1971-09-07

Mr. Speaker:: I wish to inform the House that, in accordance with representations made by the government, under the provisions of section 2 of Standing order 42 the Chair has caused to be published a special order paper giving notice of a bill entitled "An act to support employment in Canada by mitigating the disruptive effect on Canadian industry of the imposition of foreign import surtaxes or other actions of a like effect."
I now lay on the table a letter dated September 2, 1971, from the government house leader concerning that bill.



WELCOME BY SPEAKER TO MEMBERS-STAINED-GLASS WINDOWS-NEW SOUND REINFORCEMENT SYSTEM-ADDITIONAL ACCOMMODATION

Mr. Speaker:: May I, with the consent of the House, welcome hon. members back to the House after a well earned respite from their duties in Ottawa.

I am confident that in the best parliamentary traditions, the members of this House are pleased, at least for the time being, to meet together again.

Hon. members will have observed that the summer months have given us an opportunity to effect certain changes which, it is hoped, will improve services and aid members in the discharge of their duties.
In the chamber it will be noted that there is a new window on the west wall. As hon. members know, we have a continuing problem because of the glare of the afternoon sun, and over the years efforts have been made to provide appropriate covering or dark glass so that this difficulty could be overcome. The present intention is to instal stained-glass windows depicting the flora and fauna of the ten provinces and the two territories.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The west wall will have windows appropriate to Ontario and the western provinces while the windows on the east wall will depict Quebec and the eastern provinces. The north wall will depict the Yukon and the Northwest Territories.
I am sure many hon. members will be pleased to note that the first completed window panel is that which represents Alberta.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Hon. members, I am sure, will also be pleased to note that this work is being executed by Miss R. Eleanor Milne who, as hon. members are aware, is responsible for the continuing work of sculpture in the Centre Block. I should insist that this is an experiment and the Chair and officers of the House, the servants of the House, would welcome any suggestions or comments by hon. members concerning this project.
Hon. members will have noted the introduction of a new sound reinforcement system.


Some hon. Members:: Explain.


Mr. Speaker:: The passage of time had brought the previous system to the phase where it was rapidly wearing out, and it became necessary to introduce a completely new system. It will be noticed that the new speaker units on members' desks provide for language or interpretation selection; it is felt that the controls are more conveniently placed than before. At the same time, because of the expansion in our committee operations, it has been found necessary to make major alterations and additions in our committee rooms in order to bring the sound and recording systems up to date.
Extensive work has also been done in the centre block. The four inner courtyards on the first floor have been filled up in order to provide additional space for storage, offices and rooms, so that members may enjoy improved services. For example, it was necessary to enlarge the post office area, due to the improvement of postal and duplication services.
The hon. members will admit, I am sure, that the temporary allocation of the Commonwealth room for interviews given by members to reporters after the orders of the day has not given the expected results as far as the members weas well as the representatives of the press, television and the radio are concerned. The construction of a room fitted with a more permanent equipment is designed to meet the needs of that essential sector of our parliamentary proceedings and especially to keep the public interested in parliamentary activities better informed.

It is hoped that after they have been put to the test and experience of time these changes will commend themselves to all hon. members.

September 7, 1971
Appointment of New Ministers



ROUTINE PROCEEDINGS


Right Hon. P. E. Trudeau (Prime MinUter):: Mr. Speaker, I should like to inform the House that by Order in Council P.C. 1971-1872 of September 1, 1971 a writ has been issued for a by-election to be held on Monday, November 8, 1971 in the federal electoral district of Assiniboia.



NATIONAL DEFENCE


Hon. Donald S. MacDonald (Minister of National Defence):: Mr. Speaker, pursuant to Standing Order 41 (2)
I should like to lay on the table copies in both official languages of the white paper on defence policy.



TABLING OF REPORT OF COMMITTEE

Hon. Gerard Pelletier (Secretary of State):: Mr. Speaker, under Standing Order 41, I wish to table, in both official languages, the report of the Youth Committee.



THE MINISTRY


Pierre Elliott Trudeau: Mr. Speaker, I should like to advise the House of changes made within the cabinet which became effective on August 12, 1971:
The Hon. Robert Stanbury, formerly Minister without Portfolio, has become Minister of Communications.
The Hon. Alastair Gillespie has been appointed Minister of State responsible for Science and Technology.
The Hon. Martin P. O'Connell has been appointed Minister of State to assist the Secretary of State.

I should also like to table the Order in Council concerning a shift in the responsibility of one of the parliamentary secretaries.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I simply wish to thank the Prime Minister (Mr. Trudeau) for conveying officially to the House the news of the changes in the cabinet and to extend my best wishes to those who have received appointments or changes in their responsibilities. The government seems to spend quite a bit of time these days in parties welcoming new ministers. I could not fairly call it a game of musical chairs because the Prime Minister keeps adding chairs before the music stops. I hope, sir, that the Toronto trio plays well together.

Now that the Prime Minister has indicated to the House what the duties of these gentlemen are, I hope he will make their duties clear to them because there seems to have been some confusion.



NATIONAL SECURITY


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, pursuant to Standing Order 43 I request unanimous consent of the House to propose a motion in a case of urgent and pressing necessity. This matter is of the greatest import. It concerns the delicate balance that this Parliament must maintain between the government's duty to preserve Canada's internal security for the good of all citizens and the government's consequent power to violate the citizen's right to privacy. Heretofore Canadian governments of all parties have entrusted that duty and that right to the Royal Canadian Mounted Police, a body constituted and regulated by act of this Parliament and accountable to this Parliament. Now, secretly and without notice to the public and without the consent of this Parliament, the government has organized a civilian security force, so-called, operating solely-


Mr. Speaker:: Order, please.


Eldon Mattison Woolliams: -under and accountable only to the Solicitor General.


Mr. Speaker:: Order, please. The hon. member knows that he should not argue his case but suggest to the House what the motion is for which he seeks unanimous consent of the House.


Eldon Mattison Woolliams: Mr. Speaker, I am glad that the acoustics are working. I know the new system was installed because the House has always had difficulty in hearing me. The duties of this "force" are unknown and its powers are unknown. I would therefore move:
That the Standing Committee on Justice and Legal Affairs forthwith inquire into and report upon the recruiting by the government of Canada of a "civilian security force", so-called, the duties and powers of such force, and the powers, duties and relationship of the Royal Canadian Mounted Police under that force; and that it be an order of this House that the Solicitor General be at all times subject to the call of the committee.


Mr. Speaker:: The House has heard the motion proposed by the hon. member for Calgary North. Under the terms of Standing Order 43, the motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not, and the motion therefore cannot be put at this time.
September 7, 1971



EMPLOYMENT SUPPORT BILL


Hon. lean-Luc Pepin (Minister of Industry, Trade and Commerce) moved: for leave to introduce Bill C-262, to support employment in Canada by mitigating the disruptive effect on Canadian industry of the imposition of foreign import surtaxes or other actions of a like effect.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the said bill be read the second time?


Some hon. Members:: By leave, now.


Mr. MacEachen:: Mr. Speaker, may I rise on a point of order and suggest that-


Mr. Fairweather:: We cannot hear the minister.


Allan Joseph MacEachen: Mr. Speaker-


Robert Gordon Lee Fairweather: We cannot hear the minister. Speak up.


Allan Joseph MacEachen: Mr. Speaker, may I suggest that as a result of consultations that took place last week and on the weekend, it might be possible-


Robert Gordon Lee Fairweather: Speak up.


Allan Joseph MacEachen: -to have unanimous consent to deal with the second reading of this bill today.


Robert Gordon Lee Fairweather: We cannot hear the minister.


Allan Joseph MacEachen: Under the normal course we would not take second reading until tomorrow but, hopefully, we might proceed with that today, with consent.


Robert Gordon Lee Fairweather: Would the minister repeat that?


Mr. Baldwin:: Mr. Speaker, we are agreed that that should be so.


Mr. Knowles (Winnipeg North Centre):: Agreed.


Mr. Caouette:: Agreed.


Mr. Speaker:: By leave, later this day?


Some hon. Members:: Agreed.



STATUTORY INSTRUMENTS


[Stage Direction]
On the order: Government Notices of Motions:
June 29, 1971-The President of the Privy Council: That Standing Order 65(3) be amended by adding thereto the following:
"(c) On Regulations and other Statutory Instruments, to act as members on the part of this House on the Joint Comr littee of both
Inquiries of the Ministry
Houses established for the purpose of reviewing and scrutinizing statutory instruments standing permanently referred thereto by section 26 of the Statutory Instruments Act, to consist of 12 members;"
And that a message be sent to the Senate requesting that House to unite with this House for the above purpose, and to select, if the Senate deems it advisable, some of its Members to act on the proposed joint committee.
Mr. Speaker:: Pursuant to section 2 of Standing Order 21, this notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: Mr. Speaker, I would like to ask the Prime Minister whether the government intends to introduce a package of specific measures to reduce high unemployment and reduce the prospects of severe winter unemployment? Does the government intend to introduce such a package of specific measures?


Pierre Elliott Trudeau: Not today, Mr. Speaker. Today we are only introducing the legislative measure that has just been accepted for second reading.


Robert Lorne Stanfield: I ask the Prime Minister whether in the near future we may expect a policy to provide some reasonable opportunity to combat unemployment this year? Does the government propose to introduce any measures?


Pierre Elliott Trudeau: Mr. Speaker, in the debate today the Minister of Finance intends to make a speech. The views of the government will be made known through that speech.


Robert Lorne Stanfield: Will the Prime Minister indicate to the House whether it is still the view of the government that unemployment is declining at a satisfactory rate, and is the statement of the Minister of Finance going to be premised upon such an assumption?


Pierre Elliott Trudeau: Mr. Speaker, if the Leader of the Opposition would not mind holding his breath, he will hear the speech this afternoon.


Robert Lorne Stanfield: I do not mind holding my breath, but other Canadians do mind.



THE CANADIAN ECONOMY


Mr. David Lewis (York South):: Mr. Speaker, would you guide me as to whether I have to speak into this microphone in order to be heard?

September 7, 1971
Inquiries of the Ministry


Some hon. Members:: We can hear you.


David Lewis: I thank the Minister of Industry, Trade and Commerce for having confidentially let us see a copy of the proposed employment support bill. On the basis of that, and in order to assist our debate this afternoon, I ask the minister whether it is his intention to table the regulations under the bill or, if the regulations have not been adopted yet,-a draft of the intended regulations inasmuch as they contain the basic criteria for administering the proposals of the bill?


Jean-Luc Pepin: Mr. Speaker, my intention is to refer in my speech this afternoon to some of the things which might be in the regulations and I will do my very best to bring the said regulations to the committee for discussion when the bill is studied there.



UNITED STATES IMPORT SURTAX-REQUEST FOR STATEMENT ON NEGOTIATIONS WITH WASHINGTON

David Lewis: May I ask the Minister of Industry, Trade and Commerce or the Prime Minister whether it is the intention of the government on motions today-I think the House would agree to revert to motions-or tomorrow or shortly to tell the House more formally the precise progress of negotiations in Washington with respect to the 10 per cent United States surtax on imports into that country?


Pierre Elliott Trudeau: Any information that can be given to the House on this matter will be given in the speech of the Minister of Finance this afternoon.


An hon. Member:: It will be a long speech.



UNITED STATES IMPORT SURTAX-POSSIBILITY OF ABOLISHING TAX ON GOODS MANUFACTURED IN CANADA

David Réal Caouette: Mr. Speaker, I should like to ask the Prime Minister, as a supplementary question, whether the government, when deciding to move this bill and to grant some 80 million dollars to Canadian industries affected by the United States 10 per cent surtax also considered the advisability of doing away with the 12 per cent tax on products manufactured in Canada which, in my opinion, would be more helpful in maintaining the level of employment in Canada?


Pierre Elliott Trudeau: Mr. Speaker, the legislation before the House is the one the government considered most appropriate to meet the present crisis.



EFFECT OF UNITED STATES IMPORT SURTAX ON UNEMPLOYMENT IN CANADA-WINTER WORKS PROGRAM

Hon. George Hees (Prince Edward-Hastings):: In view of the fact that the 10 per cent surcharge imposed by the United States will undoubtedly add considerably to the

already high figure of unemployment which is forecast for the coming winter, is it the government's intention to introduce a winter works program to be effective in time for it to be useful?


Pierre Elliott Trudeau: No, Mr. Speaker.



UNITED STATES IMPORT SURTAX-ESTIMATE OF UNEMPLOYMENT INCREASE IN CANADA

Mr. Lincoln M. Alexander (Hamilton West):: Bearing in mind the injurious effect the 10 per cent surcharge will have on the Canadian economy, is the government prepared to table its estimate of the amount of unemployment the United States action will cause so that the Canadian people may be well advised as to what is happening?


Pierre Elliott Trudeau: In his speech this afternoon the Minister of Industry, Trade and Commerce will have some figures to give to the House in this respect.



ECONOMIC COUNCIL OF CANADA


Hon. Marcel Lambert (Edmonton West):: I have a question for the Minister of Finance. On June 30 I asked the hon. gentleman whether he had heard of the remarks of the Deputy Minister of Finance criticizing the Economic Council of Canada. The minister replied that he had not, but in the interval I assume he has. Will he advise the House whether the remarks of the Deputy Minister of Finance were made with the knowledge of the minister, whether he approves of those remarks and, now that Dr. Smith has resigned from the headship of the Economic Council, whether the government has chosen a successor?


Hon. E. J. Benson (Minister of Finance):: There are really a lot of questions there.


Some hon. Members:: Louder!


Edgar John Benson: In answer to the first part of the question, the statement by the Deputy Minister of Finance was not made after consultation with me. With respect to the chairman of the Economic Council-


Some hon. Members:: We can't hear you.


Marcel Joseph Aimé Lambert: Now that he has had a
chance to read the remarks of the Deputy Minister of Finance, will the minister tell us whether he approves of those remarks, and, if not, what action he proposes to take? We cannot have these situations cropping up.


Some hon. Members:: Order!
September 7, 1971



INDUSTRY


Mr. Edward Broadbent (Oshawa-Whitby):: I have a question for the Minister of Industry, Trade and Commerce. Following the imposition by the United States of the import surcharge, can the minister inform us whether the Canadian government and the United States government have discussed the terms of the Canada-United States automotive agreement?


Jean-Luc Pepin: These discussions have been going on now for a number of months. They were renewed at the time the Minister of Finance and I went to Washington. We were assured then that difficulties created by the auto pact agreement were not considered factors in the decision arrived at by the United States to impose the 10 per cent surcharge applicable to Canada.


John Edward Broadbent: Can the minister assure the House that the Canadian government obtained from the United States a continuing commitment to maintain, in the agreement, the safeguards protecting jobs in Canada?


Jean-Luc Pepin: The fact that the United States government eliminated the excise tax of 7 per cent on automobiles purchased in the United States will have a beneficial effect on Canadian exports of automobiles to the United States; I gather from this that the disappointment experienced in the United States in connection with the gains made by Canada under the automotive agreement is not of such magnitude as to lead that country to take an unfriendly position toward Canada in these matters.



AUTOMOBILES-ATTAINMENT OF SAME PRICES FOR CANADIANS AS PAID BY UNITED STATES BUYERS

Mr. A. D. Hales (Wellington):: My question is for the
Minister of Industry, Trade and Commerce. In view of the United States government removing excise tax on automobiles, which has thus widened the price differential between Canada and the United States, what steps is the government taking so that Canadians can buy cars at the same price that people in the United States pay?


Jean-Luc Pepin: Mr. Speaker, I can only observe that the gap is shrinking progressively.


George Harris Hees: Increasing progressively.


Jean-Luc Pepin: No, shrinking progressively. The rate of shrinkage has to take into account other factors such as valuation and the disappearance of the excise tax, but my proposition is nevertheless still valid.


Gerald William Baldwin: No wonder you didn't get anywhere in Washington with that approach.
Inquiries of the Ministry



THE CANADIAN ECONOMY


Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I would like to direct my question to the Minister of Industry, Trade and Commerce.
Is the introduction this afternoon of a bill designed to provide grants to exports an indication that the consultations between Canada and the United States have failed or is it suggesting that the United States will go back on their decision as a result of our representations in Washington?


Jean-Luc Pepin: The Minister of Finance will raise this question this afternoon. The government in general is taking for granted that the exemption would not occur within a period of time which would enable it to accept the effects which the surcharge will have on the Canadian industry.



EFFECT OF UNITED STATES IMPORT SURTAX-REQUEST FOR STATEMENT ON TEXTILE POLICY

Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I should like to put a supplementary question to the Minister of Industry, Trade and Commerce.
In view of the disruptive effect of the American decision on the Canadian economy, more precisely in the field of textile products, and in view of his recent statement in Victoriaville, would the minister be prepared to tell us when he will announce a Canadian policy on textiles, so as to put an end to unrestricted imports of such products, which seriously disrupt employment of Canadians in that sector?


Jean-Luc Pepin: Mr. Speaker, I do not feel that many hon. members would be prepared to agree with the premise of this question which suggests that any import of textile products should be avoided.



UNITED STATES IMPORT SURTAX-MAINTENANCE OF CANADIAN DOLLAR BELOW PAR

Eldon Mattison Woolliams: Mr. Speaker, I have a question for the Minister of Finance. In view of the seriousness of the surtax situation, is the government taking any action, or is it going to take any action, to keep the Canadian dollar below par at this time with the United States dollar?


Edgar John Benson: Mr. Speaker, the government has not endeavoured to intervene in the floating Canadian dollar situation. As my hon. friend knows, almost all of the major currencies are now floating.


Eldon Mattison Woolliams: Are we to gather from what the minister says that it is the policy of the government to endeavour to keep the Canadian dollar below par with the United States dollar, and has that position been made clear to the United States government?

September 7, 1971
Inquiries of the Ministry


Edgar John Benson: Mr. Speaker, we have stated that the policy we have is one of a freely floating dollar. If that policy is to be changed it would, of course, be announced in the House in the usual manner.


Robert Lorne Stanfield: supplementary question, Mr. Speaker. May I ask the Minister of Finance whether it is acceptable to the government of Canada that the Canadian dollar should move up beyond par with the United States dollar?


Edgar John Benson: Mr. Speaker, I should not like to see the Canadian dollar appreciate further.



MEASURES TO LOWER EXCHANGE VALUE OF CANADIAN DOLLAR

Mr. Max Saltsman (Waterloo):: Mr. Speaker, I have a supplementary question which I direct to the Minister of Finance. Is the minister taking any measures to bring about a lowering of the value of the Canadian dollar in relationship to the United States dollar and, if so, what might the measures be?


Edgar John Benson: Mr. Speaker, we are not taking any such measures at the present time. As I have stated, our dollar is floating freely. We are not intervening in the exchange market except to a minor extent to see there is no undue fluctuation, and this is now the policy of the government.


Max Saltsman: A further supplementary question.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Waterloo and perhaps one or two supple-mentaries on this subject, but I would suggest to hon. members that we might attempt to go to other subjects after we have had the supplementaries. For the moment the Chair recognizes the hon. member for Waterloo on a supplementary.


Max Saltsman: Thank you, Mr. Speaker. May I ask the Minister of Finance whether he is giving any consideration to lowering interest rates in Canada below those of the United States as a way to reduce the value of the Canadian dollar?


Edgar John Benson: Mr. Speaker, if my hon. friend would take a look at exchange movements he will find that the short range movement of funds has been out of Canada, thus offsetting to some degree the balance of payments surplus that we have through our very favourable trading account and through capital investment for loan purposes.


Mr. Speaker:: The hon. member for Fundy-Royal. [Translation]


André-Gilles Fortin: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: Order. The hon. member for Lotbiniere on a point of order.


André-Gilles Fortin: Mr. Speaker, while the Minister of Finance was speaking, the interpreter, who, nevertheless, is doing his best, stated that he could not hear the minister. Consequently, French-speaking members have not heard a word of the answer. Could this be corrected immediately?


Mr. Speaker:: The only suggestion that I can make is that the minister himself repeat his answer in French. That might perhaps prove difficult.


David Réal Caouette: Mr. Speaker, on the point of order, I wonder if the new loudspeaker system, which has a clanking sound, could not be replaced by the old one which was decidedly better?


Mr. Speaker:: Obviously there are difficulties, technical and mechanical, with the new system and I regret at this point that I took credit for its installation. On a question of privilege I might seek permission to withdraw that part of my statement. However, hon. members will realize that this is the first experience we have had with the new system and gallant efforts will be made during the next hour and throughout the day to try to improve it for the benefit of hon. members. The hon. member for Fundy-Royal.



NATIONAL SECURITY


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Minister of Justice. Has the government made any representations to the government of Quebec about its decision to order an indefinite stay of proceedings against 32 persons charged under the Public Order (Temporary Measures) Act? Has the government taken a position on the correctness of using this procedure of a stay of proceedings and, if so, what is that position?


Hon. John N. Turner (Minister of Justice):: Mr. Speaker, I have made no representation to the Attorney General of Quebec who is, of course, entitled to examine all factors in determining whether or not it is in the public interest to continue or suspend such charges pursuant to section 490 of the Criminal Code. I have ordered the federal Department of Justice to examine further the question of whether legislation is necessary to clarify the effect of an order of stay of proceedings by a provincial Attorney General. As a matter of fact, I ordered this to be done pursuant to a resolution of the Canadian Bar Association last year, and it was one of the items on the agenda for the uniformity commissioners this summer.


Robert Gordon Lee Fairweather: At some later date could we have a sort of statistical catalogue as to the success of the Public Order (Temporary Measures) Act vis-a-vis those people who have been charged under it, and so on?


John Napier Turner: Mr. Speaker, I would think that the Solicitor General might well approach the Attorney General of Quebec for this type of statistic.


Eldon Mattison Woolliams: Mr. Speaker, may I ask a supplementary question?


Mr. Speaker:: The hon. member for Calgary North on a supplementary.

September 7, 1971


Eldon Mattison Woolliams: Thank you, Mr. Speaker. Out of the 497 people who were arrested how many were actually charged and convicted? I think it would get down to either one or zero.


John Napier Turner: Mr. Speaker, I would not accept the innuendo in the statement of the hon. member for Calgary North. I should remind him that while Parliament took responsibility for both the proclamation of the War Measures Act and the content of the Public Order (Temporary Measures) Act, the administration was left to the Attorney General of the province.



QUEBEC-PAYMENT FOR SERVICES OF ARMED FORCES- AMENDMENT OF NATIONAL DEFENCE ACT

Gerald William Baldwin: Mr. Speaker, I have a supplementary question for the Minister of National Defence. Is it the intention of the government to move for amendments to the National Defence Act to give effect to the view of the Prime Minister of Quebec that the federal government should defray the whole cost of the military operations in Quebec during that period?



NATIONAL REVENUE


Mr. Frank Howard (Skeena):: Mr. Speaker, may I direct a question to the Minister of National Revenue regarding an intrusion into the rights and privacy of a number of people resident in the community of Atlin, B.C.. Would the minister be prepared to have the officers of his department and of the Royal Canadian Mounted Police who are responsible for that invasion appear before an appropriate parliamentary committee to explain their actions?


Hon. Herb Gray (Minister of National Revenue):: Mr. Speaker, I have already written to the hon. member setting out the position of the department in this matter. I think that the contents of the letter sent by myself indicated that, so far as I have been able to determine, proper procedures were followed in this case.


Frank Howard: Mr. Speaker, I will not argue with the minister about the letter because I have not seen it yet, but after reading it perhaps I will have something else to say. I should like to direct a question to the Minister of Justice or the Solicitor General, whichever is responsible for the issue of writs of assistance to Royal Canadian Mounted Police constables in this instance. Can the minister explain the reasons for the issuance of a writ of assistance which is in effect a blanket search warrant to seize, arrest and break into people's property without suspecting anything? Can he give us an explanation?


John Napier Turner: Mr. Speaker, I am not aware of the particular facts in this instance, but the writs of assistance to which the hon. member refers
Inquiries of the Ministry
were issued under the terms of the statute and under the authority of the Minister of National Revenue.


.43 p.m.)



AGRICULTURE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture.
In order to reassure industrial milk producers, would the minister be in a position to tell the House whether the increase in price support for butter will benefit industrial milk producers in the same proportion as the price increase decreed for butter?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I am unable to grasp the relationship between the prices of beef and milk, if that is what the question was about.


Joseph Adrien Henri Lambert: May I ask a supplementary, Mr. Speaker?
We have evidence that the amplifying system is not working very well. I did not talk about beef, but rather about butter.
In view of the increase of price support for butter, will industrial milk producers benefit from the price increase in the same proportion?


Horace Andrew (Bud) Olson: Mr. Speaker, the amount or level of the pay-out to the producers of milk that is delivered to processing plants is a matter that is determined in Quebec and Ontario by the respective milk marketing boards. Of course we cannot insist that they set the level at any certain price. However, in respect of recent prices for processed butter, which we supported in the processing plants, as well as cheese and skim milk powder, we know they are now in a position to raise those prices.



DAIRYING-PROMPT PAYMENT OF SUBSIDY CHEQUES

Mr. R. E. McKinley (Huron):: Mr. Speaker, is the Minister of Agriculture going to take immediate steps to make sure the subsidy cheques reach the hands of the dairy producers in a more prompt and orderly fashion? Some of them have not received a cheque for six months.


Horace Andrew (Bud) Olson: If there are any individuals who have not received equalization payments at the year end I should like to know about it. I thought they were all cleared away. I should like to apologize for the delay that occurred when there was a calculation being made for the year-end payments. This held up some of the other payments, but it is my information that this has all been cleared up now.


Robert Elgin McKinley: Mr. Speaker, I understand that those who are on graduated entry at least in the province of Ontario have not as yet received their April cheques, so they are at
7552

September 7, 1971
Inquiries of the Ministry
least six months behind. When can they expect to receive them?


Mr. Speaker:: Order, please.

*	GRAIN



RAPESEED-COMPENSATION TO FARMERS FOR DAMAGE CAUSED BY BERTHA ARMY WORM

Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: Mr. Speaker, I have a question for the Minister of Agriculture. Is it the intention of the government to make an emergency payment to individual farmers engaged in the oilseed industry whose crops were so severely damaged recently by the Bertha army worm invasion of rapeseed crops in western Canada?


Horace Andrew (Bud) Olson: That is under consideration, Mr. Speaker. However, the latest reports indicate the rapeseed crop in western Canada will still be the largest on record in spite of the damage done by these worms.


Mr. John L. Skoberg (Moose Jaw):: Mr. Speaker, my question is for the Minister of Agriculture. Can he say whether any research was undertaken regarding the Bertha army worm before the invasion by that worm in western Canada?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker. I should advise that officers of my department and entomologists on the scene did in fact advise a number of people in provincial governments that there was an unusual number of these moths present some time before the outbreak occurred.



RAPESEED-COMPLAINTS RESPECTING USE OF LANATE TO CONTROL BERTHA ARMY WORM

Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I should like to ask the Minister of Agriculture whether he has received specific complaints about the use of chemical lanate in the destruction or control of the Bertha army worm?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker.



RAPESEED-IMPOSITION OF IMPORT DUTIES BY FOREIGN COUNTRIES

Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to direct my question to the minister responsible for the Wheat Board. What action, if any, has been taken by the Canadian government regarding the allegation that there may be a trade war developing between some countries to which we export our rapeseed products in view of the fact they have imposed duties?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: Mr. Speaker, I am not exactly sure what the hon. member is referring to, but there have been some surtaxes or special taxes created in respect of rapeseed in

recent weeks in a couple of countries. The appropriate protests have been made in connection with this and discussions are continuing. If anything further has happened I would require more specific information.



INQUIRY OF THE MINISTRY

Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a question for the Prime Minister. Now that the government has given priority to protecting the Canadian employment picture because of the action taken by the United States government, what priority do the Prime Minister and the government intend to give to Canadian industries disrupted by actions of his own government?


Some hon. Members:: Oh, oh!


Donald MacInnis: Mr. Speaker, I rise on a point of order. It arises from the long-standing grievance of the swordfishing industry on the east coast of Canada which was completely wiped out by the actions of this government and so far no compensation has been paid.


Mr. Speaker:: Order, please. That is hardly a point of order.



NORTHERN AFFAIRS


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. Following his recent pilgrimage to the Soviet Union and his laudatory remarks in respect of the advanced state of Soviet research and development in the north, will he now inform the House whether it is the intention of the government to proceed with the opening of northern research stations in Canada's north in order that we may keep pace with this development?


Hon. Joan Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I stated that the Soviets had made some progress in certain fields and that we had made greater progress in other fields. A serious research is being made with regard to the northern development in the north as well as in the south. However, proposals which tend to emphasize research beneficial to northern development are always under study.


Walter Gilbert Dinsdale: Mr. Speaker, I wonder whether the minister could be specific in respect of the opening of further research stations to supplement the excellent work done by the research centre at Inuvik which was planned as the first of a series of similar centres?


Joseph Jacques Jean Chrétien: I must say, Mr. Speaker, that I am rather surprised to find that the hon. member is referring to a station in Inuvik. It is still working and giving excellent
September 7, 1971

results. I think he is confusing this proposal with another one.


Walter Gilbert Dinsdale: I have a further supplementary question. I think the minister misunderstood.


Mr. Speaker:: Order, please. The Chair recognizes the hon. member for Greenwood. Immediately following his question I will return to the hon. member for Brandon-Souris.


Walter Gilbert Dinsdale: Mr. Speaker, I think the problem is the new sound system. I asked the hon. gentleman if he was now going to develop other research stations across the north similar to the excellent program that has been operating at Inuvik since 1962?


Joseph Jacques Jean Chrétien: Mr. Speaker, I really made a mistake; I did not catch the question. I said we have a good station at Inuvik and are not planning to have another one. If there is need we will extend this one but do not need duplication of stations in Canada.


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, in the absence of the Secretary of State for External Affairs I should like to direct my question to the Prime Minister. In light of the immense tragedy unfolding in India and East Pakistan and of the deep concern of Canadians, will a full statement be made as soon as possible on motions on the present situation and Canada's plans both by way of direct relief and through action in the United Nations?


Pierre Elliott Trudeau: Mr. Speaker, I will convey the hon. member's question to the Secretary of State for External Affairs and ascertain his views.



ROYAL CANADIAN MOUNTED POLICE


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the Solicitor General. Will he assure the House that no fundamental changes in the Royal Canadian Mounted Police will take place at the initiative of the new civilian security force except by legislation?


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, there has been no fundamental change to the policy the right hon. Prime Minister stated to the House in his comments on the report of the Royal Commission on Security in Canada.
Inquiries of the Ministry



PENITENTIARIES


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: My question is also for the Solicitor General. Today's news indicates that two more convicted men have failed to return to Kingston penitentiary after special leave granted them which they have turned into an extended holiday. When will the government change its dangerous, permissive policies in order that the safety of the public will be given its proper priority.


Mr. Speaker:: Order, please. The hon. member's question is obviously asked in the form of argument.


EXTERNAL AFFAIRS
Mr. Barry Mather (Surrey):: Mr. Speaker, I have a question I should like to direct to the Prime Minister. Having in mind the increasing concern in British Columbia about the scheduled massive underground nuclear blast in the north Pacific, can the Prime Minister say whether he has given consideration to making direct representations against this dangerous experiment to the President of the United States.


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member is referring to personal representation by myself to the President, I have taken no decision for or against this procedure. I would not want to rule it out completely if I had reason to believe the United States government was not aware of the Canadian government's attitude on this matter, but so far as I am able to ascertain the United States government knows our position. It was stated to them very clearly as early as last February and the note transmitted to them at that time I believe was tabled in the House. Therefore I believe the Americans and the President know our position very well.



INDIAN AFFAIRS


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to ask the Minister of Indian Affairs and Northern Development whether there have been discussions between the federal government and Quebec regarding the dislocation of Indians from the eastern basin of James Bay due to the construction of a power project in the area?


Joseph Jacques Jean Chrétien: Mr. Speaker, I got in touch with the government of Quebec as early as last June in that regard, and I suggested the federal and provincial govern-

September 7, 1971
Inquiries of the Ministry
ments and Indians should get together as soon as possible. I was told this morning that the Quebec government will meet the Indian chiefs in the next few weeks and I am being informed daily of developments.


Gérard Laprise: I have a supplementary, Mr. Speaker.


EXTERNAL AFFAIRS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is a supplementary in a roundabout way to the question posed by the hon. member for Surrey-White Rock. It refers to the Prime Minister's policy of direct representation to leaders of other governments or heads of state. Does the Prime Minister believe there is any useful purpose that can be achieved in direct representation to other heads of government in the Amchitka incident, and has the Prime Minister made any direct representation to the President of the United States in respect of the 10 per cent surcharge and, if so, what was it?


Pierre Elliott Trudeau: Mr. Speaker, on the final part of the question the answer is no. I have made no personal representation, but the rest of my answer is substantially the same. I have reason to believe the United States, including the President, knows very well the Canadian position. In respect of the question asked by the hon. member for Surrey-White Rock it is my understanding also that the President has not given his final approval for the test yet.


John Patrick (Pat) Nowlan: Mr. Speaker, I have a supplementary. In view of the Prime Minister's answer, can the House and the country assume that he will wait until the springtime meeting with the President in Ottawa to discuss retroactively after the event both the surtax and the Amchitka incident?

[Translationj




Gérard Laprise: Mr. Speaker-


Mr. Speaker:: The hon. member for Abitibi would like to ask a supplementary to his previous question.


Gérard Laprise: Mr. Speaker, I would like to ask the hon. Minister of Indian Affairs and Northern Development if the federal government has made indemnity offers to Indians in that region?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have not yet reached that stage. We are holding discussions with the provincial government and they wish to meet the Indians. Once the situation has been straightened out we will be

able to make the necessary recommendations to Parliament.


Mr. Speaker:: Order, please. I suggest to hon. members that we will need to limit our supplementaries. We are coming very soon to the end of the question period. I will recognize the hon. member for Winnipeg North and try to move on as quickly as possible after that supplementary.



DISLOCATION OF NATIVE PEOPLE BY PROPOSED JAMES BAY POWER PROJECT-PROVISION OF EXPERT ASSISTANCE

Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to ask the Minister of Indian Affairs and Northern Development whether his department is prepared to help the Indians affected by the proposed James Bay development by providing them with the kind of technical know-how and expertise they need in order that they may proceed on a fairly equal basis in respect of the whole problem with the government of Quebec?


Joseph Jacques Jean Chrétien: Mr. Speaker, we intend by all possible means to help Indians follow up these negotiations and I should add that a committee now exists which includes government representatives at both the federal and provincial levels as well as Indian representatives. This committee sits regularly and it is our intention to use this machinery to help the Indians.



THE CANADIAN ECONOMY


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, if I may I
should like to direct my question to the Minister of Industry, Trade and Commerce. Either in deliberations with the various segments of the economy or in making representations on the surcharge were the various segments of agriculture which are not exempt under the surcharge and also small businesses either heard or invited to be heard, and would the minister indicate whether or not he will now or in the progress of his speech inform the House whether these two segments would qualify for benefits under the proposed bill?


Jean-Luc Pepin: In receiving delegations, three or four ministers have really divided the work among themselves. The Minister of Agriculture received representations from the group with which he is more closely associated than I am. So did the Minister of Labour. But the food branch of my department is in close contact with the food associations and processors and has also received information and representations from them. I think there was another aspect of the question which I am not answering now.
September 7, 1971



FISHERIES


Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the Minister of the Environment and Fisheries. In view of the increasing activity of foreign nationals fishing off Canada's east coast and the serious decline in the catches of the inshore fishermen, can the minister say whether his department has taken any initiative to bring about conservation, or does the minister intend to take any new initiatives?


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, as the hon. member indicated, the situation is a very serious one and the department is doing all it can in order to ensure that foreign fishermen do not take too many fish off our East coast.


Walter C. Carter: Can the minister tell the House if it is his intention to convene a meeting of the fishing nations of the world to bring about some method of conservation, or does he expect this matter to resolve itself or to be resolved at the next Law of the Sea Conference?


John (Jack) Davis: Mr. Speaker, we had such a meeting at Halifax in June and there are further meetings scheduled for this fall. Of course the next Law of the Sea Conference is coming up in 1973.



INCOME TAX


Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Minister of Finance. In light of accusations at the Canadian Bar Association's annual meeting held at Banff in that great Tory province of Alberta-


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: -that the drafting of the new tax bill is so complicated and ill-defined that neither the public nor the legal profession will know what Parliament will be voting on this fall, is the government at least going to publish the bill's new concepts in clear language, as was suggested, before the House debates the new act?


Edgar John Benson: Mr. Speaker, I believe the bill is in clear language. I also believe that people have had an ample period of time-


Some hon. Members:: We cannot hear you.


Edgar John Benson: -in which to study the bill, and it is our intention to proceed with the bill.
Inquiries of the Ministry POLLUTION



THREAT FROM SUNKEN &quot;IRVING WHALE&quot; AND &quot;IRVING LAKE&quot;-REQUEST FOR PROGRESS REPORT ON REMOVAL

Mr. David MacDonald (Egmont):: Mr. Speaker, my question is directed to the Minister of Transport. In view of the announced intention of the minister to try to alleviate the considerable danger posed by the Irving Whale presently resting at the bottom of the sea close to Prince Edward Island, and in particular the danger of pollution to the northern coast of the island, can the minister make a progress report on the removal of the Irving Whale and also a progress report on steps to deal with the Irving Lake which has been a threat to the coast of New Brunswick for over eight years?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, on September 2 there was a meeting held in Montreal of potential tenderers for the job of either lifting the vessel or removing the oil from it. As a result, there was an on-site inspection arranged for all the tenderers so that they would be able to see all the circumstances at first hand. After that is done we will get their proposals, but no decision will be made either to remove the Whale or to take the oil from it until we are absolutely certain that the maximum amount of protection is provided.



THE CANADIAN ECONOMY


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce. Can he say whether or not the Canadian government has been able to estimate the dollar value loss in sales of Canadian products to the United
States as a result of the surtax?


Jean-Luc Pepin: Mr. Speaker, I have a couple of pages in my speech dealing with that.



INDUSTRY


Mr. Ambrose Hubert Peddle (Grand Falls-White Bay-Labrador):: Mr. Speaker, I wish to direct a question to the Minister of Industry, Trade and Commerce. Can the minister inform the House of any initiatives taken by his department to find markets for the Canadian pulp and paper industry, especially in view of the severe difficulties being suffered by some of our mills, and is the minister in a position to say if his department intends to take some special measures to assist the industry through this rough period?


Jean-Luc Pepin: Mr. Speaker, a number of measures were taken to assist the industry in the last budget. With respect

September 7, 1971
Inquiries of the Ministry
to the Bowater case, which is the one my hon. friend has in mind at the moment, I must say that I have received no requests for assistance either from the company or from the Newfoundland government. However, my officials are in touch with both the government of Newfoundland and the company in London and have made their services available if the need arises.


Mr. lames A. McGrath (St. John's East):: As a supplementary question, Mr. Speaker, may I ask the minister if he intends to propose to his colleagues in the government the placing of a moratorium on further grants to new paper mills in Canada until world market conditions improve?


Jean-Luc Pepin: Mr. Speaker, I think the problem is more complicated than the hon. member is implying at this time.


James Aloysius McGrath: You are building new mills.


Jean-Luc Pepin: There are things called new mills which have the higher degree of productivity; there are things called older mills which have a lower degree of productivity, and there are things called multinational companies.


Mr. Speaker:: Order, please.



CRIMINAL CODE


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I wish to direct a question to the right hon. Prime Minister. In view of the numerous postponements and the very great dangers and difficulties caused thereby, is the Prime Minister now in a position to give us the date when we can expect the debate on abortion which was promised several times in the past?


Pierre Elliott Trudeau: Mr. Speaker, I am not in a position to give any date at this time. I think we have made the House aware that we want to proceed with the legislation on tax reform at the outset of this part of the session and then we will see, as things develop, what time we have left for other items.


Donald MacInnis: But may we still have an assurance that this debate will be held in this session?


Pierre Elliott Trudeau: Mr. Speaker, that would be the government's intention, but I am not in a position to control absolutely the time that the House will take with prior legislation and therefore I cannot give that firm commitment. If we get through other items in reasonable time, then the answer is yes.



FINANCE


Lincoln MacCauley Alexander: Mr. Speaker, I wish to direct a question to the Minister of Finance. In view of the fact that business failures are increasing very rapidly in 1971, which is having a disastrous effect on

the economy, may I ask the minister whether, over and above the measures the government intends to introduce with respect to the 10 per cent surcharge on imports imposed by the United States, the government is developing any special tax or loan programs which will assist Canadian businessmen to maintain and expand production and employment and, if so, is the minister going to make a statement to this effect?


Edgar John Benson: Mr. Speaker, I did make such a statement on June 18.


Lincoln MacCauley Alexander: Are you going to make another one?


Edgar John Benson: Let's deal with the last budget first.


Lincoln MacCauley Alexander: Let's deal with the present situation.



OPPORTUNITIES FOR YOUTH PROGRAM-CONTINUATION OF PRESENT POLICY

Mr. Roch La Salle (Joliette):: Mr. Speaker, I wish to direct my question to the Secretary of State.
In view of the unusual success of the Opportunities for Youth program, would the minister state whether this policy will be continued next year or whether he will be in a position to state in the near future, with a view to reassuring young people that a similar policy will be set up?


Mr. Speaker:: If the hon. member is referring to the possibility that certain programs be implemented next year, then the question is not that urgent. In any case the hon. minister might reply briefly before we proceed with the orders of the day.


Gérard Pelletier: Very quickly, Mr. Speaker. We are now very actively engaged in assessing the results of this year's programs and studying the activities which the government would be able to undertake next summer. We are therefore farther ahead in this field today than at this same period last year.


Mr. Speaker:: Order, please. Hon. members will have noted that the question period expired a few minutes ago, but in view of the difficulty we have had with the sound system I felt that a few additional minutes should be allowed. I suggest to hon. members that although a number of hon. members have been waiting for an opportunity to ask questions, and I have tried to note whether they were, we should at this point call for orders of the day.
September 7, 1971



GOVERNMENT ORDERS


Jean-Luc Pepin: that Bill C-262, to support employment in Canada by mitigating the disruptive effect on Canadian industry of the imposition of foreign import surtaxes or other actions of a like effect, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Speaker, on August 15, President Nixon announced a set of economic measures called new economics but-


Mr. Speaker:: Order, please. Perhaps the minister might wait a moment until order is restored in the House. Some hon. members are re-arranging their papers, and perhaps we might have a few seconds interval before the minister proceeds with his statement.


Jean-Luc Pepin: Mr. Speaker, as I was saying, on August 15 last, President Nixon announced a package of economic measures intended to solve the difficulties originating from the balance of payments in the United States.
I have here, Mr. Speaker, two documents in French and in English, one of which deals with the explanations, the briefing given at the White House on the steps taken and could be useful to the more diligent members. I also have a document, in French and in English, analyzing the effects which the 10 per cent surcharge could have on Canadian exports to the United States.
With the consent of the House, I would now like to table those documents.


Mr. Speaker:: Hon. members have heard the suggestion of the minister that certain documents to which he has referred be tabled. Is this agreed?


Some hon. Members:: Agreed.


Donald MacInnis: On that very point, Mr. Speaker, I would like the minister to reconsider his remarks and say that instead of tabling documents for the more studious members that he is tabling documents for all members of the House.


Jean-Luc Pepin: As a matter of fact, Mr. Speaker, I sent copies of one of these to all members and I assume that the hon. member who has spoken, being studious, has already read it.

Mr. Speaker, the Minister of Finance (Mr. Benson) will be dealing with the background of the legislation we will introduce today. He will speak more particularly of the arguments we invoked with the American authorities with
Employment Support Bill
a view to obtaining that Canada be exempted from the surcharge. I should like to point out that our efforts to date have not been fruitless since we have already obtained, for instance, more favourable definitions of the surcharge as it applies to Canadian exports, thus reducing its impact, slightly I admit. Copper sections, certain meats, cotton textiles, oil exports to U.S. District No. 5 will be exempt from the surcharge thanks to those favourable definitions.
The right hon. Prime Minister (Mr. Trudeau) said, a while ago, that now the American authorities are at least perfectly aware of the effects those measures will have on the Canadian economy. I also think that the Minister of Finance, as well as myself and our advisors, have contributed toward making the Americans more aware of the effects which those measures would have on their own exports to Canada. For there is some sort of a relationship between the slow-down in American exports to Canada and the difficulties which the Canadian economy is encountering. This can be proved on a long-term as well as on a short-term basis. This past year, for instance, U.S. exports to Canada decreased by 3 per cent, while Canada was facing well publicized economic problems. This year, with our economy picking up, American exports have so far increased by 2.6 per cent which seems to bear out my theory that action taken by the U.S. government will have negative effects on our economy and will prevent Canadians from buying more in the United States. In my opinion, we have managed to get our point across and they understand things a little better than before we made our representations to them.
Since the Minister of Finance will give a more comprehensive outline of the bill, there are only two points I would like to make.
First I will deal with the impact of the surcharge on the Canadian economy and, secondly, I will explain rather rapidly the legislation which we are introducing today.
There is first of all the impact of the surtax. It is known as has been reported by the newspapers that the surtax will have an effect on about 25 per cent of our exports to the United States, that is a volume of exports of around $2.5 billion.

After having said that, and after having mentioned that 75 per cent obviously is exempted, which is quite substantial, one has to emphasize that the sectors affected are mostly processed and manufactured products. The manufactured part of our exports represents 40 per cent of our total exports; but about 83 per cent of that 40 per cent goes to the United States and that represents about 45 per cent of our total exports to the United States. From this very elementary statistical analysis, one gathers immediately that the surtax hits a very very important sector of our exports of our economy. Members will not have to be reminded of the fact that it is in the processing and secondary industries sector that a lot, if not most of the wealth of the nation is created and where many of the jobs are also to be found.
My hon. friend, the Minister of Agriculture (Mr. Olson) will deal with the specific agricultural aspect of the effects of the surcharge on Canadian exports, so I hope my hon. friend from Kent-Essex (Mr. Danforth) will wait

September 7, 1971
Employment Support Bill
for that further explanation. There is no doubt, generally speaking, that the surcharge affects the processed part of the agriculture production in Canada which is exported to the United States and consequently that part comes under the present legislation.
What would Canadian exporters be expected to do facing this 10 per cent surcharge? They have two possibilities-I can hardly call them choices. They can absorb the surcharge and thereby accept a lower return or they can pass on the surcharge to their U.S. customers-this is allowed under the freeze generally speaking-and thereby risk the loss of their market. Not much of a choice, indeed.
The analysis of the effect of the surcharge on Canadian exports is extremely difficult to make with any precision simply because there are too many factors to be taken into account. The degree of exposure to the surtax varies quite a lot from sector to sector and from company to company depending, for example, on the actual level of the surtax. We all know by now that it is 10 per cent-but in many cases it is not 10 per cent, it is 4 or 5 per cent because there is a maximum, pre-1962, which cannot be overshot. It depends also on the percentage of the U.S. market occupied by Canadian exporters. It depends as well on the market conditions presently existing in the United States; for example, in the case of lumber, prices in the United States are good now and consequently Canadian companies might be expected to assume the surcharge, or at least part of it. Another case; my friend the Minister of Agriculture tells me that the price of pork is rather low in the United States at the moment and consequently, assuming the weight of the surtax would be more difficult for the Canadian hog producer. Another factor is the importance of quality or style in the product being exported. Let me, for example, refer to whisky. It may be that American consumers will not see too clearly the difference in the price of that commodity in the United States when the 10 per cent surcharge has been added. Hopefully, they will not notice it, quality being of the essence.


David Lewis: If they drink enough they won't!


Jean-Luc Pepin: Adjustment to the surcharge also depends on the availability of other markets for the Canadian exporters, be they in other countries or be they domestic. It depends also on the financial strength of the company. Some companies would be in a better position to take this surcharge upon themselves than others would.
The greatest uncertainty of them all is the duration of the surcharge because the effect on Canadian exporters is going to be quite different if it were to last three months, six months, a year or three years. On that count, for example the duration of the surcharge, I do not think that the Minister of Finance (Mr. Benson) and myself can inform the House, and I might suggest that the Americans themselves are not clear on it. They have kept their options open in the sense that they have tied the duration of the surtax to the rectification of some abnormalities in currency relationships in the world now. They also tied the surcharge to trade practices presently existing in the world. This is a heck of a difference, if I may use that expression.


Robert Lorne Stanfield: Would the minister permit a question?


Jean-Luc Pepin: Yes.


Robert Lorne Stanfield: Do the American authorities give any indication to the minister or his colleagues that the role of the surtax would be tied to any devaluation of the Canadian dollar?


Jean-Luc Pepin: No, I was just trying to indicate how difficult it is to assess the very precise effect of this surcharge on Canadian exports.
As I was saying a moment ago during the question period, we have given and received information. We have consulted with 1,700 odd companies, I think it is, in Canada that stand to be affected. We have, as hon. members might know from the press, had discussions with provincial ministers and business associations in all categories in order to assess the real effects of the surcharge. The answers that we have got really cover the full spectrum. Some businesses are in danger of almost immediate shutdown. Others, at the other end of the spectrum, can relatively easily shoulder it. I repeat, it is difficult to generalize.
The consensus of provincial and federal ministers is, however, that this surcharge is very damaging indeed. If I wanted to be prudent, conservative, if you like, I would simply stick to broad generalizations such as that it will mean 'a loss of exports in the hundreds of millions of dollars"; that it will mean "a loss of jobs in the tens of thousands" and that it might mean "the closure of plants in the tens".
However, I will be more specific than that. I will read to hon. members from the report that I have, saying first however, that it has no great scientific pretentions. You know, when you ask somebody how he stands to be affected by the decision taken some days ago by Mr. Nixon, that person on the spur of the moment might look at the effect in a more dramatic way than he would after two months or three months have passed. That reminds me of the story of the Canadian newspaperman who asked a cautious farmer, "How are things?". The cautious farmer enquired, "Who is asking?". In this case we were asking companies that evidently, to use Secretary Connally's favourite words, "were shaken" by the announcement made by the United States.
Let me refer to this report from my department. A careful review of responses from 1,300 firms affected by the surcharge suggests that the direct loss of export sales at annual rates could well approach $400 million after three months, $700 million after six months and $900 million after one year. That will give hon. members some indication of what the effect could be. The report goes on to say that the resulting loss of jobs in both exporting and supplying firms might approximate 40,000, 70,000 and
90,000	respectively during the period of time I have already indicated. Not all of this business would be lost permanently, in that some firms would be able eventually to recover part of their loss once the surcharge is removed. However, the extent of permanent loss would grow progressively the longer the surcharge remained in effect.
September 7, 1971

The survey conducted by my department also indicates that there are some 150 companies which would have difficulty surviving if the surcharge lasted up to a year, and many of these would go under well before the end of the year. Those companies have exports to the United States of $377 million and employ 45,000 persons. There are 73 companies which have indicated that continuation of the surcharge for up to one year would make it necessary for them to consider relocating all or part of their operations in the United States.
This is the essence of the report. I think it is dramatic enough to convince my hon. friends that the measure we have introduced today is very much needed. The question is then, how long can we wait until we get the exemption, or how long can we wait before the United States government decides to remove the surcharge for some countries or for all countries.
There is another aspect of this situation which it is very important to bear in mind. Will not the surcharge if kept for too long a period, if there were not the sort of compensation system that we are now seeking, have a long term effect? Commercial trends, or trade patterns between Canada and the United States have been developed over a long period, at great expense to the companies themselves and to Canadian provincial and federal governments in terms of research and development assistance, "GAAP" support and promotion expenditures. If no action is taken these patterns are going to be jeopardized and the effects will be with us for a long time.
May I also indicate to hon. members an argument that the Minister of Finance and I have made, which is that companies in Canada and the United States assumed in the past that these patterns were to be stable and that the possibility of the rationalization and specialization on a North American basis was something which was acceptable, accepted in the trade philosophy which exists between Canada and the United States. In other words we feel, and I hope the House will agree, that the situation created by the surcharge for these companies, for this "system", is one that Canada could not accept and had to try to correct in some way.
Some hon. members will probably suggest that we should have been more vigorous, that we should have taken retaliatory measures, that we should have imposed an export tax on things that the Americans need. I suggest that before repeating this in the House the hon. member who might make that suggestion should get his information straight.


Mr. Gilbert:: Is the minister talking about the hon. member for Duvernay (Mr. Kierans)?


Jean-Luc Pepin: In some cases that I'm aware of this export surtax would have to be paid by the Canadian exporter because prices are established on a landed basis, tariff included. So that would not be the wisest thing to do at this time.
At the same time, as an indication of the seriousness of the damage, may I hasten to add that some of the measures taken by the United States might be quite advantageous for Canada. A revaluation of other currencies would be good for Canadian exports, in other markets to the extent that they are allowed to compete in those mar-
Employment Support Bill
kets. That would be good also for our industry selling on the Canadian domestic market. A "relance" a pick-up in the United States economy would also be good for Canadian exports. More specifically, the removal of the excise tax of 7 per cent on automobile purchases will benefit Canadian exporters. One would need to balance these advantages and disadvantages. So far as Canadian manufacturing processing industries are concerned, the damaging effect was too great we feel, to be contemplated at this time.
Mr. Speaker, Bill C-262 which I am now introducing is entitled "Employment Support Act". Its purpose is to mitigate the disruptive effect on employment in Canada of restrictive trade meausres such as the American tax on export products. It may already have been noted that the bill is of a general nature and also of a permanent character, that it constitutes a sort of umbrella under which different situations could be covered. It may be a matter of surtax or something else coming from countries other than the United States. In this regard, the bill has a general bearing.
The government feels indeed that it must be prepared to act quickly every time other countries are using restrictive measures having a substantial effect on our exports and causing a serious disruption of employment, I insist on the words "substantial" and "serious", so that it may be understood that this is not the kind of measures to be employed-as was suggested today for instance-in order to prohibit of textile products, being carried out in a perfectly legal manner, from Japan, Hong Kong or elsewhere. This is a self-protection measure against decisions of tremendous impact taken by other countries, such as the American surtax.
Of course for the application of this act, each case will have to be judged on its merits. In each instance, need will have to be determined as well as the amount and the form of the aid, while taking into account both the effects and the circumstances prevailing at the time, as well as the kind of measures involved and their possible effect on employment in Canada. Once again, retaliation is not the object here. All that the government is seeking is to minimize the effects of the restrictive measures in question where such measures could seriously affect employment. We would thus be able to avoid a serious threat to the economic, social and even political stability of Canada. It is not a piece of legislation to be applied all the time. It will be a measure to be put in operation, as my grandmother would have said, "on very important occasions".
What kind of assistance is provided under the bill? I repeat that the financial aid suggested in this legislation is in the form of grants to support employment. As the program aims first at mitigating employment disturbances in the various Canadian regions, grants will be related to the operation of each plant individually-in English we say "each plant"-rather than to the whole activities of undertakings or corporations which own it. If the purpose is to maintain employment, we must therefore seek to avoid large-scale shiftings in the jobs which are to be protected.

September 7. 1971
Employment Support Bill
In the context of the American measures, for instance, the grant will generally amount to two thirds of the applicable surtax on the U.S. exports of the plant, on the basis of the 1970 exports. Grants will be established and paid on the basis of three-month periods as from August 16. The assistance given under this program will be ended at the time the American foreign import surtax is removed.
The next question deals with the eligibility for assistance. This is a very important matter. There are at least three criteria that a company must meet in order to benefit from the assistance given under the program as it is devised in the context of the American measures. At least one of these criteria is to be found in the Act itself. Two others will be found in the regulations. I already see that opposition members can hardly wait to voice their objections.
Some will say: Why not have embodied all those criteria in the legislation now before the House? Then I can simply ask my hon. friends to think a little bit more about the problems to be faced.
In general legislation, is it possible to foresee all particular situations when we do not even know what will be the specific reason to invoke the general legislation? I think that in all logic, French or English, it is impossible to predict everything. It is also unfeasible to include all shades of meaning in general legislation. The detailed implementation will have to be left to rules or to the administrative board. In the present case of the American surtax, for instance, it may very well happen that one exporter has no record, no previous experience to use as a claim basis. Why? Simply because he was not exporting last year while yesterday, today, he held or is holding real contracts with American importers. It may also be that the plant did not exist last year. It is therefore evident that quite a lot of discretion must be given to the board, precisely in order that it may make the adjustments between the legislation and the particular situation to be remedied.
I therefore go back to what I was just saying. The legislation includes a criterion for eligibility: that lay-offs in the plant based on compensation be-I don't know whether that is a good word in French-that they be "significant", in other words that the number of lay-offs should be quite significant. I expect recommendations to the effect that I accept the criteria embodied in other legislations, namely that lay-offs must involve some 10 per cent of the staff, or at least 50 employees. We thought of putting a provision of that nature in the legislation and the regulations but after thinking it over we felt this minimum might be too high in several cases. So, instead of making a general rule that would be changed five times a day, I think it would better to rely on the intelligence of the members of the Board. I know that at the committee stage there will be discussions on that between the two large categories of minds that make up the world, the absolutists and the relativists, and I foresee conflicts in the style of Corneille between certain members on that matter.
Two other criteria will be included in the regulations; in order to be eligible for assistance, 20 per cent of the plant's production must have been exported to the United States. According to the third criterion in the regulations and the legislation the company will have to maintain

employment and production at satisfactory levels in that plant. It will be argued that this is another vague concept, and my answer is that there is no other way out. Is it actually possible to require that the level of production be the same as during the basic period of entitlement? Is it possible to say: in 1970 your production was equal to 100 and in 1971, you should be able to produce that same amount of 100 with the same number of workers. It would not be very bright to say so. This is why we have specified: "at satisfactory levels".
It could happen that the industry concerned has undergone some rationalisation or automation process and it would not be possible accordingly to compel such a company to maintain the same number of workers as were employed during the basic period of entitlement. Once again, my hon. friends will have to take into account the hard facts of life to accept the degree of flexibility which must characterize this legislation. Being men of goodwill, we will likely reach some agreement.
There is another clause very dear to the Minister of Agriculture (Mr. Olson) in particular, namely clause 14, which reads as follows:
The Board in considering an application by a manufacturer for a grant in respect of a plant or otherwise shall take into account all relevant factors including
(o) the levels of employment and production at other plants in Canada of the manufacturer or of any persons associated or affiliated with the manufacturer . ..
If a company which is eligible on the basis of production and employment in a given plant transfers the production of another plant to another country, this will be taken into account. I believe that the purpose is self-evident.
Subclause (b)-which is dear to the Minister of Agriculture-reads as follows:
(b) the prices paid by the manufacturer to suppliers for goods that enter into the cost of production of the manufacturer.
In other words, the price which the producer will pay to his suppliers will be taken into account. Why is that? Because you might just run into a shrewd businessman who will take advantage of the American surcharge to obtain cheaper prices from his suppliers while trying at the same time to obtain the grant provided by the legislation under study. We would not want this to happen.
Now, who will administer the legislation? The bill provides for the establishment of an employment support board. The Board will be made up of seven members, three of whom will not be civil servants. This decision reflects the present government policy of having well-known and respected industrialists or businessmen involved in the administration of those programs, especially those that require a high degree of judgment and discernment. Not that civil servants do not have those qualities: on the contrary, they do have them but in another way.
The Board will be such that it can work in two groups, in two "panels" as Lafontaine would say, if the work load demands. At least a thousand requests are expected within the next few days after this legislation becomes effective. It may well be that the Board will have to sit in two panels simultaneously.
September 7, 1971

Where will the funds come from? So that the program can be launched without delay, the bill provides for the appropriation of the funds required from the Consolidated Revenue Fund, namely $80 million for grants and $300,000 for administration purposes.
We all hope-the Minister of Finance the first one-that this amount will be too much, that the surcharge will only last a few days and that the funds will thus remain in the Consolidated Revenue Fund.


An hon. Member:: Ha! Ha!


Jean-Luc Pepin: I am not trying to be funny at all. I apologize if I unintentionally . . .


David Lewis: Not if it drags on a few years.


Jean-Luc Pepin: I hope so. Nobody can prevent me from hoping.
Those funds will be sufficient for the remainder of the current fiscal year. If the American surtax is maintained beyond the stated period, additional funds will be obtained through the regular estimates of my department.
The bill specifies that a report on the administration of that legislation must be tabled each year before Parliament.
In conclusion, Mr. Speaker, I would like once again to stress the point that the program provided in this bill is temporary. It will come to an end when the American surcharge is repealed. I do not suggest that the administration of the bill will be terminated, but that its application to the American surcharge will end with the removal of the surcharge itself.
I point out that under this program, the manufacturer must assume part of the burden created by the surtax. In our view, the government must not compensate the global effect of the surtax at the Canadian taxpayer's expense. There are risks in the export trade and Canadian producers are aware of them. Again, I repeat that exceptionally painful situations will be considered according to their importance.
The legislation does not aim at giving assistance to manufacturers who do not need any. Where a manufacturer is able to sell an appropriate volume of products and achieve a reasonable profit, in spite of the surtax, as when demand is sufficient or when the product is of a particular type, the granting of a subsidy shall not be necessary. In some cases, an amount inferior to the maximum subsidy available will be sufficient to maintain the employment and production level in a factory.
This is a new program which has been quickly set up so as to meet a special situation. A combination of statutory measures and regulations provides a possibility to adjust the program according to experience and circumstances. We are prepared to do it.

So we have addressed ourselves in this bill to the best means available at this time of assisting Canadian producers whose prospects have been damaged, and, more particularly, of protecting Canadian jobs. Our United States neighbours are aware that in the circumstances in
Employment Support Bill
which we find ourselves the Canadian government has been considering possible measures to minimize the damage to the Canadian economy. So this bill will not come as a surprise to them; they should understand the reasons for the actions we are presently taking.
I should also like to make it clear that what we are proposing to do can in no way be regarded as a solution.


Some hon. Members:: Hear, hear.


Jean-Luc Pepin: At least we get full marks for being frank. The assistance provided by this legislation must, by definition, be regarded as merely a short-term, temporary measure designed to minimize the damage. It in no way detracts from the need for the earliest possible removal of the surcharge which has been imposed against Canadian trade.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: Mr. Speaker, I shall try to master the new equipment as well as the House today. The minister has just explained the purpose of the bill before us, which is to mitigate the effects of unemployment caused by foreign import surtaxes and to assist industry which is adversely affected. The bill arises, of course, from the surtax imposed by the United States.
The minister, quite rightly, spent a good deal of time emphasizing that it is extremely difficult to be at all precise as to the effects of this surtax upon Canadian exports-which industries are likely to be affected and how many people may be thrown out of work. He indicated that the figures depend upon a great many factors. However, he did give us some estimates as to the exports and the types of employment most likely to be affected, depending upon the length of time during which the surtax remains in effect.
It is clear that unless effective action is taken by Canada, a good many of our exports will be curtailed and that men and women engaged in the manufacturing and processing of those exports will find their employment affected. Indeed, I suppose it might be said that the Minister of Finance (Mr. Benson) and the Minister of Trade and Commerce (Mr. Pepin) were the first exports we were unable to sell in the United States.


Jean-Luc Pepin: They cannot afford them.


Robert Lorne Stanfield: I do not know whether the Americans can afford it or not, but we cannot afford to have it happen to us.
I shall not go over the ground the minister has traversed. We must bear in mind when we are considering this bill that the surtax takes effect following a substantial increase in the value of the Canadian dollar in relation to the United States dollar, a factor which has already had the effect of weakening substantially the competitive position of the industries with which we are particularly concerned today. Clearly, the principle of the bill is that the industries concerned and the employees concerned deserve assistance.
The purpose of the legislation is very limited. The bill does not deal in any way with the difficulties which the industries concerned have already experienced as a result

September 7, 1971
Employment Support Bill
of the rise in the value of the Canadian dollar in relation to the United States dollar during the past year. Obviously, it makes no provision for the effect on those industries of any further increase which may take place in the value of the Canadian dollar in relation to the United States dollar and the impact this would have upon the competitive position of Canadian goods in export. I am just pointing out to the minister that, as he himself must realize, this is a bill of very limited import designed to serve a very limited purpose.
.50 p.m.)
This bill clearly also does nothing about unemployment that already existed in the economy prior to the imposition of the surtax by the President of the United States. I refer to unemployment during the course of this year- without going back any further than that-that rose to an unacceptable level, unemployment that the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. Benson) as well as other members of the government have predicted all this year, and indeed predicted prior to the commencement of this year, would be reduced steadily and satisfactorily throughout the course of the year.
Unfortunately their predictions have turned out to be very wrong. Equally unfortunately for the country my prediction that unemployment, seasonally adjusted, would remain above 6 per cent for the year is proving all too correct. In the month of July, for example, which is the last month for which we have figures, the seasonally adjusted rate stood at 6.3 per cent, which I think is higher than it was in the month of February.
There is no provision in this bill that faces up to this problem. There is nothing in the bill that recognizes the failure of other government measures to spur the economy and reduce unemployment. Nor is there anything in the bill that recognizes the failure of government policy prior to the initiative taken by President Nixon. Indeed, I am rather amazed at some of the language used in the title of the bill, namely "An act to support employment in Canada by mitigating the disruptive effect on Canadian industry of the imposition of foreign import surtaxes or other actions of a like effect". For a government that has wantonly and deliberately produced policies that have dished up a bellyfull of disruptive effects upon the Canadian economy to suggest that the present disruptions are caused substantially from abroad or could only happen by accident certainly would be deceitfully ridiculous.
The picture that some ministers have already tried to create is that of the innocent, dutiful lad sticking his thumb into the dyke to save the village. Do they really think that Canadians are going to buy such a picture? Certainly I do not. I think that Canadians have come to the rude awakening that this government has sat around complacently, has sat around on high ground, so to speak, while the dyke was in need of repair.


Jean-Luc Pepin: The Americans are full of praise for us.


Robert Lorne Stanfield: Yes, I am sure they are; they show it. Then, with all the villagers up to their necks in water, so to speak, a rainstorm has blown up from the United States to complicate matters, and it strikes me that what the government is doing in this bill is to try to say that the

storm has caused the dyke to break in advance. The government is also, of course, trying to make a big thing out of its wonderful gesture of throwing out umbrellas to protect all the drowning people from the rain. Are we going to have a succession of bills and orders in council to mitigate things? If so, I think that the unemployed people of this country would like to have a measure to mitigate the gall of this government.
It is worth pointing out to the House, too, that there is no provision in this measure to strengthen Canada's longer term trading position, in the United States or elsewhere. It is simply a very limited measure that is designed to meet the problem created by the surtax. And how adequate is it for that purpose? As the minister has mentioned, the surtax is a temporary one. It has been described as being temporary. The Minister himself has wondered just what is the meaning of "temporary". Is it a few months, is it six months, is it a year as some people in responsible positions in the United States have suggested it might be, or is it a couple of years as others in responsible positions in the United States have suggested? Surely, a measure that is reasonably adequate to deal with a surtax that is to last for a few months, as this measure may well be, could be anything but satisfactory if the surtax were to continue over a period of a year or two years. We cannot regard this measure as anything more than a very short-term, interim measure to deal with a problem of a very few months' duration. Otherwise, a measure like this would surely be completely unsatisfactory and inadequate.
In addition, it is obvious that the measure is very general and very vague. I had to leave the chamber for a few moments while the minister was speaking and I do not know whether he assured the House that this bill would provide for all exports that might be affected by the surtax-in other words, whether or not the definition of "manufacturers" in the bill is sufficiently broad to cover all exports that might be affected by foreign surtaxes. I may have missed that assurance if the minister gave it, but that is a matter that we need to know.
The minister talked for quite a while about the use of the word "significant", because only where there is a "significant" decline in employment does the aid come into operation. What does that mean, Mr. Speaker? It obviously means, for this reason and for others mentioned by the minister, that this board is going to have a good deal of discretion. At least, the government is going to have a good deal of discretion in connection with the regulations, and presumably the board will be left with a good deal of discretion under those regulations.
Consequently, we are obviously considering here a measure that is loose and open to abuse. It is one that will be hard to police. On the other hand, it may be that the board has so much discretion in judging whether or not an employer has really carried out what he undertook to carry out that a good many businessmen and firms would not wish to run too many risks or to make too many commitments in terms of expenditure and would place themselves entirely in the hands of the board. So, it will remain to be seen whether this measure proves to be really effective in bringing forth request for assistance upon which manufacturers, as described in the bill, are prepared to make commitments in the confidence that they can properly place themselves and their financial
September 7, 1971

welfare in the hands of the board. These manufacturers are not going to get a grant unless they carry out the terms of any arrangement arrived at as a result of the exercise by the board of its own judgment. I should think that is a factor that might cause some concern to any firm that makes an application.
The next point I should like to make is that in terms of time it will be necessary not only to get the bill through the House, the regulations passed and the board set up, but applications will have to be made, considered and dealt with. In the meantime, many, many Canadians may be laid off, and I do not know what the government is proposing by way of a holding action in the interim, if anything.
I should also like to raise with the minister the question of the position of a United States competitor of a Canadian firm that obtains a grant from this board. Can the United States competitor then go to the appropriate institution in the United States and get, shall I say, a supertax imposed on the surtax that is placed on the exports of that Canadian firm on the ground that the Canadian exporter is receiving a specific subsidy or subvention for the purpose of exporting his goods to the United States? Can the minister give the House an assurance that a U.S. competitor of such a Canadian firm cannot get an offset from a particular authority in his own country to this grant which will be made to the Canadian exporter by this board? Is the minister able to give that assurance?


Jean-Luc Pepin: That is called countervailing.


Robert Lorne Stanfield: That is countervailing, or call it what you like. The question is whether the aid given Canadian exporters in this way is going to be effective, or can it be offset by methods the U.S. competitors can follow in the United States through an appropriate board?


Jean-Luc Pepin: Obviously, we do not think so.


Robert Lorne Stanfield: The minister says obviously he does not think so. I have great respect for the minister in some respects, but I think we can agree this measure will not amount to much if, in fact, a U.S. competitor to a Canadian exporter can get that kind of countervailing relief from the United States authorities. I think we should have some pretty good advice on this, and I hope the appropriate committee to which this bill is referred will look into that point. It should be looked into very carefully because we do not want a farce here.
This bill is a temporary expedient whereas, in fact, the U.S. surtax is a dramatic reminder of long term importance to us in respect of two related problems. One is diversification of Canadian trade, and the second is a satisfactory long term relationship with the United States in terms of trade. As the minister emphasized, this bill has nothing to say or do about either of these matters.
I have been raising both these questions recently and for some time. I make no excuse for doing so or trying, unsuccessfully as it turns out, to get the government to think in terms of long-term policies in foreign trade. As far as diversification is concerned, the answer I received was that the government believes in the freest possible trade. That is fine and we all agree, certainly as far as
Employment Support Bill
access to Canadian exporters is concerned. I have been asking the government to do something about diversification as a long-term policy rather than just talking about it. I have been talking about it because I am not the government but the Leader of the Opposition, but the government has to do something more than talk. It has to take decisions and actions, and that is something rather foreign to the present government in a good many fields. For example, what has the government really done to improve our long-term situation in respect of the European Common Market?


Jean-Luc Pepin: Plenty.


Robert Lorne Stanfield: Yes, it has, I will tell the House one rather unfortunate thing it did which was badly timed. It has partially withdrawn from NATO unilaterally. This was, in effect, telling the Europeans we are not really interested in their problems, or that is at least how they interpret it. The government of Canada has taken no effective action to counter the general assumption you find in Europe that Canada's destiny is simply that of an appendage to the United States, sort of a tail to the American dog. May I say that in present circumstances, regardless of what may occasionally take place in mythology, the tail has most emphatically failed to wag the dog.
I have been speaking about diversification often and at some length over the past year, but the government's response has been virtually nil. What about our relations with the United States and the refusal to do anything effective about diversification? What has this government done regarding our relations with the United States? We have heard various speeches and statements by ministers, including the Prime Minister (Mr. Trudeau), which can only be interpreted in some cases as insulting at best and a rather unfriendly pulling of the eagle's tail, I suppose you might say. None of these statements, whether made in Denver or Moscow, has in any way increased Canadian independence vis-a-vis the United States. None of these statements did anything substantial toward increasing Canadian sovereignty in any way. They were simply in many cases gratuitously insulting and always unfriendly, which did nothing but presumably inflate the egos of at least some of the people involved in making these statements. There has been nothing substantial in this approach. These statements displayed a style of which this government is so proud; a rather snotty and superior style which indicates to others they are not quite as good as us.
As a matter of fact, the minister suggested this afternoon that if only the Americans would run things as well as we do they would not have all this trouble. This is the style of the notorious Throne Speech of a year ago which opened this session; a style that is pretentious and condescending. It is presumptuous and pompous, and I suggest the peacock has come home to roost, or is it the eagle? In any case, something has come home to roost which has booted this government off its perch. The time is long overdue for us in this country to look closely at our long-term policies in terms of trade. I have always said we should look at the question of diversification. We also must look at our trade relations with the United States of America. I said a few moments ago that in the case of the surcharge the tail had noticeably failed to wag the dog, in

September 7, 1971
Employment Support Bill
spite of the rather humiliating odyssey of the Minister of Finance and the Minister of Industry, Trade and Commerce. The government sent the Minister of Finance and the Minister of Industry, Trade and Commerce to Washington to pass the hat. They did not even get the hat back. When he came back after that trek, the Minister of Finance was reported in the press as having said that the United States might have had to resort to less extreme measures had it managed its own affairs as well as Canada. It seems to me that the Minister of Finance came back from Washington not only empty handed but empty headed.
I do not think I should be too hard on the Minister of Finance because he was off taking a properly earned vacation when this all developed. I think he was briefed by the Acting Prime Minister when he came back and was sent very quickly to Washington. I understand the Acting Prime Minister has a unique talent for unfocusing issues, a talent so unique that he is reputed to have in his office a pencil blunter. In other words, the Minister of Finance, after being briefed by the Acting Prime Minister at the time, had what they called a full and frank discussion but got nowhere.
I could go on teasing the minister, but I said at the time the trouble developed that the Prime Minister of Canada ought to have taken up this matter with President Nixon, not as a suppliant with cap in hand but as the representative of Canada which is not only the United States' best customer but also its foremost supplier of raw materials. I said also that I would associate myself as the Leader of the Opposition with the Prime Minister in the presentation of that case to show the United States that Canadians are firmly united in deploring the action taken by the United States government. In his wisdom the Prime Minister decided not to accept that offer, and that is his responsibility. But now I tell him and the government that it is up to us and the government to finally work out Canadian policies for our relations with the United States. This will be more difficult in the absence of the Gray Report on foreign ownership. We are still awaiting this document, although I must say we are becoming rather tired waiting. In any case it is time for us in Canada to work out the direction in which we wish to go and the goals we want to achieve in our relations with our southern neighbour. We can no longer be satisfied with an unintelligent ad hockery that has led us to our present sorry circumstances.
.10 p.m.)
What should we be trying to do at the present time? Of course we should be trying to get rid of the United States surtax just as soon as possible. I have said that the Prime Minister should take this up directly. In other words we should deal with Washington at a higher level than we have. Certainly we should initiate multilateral efforts to persuade the United States to drop the surtax as quickly as possible. We all know the risk of retaliation which exists so long as the United States has this surtax in effect. We all know what would be the result of a trade war or retaliation by the European Common Market and other trading areas. We know what suffering there could be in our own country. Thirdly we have to drop the ad hockery or nit-picking in respect of the United States. We

have to develop policies which ensure us access, not just to the markets we are discussing today which will be affected by this surtax. We must ensure that we have a fair share of the United States market for manufactured goods. We must work for a level of our Canadian dollar that will give our export and general trade an opportunity to expand.
We understand that later on today the Minister of Finance is to make a statement. I do not know what kind of statement it is.


An hon. Member:: A statement on the state of the economy.


Robert Lorne Stanfield: Well, let us have an honest statement on the state of the economy. It may be coming, but let the minister tell us now frankly what he or the government forecast concerning the rate of unemployment this fall and winter. Let him tell us what the outlook really is. I said last June that the Minister of Finance's budget was inadequate. In the light of what has happened since then I say it is virtually irrelevant. We now need comprehensive measures in this country to face the unemployment which exists and which any honest man admits will develop this coming winter unless this government does something effective about it. I do not know what the Minister of Finance intends to say, but I say to him the kind of evasive statements he has made in the past with regard to the outlook and the complacency he has exhibited with regard to our economy, are unacceptable to me, are unacceptable to my colleagues in the House and I am very certain are unacceptable to the people of Canada who really understand the problems. We want to know what the outlook is. We want to know what the targets are. We want to know what policies this government intends to pursue.


Some hon. Members:: Hear, hear.


Robert Lorne Stanfield: There are many measures that can be suggested the government should adopt. One is it could stimulate the domestic market with further tax cuts along the lines I have been suggesting throughout this year. There is stimulation in a practical way, in conjunction with the provinces, in respect of winter employment in this country. Another thing, among others which must be done, is that the government must meet with the provinces and make certain that the provinces have the necessary funds to meet the welfare payments that will rise- they will rise anyway-in a very large way unless this government takes effective measures. So, let the Minister of Finance today tell us frankly what the government sees, and tell us frankly what his government proposes to do.


George Harris Hees: Let him come clean for once. That is all we ask-just once.


Robert Lorne Stanfield: Mr. Speaker, I think I have said sufficient to indicate that this bill is a very small measure in the context of what is needed in the country today as a remedy or even as an effective attack on our economic problems. It is a very small and very narrow approach. I hope the bill will be a help to those who are threatened with loss of jobs through this United States surtax. But I say to you, Sir, that we need to have a firm indication of
September 7, 1971

the government's intentions in respect of facing up to the major problem of unemployment in this country and the major problems of employment and development. If we do not it may be necessary for us to propose some amendments to this measure.


David Lewis: Mr. Speaker, once again the government has indulged in a series of public relations activities and has produced a bill which in our view is mere window dressing, designed to persuade the people of Canada that the government is doing something when in fact the government, through this bill, is doing very little if indeed anything at all. Furthermore, it is an attempt in my view to distract the attention of the people of Canada from the very important fact that we had massive unemployment in this country deliberately created by the government long before the Nixon announcement about the surtax. I have no doubt that an attempt will now be made by this government, and by the Minister of Finance (Mr. Benson) later, to paint a rosy picture about the outlook for the future in respect of the economy and then lay the blame for the difficulties on President Nixon's policies.
I say that kind of an analysis is untenable and indeed much less than honest. When one heard through the press, and through the public relations media in which the minister and the government indulged for some days before this bill was introduced, that something would be done to offset the effect of this tax, one hoped it would be something substantial. One was prepared to assist in anything that would really help the workers who might be affected by the surtax and help the Canadian economy. We indicated our concern by agreeing to second reading of the bill today, but I want to say we are extremely unhappy about the measure before us. It was impossible for us to decide how we might deal with the measure so far as a vote is concerned without hearing the minister, the Minister of Finance and more of the details. I must say to the minister that his speech today was one of the least revealing I have heard him make in this House. Therefore, no one need assume we will necessarily support the bill which I think is a shameful abortion of a remedy that is needed to meet a serious crisis created not only by President Nixon's announcement but also by the policies of this government.
I said at the time the cabinet ministers went to Washington that I was getting fed up with the constant, mendicant, begging pilgrimages of the government of Canada to Washington cap in hand, a kind of procedure which in this case has proved useless despite the minister's attempt to say that certain things have been gained, and a kind of procedure which has always been undignified and humiliating to this country. I smiled a little when the Leader of the Opposition (Mr. Stanfield) twitted the ministers for having gone to Washington and having lost their hat there, let alone anything else, and then offered to join the Prime Minister (Mr. Trudeau) in another pilgrimage to Washington, this time to the U.S. President himself. I object to any of these begging pilgrimages to Washington. Canada is not a banana republic.


Some hon. Members:: Hear, hear.
Employment Support Bill


David Lewis: We can face a president and an administration of the United States with some considerable strength. There is just as much that the United States needs from Canada as Canada needs from the United States.
The Minister, I think looking at me, twitted me for having said that we should be tougher and take retaliatory steps. I want to tell the minister and the government that the Canadian people are not dumb, and that if the minister's proposals have any effect at all they are a retaliatory step. If the minister's grants are going to result in the production of goods which continue to be exported to the United States, it will only be because his grants would permit a reduction in the price of those goods to offset the 10 per cent surtax. So far as I am concerned if the minister is sending goods to the United States by reducing the price then he is doing the right thing, but is retaliatory because it undoes what President Nixon wants to do, which is to keep our exports out of the United States. So, the minister need not be so self-righteous about this retaliatory business.
No matter what steps one takes to protect the Canadian economy and Canadian jobs, they necessarily involve retaliating against what President Nixon has done unilaterally. I say that a country as powerful as the United States, a country whose economy has such a tremendous effect on the entire world, has no right to undertake without consultation monetary and other actions which adversely affect the rest of the western economy. If President Nixon found it necessary for the protection of his country's interests to ignore the effect of his actions on the rest of the western world then the government of this country ought to have the guts and the concern for the people of Canada to be ready to take whatever steps are necessary to protect Canadian industry and Canadian jobs.
The minister has attempted to create-I suppose that was the objective-a spirit of crisis on this thing by reading us the report from his department. Mr. Speaker, I hope that I got the figures correctly. As a result of consulting industry, his department came to the conclusion that there would be a loss of 40,000 jobs if the surtax lasts three months-I hope the minister corrects me if I did not get the figures right-70,000 jobs if it lasts six months and
90,000	jobs if it lasts a year. If that is true-and I have no way of knowing-I do not necessarily accept those figures as gospel, and neither does the minister. He emphasized the fact that they were not scientific and he even had the honesty, for which I respect him as I always have, to inform us that when you ask a manufacturer "What is going to be the effect on your business" it is like asking the farmer "How are things going"? They both want to know who is asking. Since the manufacturer knows that something is in the wind that might assist him, he may give figures that are or are not accurate.
The minister shrugs his shoulders. So do I, with less Gallic effect but with equal emphasis. But if he is right, if the loss is going to be 40,000 jobs in the first three months, then I say that what he has proposed is absolutely scandalous because $80 million will not save 40,000 jobs, and he knows it. He knows that this $80 million, which is the amount specified for the next six months, roughly up to the end of the fiscal year, even if it were all spent in the

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Employment Support Bill
first three months will not save half of the 40,000 jobs, if it saves any jobs at all.
If the situation is as critical as his department suggested, the minister at least ought to have come before this House with an amount of money that looked as if it might be adequate to deal with the fate of 40,000 jobs in the first three months, and 70,000 jobs in the first six months. He knows, the Minister of Finance knows, and their advisers know that $80 million will not touch 40,000 jobs in three months, let alone 70,000 jobs in the first six months. Therefore, even on its own face, this bill is utterly inadequate, and I would say that the amount is picayune.
It is most significant, and I am sure every member of the House noticed, that the minister gave us all sorts of figures about what might happen in view of the surtax, but not once did he tell us how many jobs he thought could be saved through the bill that he has proposed. This is because he does not know, or else because he knows perfectly well that even if he spends the entire $80 million on a proper basis he is not going to affect unemployment in any serious way. There is not a member of this House who is not concerned about the added unemployment that the 10 per cent surtax might create in Canada. But, Mr. Speaker, I am just as concerned about the more than half million people who were already on the unemployment rolls in the middle of July, and about the further unemployment that will occur as a result of government policies this fall and winter. It is not enough to try, in a picayune way, to deal with the added unemployment that may result from the surtax in the United States unless one takes measures to deal with the entire economy and to reduce unemployment altogether in this country to acceptable levels. The fact that the government is saying nothing about that means that the steps which the minister is proposing will not do anything or very little for the people of Canada.
All of the criteria are to be placed in the regulations. The minister told us something about what some of those criteria will be. The bill and the regulations use words like "likely", people who are "likely to be unemployed,"
and words such as "significantly" and "a significant number." The minister pleads that there has got to be flexibility. I agree with him about the necessity for flexibility in general terms but somebody has to tell us, and I hope the standing committee will be told, what is the meaning of the word "likely" and what is the concept of the word "significant." Is it 10 per cent, 20 per cent or 30 per cent unemployed in a plant?
I remind the minister that he was not satisfied with saying that people will have to meet the criteria in order to get the grants. I remind him that he goes on to say in clause 15-and I am paraphrasing-that if a company does not meet the criteria set out in the regulations then the cabinet, not the board, or not the commission, may nonetheless make grants under this bill to such a firm. I see the greatest possible danger in abuse both by the board, which will have all this immense discretion, and by the cabinet that has discretion to go even beyond the
law and the regulations to make grants to companies that may not meet the criteria here set out. At least under DREE when a grant is made there has to be a new plant or modernization of a plant, and when grants are made through the Textile Board they axe to modernize the industry so that the economy may be improved. By contrast, this is a straight welfare grant to a company, which may or may not use it in order to protect its workers, despite the safeguards that are supposed to be in the bill. It is a grant to the company.
Significantly, Mr. Speaker, I ask you to note that when the minister spoke about the board and about the noncivil servants on the board, if I heard him correctly-and his mike did not work as well as I would have liked-but if I heard him correctly when he talked about the noncivil service members of the board, he talked about industrialists and about merchants-"Les industrials et les commergants". That is what he talked about. Not a word about the workers and not a word about the unions being represented on the board. You have four mandarins of the public service plus industrialists and merchants on the board-to guarantee what? To guarantee that the working people are going to get anything out of this?


Mr. Gibson:: Yes.


Some hon. Members:: Oh, oh!


David Lewis: If the answer is yes, then I simply say to the government that we in the New Democratic Party have had too long an experience with the mandarins and industrialists and merchants supposed to protect the welfare of workers not to know that it will not be done unless the workers or unions are represented. It never occurred to the minister that such should be the case. It never occurred to him, even as a piece of tokenism, to have one representative of the unions on the board. It occurs to him to have his own mandarins and his own industrialists and merchants, but not the people who speak for the workers in the plant whose interests he is supposed to protect.


Eldon Mattison Woolliams: It will be a Liberal board.


David Lewis: How much of these grants will go to protect the jobs of workers and how much will go to preserve the profit level of the companies? What will the minister do to make certain that these grants are not merely preserving the profit level of the company? There are circumstances in which a company ought to be ready to make less profit.
I think the most disturbing part of the minister's proposal and the minister's speech is his constant reference to the fact that this is a temporary emergency measure. He says that he does not know whether the surtax will last three months, six months or a year-

September 7, 1971

indeed, the people in Washington do not know, says he. Mr. Speaker, let me stick my neck out and say that as far as I can judge economic situations at all and the situation of the United States of America, so long as that country continues its war in Viet Nam the likelihood is that the surtax or something similar will last a darned long time. Indeed, the administration in Washington could do more for its own trade and balance of payments position in one week by withdrawing its forces from Viet Nam than all the policies it has undertaken to hurt the rest of the world.
I say that there is no guarantee by Washington that this is a temporary measure. The particular means may be temporary but the situation of the United States of America will remain for a long time with regard to its balance of payments problems and trade problems. These will remain as long as it is involved in Southeast Asia to the extent that it is involved now, because its economic and financial commitments to the execution of that war are as much responsible for its monetary and balance of payments problems as any other one issue. There is, therefore, no guarantee at all that the measures taken by Washington are temporary. There is therefore no guarantee that this is a temporary emergency measure. If it is the intention of the government to maintain this kind of grant system to industry for as long as the 10 per cent surcharge remains in the United States or something similar then I say, Mr. Speaker, that this House and the people of Canada do not know for how long these handouts to industry will continue and how much good they will do the economy as a whole.
The Minister of Industry, Trade and Commerce did not tell this House and the people of Canada what it is intended that the companies who receive these grants should do. When they get a grant let us assume that they keep people at work-an assumption that I think is a little dangerous in every case-but let us assume that. Goods are produced but what is going to happen to those goods? The company is either going to ship them to the United States at a reduced price to offset the 10 per cent surcharge-in which case the Americans will probably do something because it is in a sense retaliating against or countervailing the action they have taken; it would nullify the action they have taken. Or the company will pile up its inventory of goods and not sell them and, therefore, be in a position to depress the wages of workers at a future date by saying, "If you want to strike, go ahead, as we have enough inventory for a few months." Thirdly, it may use the goods produced by the subsidy for sale on the Canadian market. This will be unfair competition with the firms that did not receive a subsidy.
These are the only three alternatives possible, unless the money is pocketed and nothing is done. If jobs are kept and goods are produced they will either be exported to the United States at reduced prices or sold on the home market. If sold on the home market at reduced prices they will have Em unfair advantage over firms that did not receive a subsidy. This may keep 8,000, 9,000 or 10,000 jobs in one sector of the economy and create unemploy-
Employment Support Bill
ment for 8,000, 9,000, 10,000 or 15,000 workers in another sector.
Mr. Speaker, that is precisely the kind of policy this government has always carried out; this patching up, this day to day ad hoc patching up of a situation may do a little bit of good here, but invariably produces more bad elsewhere in the economy. This is what DREE does. It sets up a pulp and paper company in the west and cuts employment at the Bowater plant in Cornerbrook Newfoundland. It is merely an answer to some application by a huge multinational corporation which appears to be doing some good by creating jobs in Saskatchewan, Alberta or Manitoba but the result is to cut down jobs in another part of the country. What sense is there in that? What sense is there in having a policy which will enable a small number of firms to take advantage of the public treasury perhaps at the expense of other firms and at the expense of the jobs of other Canadians? There is no sense in it at all.
If the crisis is what the minister suggests, then we ought to have the guts to say to the United States that we will not allow this kind of unemployment in our country to flow from their policies, even if it means diverting Canadian production to the Canadian market and making sure that the Canadian market is available for those products-even if it means keeping out similar imports from elsewhere.


Some hon. Members:: Hear, hear!


David Lewis: We should have said to Washington, "We are not in a position of weakness where we have to go on our knees to you. You need desperately our oil and natural gas and some other things which you are short of." We should impose an export tax on exports like gas and oil, not on those which are in a competitive market but on those natural resources where we have a monopoly or some other stronghold on the market in order, if you like, to assist Mr. Nixon but certainly in order to raise the revenues needed in Canada to build industry, to build the economy and to assist the people of Canada to increase jobs in this country.
It is also significant, Mr. Speaker, and I have no doubt that this played an important part in the considerations of this government as it always does, that a very large proportion of the $80 million that they ask us to vote will in fact go to subsidiaries of multinational corporations in this country. Everyone knows that. Everyone knows that a large proportion of the exports to the United States is by multinational corporations-about two-thirds of them. Everyone also knows that a large part of the export of manufactured goods to the United States consists of intra company exports or interplant exports, the exports from the Canadian manufacturing subsidiary to the American parent manufacturing plant. Therefore the Canadian people will, out of the public purse, pay part of the surtax that President Nixon has put on.

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Employment Support Bill
Where is the sense in that? Where is the sense in undertaking a policy that will strengthen the hands of the subsidiaries of multinational corporations and increase Canada's dependence still further on the American economy. I say that, Mr. Speaker, because what President Nixon's action and the anticipated results of it underline is the dependence of our Canadian economy of that of the United States; is the fact that we are not a free economy, economically speaking; and the fact that we have permitted-consecutive Liberal governments in their continentalist love have permitted-a situation in which 70 per cent of more of our exports to go one market, the United States, directly as a result of the foreign ownership of our resources and of branch plants of multinational American corporations right across the country. We have permitted our economy to be placed in that strait jacket, and of course we feel helpless. If we do not take measures now to correct the situation, if we do not take advantage of the situation that has been created and deal with our economy on a long-term basis, so as to free it from its dependence on the United States and from American control and diversify our trade across the world and find new, additional markets for our products, we will see in three months, six months, nine months or one year from now either a continuation of the surtax or some other action taken by the United States in order to protect its interest. That is why, Mr. Speaker, on behalf of my colleagues and of the New Democratic Party, I have time and again, as have other colleagues of mine, emphasized the need for immediate action to deal with these over-all, long range problems.
Before I deal with them let me repeat this, so that there is no misunderstanding. If the minister had produced a bill that would really assist working people in Canada on a long term basis, a bill that would really assist them and not show any danger of mainly assisting the profits of companies; if it were a bill that dealt with the situation as he described it, so that all the jobs that would be displaced might be dealt with by the bill; and if there were any suggestion in the bill or in any statement of policy that the government would simultaneously undertake other measures to deal with the economy as a whole, we should have a different situation. But that is not what is before us. In my view, what is before us is an economic abortion, the consequences of which we cannot foretell, the effect of which we cannot know and the direction of which it is impossible for even the minister to describe. It is an $80 million handout in some direction that may have a slightly desirable effect on employment. No one can guarantee even that. That handout will do nothing to underpin the Canadian economy. For that reason, we have to take a very careful look at the bill to see whether it is worth supporting. Also, in major part, Mr. Speaker, we should determine whether or not this parliament ought to give the government the chance of getting out from under its own economic policies and the opportunity to blame President Nixon for an unemployment situation which, in 99 per cent of the case, is its own responsibility and the result of its own policies.
We suggest, Mr. Speaker, that the government ought to go forward immediately with policies that will do something both in the immediate future and in the middle and long term. One of the first things it ought to do, in our submission, is to take active and energetic steps to reduce interest rates in Canada. That would achieve several purposes simultaneously. First, it would stimulate the domestic economy. A serious reduction in interest rates would have am immediate effect on housing and construction of every sort, and there is no faster way of creating jobs than by stimulating housing and construction of every sort. Second, it would stem the flow of foreign capital into Canada and make it unprofitable for foreign investors to seek the Canadian market. Heretofore our interest rate has always been higher than the American one. Also, there would be the opposite and converse move of having Canadian capital flow out of this country. The effect of foreign capital being discouraged from coming into Canada and of Canadian capital being encouraged to go out of this country would be this: it would quickly depress the value of the Canadian dollar in relation to the American dollar and that would have an immediate and salutory effect on all our exports, not only those affected by the 10 per cent surcharge, but others as well.
We suggest, secondly, as we have done before, that the moment President Nixon announced his policy, this government ought to have established a monitoring agency such as was proposed in the Watkins report of 1968 and such as was proposed by the external affairs committee of the House of Commons, of which the hon. member for St. Paul's (Mr. Wahn) was chairman and of which I was at that time a member, in order to ensure that Canadian subsidiaries of American corporations do not transfer production to their parent companies in the United States and, for that matter, to produce serious regulations and laws which would keep those companies producing in this country rather than transferring their production elsewhere.
The time has come for us to have the courage to pass serious regulations and serious laws to achieve just that. At least such a monitoring agency, with the necessary powers to obtain information, would be able to tell us whether that is happening. Such an agency ought to be able to say whether or not production and jobs are being transferred to plants of parent companies in the United States.
Thirdly, Mr. Speaker, we have said, and in this I agree with the Leader of the Opposition (Mr. Stanfield), that there ought to have been and that there should be now very substantial tax cuts, particularly for low income people, in order to increase aggregate demand in this country precisely in the area of those people who, because of their small incomes, spend every cent that they earn. There ought to be those tax cuts for low income people. Since those cuts have not been introduced until now in sufficient measure, they ought to be introduced now as part of a parcel of policies to deal not only with the immediate situation, but with the general, overall situation of our economy.

September 7, 1971

Fourthly, Mr. Speaker, we repeat what we have said time and time again; we ought to stimulate the economy by a massive infusion of funds in the field of housing and construction generally. There ought to be a serious contribution of funds from the federal treasury for the building of waste treatment plants, both for the purpose of expanding economic activity and, what is equally if not more important, for the purpose of dealing with the problem of pollution. Anti-pollution speeches have become like speeches about motherhood. Everyone makes them. The fact is, however, that a large measure of the pollution in this country-not all of it but a large measure of it-is due to the absence in various municipalities across this country, large and small, of adequate waste treatment plants. Municipalities across Canada, I feel, do not have the funds to undertake themselves the building of modern waste treatment plants. Therefore, both in order to deal seriously with the problem of pollution and to stimulate the economy-because the construction of waste treatment plants has a similar kind of multiplier effect in the economy as the construction of houses and office buildings-large expenditures ought to be undertaken immediately in this field.
Finally, I repeat what I have already suggested, serious consideration of a surtax on exports or resources like natural gas in order to both raise money for domestic adjustment programs and to reduce pressure on the Canadian dollar. I have attempted both to be critical of what has been said here because, in my opinion, the bill and the minister's statement fully deserve criticism and to indicate at least some areas of policy which our party believes to be essential. What we have to start doing in Canada, I suggest with all the seriousness I can, is to restructure our economy to make it less dependent on the American economy,-


Some hon. Members:: Hear, hear.


David Lewis: -to restructure our pattern of trade to make our exports less dependent on one market, namely that of the United States, to restructure our branch plants in this country so that they may be more efficient, competitive and specialized in the world market, to restructure our relationship with the United States and to reverse the trend of continuing foreign ownership of our economy both at the level of natural resources and our branch plants in the manufacturing sector.
All of these things are essential if Canada is to retain any semblance of economic independence and if Canada is to retain any semblance of genuine political independence which really means the capacity to make political decisions without having to go cap in hand to Washington every time a reactionary President of the United States enters on a policy of protectionism against the rest of the world, as happened by the announcement of President Nixon.


Mr. Laing:: Will the hon. member permit a question either now or when he concludes?


David Lewis: Yes, Mr. Speaker.
Employment Support Bill


Arthur Laing: I think in recent days the hon. member is on record as having advocated a uniform and general export tax on all resources in Canada. Today he has retreated to gas and oil only. Is he still thinking of mineral elements?


Eldon Mattison Woolliams: You better stay out of Alberta.


David Lewis: No, Mr. Speaker. I do not know to what the Minister of Public Works (Mr. Laing) is referring. I never suggested a general unspecified tax on resources. I know a little more about Canada's economy than to do that. I have always indicated oil and gas as the examples I had in mind. I do not know what the people of Alberta told him. The hon. member is no doubt referring to the fact that his party won the election in Alberta. Let me congratulate the new premier of that province and wish him well. Whether that government will make any difference to the basic policies of the people of that province remains to be seen, Mr. Speaker.


Some hon. Members:: Oh, oh!


David Lewis: I am merely keeping my mind and eyes open to the next few years to find out exactly what will happen. I described the difference between the two when I was in Alberta. I do not intend to repeat it here.


George Harris Hees: You helped a lot.


David Lewis: I have already fought the Alberta campaign, not with outstanding success. I do not intend to refight it here, to be honest with you, Mr. Speaker. In view of what I have already said, I therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That Bill C-262 be not now read a second time, but that it be resolved that in the opinion of this House the Government should give consideration to the introduction of measures to stimulate the Canadian economy and. to free it from its dependence on that of the United States, to obtain additional markets for Canada's exports, and to protect Canadian jobs from the consequences of the policies announced by the President of the United States.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. Hon. members have heard the amendment proposed by the hon. member for York South (Mr. Lewis), seconded by the hon. member for Winnipeg North Centre (Mr. Knowles). Before accepting the amendment or giving any opinion as to the procedural acceptability I might, purely in context, make some observations because I am going to ask hon. members to assist me on the question of procedural acceptability.
The first observation, and there may be arguments to persuade me otherwise, is that at first blush it seems that the bill we are now considering is relatively narrow. The principle is relatively narrow:
An Act to support employment in Canada by mitigating the disruptive effect on Canadian industry of the imposition of foreign import surtaxes or other actions of a like effect.
The concern that the Chair has is twofold. First, it may be that the hon. member's proposed amendment does not

September 7, 1971
Employment Support Bill
oppose the principle enunciated. I just read the title of the bill now before us. With regard to the second concern, the Chair invites hon. members to assist on this. It is that the proposed amendment may be beyond the scope of the bill we now have before us for consideration because it seems that this is a very broad and general amendment. I will read it for hon. members who will be assisting me shortly with argument:
That Bill C-262 be not now read a second time, but that it be resolved that in the opinion of this House the Government should give consideration to the introduction of measures to stimulate the Canadian economy and to free it from its dependence on that of the United States, to obtain additional markets for Canada's exports, and to protect Canadian jobs from the consequences of the policies announced by the President of the United States.
Without making any final decision, it seems that the proposed amendment is somewhat beyond the four corners of the bill now before the House for consideration. I invite hon. members to assist the Chair in this regard.
Mr. Stanley Knowles (Winnipeg North Centre) Mr. Speaker, in response to your invitation, I should like to do my best to help you come to the realization that this is the kind of reasoned amendment that the Chair ought to allow. This is an area of procedure that we have been over a good many times in this House. It is. of course, one that takes us to citation 382 of Beauchesne's Fourth Edition and from that citation to a certain reference in May's 17th Edition. Citation 382 of Beauchesne's Fourth Edition reads as follows:
It is also competent-
This, of course, is at the second reading stage.
-to a member who desires to place on record any special reasons for not agreeing to the second reading of a Bill, to move as an amendment to the question, a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill, or expressing opinions as to any circumstances connected with its introduction, or prosecution; or otherwise opposed to its progress; or seeking further information in relation to the Bill by Committees, Commissioners, the production of papers or other evidence or the opinion of Judges.
For the purpose of completeness I have read the entire text of citation 382 although, it will be obvious it is only the first half of it which applies in this case. Accordingly, if one turns to May's 17th Edition he will find the same ideas that are copied in Beauchesne spelled out on pages 526, 527 and 528. I do not have a copy of May's 17th Edition in my hand at the moment, but I read those pages earlier this afternoon and a number of us are quite familiar with them. On those pages, May makes it clear that the use of reasoned amendments in connection with the latter part of citation 382 has pretty well died out but that it is still appropriate for a member to rely on the early part of 382; in other words, to present an amendment implying opposition to the bill and asking the House to state by resolution some principle adverse to, or differing from, the principle or the policy placed before the House in the bill itself.
May goes on to point out that there are certain things one must avoid in an amendment of this kind. I believe
we have avoided the pitfalls. We are told that a reasoned amendment must be relevant to the subject matter of the bill. May makes it clear that this means we must not deal with other bills which are on the order paper. I maintain we are staying within the four corners of the purpose of this bill as cited in its title which Your Honour read out a few moments ago, namely, a measure to support employment in Canada by mitigating certain disruptive effects. It is our contention that the bill does not do what it aims to do at all and that the House has, therefore, the right to consider a resolution asking that the government turn its attention to measures which would accomplish in some detail the very things the government said it was proposing to accomplish. In any case, I submit we are obeying the instruction in May to make our amendment relevant to the subject matter of the bill. I say it is relevant in that it does relate to the crisis which has been presented to us. This is what the bill is about, but it is our contention, in opposing second reading, that the bill does not do what it says it will do.
Another caution in May is that a reasoned amendment must not propose changes which could be made to the bill when the bill is in the committee of the whole or in the hands of a standing committee. I think we have avoided doing that. The things we ask the government to consider could not be moved as amendments of detail to the bill before us. For one thing, such amendments would involve the expenditure of money and could not, therefore, be moved by a private member. I point out that although private members cannot, of course, move motions which involve the direct expenditure of money it is well established that a private member can move a motion asking that the government give consideration to a proposal which might cost money.
Another restriction mentioned in May's 17th Edition is that a reasoned amendment must not amount merely to an indirect negative. In other words, if all we want is to say no to the bill, we can do that by our vote on second reading and one does not need a reasoned amendment for that purpose. But our whole object in supporting the procedural propriety of this amendment arises from our belief that the House has a right to say at this time, if a majority agrees, that although the government did the correct thing in bringing this subject before us, it failed Parliament by not bringing in a measure or measures to cope with the essence of the problem. What we are asking is that the House say "No" to the second reading of this inadequate bill but express itself at the same time as in favour of the proposition that the government should reconsider the whole matter and give thought to bringing in a measure or measures which would, in fact, do the things spelled out in the proposed amendment, an amendment which would represent effective ways of doing what is envisaged in the title, namely, assisting employment in Canada and mitigating the disruptive effects upon Canadian industry of certain acts which have taken place outside the country.
As I say, I feel we have, in drafting this amendment, avoided the pitfalls which May says we must avoid. Moreover, I feel the amendment is in line with the right which May confirms, namely, the right to be opposed to a

September 7, 1971

measure and to state the reasons tor which we believe some alternative measure should be presented, in the same field. This is what our amendment proposes, and I hope Your Honour will find it in order so that the House may decide on this important issue.


Gerald William Baldwin: Nothing can be better, Mr. Speaker, than to welcome you back to the House with an interesting and fascinating argument which will form the subject of debate and which will be read with interest by members of the House tonight and on other nights to come. They are, of course, interested in this fascinating matter.
The hon. member for Winnipeg North Centre has traversed the ground generally. I wish to say one or two things very briefly in support of the principle he seeks to have Your Honour accept, without in any way implying that we accept the amendment itself. I would refer to the following comment: a reasoned amendment, if carried, would not exactly mean the outright rejection of the bill. A bill could be brought up again on a subsequent occasion. Following the observations my leader has made, I say that the present bill is not adequate. In many respects it fails to provide a means for solving the problem to which it is directed. Nevertheless, if nothing else were done it would still have a certain minimum value- like sending a man suffering from pneumonia out in 40-below-zero weather with gloves on his hands whether he had any other clothing on or not.
We are not supporting this amendment on the same basis as we would a six-months hoist which would have the effect of killing the bill. Inadequate as the bill is, if the government will not see reason, if gentlemen opposite will not add to it, it does possess a certain minimum value. We recognize this fact. This is why we agree that this debate should be brought on without delay.
The actual wording of the proposed amendment is not one which we can accept. Our opinion will have to be made known on that aspect later if Your Honour approves the amendment. Nevertheless, I repeat that the measure presented to us is largely inadequate and for this reason we say it should be competent for a member of this House to say there should be added to it other proposals which would not change our position as far as the principle is concerned.
The amendment of the hon. member for York South proposes that the government should give consideration to the introduction of measures to stimulate the Canadian economy, which would deal with the issue that is the particular subject of this bill and probably go somewhat further, based on the very firm and I think correct statement made by my leader that we are now facing a very serious situation with regard to unemployment, the causes of which we have enumerated in this House for some time. What the government is now doing is seriously aggravating an existing condition. We must not forget that if the condition is extremely bad now this measure will aggravate it out of all proportion.
Employment Support Bill
Again the amendment speaks of obtaining "additional markets for Canada's exports, and to protect Canadian jobs". I submit that since the bill is inadequate the government should examine the additional alternatives proposed by the hon. member for York South. Indeed, my leader has indicated that we may ourselves yet propose additional alternatives, although our language may be different.
The point I want to make is that the words describing this act as an act "to support employment in Canada by mitigating the disruptive effect on Canadian industry of ... foreign import surtaxes" may be all right as far as they go, but in our opinion we should direct our attention to root causes and fundamental cures, and to this extent I think this is what the hon. member for York South is attempting to do, in part, by his amendment.
There are one or two English precedents that I shall cite to Your Honour since we seem to have difficulty in establishing Canadian precedents. On April 23, 1968 in the House of Commons at Westminster the following reasoned amendment, which obviously was accepted, was moved. It related to a bill dealing with racial discrimination.
This House, reaffirming its condemnation of racial discrimination and accepting the need for steps designed to improve the situation, nevertheless declines to give a second reading to a bill which, on balance, will not in its practical application contribute to the achievement of racial harmony.
Your Honour may well say that the operative wording of that amendment may be different from the one moved by the hon. member for York South, and if we ourselves move an amendment we may well be driven to using wording somewhat similar to that used at Westminster.
May I quote a second precedent along the same lines, an amendment to a bill establishing a decimal system:
This House, while accepting that a decimal currency should be introduced in 1971, declines to give a second reading to a bill which provides that the basis of the new currency should be the pound-new penny-new halfpenny system.
In other words, in both of those amendments there is the thought that what is proposed goes some step along the way to curing an evil or to providing a remedy for a defect; but that a better cure or remedy would be effected if other steps as well were taken. To the extent that the hon. member for York South has proposed a motion along those lines, I support the principle of his argument, without prejudice to our right not to accept the terms of the motion itself. That is the point I want to emphasize before sitting down.


Marcel Joseph Aimé Lambert: Mr. Speaker, I want to join my colleague from Peace River in very briefly outlining certain arguments as to the admissibility, for purposes of order only, of an amendment of this type. There has been some difficulty, which I must confess has become more and more apparent, regarding acceptance of reasoned amendments over the past several months. I would point out to Your Honour, without traversing any arguments of a technical nature that have been expounded either by the hon. member for Peace River or by the hon. member for Winnipeg North Centre,

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Employment Support Bill
that we are now operating under different rules. Many of the arguments and precedents cited with regard to acceptance of such amendments are based on rules of the House that no longer are applicable. It must be remembered that we no longer have a resolution that is debatable in this House. I agree that a resolution could be amended within limited terms, but under the present rules this is the first opportunity that any member of the House has to put forward an amendment. Merely to say that there shall be a six months' hoist, which is tantamount to a negative vote, or any kind of dressed up motion, shall I say, which has the same effect really as voting against a motion on second reading, is to me far too restrictive.
It seems to me that what we have done has been to change our rules to shorten the "front end load", which is a phrase that I used to use in committee. We have very definitely eliminated the front end load of the legislative process. But any application of rules that belong to our older, abandoned generation of rules is wrong. It* seems to me that if an amendment is a reasoned one and does not fall into the quicksands of difficulty illustrated by the hon. member for Winnipeg North Centre, then I think it should be possible to put an amendment of this nature at this stage.
I am arguing merely as to the right of a member of the House to put forward this kind of amendment. There are many features of this proposed amendment that is now under consideration which I would find entirely repugnant and which I would not accept; but that is as to subject matter, not as to technicality.
For these reasons I urge Your Honour to look upon this type of amendment in a light different from that heretofore since we are now working under new rules. I would hope there could be some consideration given this particular aspect during the dinner hour and then the Chair could give the House the benefit of its mature reflection upon such an amendment as this.


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I will attempt to address myself solely to the question whether the proposed amendment offends the rule that has been so frequently spoken of here this afternoon of not being an outright rejection of the bill, or not negativing the bill, or not being contrary to the bill itself, as the situation has variously been described by those who spoke on the validity of the amendment.
If it is the intention of the proposers of the amendment, as they say it is, to make up for inadequacies in the bill, for the lack of certain measures that they feel should be taken to effect the intended objectives of the bill, then it is obvious that they are at liberty to propose specific measures by way of amendment at committee stage, as I am certain they are preparing to do. Obviously that would be the correct, legal way to achieve such objective.
When one examines the terms of this proposed amendment, one would agree as a matter of commonsense that the only sensible, intelligent interpretation of the words "That Bill C-262 be not now read a second time but that

it be resolved that in the opinion of this House the government should give consideration to the introduction of measures" is that the bill should be withdrawn. The effect of that language I have quoted would be the withdrawal of the bill as a result of action from that side of the House instead of from this side.
The amendment suggests that the bill do not now proceed but that it be withdrawn from the House with another new and larger measure being considered by the government for introduction at some other time. In my humble opinion, the only sensible interpretation of those words is exactly that interpretation, the effect of which is not only an outright rejection of the bill, negativing or going contrary, but a complete withdrawal of it from the chamber. Your Honour knows very well, as do the hon. members who have spoken in support of this amendment, that this can only be achieved with the unanimous consent of the House. I suggest that is the clearest argument which points out the illegality of this measure. Perhaps the strongest attestation of that is that if Your Honour accedes to and goes along with that interpretation, what you will in effect be doing is sweeping aside the first three of the four points put forward in the motion and going directly to the fourth point at the bottom of the page, which is an exact description of the intent of this bill, that is to protect Canadian jobs from the consequences of policies announced by the President of the United States. I think that is the task we should get on with as quickly and as directly as possible.


Mr. Deputy Speaker:: If there is no other hon. member who wishes to assist the Chair regarding the amendment, perhaps I should make some comments. The Chair thanks the hon. member for Edmonton West (Mr. Lambert) for his assistance. He has been very helpful, but the Chair feels that unless there is some other argument or doubt created in my mind there is no real purpose in deferring the decision regarding this procedural argument over the dinner hour. In any event, I thank hon. members, particularly the hon. member for Edmonton West, for their assistance.
I have some difficulty in respect of arguments in view of the precedents and authorities which bind the Chair in matters of procedure. If the bill under consideration and the motion before the Chair were different, it might well be that the hon. member for Edmonton West could impress the present occupant of the Chair with his argument. In these particular circumstances, I feel I must be bound by those precedents cited by hon. members who have presented arguments. They must, of course, all be considered by the Chair in the determination of a procedural argument such as this.
When I heard the motion I did indicate some doubt about two points, and at that time I asked for assistance. The hon. member for Winnipeg North Centre (Mr. Knowles) has cited the authority of May's Seventeenth Edition. I do not think it is necessary for me to review the authorities that hon. members drew to the attention of the Chair. I think it is sufficient at this time for the
September 7, 1971

Chair to indicate it cannot go as far as the hon. member would like. It does seem to me that I should base my opinion essentially on the proposition that the amendment does not oppose the principle of the bill. Hon. members will realize that the authorities indicate we are not concerned with the question of an amendment opposing the subject matter of a bill, but rather an amendment must clearly oppose the principle of a bill. This is a rather more confining situation than we would face if an amendment were required to oppose only the subject matter. An amendment must state a principle opposed to the principle of the bill rather than the subject matter thereof.
The second point I should like to make is that an amendment must stay within the four corners of a bill. On the question of relevancy it does seem to me that this amendment goes beyond the four corners of the bill. I have a great deal of sympathy for the argument presented by the Parliamentary Secretary to the President of the Privy Council. He suggested that if indeed the amendment were permitted from a procedural standpoint what we would in effect be doing in this chamber is withdrawing the bill. The debate would then revolve around suggestions and proposals as to how we could attack the problem in different ways.
For these reasons, I regretfully must indicate that in my opinion the amendment is not procedurally acceptable.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Egmont (Mr. MacDonald)-Indian Affairs-Lennox Island Reserve-construction of link to mainland; the hon. member for Vancouver-Kingsway (Mrs. Maclnnis)-Consumer Affairs-Food price increases-assistance to people on low incomes to maintain good nutrition; the hon. member for Champlain, (Mr. Matte)

Inquiry of the Ministry.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Pepin that Bill C-262, to support employment in Canada by mitigating the disruptive effect on Canadian industry of this imposition of foreign import surtaxes or other actions of a like effect, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Employment Support Bill
[ Translation]
David Réal Caouette: Mr. Speaker, I listened very carefully to the statement delivered this afternoon by the Minister of Industry, Trade and Commerce (Mr. Pepin) in respect of Bill C-262 in which he detailed the contents of the bill and the consequences it may entail for Canadian manufacturers. The bill purports to sustain employment in Canada.
The minister stated that all sorts of criteria can be established: to the left, to the right, in the industrial field or any other, to the extent that the bill is so bristling with assorted criteria that it becomes impossible for the public and even for manufacturers and official economic advisers to understand it because the minister himself admitted earlier. We do not know what will be the outcome in terms of employment or maintaining employment levels.
The minister also said, we cannot foresee the outcome, we cannot anticipate on our trade with the Americans, we cannot foresee the Japanese reaction, we cannot foresee the effects on the textile industry, on the pulp and paper industry, on the plywood industry, on the clothing industry, on all kinds of domestic industries. He bluntly stated, there is no way to tell what will happen, we can only try to find a solution. He recognized that Bill C-262 offers no solution.
Sunday night, I heard the minister on CBC talking with two newspapermen, his good friend Pierre Nadeau and a fellow from La Presse. The minister confessed quite frankly, if we behave like good little boys, maybe Mr. Nixon will soften the burden of his 10 per cent surtax!
If we grovel at the feet of the United States government on bended knees it might be that the U.S. government will take our heed of kow-towings. That is about what the minister said on Sunday to the two reporters present. He told them: The effects of the tax will be disastrous in three months, incalculable in six months, unbearable in a year. That is what the minister said.
And just now the Minister of Finance (Mr. Benson) will be repeating exactly what the Minister of Industry, Trade and Commerce (Mr. Pepin) told us this afternoon! A little later this evening, or tomorrow afternoon, the Minister of Agriculture (Mr. Olson) will repeat exactly the same thing, asking us to believe that the 10 per cent surcharge applied by the United States on imports will be the cause of an increase in the number of unemployed in Canada. As if Canada did not have any unemployment before the United States took that stand:
And on Sunday night, the minister said further to the two newspapermen: It is unfortunate that this surtax should hit us at this time, because our economy was booming, things were going better, there was no more unemployment, industries were working at full capacity, when the opposite is true.
Just two days ago, General Motors at Sainte-Therese-de-Blainville, near Montreal, announced that it had

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Employment Support Bill
advised the government in June that they would lay-off more than 500 employees, adding that the 10 per cent tax did not have anything to do with it.
The government-first, the Prime Minister followed by his henchmen-wil continue to tell us that this unfortunate American tax is responsible for unemployment in Canada.
Last spring we had 800,000 unemployed and there was no 10 per cent surcharge by the U.S. Bluffs are made in an attempt to blame the Americans for what is happening in Canada. If a plant closes down, it is Nixon's fault. If Chicoutimi or Gaspe Peninsula newspapers report that a plant has been closing down three days a week for over six months, it is on account of Nixon! If mines are stopping their operations in my region, it must also be because of Nixon. There is no more ore; Nixon must also be responsible.
It is easy, Mr. Speaker, to blame the neighbour when one lacks the courage to take his responsibilities. This is where the government is failing in its duty. It lacks the courage to take its responsibilities. It presents us this unimportant bill to make us believe that an amount of $80 million will sustain employment in Canada. They must be joking!
The government voted hundreds of millions, with the blessing of the Minister of Regional Economic Expansion (Mr. Marchand) and said: We shall succeed in controlling unemployment in our country. Let us see what are the results after three, four, five years of operation. ARDA in the Gaspe Peninsula has been a gigantic failure, as it has been throughout the province. In areas where funds could be usefully spent for the creation of new industries, the government is powerless and says no.
Mr. Speaker, I say that this is simply throwing dust at peoples' eyes. The $80 million the present government wants to grant Canadian industries affected by the famous 10 per cent tax are only a bluff. The government wants a solution, but not the same one as the leader of the New Democratic Party who has just suggested imposing a 10 per cent tax on Alberta gas and oil.
It could be a 10 per cent tax on the operation of the Ungava iron mines, a 10 per cent tax on our textile products, on our raw materials, copper, zinc, etc. It could be a 10 per cent tax on our forestry operations, a 10 per cent tax on our hydro electric resources, because the Americans, as we know, need electric power and they can only get it in Quebec.
There is talk, as we know, of a five, six or seven billion dollar project at James Bay. Why? Because probably 75 per cent of the electric power produced there will be exported to the United States. It could be a 10 per cent tax, then we could wage an economic war against the United States. Our population numbers 20 million while there are 200 million Americans. That would be some war. In the United States, per capita production is probably three, four or five times that of Canada. Can we afford to fight, to play on taxation, when there is such a simple way to avoid polluting our international trade with the United States?
There is a simple way. I put a question this afternoon to the Prime Minister (Mr. Trudeau). Instead of granting subsidies to industries which are affected by the imposition of the 10 per cent American tax, why would the government not suppress the famous 12 per cent excise tax on products manufactured in Canada?
This would not only help manufacturers who export to the United States, but also the Canadian consumer who cannot now afford to buy goods manufactured in his own country. There would be no need to make monetary changes to achieve this. By suppressing the 12 per cent excise tax, we would favour international trade without prejudice to anybody; we would at the same time help our trade.
Yet, nobody suggests that solution. Instead they want us to get the bill ready. They give us boxing gloves and urge us to fight the Americans, to impose taxes on American importations from Canada and to go on taxing Canadians as we are doing at present.
Another tax whose abolition should have been provided for by the government in a Bill C-263, as this one does not make sense, is the 12 per cent sales tax on building materials.
We have been demanding for a long time the abolishment of the tax on building materials. At the present time, our domestic and external lumber trade is in an extremely poor condition. We have reached the point where large companies are closing down. The mills are hardly and poorly operating. We do not know whether they will still be opened in two, three or six months. Those companies will probably obtain grants out of the $80 million mentioned in the bill. If the sales tax on building materials was withdrawn, the mills, plywood plants and others would get new orders in Canada. The members of the Social Credit know that Canada has an extensive production and that we will never be in position to consume our entire output. However, Mr. Speaker, it is possible to trade on an international level without penalizing the Canadian people and compelling our manufacturers, our factories, our industrialists to close their plants or to operate at a loss as is now the case. Every time a solution is proposed by the government it is aimed at increasing production but nothing is done for the consumer.
Mr. Speaker, as the title of the bill indicates, the purpose of this bill is
-to support employmentnot consumption, not to help Canadian consumers.
This legislation comes too late, because there was unemployment, I said it earlier, before President Nixon announced his measures. This is so true that everyone talks about it, even the papers. For instance, one could read in La patrie for August 11-before Mr. Nixon announced his measures-an article by Roger Lacasse in which he said that Canada's program is not Mr. Nixon's tax. The Minister Industry, Trade and Commerce said that these things cannot be foreseen. I say: to govern

September 7, 1971

is to foresee, and he who cannot foresee should at least quit governing. That would be a first solution. We did not anticipate that we would have unemployed; we did not anticipate that other countries would eventually have a production equal to ours; we did not anticipate that international trade would become increasingly fiercer. These are our very own Canadian problems, they are not the problems facing the United States, France or Britain.
When, for instance a premier such as Mr. Bourassa goes to New York City to borrow $75 million for Hydro-Quebec, he does not return with a wheelbarrow full of greenbacks. He returns with a little note on which these words are written: $75 million. More often than not, the Americans take this money from our own Canadian banks and charge an interest on our own credit. What are these $75 million based on anyway? On the American value? No. They are based on the value which we are going to develop, here at home, in our country and our province.
Mr. Speaker, according to 4,250 voters, on August 11, 1971, before the crisis the American dollar, the problem was that of bread and butter before the problem of the constitution. There are some who still keep on speculating on the Canadian constitution: there is bickering and quarreling, but when we ask the man in the street, the laborer, the family, the mother, the young people: what is the problem? The constitution? No. Bread and butter before the constitution. That is the problem. Before Mr. Nixon's tax, the problem was that of bread and butter in Canada. And we can produce enough to guarantee to all at least an honest living. And there is no doubt about that.
Mr. Speaker, in Le Devoir of Friday, September 3 last, Mr. Clause Lemelin wrote that it was not Mr. Nixon's fault if Quebec industry is slowing down. This was going on before the 10 per cent surtax. Mr. Lemelin wrote, and I quote:
In all the rest of the manufacturing industry, investments have been marking time in Quebec compared to those made in the neighbouring province. Here are a few examples.
I will now give you an example.
During the 1962-66 period, Quebec investments in basic metals have reached an average of $64.2 million per year; in in the neighbouring province. Here are a few examples.
This is almost a 15 million decrease per year.
At the same time, Ontario investments in basic metals increased from $165.3 million to $228.6 million per year. Thus the value of Quebec investments dropped from 39 per cent to 20 per cent compared to Ontario investments.
This applies to the central provinces only.
Mr. Speaker, the slowing down of Quebec industries was going on before Mr. Nixon imposed his surtax. On July 8, 1971, one third of the population of Montreal was poverty striken. This is well before Mr. Nixon!
What do we hear? For that inquiry, we had the assistance of the director of the Montreal Welfare Service, Mr. Jean Seguin, and the director of research of the Metropolitan Montreal Social Development Council, Mr. Perre Beauchesne. We also had to guide us the reports "Operation-Renovation sociale" by the Conseil des 24171-594
Employment Support Bill
oeuvres de Montreal and "Le Regime des allocations familiales vu par la famille"-not by any bureaucrat but by the family-by the Metropolitan Montreal Social Development Council. Mr. Marcel Simard and Mrs. Francine Duchesne-Fortin were in charge of the project.
But when the tax was announced, delegates, pilgrims from Ottawa, from a better world, went to meet officials from the American government. They met with the Secretary of State, the Secretary for Economic Affairs, but not the President, no. Suggestions were made. They came back saying: Well, the boys over there will not understand right now; they will not do any undue favours to the Canadian people.
Mr. Speaker, the next day Mr. Bourassa, premier of the province of Quebec, stated that he unreservedly supported the Canadian representatives sent to Washington. One can easily understand that. Mr. Bourassa promised
100.000	jobs on April 29, 1970. Now those 100,000 jobs have become 100,000 lay-offs in the province, which is not exactly the same thing. And Mr. Bourassa now says: I will not be able to achieve my goal. Did he achieve it before Mr. Nixon levied his tax? Is it Mr. Nixon's tax which prevents roads, hospitals, etc. from being built in the province of Quebec as well as elsewhere in Canada? The tax has nothing to do with that. Why is Mr. Bourassa saying that he unreservedly supports Canada's representations to Washington? It buys time and makes it possible to tell the unemployed: Well, listen, if you are unemployed, it is on account of the American people. It makes it easy to say to poor families: If you are poor, it is on account of the Americans.
I say, Mr. Speaker, that the 100,000 jobs amount to
100.000	lay-offs in Quebec notwithstanding the 10 per cent tax.
A while ago I mentioned Sainte-Therese-de-Blainville, where there will be more than 500 lay-offs a few days from now. According to the August 28 edition of Le Droit-which is not a long time ago-there was unemployment at the E.B. Eddy Company, in Hull, which laid off 175 employees and said that there would be still more.
Mr. Speaker, this took place before Mr. Nixon imposed a surcharge. Why did the government fail to take steps last spring when we asked, during the budget debate, that the Canadian people be provided with a system that would allow them to live? For the Canadian industry, the first market in the world is the domestic market made up of Canadian citizens, men, women and children, and we shall not settle the problem through grants to production which is already over abundant, but by increasing the purchasing power of the Canadian consumers, who, in turn, will seek out the products offered by the manufacturers. Then, jobs will be created in Canada. There is no other solution.
The United States government runs its business as it sees fit. It owes absolutely nothing to the Minister of Industry, Trade and Commerce. I do not agree, for instance, with what the Canadian minister said Sunday night on the C.B.C. network: If we behave like good little boys, they might look after us. How nice! And the minis-

September 7, 1971
Employment Support Bill
ter does not remember having said this to his dear friend Pierre Nadeau? He does not remember this? The recording will show that the minister actually said what I have just repeated.


Jean-Luc Pepin: -like good little boys!


David Réal Caouette: Exactly, good little boys since, it seems, we are unable to make decisions ourselves, here in Canada.
The first measure taken by the United States is to give up the gold standard. How long have we been saying, for our part, that the gold behind bank notes should be removed because it no longer has enough value. Creditistes have always claimed that. Why? Because gold is scarce and does not exist in sufficient quantities in times of plenty. That is so true that we still had a gold-guarantee, until May 1, 1940 but at the beginning of the 19391945 war that is on May 1, 1940 it was soon realized that there was not enough gold, according to the gold-guarantee, to create new credits for the conduct of the war. Therefore the gold guarantee for Canada's bank notes was just abolished. And the situation is the same today. Unfortunately, there are still university professors teaching that in order to give value to gold, to Canadian currency, to Canadian credit, they must be backed by a corresponding amount of gold. Retarded people aged 30? Some are 50 years old and still believe that, still believe in Santa Claus! They are professors at the Ottawa University and the minister knows it because he was teaching there at one time. He probably told the students that our bank notes were guaranteed by gold, because he taught political economy. In fact, he was paid to say that. So, he said it, but he did not know it, because it was only around 1946, 1947 and 1948, that he learned that, since May 1, 1940, Canadian bank notes were no longer guaranteed by gold. If the minister does not believe me, he can ask his colleague, the Minister of Finance, and the latter will show him in black and white.
Mr. Speaker, that also proves that the present system is outmoded, that it must be changed, because the present situation was not created by the Creditistes, but by the crazy system under which we live. Well might the minister struggle with this, then tell us frankly that the bill is not a solution. The leader of the official opposition (Mr. Stanfield) rises in turn and tells us: I realize that this is no solution, but we will support the bill just the same.
The leader of the New Democratic Party (Mr. Lewis) says: Get mad and tax the United States! The United States are taxing imports! Let us in turn tax exports. All that we are selling in raw materials, let us tax that to fight the Americans back. And the minister said: Perhaps we would not win in the long run, we might end up losing. That I believe because our population is a mere 20 million as opposed to 200 million Americans.
Anyhow, Mr. Speaker, the present conditions prove that the monetary system is done with and that it should be altered. If we do not tackle it, we will witness worse difficulties than those which are now confronting us.
We are not the only ones to demand a change. The establishment of a credit paper money is now being
mentioned, not by the Creditistes but by the highest banking authorities. In an article entitled: "The Bank of America suggests a reform of the monetary system", the following could be read:
The next step could well be special drawing rights on the currency of the international financial system, said the big Californian bank. This would enable the countries-including the United States-to adjust the equivalence of their money in terms of SDR while leaving untouched the relation between SDR and gold. It would not be subsequently impossible to widen our original concept of SDR to allow them to fill more conventional functions of money than we can think it feasible up to now.
When we spoke of new credits, of the use of credits by the Bank of Canada, smart alecks in Canada, well-informed economists, claimed we were advocating funny money. And now the Bank of America proposes funny money. But it is taken seriously and governments are studying the proposal. The ten major members of the IMF meet and create paper-gold.
A country could stamp "100 million" on a slip of paper and it would be worth 100 million in gold. Where is the gold? Nowhere, but it is called 100 million in gold. I have never seen so much illogicality. That proves that what we have been clamoring for 35 years is coming true, is being understood by the whole population.
The ministers are grappling with a funny money system; they are going in circles. When the Minister of Industry, Trade and Commerce goes back to his riding, his electors give him a tongue lashing about the textile industry. The minister tells them-and that, before the surcharge of President Nixon-We will have you retire at 54 because the textile industry has fewer orders, less publicity than before.
But the Japanese are still exporting to Canada. We are not against trade with Japan. But the minister knows what he has to face when he visits his riding in the Eastern Townships. There, he meets all types of workers. It is impossible to create jobs precisely because not enough attention is paid to Canadian consumers.
Mr. Speaker, may I call it six o'clock?


The Acting Speaker (Mr. Laniel):: It being six o'clock, I do now leave the chair.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
David Réal Caouette: Mr. Speaker, before recess I was suggesting that instead of subsidizing the industries which will be affected by the 10 per cent surcharge announced by President Nixon, the government should rather remove the notorious excise tax, the abolition of which we are not the only ones to demand. Among the proposed recommandations, we ask, as I did this afternoon for that matter, that the sales tax on building materials be abolished. The Minister of Finance has been objecting to that for several years, but he will eventually have to revise

September 7, 1971

his position with respect to this tax which prevents the building of homes, the reduction in the price of homes, which would enable a greater number of people to secure housing materials.
As to the other solution which I mentioned this afternoon, it was advocated only a few days ago, on September 3, by the president of the Chrysler Company of Canada, Mr. Ron Todgham, when the new 1972 cars were put on display.

Ron W. Todgham, president of Chrysler Canada Ltd. of Windsor, suggested yesterday that Canada should remove the 12 per cent federal sales tax to spur the economy.
"If the United States, with its lower tax rates, felt it imperative to adopt such radical measures as we have witnessed in the past month, perhaps we here in Canada may be reaching the point of no return, especially in view of the potential impact of the U.S. measures on Canadian economic activity," he said.

Mr. Speaker, we are not alone therefore in advocating the abolition of the 12 per cent excise tax. This is in contrast with the suggestion made by the leader of the New Democratic Party, as reported in La Presse of September 4, and I quote:
Lewis advocates a 10 per cent tax on the export of natural resources.
The leader of the New Democratic Party stated that Canada was not a banana republic nor a weak country. We are aware that it is not a banana republic,, but we also know that we often have to purchase bananas from the United States.
As to the weakness of Canada, it is mostly due to the government's irresponsibility and its fearful avoidance of real problems. Even though a hundred bills C-262 were to be introduced, each authorizing an $80 million expenditure, which is a huge amount, the problem would still remain unsolved.
We can help industry to produce more, of course, but the problem is not so much to produce more than to distribute what has already been produced. And that production, according to the Creditistes, should reach primarily the Canadian consumers. Not the American consumers! The Creditiste solution is simple, as we have heard often enough. The Minister of Finance has told us time after time; it is simple but nobody takes the trouble to test it. All sorts of gimmicks have been tried and they are still coming up with more. To maintain what? Nothing- The Minister of Finance knows exactly what our position is in relation to the United States. It will not improve, far from it even if we pumped hundreds of millions into the industries affected by American exports and imports.
Mr. Speaker, the Creditiste solution is the compensated discount to the consumer. The removal of the 12 per cent excise tax would be one kind of compensated discount.
I see in his seat the Minister of Agriculture (Mr. Olson), an out and out Creditiste who, since he became a Liberal is not allowed to rise and speak on Creditiste solutions, although he knows them as well as I do.
The other point I want to mention is the distribution of a dividend based on Canadian production, rather than on American production. This dividend should be based on
Employment Support Bill
Canadian agricultural production, on Canadian production of furniture or clothing, on the development of Canada's natural resources.
I mentioned this afternoon the huge James Bay project, which may cost $6 or $7 billion. The Canadian government, and the Quebec government, will probably go to New York and kneel before Mr. Rockefeller, and beg him to help finance the development of James Bay, in the northern part of the province of Quebec, and of Canada.
Mr. Speaker, I would like the Minister of Finance to tell us, in his speech, why we cannot use Canadian funds, loaned by the Bank of Canada, for the development of the fantastic James Bay project. Why not? Is a Canadian cheque any different from an American cheque? The Americans will stake their $6 billion on the resources of James Bay, while us Canadians are not smart enough to do the same thing.
Mr. Speaker, the solution proposed by the government will only slow down our economic growth. Clause 15 of the bill which has been mentioned this afternoon by the leader of the NDP provides that regardless of the Board which the government will establish, it will be able to make grants to firms turned down by the committee which is in the process of being created. The government will be able to act under orders of the Governor in Council. Mr. Speaker, clause 15 is a political patronage clause. It means that independently of the Board the government will have the right to award subsidies of certain firms. The minister of Agriculture is making a gesture to deny this. He might be the first to monkey with election patronage at that time.
Mr. Speaker, why should there be a board, a committee, if the government, under clause 15, can make decisions independently of the Board? Wherefore that Board? To set up more bureaucrats? That is what those $80 million will be used for. It will take another bureaucratic organization to know whether some company will not be fooling us. The Minister of Industry, Trade and Commerce told us so this afternoon. There must be supervision, to make sure that some people will not try to play tricks on us.
Should the government decide to abolish the excise tax, that would apply to everyone. There would be no need for further bureaucracy. Nor would we need to watch whether someone gets it or not. It would be abolished for everyone, and while this will promote our exports to the United States, it will also promote Canadian consumption.
Mr. Speaker, before resuming my seat, I wish to move an amendment to Bill C-262, an amendment contrary to the bill, one that is realistic, that asks the government to act in a positive fashion and not in a negative one, as is the case with Bill C-262.
I move, seconded by the hon. member for Lotbiniere (Mr. Fortin):
That Bill C-262 be not now read a second time, but that it be resolved that, in the opinion of this House, the Government should immediately abolish the 12 per cent excise tax on products manufactured in Canada.

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Employment Support Bill


Mr. Speaker:: Hon. members have heard the amendment moved by the hon. member for Temiscamingue. I have listened carefully while the hon. member, for the information of his colleagues, read the amendment which he wishes to submit to the approval of this House. I must say right away to the member for Temiscamingue that I have serious doubts about the legality of his amendment, strictly from the point of view of parliamentary procedure. Still, I should not want to give my decision without hearing the comments members may want to make to enlighten me. If some members wish to express their points of view on the matter, I shall be pleased to hear them out. Otherwise, I am ready to give my ruling.


Edgar John Benson: Mr. Speaker, I wonder if I might request that the hon. member send me a copy in English, because I usually send my notices to him in French.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


David Réal Caouette: Mr. Speaker, I did not have time to make a translation, but I will personally make one for the minister and send it to him.


André-Gilles Fortin: Mr. Speaker, the hon. member for Temiscamingue has just introduced a reasoned amendment to reject, if it were, Bill C-262. My hon. colleagues have heard the member for Temiscamingue insist on the fact that the bill must essentially be aimed at providing subsidies to industries, the government giving them its support so that they may solve the difficulties brought about by the American decision. The hon. member for Temiscamingue would like to see it done the other way around. Instead of giving certain amounts to individuals the government should deal with the problems of the consumer and producer and should immediately abolish the 12 per cent excise tax. It therefore contradicts the bill itself and, in that regard, it complies with citation 382 of the Fourth Edition of Beau-chesne's Parliamentary Rules and Forms, where we may read the following:
It is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a Bill, to move as an amendment to the question, a resolution declaratory of some principle adverse to .. . the principles ... of the bill . . .
Mr. Speaker, I basically contend that according to its principle the bill suggests that the federal government, faced with the American position, distribute a total of $80 million, at the cost of $300,000 in management, to undertakings complying with certain basic criteria and this in order to mitigate the disruptive effects of the American decision. As I said, that is the basic principle of the legislation.
My colleague the hon. member for Temiscamingue (Mr. Caouette) claims-and I agree with him-that the principle of the bill is not in itself acceptable to our party and that it is nothing but bad business, a bad administrative principle.
This is why he proposes, with our support, to turn the principle of the bill around and that instead of granting
subsidies, we eliminate this excise tax, which would have just about the same results, and even more, and reach producers and consumers.
Citation 382 of Beauchesne's clearly indicates that it is also competent to a member who desires to place on record any special reasons for not agreeing to the second reading of a bill-this is indeed our case, since we do not agree with the principle of the bill-to move as an amendment to the question a resolution declaratory of some principle adverse to or differing from, the principles, policy, or provisions of the bill.
Now, what does this amendment say? Here is what it says, and I quote:
That Bill C-262 be not now read a second time-
-it is a flat refusal-
-but that it be resolved that, in the opinion of this House, the Government should-
We comply even more with Beauchesne's, citation 382, when we say that the Government should ...
-immediately abolish the 12 per cent excise tax on products manufactured in Canada.
There, Mr. Speaker, is the conflicting principle stated in the said bill, and I shall spare you the long quotation from May's Parliamentary Practice, 17th edition, where almost the same interpretation of the rules can be found.
Besides, citation 382 in Beauchesne's Parliamentary Rules and Forms also states the following:
-a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill, or expressing opinions.
In the case of the New Democratic Party, the amendment moved this afternoon by the hon. member for York South was rather a resolution declaratory stating a lengthy enumeration of somewhat vague things, while the amendment of the hon. member for Temiscamingue is about precise measures, that is a 12 per cent tax, which cannot be found in the bill, and it is contrary to the very principle of the bill.
Mr. Speaker, we believe that your usual competence and your kind attention towards hon. members will guide you in rendering a fair decision by which we shall abide.


Mr. Speaker:: I thank the hon. member for Lotbiniere for his remarks on the procedural aspect of the amendment moved by the hon. member for Temiscamingue.
I must remind the hon. member for Lotbiniere that an amendment, even one moved in the form of a declaratory resolution, must nevertheless abide by the principle of relevancy. I take the liberty of quoting in that respect an excerpt from the 17th edition of May's Parliamentary Practice on page 527:

The principle of relevancy in an amendment governs every such motion. The amendment must "strictly relate to the bill which the House, by its order, has resolved upon considering"-

In other words, and even in the case of an amendment moved in the form of a declaratory resolution, as I said, the principle of relevancy still applies.

September 7, 1971

The alternative proposal submitted by the hon. member for Temiscamingue seems to me to be worded in terms that go far beyond the scope of the bill of the motion now before the House.
The hon. member said so himself. This is an alternative proposal, suggesting another bill. Essentially, the hon. member wishes to substitute his own bill to that introduced by the government. In a sense, I think that he will himself recognize that the motion is not in order.
I regret having to render this decision.


Edgar John Benson: Mr. Speaker, the bill introduced today for urgent consideration of the House seeks authority for the swift establishment of an employment support program. This immediate step is necessary because of the important and far reaching changes that have taken place in the whole international economic system since Parliament adjourned in June. These changes are a matter of critical concern to Canada. No other country stands to be as deeply affected, directly and indirectly, by the crisis confronting the post-war system of trade and payments, a crisis brought to a head by the wide ranging series of measures announced by President Nixon on the night of August 15.
As one of the foremost trading nations, we have a vital interest in ensuring the maintenance of a sound and stable international trade and monetary system. We are even more vitally affected because the annual flow of capital, goods and services between Canada and the United States is far greater than that between any other two nations in the world, amounting to about $10 billion from Canada's point of view, which is about one-ninth of our gross national product; from the United States' point of view it is about one-thousandth of their gross national product.
The legislation before the House is a first, important step to deal as a matter of urgency with the most immediate and pressing problem confronting Canada as a result of the temporary surcharge of up to 10 per cent imposed by President Nixon on a wide range of U.S. imports.


David Réal Caouette: Mr. Speaker, I rise on a point of order.
Mr. Speaker, I do not want to interrupt the hon. minister very long. I have no question to ask him either. But the sound system is so weak that we cannot understand the translation of what the minister is saying. We believe he must be saying something intelligent at least and we would like to hear him.
Mr. Lambert (Edmonton Westlr Increase the volume. [English]


Edgar John Benson: I can well understand the hon. member's desire to hear the important words I have to say tonight.
Employment Support Bill


Some hon. Members:: Hear, hear!


Edgar John Benson: Unfortunately, I have no control over the sound system and I cannot shout any louder than I am shouting now, although the hon. member can, because I often heard him do so on television.
About one-quarter of Canadian exports to the United States are at present covered by the surcharge, approximately $2.5 billion worth on the basis of 1970 trade. As hon. members will be aware, we have been pressing for a total Canadian exemption from the surcharge on grounds which I shall discuss later at greater length. Discussions between the two governments are continuing and our position remains under active consideration by the administration, even though we have not had the benefit of the Leader of the Opposition (Mr. Stanfield) going down to Washington to make representations about it.


George Harris Hees: If you had, you would have an agreement right now.


Edgar John Benson: If we can have an agreement right now I will try to provide a D.O.T. aircraft for the Leader of the Opposition to go tonight.


George Harris Hees: If your visit was a success, I should hate to see a failure.


Edgar John Benson: George, you only have to go back two years to see a failure.


George Harris Hees: Get some new writers.


Edgar John Benson: For the present, it is critically important that we develop a program to minimize the immediate impact on the Canadian economy of the U.S. surcharges. My colleague, the Minister of Industry, Trade and Commerce (Mr. Pepin) has already outlined the nature of the program provided for in the legislation now under consideration. Let me say only that it is directed to providing significant assistance to those factories and firms which would be most severely affected by the continued imposition of the special duties.
There is no question, Mr. Speaker, that a number of the measures announced by the President pose a threat, although one of still unknown magnitude, to a continuation of the strong growth currently under way in our economy.


Some hon. Members:: Hear, hear!


Edgar John Benson: And, of course, as I have explained to Secretary Connally, to the extent our economy is damaged the U.S. program will be self-defeating.
Virtually all the major indicators provide clear evidence that the economy has, in fact, been continuing to expand at a steadily accelerating rate. Just a week ago, Statistics Canada reported that during the second quarter of this year Canada's production of goods and services rose by almost $3 billion to an annual rate of $91 billion.


Some hon. Members:: Hear, hear!


George Harris Hees: Now tell us about unemployment.

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Employment Support Bill


Edgar John Benson: In value terms, the gross national product rose by 3.3 per cent during the quarter and real output by a substantial 2.1 per cent, an increase which Statistics Canada reported as among the best experienced in recent years. At an annual rate, this represented an increase in real GNP terms, without inflation involved, of 8.9 per cent per annum. In addition, Statistics Canada doubled its estimate of real growth of our national production during the first quarter of 1971 from .6 per cent to 1.2 per cent. This substantial upward revision is the result of later information and confirms the view taken in my last budget that the economy was firmly embarked upon a strong upward course.


George Harris Hees: Now tell us about unemployment.


Edgar John Benson: I know this upsets hon. members opposite, but it is happening.


George Harris Hees: That speech is nine months old. Tell us about unemployment.


Edgar John Benson: The average quarterly rate of growth in the first half of this year is now estimated by Statistics Canada to be a full percentage point above the average quarterly rate of real growth during the previous four quarters. The quickening pace of the economy has been sparked by sharply increased spending by consumers on goods and services. During the second quarter these expenditures rose by 4.3 per cent, which was the largest quarter to quarter increase in many years.


Mr. Harkness:: Why are you in trouble, then?


Edgar John Benson: You are in trouble because you have no platform.


Some hon. Members:: Oh, oh!


George Harris Hees: We never had it so good.


Edgar John Benson: This expansion of consumer spending continues to be reinforced by steadily rising labour income, which grew by 3.2 per cent during the second quarter. The rise in labour income in turn reflects the strong growth that has been taking place in employment. Between April and July of this year, 817,000 more Canadians were at work. This increase in employment was 26 per cent higher than that which occurred during the same period last year.


George Harris Hees: Now tell us about the unemployment.


Edgar John Benson: Because this very substantial increase in employment has been matched by an almost equally substantial increase in the size of the labour force of 817,000, which is a tremendous growth, the rate of unemployment in July, the last month for which figures are available, declined only marginally, from 6.4 per cent to 6.3 per cent on a seasonally adjusted basis. We are confident that the trend will be that unemployment will continue to decline as the economy gathers further strength. My hon. friends opposite know that this will happen, and I hope that the Leader of the Opposition, who guaranteed
that unemployment would not go below 6 per cent this year, will turn his leadership over to the hon. member for Prince Edward-Hastings (Mr. Hees) when it does.


George Harris Hees: Obviously this is Jack Benny's successor.


Edgar John Benson: All I can say, Mr. Speaker, is that it is better than growling and groaning. There are growing indications that one element of that further strength may come from increased capital investment undertaken in response to growing consumer demand. During the second quarter, total capital investment expenditures increased by 5.7 per cent, while those undertaken by business for machinery, equipment and construction rose by 6 per cent. Outlays on new housing remained very strong, the second quarter increase matching the 4.5 per cent increase recorded in the first. The mid-year survey of capital investment spending intentions which was published recently anticipated an increase in total investment outlays in 1971 of 11 per cent over 1970. This is an upward revision of almost two percentage points over the initial survey published earlier in the year, with most of the increase anticipated in the private sector.
An important element of the improving economic picture is the recovery of corporate profits and the consequent improvement in the ability of companies to undertake expanded capital investment. Profits increased by 8 per cent in the first quarter and by the same amount in the second, returning the level of corporate earnings close to the peak that was hit in the first quarter of 1969.
The fact that business inventories declined during the second quarter and that the ratio of stocks to current sales and unfilled orders was unusually low suggests that the rebuilding of inventories will provide an important new source of demand for goods during the second half of this year.
I should remind members that the gathering momentum of the economy will continue to be reinforced in an important way by the expansionary budget measures which I introduced in the House on June 18, and by the removal of a major cause of uncertainty in the business sector with the introduction of the tax reform legislation this year.


Douglas Scott Harkness: What unbecoming modesty.


Edgar John Benson: At least I am probably going to run again. As I indicated earlier, Mr. Speaker, the bright prospect for the continued acceleration of Canada's economic growth has been clouded by the possible adverse impact of some of the measures announced by President Nixon. Because of the close links between the two countries, of course, it is undoubtedly true that Canada stands to gain some benefit to the extent that measures undertaken by the administration to strengthen the United States economy are successful in achieving their purpose.
It is probable that the initial impact of the surcharge on the Canadian economy as a whole will not be too severe. For certain sectors of the economy, however, the surcharge poses serious problems immediately and it is these problems which the present bill is designed to alleviate. The longer the surcharge is applied against

September 7, 1971

Canadian goods, the greater will be the adverse impact of the measure on the whole economy, an impact that could more than offset any benefits to be derived from an acceleration in growth of the United States economy.


George Harris Hees: Jean-Luc said it all this afternoon, and a little better, Ben. Just skip the next few paragraphs and get down to the guts of what you are going to do.


Edgar John Benson: Four days after the announcement of the United States economic measures, the Minister of Industry, Trade and Commerce and I-unfortunately, George Hees was on holiday and could not go with us-led a Canadian delegation to Washington to meet with Treasury Secretary John Connally, Commerce Secretary Maurice Stans and their senior officials. The primary purpose of our discussions was to explain to the United States that if they damaged Canada it would hinder rather than help their program. That is why it is in the interest of the United States to exempt Canada from the surcharge.
During our meeting with members of the administration we readily acknowledged the necessity for the United States to take appropriate steps to deal with its deteriorating balance of payments and exchange situation. We recognized that they had posed increasingly critical problems, not only for the United States but for the continued stability of the international trade and monetary systems.


Robert Lorne Stanfield: Did they ask for your services?


Edgar John Benson: Yes, they asked me to help them all I could in the Group of Ten. The solution of those problems and the improvement in the domestic economy of the United States by fair and effective means is in the interest of every nation in the western world: Canada, Britain, France and Germany all benefit, and the Japanese too, if they improve their situation. At the same time, however, we also emphasized that for the United States to attempt to deal with its balance of payments problems by measures that could cause such disproportionate damage to the Canadian economy would be self-defeating. Canada is the best customer of the United States. Roughly a quarter of all United States exports abroad are purchased by Canadians, more than the total sold to Germany, Britain, France and Japan combined. For the United States to adopt measures which would have the effect of restricting the growth of the Canadian economy could only serve to restrict the amount of goods and services Canada can import from the United States.
We also pointed out in our discussions with members of the administration that the reasons put forward by the President for imposing the surcharge did not apply to Canada. Our currency has not been unfairly valued in relation to the United States dollar. Since a year ago last May we have allowed the Canadian dollar to float. Our dollar is valued each day by the forces of demand and supply. As a result of this process the exchange rate has appreciated by more than 6 per cent. This surely cannot be considered unfair in the sense expressed by President Nixon.
By the same token, the United States government has not contended that Canada maintains trade restrictions
24X71-60
Employment Support Bill
that impede their exports to this country in a major way, a complaint they have directed against some other nations. Given the massive volume and diversity of trade between the two countries, there are, of course, almost always minor problems concerning each government, but the United States has acknowledged there is not at present any problem outstanding between Canada and the United States that they regard as one of substantial dimensions.
While the United States has indicated concern about the substantial surplus Canada built up with it in merchandise trade last year, we have pointed out that this was due to a number of special and temporary factors. Even this surplus of over $1 billion was more than offset by our deficit with the United States in non-merchandise trade, with the result that we ended last year with a small over-all deficit on current account. With the advance of the Canadian economy and the consequent rise in our imports, Canada's merchandise surplus with the United States is in the process of declining, and the current account deficit increasing.
There has also been a substantial decline in the flow of long-term capital into Canada over the past several months, which undoubtedly reflects to some degree the request which I made to provinces, municipalities and corporations to restrict their borrowing abroad to the greatest extent possible because of the upward pressure, at places, on the Canadian dollar. While our most immediate and pressing concern is the impact of the surcharge on Canadian exports, the series of protective measures put forward by the administration will have implications for the longer term which may be of even more fundamental importance.
Since the mid-thirties the world has turned away from protectionism. Canada and many other countries worked with the United States to reduce barriers to international trade substantially, including our own. This move was consistent with, and in fact a vital part of our own industrial and commercial policy. Within this framework a series of Canadian governments has sought to build up a sound and viable manufacturing industry in order to escape from undue dependence upon the output of natural resources and to provide employment for our fast-growing labour force. In earlier years the manufacturing sector was confined largely to producing a wide variety of goods in relatively small volume to serve the Canadian market alone. I felt shades of this when I heard the leader of the NDP speak this afternoon. During the post-war period, however, we have made intensive efforts to restructure this sector of the economy so that it could take advantage of the opportunities for multilateral trade by specializing in the efficient production of goods that could compete effectively in the markets of the world.
Some 85 per cent of exported Canadian finished goods are sold in the United States. The basic question that is raised for consideration is whether we can continue to count on access to the United States over the longer term on mutually acceptable terms-that is, on terms negotiated and agreed between the two governments-or

September 7, 1971
Employment Support Bill
whether we must reconsider our whole industrial and commercial policies in the light of events of the past few weeks.
The discussions which the Minister of Industry, Trade and Commerce and I held with members of the administration were followed a week later by further talks between senior Canadian officials and their United States counterparts to examine in greater detail the impact of the surcharge on various sectors of the Canadian economy. It was agreed that these talks would be resumed following further study by the two governments.
Meanwhile, the implications of the United States measures are also being examined in a number of international forums. The Council of the General Agreement on Tariffs and Trade has already met to study the issue. As chairman of the Group of Ten, I have convened a meeting of ministers in London on September 15 to give consideration to the international monetary questions raised by the United States move and the reaction to it by a number of leading industrial nations. To lay the groundwork for that discussion senior officials of member countries of the Group of Ten met in Paris late last week. The meeting of ministers of the Group of Ten in London will be followed by another meeting in Washington prior to the beginning of the annual meeting there of the International Monetary Fund.
As the Prime Minister (Mr. Trudeau) said in a statement following the announcement of the United States economic program, much of our effort on the international front has been directed to dampening any tendency abroad to adopt counter measures of a retaliatory nature, which could escalate into an international trade war. I think that the measures proposed in this bill are not of that nature. We have also sought to contribute constructively to the intensive discussions now going on about the way in which the international monetary system should be restructured to end the severe imbalances which have created intolerable strains on the existing system, and to restore international confidence.
We agree with the United States that one of the first requirements of an improved international economic system is a realignment of exchange rates to reflect more accurately the real balance that should exist. It may well be that reaching agreement on adjustments of this kind may be closely interrelated to the securing of agreement with regard to the removal of restrictive United States measures. Ultimately, however, a proper balance will be achieved only if the relationships of exchange rates reflect the underlying forces at work in the market.
It is not feasible for Canada or any other country to attempt to establish and maintain unrealistically low or unrealistically high exchange rates. Our own experience early last year, and the more recent experience of several major countries, dramatically underline the truth of this contention. I am, however, acutely aware of the fact that the appreciation of our currency has raised difficult problems for a number of sectors of the Canadian economy, many of which have now seen their problems compounded by the new United States surcharge on imports.
In the difficult and still evolving international situation that confronts us it is important to move with extreme care and careful consideration of all the many complex elements involved. As a government we are determined to do everything that is reasonably possible to protect the economic interest of Canadians against the adverse consequences that could result from restrictive measures adopted by other nations. The program provided for in the legislation placed before the House today is an important first step to deal with the immediate problem that has been raised for a number of sectors of the Canadian economy. As a matter of contingency we have given and are continuing to give intensive consideration to a number of other measures. We will not hesitate to bring forward such measures if they are warranted by the situation as it unfolds in the days and months ahead.


Max Saltsman: Mr. Speaker, I wonder if the Minister of Finance (Mr. Benson) would accept a question. I think it is rather important at this time. In view of the fact that the minister concluded his speech with fine, flourishing promises that he has some measures in mind, would he indicate what are those measures?


Mr. Speaker:: Order, please. The hon. member has sought the floor for the purpose of asking a question. I am sure he proposes to make his own speech. If he wishes to ask a question, the Chair will recognize him; if not, the Chair will recognize the hon. member for Edmonton West (Mr. Lambert).


Max Saltsman: Thank you, Mr. Speaker. Would the Minister of Finance indicate what measures he has in mind should the present measure before the House not prove effective?


Edgar John Benson: Mr. Speaker, this depends greatly on how the international situation develops. When we are talking about future contingencies we have to consider all the possible actions of various countries in the world. All I can say is that we are continuously considering the situation in an attempt to determine what we would do if various contingencies arose.


Mr. Speaker:: Has the Leader of the Opposition (Mr. Stanfield) the consent of the Minister of Finance to ask a further question?


Robert Lorne Stanfield: Yes, Mr. Speaker. Would the minister accept another question for the purpose of clarification? Are the additional measures he has in mind related to international problems, or does he have in mind additional measures in relation to our domestic economy?


Edgar John Benson: As I have often told my hon. friend, a review of the domestic economy goes on continuously in the government and we take the measures we need to take at appropriate times. I know he is terribly upset because the economy is moving ahead.


Marcel Joseph Aimé Lambert: Mr. Speaker, we were convened today in a rather dramatic setting of

September 7, 1971

anticipation that we would be presented by the government with a measure that would deal with what I believe has been artificially inflated by the government for its own purposes. I refer to a situation which has consequences arising out of the action of the United States government.
I hope the Minister of Finance (Mr. Benson) will remain. It seems to me we have seen two ministers performing here today much in the nature of two hunters in big game country who are busy getting ready to set off. You expect them to go hunting for moose and bear, but they say "Oh, no; we are only hunting for squirrels and rabbits". That is precisely what the two ministers performed like today-rabbit or squirrel hunters. They gave us practically nothing. The bill introduced by the Minister of Industry, Trade and Commerce (Mr. Pepin) is really but a bandaid. That is all it is. It is a small measure which promises nothing.
It was interesting to listen to the Minister of Finance juggle figures back and forth in order to tell the story he wanted to tell. One could take much the same figures and come up with a rather different result. If the Minister of Finance does not believe that-and a number of government backbenchers seem to think other than I do-why does he not tell those figures to the thousands and thousands of unemployed in this country and see whether they will believe everything is all rosy? The Minister of Finance tonight had almost the unmitigated gall to tell the unemployed they never had it so good because the situation in the country was never so good. We know very well that is not the case and that there will be more unemployed. It is unfortunate, but we will see more unemployed as the winter comes along. I venture to say that this is the stage which is being set by the government so that it can blame any increase in unemployment on the results of the United States action.
In respect of the remedial action to be taken by the board which is to be set up under this bill, it will be months before anything can be accomplished. It will be months before anything can be done under this bill.


Jean-Luc Pepin: Before what?


Marcel Joseph Aimé Lambert: Let us have that again.


Jean-Luc Pepin: Before what?


Marcel Joseph Aimé Lambert: It will be months before there are any concrete results and before some of the, shall we say, inexactitudes, generalities and uncertainties about which the Leader of the Opposition (Mr. Stanfield) spoke this afternoon are resolved. The Minister of Industry, Trade and Commerce knows this board will not be set up and functioning until December at least.


Jean-Luc Pepin: Let us pass the bill.


Marcel Joseph Aimé Lambert: We passed the bill in respect of the Canada Development Corporation and we have not heard about it since.


Robert Lorne Stanfield: We will pass the bill if you fellows stop passing the buck.
Employment Support Bill


Marcel Joseph Aimé Lambert: We have not had anything in respect of the Canada Development Corporation. The minister knows full well that much the same mechanism was required as a result of the Kennedy round concessions. It took not weeks but several months for it to work at all effectively. It will be the same in respect of this particular operation. It will take several months before it is functioning.


Jean-Luc Pepin: Place your bets.


Marcel Joseph Aimé Lambert: I will tell the minister privately what I am prepared to bet. It will take several months before the first case is heard and adjudicated. The minister this afternoon did not tell us much more than was contained in the press release we already had. The minister actually gave us a beautiful expose written by the information officers of the department.


Jean-Luc Pepin: That is not true.


Marcel Joseph Aimé Lambert: The minister read it in that manner; that is what it sounded like. Did it come from Information Canada? I would ask the Minister of Transport (Mr. Jamieson) whether he relies on Information Canada to write his speeches. Yes, we know he can snort. That is the estimate he has of that organization. This Minister of Industry, Trade and Commerce did not give us the information we wanted. Certainly the Leader of the Opposition and myself had indicated we would support him in principle depending upon what he told us, but this afternoon he did not tell us very much.


Jean-Luc Pepin: What do you want to know?


Marcel Joseph Aimé Lambert: As a matter of fact, if the minister is in such a great hurry to pass this bill he should have the regulations. If this bill were passed, say tomorrow, it could go to the finance committee this week and then the minister would appear and say he does not have the regulations. Let us have the regulations.


Jean-Luc Pepin: Place your bets.


Marcel Joseph Aimé Lambert: Will the minister have the regulations? If they would be ready for Thursday or Friday, are they not ready now?


Jean-Luc Pepin: They will be ready on time.


Marcel Joseph Aimé Lambert: Oh, they will be ready on time-about the end of next week! These are the things we want to find out. Clause 18, for one, is amazing. Incidentally, this bill has a great number of deficiencies in it. I am surprised the minister is prepared to turn a bill like this in to the Finance Committee, because there will have to be amendments since there are too many loose ends in it. In any event, before we will accept the bill we want answers in respect of who may qualify, how the amounts will be computed, what we are going to do and all these other uncertainties which were advanced by the Leader of the Opposition, the hon. member for York South (Mr. Lewis) and others.
This acceptance is not an acceptance in principle. This is a motion to refer the bill to the Standing Committee
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on Finance, Trade and Economic Affairs. So far as I am concerned, I would agree to refer this bill to the committee after a number of observations have been made on all sides of the House.
Just what are we getting at in this particular bill? In one part of President Nixon's speech it is stated that the intention is to strengthen the U.S. balance of trade and payments during a period while more fundamental measures are coming into effect. One has perhaps to look back and see the reason for this particular measure. There is no doubt that the United States had a very serious problem on its hands. That could be the understatement of the year. Canada had a problem in 1962 and took action which it had the right to take. It had the full right to take that action. Some of the consequences will be different for the various countries. I am glad the Minister of Finance cleared this up because I was concerned about the words of President Nixon when he said:
This import tax is a temporary action. It isn't directed against any other country. It is an action to make certain that American products will not be at a disadvantage because of unfair exchange rates.
I wanted to know where Canada's exchange rate was unfair vis-a-vis the United States, and the explanation was given by the Minister of Finance (Mr. Benson) as given to him by the United States authorities. I think it was not fully satisfactory, but at least that reason was given.
There is no doubt that some of the currencies of the world were undervalued, and here I find it extraordinary that we received suggestions from various quarters that Canada should artificially peg its dollar at about 90 cents or 92 cents in order for us to get right back into the market. Tonight I would have preferred to have heard the Minister of Finance tell us more about what Canada will propose to put an end to what is a rapidly deteriorating situation in the international monetary market.


Robert Lorne Stanfield: I propose that we loan the Minister of Finance to the U.S.


Marcel Joseph Aimé Lambert: That is one minor export we could make, and for free.


Donald Campbell Jamieson: How much will you take for Nixon?


Marcel Joseph Aimé Lambert: The international monetary arrangements that existed are now a complete shambles and there is no doubt in my mind that if we want to avoid the chaos and the international trade piracy that existed in the thirties we must get back to some orderly system of exchange. It may be unfortunate that this action by the United States was necessary to precipitate this, shall we say, very extensive result, in order to bring people to their senses with regard to a situation that had been deteriorating for the last couple of years.
On many occasions we have spoken about this situation in the House. We have asked whether or not Canada was going to advocate a wider range, instead of a plus or minus 1 per cent, within the range of variations in the

international monetary market. We have asked whether there could not be a wider range so that simple gamblers-I should not say simple, but pure gamblers in the international monetary market would be faced with the prospect of suffering a loss.
Prior to the devaluation on August 15 by the United States there was no way in which an international monetary gambler could lose any money. That is why there was an open field, and whenever a currency was available for raiding, a raid resulted. Now we would like to know from the Minister of Finance whether Canada is definitely going to make a proposal in this regard in order to get the arrangement back on the rails. We must remember that the minister is chairman of the Group of Ten monetary committee.
I believe that the surcharge will be peanuts compared with the effect on Canada if we have a wide-open, floating exchange where anybody can decide to play joker. In such a situation the joker is wild. And it must be remembered that some governments in the world are so inclined if it is to their particular advantage. So far as they are concerned, there is nothing sacred about retaining the valuation of their currencies. We must remember that in the thirties devaluation was undertaken for all sorts of purposes. To me this poses a far greater problem than the 10 per cent surcharge.
The 10 per cent surcharge will affect perhaps 25 per cent or 26 per cent of Canada's exports to the United States. Those industries that will be hit will suffer to some degree if their sales are cut back, but if the U.S. has no alternative source of supply within the price range then the American consumer will have to accept the 10 per cent. It is by trying to discourage the American consumer from buying Canadian goods and perhaps turning to the U.S. market that President Nixon hopes to restore a balance of payments in his country's international payments.
But every industry is not going to be affected in the same way. Further, we do not know to what degree all industries will be affected. For instance, Mr. Speaker, our beef industry is going to be affected. But to what extent is the steel industry going to be affected? There are many industries that expected they were going to be sadly hit, but in fact they were not hit. As a matter of fact, I would say that the Minister of Industry, Trade and Commerce and the Minister of Finance were precipitate in their action in running to the U.S. As a matter of fact, they went down there before the situation had been fully examined, before the Americans had made up their minds with regard to decisions.


Jean-Luc Pepin: How do you know?


Marcel Joseph Aimé Lambert: Everyone has a right to an opinion. There are many people who share this opinion in Canada, that you ran off crying to mamma far too quickly, before you were hurt and before you knew how you were to be hurt. As a matter of fact, Mr. Speaker, the appearance of the two ministers in Washington, with their delegation, forced Secretary of the Treasury Connally to take a position publicly which
September 7, 1971

undoubtedly he had to hold privately, but which was negotiable. Now the matter has been jelled publicly.
I agree in some respects with the hon. member for York South about these peregrinations and pilgrimages to Washington as undertaken by ministers of finance in the past. We had Walter Gordon going down, cap in hand, on one occasion in 1963 because previously in his budget speech he had put both his feet in his mouth at the same time and kept them there.


Donald Campbell Jamieson: That's a heck of a way to run to Washington.


Marcel Joseph Aimé Lambert: Walter Gordon, in both his thinking and his actions was a contortionist. He would have Canada and the economy perform the most amazing backflips. On another occasion the man who presently performs the task of Acting Prime Minister, at a time when he was Minister of Finance, also undertook a pilgrimage to Washington. It was at a time when the Canadian dollar was in very bad shape. I am afraid the Minister of Finance has not learned the proper lesson. The Minister of Finance stood up in this House and said he would guarantee that we would have no budgetary deficit, but within a very few months we had a deficit of $875 million.
Again tonight the Minister of Finance made some very flatfooted assertions about the economy behaving so well. We heard much the same thing from him at the time of the presentation of his budget in June, based upon the deviation of one month going one way; but the economy, which had been going the other way in a steady pattern, soon reasserted itself. Frankly, Mr. Speaker, I have no faith in the forecasts of the Minister of Finance based upon the very narrow figures he gave us tonight. They just will not stand up. The minister has established a reputation for very poor forecasts.
To return to a discussion of this bill, I had hoped that we would have had the regulations disclosed to us this afternoon. We want to see what is going to happen inside the International Monetary Fund. Neither of the two ministers who have participated in this debate spoke about the job incentive credits that are to come forward in the United States and which, I venture to say, may have a greater effect than the 10 per cent surcharge in changing the shape of the American economy and encouraging a much higher degree of economic nationalism.
The President of the United States has said that the surcharge is a temporary measure. Certainly we know that it affects only a limited number of commodities as far as Canada is concerned. If the Americans really want to have something effective to improve their economy across the board, it will be found in actions such as the proposed job encouragement credits, tax cuts which apply to everybody and the elimination of the excise tax on automobiles.
Why do we want to go crying to Washington to show that we are more particularly concerned about the 10 per cent surcharge? Is it that we want to bring on to the mat the auto agreement in the exchange? Do we want to
Employment Support Bill
bring that up? I would think not. There are many other things, too. Going to Washington has always meant that you get one hand untied, as under the Interest Equalization Act: we untied one hand there, but when he came back from Washington the then Minister of Finance found that he was tied by both feet because of the limitation on the size of our foreign exchange reserves. That put us through two or three years of absolute hell in this country, with the result that we could not fight inflation because of the artificial ceiling that had been imposed upon our international reserves. These are the complications for which we have to watch.
I say the discussions on an informal basis could have been conducted through officials. Then, when the thing was set and you had a case you could negotiate. But at the moment I would say that the two ministers were precipitate in moving forward so early in the piece. I also want to know why, and what steps are being taken in order to balance off any possible price for the elimination of the 10 per cent surcharge. Personally-I am speaking purely personally here-I cannot see how the United States could exempt Canada, bearing in mind Japan and several of the other major partners of the United States.


Jean-Luc Pepin: You would have stayed home, then.


Marcel Joseph Aimé Lambert: At that time I certainly would not have gone down there and made a spectacle of myself, which is precisely what the two ministers did.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: The Minister of Finance knows very well that is wrong. The Leader of the Opposition has said that if the Prime Minister wants to go down to talk to President Nixon, he is prepared to go with him.


Some hon. Members:: Oh, oh!


Donald Campbell Jamieson: He wants to be there when he makes a spectacle of himself. Stay in the mountains, you are in a little trouble.


Marcel Joseph Aimé Lambert: Hardly any trouble. There is a vast difference between the Prime Minister (Mr. Trudeau) going to see the President of the United States-


James Alexander Jerome: What is his name?


Marcel Joseph Aimé Lambert: -than two ministers. Are we sure? I would like to hear the hon. member for Sault Ste. Marie make his contribution-


James Alexander Jerome: Sault Ste. Marie? That is two of them.


Marcel Joseph Aimé Lambert: He may come from Sudbury. Anyway, whoever he may be. The Prime Minister, when talking of another government member, used another phrase which I am not going to use. What I am
September 7, 1971

Employment Support Bill
saying, Mr. Speaker, is that this bill must be discussed further by other members of this House. It will go to committee, but we want a full discussion. Going to committee is not a vote except in principle, and certainly not of the bill we have before us. To that extent I say that I am prepared to discuss it with the minister in committee, but there certainly will have to be some improvements.


Horace Andrew (Bud) Olson: Mr. Speaker, my colleagues have indicated that the general impact of the United States new economic measures on Canadian industry and trade in general could be considerable. Additionally, they have outlined the measures that are today being introduced to cope with some of the problems. First, however, I would like to note that because of the nature of agricultural production and trade, and because of the trade pattern that has evolved over the years, the impact of these measures taken by the United States on our agricultural industry could be particularly severe.
I say that because for many important agricultural products the market is not solely a Canadian one nor a United States one but, rather, a North American market. Trade flows both ways across the border according to demand and supply conditions and particular regional needs. During the post-war years tariffs have been reciprocally negotiated downward. For example, when the Kennedy round tariff reductions are fully implemented, the tariff on apples, both ways, will be reduced and that on pork will be reduced to one-half cent per pound. Maple products and many forage seeds will become free of duty.
These are examples of items for which there is important two-way trade, and it has been to our mutual advantage to progressively reduce these tariffs. Some of these items, such as apples, we expect will be reduced to a nil tariff as of January 2, 1972. Of course, if that happens as has been announced by the United States, then we hope that the impact or indeed the application of the surtax will be completely exempt because they have not applied it to any agricultural products that were entering the United States duty free. Further, during the recent Kennedy round of negotiations-


Robert Lorne Stanfield: Would the minister permit a question?


Horace Andrew (Bud) Olson: Yes.


Robert Lorne Stanfield: Would this bill provide any help?


Horace Andrew (Bud) Olson: Oh, yes, Mr. Speaker, there is definitely some assistance provided in this bill and in other measures that I shall deal with. The point I wanted to make is that a number of products have been slated by the United States for a reduction to a nil tariff or duty as of January 2 next under the Kennedy round of negotiations. If that happens, under the formula they are applying now they should then remove not only the duty but the surtax because they would be items entering the United States free of duty other than the surtax.


An hon. Member:: Which is it?


Horace Andrew (Bud) Olson: It is both. During the recent Kennedy round of negotiations, because of the dominant position of the United States in our export trade the Canadian negotiations on agricultural products other than cereals were conducted largely with this in mind. Thus, any measures such as the 10 per cent United States surcharge which disturbs this long established equilibrium cannot help but have disruptive effects on agricultural trade.
In many ways we are fortunate to be in such close proximity to a market of 200 million consumers. But in a situation such as we face now, this very proximity and the relative disproportionate size of our two markets works to our particular disadvantage. For many of our products, the prices producers receive on both sides of the border are based on the continental or North American market. Thus, when the normal market flow is disrupted and our producers are forced to reduce their price in order to compete, it is not only the quantity that is exported that is affected but total Canadian marketings. The border effects reverberate and are felt throughout the whole Canadian market. Nevertheless, regardless of trading changes and the resultant market disruptions, the harvesting and marketing of crops, particularly fruits and vegetables, must go on as the crops reach maturity: livestock and poultry have to be sold when they reach market weight.
Looking particularly at the two main aspects of the problem as far as agriculture is concerned, the surcharge on imports and the price freeze, I think I can say that the latter does not appear now to present us with as great a problem as was first thought. There are two reasons for this. Raw agricultural products, defined as those essentially unchanged from producer to consumer, have been excluded from the freeze. Grading, washing and packaging have not been defined as processing for the purpose of the price freeze. Many of our exports, such as fruits, vegetables and eggs, will not be subject to the price freeze. Another factor of importance is that prices will be frozen at the level determined by that which applied to a significant proportion of sales in the 30 days preceding August 15 or by the price at which the product sold on May 25, 1970, whichever is higher. Thus, for certain Canadian products-and I think hogs is the outstanding example here-for which the price has been lower in recent weeks than it was in May, 1970, there is some scope for price rises before the price ceiling is reached if, of course, market conditions warrant.
Let us, for example, take a look at how this will affect hog prices. As hon. members are well aware, hog prices are and have been depressed. Nevertheless, the outlook is for strengthening prices. Of course, this trend has been going on for about the last six weeks-but prices are strengthening. As I say, the outlook is for strengthening prices as the supply position improves this fall. Were the U.S. price freeze to be based solely on the 30-day period immediately preceding August 15, hog producers on both sides of the border would be seriously affected. However, in the United States the average price for hogs as of May 25, 1970, was 23.63 per hundredweight live weight, which
September 7, 1971

is the equivalent of $30.69 per hundredweight dressed or about $31 per hundredweight in Canadian funds.
Thus, Mr. Speaker, based upon the anticipated supply position forecast for this fall, the freeze should not be a limiting factor in determining hog prices on either side of the border. Although hog prices have been moving up in the last five or six weeks particularly, we believe that there is sufficient latitude between prices where they are today, somewhere between 23J cents and 26 cents, and 31 cents, if market supply conditions continue to move up within the next 90 days.
The application of the surcharge weighs particularly heavily on agriculture. In 1970 the United States imported approximately $330 million worth of agricultural products from Canada. Of this, about $62 million worth or approximately 20 per cent entered duty free and, therefore, as has been explained by my colleagues under the criteria established by the United States is not subject to surcharge. This category includes such important items as purebred breeding stock, most furs, sausage casings, certain pet foods, some forage seeds and bran, shorts and middlings.
There is a second category to which the surcharge does not apply. It relates to those products for which the United States has fixed import quotas. About $44 million or approximately 13 per cent of our agricultural exports fall into this category, the main items being fresh or frozen beef and veal, cheddar cheese and wheat and flour. The other category in addition to these two that is exempt from the surcharge relates to those products where the most favoured nation tariff rate and the general tariff rate are the same. This applies to about $5.6 million worth or 2 per cent of U.S. agricultural imports from Canada. The main items here are cattle in the weight category of between 200 and 700 pounds-this is mostly feeder cattle-pork, boned and cooked, and potatoes in excess of the tariff quota.
For all other United States agricultural imports from Canada, which in 1970 amounted to about $219 million, the surcharge rate will apply. There is a range of rates here. It goes from a marginal amount up to 10 per cent of value, the level of the general tariff rate. About 65 per cent of our agricultural exports fall into this category. The potential seriousness of this for our industry in particular can be seen when one compares this proportion with that for total Canadian exports to the U.S.A., where about 25 per cent will be subject to the surtax.
Important items in this category from the volume of trade standpoint, and there are others that are just as important from the individual producer or area standpoint, are as follows. I wish to give hon. members a list of the main items; indeed, I am prepared to provide for them a very detailed list of the items and the definitions that are contained in the U.S. regulations respecting them. The list that I should now like to give to the House is based on the 1970 value of exports that can be subject, and indeed some are subject, to the surtax. Firstly, there is grade dairy cattle over 700 pounds, for $11.9 million; other cattle over 700 pounds, $11.4 million; live swine,
Employment Support Bill
$3.8 million; pork and bacon that is not boned and canned, $3.4 million; eggs, $3.2 million; seeds for sowing, $6.6 million; barley, $12.6 million; potatoes, $4.2 million; turnips, $2.8 million; apples, $5.3 million; blueberries, $3.3 million; maple syrup and sugar, $5.8 million; biscuits, etc., $10.7 million; brewers and distillers grains, $5.9 million; and peat moss, $12 million.
During the past three weeks or so the Department of Agriculture, in co-operation with the Department of Finance and the Department of Industry, Trade and Commerce, has released a number of information bulletins to the industry. We have also had some meetings so that all those involved in the industry as well as producer organizations throughout the trade, and so on, could have accurate information interpreted from the bulletins we receive from the United States, and so everyone might know exactly what the amount of surtax might be and how it would apply to various classifications. I must say that the industry has been very co-operative. Indeed, I am pleased to say that they have indicated to me that they have been extremely appreciative of the fact that they have received this information as rapidly as it could be passed to them, which was as soon as it was available to us. I wish to repeat that if any hon. member wishes to obtain a detailed list of these things, he need only apply to my office and it will be sent to him immediately.
It is evident from what I have said that the impact of the United States surcharge on Canadian agricultural exports and for many products on the whole Canadian market could be severe. It is important, therefore, that provisions are included in this employment support bill to cover agricultural processing plants and agricultural producers.
Among the factors that will be considered in assessing the eligibility of processors of agricultural products for grants under this act will be whether the processors maintained prices to supplying producers consistent with those that would have been in effect had the U.S. surcharge not applied. Thus, processing plants that in the absence of this act would have little or no alternative other than to, in effect, compensate themselves by adjusting prices to producers will now be able to maintain producer prices and apply for a grant under this program.


Robert Lorne Stanfield: Mr. Speaker, may I ask the minister a question? Is he maintaining that agricultural items such as cows, blueberries, and so on, come within the definition of manufactured products or within the scope of the bill we are considering?


Horace Andrew (Bud) Olson: No, Mr. Speaker, not entirely. I do not think we could so classify live cattle that are shipped. On the other hand, there are certain classes of beef products that come within the scope of the bill, and there compensation could be made.


Robert Lorne Stanfield: Mr. Speaker-


Horace Andrew (Bud) Olson: Mr. Speaker, I think it might be helpful if the Leader of the Opposition (Mr. Stanfield) were to wait for about four or five minutes, because I have something
September 7, 1971

Employment Support Bill
else to say about products that cannot administratively be handled within the ambit of this bill. I am speaking with respect to compensation, and so on. There are other matters that I intend to deal with in a very few moments.


Robert Lorne Stanfield: I shall wait ten minutes.


Horace Andrew (Bud) Olson: It is obvious, however, that this will not solve all the problems. For example, many agricultural commodities are exported to the U.S. in non-processed form. Under circumstances such as this, where agricultural producers' returns are seriously affected by the U.S. surcharge but where compensation cannot be provided through this bill, provisions can be made through programs administered by the Department of Agriculture to stabilize returns. Here the government has available the Agricultural Stabilization Act under which wide powers are given to assist producers through periods of price disruptions. Under it, the Agricultural Stabilization Board may be authorized to (a) purchase any agricultural commodity, (b) make payments to producers of agricultural commodity-these are commonly known as deficiency payments and represent the difference between the support price and the average price at which the commodity is sold-or (c) the board can make payments for the benefit of producers. We have done this many times. Thus, payments could be made to entities other than the individual producer should this be considered to be desirable. We have done this in a number of cases, Mr. Speaker, in agreements with certain processors and people involved in the trade, on the basis that they undertake it will be for the benefit of and therefore passed directly back to the producers.
Thus, while it is important that provisions be made in this bill to ensure that agricultural producers will receive treatment at least equivalent to that obtainable by the non-agricultural sectors of the economy affected by trade disruption, these other avenues of assistance are available and will be favourably considered by the government on a commodity by commodity basis. While these measures may not in total solve all of the price problems our farm producers may face in the weeks ahead which may result from the supply position of particular commodities-and this can happen on both sides of the border- they will, however, I am confident, go a long way toward solving market abnormalities resulting from the effect of the surcharge on agricultural commodities entering the U.S. market.
In conclusion, Mr. Speaker, the processing plants, where it is administratively feasible-that is, processing plants processing agricultural products-will be required to give assurance that not only the employment in those plants but the prices paid to the producers of agricultural .products being processed in those plants can be maintained and an application can be made for compensation. In addition, as the Leader of the Opposition mentioned, there are some commodities where it is administratively difficult, impossible, or indeed where there is very little or no processing involved. We intend to initiate programs that will indeed provide for the losses, or some of the
losses that have been suffered as a result of disruption in those market areas as well.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The hon. member for Yegreville (Mr. Mazankowski) is rising on a point of order.


Mr. Mazankowski:: I wonder if the minister would
answer a question. His agricultural news release indicated that something in the order of $19.5 million of cereal grains, mill grains, malts and starches would be affected under the program he has outlined this evening. Can the minister indicate how there will be any compensation for this $19.5 million worth of grain that has been traditionally shipped to the United States?


Horace Andrew (Bud) Olson: Most of that, of course, is the $12.9 million worth of barley shipped in 1970. In addition to that, there are some brewers and distillers grains that have been shipped. We expect that the surtax there will be completely removed on, I believe, January 1 because that is one of the items that was slated for a reduction to nil tariff. With regard to that $19 million, I do not want it to be misunderstood that there will be a complete payment through either the Agricultural Stabilization Board or the employment support act, but there are avenues open and I give an undertaking tonight that we are going to look at these on a commodity by commodity basis and utilize the Agricultural Stabilization Board to assist in those areas which are severely hurt.


Mr. Deputy Speaker:: Is the hon. member rising on a point of order? He may ask the minister a question if the minister is in agreement.


Mr. Gleave:: As I read the list that the minister sent over, there will be an increase on the duty for both chicks and turkey products going into the United States. Is there something on hand to deal with this situation?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker. As I pointed out and as ministers, the Minister of Industry, Trade and Commerce (Mr. Pepin) in particular, pointed out, at this point in time we are not prepared to make a detailed account. That will be dealt with or put through one or the other of these acts, because we have to assess how much damage has been done to the industry and to prices generally. We have to bear in mind that there are some commodities where the price freeze in the United States can move up by the amount of the surtax. If that happens, we will hopefully be continuing to sell into that market at the same level as if the surtax had not been applied. We have to take this into account. There will certainly be other commodities where to remain competitive in that market the surtax will have to be absorbed by someone on the Canadian side. It is under those conditions that we intend to be helpful.


Alfred Pullen Gleave: May I be permitted one further question? Can the minister indicate who the "someone on the Canadian side" will be who will absorb these losses?

September 7, 1971


Horace Andrew (Bud) Olson: I did not try to define who that will be. I said if we are to remain competitive in the United States market, someone from the producers through the processing industry will have to reduce their price by the amount of the surcharge to get into that market and be competitive. It is those kinds of situations, where the producer, processing plant or whoever absorbs them to remain competitive, that we intend to compensate.


Max Saltsman: Mr. Speaker, it has been a great night in Parliament. Three ministers have spoken. First, we heard from the Minister of Industry, Trade and Commerce (Mr. Pepin), then the Minister of Finance (Mr. Benson), and we have just had the pleasure of listening to the Minister of Agriculture (Mr. Olson).


An hon. Member:: Now we have you.


Max Saltsman: In addition, outside of the question period I have never seen quite so many cabinet ministers in the chamber, not to mention the untotalled complement of parliamentary secretaries. It has been a great night. With this great entourage one expected that momentous things would be said, that the big guns were almost out. One was almost inclined to put his hands over his ears lest they be shattered by the wisdom and clarity that was going to emerge from the government benches. Instead of a bang, we got an insignificant "pflt" like a wet squib. At least there was some humour in what the Minister of Industry, Trade and Commerce said. He brought all his charm to bear on trying to make an impossible bill palatable. The bill is completely ridiculous and even the charm of the Minister of Trade and Commerce, who probably could make rape look like romance, did not succeed. If there is a trophy to be given for the most ridiculous speech, it should be given to the Minister of Finance. He made a very brave speech to us tonight. He said, "I went down there and I told them this and I told them that. They were going to hear from Canada and we weren't going to take it lying down." Of course, he came back empty-handed with a few fingers missing. He reminds me of a little kid who has just emerged from a dark alley bleeding from head to toe and says, "You should have seen me teach that big boy a lesson" and then he turns around and says, "There's a smaller kid up the road; let's go and beat him up." The one who will get beaten up by this bill is the Canadian taxpayer.
We are faced with a situation which will create serious difficulties for Canada. Instead of saying, "Well, it is the Americans who have created the problem for us; they should be prepared to pay for it," we say, "No, they have created the problem for us but we should pay for it." We have made our brave little speech to them but they did not listen to us, so we propose to bring in a bill to compensate Canadians who have been hurt by measures imposed by the United States.
How long does a country like Canada intend to go on turning the other cheek? It is not as though we have been difficult with the United States, though some of us wish we had been difficult with the United States on
Employment Support Bill
occasions. The United States has very few grounds for complaint against Canada. We have co-operated in virtually every way which would prove helpful to the United States. Throughout our history we have more than proven our willingness to encourage and support the United States. For example, we have held our foreign exchange reserves in the form of United States treasury bills, and instead of holding gold we held American dollars, thereby running the risk of loss due to the depreciation of United States currency.
I do not say the Americans are ungrateful. They have a problem. We know they have a problem. We are sympathetic with them, but only up to a point. We are sympathetic with those Americans who despise the Viet Nam war as much as we do. This is a situation they have created for themselves and they are now asking the rest of the world to pay for it and we are being asked to be understanding, to take it without using words like "retaliation."
The minister went on to say, "We told them down in the United States that this is going to hurt them more than it hurts us". I do not see it. I think it is hurting us more. The minister has said that no other country stands to be so deeply affected as Canada, and we can all agree with this. The minister has defined the problem, but if we look for a solution from his side of the House we do not find one. In any event, he has only posed part of the problem; the other part is the party he represents. He is the problem, his party is the problem and the government to which he belongs is the problem. It is they who have contributed to placing us in this intolerable situation where we are so dependent on the United States market that if the Americans impose any measures we suffer more than anyone else. This situation, difficult as it may be for us, could have been handled relatively easily had we created a climate of development for Canada, had we created a climate of growth and of employment in Canada.
Despite all the statistics the minister has rattled off, he is unconvincing. His government is responsible for putting Canada into an economic downward spiral. They have created unemployment intentionally, and into this kind of vortex has oome the difficulty arising from the United States surtax. We could have weathered the surtax without too much trouble if we had full employment in this country, because those resources which are to be excluded from the American market could have been absorbed by the Canadian market. So the minister has a problem. But it is a direct responsibility of the government he represents. It is useless for him to go around complaining and wringing his hands and looking for someone else to blame.
The Minister of Trade and Commerce presented the bill to the House as the best means of helping in this situation. I want to ask some questions about whether it is in fact the best means of helping. This is what we must decide. As we look at the bill we should ask ourselves: Is this the way to handle the situation, or is there something else we can do? Can we best help by giving an amount of money in an ill-defined way, or making it available, we do not know how it is to be used, we do not

September 7, 1971
Employment Support Bill
know who is going to get it, we do not know what the criteria are, or how adequate it is likely to be? The minister himself, in his honesty, says he really does not know. He does not know the dimension of the figure; he does not know what the criteria will be; he does not know how he will be able to define the method of payment.
How are we to have any confidence in this measure? Even if the extent of the problem were capable of definition it would seem to me this is the last thing we should be doing rather than the first. The measure is being presented to us not as a complete solution. If it were, obviously we should all be laughing so hard that nothing else would be heard in the House. The ministers all know that this cannot be put forward as a complete solution. So they say we are starting off with this sort of thing and will introduce other measures later on.
It seems to me the idea of compensation should arise only after you have taken more effective measures in a certain direction. After that you can talk about specific measures to provide for compensation. You do not start off with compensation, because when you start off with it you get the feeling that the government really does not intend to do anything more than this, having provided some kind of little packet to take the heat off themselves. It will serve no other purpose, it will not get the economy moving, it will not solve the problem and I do not think it will really take the heat off them either, because the Canadian people are far too astute not to see through the kind of proposal which is before us. What we should ask ourselves is this: Do we have other choices? Have we any other choice apart from simply deciding to bring in a compensatory measure?
I think there are many other choices. For instance, when the provincial ministers of finance and trade and commerce were called recently to Ottawa so the government could find out what were their views on this particular crisis and how they would be affected, one suggestion that emerged from virtually the minister of every province was the necessity for lowering the value of the Canadian dollar. The manufacturing provinces felt that if this were done their products would be more competitive in the United States and that even with the 10 per cent surtax they could compete reasonably effectively and ride out this particular crisis.
The people from the west felt very strongly that a lowering of the value of the Canadian dollar would enable Wheat and grain which have to be sold on international markets to be offered more competitively. This crisis does not create difficulties for manufacturing industry alone; the farmer stands to lose as much as anybody else. Certainly keeping the Canadian dollar at its present level means that the difficulties facing the farmers will continue as they have in the past.
Therefore, it seems to me that one of the chief priorities of the government should have been to take measures to lower the value of the Canadian dollar. I am not talking of fixing exchange rates, because that is impossible. This party has always argued that a flexible
exchange rate was the only appropriate kind of exchange rate for Canada, and we raised this question years before the government was willing to move in this direction. To fix the rate would only encourage speculators to work against our currency, and this we all realize.
Nor does this party think that trying to hold the rate down and building up excessive reserves is the answer. We have to make some fundamental changes in the relationship between our currency and other currencies and I think the way to do this, as many will agree, is to lower substantially Canadian interest rates below those of the United States.
A number of effects would flow from this. The first is that foreign capital is not attracted into Canada, which is one reason that the rate gets pushed up. Another effect is that some of the capital in Canada that is not gainfully or usefully employed here would flow out of the country, and this also helps. A third and vital effect is that it provides an enormous internal stimulus, whether to housing or to machinery purchases, which creates a degree of confidence in the economy and stimulates growth.
We think that lowering the interest rate would accomplish many of these things and it is something that can be done immediately and will be effective in the very short term, certainly effective far more quickly than the proposal before us. Indeed, I do not know that this proposal could be applied quickly. One would have to go before the board to make a case and prove one is being hurt, and this would take months and months. Anyone who has had experience of anti-dumping or tariff legislation knows the rigmarole one has to go through, perhaps necessary rigmarole. The point is that the interest rate proposal will work much more quickly, effectively and decently than the proposal now before us.
In reply to an earlier question of mine asked today as to whether the government had any plans to lower the interest rate, the minister said that oh, we had already done that; short-term interest rates are lower now and more borrowing is being done on the Canadian market. I agree, but what I am saying is that this process must be accelerated very rapidly. Provincial governments that are borrowing on the Canadian market are not doing this because the minister has been exhorting them to do so; they are doing it because the interest rate for their particular need has been dropping. I suggest we should drop it even further than it is now to provide the kind of stimulus that we require.
Another thing we can do, for which we have argued on many occasions, relates to resource industries. Many of the problems that we in Canada are facing, much of the imbalance of trade that we have, and much of our dependence on the United States as a market, stems from the export of raw materials from this country. The Carter commission emphatically stated that the privileges and bonuses offered in encouraging the development of raw materials and their exportation from Canada should be abolished. At the very least the companies concerned should pay the taxes they should have paid but have not been paying.

September 7, 1971

Instead of this the Minister of Finance comes crying to us today, saying we have a terrible problem facing us. Yet he has brought in legislation which restores the resource industries to their former position. In other words, these industries are going to get very largely the same benefits that they have always got out of the Canadian taxpayers. Rather than discourage the outflow of raw materials, we have as a matter of tax policy deliberately encouraged the further development of raw materials which will find their outlet in the United States, thus making us more and more dependent on the United States economy, with all the consequences flowing therefrom.
A third measure that the government should take is to impose a surtax on raw materials exported to the United States. The surtax imposed by the United States does not apply to Canadian raw materials, but I think we should impose a surtax. It may slow down the export of raw materials, but again it will help our exchange rate and lower the value of the Canadian dollar. It will subsequently encourage the development of manufacturing in Canada.
As important as all those things are, the money that we obtain from the imposition of a 10 per cent surtax could be used to provide this compensation. If we are going to have a compensation board to compensate those in Canada who suffer as a result of the United States surtax, then this is where the money should come from. This compensation should not be derived from the pockets of Canadian taxpayers. The United States has created the difficulty, and at the very least they should be asked to provide compensation for the difficulty they have created in Canada. This is one way of providing that compensation.
A fourth measure that we should take relates to products which as a result of the United States surtax are going to be excluded from the U.S. market. In cases where we find a product effectively excluded from the U.S. market we should at the very least make the Canadian market fully available to that product, if necessary excluding United States products from the same market. After all,, the United States has a perfect and absolute right as a sovereign nation to determine the kind of policies and economic course it wishes to pursue and we cannot do anything about it. But we in Canada have the same right. The United States would think us extremely foolish if we stood by and did not take action to protect our own citizens and economy.
May I call it ten o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION

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

David Samuel Horne MacDonald: Mr. Speaker, on June 18 last I raised once again, as I had on a number of
Proceedings on Adjournment Motion
previous occasions, with the Minister of Indian Affairs and Northern Development (Mr. Chretien) the possible commencement of construction of the link-causeway or bridge-to the Lennox Island Indian reservation off the northern coast of Prince Edward Island. At that time the minister informed me that it was necessary to carry out certain surveys in order to ascertain what form of construction should take place and where it might best be located. He also indicated that because of the fire that took place last winter in which the school and teachers' residence was destroyed, perhaps some kind of arrangement might be worked out whereby the Indian community might receive either a school or a causeway, but not both.
In view of the fact, as I pointed out on June 18, that the loss of the school and teachers' residence was very largely due to the absence of firefighting equipment, and that none could be transported because no efficient means of transportation was available, the government then, as it has now, had a very definite responsibility to face up to both of these problems.
I feel that in raising this matter again this evening in the adjournment debate I am raising what must be considered one of the great ironies of this particular Parliament. Just a short while ago this evening the ferry on service to the Lennox Island reservation was burned and completely destroyed. About an hour and a half ago the engine component of the ferry exploded as it was leaving the Lennox Island side. Fortunately, those on board, some half a dozen, were able to make it safely back to shore.
This additional irony can only again point up the continued neglect and callousness of this government in not facing up to and assuming its responsibility to the people on Lennox Island. It is fortunate that no one was injured this evening. The ferry is the last means of communication between Lennox Island and the mainland. It is not so fortunate when we realize the countless number of lives lost over the years, and who knows the toll in human misery and over-all isolation caused the Indian communities in Prince Edward Island because they have no permanent means of transportation to and from their Indian reservation to the mainland.
I wonder for how long we are going to have to badger this government about taking the full share of their responsibilities, in view of the fact we are being treated to a situation in which there seems to be no real interest by the government in answering this basic problem of transportation and communication for the people of this community. I do not know whether it is the direct intention of the government to maintain these people in a ghetto, as it were, but certainly that is the end effect of their policy to date. The people of that community have put up with the situation for years, but I believe they will not put up with it any longer.
The government's answer has been that they need more surveys. For more years than I care to remember there have been surveys of one kind and another. There is the saying that the road to hell is paved with good intentions. It could be said of this government, in this
7592	_______________COMMONS DEBATES__________________________September 7, 1971
Proceedings on Adjournment Motion regard, that the road to hell is paved with studies, reports and surveys but certainly not with action.
It is passing strange that in this year's estimates there was an allocation of some $500,000 to begin and perhaps complete construction of this causeway link. Somehow or other the government seems unwilling to implement its own budgetary allocations. Was the government serious when it allocated that amount of money for the construction of a causeway, or was it engaged in some kind of sophisticated deceit? If it was deceit, it certainly is dishonest if not criminal.
There has also been haggling over the site where this proposed causeway should be located. Apparently one government position favours the establishment of a causeway link toward the opposite shore to that normally traversed by the Indian community. This would create considerable hardship if not the impossibility of transportation during the winter months. The only site acceptable to the vast majority of the people of the Lennox Island Indian reservation is that normally traversed to and from Port Hill or in that neighbourhood.
It does not seem to me that it would take very much imagination or engineering know-how to construct an adequate causeway to and from Lennox Island to the Port Hill area. This would give a full and complete opportunity to the people of the Lennox Island Indian reservation to engage in the cultural and social economy of Prince Edward Island, and to continue to deny them this is something that neither I nor the people of Lennox Island Indian reserve will accept. When is this government finally going to act?


Mr. Judd Buchanan (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am very sorry to hear the news concerning the destruction of the ferry this evening. Certainly the hon. member's information is in advance of mine. As the hon. member has indicated, the proposal to construct a bridge from Lennox Island to the mainland of Prince Edward Island has been under almost continuous review since 1965.
The resident population of Lennox Island approximates 270 persons, and as the hon. member is well aware, the community is considered to be of a permanent nature. Up until this evening transportation had been provided by a ferry supplied by the department. The Department of Public Works has agreed to provide the necessary design services for this project and the Department of Regional Economic Expansion, in co-operation with the provincial government, had agreed to provide the access road and approach to the Prince Edward Island side of the bridge.
To permit construction of the bridge, the department provided $250,000 in its 1971-72 estimates and forecast an additional expenditure of $250,000 in 1972-73. The intention was that this would be for a single-lane structure which could be designed and in respect of which tenders would be called during the early summer of 1971. However, soil tests revealed that the design of the substructure will be much more complex and expensive than had been anticipated.
New cost estimates are not yet complete. Preliminary calculations, however, indicate that a revised budget of $750,000 may be necessary, which is approximately a 50 per cent increase over the budgeted figures. The department is currently discussing the matter with the Department of Regional Economic Expansion to see whether some agreement can be reached to cover this increased cost.



CONSUMER AFFAIRS-FOOD PRICE INCREASES-ASSISTANCE TO PEOPLE ON LOW INCOMES TO MAINTAIN GOOD NUTRITION

Winona Grace MacInnis: Mr. Speaker, on June 15, just before the House rose for the summer recess, I drew attention to the fact that the April to May increase in the cost of food was the greatest for that period in six years. I asked the government if it was prepared to consider a measure to help in respect of the nutrition of low-income families across Canada which were in immediate need. Since then the month of July has provided the greatest food cost increase for that month since 1967. In August the Canadian Dairy Commission raised the price of butter. The price of fresh fruits and vegetables is higher this year. We have had months of great distress caused by very high levels of unemployment. I am still awaiting an answer to my question.
Today we spent hours debating a measure to provide $80 million to help business concerns in this country which are threatened with hardship by the recent import surcharge imposed by the United States. The government urges immediate action to help these firms. However, when it is a question of measures to prevent the physical and mental deterioration of people, it is another story. The government can find no money to help these people. Oh, yes, the government knows very well what is required for good nutrition. Again today I obtained a copy of Canada's food rules. These rules state that in order to keep well, people must have milk in quantities varying from a cup and a half per day for an adult to four cups a day for adolescents and expectant mothers. There should be two servings of fruit or juice, including a satisfactory source of vitamin C, including tomatoes, oranges and vitamized apple juice. There should also be one serving of potatoes and two servings of other vegetables, preferably yellow or green and often raw. In addition there should be one serving of bread with butter or fortified margarine and one serving of whole grain cereal.
These food rules state that people should have one serving of meat, fish or poultry and should eat liver occasionally. Eggs, cheese, dried beans or peas may be used in place of meat. In addition, there should be eggs and cheese each at least three times per week. There should be 400 international units of vitamin D for all growing persons and expectant and nursing mothers per day.
Mr. Speaker, this government provides food rules and at the same time neglects to provide measures to guarantee the people on low income any means of providing themselves with the necessary food. This is a sham, a mockery and an avoidance of the responsibility of proper government in this country.

September 7, 1971

Conditions in this country are steadily worsening tor low-income people. Back in July the Globe and Mail carried an editorial headed "A Damning Indictment", dealing with conditions in Canada's largest city, and I point out that conditions in the cities are growing worse because they are the most congested areas and have the largest percentage of poverty. The editorial recalled as follows:
In 1970 a report to the Senate Committee on Poverty by the Quebec Corporation of Professional Social Workers found infant mortality in underprivileged in Montreal 35.1 per 1,000, twice that of other areas; it found a third of grade 1 poor children undernourished, and half suffering from emotional problems; it found three times as many of them with intelligence quotients under 80.
Low intelligence, as explained in another 1970 report, could be accounted for by undernourishment. A child who is undernourished in his first months of life, or whose mother is undernourished during pregnancy, has less than the normal rate of cell division and ends up with fewer brain cells. Or, as explained in the 1970 report of the Claude Castonguay commission to the Quebec Health Department, "A great lack of food during the first 18 months of a child's life prevents a normal cerebral development."
In my own city of Vancouver last February the city social service's own nutritionist, Rosemary Callaway, inquired how much people on welfare actually spent, and sent a report to the city administration. I quote:
Take a family of four-father, mother and boys 15 and 16. Eating as cheaply as possible, but getting proper foods, the family needs $127.37 a month. Food allowance-$101.
Or take a family of six-mother, boys 16, 14, and 14, and girls 15 and 13. Even with a 10 per cent adjustment for buying in quantity they need $162.93. They'll get $150.
One mother was asked:
How do you make do with four growing boys and a welfare cheque of $257 a month?
Simple. "Towards the end of the month we cut down on food . . .
We eat mostly soup and potatoes-we eat a lot of potatoes.
These are conditions that exist all across Canada. For the life of me I cannot understand why we in this House cannot expect some kind of answer from the government with respect to these conditions. It is not as though these conditions are static and not becoming worse. Recently I talked with a woman here in Ottawa. She is a public servant and does not have a particularly high salary. For three people she spends $36 a week, or $144 a month for food, which is just exactly about half of what the relief rates give. Her family is properly nourished, but this other family is undernourished.
How can this problem be met? There are various ways. In a great many countries they do it by the provision of school meals-


The Acting Speaker (Mr. Laniel):: Order. I regret having to interrupt the hon. member, but the time allotted to her has expired.


Mr. P. M. Mahoney (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, one of the more challenging things that confront one in responding to questions at
Proceedings on Adjournment Motion
this hour, particularly those posed by the hon. lady from Vancouver-Kingsway (Mrs. Maclnnis), is that in the comments she makes during the seven minutes allotted-and she has not disappointed us again tonight in using the allotted time

she generally covers a wide range of subjects of which there was no intimation in the original question. The original question dealt with food prices in Canada, and the response which we have prepared for this regretfully does not cover many of the subjects which the hon. lady just dealt with in her comments. However, the basic purport of the response is that the interpretation which has been placed on statistics, and indeed the selection of statistical information which she has chosen to support her argument, are not well founded.
During the latter part of 1970, food prices declined substantially, largely because there was a price war among retail food chains in Central Canada. The price war came to an end early this year and many of the price cuts were rescinded. In consequence, food prices rose very rapidly, particularly for a few months. The rate of increase has tended to moderate more recently. The food price index increased substantially from June to July, but seasonal factors seem to have been a major factor in the increase. The rise from May to July of this year was slightly lower than the average increase between these two months over the last decade. In spite of the increases of recent months, food prices in July were only 1.3 per cent higher than in July, 1970. This was the smallest increase for any 12-month period ending in July recorded since 1960.



INQUIRY OF THE MINISTRY

Mr. Rene Matte (Champlain):: Mr. Speaker, you will allow me simply to ask once more the question which I directed to the Prime Minister on May 13 last:
In view of the contradictions which cast doubts on his words, could the Prime Minister once and for all clarify the situation and tell us whether or not the existence of a parallel government under the leadership of Mr. Claude Ryan has influenced the government in its decision to invoke the War Measures Act last October?


Mr. Barnett J. Danson (Parliamentary Secretary to Prime Minister):: Mr. Speaker, with reference to the question of the hon. member for Champlain (Mr. Matte) I should like to refer to Hansard for the period in question, which was a very very dramatic one in the life of this Parliament and in the life of this country. I quote from Hansard of October 26, 1970, halfway down page 547, where the Prime Minister (Mr. Trudeau) said:
They are very clear facts. First, we had from the authorities of the province of Quebec and of the city of Montreal a clear statement that they apprehended insurrection. Second, there had been the abduction of two very important citizens in the province of Quebec, with an intention to murder them if the government did not give in to ransom. The third fact was circumstantial, if you wish, that approximately two tons of dynamite had been stolen in the province of Quebec this year, as well as a sizeable number of small arms and other ammunition. Also, there was such a state of confusion and threats of violence in the province of Quebec. We decided to act on these facts as we interpreted them, and on this the government will stand or fall.

September 7, 1971
Proceedings on Adjournment Motion There are other references which I could quote-for instance, on October 23 at pages 510 and 511 of Hansard-which bear out the same facts. There were many factors involved in the situation at that time. Perhaps in retrospect, and with 20-20 hindsight, one might say that
the actions were not justified, but one could also conclude that it was the firm action of the government at that time that prevented our worst fears from being justified.
Motion agreed to and the House adjourned at 10.20 p.m.

Wednesday. September 8, 1971