minister to state whether he is satisfied or dissatisfied with a situation. At that point the hon. member is asking for an opinion. The second part of the question is quite in order.
Nov ember 22, 1971


Hon. John N. Turner (Minister of Justice):: Mr. Speaker, I will draw the second part of the question to the attention of the Solicitor General whose responsibility it would be to amend that law.



OPPORTUNITIES FOR YOUTH PROGRAM-AGREEMENTS WITH QUEBEC AND OTHER PROVINCES-REQUEST FOR REPORT ON 1971 ACTIVITIES AND 1972 PLANS

David Samuel Horne MacDonald: My question is for the
Secretary of State. It concerns the announcement last week by the Minister of Education in the National Assembly of Quebec relative to a number of agreements concerning next year's Opportunities for Youth program. Can the minister indicate whether there has been a final or even an intermediate agreement with the government of Quebec and whether such consultations and agreements exist with other provinces? Also, in view of the late date when may we expect to hear some report on this year's program and some statement with regard to next year's plans?


Gérard Pelletier: Mr. Speaker, the hon. member is right in saying "agreement" since, in fact, there has not been any formal agreement with any of the provinces visited, that is, neither with Nova Scotia, New Brunswick, Prince Edward Island, nor with Quebec. This is where we stand in our consultations. We propose to them a certain number of ideas; some of these seem interesting to them, and they accept them; others are rejected, and we do likewise on our side. We speak all the less firmly that the pursuit of the Opportunities for Youth program has not yet been the subject of any final decision.
As for the report, I apologize to the House for the delay in tabling it, but this is a matter of data processing and the task force responsible for producing the report is working very hard at this.
As for deadlines, we will be meeting them much better this year than we did last year, if it is decided that the program should be taken up again under the same form as last year.


David Samuel Horne MacDonald: The minister did not indicate whether three firm agreements had in fact been arrived at with the province of Quebec, nor did he indicate when there would be some statement with regard to the general criteria that would be applied. I understand there has been a special task force at work doing this evaluation. I wonder why it should take so long to make some statement, now a month or a month and a half overdue?


Gérard Pelletier: Mr. Speaker, I do not think the hon. member understood the last part of my reply, in which I said that I quite agreed with him, and was hoping to be able to table this report as soon as possible.
As far as the agreement is concerned, he also misunderstood the first part of my reply, which was that there
Inquiries of the Ministry
:bviously could not be an agreement with any province on a program whose continuation had not yet been definitely decided upon.



BRIDGES


Winona Grace MacInnis: In the
absence of the Minister of Transport and his parliamentary secretary I will address my question to the Prime Minister. In view of the assurances given to the House by the minister on October 12 and November 2 that interested local groups would be consulted before a decision is made concerning tolls on access bridges to Sea Island, will the Prime Minister look into the reason why the Sea Island Ratepayer's Association and the Free Airport Access Committee are being barred from the consultation which the minister set for tomorrow morning in Vancouver?


Pierre Elliott Trudeau: Mr. Speaker,
I will look into this matter and see if the facts are as alleged. I know that the minister is in Vancouver today. It may be that while we are talking he is consulting such groups as have been referred to by the hon. member.


Winona Grace MacInnis: Can the Prime Minister give the assurance that these local groups will be consulted before a firm decision is made with regard to those bridges?



GOVERNMENT ADMINISTRATION


Robert Lorne Stanfield: wish to direct a question to the Prime Minister without in any way wishing to inquire into cabinet secrets.


Erik Nielsen: There are none left.


Robert Lorne Stanfield: Will the right hon. member tell the House whether any investigation is being conducted into the question of whether there has been unauthorized possession of a cabinet document involving the decision of July 29, 1971? Is any investigation being conducted?


Pierre Elliott Trudeau: Yes, Mr. Speaker. We are looking into the matter.



NATIONAL ANTHEM


Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, I have a question for the Secretary of State. Can the minister confirm that in fact the government of Canada does pos-

November 22, 1971
Inquiries of the Ministry
sess the copyright to the words of "O Canada" and that no royalties are being charged, contrary to the impression left in the House last Friday by the right hon. member for Prince Albert, as reported at page 9713 of Hansard? [Translation]


Gérard Pelletier: Yes, Mr. Speaker.



CANADIAN CULTURE


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to address a question to the Prime Minister. It concerns a matter raised by the Premier of Quebec in connection with a statement made recently by the Prime Minister in regard to Canada being a multicultural society. Have there been any definite objections raised by the Premier and, if so, what has the answer been in regard to this very important matter?


Pierre Elliott Trudeau: Mr. Speaker, at the federal-provincial conference last week the Premier of Quebec did tell me that he was sending me a letter on this matter to explain his position vis-a-vis the position of the federal government. I have not to this date studied his representations, but I hope to do so soon.


Lincoln MacCauley Alexander: In view of the importance of the statement made by the Prime Minister some time ago, can the Prime Minister assure the House and the people of Canada that he and the government will stand by his statement as originally uttered?


Pierre Elliott Trudeau: That is our position, Mr. Speaker.



BILINGUALISM AND BICULTURALISM


David Réal Caouette: Mr. Speaker, I would like to ask the Secretary of State a supplementary question.
Having heard what the minister had to say last night on television about multiculturalism, I would like to ask him whether he intends to change the name of the well known BB Commission to BM commission in order to stress the multicultural character of that body?


Gérard Pelletier: Mr. Speaker,
I think it would be difficult to change the name of a body which no longer exists.



TAXATION


Mr. R. E. McKinley (Huron):: Mr. Speaker, I have a question for the Minister of Finance. Would the minister

advise the House whether or not a decision has been taken by the government on the request of Canadian school trustees that school boards be granted the same status as hospitals under the Excise Tax Act?


Edgar John Benson: Mr. Speaker, I would have to take the question as notice.


EXTERNAL AFFAIRS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. Would the minister inform the House whether or not, prior to the debate that took place in the United States Senate a week ago Saturday which led to a vote that, if it had been resolved in the affirmative, would have exempted Canada from the imposition of the United States surcharge, officials of the Canadian embassy in the United States informed members of the U.S. Senate on the question of the auto pact and, more particularly, whether or not Canada had reneged on the auto pact?


Mitchell William Sharp: Mr. Speaker, I find that question very complicated. Perhaps the hon. gentleman would simplify it and I might be able to answer.


John Edward Broadbent: Mr. Speaker, my question is whether or not Canadian officials at our embassy in Washington took steps, prior to the vote a week ago Saturday in the U.S. Senate, to inform U.S. Senators about Canada's position on the Canada-U.S. automotive agreement? '


Mitchell William Sharp: Mr. Speaker, our position on the agreement is probably well known, but any negotiations that have taken place have been between embassy officials and members of the United States administration.


John Edward Broadbent: Mr. Speaker, might I put a further question to the Secretary of State for External Affairs following the answer he gave me. Do I understand the minister to say that, in terms of important questions or problems that exist between Canada and the United States, the government of Canada has direct contact in regard to the provision of information and so on only with part of the executive branch of the United States government and does not deal with the legislative branch?


Mitchell William Sharp: Mr. Speaker, I think we take much the same view as would be taken of efforts by the administration of the United States to deal directly with Members of Parliament here. It would be permissible but sometimes does not produce the best results.
November 22, 1971



THE CANADIAN ECONOMY


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Prime Minister. At today's meeting with key Canadian business leaders is the Prime Minister going to outline the thinking of the government on the idea of a special screening mechanism, and canvass their views and suggestions regarding guidelines for such a mechanism?


Pierre Elliott Trudeau: Mr. Speaker, the meeting has already taken place and this question did not arise.



INDICATION TO BUSINESS LEADERS OF WILLINGNESS TO AMEND COMPETITION AND LABOUR CODE BILLS- DISCUSSION OF PRICE AND WAGE CONTROLS

Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, may I ask the Prime Minister whether the right hon. gentleman indicated to the business leaders that the government was willing to make changes in the competition bill act and in the bill to amend the Canada Labour Code?


Pierre Elliott Trudeau: No, Mr. Speaker, I did not.


John Howard Lundrigan: A further supplementary question. Were there any discussions regarding price and wage controls, and can the Prime Minister indicate to the House what was the position of the government in these discussions?


Pierre Elliott Trudeau: That question was not brought up, Mr. Speaker.



COMPETITION BILL


Steve Eugene Paproski: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. In view of the royal shafting the minister received during his speaking engagements across the country, and particularly last Wednesday when he addressed businessmen in Edmonton, would the minister now withdraw the contentious competition bill and before redrafting it contact the business sector of Canada so that businessmen too may bring in some recommendations?


Hon. Ron Basiord (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I spoke at a luncheon given by the Edmonton Chamber of Commerce and I thought received a good reception from a very intelligent audience there. Certainly they went away with the clear understanding that this was a proposed piece of legislation and that, in so far as they could show that it had practical difficulties, we on the government side had a very open mind and would listen to any comments or suggestions.


Mr. Speaker:: Is the hon. member rising on a point of order?
Income Tax Act


Steve Eugene Paproski: Mr. Speaker, my question was: Is the minister going to withdraw the bill before the end of the session and redraft it?


Stanley Ronald Basford: Mr. Speaker, the hon. member is so keenly interested in this subject that I thought he would have read my speeches on the subject since June 29, all of which have-


Mr. Speaker:: Order, please. Perhaps this matter might be pursued tomorrow. Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, November 19, 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:: Order. In accordance with the statement of the Parliamentary Secretary to the President of the Privy Council as recorded at page 9677 of Hansard for November 18, 1971, the committee will now proceed to sections 2, 17, 56 and 58 inclusive, 90 to 95 inclusive, 113 to 116 inclusive, 126, 133, 134, 212, 219 and 257 dealing with international income. I must bring to the attention of the committee that sections 56, 57, 58 and 126 have already been agreed to.
On Clause 1-Section 2: Tax payable by persons resident in Canada.


Mr. Ritchie:: Mr. Chairman, the provisions relating to the taxation of foreign source income set out in the bill to amend the Income Tax Act introduced by the Minister of Finance (Mr. Benson) differ very little from the corresponding proposals set out in his 1969 white paper. In that document the governement put forward the following position:
The over-all thrust of Canada's present provisions for taxing the Canadian income of non-residents is generally regarded as reasonable.
The changes envisaged in Bill C-259 involve a number of structural changes in the treatment of foreign source income of Canadian residents. The two broad concepts remain: taxing Canadians on their world-wide income and the granting of relief in respect of foreign taxes. What is the importance of this? I think it is self-evident because in 1970 Canada received $513 million in interest and dividends on foreign holdings which was a 74 per cent increase over the 1967 revenue of $295 million. In 1967, Canadian direct investments abroad represented a book value of $4 billion out of total long-term investments with a book value of $8 billion. Canadian direct investment abroad in 1970 was $215 million exclusive of undistributed profits. So, it can be seen that this is an extremely important part of the proposed tax changes.

November 22, 1971
Income Tax Act
In speaking on this section relating to international income, I think it would be an understatement to say that this aspect of external international income and this part of the tax reform have undergone radical alteration since the white paper and even since the drafting of this bill. The effect of the United States surtax of August 15 most radically altered our concept of what changes in taxation of international income should occur. Although financial authorities throughout the world, including our own Canadian experts, have been warning that the United States balance of payments position had to be corrected at some time, still our own drafters of tax law completely forgot about the possibilities of changes in the outside world, especially in respect of such a great trader as the United States.
The whole thrust of Bill C-259 has been that we could demand of capital in our own hands, as well as that invested in our country, complete acquiescence, in the hope that capital would come in and be operated in a manner which we expect, and in the hope that the tax structure would be so arranged that all enterprise would be directed for the public good-whatever interpretation the government may put on that phrase-with the profit factor being of secondary consideration. In the matter of international income, the action of the United States government brought home to us that we cannot always have it both ways. They have served notice on us that we cannot expect the United States market to be open to us always and open to our multi-national companies without regard to their own position.
The ill-fated Gray report that would have set up a so-called screening agency is just an extention of what has already been happening to a large extent in our foreign capital transactions which affect our international economy. Altogether we have been screening foreign investment for some time; we prevented the sale of Dennison Mines to United States interests and we prevented the sale of Home Oil also to United States interests, presumably on the basis that some part of the oil industry should be Canadian owned. We have to consider the taxation of international income in light of all the things that Canada must do in international affairs. The government has not prevented the take-over of Supertest by B.P. Canada presumably because it is an English company and not a United States company.
Canada has to re-assess its international relations in the matter of foreign capital and trade. There is no more obvious fact than that Canada is situated on the North American continent and the flow of trade will increasingly revert to north and south as opposed to east and west. The severing of our links with Great Britain has set us in a period of drift and has inevitably forced us in matters of trade to the recognition that we are becoming more and more continentalists. Especially in western Canada, the north and south pull is enormous and all Canadians, especially those who feel that Toronto and Montreal decide for the Canadian nation what course it will follow, will encounter severe controversy and objection. The whole new course that Canada must chart in the matter of foreign investment is inevitably bound up with international taxation. Canada will have to assess its trade relations with the United States, and this will encompass all manner of arrangements from free trade, in some single

commodities, such as the auto pact, to a customs union, which has been advocated by the Premier of British Columbia.
The problem of international taxation is bound up with the fact that the most urgent needs of Canada for the future seem to be those in which this government has been the least successful, that is, economic growth and some sense of effective Canadian participation in the world at large. As to the latter and its relation to economic growth, this is important to Canada since it is the sixth largest trading nation in the world and exports one-third of everything produced. It is now far more generally recognized than it was a few years ago that there is no alternative for Canada but to seek wider and more diversified access to markets, not only for our primary products but for our manufactured products as well. This will involve the necessity of exposing Canadian markets in return. Bill C-259 is going to lessen the chance of our companies competing in foreign markets because of these taxation proposals. It is acknowledged that since international markets are involved, a maximum Canadian productive effort will be required. Canada needs not only the opportunity to participate in new markets, particularly now that 65 per cent of our exports are going to one place, the United States, but what is needed too is the "carrot" of being able to keep more of what we make. This is an essential element to the production of a positive climate for aggressive effort and risk taking.
I think in Bill C-259 we have an example of the omission of the "carrot" which would induce our multi-national companies to proceed overseas to get a portion of the action. If we extend the carrot, it would mean the elimination of taxation proposals to make it possible for Canadian companies to expand overseas. No one really believes there is much likelihood of an over-all reduction in the Canadian tax burden in the near future, although that must be an ultimate goal.
There should be little reliance on artificial support or other gimmicks of a legislative nature as a means of achieving greater Canadian control of our manufacturing industry and a requisite export effort. Too much reliance has recently been placed in talking up Canadian participation and talking for or against foreign investment. What is essential is that capital should flow on the basis of market decisions arrived at by considering their economic merits. The answer to non-resident control does not rest with legal devices which counter the natural economic forces, but rather with the encouragement of Canadian enterprise in positive ways and the discouragement of non-Canadian enterprise regardless of its parentage.
In any discussion of international taxation on income, one of the great considerations we have to look at is the multi-national companies. Whatever we may feel about them they are indeed here. They are looked at by many as being companies which do not necessarily have the national interest at heart. In fact, they are companies that may not always be responsive to the desires or aims of the country which is their home. A year or two ago when the discussion of the drug issue was being carried on in this House it could be shown that Canada was not willing to promote drug companies which would have established us in the international market. If Canada is to retain any place in the international trading arrangements of the
November 22, 1971

world, it seems to me that we must have some Canadian based multinational corporations. Fortunately for us, I think Canada has some of these, such as Massey Harris, Alcan and a few others, a considerable number when the size of our population is taken into account.
On Thursday November 4, 1971 in a preliminary report of the banking, trade and commerce committee of the other place, there was discussed the impact of the continuing viability of Canadian multinational corporations, their domestic and foreign operations through foreign affiliates, their need for such foreign outlets to maintain higher levels of employment in Canada, their capital needs in Canada and abroad and their competitive position in world markets. That part of the report reads:
Your committee is deeply concerned with the possible affect of the proposed legislation on the competitive position of Canada's international corporations in world markets. To the extent that Canada's world trading position is adversely affected, it follows that our economic growth as a whole must likewise suffer.
The white paper on taxation explicitly recognized the following four objectives:
1.	The Canadian tax system should not encourage nor discourage foreign investment by Canadians.
2.	Canadian companies competing in the foreign market should not be subject to more onerous taxes than their competition (particularly U.S. competition).
3.	Canada should promote a climate hospitable to the unrestricted flow of capital across international boundaries.
4.	Canadian tax laws should not permit the evasion of Canadian tax through artificial arrangements.
Even more important in view of the economic environment of the past few months, industry and government must share two basic desires. They are, to create jobs for Canadian citizens, to create profit for Canadian shareholders and, in achieving these purposes, to create revenue for the Canadian government.
In its final form, Bill C-259 seems to have concentrated on the anti-avoidance objective. Witnesses before the committee in the other place had this to say:
The bill as it affects multi-national corporations was extremely complex and distracting from the present great difficulty of dealing with the United States actions on trade.
This refers to the recent surtax problems and recent DISC problems. The point that was brought out is that the taxation effect of the proposals on international income of Canadian based multi-national corporations will be substantial. There appears to be a possibility of a loss of international competitiveness or the departure of such corporations from Canada. Witnesses who appeared before the committee of the other place when dealing with this aspect cited Patino Mining Company and Hunter Corporation as two corporations which had departed from Canada, one of which was considered to be a Canadian-owned company. Whatever is the long term result of the new taxation policies, the point made now is that it does not appear that this is the time to be making major changes in the area of international trade and multi-national corporations, when other countries are attempting to adopt a stance to maintain and expand their trading positions.
Income Tax Act
For us to impair our own competitiveness in international trade seems to be almost incredible at this time. The international provisions assume and require external treaty negotiations to be workable. This is clearly no time for the opening up of provisions of existing treaties or attempting to work out new treaties with the many countries with whom they are needed if the new approach is not to have serious adverse effects on our international competitive position. Just consider the great reluctance the government has shown about the possibility of renegotiating the U.S. treaty, particularly when we are involved in negotiations in respect of the defence-sharing agreement and the auto pact.
There seems at this time very good reason to hold the international income provision for a year at least until the world economic position is clarified. In the Globe and Mail of Thursday, November 18, 1971, page B-l, there was a news item that the United States Senate had approved the DISC program. Although still not law, the Senate, the House of Representatives and the Nixon administration all favour DISC in one form or another. Some version is expected to gain final approval. When appearing before the committee on banking, trade and commerce of the other place, the Massey-Harris Company detailed how the DISC program could affect it. The DISC program will give the United States manufacturers of farm machinery a substantial financial advantage over Canadian manufacturers next spring because Massey-Ferguson has tended to keep its North American manufacturing facilities located in Canada rather than in the United States. The DISC program would work to the disadvantage of Massey-Ferguson because the domestic manufacturer and exporter in the United States would enjoy a lower corporate tax rate in the United States on that part of his earnings which resulted from foreign operations.
In fact, DISC is a means whereby United States manufacturers selling in a foreign market will not pay taxes. Their earnings will be subject to tax when the DISC organizations distributes them to their shareholders. It is likely that these taxes can be deferred indefinitely or up to 10 years. When it is considered that Canada had a known trading imbalance last year of $113 million in farm machinery-the excess of imports over exports-and that Massey-Ferguson exports 50 per cent of the farm machinery exported to the United States, or nearly $80 million, it is quite obvious how important these proposed tax changes for foreign subsidiaries of Canadian companies will be in the future.
At the present time United States exporting corporations have been able to defer profit by the use of off-shore subsidiaries, at least in large part, and at the present time under the Canadian Income Tax Act Canadian Corporations do not have to pay income tax on dividends from foreign subsidiaries; thus, U.S. and Canadian Corporations are roughly equivalent. Once Bill C-259 is enacted, then our foreign subsidiaries would be greatly disadvantaged as to a United States company operating under DISC. Even if the subsidiary of a Canadian international company in the United States could operate under DISC it would lose its advantage because the profit would be taxed as in Canada. And under the foreign accrual property regulations of Bill C-259, the DISC affiliate of the Massey Ferguson Company in the United States, if it lent

November 22, 1971
Income Tax Act
money to the parent company, would then have no business income and would be subject to Canadian tax. During the testimony before the Senate committee, on page 42:8, October 20, one of the witnesses made what I think is a significant statement:
If I could start by making a general answer to this question, it is this: Our belief is that the world is becoming rapidly more technology-oriented and that industry-national corporations and multi-national corporations-will rely on a high degree of technology for the base of their future growth. It seems to us that Canada has two choices for its future development. It can either encourage multi-national corporations, because a company operating solely in Canada, bearing in mind the population of Canada, is not large enough to support the technological base that is required to compete with other countries-
I think this is the most important aspect of international income in respect of the taxation of companies. Whether we like it or not, technology seems to demand that we have multinational companies and they must be based in Canada if we are to get a portion of the world's trade.


Russell Clayton Honey: Order, please. I regret to interrupt the hon. member but I must do so to advise him that his time has expired. The hon. member may continue if there is unanimous consent of the committee. Is there such consent?


Some hon. Members:: Agreed.


William Gordon Ritchie: Thank you, Mr. Chairman. I should like to finish quickly with one or two thoughts.
There are as well other conditions under which Canadian multinational corporations must operate around the world. In the matter of cash flow, a Canadian corporation must pay its income tax much more quickly than a United States corporation. In fact, the whole of the DISC program is really concerned with cash flow. The Canadian corporation begins to pay at the beginning of the fiscal year; the U-S- corporation does so much later. For those who think that the United States economy is still not a highly significant economy, I think the events since August 14 have demonstrated otherwise.
I hope I have said a few things to demonstrate what I think is an extremely important aspect of this tax bill, and in my own personal opinion, next to capital gains, the taxation of international income takes precedence.


Mr. Burton:: Mr. Chairman, this portion of the tax bill, the white paper and the brown paper leading up to it dealing with international income, has not received the same attention other portions of the government's proposed tax legislation have. But I do agree with the last remark of the hon. member for Dauphin that it is indeed an important part of our considerations in developing a taxation system. Therefore, there are two aspects of the taxation of international income with which we are concerned in this part of the bill: one is the taxation of income earned in foreign countries by Canadians, and the other is the taxation of income earned in Canada by foreigners. Both aspects of taxing international income have a great deal to do with the relative attractiveness of foreign countries as the place for Canadians to invest and, on the other hand, for Canada as a place for foreigners to

invest in so far as this may be allowed within the framework of national economic policies.
The New Democratic Party, as has been made clear on many occasions, is concerned about the matter of foreign ownership. However, we have never considered that taxation is a particularly appropriate instrument either to discourage foreign ownership or to encourage Canadian investment. There may be occasions when steps are warranted and when particular actions may be justified, but as a general rule we feel that this is not the best instrument or the most effective instrument to use in this regard. In fact, it can result in distortions in the economy and in a misallocation of resources which can have detrimental effects on our economy. Also, invariably concessions given to encourage Canadian ownership through taxation do result in higher profits to the already well off in the country, and in some further undesirable changes with respect to the distribution of income and wealth in Canada. This was made clear at the time members of the NDP on the Committee on Finance, Trade and Economic Affairs submitted a minority report dealing with the study of that committee on the white paper on taxation; the hon. member for Waterloo and I, on behalf of the NDP, submitted our report.
In the summary of the report, we stated that the tax system should not be used to limit foreign ownership since an inequitable tax structure would result, and legislation limiting foreign ownership similar to recent bills or other steps that have been proposed should be enacted or taken. Later on, in elaboration, we stated as follows:
Foreign ownership must be dealt with since we believe it stands in the way of bringing about social justice in this country. However, it is our view that instruments other than the tax system are preferable, especially since an inequitable tax structure would result from the recommendations of the majority report proposed in the name of economic independence.
At this juncture, we depart in policy terms from the middle class nationalists whom we have in Canada and who seek to exclude foreign involvement in our economy in order to assure themselves a bigger place in a smaller sandbox. Of course, we have to keep in mind that some of these people, to whom we might refer as middle class nationalists, in many cases are the people who have sold out the Canadian economy to large American corporations. They have sold out Canadian interests, their own interests, for the sake of being a junior partner in a large American multinational corporation. The often favourable response of Canadian capitalists to economic nationalism must be generally regarded with some suspicion. The most recent example of this was the number of firms in the securities industry which appeared before an Ontario Royal Commission. Their agreement was clearly premised on maintaining a competitive position that would enable them to increase their profits.
In contrast, the NDP support for economic nationalism comes from the same root as our concern about the ownership of the means of production in the domestic economy. The possibility of working men and women influencing the productive process so that it responds to their needs, a process that is already difficult in dealing with Canadian managers, is even more difficult when the industry is foreign owned.
November 22, 1971

Tax concessions to encourage Canadian capitalists do not necessarily improve the position of the Canadian worker. Indeed, to the extent that government give aways end up in profits, the bargaining position of management in its dealings with the workers becomes relatively stronger. The encouragement of Canadian ownership through the tax system puts an unequal burden on Canadian taxpayers. Those receiving concessions gain at the expense of other taxpayers to whom concessions are not available.
I should like to say a few words dealing with the part of the bill which concerns foreign income of Canadians. The principle adopted by the bill, as we understand it, is that foreign income of Canadians should in general be taxed the same way it would have been taxed had it been domestic income. An exception to the general rule is that certain tax concessions are available to certain classes of Canadian taxpayers to encourage Canadian ownership.
Canadian taxation of the foreign income of our citizens takes into account tax paid to the country where the income was earned. If the tax is less than would have been paid had the income been earned in Canada, tax is payable to the Canadian government to bring the rate up to the Canadian level. If this approach were adopted, we would find no argument with it if we could accept the basic approach that is involved.
When we come to the question of the Canadian income of foreigners, we note that wage and salary income, to the extent that it is earned by foreigners in Canada, is subject to the normal tax provisions. Investment income, pensions and similar payments are subjected to a withholding tax. I understand that beginning in 1976 withholding tax will be increased from 15 per cent to 25 per cent in most cases. However, a particularly inappropriate provision reduces the withholding tax to 20 per cent for shareholders receiving dividends from corporations with a certain degree of Canadian ownership. To this we must take objection. In addition, I would also note that where reciprocal treaties are arranged with other countries, the withholding tax on Canadian source income of foreigners is often reduced as part of a bilateral arrangement. In this context it will take time to negotiate changes in taxation. I would hope that as a general rule the Department of Finance and the government would adopt the principle of minimizing concessions to the greatest extent possible.
I am not sure that I can go along entirely with the remarks of the hon. member for Dauphin who pointed out, as is so often pointed out by the Progressive Conservative party, that this is the wrong time to be making any such change. Without passing judgment on those changes which may be necessary, or which the government may try to negotiate, it seems to me that the Progressive Conservatives always declare that a particular proposal is being made at the wrong time. I presume the general rule would be that no change should be made unless, in the judgment of the government, it was to the advantage of Canada within the over-all framework of tax policy.
When we are dealing with the subject of Canadian income of non-residents there is one particular point I would like to take up with the parliamentary secretary. In this context I wish to quote from the Summary of 1971 Tax Reform Legislation presented to us on June 18.
Income Tax Act
Under the heading "Non-resident-owned Investment Corporations" it reads:
The special tax treatment for non-resident-owned investment corporations (NRO's) is continued in the new bill.
Once the new system is fully operative in 1976, it will provide for:
-a 25-per-cent tax on the income of the NRO, including capital gains that are taxable to non-residents, but excluding other gains; the tax paid (including only one-half of the tax on capital gains) will be refunded to the corporation when the earnings are distributed; and normal withholding tax on dividends paid;
-a requirement that NRO's must be 100-per-cent owned by non-residents, compared with the existing 95 per cent ownership rule.
Until 1976 the rate of tax on income will stay at 15 per cent and the new ownership rules will not apply.
This is a special concession in this area. I note that a very lengthy and complex amendment was submitted on October 13, and moved on October 22, dealing with this matter. I must confess that I have not waded through it sufficiently to understand its import fully, but I think it is necessary that we be given some explanation by the parliamentary secretary why special tax treatment is needed for non-resident-owned investment corporations. I would also like to have some further explanation concerning the amendment.
In dealing with this matter we must also concern ourselves with Canada's policy regarding foreign ownership. There has been considerable discussion of this subject in recent days. It has become apparent that the government took a decision in principle to establish an agency to act as a screening mechanism with regard to foreign takeovers. This is an entirely inadequate response to the problem. It is typical of the Liberal responses to so many problems connected with the Canadian economy. It does not come to grips with the basic question.
We have to deal with the problem of multinational corporations. This is a problem which is growing in importance on the world scene. Some observers have suggested that by the end of this century multinational corporations will be the effective power instruments on the world scene rather than the nation states, such as is the case today. The question comes up: should Canada get into this game and try to get its share of the multinational corporations, of the 300 or 400 such corporations that are paramount? I question whether Canada should get on the bandwagon and try to get a small piece of the action because I can assure you, Mr. Chairman, it would be only a small piece of the action. At the same time we must recognize that, regardless of what policy Canada adopts, there will be a continuation of the proliferation of multinational corporations, and a continuation of the growth of their influence. The only context in which we can hope to find an eventual solution for the problem is some form of international action.
In this regard I note that Canada has taken a halting, limited step at the United Nations in an effort to have a study undertaken on the influence of multinational corporations. This is only a timid step, and possibly it is all that could be accomplished in that forum at this stage. I maintain that Canada must be more aggressive at the United Nations in trying to get a greater degree of international action to deal with multinational corporations.

November 22, 1971
Income Tax Act
We must also consider what policies we are going to adopt in Canada, and how we are going to control the existing problem here. There may be a number of mechanisms proposed to try and exercise control over our economy. We will have to consider what we should do by way of policies involving economic goals, perhaps in some cases by buying back certain industries. I acknowledge the point that it would be an inappropriate use of resources to place over-emphasis on this area, simply trying to buy back the economy, but at the same time there may be instances when this will be the appropriate action to take.
More importantly, Mr. Chairman, dealing with the future we must take a look at the sources of Canadian capital, and here we have to be concerned with the development of our own sources of capital, and accumulating savings that can be invested in the economy. There is also the external problem. There is a good deal of argument about whether we still need foreign capital in order to achieve the degree of economic growth that we desire in Canada. I am not sure whether all of this debate is entirely useful. There may be times when we will want external capital, and other times when we will have no need for it. In any case, there are two basic points to be kept in mind.
Whenever it is considered appropriate to have an infusion of foreign capital one question that must be considered is how the capital is used, that is, whether it is invested in equity capital or results in an alienation of ownership of Canadian resources. The question of the extent to which the infusion of foreign capital is placed into equity is an important one, but it is not the only consideration. We must also be concerned with the question of how the money is spent, and just what sort of industry it is invested in, both in terms of the actual expenditure of the money and the type of growth brought about by that expenditure. This can have very important consequences for the Canadian economy.
At the same time I recognize that we have to maintain our links with the international community and we have to be concerned about markets for some of our products. Certainly, we want to have more finished products exported from Canada rather than simply raw materials. We all also have to be concerned with the area of technology because that is at the very core of our development policy today. We must have an adequate science policy, one that will enable us to undertake the type of research programs necessary if we are to excel in those areas of economic development upon which we decide to concentrate. We must take care however to maintain our links so that we do not exclude from this country technological development from other parts of the world.
In terms of the structure of the economy that we decide upon, we must select the areas of that economy upon which we will concentrate to bring about the economic growth necessary to do the best possible job. Two or three years ago, the then minister of communications, now the hon. member for Duvernay, pointed out that in the area of communications there was a golden opportunity for Canada to develop a first rate industry, Canadian-owned and Canadian-controlled, geared primarily to Canadian needs and conditions. He felt that we could excel in this
field, first of all to take care of our own requirements and then expand to world markets.
Another area about which we must be concerned is that of outflow of capital from Canada. At the present time this is directed by some of our financial institutions and some of it is aimed toward production capacity in other countries rather than to Canadian development. However, I am afraid there are many cases where that development is not directed toward Canada's well-being but rather the corporate well-being of the particular institution involved. Of course, we have the development of various resort facilities in the Caribbean and so on. This type of investment may serve to develop that area, if that is the object, but in many cases it is of no particular benefit to Canada. Certainly, Canada's present actions-


Russell Clayton Honey: Order, please. I regret to interrupt the hon. member but I must do so to advise him and the committee that his time has expired.


Some hon. Members:: Carry on.


Russell Clayton Honey: Is there unanimous consent for the hon. member to continue?


Some hon. Members:: Agreed.


John Stratford Burton: Thank, you. I just have a few more remarks, but I think it is important to round out the discussion on this subject.
Another area to which we must give greater attention is the Canada Development Corporation. The stand of the New Democratic Party is very clear. We were unhappy about the type of Canada Development Corporation established by the government some months ago. We think that an entirely different type of structure is required which will enable the government to use it as a key instrument in directing Canadian development and giving some hope to Canadian development policy. I think we also have to keep in mind the effect of our actions on trade and trade policy in view of the upheaval we are facing at the present time. We must decide whether to go in with one or the other of the trading blocs of the world or whether to establish ourselves on a relatively independent basis, at the same time developing links with the various trading blocs being established in the rest of the world. It is very difficult to know what government policy is on this matter. We must decide what kind of economy we want in Canada. Do we want one which is self-sufficient in which we develop our own capacity, or do we want a policy inseparably linked with another part of the world and which would make us dependent on the economic well-being of that area. I do not think that is a desirable course of action for Canada.
In conclusion, Mr. Chairman, we must pay close attention to the manner in which the tax system is used in connection with our international economic relationships. We agree with some aspects of the government's approach, but it must be underlined that we need a greater development of policies in other areas in order to achieve a more adequate development of the Canadian economy than we have seen up to the present time.


Sylvester Perry Ryan: Mr. Chairman, this is the second opportunity that I have taken to speak upon some of the subject

November 22, 1971

matters contained in Bill C-259. Today I am concerned about the taxation of international income as reflected in this bill-the Boeing bill. I call it the Boeing bill because it has 707 pages and the government is trying to "jet" it through.


Steve Eugene Paproski: Very good.


Sylvester Perry Ryan: In this topic, international income, there are two quite separate subjects. One concerns the taxation by Canada of those portions of income derived from Canada by non-residents. The other concerns the taxation of Canadian residents on those portions of their incomes derived from foreign sources. It is with the latter of the two subjects that I wish to deal now. More specifically, I intend to concentrate upon those sections of Bill C-259 which affect Canadian multinational companies.
The Canadian multinational corporation is extremely important to us. By the term "Canadian multinational corporation" I mean a Canadian corporation, of which sufficient voting shares are owned by Canadians to control the corporation. This kind of corporation brings in foreign exchange to our country, develops our technology and aids in redressing our balance of payments. In 1970 Canadians received $513 million from foreign sources as interest payments and dividends alone as stated by the hon. member for Dauphin. But in the first two quarters of 1971, $270 million were received. Obviously, Mr. Chairman, a great part of this income of foreign exchange into Canada was the result of the activities of Canadian multinational companies.
As well, they aid in the generation of markets abroad for Canadian produced goods and generate jobs in Canada itself. For example, Massey-Ferguson Limited, one of Canada'a all too few great multinational companies, employs about 4,000 Canadians in Ontario directly, and thousands more indirectly in the industries that supply this farm machinery giant. This company is majority-owned and controlled by Canadians. Its head office and largest plant are in my riding of Spadina. There is a more general appreciation in the world today that home-based multinational companies are very important to the economy of any country. We need the ones we have and to seek more, thus ensuring their continuing ability to compete in world markets. Yet the government does not seem to wish to do this. It has introduced in Bill C-259 measures which will encourage Canadian multinational corporations to move their head offices out of Canada and merely continue branch plant operations in Canada.
Mr. Chairman, the President of Massey-Ferguson, Mr. Albert A. Thornborough, after studying the international income effects of Bill C-259 and consulting lawyers and tax advisors, came to the conclusion that the international tax law revisions proposed by this bill would make Massey-Ferguson a relatively less attractive investment to Canadians compared with an investment in a Canadian corporation operating only in Canada. He pointed out that the results would be that Canadians would sell their shares to American shareholders as the company will face higher taxes and stiffer competition because of the bill. So we ask, why is it that the government wishes to have our companies sold off to people of other countries?
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This is inconsistent with the cabinet's "Midsummer Night's Dream" when it adopted the principle of a screening board as recommended by the Gray report. We should be trying to encourage Canadian ownership, not discourage it, as this section of the bill does. A company doing business solely in Canada is exposed to only one tax system. However, when Canada extends its tax system beyond its borders, the multinational corporation in many cases is subject to double taxation which must be borne in addition to the extraordinary cost of doing business abroad.
The Massey-Ferguson case is just one example; yet it applies equally to all exporting Canadian corporations that have subsidiaries or affiliates in other lands. It does not take a sage to predict that if this bill's international income provisions remain unaltered, companies like Massey-Ferguson will move their head offices and most of their prime level activities to another country. Now that the DISC proposal has passed the United States Senate and will very likely be brought into effect soon, this company must be looking at the advantages of a large transfer of its activities to that country. Although Mr. Thornborough did not say so, it follows that as his company's competitive position deteriorates, so will its profits and its view of its whole Canadian operation. Hence, the value of the company to the Canadian people will very likely soon deteriorate and may even disappear. After top management, research and development facilities have been moved, not only lawyers, accountants and engineers will be looking for work, but, Mr. Chairman, many if not all of the factory jobs involved are going to disappear. That is what I am primarily concerned about. I am worried about the people who are now working for Massey-Ferguson in the centre and west side of downtown Toronto. There are thousands of them, and their jobs may disappear.
The Standing Committee of the Senate on Banking, Trade and Commerce in its preliminary report on the Summary of 1971 Tax Reform Legislation has also noted that the competitive position of Canada's multinational corporations will deteriorate. May I read from page 5 of that committee's forty-seventh record of proceedings. I repeat what is said there for emphasis, even though the hon. member for Dauphin has already alluded to this matter. The report reads in part:
Your committee is deeply concerned with the possible effect of the proposed legislation on the competitive position of Canada's international corporations in world markets. To the extent that Canada's world trading position is adversely affected, it follows that our economic growth as a whole must likewise suffer.
This government, Mr. Chairman, must face up to reality and admit the truth of this statement. Though the matter has been put gently by the other place, it is imperative for us to heed what has been said. In my opinion, the part of the tax reform bill we are now discussing constitutes a very serious government blunder. It must be remedied without delay. I would recommend that every hon. member of the House of Commons read the forty-second record of the proceedings of the Standing Committee of the Senate on Banking, Trade and Commerce. Hon. members will be considerably enlightened as to the predicament that not only Massey-Ferguson but also companies like Alcan find themselves in due to this Bill. Apparently,

November 22, 1971
Income Tax Act
about 25,000 jobs are at stake within those two companies alone. Already, two smaller companies have decided to leave Canada or to fold up.
Also, the Senate committee, in the forty-seventh record of its proceedings, makes far reaching recommendations on page 7 with respect to foreign accrual property income and dividends received from foreign affiliates. Those recommendations would completely alter, if accepted, the character of the legislation before us. In placing these recommendations before us, the other place in my opinion has done an excellent job of giving sober second thought to legislation to which very little "first" thought was given.


Some hon. Members:: Hear, hear.


Sylvester Perry Ryan: If the bill passes in its present form, Mr. Chairman, Canada will be the only country in the world with such complex and intrusive laws governing the taxation of foreign affiliates.
In its usual fuzzy manner, Mr. Chairman, the government has introduced a number of fuzzy concepts and terms in this bill. In the area of the taxation of international incomes, the most outstanding of these vague concepts is that of FAPI, foreign accrual property income. As usual, the government has failed to define this term properly and, hence, a great deal of uncertainty has arisen. The alleged purpose behind the application of the FAPI concept is to prevent the undue deferment or avoidance of payment of Canadian tax on passive income. But the plug, Mr. Chairman, is far bigger than the hole and the result is tax regulations which are somewhat astonishing, to say the least.
Let us take as an example the case of three companies, A, B and C. Let us say that A is a wholly-owned Canadian corporation which is based in Canada and let us say that that company owns 30 per cent of B, a company in a non-tax treaty country. Company B, in turn, owns 100 per cent of the common shares of C, a company in another non-treaty country. Company A also owns 100 per cent of the preferred shares of C. Therefore, under the proposed tax legislation, A has a 130 per cent equity in C. Thus, if C receives $100 of passive income, A has $130 of passive income attributed to it and must pay tax on it, even though C may well choose not to pass on to A and B in the form of dividends or otherwise any part of its $100 passive income. This, Mr. Chairman, is clearly a nonsensical situation and it looks every much as if the government did not read this part of its proposed legislation very carefully before proposing it.
Another disquieting feature of FAPI, Mr. Chairman, relates to the fact that the treatment of dividends from foreign affiliates differs, depending upon whether or not the foreign affiliate's home country has a comprehensive tax treaty with Canada. This is inequitable. First, the Canadian government has no right to penalize a company simply because the country in which its foreign affiliate is located has no tax treaty with Canada. The lack of any tax treaty may be the government's own fault. Second, as the committee of the other place on banking, trade and commerce has noted with regard to countries which do not have tax treaties with Canada, "Many of these countries are developing nations which offer tax incentives to foreign corporations. Canada should not tax away these incentives and reduce their value to Canadian corpora-

tions." Third, there is absolutely no reason companies should not receive a tax credit for foreign withholding taxes paid on dividends from non-treaty countries.
Another aspect of FAPI which the government has failed to consider is that the information necessary for its application may be at times extremely difficult to gather, especially if a Canadian company does not have a controlling interest. The Alcan company made this clear to the committee of the other place. They said' "We are working with the Nippon Light Metal Company, the largest aluminum producer in Japan." Alcan has about 50 per cent of its shares but the Nippon company has about 150 subsidiaries. The Alcan company said, "We do not know much about a great many of these companies in Japan and we cannot ask too many questions because the Japanese may think we are interfering." Under this legislation, Alcan will have to go to all the trouble of filling out all the forms in order to find out what has happened to any passive income, if any. Furthermore, since they must deal in the Japanese language, there will be translation difficulties.
In addition, Mr. Chairman, the taxation theories of many countries are completely different from our own and what we may consider as passive income they may consider as active income. This is true of Great Britain. The question is, who is to sort out this mess? Surely, the government can find some simpler system than this one that it is trying to impose upon multinational corporations. In my opinion, Canada needs its multinational corporations. We must not drive them away. I hope the government will realize this and will provide sensible legislation in the area of international incomes. Let us have more common sense legislation, simpler and far more well defined than that which is now before us. Let the government concentrate on taxing truly tainted diverted income which it can do by enforcing existing laws and regulations.
Surely, it is more important to have more and not less multinational giants based in Canada. France found that out. She permitted the growth of multinational corporations and then moved to ease them out of France, claiming that there was too much American influence involved. They moved into Belgium, Holland, Luxembourg and West Germany. That happened just to please Mr. DeGaulle. With them went the jobs of thousands of French workers. Soon the French completely reversed their policy and welcomed the giants once more, but it was too late for most of the gravy because many opportunities were lost in the interim. Mr. J. J. Servan-Schrei-ber has told us all about that trouble in France and we in Canada ought to be warned by it. For the sake of an estimated $10 million or so for a hungry Department of National Revenue, we can very easily do great harm by winding down the control and operations of our exporting multinational corporations with the loss of thousands of jobs, economic growth and, eventually, the loss of tax revenue.
It is all too easy to strike from within at multinational corporations that are Canadian based. However, they have the worry of different tax laws in every country in which they operate. Naturally, they are attracted to the most favourable tax and economic climate. We must help
November 22, 1971

to keep them competitive for they are our major hope for expanding secondary labour intensive industry in Canada. In short, Mr. Chairman, we are not happy with FAPI.


Mr. Saltsman:: Mr. Chairman, throughout this debate the New Democratic Party has taken the position that the tax system should be one in which people in similar circumstances are treated alike. In general, we refer to it as a matter of equity. We think that equity is as important to the corporate sector as the private sector. We see no reason a corporation which is domiciled and does its business in Canada and pays the full rates of tax should be treated differently from a corporation that invests outside of Canada and receives its income there. It makes no sense in a country like ours, which is seeking internal development and is so reliant on foreign capital, to say you are going to disadvantage indigenous corporations, in effect those who invest inside Canada.
We took exception when the export insurance bill was before the House. We pointed out that the government was introducing measures to stimulate the export of capital. We are in favour of assisting other parts of the world that need our technology, skills and money, but we are not prepared to see the world civilized by international corporations, whether they be Canadian, American or anything else. We do not trust them. We do not believe they act in the best interests of the nationals of the country in which they are situated. They are there to make money; that is their term of reference. Sometimes making money may coincide with the best interests of the country in which they are located, but all too often it does not. We have only to look around the world today to see the conflict that is developing in every country of the world between the attitude and objectives of the international corporation and the national objectives of those countries.
We in Canada are familiar with the difficulties that we experienced because of an existing amount of foreign investment or, more properly, multinational investment in Canada. A lot of this investment comes from the United States. We tend to think that the people in the United States are keen as can be to have this investment in Canada. The international corporation may be keen on it, but not the ordinary citizens of the United States. That same concern that we have developed about the international corporation in Canada is being felt in what is essentially the home of the international corporation, the United States. Certainly, the greatest development of that form of corporate organization is in the United States. The ordinary working people in the United States are saying "We want your investment here. We need some of your investment here in order to provide jobs for our own people." The objectives of the international corporation are not the same as the objectives of the people of the United States, Canada, Liberia or any other country. Therefore, our position is that there should not be any difference in treatment between a corporation that derives its revenue from investment and operations in Canada and a corporation that gets its revenue from outside this country.
We think the government has weaselled and backtracked on what it started out to do. It started out to treat these organizations in a reasonably similar manner. How-
Income Tax Act
ever, it has backed off a lot of these proposals, thereby weakening its position. It has provided advantages to income derived outside of this country. I do not think it intended to do that originally. The original position, that of the white paper, was a considerable departure from what Carter recommended, namely complete equality. The white paper subsequently watered that down by amendments, additions and various interpretations. We do not support the government on this weaselling that they have carried out under pressure from the larger companies.
I wish to read an analysis of the present tax situation made by Mr. Samuel R. Baker when speaking to the Canadian Tax Foundation in Vancouver. This quotation appears in the Globe and Mail. Mr. Baker is referring to the behaviour or the kind of taxation to which the international corporation is subject and the results of that. I quote:
"The result is to permit Canadian residents, through proper planning, to conduct their affairs outside of Canada through nonresident corporations and trusts substantially without reference to the Canadian system of taxation.
The existing system is so open that it has not only allowed Canadian taxpayers the freedom to compete with businessmen from other countries through the use of various tax planning techniques, but has in effect provided loopholes whereby some taxpayers have adopted practices for the avoidance of tax on Canadian-source income which, in the Government's view would ordinarily be taxed in Canada, by diverting such income to tax-haven jurisdictions."
How does it feel to a Canadian manufacturer who is trying to make his living within the confines of Canada to see that people who invest outside the country, which is contrary to the national interest in most cases, are given far more favourable treatment? The member who just spoke referred to the fact that the revenue that would be obtained by taxing corporations on their out of country income would not amount to a great deal more than $10 million. For that amount of money we should not bother to erect barriers to investment outside this country. But even assuming that $10 million is reasonably accurate as a figure and that we are not going to get more than $10 million, the point is that loopholes do exist. Canadian companies see their competitors or other companies that invest escaping substantial taxation or being subject to ordinary taxation, as the case may be, by investing outside the country and building up tax havens elsewhere. As a result these companies wonder why they should be good citizens when they can do the same thing, and very quickly the $10 million becomes $100 million.
The greatest disservice anyone can provide to the development of indigenous Canadian industry is to grant special incentives and privileges to those who invest money outside the country from which they derive income. Over a period this will destroy the effectiveness of Canadian manufacturers and industries to compete and to continue their present mode of operation. I also ask, what is the point of developing and encouraging industrial activity outside the country. It does not provide employment in this country. Very often there may not even be use of materials produced by this country. If this sort of investment is encouraged and taxes are not collected on the income therefrom, then what is the point of it? What use is

November 22, 1971
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it to this country? Why should such investments receive special consideration? I would have thought that this was the worst kind of encouragement to offer a country that wants to develop and provide employment for its own people.
What is the rationale for this approach if no benefit is derived from it and its purpose is to provide a nice tax haven in Canada to conduct operations? I do not know how such a proposition can be defended, and I am rather surprised at the position that some of my friends in the Conservative party are taking on the issue. I can understand the government backtracking on the matter, but I would have thought that these hon. members would criticize the government for trying to weasel out of what should have been a firm position. The government now wants to weasel out even more, and I find the situation difficult to understand.
International corporations have created serious problems around the world as well as serious differences between the countries from which they originate and the national aspirations of the countries in which they invest. It is a new kind of imperialism which is very similar to 19th century imperialism, the sort of thing Professor Hobson talked about. They are not sending in gunboats this time; they are sending in international corporations instead. The theory is just the same. They say: "We are doing this for your good. We are going to civilize you. We are going to bring you the Coca-Cola civilization. Where would you be without our gunboats and our civilizing influence?" We have seen the results of 19th century British imperialism. Do we want to duplicate the same sort of principle by using this different approach? Furthermore, do we as Canadians want to be participants? Have we not suffered enough from imperialism that we want to go out and play the same sort of game ourselves?
This country does not have to live off international corporations; we are rich enough without that. The international corporations tell the public to look at all the good they are doing, that they are providing industrial benefits and so on. But they do not pay taxes. Often the poor countries have been forced on their hands and knees to invite international corporations, to invest and to play off one country against another to give tax relief and all kinds of concessions in return for investment. Then they develop and expand through the use of government money which they claim is helping the country concerned.
I would far rather international corporations be taxed either by the country of their origin or by the country in which they operate. You could then have government level discussion on how to develop the country with the use of this money. I do not want Massey Ferguson civilizing the world because I am not that impressed with its civilizing attitudes. Neither do I want any other large company civilizing the world on Canada's behalf. If we are going to contribute to foreign aid and assist other countries, then it is this Parliament that should make that decision. It should not be made indirectly by other people who are exempted from taxation. I cannot understand why it is not clear and obvious that we get no benefits from this sort of operation. For example, we had a number of briefs presented to the committee.


Sylvester Perry Ryan: One of the benefits was $113 million in foreign exchange.


Max Saltsman: But for whose good was it, and what was it used for? To raise our dollar still further? The hon. member was complaining that the value of the dollar was too high. I remember one case before the committee made by. I think it was, a Liberian ore company which pointed out that they did not put any strain on our school system and suchlike but were simply using Canada as a vehicle for passing through income. They pointed out they were providing Canada with two million dollars a year for the privilege of using Canada as a tax haven, that if we insisted on passing legislation to put a stop to this they would go elsewhere and we would be short a couple of million dollars. Why should Canada, with a gross national product of over $90 billion, prostrate itself as a tax haven for corporations of this kind for fear that they may move out of this country? Are we so poor and lacking in dignity that we must behave like a banana republic and provide a tax haven for companies that ought to pay taxation just as other companies do? I do not want my country to do that.
I think most Canadians would willingly pay a few cents ore on their tax bills-in order to retain their dignity and not sell themselves out for a few bucks.


Sylvester Perry Ryan: What will you do about all the jobs created?


Max Saltsman: They are not providing jobs. What sort of jobs are they providing?


Sylvester Perry Ryan: Union jobs.


Max Saltsman: They are not providing any jobs, whether they be union jobs or any other sort of job.


Mr. Horner:: Don't forget the international unions.


Max Saltsman: Mr. Chairman, every time members of the Conservative party get hurt because someone throws their faulty logic back in their teeth they raise all kinds of irrelevancies. I respect hon. members on that side of the House very highly, but does it not discourage good debate in this House to drag in all these tired old saws?
Let me continue with what I was saying. One of the most important points to bear in mind, one which my colleagues and I have referred to before, on the subject of foreign ownership is that the difficulty in Canada arises not so much from foreign ownership itself but from the fact that it is associated with the multinational corporation, which usually has a different set of objectives from those of the country in which it resides. In other words, these companies very often do what is best for them. If it happens to suit the country in which they reside, then that is all right. If it does not, then that is too bad. The Canadian multinational corporation is just as destructive of national interests as is the United States or any other foreign corporation. At the head of the list of those who are the most vociferous in their opposition to any attempt to limit foreign ownership in Canada is the Canadian multinational corporations, the big companies of Canada. They do not want any restrictions on what they may or may not do because they are always afraid that if Canada places restrictions on them other countries will follow suit. This is what they fear, and so they should.
November 22, 1971

Under pressure from farmers of Canada, which I think was justifiable, we moved rapidly toward free trade of agricultural implements. By and large agricultural equipment now comes in free of tariff. The argument was that free trade would lower prices to the farmer, provide competition and that we would benefit industrially. We would have more work for the people in Canada as a result of removing the tariff. In fact, none of these things has happened. The price of farm machinery is atrocious in Canada and it is artificially maintained. The Barber report showed documented evidence of the high price of farm machinery in Canada in spite of free trade. As far as employment is concerned, one need only look at the Mas-sey-Ferguson investment pattern. It left its labour intensive manufacturing here in Canada but all its technological developments took place in the United States. Its tractor factories are in the United States, not in Canada. When Canadian workers said to Massey-Ferguson a couple of years ago-


John (Jack) Henry Horner: Where are the parts made?


An hon. Member:: And the combines?


Max Saltsman: I will return to combines in a minute. I know a lot of my friends to the right are bristling for knowledge. If they will simply contain themselves for a few minutes, I will see if I can assist them.
A few years ago Massey-Ferguson was involved in a strike with its workers. In anticipation of the UAW taking strike action they hired Hedlen-Menzies, a very well known firm in Canada, to do a study, the purpose of which was to persuade the workers of Massey-Ferguson that if the company had to pay wages in Canada comparable to those in the United States it would not be worth while to operate in Canada. The union was not asking for higher wages than those paid in the United states. It was not asking that the workers do less work than those in the United States. The union simply said that if the men worked as hard and as well, they should be entitled to the same wages as their counterparts across the border. After all, there is this free trade without tariff and the goods are coming in competitively. The union felt the workers were entitled to wage parity.
The argument was that the workers were not entitled to parity because the company maintained its plants in Canada that were labour intensive, and that if the company had to pay Canadian workers the same wages being paid in the United states it might as well move the whole operation to the United States. This is a Canadian company, not a United States company. This is not a foreign company putting Canadians under muscle, but a Canadian company which got its start here. Its greatness originated from the market in Canada, but in fact it was saying that Canadian workers should be permanently condemned to lower standards of living than their United States counterparts across the border. This was not because Canadian workers were not as productive. This is what the study indicated, though the report tried to say this nicely. There is no way you can say this kind of thing nicely. Is this what we want in Canada?


An hon. Member:: You are not accurate.
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Max Saltsman: You better read the Hedlen-Menzies report which outlined the reasons the company could not pay the same wages in Canada. The experience so far as productivity is concerned in this country has been that if you give the Canadian worker the same kind of machines and opportunities he will produce as effectively as his United States counterpart, and sometimes even more effectively. There can be no argument that because the workers are not as productive as others they should not receive the same wages. The point is that even if parity had been granted at that time it would not have been true parity because the Canadian dollar was around 92.5 or 93 cents, so this would have meant the workers would still be receiving 7 per cent less in real income than their friends across the border.
This is the corporation about which some of us in this House are bleeding. They are afraid they will leave Canada. If that is the way they behave, then we are better off without them and should find a Canadian company which will operate in Canada's interests and be concerned about the workers of this country.


John (Jack) Henry Horner: Suggest one that will take its place.


Max Saltsman: Let us be very clear that the company is not a charitable organization. It is set up to do business in Canada because there is a market here; Canadian farmers buy machinery for use in this country. If Massey-Ferguson does not want to make this machinery, then somebody else will.


John (Jack) Henry Horner: Name one other manufacturer in Canada who will.


Max Saltsman: If other companies will not do it, the government can do it.


John (Jack) Henry Horner: The government, that is what you want. You want government ownership. Now, we are hearing the truth.


Some hon. Members:: Oh, oh!


Russell Clayton Honey: Order, please.


John (Jack) Henry Horner: Talk to Tommy, he will tell you the trouble.


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


Russell Clayton Honey: Order, please. The hon. member for Annapolis-Valley knows that he may ask a question only with the permission of the hon. member who has the floor.


John Patrick (Pat) Nowlan: This has been a very interesting dissertation, but does the hon. member for Brant believe everything the hon. member for Waterloo is saying? I am wondering whether he would like to see Massey-Ferguson move out of Brantford?


An hon. Member:: He is listening to the financial spokesman of that party, but he has not said no.


Max Saltsman: I see that the hon. member is treating the remarks of the hon. member for Annapolis-Valley with the kind of contempt that such misinterpretations of my remarks deserve.


John (Jack) Henry Horner: There is no misinterpretation.

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Max Saltsman: If the hon. member wants to enter into this discussion, he should at least be very careful of what he says. I think my statement was very clear, but let me repeat it. As long as companies serve the interests of Canada that is fine, but when they stop serving the interests of Canada, whether the consumer, the worker, the farmer or somebody else, then the job should be done by somebody else. If "A" will not do it, "B" will, and if "B" will not do it-


John (Jack) Henry Horner: Then "G" will.


Max Saltsman: -then "G" will.


John (Jack) Henry Horner: Yes, the government will.


Max Saltsman: We do not have to be blackmailed and we do not have to be treated in the shameful manner we have been treated in this country because we have an alternative. As most hon. members know, I am not one who advocates nationalization or public ownership of any kind or to any large extent.


John (Jack) Henry Horner: But you were one of the Waffles.


Max Saltsman: I am sure the Waffles would be very happy to hear that. My record is very clear on this matter.


Some hon. Members:: Oh, oh!


Russell Clayton Honey: Order, please. Perhaps it is a matter of geography, but it does seem to the Chair that hon. members are located close enough to each other that they are carrying on a debate among themselves. I really feel the remarks should be made to the Chair.


Max Saltsman: Thank you, Mr. Chairman. You will know, of course, that I have not been one of the favourite Waffle heroes in Canada. We are not helpless, as my friends in the Conservative party seem to think we are. They gave away this country on every occasion they could.


John (Jack) Henry Horner: Would the hon. member permit a question? Mr. Saltsman: Of course.


John (Jack) Henry Horner: Is the hon. member aware that his leader told Mr. Laxer of the Waffle group that he cannot say these things about nationalism and get elected?


An hon. Member:: You obviously haven't listened, either.


Russell Clayton Honey: Order, please. The question has been asked and the hon. member for Waterloo may want to respond. When he has done so, I think we should try to get back to the subject matter of the debate.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: We are getting a little bit of help from the modern socialists over there.


Max Saltsman: The question asked is very interesting, but I really do not know what relevance it has to the matter we are discussing. I would be very pleased to provide the hon. member for Crowfoot with a copy of this report if he is as interested as he seems to be. I would be

pleased to. straighten him out on the internal events of this party.


An hon. Member:: Maybe we could find him a membership card.


Max Saltsman: I should hope not. We have been discussing this matter from a number of points of view and I should like to recapitulate for a moment.
I should like to recapitulate for a moment. The first point is that if these companies are not going to pay any taxes or provide any employment, what good are they to us. If they want to pack up and say that they do not want to be in Canada, they will not be of very much help to us anyway. Second, and perhaps this should be the first point, is the matter of equity. If we are to provide any advantage in the tax system to one group over another, surely it should be in respect of the companies which manufacture in Canada rather than those which just export raw materials out of Canada and ask for a tax exemption. The simple matter of equity demands that any advantage be given to those who manufacture in Canada. Certainly, our position is that they should be treated alike. Equity demands there should not be any special treatment for one over the other. Third, Canada does not need international complications. These multinational companies could get us involved in considerations in which we do not want to be involved. We do not want to be part of a twentieth century imperialism and do not want to become involved in having the international corporation determine international priorities. That should be a matter for decision by government and not the international corporation with the government itself being held up for ransom.
The other point which I was talking about when some questions arose from my friends on the right was that some companies, like the Liberian Ore Company, will leave Canada if we do not provide a tax haven for them here in Canada. The day of the tax haven is rapidly drawing to a close, and not only in Canada. Even the poorest nations have some sense of dignity and pride and, I am sure, do not want to be tax havens any longer. Many of those which have become tax havens have regretted this and have found that any small benefits they have received have created more problems and costs than benefits. Surely it would be ironic, if the small, poorer nations of the world are no longer willing to provide tax havens, for a country as prosperous as Canada to say it will. It is for these reasons I have spoken at length. I have some further things I should like to say as this debate continues. Certainly, there should be equity between corporations if there is to be equity between people. I do not think this government measure goes far enough to ensure this equity, and we think the government has backed off from doing what should have been done in this particular case.


Mr. Bigg:: Mr. Chairman, the tragedy in Canadian life today is that we have two socialist parties, one of them anti-American and the other stumbling around without a policy, national or otherwise, which is adequate to bring Canada out of the economic doldrums in which it finds
November 22, 1971

itself. World trade, of course, is the most important thing in our economic life. The question, however, is how do we get that world trade. We must be realistic about this. It is no good bleating about what was wrong in the 18th century, in the 19th century or since the beginning of time. We are not faced with British imperialism anymore or with a trade war among people. We are faced with reality in the last quarter of the 20th century. We want to know what should be done about the situation now. Karl Marx is long out of date.


Mr. Nystrom:: So is Jack Bigg.


Frederick Johnstone (Jack) Bigg: I might be, but we are not yet ready for the Nystrom era. Heaven defend us so that we will never get it. The gentleman who just interjected could tell us, if he wanted to be honest, as a result of his last journey to Sweden about the situation in that country today, one of the havens of socialism-perhaps we could say national socialism.
Sweden is not particularly worried about what is happening in the rest of the world because she has a nice little homemade economy of forest farming. What is the income tax situation in Sweden? The hon. member could tell us if he wanted to. It is something in the neighbourhood of 70 per cent and perhaps this accounts for the highest suicide rate in the world. This is well known and the hon. member is aware of it. So, we can learn very little from Sweden. If we in Canada want to go back to being nothing but farmers of trees, and if we could be satisfied with being nothing but a country which shares the wealth in trees like a snake with his tail in his mouth forever chewing until he is chewing his own ears, fine and dandy.
However, I suggest this is not the future of the great Canadian nation. We look outward. We should look outward and should not be talking about what is wrong in the United States. It is true there are things wrong in the United States but that is not our problem. Our problem is what is wrong here and why are we not getting together, planning together and legislating together to put the great Canadian economy on its two feet. This is not impossible; it is just difficult.
As I am very seldom negative in my remarks, I want to suggest one or two things we could do in a positive way. One is certainly not to take the Carter report as the law of the Medes and the Persians. The Carter report is a product of the Conservative government. We brought together on this matter the minds of the best economists of the time. They brought in a very voluminous report. Anyone reading the Carter report-which I have done although I doubt very much whether my friends on the left have read it as well as they pretend they have-would realize it is not a document which gives us all the answers. It is old fashioned, London School of Economics economic theory. It is Canadian in its basic philosophy, but in the latter quarter of the 20th century that is not quite good enough. Things have changed. We are not now simply in a quarrel between a big landowner and the poor downtrodden hedge clipper. We are in competition not only with international corporations-and I accept the fact that this is one of the facts with which we have to deal-but with great trading blocs in the world.
England has just been forced, through no fault of her own, into the European Common Market. Our great
Income Tax Act
socialist leaders in England, Mr. Wilson for one, are hypocrites of the highest order. Now that Britain is on her knees through being forced to enter the European Economic Market to which she did not wish to belong, Mr. Wilson decries the fact that anyone wants to be co-operative. Now, he suddenly becomes an imperialist, British to the core. Any co-operation with the European Common Market is now treason. Mr. Heath, of course, a Conservative, is to be blamed for it all. Who is the great critic? The leader of the socialist party in Britain.
We owe to our friends to the south in this 20th century 90 per cent of all the wealth and affluence we have. We owe this to the ingenuity, business ability, friendship and co-operation of this great industrial giant to the south. However, now it is the cat somebody should bell. Apparently these socialists in both parties, the Liberals and the avowed socialists, say if we can only bell this great cat to the south of us everything will be well. Let us have none of that nonsense. Let us set our Canadian house in order, and let us look for a while at what we can do to expand our own economy. Where has the Roads to Resources Program gone? Down the drain. Where has the winter works program gone? Down the drain. Where has the vision of north gone? Down the drain. Why? Because it is the avowed policy of the present administration to keep us busy fighting among ourselves, and then we will never build a solid economy in the north. We will have to look elsewhere for leadership. I do not like this one bit. I, for one, am unwilling to trade any reliance we have upon the great republic to the south of us for reliance upon the Union of Soviet Socialist Republics or the great Republic of China. I say that if there is a future for Canada, it is in paddling our own canoe, rowing our own boat, to get our own economic house in order. It is about time we got down to some solid thinking about this.
I do not suggest in any way that a mere tax haven is the full answer, but it is one of them. I do not see very much of a tax haven in this document which would give any comfort to the people in Canada who want to save their hard earned wages, who want to put risk capital into the development of their own country, who want to buy Canada back, and who want to develop that part of Canada which is still untouched and which lies anywhere north of the 49th parallel. Let us have no more of this talk blaming the United States for the trouble in which we find ourselves.
Part of the trouble of the United States is due to the fact that it has been far too generous since World War II. Part of her trouble is that she has been fighting all the wars of the free world and we have been giving her little comfort and no financial or military help. The colossal figure of $145 billion was spent in Marshall aid by one nation in the last 25 years in international help for the downtrodden and hungry nations of the world, more than in all the history of this planet. I am sick and tired of hearing our friends to the south, the best friends we have ever had and the best friends we could ever have, being blamed for all the troubles we have, many of them self imposed. I do not think such statements should be made by any group of people who talk about Canadian sovereignty and who

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know perfectly well that most of their support comes from U.S. dominated unions.
Where is this sovereignty when there is a strike in the Massey-Ferguson Company? The orders come from south of the border. Probably that is one in which they have an excuse for the proper complaint that sometimes workers in Canada are on strike when they have nothing to gain from a strike except competition with the giant to the south. Our course is not to blame the United States of America for all of our faults, but to go back to work. Everybody in Canada knows that it is ridiculous nonsense for the workers of Canada to whine, to yelp and to strike for equal wages unless we have equal opportunities to sell our goods. As everybody knows, the Americans have a market at least ten times as great as ours. Those are the facts of life. If we demand equal pay for equal work, how are we going to account for the differences in transportation and in climate, for the fact that we do not have available to us the sophisticated tools which they have south of the border? It is perfectly true that if we had sophisticated tools, large factories and transportation, as well as the many advantages which American industry has, we could pay equal wages for equal work. You know it is impossible. If you get the right provisions written into an agreement so that you get equal wages, then you can expect companies-which as somebody said are not a religion but are in business for profit-to locate elsewhere.
When we are looking at Bill C-259 we have to look at its clauses which will give some hope to Canadian business and to Canadian investors and which will give us equality, at least taxwise, with the Americans. In the farm machinery industry, of which I have some knowledge, there has been some parity until the present time. But as I read Bill C-259, there are changes in it which will make it more difficult for Canadian manufacturers of farm machinery to compete with their American counterparts.
This is a retrograde step and the kind of thing at which we should be looking. Instead of looking for a scapegoat or for somebody else to blame, why do we not look at our own stupidity when we are not even capable of putting in a clause in a seven-pound document which would protect, for example, Brantford and other areas which are producing farm machinery?
Let us consider the Carter report, that socialistic document. I say that socialism for Canada is not only out of date but will not work. We now depend on international trade in manufactured goods, sophisticated machinery and even heavy water plants and atomic products, very sophisticated products indeed. There is international competition and we must make it possible for the taxpayer of Canada who wants to save his money and invest in mining and processing of Canadian materials to have equality so far as taxes are concerned with his American and international counterparts. That is something which we can do and over which we have control.
Is there anything we can do about the trading blocs? I suggest there is. As radical as this may sound, I say that if we are not capable of developing in North America a trading bloc of some kind which would act as a counterbalance to the European Common Market and to Soviet and Chinese influence in trade, we are in deep and serious trouble. Nothing could be more simple to my mind, and if
[Mr. Bigg.)
we plan it properly it is not fraught with the dangers which have been paraded in this chamber today. We have been treated well by our American counterparts. Until now they have found Canada to be a rich and profitable place in which to invest their money. Our taxation laws have encouraged this. The United States, in their wisdom, have seen fit to make it profitable for American companies to invest in Canada.
I say that one of the first steps we should take is to make sure that when Canadians invest in their own industry, particularly the oil and gas industry, we should make it equally profitable for Canadians to invest risk capital in these areas. Then, you will find that Canadians are more interested in developing their own resources than in investing in such places as Brazil, Australia, South Africa, or the great United States. We have not done enough to encourage Canadian participation in our own country. The Carter recommendations not only do not give the proper encouragement but do not suggest proper means for developing our country. If you take them to their ultimate conclusion, they lead down the road to a complete take over by the state. If we get to this point, we know perfectly well that initiative would be killed and there would be workers only because they were driven by a gun. My experience with Canadians, and I know them pretty well, is that this would never work in Canada. It would take two men with guns to make me work, and they had better be good with the gun.
We need to take a good look at the question of state ownership of anything. In Saskatchewan they tried an experiment with state ownership involving some 17 companies established as Crown corporations, covering everything from box factories to shoe factories. They all went broke. None of them showed a profit. State ownership does not work. State ownership is all very well for a country which has experienced a thousands years of slavery. Anything is better than that, but surely nobody in this chamber can say Canada is in a situation where we have to accept anything in order to get out of our slavery. Our only slavery is slavery to stupidity, to laziness, in accepting a document like this and being so subservient as to allow it go through unamended. Amendments are needed, and we know what the amendments should be. Before it is too late we must write into this document protection for private industry, private enterprise, private wages and private profit, instead of rushing into a socialistic takeover.
We should be giving every Canadian an opportunity to become a shareholder in Canada. This can be achieved. We launched a small experiment in Alberta a few years ago, the Alberta Gas Trunk Pipeline. Shares in that enterprise were sold practically before the certificates were printed. Through you, Mr. Chairman, I suggest to the parliamentary secretary and to the minister that we should be seeking opportunities to expand Canada's economy, giving all Canadians an opportunity to invest in it. Look at the wonderful opportunity we missed after the discovery of oil and gas at Prudhoe Bay.
I am not a negative individual. Three years ago, when the first news came out of that discovery, I could hardly wait to get a chance to speak in this chamber to beg the
November 22, 1971

government to undertake plans to build a pipeline, or series of pipelines, stretching from Prudhoe Bay down through Canada to the United States. What was the result? From all sides we had people whining about the ecology, about the loss of nesting places for the whooping cranes and grazing land for the caribou. People just did not know that caribou are quite capable of looking after themselves. We should have undertaken the necessary research at once. Our Prime Minister went over to Russia and saw how our Russian friends build pipelines in the north. I say that anything they can do we can do better. If we wanted to, we could build a pipeline from Prudhoe Bay and have Canadians invest in it. It would probably be the biggest single development in the history of the oil and gas industry in Canada.
But what have we done up until now? We have had nothing but wrangling, nothing but whining, nothing but criticism of things we know nothing about. A few years ago if we had placed experts to work, and backed them with a few millions of dollars, by now such a pipeline would be half completed, and we would not have to worry about oil being piped across Alaska and shipped down the west coast. A pipeline from Prudhoe Bay through the centre of North America, taking the shortest route between the wells and the market, is a project, of the type that can be undertaken by good, aggressive, free-thinking Canadians. We could hand the oil over at the border to good, strong, free-thinking Americans.


The Assistant Deputy Chairman:: Order. I regret to interrupt the hon. member but his time has expired,


James Alexander Jerome: Mr. Chairman, I rise on a brief point of order to bring hon. members up to date on the business of the House for the rest of the week. Further to our announcement on Friday about the possibility of holding an opposition day this week, it has now been agreed that Thursday will be an opposition day and that the subject matter for debate on that day will be determined by the Creditistes. That will have a distorting effect on the four days that had been allotted this week for the subject matters that were announced on Friday, and adjustments will have to be made to make sure that the full number of hours allotted to the four subjects mentioned on Friday will be available for discussion of them.
The first of those subjects was international income, to be debated today, and tomorrow; under mining and petroleum, we propose to deal with sections 21, 35, 46 to 48 inclusive, 59, 64 to 66 inclusive, 87 and 124. This will then leave, beginning on Wednesday, corporations and their shareholders, which will involve discussion on the following sections: 36 to 41 inclusive, 82 to 84 inclusive, 89, 112, 121 to 125 inclusive, 129, 143 and 181 to 197 inclusive. The fourth of the categories which will be dealt with this week is business and property income, which would be commenced on Friday and concluded on Monday, depending on the exact adjustment made to compensate for the fact that discussion on corporations and their shareholders will begin on Wednesday, because it was specifically undertaken that Wednesday would not be treated as a full day in the decision to give one day to each of those four categories. Therefore, discussion on business and property income will begin some time on Friday and will conclude on Monday. This will include sections 14 to 19 inclu-
Income Tax Act
sive, 22 to 26 inclusive, 28, 32, 33, 34, 36, 37, 50 to 59 inclusive, 104 to 108 inclusive, 122, 130, 131, 132, 138 to 142 inclusive and 208 to 211 inclusive. Those sections are all contained in the list which I filed when I made the announcement of business last Friday.


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 Hillsborough (Mr. Macquarrie)-External Affairs; the hon. member for Oshawa-Whitby (Mr. Broadbent)-External Affairs; the hon. member for Ottawa West (Mr. Francis)-National Anthem.


Mr. Osier:: Mr. Chairman, in considering this subject we must consider the real world in which we live, and try to make our legislation appropriate to that real world. So far this afternoon we have heard things which may have been at a bit of a tangent to the subject. I am sorry the hon. member for Pembina is not in the chamber because I do not like to speak about a member when he is not present. I hope he is behind the curtain and will return. He said that we were blaming the United States for all our troubles. I have never heard people blaming the United States for all our troubles.


Lincoln MacCauley Alexander: Not yet, wait until the elections.


Edmund Boyd Osler: I have heard a lot of people blame some parties for blaming the United States for all our troubles, but I have not heard the parties blaming the United States. We are not saying that anybody has offended. We are saying that we do not like the way they put on surcharges or discount programs against us when, even by their own criteria, we are not offending them.
The hon. member for Pembina said, "We must trade to live" and he somehow hooked that in with the idea that we were being offensive to the United States, that we should be trading with the United States to live. Of course, we should. His own former leader and the former outstanding prime minister, a genuine voice from my part of the country, was the first in modern times to see the danger that has materialized and to endeavour to divert 15 per cent of our trade from the United States to other parts of the world.


Mr. Peters:: It is too bad the Liberals didn't do it.


Edmund Boyd Osler: Yes it is too bad that they did not manage to do it, but they have managed to do more than has ever been done before and they are still endeavouring to do it. My part of the country depends on trade more than any other, and when I go about it is pitiful to hear people in various mealy-mouthed opposition parties saying that our Prime Minister travels too much trying to drum up trade.


Walter Gilbert Dinsdale: Trade?


Edmund Boyd Osler: We need trade in order to sell our manufactured goods and farm products, yet when people go out to try to get it they get blamed for it.
The hon. member for Waterloo said that this country does not have to live off other people. I wish he had gone to Assiniboia to tell that to the people he was trying to
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persuade a couple of weeks ago. No other people in the world try more to live off other parts of the world than do Canadians, whether they are in Ontario or in the west. One thing we have in common is that Ontario and the west need to live off other people. Here we have this inward-looking orthodox, rigid thinking, mealy-mouthed-My God-


William Arnold Peters: You people are just moving into that field now. Don't be too brave!


Edmund Boyd Osler: What field?


Mr. Lefebvre:: Address the Chair.


William Arnold Peters: International trade.


Edmund Boyd Osler: I did not realize that any so-called labour party knew anything about international trade. They have always been inward-looking, contemplating their own little umbilical cord. They do not think it is worth trying to live in the real world. However, they have nothing to fear because they will never have to live in the real world.


Mr. Skoberg:: You have never lived in the real world yourself.


Edmund Boyd Osler: I would just ask the hon. member for Waterloo to repeat his statement that this country does not need to live off other people to the farmers or the industrial workers for whom he reputedly speaks. There is no country in the world where 20 million people depend on trade more than in this country.
Having said that, there is no use spending a lot of time talking about the great evil international corporation. Canada is a mature country and if it does not like the rules under which some international corporations play the game in this country it can change the rules. But to say that international trade is something to be suspicious about is being pre-19th century-probably a taste of the mercantilism which went out about the time the Stuarts went out.
Canada's domestic market is small. The thing that worries me about the treatment of international corporations is that, even more than tariffs today, the ability to locate work in various countries through international corporations is emerging as one of the fundamental keys to prosperity and job opportunities. They found this out in Europe and we are finding it out in Canada; it can be expected that some members will realize that it is happening. If that is the case, as I believe it to be, then Canadian companies wishing to establish operations in foreign lands in partnership with local nationals under the laws created by those countries, should not be discouraged from doing so. I think this legislation should perhaps be looked at because I believe it may be discouraging this possibility. By establishing in other countries, sometimes firms can protect and even create technical and non-technical jobs for Canadians. This could help protect tax revenue in Canada and even help our balance of payments position. Such companies could make friends in foreign lands that would give other aspects of Canada's endeavour an opportunity to obtain fresh markets, agricultural or industrial. It is very important that we remain an outward looking country and that we have 
friends in other countries who can help us generate and open up markets for industrial or agricultural products.
So, Mr. Chairman, there are many pluses pointing to encouragement for Canadian corporations to be on the ground in foreign countries. I am not talking about Canadian corporations unduly expanding a foreign company in a foreign land, and it is up to those countries to avoid this. But a lot of Canadian firms play by fair ground rules, Mr. Chairman, and are not out to diddle everybody as our NDP friends assume. It is short-sighted to negate tax incentives offered to Canadian companies by developing countries as this legislation will tend to do, except under certain conditions which will be beyond the control of those very companies.
By joining forces with the local manufacturers, Canadian companies can increase the demand for Canadian technology and, more important, for Canadian-made components. Most people know, and those who don't are beginning to realize, that in order to sell refrigerators in Europe it may be advisable to allow the doorhandles for those refrigerators to be manufactured there. A lot of Canadian components can be shipped to another country if there is agreement with that country to make some parts. This is very important in many of the opening markets, and we should encourage our companies to make deals with others that are on the ground so that this sort of rationalization of component parts can be made. It will keep people employed in Canada.
Multinational activity can be more useful in developing trade and Canadian jobs than tinkering with tariff adjustments. I am sure most people will agree. Tariffs are down and are going down further; in many ways, they have become irrelevant. It is the deals that can be made between companies and countries to provide adequate work for people in both countries that will often allow our product into those countries more readily than tariff adjustments.
It seems to me that we should look at this legislation once more with the idea of finding some way of directing legislation against those who offend, and leave the legitimate international Canadian companies unpenalized to get on with their job.


Walter Gilbert Dinsdale: Good sense!


Edmund Boyd Osler: How can we define active business income and what is the legitimate plowback that can be made in the company of a subsidiary in order to improve its functioning? It is true that tax treaties can provide for exemption from additional Canadian tax when dividends flow from other countries back to Canada. Yet when our government cannot or will not negotiate, for any number of reasons, such tax treaties why should Canadian companies be penalized? I hope the parliamentary secretary will advocate strongly that another look be taken at these sections in order that some way may be found to help legitimate Canadian companies doing business with affiliates or allied companies in other countries get on with the job and, at the same time, to protect jobs at home.


Mr. McCutcheon:: Mr. Chairman, will the hon. member permit a question.
November 22, 1971


Gérald Laniel: Is that agreed?


Edmund Boyd Osler: Agreed.


Maclyn (Mac) Thomas McCutcheon: Is the hon. member of the opinion, as I am, that the taxing habits of the government in Canada may have had an adverse effect on developments in Winnipeg, inasmuch as the Versatile manufacturing people, according to my understanding, are moving to Mexico?


John Leroy Skoberg: Where did the hon. member hear about that?


Edmund Boyd Osler: Mr. Chairman, I am not enough of an expert to answer that question. I have not heard the particulars of the situation. I know that the particular individuals who have control of that company are singular men with singular attitudes, attitudes that are different from those of most businessmen. We cannot really believe that their move has been purely prompted by so-called tax rules, although they may have used those rules as an excuse. I know that they were pretty restless before anybody thought of tax changes.


An hon. Member:: It must be the weather.


John Patrick (Pat) Nowlan: Mr. Chairman, I listened with interest this afternoon to the remarks of various hon. members on this section of the tax bill relating to international income, both flowing in and flowing out of Canada. My remarks will be primarily directed to the position of the Canadian corporation doing business in a foreign jurisdiction and some of the problems that it may be exposed to if this bill goes through in its present form. Before developing my thoughts on this complex part of the bill, may I say that we have been given interesting and constructive contributions by the hon. member for Dauphin and the hon. member for Spadina. They both spoke earlier this afternoon, and both pointed out in cogent terms what Canadian companies doing business abroad fear. I was glad to hear the hon. member for Winnipeg South echo some of these concerns. He suggested how these provisions will adversely affect the operation of Canadian corporations doing business abroad.
Having said that, Mr. Chairman, may I digress partially from the trend of my remarks to say I was astounded at what the hon. member for Waterloo said. Although the hon. member is not now in the House, I want to comment on his remarks. If the trend of his thoughts were to be followed to their logical conclusion, one could assume that that hon. gentleman is not only against the provisions of the auto pact but would like to go back to the days of the horse and buggy. Before this debate ends, I hope the hon. member for Brant, who was in the chamber but who is not here now, will attempt to explain to us the remarks of the hon. member for Waterloo as they applied to Massey-Ferguson and that part of the Massey-Ferguson business which is located in Brantford. The hon. member for Waterloo threw out interesting thoughts; yet I find it inconceivable that the hon. memher for Brant who represents Brantford could support what the hon. member for Waterloo said in total or in part. Be that as it may, I hope my remarks will be brought to the attention of the hon. member for Brant. No doubt the hon. member for Moose Jaw will be the purveyor of glad tidings and good advice and will invite the hon. member for Brant to contribute to
Income Tax Act
this debate in order that he may rationalize the remarks of the hon. member for Waterloo for the benefit of the people who work for Massey-Ferguson.
Basically, the more we discuss the sections of the bill dealing with international incomes and international finance, the more it becomes apparent that Lewis Carroll's "Alice in Wonderland", when considered in terms of this debate, is more a work of fact than of fiction. We are told that that eminent classic is all fable; yet I submit that what the committee of the whole is attempting to do in dealing with the abstract ideas of international income and international finance makes Alice in Wonderland seem more like fact than fable. The determination of the Minister of Finance to proceed with the bill, regardless of changing circumstances, regardless of conditions which have changed since the Carter report came out and since this bill was first introduced, regardless of developments on the international scene which culminated on August 15 in Mr. Nixon's proposals for protectionist measures which show that America is looking inward, is enough to make one think that he might be a character in Lewis Carroll's famed fable of yesteryear. The decision of the President of the United States has brought difficulties to almost all communities of the world.
In pretending that Mr. Nixon has developed his proposals in a vacuum, so to speak, the minister has become a perpetrator of fable, because what he is doing cannot be based on fact. Basically, and I think this is most likely, the Minister of Finance supports these international income provisions because there is very little sex appeal, in a political way, to them. I suppose that most people will look on companies like Massey-Ferguson and Alcan as giant corporations doing business abroad. To the majority of hon. members as well as to Canadians, they are rather distant and their operations are rather far afield. I suggest nevertheless, Mr. Chairman, that these provisions regarding international income are about as fundamental to this tax reform bill as Mr. Nixon's DISC proposals are to his income incentive proposals relating to foreign investment by American companies. Although the President of the United States is trying to correct that country's imbalance in trade by encouraging, through legislative sanctions, multinational corporations to develop their activities abroad, we, in this country, seem to be going in the reverse direction. The sections of the legislation which stimulated Canadian multinational corporations in their development abroad are being removed or restricted in scope.
I submit that the future prospects of Canadian corporation doing business abroad will be adversely affected if these sections, in their present form, are passed. Yet I believe, Mr. Chairman, that these sections dealing with international income are as fundamentally important to us as Mr. Nixon's proposals, which are attempting to restore the balance of the American economy, are important to the United States. The proposals in this bill relate to the question of whether we shall enjoy a more diversified economy. They relate fundamentally to the question of whether these companies will provide jobs for Canadians, both abroad and here in Canada. Those companies which successfully do business abroad must be serviced. It is rather paradoxical to me to see that, regardless of our attempts to develop new policies in a vacuum, the United

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States, in attempting to correct its imbalance of trade and balance of trade difficulties, is moving outward. That it is moving outward is a sort of paradox in itself, because it is so doing through protectionist measures. They are moving outward in the sense that they want to help their international corporations doing business in Canada or elsewhere in the world to improve their profit margins.


John Leroy Skoberg: But they are looking inward.


John Patrick (Pat) Nowlan: The hon. member for Moose Jaw did not listen to what I said. I said this is a paradox, because, in moving outward they are building trade barriers to protect industries inside that country. They are moving outward in the sense that they are giving financial, fiscal and tax incentives to a corporation doing business abroad and at the same time protecting their backyard with trade protectionists measures.
We watched this paradoxical movement by our best neighbour. The United States is still our best neighbour, even though we are finding their financial binds on taxation hurdles to overcome. While they do this to increase their multinational development and international income we in this country, the small partner in the whole trading scheme, are moving inwardly. We are withdrawing or restricting those tax provisions that help stimulate the Canadian corporation into doing business abroad. I do not understand how we can rationalize this counter-thrust with two economies that are next door to each other and that are integrated, or how we can help but expect that there will be fundamental problems on the economic scene for years to come.
There is another part that I find difficult to reconcile. Ministers of the crown, regardless of what government is in power, say we must diversify and expand our trade as well as create jobs. This is the great present under the Christmas tree. This will justify every type of proposal. It is a worthy one. It struck me as passing strange that within the past week, when the international income provisions were before the committee of the whole, according to a report in the November 18 issue of the Globe and Mail there was a seminar in Toronto on how government and industry could join together to participate even more in the development across the seas and, in particular, capital development across the seas. There were many proposals advanced at this conference. I will refer to a couple of them to illustrate the paradox of these provisions which are moving inwardly and adversely affecting our Canadian output abroad. Canadians who are trying to create jobs and diversify our economy want more stimuli and incentives to move abroad.
Among those who participated in this conference that was arranged by the Ontario Department of Trade and Development was Paul G. Opler, vice-president of Foundation Co. of Canada Ltd. which does a fair amount of business abroad. With regard to capital projects abroad, he said:
-that Canada has not earned its share of the world's bustling export business and has not taken full advantage of representing the only source of North American technology outside the United States,
This is a rather important contribution. We are in a unique position. We should have the determination and guts to develop it. Through geography and history, we are part of a North American complex. Unlike the hon. member for Waterloo, we cannot crawl into our shell or bury our head in the sand. This is not the United States. Yet we have been able to share in the joint development of technology, research and many hydroelectric projects. We have been able to inherit the bounty as a result of this fine relationship with our very large and powerful neighbour, which I think is still the industrial leader of the world. In many ways we have been able to share far beyond our economic capacity in the dollars and cents which have been generated in this country.
Countries outside the North American continent naturally look to us to provide an input in the capital projects abroad. We are in the unique position where we should be able to develop and diversify our trade potential and also to create more jobs. In terms of these provisions, that ability to develop this unique relationship in the most positive sense is going to be adversely affected. In the same article, Mr. Opler said:
The most salient factor enabling Canadian companies to displace domestic firms in the host country, and to edge out other competition, is a discernible lead in technical competence.
That is interrelated to the point I made earlier. Because of our unique situation, having shared in joint development either because of branch plant economies, the fact that our natural cousins or relatives have worked somewhere else or International Nickel may have a lot of copyrights of research registered in New York, there has been joint development. We have a technical competence to share in projects abroad. These tax provisions are going to help dilute or diminish any advantage we have in technical competence. Therefore, we are not going to receive our just share of this capital development in foreign countries which is going to be one of the tremendous fields of development in the 70's and 80's as the developing nations really begin to emerge.
Another gentleman who contributed to this conference was Charles I. Rathgeb, president of Canadian International Comstock Co. Ltd. of Toronto, another company that does a fair amount of business abroad. He said:
Canada could cure its unemployment problem by making more competitive bids on big foreign capital projects.
That is understandable. He then went on to echo the sentiments of others at the conference with regard to foreign aid. He developed an 11 point program on how Canada could share much more than it has shared up to now in the potential capital development of these developing nations. He admits that some of the proposals are rather controversial, but one is rather basic. This gentleman is known for his outspoken comments. His program is rather interesting. I quote one of the proposals:
Tax incentives should be offered on profits earned outside Canada and repatriated to Canada.
Later in the article we find this:
He concluded that Canada has great expertise in certain areas, on the world scene, but the Canadian engineering construction industry is faced with intense competition on foreign markets.
Canada must continue to expand into these markets as a trading nation; this can be accomplished with unselfish efforts by industry

November 22, 1971

and flexible, continuing support from Canada's governments, he said.
I have the Alcan brief submitted to the Senate banking committee. I suggest the Parliamentary Secretary to the Minister of Finance cannot deny, that in attempting to establish equity, regardless of the justifications, there has been no thought given as to how these provisions are going to affect the international operations of Canadian corporations. I want the parliamentary secretary to deny, if he can, that the provisions in total are going to affect the competitive position of Canadian companies working abroad.
My hon. friend from Waterloo South said that he did not care about giving special privileges or preferences to these corporations, that under the catchword "equity" everything should be the same. In Canada we have developed regional disparity programs to help the disadvantaged areas but these programs are not necessarily good for other countries. Different environments require different approaches. Not all tax situations are the same. Therefore, it is not reasonable to give them all the same label under the guise of equity.
My final contribution regarding the report of the conference held last week on how Canada can contribute to the international scene is to quote Mr. Ray Pillman, president of H. G. Acres Limited who do a fair amount of consulting work around the world. As reported in the Globe and Mail, he said:
Even with removal of U.S. import surcharges, Canada will be in a new era for the next 25 years that will have no similarity to the past 25 years, and must develop new economic strategies to maintain a high standard of living, the capital-projects-abroad conference in Toronto was told yesterday-
Since trade is fundamental to Canada's prosperity, and it is carried on by businessmen, not nations, ways must be found so business can compete efficiently and effectively. This need not require subsidy, but Canada should examine with top priority what other countries are doing on international trade.
I suggest that other countries are not pulling back in the field of international trade and developing tax laws that diminish the thrust or adversely affect the business of corporations abroad. Rather the reverse: they are giving stimulus to corporations that are developing abroad, just as President Nixon, in an extreme way, is overstimulating the economy of the United States so as to develop its full potential, creating trade outside the United States in order to provide jobs within that country. There are many other things I could say about this tax conference, but I think my time is almost up.


Gérald Laniel: Order. The hon. member for Hamilton West.


John Patrick (Pat) Nowlan: May I just finish my sentence, Mr. Chairman?


Gérald Laniel: Order. Does the committee give unanimous consent to allow the hon. member to continue?


Some hon. Members:: Agreed.


John Patrick (Pat) Nowlan: I will just finish my sentence, with the indulgence of the committee. There are many other things
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I could say about "Nixonomics" and how they work one way, while the proposals of the Minister of Finance work the other way. But if there is any reason to doubt how the provisions of this tax bill apply to the international scene it is with regard to the repatriation of dividends and the emphasis placed on the bilateral negotiation of tax treaties.
I am informed that by 1975 or 1976 we will have to negotiate 50 new tax treaties and renegotiate 16 existing tax treaties. I suggest that in view of the economic climate in the world today such a prospect is unreal. We will be unable to carry the clout in these negotiations that will give us the full benefit of these tax provisions. Amongst other things, this is a form of hari-kari and I shall have something more to say about it at a later stage.


Lincoln MacCauley Alexander: Mr. Chairman, I am pleased to have an opportunity of saying a few words in this debate. As we reflect in this age of Aquarius, we realize that one of the most important things to which we should turn our attention is the economic growth of Canada, which of course embraces the question of employment. The bill before the committee is complicated beyond the comprehension of-


An hon. Member:: Of mortal man.


Lincoln MacCauley Alexander: I was going to say, of any tax accountant or lawyer who will be called upon to deal with it or, for that matter, beyond the comprehension of members of the bureaucracy. With all due respect, even the Parliamentary Secretary to the Minister of Finance who, to give credit where credit is due, is doing an admirable job, is having trouble with this bill. The hon. gentleman is answering our questions-I must say that in all fairness-but of course we do not accept some of his answers.
In this time of economic stress, what concerns me is the direction taken by the government's policies. In view of the repercussions of the Carter commission report and the economic policies announced on August 15 by the President of the United States, this bill is a monstrosity, yet the government is stubbornly pushing it through. There was a headline in the Globe and. Mail for November 20 which read: "Trudeau to discuss new laws with 44 business leaders". This was a significant meeting. Both business and industry are fearful of the obstacles that lie ahead in the form of the competition bill, the labour bill and particularly this tax bill. What was discussed at this meeting I do not know. Let us hope that by tomorrow we will be able to ascertain what are the government's intentions respecting the several problems that were raised.
I listened to the speeches of the hon. member for Dauphin, the hon. member for Spadina and the hon. member for Annapolis Valley. The hon. member for Winnipeg South Centre, who sits on the government side, I think spoke for many of his colleagues in registering legitimate concern at the problems that these sections of the bill will create. At the same time, I am concerned about the attitudes taken by my hon. friends of the New Democratic Party, whose classic statement is that this bill does not go far enough. Then they go as far as accepting a policy of government ownership. As I understand the mood of this country which is projected through the hundreds of briefs Members of Parliament are receiving-and I presume the members of the New Democratic Party receive copies of

November 22, 1971
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the same briefs-such a policy as enunciated by that party is unacceptable.
What concerns me about that party is that, commend-ably, they say they are interested in the little man and the worker and assistance should be given to him. But lo and behold, the moment we start talking about industry, whether it is primary or secondary, they say whatever we are doing in this regard is reprehensible. I do not understand their thinking, because it seems to me if we are to be consistent in our concern-not for the little man, because I do not appreciate that term, but for Canadians as individuals-to the extent that we are prepared to give relief, whether tax deductions, incentives or otherwise, we should be concerned about primary or secondary industries which create jobs for our workers. I do not understand the thinking of the NDP and I do not intend to try, because I think it is ridiculous.
As I deal with the sections of this bill I should like to bring to the attention of this House and those who read Hansard what I would call a classic document. It is a report of the Senate Standing Committee on Banking, Trade and Commerce, dated Thursday, November 4.1 am sure the government is aware of this document, and I know that with the astuteness of the parliamentary secretary he is also aware of it. It is dated November 4 and today is November 22, so I am sure he knows of these recommendations.
Let me review some of the matters which were raised in this classic document because it seems to me the gentlemen in the other place had the opportunity of interviewing witnesses in a non-partisan way for the betterment of all Canadians. They have come up with a document I think should be a guideline in respect of questions we are now facing in terms of multinational corporations.
Having read this document, it seems to me I can properly conclude that the impact on the continuing viability of Canadian multinational corporations will be disastrously affected. If we proceed with the sections of this bill in terms of the matter we are now discussing, I can also conclude that these multinational corporations, their investment in foreign operations, their need for foreign outlets to maintain higher levels of employment, will be hampered. I can also conclude that their need for foreign investment to maintain these higher levels in Canada will be hampered. Their capital needs in Canada and abroad should unquestionably be of concern. Last but not least, their competitive position on the world market will be in jeopardy.
It is imperative that we as a nation should not lose sight of the fact that Canada is one of the major trading countries of the world. We should encourage Canadian international corporations in their efforts to expand world markets as of the greatest national importance and high priority. Any measures such as those contained in the proposed legislation which inhibit these efforts are to be deplored. We in our wisdom are here to give some guidance and leadership in this regard, and we must be concerned about these matters. One need not be a financial analyst to determine that cutting the net return on investment almost in half may make foreign operations untenable, especially when foreign competitors do not carry the

same handicap. The situation is not improved when actions of other important countries are involved. I refer to United States fiscal and monetary policy, the surcharge and DISC.
The plain fact is that business operations abroad require an absolute ability to remain competitive by operating in a tax environment that is no less favourable than that of foreign competitors. For a significant number of Canadian companies the new rules will impose penalties that will restrict their foreign operations. For a larger number, foreign operations may remain competitive but will increase in complexity.
As I look at the report of the Senate Standing Committee on Banking, Trade and Commerce I wonder whether the parliamentary secretary is in a position to advise this House that there has been consideration by the government of amendments or recommendations submitted in the report. I read from page 47:5 of that report as follows:
It is the hope that, upon the receipt by the Minister of Finance of these recommendations, the same will be accepted by him as being pertinent and relevant, and to the extent so regarded, that appropriate amendments will be submitted by him to the other House while the said proposed legislation is being considered in the committee stage.
I do not know whether what was said by the hon. member for Winnipeg South Centre is indicative of the thinking of the government in this regard, but it seems to me when he is concerned he speaks on behalf of a number of those on the other side who will not give vocal expression to their concern. Perhaps the parliamentary secretary will take it upon himself to advise the minister what the hon. member for Winnipeg South Centre said on behalf of many of his colleagues who are concerned about the drastic effects of this bill.
In the event the parliamentary secretary has not had an opportunity to read these recommendations, I should like to put them on record. It seems to me they were made by a body we should appreciate, because they are giving this place some direction in respect of our economic climate and its effect on multinational corporations. I read from page 47:7 of this report as follows:
That the government give renewed consideration to the "foreign accrual property income" (FAPI) rules with a view to making at least the following changes: (a) that the definition of the term "foreign accrual property income" be amended to exclude from the category of income which is subject to the foreign affiliate rules any income or capital gains from property that may reasonably be regarded as having been used for the purpose of gaining or producing income from an active business; or, that the term be redefined in such other manner as to ensure that the over-all thrust of the foreign accrual property income provisions will be restricted so that the income subject to these rules will include only diverted income; in the result, that income such as interest on short-term deposits, interest on trade receivables, gains on the disposition of capital property used in a bona fide business operation and other like items will not be classed as foreign accrual property income.
I know this committee was very concerned about passive and diverted income. Let me read from the report at page 47:5 regarding passive and diverted income. At the bottom of the page is to be found the following statement:
This is particularly unfortunate in the light of the fact that the proposed legislation does not define what income is to be excluded from the diverted income rules as being "active business income". Because of this, there is a serious danger that income such as interest received by a foreign affiliate on short-term deposits or on
November 22, 1971

trade receivables and royalties received by such an affiliate in respect of patents or know-how developed by it abroad in the course of its active business operations (to name but a few) may be taxed currently in the hands of the Canadian shareholder as diverted income even though such income is in fact directly attributable to the foreign affiliate's active business. Such income is not diverted income.
I move on to the second recommendation:
(b)	that the de minimis rule contained in the proposed legislation be broadened to the effect that the passive income rules will not apply to any foreign affiliate whose passive income does not exceed a specified percentage of its total gross revenue (such as the 30 per cent rule in the United States); alternatively, the de minimis rule may be expressed as a percentage of the foreign affiliate's gross assets.
(c)	that the term "foreign affiliate" be re-defined for purposes of the foreign accrual property income rules to include with respect to foreign corporations only those corporations which are controlled directly or indirectly in Canada.
I am positive the parliamentary secretary is aware of this recommendation. Let me quote again from this document. This is not my usual manner of speaking but I am at a loss for further elaboration, as I read this document, in attempting to place the case for the Canadian people before the government. In the conclusions the report reads:
In conclusion, your committee feels constrained to reiterate the views expressed by it in its report on the white paper proposals for tax reform condemning the implications inherent in the government's proposals that vast tax avoidance schemes exist through the use of foreign entities. As stated in its report the committee believes that tax avoidance of this kind can be effectively blocked under existing legislation and failure to block such abuses (if they exist) is due more to lack of enforcement of existing law than to lack of legislation.
Mr. Chairman, I could continue but let me just say that we are at the stage where we must be very much concerned about the direction in which we are going. If we do not take serious note of the actions of other countries in respect of their corporations or industries, and if we do not attempt to give the same type of assistance and exercise the same type of concern in respect of our industries, we must ask where we are going. I think this is why the Canadian people and our industries are very concerned. They do not know where this government is going.
When I continually receive these briefs, brochures and letters of concern from industry, the labour movement and the layman there is no wonder we have lack of confidence. Everyone is afraid of the future. I believe that the pursuit of the provisions relating to multinational corporations in this bill can have nothing but a disastrous effect upon Canada and its economy. We all talk about tax reform. Certainly we want tax reform. However, I question whether this is tax reform. If we are to have tax reform, I respectfully submit that we should not attempt to unduly stifle personal initiative and economic growth. It is based upon these two policies or philosophies, if you will, that we can arrive at full employment.
This bill in many instances smacks of the policy of discouragement rather than encouragement. We wonder what the United States surcharge will do to us in terms of moneys lost. I believe the amount has been put at $1 billion, if implemented for a year, plus the loss of 90,000 jobs. I should like to know right now what the future
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holds for us. We hear there is a possibility that the DISC program will go ahead. It probably will. I was one of the fortunate persons who had an opportunity to meet with our United States colleagues. They were equally concerned about what is happening to Canada.
As I understand it, there will be a move to make this program ineffective in the long run, because they are very much aware that so long as their policies create unemployment, obviously they can never reach a balance of trade, because if we do not have sufficient employment we do not have the money with which to buy goods. When the parliamentary secretary has a big t-bone steak for supper and comes back refreshed, I hope he will be able to give us some answers to the many problems and questions raised by hon. members on this very complicated subject.
Since the parliamentary secretary in the first instance brought in 95 amendments to this bill, it would seem that it was improperly drawn up or that the drafters were not competent. Then later a further 40 amendments were moved. I may be out by four or five amendments but I know the parliamentary secretary will correct me if I am wrong. This certainly is reason to question the competency of those behind the bill. Eight more amendments were recently brought in. Are we to have more?


Patrick Morgan Mahoney: Your party has asked for more.


Lincoln MacCauley Alexander: Your side has also asked for more. I know your side has had a great deal to say about co-operatives and credit unions. I am not becoming involved in that subject at this time, but I understand if that part of the bill is passed one of your members is likely to quit.


Gérald Laniel: Order.


Lincoln MacCauley Alexander: I will call it six o'clock, Mr. Chairman.


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


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Russell Clayton Honey: When the committee rose at six o'clock it had under consideration clause 1, section 2. Shall the section carry?


Lincoln MacCauley Alexander: Mr. Chairman, as we reached the hour of six o'clock I had completed my remarks, but now I wish to rise on a question of privilege. In speaking on these most controversial sections I quoted at length at times, from the report of the committee on banking and finance of the other place. In my enthusiasm with respect to the inequities I have found in these sections dealing with multinational corporations, I was carried away. It has now been brought to my attention that in reference to documents or speeches, or anything that occurs in the other place one should not quote them at length and the most one can do, as I understand it, is to paraphrase.

November 22, 1971
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I wanted to let you, Mr. Chairman, and members of the committee, know that I have been advised of this. I say this for the edification of those who do not know of this rule, and I hope my words will reach their ears. In any event, I find it makes things very difficult, when we find that such an important committee refers at length to this matter and arrives at important conclusions, that it is impossible for us to quote directly from their report. I find this confusing and perhaps in the future I will find the reason for it.
For instance, with regard to Bill S-9 which is presently before the justice committee, we are hamstrung in giving to members of the House and to the people of Canada the full benefit of all that has occurred in these surroundings. Perhaps in view of the importance of the conclusions that are reached and of the recommendations that are made in the other place, it is time for us to consider this matter in a critical and constructive way in order that without paraphrasing the whole proceedings we are to become aware of matters which occur in the other place and are of great importance to us. Thus, we could have some indication of what is going on there.
I hope that in raising my question of privilege I have not trespassed unduly on the time of the committee because, as I said, it is extremely difficult to make one's feelings known when we are not allowed to quote speeches or proceedings in the other place. I understand, also, that under the rules we are not allowed to refer to hon. senators by name. That is my question of privilege.


John (Jack) Henry Horner: In rising to take part in the debate concerning international corporations and Canada's taxation policy, I cannot help but be drawn to the speech of the Minister of National Revenue delivered in Vancouver on November 16. He was quite right in the early part of the speech when he said, referring to the whole matter of taxation, that no subject has been so thoroughly discussed as tax reform-including weather-in Canada. He went on to say how thoroughly this whole matter has concerned the government. He said the following on page 2 of the speech:
Suffice it to say that while the government does not claim to have presented legislation for a new tax system that pleases everyone, I submit that Bill C-259, to a greater extent than any tax legislation before it, is the result of careful consideration of the collective views of a great cross-section of the Canadian public, as well as of committees of the House and Senate. On no previous occasion have Canadians had such an opportunity to contribute to the construction of a new tax system.
I am not disputing that statement: it is correct. But where does that bring us to today? About a month ago, after presentation of the bill, the minister tabled 148 amendments. Let us be honest about it, Mr. Chairman. Let us lay the cards on the table. The whole question before the country is: shall this bill pass before December? Can those who oppose the bill hold it up and still win public favour?
According to the Minister of National Revenue, the bill has been exhaustively studied. He thinks the Canadian people have made a contribution to it. In his terms the question is: how can a bill so good be held up by any responsible opposition? If the opposition holds it up then,

automatically, it must be facing complete ruination at the polls. No opposition party, so close to a federal election, would dare to hold up the bill. According to the Minister of National Revenue, everybody wants the bill passed. Yet the parliamentary secretary who has responsibility for piloting the legislation through the House leaves this chamber every day, shaking his head pessimistically and saying, "I cannot see any hope for it. I cannot see it going through at all. There is just too much opposition to it.


Patrick Morgan Mahoney: I have never said that.


John (Jack) Henry Horner: The parliamentary secretary says that I am misinterpreting his remarks. That is fine; I stand corrected. I hope he places his exact words on the record before the evening is over. But I do not think I paraphrased him so incorrectly; I was nearly right, Mr. Chairman. The opposition is confronted with the question of whether or not the legislation is good or bad. Does it help one segment of our economy, or does it hinder it? Does it help one segment and hinder another? We have to analyse it.
The Minister of National Revenue at page 2 of his speech said:
-I am told that there are those who claim that the bill is complex and even some who claim that it is unworkable. Is the bill complex? Yes-
What did the minister say about the complexity of the bill as it applies to Canadian international corporations, Canadian corporations and Canadian taxpayers? At page 2 of his speech he said:
Once tax reform comes into effect, the increased need by taxpayers for rulings and interpretations will make greater demands on the limited numbers of staff engaged in this work. I am concerned about the problem involved in finding the additional staff that will be needed. The people required must be, or be capable of becoming, tax experts and, as you know, they are not easy to find. We are counting on many of those who worked on our task force in planning the introduction of the new law to transfer to this area. Already we have supplemented our staff with three lawyers and three chartered accountants for whose services we contracted with their firms. This has been most successful and in all cases we have been supplied with young, enthusiastic and most competent people.
I could read the whole paragraph. In his speech in Vancouver he posed the question: is the legislation complex? He answered yes. Then at page 7 of his speech he outlined the complexity which the ordinary taxpayer would face. He said we would need more tax experts, more chartered accountants and more tax lawyers. He said there would be more litigation. Where does all this leave the taxpayer? It leaves him frightened and scurrying for cover. That applies to individual Canadian taxpayers, Canadian corporations and Canadian international corporations.
What is the major problem facing Canadian international corporations? It is the uncertainty over tax reform. They are concerned about the question of Canadian policy with regard to foreign investment. This tax bill slaps their wrists. It will place increased taxation on them. These corporations also face the problem that arises from Britain entering the European Common Market. They face the problem of fluctuating international monetary rates and problems posed by phase two of President Nixon's economic program. It has often been said that Canadian business should reach out and make its mark in
November 22, 1971

international markets. But, as I say, Canadian international corporations are concerned about this legislation. The Prime Minister and previous Prime Ministers have asked how long should Canadians continue to be hewers of water-


Patrick Morgan Mahoney: Quit chopping that water, Jack.


John (Jack) Henry Horner: I stand corrected-hewers of wood and drawers of water. How long should Canadians remain producers of raw materials and semi-finished products without entering the intensive employment field associated with the production of finished products? Will this tax legislation, with its severe tax penalties, be beneficial to Canadian international corporations? All members of this House are rightfully concerned about Canadian ownership. Should we slap a penalty on international Canadian corporations today, when we are striking out for greater Canadian ownership and greater employment within the Canadian economy?
I listened to the speech of the hon. member for Waterloo this afternoon when he condemned Massey-Ferguson and said that if they do not like living in Canada they should get out. It is all very well to say that when you do not have to answer to the people who are unemployed. There may be many workers within Massey-Ferguson at Brantford who are dissatisfied with the corporation and say it should be told to get out. But where are we to find employment for those people? Will the workers be asked to move with the company if it leaves Canada?
We want to maintain our place as a world trader, and world trade is becoming complex. We are slowly gobbling up areas of trade with raw materials. But if a country is buying raw materials its object is to become more industrialized; it is trying to become an exporter of manufactured goods. The country that is buying unfinished products is saying, "We must produce our own raw materials and be a supplier for our industrial complex". If we analyse world trade today we will find that countries are exporting more and more finished products.
If we want to go as far as the financial critic of the New Democratic Party did this afternoon, we can say if the international corporation does not abide by our rules, let us nationalize it and become the producers of that product. But let us consider the consequences, Mr. Chairman. First of all, we confine ourselves to our home market and thus we exclude importation from other markets. Retaliation sets in and we have very little room to export finished products to needy countries. That is the problem. If we are prepared to go as far as the NDP suggests and nationalize industry, we eventually become absorbed in our own market and exclude ourselves from international competition except with a few countries. I see the hon. member for Waterloo is listening. I am glad he is back in the House. This is where we fall out, at the end of his speech which advocated nationalization of the farm implements industry. I shall deal with that at greater length.
We have to recognize, Mr. Chairman, that this is one of the most important aspects of this bill. Are we to be a world trader? Are we to be the eighth or the seventh trader in the world? Canada now ranks seventh. Will we hold that position or slide back to being suppliers of our
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own market only? This is what we have to assess. If we say that we will maintain No. 7 or No. 6 position and crawl up to No. 5, where we once were, we have to assess our ability to compete with international giants.
How can a country confined to a small market of 20 million people compete with an international giant which has a market of "X" million people before it? It is pretty nearly impossible when you consider the complexity and mass production involved. The country that is confined by the rigidity of its tax structure to a market of 20 million people has great difficulty in competing with an international corporation that is allowed to produce for the whole world-two billion people or more.
We are at the crossroads, Mr. Chairman. We must decide whether to remain No. 7 or whether to go up to No. 6 or No. 5 in world trade. To maintain our present position we must recognize within our tax structure that Canadian international corporations are necessary in order to compete in world markets. It may be said that they are not the answer. Governments can take over business and make unilateral agreements with other governments, thus obtaining more of the market. But where does that leave us in the conflict confronting the world today? We have the east and west. You know that as well as I do, Mr. Chairman. The Canadian population is becoming more aware of it. If we are to move into unilateral agreements and Crown corporations get into that sphere, then we are going into the eastern world. That is the grave situation facing Canada today. In which direction are we going?
It will be a sad and sorry world if we in Canada find ourselves directed slowly by this insidious socialism of the present government. You may say that I am going too far, Mr. Chairman, that you do not see it as insidious socialism. But more and more Canadian corporations and international corporations are becoming dependent on government-government	rules, government regulations,
government subsidies. When this situation has existed for five or ten years, then international corporations will be even more dependent upon government. They will become hooked and will obey the wishes of government as if government owned them. They cannot rebel because government owns them. They go bankrupt and government buys them in order to keep people employed. This is the situation we are facing in Canada, Mr. Chairman-an insidious, seeping, creeping socialism, and this tax measure against international corporations is part of it.
We have an employment problem and this should be our immediate concern. A year or so ago in his annual report the Minister of Regional Economic Expansion said he had found that it took $16,000 of subsidies to increase employment by one person. And that was only the subsidy-the corporation itself put in a great deal of money. I think it would be fair to say that today it takes an investment of about $46,000 to create employment for one more person in the industrial world, and many more people are entering the labour force every year.


Russell Clayton Honey: Order, please. I regret to interrupt the hon. member. I must do so to advise him that his time has expired.


Some hon. Members:: Carry on.
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Russell Clayton Honey: The hon. member may continue only if the committee unanimously agrees. Is there such consent?


Some hon. Members:: Agreed.


John (Jack) Henry Horner: Mr. Chairman, I appreciate the generosity of the committee and will try to limit my remarks. In talking on such a complex subject I had not realized that my time had gone so quickly.


An hon. Member:: But we had.


Lincoln MacCauley Alexander: Hon. members over there have not been listening.


John (Jack) Henry Horner: I hope the committee is not so set in its ideas as to be unprepared to listen to new ideas. It is unfortunate that the hon. member for Rocky Mountain made a remark like that. Fortunately for him, I do not judge the whole committee as being so stubborn in clinging to old ideas.


An hon. Member:: We want to listen to your ideas.


John (Jack) Henry Horner: The Minister of Regional Economic Expansion pointed out that it costs $16,000 for every new job that is created under programs of his department. I suggest that it is safer to say that in the past couple of years it has taken about $46,000 of new capital investment to create one new job in Canadian industry. Since our labour force is increasing by approximately 350,000 people a year-that being the increase in population-one can readily see, by multiplying the increase in the labour force by 46,000, that providing all these additional jobs will cost many millions of dollars of capital investment.
We must find this money at a time when we are in keen competition with Japan and West Germany, with the European Common Market countries and with the United States. We must compete with manufactured goods coming from Russia. Russia has been trying to break into the North American market for industrial goods. China has recently become interested in this market. Although at present they are not really in the business of selling manufactured goods here, they will be in that business within the next ten years.
Before closing I want to say a word or two in defence of Massey-Ferguson, the corporation which the hon. member for Waterloo, speaking for the whole NDP, suggested should be nationalized. I am not surprised at this, Mr. Chairman. In 1961, when the Standing Committee on Agriculture was studying the cost of farm machinery, the then NDP government of Saskatchewan, by its representations before that committee told us that the farm machinery industry should be nationalized. That suggestion came from Mr. Nollet, the minister, as will be evident to anyone who examines the committee proceedings. That was the position of the NDP government of Saskatchewan of that day, and the party has not changed; that still remains the NDP position.


Erik Nielsen: There is one capitalist among their ranks at present.


John (Jack) Henry Horner: Will their position help the competitive situation of the farm machinery industry which must operate on a world-wide basis? That is the question we must
[The Chairman]
examine. That is the question we must ask ourselves, because we as farmers are concerned about free trade in farm machinery markets.


Mr. Rose:: That is your problem.


John (Jack) Henry Horner: I wish members of the NDP would make serious remarks on this subject in committee. What did Massey-Ferguson say about the proposed tax changes?


Mark Willson Rose: They are against them. They are against any taxes at any time.


John (Jack) Henry Horner: The hon. member says they are against them. Speaking before the banking, trade and commerce committee of the Senate, an official of Massey-Ferguson Limited said, as reported at page 42:5 of the October 20, 1971, proceedings of the committee:
We have found the bill, as it affects multinational corporations, to be extremely complex and, quite frankly, a frustrating diversion from the serious business-


Mark Willson Rose: They did not understand the bill.


An hon. Member:: Do you?


John (Jack) Henry Horner: I think the Canadian people will judge whether or not they understood the bill. The official went on to say:
-questions which we face-questions which have been so obviously accelerated by the recent United States' action.
I will not take time to list the four points the company brought forward before the committee on October 20, 1971. They listed all the objectionable parts of this legislation. Let me just comment on the attitude the hon. member for Waterloo this afternoon displayed to Massey-Ferguson. He gave that company two options: they could either obey our tax laws or get out of Canada. The company should be nationalized, he suggested. If the company does not like our tax laws, it can get out; or if it stays he suggested we should nationalize it.


Max Saltsman: On a point of order, Mr. Chairman. I am sure the hon. member for Crowfoot would not wish deliberately to mislead the committee. If he had listened carefully to my words this afternoon he would know that he has not quoted me or even paraphrased me accurately, as Hansard will bear out.


Erik Nielsen: Capitalist.


John (Jack) Henry Horner: I deliberately asked the hon. member a couple of questions while he was speaking and he did not deny that that was the direction he was suggesting should be taken. He suggested that if the company will not obey the tax laws of Canada, it should get out or be nationalized. That is what he suggested and he made no bones about it. I am a student of NDP philosophy and of long-range NDP policy. That is the attitude of Laxer and the Waffle group. I have long said that they are the only honest socialists in Canada today. I commend the hon. member for joining that group and for saying exactly what it says. That group says, "Nationalization if necessary, but not necessarily necessary"-if I may paraphrase somewhat loosely what a former Prime Minister of Canada said on another occasion. That is what the hon. member meant and that is what he suggested.
November 22, 1971

Massey-Ferguson went on to list their four points of objection, the third of which reads as follows:
Quite apart from this long-term result and in addition to it, we are convinced that now is the wrong time for Canada to establish its long-term policies in the area of international trade and the multinational corporation. Each of the major trading companies of the world is now engaged in adopting a stance for negotiations to maintain or expand its trading position. For Canada at this time to drastically impair its own competitiveness in international trade appears to us to be almost an incredible course of action.
They are not mincing words, Mr. Chairman. That is strong language. Why is this course so bad for Canada at this time? I go back to what I said a few minutes ago. At present we face serious international complications. We are confronted by a situation the outcome of which will determine whether or not we shall be hewers of wood and drawers of water the rest of our days. We suffer from high unemployment. For all these reasons I cannot help but agree with Massey-Ferguson. If one looks at the 1961 proceedings of the Standing Committee on Agriculture one will see that when the committee dealt with the question of farm machinery nobody gave Massey-Ferguson a rougher time than I did.


Mark Willson Rose: What changed you?


Mr.   Homer@: Nobody gave them a rougher time in the 1961 committee when we dealt with farm machinery, and nothing has changed me. Nevertheless, I recognize that now is not the time for Canada to take a retrograde step with regard to international corporations and, particularly, Canadian international corporations.


Mark Willson Rose: And just what are Canadian international corporations?


John (Jack) Henry Horner: And what about the trade position, Mr. Chairman-


Max Saltsman: I rise on a point of order, Mr. Chairman. I wonder if the hon. member would accept a question.


John (Jack) Henry Horner: Certainly.


Max Saltsman: As the hon. member is making considerable play of the fact that now is not the time to do this, can he indicate when would be a better time to bring in this tax on international corporations?


John (Jack) Henry Horner: I hesitate to do so, Mr. Chairman, because I am on borrowed time. A better time would be when we are less dependent on foreign investment and when we do not have 7.1 per cent of the population unemployed. That would be a better time. I believe that time is in the future.


Russell Clayton Honey: Order, please. The hon. member for Fraser Valley West is rising on a question of privilege.


Mark Willson Rose: The hon. member for Crowfoot spoke about a better time for Canada in respect of the unemployment situation. I wonder if he would enlarge on that and tell us when would be a better time in respect of the unemployment situation than at the moment.


John (Jack) Henry Horner: I am glad the hon. member asked that question. If I was uncertain, which I apparently was, I am glad he brought it to my attention. I intended to say that a
Income Tax Act
better time would be when Canada has less unemployment, not when Canada is overly concerned about the number unemployed. The proper time would be when we have 3 per cent or 2 per cent unemployment, or effectual full employment. Then we could become concerned about the tax structure for our manufacturing industries, because our manufacturing and service industries are the biggest employers in Canada. That is the time, not now. I am glad the hon. member asked that question.
Let me go a little further with regard to the international farm implement manufacturing corporations. The hon. member for Waterloo suggested that Massey-Ferguson objected to paying the same wage rates as the United States and said it is manufacturing high wage component machinery within Canada. However, automation comes into the question. This assembly line production of farm machinery is all done in the United States. They are trying to balance off the two. I will not get into an argument on that matter.


An hon. Member:: Why not?


John (Jack) Henry Horner: No tractor manufactured in Canada today does not basically consist of component parts that are imported. The only tractor manufactured in Canada today is the Versatile tractor which is manufactured in Winnipeg. The engine is imported from Great Britain. The tractors which Massey-Ferguson manufacture in their Detroit plant are assembled with component parts, most of which are imported from Europe and Great Britain. They are not manufacturing tractors. Because of our tax structure and our whole unemployment situation, Versatile is seriously considering moving their manufacturing plant to Mexico.
We in this House must come to grips with the whole complex situation of employing Canadians.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: Why should we come to grips with the question of employing Canadians? Unless the Canadian people are given an opportunity to play a part in our society, they will not be satisfied. Do I have to search for unsatisfied Canadians? There are hundreds of thousands of such people in Canada.


Frederick Johnstone (Jack) Bigg: Everywhere.


John (Jack) Henry Horner: As the hon. member for Pembina suggested, they are everywhere. Why? Because they fail to see from within the game. Everybody wants to play Monopoly. Everybody wants to be part of the game. This tax structure excludes Canadians. It attempts to wipe them out of the international field. Why should we be so complacent and smug as to say we do not have to involve ourselves in the international manufacturing field? I do not think the facts substantiate such a position. What does Massey-Ferguson do? They will have an opportunity. This brief continues:
In 1970 the trade balance against Canada was $113 million in farm machinery. It consisted of $274 million imports by Canada and $160 million exports from Canada to the United States.
In other words, we have a deficit on farm machinery of $113 million. What percentage of these exports does Massey-Ferguson represent? It represents 50 per cent. They
24372-60}

November 22, 1971
Income Tax Act
are going to get rid of it; they want to remove it. For every $2 that we export, Massey-Ferguson represents $1. The hon. member for Waterloo suggested they have a plant in the United States and that we are now becoming a subsidiary plant because the plant in the United States manufacturers tractors. They do not manufacture tractors in the United States; they assemble tractors. The component parts are imported into the United States. What advantage do they have in manufacturing and assembling them in the United States? The basic fact is that their United States plant is closer to the market.
One of the major factors in manufactured goods is transportation of the finished product. The Massey-Ferguson manufacturing plant in the United States is closer to the market. Therefore, the cost of delivering the finished product is less. Where is the Massey-Ferguson manufacturing plant in Canada? It is located at Brantford. I have not heard the hon. member for Brantford speak on this issue. Brantford is a long way from the Canadian market. It is no wonder they want a tax advantage in Canada. If they do not get it, they are better off to move their manufacturing of farm implements to Detroit which is closer to the market.
What benefits does Versatile have in Winnipeg? It benefits because of its proximity to the market. If we are not prepared to ensure that Canadian international corporations can survive in Canada, they will move elsewhere. I close with these remarks, Mr. Chairman-


Mark Willson Rose: Hear, hear!


Max Saltsman: Let them move.


Mr.   Homer@: The hon. member for Fraser Valley West can clap his hands and the hon. member for Waterloo can say, "Let them move''. But the question is this: will Canadians also have to move? If we force Versatile in Winnipeg to open a plant in Mexico, will the 700 workers in Winnipeg have to move to Mexico? Will they be allowed to go to Mexico? Will they enjoy the same standard of living in Mexico that they enjoy in Winnipeg? I doubt it. Will this really be contributing to the growth of the consumer market in Canada? I doubt it.
It is time Canadians faced the fact that we are involved in a tremendous trade war. We must recognize this. Never before, even in the late thirties, have we been involved in such a trade war. Now is not the time to pass legislation which is regressive and which will impair the Canadian international corporations which we have fostered. We should not be prepared to cast them out and let them move elsewhere, because in doing so we will cast out opportunities for Canadians.
We have 7.1 per cent of the labour force unemployed. In addition, many of our employed are not satisfied with their jobs. We should be making every effort to create opportunity so that those who are employed can seek satisfaction in their work and those who are unemployed can find opportunity in jobs. I urge the House to reject this tax bill because now is not the time to bring in retrogressive legislation involving international corporations, Canadian corporations, family farms, small businesses and a complex employment situation.


Mr. Gundlock:: Don't forget the oil men from Calgary.


Mr.   Homer@: I am glad the hon. member for Lethbridge has reminded me that I should not forget that Canada is rich in resources, with one-third of the world's fresh water supply, a vast amount of minerals and the second largest land area in the world. This tax bill is a retrogressive step in the development of our natural resources which will, if proper tax legislation is presented to the country, be the foundation of a wider employment base in the country. I realize I am speaking on borrowed time, but I can assure you, Mr. Chairman, that I shall speak again on this very serious matter.


Mark Willson Rose: Mr. Chairman, I was very impressed by the speech of the hon. member for Crowfoot.


Lincoln MacCauley Alexander: That is the best part of your speech.


Mark Willson Rose: He referred to a lot of firsts for Canada, and since he comes from Alberta he did neglect to mention another first, that of the production of hot air. I would ask the hon. member for Crowfoot, who is looking at me balefully and wriggling his eyebrows, whether or not he does not find it inconsistent-


Deane Roscoe Gundlock: What do you want, the whole bucket?


Mark Willson Rose: Perhaps the hon. member for Lethbridge will sit in his seat. I do not recognize him behind the curtains since he is really a frontbencher. I would ask the hon. member for Crowfoot whether he would comment on this. I sat with him for a long time on the agriculture committee and I think he was one of the protagonists of the position that the west had to sell in an open market yet was forced to buy most things, including tractors and farm machinery, in a tariff-protected market in the east. I should like to ask him why he is suddenly switching his position and protecting the same kind of market that my hon. friends across the way have been responsible for perhaps for the last 50 years.


Russell Clayton Honey: Before the hon. member for Crowfoot responds, I wonder whether the hon. member for Fraser Valley West would assist by advising the Chair whether he is taking part in the debate or is asking the hon. member for Crowfoot a question.


Deane Roscoe Gundlock: A point of order, Mr. Chairman.


Russell Clayton Honey: Order, please.


Deane Roscoe Gundlock: The hon. member who has the floor did not understand me because I was not sitting in my seat.


Russell Clayton Honey: Order, please. The hon. member for Crowfoot was, as hon. members will recall, on extended time and it is important for the Chair to know if the hon. member for Fraser Valley West is intervening to make a speech. If he is, that is one thing. If he is asking the hon. member for Crowfoot a question, that is another thing. The Chair would like to know which it is.


Erik Nielsen: What difference does it make?


Mark Willson Rose: I do not know whether or not the Chair is prepared to respond to the point of order raised by the hon. member for Lethbridge.
November 22, 1971


Deane Roscoe Gundlock: I only wanted an opportunity to raise a further point of order.


Russell Clayton Honey: Order, please.


Patrick Morgan Mahoney: Just explain what you are doing here.


Russell Clayton Honey: To assist the Chair, would the hon. member for Fraser Valley West indicate if he has the floor for the purpose of intervening in the debate. Otherwise the hon. member for Crowfoot will answer the question but I would like that information first. I think that would be fair.


Deane Roscoe Gundlock: On a point of order, Mr. Chairman-


Russell Clayton Honey: Order, please.


Deane Roscoe Gundlock: -the hon. member who has the floor suggested that I could not be recognized over there. You know full well, Mr. Chairman, under the rules-


Russell Clayton Honey: Order, please.


Deane Roscoe Gundlock: -that I can come down here or go up there. During this point of order I will resume my seat.


Russell Clayton Honey: I will recognize the hon. member for Lethbridge on his point of order immediately the other matter is cleared up.


Erik Nielsen: On the point of order that has been raised, Mr. Chairman-


Some hon. Members:: Oh, oh!


Erik Nielsen: I only wish to assist the Chair, as I always do. In committee, Mr. Chairman, regardless of the number of times a member speaks, whether on a question that occupies one minute of the committee's time or for the purpose of taking his full time, he may speak as often as he pleases so long as the Chair recognizes him. Whether the hon. member for Fraser Valley West is asking a question or participating, however briefly, in the debate makes no difference. If the hon. member for Crowfoot wishes to rise to answer a question, he can do so on that basis or to take part in the debate.


Russell Clayton Honey: I agree partially with the hon. member for Yukon, but I think he will agree that it is within the discretion of the Chair to recognize another speaker once an hon. member has concluded his remarks. If the hon. member for Crowfoot still has the floor, that is one thing. If he has yielded it to the hon. member for Fraser Valley West for the purpose of making an intervention in this debate, that is another thing. That is all the Chair is trying to get clear. The hon. member for Fraser Valley West.


Mark Willson Rose: Mr. Chairman, I think I can assist the Chair to a certain extent by saying that the hon. member for Crowfoot reiterated several times during his speech that he was living on borrowed time. In this I agree with him. But in terms of my intervention, may I merely say that I would invite the hon. member to answer my question and I sit here in anticipation of his answer.


John (Jack) Henry Horner: Mr. Chairman, I wonder whether the hon. member would mind asking his question again. During
Income Tax Act
the long exchange and the points of order I missed the pertinent point that he was attempting to make.


Mark Willson Rose: Mr. Chairman, I was reviewing past months on the agriculture committee when the hon. member for Crowfoot was complaining bitterly that people engaged in the agricultural industry in the west were often victimized because they had to sell everything they produced in an open market, a futures market if you like, at world prices which meant their return was determined by a kind of auction process, whereas what they had to purchase to produce their products, which they sometimes sold and sometimes stored, was bought from a protected market.
They have to buy their equipment from the industry in Canada, in a protected market. Frequently this industry is foreign-owned or dominated, contrary to what the hon. member said. He discussed Massey-Ferguson as a Canadian international corporation. I ask whether there is not a conflict in the fact that he was very critical of the farm machinery industry in terms of costs to farmers, and the fact that he is protecting the industry during this part of the debate.


John (Jack) Henry Horner: I thank the hon. member for asking that question because it gives me an opportunity to say something which I have not said before in this House of Commons. Few people in the House are aware of this fact. First let me correct the impression the hon. member has left. He said I was living on borrowed time.


Mark Willson Rose: You said that.


John (Jack) Henry Horner: The hon. member was referring to my speech. I was speaking on borrowed time and I acknowledge the generosity of the committee in allowing me more time. I am not living on borrowed time, and I would be glad to accept the challenge of any hon. member who suggests that I am. Let me deal with the question of western Canada and free trade.


Mark Willson Rose: Yes, do that.


John (Jack) Henry Horner: I am not a believer in free trade as an absolute thing, because of the complexities involved. Free trade is a utopia in which only the NDP believe.


Mark Willson Rose: Who said that?


John (Jack) Henry Horner: Free trade is something in which the NDP believe.


Mark Willson Rose: I rise on a point of order, Mr. Chairman.


John (Jack) Henry Horner: Let me deal with that aspect of the matter.


Russell Clayton Honey: Order, please. The hon. member for Fraser Valley West rises on a point of order.


Mark Willson Rose: The hon. member for Crowfoot suggested that some segment of the NDP has put forward the concept of free trade as a postulate or a point of dogma. I ask the hon. member which hon. member has done this, and to assist the House by pointing to the particular group that brought this idea to the House of Commons.

November 22, 1971
Income Tax Act


John (Jack) Henry Horner: The hon. member asked me one question and I am trying to answer. There was no point of order in his last remark. Free trade is a phrase used by many people. I am not a believer of absolute free trade because there are too many complexities and factors involved in trading. There are subsidies, tax concessions and discriminatory measures used by countries and provinces. We all know that certain materials and products have to meet health standards and one thing and another. There may be no tariffs, and you may believe that there is free trade, but certain commodities are subject to health standards which in essence is a partial barrier. There is also a difference in the value of money, which creates another complexity in respect of trade.
I refer to the Barber commission report. When I began my remarks I said there was something I intended to tell the House that few members are aware of, and I shall do so now. I know of no other member of this House who presented a brief to the Barber commission on farm machinery costs. I submitted a brief to that commission outlining how I felt we could bring about lower farm machinery prices. I do not know of any other Member of Parliament who took the trouble to advise the commission on certain aspects of the farm machinery industry.
I have not been an advocate or a great promoter of Massey-Ferguson. If one studies the farm machinery inquiry carried out by the agricultural committee of the House of Commons he will discover that I was one of the worst interrogators of representatives of Massey-Ferguson.


Mark Willson Rose: You were always one of the worst.


John (Jack) Henry Horner: The vice-president of Massey-Ferguson was beside himself because of the annoying questions I asked about their pricing set-up. That company charges all the market can bear, and there should be measures to bring about a realistic situation in respect of farm machinery prices. But we must allow the company to survive within Canada. It is one thing to bring about a realistic price mechanism within a company selling goods to Canadians but it is another thing to force an existing Canadian company out of Canada. It would still be selling at the same high prices in Canada.
Apparently the NDP wants to force Massey-Ferguson out of Canada and into the United States, and then let the company continue to sell at the high prices that now exist within Canada. That is not the solution to Canada's farm machinery problem. That is not a solution to the problem of unemployment within Canada.


Mark Willson Rose: Mr. Chairman, I rise on a point of order.


John (Jack) Henry Horner: There is an opportunity for Canadian investment in the corporation in Canada, and it is a rather idealistic and foolish approach-


Russell Clayton Honey: Order, please. The hon. member for Fraser Valley West seeks the floor on a point of order.


Mark Willson Rose: Are these strident exhortations an answer to my question, or is the hon. member launching a speech?


Russell Clayton Honey: The hon. member asked the question and I think, with respect, he should not comment on the answer he gets.


John (Jack) Henry Horner: Mr. Chairman, I think the hon. member doth protest too much. My answer was too telling and he attempted to cut me off. The NDP wants to force through greater tax measures than those now proposed. In this way Massey-Ferguson will be forced out of Canada, with the hope that this will meet some NDP idealistic position. This company will still sell in Canada at the same high prices. This will not help our unemployment picture.
I would much rather encourage a Canadian international corporation such as Massey-Ferguson to remain in Canada, hiring Canadians and creating job opportunities. Then through corrective measures other than taxation we could encourage companies to sell their products at an acceptable rate, one that has some relationship to the value of the goods the machinery will be used to produce. This is what I would encourage Massey-Ferguson to do. The NDP is completely wrong if it believes in nationalization. If hon. members believe in nationalization, I wish they would all be like the hon. member for Waterloo who came out in favour of nationalization. They could then be judged on what they really believe, rather than on the camouflage they so often espouse.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Chairman, I hope the hon. member for Crowfoot will forgive me if I do not follow in the vein in which he has been speaking this evening. I have listened to several hon. members of the Official Opposition take on my colleague, the hon. member for Waterloo. So far as I am concerned they have not touched him, so I should like to discuss briefly a completely different phase of the general question of taxation of international income. Indeed, I hope the Parliamentary Secretary to the Minister of Finance will respond to the statement I wish to make and give the kind of assurance I am seeking on behalf of a large number of people.
While technically we are discussing section 2 of clause 1 of the bill, we are also discussing 18 or 20 other sections some of which have to do with the tax which must be paid by non-residents of Canada on income derived in Canada. Let me say quite clearly that we in this party welcome these provisions, particularly in so far as they endeavour to catch up with people who have taken their wealth to various tax havens around the world in order to avoid the payment of income tax either in Canada or anywhere else. It is no surprise, of course, to the parliamentary secretary when I say we agree with this aim as it is to be implemented in the bill before us.
However, in the attempt to make sure that all income earned in Canada is properly taxed, there are some specific provisions in this bill, and indeed in the sections under discussion now, about the taxation of pensions, superannuation benefits, annuities and other income of that kind. If I have read the bill correctly there is a provision that there should be a 25 per cent tax on most income of this kind. It is clear that old age security payments are exempt from any such 25 per cent tax, and there are a number of other pension benefits that are listed as not subject to this tax. However, it is also very clear that superannuation payments generally, payments
November 22, 1971

from the Canada Pension Plan, annuities, and so on, are subject to a 25 per cent tax.
I believe this is to be in the nature of a withholding tax so that before these payments are sent from Canada to persons living abroad the 25 per cent is to be deducted. The parliamentary secretary knows very well the kind of people I am thinking about, namely, pensioners who have gone to a more southern clime or to other parts of the world and are concerned when they learn of this 25 per cent withholding tax. Some of them say to me that the amount of income they have is such that they would not reach the 25 per cent level. But the bald way in which this is stated seems to fail to take that into account, and it also seems to ignore the exemption levels which apply to taxation in Canada.
I want to say quite clearly I have made inquiries. I have studied the various documents before us and I am satisfied that these people will not lose. In the first place, old age security pensions are not taxable in this way and in the final analysis the tax treaties which apply between Canada and other countries will come into play and in the end, even though there may have been a deduction at the source, no one who is retired and away from Canada living on a pension will pay any more income tax than he would have paid had he continued to live in Canada. Nevertheless, there is the bald and stark provision in this bill that there is a 25 per cent withholding tax on the total amount of certain kinds of pensions.
The parliamentary secretary realizes what I would like him to do. If he is able to get the floor now, I should like him to give a categorical assurance to public servants who retire, to people on annuities and to pensioners generally, that they need have no fear that by taking advantage of certain rights they have to go to another country that because of this 25 per cent withholding tax they will be in a worse position vis-a-vis their taxation than would have been the case had they remained in Canada.


Patrick Morgan Mahoney: Mr. Chairman, first may I say it is most refreshing to return to something completely relevant and germane to the particular block of sections under discussion. Since the hon. member for Regina East asked me a question about NRO's earlier this afternoon, which I have not yet had an opportunity to answer, this is the first specific comment we have had on the sections before us.
I can give the hon. member the assurance he requests. The situation generally speaking is this: we do have treaties with certain countries. A proposal to impose a 15 per cent withholding tax, for example, in the case of a country like the United States does not override the existing treaty. Until and unless that treaty is changed, the provisions of the treaty will preclude that withholding tax being exacted. However, it is thought fair and equitable that in the circumstances Canada should have a right to withhold a tax. The hon. member will appreciate that the United States-since this is the example I have used-does tax income fully in the hands of the recipient resident of the United States.
The 25 per cent withholding tax is proposed in respect of other countries with which we do not have tax treaties at the moment. The legislation does give the Canadian taxpayer, the person from whom the 25 per cent is withheld, the option of filing a Canadian income tax return
Income Tax Act
and if as a result of filing that tax return the 25 per cent tax withheld in Canada means that he or she has paid more tax in total in Canada and in the foreign jurisdiction than would have been the case otherwise in either country, there would be a refund or credit against the tax allowed in Canada as a result of the taxpayer electing to file a Canadian income tax return.


Erik Nielsen: Mr. Chairman, in listening to the hon. member for Fraser Valley West and the hon. member for Waterloo I was struck by the phoniness of the position customarily taken by hon. members to my left.


Mark Willson Rose: You said the same thing last year.


Erik Nielsen: I did not say anything of the kind last year, but I am calling it phoniness now and I am calling it hypocrisy. It is out and out hypocrisy for an hon. member like the hon. member for Waterloo to spout socialistic concepts when he does not for a moment believe in them; and for the hon. member for Fraser Valley West to adopt the same spurious stance is just beyond comprehension.


Mark Willson Rose: On a point of order, Mr. Chairman, I should like to correct the hon. member's pronunciation of the word "spurious".


Erik Nielsen: The members of that party clutch taxes to their bosom like a suckling child. One would think that this offends the motherhood syndrome which they would have us believe the people of Canada believe they espouse. They want to appear to the people of the country-to the little man as they call him and as the Minister of Labour calls him-as champions of the little man. They think the more they put down the big corporations, the more votes they can get. This is absolutely shameful. I can understand why their noses are out of joint. In the last 31 years, at every turn they have been outmanoeuvered by the government. The hon. member for Crowfoot referred to creeping socialism. It is not creeping socialism at all; it is galloping completely out of control.


Some hon. Members:: Hear, hear!


Erik Nielsen: What are we to expect when we have at the helm the three horsemen of the Apocalypse sitting in the House, one upstairs in the Prime Minister's office, the Prime Minister, the Minister of Regional Economic Expansion, and the Secretary of State, all ex-members of the NDP? What are we to expect but galloping socialism?


Some hon. Members:: Hear, hear!


Erik Nielsen: We see the Leader of the NDP now, and before him the hon. member for Nanaimo-Cowichan-The Islands when he was leading that party, every time a government spokesman rises in his seat to announce some new measures, such as the Canada Development Corporation Act, the competition act or the investment incentives act, getting red in the face. They are burned up by their anger and by their indignation at being outmanoeuvered and pushed further out of the socialist spectrum. That is why they are angry. They cannot call themselves true socialists any more because they have been displaced. Nor can those across the way call themselves Liberals.

November 22, 1971
Income Tax Act


Some hon. Members:: Hear, hear!


Erik Nielsen: That is a pretty hollow claim. If they were to tell the truth and if they would banish this constant charade of parading themselves as Liberals, if they would banish hypocrisy and admit where this country is going with this list of legislation with which I will not bore the House, then we could have some truth in this place.


An hon. Member:: Oh, oh!


Erik Nielsen: The hon. member for St. Boniface interjects over and over again with his loud mouth and loose tongue. If he would get up and participate in the debate he might give us the advantage of some of his views.


Mr. Guay:: I rise on a question of privilege, Mr. Chairman.


Some hon. Members:: Oh, oh!


Joseph-Phillippe Guay: It would be very easy for one of us on the government side to rise and discuss matters sensibly with the opposition. But you will have noticed, Mr. Chairman, that the last speaker has not said one word pertaining to what we are discussing at present. All he has done is to criticize the NDP and the Liberals. So I suggest that if they-


An hon. Member:: Sit down.


Gérald Laniel: Order, please. First, I will point out to the hon. member that the point he raised is not a question of privilege. However, I will also take this opportunity to tell the hon. member for Yukon that he should address himself to the Chair and should make his remarks relevant to section 2.


Erik Nielsen: Mr. Chairman, I have never heard a larger pot than the hon. member for St. Boniface calling the kettle black. I hear him interjecting day after day. At least when I speak I have something to say, and that is more than I can say for the hon. member for St. Boniface.


Some hon. Members:: Hear, hear!


Erik Nielsen: The hon. member for Crowfoot-


Joseph-Phillippe Guay: Let us talk about St. Boniface for a while.


Erik Nielsen: I do not think hon. members would agree to that. Unless the hon. member starts talking about it, the country will forget about St. Boniface.


Joseph-Phillippe Guay: Speak louder so I can hear you.


Gérald Laniel: Order, please. It is difficult for the Chair to understand what is going on-I ask hon. members to help me keep order.


An hon. Member:: Eric, you are on.


Erik Nielsen: For a moment I did not know whether the hon. member for St. Boniface had the floor or whether I had.


Joseph-Phillippe Guay: You do not know the difference. You are not here half the time.


Erik Nielsen: One of these days he will have the courage to rise and tell us about his riding and his constituents, because we certainly have not heard anything yet.


Joseph-Phillippe Guay: It would make a hell of a lot more sense.


Gérald Laniel: Order, please. I will ask hon. members once more to give the Chair a chance to hear what is going on and to hear the speaker who has the floor. With their co-operation, I give the floor back to the hon. member for Yukon.


Erik Nielsen: Thank you, Mr. Chairman. The hon. member for Crowfoot referred to timing. Indeed, this legislation is ill-timed. My urgings to the government have already been expressed by the hon. member for Crowfoot. Why are we in the difficulties that we face now with respect to the matters before us? This is a problem of the government's own making. How in the world can we expect the kind of economic climate to exist between ourselves and the United States when we have actions of the government such as we witnessed over the past few months, starting with the statement made in Russia by the Prime Minister referring to the U.S. military threat to Canada.


Some hon. Members:: Oh, oh!


Erik Nielsen: I hear groans from the Parliamentary Secretary to the Minister of Finance. What I am saying is the truth, and the parliamentary secretary knows it.


Patrick Morgan Mahoney: It is the contrary.


Erik Nielsen: It is not, and the parliamentary secretary knows it when he challenges my statement and says it is not correct. I am not the one who is lying. This was followed by the Premier of the Soviet Union, who came here and used Canada as a platform from which to make anti-American statements. That did not help. This followed on the heels of the Minister of Energy, Mines and Resources making a statement with respect to the investment of foreign money in this country for the purpose of constructing pipelines, and the Minister of Indian Affairs and Northern Development travelling to the United States and making a statement diametrically opposed to that. No wonder the United States feels so confused.
Then, after cataloguing all these things, the Prime Minister says something is wrong and we have to mend the situation or at least give the appearance of mending it. So he calls together the offensive team, the Minister of Justice, the Minister of Finance, the Minister of Consumer and Corporate Affairs, and he shoves them across the country and instructs them to get the government out of the mess. What do they do? We find the Minister of Justice, whose portfolio has no concern with economics, saying in a speech to the Empire Club in Toronto last Thursday:
If there has been any straining in our friendship with the United States, that surely has resulted from Americans initiatives.
Having regard to statements of that nature from senior ministers of the Crown, how in the world are we going to smooth over the deterioration in our relations with the

November 22, 1971

United States which have never been so low in Canada's history.


Mark Willson Rose: Since Diefenbaker.


Erik Nielsen: The hon. member for Fraser Valley West has interjected, "Since Diefenbaker."


Mark Willson Rose: Right.


Erik Nielsen: That is an untrue, an uncalled for remark and it is beneath the dignity of the hon. member who uttered it. That former Prime Minister of this country was and is a great Canadian.


Mark Willson Rose: That is right. Mr. Chairman, I was accused of an untruth in regard to relationships between Canada and the United States. In response to the suggestion of the hon. member for Yukon that our relations were at a very low ebb, I suggested that they had not been at such a low ebb since the time of Right Hon. Prime Minister Diefenbaker. I do not retract that statement. I am suggesting that if they are not below that point now, that they are at least equal to it. It is not my problem; it is the problem of the hon. member for Yukon that this is so.


Gérald Laniel: Order. The hon. member knows that this is not a point of order. It is a matter of debate.


Erik Nielsen: Does the hon. member wish to raise a point of privilege?


Mark Willson Rose: If you like.


Gérald Laniel: Does the hon. member have a point of order again?


Mark Willson Rose: Mr. Chairman, you suggested that my intervention was not a true point of order. If it would please Your Honour, I would change it to a point of privilege.


Gérald Laniel: Order. I said it was a matter of debate.


Erik Nielsen: In all good conscience, if the hon. member for Fraser Valley West were called upon to answer he would have to admit he knew it was not a question of privilege but just another abuse of the rules to get an interjection on the record. In reply to the hon. member I say that it is not my problem. The situation in which we find ourselves today, with our relations with the United States being at the lowest ebb in our history, is the government's problem. If hon. members to my left were honest with themselves they would admit that.


Joseph-Phillippe Guay: You missed that debate.


Erik Nielsen: I think I hear the hon. member for St. Boniface again.


Joseph-Phillippe Guay: You were away when that subject was discussed.


Erik Nielsen: I wish the hon. member would speak up.


Joseph-Phillippe Guay: On a point of order, Mr. Chairman, I just want to bring to the attention of the hon. member for Yukon that the matter he is discussing was
Income Tax Act
fully discussed in a debate when he was absent a couple of weeks ago.


Gérald Laniel: Order. The hon. member for Yukon.


Erik Nielsen: I cannot understand how the hon. member for St. Boniface knows what was discussed in the House, because all he can hear is himself. In Toronto, the Minister of Justice-one of the offensive team-was followed by the Minister of Finance who, to put it mildly, has taken much buffeting in the last few months. In a speech there that minister said: "As it stands now the U.S. program contains elements that are prejudicial to the development of world trade." His whole speech was along that line. How on earth are we to improve rapidly deteriorating relations with a country that is so vital to our existence by sending out ministers to say that kind of thing?
On top of these harsh, blunt, undiplomatic statements made by ministers of the Crown-and the Prime Minister is no exception-we have things like the leakage of the Gray report advising of the setting up of some kind of screening mechanism, staffed by a board with broad, sweeping powers to exercise political discretion over what foreign capital can come into this country, how much of it, for where, and for what purpose. Members of the NDP would dearly love to see that happen. I point out that the so-called pseudo Liberals have been stealing the stuff of the NDP for as long as I can recall. That is why members of the NDP are now redundant. The true NDP are all over there opposite me. Why don't you go over there? That is where you belong. Conversely, the government should move over to this side.


Gérald Laniel: Order. I ask the hon. member to address himself to the Chair.


Erik Nielsen: Mr. Chairman, I have been careful about addressing my remarks through the Chair, but because I may have been facing in another direction this does not mean that I have forgotten about Your Honour's existence. Then one must read some of the editorial comment on this subject.


Joseph-Phillippe Guay: More questions.


Erik Nielsen: The hon. member for St. Boniface is disgruntled again.


Joseph-Phillippe Guay: All you can do is read quotations from newspapers.


Gérald Laniel: Order. The Chair is having a very difficult time tonight. This is my worst experience so far in the chair. I am trying to follow everything that is said. I wish hon. members would allow the hon. member for Yukon to speak without interruption so that I may follow what he is saying.


Erik Nielsen: Mr. Chairman, I am greatly interested in the interjections of the hon. member for St. Boniface. They merely point out the great unrest that exists in the backbenches on the opposite side. This is one way for the hon. member to blow off a little steam. I don't begrudge it to him because he needs it, if only to maintain good health.

November 22, 1971
Income Tax Act


Joseph-Phillippe Guay: On a point of order, Mr. Chairman, I just want to say that I agree with the hon. member that there is unrest here, but it is because we are getting tired of listening to nothing.


Erik Nielsen: I think the hon. member will agree with me that for 31 years we have been listening to nothing from the government backbenches. In an editorial last Saturday the Globe and Mail said:
Even the hesitation of business to invest deplored by Mr. Benson has its Canadian causes-the long doubt of the tax bill, the dangerous and arbitrary elements of the competition act, and now the foreshadowing of another arbitrary tribunal in the Gray report.
There, Sir, is the nub of the question. The problems the government is facing today are problems of its own creation, because of its blind, stubborn, stupid ineptness in managing the country, as a result of which it now finds itself deep in the proverbial mire. The editorial added:
Verbal assaults on the United States will not solve our problems. Even U.S. concessions would not solve them all. Our economic disease has its Canadian causes, which can only be removed by new Canadian initiatives.
We are not going to see any initiatives coming from the government or coming from the NDP, because all they are concerned about is one great superstructure of the state having control over virtually every aspect of our freedoms, our freedoms of commerce, of industry, of business, and in that respect members of the NDP are beaten hollow by those who sit on the government benches.


Some hon. Members:: Hear, hear!


Erik Nielsen: They can cry in their soup until doomsday because until the government goes they will be outlefted every time-and heaven help us if the government doesn't go soon.


Mr. Flemming:: Mr. Chairman, I wish to make a few remarks in connection with Bill C-259 and the portion which we are supposed to be discussing. Perhaps I should say that we are talking about the taxation policy on income, as it applies to Canadian individuals and Canadian corporations, from foreign sources. I happen to belong to a group of people which I hope is not in the minority, people who are pleased and proud of the fact that in Canada we do have corporations large enough to compete in all the markets of the world.


Some hon. Members:: Hear, hear!


Hugh John Flemming: This business of trying to point the finger at corporations that have their head office in Canada, as though it were a crime, does not stand up in my opinion and should be frowned upon by every member of this assembly.


Some hon. Members:: Hear, hear!


Hugh John Flemming: We are discussing a complex phase of a complex portion of the tax reform bill. When I say tax reform I want to say that I do not subscribe to the words whatsoever, because tax reform suggests tax improvement. This is not tax improvement by any stretch of the imagination. If people were honest with themselves they

would not call this monstrosity tax improvement, because it is not.
When the bill is referred to committee of the whole then I suggest it is the business of the minister sponsoring it to be in his place to explain the bill for the illumination of all members. In this case, that responsibility has been delegated to the parliamentary secretary to the minister, the hon. member for Calgary South, and I find no fault with that. But when the parliamentary secretary fails to rise in his place at the beginning of any series of sections of a complex bill to explain to the committee what the government expects to accomplish by these new portions of this bill, then I do find fault.


Mr. Benjamin:: They don't know yet.


Hugh John Flemming: If you will examine the bill you will see that in every case it is written that these are new sections. I submit it was the duty of the parliamentary secretary to rise in his place and explain why the changes are being made and what gain is expected in comparison to the old act. As I said a few moments ago, while I do not agree with the principle of delegation because people are elected for a specific purpose, since it had to be done I am sure it could not be on more capable shoulders-except that he did not do it. He has not given the committee any explanation of why this is done and what the government expects to gain by it.
I shall give a bit of information on what we are gaining under the present act. Let us examine the record, Mr. Chairman, and see what it shows. We find that in 1970 Canada received $513 million in interest and dividends on foreign holdings, a 74 per cent increase over the 1967 revenue of $295 million. In 1967, Canadian direct investment abroad represented a book value of $4 million out of total long-term investments with a book value of a little over $8 million. Canadian direct investment abroad in 1970 was $215 million exclusive of undistributed profits.
With that in mind, Mr. Chairman, it becomes the duty of the parliamentary secretary to tell this House what improvement the government is going to make. I know what has been said by some members. They have raised this particular phase of the new bill and emphasized that portion of it which would interfere with people who are wealthy and move their place of residence to another country. I agree with that. I do not, however, agree with the idea of saying to Canadian corporations which are doing business throughout the world that you are going to make it as hard as you can for them because there are ways in which they could be made to pay taxes.
In my opinion, the people who are contributing to taxation in this country, which last year amounted to something in the area of $6 billion or $7 billion, are a most important class because they contribute to the expense of various social services and the expense of government in general. Why should the government try to make it hard for the taxpayer? It seems to me that what they are doing is discouraging him or the corporation to the extent that he loses his incentive to go ahead and make a profit. I happen to believe in profit because, in the first place, I believe it makes for good times and, in the second place, government gets about 50 per cent of it anyway. I see that you agree, Mr. Chairman, because you smile. Why should the taxpayer be held up almost as a public enemy of

November 22, 1971

Canada when he is almost the greatest benefactor that the country could possibly have?
I think we have to look at all these phases, but it seems to me that the government has not considered them. They seem determined to make change, but unless you can make an improvement you should not make change. The power to tax is surely the power to destroy, and the power to change taxes and make them more onerous surely has the same connotation. I think the parliamentary secretary should have been on his feet a long time ago telling this House what the government had in mind and why they were doing it.


Erik Nielsen: He doesn't know.


Hugh John Flemming: Mr. Chairman, I believe that the remark of my hon. friend from the Yukon is correct; I do not think they know. They do not seem to know, but they seem to have the idea that they must of necessity make changes. It really amounts to this. The government thinks it must make changes for the sake of change. That is all we have here.
Mr. Chairman, I make this assertion: income from foreign affiliates is not at present taxed by Canada when it is earned or remitted as dividends; only when that income is distributed by the Canadian parent company to the shareholders will it become taxable, presumably. In other words, the government is making it impossible for a company with an affiliate in another country to bring funds from that affiliate into Canada without paying tax. It cannot bring money into its own treasury even. That seems to be a step in the wrong direction. We must look at possible government objectives for clues to indicate why the government is thinking this way. I have referred to the question of tax havens.


An hon. Member:: Are you for or against them?


Hugh John Flemming: The government's objective may be to allow Canadian businesses operating abroad to remain competitive and viable. Mr. Chairman, you cannot make them competitive and viable if you impose on them provisions like these so that they cannot live. That, to me, does not seem sensible. There has been talk of bilateral tax treaties. These treaties are not easily made. They take a great deal of time. Why, for goodness sake, is it necessary to enter into additional tax treaties when under the present law $513 million in cash flowed into the treasury of this country in 1970? In 1971 it is quite possible that the amount will be much greater. The international aspects of Bill C-259, Mr. Chairman, might be described as a nightmare of overkill, subverting international equity and confronting Canada's international interests with grim prospects.
I think the parliamentary secretary should explain what the government has in mind. Why did 44 top businessmen come to Ottawa today, if not to express concern about the new tax legislation?


Patrick Morgan Mahoney: They came because they were invited by the Prime Minister.
Income Tax Act


Hugh John Flemming: So the Prime Minister invited them. Let us accept that as a proper statement. But why are they here, if not to object? I submit that business in Canada today is in a state of tremendous confusion and uncertainty resulting largely from the government's actions on taxation. The government seems determined to make change for the sake of change. It has not been demonstrated to me that things needed to be improved.
I said a moment ago that about $6 billion of our total revenue, or about 50 per cent, comes from the taxation of individuals and corporations. However, I did not give the whole story and now I want to do so. In the three years for which I am about to give figures-that is, 1968, 1969 and 1970-the revenue from taxation under the headings I referred to was $4.5 billion, $5.3 billion and $6.7 billion respectively. The point is that here we have tax laws which apparently without disturbing the business community resulted in increased revenues every year of about $1 billion. The government is not satisfied with that; apparently it wants more.
The plain fact is that if business in Canada and abroad is to remain competitive, it must operate in a tax environment that is at least as favourable as that applying to its foreign competitors. I should like the parliamentary secretary to listen to me. If businesses are to remain competitive, Mr. Chairman, it is necessary for them to operate in a tax environment that is no less favourable than that in which their foreign competitors operate. That seems like ordinary, common sense. Apparently this government is not conscious of that fact or, if it is, it is absolutely indifferent. They go merrily on their way chasing after the last dollar and trying to portray the businesses of this country as public enemy No. 1. That is what the government is doing by this legislation.


An hon. Member:: Ten o'clock.


Hugh John Flemming: I will take only a minute, Mr. Chairman. We have no assurance from the government that the restrictive measures which have been included in this bill will have any beneficial effect. Perhaps the parliamentary secretary would like to convince me that they will. I would be glad to be convinced. So far, however, I remain unconvinced. The government seems to be absolutely unconscious of the effects of high taxation. It is time it woke up and considered what action it ought to take in the interests of all the people of Canada.


Patrick Morgan Mahoney: Mr. Chairman, the hon. member for Carleton-Charlotte was the first member of the official opposition who displayed any interest in the contents of this particular block of sections. I only regret that he took up all the time available and that I cannot respond to him.


Winona Grace MacInnis: On a point of order, Mr. Chairman, I wish to draw your attention to the fact that some electronic equipment has been used in the committee. I should like the Chair to rule on whether that is a proper procedure for the hon. member for Davenport to follow.


Gérald Laniel: I do not see any
equipment.


Winona Grace MacInnis: Look. It is in his hand.

November 22, 1971
Proceedings on Adjournment Motion


Gérald Laniel: If it is, it is not supposed to be there. I will note the matter and report to Mr. Speaker.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Heath Nelson Macquarrie: Mr. Speaker, when I raised this issue some time ago it was because of my hope that something additional might be found to add to the assistance this country and its people are providing for the unfortunate refugees in the Indian subcontinent. While there are events, political problems and grave dangers of serious international consultations, the human problem is urgent, pressing and compelling.
I do not hesitate, and I never have hesitated, to endorse enthusiastically the efforts of this country to assist developing countries and, more particularly, to assist the nationals of other countries in time of unique and special need. Certainly, the last requirement is met in the tragedy which has befallen the millions of people who have fled East Pakistan for India. The world must know that the Indian burden is immense and must be taxing the capacity of that country, and thus we cannot overlook any avenue of assistance.
It is one of the sad anomalies of our world that some parts are in abundance and others are in grave deficiency, even confining ourselves to foodstuffs. It passes the understanding of most people that we find some areas of the world with food that is wasted and other parts of the world where people literally starve. This was a perplexing problem in the thirties in the Canadian prairies, and I suppose the American prairies too. Wheat was burned or roasted to make a form of coffee, while in Brazil coffee was destroyed because there was no sale. Canadians could have used the coffee and the Brazilians could have used the wheat, but never could we get the proper correlation between surplus and deficiency.
It would seem that in our highly sophisticated age when we can literally land on the moon and send with precision the most sophisticated instruments to the planet Mars, there must be something wrong in our universal patterns of life if we cannot relate the terrible needs of some human beings to the overproduction of others.
I know that respect must be had for the life styles and taste preferences of people, and I understand that we have in the past made mistakes and sent food to areas where the people either could not or would not make use of it. However, it is my understanding that dried, instant potatoes can be usefully added to the diet of the East Pakistan refugees. As I understand it, a mixture of these potatoes with spices, combined with some leafy vege-

tables which are found in the area, add considerably to the rations of these people.
One of the great problems which faced the sector of the agricultural industry devoted to potatoes is the fact that this crop was perishable and, unlike wheat, could not be stored from year to year. The advent of the potato flake, instant potatoes-a most wonderful product-has helped to make this problem a little less acute.
My main concern in this question is not to criticize but to inquire as to what has been done by the Department of External Affairs, by CIDA, what advice has been received from the Department of Agriculture on the possibility of making use of the ample supplies of potatoes in an instant form to assist in providing sustenance for the unfortunates in India. I hope the parliamentary secretary will be able to indicate that considerable research has been done and that the omens are good for this further development of Canada's external aid program.
I still believe that the best possible contribution is cash-cold, hard and generously delivered cash-but foodstuffs that are light and therefore reasonably easy to transport should be utilized wherever possible. I call upon the government to make every effort toward the utilization of these items. I note with immense concern and profound sorrow what was said by our representative at the United Nations the other day, reporting what the UNHCR man had reported to the United Nations assembly, namely, that it would require $700 million to provide for the basic needs of these refugees for the year ending March, 1972.
I profoundly hope, with a great feeling that we must all unite on this matter, that something can be done in this particular area in order to provide some amelioration of the terrible need of so many of our fellow human beings who are experiencing great distress and unique suffering.


Mr. Gaston Isabelle (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, we fully share the sympathy of the hon. member for Hillsborough (Mr. Macquarrie) on the question presently under study.
His opinion is also shared by the government but I must tell him, on that matter, that the Canadian International Development Agency has been approached and encouraged to provide Pakistan refugees in India with instant dehydrated potatoes.
Senior officials of the agency have consulted representatives of the FAO and the League of Red Cross Societies and both inquiries have clearly demonstrated that dehydrated potatoes do not meet the dietetic needs of this population and that this moreover implied serious difficulties due to the rudimentary implements available in that country. However, CIDA officials are still seeking the best way of utilizing the stocks that have already been shipped by various private organizations.



EXTERNAL AFFAIRS-SUPPLY OF AUTO PACT INFORMATION BY EMBASSY OFFICIALS TO U.S. SENATORS PRIOR TO VOTE ON EXEMPTION OF CANADA FROM SURTAX

['The hon. member has an instinct for a joke. Therefore, no company or society can require fees for royalties in the case of "O Canada".\nMotion agreed to and the House adjourned at 10.24 p.m.', 'Tuesday. November 23. 1971']
John Edward Broadbent: Mr. Speaker, the issue I wish to speak about briefly this evening is
November 22, 1971

concerned with the degree of effort this government is making to provide our trading partners, more particularly the United States of America, with information directly relevant to current issues that exist between our two countries. The question is by no means an abstract one; quite the contrary. I was in Washington last week to speak with representatives of both the legislative and executive branch of that government in connection with the Canada-United States automotive agreement. To my dismay I discovered that those at the legislative level were simply uninformed of Canada's position and the facts-I emphasize "the facts"-concerning the Canada-U.S. automotive agreement.
I spoke with Senators Buckley and Gravel, the former from New York city and the latter from Alaska, concerning an amendment that they had put before the U.S. Senate a week ago Saturday. The substance of the amendment was extremely important to this country. If passed, it would have recommended to the President of the United States that that government exempt both Canada and Mexico from the current surcharge. The vote failed by seven votes only. In other words, if four Senators had voted the other way, that amendment would have passed.
The central argument used against the exemption of Canada came from Senator Long, chairman of the important finance committee, and it stressed almost exclusively the so-called reneging by Canada on the Canada-U.S. automotive agreement. The Senators present who were supporting the amendment simply did not have at their disposal, so I am informed and have had partially confirmed, contrary facts, facts that could and should have been provided to them by our embassy in the United States.
I am not arguing or suggesting strong tactics or anything of that kind, but simple, straightforward provision of information to important and powerful politicians should have been carried out. The minister in his reply to my question in the House this afternoon as to the degree of action we took in this area, suggested this was perhaps inappropriate. He said it was perhaps permitted both by our government and others but it might cause more harm than good. It seems to me that anyone who knows anything at all about the operation of modern government could not accept this answer at face value. Virtually all active governments are busy providing us as Members of Parliament on a regular and daily basis with all kinds of information concerning themselves. We are ordinary Members of Parliament and, indeed, almost half of us are members of the opposition. It seems to me that in the United States system of government the legislative branch is in many basic ways much more powerful compared with Members of Parliament.
This is all the more reason for saying it is an essential function of our embassy abroad and the foreign policy of this government to keep people at that legislative level in the United States government informed of Canadian positions, and particularly informed of basic factual information that could be used in a positive way when votes are taken in the Senate or in Congress which could have a good or detrimental effect on this country.
Proceedings on Adjournment Motion
To repeat the point, the vote last Saturday could well have been different and could well have come out in Canada's favour if members of our embassy and members of this government had been doing the job they ought to have been doing.


Joseph Gaston Isabelle: It is of course one of the
responsibilities of our embassy in Washington to establish contact with all sectors of the United States government. Officers are expected to be acquainted with not only their opposite numbers in the administration but also with Senators and Congressmen who are interested in Canadi-an-Ameriean relations.
Several Senators supported the unsuccessful amendment to the tax bill, advocating withdrawal of the 10 per cent surcharge from Canada and Mexico. Many of them may have been made aware of the general Canadian position, including the auto pact, and of the effects of the surcharge on our economy, through the efforts of our Washington embassy staff. Such contact between diplomats and legislators within the country to which diplomats are accredited is normal and natural. Indeed, officers might be subject to criticism if they did not develop and maintain these contacts.



Cyril Lloyd Francis: Mr. Speaker, on Friday, November 19, as reported at page 9713 of Hansard, the right hon. member for Prince Albert (Mr. Diefenbaker) asked the following question:
Mr. Speaker, I ask the Prime Minister to give consideration to a problem that has arisen as a result of the royalties being collected by the Authors, Publishers and Composers Association of Canada for the use of "O Canada" when played at any time by any organization which charges admission. Up to the present time "God Save the Queen" and "O Canada" have been accepted as national anthems. This organization, this all-powerful behemoth of art, have a copyright on "O Canada". Will the Prime Minister give consideration to bringing before Parliament the necessary legislation to cancel the copyright as such a preposterous anachronism whereby Canadians have to pay for the privilege of having "O Canada" played?
In reply, the Prime Minister (Mr. Trudeau) stated that it was the intention of the government to bring in legislation on this matter but that it will not be possible at this session. In fact, Mr. Speaker, the right hon. member for Prince Albert is badly mistaken in his facts. The copyright for "O Canada" was turned over to the Crown in October, 1969, for the sum of $1. I am in possession of photostat copies of letters indicating that this offer was made on a number of previous occasions by Gordon V. Thompson Limited, who held the copyright.


Mr. Forrestall:: Your leader, then, is a liar.


Cyril Lloyd Francis: Mr. Speaker, I believe I have the floor. The hon. member has the right to make his own representation at another time. What he is saying now is totally false.


J. Michael Forrestall: It is not false at all. Why do we not have the legislation?


The Acting Speaker (Mr. Boulanger):: Order. I would ask for co-operation with the hon. member who has the floor.

November 22, 1971
Proceedings on Adjournment Motion


Cyril Lloyd Francis: I will ignore the remarks. As I say, I have photostatic documents, and I trust the hon. member making the objection is in possession of material to back up the very false statement he made in his interjection. I am in possession of photostats of letters indicating that the offer was made on a number of previous occasions by Gordon V. Thompson Limited, who held the copyright. While this firm is a member of the Authors, Publishers and Composers Association of Canada, such nominal royalties as were collected were actually collected by Gordon V. Thompson Limited.
My purpose in raising the matter at this time is to clear the name of Mr. Gordon V. Thompson, in the interests of his family some of whom reside in Ottawa. While a student at the University of Toronto before the First World War, the late Mr. Thompson became interested in the lyrics of "O Canada" in English. Some 40 versions were current at that time. After much research and consultation with many authorities, he finally came to the conclusion that the version by Judge Robert Stanley Weir of Montreal was the most generally accepted.
The problem of how to protect the lyrics of a song which had no official status but which many hoped would become the national anthem was a difficult one. Mr. Thompson negotiated with the heirs of Judge Weir and took out a copyright. By means of the copyright he and his firm were able to protect the dignity of the lyrics and the music as something which they could pass on to future generations.
In the course of administering the copyright a number of difficult decisions arose. In one case a parody of the song was prepared and, of course, this was forbidden. In another case a firm wanted to make a singing commercial to sell deodorants, using the music of "O Canada", which was again refused. While these cases were obviously offensive to public taste, other decisions were much harder to make. In general, permission to use the copyright was granted freely for any public or non-profit purpose.
As far as royalties were concerned, I am informed that these amounted to approximately $150 per year, of which 50 per cent was turned over to the estate of Judge Weir. A royalty of 10 cents per sheet for sheet music produced negligible returns, but all the money from this source was turned over to Judge Weir's estate. The costs of administering the copyright, of preventing abuse and maintaining uniformity of the version across Canada, indeed for international purposes, far exceeded the nominal royalties received. Indeed, the firm of Gordon V. Thompson Limited became specialists in this kind of work. They were given responsibility for administering the copyright of Canada's centennial song written by Bobby Gimbey, and also I believe they have a similar arrangement with the "Ontario" song promoted by the province of Ontario.
A review of correspondence in my hands indicates that Mr. Thompson offered on a number of occasions to turn over his copyright to the Crown, which was finally done in
1969.	The task of working out a fair set of rules to guide those responsible for administration of the copyright, however, has not yet been completed by the Secretary of State's department. No doubt in the near future we can expect, as the Prime Minister indicated, legislation and possibly regulations to deal with this complex and difficult subject.
Those interested in the subject might refer to the 1967 report of the Special Joint Committee of the Senate and House of Commons on the National and Royal Anthems, and the Minutes of Proceedings of November 30, 1967, pages 55-58. It is to the credit of the late Gordon V. Thompson that he undertook to copyright the Weir version of "O Canada" in order to protect it as a public service. Through the device of the copyright, a standard version was promoted from coast to coast and the other versions have fallen into disuse. The fact that the Weir version has received the recognition it enjoys today is in no small part due to Mr. Thompson's efforts and it is out of a sense of obligation to set the record straight that I have taken the opportunity of raising this matter tonight.


Barnett Jerome Danson: The statement made by the right hon. member for Prince Albert (Mr. Diefenbaker) and the press article on which it was based were both inaccurate. The Composers, Authors and Publishers Association of Canada requires royalties for their repertory, and "O Canada" is not included in this repertory.
So far as the English version is concerned, "O Canada" copyrights have been Crown property since October 12,
1970,	at which time the heirs of Judge Weir, I am given to understand, through selfless effort and the co-operation of Gordon Thompson turned over to the government the copyrights. The French version, both the words and the music, have been public property for a number of years.


J. Michael Forrestall: Nonsense.


Barnett Jerome Danson: The hon. member has an instinct for a joke. Therefore, no company or society can require fees for royalties in the case of "O Canada".
Motion agreed to and the House adjourned at 10.24 p.m.

Tuesday. November 23. 1971