1971-09-29

PRESENCE IN SPEAKER'S GALLERY OF PRIME MINISTER OF THE BAHAMAS, HON, LYNDEN OSCAR PINDLING

Mr. Speaker:: Order. May I be permitted to bring to the attention of hon. members the presence in the Speaker's gallery of an eminent visitor in the person of the Hon. Lynden Oscar Pindling, Prime Minister of the Bahamas.


Some hon. Members:: Hear, hear!


Mr. Speaker:: On behalf of all hon. members I extend to you, Mr. Prime Minister, a most cordial welcome to Canada and to the House of Commons.


Some hon. Members:: Hear, hear!



PRIVILEGE


Mr. Frank Howard (Skeena):: Mr. Speaker, I rise on a question of privilege regarding an answer given by the government to question No. 602, shown in Hansard at pages 2228 and 2229 for January 12, 1970. It came to my attention only this morning that it is a false answer and that, again, misleading information has been given to the House of Commons. Part of the question which was posed was:
Have all reclassified employees been retroactively paid the salary, allowances, pension and other benefits to which they were entitled as of the 1967 date-
And so on.
The answer given was "Yes". The fact of the matter, with regard to the one employee who at that time was involved in this situation, is that in fact he had only been paid retroactive salary and wages to December 1, 1968, and not to 1967, as had been asked and answered in the affirmative, and that he had been employed by the government in this capacity back on October 1, 1966.
There is another erroneous part of the answer which I shall not go into at this stage, but it deals with more than this one employee. The result of this false information is that the employee involved, a person of Indian descent, has been denied the further retroactive wages he should have received and that there may be involved another $2,000 or $3,000 in back wages. The erroneous answer to the other part of the question would involve at least 100 other caretakers of Indian day-schools, because likewise they have been denied their full benefit under the Public
Service Staff Relations Act and the wages which have accrued to them.
Based on this, Mr. Speaker, I should like to move, seconded by the hon. member for Timiskaming (Mr. Peters), if you find there is a prima facie case of privilege:
That the Committee on Privileges and Elections be authorized to inquire into the information given by the government in response to question No. 602 as shown at pages 2228 and 2229 of Hansard for January 2, 1970, as well as into the matter of all persons employed by the Department of Indian Affairs and Northern Development as Indian day-school caretakers.


Mr. Speaker:: The hon. member for Skeena proposes that the House consider, by way of breach of parliamentary privilege, what he calls false information given in a return to a written question. I suggest to the hon. member that there are at least two procedural obstacles that he does not appear to have overcome in the presentation he has just made to the Chair and to the House. The first is that the Chair is not at liberty to rule that there is a prima facie case of privilege when the matter complained of is a dispute as to fact. There are many well known precedents which could be quoted in this respect.
The other difficulty relates to the requirement that the matter should be raised at the earliest opportunity. In this respect I refer hon. members to May's Seventeenth Edition, page 378, as follows:
The matter must be raised at the earliest opportunity. A matter of privilege which claims precedence over other public business should be a subject which has recently arisen.
As an example, the learned author makes the following statement:
A matter which occurred during the recess was refused precedence as a matter of privilege because it was not raised at the commencement of the session.
Similarly, a matter concerning an article in a newspaper published on 6 May was refused precedence because it was not raised till the 14th and a speech reported on a Saturday because it was not raised until the following Tuesday.
In the case brought before us we do not have a situation where the hon. member failed to raise the matter the day after the subject of privilege arose; it is, indeed, more than a year since this particular matter was reported in the Official Report of the proceedings of the House of Commons. I do not think it is sufficient for the hon. member to say that he has just become aware of the alleged inaccuracy of the return. It would be extremely difficult to find that the matter has, in fact, been raised at the first opportunity.
For these reasons I cannot agree with the hon. member that there is a prima facie case of privilege which ought to be considered by the House at this time.

September 29, 1971
Withholding of Grain payments



MR. GLEAVE-ALLEGED MISLEADING STATEMENTS BY GOVERNMENT MEMBERS RESPECTING PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT

Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, I rise on a question of privilege of which I have given notice. The question of privilege affects all members of the House. Government spokesmen are giving misleading descriptions of an issue faced by the House, namely, the refusal of the government to make statutory payments for wheat storage under the Temporary Wheat Reserves Act.
The Minister of Agriculture (Mr. Olson) said on television as recently as last night that the government would give the Opposition one more chance to permit passage of Bill C-244, and if the opposition continued to block the bill the government would have to reconsider its position with respect to payments due under the act.


An hon. Member:: Blackmail.


Alfred Pullen Gleave: The opposition has not created any impediment, by its opposition to Bill C-244, to government obedience of the law.


Some hon. Members:: Oh, oh!


Alfred Pullen Gleave: It is the government's duty to make payments as required by the act, independently of the opposition's stand on a bill that has not yet been adopted.


Some hon. Members:: Hear, hear!


Alfred Pullen Gleave: Again, the government was quoted on CBC radio this morning as saying that only $62 million in payments under the act is now due and that another $30 million is due only on July 31, 1972. In fact, payments are made in equal, monthly instalments.


An hon. Member:: Through the Wheat Board.


An hon. Member:: Right. You are catching on.


Some hon. Members:: Oh, oh!


Mr. Hees:: What do you know, the cat is out of the bag!


Alfred Pullen Gleave: In fact, payments for August and September are now overdue, in addition to payments for the whole of last year. The $100 million provided in Bill C-244 is a one-shot payment. The Temporary Wheat Reserves Act provides for payments every year-


Mr. Speaker:: Order, please. The hon. member is now debating the issue. He should indicate his question of privilege. I suggest that the hon. member is now making a speech on the substantive issue, rather than on the procedural aspect of the matter which, of course, is the only aspect that can be of interest to the Chair.


Alfred Pullen Gleave: Mr. Speaker, the question of privilege is that, essentially, by these statements outside the House the government is deliberately misleading the Canadian public on what is at issue here. This, Mr. Speaker, is my question of privilege. The Temporary Wheat Reserves Act provides for payments every year in which more than 178 million bushels of wheat are in storage, and payments would amount to more than $100 million if they were continued under that act. About $90 million is already overdue. If Your Honour finds that I have a prima facie

case of privilege, I would be prepared to make an appropriate motion to have the matter referred to a standing committee of the House.


Mr. Speaker:: The hon. member for Saskatoon-Biggar has given the required notice of his intention to raise this matter by way of a question of privilege. I, of course, do not intend to consider the matter lightly because I realize the importance of the situation and the interest of all hon. members in this very important and obviously contentious issue.
The hon. member suggests that there is a breach of parliamentary privilege, either a breach of his privileges or of those of the House, in that, to use his words, "the Canadian government by statements outside the House is misleading the public." I cannot judge whether that is so or not, but I suggest to the hon. member that this cannot possibly be the basis for the submission of a question of privilege.
I have gone into the precedents and considered the Standing Order at length yesterday when a similar motion was proposed which, I might say, was in all points similar to that proposed today by the hon. member for Saskatoon-Biggar. There is no point in restating the precedents I referred to yesterday. I am sure the hon. member will appreciate that in view of the precedents I quoted yesterday and the citations mentioned in my ruling I cannot rule today, contrary to my ruling yesterday, that there is a prima facie case of privilege.


Frank Howard: On a point of order, Mr. Speaker, I would like to know if it would be appropriate for the Minister of Agriculture (Mr. Olson) to make those false statements in this House, where he could be dealt with properly.


Mr. Speaker:: Order, please.



ROUTINE PROCEEDINGS


Mr. G. W. Aiken (Parry Sound-Muskoka):: Mr. Speaker, under the provisions of Standing Order 25 I move, seconded by the hon. member for Calgary North (Mr. Wool-liams), that because of the continued refusal of the government to make the payments required under the Temporary Wheat Reserves Act-


Mr. Speaker:: Order.


Gordon Harvey Aiken: -this House do now adjourn.


Mr. Speaker:: Order, please, If the motion is put in those terms, I suggest it is not in order. It can be put to the House in the traditional form, simply that this House do now adjourn. If the hon. member will make that motion it will be put to the House.


Gordon Harvey Aiken: Mr. Speaker, I move, seconded by the hon. member for Calgary North, that this House do now adjourn.
September 29, 1971


Some hon. Members:: Hear, hear!


Mr. Speaker:: Would the hon. member kindly supply the Chair with the written motion?
The motion is that this House do now adjourn. Is it the pleasure of the House to adopt the said motion? All those in favour will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


EXTERNAL AFFAIRS
Mr. David Anderson (Esquimalt-Saanich):: Mr. Speaker, I should like to move a motion pursuant to Standing Order 43. I believe unanimous consent is required. The urgency attaching to this motion arises from the fact that within the next few days President Nixon is to make a final decision on whether the proposed underground nuclear test on Amchitka Island will take place. It is known that Japanese and Canadian concern will have an important bearing on his deliberations. I therefore feel it is urgent that at a time when the Secretary of State for External Affairs (Mr. Sharp) is expressing at the United Nations, Canadian reservations with regard to the proposed test, this House, government and opposition members alike, should indicate to the President of the United States that we all share the minister's concern in connection with this subject.


Some hon. Members:: Hear, hear!


David Anderson: The motion is as follows:
That this House expresses its grave concern at continued nuclear weapons testing and its serious implications for the arms race, regrets the recent high-yield underground test in the Soviet Union, emphasizes its hope that the United States government will reconsider its plans to carry out a high-yield test on Amchitka Islands which are close to Canada and known to be prone to earth and ocean disturbances, and strongly supports the efforts being made in the United Nations by Canada and other countries to achieve the prohibition by international agreement of all underground nuclear weapons tests.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Esquimalt-Saanich (Mr. Anderson). Under the terms of Standing Order 43 this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: There appears to be unanimous consent.


Mr. Maclnnis:: No.


Some hon. Members:: Shame!


Mr. Speaker:: There is' not unanimous consent. The motion cannot be put.



INDIAN AFFAIRS


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask the unanimous consent of the House to discuss a matter of urgent and pressing necessity, namely, the crisis in Indian education which has arisen in northeastern Alberta.
Hundreds of Indian school children have been withdrawn from school in protest against inadequate school facilities. The parents are requesting a meeting with the Minister of Indian Affairs and Northern Development to discuss the problem. To date there has not been a satisfactory response from the minister. There is no need to remind you, Mr. Speaker, of the harm which is done to children by lack of attendance at school.
I therefore move, seconded by the hon. member for Vegreville;
That the House do adjourn and that the education crisis in northeastern Alberta and the wider subject of Indian education be discussed.


Mr. Speaker:: I have some doubt as to the correctness of the form of the hon. member's motion. What he is proposing now is an adjournment motion. As hon. members know, that should be done under the terms of Standing Order 26, not under the terms of Standing Order 43. For this reason I hesitate very much about putting the motion. Perhaps I will on this occasion merely issue a caution to hon. members that they have to make a choice between the use of Standing Order 26 or Standing Order 43. If it is the adjournment of the House they wish to propose, it should be done under the terms of Standing Order 26. This having been said, the Chair will proceed. Hon. members have heard the motion which, in accordance with Standing Order 43, requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


Winona Grace MacInnis: I rise on a point of order, Mr. Speaker, with respect to the motion introduced by the hon. member for Esquimalt-Saanich.


Some hon. Members:: Too late.


Winona Grace MacInnis: I would ask the Chair to rule whether it was a debatable motion or not. If it was a debatable motion, I withdraw my objection.


Some hon. Members:: Oh, oh!



WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, in accordance with Standing Order 43 I should like to move
September 29, 1971

the following motion, seconded by the hon. member for Moose Jaw (Mr. Skoberg):
That in the opinion of this House the government should forthwith pay to the Canadian Wheat Board the full amount now due under the Temporary Wheat Reserves Act, including the total due for the crop year 1970-71, and the payments due as at August 1 and September 1,1971, as specified in the said act.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Once again I point out to hon. members that this motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There are yeas and nays, therefore there is not unanimity among hon. members and the motion cannot be put.



INDIAN AFFAIRS


Frank Howard: Mr. Speaker, I rise under the provisions of Standing Order 43 in order to test the views of the House in respect of the matter on which Your Honour ruled there was not a question of privilege. Because of the morality involved and the fact that at least one person was disadvantaged by the answer given to the House in response to a question in January of 1970 in that the answer was not, to put it mildly and politely, in accordance with the facts of the situation, I should like to ask the House, and particularly the Minister of Indian Affairs and Northern Development (Mr. Chretien), whether they would agree to the following motion:
That the Committee on Privileges and Elections be authorized to inquire into the information given by the government in response to question No. 602 as shown at pages 2228 and 2229 of Hansard for January 12, 1970, as well as into the matter of all persons employed by the Department of Indian Affairs and Northern Development as Indian day-school caretakers.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Skeena. Again, this motion requires the unanimous consent of the House.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Again there are nays which prevent the Chair from putting the motion.



PUBLIC ACCOUNTS


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, perhaps I might suggest at this point
Canada-United States Auto Part
that there have been discussions, especially with the chairman of the Public Accounts Committee who is eager to get the committee under way to study the report of the Auditor General, and if there is agreement we could call that order of business, pass the motion without debate and get the committee under way to study the public accounts for the year ended March 31, 1970.


Mr. Speaker:: Is that agreed?


Frank Howard: Mr. Speaker, I certainly think there is agreement to pass the motion without debate, but there must be some question in the minister's mind whether this is going to be an exercise in futility if the Prime Minister seeks to dissolve Parliament one of these days.


An hon. Member:: Oh, sit down.


Mr. Speaker:: Order, please. The suggestion has been made that the motion be adopted without debate. I must inquire whether there is unanimous consent.


Some hon. Members:: Agreed.


Allan Joseph MacEachen: That the Public Accounts for the year ended 31 March 1970, tabled in the House January 12, 1971, and the Auditor General's report thereon, tabled in the House June 4, 1971, be referred to the Standing Committee on Public Accounts.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Derek Blackburn (Brant):: Mr. Speaker, I rise under the provisions of Standing Order 26 and ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the declaration by a United States official that the safeguards for Canada in the Canada-U.S. auto pact must be dropped before the U.S. import surcharge can be withdrawn and the implications of this U.S. position for an industry already experiencing serious lay-offs.


Mr. Speaker:: The hon. member for Brant has given due notice of his intention to move this motion under Standing Order 26. Meanwhile I have had an opportunity to give careful and sympathetic study to the request outlined in the motion proposed by the hon. member.
The Chair does appreciate the seriousness of the matter raised by the hon. member. It is undoubtedly one which is
Questions

September 29, 1971
of national interest and of concern to all hon. members. In determining whether the business of the House ought to be set aside for the purpose of considering such an important and urgent situation, the Chair has to be guided by certain criteria specified in Standing Order 26. One of these requirements is that the matter proposed for discussion should relate to an emergency which calls for immediate and urgent consideration by the House. In other words, it is not only urgency of the matter which has to be considered but the urgency of debate.
While I surmise that the House would want an opportunity to discuss this problem, I doubt that the urgency of the situation would require that the debate be held today or tomorrow rather than later. If the Chair considers the additional factor of opportunity of debate within a reasonable period of time, I would suggest to the hon. member that from the procedural standpoint an immediate emergency debate would hardly be justified.
Therefore, in view of all relevant circumstances the Chair suggests that the adjournment motion should not be put at this time.



QUESTIONS ON THE ORDER PAPER

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

Mr. Coates: Has the Minister of National Defence examined the statements of Rene Levesque, leader of the Parti Quebecois, regarding members of the Armed Services in the Province of Quebec and, if so, is he in a position to provide information as to whether all members of the Armed Services have taken the oath of allegiance and, if they have, will any action be taken against them if they are known to be Separatists and advocate the separation of the Province of Quebec from the Dominion of Canada?


Hon. Donald S. Macdonald (Minister of National Defence):: Statements purported to have been made by Mr. Rene Levesque regarding members of the Canadian forces in Quebec being separatists have been examined. All Canadian citizens, and British subjects other than Canadians, applying to join the Canadian forces are required to take the Oath of Allegiance upon enrolment. Other persons enrolled in the Canadian forces are required to take a special oath that includes the agreement to well and truly serve Her Majesty, in the Canadian forces. In addition, Queens Regulations and Orders stipulate that no officer or man of the regular force shall take an active part in the affairs of a political organization or party. What action would be taken against members of the Canadian forces who may become known to be active separatists and advocates of the separation of the Province of Quebec from Canada would depend upon the circumstances of each case.


INFORMATION CANADA
Mr. Schumacher: 1.	During the period 1970 to date did Information Canada sponsor any conferences or courses (a) at Grey Rocks Inn, St. Jovite, Quebec (b) elsewhere in Canada and at what locations?
2.	What was the duration of these courses or conferences?
3.	What was the nature and purpose of these courses or conferences, and what conclusions, if any, were reached?
4.	What departments participated in each case?
5.	In each case (a) how many employees of each department attended (b) what position does each one hold (c) what expenses were involved for (i) transportation (ii) accommodation (iii) meals and per diem expenses (iv) registrations or fees (d) what mode of transportation was involved for persons attending?
6.	Did any expenses involve wives or families and, if so, (a) what was the amount in each case (b) who authorized such expenditures (c) what mode of transportation was involved?
7.	In each case, for what reasons were the locations for the conferences chosen?


Hon. Martin P. O'Connell (Minister of State):: 1. Information Canada sponsored two functions during the period 1970. (i) a conference at Grey Rocks Inn (ii) a seminar at La Reserve Inn At St. Donat.
2.	The conference lasted three days; the course two days.
3.	(i) Information Canada sponsored a conference at Grey Rocks Inn to bring together Information Directors of all Federal Government departments and agencies to outline existing and proposed programs of Information Canada, (ii) The two-day training course at La Reserve Inn was sponsored for new Enquiries Officers of Information Canada.
4.	National Film Board; Science Council of Canada; National Defence; Secretary of State; Agriculture; External Affairs; Manpower and Immigration; Energy Mines and Resources; National Harbours Board; Prices and Income Commission; Fisheries and Forestry; Information Canada; Central Mortgage and Housing Corporation; Regional Economic Expansion; St. Lawrence Seaway; Dominion Bureau of Statistics; Communications; Post Office; Unemployment Insurance Commission; National Library; Emergency Measures Organization; National Revenue; Transport; Department of Supply and Services; Treasury Board; Veterans Affairs; Indian Affairs & Northern Development; Public Service Commission; Labour; International Development Agency; National Research Council; Industry Trade and Commerce; Solicitor General Department.
5.	(a) Information Canada 10. Other departments generally one each, (b) Information Canada-Directors and Chiefs of Divisions. Other departments-Director of Information Services or representative, (c) (i) Average of $20 for each delegate; (ii) and (iii) $17.50 per day each for accommodation, meals, conference facilities and services, (iv) nil. (d) Private car and bus.
6.	No.
7.	Locations chosen as the most economical means of providing the required facilities.

September 29, 1971


NUMBER OF STUDENTS WHO WILL QUALIFY UNDER NEW PROVISIONS OF UNEMPLOYMENT INSURANCE ACT
Mr. Fairweather: What is the estimated number of school or university students who will qualify for Unemployment Insurance when they return to classes under the new provisions of the Unemployment Insurance Act?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: School or university students who return to classes are not eligible for unemployment insurance benefits because they are not available for work as required Under the Unemployment Insurance Act. There is no estimate of the number of school or university students who do not return to the full-time attendance of classes and are unemployed. The latter students could qualify for benefits if they worked in insurable employment for eight weeks in the past 52 weeks.


COVERAGE OF CONSTITUTIONAL CONFERENCE IN VANCOUVER
Mr. Mather: How many CBC staff members were in Victoria to cover the Constitutional Conference?


Hon. Gerard Pelletier (Secretary of State):: I am
informed by the Canadian Broadcasting Corporation that its English and French radio and television services and International Service covered the Victoria Constitutional Conference, June 14 to June 17, using a total of 88 personnel, some of whom were in Victoria for only part of the time.


CBC-OVERSEAS TRANSMITTING SERVICES
Mr. Mather: 1.	Has CBC any overseas transmitting services for Radio Canada International programs located on the Pacific Coast and, if so, are any programs transmitted in the Japanese language?
2.	Is CBC aware of the importance to Canada of Pacific rim communication?


Gérard Pelletier: I am
informed by the Canadian Broadcasting Corporation as follows: 1. No. However, the CBC International Service is carrying out tests with its new transmitters at Sackville, N.B., to see whether these can be used to transmit a usable signal to the Far East.
2. Yes, and the Corporation is conducting studies on this matter.


DEPARTMENT OF CONSUMER AND CORPORATE AFFAIRS-PROVISION OF GRANTS TO PRIVATE INDUSTRY
[Stage Direction]
Question No. 1,654
Mr. Broadbent:: 1.	What programs of the Department of Consumer and Corporate Affairs provide grants, subsidies and other cash incentives to private industry?
Questions
2.	What amount was provided to industry through each program in each of the past five years?
3.	What amount, by program, has gone to each of the five major regions of Canada in the same years?


Hon. Ron Basford (Minister of Consumer and Corporate Affairs):: 1. Nil.
2 and 3. N.A.


WAR VETERANS ALLOWANCE TO VETERANS LIVING OUTSIDE CANADA
Mr. MacRae: Is the government giving consideration to amending the War Veterans Allowance Act so that war veterans living outside of Canada, especially in the United Kingdom and in the United States of America, would be permitted to draw War Veterans Allowance without having to return to Canada?


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: Section 3(3) of the War Veterans Allowance Act, as amended in 1960, reads as follows:
"3. (3) Notwithstanding subsection (1), the allowance payable under this section to a veteran, widow or orphan may be paid to that veteran, widow or orphan who absents himself from Canada after the coming into force of this Act if, on the day that he leaves Canada, he
(a)	is a recipient of an allowance under this section or section 5; and
(b)	had been resident in Canada for the twelve months immediately preceding that day."
The foregoing provides that such a recipient can normally continue to receive his allowance indefinitely outside Canada.
The government is not giving consideration to amending the War Veterans Allowance Act at this time.


RIDING MOUNTAIN NATIONAL PARK-ZONING POLICY
Mr. Stewart (Marquette): 1.	Is the zoning policy still in effect in Riding Mountain National Park?
2.	Is the government establishing a buffer-zone around the Park and, if so (a) what amount has been spent in the purchase of lands for this purpose (b) how much land has been purchased (c) how was the value of these lands established?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: 1. Yes.
2. No. (a) not applicable; (b) not applicable; (c) not applicable.


RIDING MOUNTAIN NATIONAL PARK-NEW HIGHWAY
Mr. Stewart (Marquette): Are there any plans for the construction of a new highway to replace the present No. 10 Highway in Riding Mountain National Park and, if so, what are these plans?


Joseph Jacques Jean Chrétien: Yes. Current planning is to commence reconstruction of this Highway in 1973-74, subject to the availability of funds at that time.

September 29, 1971
Order for Return


GEOLOGICAL SURVEY OF CANADA-CLOSURE OF OFFICE AT NOON HOUR
Mr. Ryan: Is the office of the Geological Survey of Canada at 601 Booth Street, Ottawa where maps are sold to the public closed for the noon hour and, if so, for what reason?


James Alexander Jerome: Mr. Speaker, the office referred to by the hon. member is closed during the lunch period, which is from 12 noon to 12:45 p.m. Consideration has been given to manning the office during this period but it is considered to be impracticable. Most business results from mail orders. On an average day there are fewer than a dozen visitors and only occasionally during the lunch period. However, geological maps and reports may be examined in the library and a selection made there during that time.


NATIONAL DEFENCE-TRAILER COURT, CFB SHILO
Mr. Stewart (Marquette): Is it the intention of the government to establish a trailer court for mobile homes at CFB Shilo and, (a) if so, will it be operated by the Department of National Defence (b) if not, on what basis?


Donald Stovel Macdonald: Not at this time, (a) not applicable; (b) civilian facilities are available in the vicinity and there are vacant PMQ's at CFB Shilo.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Nystrom: 1.	What advertising agency prepared the advertisement "Have we got what it takes to grow the jobs we need" over the name of the Minister of Manpower and Immigration?
2.	What is the complete list of publications in which the advertisement was placed and how many times did it appear in each?
3.	How many publications received a total of more than $25,000 for the advertisement?
4.	Under what appropriation were expenditures made?
5.	What is the total expenditure to date and estimated total expenditure for the advertisement?
Return tabled.


Mr. Valade:: Mr. Speaker, I rise on a point of order.
I should like to ask the hon. member for Sudbury (Mr. Jerome) whether he could not consider question No. 830 which has been on the order paper since January 28,1971, and see whether I could get an answer shortly?


James Alexander Jerome: I have made a note of the number, Mr. Speaker.


MOTIONS FOR PAPERS
James Alexander Jerome: Mr. Speaker, Notice of Motion for the Production of Papers No. 248 is acceptable to the government.


CORRESPONDENCE REGARDING PROPOSED NUCLEAR DEVICE TEST AT AMCHITKA ISLAND
Mr. Howard (Skeena): 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, telegrams and other documents exchanged between the Government of Canada and the Government of the United States of America since January 1, 1971 regarding the proposed nuclear device test at Amchitka Island.
Motion agreed to.


James Alexander Jerome: Mr. Speaker, I ask that the remaining notices of motions be allowed to stand.


Mr. Skoberg:: Mr. Speaker, I wonder if there could be some indication when Notice of Motion for the Production of Papers No. 75 of October 8 last, having to do with transportation policies, will be made available?


James Alexander Jerome: I have made a note of the number of the notice of motion, Mr. Speaker.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask the Prime Minister a question arising out of the reported statement of Mr. Petty, the United States Assistant Secretary of the Treasury, that the removal of the transitional safeguards in the auto pact is definitely an item to be negotiated before the United States will remove the import surtax. Is it the position of the government that the two questions are linked, and that satisfactory renegotiation of the safeguards in the auto pact is a precondition to the removal of the surtax?


Hon. E. J. Benson (Minister of Finance):: Mr. Speaker, that is not the case. The auto pact has been discussed by the two governments, through the Minister of Industry, Trade and Commerce and the United States treasury and trade and commerce departments. There have been continuing negotiations. My understanding of the press reports is not that Mr. Petty was saying that this was a condition precedent or anything else but that it was simply a factor he was raising as being unsolved at the present time.
September 29, 1971


Robert Lorne Stanfield: I have a supplementary question, Mr. Speaker. I must say that the minister's interpretation is not the same as mine.


Edgar John Benson: You were not there.


Robert Lorne Stanfield: I should like to ask the Prime Minister whether, in light of the actual statement Mr. Petty made rather than the interpretation of the Minister of Finance of that statement, it is now the policy of the government of Canada to insist on the retention of the restraints and safeguards that are presently in the auto pact?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, Mr. Petty does not express the views of the Canadian government. Those views were expressed by the Minister of Finance, by the Minister of Industry, Trade and Commerce and by myself on several occasions.


Robert Lorne Stanfield: Mr. Speaker, I asked the Prime Minister a question about the policy of the government.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: On a point of order, Mr. Speaker, I realize the Prime Minister does not have to answer my question, but he does not have to pretend that I asked a question different from the one I did ask.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: I ask the Prime Minister specifically whether it is the policy of his government-


Mr. Boulanger:: Dont' get mad.


Robert Lorne Stanfield: -to insist upon the retention of the safeguards which are presently in the auto pact. That is a very simple question.


Pierre Elliott Trudeau: Mr. Speaker, if the Leader of the Opposition wants to read the record he will find that the Minister of Finance, the Minister of Industry, Trade and Commerce and myself have replied to this question several times.


George Harris Hees: You have not.


Pierre Elliott Trudeau: The Minister of Finance said just now that the auto pact is under discussion. It was under discussion even before Mr. Nixon's announcements of last August. Therefore the two are not linked in our minds, and I cannot be asked to answer to this House for a statement by a United States official.


Robert Lorne Stanfield: Mr. Speaker, I think it is time the government started to deal a little candidly with the people of this country.


Some hon. Members:: Hear, hear!


Derek Nigel Ernest Blackburn: Mr. Speaker, will the Prime Minister definitely assure the House that the safeguards will not be surrendered under any conditions?


Mr. Speaker:: Order, please. The hon. member for Nanaimo-Cowichan-The Islands.
Inquiries of the Ministry



PRECONDITIONS INDICATED BY UNITED STATES FOR REMOVAL OF IMPORT SURTAX

Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, if the Prime Minister is not prepared to give an answer in reference to the removal of the transitional safeguards in the auto pact, can he tell us whether or not there are any other preconditions which have been set by the United States government for the removal of the United States import surcharge? I have particular reference to the statements made by Mr. John Petty, Assistant Secretary of the Treasury, with regard to bilateral agreements on currency. Is one of the preconditions that the Canadian dollar be allowed to rise to at least $1.02 in relation to the United States dollar, and have any other preconditions been laid down?


Pierre Elliott Trudeau: Mr. Speaker, this question has been answered in the House several times, perhaps in the absence of the hon. member. This condition and other conditions were not made to us as conditions for the removal of the surtax. So far as I know, the United States has never said under what kind of developments they would remove the surtax. This is what we are discussing with them, but they have not said, "if you do this we will do something".



EMPLOYMENT SUPPORT BILL-REPRESENTATIONS TO UNITED STATES AGAINST IMPOSITION OF COUNTERVAILING DUTIES

Thomas Clement (Tommy) Douglas: In
view of the implication in Mr. Petty's remarks to the effect that there is some conflict between the legislation now before this Parliament, the employment support bill, and the U.S. provision of countervailing duties, has the Canadian government made any representations to or inquiries of the United States government concerning whether or not countervailing duties would be applied in the event Parliament passes the employment support bill which provides assistance to industries in Canada adversely affected by the United States import surtax?


Pierre Elliott Trudeau: Of course we have made representations. We have had several occasions to explain to the Americans the meaning of this act which was before the House and we explained to them that we did not think it would justify countervailing measures in any way.


Thomas Clement (Tommy) Douglas: Mr. Speaker, may I ask the nature of the reply the Canadian government received from the United States to these representations?


Pierre Elliott Trudeau: Mr. Speaker, they were very considerate and polite and said they would listen to our representations and decide what decision they had to take in the interests of their own government. It is up to the United States to decide if it is to act or not. The most we can do is make representations.



UNITED STATES IMPORT SURTAX-DISCUSSION WITH AMERICAN OFFICIALS

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

September 29, 1971
Inquiries of the Ministry


Mr. Roch La Salle (Joliette):: Yes, Mr. Speaker.
With reference to the statement made yesterday by the U.S. Under-Secretary of the Treasury to the effect that the American government was ready to undertake next week some new trade negotiations to which would be invited the representatives of the Canadian government, is the Prime Minister in a position to say whether he has decided to send a delegation to the United States as a result of that invitation?


Pierre Elliott Trudeau: Mr. Speaker, I did not understand what that invitation is and what the subject matter of the negotiations would be.


Roch La Salle: I refer to trade negotiations with Canada next week.


Pierre Elliott Trudeau: Mr. Speaker, once again the Minister of Industry, Trade and Commerce met at the beginning of last week with the U.S. Secretary of Commerce and they held negotiations and discussions. I do not know to which new meeting the member is referring.



UNITED STATES IMPORT SURTAX-EFFECT ON FUTURE CANADIAN CO-OPERATION RESPECTING NATURAL RESOURCES

Mr. David MacDonald (Egmont):: Mr. Speaker, I have a question which is supplementary to the original questions asked. The United States Assistant Secretary of the Treasury has suggested that the question of continental energy policy should not be discussed in dealing with the surtax. Can the Prime Minister tell the House whether or not this is acceptable to the government or whether the government intends to make clear to the United States that the continuance of the surtax will jeopardize future co-operation in respect of resources and raw materials.


Pierre Elliott Trudeau: No, Mr. Speaker.



UNEMPLOYMENT INSURANCE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Labour.
As a new Unemployment Insurance Act now applies in Canada and the rates have been changed considerably, will Canadian workers now employed in the States of Maine and New Hampshire be eligible for comparable benefits?


Hon. Bryce Mackasey (Minister of Labour):: Mr. Speaker, negotiations are now going on with both those states in order to make our plans reciprocal. I will report fully before the end of the week concerning the results of the negotiations.
(Mr. Speaker.]



INFORMATION ON AGREEMENT WITH UNITED STATES

Mr. Speaker:: Would the hon. member wait just a moment? I believe that the hon. member for Bellechasse has a supplementary.


Joseph Adrien Henri Lambert: Thank you, Mr. Speaker.
May I ask the minister whether officials of his department have made the necessary arrangements in order to provide information on the agreement made with the United States, so that Canadian workers may have access to the benefits of the agreement should the occasion arise?


Bryce Stuart Mackasey: Yes, Mr. Speaker, we are now doing exactly what the hon. member has suggested.



FINANCE


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is for the Minister of Finance. In the absence of information from the Prime Minister late last week and early this week, can the minister advise the House whether the Canadian government received any proposals from the Secretary General of the International Monetary Fund that Canada revalue upward its dollar by 11 per cent or 12 per cent and, if so, what was the Canadian government's reaction to that proposal which was reported in important circles during the weekend?


Edgar John Benson: Mr. Speaker, it was not really a proposal at all-


Robert Lorne Stanfield: Oh, no?


Edgar John Benson: The IMF, as is the case with many international bodies, is looking at the particular problem and analysing it, and out of their analysis came some figures in a working paper which was not officially transmitted to governments but was really just put forward by the Secretary General of the IMF.


Marcel Joseph Aimé Lambert: Would the minister advise the House, since the Prime Minister did not seem to have the information, whether Canada advanced or disclosed any new initiatives with regard to the regularization of the situation in the international monetary field, particularly toward the re-establishment of a stable, international, fixed scheme of foreign exchange?


Edgar John Benson: The best thing I might do in answer to the question is to table the communique of the meeting of the Group of Ten which I chaired last Sunday.
September 29, 1971


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.



PROMOTION PROGRAM TO ENLARGE CANADIAN


George Harris Hees: Mr. Speaker, I have a question for the Prime Minister. Is it the intention of the government in the near future to initiate a massive trade drive in countries other than the United States to make Canadian exports less dependent upon the American market?


Pierre Elliott Trudeau: We have been increasing the trade of Canada to other countries. We have not reached 15 per cent as was tried by hon. members on the other side some years ago, but we are trying to sell more to other countries, including the United Kingdom.


George Harris Hees: Obviously, nothing is being done.


Some hon. Members:: Oh, oh!


George Harris Hees: I have a supplementary question for the Prime Minister. Has the Prime Minister either telephoned or written President Nixon to express the great concern of this country over the effects that the President's new economic policy will have on our economy, or does the Prime Minister merely intend to confine his protest to whining on the CBC?


Mr. Speaker:: The hon. member for Vancouver-Kings-way.



POLLUTION


Winona Grace MacInnis: Mr. Speaker, my question is for the Minister of the Environment. In light of his recent announcement of the award of a contract to make an assessment of the socio-economic effects of possible Alaska oil spills in Georgia Strait and nearby waters, and in view of the lack of action on the Science Council's recommendation of last fall for a joint study of all uses of the environment in the same area, does the minister's announcement mean that the federal government has failed to reach agreement with British Columbia to make a joint survey?


Hon. Jack Davis (Minister oi the Environment):: No, Mr. Speaker.


Winona Grace MacInnis: Does the announcement mean that the government has decided that the United States will go ahead with the Valdez route for Alaska oil despite Canadian protests?


John (Jack) Davis: The answer in this case is also no.
Inquiries of the Ministry



AGRICULTURE


Mr. Marcel Roy (Laval):: Mr. Speaker, my question is very important. I do not intend to seek adjournment of the House because I am fully aware of our responsibility to govern the country-


Mr. Speaker:: Order. The hon. member should put his question.


Marcel-Claude Roy: Thank you, Mr. Speaker.
My question concerns the economic situation of agriculture and more specifically in the province of Quebec.
In view of the price gap between the Prairie provinces and the eastern provinces for the volume of non-quota grain, would the minister in charge of the Canadian Wheat Board consider the offer of assistance proffered by the premier of Saskatchewan in the form of a deal for 100 million bushels of barley, in order to help Quebec farmers?


Hon. Otto E. Lang (Minister oi Manpower and Immigration):: Mr. Speaker, I have seen the reports regarding the offer of the Premier of Saskatchewan of one million bushels of barley to Quebec. I am sure the Canadian Wheat Board would be delighted to receive his order and fill it.



FORESTRY


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my question is for the Minister of the Environment. Can the minister tell us what the prospects are for co-ordination between the forestry sector of his department and the provincial forestry departments regarding projects such as silviculture?


Mr. Speaker:: I hope the minister can give a brief reply. I have the impression that this is such a general question it should be answered by way of a statement on motions. However, the minister can reply briefly.


John (Jack) Davis: The
prospects are very good indeed.



OMISSION OF TEMPORARY WHEAT RESERVES ACT FROM REVISED STATUTES OF CANADA, 1970

Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to ask a question of the Minister of Justice in his capacity as the Attorney General of Canada. First of all, I welcome him back from the province of Saskatche-

September 29, 1971
Inquiries of the Ministry
wan. Did the minister give instructions that the statute known as the Temporary Wheat Reserves Act, which is still on the books, be left out of the new Revised Statutes of Canada and, if not, who gave the instructions that it be omitted from our Revised Statutes?


Hon. lohn N. Turner (Minister of Justice):: Mr. Speaker, it is true that the Temporary Wheat Reserves Act is not included in the Revised Statutes, following a decision of the Revised Statutes Commission of which I happen to be chairman.


Some hon. Members:: Oh, oh!


John Napier Turner: I would suggest to the hon. member that he would not want to confuse the House. The Temporary Wheat Reserves Act was not repealed. It is not listed in schedule A and it remains on the books as a statute of Canada.


Eldon Mattison Woolliams: I am not arguing that it is not the law of Canada. I am asking the Minister of Justice, not only in his capacity as Attorney General of Canada but in his capacity as chairman of this commission, who gave the instructions that it not be printed in the Revised Statutes of Canada when it has not been repealed?


John Napier Turner: That was a joint decision of the commissioners. The same decision was made with respect to about 150 other statutes, so there is nothing remarkable about this.


Some hon. Members:: Oh, oh!


Eldon Mattison Woolliams: The only remarkable thing is the Attorney General of Canada.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: I should like to ask him one further question regarding the 150 statutes, more or less, that were left out. Were they statutes that were not repealed?


John Napier Turner: Yes, statutes that were not repealed, and some of them remain on the books. It was a matter of judgment as to which statutes merited inclusion in the Revised Statutes of Canada. I might say that the Canadian Bill of Rights, under the authorship of a former Prime Minister, the right hon. member for Prince Albert, was not included in the Revised Statutes of Canada but, rather, was included in a separate volume because of its unique character.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I will allow one more supplementary question by the Leader of the Opposition and then we will go on to the hon. member for Winnipeg North Centre.



WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT-POSITION OF MINISTER OF JUSTICE

Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Minister of Justice whether as Minister of Justice he advised the government, of which he is a member, that it is obliged by the law of Canada to comply with statutes on the books, and that he

intends to dissociate himself from a government which is not complying with the law?


John Napier Turner: I am a member of the government and I am as interested as anyone else in this government. As a matter of fact, the hon. member for Calgary North welcomed me back from Saskatchewan. The question which farmers in Saskatchewan are asking is, why does Parliament not pass this bill?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The Chair will recognize the Leader of the Opposition for another supplementary question, but I hope that in the few minutes left in the question period we will not spend our time reviving this debate. For the moment the Chair recognizes the Leader of the Opposition.


Robert Lorne Stanfield: I ask the Minister of Justice specifically whether he condones the government of Canada ignoring a statute of Canada.


John Napier Turner: Mr. Speaker, the government of Canada recognizes that there is a debt due to the farmers of western Canada in the amount of $38.5 million. We are suggesting that payment of $100 million should satisfy that.


Some hon. Members:: Shame!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Hon. members are seeking the opportunity to ask supplementaries on this subject. I suggest, with respect, that we could spend the rest of the question period on the same subject, but for the moment the Chair recognizes the hon. member for Halifax-East Hants.



LEGAL ACTION TO COMPEL GOVERNMENT TO MAKE PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT

Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my supplementary is directed to the Minister of Justice. Will he permit certain professors of law in Toronto to take mandamus proceedings against the Minister of Finance to compel him to make the payments under this act, as they have requested him to do, if he himself will not take such proceedings against the Minister of Finance?


John Napier Turner: Mr. Speaker, the gentlemen concerned can take any action they want. Whether the courts will receive it is another matter.


Robert Jardine McCleave: As a supplementary-


Mr. Speaker:: Order, please. Again, I hope other hon. members will be given an opportunity to ask their questions; but of course I do not want to interpose myself, and if hon. members have legitimate supplementaries they will be recognized.

September 29, 1971


Robert Jardine McCleave: Mr. Speaker, this is the first question I have asked in three weeks in this place. I am asking the minister whether he will give permission to these people to institute such proceedings.


John Napier Turner: Well, I have not
received-


Eldon Mattison Woolliams: Go ahead and break the law, John. You have been doing it and endorsing it.


John Napier Turner: I have not received any request for mandamus action. I would have to consider it when I get it. But the final result remains with the courts, as the hon. gentleman knows.


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, I have a question for the Minister of Justice, which I think future generations would like to see on the record, with respect to this matter. Has the minister himself initiated any proceedings against the Minister of Finance for his failure to fulfil the statutory duty imposed upon him by sections 3 and 4 of the Temporary Wheat Reserves Act?


John Napier Turner: No, Mr. Speaker, and I think the record will speak for future generations.


Robert Lorne Stanfield: That is exactly right.


Mr. Speaker:: Order, please. I have tried to be as fair as possible in giving members an opportunity to ask supple-mentaries, but we are running short of time. Other hon. members have been rising for the last few days, and I would like to give them an opportunity to ask questions. We might allow one last supplementary and then go to the next subject.


John Howard Lundrigan: My last supplementary is: Does the minister intend now or in the future to take action such as was mentioned a few minutes ago by my colleagues and initiate proceedings against the Minister of Finance under this particular law of Canada? I want this on the record.


John Napier Turner: No, Mr. Speaker.



PENSIONS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to stay on the previous subject, but instead I shall direct a question to the President of the Treasury Board. He is also a remarkable minister.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: In view of a commitment the minister gave to the House when we were debating Bill C-207 earlier this year, that a certain anomaly would be corrected, I wonder if he is in a position to report progress on his efforts? The anomaly I refer to is the fact that retired armed forces and RCMP personnel are not able to get their pensions escalated until they are 60 years of age, whereas this is now possible for certain retired public servants. How is the minister getting on
Inquiries of the Ministry
with the implementation of his commitment to get this anomaly straightened out?


Hon. C. M. Drury (President of the Treasury Board):: can report progress, Mr. Speaker, not at what one would regard as a breathtaking pace, but some progress.


Stanley Howard Knowles: As I said, the minister is a remarkable man.



AIRPORTS


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I would like to put a question to the Minister of Indian Affairs and Northern Development.
Has the minister recently assured a delegation from the Trois-Rivieres constituency that the Trois-Rivieres airport would not be closed down?
Hon. jean Chretien (Minister of Indian Affairs and Northern Development): Mr. Speaker, I have not received any delegation from Trois-Rivieres with regard to this matter.


Mr. Speaker:: I do not believe that this question should have been put to that particular minister.



REGIONAL ECONOMIC EXPANSION


Hon. Theogene Ricard (Saint-Hyacinthe):: Mr. Speaker, I would like to put a question to the Minister of Regional Economic Expansion.
Does he intend to claim reimbursement from the Canadian Ingersoll-Rand of Sherbrooke which has obtained a $200,000 grant from his department to create 75 jobs but which has decided to close its smelting plant in Sherbrooke, thus putting 140 people out of work?
Hon. jean Marchand (Minister of Regional Economic Expansion): Mr. Speaker, I think my hon. colleague should at least get acquainted with the facts. No grant has been awarded to Ingersoll-Rand, so no reimbursement can be claimed. A grant was promised if jobs were made available. The part of the plant which is to stop operations has nothing to do with the one for which the grant was offered.


J.-H.-Théogène Ricard: Mr. Speaker, I rise on a point of order. I would like to advise the minister to check the facts before issuing press releases, so that we shall be better informed.


Mr. Speaker:: Order, please. I believe the hon. member for Mackenzie is one member who has been trying for a few days to ask a question.
8278

September 29, 1971
Inquiries of the Ministry SHIPPING



HUDSON BAY-INSPECTION OF CONDITIONS BY INSURANCE UNDERWRITERS

Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like to address my question to the Minister of Transport. Has the minister had any success with the insurance underwriters of ocean shipping in inviting them to Churchill to view the situation there, similar to what he did with respect to the St. Lawrence earlier this year?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I regret that although an invitation was given to a like group to visit the north and Churchill, they did not feel they could include the trip in their itinerary in the current year. They did make a trip on the St. Lawrence and I understand the response was favourable. They have indicated their willingness to come to Churchill, but the date remains open. It may be in the spring or at some other time in 1972.


Stanley James Korchinski: Will the minister not renew his invitation at this time, with an offer to provide them with a ship after regular shipping has closed at Churchill?


Donald Campbell Jamieson: Mr. Speaker, I would be prepared to have them come at any time of their own choosing and provide the transportation for them.



TRANSPORT


John Leroy Skoberg: Mr. Speaker, will the Minister of Transport look into the matter of discriminatory freight rates in respect of imports and exports through the port of Churchill?


Donald Campbell Jamieson: Mr. Speaker, I would have to take that question as notice. I am not sure what the hon. member means by "discriminatory." I will try to look into the matter.



INQUIRY OF THE MINISTRY

Mr. E. B. Osier (Winnipeg South Centre):: Mr. Speaker, in view of certain events during the last couple of days I ask the President of the Privy Council whether he will seek an order of the House to commence sittings at one o'clock on Mondays, Tuesdays, Wednesdays and Thursdays, and at ten o'clock on Fridays, so that the opposition's ritualistic obstructionism will be a waste of our time rather than the country's?



POLLUTION


Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Minister of the Environ-
(Mr. Speaker.]
ment. In light of information that dust-fall readings at one location in Sydney were monitored at 261.5 tons per square mile per month, and the fact that pollution technicians consider dust-fall of more than 20 tons per square mile per month to be dangerous, what steps are being taken by the minister and his department to alleviate this rather choking problem?


John (Jack) Davis: Mr. Speaker, I will look into this matter and report back.


Robert Muir: Would the minister be good enough to have a team of experts from his department go to the Sydney area and ascertain what can or may be done by himself and his department? This situation is very serious, Mr. Speaker.


John (Jack) Davis: From the description I would think this is a provincial matter, but we will gladly support provincial officials in this regard.


Robert Muir: On a point of order, Mr. Speaker. I do not know why we have done away with the Minister of Fisheries legislatively because we still have fisheries. We now have a man who is supposedly in charge of the environment. I bring a problem to his attention and he immediately sloughs it off on the provincial government-


Mr. Speaker:: Order, please. The hon. member for Timiskaming.



AIR TRANSPORT


Mr. Arnold Peters (Timiskaming):: I should like to ask the Minister of Transport a question. Under our national air policy as it involves regional carriers, have negotiations been finalized regarding Nordair as the regional carrier for northeastern Ontario and northwestern Quebec?


Donald Campbell Jamieson: Not
that I know of, Mr. Speaker. There have been discussions between Air Canada and Nordair with respect to possible exchange or co-operation for certain air routes but to the moment at least, and so far as I know, no conclusions have been reached.


William Arnold Peters: Has a charter been sought from the Canadian Transport Commission by the Ontario government through its commercial carrier, White River Air Service? If so, what role in the regional transportation system is being filled by this application?


Mr. Speaker:: Order, please. I would suggest to the hon. member that this question really ought to be put on the order paper. If there is urgency it can be considered at the time of adjournment.


Edmund Boyd Osler: A point of order, Mr. Speaker.



^HB9flHS9flR9HHI
September 29, 1971


Mr. Speaker:: The hon. member for Winnipeg South Centre on a point of order.


Edmund Boyd Osler: Now that the House leader is back in his seat I wonder if he can answer the question I put to him a moment ago. It was a serious question.


Mr. Speaker:: Order, please. I suggest to the hon. member that it was more in the form of representation than a question. I also detected that it had overtones of argument.



ACCURACY OF INFORMATION IN GOVERNMENT PAMPHLET DISTRIBUTED TO PENSIONERS AND FAMILY ALLOWANCE RECIPIENTS

Mr. P. B. Rynard (Simcoe North):: I have a question for the Minister of National Health and Welfare. In view of the Quebec College of Pharmacists' statement that a pamphlet produced recently for pensioners and family allowance recipients under the government's new drug quality assurance program may be dangerous to public health as it lists drugs which might have harmful side effects and certainly encourages self-medication, is the minister going to review, with the provinces and the medical profession, the accuracy of the scientific information contained in this pamphlet?


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, this action was taken on our part as a further step in a series of actions we have taken in terms of reducing the cost of drugs. We are satisfied it is accurate information. We are also satisfied it is useful information and that people receiving old age pension cheques and family allowance cheques should have it. I would also point out that the leader of my hon. friend's own party has indicated that steps of this kind should be taken in terms of reducing the cost of drugs.


Philip Bernard Rynard: Has the minister conferred with the Quebec College of Pharmacists on the statement they made that they are not safe?


John Carr Munro: Mr. Speaker, I have already indicated that we have checked the information and we are satisfied that our information is accurate.


Philip Bernard Rynard: You still did not answer the question.


Georges-J. Valade: I have a supplementary question for the Minister of National Health and Welfare. I should like to ask the minister if he was not accused by the College of Pharmacists of the province of Quebec of contravening the law by telling people how to buy drugs without prescriptions and influencing people to use, on their own initiative, some drugs that should be left to the doctors to prescribe?


John Carr Munro: We were not advertising or promoting drugs, Mr. Speaker. We were simply indicating to the people of Canada what the comparative prices of various drugs were in various regions throughout the country and that there are variations in prices. There is then some motive
Inquiries of the Ministry
on their part to shop around to get the lowest price. I might also indicate that this type of information went to people whose incomes are not great and who cannot afford to pay excessive prices.



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: I have a question for the Minister of National Defence who has been neglected somewhat lately. In light of current suggestions floating about that he will be having a meeting some time this week to settle the future of the hydrofoil, can he confirm this? If so, could the minister give the House some indication when the decision by the government will be made public?


Donald Stovel Macdonald: I should like to thank the hon. member for notice of this question, Mr. Speaker. I can assure him that, depending on the length of this question period, I shall be meeting at an early date on the question of the hydrofoil.


J. Michael Forrestall: If there should be a $50 million saving I would hope it would go to the services in the form of pay increases. Would the minister answer the other part of my question and advise the House when he anticipates he will be in a position to make the decision known to the general public?


Donald Stovel Macdonald: That is a little difficult to say, not yet having had a full analysis, Mr. Speaker. I would hope, however, to be able to do so within the coming month.



REPLACEMENTS FOR ARGUS MARITIME PATROL AIRCRAFT AND CENTURION TANK

Mr. Doug Rowland (Selkirk):: My question is also for the Minister of National Defence. Can the minister inform the House whether the government has yet decided on a replacement for the Argus maritime patrol aircraft and the Centurion tank? If so, will they be produced in Canada?


Donald Stovel Macdonald: No decision has been taken yet with regard to the long-range patrol aircraft, Mr. Speaker. I should remind the hon. member that as well as the option of replacing the Argus there is the option of refitting it for future use. It is correct to say that the Centurion tank will be retired from service about 1974 and we are now in the process of bargaining for a replacement.



BANK OF CANADA


Mr. John M. Reid (Kenora-Rainy River):: I have a question for the Minister of Finance. Can the minister inform


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the House when the Bank of Canada will release the next bill in its new series of colourful currency which began with the psychedelic $20 bill?


Edgar John Benson: I really cannot, Mr. Speaker. I shall have to take the question as notice.



FAMILY INCOME SECURITY


Mr. Stan Schumacher (Palliser):: My question is for the
Minister of National Health and Welfare. Has the minister's department conducted any studies or contemplated initiating any studies to ascertain whether the increase in family allowances to low income and large families will have any effect on the birth rate?


John Carr Munro: Yes, Mr. Speaker. Studies of this kind have been conducted. We are satisfied that in terms of allowances it certainly does not cover the cost of maintaining a child for a month, as the hon. member must be aware. It would therefore be only a marginal incentive toward a large family.



INDIAN AFFAIRS


Paul Yewchuk: My question is directed to the Minister of Indian Affairs and Northern Development. In view of the fact that there is a rumour around that the minister prefers to keep Indians undereducated because they are easier to control that way-


Mr. Speaker:: Order, please. The hon. member knows that he cannot ask a question based on a premise in those terms. The question should be asked directly.


Paul Yewchuk: I will ask it more directly, Mr. Speaker. Can the minister indicate whether he intends to go to northeastern Alberta to meet personally with the chiefs of the Saddle Lake-Athabasca district to discuss problems of Indian education in that area?


Joseph Jacques Jean Chrétien: Mr. Speaker, if the hon. member was in the House more often, he would have heard the answer I gave yesterday-


Mr. Speaker:: Order, please. Perhaps the minister might also reply to the question directly.


Joseph Jacques Jean Chrétien: Last Thursday and Friday I met with the chairman of the Alberta Indian Association and we both
agreed that an official from my department would go to Cold Lake today. The official is there and I will make a decision after I have studied his report.


Paul Yewchuk: Could the minister indicate whether he received a telegram from the chiefs of the Saddle Lake-Athabasca district yesterday requesting that he personally attend in northeastern Alberta for a meeting with them?


Joseph Jacques Jean Chrétien: Mr. Speaker-


Mr. Speaker:: Order, please. The question, asked in those terms, is not in order. The hon. member for Saskatoon-Biggar.



MANPOWER


Alfred Pullen Gleave: May I address a question to the Minister of Manpower and Immigration. Given that federal funds are being distributed under the Canada Manpower training program somewhat less than equitably among the provinces, as demonstrated in the last annual review of the Economic Council of Canada-


Mr. Speaker:: Order, please. I suggest to the hon. member that the question should be asked without argument. Perhaps the question could now be asked directly.


Alfred Pullen Gleave: Has the minister considered taking creative action so that unemployed workers in Saskatchewan will get the same chance to be trained as the unemployed in more prosperous regions?


Otto Emil Lang: Mr. Speaker, the allocation of training allowances is reviewed each year with an eye on the employment situation in the province, on the training demand in the province, and on the training places available. I reject completely the argument of the hon. member which was out of order.


Mr. Speaker:: The hon. member for St. John's East. I apologize to the hon. member. I will first recognize the hon. member for Saskatoon-Biggar on a supplementary question and then end the question period on a very happy note by recognizing the hon. member for St. John's East.


Alfred Pullen Gleave: Mr. Speaker, would the minister ensure that federal training expenditure in Saskatchewan, which in 1969-70 amounted to $695 per capita of unemployed compared with $949 in Alberta and $1,138 in Nova Scotia, is increased to an equitable level?


Mr. Speaker:: Order, please. I suggest to the hon. member that this is not a supplementary question but argument.

September 29, 1971



REGIONAL ECONOMIC EXPANSION


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I ask the Minister of Regional Economic Expansion whether he proposes to continue providing grants to companies relying on United States sales, on the same basis as before the imposition of the United States surcharge, under the Regional Development Incentives Act.


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, I do not think we will take that into account at all.


James Aloysius McGrath: Is it the conclusion of the government that the United States surcharge policy is of a very temporary nature and, hence, that grants will continue to be made in the same way as before to companies relying on United States sales?


Jean Marchand: Mr. Speaker, I think that question ought to be put to the Minister of Finance.


Robert Lorne Stanfield: He doesn't know anything.


Mr. Speaker:: The hon. member for Fraser Valley West.



MANPOWER


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I always welcome the opportunity to supply the coda to the question period. In view of the Prime Minister's recent statements concerning the decline in the number of students able to resume their education and the consequent increasing number of young people seeking employment, I ask the Minister of Manpower and Immigration whether or not he is planning to amend the OTA regulations in order to abolish the three years in the work force rule so that more young people may qualify for income replacement during manpower training or retraining?


Otto Emil Lang: Mr. Speaker, as I indicated only a short time ago to the House, the question of the three-year rule has been discussed very frequently over a period of time, particularly with provincial authorities, and consideration is being given to the advisability of changing the rule.


Mark Willson Rose: Could the minister advise the House whether or not his department is preparing to initiate, on a much larger scale than last year, certain work activity projects as provided for under the Canada Assistance Plan? How much money is he prepared to allocate this year for that purpose?


Otto Emil Lang: Mr. Speaker, Canada Assistance Plan work activity projects involve mainly provincial departments and the Department of National Health and Welfare when provincial departments wish to take advantage of them.
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Mr. Speaker:: Order, please. I must draw to the attention of hon. members that the question period expired three minutes ago. The hon. member for Fraser Valley West had a supplementary question and he has asked it. I appreciated that he had been trying to ask the question for a little while and therefore allowed him to proceed. However, I think that at this point I should call orders of the day.



BUSINESS OF THE HOUSE

Stanley Howard Knowles: Mr. Speaker, on a point of order, I wonder if I might ask the government House leader a question concerning a potential matter of House business. In view of the near unanimity today on the motion of the hon. member for Esquimalt-Saanich concerning the opposition of the members of this House to the Amchitka underground test, would the government consider filing today a government notice of motion in the very words used by the hon. member for Esquimalt-Saanich so that it could be on the order paper by Friday, which would permit the House to deal with it and thus express its view on this important issue?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Mr. Speaker, I would be happy to consider the suggestion made by the hon. member, and if I have an opportunity to consult my colleagues within the time in which the notice must be filed I will do that also.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, September 20, consideration of the motion of Mr. Gray (for Mr. Benson) that Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequent upon the amendments to that act, be read the second time and referred to the committee of the whole, and the amendment thereto of Mr. Lambert (Edmonton West) (p. 7763).
Mr. Melvin McQuaid (Cardigan):: Mr. Speaker, while I appreciate, as I am sure do all hon. members of the House, the importance of the proposed amendment to Bill C-259 and the importance of Bill C-259 itself, there is another matter which disturbs me a great deal. Members of the government day after day continue to break the law of this country by reason of the non-payment to farmers and to the Wheat Board of the amount due under the Temporary Wheat Reserves Act.


Mr. Speaker:: Order, please. Important though that matter may well be, I think the hon. member appreciates that his remarks should be directed to the bill which is now before the House. It is my understanding that its

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Division
subject matter is different from that to which he has just referred.


Melvin James McQuaid: Mr. Speaker, in view of the fact that Bill C-244 has not been brought back to this House by the government, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House do now adjourn.


Mr. Speaker:: Order, please. The hon. member no doubt realizes that such a motion cannot be moved twice in the same day. That motion has already been moved, put and negatived and it cannot be put a second time.


Melvin James McQuaid: Mr. Speaker, I meant the motion to be:
That this debate do now adjourn.


Mr. Speaker:: That is not the motion the Chair heard the hon. member put. A motion that the debate do now adjourn is a different motion, which the hon. member has a right to put. I think the hon. member will realize that he cannot put the motion that the House do now adjourn. If he will correct the motion, it will be put to the House.


Melvin James McQuaid: Mr. Speaker, I do not have the motion written out.


Mr. Speaker:: If the hon. member will write out the motion and submit it to the Chair, it will be put. No motion may be put to the House unless it is written and submitted in proper form to the Chair. I will wait for the hon. member to prepare his motion and submit it.


Melvin James McQuaid: Mr. Speaker, I move, seconded by the hon. member for St. John's East:
That this debate do now adjourn.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion? All those in favour will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


Mr. Speaker:: I declare the motion lost. The hon. member for Peel South (Mr. Chappell). Is the hon. member for Cardigan rising on a point of order?


Melvin James McQuaid: When the debate opened, Your Honour, I had the floor.


Some hon. Members:: Oh, oh!


Mr. Speaker:: The hon. member will recognize that procedurally he is deemed to have spoken and, of course, he cannot speak twice in debate on the same motion unless he has the consent of the House. The Chair will recognize the hon. member for Peel South.


Winona Grace MacInnis: I rise on a question of privilege, Mr. Speaker. In spite of the thinking of the Prime Minister (Mr. Trudeau) as to my reputation, namely, my not being a gentleman, I would call your attention to something which took place in this House a couple of nights ago. As a result of common courtesy on the part of members on this side of the House, including myself, the Minister of Industry, Trade and Commerce (Mr. Pepin) was allowed to take part a second time in a debate. It is too bad that this government cannot show us the same courtesy.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Is the hon. member for St. John's East (Mr. McGrath) rising on a point of order?


James Aloysius McGrath: Mr. Speaker, I was rising to move that the hon. member for Cardigan (Mr. McQuaid) be now heard.


Mr. Speaker:: Order, please. The Chair has already recognized the hon. member for Peel South.


Mr. Hyl Chappell (Peel South):: Thank you, Mr. Speaker.


An hon. Member:: Just what we need-a farmer from the city.


Hyliard G. Chappell: Mr. Speaker, I join in this debate to call for an amendment to Bill C-259 to bring relief from the U.S. protective measures introduced on August 15.


Winona Grace MacInnis: I rise on a point of order, Mr. Speaker.


Mr. Speaker:: Order, please. The hon. member for Cape Breton-East Richmond (Mr. Maclnnis) is rising on a point of order.


Winona Grace MacInnis: My point of order is one which I continue to raise in this House. I raise it again in this case because the hon. member is now trying to read his speech.


Mr. Speaker:: Order, please. I hope the hon. member will not read the speech but will be guided only by the notes he may have before him. I appreciate the point raised by the hon. member for Cape Breton-East Richmond.


Hyliard G. Chappell: Mr. Speaker, we have all heard of the import surcharge. The seriousness of its effect on Canada is apparent, but the employment support bill will do much to bring relief. We have also heard of the U.S. wage and prices freeze and appreciate the advantage it will give U.S. industry over Canadian industry if Canadian labour continues to push for increases in wages at a time when U.S. wages are frozen. One need only look at the Douglas Aircraft Corporation in Mississauga, in my riding, which employs 6,000 or 8,000 men. This company produces aircraft wings for assembly in California.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order.


Hyliard G. Chappell: This company has already had to absorb-


Mr. Speaker:: Order, please. Would the hon. member kindly resume his seat. The hon. member for Winnipeg North Centre (Mr. Knowles) is rising on a point of order.


Stanley Howard Knowles: Mr. Speaker, since the House passed Bill C-262 last night, I am wondering whether the hon. member is still speaking to it. Does he not realize we are on Bill C-259?


An hon. Member:: He is on the wrong speech.


Hyliard G. Chappell: As I said in opening, Mr. Speaker, I join the debate to call for an amendment to Bill C-259 to bring relief from the U.S. protective measure introduced on August 15.


Mr. Speaker:: Order, please. Would the hon. member for Peel South kindly resume his seat. The point of order raised by the hon. member for Winnipeg North Centre is that Bill C-259, with an amendment, is before the House and that hon. members who take part in the debate should make their remarks relevant to the bill and the amendment. I am sure the hon. member will want to take this suggestion into consideration.

September 29, 1971
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Mr. Mahoney:: I rise on a point of order, Mr. Speaker. During the debate on the bill and the amendment moved by the hon. member for Edmonton West (Mr. Lambert) a very wide range of views on economic matters has been considered relevant up to this point. I respectfully suggest to the Chair that the words of the hon. member for Peel South (Mr. Chappell) have indeed been relevant to the amendment.


Mr. Speaker:: The Chair did not suggest that the hon. member's remarks were not relevant. I merely indicated that there is a bill before the House and the hon. member's remarks should be relevant to that bill. I appreciate that this matter has very wide scope. It was not my view that the hon. member for Peel South was in order or out of order; I simply referred to the point of order raised by the hon. member for Winnipeg North Centre and indicated that I was sure the hon. member would take the remarks into consideration. That was the extent of my remarks.


Hyliard G. Chappell: As I was saying, one need only look at the Douglas Aircraft Corporation in Mississauga, in my riding, which employs 6,000 to 8,000 men to make aircraft wings for assembly in California. This firm has been absorbing the shipping costs, and since the change resulting from floating the Canadian dollar it has had to absorb the difference in dollar value and still compete with its counterparts in the United States.
The surcharge will cost this firm about $165,000 a week, less any assistance it may receive under the unemployment support bill. If labour causes an additional disadvantage, is it not obvious that this company may well accept United States governmental persuasion to repatriate to the United States at a location much closer to California and in a state offering financial assistance? Should we encourage this firm to leave, or encourage it to stay? If this firm moves, the resulting loss of jobs in Canada would number about 10,000.
We have also heard of the proposed Domestic International Sales Corporation, commonly called DISC, which would seek to lure firms like the Douglas Corporation back to the United States by offering home-based corporations tremendous advantages over foreign-based ones and by allowing tax deferral for earnings on export sales. Many think we in Canada export only pulp, oil and wheat, but that is not so. Half of our manufactured goods are exported, the majority of them to the United States. The U.S. surcharge was not meant to affect their imports of our raw materials because they need them but, rather, the export of our manufactured or high labour content goods. In the long run we must work out a set of rules with the United States authorities which will give our manufacturing concerns an equal opportunity with the American firms, or we shall revert to being an agricultural nation living on our natural resources because we will not have the money with which to manufacture and trade.
None of the measures I have mentioned is pleasing, but the worst one, a real sleeper, has received very little attention in public discussions so far. It is the 10 per cent tax credit on the cost of all new machinery and equipment produced in and for use in the United States. This is called by the innocuous name "job development tax credit." But look at what it does. The 10 per cent tax credit on

all new machinery purchased in the United States for use there, along with the usual tax write off would amount to a price reduction of 12 per cent to 14 per cent for at least a year, and something less than that for an indefinite period.
The expressed long-term purpose of this tax benefit is, first, to cause replacement of productive facilities with new, modern equipment with the newest technological innovations and thus increase the productivity of their workers and, second, to thus make their domestic industries more competitive in domestic and foreign markets. Third, this in turn would supply more jobs, provide a sound basis for future wage increases where productivity has increased, and decrease inflationary pressures on prices. This means that no United States industry would buy a piece of machinery or mechanical equipment in Canada if it or a substitute can be made in the United States. Last year we exported about $332 million worth of machinery and mechanical equipment to tne United States. If nothing is done to replace these sales we will lose 20,000 skilled and semi-skilled jobs almost immediately, and about 50 per cent of them in Quebec where we were trying so hard to create employment through regional development.
This is not all. United States firms extract perhaps 70 per cent of our natural resources. This part of the operation being low in labour content, we naturally hope and try to persuade them to process the raw materials to some extent in Canada. But if a new mine or other natural resource is started here now, there is no way that an American or Canadian would buy new machinery here to process the raw material in Canada. He would be disadvantaged in the machinery purchase. After extracting the raw material he must process it in the United States for this advantage and other benefits which the United States is innovating to encourage and aid industry and, thus, the creation of jobs. The result is, if we do nothing about this measure we are in effect allowing United States citizens here, Canadians and all others, to be forced to process our raw materials in the United States.
And now the most jolting realization of all. The United States will give this huge tax credit, with resulting loss of revenue, so that all of their industry will take advantage of it and quickly introduce all technological improvements available and thus become more efficient and productive in every type of industry. They give business a year under the full 10 per cent incentive, so one may be reasonably certain that all steps possible to introduce new and more efficient machinery will be taken quickly. This will not affect the machinery and mechanical business only but the whole manufacturing industry. In all business, industrial and commercial, carried on by Canadians we will be seriously disadvantaged on the U.S. market and against Americans in the other marketplaces of the world because the American competitor has, by tax incentive, been assisted in modernizing his equipment up to the moment.
We cannot afford to allow this situation to stand another day. We must undertake to introduce legislation in the form of an amendment to the bill, retroactive to this date, to give exactly the same advantages to industry purchas-
September 29, 1971

ing Canadian machinery and mechanized equipment for use in Canada and to further improve the whole industrial climate by taxation and other incentives and the removal of annoying and unnecessary obstacles.
During the last year we imported about $1,325 million worth of machinery and mechnical equipment. This is about four times the amount we exported. From my conversations with representatives of industry I am satisfied that we could produce in Canada $660 million worth of that which we have been importing. With the amendment to this bill which I propose we could increase sales in Canada by that amount, about $660 million, thus avoiding the loss of 20,000 jobs and in fact creating an extra 30,000 jobs. Moreover, such a provision would cause us to look to ourselves as Canadians and reexamine whether at this time of emergency we could not somehow find the product available in Canada.
From my contacts with industry I am satisfied that the Department of Industry, Trade and Commerce is doing an excellent job. But what about some of the other departments? Under the proposed Canada Labour Code Bill C-253, if an industrialist proposed a technological change that might make him more efficient by introducing a machine which would do the work of six people, he must give notice of the change to the bargaining agent of the union, along with considerable detail as required by the act and as may be further required by the regulations under the act.
If the bargaining agent makes certain allegations there must be a hearing before the board. The board can direct the employer not to proceed and has considerable other power to throw blocks and even prevent the technological change no matter how much more competitive it might have made that industry in the world market. On the face of it one might think that this proposal is kind to labour. But this is not so. It is this type of thinking that has made our railways so overstructured in labour content and so costly, and thus destructive of the efficient movement and lower price of goods which would make them more competitive.
The new competition act, Bill C-256, which in a sense contemplates confrontations between government and industry, or at least provides for overly severe policing, is in a very real sense a form of nuisance and in fact has been used to prosecute and harass on charges that are old and really quite trivial. I suggest that more effort should be diverted to encouraging, rather than hindering, industry.
When the United States authorities introduced a wage freeze and it was suggested that this action would prevent an increase in wages at Douglas Aircraft in Canada, what a fuss was raised by the NDP, and one of our ministers said the United States action could not influence our wages. It would have been better had we all reassured business that we have enough intelligence to realize that if wages in Canada go beyond those of competing industry in the United States, where productivity is the same or higher, our industry is disadvantaged to the point where it will eventually have to close shop. One wonders what international labour, under their United States leaders, is trying to do. With a freeze on wages in the aircraft industry in the United States, a strike at the Canadian plant which provides the wings for the planes would be an
Income Tax Act
indirect strike in the United States. If this plant could thus tie up the whole United States aircraft industry, certainly it would be transferred back to the United States. Surely we must realize that the time has come, when we are faced with these new United States protective measures, that we must encourage industry and co-operate with industry because otherwise the jobs which we must have will not be saved.
Japan and the United States encourage, encourage and encourage industry. It seems in Canada that we give the impression that we want more and more from industry and that we want to give more and more by way of handouts to other people whose only retort is, "Is that all you are going to give me?"
I have heard it said so often in this House that we should tax profit more, put greater taxes on big business. The profits that are not taken in taxes are distributed in dividends, and the dividends in Canadian big business are not high. In fact, they are so low that people will not buy shares in existing companies or new companies which would create jobs. If the profits are low and dividends are low, in no way can we find the money to create extra jobs.
We must react with more positive and speedier action, not only because it is necessary to avoid massive loss of employment but we must appear determined to keep the economy healthy so that investment and expansion will not draw back again and American capital leave to return to the United States, and Canadian capital migrate out of Canada to other countries. If our machinery and mechanical industry were given the same tax credit advantage as in the United States, the American corporations which have been exporting these goods into Canada would be in trouble, naturally. Then we would have a strong American lobby assisting us in our quest for more reasonable trade arrangements between Canada and the U.S.-a very helpful ally, I would think.
If we wait until the Americans are satisfied with their trade balance we will lose some of those industries which began specializing or, as they call it, rationalizing two or three years ago. By the time we return to the former trade pattern those industries will have lost many of their customers, much of their skilled labour and their ability to compete against their larger competitors. Under the American DISC plan many American companies will be persuaded to take their export production back to the United States and perhaps also their whole production. In some cases Canadian manufacturers will be asked to fill in those gaps for Canadian consumption. This is another reason for a tax incentive on the purchase of Canadian machinery, so that Canadians will take the gamble and buy new machinery to replace this production and to re-employ labour where jobs have been lost.
In conclusion, I say that although such an amendment would indeed be helpful and it is absolutely essential as an immediate step, we must still bring forth more concrete and substantial incentives for Canadian-owned companies to export. If our resources are to be sold, they should not be sold just for dollars, but for jobs. Our resources will have to be exported in the finished form or alternatively an equivalent number of jobs created by an
8286

September 29, 1971
Income Tax Act
alternative export of manufactured goods to the country receiving our natural resources.


Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: Mr. Speaker, I rise to speak on Bill C-259, commonly referred to as the tax reform bill of the Minister of Finance (Mr. Benson) because, coming from an agricultural riding, I find that unfortunately it spells bad news for our farmers. This naturally means that I and other hon. members and colleagues should raise our voices in protest where we feel injustices are being meted out. Just to refresh our memory I would read the amendment that is before the House. It was moved on September 13 by the hon. member for Edmonton West (Mr. Lambert) and is as follows:
That this House deeply concerned with unacceptable levels of inflation, persisting unemployment and stagnant industry and conscious of the necessity for meaningful tax reform declines to give second reading to a bill which does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts and incentives, does not contain adequate tax exemptions and is not calculated to materially improve business and labour conditions in Canada now or in the foreseeable future.
Of course, the terms of this bill, as with any other taxing measure, not only affects our farmers but also our fishermen, small business, the labouring man and all other sectors of our economy. In fact, when the government refers to Bill C-259 as tax reform legislation I have grave doubts about the correctness of their terminology. It appears to me to have finally emerged as a subtle plan to gouge more and higher taxes out of more and more Canadians who are already staggering under the burden, which is having the effect of an economic millstone around our necks in our endeavour to produce goods at a price that will compete on world markets and provide for our basic, everyday needs.
The original Carter commission report on taxation, brought in several years ago for the government's consideration, did contain a number of suggested tax reforms, but it was so socialistic in many areas that even the NDP, then led by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), had to back away from several sections of the report, although at first blush he and his party seemed to be ready to clasp to their bosoms the whole program as outlined.
The white paper of the Minister of Finance was a well watered-down version of the Carter report, and today we are looking at a bill that, again, is only a shadow of his original intentions planned for us in the white paper which was so much debated a year ago. This change of heart can be credited chiefly to the Leader of the Opposition (Mr. Stanfield), who almost in a one-man crusade across this country last spring and summer alerted thousands of Canadians in all walks of life to just what the white paper on taxation would do to them and to our economy in general if it were thrust on us in its original form.
In the present bill, everyone is in agreement with increasing tax exemptions for those in the low-income brackets. Every one of us also supports the closing of loopholes in our tax laws with respect to income tax evasion, and perhaps we are in agreement with several other sections of the bill, depending where we sit in this House. However, in my opinion these suitable and neces-

sary changes could have been made by simple amendments to the present law without all the political fanfare, a wasteful spending of the taxpayers' dollars and the consequent subterfuge leading people to believe that great changes were taking place when in fact they were being asked to dig up more tax dollars for this spendthrift government.
I do not pretend to be a tax expert, but if what I read and hear is true, this bill in its present form will lead to the greatest tax jungle in Canadian history. It seems that our top accountants and tax lawyers who have looked at the bill are about ready to throw up their hands in despair when it comes to properly interpreting the proposed legislation. If this is the case with the so-called tax experts, imagine the trouble and feeling of despair of the ordinary layman when he looks at how he may be affected by this legislation.
At this point I wish to deal with two aspects of the finance minister's tax reform bill, how it will affect the agricultural industry, farmers in particular, and how it will affect co-operatives, a matter with which some hon. members are probably involved. First of all, let us consider the farmers. Under the present law a farmer may classify a group of animals as his basic herd, and gains and losses are treated as capital gains and capital losses and are tax exempt. However, under the new tax reform bill, the basic herd provision and straight line depreciation will be phased out. Livestock farmers will be able to establish a basic herd as of December 31, 1971, and any gain thereon will be tax free, but no additions to the basic herd may be made after December 31. When livestock is sold after December 31, 1971, the sale will be considered as going out of the basic herd or the other herd and will be subject to special rules.
Assets acquired after December 31, 1971, must be depreciated on the diminishing balance system. If proceeds from the sale of assets, depreciated on a straight line basis, exceed their cost or valuation day value, the excess is capital gain. As an example, trading-in tractors and combines for new machinery will be affected in this respect. Under the new legislation capital gain will be subject to taxation. As far as a hobby farmer is concerned, he may still deduct only $5,000 of his annual farming loss from other income. But in addition, any amount of interest and property taxes not deducted because of this limitation may be applied to reduce any proceeds on the eventual sale of the farm.
In general, income gained from farming and fishing will be brought more into line with the tax treatment of other businesses. Farmers probably will be taxed somewhat more heavily in this area, but it is impossible to say how much because the government has not calculated additional revenues which might result in this area. One measure in the tax reform bill that will adversely affect farmers is that no new additions and sales can be deducted after the livestock farmer has established his basic herd as of December 31, 1971.
Another part of this bill that will spell bad news for farmers is valuation day, because property will be subject to the new capital gains tax proposed in the bill. This capital gains tax is new to Canada and will begin with
September 29, 1971

valuation day. Some people may not be familiar with the term "valuation day" or V-day as it is commonly called. Some time before the new tax plan takes effect the government will declare what it calls valuation day. Only the gains realized after that date will be taxed. If a capital asset is valued at below cost on that date, the cost value will be taken as the starting figure for the system. For many farmers this measure will not mean much, but farmers who sell to developers will face a large tax bill.
Under the new plan there will be no capital gains tax on a taxpayer's principal residence, and one acre of surrounding land will also be exempted. That is to say, no capital gain will be calculated when he sells his acre of land or his house, but his farm machinery and barn are still subject to capital gains. However, this plan could hardly bring any comfort to farmers who have considerably more than one acre of land, so farmers will have an alternative. A farmer may choose the white paper formula for a $1,000 annual deduction against gains on his farmhouse and all his farm property, whichever plan is more beneficial to him.
One aspect of the finance minister's capital gains tax structure which does not make sense is this: if all capital gains are to be taxed, why aren't all capital losses to be deducted? Mr. I. H. Asper, in the Globe and Mail of July 1, 1971, clarified this situation very well as follows:
Take, for example, the situation of the farmer who, because his children do not want to carry on the family farm, sells his assets. He has a capital gain of, for example, $50,000 which is taxed.
He retires and invests all of his money in the market. Three or four years later he liquidates because his investments are not advancing, and suffers a $50,000 loss.
In fairness he should not pay any tax because he is even, not ahead-he has had a taxable $50,000 gain and a non-deductible $50,000 loss.
Now if another farmer had the same results but in reverse order-first a $50,000 capital loss and then later made a $50,000 capital gain, the gain would not be taxed because the law, as written, provides that a loss can be carried forward indefinitely to offset future gains. But the reverse is not true, resulting in an unequitable situation.
At first the Saskatchewan Wheat Pool appeared to be one of the few organizations throughout the tax reform debate that was ready to support partially some of the finance minister's proposals, for the simple reason that they thought Saskatchewan farmers would likely be among the first to benefit from measures to reduce taxes for some and eliminate them entirely for others. However, the pool has many qualifications. For example, Mr. Speaker, it has argued that a tax on capital gains may hit farmers and other small businessmen particularly hard because most of them seek to retire on proceeds from the sale of their farm or business and fear the proceeds may be whittled away by a collection of tax on the capital gain. The pool has said that farmers and small businessmen should be permitted to purchase a registered retirement plan from the proceeds of the sale of their business before a capital gains tax is levied. But the minister's tax reform legislation does not appear to allow opportunity for this kind of purchase.
Let us now consider the new tax bill as it affects cooperatives and credit unions. In a rather obscure and complicated way the bill seems intent upon profoundly altering the nature and goals of co-operatives in Canada.
Income Tax Act
Under the present law, new co-operatives are exempt from taxation for the first three years. The new bill proposes to withdraw this three-year tax exemption.
Consumer patronage dividends are to remain exempt as long as they can be distributed. Under the present law, patronage dividends on production goods, for example farm supplies, are considered a reduction of cost and must be taken into income by the recipient and are taxable at the recipient's personal rate. Patronage dividends for production goods will remain as income under the new bill.
The capital employed principle has been drastically changed under the new bill. Whereas now co-operatives cannot reduce their taxable income below 3 per cent of the capital employed, the formula for calculating the capital employed under the new tax reform bill will include essentially only members' equity, that is, shares, loans and general reserves, and the rate has been increased to 5 per cent. The only deduction is the interest paid on members' loans.
These changes will have the accumulated effect that less and less of a co-operative's earnings can be distributed as patronage dividends on purchases. This means that the earnings of co-operatives will gradually have to be distributed on the basis of the equity owned by the members. This will force co-operatives into the pattern of investor-owned corporations rather than service corporations distributing earnings on the basis of use. When this point is reached, co-ops would be better to incorporate as ordinary corporations because then the shares would not be on call. It is unbelievable that the government of Canada wants to kill the co-op system in this way.
The tax on employed capital wfes introduced in the amendments to the Income Tax Act of 1948 purely as a political answer to opponents of co-operatives, and was not suggested or recommended by any of the various royal commissions which inquired into the position of co-operatives. It is an inequitable tax, practised nowhere else in the world. Some years ago the Danish government attempted this method but soon abandoned it.
It should be kept in mind that earnings on non-member business and money put into reserves or held by the co-operative itself are taxed at normal corporation rates. No one questions these regulations. The Minister of Finance has indicated that he will be receptive to amendments in this area. We hope he follows through on his word, and we intend to press the government to explain just what it means by these changes. Special sectors of the economy, for example the resource industries and small businesses, have received favourable consideration in the tax reform bill to assure their continued viability, and we feel co-operatives should receive similar treatment. These new tax reform proposals appear to favour the distribution of co-operative earnings as interest on members' equity rather than as patronage refunds. Perhaps the members of co-operatives, and not the federal finance department, should determine how earnings of co-operatives are allocated to members who are also patrons.
Aside from the tax reform bill there are two items in the minister's June budget which also affect the agricultural sector-the end of the federal estate tax and the elimination of the 12 per cent tax on margarine. Roy Atkinson,
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president of the National Farmers Union, has said that the imposition of the capital gains tax will nullify any benefits that could come from the abolition of the estate tax. The National Farmers Union has been advocating an end to the estate tax for some time. However, this tax was never one of the biggest problems facing farmers, particularly in western Canada. George Heffelfinger, president of the National Grain Company, was much more optimistic about the effect of this particular portion of the budget. He said that the estate tax in the past has been responsible for the sale of many small businesses and farms, particularly to American buyers.
The elimination of the 12 per cent tax on margarine has drawn varied reaction from within the dairy industry which stands to be hardest hit by a projected lowering of the price of margarine. Philip Isaacs, former manager of the Winnipeg Dairy and Poultry Co-operative, is reported as saying that the dairy processing industry has been urging the removal of this tax for several years. He said he did not expect any great increase in the consumption of margarine, but conceded it may cause many difficulties for dairy producers. The dairy farmers of Canada, on the other hand, have been opposing the removal of this tax. Roy Atkinson has said the removal of this tax may make margarine more competitive with butter and may pose a problem for the butter producers.
In conclusion, Mr. Speaker, on the basis of the serious reservations expressed by my colleagues earlier in the debate on Bill C-259 and in light of the views I have just expressed, I have no alternative but to support the amendment now before the House.


Mr. John Burton (Regina East):: Mr. Speaker, the events leading to the introduction of Bill C-259 were billed as an exercise in participatory democracy. That is how it was publicized. To those hon. members who may be under the delusion that this is what took place, I suggest that it was one giant fizzle. We did not have participatory democracy in any way, shape or form. This is demonstrated most vividly in the result of the exercise as expressed in the form of Bill C-259 now before us. It in no way speaks for the people of Canada nor does it relate to the needs and desires of many people throughout the country.
Perhaps we should ask ourselves who won the exercise, such as it was. I think this was demonstrated in the concessions made by the government with respect to capital gains, to the mining, oil and gas industries, the difference in the way various forms of income are treated and the difference in the treatment of working people compared to businessmen and others who receive their income in different forms.
Mr. Speaker, if there is any thought in the minds of members opposite that the bill now before us is an expression of the just society, they had better think again. As soon as they have looked beyond the few goodies contained in the bill, people will realize that in fact it contains a great many inequities. The public will react to the hoax that has been perpetrated upon them and this will result in a further build-up of pressure in our society for some sort of meaningful change. It will be realized that the

government of the day has not been responsive to the very real needs and desires of the people.
I should like to deal with some aspects of the debate that has taken place on this bill, Mr. Speaker. First of all, I should like to deal with the argument that has been debated very widely on the whole question of equity versus growth. It has been quite apparent that the primary consideration of members on the government side of the House, in many instances, and on the part of the government itself has been in terms of giving more emphasis and more priority to growth considerations. This has been the justification put forward for some of the measures proposed in this bill.
I suggest, Mr. Speaker, that if they really want to examine this question in depth it will be apparent that it is not possible to have true and meaningful growth unless it is linked with considerations of equity and unless equity is built into the tax system in all respects. Before we can have any real tax reform we must have more emphasis on tax equity than so far has been demonstrated in this bill.
I acknowledge that one important departure which the government has proposed is the introduction of a capital gains tax. It is a half-baked measure but it does give some hope for the future. Once the breakthrough is made in terms of introducing the principle of taxation on capital gains, it may be possible in the future to introduce further improvements in order to realize a greater degree of equity.
Looking at the over-all picture, I think one of the worst features of the bill is the manner in which it deals with the resource industries, particularly mining, oil and gas. It continues a system of concessions made available to those industries which is not available to any other sector or taxpayer in the Canadian economy. This seems to me to result in a very serious distortion of our economic system and of the pattern of our economic activity. It will result in greater incentives and greater inducements to development within that sector of the economy, but that is not necessarily the best allocation of resources in terms of our development policy. It will not necessarily result in the greatest possible number of jobs. It is well known that these primary industries have a very low labour input. They do have a high capital input and on many occasions in the past it has been necessary for Canada to import the capital required to bring about the development of these industries, but in terms of new jobs the result has been minimal.
There has been added pressure on the Canadian dollar and on our international economic position by way of added inflows of capital. The additional export of raw material has not produced much benefit. It is probably true that as a result of the concessions contained in this legislation and in the government's policy there are some marginal mining operations which have benefited, but I suggest that the allocation of resources to those industries which results from the influence of our tax system is not in the best interests of Canada. The suggestion that a change in the present system will result in a massive outflow of capital and resources industries is straight nonsense, Mr. Speaker. Certainly, these industries will make a noise and will protest. But I think when we see the end result we will realize that only very marginal industries are affected in any way.
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It seems to me that we must keep these factors in mind when thinking of the current economic crisis facing Canada as a result of President Nixon's new economic measures. The fact is that the Canadian dollar is under severe pressure at present. In large part, but not totally, this has been brought about by our heavy emphasis on primary, non-renewable resource industries. These industries export most of their products in a raw or semi-processed form, the result being a heavy inflow of United States dollars to Canada. At the same time this produces little in the way of benefits for Canadians.
In my contribution to the debate this afternoon I should like to deal with one particular problem at some length. It is of a serious nature. I want to deal with the proposals in this bill with respect to taxation of co-operatives and credit unions. I feel that this constitutes a very serious problem. It has been brought to the attention of all members of this House. I am pleased to note that some members of all political parties have expressed concern about this matter. This shows, I think, that something has gone wrong with the system responsible for the introduction of this bill.
It seems that either nobody in the Department of Finance really understands what the co-operative movement is about-and I can hardly believe that since many capable and competent people are in the employ of the department-or somewhere along the line, before the bill was finalized in its present form, somebody got to the Minister of Finance (Mr. Benson) or to the government and brought undue influence to bear. That has resulted in the atrocious proposals we have before us in clauses 135, 136 and 137. I do not hesitate in saying that from the viewpoint of the co-operative and credit union movements the proposals in this bill which affect them are nothing short of disastrous.
I think all hon. members should pause and think about this matter before they pass lightly over the proposals introduced by the government. We must keep in mind the history of the credit union and co-operative movements and the contribution they have made to Canadian society and to the economy. These movements are dedicated to helping people and to enabling people to exercise a greater degree of control over their own affairs. Their operations have been built largely on the principle of self-help. They have arisen in large measure because of the very real needs of Canadian people in many walks of life-not just in one sector of the economy, in one sector of our society or in one geographic area. In all the areas of Canadian society we have seen the credit union and cooperative movements grow in response to the needs of people and their desire to help themselves, to improve their conditions, their community and their country.
If the government is to take the step of doing something that actually will destroy the co-operative and credit union movements-and I suggest that is what is at stake- I suggest it will be perpetrating on this country one of the most serious follies we have witnessed in a long time. I also suggest that the co-operative and credit union movements have made a great contribution to Canada in terms of bringing about a greater degree of equality within our society and of bringing somewhat closer than would
otherwise be the case equality of opportunity and equality of condition. If we are to think of the future of Canada in meaningful terms, we must think about these matters.
If the government continues on a course which results in the destruction of the co-operative and credit union movements in Canada, I suggest it will be taking a major step toward destroying Canadian society and democracy. Our co-operative movement is dedicated to the principle of democracy. It is thoroughly steeped in the principle of democracy. It is an expression of democracy in its truest form in social, economic and political terms. For these reasons I suggest that the government must reconsider the proposals contained in this bill.
I think we must look at clauses 135, 136 and 137 of this bill, Mr. Speaker, and ask ourselves this question: What will happen to a society that cannot tolerate a different form of organizing its affairs than that which seems to predominate? We must also ask ourselves: Are we to have a tax system that is designed primarily to meet the needs of people, that is designed primarily in terms of people, or are we to have a tax system that thinks first in terms of money and capital? I think the answer is obvious when we consider that simple proposition.
We must translate that proposition into real terms with respect to the legislation now before us. I believe that the legislation as drafted thinks first in terms of money and capital. Those who drafted it and decided on the form in which it would be introduced, it seems to me, thought only of some form of economic structure or organization which begins with capital and financial considerations. They did not begin from the basic premise which is: Before you have money, before you have capital in any form you must have people, and it is people who are the prime movers in society and in our economy.
Members of my party, Mr. Speaker, have often been accused of being doctrinaire in their approach to our economy. It seems to me that clauses 135, 136 and 137 constitute one of the best examples of a doctrinaire approach ever envisaged. It seems that those responsible for including these clauses in the bill could think only in terms of classical capitalism. They could think only in terms of some form of economic organization which begins with a capital structure based on a classical capitalist type of economic organization. I suggest seriously to the government that a society which cannot accommodate a variety of approaches involving social and economic considerations is doomed. The minister must consider that when approaching this question.
Under the co-operative movement people have banded together to deal with their own problems. They wanted to help themselves. That was the prime, motivating force behind the co-operative and credit union movements. I suggest that these movements have developed a unique form of organization, a unique type of corporate structure, you might say, which differs from the usual type of corporate structure in our economy. The government has totally failed to take into account in the bill before us the unique characteristics of the movement.
I assure those on the other side of the House, the government in particular, that many of us will not stand idly by and see the co-operative and credit union movements

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destroyed. We will stand in this House and fight for the changes that are necessary in order to produce a fair deal for this movement. I serve notice on the government that many of us will do battle when we come to these clauses of the bill. The operation and the structure of the co-operative and credit union movements differ in some respects, although they are based on similar principles. I would like to deal with each in turn because I believe there are some considerations that must be brought to the attention of the House.
Members will be familiar with representations that have been made to them by both the co-operative movement and the credit union movement. The credit union movement has expressed some very real and valid concerns with regard to the proposals in Bill C-259. We have to keep in mind that Bill C-259 proposes, for the first time, to remove the present exemption from taxation of caisses populaires and credit unions. This is a new departure in the Canadian tax scene. The last major change in this area was in the late 1940s. At that time the McDougall royal commission studied the question of taxation of cooperatives and credit unions. In spite of the changes and recommendations they made with regard to co-operatives, they recommended that credit unions should not be subject to taxation. I quote from the McDougall commission report:
Credit unions provide a method whereby people in poor circumstances are encouraged to develop a habit of thrift, since by pooling their savings they can provide a source of credit for themselves in time of need.
That only has to do with the question of taxing credit unions as such, taxing their surpluses or net income. I think it is fair to say that the credit union movement has very serious concerns about regard to the manner in which taxation will be imposed on them. I would like to enumerate some of their major concerns. First, members of the credit union and caisse populaire movement request an equality of tax with that accorded to corporations and the availability to corporations of a lower tax rate of 25 per cent. Of course, private corporations can under the revised rules continue the application to them of a lower rate of tax by the payment of dividends.
It must also be kept in mind that under provincial laws governing the operation of caisses populaires and credit unions, reserves set up by a caisse populaire or credit union cannot be distributed to members to provide for the continuation of a lower rate of tax as provided in other sectors of the tax system. Credit unions and caisses populaires ask that modified rules be provided for them so that the period during which they have received the reduced rate of tax of 25 per cent is extended in a manner equitable to that provided for corporations.
The second major point raised by the credit union movement is that payments made by a credit union or caisse populaire as a payment of interest or dividends, as they are commonly known, on members' shares, are not deductible as an expense. That is the proposal in the bill. This provision demonstrates a failure to recognize that the shares of a credit union or caisse populaire are a form of deposit by their members and are not shares similar in nature to ordinary corporate shares such as hon. members opposite are generally familiar with.

The third major concern is that clause 137 imposes very severe limitations on the manner in which a credit union or caisse populaire may carry on its business or in the manner in which it may invest its funds. I feel this question has to be looked at as well. They are also concerned about some of the transitional provisions developed for credit unions and caisses populaires in the application of Bill C-259.
Finally, members of caisses populaires object to the principle of "capital employed" limiting the patronage refunds that may be made by a credit union or caisse populaire to reduce the cost of borrowing by their members. This is a very reasonable set of objections which must be taken into account by the government. The National Association of Canadian Credit Unions and several other credit union and caisse populaire organizations made these representations to the government. They are also making them to members of the House of Commons. I think it is incumbent upon every member of this House to give them very serious consideration.
Members must bear in mind that the credit union movement has been of very great service to thousands of people across Canada in providing a start for them in solving their financial problems and financing the necessities of life. It is recognized that there is now general acceptance of the value and role of credit unions across Canada. It must be kept in mind that the people who invest their savings in credit unions are subject to different levels of taxation. No one is quarrelling with the principle that the dividends received from savings in credit unions, which are termed as shares, should be subject to taxation at whatever level may apply to the individual. It must be emphasized that there is a very serious malaise in our economy and our society if it is not possible to find a way of accommodating our tax system to the very unique structure and role that is played by this movement.
I would like to deal with the situation of the co-operative movement because it plays a very important role in the Canadian scene. The latest figures show that there are
1,700,000	members of co-operatives across Canada. Many are small community organizations but there are also large operations. These organizations have very real concerns which I believe should be made known to members of this House.
Co-operatives in general object most strenuously to the "capital employed" concept contained in Bill C-259. This substantially reduces the amount of patronage refunds which can be paid to members. Second, reducing patronage refunds hits at the economic existence of co-operatives. This point relates to my earlier submission that it will result in the destruction of some co-operatives and in other cases will seriously hamper their growth. It has to be kept in mind that patronage refunds are part of the investment required to enable a co-operative to operate. If a co-operative has no means of raising equity capital except through the reinvestment of patronage refunds in its share structure, it is obviously unable to expand and develop. This is the practice followed by many co-operatives-they do plow back patronage refunds into their capital structure. This provides them with the resources necessary to continue their operations and expand them if desired.
September 29, 1971

There are other objections which need to be taken into account. I was very much concerned by a statement made earlier by the hon. member for Edmonton West (Mr. Lambert) when he led off the debate on behalf of the Progressive Conservative party. He made some comments with regard to the taxation of co-operatives. I quote from his speech as reported in Hansard at page 7762 for September 13:
We have had quite a reaction to this bill from the co-ops. I do not know what the House is going to decide, but it seems to me that the government has advanced its proposals after looking at some of the largest co-ops in the country, organizations which have lost their co-operative origins, that operate in the hundreds of millions of dollars class, their boards of directors being far removed from the ordinary members, in the same way as the boards of the biggest multinational corporations are far removed from the shareholders.
Unfortunately the government's proposals gather up into the same net hundreds if not thousands of small local co-operatives. I am speaking of co-operatives organized on a local self-help basis.
There is no question but that this statement reflects a serious lack of understanding of the nature of the co-operative movement. It is certainly true that many large cooperatives operate on a large scale. There are many others which operate simply on the basis of serving a small local community. But I suggest that all of them are part and parcel of the co-operative movement. I do not say the co-operative movement is free from criticism with respect to the extent to which it has kept contact with its membership, but this is something which ought to be dealt with within the movement itself.
If you take time to look at some of the large co-operatives in Canada you will find that many of them have made monumental efforts to keep in contact with their members. It seems the hon. member is not familiar with the efforts of the Saskatchewan Wheat Pool, for example, to keep in touch with its membership and carry out an on-going program of membership participation in its activities and in the decision-making process. I invite him to take a close look at the highly developed organization, structure and pattern of the Saskatchewan Wheat Pool. I think it is a first-class example of the way in which organizations could keep in closer touch with their membership.
I think the hon. member for Edmonton West was off-base when he suggested that the tax proposals contained in clauses 135 and 137 were designed primarily with the very large co-operatives in mind. In fact, some of the very large co-ops will be hit most severely. Many of the large co-operatives are now being called upon to undertake expansion programs in order to meet new conditions and will be unable to continue in existence if the bill now before us is enacted.
Hon. members will be familiar with the representations which have been made by the movement to the Minister of Finance. The co-op movement has objected to the continuation of the capital employed concept as contained in Bill C-259. I should like to pose to the government the same question as the co-operative movement has posed: What is the rationale behind the capital employed concept? Is there any rational explanation for using a fixed capital employed concept? What justification is there for doing so?
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Having set an arbitrary level in a capital employed formula-it was 3 per cent as applied to co-operatives under the old act; the percentage is now to be raised to 5 per cent-the principle is to be extended to the credit union movement. The co-operatives find the emphasis placed on the relation between income and capital to be unreasonable and illogical. They view this as a form of discrimination and point out that no similar provision appears in the proposed tax bill affecting other methods of doing business.
There is a further aspect of these proposals which ought to be considered, namely, the manner in which the cash flow of co-operatives will be affected. What is envisaged here will completely destroy the operation of the co-ops; it will make it impossible for them to carry on their operations within the structure they have developed over the years. There is one alternative open to them: they can simply change over to a stock company type of operation. But if they did that they would be abandoning the principles upon which the movement has developed and flourished. Consider the question of shares. A share, as we speak of it in the co-op movement, is a completely different thing from a share in an ordinary corporate operation.
It should be kept in mind that the only source of equity capital for co-ops is through the patronage refund system as they have developed it. Again, they could reorganize on a different basis, but if they did they would no longer be co-operatives; they would no longer be carrying on as in the past. The bill will make it impossible for them to operate as they desire to operate, and this is a serious matter.
Similarly, it should be kept in mind that there is no means whereby credit can be obtained for corporate taxes paid under the new proposals before us. There is no dividend tax credit applied to pay-outs of patronage refunds as is available to recipients of dividends from ordinary stock corporations. This, too, is a discriminatory feature in the bill, one which is totally intolerable.
The co-operative movement has also pointed out that the new tax proposals will make it virtually impossible for most co-operatives even to consider paying dividends to their members. I hope the government will reconsider its proposals in this area, bearing in mind that the purpose of a co-op is not so much the earning of profit as the provision of services to those who have organized it.
I suggest that if the government allows clauses 135 to 137 to pass without substantial change and without giving substantial weight to the representations of the co-operative and credit union movements, it will destroy something that is essential to the future well-being of Canadian society. That is a cross that I am sure even a Liberal government would not want to have hanging around its neck.


Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, through certain manoeuvers this afternoon, members of the opposition have succeeded in delaying study of Bill C-259. In order to recover some of the precious time we have lost-

Pursuant to Standing Order 6(5)(a), that this sitting be extended

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until 7 p.m. for the purpose of continuing consideration of the second reading stage of Bill C-259.


The Acting Speaker (Mr. Laniel):: Hon. members have heard the motion put forward by the hon. Postmaster General pursuant to Standing Order 6 (5).

Hon. members have heard the motion.


Gordon Harvey Aiken: I did not hear it, Mr. Speaker. Would you repeat it?


The Acting Speaker (Mr. Laniel):: I will in a moment. The minister is proposing to extend the hours of sitting until seven o'clock. Before putting the motion I should like to remind hon. members that when such motions are put in the hour before the adjournment of the House, after the motion has been put the Chair asks members who oppose the motion to rise. If more than ten members rise, the motion is deemed to have been withdrawn. [Translation]
Mr. Cote (Longueuil), seconded by Mr. Mahoney, moved:
That this sitting be extended until 7 p.m. for the purpose of continuing consideration of the second reading stage of Bill C-259.

All those opposed to the motion will please rise.
And more than ten members having risen:


Stanley Howard Knowles: You thought we were not ten.


Robert Jardine McCleave: We'll put the run to this German tactic.


The Acting Speaker (Mr. Laniel):: More than ten members having opposed the motion, it is deemed to have been withdrawn.


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, I rise to speak on this very important Bill C-259 because I feel the amendment moved by the hon. member for Edmonton West (Mr. Lambert) expresses very well the concern which is felt by a great many Canadians. The amendment reads: That this House deeply concerned with unacceptable levels of inflation, persisting unemployment and stagnant industry and conscious of the necessity for meaningful tax reform declines to give second reading to a bill which does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts and incentives, does not contain adequate tax exemptions and is not calculated to materially improve business and labour conditions in Canada now or in the foreseeable future.
That expresses a concern which is felt by thinking Canadians generally at this time, particularly those who have studied this so-called tax reform bill. Taxation is an increasingly important factor in the economic life of our country. We have a situation in which we have two phenomena, which used to be considered to be mutually exclusive, occurring at the same time. The first is inflation and the other is high unemployment. It was once thought that you only had inflation in a period when the economy was buoyant and everybody was employed, and that you only had unemployment when the economy was in a depressed condition, when prices were stable or falling and when the value of the dollar was not being inflated

but deflated and going up in value. At the present time we have these two phenomena, a high rate of unemployment and a high rate of inflation, happening concurrently. A good question is, what new factor is there in the equation which makes this not only possible but perhaps inevitable?
In what I am about to say I will do my best to avoid being unduly partisan, because what I say is not criticism of this government only but criticism of our general outlook in government. It applies not only to this government but, in a larger context, perhaps to all levels of government. I believe our rate of increasing taxation has to be controlled. We tend to look at this progression of increase as so much of a percentage each year and it does not seem very serious. It may be just an increase of 10 per cent, or something of that sort, and we forget that it is a geometric progression. It is like the population explosion or compound interest rates: when they continue for a while the absolute increase is frightening and ultimately explosive.
I think I can illustrate what I am saying by a classic story which has various forms and settings. It is about a farmer who sent his hired boy to the blacksmith's shop to get a horse shod. As you will know, Mr. Speaker, there are 32 nails in a set of horseshoes. The regular charge for this job was $2. The blacksmith asked the boy whether he would prefer to be charged the $2, or would he like to be charged one cent for the first nail, twice as much for the next, twice as much for the next, and so on. The boy thought that there being only 32 nails, this would not be a very large amount. The blacksmith then pointed out that this was a compounding, or a geometric progression and that by doubling even 32 times you arrive at a colossal figure. As a matter of fact, I believe it would cost something like $21 million to have a horse shod on that basis. This is the kind of lack of appreciation for trends taking place in this and many countries which produces exponential curves which become steeper and steeper. They are trends which cannot continue becoming steeper and steeper with ever-increasing acceleration without something flying apart at the end.
Some people might say, "We have inflation, but what does that matter? If a dollar will only buy half as much now as it did X' number of years ago, it comes out to the same thing." It does not come out to the same thing. Inflation has a very great number of unfortunate effects on the economy. The first is that it discourages thrift and saving, because if one saves for the future, his old age or anything of that sort, the value of the savings is depreciated as the value of money goes down and inflation increases. The people who want to borrow money realize that the thing to do is not to have their property value in dollars but, rather, to have those dollars invested in perhaps stocks or real property.
The effect of this is that there are more people who want to borrow money than there are people willing to lend money. The people who lend money not only wish to have a reasonable rental on the money they loan, but also an increment on the interest which will neutralize the depreciation of the money in the period it is loaned. They do not want to lend a dollar with which one could buy a dollar's worth of goods and find that when they get that
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dollar back a year from now it will only buy 95 cents worth of goods in terms of its original value. The result is high interest rates. That is an inevitable result of inflation. This places an added burden on people who invest in the means of production whether they be farmers, representatives of companies or anything else. They must borrow money, and while it is depreciated on their income tax return they are gypped because the depreciation they receive is in respect of cheap money.
When these people have to replace the capital goods and means of production at the end of that period, they find the replacement cost is twice what it had been. I will give an example, Mr. Speaker. This is a homey example. This summer I found it necessary to put a new roof on my barn. I am a farmer. The barn had been built many years ago and I happened to have the contractor's receipt from the time when this fair-sized building was built before the turn of the century. When I repaired the roof this year I found that the cost of just the nails to put on the roof was about the same as the cost of the whole building when it was first built. That is inflation.
We are experiencing a type of inflation which is becoming steeper all the time. It is very dangerous. I remember being appalled when I was told that when the Palace Hotel in Brussels was redecorated after World War II the inside decorations cost more than the total cost of the building just before World War I. I thought at that time, "Thank God we have not been exposed to that kind of inflation in North America". Now, however, we have that kind of inflation, or something very close to it. This concerns me greatly.
This situation makes it impossible for industry or business to plan for the future or to engage in many of the economic stimulations they could carry on if they were dealing with a dollar that was fairly constant. It would be an impossible task to try to plan for business expansion or for the future in a situation where the value of the dollar is wildly fluctuating, where you have wild inflation or where you have a rapid rate of inflation, because the businessman or the entrepeneur is in the same position as an engineer if he were called upon to plan a building like the Arts Centre and was told that his yardstick would expand by 5 per cent per year.
It is this type of difficulty which is slowing down our economy. Our economy is being slowed down by high taxes. One might say, of course, "We are paying high taxes, but governments are in so many fields of endeavour now and are giving good service in return for the tax dollars. We have many things such as the old age pension, medicare and better schooling." This is all good; it is excellent. I am for this so long as we can afford it and so long as we do not live beyond our means.
If we should find that we are living beyond our means we must make the difficult decision as to what our priorities are, because I believe our tax burden is already too heavy and that our tax load has been expanding at a rate which is much greater than the rate of expansion of either our population or our gross national product. This cannot go on idenfinitely. I would give an illustration or two about what I have in mind. I have here a statement which was prepared in reply to an answer to a question placed on the order paper last year. We find, for example, that the ratio of federal government employees to the population has increased, from 1950 to the present time, from one civil servant to 106 members of the population to one civil servant for every 87 members of the population.
In reply to another question we find, in absolute terms, that the number of civil servants in the federal civil service increased between 1934 and 1968 from 40,000 to 235,000. Yet in that period the population only doubled. I am not against civil servants. We have an excellent civil service in this country, comprised of dedicated people; but I believe it is unfair to them if it is government policy to expand government services to the extent that we have civil servants working in many non-productive fields.
As I have said, the effect of taxation on the Canadian economy is fairly extreme. I should like to quote some figures in respect of the total revenue of the federal government. I have the figures for only the period 1926 to 1946 and to 1966. The total revenue of the federal government increased from $373 million in 1926 to $2,602 million in 1946 and to $9,721 million in 1966. The municipal and provincial rates of revenue increased in roughly the same proportion, so that the total tax paid by Canadians to all three levels of government in a matter of 40 years has increased from a total of $879 million to $22,155 million in 1966, and the trend has continued. The fact that disturbs me is that this trend continues at an ever-increasing rate in most cases.
What is the end result of such a trend? To give an illustration of the end result, the taxes paid in Canada in the 40 years-per individual, per capita, not per wage earner-prior to 1966 increased from $87.90 to $1,107.75, to all levels of government. If the average family consists of four people, that is a tax burden of $4,400. It is no wonder that it is an absolute necessity, especially in the cities, for there to be at least two wage earners in a family so that they can make both ends meet. If there is not, their income does not allow them to own a home.
This sort of change in our economy affects the quality of life and the kind of homes that we are able to provide for our growing children. I think that from this situation stem some of the other problems that are facing Canada. One might suggest that big corporations can be taxed more, or that the sales tax can be increased since nobody knows whether the increase is part of the actual cost of production or not, and what the taxpayer does not know will not hurt him. So we keep on piling these hidden taxes on everyone and there is no escape. I do not care whether a taxpayer's income is high or low, he pays through the nose day in and day out to all three levels of government. There is no escape for him, and the taxes that are imposed on corporations or on the so-called rich filter down through all income groups.
Let me give another illustration of the effect of high taxes. I have here a statement which I suppose all telephone subscribers received recently with their bill. It points out that the total tax on the Bell Canada telephone service, which must inevitably be paid by their customers whether the taxes are direct, indirect or merely collected by Bell and remitted to government, amounted to about $44 for each telephone in service last year. They write: Consider that we have more than six million phones in service and you'll see why we say we deal in "huge" numbers.
Income Tax Act

September 29, 1971
The tax per phone has increased by 90 per cent since 1960. This rate of increase in taxes is four times the rate of increase in general operating costs over the same decade.
This is a typical example of how high taxes affect business, because one cannot do much business now unless one has a telephone, at least one. But with one telephone you will be stuck with $44 worth of taxes which you have to pass on to your customers.
Automotive transportation I think is considered a business necessity for the transportation of goods. What happens at present? For example, from 1955 to 1970 the oil companies got three cents less for each gallon of gasoline that they produced than they did 15 years ago. The filling station operators who distribute the gasoline receive about the same as they did 15 years ago. Federal taxes have gone up by more than half a cent per gallon in that time, and other taxes have gone up by 6 cents a gallon, with the result that now, although the industry is so efficient that the costs of production and distribution have not increased in that period, the cost of a gallon of gasoline, which is an essential element of production, has gone up sharply.
I could go on, but I want to make the point that high taxes have an inhibiting effect on industry, and when I say industry I mean business in general down to a person who is self-employed. It is harder and harder for Canadians to compete in world markets or to continue in a business which might have been prosperous under similar
circumstances if the tax load were not as high. We cannot avoid taxing the means of production, and this is very unfortunate because it makes us uncompetitive in world markets.
We still feel that we live in an affluent society and should have the newest cars and everything we need. But how do we pay for this if we do not export competitively in world markets goods that have a high element of employment, that create many jobs? We are doing it less and less successfully. We are blessed with a tremendous hoard of natural resources, so we export them. They take a minimum of work and that keeps international payments in balance. But the result is that the Canadian dollar is relatively higher, compared with other currencies, than it would be if it were a measure of our competitiveness as it should be. This vicious circle makes it more difficult for us to compete in world markets, as the hon. member for Duvernay (Mr. Kierans) pointed out so clearly the other day. The kind of life we are living as Canadians can be compared to the life of a farmer who could not make ends meet and decided to pay the grocery bill by selling some of his acreage every year.
May I call it six o'clock, Mr. Speaker?
The Acting Speaker(Mr. Laniel): Order, please. It being six o'clock, this House stands adjourned until tomorrow afternoon at 2 p.m.
At six o'clock the House adjourned, without question put, pursuant to Standing Order.

Thursday. September 30, 1971.