1971-11-19

ROUTINE PROCEEDINGS


[Stage Direction]
A message from the Honourable Deputy to His Excellency The Governor General transmitting Supplementary Estimates (A) for the financial year ending March 31, 1972, was presented by Hon. C. M. Drury (President of the Treasury Board) and read by Mr. Speaker to the House.

Hon. Donald S. MacDonald (Minister of National Defence):: Mr. Speaker, I should like to move, seconded by the President of the Treasury Board (Mr. Drury):
That the Supplementary Estimates (A), 1971-1972, tabled this day, be referred to the Standing Committee on Miscellaneous Estimates.


[Stage Direction]
Motion agreed to.


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, last week I indicated to the House in answer to a question from the hon. member for Edmonton Centre (Mr. Paproski) that I would table a study carried out for my department on the matter of snowmobile safety. Therefore, in accordance with Standing Order 41(2) I wish to table in the two official languages a report entitled "An Evaluation of Snowmobile Safety", prepared by Hovey and Associates Limited, of Ottawa.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, in view of the recommendation contained in the
report of the Senate Committee on National Finance regarding growth, employment and price stability, I should like to ask the Prime Minister whether the government is now prepared to set up an independent commission for economic analysis charged with the responsibility of producing short-term forecasts and short-term analyses of economic performance as I requested on December 4, 1970, and on May 5 and May 17 of this year?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, as the hon. member knows, the report was only tabled and made public yesterday and I have not had a chance to study the argument. I will do so and consider the case made for the establishment of a short-term body.


Robert Lorne Stanfield: Mr. Speaker, I appreciate that the right hon. gentleman has not had an opportunity to study the report in detail, but I had hoped he would have had an opportunity to give certain matters of principle some consideration. I should like to ask whether he is prepared to accept in principle the recommendation of the Senate committee that there should be a new openness in the process of formation of economic policy in Canada and, at the very least, whether the government will report to Parliament and through Parliament to the Canadian people its own specific projections in respect of the performance of the economy and employment in the coming months? Is the right hon. gentleman prepared to accept the principle of the need for more openness and, if so, is he prepared to have the government give this kind of projection?


Pierre Elliott Trudeau: Mr. Speaker, we report to Parliament on our views in respect of the present and future state of the economy. We have occasion to do this in our budgetary speeches and we do it sometimes as often as two or three times a year. I do not know whether the recommendations of the committee go farther than that. As I say, the report was only made public yesterday and I have not read it.
As to new openness, I am not sure what the Leader of the Opposition has in mind. Perhaps he could ask a supplementary and say what he means by "new openness". Does he mean that we should make the budget public before announcing it to the House of Commons, or some other alternative? I do not know what the report recommends.


Robert Lorne Stanfield: Mr. Speaker, in response to the request of the Prime Minister for further enlightenment I should like to ask whether he is prepared to involve the House of Commons and Parliament more actively in the formation of economic policy as recommended by the Senate committee, specifically, for example, by establishing a shortterm forecasting commission, as I have recommended, and having the report of that commission as well as the report of the Economic Council of Canada referred to a standing committee adequately strengthened with

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Inquiries of the Ministry
resource personnel? Is the right hon. gentleman prepared to adopt that kind of openness in the formation of economic policy in this country?


Pierre Elliott Trudeau: Certainly if committees of the House want to study in more detail the report of the Economic Council of Canada the government sees absolutely no objection. There is no lack of openness in the possibilities offered to the opposition parties and the people of Canada generally to state their views on the economy and what should be done. I have noticed no lack of interest in the opposition ranks in stating their views on the economy. Therefore this is all open. I am not clear, once again, what the Leader of the Opposition desires in terms of the eventual decisions which have to be taken on budgetary measures. Does he suggest these should be discussed in the open?


Mr. Speaker:: Order, please. Obviously at this point we are engaging in a debate. The Chair will allow the Leader of the Opposition to ask a supplementary question in a moment, but we are getting involved in debate when the right hon. Prime Minister suggests that a supplementary question might be asked and the Leader of the Opposition asks a supplementary. This is more in the form of a conversation and exchange of views between the hon. gentlemen. I would not think that is in keeping with the spirit of the question period.


Robert Lorne Stanfield: I agree, Mr. Speaker, but I am simply trying to carry out my usual policy of co-operating with the right hon. gentleman at every opportunity. I would simply commend to him the reading of these recommendations by the Senate committee.



STATEMENT BY MINISTER OF JUSTICE RESPECTING UNEMPLOYMENT AND NEED FOR MORE COMPREHENSIVE ECONOMIC POLICY-GOVERNMENT POSITION

Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister. Was the Minister of Justice stating government policy in his address yesterday to the Empire Club of Toronto when he said that Canada's rate of unemployment is totally unacceptable and that the situation calls for a more comprehensive government economic policy?


Pierre Elliott Trudeau: Mr. Speaker, this is hardly a question of policy; it is a statement of fact. It is a fact that we have recognized in government ranks that we would like to see the unemployment rate lowered. If it is a policy, it is certainly a multilateral policy which we all share.


Stanley Howard Knowles: What steps is the government taking to implement the policy called for by the minister, a more comprehensive approach to the whole problem of economic growth?


Pierre Elliott Trudeau: That is what the Minister of Justice and the other ministers have been engaged in in the past few years, trying to reach a more comprehensive approach.



INVOLVEMENT OF PROVINCES AND INDUSTRY IN FORMULATION OF POLICY TO ACHIEVE GREATER INDEPENDENCE

Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a supplementary on a matter closer to home and more recent. Was the Minister of Justice stating government policy when he said that an economic policy to give us more independence and international muscle must involve closer federal-provincial liaison and a closer relationship between government and industry? Is this now becoming government policy and when will the government in fact be moving toward this new type of policy?


Pierre Elliott Trudeau: Mr. Speaker, I am glad this excellent speech has attracted so much commendation from the opposition ranks and that they now have begun to realize the direction in which the government is moving.



FULL EMPLOYMENT GOAL

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have a question on unemployment for the Prime Minister. Can the Prime Minister say whether or not the government endorses and will adopt the recommendation of the Special Senate Committee on Poverty that Canada must have a goal of full employment?


Pierre Elliott Trudeau: Yes, Mr. Speaker.



PENSIONS


Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is addressed to the Prime Minister. As recommended by the Senate committee report, is the government considering putting a full adjustment mechanism in old age security pensions as the cost of living rises and, if so, when will legislative action be taken?


Pierre Elliott Trudeau: When the Senate forms the government, Mr. Speaker.



REGIONAL ECONOMIC EXPANSION


Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I wanted to put my question to the hon. Minister of Regional Economic Expansion but, since he is away, I will put it to the right hon. Prime Minister. Following an accusation made yesterday by Quebec Premier Bourassa against the federal government to the effect that it did not meet its electoral promises of three years ago in order to eliminate regional disparities and faced with this obvious failure noted by the premiers of Quebec and of the other prov-
November 19, 1971

inces, does not the present government think that its regional development policies should be revised without delay and new programs developed after consultation with the provinces?


Pierre Elliott Trudeau: Mr. Speaker,
I do not accept the premises of the question. I should be very surprised if the Quebec premier had said anything like that.
With regard to the regional economic expansion program, Quebec got far more out of it than any other province in Canada, and I would be very surprised if the Quebec premier expressed dissatisfaction with the funds invested in his province as a result of the program implemented by the Minister of Regional Economic Expansion.


Georges-J. Valade: Mr. Speaker, I should like to put a supplementary to the right hon. Prime Minister and ask him if he has read the article published in the Globe and Mail this morning. Can he tell us whether what was published about Mr. Bourassa reflects the policy of the government?
I quote:

... it is normal that people question the general effect of these policies, the justification for these policies.


Mr. Speaker:: Order. The Prime Minister can obviously answer the question, but I would hope that the questions asked during the question period were not based on newspaper reports especially not when they are quoted as the ion. member did.
Anyhow, I recognize the importance of the question and the Prime Minister can obviously answer.


Pierre Elliott Trudeau: As you seem to admit it, Mr. Speaker, Mr. Bourassa does not usually communicate with me through the Globe and Mail. When he wishes to speak to me, he does it viva voce. When he wants to speak about regional economic expansion, he communicates with the responsible minister. Moreover, we are frequently in touch. Mr. Bourassa has never spoken to me in the terms referred to by the member.


Georges-J. Valade: To clarify the situation, I should like to ask the Prime Minister whether, in fact, he and his Quebec counterpart have discussed a review of the regional development policy. Could he assure the provinces that they Lwwiill be consulted before any new program is developed?


Pierre Elliott Trudeau: Mr. Speaker, the Premier of Quebec did not raise this question when we met recently.



NATIONAL ANTHEM


Right Hon. J. G. Diefenbaker (Prince Albert):: 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
Inquiries of the Ministry
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?


Pierre Elliott Trudeau: Mr. Speaker, it is our stated intention to bring in legislation on this matter. It will not be possible at this session, but we intend doing so as soon as we find time in Parliament.


Mr. Speaker:: The right hon. member for Prince Albert.


Mr. Gibson:: A supplementary question.


Some hon. Members:: Sit down.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member in a moment but at this moment I have recognized the right hon. member for Prince Albert on a supplementary.


John George Diefenbaker: I do not want to intrude on the hon. member. I always put him first. In the meantime, will the Prime Minister use his good offices to get in touch with this group and point out that what is being done is not acceptable to this government, this Parliament or the people of Canada.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I certainly welcome the suggestion by the right hon. member. I will ensure that someone from my good offices will get that message across.


Colin David Gibson: I have a supplementary question. Is it possible for the Prime Minister to prevail on the right hon. member of the Conservative party to prevail on his colleagues to support an amendment to the Dominion Day Act to change the name to Canada Day?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!



NATIONAL DEFENCE


Mr. Doug Rowland (Selkirk):: Mr. Speaker, my question arises out of a line of questioning yesterday by the right hon. member for Prince Albert concerning the possible dangers to Canada inherent in the American desire for changes in the defence production-sharing agreement. I ask the Minister of National Defence whether, in view of the point made in the version of the Gray report contained in The Canadian Forum that the present arrangement "has made it difficult to develop similar defence produc-
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tion arrangements with other countries", the government is suggesting a broadening of the arrangement to the United States in its discussions so that similar agreements may be made with other countries, or has the government attempted to enter into any defence production-sharing arrangements with other countries?


Donald Stovel Macdonald: Mr. Speaker, I regret to say I have not read The Canadian Forum, but if it is a question of trade policy I suggest that the hon. member might direct it to my colleague, the Minister of Industry, Trade and Commerce.


Douglas Charles Rowland: Mr. Speaker, it is not a question of trade policy as much as of the defence production-sharing agreement for which the Minister of National Defence has some responsibility.


Donald Stovel Macdonald: Mr. Speaker, it falls under the responsibilities of my colleague, the Minister of Industry, Trade and Commerce.



POST OFFICE


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is directed to the Postmaster General. We welcome him back to the House after being lost in the mails while engaged in important negotiations. Can he assure the House that on the basis of these negotiations there will be no serious disruption of the Christmas mail service?


Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, the discussions that we have held have not been that long. In fact, I do not know yet what decisions the members of the executive will take when they gather on Monday. But if they decide to vote for a strike, they will have to bear the consequences.


Walter Gilbert Dinsdale: Mr. Speaker, based on the letter edged in black that we received from the minister this morning the main issue in contention seems to be the hiring of casuals to avoid paying overtime to the regular employees. Is the minister pursuing this point of contention so that a successful solution will be found for all concerned?


Joseph Julien Jean-Pierre Côté: Mr. Speaker, we are not afraid to discuss with them the measures that the department might consider with regard to a new method of work allocation in the case of unmanned routes. We are ready to discuss this matter and, if possible, to affect members of the bargaining unit to mail delivery in case of continuing need, but the department cannot undertake not to hire casual workers, because it could not then hire the 60,000 normally needed during the Christmas season.



POSSIBLE STRIKE BY LETTER CARRIERS-ACTION TO ENSURE DELIVERY OF OLD AGE PENSIONERS' AND VETERANS' CHEQUES

Mr. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, I wish to ask the Postmaster General a supplementary question. In case there is a walkout toward the end of the month, would the minister do something to assure that old age pension cheques and veterans' cheques are delivered to those needy people?


Joseph Julien Jean-Pierre Côté: Mr. Speaker, that is a hypothetical question.



LETTER CARRIERS-POSSIBLE REMOVAL OF RIGHT TO STRIKE

Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I wish to direct a supplementary question to the Minister of Labour. I understand that in a speech last night the Minister of Labour indicated that it may be necessary to remove the right to strike in order to protect the public interest and maintain public services. Was he thinking of the letter carriers in this instance?


Mr. Speaker:: Order, please. I have some hesitation about allowing the question in those terms. The hon. member knows it is not quite regular to ask questions of ministers in relation to speeches made outside the House. Perhaps we can assume that the question has been asked directly and the minister might be allowed to reply.


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, what I did say was that in the case of disputes where it has become evident that the dispute must be brought to an end in the best interests of the public, I would have no hesitation introducing legislation removing the right to strike from the union in question and providing ways and means of settling that dispute. In the case of the postal workers I would suggest to them that their collective agreement and the Public Service Act provide a legal method for settling honest differences of opinion on any particular clause in the agreement, and any premature walkout or strike on Monday next would make it very difficult for those people who understand the labour movement to agree with their action. In other words, through irresponsible actions they make it very difficult for their friends to help them. I hope they understand precisely what I am talking about, Mr. Speaker.



INDIAN AFFAIRS


Mr. Derek Blackburn (Brant):: I have a question for the Minister of Indian Affairs and Northern Development. When the minister visits the Mohawk Institute in Brantford on November 27 will he be prepared to present at
November 19, 1971

that time any recommendations for the future of that institute?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, this matter has been looked into by the Indians themselves and they are the ones who have to make recommendations to us. I must admit that I have not yet received any.



THE CANADIAN ECONOMY


Mr. Jack Murta (Lisgar):: I should like to direct my question to the Prime Minister as soon as I can get his attention. It has been reported that the government has further agreed to consult the provinces on foreign investment. I should like to ask whether the government is prepared to hold special talks and undertake joint research with the provinces on this very important matter?


Pierre Elliott Trudeau: If they so desire, Mr. Speaker, we can have joint talks and research, but our intention now would be to consult them one by one. It would be a more harmonious conversation, I believe, if we heard their opinions singly rather than together.



UNEMPLOYMENT INSURANCE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I would like to direct a question to the Minister of Labour.
Could he tell the House if other talks have been held with the U.S. government regarding unemployment benefits? Since American benefits are lower than Canadian ones could the minister tell us if negotiations have been entered into in order to establish benefit parity?


Bryce Stuart Mackasey: Yes, Mr. Speaker, such talks are being held today and will continue next week.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: I have a question for the right hon. Prime Minister. Can he indicate whether the government was advised by the government of the People's Republic of China regarding that country's recent atmospheric nuclear explosion, and can he advise
Inquiries of the Ministry
what channels the government will be using to protest against this further proliferation of pollution?


Pierre Elliott Trudeau: Mr. Speaker, we are trying to verify whether this explosion actually took place.


Some Hon. Members:: Oh, oh!


Pierre Elliott Trudeau: We have heard that such a likelihood is possible. If it is confirmed that there has been a nuclear explosion we will express our protest to the government of China through the usual channels, our embassy in Peking, as we did express to them our opposition after the House of Commons adopted the resolution condemning nuclear tests. The position of the Canadian government is that we are against all nuclear testing of all kinds everywhere.


Heath Nelson Macquarrie: For clarification, Mr. Speaker, is the Prime Minister advising that our government has no information that an explosion took place yesterday?


An hon. Member:: No leak there yet.


Pierre Elliott Trudeau: Mr. Speaker, my information is that we are trying to confirm the accuracy of the report. This should be a relatively simple matter.


Mr. Bell:: Then he is going to protest.


Mr. R. J. Orange (Northwest Territories):: I have a question for the Minister of Indian Affairs and Northern Development. Would the minister please advise whether statements are correct which are attributed in the press to Secretary Morton of the United States to the effect that the Canadian alternative oil pipeline route is not being considered because it does not appear to have the support of the Canadian government?


Mr. Speaker:: Order, please. I am sure the hon. member knows that a question cannot be asked in those terms. Would the hon. member resume his seat. The hon. member is asking the government to confirm a report in the newspapers. I do not think that a question asked in those terms is in order. The hon. member could rephrase the question.


Robert John (Bud) Orange: Can the minister say whether the suggested alternative oil pipeline down the Mackenzie Valley still has the support of the Canadian government?


Joseph Jacques Jean Chrétien: Mr. Speaker, I should like to advise and confirm to the House the continuing interest and willingness of the government of Canada to examine and discuss any proposals relating to the transport of Alaskan petroleum resources through Canada to market in the United States. Together with the Minister of
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Energy, Mines and Resources I announced guidelines to northern pipelines on August 13, 1970.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: Those guidelines-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The minister knows that if he wants to make a statement in the House he should be prepared to do so on motions.


An hon. Member:: What a smuggling job!


Joseph Jacques Jean Chrétien: Mr. Speaker, I have only one more line.


Mr. Speaker:: Order, please. If the Minister has only one more line he might be allowed to finish.


Joseph Jacques Jean Chrétien: I should like to thank members who have given me the opportunity to practise my English. Those guidelines made it clear that, in principle, oil and gas pipelines were acceptable to the government of Canada but on the conditions stated in the guidelines.


Robert John (Bud) Orange: Can the minister indicate the degree of priority which has now been given by the government to the environmental and social studies necessary before such pipelines are constructed?


Joseph Jacques Jean Chrétien: Mr. Speaker, the House knows very well that the government has given the highest priority to the environmental and social studies on which we have spent millions of dollars. We have made a lot of progress and are ready to entertain any application.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Minister of Indian Affairs and Northern Development whether the studies have now been completed with regard to environmental protection and environmental risk resulting from such a pipeline through the Canadian north and, if so, is the minister prepared to be open with the House and the country and indicate the results of this research?


Joseph Jacques Jean Chrétien: Mr. Speaker, I cannot certify that all studies are completed. I said earlier that we made considerable progress in that regard and that we could examine any application we would receive. Then decisions would probably be taken after completion of the studies.


Mr. Erik Nielsen (Yukon):: I have a supplementary question for the minister since he seems to be so well prepared to answer these questions today. Has he yet had any consultations with the Indian people whose lands, which any proposed route must traverse, are involved with

respect to settling their land claims? If he has not had such discussions, when does he intend to commence them?


Joseph Jacques Jean Chrétien: Mr. Speaker, the hon. member should know that Indians have had their own committee to study their rights and treaties for two years already and that they are examining that problem while Commissioner Barber is doing the same work for the government.


Erik Nielsen: Since the minister did not answer my question I can only assume that he did not hear it. Has the minister had any discussions with the Indian people concerning their land rights in these areas of the north and, if not, when does the government intend to commence them?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have explained to the House that there is a mechanism in place. Probably the hon. member was not aware of it.


Erik Nielsen: That is still no answer.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for New Westminster for a last supplementary on this subject. We will soon be running short of time and I have to seek the co-operation of hon. members to limit the number of supplementaries.


Mr. Douglas A. Hogarth (New Westminster):: I should like to ask the minister whether the government will give consideration to the possibility of the construction of such a pipeline by the Canadian government with Canadian funds?


Some hon. Members:: Hear, hear!


An hon. Member:: You are in the wrong party, Doug. [Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, the matter of Canadian participation in the construction of the pipeline was dealt with in statements made in August 1970. In fact, we would be happy that Canadians take part in it to the greatest extent possible.



AIR TRANSPORT


Mr. Cliff Downey (Battle River):: Mr. Speaker, about two weeks ago I asked a question of the Acting Prime Minister at that time concerning difficulties in air traffic control towers which could have caused accidents in the province of Quebec. It was indicated at that time that indeed a
November 19, 1971

serious situation did exist. I should like to ask the Minister of Transport if investigations are going on, if they are completed in any respect, and if he has anything to report to the House in regard to this matter?


Donald Campbell Jamieson: Mr. Speaker, first, investigations have been carried out. Second, I am satisfied there is no danger involved in any of the practices to which the hon. member refers. Third, I am meeting with CATA, the air transport association representative group, on Thursday for further discussions on this matter.


Erik Nielsen: With respect to the stated government intention of establishing French unilingual speaking controllers in certain areas in the province of Quebec, and having regard to the recommendation of CATA and the necessity for maintaining high standards of safety in the control of aircraft, will the minister assure the House that, in keeping with the maintenance of these high standards of safety in the operation of control activities, English will be the language spoken by controllers in these areas?


Donald Campbell Jamieson: Mr. Speaker, the hon. member knows that not only in those areas but throughout the world English is the acknowledged language for air controllers. I can assure him that nothing will be done with regard to Canadian policy that will compromise the safety that is implicit in that arrangement.


Mr. Speaker:: The hon. member for Surrey-White Rock.


Mr. Mather:: Mr. Speaker, both the questions I wanted to ask have been asked.



AIRPORTS


Mr. John Gilbert (Broadview):: Mr. Speaker, my question is directed to the Minister of Transport. In view of the government's decision to build the second Toronto international airport at Peters Corners just northwest of Hamilton, may I ask when construction will commence on that secondary airport?


Donald Campbell Jamieson: Mr. Speaker, the hon. member must be talking about some kind of toy outfit to operate the kind of toy aircraft that he will have, because I do not know anything about such an arrangement.


An hon. Member:: The hon. member was toying with the truth.


John Gilbert: Mr. Speaker, I was just revealing another government leak and I thought the minister might like to confirm it.


Lincoln MacCauley Alexander: I should like to clear up a shaded area left by the answer the Minister
Inquiries of the Ministry
of Transport gave to the hon. member for Broadview. Has a decision in fact been taken with respect to the site of the new airport for Toronto? If not, how soon does the hon. gentleman expect a decision to be reached so that it may be announced in the House?


An hon. Member:: Or late.


Donald Campbell Jamieson: No decision has been made. The Minister of Transport for Ontario has been enjoying a somewhat well-earned rest, I understand, after his hectic activities in October. I believe he is due back shortly or may be back now. I am ready to see him whenever he is ready. That should be some time next week.



NATURAL RESOURCES


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Prime Minister. In view of the statement made by the chairman of Mobil Oil Corporation to the New York Security Analysts Society to the effect that restrictive regulations out of all proportion to the problems they are intended to solve as well as continuing hassles about offshore development are handicapping operations in many promising areas on the Atlantic seaboard, will the Prime Minister reconsider his arbitrary 50-50 stand on offshore mineral royalties so that orderly development of the oil and gas potential off the Atlantic seaboard may be carried out?


Pierre Elliott Trudeau: Mr. Speaker, the offer we made to the provinces more than two years ago was not an arbitrary one. At the time, as I recall, no opposition member suggested a better formula. They just sat back to wait and see how the wind was going to blow.


Lloyd Roseville Crouse: In view of the statement by the chairman of Mobil Oil that if exploration and development can be proceeded with it will be a matter for political and not industry decision, will the Prime Minister meet with the premiers of the Atlantic provinces in order to stop the present impasse? Let me also give him another suggestion. We in Atlantic Canada believe in a formula that will give the Atlantic provinces 100 per cent of all offshore royalties.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.



CANADA LABOUR CODE


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of Labour. Is the minister now in a position to confirm to the House that when Bill C-253 is brought forward even if at

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Inquiries of the Ministry
the next session under another number, it will still contain the provisions that are in it now respecting technological change?


Bryce Stuart Mackasey: Mr. Speaker, when the bill comes back the philosophy of that section will remain but it probably will be amended and improved upon. That will depend not on the volume of mail but on the quality of briefs and representations made to me in the interval and to the standing committee of Labour, Manpower and Immigration of which the hon. member is a member.



MANPOWER


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is for the Prime Minister. In view of the continuing problem of unemployment and in view of the failure of the federal-provincial conference to come to grips with that problem, does the government have any plans for a more co-operative approach on the part of the provincial governments and the federal government in regard to manpower, particularly in view of the consortium approach being developed in Alberta?


Pierre Elliott Trudeau: Mr. Speaker, I am not clear as to what-


Mr. Maclnnis:: Read Turner's speech.


Pierre Elliott Trudeau: I will.



HOUSING


Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. In light of last month's .7 increase in prices in the housing sector and predictions by experts in this sector that stop and start federal housing policies are leading to a new round of inflation in housing, is the government going to discuss with the provinces and the housing industry ways to stabilize inflationary forces in the house building industry? If so, when will such talks be held?


Hon. Robert K. Andras (Minister of State for Urban Affairs):: Mr. Speaker, the stop and start aspect of the matter in my opinion has no validity now because there has been a sustained supply of mortgage funds for almost three years at an unprecedented rate in this country. In fact, we will exceed the target of 220,000 housing starts set for this year by a considerable margin. With regard to other factors causing increased housing costs, we are constantly seeking solutions in consultation with the provinces. Actually there has been a considerable degree of encouragement in getting a mandate to pursue better

consultative mechanisms, flowing from the federal-provincial conference held earlier this week.


Mr. Speaker:: Order, please. I believe the hon. member for Gander-Twillingate has a supplementary to a previous question.



TRANSPORT


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, my question is directed to the Minister of Transport and is supplementary to an earlier question by the hon. member for South Shore. Can the minister say whether the recommendation of the Darling report that offshore drilling rigs be classified as Canadian ports will be accepted, and will there be an amendment to the Canada Shipping Act to accommodate that recommendation?


Donald Campbell Jamieson: Mr. Speaker, I cannot give a categorical answer because, as the hon. member is aware, I have asked for representations from all the affected parties. A great many have been received and there is quite a diversity of views on this subject. In a general way I think I can answer by saying it is my position, and I believe I reflect the government's position, that we want as much Canadian involvement as possible in this offshore drilling and, hopefully, our actions will reflect that desire.



NATIONAL DEFENCE


Hon. D. S. Harkness (Calgary Centre):: Mr. Speaker, my question is for the Minister of National Defence and relates to the 11 Yukon aircraft which, according to reports this morning, have been sold for $100,000 each. What was the estimated life of these aircraft? In other words, how long were they still good for and did they all carry certificates of airworthiness?


Donald Stovel Macdonald: Mr. Speaker, the aircraft do not have certificates of airworthiness and it was for that reason that we had difficulty in disposing of them at a favourable price. The arrangement for sale involves placing one of the aircraft with Canadair for purposes of refitting and trials to see if it can be brought up to airworthiness standards. Therefore it is difficult to say at the moment what length of life remains for these aircraft. Of course, from now on that will remain the problem of the purchaser and not of the Department of National Defence.



November 19, 1971



POLLUTION


Colin David Gibson: Mr. Speaker, my question is for the Minister of Transport. Will the minister attempt to prevent a possible pollution crisis in the nature of a waterfront cesspool which could arise, as alleged by Alderman Custeau in yesterday's Hamilton Spectator, as a result of the exchange of lands by the city of Hamilton and the Hamilton Harbour Board in the Hamilton beach area?


Donald Campbell Jamieson: Mr. Speaker, I think I can flatly and unequivocally say that I have come out strongly against cesspools, wherever they happen to be.


Gerald William Baldwin: Resign, then.



TRANSPORT


Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, my question is for the Minister of Transport and arises out of the recent conference on snowmobiles and all-terrain vehicles. Is the minister's department planning to undertake a study of the charges made at the recent conference concerning the threat to the ecology and to humans by noisy and overpowered machines?


Donald Campbell Jamieson: Mr. Speaker, may I call the hon. member's attention to the fact that the report of the first study on snowmobile safety, conducted under the auspices of the Department of Transport, was tabled this morning. It contains some references to the matter which the hon. member has commented upon and perhaps may provide him with some of the answers.



GOVERNMENT ADMINISTRATION


Thomas Miller Bell: Mr. Speaker, my question is for the President of the Treasury Board. Is the government reviewing its over-all purchasing activities, as recommended in the Senate committee report, to make certain that the cards are not stacked in favour of central Canada? If so, will someone be making a statement about the government's intentions in this regard?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I am not sure that I accept the premise that the cards are stacked, in government purchasing, in favour of any particular part of Canada. There is, of course, a continuing review of our contracting and procurement
Inquiries of the Ministry
procedures. This will be continued in the light of the recommendation of the Senate committee.



TRANSPORT


Lorne Edmund Nystrom: Mr. Speaker, my question is directed to the Minister of Transport and follows on questions asked previously by my colleague, the hon. member for Saskatoon-Biggar. Can the minister say whether he or his department has arranged a meeting respecting the movement of grain?


Donald Campbell Jamieson: Mr. Speaker, I have been in touch with both railways and Canadian National and Canadian Pacific will have representatives here next Thursday immediately following the question period, I believe. We will arrange to circulate information as to the time and place of this meeting to all interested members before then.



THE CANADIAN ECONOMY


Steve Eugene Paproski: My question is for the Prime Minister, Mr. Speaker. Is the government considering dropping the tax bill and starting a new session this year, as suggested by the Parliamentary Secretary to the Minister of National Revenue, to deal specifically with DISC and other United States economic threats to the Canadian economy?


Pierre Elliott Trudeau: There would have to be DISC legislation before we would want to announce our decision on that.


Steve Eugene Paproski: Will the government outline its contingency plans in connection with DISC and its policy on foreign investment before the Christmas recess and in time for parliamentary discussion this year?


Pierre Elliott Trudeau: I do not see the advantage of outlining a contingency plan relative to a contingency which has not yet arisen.


Mr. Gray:: On a brief question of privilege, Mr. Speaker, I think I should inform the House that contrary to the suggestion of the hon. member I do not have a parliamentary secretary.


Some hon. Members:: Oh, oh!


Gerald William Baldwin: You need a dozen.


Mr. Peters:: How about Steve Paproski?


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

November 19, 1971
Income Tax Act
noon)



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, November 18, 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.
On Clause 1-Section 135: Deduction in Computing Income.
The Chairman:: Order. When the committee rose last evening section 135 of clause 1 was under consideration with an amendment proposed by the Minister of National Revenue and a subamendment proposed by the hon. member for Regina East. Sections 135, 136 and 137 were grouped for debate.
Shall the subamendment carry?


Cliff Downey: I should like to ask the parliamentary secretary whether he would clear up several areas of doubt which are in my mind, and in the minds of those who have presented briefs to hon. members and also, I assume, to the Minister of Finance, on the question of possible double taxation of co-operatives under the proposals contained in the bill before us.


Mr. Mahoney:: On a point of order, Mr. Chairman. The hon. member's microphone does not appear to be effective. I wonder if he realizes he is not bound to sit in his own seat, in committee I should like to hear his question and I am finding difficulty with the transmission from his present location.


Cliff Downey: Is it working, now?


Patrick Morgan Mahoney: That is fine.


Cliff Downey: I have some questions with regard to the taxation of co-operatives. Many representations have been made to us on this subject and the possibility of double taxation keeps cropping up. It appears to some of those who are interested in this subject that dividends flowing from co-operatives might be taxed both in the hands of the co-operative and in the hands of individuals who receive them. Would the parliamentary secretary fully explain to us which aspects of double taxation are involved with regard to the system proposed, and whether there are any provisions in the amendments before us which would materially change the position as it stands at present under the existing act?


Patrick Morgan Mahoney: First, there is no material change proposed in the law in that respect as far as I am aware. Corporate dividends received by a co-operative would be received tax-free. Patronage dividends paid out by a cooperative are deductible from its income for taxation purposes down to the floor indicated in the bill. So, there is no tax paid by the co-operative on earnings paid out as patronage dividends.
Whether these are taxable in the hands of recipients is, of course, the question. They are in some cases. In the

case of consumer co-operatives it amounts really to a reduction in the purchase price of the commodities the party concerned is buying. I cannot, myself, identify any area where double taxation would be a matter of particular concern to the co-operatives.


Cliff Downey: Do I understand, then, that the incidence of double taxation is no worse under the new bill than under the present act?


Patrick Morgan Mahoney: I suppose a case of double taxation could arise if the co-operative were to choose to distribute patronage dividends to an extent which brought its retention below 5 per cent of the capital or one-third of earnings. Once it got into that area there could be some element of double taxation. So I suppose the change from 3 per cent to 5 per cent would create an area where there might be a greater possibility of double taxation arising. I am not aware whether co-operatives would ordinarily make distributions down to the point at which the difficulty would actually be encountered.


Cliff Downey: Mr. Chairman, there has been a great deal of concern expressed by credit unions over the special status of their reserve accounts, especially since it is mandatory that these be maintained at a certain level, much in the same way as deposit reserves with the chartered banks. I would ask the parliamentary secretary, in view of the representations that have been made, whether he would explain to us the changes he has made giving additional recognition to the special status that reserve accounts have with credit unions as opposed to the reserve accounts in ordinary co-operatives, for example.


Patrick Morgan Mahoney: Mr. Chairman, the problem we have is that the reserve requirements are established by provincial governments and vary from province to province. The suggestion that the reserve allowance provided in Bill C-259 should correspond to provincial reserve requirements just is not valid. Indeed, in the case of other financial institutions such as banks, insurance companies and so on, their reserve requirements, which are governed by the laws applicable to them, vary considerably compared with the reserves permitted them by the Income Tax Act.
It is possible that provincial law would require that a credit union maintain its reserves at a level higher than would be allowed for tax purposes by the Income Tax Act. However, we have not seen any way of solving this problem in view of the great diversity of provincial policy in this regard. In some provinces the question of reserves is, in a practical sense, left much to the discretion of directors or managers of credit unions. I do not think we could agree that they should have discretion to establish their own tax situation in this regard.


Cliff Downey: I should like to ask the parliamentary secretary if the provinces were consulted in the drafting of this legislation in view of the implications of the special arrangements provinces make with credit unions.


Patrick Morgan Mahoney: Mr. Chairman, the provincial requirements are based, of course, on ensuring solvency of credit unions. There were extensive consultations with the provinces about the whole formulation of the policy contained within Bill C-259. As to whether this particular item was a

November 19, 1971
matter of intense discussion, I cannot answer because I was personally not a party to the negotiations.


Cliff Downey: Mr. Chairman, as a final question I should just like to read a paragraph from a letter that the Minister of Finance sent to one of the pools and perhaps the parliamentary secretary could explain or clarify it. It reads as follows:
The impact of this new formula could have been severe for some co-operatives because of the way in which the capital of a co-operative revolves. Co-operatives typically raise capital through patronage dividends which are reinvested in shares, and they redeem the shares as members die, retire or give up farming. This requirement for an annual redemption of capital is one which the investor-owned corporation does not face. Where the earnings of a co-operative are relatively low, the proposed limit on patronage dividends could have caused financial difficulty for the co-operative. Accordingly, under an amendment tabled October 13, an alternative limit will permit patronage dividends to be fully deducted to the extent of two-thirds of the income of the co-operative before patronage dividends.
In the case of the wheat pools, the particular group in question here, how would the amendment that was made on that date to provide an alternative limit appreciably improve their position in this regard?


Patrick Morgan Mahoney: Mr. Chairman, I have no more access than the hon. member or anybody else to individual tax returns, so I am not able to answer questions regarding specific taxpayers. The amendment does not exactly permit an option though it is an either or situation; it is either the lesser of 5 per cent of the capital employed or one-third of the taxable income for the year before allowed deductions. However, on a gross basis, and as far as the co-operative movement is concerned, the taxation will be approximately one-third of what it would have been but for the amendment. This assumes, of course, the full application of the amendment ten years hence; it will be much less during the intervening period as the particular provision is being phased in.


Cliff Downey: Mr. Chairman, that is the extent of my questions at this time and I thank the parliamentary secretary for his answers.


Mr. Whelan:: Mr. Chairman, I have not taken much part in this debate, indeed any at all, since the matter has come before the House though I have listened to a lot of comments made about co-operatives and credit unions, some of which have been very appropriate. It is obvious to me that some people who have talked about co-ops and credit unions think there may be some political advantage in talking about them. I want to make it clear that I, as a Liberal member, and as what I call a real Liberal, am a strong supporter of co-ops and credit unions and always have been.
I might add that the first time I became active in public life was in the co-operative movement with my local cooperative, the Harrow Farmers Co-operative. This was when I was 17 years of age and wanted an advance so that I could buy a farm tractor. The banks would not give me the money I required. No one wanted to lend this poor farm boy money, and so I went to see the local manager of my co-operative in Amherstburg, who was a Scotsman by
Income Tax Act
the name of MacDonald, and he gave me an advance which enabled me to enter the agricultural industry.
My local co-op has also helped many other young people, as well as older people and new Canadians in the area. Some of them owe their very existence today to their local co-operative. However, this co-op, as is the case with others in Canada today, is finding it very difficult to stay alive, let alone be a threat to big business. As a farmer I have always felt that my co-op was just another machine which did a necessary job and enabled me to carry on my farming operations. I felt that I owned just a little piece of that machine along with about 700 other farmers. I later became president of this co-operative which was and is mainly a farm supply co-operative, along with a large grain business owning probably three of the most modern grain elevators in the country. I might say to western members that from what I know of their elevators, having visited them, ours are even more modern than those in western Canada. The co-operative also has grain dryers and a large storage space which was built in recent years.
Being a member of this co-operative I later became a director of the United Co-Operatives of Ontario which, by the way, elects its directors by a vote of the delegates that are sent to its conventions by the local co-operatives. The procedure is not the same as in some of the big companies which pick their directors from among members of the other place, or in some manner such as that. In the cooperative movement, the directors are elected. This way it is a truly democratic organization and you must take your chances on being elected. I might say that I was a delegate at large and when I ran for a directorship, I was elected by the delegates from all Ontario, not just by those from my own area. I repeat, the directors are not appointed. The United Co-Operatives of Ontario is owned by all the other co-operatives in Ontario. It is mainly a wholesale house for the locals all over Ontario. Some have stated that co-operatives have not being paying their fair share of taxes. Co-operatives have not been paying taxes for many years. Here in Ottawa United Co-Operatives and organizations on which I have had the privilege of serving as a board member, this year provided $350,000 for payment of income taxes, and last year this amount was over $300,000. We hardly consider this to be in the exempt class. If the minister considers this to be exempt, no wonder co-operatives are concerned when they think of what their taxable status might be.
Another point I should like to make, and this is very confusing to me, is that on the one hand the government appeared to be encouraging co-operatives and self-help programs, particularly for Indian and Eskimo housing, and so on. I can remember when the united co-operatives sent one of its personnel skilled in organizing co-operatives to help the Eskimos organize a co-operative. Why then is this government, through its proposed tax legislation, trying to kill established co-operatives, because that is what this will do. Why does the government keep insisting that co-operatives have preferential tax treatment? We do not have such treatment.
The government is concerned about the consumer and keeps a watchful eye on prices and price increases. This is as it should be. I was a member of the consumer affairs committee and I thought this was something we should have been doing years ago. Members of the consumer
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November 19, 1971
Income Tax Act
co-operatives have long been aware of the high prices people have to pay for goods and services. So, on their own initiative they tried to do something about it by forming their own organization, the object being to obtain goods and services at as low a price as possible through an organization under their control. Technically any overcharge is returned to the member as a patronage dividend. The same effect could be obtained by lowering the purchase price in the first instance. Some co-operatives do this now. The direct charge co-operative here in Ottawa offers its members groceries at cost prices and charges them a fee to cover the costs of operation such as rent, staff costs, lights, heat and water. No matter what the method, the principle is the same. The object is to reduce costs and improve the economic well-being of the participants. Why does the government accept the principle in one case and reject it in another through the application of the tax reform bill?
Why does the government insist on taxing co-operatives on the basis of imputed income? Where else in the world has such a concept ever been applied? If such a concept were applied to normal commercial enterprises they would face chaos and disorder. Why then force co-operatives to pay tax on capital employed? Would it not be more practical and make more sense to follow the recommendations of the co-operative people to have a withholding tax or some other method that is at least related to fundamental tax principles?
The principle of double taxation has generally been avoided by the government. In this legislation it is proposed that taxes be imposed on the commercial level, whereas the earnings are also taxable in the hands of the co-operative members when distributed as patronage dividends. I say to the parliamentary secretary that any farmer who does receive a patronage dividend this year from his co-operative is damned lucky because costs are higher and co-operatives are working on lower margins and the farmers are receiving low prices for their grain. For instance, if a farmer receives a patronage dividend as a result of the purchase of fertilizer, that reduces his cost and increases his taxable income. He pays tax on that at his rate. Why should there be double taxation?
The unfairness and inconsistency of the legislation is again shown by the tax on capital employed. In the definition of capital, reserves are included. If a co-operative places taxable earnings in reserves, and then those reserves are used as the basis for the imposition of a further tax that is unfair. This amount which is in reserve could compound itself until it strangled the co-operative. No wonder members of these co-operatives feel they are not receiving equitable treatment under this legislation.
I should refer again to our concern for principle as members of the co-operative movement. I am still a member of a co-operative. If patronage dividends reduce the costs of goods and services in a co-operative or in any other business, why should there be any restriction on this procedure? What recommendations put forward by the co-operatives were unreasonable? This is something I have never understood or been told. Why can we not be told what is wrong with the demand of the co-operatives?
I say to the parliamentary secretary, through you, Mr. Chairman, that I do not know who the minister's advisers are. I know a lot of people but I do not know those who

are really advising him on this matter. This is much like writing unsigned letters to the daily newspaper. I have recommended on occasion in letters to the minister that some of his top advisers be fired, with little result.


Some hon. Members:: Hear, hear!


Eugene Whelan: I say through you, Mr. Chairman, that if the minister's top adviser on credit unions and co-operatives is the person to whom I just referred, I again recommend that he be fired. If the advice is coming from some of the subordinates I do not know, I recommend that they be fired also.


An hon. Member:: Fire the lot of them.


Eugene Whelan: It is more difficult to get rid of a civil servant than a backbencher, because top civil servants are here forever and backbenchers come and go like the wind. If we pass this legislation in its present form, when this backbencher goes he will go in the damndest storm you ever saw.
I also want to say that Carter and all those other so-called smart people can make all the recommendations and reports they want. I remember who appointed Carter to make this report. However, the Members of Parliament are the ones who are elected to run this country, and I know that the majority of the Members of Parliament are not in favour of taxation for co-operatives and credit unions in the manner presently suggested.


Some hon. Members:: Hear, hear!
.20 p.m.)


William Arnold Peters: Mr. Chairman, I have been very interested in the remarks made by the Liberal backbencher from Essex on this matter.


An hon. Member:: An outstanding member.


Stanley Howard Knowles: He should be on the front bench.


William Arnold Peters: It seems to me he has pointed out the problem which faces us without becoming involved in all the detail and the complex arguments which have been made by the parliamentary secretary. After listening to him, I am impelled to ask the parliamentary secretary what we have done about the churches. Have we decided to tax the income of all churches? I remember when I was a small child my father spent a good deal of his time organizing the co-operative movement all across northern Ontario. He organized one for the government of Ontario which was very much like to a religious organization. He believed the people should get together and should work together in a specific field to set up a co-op. He established a creamery co-op in an area where there was no market for the producer's cream. He established a co-op for a group of farmers in the Kapuskasing area. He organized a number of co-operatives for people pretty much in the manner the hon. member for Essex described. He believed people should be able to help themselves. He believed they could help themselves if they were provided with certain background material that would allow them to organize together and to work together to help themselves. No co-operative was ever established for the pur-
November 19, 1971

pose of making money. Co-operatives are established only for the purpose of helping their members.


Some hon. Members:: Hear, hear!


William Arnold Peters: It has always been necessary for a co-operative to establish a limited amount of capital, sometimes in order to buy equipment. A little co-op was started in Ottawa which probably is a good example. A group of people decided to get together and donate their time. They did so and established a grocery co-op. They did not have a paid cashier or paid manager. No one was to be paid. This co-op obtained a small building, went to a wholesaler and purchased the material for the co-op. Then, these people started distributing the commodities in the store to themselves. One person volunteered to work today, another volunteered to work the next day and so on. No money was involved. Pretty soon, however, it was found that there was a certain amount of breakage and, I suppose there were losses in other ways. It was found a charge of about 1 per cent was necessary in order to cover these losses.
Then, this group found they needed a refrigerator and the problem was, how to get a refrigerator. Do you go to the Salvation Army and ask for a charitable donation? They wanted to do things themselves, so they had to raise a little capital to buy a refrigerator. In addition, it was decided it would be advantageous to add to the equipment in the store. This was a very basic co-op. In the beginning, as I say, a number of people got together and decided to serve their own ends. In some cases this necessitates the accumulation of capital and the investment of it.
If this government is honest, which is not likely, perhaps it will tell us what it is doing in respect of the churches. Some church organizations might own perhaps 1,000 houses in a city, the income from which is plowed back into the church operation. Are these churches taxed? No. The government does not have the guts to tax the churches. The municipalities do not have the guts to tax the churches. Some people may also say that the organized religions of this country have been able to buy churches because most people in this country have decided they have the right to organize themselves for their own purpose, not in a manner that would hurt anyone else, not a competitive manner, but only to serve their own ends. In many cases these churches have amassed, over a very long period of time, a very large amount of capital, and because of circumstances have a very rich portfolio of real estate.
The co-op is in the same position. It does not pay patronage dividends to someone who is not a member. I am not paid any dividends, although I belong to several co-ops. I have shares in a co-operative but because I do not deal there I am not paid any dividends. I do not deal there simply because this is a farmer's co-op and I do not have any reason to buy food for cattle or wire for fencing. I really have no reason to be dealing with that co-op and therefore do not receive any dividends. That is the way it should be. The people who deal in that co-op, and are members of it, have combined together to produce for themselves an amount of capital that will supply them with a service.
If co-operatives were competitive, and if over the years they had been given an advantage, why would Coldpac
Income Tax Act
not have been able to deal with Canada Packers and Swifts as well as others. Coldpac was in Barrie for a number of years, but because of the structure it had and its inability to build up capital assets it went broke. This happens much too often in the co-operative movement. I know of no co-operative that has been able to amass a very large amount of money. If there are dividends in the operation, whether it be farming, a grocery store or whatever, those dividends in the hands of the person receiving them represent income on which he would pay a tax, because obviously he would have other income as well.
I should like to ask the parliamentary secretary why the government is picking on the co-ops which all his backbenchers will tell him are self-help organizations. Why has the government picked on them if it is not doing the same thing in respect of the churches, which in many cases are in the real estate business. We have churches in Ottawa having a congregation of 15 or 20 people which own property worth $2 million or $3 million. There must be a certain amount of return from that eventually. The municipality does not impose any taxes on these churches, and if it did such a small group of people would not be able to pay the taxes. They are not taxed municipally, they are not taxed provincially and they are not taxed federally. Another self-help organization, the co-operative movement, has been taxed over the years municipally, provincially and federally. What we are suggesting is that if one self-help organization is to be taxed the other agencies, as Carter would have suggested, should be taxed because a buck is a buck. Are the churches being subjected to the same type of taxes as the other self-help organization, such as the co-operative movement?
I intend to obtain an answer in this regard from the parliamentary secretary, so he might as well answer now. As you know, Mr. Chairman, as long as there is an intervening speaker we have the right to speak as often as we are recognized by the Chair, so if I do not receive an answer before this debate is over I shall probably participate a number of times because I would like an answer.


Mr. LeBlanc (Rimouski):: Mr. Chairman, I welcome the opportunity of expressing my views and above all calling for clarification of the provisions of the bill to amend the Income Tax Act affecting credit unions and co-operatives.
The legislation deeply concerns my constituents in the riding of Rimouski, as indeed it concerns all other Canadians.
Far be it from me, Mr. Chairman, to claim I can deal with the subject as an expert. I must humbly confess that as a layman in this field I must rely on assumptions.
The provisions of the Income Tax Act now before us and, for that matter, many others, are rather complex in the view of the ordinary citizen. Only insiders, experts or bookkeepers in the department or in private enterprise or economists can with any authority deal with this matter. In any event, I am sure that on the whole, a great number of people need a lot of explanations.
The success of Caisses populaires and cooperatives is of great concern to me. I am wondering like many other hon. members where this legislation will lead us, although
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November 19, 1971
Income Tax Act
some amendments have recently been introduced to improve it in the area of co-operation.
One of my friends, a manager of a Caisse populaire, got in touch with me recently, and said: "I am happy to find that Bill C-259 has been somewhat improved, and I have no doubt that it is due to the information given to every Member of Parliament by the co-operative movement."
However, during a longer talk he gave me his views on the whole problem. As we all know, ever since the introduction of Bill C-259 in the House, general dissatisfaction has been shown by our friends in the Caisses populaires and co-operatives. The changes announced on October 28 by the minister met their wishes in part.
At the beginning, the co-operatives were apparently not happy because they feared they would have to pay too much taxes. Of course, as an hon. member stated yesterday, nobody is happy when it comes to paying taxes. We all agree that taxes are too high.
But if, because of too heavy taxes the disappearance of co-operatives or Caisses populaires can be anticipated, that is another story. It might be said that not only the Caisses populaires but also their members will be penalized. They feel that is not progress but rather a backward step.
When the amendments were announced some expressed their satisfaction. Improvements have been made. For example, I think of the period of 16 years instead of eight allowed to reach the $400,000 limit. Thus a lesser amount of money is required from the Caisses populaires than under the initial proposals and more heed is paid to the provincial legislation requiring a certain level of reserves, namely for Caisses populaires.
From what I have been able to conclude from this conversation there is still a certain amount of dissatisfaction and concern. The Caisses populaires are not against paying taxes but they want to keep on going. That is the reason for their concern. They are said to compete with large business and should bear a fair tax burden. I wonder whether this competition is so serious since it is said that the major Caisses populaires, at least in my single region, have assets of $20 million. On the other hand, as regards the assets of certain banks, we note that those of the Provincial Bank of Canada, for instance, would amount to $1 billion, which is a lot compared to $20 million and it seems there is no possible comparison between what could be called the Caisses' income, as it is said that, theoretically, they have no income, and that of the banks.
In a way one may say that the Caisses are not doing big business. The people they do business with are middle class people and also poor people, farmers, people we wish to help by every possible means. Indirectly, we should take care not to inconvenience the farmers or the poor by hampering the growth of the Caisses populaires and co-operatives.
For instance the big companies we need in Canada, like ALCAN and the CPR, do not do business with the Caisses populaires. On the other hand, one must admit that the deposits of the Caisses' members do not go to the banks.
One could also add that trusts are much more important than caisses populaires.

I am wondering if the question of competition is not debatable. I would add that in theory caisses populaires should operate on a cost basis to be logical since they are said to be non-profit organizations and I think that from a practical point of view that would be impossible because of the unforeseeable elements involved. The fact remains that banks operate to bring profits to their shareholders, and that is quite normal. I am not against profits.
Finally, I think the federal legislation should fully recognize the requirements of provincial legislation with regard to statutory reserves because it seems to me that those statutory reserves do not belong to the co-ops or the caisses populaires as would be the case for ordinary public corporations but rather to the shareholders who are themselves subject to taxation.
The problems which co-ops and caisses populaires are faced with are very similar. Theoretically, instead of having those tax measures applied immediately, according to what I was told recently by co-op members, they will be applied gradually in the course of a ten-year period. It is like storing the virus they fear for ten years and freeing it after that period of time. Will the evil that is being hidden today not come back in ten years?
Co-ops and caisses populaires are prepared to pay but they fear that the methods used could mean their destruction. They have no objection against paying taxes but just as to the methods used.
To a certain extent, as I said a while ago, the money in the hands of the co-ops belongs to the middle class, to the small people, to the poor and it is being fed back to them. And we want to protect the poor.
I can hardly understand, when comparing the non-profit corporations, that also have a non-taxable capital employed which, I do believe, should not be taxed, to the co-operatives and the caisses populaires, why the latter, being also non-profit organizations, should be taxed. For that matter, they should be treated with great consideration for income tax purposes. We must consider the help they have given to middle class people, and especially to the poor, as well as their contribution to the economic progress of Canada. For that reason, I join with the cooperative members, those who are active in the caisses populaires movement and hon. members who have pleaded their cause, to ask the government to listen carefully to our requests so that the caisses pooulaires and co-operatives will not be placed before insoluble problems, but allowed to pursue their development, for the good of their members and that of Canada as a whole.


Heath Nelson Macquarrie: Mr. Chairman, this is my first intervention in this long debate on this bill. I have been reluctant to move into the discussion on this immense bill. I spent a good many years in the study of economics but no one ever assigned me a document so challenging, so confusing, and so overwhelming as this bill. Hence my trepidation in speaking about it. It also struck me that this was the ideal type of legislation for a standing committee rather than for the committee of the whole.
I thought the hon. member for Essex was a bit unworthy when he began his speech by suggesting that
November 19, 1971

some people were making remarks because they thought it might be to their political advantage to talk about cooperatives. I thought that was a bit unworthy, but he improved towards the end of his speech when he called for the resignation of everybody from the Minister of Finance and the parliamentary secretary on down. Whether I can be so unkind as to go along totally with that, I do not know. I cannot speak too authoritatively on the question which the hon. member for Timiskaming raised so powerfully because I do not belong to one of those churches which is so well off. My usual communication from my church is a regular appeal for a little more help to keep them out of the sheriff's maw, so to speak.
I cannot refrain from saying a word about this particular section because I come from a part of the country in which the co-operative movement and the credit union movement have had a glorious history. Not long ago in South Rustico, Prince Edward Island, there was dedicated by the Historic Sites and Monuments Board the building which housed the first credit union in North America. That little community in South Rustico has had a wonderful history of co-operatives and credit unions. There are many of these all over the Atlantic provinces. One of the great men, I suppose, in the whole range of Canadian history would be Monseigneur Coady, the founder of the Coady Institute at St. Francis Xavier University in Anti-gonish, who initiated and inspired a series of community betterment programs which probably did more to improve the lives of people in the Maritime provinces, especially in Cape Breton, than any piece of legislation that any group of legislators ever passed.
The co-operative movement has done great things for the fishermen, for the farmers and for others. I was always impressed by what could properly be called the social value of the co-operatives, especially the many small co-operatives which have literally helped the little communities in the Maritime provinces pull themselves up by their boot straps.
As I was preparing for this debate I ran across a memorandum which I thought very succinctly set the co-operatives in their proper perspective, a part of which reads:
Co-operatives are different forms of enterprise, primarily because of their objectives. They are "self-help" organizations (incidentally always Canadian and locally owned) that are generally found in primary production areas, viz grain, dairy, farm products, fishing industry and the merchandizing carried on largely serves these industries although some co-ops are found in urban centres that serve city people . . .
Co-operatives usually serve members whose income level is below average. This should be sufficient reason to encourage their self-help efforts.
On that point of view, I note that others have a similar reaction.
The amendments that have been brought forward to this bill and on these sections-and it takes time to count them, let alone read them or understand them-have had some ameliorating effects and to that extent they are welcome. However, I cannot accept any changes in the taxation structure which will make it harder for the cooperatives and credit unions to function in those roles and in the manner in which they have been carrying on over these many years. I do not belong to any co-operative; I never did. I do not belong to a credit union, but I do not
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want to be a willing pallbearer for any type of funeral arranged for them through this legislation.
My colleagues have made some helpful and useful contributions. I do not believe in any debate, and certainly not in this kind of debate, in repeating what someone else has said just as well as I could have said it. The hon. member for Moncton made a most excellent speech yesterday as the first spokesman for our party on these sections. He is a very fine economist. His economics training showed extremely well yesterday. Something else showed, too, and that is that he knows the practical problems of practical people living out their daily lives in the Atlantic region and in the rest of Canada. I commend his speech, especially to all who are interested in this particular aspect of the bill.
I have always been impressed, apart from their social value, about the whole matter of Canadian content of co-operatives, and I think that requires more emphasis than it has been accorded so far. Here we are in paroxysms of uncertainty, if nothing worse, about foreign ownership, but here is a viable, useful segment of our economy which is excluded from this aspect of foreign ownership of our economy. I repeat that this is at a time of anxiety over that particular question, and yet there is no reason we should be concerned about it. I ask that the good suggestions that have been made by my colleagues, with their expertise in this field, be taken into consideration.
I want to commend the co-operatives. Someone said that we get pressure from the co-operatives and that they have become a pressure group. I have the highest regard for the manner in which co-operatives and credit unions have marshalled their arguments, and I may say that the arguments which I receive from the co-operative organizations of Canada, from the Maritimes, from Prince Edward Island, surpass in comprehension the bill itself and all the amendments introduced by the minister. I knew exactly what they meant. They made their case abundantly clear and I think they made a very good case. I believe that is what the public bodies should be doing, presenting their case clearly. It is not iniquitous lobbying and it is not unfair pressure. In my opinion, it is the very finest form of enlightenment on a difficult matter. These are the people who know the situation and they share their knowledge with the Members of Parliament. I cannot recall any argument which they put forward which looked as if they were seeking special treatment. I think co-ops have done a very fine job in presenting their case.
I congratulate my colleagues who have spoken so eloquently on this matter and I join with them. Since I am a laconic man of few words, I will rest my case at this moment.


Mr. Latulippe:: Mr. Chairman, I am pleased to have the opportunity of stating my party's views and of commenting on the kind of treatment we wish to be applied to Caisses populaires and credit unions. I would like to draw a picture of the exact situation of credit unions and large corporations and to prove, by means of supporting tables

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and statistics, that the large organizations and corporations accumulate huge profits by comparison with Caisses populaires.
Mr. Chairman, I wish to state my point of view on the precise aim of this legislation and its possible consequences in the years to come on the development of Caisses populaires in Canada, and particularly in Quebec, where these organizations play a most important part for the benefit of a large section of the population.
Mr. Chairman, before taxing caisses populaires, which are considered non-profit institutions since their shareholders never enjoy the invested capital as compared with that invested in banks or other financial or industrial institutions, it has to be shown that it will not be done to prejudice their development or to punish them, because they can compete with banks and other financial institutions of a capitalistic nature whose aim is profit for itself.
The primary objective of caisses populaires is to provide service to their members, not earnings from invested capital. That is the basic distinction one must consider before imposing the same taxes on co-operatives and caisses populaires as on companies, banks and other institutions whose responsibility is limited but whose profits are limitless, whose capitalization is also limitless through numerous legal formulas that have become their exclusive privileges, which privileges are not accessible to cooperatives and caisses populaires which deal only with their members or in restricted areas, whether parochial or municipal, while the large capitalistic corporations can operate on a provincial, national and international basis.
Does that situation not warrant special consideration, special evaluation when time comes to take away the meagre profits required by caisses populaires and cooperatives to guarantee their proper and prosperous administration and forcing them to operate in the red through tax measures both annoying and detrimental?
I love Canada, my country. Far from me the idea of criticizing at random or without rhyme or reason. Throughout my lifetime, I have resorted to the services of banks and credit unions, services which both kinds of thriving organizations offer to all citizens at different levels of economic activity. I am proud of the good understanding between both co-operative and capitalistic institutions under the supreme authority of the governments and which are also conservative as regards certain utilitarian operations for various classes of society.
May I point out, Mr. Chairman, that it is one o'clock? [English]


Russell Clayton Honey: Would there be agreement in committee that we might call it one o'clock?


Some hon. Members:: Agreed.


Russell Clayton Honey: It being one o'clock, I do now leave the chair.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2 p.m.
Henry P. Latulippe: Mr. Chairman, as I was saying before lunch, I grant that good will and guarantees of success and growth should be maintained as regards these two categories of institutions, but if this must be, tax reforms should not reduce profit opportunities for the caisses populaires. They are far from enjoying the same latitude as chartered banks concerning competition related to services which they provide to people.
In this regard, Mr. Chairman, one should see how the capitalization of chartered banks and caisses populaires has increased from 1900 to 1934 and from 1967 to 1971. If 1900 marks the beginning of this century and of the caisses populaires, 1934 marks that of the Bank of Canada at the top of the whole banking system. It was in 1967 that the latest changes were made to the chartered banks, the caisses populaires and the near banks, insofar as their relations with the federal government are concerned.
I do not want to be too long, but one should remember, Mr. Chairman, that the money supply increased from $24 billion to over $36 billion from 1968 to 1971. This is no joking matter, Mr. Chairman, an increase of $12 billion in the money supply, in our banking system, in the last four years; the increase was of $24 billion during the years that followed the establishment of our banking system and of $12 billion-that is over 50 per cent-from 1968 to 1971 inclusively. That is that as far as the money supply, bank deposits and money in circulation are concerned.
What was the small share of the caisses populaires in the last four years? Not even an increase of half a billion dollars. So that the caisses populaires may continue to be of service to the people, we must not tax them further nor must we reduce further their chances of making reasonable, appropriate and sufficient profits to at least remain in operation. Besides co-operatives we have large companies, big financial establishments and chartered banks which have a lot more opportunities to grow, to make profits and build reserves as well as to increase their capitalization while paying their taxes and making money for their shareholders. Whatever his position in society, the individual must learn to live with royal commissions of inquiry, with the famous white papers, with a 707-page bill like the one now before the House. And what about the 599 pages of amendments and supplementary explanations and the Carter report with its 2600 pages? If the Canadian citizen wishes for a just society in a united Canada I earnestly urge hon. members, before they complete the study on banks and Caisses populaires taxation, to read the tables shown on pages 1234 and 1239 of the 1970-71 Canada Yearbook, dealing with chartered banks and Caisses Populaires.
It contains the following figures. Caisses populaires have an equity capital of $1,328 million and chartered banks of $303,758,000. Caisses Populaires and chartered banks have reserves amounting respectively to $185 million and $1,189,126,000. Caisses Populaires have $4.64 billion in capital assets and chartered banks, $42,578,338,000.
Mr. Chairman, caisses populaires have accumulated $4 billion in capital assets and reserves of $185 million on $1,328 million invested capital. Banks have accumulated capital assets of $42,578 million and reserves of $1,189 million on $303 million invested capital. Banks assets
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increased 140 times while those of the caisses populaires increased only 3 times.
This is very important. It shows that our Caisses Populaires have not made as much money because they do not have the same organization. They do not enjoy the same advantages as the chartered banks do. Caisses Populaires shares are worth about $5, yield 6 per cent interest per year and retain their nominal value. Chartered banks shares are all worth $2, but they yield dividends of about 70 per cent a year while they are worth between $14 and $28 each on the Montreal, Toronto or Vancouver stock exchanges.
Therefore, we can see the difference that exists between Caisses Populaires and banks, between co-operatives and capitalist corporations. Should they be treated in the same manner for income tax purposes? We have noticed that banks are making greater and quicker progress as far as their total assets are concerned since the last review in 1967 of the Bank Act, following the Porter inquiry. Their assets now come close to $52 billion, which is an increase of some $10 billion over the past two years.
In one year only, bank assets increased by over $5 billion and that one annual increase absorbs at one fell swoop the whole $4 billion accumulated since 1900 by Caisses populaires and credit unions.
Even though Canada admittedly is a country which belongs in the capitalistic group, its duty is to protect the orthodox banking system. These few notes and remarks clearly show that the progress of caisses populaires does not and should not raise any fears among the defenders and protectors of the Canadian banking system. If we recognize that banks and caisses play a necessary and complementary role for the people of our prosperous country who benefit from both systems, it is up to us, as members of the House and ministers, to see that the caisses populaires are allowed to continue to play their meaningful role with the support of the federal government.
Since we have realized the difference between large and small financial interests, I think that it would be advisable for us to stop one moment before concluding too quickly the consideration of Bill C-259. It is necessary to examine the general situation of our Canadian economy which has widened since the last war the gap between the rich who become richer and the poor who become poorer.
If we are all conscious of the great lack of economic balance which prevails in Canada on account of inflation, unemployment, poverty, insecurity, continuing increases in taxation, debts and interests on capital borrowed to finance provincial governments, municipalities, Hydro-Quebec, Ontario-Hydro, or other Crown corporations, why not solve the tax problem by a complete restoration of the economic balance between all the constituent elements of our national heritage, between all capitalistic and co-operative institutions, between the industrial and commercial institutions of free enterprise and small industries, small businesses and small enterprise?
Every member knows that tax reform alone will not solve all the problems nor get our economy out of its present confused state. The more the government's reve-
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nues increase, the more the government's budget grows and the more the taxpayer's budget decreases. Therefore the result of the government's budget is to diminish that of the small taxpayers. Many of them have no more money; they depend on social welfare. This is the same as robbing Peter to pay Paul.
There is no practical solution to it. Overall taxation reforms like those before us now will not solve the problem. In order to solve it and give our economy a new logical and proper balance, we should reduce taxes, lighten the taxpayer's burden so as to give him more power through caisses populaires and those institutions serving the people.
I have shown that caisses populaires do not make any profit, but the banks do: 46.6 times more.
Mr. Chairman, it is therefore logical in these circom-stances that our leaders step in and that all hon. members speak out. When public institutions have to be protected, nothing is neglected. Institutions such as our caisses populaires deserve our protection and all possible measures likely to help them, since they serve the poor people, the middle class, those unable to obtain chartered bank loans.
Mr. Chairman, the caisses populaires were created because the larger institutions would not serve ordinary people. Such people were refused the services they needed and the caisses populaires intervened to provide those services to them.


Mr. Nowlan:: Mr. Chairman, without discussing in specific ways apples or plums today, this section of the income tax bill deals with co-operatives and provides some of the lemons the Minister of Finance is going to offer the whole co-operative movement if the sections of this bill pass unamended. Since we are talking about different varieties of fruit-co-operatives in my area of Nova Scotia have a lot to do with fruit-we have the opportunity to speak on the question of co-operatives.
I am not going to discuss in very much detail the problems of credit unions; other members have done this. Some of the amendments the minister has brought forward have softened the impact of the proposals affecting credit unions. The minister is also to be given some credit for having brought forward further amendments to soften even more the impact of the proposals relating to co-operatives. But the first amendments still do not come to grips with the basic problem these proposals create.
In the area of Nova Scotia where I come from co-operatives have contributed in a most constructive way to the life of the community, and it is all too easy to appreciate the concern of those directly engaged in the co-operative movement and those vicariously involved in or with cooperatives at the problems that may be created by these proposals. Many members in this chamber during the committee hearings these last days, when we have been talking about co-operatives have philosophized about the basis of the co-operative movement. Some have said it is a step on the road to socialism. Others have said it is like a business and should be taxed as such. That is what the minister's proposals are doing; co-operatives are being treated as a corporate entity.

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Without getting into the semantics of political philosophy, I do believe the co-operative movement is a form of capitalism in the widest sense which allows average Canadians in their own communities to own something that ordinarily they could not afford, namely to own a share in a co-operative so the co-operative can provide a service to them and others, thus enhancing community life. It seems rather paradoxical to me that a minister should, with no stated justification or apparent reason, bring in fundamental changes to the operation of the co-operative movement, which has been flourishing in Canada since the forties, thus adversely affecting, in the minds of those in the co-operative movement, a segment of society which is perhaps the most bona fide, true-blue part of Canadian society that we have.
Many members of this House have been talking about economic nationalism. Newspaper editorials also put the case for and against economic nationalism. In the co-operative movement Canadians who own a significant part of Canada are working in the best interests of Canada, and they fear that these proposals are going, if not to completely suffocate, at least to stifle the operations of cooperatives. These Canadians in local communities are participating in a meaningful way, exercising some initiative, using the incentive of the patronage dividend, knowing they are part of an entity that they own, yet being faced with proposals that adversely affect the co-operative movement.
We have heard tales in other days during this debate about capital gains taxes. We have heard how the corporate tax field will be plugged up. We are going to discuss on Monday aspects of international income and the revi-son of arrangements in this tax field with other countries. On this matter there have been some explanations from the ministry. One can agree with them or disagree, but at least there have been some stated objectives and usually facts to back up the objectives. But as far as this section dealing with the co-operative movement in Canada is concerned, we have not had any cogent reasons given by the minister as to why he is upsetting a very large segment of what I say is likely the truest, bluest form of Canadian society from the entrepreneurial point of view that we have in Canada. Unless there is some justification from the minister on this matter, I do not see why members should give the minister what is almost a blank cheque to makes the changes proposed in this section.
Other members at other times have talked about the irrelevancy of parts of the bill that have gone through a ten year gestation period, from the days of the Carter commission, the studies, papers, briefs and documents that flooded therefrom, to their inclusion in Bill C-259 today. But if there is any part of the bill to which the argument of irrelevancy should apply, I suggest most sincerely it is to the co-operatives phase of the bill, in regard to which there have been no explanations, facts or figures of reasons given by the minister to justify the changes.
Some might infer that he is trying to plug up our tax laws because of the way co-operatives allegedly play around with patronage dividends or the capital they use, but there are those who feel apprehensive that the purpose of the change is to destroy the co-operative movement in Canada. If that is the case, then again I do not

think members should accept without some further explanations such a fundamental disaster that will befall the co-operative movement in Canada.
If anyone has been misled into believing that co-operatives themselves are completely against taxation, this is not so. Obviously no one wants to be taxed. Everyone likes to avoid tax. In fact, avoidance of tax is quite permissible under the Income Tax Act regulations. It is when you try to evade taxes that you get into trouble. The co-operatives themselves know they have a social responsibility to be taxed and they are quite prepared to be taxed. This "mythology" that this is a privileged group that does want to be exposed to the pain of taxation I suggest is false and misleading, for they themselves have advanced a proposal under which they will be taxed. This proposal, I am informed, was advanced to the ministry by The Co-operative Union of Canada on October 29. The cooperatives proposed that their members receive the annual earnings resulting from business done with the members, with any earnings retained in the hands of the co-operatives taxed at the corporate rate. This proposal is a very definite and real form of taxation and was, as I say, advanced by the co-operative union to the ministry.
They also put forward some restrictions and conditions which were outlined in the proposal and which I propose to repeat here. The proposal was subject to the following restrictions and conditions:
1)	That there be paid by the co-operative a withholding tax on all distributions made by way of a patronage refund.
2)	That the withholding tax paid in respect to patronage refunds be creditable toward the recipient's personal tax. If the recipient is not taxable for some reason, the withholding tax will be refundable upon filing the usual tax return.
3)	That the payment of patronage refunds be limited to the extent of income derived from member business and that any income derived from non-member business be taxed at the appropriate corporate rate, unless patronage refunds are paid to both members and non-members.
4)	Any surplus remaining in the co-operative after making distributions by the co-operative, shall be taxed in the hands of the co-operative at an appropriate rate of corporate tax.
In their own submission to the minister, they were quite ready to advance a proposal through which they would be subject to a very meaningful tax. Certainly, if there is not a positive response to this proposal, and at the moment I gather there has not been such a response, then we, in the committee of the whole, should do nothing further than maintain the status quo. Basically we have a situation in which private business, the co-operative sector and the government have learned to live together and have worked out certain principles and terms of relationship in various areas. Without a reason being given by the minister, I do not think we should upset these relationships by these proposals presently in the tax bill.
I may receive some catcalls, I suppose, but regardless of political philosophy, I am all for change where necessity dictates change, but when the change is not indicated by necessity, fact or figure then there should not be change just for the sake of change. I believe very seriously that those who drafted these proposals did not understand the fundamental concept of the co-operative movement or what it is all about. That is one of the difficulties or
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dilemmas that confront us in debating this proposal, because in the words of the hon. member for Lanark-Ren-frew-Carleton, we are comparing plums and grapefruit.
We can talk about a variety of different fruits including grapefruit, lemons, apples and plums, just as we can talk about many forms of entrepreneurial enterprises. A cooperative movement is one, a corporation is another and the C.N.R. and Air Canada are another form. However, when you try to apply the same philosophical principle to Air Canada that applies to a private enterprise or corporate structure, it is like trying to find some similarity between grapefruit and lemons or apples and plums. That is just what is happening here in sections of this bill. These proposals do not distinguish fundamentally between the co-operative movement and an ordinary corporate entity.
As I said earlier, in my area of the country just about every town has a viable local co-operative of one form or another. There are many credit unions in the Annapolis Valley and throughout Nova Scotia. The hon. member for Hillsborough said this morning, there was a man called Dr. Coady at St. Xavier University who is famous for his work in the co-operative movement. He was the initiator of the famous Coady Institute. The book that outlines his history is entitled, "The Man from Margaree." He was known as a man who contributed to areas far beyond the confines of the relatively small area in which he worked, lived and died. His contribution to the co-operative movement stretched not just from coast to coast but to the international scene as well. Thus, I feel perhaps a little more emotionally involved and concerned about what is happening and what may happen to the co-operative movement after these changes than I might otherwise. I had the privilege of meeting Dr. Coady. I know others who knew him better than I did, but in view of the fact that this great Canadian did so much for so many with so few chances to make a contribution, his contributions should have been recognized even more than I think it was at the time.
While I talk about Nova Scotia and the fact that the co-operative movement has a very real history in that Atlantic area, it obviously goes far beyond that. The statistics from the Department of Agriculture for 1969 show there were 2,373 co-operatives in Canada with 1,690,000 members. That is not a mean or small group of Canadians. I believe most of the members are from the so-called rural areas of Canada, certainly small towns, villages and other rural parts of our society, but that does not mean that co-operatives do not exist in urban centres. The contribution of these co-operatives has resulted in the distribution of many products, including a lot of fruit, grain and potatoes.
When we talk about the co-operative movement we are talking about something that perhaps does not directly affect people in the city, but does directly affect people in the rural areas. The Parliamentary Secretary to the Minister of Finance sits there swinging his little hearing aid. I am glad he is doing something to show some life, because there has not been much life shown or much interest in listening to some of the constructive suggestions from members of all parties, including his own.
The hon. member for Essex had the intestinal fortitude to stand in the House and say what he thought about this
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bill. He sits over in the government ranks, but I do not know how close he will be to the government following his speech this morning. There are other members in the House on both sides who have said what they thought about this bill. I will not embarrass those on the government side by mentioning them, but they have strongly condemned this theoretical, unworkable and impractical suggestion which affects co-operatives, particularly as there has been no stated reason for the change. The parliamentary secretary is showing some life, and perhaps I can stir him even more by suggesting we have had three series of amendments. On October 22 we were given 96 amendments, on October 29 we were given 28 more and on November 16 we had 8 more. We now have amendments to the amendments to the amendments.


Patrick Morgan Mahoney: Mr. Chairman, I rise on a point of order. I hope as the hon. member continues his remarks he will reconcile his statement that we have not paid any attention to the serious recommendations on the one hand with his criticism of the number of amendments which have been presented as a result on the other hand.


John Patrick (Pat) Nowlan: The parliamentary secretary has raised a point that is at least interesting, and which I will attempt to answer. He knows as well as I do that the first batch of amendments, numbering 96, were presented the first day we started to debate this bill, long before he heard some of the reasonable suggestions from this side.


Patrick Morgan Mahoney: They have been on the table all summer.


John Patrick (Pat) Nowlan: There has to be some credit given. Some of the amendments affecting credit unions did go a long way towards resolving some of the dilemmas which would be created if the original legislation had gone through unamended, but the parliamentary secretary tells us that these amendments were brought in as a result of the reasonable suggestions from members of the opposition. I would like him to point out, apart from the very technical amendments, one amendment that was the result of a suggestion by the opposition. These amendments were required because of the sloppy draftsmanship to be found in the original bill. The legislation could not possibly work without the amendments. I do not want to digress any further from that point.


Patrick Morgan Mahoney: I bet you don't.


John Patrick (Pat) Nowlan: There have not been any substantive or meaningful amendments to this bill since this debate started.


Patrick Morgan Mahoney: Wrong.


John Patrick (Pat) Nowlan: If there have been, let him stand in his place and tell me. Let us get away from this digression. I hope it is not taken from my time. I know I have only 20 minutes in which to speak and many members are excited and interested in participating in this debate because it concerns the fundamental matter of the kind of society in which we want to live. The minister, unfortunately, in drafting this bill has not-

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


Some hon. Members:: Carry on.


John Patrick (Pat) Nowlan: Mr. Chairman, perhaps I could just finish this sentence.


Gérald Laniel: The hon. member may continue only if he has the unanimous consent of the House.


Some hon. Members:: Agreed.


John Patrick (Pat) Nowlan: It would appear that in drafting Bill C-259 and the later amendments, the simple nature of the method of operation of a co-operative, and the essential difference in its position and capital structure from that of an ordinary corporation, has been given little or no attention or has not been understood. Considering the many objections to the government's treatment of the co-operatives, it would seem that the government has adopted an attitude in respect of the co-operatives which is almost an anti-business attitude. The government would appear to be adapting its anti-business attitude to the co-operatives. It has an anti-business and anti-co-operative attitude. This is the attitude of the government as shown by its stubborn refusal to adopt any other position in respect of the proposals in this bill. I do not want to trespass further upon the good nature of many members in this House, but I hope I shall have an opportunity to finish my speech later.


Gérald Laniel: The hon. member for Gloucester.


Mr. Beaudoin:: Mr. Chairman, I rise on a point of order. I would like to put a question to the Secretary of State (Mr. Pelletier) to get something straight in my mind.
Several hon. members have stated yesterday-


Gérald Laniel: Order. The hon. member rose on a point of order and he cannot ask a question since the Chair has recognized the hon. member for Gloucester (Mr. Breau).


Léonel Beaudoin: Mr. Chairman, I rise on a point of order. Things are happening and I think that there is-


Gérald Laniel: The hon. member for Richmond is rising on a point of order.


Léonel Beaudoin: Mr. Chairman, I think someone said yesterday that the amendment would grant the co-operatives a ten-year period of progressive taxation before full taxation. Could the Secretary of State tell me if this is true?


Mr. Clermont:: Mr. Chairman, the Secretary of State is not in attendance. The bill is presently seen through by the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney).


Gérald Laniel: Order. This is not a point of order but only a question. The hon. member cannot ask his question since I have already recognized the hon. member for Gloucester.


Mr. Breau:: Mr. Chairman, first of all I should like to respond to the remarks of my friend from Annapolis Valley. At times he is very constructive, but when he says the government has not paid any attention to the objections of the co-operative organizations I do not think he is quite accurate. As a matter of fact, with the capital employed concept, I believe the government has gone a long way-


Some hon. Members:: Come on.


Herb Breau: I should like the members who say "come on" to stand up and tell me what the government has done within the capital employed concept which does not go a long way towards meeting the suggestions of the co-operatives. If they say that, then they have not spoken to the co-operatives because the co-operatives accept the fact that the government has gone very far in staying within the capital employed concept.


An hon. Member:: That is the objection.


Herb Breau: Probably some members cannot understand this concept and the mechanics of the taxation system. I would appreciate it if they would listen to my remarks which might enlighten them a little. There are two questions here. First of all, if we accept the amendment of the hon. member for Regina East, I wonder if there would be a difference in the taxable revenue to the treasury, because if there is that is one matter. The second question is the long standing one, which is not necessarily changed in this bill, that is should we or should we not in the taxation system have a capital employed mechanism for co-operatives.
I should like to know from the parliamentary secretary or the Minister of Finance if there would be a difference in the taxation revenue to the treasury if the proposal of the co-operatives, which I believe is about the same thing as the amendment of the hon. member for Regina East, were adopted. I am sure there cannot be any administrative problem because the amount of patronage dividends that would go to taxpayers on which they would have to declare income tax would be minimal. Assuming, therefore, there is not a difference in the taxation revenue, or only a slight change, it would seem to me that this debate should be on the question of whether or not there should be a capital employed concept.
To tell the truth, I never really understood the rationale a capital employed concept. It would seem to me that if we had it, it would be for two reasons. First of all, it would be because private interests or people more oriented toward private business applied political pressure to see, in cases where they compete with private businesses, that co-operatives would pay taxes in an amount equivalent to those paid by private business. The second reason could be that we simply want the co-operative to pay more taxes. I believe this is a very complicated formula. It is one which many private citizens do not understand. If there is no loss of revenue, I think we should accept the proposals of the co-operatives because I do not believe we should retain at this time a formula as complicated as the capital employed concept simply because we want to

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appease big business which believes it has to compete with the co-operative movement.
Many members are involved with the problem, but we do not have the facts in front of us. I should like to know from the officials, through the parliamentary secretary, if they have calculated whether there would be a loss of revenue. It would seem to me, even with the safeguard of one third of the taxable income and the concession made concerning people who declare their patronage refunds at the end of the year, this would be quite a source of revenue to the treasury. So, if there is no difference in the taxation revenue to the treasury, there would seem to be no justifiable reason for retaining the capital employed concept. On the contrary, I think everything is against such a complicated formula because the people dealing with co-operatives are mainly private citizens who do not know very much about the taxation system. Why complicate it for them? I do not see any administrative problem, as I mentioned a while ago.
If you look at the number of taxpayers who receive patronage refunds on which they have to pay taxes, that is those who receive such refunds as a result of purchases, the number would be very small indeed. I am referring to those who receive refunds of under $100. If that is the case, all that would have to be done by national revenue would be to say to the co-operatives "you will withhold taxes. You send refunds to everybody, but only hold taxes after the patronage refunds, have reached a certain limit". It must be possible to look at the statistics for the past few years and find out the percentage of taxpayers receiving patronage refunds and what amount they receive. It would be administratively simple to say "send them to everyone, but only withhold taxes after a certain amount of refunds has been reached".
I really cannot see that there will be a loss to the treasury. If there is a loss to the treasury by accepting the proposals of the co-operatives, I am ready to listen to that argument. That would change the picture. After all, somebody in this country has to pay taxes if we are to provide public services. If we went to a co-op oriented economy, co-ops would have to pay more taxes. However, I do not think that is the case. I do not think that anybody in a responsible position would say that co-ops compete unfairly with private business. I have seen how co-operatives operate. The type of competition they provide has brought about social justice as well as patronage dividends. In areas of the Maritime provinces, where there are co-ops, the price of fish is higher than in communities where there is only private business.
There is a social need for co-operatives. I do not think we should be concerned about the competition from co-ops. I believe that the competition co-ops give to business brings about more social consciousness in this country. I am a defender of the private enterprise system. As a matter of fact, I was in private business. I never had unfair competition from co-operatives. As a matter of fact, business people who support the concept of private business and not state intervention should be happy to see co-operatives because with co-operatives you also have social progress. The more progress you have, whether social, cultural or economic, the better for everyone.
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I do not believe business people in this country or any member of this House would be such strong supporters of private enterprise to want private enterprise at the expense of competition. What good is society if we do not have as a basic philosophy the protection of the individual? The capital employed concept was introduced into the taxation system approximately 22 years ago. If this is the only pressure, I urge the parliamentary secretary and the Minister of Finance to change their minds on this.
Why complicate the system for co-operatives or, for that matter, for anybody? If there is a difference in revenue, that is a horse of a different colour. If there is not a difference in revenue, we should do away with the capital employed concept. We should then accept the proposals of the co-operatives and let them operate as they were intended to operate. Members who use the patronage refund as a business revenue, should pay the taxes. We should not complicate things just because big business people are afraid of competition from co-ops. Let there be no doubt about where I stand. I stand with the co-operatives.


Patrick Morgan Mahoney: Mr. Chairman, for the information of the hon. member for Richmond, the transitional provision covering the 10 year phase in does not appear in the amendments to sections 135, 136 and 137 that we are now considering. It is in part III of the bill. The hon. member will find the text of the amendment on page 9166 of the English edition of Hansard for October 29. I do not know what page it is in the French edition.


Mr. Harding:: Mr. Chairman, I wish to take part in the discussion on the tax bill this afternoon, particularly on sections 135, 136 and 137 which deal with co-operatives and credit unions. I have a number of comments to make. I received a considerable amount of correspondence from my area on this matter. I am going to pass this information on to the parliamentary secretary because I feel that his views on this topic certainly need updating.
Yesterday and today, I listened with interest to the views of members of all parties. Almost without exception, the members are not happy with the legislation before the House. They have indicated that changes should be made. I am not thinking in terms of making some rather minor amendments. I suggest to the parliamentary secretary and the government that they should take another look at the whole approach to co-operatives and credit unions.
There is a very clear indication that large segments of the Canadian population are disturbed over the legislation currently before us. They are asking the government to make changes in it. That is the reason for the considerable amount of debate on these three sections. Frankly, I believe there will be more debate. After the debate ends today, the government would be wise to stand these sections for a day or two, take a good look at them and bring in some meaningful amendments which will not cripple either the co-operative movement or the credit union movement in the vital function they are playing in society today.
Quite frequently the government is not too happy when opposition members speak about these points. However, I would like to make this point in passing. The speaking out on the second reading of this bill, and the opposition from

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individuals in committee stage, have brought about some very substantial changes to the legislation as it was proposed initially.
All we have to do is go back and look at the original white paper and legislation introduced by the government. I admit that some substantial amendments have been introduced-and they are welcome-but they do not go far enough. It would be foolish for the House to cripple the co-operative and credit union movements by leaving some of these provisions in the legislation.
Another point bothers me. As the debate goes on it becomes clearer that those responsible for this outright attack on the co-operative movement do not really understand the basic principles upon which that movement works. Members on all sides of the chamber have pointed out this fact. It is like putting a fox in charge of a chicken-coop. There is no use putting someone in charge of drafting legislation for the co-op and credit union movements unless he understands the principles upon which they operate. If one has not been a member of these movements he cannot fully realize the benefits they confer and their effect on society.
Entrenched privilege organizations have launched a major campaign against co-operatives and credit unions. That campaign did not start this year; it has been in progress for a number of years. People in the co-op movement are well aware of it. What worries me is that at long last these entrenched privilege organizations have gained the ear of the government, and that is why we are now debating this legislation.
I am a member of a credit union and of a co-operative. I know the type of service they give to the communities which I represent. It is a vital service. I well remember the desperate need which these communities had for co-operatives and credit unions. I remember when times were a lot tougher than they are today, when the average working Joe could not get a loan from a bank, and had nowhere else to go for a loan. That was back in the thirties. It was at that stage the credit union movement expanded in my area. Through it people were able to obtain credit and do things which otherwise they would not have been able to do. But when that movement reached the stage of development that entrenched privilege organizations felt their toes being stepped on slightly, they launched an attack against it.
I am going to read into the record some of the principles underlying the co-operative movement. It is said that repetition is the mother of learning, and I hope that repetition of these principles will convince the government that more changes must be made to the bill. The co-operative movement is not dodging taxation. All members of this House will admit that fact. Recently we all received copies of a letter from Mr. E. K. Turner, president of the Saskatchewan Wheat Pool, in which he made several interesting points that have already been quoted in this debate. I shall quote his letter again because these are points which should not be lost sight of during discussion on this legislation. In his letter Mr. Turner wrote:
Co-operatives are prepared to pay tax at the ordinary corporate rate on any earnings retained by the co-operative. Earnings returned to the member should become part of his income.

For a taxation act to force an imputed taxable corporate income on a co-operative is to interfere with the democratic right of members to run their own business. Such a treatment is not applied to co-operatives in any other country, to our knowledge.
... the taxation proposals completely ignore the basic principle of a co-operative, which is that earnings are a result of surplus on operations and belong to members. Earnings are not a return on investment.
This is something that we still have not been able to get through to the parliamentary secretary and his advisers.
The co-operative is nothing more than an extension of the members' personal business. Any saving he is able to make in dealing with his organization is an increase in his personal income.
These points constitute the basic philosophy of the cooperative movement and should be recognized by the government. The president of the Saskatchewan Wheat Pool and the Co-operative Union of Canada, which is the voice of the co-operative unions collectively across this great country of ours, set out other fundamental distinctions in the nature of co-operatives. Again I would place these on the record because I believe they are useful to our debate. These distinctions are:
1.	That co-operatives provide primarily a self-help service required by members.
2.	That co-operatives distribute earnings to members in proportion to member business.
3.	That co-operatives raise and service equity capital by revolving the same in relation to the use of the co-operative by its member.
4.	That capital contributed by a member of the co-operative is to provide himself with service and not to produce a return on investment.
Somewhere behind the scenes are individuals who do not understand the functions of co-operatives and credit unions, because if they did understand, then legislation such as this would not have been introduced. Yesterday the hon. member for Regina East moved an amendment to section 135. Reading it in isolation makes it difficult to understand what he is getting at, but read in conjunction with the section it becomes crystal clear and certainly makes sense. This was his amendment:
That the amendment to section 135 be amended by deleting all words after the words "page 356" and substituting the following: "and also by striking out lines 20 to 47 on page 357, lines 1 to 23
on page 358 and lines 33 to 40 on page 359."
This amendment, Mr. Chairman, points up the core of the whole problem. It is the key to the whole complaint which has been brought to all members in this House by co-operative groups all across Canada. The parliamentary secretary has not yet indicated whether he will accept the amendment, but I urge him to give it close scrutiny and, I trust, his full support. This could save much debate on this section of the bill.
The amendment deals with the "capital employed" concept and also with the option proposed in the government amendment. It will remove from the legislation one of the major objections of the co-operative movement. The "capital employed" concept as contained in the legislation will make it impossible for most co-ops to pay cash dividends. It involves the very existence and life of the co-op movement. Surely it is not the intention of the government to put into operation a plan which will slowly and surely
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strangle the movement over the years. Mr. Chairman, I contend that if the legislation as now drafted goes forward, this is exactly what will happen to co-ops from one end of Canada to the other. Members on the government side of the House should read and discuss this legislation. If they vote for legislation that will cripple the co-operative movement across Canada, they will be in serious trouble at election time.
I should like to speak briefly-we will have an opportunity later to deal with the co-operative amendments-on section 137 which deals with credit unions. I have received a number of representations from various credit unions in my riding of Kootenay West. I have received representations from the Arrow Credit Union of Edgewood and the lower Arrow Lakes, the Castlebar Savings Credit Union, the Kootenay Savings Credit Union, the Nelson and District Credit Union, the Nakusp and District Credit Union and credit unions from the Creston area, as well as from a large number of individuals in these credit unions. They are opposing one of the provisions in section 137. I do not think I can explain it any better than by reading one of the letters which I have received. Many are similar to the one I shall read, which outlines very distinctly the apprehension felt by credit union members in our area as far as section 137 is concerned. This letter is addressed to me and is generally the type of letter I have received. It reads:
In the tax provisions for credit unions contained in Bill C-259 the most important area is the taxation of reserves which must be set aside under the provisions of provincial legislation. No amendment has yet come forward to deal with this problem.
Not only are the transfers to reserves non-discretionary but there is a legislative bar to their distribution to the members even on the winding up of the credit union. Apart from this restriction in the legislation there is a basic principle that shares in a credit union may only be redeemed at par irrespective of the amount of reserves on hand. The fact that these reserves are beyond the reach of the shareholders, removes in effect shareholder's ownership, a very cardinal quality of income as contemplated in the Income Tax Act.
Commercial corporations are in an entirely different position. Retention of corporate income will increase the value of the shares and in this way give a benefit to the shareholder. Alternatively amounts reserved may be paid out as dividends. Again, benefiting the shareholder and earning for him a tax credit on his dividend- essentially representing a rebate of the corporate tax. The effect of the provincial legislation is to deny these benefits to credit unions.
Although there is a strong legal case for tax exemption, with supporting precedents, credit unions have interpreted the white paper and the tax act as pronouncements of government policy and have from the outset agreed to pay their fair share of taxation.
Because they lack the quality of income and because these non-discretionary reserves cannot be distributed to members, credit unions find themselves trapped by the provisions of section 125 of the tax act. These reserves will be considered income in the "business limit" of $50,000 per year and in the total "business limit" of $400,000. The very fact that the credit union is statute barred from distributing these reserves means that the "total business limit" will automatically be reached in a short period of time. Aggravating this situation is the fact that transfers to the reserve must be tax paid-no provision exists permitting income taxes to be charged against the reserves. The sum of these factors means that section 125 (which provides for a reduction of tax under certain conditions) will not apply to a medium sized credit union beyond five years, after which time a transfer of $50,000 to reserve will attract a tax of $50,000.
The solution we propose is that section 137 (credit union taxation provision) be amended to provide that amounts required to be
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transferred to statutory reserves be excluded from the calculation of the "business limit" and the "total business limit" in the application of section 125.


Gérald Laniel: Order, please. I regret having to interrupt the hon. member, but his time has expired.


Some hon. Members:: Carry on.


Gérald Laniel: The committee knows that this can be done only by unanimous consent. Is there unanimous consent to allow the hon. member to continue?


Some hon. Members:: Agreed.


Patrick Morgan Mahoney: I agree, Mr. Chairman, but there are many hon. members waiting to participate in the debate. I am sure the hon. member would not abuse the opportunity afforded by the committee giving its consent, because he is aware that other hon. members are waiting to speak.


Randolph Harding: Mr. Chairman, may I have the privilege of finishing the letter because there are only two paragraphs which I have not quoted?


Gérald Laniel: Does the committee agree?


Some hon. Members:: Agreed.


Randolph Harding: Thank you, Mr. Chairman.
The effect of such an amendment would be that tax paid transfers to reserve would attract a tax equal to 33 per cent of the reserve requirement as opposed to a tax equal to 100 per cent of the reserve requirement.
Reserves have no advantage to the member beyond securing the principal of their investments. They can never share in them. We regard a tax equal to the amount of the annual reserve requirement as unnecessarily punitive.
I urge the parliamentary secretary to read this section 137 again and to make the necessary amendment to rectify it.


Mr. Badanai:: Mr. Chairman, I wish to say a few words on this section of Bill C-259 dealing with credit unions and co-operatives. I am very appreciative of the amendments introduced by the Minister of Finance which are designed to reduce the basic tax rate contained in the bill. The history of credit unions can be summarized by the experience of one operating in my constituency. I am referring to the employees of the Abitibi Paper Company which formed a credit union some years ago. The motivation of the credit union was the principle "not for profit but for service", which I submit is the philosophy behind the movement established to encourage saving and, when in need, borrowing. It is this principle which dominates all credit unions as well as co-operatives.
The money that members put into the credit union is already taxed; every dividend they receive is taxed. Section 135 of the bill is simply designed to tax the profits that credit unions have accumulated through the use of their savings. I urge the minister to reconsider this whole question and scrap the idea behind this section of the bill.


Some hon. Members:: Hear, hear!


Hubert Badanai: The Prime Minister, in a recent message to credit unions stated, "Credit unions have experienced

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enormous success because they encourage both regular savings and the wise use of credit." I would also quote from his message on International Credit Union Day. The Prime Minister said:
It can also be said that credit unions encourage self-help and mutual assistance. I look upon them as more than saving banks; they are also a welcome social force in the community, and the same can be said about co-operatives which have similar objectives.
The amendment proposed by the minister on November 10, which proposes that co-operatives would leave one-third of profits as taxable, affects all the members of these organizations. In other words, the tax now falls upon the members. The crux of the whole question, Mr. Chairman, is that the credit unions and co-operatives are asking, not for exemption from taxation but for this House to consider the most equitable way of applying it so that taxation as between these organizations and their members will be just and fair.
Mr. John M. Halliman, general manager of the Ontario Credit Union League, in a letter to the Minister of Finance pointed out that credit unions are organized for service and that they are simply vehicles by which man helps his fellow man by bringing together those who have a little money to save with those needing temporary financial assistance. The credit union itself is not seeking profit but is merely an intermediary between the savers and the borrowers. To the extent that those who contribute their savings for this purpose earn dividends or interest from the loan operation, they already pay tax on such income. Taxing the interest paid on loans in the hands of the credit union and then again in the hands of its members would be, I believe, double taxation.
At page 52 of the report of the Royal Commission on Co-operatives, submitted to the House of Commons in 1945-which is known as the McDougall report-is the following description of the special assistance rendered by credit unions. This applies equally today:
(a)	It provides a method whereby people in poor circumstances are encouraged to develop a habit of thrift, since by pooling their savings they can provide a source of credit for themselves in times of need;
(b)	The bond of association, occupation or other community interest on which the membership of credit unions is based tends to minimize the element of risk which has to be considered by another type of lending institution when considering an application for a loan from an individual with little or no collateral security;
(c)	Accordingly, it provides a service for those who are either not provided with credit services from other lending institutions at all, or only at much higher rates because of the risks involved.
(d)	The tangible material and other benefits which can be derived through the credit union from of activity enable and encourage the members to solve their problems through self help rather than by relying on government aid in times of emergency or depressed conditions.
The report reads, at page 52:
Credit unions return to their members a very high proportion of their surplus earnings. In some cases, however, they are retaining amounts which appear to be larger than are required for reserves against bad loans and losses on the basis of past experience. If they were to be taxed by the methods we have recommended for co-operative associations, additions to these excess reserves would be made subject to tax. However, the individual amounts to be assessed would, in many cases, be very small. Moreover, we consider that it is not desirable to discourage the accumulation of 
reserves to protect the savings of members who, for the most part, receive small or very moderate incomes.
In that report, Mr. Chairman, the royal commission recommended that the income of credit unions should continue to be exempt from taxation. All this seems to indicate that the case for the credit union and co-operative is as strong today as it was in 1945. I therefore, with respect, repeat that this whole question ought to be reconsidered by the government.


Jack Burnett Murta: Mr. Chairman, in speaking on the amendments dealing with co-operatives and credit unions I should first like to deal with co-operatives and discuss how they are being treated in the legislation, and then deal with credit unions very briefly near the end of my remarks. I say at the outset that the government has done with this legislation that which it has done with so many other pieces of legislation. It seems to have taken two giant steps forward and one step back and has told the people concerned that they have been given consideration so far as the Income Tax Act and other pieces of legislation are concerned. Nevertheless, the income tax legislation is still a step down the road to what he government considers to be tax reform. I think that this can be borne out if one reads the first draft of the bill and looks at the amendments pertaining to co-operatives and credit unions put forward by the government.
Co-operatives have for the most part their own special place within our society, having been formed mainly because groups of people felt the need to join together in order to work more efficiently. This need has been exemplified, I think, more in rural than in urban areas. The co-ops in the rural areas of Canada have become stronger, possibly because of the necessity of people having to band together and work together. The latest statistics on cooperatives published by the Department of Agriculture show that by the end of 1969 there were 2,373 co-operatives in Canada, with a membership of well over half a million. It appears that in drafting Bill C-259 and the later amendments little attention has been given to the essential nature and method of operation of a co-operative, and the essential difference between its purpose and that of an ordinary corporation has not been understood. I will not deal with the make-up of a co-operative because I believe most hon. members know how a co-operative works. Most hon. members are aware of the voting and capital structures of co-operatives.
There is no relationship between a member's investment in a co-operative and the returns to him. A member with $1 invested may receive a return of $100, or vice-versa, depending on the amount of business done with the co-operative during the period involved. Furthermore, the member with the $1 investment has the same voting right as the member with an investment of $100 or $1,000. It is an accepted principle that a member wishing to remove some or all of his investment from the co-operative, either while continuing to use its services or upon terminating his membership, will receive only the amount of his investment, with no capital gain.
In general, co-operatives are objecting to the provisions contained in section 135 of the bill which retain the
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requirement that prior to any payment of patronage payments, dividend income must be allocated to the capital of co-operatives on the basis of a fixed percentage of capital employed by the taxpayer at commencement of the taxation year. This, according to co-operatives, interferes with their freedom and ability to distribute earnings as patronage refunds.
In briefs I have received from across western Canada the co-ops maintain that although section 135 applies to all corporations wishing to pay patronage refunds, the imputation of income to capital in a co-operative is not only unreasonable and illogical but is discriminatory. Co-operatives, by nature, are different from corporations and should be treated as such. They contend that the "capital employed" concept creates a cash flow problem. In most co-operatives this is accomplished by having members of the co-operative reinvest patronage refunds in the co-operative.
Such reinvestment is used to retire the equity of members who no longer use the services of the co-operative and provide facilities for additional services to members. Co-operatives maintain that no matter what is the size of the organization, ownership of shares has no attraction for the public market since the return on shares is limited, so a public sale of co-operative shares to secure additional funds is not practical.
I believe that the proposed amendment to section 135 will assist co-operative in years of low earning. The taxable income which must be retained by the co-operatives before paying patronage refunds will be lower than that used under the proposed "capital employed" formula. Basically, section 135 of Bill C-259 gives co-operatives two choices. They can pay tax on the capital employed formula, or they can pay tax on the basis of one-third of their income. Either choice, according to the co-operative spokesmen with whom I have talked, will result in a forced imputation of taxable income. The assignment of income to a co-operative using a formula based on capital employed is unique in Canada; it is a form of tax treatment of co-operatives not utilized in any other country.
I would be inclined to recommend that all tax reforms relating to co-operatives be stuck from the bill. But my recommendation now is that this ought to be done on the basis of a study made to determine a more equitable basis for the taxation of co-operatives than the one now proposed. The sections of the bill are so interwoven, however, that action along these lines could delay the legislation for many weeks while the sections were being rewritten.
If the Minister of Finance had been thinking and had recognized that co-operatives are essentially different in nature from other corporations, he would have amended Bill C-259 to satisfy co-operatives and still provide taxation for their earnings. I believe co-operatives should be permitted to distribute to their members the annual earnings resulting from business done with their members, with any earnings retained in the hands of the co-operatives taxed at the corporate rate. It seems to me, Mr. Chairman, that the way the government has handled this part of the legislation typifies their attitude toward cooperatives and credit unions.
I should like to read the following from a brief I have received from a co-operative in western Canada:
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-we have previously not felt it necessary to stress that capital employed in co-operatives must be serviced the same as capital in other investor-owned corporations. By imposing a form of double taxation which the capital-employed formula does, the co-operatives are being discriminated against in a manner which we believe is without justification.
We have heard this over and over again from members on all sides of the House during the debate. It seems to reflect my feelings as to co-operatives.
I should like to deal now with the amendments to the legislation affecting credit unions. I think it would be very hard to give an exact account of the good done to rural communities by credit unions. Credit unions have lent money in many instances when other organizations would not do so. They have played a vital role in the growth of Canada and in the expansion of our rural areas. The fact that they are another lending agency has in itself been significant for the Canadian population.
Under the proposed legislation a credit union will no longer be exempt from tax. It is proposed that it should pay tax in substantially the same manner as other private corporations. As such, it will be able to take advantage of the small business deductions to the extent permitted to private corporations. Credit unions will be taxed in a manner similar to co-operatives in that a deduction is to be allowed when computing income for payment to members pursuant to allocations in proportion to their borrowing.
I believe the government should recognize that credit unions are a form of financial partnership which receives deposits from members and provides financial services on behalf of members. The amendments which have been brought in by the government fail, in my opinion, to take into account the legitimate concern with respect to the application of section 189(b). Credit unions should be permitted to operate a full financial service for their members; the legislation should be amended to provide the right of credit unions to perform the services permitted under their incorporated status.
An example of the difficulty anticipated is that it is doubtful whether a credit union could invest in a housing development to improve the living conditions within a community. It is in these local fields that credit unions have served their most useful purpose within the past, and I for one am fearful that under the present legislation certain of their activities may be curtailed.
In conclusion, Mr. Chairman, as in the case of farmers, small family business, co-operatives and other sections of the proposed legislation there seems to be a fundamental inability to appreciate the consequences of tax legislation on society. This failure can be ascribed in part to the government's eagerness to rush headlong into any project which would be bureaucratically efficient and administratively tidy from their point of view. The government is insensitive to other considerations even when these are founded on very real human and social concerns.


Mr. Blair:: Mr. Chairman, in the course of the debate yesterday afternoon the hon. member for Regina East made certain remarks which are reported at page 9681 of Hansard. My own observations in that connection are reported at page 9686. Questions were raised about the-definition of "co-operatives" for the purpose of these sections. There have been some discussions, and I have an

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amendment which I believe meets with the general approval of all who are interested in this problem.
I might offer one or two words of explanation. Yesterday concern was expressed about the position of co-operatives whose operations are conducted on what is called a delegate system of voting. The consensus reached after further study was that the section now in the bill does not in any way affect the operation of that type of co-operative, which is covered by the present definition.
However, there are other important co-operatives that might be described as federations. Their members consist of other co-operative organizations. On close examination it was considered that this type of co-operative, the federated co-operative, is not covered by the existing definition in the bill. Accordingly, in order to eliminate any possibility of doubt and uncertainty, I move the following amendment to section 136:
That section 136 as set forth in clause 1 of the said bill be further amended by striking out lines 33 to 35 on page 360 and substituting the following:
"(b) none of its members (except other co-operative corporations) have more than one vote in the conduct of the affairs of the corporation, and"


William Arnold Peters: Mr. Chairman, would the hon. member who has moved the amendment be kind enough to explain what the effect of the amendment will be?


Duncan Gordon Blair: I would be glad to do that, Mr. Chairman. I am sorry my previous explanation was not clear. The amendment simply inserts four words into the previous section which have reference to co-operatives whose members are other co-operatives. In this way it is considered that any difficulty that might have existed under the previously stated section will be eliminated. The fear was that if co-operatives, in order to qualify under this statute, had to meet the literal test of one member, one vote, some federated type co-operatives might not be able to do so. They have different methods of voting and sometimes votes are weighted in accordance with the business that the different member co-operative do with them.
I think I can say with propriety, but without binding anyone, that the co-operative organizations most concerned that this statute be properly worded have been consulted and I believe the amendment that has been proposed meets their requirements.


Stanley Howard Knowles: Mr. Chairman, on a point of order I should like to say that I understand that my colleague from Regina East was a party to the discussions that led to this amendment and that it is one that we would be prepared to accept. However, since we have already before us an amendment and a subamendment to section 135, perhaps this should stand until we have first dealt with the amendment to section 135.


Patrick Morgan Mahoney: Just to clarify the situation, Mr. Chairman, in suggesting that the amendment stand, the hon. member is referring to the vote on it. He is not suggesting that it has not been moved and accepted by the Chair.


Stanley Howard Knowles: Mr. Chairman, the parliamentary secretary is quite correct. The amend-

ment has been moved and it is before us. However, I suggest that the voting on it be delayed till we have disposed of section 135, hopefully as amended.


Gérald Laniel: Does the committee agree to the proposal made by the hon. member for Winnipeg North Centre?


Some hon. Members:: Agreed.


John Howard Lundrigan: Mr. Chairman, there is hardly any need for me to add my support for the statements already made by my colleagues who represent various parts of Canada. The parliamentary secretary must be convinced by now that there is almost unanimous consent in the committee at least to have the sections dealing with cooperatives amended, if not stricken altogether from the record, so we can get back to a discussion of other parts of the bill. I do not have a great deal of background in the co-operative movement, though I can claim to have been a member of the Gander Consumers Co-operative for a number of years while I was living in that beautiful town, the home of one of the biggest international airports in the world.
If I may give the parliamentary secretary, who I trust will bear with me, an indication of the kind of response that I have received from a riding where the co-operative movement has not fully blossomed but is in the process of blossoming, and in the interests of allowing some of my constituents to express their views, I should like to follow the example of other members and place on record the opinions of consumer co-operatives that have written to me about this bill. This is the kind of evidence that I hope will convince the parliamentary secretary and the government that they should accede to the demands of consumer co-operatives across Canada as well as of members on both sides of the House that the position of the co-operatives be restored to the status quo.
I have before me a letter from a Mr. Dan Roberts who is the secretary of the Fogo Island Shipbuilding Producers Co-operative Society Limited. Fogo Island is an island community of about 5,000 people and is situated approximately 12 miles off the east cost of Newfoundland. It is an island community that some four years ago was on the verge of economic collapse and was facing the prospect of having its population relocated in other parts of the province.
Mr. Roberts and other individuals in that area began to revitalize the island community, which is comprised of a number of scattered small communities. Some of the members of this House travelled with me 2) years ago to the island to see the results of the efforts of the community to improve its economy. The consumers co-operative to which I refer has had a very substantial impact upon the economy of the island to the point where governments, both provincial and federal, have responded with programs offering certain types of assistance in the construction of marine facilities. This co-operative, which is the backbone of economic development on the island, writes to me as follows:
Dear John:
The white paper on tax reform will have an adverse effect on co-operatives.
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1.	The taxable income will be raised from 3 to 5 per cent of employed capital.
2.	Withdrawal of the three-year tax holiday for new co-operatives.
3.	The further limiting of patronage refunds because of number one above.
The letter goes on to give certain examples and implores the federal Members of Parliament to place their plea on the public record. From the same community I have received a letter from Mr. A. Cull, manager of the Snap Rock Consumers Co-operative Society Limited. He writes as follows:
I am writing to you on behalf of the board of directors of Snap Rock Cons. Co-Op Soc. Ltd. at Joe Batts Arm to ask you, as our representative, to protest sections 135 and 136 of Bill C-259 which is going to be considered this month in Parliament.
If this bill is allowed to pass it will have a very serious effect on co-operatives in Canada. The bill as it stands goes against the principles of co-operatives and if passed could very well mean the closing of co-operatives.
I have another letter from a Mr. Reginald Eveleigh, secretary of the Atlantic Credit Co-operative Society which reads:
The white paper on tax reform issued by the finance minister Benson during June of 1971 stating tax raise from 3 per cent to 5 per cent will definitely affect co-operatives across this province. The paper ignores the very principle of co-op and will limit patronage refund to members.
We the members of Atlantic Credit Co-op Society of Joe Batts Arm, do strongly recommend that you do everything in your power to try to get this legislation changed before it becomes law.
I have another letter from an adjacent riding, from Mr. Lloyd George, secretary of the Clarenville Area Consumers Co-operative Society Ltd. in which he points out in some detail the effect of this piece of legislation as it stands with regard to newly formed co-operatives. The letter reads:
Our co-operative (a supermarket) opened for business just over three years ago. At that time it was our hope that, we would get approximately 200 members. However, the people throughout this area really accepted the idea and under the direction of a very competent and enthusiastic board of directors our registered membership has grown to over 500 active members. Our gross sales this year will exceed 3/4 million dollars which is ample proof that our co-operative is a most successful one.
This success has been due to a combination of a very hard working board of directors, management and staff and a dedicated membership. Our patronage dividends returned to our members (while operating on a competitive basis with other businesses) have been 6 per cent for the past three years! This tremendous savings to our members have been a Godsend in many cases.
Our board of directors at the last meeting were very much concerned with Bill C-259 which will have the effect of just about wiping out savings earned by members in the form of patronage dividends, destroy all incentive in co-operatives and result in the total collapse of the co-operative movement.
He goes to express in graphic terms the opinion of the membership. Let me read now from a letter from Mr. Robert Hellier of the Gander Consumers Co-operative Society Limited, Gander, Newfoundland. It reads:
The Gander Consumers Co-operative Society Limited earnestly requests your support in its efforts to change Bill C-259, (federal) which if allowed to pass in its present form threatens the very existence of co-operatives.
Income Tax Act
He goes on to make the following proposals:
1.	Consumer patronage dividends remain exempt in so far as they can be distributed.
2.	Patronage dividends for production goods remain as income.
3.	Three year exemption for new co-operatives removed with no compensating provisions. Mining companies which had this exemption will have until 1973 before it is removed and then generous other concessions are given in lieu of it.
4.	Capital employed principle drastically changed. The formula for calculating capital employed has been changed and now includes essentially only member equity, i.e. shares, loans and general reserves, and the rate has been increased to 5 per cent. The only deduction is the interest paid on on member loans.
Mr. Hillier represents several hundred members of this consumers co-operative and expresses as well his concern for the future of the co-operative movement. The parliamentary secretary seems somewhat amused by my presentation. I hope he recognizes that this is not my usual style of style of presentation to the House of Commons, but I want him and the government of this country to realize the extent of concern and frustration felt by average individuals. These are not wheat pools or organizations with thousands of members; these are small, individual organizations, associations and co-operative mouvements trying to do a worth-while job in a relatively small community.
I have a letter from the Eastport Consumers Co-op Society Limited. Mr. Edwin Moore, the president, writes about his concern for the co-operative movement and says that if Bill C-259 is allowed to apss he has fear for the future existence of the co-operative movement. He writes: After study it appears that should this bill be allowed to pass in its present form co-operatives will definitely soon be things of the past.
I have another letter from Beaumont, an island community in the district of N.D. Bay on the east coast of Newfoundland. This is a relatively small island community. The letter is from Ford Paddock, secretary of the Long Island Consumers Society. He writes:
The Long Island Consumers Society Ltd. have recently asked me to contact you, expressing our concern regarding proposed changes in taxation of co-ops as proposed by sections 135-136 of Bill C-259. We are soliciting your support and would appreciate any advice you could offer us on this matter. As we are experiencing difficulties at the present and last fiscal years our little business though at times weak has been practically the only source of fishing supplies available on Long Island.
I have, as well, a letter from the Newfoundland Co-operative Services signed by Mr. W. E. Benedict who writes on behalf of that co-operative as well as those throughout the province. I have another letter from the Newfoundland Teachers Association Co-operative, and others I could read. Let me point out that we are not making a humble suggestion or request; we are demanding that these representatives of co-operatives from all parts of Canada in every province be considered. We demand that the changes we have recommended be brought about. These sections of the bill if passed as they stand, will destroy the co-operative movement in Canada, and they must be eliminated.
Mr. Chairman, I should like to call it four o'clock.
Progress reported.


The Acting Speaker (Mr. Laniel):: It being four o'clock p.m. the House will now proceed to the consideration of

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Suggested Improvements to Committee System
private members' business as listed on today's order paper, namely, notices of motions, public bills and private bills.



PRIVATE MEMBERS' MOTIONS


Douglas Charles Rowland: That, in the opinion of this House, there should be further improvements made in the operation of the committee system in order to enhance the influence of the House of Commons upon the policy-making process and in order to reduce the information gap between private members and cabinet ministers and to that end that the following subject-matters be referred to the Standing Committee on Procedure and Organization for the purpose of study and the making of recommendations (a) the possibility of establishing a means whereby committees could take the initiative in recommending to the House matters which should be referred to them by the House; (b) adequate staff support for committees; (c) the advisability of making it mandatory for each committee to prepare at the end of each Session a running record of recommendations it has made to the government and government action taken on its recommendations; (d) making it mandatory for a motion of concurrence to be moved in connection with all committee reports and discovering a means by which debate on such motions could be kept to a reasonable level, specifically the possibility of increasing the number of assigned days, the increase in number to be allocated to the discussion of committee reports, the reports to be considered to be determined by opposition parties;
(e)	making it possible for minority reports to be tabled together with majority reports from committees; <J) allowing Standing Committees to be constituted as committees of inquiry.
He said; Mr. Speaker, traditionally Parliament serves three separate but related functions in discharging its ultimate responsibility to the elector. Those are, the formulation of policy, the implementation of policy through legislation, and the collection and allocation of funds necessary for the effective operation of legislation. Parliament, of course, performs many other functions but all, in theory at least, are ancillary to the three I have mentioned.
In Canada the right of Parliament to formulate policy and to legislate for the implementation of policy was established with the passage of the Rebellion Losses Bill and the according of responsible government in 1848. The principle of parliamentary control of finance was established at the same time. The only remaining practical exceptions to the full implementation of the principle were removed in 1849 and 1851 with the repeal of the English navigation laws by Westminster and the passage of Sir Francis Hinck's new tariff laws, respectively.
After a relatively brief period in which parliamentary control over policy, legislation and finance was consolidated there began a gradual erosion of that control which first became apparent after the turn of the century and which became a cause for active concern following World War II. Gradually Parliament came to exercise control over policy, legislation and finances in name only. The real power, the real control was in the hands of the cabinet and the bureaucracy which served it. In recent
[The Acting Speaker (Mr. Laniel).]
years there has been a further pyramiding of power in these three crucial areas with the full cabinet being eclipsed by an inner circle of ministers and, more recently, by the Prime Minister's office.
It is only slightly overdrawing the case to say that in 125 years we have gone full circle from legislatures being relatively weak advisers to and opposition for the government, to full legislative control and responsibility and back again to a situation in which the legislature is in fact of only peripheral importance in the governing of the nation. Parliament stands in danger of becoming, as has the monarchy, a largely honorific element in the constitution.
I make these remarks in no partisan sense. What has happened in Canada is happening throughout the world. The decline of the power of Parliament in relation to the cabinet and the first minister has been allowed to proceed as far as it has in part because the process was neither the result of stated policy nor, for the most part, of conscious effort. The change is, rather, the result of innumerable individual decisions made on a pragmatic basis over a long period of time and as a consequence of two major developments-the growth in the scope of responsibility of the modern state and the marked strengthening of party discipline which has taken place since confederation.
Whatever the reasons for the change, whatever the reasons for the phenomenon of the decline in power of the legislative arm of government in relation to the executive arm, it is absolutely necessary for us to use every means at our disposal to attempt to halt the trend, if not reverse it. I make this assertion not because of some antiquarian concern for the dignity of the House but, rather, because the more power becomes concentrated, the less responsive is the government to the felt needs of the people. I have no doubt that this very concentration of power is producing the current, entirely legitimate demands for "people power" in democratic states, if I may use that term to describe the phenomenon, and is producing as well some of the less savoury aspects of that movement.
It is within this context that I wish to discuss my suggestions for change in our current committee system, for I see the committee system as having the greatest immediate potential for beginning the process of re-establishing, in fact, the control of the executive by the legislature or, to put it another way, ensuring the responsibility and accountability of the cabinet to Parliament.
Our present committee system, which was first set up in 1965 on a trial basis and was given formal approval by the House in December, 1968, was designed to fulfil a number of functions most of which have relevance to the question of adequate controls on the executive. The committee system was designed, first to save the time of the House and to streamline its operation by reducing the amount of time spent in committee of the whole in clause by clause study of legislation and in examination of the estimates; second, to provide government backbenchers especially with a means of becoming involved in the work of government in a meaningful way; third, to provide for the careful scrutiny of legislation; fourth, to provide for detailed and more comprehensive examination of proposals for departmental expenditures through referral of the estimates; fifth, to provide forums for enquiry not only for
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existing or proposed government legislation but also with respect to possible new policy directions for government in important issue areas; sixth, to provide individuals and groups within the community with a more direct influence upon policy through the calling of witnesses; seventh, to provide for the development within Parliament of cadres of experts in each of the major areas of government concern.
I hope hon. members will forgive me if because of time limitation I simply state, without documenting the position, that the committee system has not worked quite as we had hoped it would. I believe most members could find many arguments to support this contention. In establishing the committee system, Parliament gave up a number of its more effective controls of executive powers, such as the study of estimates in committee of the whole at which time grievances could be raised with the government with some effect. We have lost that control and the committee system has not replaced it with another.
The last five functions which I mentioned of the committee system as established have particular relevance to the problem of controlling the executive. The seventh point I mentioned, the creation of cadres of experts in this House, has the greatest impact of all since it has the effect of reducing the information gap which exists between the private Member of Parliament and the cabinet minister. Parliament's power to supervise has declined because of the increasing demands being made on its time and because its members are representative men and women best equipped to deal with general principles, broad objectives and fundamental issues. It is not a technical body. In any given subject area in relation to the expertise of a civil servant, the average member is ill-equipped and ill-informed.
Moreover, the same is true of the average member in relation to the cabinet minister. Cabinet ministers can draw upon the talents and resources of the legions of public service experts, which the cabinet controls, for necessary information in any field. With rare exceptions, such as the audit office, Parliament can call upon no such able assistants. The result is that the debates in the House are rather unequal. The ability of Parliament to adequately assess and scrutinize every government action is severely reduced.
The committees would have the potential to remedy this situation if their membership were more stable-in other words, in Members of Parliament remained on a given committee for a longer period of time, were not shuffled about so frequently and if there were periodic adjournments of the House for the purpose of enabling committees to do their work. A number of different systems have been suggested with regard to the latter point. I will not go into them here but will content myself by saying that the Standing Committee on Procedure and Organization should be instructed to seek the most satisfactory means of providing committees with the time they need to do their work properly without interference of duties in the house.
It is with the same end in view, that of enhancing the ability of committees to reduce the information gap between Parliament and the government, that I have
Suggested ImpTovements to Committee System
recommended in my resolution that committees be provided with adequate staff support. I refer especially to research staff who would possess the expert knowledge necessary to assist Members of Parliament in preparing themselves adequately for their various committee duties. The value of such staff has been made manifestly obvious by the work Mr. Peter Dobel and the Parliamentary Research Centre have done in connection with the Standing Committee on External Affairs and National Defence.
There is a problem in deciding whether such staff should be permanent or rotating, assigned to a single committee or moved from committee to committee as required. I tend to opt for a permanent staff, but the point that able research staffs of some description are urgently required by committees is what I want to establish at this time.
A related suggestion which I have made in the resolution is that the standing committee be permitted as a matter of course to act as a committee of inquiry. I regret that my wording of this recommendation and, more particularly, my failure to note that the words "Committees of Inquiry" were capitalized on the order paper may have led to some confusion on the part of hon. members about my intention. All I mean to suggest is that the Standing Committee on Finance, Trade and Economic Affairs, for example, in the situation now confronting the nation should consider it to be a normal part of its duties to inquire into the relationship between inflation and unemployment or into the possible effects of the American DISC program upon our economy and, accordingly, make appropriate policy recommendations in these fields. Such a development would have the two major beneficial effects of better equipping Parliament to assess government policy decisions in these areas and perhaps even giving Parliament an important role in shaping eventual government policies.
Another group of recommendations contained in this resolution is designed to give committee recommendations more importance and to create a system in which it would be difficult for a government to ignore the recommendations of a committee. There has been no attempt to get away from the concept of cabinet responsibility or to give power to the committees to initiate legislation but, rather, simply to ensure that the cabinet would have to seriously examine committee proposals. Whether the government would act on the basis of committee recommendations would remain its decision. I want to ensure that the government would have to examine committee proposals seriously.
Hence I have suggested that it be made mandatory for a motion of concurrence to be moved in connection with all committee reports and that such a motion be deemed debatable. This would provide two salutary effects: first, the recommendations of the committee would be aired in public; second, if concurrence was granted the government would be forced to explain its reasons for failing to act upon a recommendation of the committee. It would have to pay more attention to what the committees did.
Obviously, this suggestion poses problems with regard to the time of the House. As I note in the resolution, a means would have to be discovered for limiting debate. Perhaps a Standing Order could provide that only a certain number of reports could be debated in a session or,

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more likely, an over-all time limit for such debates could be established and the opposition given the choice of which reports to debate within that time. Perhaps more allotted days could be granted with the express purpose of such debates in mind. Once again, the actual procedure decided upon does not concern me at this stage as much as the principle.
I have also suggested in the resolution, in an effort to strengthen the impact of committee reports, that committees be required to prepare at the end of each session a running record, covering previous sessions as well, of the recommendations it has made to the government and the action the government has taken on them. Such a report could be a powerful weapon in the hands of individual Members of Parliament determined to make the government take some account of the work done in committees.
If, for example, over a period a committee made 27 recommendations and the government did not do anything about them, this could be devastating ammunition in the hands of a member such as the right hon. member for Prince Albert (Mr. Diefenbaker). The idea is not original. It is derived from the practice of the British public accounts committee which each year prepares an epitome of proposals. The suggestion is not exactly parallel to the British experience because our committees do not operate in the same way. It is an adaptation of a system that works successfully in another jurisdiction. It is one at which we should look.
I have also suggested that minority reports be allowed to be tabled along with majority reports. It seems to me that democracy not only means majority rule but also respect for minority opinions. It is simply not good enough to say that a member can always issue a press release or express his opinion in the House if he does not agree with a report that he has assisted in drawing up. Such ventures do not have equal weight with a formal written document and tend to be transitory rather than a part of the permanent written record.
Finally, I have suggested that committees be granted a greater degree of independence of government control and that they be allowed an initiative in matters referred to them by the House. I have in mind that committees be allowed to present a resolution to the House suggesting subject matter for them to examine rather than being forced to wait upon the government to take action, as is frequently the case. I think this procedure would overcome the argument that such initiative on the part of committees would tend to obscure the fact that they are and should be subordinate to the House because the House would determine the fate of their requests. The House could always turn down a committee. Moreover, a government need not be unduly worried about what action the committee would take if given this power, because the government would always have the majority on a committee.
The current committee system has been in operation, in roughly its present form, for almost six years. I think it is time its operations were assessed and evaluated by the Standing Committee on Procedure and Organization and, ultimately, by this chamber. This resolution suggests a number of areas for examination. Many more could be mentioned, such as how committee chairmen are selected and assigned. Should we adopt the British system, where

they areappointed from either the opposition or the government? Should we have a panel of chairmen who would move from committee to committee, members who are schooled in the rules so that committees operate more effectively and efficiently under trained chairmen? These are other considerations which should possibly be looked at by the Standing Committee on Procedure and Organization. I could mention many more.
The important thing is that the examination take place as quickly as possible. The issues involved are too important to be pushed under the rug.


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, this is a very interesting notice of motion dealing with a subject that is very close to all hon. members. I know that several members are anxious to contribute to the debate and I know their contributions will be very valuable. I know that the hon. member for Saint John-Lancaster (Mr. Bell) wants to participate in the debate.
This is a tribute to the hon. member for Selkirk (Mr. Rowland) who drafted this motion very carefully. It is consistent with his excellent background in politics and his performance in this House. I know, as well, that no less a student of politics, one who has had considerable experience in the committee system as chairman and as member, the hon. member for Kenora-Rainy River (Mr. Reid), is anxious to contribute, so I propose not to keep the floor for any longer than necessary.
There are a number of things that should be said relevant to the functioning of the committee system and to specific recommendations put forward in the notice of motion. As background, reference has already been made to the changes in the rules in the functioning of the committee system that came into force in 1965. To me, Mr. Speaker, the whole story of the committee system is one of conflicts of interest or of tensions, as it were, between opposing points of view. It is no coincidence, I am sure, that one faction in the House of Commons was adamant that the changes made in 1965, and the further changes made in the rules in 1969, went a long way to increase the emphasis on committees and therefore received the encouragement of all those who would support this notice of motion put forward by the hon. member. On the other hand, there has been a considerable body of opinion in this House that the effect of those changes, while they increase the emphasis on the committee system, had a devastating effect in downgrading the importance of this chamber. So the whole story beings with a serious conflict of interest in that regard. There is a good deal of merit in both points of view.
You can carry the conflict further by looking at the point of view of the government of the day, on the one hand, and the point of view of the opposition of the day on the other hand. Indeed, the interest of the one in the functioning of the committee system is considerably different from the interest of the other, it being obviously in the interest of the government that the committee be as efficient and as functional as possible but that it keep its disruption of the government's program to a minimum.
Of course, while the opposition has no ingrained opposition to the idea of efficiency or to the functional nature of
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the committee system, it takes a much opposing point of view as to the disruptive nature or effect that it should have on the government's legislative program. If one wanted to take a lot of time, this argument leads us down the path to the whole question of time allocation, not only in the chamber itself but in the committees, which is another subject all of us would like to debate at some length and which will continually raise its head as we study the committee system, particularly in its legislative functioning.
One can carry on the conflict by examining the desires of the cabinet on the one hand and of the backbenchers on the other, even of the backbenchers within the government party. Indeed, there is the desire of the minister responsible for legislation that his legislation pass as smoothly as possible. That is well understood. And there is the desire, even of government backbenchers, that if they have not managed, as so frequently happens, to get a real piece of the action in the House they be entitled to become extremely active and aggressive in the committees. Accordingly, the committees provide an excellent opportunity for those who have not had an opportunity to contribute formally to House debates on legislation to get into action in the committees, and not only make recommendations but propose and make amendments. Again, there is a serious conflict over whether it is much more important for the government to accommodate the views of all those who want to participate in debate or to get on with the legislative program that it has introduced to serve the country.
However, perhaps the most interesting conflict of all is between theorists who endorse the parliamentary system as we know it and those who endorse the congressional system, or a more congressional system than we have here. In this context I do not want, as many people do, to see the word "congressional" used as a synonym for anything that is American because there is, of course, a great deal more to a congressional approach to our work here than simply an imitation of what takes place in the United States. But let us assume that which tends to compartmentalize the legislative function and that which tends to create the separate bodies of the legislative organization and set them up independently with statutory authority of their own, which is the more congressional of the two systems, as opposed to the parliamentary system as we know it, where cabinet responsibility extends throughout the system.
The cornerstone of the parliamentary system is that the cabinet, as the executive, must remain responsible to Parliament and to the country at all times for its decisions and actions. It can be accepted, therefore, as an ingrained attitude of the executive that it tends to guard, sometimes to ridiculous lengths, the sanctity of its legislation in committee, which is explained away by virtue of the fact that a defeat on a major issue in committee reflects badly on the cabinet.
Let us go to the extreme of indicating that committees should be able to take a totally independent position in this regard but this does not conform to the parliamentary system as we know it, this is a most interesting conflict and, hopefully, may be resolved by a continuing attitude that activities in committee which appear to be detrimental to features of legislation should not be considered by
Suggested Improvements to Committee System
Parliament to be in the vein of a serious defeat that would prejudicially affect the stability of the government. How does one achieve that kind of spirit without changing the rules to constitute an independent system, which I do not think would be a better system on its own than the system we have now, when one takes into account all the features of the present system?
One can go on to deal with the view of the public as opposed to the view of political scientists. The public does not understand all the technical language that we use here, all the rules and regulations. The public senses that Parliament takes a long time to get things done. The public desires action and wants to know why it is that a bill, once drafted, has to be guarded against change by the cabinet. The public wonders why it is that changes cannot be made. And if independent members have views that they want to put forward, the public wants to know why amendments cannot be made without the result reflecting on the government, possibly leading to its defeat. The public has one interest, an interest in action, the kind of action that the hon. member is seeking through his notice of motion.
The political scientists, on the other hand, recognize that any departure from the rules that set up the parliamentary system, as we know it, can lead us into dangerous areas, can get us away from parliamentary democracy and into some new kind of system, into something requiring a new set of rules and regulations.
Mention was made of the possibility of moving toward the establishment of a panel of chairmen of committees, a feature that would be borrowed from the United Kingdom system. Indeed, much can be said against the current system of carrying a government majority and government chairman on almost all committees. Admittedly, it could be an improvement to see an independent panel of chairmen, perhaps assigned by the Speaker, representing the proportionate strengths in the House of Commons, with individual responsibilities assigned by the Speaker. But, again, how does one compensate for the fact that if the government majority does not carry on a committee, and if the chairman is an opposition chairman-which in many cases could be an excellent feature-a serious defeat of government legislation in committee reflects badly on the government itself and, under our traditional system, may cause its resignation?
These conflicts exist in every aspect of the committee system that one discusses. When one gets into discussion of the functions of the committee as we know it, doing the legislative function primarily and the examination of the estimates-a separate function, again-the question becomes: Can the committee carry on and take that independent step to become a committee of inquiry? I do not mean within the scope of the Inquiries Act, but inquiring into parliamentary business and affairs and, logically following from that, making recommendations that are not initiated by Parliament, that are not an order of reference from Parliament to the committee on a specific aspect but that are of independent origin within the committee itself.
It follows logically, if one supports that view, that the motion for concurrence of such committee reports

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becomes an automatic feature. Here again immediately we get into an automatic motion for concurrence; we are thrust right back into the House of Commons and the whole question of government majority. Indeed, if the committee's report contains minority features or in fact goes further and contains recommendations against government policy, then what is the position of the government in face of a motion for concurrence which, even if it is not debated, has to be voted upon?
The sum and substance is that whatever questions are set, if we are to have a parliamentary system the government majority pervades that system. If we were to attempt to remove that feature of government majority from the parliamentary system we would have something different that has to be constituted by a new set of rules for the Parliament pertaining to the life of the government-an element of defeat. I am not suggesting this is all bad. I have held to the view for a long time that the country would be better off with a complete parliamentary system if elections were held at fixed periods.


Some hon. Members:: Hear, hear!


James Alexander Jerome: That is just one feature that could be introduced which I think would go a long way toward achieving the objective without going entirely to the congressional system.
Lastly, Mr. Speaker, I want to say a word about the facilities of the committees because this is very important. I say it in this vein: when we examine the questions before us, which has the greater priority-to enact further changes in the committee system, or to ensure that we have taken from the existing committee system all the benefits that are there? I think at the present time we have not derived all the benefits that exist in the committee system. To a great extent this is because of lack of proper facilities, lack of proper staff, lack of funds that might be looked at as research assistance, and staff for the committee system as such.
I can see that we could go to well established physical committee facilities where offices and a secretariat would be maintained to support that committee regardless of its chairman, whichever party he belonged to, and the chairman could occupy an office containing the files of the committee, continuing its work, giving it some longevity and continuity. I would consider that priority to be higher than further substantive changes, because we have come to live with the changes we made last time around. I would consider it a higher priority to try to improve the facilities we have at the present time and make the existing committee system more functional than it is before introducing further substantive changes.
It would be impossible, in my opinion, for any government worthy of the name to exist and to maintain that it was not examining and continuing a study of the committee system. I advocate, and will continue to advocate, that any Parliament must examine not only its committee system but must examine it on a constant basis, not intermittently or by special order of reference or the rules of the House. The mechanics for doing this, when we agree that it should be done, then raise the question of power.
I submit the Committee on Procedure and organization should have the continuing power to review any ruling or 
proceeding of this House, including the committee system, and it should have the right at any time to request that that committee review a specific rule or a group of rules pertaining to a particular practice or procedure of the House, and that the committee be required within a reasonable time to return to the House its recommendations and that machinery be developed to take action on them. As it is now, the Committee on Procedure and Organization cannot consider procedure or organization unless the House gives it a specific order of reference. That is not as it should be.
I wish to assure the hon. member at least of my personal interest, and I am sure I divulge no secrets when I say it is in the interest of the government as a whole to continue to examine the functioning of our committee system and all our practices and procedures. This government is doing that, and I am sure will continue to do it in an effort to make sure that we maximize the return from the committee system as it exists and endeavour to implement any sensible and intelligent recommendation for substantive change, however great it may be, if it would be an improvement which would make the role of the member more efficient in all his functions in this House.


Thomas Miller Bell: I will be brief, Mr. Speaker, in the hope that others who are active in committee work can speak on this matter. I think this is a good motion and it has my wholehearted support. It is the type of motion that could well be considered by committee in detail. The parliamentary secretary has outlined quite well the comparison between our system and the American system as far as committee work is concerned. Those of us who were in Washington last week noted the differences when we saw a joint committee in operation there.
As the parliamentary secretary said, we appreciate the everyday problems that we have if we follow their type of committee system and then have to superimpose on the results two entirely different systems of government. But we have nothing to be ashamed of, in my opinion, Mr. Speaker. I think we have made very great strides in the last six years, but this does not mean that we have not a long way to go.
There is one point that I want to mention which might come under section (b) of the motion, "adequate staff support for committees". I feel that in our facilities a tremendous duplication of research is growing. I am pleased that we have the research facilities available to different parties which are doing a good job and are increasingly becoming more efficient. We have a giant research staff in our library, which of course is non-political. Now everybody is in the process of acquiring a second secretary who may be used in the proper way for research in that sense.
I think we have overreacted to research. I am not saying it should be the end of research for everybody, but I suggest that we might take one of these bodies, probably the research facilities connected with the parliamentary library, and detail them in a particular way to the committee work. In this way we would use them to great advantage. We would take out any fears they might have of being partisan if they had direction from the committees. This would add something to the resolution before us.
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There are many other suggestions one could make about our committee work, Mr. Speaker. I think we need to specialize more than ever. We should be sitting more regularly and a great deal of attention should be paid to the conflicts that occur in committee sittings. Sometimes committees get going, there is a good chairman and a good group of members-a good rapport-and then they start to look into everything. They should, in my opinion, provide a priority for their work from season to season.
Some ministers pay a great deal of attention to committee work and others do not even know where the committee rooms are. I think that if a minister goes regularly before committees for passage of his estimates and passage of legislation as well as other important matters, the importance of the committees will be enhanced. A minister should not send his parliamentary secretary to deal with these matters, since a parliamentary secretary, with all due respect, has no way of answering some of the political questions that come up.
I feel that there is one important matter that was referred to by the parliamentary secretary. The committee system developed fairly quickly, and the government held the line-I do not criticize them for this-on amendments proposed in committee. Very reluctant was the government to accept any amendments. I think our committee system would be improved if the government accepted amendments moved in committee by opposition as well as government members. That would avoid the sort of clashes we have seen in the House. The other night we saw a parliamentary secretary standing up and moving amendments in the House. Now that the government has assessed the work of the committees, that would be one way it could add to the strength of the committee system.
I hope that this notice of motion is given good attention.
I hope it will not be talked out, because it is a good notice of motion and the hon. member for Selkirk (Mr. Rowland) deserves credit for bringing it forward. We will work, keeping in mind what he has suggested, to make our committee system better. In this day of communication, involvement and credibility it is important for the committees to be a strong arm of government and to create the right impression with the people. It is important for us to produce results that will make this a better nation.


Mr. John M. Reid (Kenora-Rainy River):: Mr. Speaker, I join other hon. members in congratulating the hon. member for Selkirk (Mr. Rowland) for bringing forward this notice of motion. As the parliamentary secretary indicated, the government at the present moment is looking at the committee system with a view to discovering exactly how it has worked and what its successes and failures have been. We hope there will be an opportunity for the Standing Committee on Procedure and Organization to discuss this question with the minister before any report or suggested changes are made to the House.
I think, when we examine the committee system, that it will be important to look, first, at the question of how it has affected the backbencher, the ordinary member of the House of Commons. I think that many of the high hopes the government and members of the opposition had for
Suggested Improvements to Committee System
the committee system when it was first introduced in its present form back in 1964 have not been justified. The reason is quite simple. Basically, Members of Parliament have not participated in committee work to the extent possible. They have not prepared themselves for committee work to the extent that they might or for debate in the House of Commons. The reason is not hard to find. Members of the House of Commons are more accustomed to speaking in the House and their experience has ill-prepared them for the kind of work which must be done in committees.
According to our concepts, the House of Commons was to be the forum for policy debates and for the discussion of broad, general principles and great issues. Committees, on the other hand, would be the forum for discussion of details of legislation. The actual things to be done were to be discussed in committee. The discussion was on a different plane. Whereas Members of Parliament had found it easier to speak in the House of Commons without preparation, since they could get away with statements that were not entirely accurate, they found in committee, for the first time, that their facts and interpretations could be challenged by experts. Consequently, their lack of preparation was not found compatible with the needs of committee work. The committee system brought parliamentarians, for the first time face to face with civil servants and ministers in a way which enabled meaningful dialogue to be undertaken.
Unfortunately, it has struck me from personal observation that Members of Parliament have not yet met that challenge. They have not met it, not because research facilities are not available to them but because they have not utilized to the full research facilities such as the Library of Parliament and other facilities which are available to them through their parties. I had high hopes for the committee system when it was first brought in, and I speak as chairman of a committee. Those high hopes have not been realized. I submit that the members of the House of Commons will need to revise the way in which they go about their work in committee.
One thing bothers me, and this has been alluded to by the parliamentary secretary. The whole concept of what the House of Commons is and how it should operate needs to be clarified. Mr. Speaker, I am a fervent believer in responsible government. That is to say, I am a fervent believer in the system under which parties are responsible for their actions. Personally, I sympathize with some views brought forward from time to time which suggest that individual members should be given much more freedom to express their opinions. However, the point is that we operate under a responsible system of government and if in the eyes of the electorate the government does wrong, the electorate has the opportunity to kick the government out at the next election. Therefore, responsibility is clearly defined.
If the government extends its jurisdiction beyond the House of Commons, so to speak, to the committees, it will need to face its responsibilities in those other jurisdictions, in committees, in the same way as it faces its responsibilities in the House. Such matters then become a question of confidence and a matter of importance to the government. The country would not be well served by a system in which responsibility is diffused over a wide
November 19, 1971

Suggested Improvements to Committee System
range of agencies of the House of Commons. Personally, I would be unhappy if such a system were introduced. It is bad enough now. We are proliferating independent, quasijudicial agencies more quickly than our ability to keep track of them. Indeed, the responsibility of government is diffused, and responsibilities under the political part of our system are being diffused through this delegation of responsibility.
In considering any reform of the House of Commons I would be inclined to stick strictly to a system involving the government's being accountable and responsible for its activities. Here we come to the question of allocation of time in debates of the House of Commons. Speaking as a backbencher, I have been extremely frustrated in that I have not had the opportunity to speak in debates in the House, largely because the House has not been subject to an allocation of time rule. This applies to committee proceedings as well. Backbenchers, who are part of our responsible system of government, are always under pressure by government to co-operate and to ensure that legislation is passed. We are only given opportunities to speak when there is an allocation of time agreed to formally or informally.
If hon. members want proof of this they should look at the debate that has been going on today on the subject of co-operatives and credit unions. In this debate an allocation of time was agreed on. They should also look at budget debates, at the Throne Speech debate and at debates on opposition days. On those occasions the whip on the government side has to fight off members who want to speak, because they so seldom have an opportunity in the ordinary course of House business. This factor must be taken into consideration. We cannot consider the committee system and its reform without considering the entire operations of the House of Commons and the way in which the House operates.
May I now turn to the facilities which are made available to committees. I agree with the hon. member for Selkirk. A great deal more could be done to facilitate committee work if the facilities were available. One of our problems in the House of Commons is that we have run out of space. With the fantastic growth of the administration, with the increased number of cabinet ministers and parliamentary secretaries, the result has been that almost no space is available for backbenchers on all sides of the House. We require a substantial increase of space to bring us back to the position we occupied in 1963. This means that there soon must be initiatives taken by the government. Members cannot be effective in the House or in committee if they do not have adequate facilities, adequate space and adequate staff.
One of the duties I perform for caucus is as co-ordinator of the parliamentary intern program. Members have turned down the opportunity to take interns because of a lack of space in their offices. As the hon. member for Saint John-Lancaster (Mr. Bell) pointed out, we are now taking on a second secretary. Many members do not even have enough room in their offices, according to federal civil service regulations, for one secretary and themselves.
This is an indication of how badly the government has bungled its responsibility of providing space on Parlia-

ment Hill for Members of Parliament. We attempted to get the government to move on this. They have so far been unwilling to do so. The only suggestion they made results in shoving backbenchers off to the Confederation Building and turning the centre block and the west block into a haven for ministers and their flunkeys. This solution is entirely unsatisfactory and would only go further to widen the gap between the government and the backbenchers of all parties. It seems to me that one of the things opposition members could do with their control over opposition days is to bring this very important matter up as a full two-day vote of confidence. If they did that, I can assure hon. members opposite there would be a large number of government members on this side who would be prepared to vote against the government on that subject.


Mr. Walker:: Would the hon. member permit a question? Can he say whether he felt this way when he was the executive assistant to a minister?


Some hon. Members:: Oh, oh!


John Mercer Reid: In those days, Mr. Speaker, we only had two offices, one for the minister and one for the secretary. The executive assistant in those days was lodged somewhere in the departmental offices. But I must say that as a backbencher I have far less space available than I ever did as an executive assistant. If Members of Parliament were treated as well as executive assistants, there would be no criticisms and no difficulties from any backbenchers in this House.


Some hon. Members:: Hear, hear!


John Mercer Reid: The last point I want to make, Mr. Speaker, concerns the proposal made to bring committee reports to the floor of the House of Commons. I think, in general, this is a good idea. Committee reports do not yet get the attention they deserve in the House of Commons. However, to make time for this the opposition will have to give up something. This brings me again to questions of allocation of time. In a responsible system of government, it seems to me the government should have reasonable assurances from the opposition that a program laid out at the beginning of a session should have a reasonable chance of being implemented. At the present time, the government does not have that assurance and is faced with the problem of providing extra time for almost any motion. This is extremely difficult to find simply because there is no guarantee that its legislation will get through, and if there are allocation of time agreements they are always made after the end of a fairly substantial debate.
There are other alternatives available to opposition members-not, unfortunately, to government backbenchers. Opposition members have opposition days available to them. Such opportunities allow them, in a variety of motions, to pinpoint areas of public concern. Why not use these days for the discussion of committee reports? The opportunity is there. Why not use it? Surely the government could have no objection if an opposition member rose in his place and moved that, say, the report of the broadcasting committee of such and such a day be accepted. This would at least force a vote. If the government did not want to do this, and since those reports are generally a
November 19, 1971

question of consensus between majority and minority it would be a very interesting exercise indeed if the opposition were to use it.
One more point I would like to make about the committee system is in terms of the time made available to it. At the present time we have a system where the estimates are brought down and guaranteed to remain for about 21 or three months in committee. Unfortunately, this means that some 20 committees all receive their estimates at the same time and all rush to hold as many committee meetings as they can, leading to a great deal of congestion, inefficient use of time and competition among them. The result is that the committee structure in terms of the investigation of estimates, leaving out the inefficiency of the backbenchers themselves, leaves a great deal to be desired, although it is incomparably better than it ever was in the days when the estimates where brought before committee of the whole in the House of Commons.
The suggestion has been made many times by backbenchers that the government should to create a system in which so many committees would receive their estimates at varying times of the year. There are approximately 20 committees. Why not divide them into thirds and have a third of the committees take their estimates in the fall term, then the next could come in the spring term and the balance could be discussed in what is known as the summer term. In that way a great deal of the congestion would be reduced. The government, knowing what legislation it was likely to have and, hopefully, under some form of allocation of time formula, would have agreement with the opposition parties as to when they might expect legislation to be passed. It would be possible to work out a schedule that while still tentative would be a lot better than the ad hoc system under which we are operating.
Even though the government has attempted to put more planning into the presentation of its legislation, because there is no agreement on the disposition of such legislation there can therefore be no real planning for the activities of committees. I think this is another frustration which members develop, and which could be eased with a little co-operation across the floor of the House. As I say, if you accept the concept of a responsible government, of a responsible Parliament, then you must move into these new directions quickly.
The hon. member for Selkirk in his opening remarks made the point that many citizen groups are objecting to the concentration of power which is now found in the hands of governments at all levels. One of the reasons for
Suggested Improvements to Committee System
this is that not only is there a centralizing tendency going on at all levels of government, each government stretching out to obtain as much authority and power as it can in order to enhance itself, to blow itself up into a greater whole than it was designed to be, but also that in the exercise of that power governments have not been exactly wholesome, not particularly well-advised and they have made a tremendous number of blunders.
One of the reasons this has come to pass is that Members of Parliament have failed to arm themselves with the weapons which are available to them, have not exploited them properly and have wasted too much of their time in what seems to be competition for political Brownie points and, unfortunately, have not made the committee system the effective, efficient weapon it might be in the hands of all backbenchers.


John Howard Lundrigan: On a point of order, Mr. Speaker, a number of hon. members, including the hon. member for York Centre (Mr. Walker), the hon. member for Pembina (Mr. Bigg) and myself wished to take part in this debate. I understand that according to discussions which have taken place in the last few minutes there is a general feeling that the motion might be permitted to stand in its present place of priority on the order paper. I believe the leader of the House is in agreement with that proposition.


David James Walker: On the point of order, Mr. Speaker, this is probably one of the most most important subjects we have had before us for a long time. Many of us would like to have an opportunity to speak. There is precedent for a motion such as this to retain its position on the order paper with the consent of the House. I hope this debate can be carried on the next time notices of motion are before us.


The Acting Speaker (Mr. Laniel):: Hon. members know, of course, that this can only be done by unanimous consent. Does the House consent to the motion of the hon. member for Selkirk (Mr. Rowland) to retaining its present place on the order paper?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Laniel):: It is so ordered.


The Acting Speaker (Mr. Laniel):: Order. The hour assigned to the consideration of private members' business has now expired. It being five o'clock, this House stands adjourned till two o'clock Monday afternoon.
At five o'clock the House adjourned, without question put, pursuant to Standing Order.

Monday. November 22, 1971