1971-03-03

ROUTINE PROCEEDINGS


[Stage Direction]
Ninth report of Standing Committee on Finance, Trade and Economic Affairs, in both official languages-Mr. Clermont.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, pursuant to Standing Order 43, I wish to move a motion of urgent and pressing necessity. In the light of the public debate now taking place in Canada and in the United States concerning the proposal to construct an oil supply line via pipeline in Alaska and by ocean tanker to United States west coast markets, and arising out of the statement in Washington yesterday attributed to the Minister of Energy, Mines and Resources offering the Mackenzie Valley route as a possible alternative to the Alaska TAPS pipeline route, such statement implying the feasibility of the Mackenzie Valley route and the offer as expressing government policy without public examination of the consequences and ramifications of such a plan, I move, seconded by the hon. member for South Western Nova (Mr. Comeau):
That this House is of the opinion that the government should make the necessary arrangements for a full debate in government time to discuss the whole question of the desirability of constructing oil and/or gas pipelines along the Mackenzie River valley from the Arctic coast to southern Canada and the effect of such an undertaking on, among other things, the ecology of the region, the rights of native peoples, the Canadian economy, the type of ownership thereof and by whom, international trade and Canada's foreign relations.


Mr. Speaker:: The House has heard the motion proposed by the hon. member for Edmonton West for consideration by the House under the terms of Standing Order 43. Is there unanimous consent?


Some hon. Members:: Agreed.
23966-35J


Some hon. Members:: No.


Mr. Speaker:: The hon. member does not have the unanimous consent of the House therefore the motion cannot be put at this time.



CANADA LABOUR (STANDARDS) CODE PROVISION OF EMPLOYEE PENSIONS AT AGE 55 WHEN UNDERTAKINGS CLOSED

Mr. Rod Thomson (Balileford-Kindersley) moved: for leave to introduce Bill C-227, to amend the Canada Labour (Standards) Code (pension on permanent closing).


Some hon. Members:: Explain.


Roderick J. (Rod) Thomson: Mr. Speaker, at the present time employees with many years of service are subject to losing their pension rights when an undertaking permanently closes. The purpose of this bill is to require the employer of such an undertaking, when it is permanently closed, to provide for the employee at age 55 a pension commensurate with the number of years he was in its employ.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

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

Mr. Coates: Have any members of the Canadian Broadcasting Corporation been arrested under the War Measures Act since October 16, 1970 and, if so (a) what are the names of these individuals (b) what positions did they hold with CBC (c) what was their salary in each instance (d) have charges been laid against them or have they since been released (e) in each instance, are they still employees of CBC?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: I am informed by the Department of the Solicitor General and the Canadian

March 3, 1971
Questions
Broadcasting Corporation as follows: Yes, two as of November 5, 1970. (a) It is not in the public interest to release the names of those persons arrested and released without being charged under the War Measures Act. (b) One employed in the programming department. One employed as a TV producer, (c) It has not been customary for the CBC to disclose such details of internal management and administration, (d) No charges were laid against either person and both have been released, (e) Yes; on their release the two people returned to their employment with the Corporation.


DEPARTMENT OF NATIONAL HEALTH AND WELFARE-CHANGES IN PERSONNEL AS A RESULT OF USE OF COMPUTERS
Mr. Robinson: As a result of the use of computers by the Department of National Health and Welfare how many employees have been (a) laid off (b) hired?


Hon. John C. Munro (Minister of National Health and Welfare):: Departmental records are not maintained in a manner to reply to this question. A complete reply to this question would be too costly and the Department of National Health and Welfare does not have the staff nor the funds to undertake such a project.


BROADCASTING-RESULTS OF EFFORTS TO PROVIDE MORE POSSIBILITIES OF COLLABORATION AND EXCHANGE
Mr. Nowlan: What are the concrete results, to date, of the intensified efforts to provide more possibilities of joint collaboration and exchange, either on a dubbing basis or on a joint production basis with separate sound tracks referred to by Dr. Davidson on June 4, 1970 before the Standing Committee on Broadcasting, Films and Assistance to the Arts?


Hon. Gerard Pelletier (Secretary of Stale):: I am informed by the Canadian Broadcasting Corporation as follows:
The CBC's Program Council, under the chairmanship of the Vice-President, Programming, has the responsibility of promoting the exchange of program material and joint collaboration in production of programs and coverage of events wherever and whenever this is considered desirable. The Program Council includes among its members the Vice-Presidents and General Managers of the French and English language divisions.
A joint program planning group, consisting of senior officers from both French and English services and working under the aegis of the Program Council meets regularly to further inter-service collaboration and to examine specific program ideas and projects which lend themselves to joint production arrangements. Film properties are reviewed with a view to the possibility of use by both language services (including the requirement of dubbing). News, sports, music, special events and documentary programs generally afford the best opportunities for effective use of the same CBC program material by the two language services.
Examples of collaboration between the two language services in the coverage of events include Expo 67 (Montreal): Canada Games (Halifax) 1969; Commonwealth Games (Edinburgh) 1970; Expo 70 (Tokyo); Saskatoon Winter Games (1971); and many others. Joint productions, or dual use by the two networks of the same program material (with adaptations) include the d'Iberville series and the ballet Carmina Burana. Imported programs such as "The Undersea World of Jacques Cousteau" and "The Forsyte Saga" have been scheduled on both CBC English and French TV networks.
Material used on the French network public affairs program "Format 60" has also been used on the English network's "Weekend". The well-known French network commentator Pierre Nadeau has been engaged to do special reporting for "Weekend". The current Canadian TV serial, "Adventures in Rainbow Country" has been converted for broadcast on the French network under the title "Au pays de l'arc-en-ciel".
Programs in the music field include a concert devoted to the music of Manuel de Falla; a concert of Canadian music; the opera "Hansel and Gretel"; a Glenn Gould program; the Canada Day program broadcast from the National Arts Centre July 1st; between 40 and 50 programs included under the series title "Son et Images" in French and "Music to See" in English.
Consideration is currently being given to the conversion of the twice repeated English play "Charbonneau and the Chef" for use on the French radio network, and plans are also being developed for future public affairs series to be scheduled by both French and English services, covering such subjects as pollution, the Arctic, science and technology. Looking further ahead plans are being developed jointly by the two networks for joint coverage of such future events as the Summer Olympics (Munich) 1972: the Winter Olympics (Sapporo, Japan) 1972 and the 1976 Summer Olympics (Montreal).


CANADA ASSISTANCE ACT-PAYMENTS TO BRITISH COLUMBIA
Mrs. Maclnnis: 1.	With reference to claims made by British Columbia under the Canada Assistance Act for the fiscal year 1970/71, how many persons were claimed as being in receipt of social allowance, excluding supplementary allowance and child welfare allowance, in each month to date and how much was paid to British Columbia as the federal government's share of such assistance?
2.	What was the total amount paid to British Columbia under the Canada Assistance Act in (a) 1969/70 (b) 1970/71?


John Carr Munro: 1. See following schedule for latest available data.

March 3, 1971

2.	Total Federal Payments to British Columbia under the Canada Assistance Plan,
Fiscal Year	Federal Payments
1969- 70 (12 months)	$43,086,262
1970- 71 ( 9 months)	$44,631,282
Social Allowance Recipients and Federal Contributions 1970-1971
Month	Number of	Federal Share
	Recipients	for Costs of Basic Assistance
April, 1970 	.. . 109,963	$3,076,667May, 1970 	... 117,985	3,017,945June, 1970 	. . . 126,026	3,458,541July, 1970 	. . . 129,597	3,591,632August, 1970 	. . . 135,858	3,844,329September, 1970 	.. . 136,537	3,969,641


FISHERIES ACT REGULATIONS
Mr. Barnett: 1 On what date will draft regulations with respect to the disposal of tailings from mining operations be completed?
2.	Is it expected that Sections 33, 33A, 33B, 33C and 33D of the Fisheries Act will become operative in respect to such operations?


Mr. Eymard Corbin (Parliamentary Secretary to Minister of Fisheries and Forestry):: 1. Not known.
2.	Yes.


RESEARCH INTO HARMFUL EFFECTS OF ALCOHOL
Mr. Robinson: Will the government consider the advisability of requiring the producers of alcoholic beverages to pay 1 per cent of gross earnings into research of the harmful effects of alcohol?


John Carr Munro: The government does not propose to introduce, at the present time, legislation to this effect.


RESEARCH INTO HARMFUL EFFECTS OF DRUGS
Mr. Robinson: Will the government consider the advisability of requiring the producers of drugs to pay 1 per cent of gross earnings into research of the harmful effects of drugs and drug abuse?


John Carr Munro: The government does not propose to introduce, at the present time, legislation to this effect.


CBC-SHOWING OF &quot;SESAME STREET&quot;
Mr. Fairweather: 1.	Will CBC carry Sesame Street in the 1971-72 television season?
Questions
2.	Has the current series of Sesame Street been given special status as non-import content by the CRTC?
3.	What consideration has the Canadian Radio Television Commission given to extending the non-import status of Sesame Street?
4.	Is consideration being given to a formula which would permit the networks to show programs of international renown without being subject to the Canadian content rule?
5.	By what measure can a feature such as "Civilization" be considered as offending the principles inherent in the Canadian content regulations of the CRTC?


Gérard Pelletier: 1. I am informed by the Canadian Broadcasting Corporation that the final decision has not been taken but the Corporation certainly hopes it will be possible.
I am informed by the Canadian Radio-Television Commission as follows:
2.	No. None the less, the CRTC has authorized the CBC to exceed the 30 per cent limit on U.S. programmes for the 1970-71 broadcast season providing that the excess is entirely due to Sesame Street. This authorization was given in consideration of the fact that the CBC was required by the recently revised TV Regulations to comply with increased levels of Canadian programmes two years earlier than privately-owned stations and networks.
3.	The CBC has not requested the Canadian RadioTelevision Commission to extend the present arrangement.
4.	No. The Commission is of the opinion that networks, particularly the CBC, should endeavour to import the best foreign programs available without reducing the opportunity for Canadian programs to be shown.
5.	Programmes like "Civilization" do not offend any principles of the CRTC Regulations. Provision is made under the new regulations for up to 10 per cent of television schedules to be from sources such as the BBC, which produced "Civilization". The Commission naturally recognizes the high quality of the programme "Civilization" as did the CBC in arranging to broadcast the series.


CBC-ABORTION SHOW, NOVEMBER 22, 1970
Mr. Robinson: 1.	How many complaints were received by CBC as a result of the abortion show on CBC Weekend, November 22, 1970?
2 Is it the intention of CBC to continue to show such abortion spectacles in the future?
3.	How many requests have CBC received for a re-run of the abortion show?
4.	How many letters of congratulations were received by CBC as a result of showing the abortion and from whom were they received?


Gérard Pelletier: I am informed by the Canadian Broadcasting Corporation as follows:
1.	Audience reaction in terms of letters and telephone calls unfavourable to the item amounted to about 260 letters and 180 calls.

March 3, 1971
Questions
2.	The program in question represented one of a series of items dealing with different aspects of this subject. At present there are no definite plans for a similar program.
3.	One request for a repeat of the program was noted.
4.	Information obtained through the weekly CBC TV network audience panel of about 2,000 respondents revealed that the abortion item was considered "very interesting" by close to two-thirds of those who watched it. The estimated total audience was 1,400,000. Audience reaction in terms of letters and telephone calls approving the film amounted to about 45 letters and 55 calls. They came from individual viewers, including parents, young people, physicians, clergymen and teachers.


CBC-PROGRAM CHANGES BECAUSE OF QUEBEC CRISIS
Mr. Broadbenl: 1.	With reference to the reply to Question Number 549 at page 2264 of Hansard, January 11, 1971, what films were "judged inappropriate for this period and were cancelled"?
2.	What material was originally scheduled for "Something Else" and "Encounter" on October 15, 1970?
3.	What material was originally scheduled for "Cent mille chansons" on October 28, 1970?


Gérard Pelletier: I am informed by the Canadian Broadcasting Corporation as follows: 1. The reference was to films postponed. These were "Huit heures de sursis" (October 11) and "Le rayon infernal" (October 15), both about kidnapping, and "Pas de panique" (October 17) the title of which was considered in poor taste at that particular time.
2.	The program originally planned for "Something Else" cancelled on October 15, was a panel discussion on press coverage of the Quebec crisis. "Encounter" on that date was to have been a discussion of the Quebec crisis with Eldon Woolliams M.P., former RCMP Superintendant William Kelly and journalist John Gray.
3.	The program originally planned for "cent mille chansons" on October 28 was a repeat of a September 23 program featuring singer Pauline Julien and pianists Gaston Brisson, Gerard Hebert and Gilles Breton. In mid-October when confirmation of the scheduling and advance publicity and promotion was required, Miss Julien was among those arrested and her case was pending a hearing. Under the circumstances at that time the CBC felt it appropriate to defer the re-scheduling. Miss Julien was later released without charges being laid. While no date has been set for a repeat of the "Cent mille chansons" performance Miss Julien has since appeared on the CBC French network television program "Zoom", on February 7.


LANGUAGE TRAINING PROGRAM
Mr. McCleave: 1.	In the government language training program, are students receiving cassette tape recorders as training aids and, if so, are these on loan or are they given outright?
2.	How many recorders have been purchased for this program (a) what is their total cost (b) who supplies them?
3.	If such recorders are returnable, what is the approximate percentage of such return and what steps are being taken against delinquent holders?


Gérard Pelletier: I am informed by the Public Service Commission as follows:
1. Yes. Students are loaned cassette tape recorders, under a programmed instruction course.
2.	435. (a) $40,090. (b) The Language Bureau, Public Service Commission.
3.	The initial distribution will not be returned until June 1971. A formal loan agreement is signed by each student for each machine, with serial numbers recorded.


FALLOUT SHELTERS
Mr. Laprise: 1.	Since 1960, how many fallout shelters were built (a) in Canada (b) in the Province of Quebec (c) in the constituency of Abitibi?
2.	How many shelters may still be used and what is their use?
3.	Since these shelters were built, what were the maintenance
costs?


Hon. Donald S. Macdonald (Minister of National Defence):: 1. Based on a 1962 survey to determine the number of fallout shelters constructed in Canada, there were about 2,000 private shelters at that time, both family and group types. It is not known how many of these were constructed since 1960, and no statistics were received from the province of Quebec. 2&3. Construction of private shelters is the responsibility of property owners and because of this no records exist as to the current usability of such shelters or their maintenance costs.


NATIONAL ARTS CENTRE-SALE OF TICKETS
Mr. Coates: Have complaints been received by the National Arts Centre regarding the present method of the sale of tickets and, if so, are arrangements under consideration that will allow a person to call in and secure seats with a definite time limit being placed on the purchaser as to when such tickets must be picked up?


Gérard Pelletier: I am
informed by the National Arts Centre as follows: Very few complaints have been received by the National Arts Centre regarding its method of sales of tickets. A telephone ticket reservation system is already in operation but is restricted to the 15,661 subscribers to the various National Arts Centre Subscription Series. It is hoped that the system will be extended in the future but it can only be acheved at a further cost of some $25,000 a year since such systems require a much higher staff level than do usual sales methods.

**I
March 3, 1971


DEPARTMENT OF NATIONAL DEFENCE-DESIGNATION OF SUPPLEMENTARY ESTIMATES
Mr. Robinson: What percentage of the supplementary estimates of the Department of National Defence is designated for (a) winter works (b) to reduce unemployment (c) underestimating expenditures (d) combatting inflationary costs (e) new programs (f) hiring of additional employees?


Donald Stovel Macdonald: (a), (c), (d), (e): Nil; (b) 100 per cent; (f) It is estimated that 336 man months of employment will be provided.


DEPARTMENT OF NATIONAL DEFENCE-COMPUTER SERVICES
Mr. Robinson: What income, if any, is derived from the computer services provided by the Department of National Defence (a) from other departments (b) from sale or services to industry (c) to provincial government departments (d) to municipalities?


Donald Stovel Macdonald: None.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Fortin: 1.	How many persons earn more than $25,000 in each of the following government agencies (a) CNR (b) Air-Canada (c) CBC (d) Polymer (e) Eldorado (f) CMHC (g) Industrial Development Bank (h) Farm Credit Corporation?
2.	Of these persons, how many (a) speak French only (b) English (c) are bilingual?
Return tabled.


HEALTH AND WELFARE-ATHLETIC GRANTS
Mr. Robinson: 1 How many athletic grants have been awarded by the Department of National Health and Welfare to students in each year 1960 to 1970 inclusive, and who were the recipients of each grant?
2.	Have students received more than one grant and, if so (a) how many (b) what amounts?
3.	(a) What sports are represented by the grants (b) what sport activity or athletic prowess warrants a grant (c) what other considerations for making the grant are relevant?
Return tabled.


PROJECTS SPONSORED BY CYC
Mr. Caouette: What are the names, locations and number of projects financed and sponsored by the Company of Young Canadians?
Return tabled.
Student Employment



MOTION TO ADJOURN UNDER S.O. 26 MANPOWER PROVISION OF EMPLOYMENT FOR STUDENTS

Mr. W. B. Nesbitt (Oxford):: Subject to your decision, Mr. Speaker, I propose to ask leave to move the adjournment of the House for the purpose of discussing a specific and important matter requiring urgent consideration, namely, that during the latter part of this month and during the months of April, May and June at least 1,300,000 students will leave their high schools and colleges and will be seeking either temporary or permanent employment. This massive influx on the labour market will greatly aggravate the existing problem of unemployment in the immediate future.
It is for this reason that an immediate discussion of this matter is urgently required in order to assist the government in providing appropriate plans at the earliest possible moment to meet this emergency. If you agree that this matter is proper to be discussed, Mr. Speaker, I shall ask leave of the House to move that this House adjourn.


Mr. Speaker:: The hon. member for Oxford has filed the notice required under Standing Order 26. His statement proposes a debate on the subject of unemployment, with particular reference to the fact that a considerable number of students and young people will be leaving schools or universities in the months of April, May and June of this year. While the matter is one of concern to the House and of national interest, and while the situation is urgent, I would hesitate very much before suggesting an emergency debate under Standing Order 26.
Hon. members are aware that during the past few weeks we have had a number of debates on the general subject of unemployment. There were two days of budget debate on February 10 and 11. Still more recently, on February 25 the House considered a supply motion and the debate which ensued on that motion was related primarily to the problem of unemployment.
I think it is relevant also to the decision which must be made by the Chair that the House on December 15 last considered a motion proposed by the hon. member for Lotbiniere. That motion, as well as an amendment moved by the hon. member for Vegreville dealt precisely with the problem raised in the motion which would be proposed by the hon. member for Oxford. I might indicate to hon. members that the situation might be different if the motion dealt more precisely with the situation to be faced by students who are looking for summer employment. It may well be that a time will arrive when such a debate should take place within the terms of a supply motion, in connection with a statement on motions, or by way of an emergency debate.
After considering the matter very seriously and with every sympathy possible, it seems to me that the terms of the statement put forward by the hon. member are per-

March 3, 1971
Motions for Papers
haps a bit too wide, and that the debate which would result under the terms of the motion as presented to the House would be very much the same as the debates we have had during the past few weeks. Although I have given the matter serious thought and have considered it with every possible sympathy, for these reasons I do not think that at this time at least, there should be a debate on the motion in the terms proposed by the hon. member for Oxford under Standing Order 26.


Wallace Bickford (Wally) Nesbitt: Mr. Speaker, I rise on a point of order. The Prime Minister in reply to a number of questions I have asked in the last two weeks has indicated that the government is presently considering plans to deal with this matter. The fact that these plans have not been forthcoming and that time is running very short may perhaps distinguish my request for a special debate from the other debates which have taken place in respect of student unemployment.


Mr. Speaker:: Of course the hon. member is not raising a point of order but rather he is debating the decision of the Chair. The Standing Order says precisely that there should not be a debate on the decision of the Chair. I can assure the hon. member that I have taken that point under serious consideration. I have suggested to him that had the motion dealt precisely with the question of summer employment for students, rather than the fact that 1,300,000 young people will come onto the labour market in a month or so, there might have been more justification for a debate at this time. At the same time, I could add that I might have thought it was a bit premature. As I have said, I have considered all aspects of the matter as sympathetically as possible and, in view of all the circumstances I did not think that an emergency debate should be held under the terms of Standing Order 26.


Mr. MacDonald (Egmonl):: Mr. Speaker, I rise on a point of order. In view of your remarks I am wondering whether it might alleviate the situation greatly if the Government House Leader or the Acting Prime Minister would indicate when we will have the kind of useful statement on motions which might resolve much of the apprehension.


Mr. Speaker:: Order, please. I suggest to the hon. member that this question might be posed during the question period.



MOTIONS FOR PAPERS

James Alexander Jerome: Mr. Speaker, Notice of Motion for the Production of Papers No. 182 is acceptable to the government.



CORRESPONDENCE REGARDING MARKETS IN RAPESEED AT VANCOUVER AND THUNDER BAY

[Stage Direction]
Motion No. 182-Mr. Gleave:
That an Order of the House do issue for a copy of all correspondence between the Minister responsible for the Wheat Board and officials of the Winnipeg Grain Exchange in regard to the operation of the futures and cash markets in rapeseed at Vancouver and Thunder Bay.
Motion agreed to.
James Alexander Jerome: Mr. Speaker, Notices of Motions Nos. 168 and 176 are acceptable to the government subject to the usual reservations concerning confidential documents and the authorization of the governmental authorities concerned.


Mr. Speaker:: Subject to the reservations or conditions expressed by the Parliamentary Secretary, is it the pleasure of the House that the said motions shall be deemed to have been adopted?


Some hon. Members:: Agreed.



CORRESPONDENCE CONCERNING REVISIONS TO REGIONAL DEVELOPMENT INCENTIVES ACT

[Stage Direction]
Motion No. 168-Mr. Burton:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of all correspondence, reports, memoranda and other documents since July 1, 1970, between the federal government and the provinces concerning revisions to the Regional Development Incentives Act and the development of new programs by the Department of Regional Economic Expansion.
Motion agreed to.

[Stage Direction]
Motion No. 176-Mr. Barnett:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House a copy of all correspondence exchanged between the Government of Canada and the Government of the Province of British Columbia on the subject-matter of the designation of Special Areas within the Province of British Columbia under the terms of Section 24 of the Government Organization Act, 1969.
Motion agreed to.
James Alexander Jerome: Mr. Speaker, I would ask you to call Notice of Motion No. 87.



CONSULTANT STUDY ON INDIAN SOCIAL DEVELOPMENT

[Stage Direction]
Motion No. 87-Mr. Skoberg:
That an Order of the House do issue for a copy of the consultant study on Indian social development undertaken for the Department of Regional Economic Expansion in the fiscal year 1968-69, as mentioned in answer to Question Number 1,323 of the 1st Session of this Parliament.
[Stage Direction]
March 3, 1971
James Alexander Jerome: Mr. Speaker, I am advised by the Department of Regional Economic Expansion that the study referred to was commissioned as a working document, intended only for internal use. As such, it is considered confidential and not for publication. Under the circumstances I wonder whether the hon. member would agree to withdraw his motion.


Mr. Skoberg:: I agree, Sir.
Order discharged and motion withdrawn.


Mr. Burton:: Mr. Speaker, I should like to draw the attention of the parliamentary secretary to Notice of Motion No. 197 which was placed on the order paper on February 11. Since the Prime Minister at one point indicated a willingness to table such correspondence subject to the usual reservations and since this motion involves a relatively limited portion of that correspondence, I wonder whether the parliamentary secretary could arrange to have the motion dealt with as soon as possible.


James Alexander Jerome: I will look into it, Mr. Speaker.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration. Is he prepared to give the House an assurance that he will make a statement before the end of this week with regard to the government's program to facilitate the employment of students this spring and summer. I ask this question at this time in view of the failure of the minister and the government to announce any program despite the fact that students will be seeking employment within a matter of a month?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: Mr. Speaker, I can only say a statement will be made on the subject as soon as that can be done.


Robert Lorne Stanfield: Mr. Speaker, I should like also to ask the minister, who seems to have a very casual attitude toward the problems of the students-


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: In fact, I might ask the Acting Prime Minister whether the government, in view of the difficulties it is creating for students this summer, is prepared to
Inquiries of the Ministry
convene a meeting with the provinces in order to ensure that the students who will not be able to get work this summer because of the policies of this government-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: -will have the financial resources necessary to go back to school?


Hon. Mitchell Sharp (Acting Prime Minister):: Mr. Speaker, it is precisely because discussions are now going on with the provinces that the government is not yet in a position to make an announcement of a program that is much bigger and much better, we think, than the one last year and one which I hope will meet with the approval of the Leader of the Opposition.


Robert Lorne Stanfield: Mr. Speaker, could the Acting Prime Minister say whether it will include the question of financial resources in general for the purpose of returning to college next autumn with a view to ensuring that young Canadians who are unable to get work this summer will have adequate financial resources to return to college and school?


Mitchell William Sharp: Mr. Speaker, the whole purpose of our plans, as the Leader of the Opposition should recognize, is to provide useful and gainful employment particularly to those who will be continuing their education. It is with that in mind that we are now having discussions with the provinces. When I referred to a bigger and better program I meant that the federal government will be spending more money.



PROVISION OF EMPLOYMENT FOR PROFESSIONAL GRADUATES

Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration. In view of reports that the job opportunities for professionals graduating this year are 30 per cent less than they were last year, while the increase in applications is about 13 per cent higher than last year, is the government giving consideration to programs to provide employment for these highly trained people?


Otto Emil Lang: Mr. Speaker, while some significant attention has been paid to these figures because of the unusualness of this particular group having any particular problem, it is our confident expectation that the upturn in the economy which is taking place and is expected to continue will soon provide jobs for them.


David Orlikow: Are we to take it then that no special studies are being carried out which pay particular attention to these people for whom so much has been expended in providing them with an education?


Otto Emil Lang: I do not think the hon. member can take that from the remarks. There are indeed studies about
3910

March 3, 1971
Inquiries of the Ministry
every section of the work force under way at different levels. The point I was making was that some of these groups who are at present having difficulty finding jobs will indeed be in short supply again before long after the economy has got fully under way.



FEDERAL-PROVINCIAL TASK FORCE TO STUDY STUDENT EMPLOYMENT PROBLEM

David Samuel Horne MacDonald: I have a question for the Acting Prime Minister. Since over the past few years we have been faced every spring with more young people coming on the job market in an atmosphere of uncertainty and apprehension, and as the time has now come to have an intelligent, integrated and permanent solution to the problem of student employment, would the Acting Prime Minister and his colleagues consider the constitution of a federal-provincial task force to study both long and short-range solutions to this problem so that governments may begin to meet their responsibilities to the young people of this country?


Mitchell William Sharp: I will at least agree with my hon. friend that I do not think we can look upon this problem as one that will come on us without notice from year to year. I am satisfied, and I think members of this government are, that there will have to be a program from year to year in the future unless, of course-and this is one of the problems that is raised-we change our university year and provide for the education of students throughout the year rather than leaving a big gap in the summer time.


Mr. Speaker:: Order, please. I will recognize the hon. member for Egmont on a supplementary question. I take the liberty of mentioning to hon. members that a number of members would like to ask supplementary questions on this subject, but we should not have an excessive number of supplementary questions on the first subject raised because then we will run short of time. For the moment the Chair will recognize the hon. member for Egmont.


David Samuel Horne MacDonald: Would the Acting Prime Minister address himself to the essence of my question and suggestion that the government might consider the establishment of a federal-provincial task force in order to implement a program now for the many thousands of students who will be faced with summer unemployment?


Mitchell William Sharp: I thought I made it quite clear in my answer to the Leader of the Opposition that discussions are going on with the provinces. You can call them task forces or whatever you like. They are engaged in a thoroughgoing and fundamental discussion of this problem, and I can assure the hon. member that we are also discussing the longer term problem because we think it will arise from year to year.


Mr. Speaker:: Does the hon. member for Shefford have a supplementary question?


Mr. Gilbert Rondeau (Shefford):: No, Mr. Speaker.



UNEMPLOYMENT INSURANCE-INQUIRY AS TO INTRODUCTION OF AMENDMENTS TO ACT

Mr. Lincoln M. Alexander (Hamilton West):: I would like to direct a question to the Minister of Labour. In view of the fact that the student employment situation this summer will more than likely aggravate the intolerable unemployment problem at this time and for the future, can the minister now state whether he is prepared to give the House a definite indication of when he will be bringing in his legislation dealing with unemployment insurance?


Hon. Bryce Mackasey (Minister of Labour):: Being as definite as I can, I would anticipate that the legislation will be tabled very shortly.


Lincoln MacCauley Alexander: Since the minister and his colleagues have continually stated in the past month that this legislation would be brought in very shortly, which to me means very little, would the minister advise whether he indicated to the Canadian Labour Congress any reasons for not bringing in immediate relief by way of widening accessibility to unemployment insurance benefits and increasing the amounts in order to help alleviate this very serious situation-


Mr. Woolliams:: Created by the government.


Lincoln MacCauley Alexander: -created by the government?


Bryce Stuart Mackasey: Mr. Speaker, I can just say very shortly that I think the hon. member, as a member of the standing committee, knows that it is the intention of the government and of the proposed legislation to begin phasing in the new plan as of July 1, and I have no reason to believe the bill will not be tabled in sufficient time to make this possible. In so far as extending the benefit period and raising the benefits is concerned, this is another matter. It is a question of whether people who are unemployed for a long period of time should be helped through unemployment insurance or through other social policies.


Mr. Speaker:: Order, please. I see at least six other hon. members who have supplementaries to ask. I call on hon. members to make sure that there are not too many. I suggest there should perhaps be only one from each hon. member who is recognized. The hon. member for South Western Nova.



SUMMER EMPLOYMENT FOR STUDENTS-ATTENDANCE OF OFFICIALS AT CONFERENCE SPONSORED BY SOCIAL DEVELOPMENT COUNCIL-PROVISION OF GRANT

Mr. Louis-Roland Comeau (Souih Western Nova):: Mr. Speaker, I which to direct a supplementary question to the Acting Prime Minister. In view of the fact that the government will not call a federal-provincial conference on this question, can the Acting Prime Minister state

March 3, 1971

whether some government officials will attend the conference sponsored by the Canadian Council on Social Development, dealing precisely with youth programs for the summer, and will a grant be made by the government as requested by that organization?


Mr. Speaker:: While the matter is being pondered, the hon. member for Surrey has a supplementary question.



SUGGESTED EMPLOYMENT OF YOUTH TO COMBAT POLLUTION

Mr. Barry Mather (Surrey):: Mr. Speaker, my supplementary question is directed to the Secretary of State and I gave him notice of it earlier this week. Having in mind the high level of unemployment among our young people in Canada, and also the high level of pollution in its various forms across the country, would the minister give consideration to employing a large number of young people this summer to work on combating the various forms of pollution?


Gérard Pelletier: Yes, Mr. Speaker, that is in fact part of the summer employment program.



ESTABLISHMENT OF CIVILIAN SERVICE CORPS FOR STUDENTS

Mr. Roch La Salle (Joliette):: Mr. Speaker, I wish to ask the Acting Prime Minister a question.
With reference to the last Liberal convention which accepted a resolution favouring the establishment of a civil service to create employment for students, can he tell us if his government is studying the possibility of establishing such a service?


Mitchell William Sharp: Mr. Speaker, the government will be bringing its plans before the House. It will be making an announcement on the establishment of machinery for this purpose.



SUMMER EMPLOYMENT FOR STUDENTS-CO-OPERATION OF INDUSTRY

Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, my supplementary is directed to the Acting Prime Minister. Has the government made any special formal effort to seek the co-operation of industry in resolving this problem, what type of effort has this been, and with what results?


Mitchell William Sharp: Mr. Speaker, it is our intention in the program that will be brought before the House to enlist the endeavours of private industry and private individuals and institutions generally.


John Howard Lundrigan: Mr. Speaker-
Inquiries of the Ministry


Mr. Speaker:: Order, please. I have suggested to hon. members that there should be but one supplementary asked by each member. I seek the hon. member's co-operation because I gather there are three or four other hon. members who wish to ask supplementaries on this subject.


John Howard Lundrigan: On a point of order, Mr. Speaker, obviously the Acting Prime Minister did not hear my question because I did not get an answer. Has there been any special formal effort to seek the co-operation of industry in trying to resolve the problem and, if so, what type of formal effort, and with what results?


Mitchell William Sharp: I do not think the hon. member heard my answer. I said that in the program we will be bringing before the House there will be provision for enlisting the support and the encouragement of private industry in the employment of students.
* ^ *



UNEMPLOYMENT INSURANCE


Mr. R. E. McKinley (Huron):: Mr. Speaker, this question is directed to the Minister of Labour and is supplementary to one previously asked with regard to unemployment insurance. In view of all the representations that have been made to members by teachers resisting the fact that they are going to be included in unemployment insurance, can the minister give us any indication whether he may have a change of heart in this regard?


Mr. Speaker:: Order, please. That is hardly a supplementary question. I think we are getting away from the original subject, but the question has been asked by the hon. member and perhaps it should be answered by the minister concerned. The Chair will then go on to the next subject.


Bryce Stuart Mackasey: Mr. Speaker, it is my firm intention, when the legislation comes forward, to make the plan as universal as possible, and that would include school teachers.



POSSIBLE MACKENZIE VALLEY PIPELINE-APPLICATION BY INDUSTRY TO ENERGY BOARD-ECOLOGICAL CONSEQUENCES

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Energy, Mines and Resources arising out of reports of his

March 3, 1971
Inquiries of the Ministry
visit to Washington yesterday. Has he publicly invited the oil industry to make an application to the National Energy Board to construct a pipeline down the Mackenzie Valley to the United States?


Hon. J. J. Greene (Minister of Energy, Mines and Resources):: Mr. Speaker, I have not issued an invitation in those terms, but I have pointed out to my American counterparts the fact that the line to Valdez, which would mean tanker carriage of oil down the Pacific coast, would be ecologically very dangerous, and that it might be preferable to consider the Mackenzie Valley line and make an application to the National Energy Board in the normal course, at which time the economic and ecological considerations would be carefully considered during the determination of such application.


Thomas Clement (Tommy) Douglas: In view of the minister's reported statement in Washington that the Mackenzie route would be advisable from the standpoint of ecology, may I ask the minister the basis for this statement in view of the fact that on February 23 the Minister of Indian Affairs and Northern Development stated that the ecological studies regarding this route had not yet been completed? I am therefore asking the minister on what basis has he decided that this would be a safer route in view of the fact that the studies have not been completed?


John James Greene: I am, of course, not responsible for press reports even though I am responsible for many other things. My statement was to the effect that there was very great concern about the possibility of marine disaster, that there has been a three-year study by the Mackenzie Valley pipeline group in regard to pipeline safety at Inuvik, and that the question of the safety of such a pipeline would be considered at any National Energy Board hearing. Certainly I think that in that regard I am on all fours with the Minister of Indian Affairs and Northern Development.


Thomas Clement (Tommy) Douglas: In view of the statement the minister has just made that he has advised the oil industry to apply to the National Energy Board to construct such a pipeline, and in view of the fact that the National Energy Board is competent to deal with energy matters, who will make the decision with respect to the ecological matters? Is this a government decision, or is the minister now going to delegate to the National Energy Board the power to make decisions with regard to the ecology of the northern region?


John James Greene: I believe if my hon. friend will read the National Energy Board Act he will find that the question of the safety of the pipeline, in other words, the protection of the ecology, is very much one of the relevant issues in any application to the National Energy Board for the construction of a pipeline. Therefore in the first instance the Board does make that decision, along with other questions relevant to the application, and thereafter it must be ratified or denied by the government.



CONTROL OF POSSIBLE MACKENZIE VALLEY PIPELINE

Robert Lorne Stanfield: Mr. Speaker, I was going to say we did not believe there was more than one of the minister, but when he talked to his counterparts in the United States and extended his invitation to the oil industry did he give any indication as to who would have control of this pipeline going through Canada? Has the minister given any indication to the oil industry that this pipeline would have to be controlled by Canadian interests, and if he has not given such indication what is the position of the government on this matter?


John James Greene: Mr. Speaker, I affirmed the announcement made by myself and the Minister of Indian Affairs and Northern Development in August of last year, in which the conditions for the construction of such a pipeline were very clearly outlined both with respect to control by regulatory authorities on the Canadian side and with respect to ecological control, and in particular with respect to the fact that Canadian resources would have to have access to such a pipeline if it were built. That is still the government's position which was affirmed by me at my meeting in Washington yesterday.


Robert Lorne Stanfield: Am I to assume from the minister's reply that he said nothing about ownership?



INQUIRY RESPECTING GOVERNMENT GRANT FOR PRODUCTION OF &quot;LES MALES&quot;

Gilbert F. Rondeau: Mr. Speaker, I have a question for the Secretary of State.
Can he tell us whether the producers of the film "Les Males", who are well-known to him, have received a direct or indirect grant from his department?


Gérard Pelletier: Certainly not from my department, Mr. Speaker, which does not give grants for the production of films, but perhaps from the Film Development Corporation, as a loan. I shall make inquiries in order to reply to the hon. member.



EXTERNAL AFFAIRS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, in view of the recent heinous penalties handed out by Soviet courts in Lithuania and other Baltic countries against citizens of those countries who wish to leave, the refusal of the government of the U.S.S.R. to allow Jews to emigrate, and the frightening penalties
March 3, 1971

being imposed on both Jews, Ukrainians and other captive peoples, has this government made representations to the embassy of the U.S.S.R. or directly to the U.S.S.R. pointing out that such actions are in direct contravention of the United Nations charter?


Mitchell William Sharp: Mr. Speaker, as the right hon. gentleman knows and as has been announced in the House, we have made representations to the Soviet Union about the treatment of Jews there. We have also made representations in particular cases in relation to other national groups.


John George Diefenbaker: Mr. Speaker, I am referring to the recent persecutions. Would the minister state how long ago it was that the last representation was made by the government of Canada in this connection?


Mitchell William Sharp: Within the last few weeks, Mr. Speaker.


John George Diefenbaker: And what was the reaction?


Mitchell William Sharp: Mr. Speaker, to judge from what has happened in the Soviet Union, and I would not want to take full credit for what has happened-


Some hon. Members:: Oh, oh!


Mitchell William Sharp: -I join with all of those countries that have made representations in saying we are relieved that at least some action has been taken by Soviet authorities to alleviate the penalties that would otherwise have been imposed.


John George Diefenbaker: Mr. Speaker, instead of generalizing in this manner and not taking credit-it is the only thing the government has not taken credit for, including the courage to bring about unemployment-will the minister state whether or not the government of Canada will bring a resolution before the United Nations in this connection and give that leadership to the world that this government sometimes boasts about?


Mitchell William Sharp: Mr. Speaker, certainly I would look at this as a proposition. Having been Prime Minister of Canada the right hon. gentleman knows that sometimes one can achieve greater results by less flamboyant methods.


POLLUTION
Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, I should like to direct a question to the Minister of Fisheries and Forestry. Has the minister's attention been drawn to the representations made by the Federation of Nova Scotia Home and School Associations regarding the pollution and the dangers therefrom from the Springhill mine dump fire to the residents of that town? If so, what action is the minister undertaking to at least provide information in this regard?
Inquiries of the Ministry


Hon. Jack Davis (Minister of Fisheries and Forestry):: Mr. Speaker, tests have been made and to date do not indicate any health hazard. Further tests will be carried out this summer with regard to carbon monoxide content. Were this to be a health hazard it would be dealt with by the Department of National Health and Welfare.


NATIONAL SECURITY
Eldon Mattison Woolliams: Mr. Speaker, my question is directed to the Minister of Justice. In view of Premier Bourassa's statement that the Public Order (Temporary Measures) Act would only be applied in exceptional circumstances-I believe there was a cabinet declaration to that effect-has the Minister of Justice been informed of any exceptional circumstances which led to the arrest of seven people in Montreal on Monday under that Act?


Hon. John N. Turner (Minister of Justice):: I have no comment to make about those arrests, Mr. Speaker.


Eldon Mattison Woolliams: Mr. Speaker, the minister says he has no comment to make. Is it the fact that he has no knowledge-and I say this nicely to him-or does he refuse to comment?


John Napier Turner: I refuse to comment because the matter will be before the courts, Mr. Speaker.


Eldon Mattison Woolliams: May I put another supplementary question to the minister. Three or four of the people arrested have now been released and so are not before the courts. Would the minister look into the matter and accept his responsibility in light of that question?


Some hon. Members:: Hear, hear!


WAR MEASURES ACT-PERSONS RELEASED WITHOUT CHARGE-DESTRUCTION OF RECORDS RETURNED TO PROVINCIAL OR MUNICIPAL POLICE
David Samuel Horne MacDonald: I have a question for the Minister of Justice, Mr. Speaker. Some time ago the minister was asked about the status of certain records of people who had been detained under the War Measures Act and later released without charge. The minister assured us that these records had been returned to the provincial or municipal police authorities by the RCMP. Can the minister now give the House the assurance that these records have been destroyed?


John Napier Turner: Mr. Speaker, I dealt with this matter rather fully in reply to a question by the hon. member for Fundy-Royal. I stated that I had written to the Attorney General of Quebec declaring what I had done with respect to the Royal Canadian Mounted Police when I was Acting Solicitor General. I have not yet received a reply.

March 3, 1971
Inquiries of the Ministry


David Samuel Horne MacDonald: In the letter that was sent to the provincial Minister of Justice did the minister ask for an assurance that these documents, now held illegally, would not be used against these people at some later date?


John Napier Turner: Mr. Speaker, under our constitution this responsibility lies with the Attorney General of Quebec, and I would not presume to give him legal advice.


WITHDRAWAL OF PUBLIC ORDER (TEMPORARY MEASURES) ACT
Eldon Mattison Woolliams: In view of the fact that the Quebec cabinet has made a declaration not to use the Act, is the Minister of Justice now prepared to withdraw the Public Order (Temporary Measures) Act?


John Napier Turner: Mr. Speaker, the Act will be withdrawn when the facts of the underlying situation warrant such action.


QUEBEC-POSSIBLE APPLICATION OF PUBLIC ORDER (TEMPORARY MEASURES) ACT, TO ORGANIZED CRIME
Mr. Pierre De Bane (Matane):: 
INDUSTRY
Mr. Doug Rowland (Selkirk):: Mr. Speaker, my question is directed to the Secretary of State and arises out of his meeting this week with Canadian book publishers. Is it the minister's intention to provide aid to Canadian book publishers to prevent future foreign takeovers? If so, what sort of aid is contemplated and when may we expect it?


Gérard Pelletier: Mr. Speaker, since the Canadian publishers were attending an advisory meeting, we wanted to obtain some first hand information as to their needs and receive their suggestions. We have them now and we are going to study the situation for the obvious purpose of taking measures and helping this industry which is in a precarious position and is very important to Canadian culture.


Douglas Charles Rowland: Is the minister contemplating legislation to deal with the situation such as that suggested by the publishers themselves for the creation of a Canadian book development corporation or some such device?


Gérard Pelletier: Mr. Speaker, since the meeting only ended last night, the study of the suggestions which were made has not been thorough enough to enable me to tell the hon. member whether potential solution will necessitate new legislation or whether we will be in a position to work effectively under existing legislation.


Mr. J. P. Nowlan (Annapolis Valley):: My question is supplementary to one asked earlier of the Secretary of State. I would like to know if the study the minister is going to make of the problems of the book publishing industry will be separate and apart from the study presently being carried on by the Minister of National Revenue who is supposed to produce a paper on foreign ownership?


Gérard Pelletier: No, Mr. Speaker, these are two studies and two actions that will be carefully co-ordinated.



ADMINISTRATION OF JUSTICE


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I have a question for the Minister of Justice.
As the RCMP arrested 1,000 persons per month in 1970 for offenses related to the use of marijuana, hashish and other psychotropic drugs, does the minister intend to set, in future, heavier penalties or is he considering, in co-operation with the Minister of National Health and Welfare, launching a large advertising campaign to show the danger of the use of these drugs?


John Napier Turner: The government is still examining this touchy question, Mr. Speaker.



POLLUTION


Louis-Roland Comeau: have a question for the Acting Prime Minister. Since he is also responsible for external affairs, it will have a double effect. In light of the enormous ecological implications of the TAPS oil tanker route, will the government
March 3, 1971

consider presenting a motion in Parliament to enable the whole Parliament of Canada to express Canada's insistence of full bilateral discussions and the frank recognition of Canada's interest in an ecologically satisfactory oil transport system?


Mitchell William Sharp: Mr. Speaker, if I thought that the government of the United States would not respond to the invitation I have made to them to engage in consultations with us on this question, I would consider the suggestion that is being made by the hon. member. However, I believe there is no reason whatever to think that the United States will not be prepared to consult with us quite fully on this question.


Louis-Roland Comeau: Is the government prepared to suggest to the United States government that the question of a continental energy policy, something they very much want, cannot be isolated from an ecologically satisfactory answer to the oil tanker issue on our west coast?


Mitchell William Sharp: I do not think there is the direct relationship between these two questions that the hon. member thinks there is. The United States has not bargained with us for a continental energy policy. I have never heard this suggestion made by any responsible spokesman for the United States government.


Some hon. Members:: Oh, oh!



POSSIBLE THREAT TO BRITISH COLUMBIA COAST FROM OIL TANKER TRANSPORT-CONSULTATIONS WITH UNITED STATES

Thomas Clement (Tommy) Douglas: have a supplementary question for the Acting Prime Minister. Has he received a favourable response from the United States to his request for consultations so that some bilateral arrangement can be worked out in the event there are to be oil tankers operating between Valdez, Alaska and Cherry Point along the British Columbia coast?


Mitchell William Sharp: As the
leader of the New Democratic Party knows, I wrote to the Secretary of State. I have not received a formal reply yet. There have been informal consultations, the most fruitful of which have been those engaged in by my colleague, the Minister of Energy, Mines and Resources.



NORTHERN AFFAIRS


Mr. Thomas S. Barnett (Comox-Alberni):: I have a question for the Minister of Indian Affairs and Northern Development. It is supplementary to the line of questioning initiated by the hon. member for Nanaimo-Cowichan-The Islands. When will the proposed draft land use regulations for the territories be made available for consideration by the members of this House and, in particular,
Inquiries of the Ministry
when does he intend to refer them to the standing committee as he indicated last session he would do?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, the regulations in question have not yet been prepared in a permanent form because we are presently in consultation with the elected members of the Northwest Territories and the Yukon. However, as soon as these consultations have been completed, the regulations will be published in the Canada Gazette. We hope that the appropriate House Committee will then be in a position to comment on them.



PUBLIC WORKS


Mr. Robert Simpson (Churchill):: My question is for the
Minister of Supply and Services. In view of the recently announced extensive development program for the town of Churchill, Manitoba, will the minister confer with his cabinet colleagues in an effort to have the port of Churchill established as a base for government supply requirements in the northern communities in order to create a more viable economy in that town?


Hon. James Richardson (Minister of Supply and Services):: I will be glad to confer with the responsible minister, Mr. Speaker.



AGRICULTURE


Mr. Jack Horner (Crowfoot):: I wish to direct a question to the Minister of Justice. In view of the fact that the Standing Committee on Agriculture has bogged down in its study of Bill C-176-


Some hon. Members:: Oh, oh!


An hon. Member:: Guess why?


John (Jack) Henry Horner: -and in view of the fact that the Canadian Broiler Council has rejected the concept of supply management on a national basis, will the minister take a test to the Supreme Court of Canada to prove the validity or strength of section 121 of the British North America Act?


Some hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, I do not think a reference to the Supreme Court of Canada is necessary to substantiate that section of the

March 3, 1971
Inquiries of the Ministry
British North America Act. If the hon. member can suggest some way in which we can agree on the facts to provide a stated case to the Supreme Court of Canada, that might be useful. As I have said, the various statutes across the country and the regulations under those statutes do not provide enough agreement, particularly as they are being administered, to present a case to the Supreme Court of Canada by way of a reference.



UNEMPLOYMENT INSURANCE


Mr. Andrew Brewin (Greenwood):: My question is for the Minister of Labour. Is it proposed to include in the forthcoming bill amending the Unemployment Insurance Act provision for unemployment insurance benefits for women contributors during maternity leave, as recommended by the Royal Commission on the Status of Women in its seventeenth recommendation?


Bryce Stuart Mackasey: I cannot be specific about what is in the legislation until it is tabled, which will be fairly soon, but this was one of the strong features in the white paper and one of the recommendations endorsed by the standing committee.


Mr. Stanley Knowles (Winnipeg North Centre):: Will the minister assure the House that the government will stand by the commitment made in the white paper and endorsed by the committee?


Bryce Stuart Mackasey: I sun afraid the hon. member will have to wait and see.



PROVISION OF SUPPLEMENTARY BENEFITS PENDING LEGISLATION TO AMEND ACT

['No, Mr. Speaker, certainly not at the meeting I attended the other day.']
Mr. James A. McGrath (St. John's East):: Is the minister prepared to bring in by way of supplementary estimates or otherwise a provision for supplementary unemployment insurance benefits, in keeping with the request of the Canadian Labour Congress, to cover the interim period until the minister brings in the new legislation?


Bryce Stuart Mackasey: That was a very interesting part of the brief, but my own personal instincts are to not try to patch up the present legislation but to move forward as quickly as possible with the new legislation.
# * #



Mr. Henry Latulippe (Compton):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs.

Lately, the Canadian Labour Congress has urged the Canadian government to discontinue its trade with South Africa because of its apartheid policy.
My question is as follows: Has the Canadian Labour Congress also asked the Canadian government to discontinue its trade with the Soviet Union because of that country's policy towards Jews?


Mitchell William Sharp: No, Mr. Speaker, certainly not at the meeting I attended the other day.



CAPE BRETON DEVELOPMENT CORPORATION


Mr. Robert Muir (Cape Brelon-The Sydneys):: My question is for the Minister of Regional Economic Expansion who reports to the House for the Cape Breton Development Corporation. In view of the very serious unemployment situation on Cape Breton Island, how soon will the minister be in a position to announce what programs and policies the corporation may have to alleviate this very bad situation?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: I hope I can do that soon, Mr. Speaker.



FINANCE


Mr. S. Perry Ryan (Spadina):: My question is for the
Minister of Finance. Is it the position of the government that the $160 million federal-provincial special development loan program is to be the extent of the federal response to the unemployment and welfare crisis of the present winter? If not, will the government agree to meet the cities and the provinces so as to undertake an objective inventory of mutual resources and responsibilities in connection with these matters?


Hon. E. J. Benson (Minisler of Finance):: The $160 million loan fund is one of a great many measures which have been taken since last March by the government in order to speed up the economy.


Sylvester Perry Ryan: A supplementary question.


Mr. Speaker:: Order, please. Before we get into a debate I wonder whether the hon. member for Spadina would recognize that perhaps we might go on to a number of other questions before we reach the end of the question period.
March 3, 1971


Sylvester Perry Ryan: Thank you, Mr. Speaker, I have a supplementary question. Will the government consider adopting a flexible policy with regard to grants and loans directed to the provinces and cities this winter?


Mr. Speaker:: The hon. member's question is in the form of a representation to the minister. The hon. member for South Shore.


Sylvester Perry Ryan: On a point of order, Mr. Speaker.


Mr. Speaker:: Order. I had intended to return to the hon. member, but if he seeks the floor on a point of order-


Sylvester Perry Ryan: With respect, Your Honour has suggested that I have made a representation. I have never heard it ruled before that it was not possible to make a representation-


Mr. Speaker:: Order, please.



FISHERIES


Mr. Lloyd R. Crouse (South Shore):: I wish to direct a question to the Acting Prime Minister in his capacity as Secretary of State for External Affairs. Has the Canadian government or, more specifically, the Secretary of State for External Affairs taken any initiative in notifying the treaty countries of our intention to prohibit trawlers of more than 65 feet in length from operating inside the 12-mile limit of the coast of Newfoundland and, if so, what was the response to his request?


Mitchell William Sharp: There have been some discussions but I should like to take the question as notice so that I can give a precise answer.


Mr. Ambrose Hubert Peddle (Grand Falls-White Bay-Labrador):: A supplementary to the Minister of Fisheries. In view of the misunderstanding and confusion which exists concerning the recent announcement of the minister that these areas will be closed to draggers, will the minister, in a statement on motions or at some appropriate time, try to specify exactly what areas are covered by his recent announcement?


John (Jack) Davis: Yes, Mr. Speaker.



POSSIBILITY OF REOPENING INTERNATIONAL CONVENTION ON PSYCHOTROPIC SUBSTANCES FOR FURTHER NEGOTIATIONS

Mr. Stan Schumacher (Palliser):: My question is for the
Minister of National Health and Welfare. I should like to
Inquiries of the Ministry
ask him whether Canada can have the draft of the international convention on psychotropic substances reopened for negotiations between receipt of the Le Dain report and the final ratification date of January 1, 1972.


John Carr Munro: I do not think it is a question of renegotiation at this time. The convention does not come into force until 40 countries have signed it; 20 countries are prepared to do so at the present time.



ATOMIC ENERGY


Roderick J. (Rod) Thomson: Having
regard to the statement by Lome Gray that Canada will be unlikely to sell a Candu atomic energy plant to Australia, and bearing in mind that Australia may purchase a uranium enrichment plant from Britain, will the minister tell the House whether Canada is negotiating with Japan with a view to the possible establishment of an enriched uranium plant in Manitoba?


John James Greene: I do not believe any clearcut decision has yet been reached with regard to the transaction with Australia. As to the possibility of setting up an enrichment plant somewhere in Canada, we are pursuing discussions with the Japanese and we also contemplate holding discussions with the Australians in this regard.



FINANCE


Mr. Roland Godin (Porineuf):: Mr. Speaker, I wish to direct a question to the Minister of Finance.
Does the government intend to proceed with its plan to establish a National Securities Commission, in spite of the objection expressed yesterday by the Quebec Securities Commission?


Edgar John Benson: I am sorry Mr. Speaker. I did not get the purport of the question. '


Mr. Speaker:: Perhaps the minister might take the question as notice and reply tomorrow.



POSSIBLE MACKENZIE VALLEY PIPELINE-POSITION RESPECTING OWNERSHIP

Mr. Paul Yewchuk (Athabasca):: My question is really supplementary to those pertaining to the possible con-

March 3, 1971
Inquiries of the Ministry
struction of a pipeline down the Mackenzie Valley. It is addressed to the Minister of Energy, Mines and Resources. Can the minister tell us whether the government has taken a specific position in connection with the ownership of such a pipeline, that is, how much of it should belong to Canadians and how much to interests other than Canadian?


John James Greene: The guidelines issued by the Minister of Indian Affairs and Northern Development and myself in August indicate that preference will be given to any entrepreneur on the basis of maximum Canadian content but no firm and unequivocal position has been taken. When amounts of capital of this kind are involved, totalling somewhere in the neighbourhood of $4 billion, we have no way of knowing what percentage of the equity could be raised in Canada.



GRASSLAND INCENTIVE PROGRAM-MINIMUM ACREAGE TO QUALIFY FOR ASSISTANCE

Mr. S. J. Korchinski (Mackenzie):: I should like to ask the Minister of Manpower and Immigration a question relating to his grassland incentive policy. Would he consider dispensing with the requirement that a minimum of 25 acres is needed in order to qualify for assistance? If not, would he arrange to make it possible for farmers to accumulate acreages during the three years of the program in order to qualify under the 25-acre requirement?


Otto Emil Lang: The program as announced does contain a 25-acre limitation per year. For a variety of administrative reasons, I think it would be desirable to consider only applications of this size as a minimum. However, I will be glad to take a further look at the question.


Mr. Speaker:: Order, please. The question period expired a few minutes ago. With the consent of the House the hon. member for Mackenzie might be allowed to ask a supplementary question. I gather that the Minister of National Revenue is also anxious to reply to a question asked yesterday.


Stanley James Korchinski: Thank you, Mr. Speaker. I should like to ask whether there will be on the spot inspections only in connection with this scheme or whether there will be spies in the sky taking aerial photographs as was done last year?


Otto Emil Lang: While the aerial surveys carried out last year were undoubtedly successful in giving us better information about acreages, it is anticipated that the inspection of the forage acreage under this plan will be carried out by individuals.



NATIONAL REVENUE


Hon. Herb Gray (Minister of National Revenue):: Yesterday, Mr. Speaker, the hon. member for Red Deer asked me a question concerning the distribution of T-4 slips to government employees. While this is a matter which comes primarily within the jurisdiction of the Department of Supply and Services rather than the Department of National Revenue, I think I can inform the hon. member that all of the T-4 slips in respect of salaries and wages paid during 1970 were sent between February 12 and February 23 from the paying offices of the services administration of the Department of Supply and Services to all government departments for distribution to their employees. I am sure my colleague the Minister of Supply and Services will be happy to supply any additional information required.


Mr. R. N. Thompson (Red Deer):: My question related to the fact that these T-4 slips had not reached the employees. Perhaps it is a problem involving the Post Office rather than the department.


Mr. Speaker:: Orders of the day.


Wallace Bickford (Wally) Nesbitt: On a point of order, Mr. Speaker, I should like to ask permission to seek the unanimous consent of the House to revert to motions in order that I may propose a motion under the terms of Standing Order 43, requesting a discussion of student unemployment.


Some hon. Members:: No.


Mr. Speaker:: I gather there is not unanimity. Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, March 2, consideration of the motion of Mr. Benson that Bill C-219, to establish the Canada Development Corporation, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs and the amendment thereto of Mr. Baldwin (P. 3894).
Mr. Ian Watson (Laprairie):: Mr. Speaker, when I called it ten o'clock last night, I indicated that I approved the major objectives set out for the Canada Development Corporation which are to develop strong Canadian controlled and managed corporations in the private sector of the economy and to provide broader opportunities for Canadians to invest and participate in the economic development of Canada.

March 3, 1971

I also said I was confident that the CDC would play an important role in future Canadian development and that it could contribute to improving Canadian competitiveness in world markets and in the arrangements for corporation rationalization and amalgamations in which we expect it to take part. By stimulating and encouraging such changes in Canadian industry, the Canada Development Corporation will strengthen our industrial structure and consequently render it less vulnerable to foreign take-overs.
Having said that, I wish to express reservations about the lack of specifics in this bill with regard to natural resource development. I realize that northern development and resource development are part of the bill's objects, but several features of the bill convince me that it was drafted by people who were manufacturing industry-oriented rather than resource-oriented. Certainly, mineral and hydrocarbon resource development experience appears to have been lacking among those who drafted Bill C-219. This has resulted in certain contradictions being built into the bill. As a prime example, the bill specifically directs the CDC to invest for profit in the best interests of the shareholders. I have no quarrel with that objective when it is applied to the broad spectrum of industrial investment opportunities, which the drafters of the bill presumably had in mind when drafting it. But the government, in my view, must make a clearer distinction than it has between general industrial investment and high risk, natural resource development investment.
If this distinction is not made, difficulties will eventually become inevitable. The specific directive contained in clause 6 stressing investments made both in anticipation of profit and in the best interests of the shareholders, while essential for general industrial investment, I am convinced will have an inhibiting effect on investment in risky, long-term mineral and hydrocarbon resource development. Once shares in the Canada Development Corporation are sold to the general public, it becomes inevitable that the directors will be concerned with the generation of revenue for the payment of dividends; and concentration upon investment areas of relatively low risk and certain ultimate yield to support dividend payments will occur. Mining and oil investment in particular are normally high risk. When this normally high risk is combined with the fact that Canada's major undiscovered and undeveloped hydrocarbon and mineral resources are in the Northwest Territories and the Yukon, it is obvious that the risk is hardly compatible with regular dividend payments to shareholders.
Another section of the bill which 1 feel indicates the inattention of the drafters to mineral resource development is the one million dollar minimum which we find in clause 6 (2)(b). This provision reads:
-invest in the shares of corporations in each of which, in the opinion of the Board of Directors of the company, the real value of the shareholders' equity after investment by the company will be, or is likely to become, one million dollars or more.
In the mining field especially, it is quite likely that a number of extremely valuable investment opportunities will crop up from time to time, not necessarily restricted
Canada Development Corporation to the Northwest Territories and the Yukon. However, let me concentrate attention upon these two areas. If the $1 million minimum remains it will rule out, or at least inhibit, management of the Canada Development Corporation taking steps to invest in some situations which in all probability, over a long period of time, will end up being an extremely good investment. I feel that this one million dollar minimum does not make very much sense, particularly as far as mining investment is concerned, though it may and probably does make sense when applied to the industrial and manufacturing spectrum.
While on the subject of resource development in the Northwest Territories and the Yukon, may I say that it is in these regions that a development corporation is needed most and can contribute most to increasing the percentage of Canadian control over our mineral and hydrocarbon resources. In addition to the obvious economic advantages to Canada of CDC activity in the Yukon and Northwest Territories, such activity would give Canadians a more important sense of participation in national development and has the potential to be an important factor in this country's unity.
After all, 35 per cent of the Canadian land mass lies in the territories. Because its natural resources are under direct federal control, they are the common heritage of all Canadians and should be developed to the benefit of all Canadians, priority, of course, being given to ensuring that the needs of the residents of the northern territories are first met. Nevertheless, all Canadians have a direct stake in the resource development of the Yukon and Northwest Territories. For the CDC to give Canadians a sense of direct participation in the action in the northern territories would be an important contribution to national unity. This bill, with minor changes, combined with a wise selection of leadership for the CDC, has the potential of fulfilling the role I should like to see it play; but as it stands now, and with the emphasis of the bill where it is, I just do not think it will be able to play this role.
Another criticism that I have of this bill relates to the proposal to turn over Panarctic Oils Limited to the corporation at this time. Panarctic may take several more years and perhaps require hundreds of millions of dollars of additional investment before returns begin to flow back to its investors. Even with the tremendous capitalization proposed for the Canada Development Corporation, I doubt very much that the CDC would be prepared to continue to put in funds ranging conceivably to $100 million or more to protect the government's present 45 per cent interest in Panarctic. I, for one, would be extremely unhappy with, and totally opposed to, any reduction in the present 45 per cent interest of the federal government in Panarctic. I am convinced that in the long run this will turn out to be the best investment in Canada that the federal government has ever made. The Panarctic concept is one that I should like to see expanded into other areas, such as, conceivably, offshore hydrocarbon development and mineral development. I doubt very much whether even with its proposed capitalization the CDC would have the funds necessary to maintain a strong federal position in such possible investments.

March 3, 1971
Canada Development Corporation
I mentioned earlier that I thought the selection of the administrators of the CDC would be of prime importance. Certainly, if its chief officer has some mining and oil experience, or experience of resource development, then there will not be too much difficulty in convincing the CDC about resource development investment. But if we end up with a man at the top who has general manufacturing experience, it is inevitable that the CDC management will not put prime stress on resource development, which is where I feel it should be. I suggest to the minister a possible amendment which perhaps he will look at and discuss when the bill is referred to the committee. If we added powers under clause 7, by the addition of a subparagraph, permitting the establishment of a natural resources development company with all the powers of the Canada Development Corporation as outlined in clause 7, we would allow more flexibility.
I should like to see a subsidiary company set up by the Canada Development Corporation specifically designed to develop resources, with shares available to the public. It is absolutely essential that we distinguish between investment in general manufacturing and industrial enterprise across the country and investment in resource development. If shareholders require regular returns and dividends on their investment, we cannot combine this requirement with a daring and aggressive resources policy. Such a policy is essential if we are going to change the percentage of Canadian ownership and control in the resource industry.
We have a great natural resource potential. The CDC has the potential for ensuring a high degree of Canadian participation in the development of these natural resources, including the hydrocarbon industry. This is a painless way to accomplish a higher degree of Canadian control and ownership. We can do this without expropriating anything, and without nationalization. This can be accomplished by an aggressive pursuit of mineral and hydrocarbon investment by Canadians. Investment possibilities in this regard are now available in the Yukon and Northwest Territories.
Finally, I should like to draw the minister's attention, and I am sure this has been done before, to the proposed take-over objective by Canada Development Corporation of the Northern Canada Power Corporation. How this matter got into the bill in the first place is difficult to understand. The Canada Development Corporation's expressed objective is to provide a profit for its shareholders. The objective of the Northern Canada Power Company is to provide electricity at cost to northern consumers. There is just no way these two objectives can exist side by side. The objective of the Northern Canada Power Company is not to make a profit for shareholders of the Canada Development Corporation at the expense of the users of electricity in the Northwest Territories and the Yukon.
If the minister has not already considered this, I urge him to take whatever steps are necessary to eliminate the reference to the NCPC. The two objectives are clearly irreconcilable. Perhaps the parliamentary secretary has
something to say in this regard. In terminating what I have to say on this subject, I again urge the minister to make a clear distinction, when the bill comes before the Committee, between general industrial development investment and natural resources investment.


Mr. William Skoreyko (Edmonton East):: Mr. Speaker, I am delighted to take part in this debate in reference to Bill C-219. First of all, I should like to say that I concur with the amendment moved by the hon. member for Peace River (Mr. Baldwin). It is important that this bill be sent to the committee as quickly as possible in order that a number of matters which are of concern to a number of members in this House can be answered. While I am on my feet this afternoon, I should like to raise several questions and express my opinion. I hope the minister has made note of the various suggestions and will, at the appropriate time, make the appropriate reply.
Is there anyone in this House on the government side who can state the specific purpose of the proposed Canada Development Corporation? I ask that question with all sincerity in an endeavour to obtain a reasonable response. I have asked this question of members on the government side and members on this side. It appears that no one can clearly spell out the precise reason behind this legislation. It was my understanding that the Canada Development Corporation was being proposed to guarantee that certain Canadian interests which might be in danger of being taken over by foreign investors would be protected. I understand that this is not what the Canada Development Corporation is supposed to do.
I noted with some interest the press release of January 25 issued by the Minister of Finance (Mr. Benson) in which he attempted to spell out two or three reasons this legislation is necessary. It suggests that the bill provides for the establishment of a large corporation to do certain things, specifically to help develop and maintain Canadian control and Canadian management in the private sector. How can this be done? If one of the well established industries in the city of Toronto felt that its margin of profit over a given period of time did not warrant the continuation of its marginal operations and wanted to sell these operations to anyone who wished to purchase them, what could be done to keep these operations within the control of Canadians? If I managed such a company and I received a minimal offer, I would look elsewhere. I would run newspaper ads in the United States, and indeed in Europe, if I were interested in selling that company.
Then, if the CDC decided the retention of that company by Canadian interests was in the interests of Canada, it would have to be prepared to buy that company from the seller. Is it not conceivable that Canadians might feel that this company was worth, let us say, half a million dollars. An offer, indeed it could be a phony offer, might be made by United States interests in the amount of $750,000. Then, since the CDC had decided the retention of this industry in Canada was in the Canadian interest,

March 3, 1971

it would have to pay that higher price in order to retain it in Canada. I should like to know the type of companies the CDC will be interested in, how it intends to procure them and how it intends to convince the Canadian people that investment in these companies is a good idea. It is said that the CDC will provide greater opportunity for Canadians to invest and participate in the economic development of Canada. How will that be done? Will it be through the acquisition of companies, through the acquisition of shares or through the provision of risk capital to risk ventures?
I should like to have answers to some of these questions. For instance, we noted in the newspaper the other day the case of a plywood manufacturing company in Quebec which, after having been purchased by, I believe, the Quebec Development Corporation for something like $1,500,000 not too long ago, found it could not operate economically and is now being offered for sale for something like $500,000. Will the CDC pick up this plywood plant? If the CDC is indeed a profit-oriented corporation what right would it have to pick up that company? What I am a little suspicious about is it appears to me, so far as the Minister of Finance is concerned, that the CDC measure would seem to be a diversionary tactic to get the minds of the people off the more serious problem of unemployment. There seems to be an implied assurance to the people of Canada that they do not need to worry about being out of work because they will be given an opportunity to buy shares in a Canada development corporation, and in that way one day, will be rich.
I find it very difficult to conceive that the government would ask us to vote in favour of a measure which is so vague. Of course, vagueness is nothing new to this government, Mr. Speaker. We know from the hearings of the various committees that this is probably the most inept government in the history of Canada so far as the drafting of legislation is concerned. Thank God there is an opposition around to keep it on the straight and narrow. I should like to ask the Minister of Finance, who surely has some knowledge of business, who will determine the fair value of the four corporations that are to be purchased. I refer to Polymer Corporation Limited, Eldorado Nuclear Limited, Panarctic Oils Limited and Northern Transportation Company Limited. Are these conglomerates to become one entity when the CDC is in being? Who will sell these companies? I presume the government will sell them to the CDC. Who will determine the fair value of these companies and on what will the fair value be based? Will it be based on the performance record? Will it be based on earnings or potential earnings? What criteria is to be used when these companies are sold to the CDC? Will the price be so low that it will be embarrassing or will it be so high that profit will be impossible?
The minister says he is delighted to introduce this kind of a measure because, after all, it will give the Canadian people an opportunity to own shares in the CDC and in these companies. Does the minister not realize that now, although the people of Canada do not actually own the shares in these companies, they actually own the companies through their government. If the minister is right in
Canada Development Corporation
saying the CDC is profit-oriented, I wish him the best of luck in this endeavour. He says the CDC will not be a Crown corporation responsible to Parliament but will be a private corporation operating basically within the provisions of the Canada Corporations Act; but, because it is created by an act of Parliament any change in the capital structure, objects and powers of the corporation passed by the directors and shareholders will require approval by a resolution passed by both Houses of Parliament. Mr. Speaker, I ask who will exercise any degree of control over this corporation? Will it be the Minister of Finance or the Deputy Minister of Finance who will exercise majority control over this corporation?
Then, it is stated that, in addition to its broad powers of direct investment and participation in joint action with other Canadian investors, the CDC will be empowered to lend to other companies, guarantee their contracts and assist them in other ways. What does this mean? Carling's Brewery in Edmonton has found that the market has suffered a severe slump, as has been the case in almost every other market in recent months. They have found that Albertans do not drink as much beer as they should and their profits are down. Could they go to the CDC to borrow money and acquire assistance? Is this what the minister envisages? I do not know. I cannot quite understand it. At a time of unemployment and at a time when inflation is rampant, the government gives the impression of being concerned about the economic development of our country through the CDC. I am not certain it is an instrument of development. I should like to ask the Minister of Finance, who is a very dear friend of mine, whether he would agree with me on this point. I do not argue that it may not be in the government's best interest to create a corporation that would be in charge of the four companies to which I alluded earlier, but when we discuss the need for the private sector to gain access to risk capital, I should like to remind the minister that on the Prairies in particular when money is required for wildcat ventures-and the parliamentary secretary knows precisely to what I am referring-Canadians participate to a lesser extent than United States investors?
* (3:40 p.m.)
In this connection I could refer specifically to the various professions. It is odd that in Canada doctors, lawyers, engineers and wealthy businessmen would rather put their money into apartment houses, and thus be able to write off certain earnings, than put that money into risk ventures for the development of our natural resources. 1 suggest that the answer is very simple. If the minister changed the Canadian tax structure to allow the Canadian investor taking part in risk ventures the opportunity to write off certain losses over a given period of years there would be some incentive for such investment. If an investor who happened to make a bundle on a wildcat venture were taxed appropriately, and there is nothing wrong with that, that also would encourage risk investment. But it seems strange to me that the U.S. professional and businessman is more interested in gambling his capital in the resource development of western Can-

March 3, 1971
Canada Development Corporation ada than is the Canadian himself who really has an interest in that sort of development.
I say to the Minister of Finance in all sincerity that what he envisages for the CDC will ultimately turn out to be a bad dream. I think the direction in which we should be going at this point is to overhaul the tax structure as it is today.


Stanley Stanford Schumacher: The issues raised by the proposed establishment of a Canada Development Corporation are significant. Therefore, this matter should be examined in detail by this House and by the Committee on Finance, Trade and Economic Affairs. In doing so, a complete survey should be made of the results of development corporations and their activities in other countries. It seems that we have a great penchant in Canada for adopting methods, procedures and policies that have proven to be not too successful in their lands of origin. We do not seem to learn from the experience of those countries.
It is important to be clear about the objectives of the suggested Canada Development Corporation. Although the absence of details makes appraisal dependent to a certain extent on inferences, it has been intimated that the CDC would primarily assist in the development of major projects in Canada and that it would seek to reduce foreign takeovers of Canadian enterprises. These objectives make all our hearts beat a little faster. Who could disapprove of the development of major projects by Canadians or the preservation of Canadian control of our industry? A development corporation can, of course, finance projects or curtail foreign ownership. An analysis of the costs involved and the consequences of this type of institution would demonstrate that this so-called solution may be self-defeating. Any projects that are economically viable would stand on their own feet, without government assistance.
I suggest that if the CDC were in evidence last fall, there would have been tremendous pressure on the government of Canada to take over Ryerson Press, pressures that probably would have proved irresistible. In considering this question I think it is well to reflect upon what the Secretary of State (Mr. Pelletier) and Information Canada could do with such an organization as Ryerson Press if it were under their control. I suggest that there would be a measure of control by the government of Canada if such an organization formed part of the holdings of CDC or anything like it.
The function of government is to give constructive help, in co-operation with the private sector, when a decision has been taken. Claims have been made that there is a large institutional gap in our capital market. What evidence is there for this assertion? One can think of all sorts of companies that have started from scratch in Canada recently, or alternatively large companies that have made substantial distributions of equity in Canada. We can think of the examples of Oshawa Wholesale, Couvrette, Alliance and the Bell Telephone Company.
But if this is so, it must also be admitted that there are large pools of capital lying around in savings accounts and certificates. The function of the government should be

to encourage the flow of these savings into active equity capital for the development of this country by Canadians. It could take positive steps such as giving a distinct tax advantage to Canadians for such investment instead of having them equal to or at a disadvantage in comparison with foreign investors. The government could also take steps to encourage provinces to reform their securities legislation for the protection of investors because, quite frankly, a great many people are frightened of the market, and I believe they are frightened with some cause. I would suggest also that if the provinces fail to co-operate in the enactment of uniform legislation, then consideration should be given to putting investor protection under federal jurisdiction.
As an answer to the problem of foreign ownership in Canada, a development corporation is a poor remedy. The free movement of capital, both across frontiers and domestically, should not be hindered by any government sponsored pool of capital. The Minister of Finance is confident that competent management would not make unrealistic bids to counter offers from foreign sources. For a foreign operating company with world wide outlets and unused plant facilities, the benefits of an amalgamation could justify a far higher price than any development corporation should pay. For instance, what would the CDC do with a national beer company?
The advantages of a Canadian outlet to a United States company are evident in that duplicate facilities are closed down and the production and sales forces are combined. Similarly, U.S. automobile manufacturers would have an incentive to acquire automobile parts companies in Canada, since parts used by the manufacturers of new cars can be moved across the borders duty free. It is difficult to see what a development corporation could do to check foreign ownership in most cases, apart from making an unrealistically high bid.
To counterbalance the objectionable consequences of foreign capital, legislation against the specific wrongs is the proper procedure. Whether it be Canadian dissatisfaction with the inadequate openings for Canadian talent, the lack of opportunity to participate in the processing of raw materials, the failure to compete in export markets, or merely inadequate adjustment to Canadian cultural patterns, it should manifest itself in specific legislation requiring foreign capital to conform to our requirements. By virtue of a favourable tax ruling, Rio Algom for example, was able to take over Atlas Steel advantageously. If the ruling had been changed either by a different interpretation or by legislation, this take over could have been thwarted.
If the Canadian Development Corporation were to develop major resources projects without outside participation, as has been suggested, in many cases sales outlets would be lacking. For example, United States or Japanese steel companies usually prefer to own their own raw material sources in order to ensure adequate supplies and also to participate in the profits of their own purchases, both being classical reasons for vertical integration. If Canada denied these opportunities to foreign steel companies, other nations would be more hospitable and as a nation we would be the losers.
March 3, 1971

In general, it is difficult to see how a Canada Development Corporation would invest its funds. Private pools of capital like the CED have not been able to invest all their available funds as it is. Even the Quebec General Investment Fund was not fully invested several years after it was started, and it is a relatively small fund, only a fraction of the size of the proposed CDC. Its dismal record augurs poorly for a Canada Development Corporation.
The Minister of Finance claims that the staff of a development corporation could be relatively immune from political intervention. There is almost no case of a government agency being able to withstand pressure from political sources. Even if the operating personnel were independent of day-to-day direction, the reality of government parentage would be an omnipresent fact. All but the most neurotic recognize and are influenced by their progenitors! A Canada Development Corporation would realize that if it incurred the displeasure of too many Members of Parliament or voters it would be abolished, something that is not true of most private enterprises. If a Canadian Development Corporation bought a large share in a foreign corporation with large operations in Canada in order to influence the Canadian operations, could one really trust the management to make decisions based on economic merit alone? It does not take a cynic to believe that the answer is a resounding no.
No reference has been made to Quebec, yet Quebec is one third of Canada and has already given notice that it wants to control new developments if possible. If the CDC performed managerial or entrepreneurial functions in addition to supplying capital the competent staff, which the Minister of Finance urges, would be spread over such a vast area of activities that supervision and detailed scrutiny could become a nightmare.
Reference has been made to our present emasculated form of equity ownership. Surely, all ownership in large corporations by outside shareholders must be at a distance unless that outside source sets itself up to be an expert and uses its position to get a seat on the board and dictate and change policy. Is this what the Canada Development Corporation will do? Will it be an expert in the mining, the pulp and paper, the utility and the oil business? Other countries, including the United Kingdom, have experimented with development corporations. We should remember the abortive groundnut scheme in Africa, which was promoted by a former British Labour government.
A few of the problems encountered by other development corporations of other countries can be summarized under a few general headings, the first of which is financing economically unsound enterprises. Social and political considerations frequently motivate development corporations. For example, the Chilean Development Corporation built steel mills that have proved to be high-cost and economically inefficient in Chile, and whose products have been unable to hurdle tariff barriers, particularly the 40 per cent Argentine surcharge on steel. In South Africa, the Industrial Corporation was established to
Canada Development Corporation
build an iron and steel complex, as well as facilities for obtaining oil from coal for strategic and military purposes. By that government's own admission, the government project displaced private investment and therefore negated its achievements.
Secondly, there is the question of inflation. Development corporations have built-in inflationary potential. Although funds may be supplied by individuals or private institutions, additional capital is often provided by the central bank or from foreign sources. When funds from private sources have not been forthcoming all too frequently development corporations have resorted to borrowing and rediscounting at the central bank, Also, once a program is under way its termination is difficult for political reasons.
The third problem is the displacement of private initiative and private capital. By their existence, development corporations absorb funds from abroad that would normally flow to private industry. Funds obtained from private domestic sources may be absorbed by the government development corporations, whereas under normal circumstances funds might seek their own investment outlets.
Fourth is the problem of excessive government control. In various countries development corporations have appointed directors to boards of businesses where their funds are invested. The IRI in Italy and the National Financiers of Mexico appoint directors of many companies. In general there could be a tendency to ignore the free forces of business in favour of political opportunism. For example, would the government permit the closing down of an unprofitable organization if thereby many people would lose their jobs?
The scope of action of the development corporation may become very wide, as in Burma where the initial step of the government in the 1950's was to set up a joint venture corporation of government and private businessmen. Most of Burma's imports then were bought by government organizations and the choice of suppliers was dictated by national agencies. In an attempt to diversify this economy by encouraging manufacturing, the government pursued a policy of state enterprise.
The fifth problem is that large enterprises may be favoured by the establishment of the Canada Development Corporation. In general, the special problems and risks of small enterprise financing have been a restraining factor. The careful investigation and supervision which this kind of financing necessitates makes it expensive. The number and variety of staff required to sift applications has meant that the large scale enterprises have often been the main beneficiaries of these development facilities, whereas the deserving small company has been neglected. The most successful government corporations in the economically advanced countries have been limited to specific and narrow areas of economic activity such as the transportation system, mortgages, or other credit institutions. Too frequently development corporations have very broad objectives which are difficult to accomplish.

March 3, 1971
Income Tax Act
The government should provide proper fiscal and monetary conditions for sound economic growth, combined with specific legislation to correct specific abuses that undoubtedly do occur. The CDC fails to come to grips with the problem of capital formation in Canada. Capital formation and development are the result of the savings process. Development corporations should be recognized as the reactionary and unworkable solutions that they are.


Mr. Deputy Speaker:: The question is on the amendment. Is the House ready for the question?


Some hon. Members:: Question.


Mr. Deputy Speaker:: All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.


Some hon. Members:: On division.


Mr. Deputy Speaker:: Negatived on division.
Amendment (Mr. Baldwin) negatived on division.


Mr. Deputy Speaker:: The question is now on the main motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: On division.


Mr. Deputy Speaker:: Adopted on division.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.

Hon. Allan J. MacEachen (for the Minister of Finance) moved: that Bill C-225, to amend the Income Tax Act and to amend an act to amend that act, be read the second time and referred to a Committee of the Whole.


Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: As the House is aware, Mr. Speaker, the purpose of this bill is to implement two measures involving income tax changes of the several outlined in the budget that was brought down by the Minister of Finance (Mr. Benson) on December 3. One section of the bill will amend the Income Tax Act to make available a capital cost allowance supplement to manufacturing and processing industries. The other section of the bill will amend Chapter 38 of the Statutes of Canada 1967-68 to provide for an extension of the income surtax on
individuals and corporations from the end of 1970 to the end of 1971.
To encourage increased capital investment in manufacturing and processing, which recently has been relatively weak, the bill provides that those engaged in such businesses may claim capital cost allowance for 115 per cent of the actual cost of machinery, equipment and structures acquired between December 4, 1970, and March 31, 1972. The effect of this measure is to enable a qualifying taxpayer to claim capital cost allowance over a period of years of $115 for every $100 of actual capital investment put in place, an increase of $15 over the amount that normally could be written off against earnings.
It is estimated that manufacturing and processing enterprises undertake some $3 billion worth of capital investment annually that would qualify for this special allowance. Investment of this order therefore, would enable these enterprises to claim an extra capital allowance over the depreciable lifetime of assets put in place within the period up to March, 1972, of around $450 million. While the cost to the treasury of this measure is estimated at $25 million for the 1971-72 fiscal year, the cumulative capital cost allowance benefits being provided to manufacturing and processing businesses over a period of years will provide a significant stimulus to increased investment in these two sectors over the next several months.
I might mention that the definition of a manufacturing or processing business and the description of assets qualifying for the supplementary allowance will be contained in regulations to be adopted soon after approval of the legislation. It is proposed, however, that the definition of a qualifying business would be very similar to that now found in class 19 of the Income Tax Regulations, while the property that would qualify would be buildings as described in class 3 or 6 and machinery and equipment that is normally included in class 8 of schedule B of the same regulations.
The second section of the bill before the House extends for a further year the 3 per cent surtax on personal and corporate income. Members will recall that this surtax on individuals does not apply to the first $200 of basic tax, with the result that more than 25 per cent of Canadian taxpayers will continue to be exempted from payment of the additional levy. No surtax is paid by a single person whose income is below $2,743, nor by a married man with two children whose income is below $4,343.
I would be less than frank, Mr. Speaker, if I did not acknowledge that the decision reluctantly reached by the government to extend the surtax to the end of 1971 was a source of disappointment to many taxpayers. It was also a source of some criticism, frequently from those who were unaware of or did not understand the considerations which led the government to the conclusion that this was the best course to follow in the long term interests of the nation as a whole.

March 3, 1971

In his budget speech, the Minister of Finance made it clear that the government reached the conclusion late last year that it was appropriate to provide an additional stimulus to the economy in order to reinforce the series of expansionary fiscal and monetary measures adopted since the early months of 1970.
Having reached that conclusion, the government was faced with the need to reach a decision on two important questions. It had to decide how much additional stimulus could safely be injected into the economy without running an excessive risk of creating new inflationary pressures in the months ahead. Then it had to decide what form this additional stimulus should take in order to provide the maximum possible assistance in the shortest possible time to individuals, regions and industries in Canada most adversely affected by slow growth of the economy.
In reaching a judgment on the first question, the government had to consider how far it could go in creating additional fiscal stimulus by adding to its cash requirements without imposing dangerous pressures on Canada's monetary system. As the Minister of Finance noted in his budget speech:
There are limits to the extent to which the banks can be encouraged to increase their holdings of government securities without running the very serious risk that the expansion and increased liquidity of the banking system will trigger inflation and expectations of inflation.
This very fundamental point was also underlined by the Economic Council of Canada in its most recent review of the economy. "Monetary policy (together with fiscal policy with which it is closely interrelated)," the council emphasized, "should evolve in a way that seeks to avoid large destabilizing swings in the growth of the money supply." Even the Leader of the Opposition (Mr. Stanfield) appeared to recognize that there are some very real limits on the extent to which the government can reasonably expand fiscal policy when he noted during the budget debate that the government faced "a substantial and increasing budgetary deficit" as a result of the expansionary policies which it has adopted. That recognition, however, has not deterred either the Conservative leader or other members opposite from advocating measures that would enlarge the budgetary deficit and the government's cash requirements in a massive way.
In his budget speech, the Minister of Finance estimated the government would have cash requirements during the current fiscal year of around $1.57 billion, excluding those for foreign exchange reserves. This represents a massive swing of more than $1.7 billion from the position in 1969-70 and is a measure of the very large stimulus injected into the economy in the current fiscal year by the government. For 1971-72, the minister estimated the government's cash requirements would rise to $1.9 billion, matching the record peacetime level of 1968-69 and representing a swing of more than $2.1 billion from the level in the last fiscal year.
The second question facing the government was whether additional stimulus of this degree should be provided through increased spending and lending, through a
Income Tax Act
decrease in taxes, or a combination of the two. There have been suggestions from some quarters that the government decided against allowing the surtax to expire and perhaps further reducing taxes as well because of a mistaken belief that reducing taxes would be inflationary. Nothing could be further from the truth, Mr. Speaker.
The fact is, as the Minister of Finance indicated in his budget, that the government concluded it would be considerably more appropriate in the economic circumstances facing the nation to adopt increased spending and lending programs aimed at providing early and direct assistance and support to individuals, regions and industries most in need of it, rather than to provide additional stimulus by means of a tax cut that would provide greatest benefit to the more prosperous sectors of the economy.
It should be pointed out, however, that while these selective measures will have their most immediate and direct impact on the economically weaker sector of the economy, they will also provide a stimulus to the economy as a whole by reinforcing the upward thrust being provided by the parallel expansion of monetary policy that has been under way since early in 1970.
The special capital cost allowance supplement being provided in the bill now before the House for capital investment undertaken by manufacturing and processing industries is one of those selective measures adopted by the government to provide a significant boost to a sector of the economy that has been particularly slack recently.
The decision to propose extension of the income surtax to the end of the current year, which is provided for in the second section of the bill, was reached by the government with considerable reluctance but with the strong conviction that such action was necessary in the best interests of the nation as a whole.


Marcel Joseph Aimé Lambert: Mr. Speaker, this particular part of the extended budget debate appears to be anticlimatic in that it is almost three months since the Minister of Finance (Mr. Benson) delivered his budget message and indicated that there would be these two tax changes. I find it rather strange, looking at the continuation of the surtax which, of course, had a very dubious parentage. It was a misconception to start with and eventually a miscarriage.
It was finally brought in at the three per cent level. We have seen it extended, although we find singularly regrettable the words of the parliamentary secretary and the Minister of Finance that they were beginning their monetary expansion policy early in 1970. It is true that in the June or late May budget, they dropped the idea of a three per cent sales tax. I suppose it was anticipated at that time that the changes in the white paper on taxation would have been reported upon and brought into this House, allowing the government to bring in the tax changes and incorporate the three per cent surcharge into the ordinary tax rate. This was fully the intention of the government.

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In June the Minister of Finance indicated that he was going to allow the surcharge to die as of December 31, as it was not being renewed in the June budget. We also know it had been the intention not to present a budget, until the very last moment, for other than fiscal and monetary reasons, a budget was presented in order to sweeten the pot. It was a very feeble gesture because it was all promises for the future, not for this winter, arising out of the troubles of last autumn. That is what it was. Let's call a spade a spade.
The budget was one of the government's ways of reacting to the October crisis in the province of Quebec. It was also its belated recognition of the problem of unemployment, particularly in the Atlantic region and the province of Quebec. After all, the budget did not do anything for the other provinces. The parliamentary secretary shakes his head and purses his lips. The loan fund of $150 million or $160 million is supposed to be the anchor of this budget. It provides precisely $1.6 million for the entire province of Alberta for the end of fiscal 1970-71. Why, a spit in the ocean would do more than that to deal with the problem.
Many of the other things that are going to happen will only happen in the spring or after March 31. They may happen during May or June. If this was supposed to be a budget to alleviate winter unemployment across Canada, I say it was a complete and utter hoax. That is why it was so empty. The Minister of Finance can always use an extra couple of hundred million dollars. This government operates on the basis that you have to raise the money because you have the expenditures. Expenditures are already going up to approximately $15 billion. The government always taxes up to its expenditures.
If the government wanted to be careful in their expenditures in many sectors, there would not be this necessity for ever increasing demands upon the economy, far in excess of what the economy can stand. The sins are not entirely those of this particular administration, although the ministry must share the responsibility because most of them were members of the previous ministry which embarked upon programs which went beyond any rhyme or reason when measured against the economy.
If one had to put a cost benefit analysis on the economy and the spending programs, the programs would have been out the window long before this. But, no, it seemed to be politically expedient to establish certain programs and to blazes with the expense and damn the torpedoes. There they are. We are now receiving the bills. These are getting higher and higher all the time.
I wish to deal with the two particular items of this bill. They epitomize, in actual fact, the schizophrenia of the government when it comes to its monetary and fiscal policies. On the monetary side, we are told that the government is increasing the pace of the relaxation of restrictions to get the economy moving again. There were certain changes with regard to monetary policy starting in the spring. But of all the stupid things, that had to be the one. Even more paradoxical, in the June budget there were to be some retail sales credit restrictions which, of course, were never implemented because somebody finally saw the light. I do not know who it was, but they were proven to be extremely obtuse about these matters and insisted even into July that the regulations were being formulated. Then, of course, came the dawn. Unemployment was very serious. The government decided to drop the retail sales credit restrictions. This was one of the gestures given to the country. It would never have worked, and would only have increased unemployment.
It is remarkable as to how this surtax has changed over the past three years. It was imposed at the time of the monetary crisis in 1967-68. It was to be a dampener on the economy. It was renewed in 1969 because inflation was very pressing. The surtax had to be continued and extended to the end of 1970. In December, 1970, when employment was the number one problem and, to use the words of the Prime Minister (Mr. Trudeau), inflation had been licked, we were asked to continue the three per cent surtax. What is it now? Is it anti-inflationary? Inflation was supposed to have been beaten and controlled. Now, it is incorporated into the normal tax framework and will continue to be part of the anticipated revenues to be raised by the government. In other words, it is no longer a surtax; it becomes part and parcel of the normal tax structure. Moreover, the fact is that it is inflationary rather than anti-inflationary. The imposition of a surtax of this kind in a day and age when tax is deducted at source from the majority of working people means simply that in the next round of wage increases the cost of the surcharge is passed on to the employer. It is the take-home pay that counts. As far as the three per cent surcharge on corporate incomes is concerned, it is soon fed through the price structure back to the consumer. I would have thought this was so apparent to everyone that the government would have refused to resort to such a device. As a matter of fact, the government has been fighting inflation with the wrong weapons for far too long. As a result, we find ourselves in a serious depression.
By what means does the government intend to combat the recession? Not with a really expansionary budget. The one feature which the minister produced with regard to income tax changes involved a 15 per cent premium or bonus in connection with capital cost allowances. This looks very well on paper but it is difficult to foretell the result or the cost to the economy. Actually, this concession will cost the government nothing. As a result of the expansion which will be made in anticipation of this 15 per cent allowance, there will be increases in receipts from sales tax and additional benefits accruing to the treasury. So, on a net basis any loss will be more than made up by additional tax revenue from various sources. As I say, it is difficult to estimate what the total cost will be. Nevertheless, this is the type of tax incentive of which I tend to approve. All I can say is that on the basis of what we know today it is difficult to understand precisely the type of expenditure to which this concession will apply. Some elaboration will be required on the part of the parliamentary secretary when he replies.

March 3, 1971

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in many sectors? If they are not on the street, they are facing that prospect. Our industry is not big enough to transfer 300 people working in heavy chemicals in Edmonton and at Two Hills, Alberta, to Beauharnois or Shawinigan, because they are facing the same problems as well. The answer given by the Minister of Regional Economic Expansion (Mr. Marchand) the other day that the retraining programs, and so forth, of the manpower minister might provide a solution to the problem of these people was a fatuous one.


John James Greene: Shame.


Marcel Joseph Aimé Lambert: It was purely and utterly fatuous. Having said that the negative aspects of the surcharge far outweigh the potential benefits of the capital cost allowance bonuses that this particular bill following upon the budget is incorporating into the income tax structure, I conclude my remarks at this stage of the bill by saying that we intend to oppose second reading.


John Stratford Burton: Mr. Speaker, as I understand the provisions of the bill now before the House, the loss of revenue to the government as a result of provisions in one portion of the bill will be roughly equal to the gain in revenue achieved by the application of provisions in another portion of the bill. This brings to my mind the Biblical quotation: "The Lord giveth and the Lord taketh away. Blessed be the name of the Lord". I suppose the 1971 version of this Biblical quotation might be: "The minister giveth and the minister taketh away. Blessed be the name of the Prime Minister".


Some hon. Members:: Hear, hear!


John Stratford Burton: If hon. members are happy with that, that is fine.
This bill extends the application of the 3 per cent surcharge on income tax. The relevant section of the act will now read as follows:
This section is applicable to taxation years commencing or ending in or coinciding with 1968, 1969, 1970 or 1971-
It is almost beginning to read like a litany. This is now the third time we have had this surtax extended or reintroduced in the House of Commons.
To my mind, nothing can better illustrate the Liberal record of fiscal bungling and mismanagement than the story involved in this bill and the history of this particular tax measure. It seems that the Minister of Finance (Mr. Benson) is a man who can use an argument to suit every occasion. When I was preparing for this debate I had occasion to take a look at what the minister said in 1969, at which time he made it very clear that the government was not introducing the bill for purposes of revenue. At that time, the bill extended this particular surtax into 1969 and 1970, the measure having first been announced in the budget speech on June 3. The minister, however, did not get around to introducing the measure until some time late in the fall, and it was debated in December 1969. When the minister announced the extension of this surtax on June 3, he said it would be clear to

everybody that an extension of the surtax at that time was required for the purpose of economic stabilization and not for budgetary revenues.
o (4:40 p.m.)
By the time the minister got around to introducing the bill in the House of Commons the situation had changed. In June of 1969 when the minister first announced the institution of the surtax he pointed out that there were a number of factors which led the government to make this decision. He said the economy had demonstrated a strong performance at that time and that prices were continuing to climb. He said there were strong international pressures. By the time the minister introduced the bill, that situation no longer prevailed. In any event he barrelled straight ahead with the institution of a surtax, regardless of the fact that he was dealing with a different situation, and applied the measure announced in the middle of 1969.
This time the minister has a different reason for continuing the surtax. He made it quite clear in his budget address of December 3, 1970, that cash requirements represented the basic reason for extending the surtax. He said that in adopting this policy the government had decided that this would add greatly to its cash position. He went on to deal with a number of factors, one of which was the pressure for extra cash, which led the government to decide to extend the surtax into 1971. Who pays for this? Of course, the Canadian taxpayer must pay.
We have heard the Minister of Finance make other statements in the House dealing with this particular matter which are contrary and conflicting. I think for a moment we should refer again to the budget speech delivered on the night of December 3 last. At that time, the Minister of Finance was presenting a financial statement to the House of Commons. There were expectations that he would provide some stimulus to the Canadian economy. Unfortunately, there was nothing of the sort. I suggest that the best stimulus the minister could have provided to the economy at that time was a tax cut. This should have included a provision whereby this surtax would have been allowed to lapse at the end of 1970 rather than, as envisaged by the present legislation, being extended throughout 1971.
I want to make it clear that we in the NDP feel that further relief is needed through a tax credit system. This would assist our economy. I find it very difficult to understand why the minister did not respond to the situation that existed in December. It was perfectly clear then, to anyone who was prepared to analyze the situation and see what was ahead of us, that we were approaching a period of depression or recession, whatever you like to call it. Our unemployment rate was increasing at a terrible pace. Every indication was that the recovery of our economy would be very slow in 1971, and that in the meantime there would be no appreciable pick-up in economic activity. It was apparent from the early part of 1971 that there would be a relatively slow increase in he economic activity. This was the projection at that time.
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There has been nothing to indicate there has been any change in the situation.
The minister stated in his remarks that anyone with an income of less than $2,743 would not be affected by the extension of this surtax. Of course, this is correct. I am sure there will be a greater number of people than in previous years who will not be affected by this extension of the surtax because of the unemployment situation. I am sure that a great many of the 668,000 people, who were reported to be out of work in the middle of January, will not have any worry about the extension of this surtax, because their incomes will be reduced as a result of the slowdown of economic activity.
It is difficult to understand why the government, which is responsible for the over-all direction and management of the economy of this nation, did not provide greater stimulus. The answer can only be found when we consider the points raised on a number of occasions by many members of this House regarding the government's policy in respect of taxation. The government is looking at a different sort of schedule, one which does not involve merely an improvement in the rate of economic activity in 1971. There is something else involved. I suggest that "something else" is an election schedule, and the events leading up to the government's plan for an election.
There is no doubt that the government is planning for an election in mid-1972. I am sure there are many who feel that if we allow the economy to pick up too quickly in 1971,-by the time we reach the middle of 1972, people will not remember this unemployment situation. Thus, it is much better to stall off for a good portion of 1971, allowing the economic pick-up to take place toward the end of this year. According to this sort of reasoning, by the middle of 1972 the Canadian economy will be rolling fine, and things will be in good shape for the Liberal party to call a federal election. I suggest that a tax cut announced in the budget of December 3 would have been a real stimulus to the Canadian economy. It would have been of great help and might have had some beneficial effect on the rate of unemployment we are experiencing at this present moment. The government chose to do otherwise.
I should like to turn back for a few minutes to review some of the sordid history of this surtax, which really is very strange and unusual. As the hon. member for Edmonton West (Mr. Lambert) pointed out, it was on November 30, 1967 that the then Minister of Finance, who is now the Secretary of State for External Affairs (Mr. Sharp) announced this tax in his budget statement:
I come now to my tax proposals. My first proposal relates to the personal income tax. I am asking the house to approve a special surtax of 5 per cent of the amount of the basic tax assessed on an individual in excess of $100. This surtax will take effect January 1st and would remain I expect until we have completed the transition to a slower rate of growth of expenditures or until economic and financial conditions call for a change in our fiscal policy.
That was the statement in which the then Minister of Finance announced this particular measure. The resolution was introduced in the House of Commons on December 14,	1967, and the bill was introduced on
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February 6, 1968. It came up for second reading, at which time the then Minister of Finance made certain remarks. Then, something happened. I am sure this must still make hon. members on the government side of the House shudder. On February 19, 1968, the government bill was defeated by a vote of 84 to 82. This was a clear indication of a lack of confidence in the government. Nevertheless, the government managed to survive this situation.
They must have had some second thoughts because it was announced that the then Prime Minister, Mr. Pearson, was to retire and that a Liberal Leadership Convention would be held. I am sure at that time the Liberals must have thought that after the leadership convention they would want to hold an election, and that it would be much better to have a different type of tax measure before the House of Commons than that which had been first proposed and defeated in the House. So, finally a new bill was presented on March 7, 1968 which was not quite as bad as the original measure. However, it ran into some procedural difficulty and another bill was introduced on March 12, 1968. At that time the Prime Minister, Mr. Pearson, made a very lengthy speech in which he defended the government's record and pointed to the necessity for fiscal restraint. He used this as a defence in respect of introducing the surtax at that time. He went on to quote various authorities to back up his statement that this measure was needed in the interests of fiscal restraint and because of the necessity to slow down the economy.
What is the situation now? I think this was pointed out by the hon. member for Edmonton East (Mr. Skoreyko). Are we dealing with an inflationary situation? Is there no need to stimulate the economy and encourage economic activity? Are the government's policies adequate to deal with the present level of unemployment? I suggest the government's economic policies have been found to be totally lacking. This was pointed out to the government this week when the Canadian Labour Congress presented its brief to the federal cabinet. There were some pretty strong words used by the Canadian Labour Congress in its brief, and rightly so. I notice the parliamentary secretary smiles when I refer to this particular brief. I do not think some of the government's ministers were smiling when they listened to the words used by the Canadian Labour Congress, because that organization was speaking on behalf of many of the 668,000 people who are out of work, according to the January statistics. That figure probably is higher now.
In its brief, the CLC stated:
What disturbs us, and many others, is that our current unemployment problem has been artificially created. It is not the result of natural business recessionary conditions. It is the direct result of coldly-calculated policies whose sole object was to induce unemployment in order to combat inflation. Your government's anti-inflationary program, based for a long time on very tight fiscal and monetary policies, has been primarily responsible for the fact that we have hundreds of thousands of unemployed Canadians. Your government's strict adherence to "conventional economic wisdom" in attempting to deal with an

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inflationary situation which was largely external in its origins, is perhaps the most incredible phenomenon we have yet seen on the economic front in Canada.
Then, the brief stated further:
Never before in the history of this country did a Prime Minister state before a national audience that it was his government's intent to allow unemployment to rise ''if necessary to 6 per cent", to combat inflation. Never before did any federal government knowingly, consciously, and with a cool detached deliberation sentence hundreds of thousands of Canadian workers and their families to the hardships of unemployment. The brutality, the callousness, the studied indifference to the human consequences of this anti-inflationary approach were matched only by its ineptitude.
Certainly, those are very strong words. I suppose there might be a few members on the government side who would suggest that this is what might be expected from the Canadian Labour Congress because it is bound to be critical. I wish to point out to members on the government side that there have been other occasions when the Canadian Labour Congress has taken a much different approach in its presentations to the government. It has been very mild on some occasions and even complimentary in some of its presentations to the government. Not this year, and I suggest the government take careful note on this particular fact.
Now, Mr. Speaker, the other section of this bill, of course, deals with capital cost allowances. This matter has already been referred to in the introductory remarks of the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney), as well as by the hon. member for Edmonton West (Mr. Lambert). Of course, we know that in the manufacturing and processing industries owners of depreciable assets put in place between December 4, 1970 and March 31, 1972 will be able to write-off 115 per cent of the original cost according to the government's proposal.
The government, through this measure, intends to stimulate private investment and the economy. There are three different approaches to illustrate the stimulating effect these proposals which have been advanced are planned to have on private investment. The first suggestion is that 7.5 per cent of the cost of the asset will be added to earnings over the depreciable life of the asset. Second, it could be viewed as a 6 per cent reduction in the effective cost of the machinery according to calculations by Clarkson Gordon. Third, it could be viewed as having the same effect as about a 3 per cent reduction in interest rates the first year. There are really two important consequences which arise out of this which should be noted. The first is that businessmen could accelerate their investment plans or proceed with investment plans that had previously been marginal, both in order to take advantage of the more generous allowance being proposed. Secondly, businessmen who had already made investment plans will receive a windfall gain.
When we attempt to evaluate the government's proposal to increase capital cost allowances, I think one must ask what economic goals the proposal is intended to achieve and how effective the proposal will be in achieving them. The budget address of the Minister of Finance on December 3 last purported to set down in a concise
manner the economic strategy of the government for achieving our first economic objective, a steady and sustainable improvement in the real income of Canadians everywhere. Then, later on in the budget speech, the minister stated that a steady and sustainable improvement in the standard of living of all Canadians requires the fullest possible utilization of the nation's human and material resources. This really means full employment. In addition to full employment the speech indicates that economic stability, a good price and cost performance and a satisfactory balance of payments are necessary pre-conditions to the economic goals.
In his budget speech the Minister of Finance also stated that the latest figures on capital investment, apart from housing, are also stronger and that the recent preliminary survey of capital investment intentions indicates growing strength in this area of activity next year. Activity in this sector this year has been one of the weaker elements in the economy. Later on in the budget address the Minister of Finance noted that private capital investment has been one of the weaker elements in the investment picture, particularly investment in secondary industries. He went on to describe this measure as an example of selective fiscal policy since it applies only to the manufacturing and processing industry. The result, he predicts, will be new capital projects, a speed up in the outlays planned for the future, all leading to new jobs for a variety of skilled people in the labour force.
The DBS survey of capital spending intentions for the 200 largest companies in Canada indicates an 11 per cent increase in 1971. This survey of course was taken before the Minister of Finance presented his budget statement. However, the increases in the manufacturing sector are expected to be more moderate. The Economic Council of Canada, in its medium term capital investment survey, projects about a 9 per cent increase in 1971 for all industries, and some 6.2 per cent in the manufacturing sector. However, the subsectors of manufacturing show a wide diversity of intentions. For food and beverages, it is an increase of 1.2 per cent; for pulp and paper, a drop of 11.9 per cent; for primary metals, an increase of 40.8 per cent; for chemicals, an increase of only 11.4 per cent; for transportation equipment, a drop of 36.6 per cent; and for others, an increase of 15.7 per cent.
The figures for the subsectors of the manufacturing industry indicate that perhaps the capital cost allowance proposal was not selective enough. The primary metal industry, which already had planned a 40 per cent increase in capital expenditures, will receive a substantial windfall gain. The pulp and paper industry on the other hand, which has excess capacity and which brings the average investment intentions for manufacturing down, will probably not be taking advantage of the proposal. Where, on the one hand, the application of the increased capital cost allowance proposal may be too broad, the restriction on the type of expenditures that are eligible may be too narrow. Research and development expenditures, and expenditures on pollution abatement, are examples of the type of capital investment that

March 3, 1971

are not eligible in many respects. Since 11 per cent of the capital investment intentions of the pulp and paper firms surveyed were directed toward pollution abatement expenditures, how much of this would be new plant equipment which would qualify under this proposal?
A Financial Post survey of December 12, 1970 suggests that the immediate reaction of companies surveyed was not one of enthusiasm for the proposal. I would like to draw to the attention of hon. members an excerpt from an article in the Financial Post of December 12 which reads:
Ottawa's policy makers are counting heavily on the budget's extra write off to spark new capital investment in 1971-but so far industry is reacting coolly to the incentive.
Finance Department officials told Financial Post they expect that the rise in capital cost allowances to 115 per cent will have the biggest economic impact of the various measures proposed.
Industry-to judge by an FP roundup of opinion this week

thinks the incentive will provide "only minor stimulus'' to industrial expansion.
That is the view of most makers of pulp and paper, food equipment, plastics, steel, computers and other products canvassed by FP. Only a few companies said Benson's proposal might have any effect on their expansion plans.
The Financial Post went on to note the regional implications of this proposal, which leave something to be desired. The article then continues:
Those skeptical of the scheme's pull point out that Benson's proposal is not likely to be as powerful a stimulus as other measures in the 1960s, such as the U.S. 7 per cent investment tax credit or various fast write-offs made available by the 1962-64 budgets of Walter Gordon.
What's more, it's claimed by critics, the value of the extra capital cost allowance will be obscured by continuation of the 3 per cent tax surcharge.
Later on the article points out some of the reasons this particular measure would not have the desired effect for those sectors of the economy in which it was desired to bring about expansion. The article reads:
But design, land, purchase, and other preliminary activity would take about a year and a half. Construction could probably only be started when Benson's program was ending.
Ironically, companies that had already made expansion decisions but had not yet received machinery or equipment, or taken possession of new buildings, will receive an unexpected windfall.
Conversely, companies that make the decision to expand during the 16 months of the program, but leave it too late to take delivery before March 31, 1972, will lose out.
This should mean, for most practical purposes, that management expansion decisions will have to be taken during the first half of 1971 in most cases in order to qualify. And that is exactly what Ottawa wants to see happen.
But of course, it was pointed out in the article that this is not likely to take place to nearly the extent that is anticipated by the Department of Finance. Thus we see that this measure will not have nearly the stimulating effect on the Canadian economy that the government has anticipated and that it had hoped for in making the announcement that it did on December 3.
I could call once again to the attention of the Minister of Finance an article in the Monetary Times of Septem-
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ber 1968, which was referred to by my colleague, the hon. member for Waterloo (Mr. Saltsman), when he was speaking in the budget debate last September. It is recorded at page 1809 of Hansard. I will not take the time of the House to read the entire excerpt, but at that time the Minister of Finance did state, in an interview for the Monetary Times:
Big business may soon have reason to examine a further dimension of the Just Society: The Federal Government, with ample cause to do so, is almost assuredly taking a hard long look at capital cost allowances-the rates of depreciation allowed for tax purposes.
Projections made on the strength of a study done for the Carter Report suggest that since 1949 tax deferrals, arising from capital cost allowances, are now close to $6 billion. That is $6 billion which Ottawa never got and which had to be made up in other ways, notably by increasing taxes paid by individuals- hardly tolerable for a government which has been so chronically strapped for cash.
The report went on to point out:
The report to the tax authorities can understate actual earnings to a degree that is totally misleading of their value. DBS, for example, uses the returns made to tax authorities in calculating profit trends. Would the trend have declined so vigorously (if at all) last year if corporations hadn't been writing off new investment of the preceding years at, the maximum rates?
Later, the article continues:
This is one major cause for another look at capital cost allowances. Another is the consequences for the company that makes maximum use of them.
The article goes on to deal further with the subject. This shows that the minister himself, has, on various occasions in the past, expressed a great deal of doubt about the value of this particular mechanism in stimulating the economy. It can have inevitable and undesirable consequences for the economy as a whole. Thus, I feel that this is the worst possible kind of bill. It demonstrates Liberal incompetence and their callousness toward the needs of Canadian people. Consequently, we in this party will oppose the bill to amend the Income Tax Act.


Henry P. Latulippe: Mr. Speaker. I am happy to say a few words about Bill C-225 extending for another year the so-called 3 per cent social development tax.
When the government levied that surtax, it was just to offset an apparent deficit and for one year only. It is now in its third year and this will be the third extension of its duration.
The last budget reveals that in Canada debt service has increased by some $2 billion within the last few decades, and the population of Canada is increasingly living in poverty.
Indeed, Canadians are living in abject poverty and this fact is recognized by all. There is no end to the expenses involved in setting up commissions which are instructed to determine whether there are poor people in Canada, how many of them there are, and how to deal with the problem.

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But with an increase in taxes and the continuation of the 3 per cent surtax, Canadian citizens will have to pay these taxes and thus our taxpayers will lose the purchasing power which they had of could have had.
Then why is the government continuing this tax while we of the Ralliement Creditiste are advocating the introduction of a federal measure to establish an integrated credit for the whole of Canada. Accordingly, we tell the government that this economic monetary dictatorship is at the root of all our evils, of all our economic and social problems. We want a provincial and a federal legislation to wage war against poverty.
Will the extension of this 3 per cent surtax enable the government to achieve the stated aims? Mr. Speaker, we are dealing with an unpleasant and unfair situation just as we are pressing for a just legislation in a united Canada.
So, there is something the matter. What is preventing discussion and knowing the reason for the extension of this tax? To know it, you have to examine the meanders of the financial system.
According to the increase in taxes we have, or to the extension of this tax, our fiscal system is unfair. I will say that those who proclaim it, as well as those who accept it, are accessories to injustice and social disorder, accessories to anarchy, responsible for the present unbalance, responsible for taxes and surtaxes of all kinds, responsible for debts, for public and collective debts, since the extension of this tax will increase further collective debts and public debts, and even private debts. They are therefore responsible for poverty in families, responsible for dread, fear and all unnecessary privations.
The economy as advocated by the government is responsible and unfair, and is part of the injustice suffered by many Canadians. Our whole taxation system is the result of a financial system built on injustices. Our system is the aggregate of finance companies that control the financial system. It is a para-international system. Banks issue currencies that we call credit based on the real wealth of the country. Very well. Without that, credit would be valueless, because it constitutes the real wealth. Then, the credit money is only a symbol of real wealth. The true wealth is the thing; money is the symbol based on the thing. Therefore, it is recognized that credit given by various institutions is based on the true wealth of the country, that belongs to the country, that is is inhabitants.
As a matter of fact, there is individual wealth and collective wealth. Our financial associations or bodies are only individuals amongst other individuals; they are responsible for the money of the country, and now they proclaim themselves the owners of the money issued by them, as soon as it is issued; the owners of credit in order to cancel it when they decide to do so; the absolute owners of all the circulating currency, since they appoint themselves masters of the birth and death of money.
The extension of this tax, Mr. Speaker, is necessarily a reflection of wealth. The banks claim for themselves the ownership of money. Wealth is owned by citizens, but
money, the symbol of wealth, is unjustly recognized as the property of bankers. With money, bankers have in their hands the tool necessary to take over all the wealth; they have taken over a good part of it. This is one of the reasons why the government was obliged to extend these taxes.
The financial institutions hold a mortgage on all real wealth, both public and private. The total debt of the country which comprises both private and public debts outweighs considerably the value of such weal.h. The total debt of the country is the credit of the financiers. Banks own indirectly all the wealth of Canada and of Canadians; they claim an interest on these riches, and they may at any time demand the repayment of the capital. They can seize the capital whenever they like. The debts of the country to the financiers prove that this system is unfair and antisocial.
We find ourselves again in a tragic situation: either taxes are increased or the 3 per cent surtax continues to be in effect.
The present taxes are not necessary for the common good because they are levied only to pay interests to a few privileged institutions, to a few individuals who have the right of life or death over the institutions, the companies, the citizens, the government, and who thus become deprived, frustrated of their first and vital necessity. Those taxes merely and simply become a theft. They are part of a strategy organized by the powerful to strengthen their own power and, at the same time, weaken the power of individuals, of governments, who are right in claiming the ownership of the actual wealth which they create by their work.
Thus theft goes with tyranny. We must at all costs change this financial system, since the riches of the world were created for all men. It is the duty of Parliament to put them at the service of men, under the control of this government. All citizens must be able to enjoy a fair share of those riches made available to them by nature and industry and the extension of this tax does exactly the opposite.
Workers in this country create wealth and our financial institutions do the accounting so as to enable the citizens to exchange that wealth. That accounting is money. The Canadian people are by right the owners of that wealth and our institutions are constituting themselves owners of the money they make. Therefore our institutions, through a simple accounting process, register to their own credit what should be the assets of this country and at the same time they wish to register as national liabilities all the riches of this country. That last operation is practised when banks or financial institutions enter as the borrowers' liabilities, who are individuals and governments, that credit based upon riches. Financiers can steal that way because the money they create is created in the form of loans to individuals and of bonds. All the money that is made and thus created by the banks, as debts, is debt money.
The more people are taxed, the more taxes are increased and the more the people are buried in misery and austerity.
[Mr. Latulippe.l
March 3, 1971

Financial institutions lend money but do not lend interest. They demand the repayment of those loans plus the interest they did not create. Such is the nonsense of that system that is becoming the greatest fraud in history.
The national debt means the national resources that were stolen by those institutions. It would be logical for the national debts to be converted into national capital, into equity, into social credit. The interest paid on the national debt should be converted into social dividends. Through this means, debts would vanish.
Such is the solution that we have been advocating for a long time, but to which the government never agreed. However, it never found another reasonable solution to offer. If this government were really serious, democratic and responsible to the Canadian people, it would surely bring about some amendment to our legislation, within the framework of our present system. We need not change the framework of our present system, for we could, by means of simple amendments to our legislation, return to the public what it is entitled to, and, in that respect, convert the national debt into a national dividend. This is what we would do if we opened our eyes and ears.
At the present time, we keep increasing the nation's debt and pushing our people deeper into economic stagnation, for 25 per cent of our budget goes for social welfare, whereas 14 per cent of it is used for economic support and expansion. This means that social welfare institutions gobble up almost three quarters of our budget. When a country has reached the point where it devotes that much of its budget to keep people from starving to death, to pay unemployment benefits and social welfare allowances to the poor, an increase in taxes is surely untimely. This is no time to extend the application of taxes.
We must, as members of Parliament, vote against this tax and abolish it as soon as possible and reduce the debenture rate. When government bonds are sold instead of buying them back at the new interest rate of 7, 8 or 9 per cent, we should at least keep the rate at its previous level. This would be doing something for the people. As long as we fail to do that, we shall keep on increasing debts, taxes, unemployment and public welfare costs.
This leads us to blame severely the government and the opposition for not opening their eyes in time to bring the necessary changes that would allow Canada to progress and live in affluence. Instead of distributing scarcity, of increasing taxes and of giving piecemeal to our citizens what they are entitled to have, we could give them directly everything they need and we would still be able to administer within our system, because the capitalist system is the best in the world.
We are faced with two ideologies: the communist ideology and the capitalist ideology.
If we are unable to come up with a better and more humane ideology, I wonder where we will end up.
Income Tax Act
Mr. Speaker, we shall therefore vote against this tax. We cannot support any longer the extension of this tax as we have other solutions. We could do something else.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in rising to speak on Bill C-225, which is a small measure introduced to change the tax law, I must first say that I think it is small in scope but large in result. It indicates the way in which the government is carrying out its course of action for the economic and fiscal well-being of Canada.
The state of the Canadian economy is not all that good. We have one of the highest unemployment rates in the western world. Dr. O. J. Firestone, who was one of Ottawa's most powerful bureaucrats of a decade ago, recently wrote an article for the Canadian Tax Journal. He had a lot to say, nearly all bad, about this administration's anti-inflationary policy.
He writes:
The question is not whether the Canadian government should have pursued anti-inflationary policies. Rather the question is whether it was necessary to go so far out of line with the economic performance of most of the industrialized countries of the world.
Compared with the other 18 so-called OECD countries, we have created in Canada the highest level of unemployment among the industrialized nations. Consumer prices are lower admittedly than in most of the OECD countries, but in terms of industrial production we have the fourth worst record of OECD countries. Dr. Firestone estimates that a more lenient application of policies to control inflation could have increased the gross national product by $2 billion and found 200,000 new jobs.
Dr. Firestone goes on to say:
Did Canada pay too high a price in becoming the world's leading nation in fighting inflation?
He predicts there will be "continuing under-utilization of the nation's production capacity" for 1972 as well as this year. It is indeed a grim assessment of a government which has hired all sorts of experts to help it with the management of the nation's business.
Canada may have had the greatest measure of price stability in the western world, as the Minister of Finance (Mr. Benson) has stated, but it also has had the highest level of unemployment with a consequent loss of close to $2 billion in gross national product. Nor have there been any indications of material changes this year in spite of the government's effort at pump priming, in the main through regional development incentives. Indeed, it is unlikely to show any improvement on last year's 3 per cent. A large part of the reason for this is that the government has drained the well of private productivity. Inflation has taken its toll of private productivity and high taxes and labour costs have also lowered the well.
The profitability of business-still the largest source of employment-has been declining since 1965-66 in spite of the physical growth that has been attained. Attempts by the government to take up the slack have not been too

March 3, 1971
Income Tax Act
successful. The cost of job creation in the government section is considerably greater than in the private sector. And in this manner, Mr. Speaker, I think that a tax reduction would be indicated and it is for this reason that I oppose the retention of the three per cent surtax.
The white paper proposal for tax reforms based on 1969 income would extract an estimated $205 million in its first year and $560 million in its fifth year. We cannot forecast what effect the white paper on taxation will have on the flow into financing growth. I do not think that anyone seriously questions that savings will be diverted.
Then, there is the high unemployment benefits, higher pensions and related measures. All are very desirable, but all pre-empt funds from business growth. In the past some of these funds came from outside the country. However, these will likely be reduced in the future. They are being repelled by high taxation and uncertainty. It seems that the government is basically in contradiction with itself. It is increasing its demand on domestic funds when it should be reducing them. I oppose the retention of the 3 per cent surtax at this time, Mr. Speaker.


Mr. Andre Fortin (Loibiniere):: Mr. Speaker, there is now before the House a government motion designed to extend the so-called social development tax of 3 per cent which had been imposed on a temporary basis in the spring of 1968.
In fact, at that time, the then Minister of Finance, who is now Secretary of State for External Affairs (Mr. Sharp), said that this surtax would only be levied in 1968 and 1969.
Ottawa finances are now in a bad way, and what is worse, they are inadequately and inefficiently managed. They are so far from achieving the anticipated results that what is adopted temporarily becomes a sort of habit-unfortunate and unexplainable we must admit- because the government does not plan either on a short term or a long term basis.
We have evidence of it today in this measure designed to extend the social development tax of 3 per cent which had been imposed on a temporary basis. It is a clear indication of the failure of the Liberal administration which is more proficient in the art of provoking and muzzling than in management matters.
Mr. Speaker, a high level of taxation and government revenue per capita is naturally associated with a high level of public expenses per capita, and this would lead us to believe that Canadians should expect more government services.
So today the federal government must justify not only the principle of this 3 per cent increase in taxation but also the use it is being put to.
Having heard the presentations of previous speakers, with the exception of the speech of the hon. member for
Compton (Mr. Latulippe) who showed the other side of the coin, as is seldom done in this House, I say straight out that this government is unable to justify this 3 per cent surcharge.
Mr. Speaker, when this 3 per cent surtax was enacted in the spring of 1968, it was specifically designed to increase governmental revenues so as to enable the government to ensure a marked social development for the community as well as for the individual.
I refer to the speech delivered then by the Minister of Finance who said that without this surtax, the government would not be in a position to ensure social development and that with it, Canadians would be a lot better off.
The result of such a policy is apparent today. Such is truly not the case. This tax, a so-called social development tax, not only has not ensured social development in Canada but, furthermore, it has not provided anything worthwhile to those whose income places them on the threshold of poverty.
The principle of ensuring social development through taxes is, in my humble opinion, basically wrong and, as conclusive evidence, I would say the same thing of any social welfare or guaranteed income legislation which we now hear more and more about and which would only result in increased social welfare expenditures and finally, would not eliminate poverty in Canada, because it gives rise to an unfair increase in taxes based on unfair tax rates. The Finance Minister of King Philip once said: "Give me sound policies and I will give you sound finance."
Not only our financial situation is poor, but our policies are out of focus. It is a basic truth and this is why I feel that a country cannot at the same time indulge in every political trend and fancy, while forgetting the individual needs and its duties, and still believe that the economy will continue to progress.
If the government does not accept its financial and monetary responsibilities, it must not expect that the economy will be prosperous. When we sow poverty we reap poverty. When we pass legislation creating social injustices we create social injustice. When legislation that favors the big man at the expense of the little man is initiated, the result is oppression of the weak by the strong.
Mr. Speaker, naturally I want to oppose strongly the 3 per cent surtax because it advantages the big man, the large companies that crush the small people, regardless of their income.
I will go even further. The philosophy of the central government is unfair, not only to individuals at the benefit of large companies, but also to the provinces whose revenues are limited by the federal government. The policy is also unfair to municipalities that are deprived of that much taxing power.
Today, provincial and municipal governments, instead of trying to meet the needs of the individual by giving him more purchasing power, must fight with the federal government to know who will tax the individual more.

March 3, 1971

Mr. Speaker, the three levels of government all operate on the same fundamentally erroneous policy. Let us take a few minutes to analyze the phenomenon.
Mr. Speaker, when the economy is in full swing, what is the fiscal or monetary policy of governments under the present financial system? The only policy which they advocate is a policy of expansion of investments. As they cannot implement that policy of investments by their sole resources, what do they do? They go to foreign countries to borrow money at high interest rates in order to reinvest in Canada.
But when the economy is recessing, when social progress is not assured, what do those same governments do? Which principles guide them to lead the economy? They do the contrary, by adopting positions of restraint on credit. The right hon. Prime Minister (Mr. Trudeau) was telling to the leaders of the CLC this week: If inflation has caused unemployment, it is because workers have shown unwillingness to tighten their belt. A restraint policy, this is what it means.
When the economy is expanding, instead of financing such development with the tools available to them, government borrow from foreign sources. In so doing, they plunge individuals into debt.
As a matter of fact, if one refers to statistics, he will see that the per capita debt in Canada has been conti-nously on the increase for 25 years, and this because governments never stopped borrowing at exorbitant interest rates.
Such a policy contributes to individuals getting into debt. And while we go through a recession period, governments as I said propose measures of restricted credit, telling everybody: Tighten your belts! Starve to death! We have to prevent galloping inflation! Stop there! Sit quietly, we must avoid galloping inflation! And they adopt measures aimed at restricting credit.
Now, this second item of the government's fiscal policy brings about the same result as the first-indebtedness for individuals. In fact, over a period of economic recession, the individual, while seeing the various governments tighten credit, finds himself obliged to get into debt, for he lacks money. Then the unemployment rate is bound to increase. The individual lacks a stable income. His security is challenged, his freedom of choice lessened. And in such a case, as in the first, again it is the individual who becomes deprived of pm-chasing power, and his indebtedness persists. This explains why the Canadian people have $12 billion worth of debts, entered into with the help of private finance companies which are quite happy when economic crises occur for they can handsomely benefit from them while they provide loans at interest rates ranging from 15 to 25 per cent.
Mr. Speaker, the government therefore has only two means as its disposal to control, administer and guide the economy. Those two means, one of which serves in times of expansion, the other in times of recession, have the same effect, that is to deprive the individual of the purchasing power he needs, fundamentally and vitally, and secondly, to increase his debts.
Income Tax Act
That 3 per cent tax lies at the very heart of the problem. It is the logical result of an administration basically distorted that fits, it must be said, into the context of a poor administration.
Mr. Speaker, as recorded on page 7394 of Hansard of March 7, 1968 the then Minister of Finance said, at the time the 3 per cent surtax was implemented, that this tax would only apply to 1968-69 to solve an immediate problem.
The mere fact that the government is extending this tax proves that its policy is no good.
The Minister of Finance of the central government made a mistake and this is why today the government must impose again this tax with a new "song".
In 1968, the 3 per cent surtax for individuals was expected to yield $105 million during fiscal year 1968-69, but it was not necessarily applied to corporations since this was to produce only $45 million.
These figures are supplied by the ministers of Finance themselves and they prove that this 3 per cent surtax did not apply to those able to pay it but rather to those who had no choice and whose income was inadequate.
Mr. Speaker, in view of the premises I have just stated, the government's policies during expansion or slowdown periods inevitably contribute to increase the debts of the individual. In fact, this tax applies to the individual and not to the big companies. With this tax, the government is once again adding to the burden of the individual, the family man, the worker and the farmer.
Mr. Speaker, the 3 per cent surtax is not quite fair in our present system. Let us suppose-what I will never admit-that the present tax table is fair, this tax is still more unjust than the present tax table. At least the latter takes into account a certain income scale, while the 3 per cent tax equally applies to all individuals, regardless of their income, the number of their children or their responsibilities and needs.
Mr. Speaker, this tax is disgusting. Moreover, the surtax levied in 1968 was levied in an allegedly inflationary period, but according to the Prime Minister, we are not going through such a period at the present time. The Minister of Finance and the Prime Minister boast of having checked inflation and when this 3 per cent tax was established, they both said that surtax was to be levied at all costs, since it would help to check inflation.
Mr. Speaker, if we are to believe the Prime Minister's words, inflation today has been checked. Therefore, why a 3 per cent tax? Either the Minister of Finance lied in the spring of 1968 or today's minister is also a liar. But a decision has to be taken. If inflation was really checked, has he any reason today for keeping that 3 per cent tax? If it has not been checked, it means a 3 per cent tax was levied upon us in 1968 under false representations and the government should therefore give back to every taxpayer the money thus wrongly collected.
Those are but idle dreams really, for the government is using that to beguile people, so as to make them forget the real problem.

March 3, 1971
Income Tax Act
Mr. Speaker, whenever there is an economic recession, this government like its predecessors adopts measures to restrict credit. We say that it is precisely at such a time that the government should do something, through the use of two monetary and fiscal instruments, easily controllable, respecting individual freedom and security, namely the compensated discount on prices.
When the economy is expanding, the government should resort to what we call the national dividend.
The national dividend and compensated discount are the only two tools which, while respecting the liberty and security of individuals and adapting to their needs, allow them to really take part in the economy, to get their share of production, while avoiding economic recessions or the notorious economic cycle we know constantly, namely inflation or recession.
For these reasons, I am totally opposed to this so-called 3 per cent social development tax which has not really produced social progress but rather the recession of our economy, especially of individuals.
Mr. Speaker, in a twelve month period of application, according to the present Minister of Finance, it is expected that this tax will bring in $245 million. Experience has shown repeatedly that the present legislation is not strict enough with respect to companies and firms and to capital costs.
The present legislation on capital costs favours industry too much rather than the individual, and the bill before us today will result in a direct improvement of a situation which is already too beneficial to the big ones, that is, to those who already have a strong position in the economy, against those who are destitute. The bill introduced today by the Minister of Finance is aimed at encouraging new investments, and the tax paid by companies concerned will be reduced for a certain number of years by something like $250 million. Next year for instance, the reduction will amount to $25 million.
This bill has been introduced for the benefit of major companies and at the expense of individual citizens, householders and all those who now need government help to live.
In 1968, some 36 per cent of all individual citizens who had paid income tax were not concerned with the 3 per cent surtax. In 1971, because of these new principles of the Minister of Finance, only 25 per cent of Canadian taxpayers will be exempt.
Therefore, the 3 per cent surtax imposed by the government today is not exactly the same it has levied in the spring of 1968. Thus it modifies the aims set up in 1968; this is another indirect way, not to levy 3 per cent, but in fact 6 per cent on income because, owing to the renewal of the former 3 per cent tax, more individuals will be touched and fewer companies will be affected.
The government's need for money has obviously increased today. Before this bill is passed, we might wonder, whether the result of government policy, financed with millions of dollars, is really what was expected.
Mr. Speaker, when we look at the social, economic and fiscal situation of Canadians we soon realize that the results in the field of the socail policy of the liberal government have fallen short of the results which had been anticipated, and that poverty and misery have worsened in a country glutted with riches.
The wealth of a country, or its sound economic productivity should not be assessed according to its resources, since a country may have great resources and great poverty.
The value of the economy should be assessed according to the brains used to administer it. If there is still some gray matter left on the other side of the House, let them use it to make the economy serve Canadians and stop levying taxes and surtaxes. Heavens knows what kind of tax they can dream up to increase revenues. Let them stop crushing the small Canadian taxpayers and at last give them the opportunity to participate in the economy.
We are making today another attempt to protest against the levying of the so-called social development tax of 3 per cent because it was levied on false pretenses, and did not produce the results anticipated. Since this tax is not warranted, the government should save us from it.
Mr. Speaker, we are taking this opportunity to show our colleagues we are floundering in this financial system, that all these measures mean nothing and only aggravate the economic situation of the country.
Mr. Speaker, we urge our colleagues seriously to consider the Social Credit theory and the solutions it proposes, namely, use the Bank of Canada to advance the necessary credit to all levels of government, federal, provincial and municipal, in order to really finance social progress at the public sector level without putting the Canadian taxpayers into debt.
Today, to finance their investments, the governments have to get the Canadians into debt, depriving them of the minimum purchasing power. We suggest that they use the Bank of Canada to finance social development, to support the policy of the federal, provincial and municipal governments, in order to pay for only one school, only one bridge. We must no longer have to pay for three schools: two for finance, and one for us.
That is what makes the taxes go up. Interest mars the loans of the government, and by borrowing it does not use the tools at its disposal. All it has to do is to decide, but it continues to get the Canadians deeper into debt. We urge the government to use the Bank of Canada to finance the public sector on the basis of the true value of the goods produced, the real credit, so that our country might achieve a decent, progressive growth, without getting the Canadians into debt.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I cannot let this seemingly insignificant bill, as it hardly covers one page, pass. Once more in the House, there seems to be an agreement on the government side as well as on the Conservatives and the New Democratic party's side, to allow the passage of this monstrosity.
[Mr. Fortin.1
March 3, 1971

Well, no. I just want to say that we refuse to let the government tax and "retax" the population. It always proposes little insignificant and temporary taxes, which are finally retained. The Canadian people always wonder why parliamentarians do not even dare protest against this abominable-



BUSINESS OF THE HOUSE

Mr. MacLean:: Mr. Speaker, might I ask the House leader whether he will confirm the business for tomorrow, and whether or not we will continue with this debate.
Business of the House


Allan Joseph MacEachen: Mr. Speaker, we propose to continue with this measure tomorrow. It may be that when we have completed this measure the order that I announced last Thursday will be changed, but I will confer with the house leaders tomorrow morning about that possibility.


The Acting Speaker (Mr. Richard):: I must say that this House today reminds me of my family motto, "Sat seto si sat bene"-which roughly translated means "let us proceed slowly but surely".
It being six o'clock, this House stands adjourned until tomorrow afternoon at two o'clock.
At six o'clock the House adjourned, without question put, pursuant to Standing Order.

Thursday, March 4, 1971