1971-09-13

OFFICIAL REPORT

[Stage Direction]
THIRD SESSION-TWENTY-EIGHTH PARLIAMENT 20 Elizabeth II

[Stage Direction]
Published under the authority oi the Speaker of the House of Commons by the Queen's Printer for Canada
24319-1J
Available from Information Canada, Ottawa, Canada
[Stage Direction]
Monday. September 13. 1971


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a question of privilege, having given Your Honour notice under the terms of Standing Order 17(2). The basis of my question of privilege is to be found, in the first place, in two answers to written questions given by the minister in charge of the Wheat Board last Wednesday and appearing in the Hansard we received on Thursday. My question of privilege arises also out of answers to oral questions given on Thursday on the same subject. It might be suggested that the appropriate time to have raised this question of privilege would have been on Friday, but as a matter of fact neither the minister in charge of the Wheat Board nor the Minister of Finance, who is also involved, were scheduled to be in the House on Friday, so it seems to me that under the provisions of citation 104(3) of Beauchesne's Fourth Edition this is the earliest opportunity for me to raise the matter.
The answers which were given on Wednesday, September 8, should, I think, be placed on record at this point. The first one appears in Hansard at page 7596 in response to a question by the hon. member for Moose Jaw (Mr. Skoberg). The question was as follows:
Are payments being made on a monthly basis to the Canadian Wheat Board under the provisions of the Temporary Wheat Reserves Act and (a), if so, are the payments still being made; (b), if not, for what reason?
The reply of the minister responsible for the Canadian Wheat Board was as follows:
Payments are not being made to the Canadian Wheat Board under the provisions of the Temporary Wheat Reserves Act on a monthly basis because the government has a bill before the House to rescind that act effective August 1, 1970.
A similar question and answer are to be found at page 7609, the questioner in this case being the hon. member for Regina East (Mr. Burton). The written answer, which is the important part of the exchange, is as follows:
Although funds were appropriated in the estimates for the fiscal year ending March 31, 1972, expenditures have not been authorized because the government has a bill before the House to rescind the Temporary Wheat Reserves Act effective August 1, 1970.
There were oral questions and answers on this matter on that day, and further questions were put on Thursday, including a question asked by the hon. member for Regina East of the Minister of Finance and to be found at page 7660 of Hansard. Part of the question was:
. .. has the Minister of Finance .. . asked the Minister of Justice for a legal opinion on the validity of the action or lack of action by the Minister of Finance and has a legal opinion been given?
To which the Minister of Finance replied:
Not to me, no, Mr. Speaker.
If I may state my question of privilege-


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: -as succinctly and narrowly as I can, it is this. My question of privilege relates to the non-payment of moneys which it is specified in the Temporary Wheat Reserves Act are to be paid by the Minister of Finance to the Canadian Wheat Board; and, more particularly, the action of the government in telling this House that the reason it is not carrying out the provisions of the law is that it has a bill on the order paper.


Mr. Turner (Ottawa-Carleton):: That is not a question of privilege.


Stanley Howard Knowles: My hon. friend suggests that this is not a question of privilege. I submit that anything which in a court would be regarded as contempt can be regarded as privilege in this House. I further suggest that when the government admits to Parliament that it is not carrying out the law and tells Parliament the reason it is not carrying out the law is that it has a bill on the order paper to rescind that law, a bill which has not yet been passed, then the rights and privileges of Parliament are being affronted.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: My case today has, of course, to be made not to those opposite but to Your Honour. I would point out that there are certain things that a question of privilege must not do-and I think I am avoiding those things. In the first place a question of privilege must not be a dispute over facts. We must not ask Your Honour to judge as between the opinions of members regarding certain facts. I think it will be clear as I develop my case that there is no dispute over the facts. My authority for saying that I must not ask Your Honour to judge as to facts is, of course, citation 104(2) of Beauchesne's Fourth Edition.
It is also a clear provision of the procedural citations about privilege that one must not ask Your Honour for a legal opinion. I must not ask you to state whether the government is right or wrong in not carrying out the provisions of the act. But I do suggest that when the government says to Parliament that the reason it is not carrying out the clear provisions of the statute is that it has before Parliament an unpassed bill which would rescind that statute a serious question of privilege is

September 13, 1971
Withholding of Wheat Payments
raised. Does the government have the right to give us that excuse for not carrying out the law?
As I shall say when I come to the latter part of my case, it seems to me I should not ask you to rule that the government is in the wrong, but neither should you rule that the government is in the right. I submit there is a big enough question, a big enough issue, in this matter that there is a prima facie case of privilege, that it meets the requirements of the procedural citations about privilege and that Your Honour ought to let the House decide. I do not ask you to make a decision that there is an absolute case of privilege. I ask Your Honour to find that there is a prima facie case of privilege and then to let the House decide.
I said, Mr. Speaker, that I am not asking you to judge with regard to the facts. I submit that the facts are not in dispute. In the first place there is on the statute books chapter 2 of the Statutes of 1956 entitled the "Temporary Wheat Reserves Act". It is only a two-page statute but it is a very important one and some of us who are here today were here when that bill was adopted and made law.
Section 4 of chapter 2 of the Statutes of 1965 says:
The moneys payable to the Board-
To the Wheat Board.
-by the Minister of Finance under this Act shall be paid as follows:
There is nothing permissive; there is no use of the word "may". The moneys shall be paid. Then there are two subparagraphs of section 4. The (a) part need not be read because it describes how payment was to be made in the crop year 1955-56. Paragraph (b) of section 4 is the one that is still in effect. Let me read section 4 from the preamble into paragraph (b) in order that it will be complete. This is what it says:
4.	The moneys payable to the Board by the Minister of Finance under this Act shall be paid as follows: .. .
(b) in respect of any subsequent crop year, the total amount payable for the crop year shall be paid in equal monthly payments within such crop year.
There is no dispute over that. It is in the statutes and the government does not deny its existence.
The second point that is not in dispute is the fact that the payments have not been made since the end of July, 1970. This has been brought out at meetings of the Standing Committee of Agriculture, and in his answers last week the minister admitted that payments have not been made since the end of July or since August 1, 1970.
The third point that is not in dispute is that the reason given by the government is very simple and straightforward, namely, that Bill C-244 is the reason for not making these payments. Bill C-244 has not yet been passed by the House. It has in it clause 33 which says:
The Temporary Wheat Reserves Act is repealed, effective July 31, 1970.
The explanatory note opposite clause 33 reads:
The repeal of the Temporary Wheat Reserves Act is consequential on the enactment of the stabilization program set out in this Act.
That makes it clear that the government knows that clause 33 does not come into effect until the act as a whole has been passed.

One other point I cite in the list of facts is that Bill C-244 has not been passed and therefore authority to act on that basis has not been established by Parliament.
In my view the privileges of Parliament have been attacked by this action of the government. As I said earlier, I am one of those who were here in 1956. The record shows I took at least some part in that debate and agreed to the passing of the bill. As a matter of fact, it was supported unanimously. The Right Hon. C. D. Howe, who piloted the bill, gave the House the assurance that the payments would be made monthly as long as that act was in effect.
Some questions were asked. The present member for Calgary Centre (Mr. Harkness) wanted the payments to be made in a lump sum at the beginning of the year. There are five or six pages of debate in the 1956 Hansard on this matter. Mr. Howe did not agree but did make clear that the payments would be made monthly in advance beginning with the first month of the crop year which in every case is the month of August. Because that has not been carried out, I submit we have a point of privilege. Even more directly, however, I suggest it is an affront to the rights of members of the House for the government to give as an excuse the fact that there is a bill on the order paper which has not yet been passed.
You might say, Sir, that this is a legal matter to be dealt with in the courts. There is, of course, a provision in the Criminal Code, section 115, which reads as follows:
Every one who, without lawful excuse, contravenes an Act of the Parliament of Canada by wilfully doing anything that it forbids or by wilfully omitting to do anything that it requires to be done is, unless some penalty or punishment is expressly provided by law, quilty of an indictable offence and is liable to imprisonment for two years.


An hon. Member:: There goes John Turner.


Stanley Howard Knowles: No. It is the
Minister of Finance we will miss because the Temporary Wheat Reserves Act says that the Minister of Finance shall make these payments on a monthly basis at the beginning of the crop year. An answer to that might be forthcoming in the sections in Beauchesne regarding privilege which point out that we provide certain defences against arrest or against people interfering with Members of Parliament in the discharge of their duties. In other words, there might be trouble if someone tried to lay an information against the Minister of Finance. We might have to defend him and keep him here. That remains to be seen.
The point I am making is that the place for us to deal with a matter like this and what has been done to us is here on the floor of Parliament. What has been done to us is that we have been told that, although we have passed a law and although it is there and is clear, the government feels it does not have to carry it out because of this other provision, an unpassed bill which it has on the order paper. This I find strange today after a statement made by the Secretary of State for External Affairs on Friday in another context when he was Acting Prime Minister. His words were clear and are found at page 7702 of Hansard for Friday September 10. The Secretary of State for External Affairs said:
September 13, 1971

Everyone in this country knows that the Canadian Parliament makes the laws in this country and that these are the laws to be observed.
Here we have a law which Parliament made. The government admits it is not carrying out the law and gives us the excuse that it is asking Parliament to rescind that law.
I am just about through with my presentation, Sir.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: I knew that at least that statement would get applause from the other side. I make the point again, Sir-it is to Your Honour I am addressing myself and not the other side; we will take them on when we get into debate on the motion if it takes place-that I am not asking you to make a decision regarding the facts. There is no dispute between us about the facts. I am not asking you to make a decision whether the government is right or wrong, but I ask you not to say that the government is right by saying that there is no wrong.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: I do ask that the provisions in Beauchesne be observed, namely, that if there is a prima facie case of privilege Your Honour will leave it to the House to decide. If Your Honour does make that decision and if you permit a motion, may I simply read the motion I would make. I know quite well that I cannot make the motion at this time, but I think it should be on the record. If Your Honour finds that I have a prima facie case of privilege, I would make the following motion:
That the matter of the non-payment by the Minister of Finance to the Canadian Wheat Board, since August 1, 1970, of certain moneys payment of which is specified in the Temporary Wheat Reserves Act, being chapter 2 of the Statutes of Canada for 1956, be referred to the Standing Committee on Privileges and Elections for consideration and report.
I ask Your Honour to note that in that motion, as in my statement, I have avoided alleging anything that is in dispute. I do not try to settle the issue; I simply ask that Parliament be given the chance to refer this matter to the Standing Committee on Privileges and Elections so that that committee can consider the matter and make its report on this very important issue.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I see that the minister seeks the floor. I should like to suggest to hon. members that while I do not want to prevent a minister from replying on behalf of the government, the suggestion which has been made and the practice followed over the years is that only in instances where a minister's conduct is involved do we allow that minister to reply to a question of privilege. I doubt very much if any point would be served or any advantage achieved by allowing the minister to reply at this time. Again, I want to be fair and I do not want him to feel aggrieved in any way by not being allowed to reply at some length or briefly, as he might wish, to the presentation by the hon. member for Winnipeg North Centre.
I do feel that on questions of privilege hon. members have to rely pretty well on the judgment of the Chair as to whether there is a prima facie case, and if it were the
Withholding of Wheat Payments
decision at any time that there was a prima facie case, then hon. members on behalf of the government and other hon. members on behalf of the opposition would have an opportunity to take part in a full-fledged debate on whether the matter should be referred to a committee as suggested by the motion proposed by the hon. member who has raised the question of privilege. So at this point I really have to ask the indulgence of hon. members to allow the Chair to make the decision now.
I might say that I am in a particularly good position in this instance to make a decision now because of the terms of the notice given by the hon. member for Winnipeg North Centre under the provisions of Standing Order 17, subsection (2). The hon. member was kind enough to indicate at some length what the points were that he proposed for the consideration of the House and of the Chair. This was to my advantage, and I am grateful to the hon. member. I am not sure whether it was to his advantage also. Certainly it gave me an opportunity to look at precedents and to reflect for some hours on this very important issue.
I want to tell hon. members that I am not in any way belittling the importance of the matter which has been brought once again to the attention of the House. I might say that many of the points made by the hon. member for Winnipeg North Centre have been made already in the course of debate and in questions put by the hon. member for Vegreville and the hon. member for Saskatoon-Biggar, both of whom suggested last week that the regular debates of the House be adjourned under the dispositions of Standing Order 26 for the purpose of considering this important matter. The hon. member for Winnipeg North Centre suggested that this matter is so large and so big that it should impress the Chair that it should be considered by way of a question of privilege. I cannot agree at all with this argument. I would think some questions would be so immense or at least would be so considerable in terms of national importance and national interest that the Chair would not be justified in suggesting that they be considered by the House by way of a question of privilege.
Again I thank the hon. member for the notice he has given me under the terms of the Standing Order and for the fact he has gone so generously into some detail in explaining . . .


Some hon. Members:: Oh, oh!


Mr. Speaker:: I am referring to the notice which was given to the Chair and which explained so generously for the guidance of the Chair what the points were that the hon. member proposed to put to the House.
On numerous occasions, as hon. members know, the Chair has cited the definition of parliamentary privilege as "the sum of the fundamental rights of the House and of its individual members as against the prerogatives of the Crown, the authority of the ordinary courts of law and the special rights of the House of Lords". This definition, of course, is taken from May's work. It is a long-standing definition which has never been contradicted, and although we might change the citation because, this being a British citation, it refers to the House of Lords, it applies, generally speaking, to our own proceedings.

September 13, 1971
Withholding of Wheat Payments
This definition is further expounded by Sir Erskine May at page 42 of the seventeenth edition of his work on parliamentary practice:
The privileges of Parliament are rights which are "absolutely necessary for the due execution of its powers". They are enjoyed by individual members, because the House cannot perform its functions without unimpeded use of the services of its members; and by each House for the protection of its members and the vindication of its own authority and dignity.
At page 43 the learned author states as follows:
When any of these rights and immunities, both of the members, individually, and of the assembly in its collective capacity, which are known by the general name of privileges, are disregarded or attacked by any individual or authority, the offence is called a breach of privilege, and is punishable under the law of Parliament.
The duty of the Chair in the present circumstances is to determine whether there is a prima facie case of breach of privilege. That is a point that was made very ably by the hon. member for Winnipeg North Centre. The Chair is not authorized to say whether there is a question of privilege or a breach of privilege but whether the circumstances are such as to justify a judgment by the Chair that there is at least a prima facie case.
The facts are simple. Again, as the hon. member said, they do not appear to be in dispute. The dispositions of the Temporary Wheat Reserves Act are a matter of record well known to hon. members on both sides of the House. The fact that there is before the House legislation which in some way relates to the dispositions of the existing statute is also well known to hon. members.
Whether the government has an obligation under the terms of the existing law to make certain payments is not a question for the Chair to decide. The hon. member, in making his submission, has also pointed out that the Chair is not required to make a determination as to the law. This is a matter of judicial interpretation and is far beyond the jurisdiction and certainly far beyond the competence of the Chair.
In reply to certain questions members of the government have given their interpretation of the facts of the case. Whatever this interpretation may be, I again suggest that this cannot be the basis for a question of privilege.
The crux of the whole matter, as I understand it, is that the government is withholding payments authorized by an existing statute until a new statute has been adopted. Either what the government is doing is or is not contemplated, or anticipated, or authorized by the existing statute. Its action may well be subject to censure, but that would be a decision for the House to take on the basis of a non-confidence or censure motion.
Whether it is in order to use this method to induce the adoption of alternative government legislation can again be the subject of debate, but I suggest that this should not be done within the framework of a debate on a question of privilege.
Some time last week the hon. member for Vegreville and the hon. member for Saskatoon-Biggar sought the adjournment of the House under Standing Order 26 for the purpose of debating what was termed then "the failure of the government to carry out the explicit instructions of the Temporary Wheat Reserves Act". The reasons which were given by the Chair to suggest that such a
[Mr. Speaker.)
debate should not be initiated under Standing Order 26 would apply to the suggestion by the hon. member for Winnipeg North Centre that a debate on this contentious issue should be launched by way of breach of privilege.
While the Chair recognizes the importance and urgency of the situation, and also the anxiety of many hon. members to initiate a debate on the subject, I cannot agree that there has been a prima facie breach of parliamentary privilege, at least on the basis of my understanding of parliamentary privilege.



ROUTINE PROCEEDINGS


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, under the provisions of Standing Order 43 I would like to move a motion, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the matter of the failure of the government to observe the law with respect to the provisions of the Temporary Wheat Reserves Act be referred to the courts for immediate consideration.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Vegreville. I do not have before me a copy of the motion in writing. I assume the hon. member has one before him. But in any event if there is unanimous consent-


Some hon. Members:: No.


Mr. Speaker:: -the hon. member can provide the Chair with a written copy of the motion. Is there unanimous consent for the motion proposed by the hon. member for Vegreville?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: The hon. member has heard, as I have, that there is not unanimity and consequently the motion he has proposed cannot be put at this time.



FAMILY INCOME SECURITY PLAN


Hon. John C. Munro (Minister of National Health and Welfare) moved: for leave to introduce Bill C-264, to provide for the payment of benefits in respect of children.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
September 13, 1971

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

Mr. McCutcheon: 1.	Has the Department of Transport recently purchased a used Lockheed Jetstar aircraft?
2.	From whom was it purchased and at what price?
3.	What was the cost of the aircraft when new?
4.	How many hours of use remained on its engines and its airframe before requiring a mandatory overhaul when the government purchased it?
5.	Were any spare parts included in the selling price and, if so, what was their value?
6.	Has the government had to spend any money on the aircraft to bring it up to operational standards and, if so, how much?
7.	How many hours has it been flown since its purchase by the government?
8.	How many Jetstars are now in government service?


Mr. Gerard Duquet (Parliamentary Secretary to Minister of Transport):: 1. Yes.
2.	T. Eaton Company Limited, $1,200,000.
3.	$2,500,000.
4. 1-Engine, 1,730 hours; 2-Engine, 375 hours; 3- Engine, 620 hours; 4-Engine, 1,657 hours. Airframe, eight months remaining to a normal Annual Inspection.
5.	Yes, $280,000 ($130,000 spare parts and $150,000 for overhauled power plant).
6.	No. Normal Annual Inspection.
7.	584:00 Air time to June 3, 1971.
8.	Three.


COST OF CENSUS FORMS AND PENCILS
Mr. Downey: 1.	What was the cost to the government of pencils provided with census forms?
2.	Did the above cost include the cost of sharpening each pencil and the cost of the printing on them and, if not, what was the cost for each?
3.	Were tenders called for the purchase of these pencils?
4.	How many companies tendered and who submitted the accepted tender?
5.	Is the company which submitted the accepted tender a Canadian company?
6.	What was the highest bid submitted and what was the lowest?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: I am informed by Statistics Canada (Dominion Bureau of Statistics) and the Department of Supply and Services as follows: 1. The pencils provided with the 1971 Census forms cost the government $151,939.01, (unit cost of $0.0185 each).
2.	Yes; this amount includes the cost of sharpening the pencils and the printing on them.
3.	Two tenders were invited, one for 6,500,000 and the other for 2,000,000 pencils.
4.	(a) 6,500,000 pencils-Tender April 28, 1970, five (5) companies tendered. The contract was awarded to Eagle
Questions
Northrite, Division of Verol Corporation, Montreal, Que., who submitted the lowest tender, (b) 2,000,000 pencils- Tender September 17, 1970, four (4) companies tendered. The contract was awarded to Empire Pencil Company, Longueuil, Quebec, who submitted the lowest tender.
5.	Of the two companies which received contracts for the pencils, Statistics Canada has no information on company ownership for the Empire Pencil Company of Longueuil, Quebec. This information is not available as this Corporation is not required to report, at present, under any Act of Parliament. In so far as Eagle Northrite, Division of Berol Corporation of Canada Ltd is concerned, Statistics Canada informs that, as of December 31, 1969, 100 per cent of its voting stock was held by non-residents of which 99.9 per cent was owned by Berol Corporation (a United States firm).
6.	(a) 6,500,000 pencils. Highest-$185,069.30. Lowest- $115,050. (b) 2,500,000 pencils. Highest-$48,880. Lowest- $33,860.


DEFINITION OF &quot;LABOUR FORCE&quot;
Mr. Reid: 1.	What is the definition of "Labour Force" used in computing employment and unemployment rates in Canada and how was this definition conceived?
2.	To the knowledge of the government, what is the definition of "Labour Force" used in the following countries (a) United States (b) United Kingdom (c) France (d) Germany (e) Japan?
3.	In what ways does the definition of "Labour Force" in Canada differ from those of the (a) United States (b) United Kingdom (c) France (d) Germany (e) Japan?
4.	Over the past 5 years, what were the actual and seasonally adjusted annual rates of employment and unemployment in Canada using the definition of "Labour Force" in the (a) United States (b) United Kingdom (c) France (d) Germany (e) Japan?
5.	Over the past five years, what were the actual employment and unemployment rates in Canada, using the Canadian definition of "Labour Force"?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Statistics Canada reports that: 1. The labour force in Canada is composed of that portion of the civilian non-institutional population 14 years of age and over who, during the reference week, were employed or unemployed. The Yukon and Northwest Territories and Indian reservations are excluded. The employed includes all persons who, during the reference week: (a) did any work for pay or profit; (b) did any work which contributed to the running of a farm or business operated by a related number of the household; or (c) had a job, but were not at work, because of bad weather, illness, etc.
Persons who had jobs but did not work during the reference week and who also looked for work are included in the unemployed. The unemployed include all persons who, through the reference week: (a) were without work and seeking work, or would have been looking for work except that they were temporarily ill, were on indefinite or prolonged layoff, or believed no suitable work was available in the community; or (b) were temporarily laid off for the full week, i.e., were waiting to be called back to a job from which they had been laid off for less than 30 days.
The above concepts were developed in the late 1930's mainly in the United States and received international
7742

September 13, 1971
Questions
support during the 1940's and subsequently. The first Canadian survey was in 1945.
2 and 3. (a)United States-The definitions are similar to those of Canada except that the lower age for inclusion in the survey is 16; the reference period for looking for work is four weeks and some specific job seeking activities must have been undertaken in that period; and persons with jobs but not at work and looking for work are counted as employed, (b) United Kingdom-The British statistics are based on administrative data from employment offices. Differences from Canada that affect unemployment data include: The British compute the unemployment rate by expressing the number of unemployed as a percentage of the wage and salary labour force (excluding the self-employed); The lower age limit is 15; Persons registered as unemployed for only one day are counted as unemployed; Persons temporarily ill are excluded from the unemployed; There is an under-registration of married women, new entrants to the labour force, teenagers, persons voluntarily changing jobs, retired workers, persons delaying in registering, (c) France-The French statistics are based, like the British, on registrants for jobs and similar comments regarding under-registration apply, (d) West Germany-The German statistics are based on administrative data but are close to the coverage used in Canada. The German data include the military, (e) Japan-The Japanese have a labour force survey similar to that used in Canada. Differences are the exclusion from the unemployed of persons on temporary layoff, persons not seeking work because of illness or because of belief no work was available.
4.	Statistics Canada does not have sufficient information to make these calculations.
5.	Rates of Unemployment and Employment
for Canada
Annual Averages 1966-1970
Year	Unemployment	Employment1966	3.6	96.41967	4.1	95.91968	4.8	95.21969	4.7	95.31970	5.9	94.1


'GRANTS TO ORGANIZATIONS WITH HEADQUARTERS AT ROCHDALE COLLEGE
Mr. Ryan: Have any organizations whose headquarters are at Rochdale College been given government grants and, if so (a) what organization (b) in what amounts?


James Alexander Jerome: Mr. Speaker, the answer to this question is rather lengthy and I would ask the permission of the House that it be tabled and reported in Hansard as though it had been read.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.
[Editor's Note: The answer above referred to is as follows:]
I am informed by the Citizenship Branch of the Department of the Secretary of State as Follows: Four grants totalling $6,810 have been made to Rochdale College, and projects within the College: June, 1967-$5,000. During its early stage, Rochdale was of interest to the Citizenship Branch as a Canadian experiment in social organization and youth participation and its development was thus assisted. May, 1968-$110.-to assist a spin-off project of Rochdale, the Indian Institute, in its attempt to develop a better understanding of Canadian-Indian culture. For the first Cross-Cultural Workshop, the Citizenship Branch provided $110. December, 1968-$1,500-to Rochdale College, in support of its experiments to develop new, participatory approaches to learning. On this occasion Rochdale experimented with a project to involve the community in the appreciation of dance and art forms. December, 1969-$200-to Rochdale College, for a taskforce of the College engaged in the production of a handbook on legal rights. Under the Opportunities for Youth Program of the Department of the Secretary of State, the Rochdale Free Clinic was given a grant of $13,075 to extend the Clinic into a 24 hours a day medical and crisis intervention service.


QUESTION PASSED AS ORDER FOR RETURN
[Stage Direction]
1971 CENSUS-BEAUCE CONSTITUENCY
Mr. Rodrigue: 1.	What are the names and addresses of the census officials and census commissioners hired by the government for the 1971 Census in the constituency of Beauce?
2.	What salary does each receive?
Return tabled.



ORAL QUESTION PERIOD


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Prime Minister. In view of the statement this morning by the American Undersecretary of the Treasury that the United States is studying Bill C-262 and would feel free to apply special import taxes under the U.S. countervailing duty law, is the government now reviewing its position and can the Prime Minister indicate if additional alternative contingency plans are now being considered?
September 13, 1971


Right Hon. P. E. Trudeau (Prime Minister):: On the first part of the question, Mr. Speaker, the government is aware, of course, that the United States is free to act as it best sees fit. We have always felt that in this particular case it would not take that decision. There is no indication that it will take the decision to use countervailing duties on this particular bill. It is just a freedom of action reserved to itself by the United States government and we cannot quarrel with that. If the worst does happen and the hypothesis is realized-for the time being it is a hypothetical question, Mr. Speaker, but I did tell the opposition the other day that we have indeed contingency plans if the worst should happen.


Gerald William Baldwin: As a statement to this effect was made by a senior American official this morning, does the Prime Minister not feel that it is no longer hypothetical and that this government should give some serious consideration to various alternatives?


Pierre Elliott Trudeau: That is exactly the point, Mr. Speaker. I told the Leader of the Opposition last week that we were giving serious consideration to eventual action if this precise method, or the length of operation of the surtax, called for additional measures.


Gerald William Baldwin: Is the government aware of the report of the presidential commission headed by Mr. Tresizca delivered today-Mr. Tresizca is Undersecretary of State for Economic Affairs-that special arrangements with Canada with regard to such things as the auto trade pact and other matters should be reviewed and in many cases rescinded and that the whole issue of trade and economic affairs with Canada should be the subject of multilateral rather than bilateral arrangements, and does the government now feel that it should reassess its whole position in this regard?


Pierre Elliott Trudeau: The same answer, Mr. Speaker. We are assessing our whole position. We realize the grave consequences which might follow from the United States action if they embarked on a protectionist course permanently, but I repeat that these pronouncements are not government policy. We are reacting to the policy that has been established by the President of the United States and not to hypothetical suppositions by various people in that government.



EMPLOYMENT SUPPORT BILL-FORMAL NOTIFICATION BY UNITED STATES OF POSSIBLE IMPOSITION OF SPECIAL IMPORT TAXES

Mr. David Lewis (York South):: I have a supplementary question, Mr. Speaker. In view of the Prime Minister's answer may I ask him whether the government of Canada was informed officially of the statement of the Undersecretary of the Treasury in Washington? Has the government had any formal information from Washington as to their approval or disapproval or of any action they intend to take with regard to Bill C-262?


Pierre Elliott Trudeau: I could not say, Mr. Speaker. As hon. members know, the two ministers mainly responsible are in Toronto meeting with the Japan-Canada ministerial mission. I was not around here
Inquiries of the Ministry
on Friday and Saturday because I was touring certain parts of Ontario, so I cannot answer for the ministers. I am sure they will be in a position to give an answer tomorrow.



LABOUR RELATIONS


David Lewis: Mr. Speaker, I have a further supplementary question in the same area but on a different aspect. In view of the fact that there is also a report from Washington that the importation of the United States wage freeze into Canada by Douglas aircraft and Chrysler Corporation was made without the support or sanction of the American authorities and in view of the fact that there has been a strike vote at Douglas supported by some 6,000 employees, or an overwhelming majority, would the Prime Minister inform the House whether the government has made representations to those two companies to abandon their present position with regard to the wage freeze and, if not, something will be done without delay?


Hon. Bryce Mackasey (Minister of Labour):: Possibly I can answer this question because of the labour implications, Mr. Speaker. I go pretty well from press reports, but at first indication I see no federal law that has been contravened by the actions of these two companies. In the case of Douglas Aircraft, where they are now in the process of collective bargaining, if the company is not bargaining in good faith on the basis of its ability to pay there are provisions in the Ontario Labour Code under which the union can claim that the company is not bargaining in good faith. In the case of the auto workers, I do not know whether they are covered by collective bargaining. In any event, I think both the Acting Prime Minister on Friday and the government of the United States made it very clear that they take a very dim view of the policy of these companies.


David Lewis: I know, of course, about the law in Ontario, and the Chrysler employees concerned are not covered by a collective agreement. As the Minister of Labour ought to know if he does not, they are administrative and managerial staff. I am asking whether the minister or some other member of the government will convey to these companies the federal government's disapproval of the importation into Canada of foreign policies and foreign laws?


Bryce Stuart Mackasey: Mr. Speaker, the Acting Prime Minister did precisely that on Friday in his well publicized statements both in the House and outside the House that we take a dim view of this position if it is based on President Nixon's directive and not on the normal forces at play in free collective bargaining.


Mr. Speaker:: The hon. member for Edmonton West on a supplementary question.


Hon. Marcel Lambert (Edmonton West):: It is not supplementary to this series of questions, Mr. Speaker. I want to
7744

September 13, 1971
Inquiries of the Ministry
go back to those asked by the hon. member for Peace River.


Mr. Speaker:: I appreciate the point being made indirectly by the hon. member for Edmonton West. It is sometimes difficult for the Chair to determine, when a supplementary question is asked, whether it is a genuine supplementary. Even when I have doubts about it, sometimes it is easier to allow the question to be asked. Without further comment, I recognize the hon. member for Edmonton West.



THE CANADIAN ECONOMY


Marcel Joseph Aimé Lambert: My question is directed to the Prime Minister and relates to the legality or alleged illegality of the employment support bill and whether the Canadian government has examined the DISC program to see whether it contravenes the GATT undertakings. If so, what conclusion has the government reached concerning this proposal and what does it intend to do about it? Is there to be any formal protest by the Canadian government regarding the illegality of the DISC program under GATT?


Pierre Elliott Trudeau: Our position on the surtax was made in the GATT forum but our position cannot be made on a United States program which is not law yet but is just something that is being talked about. This House knows that an item does not become law the day it is introduced by the government.


Marcel Joseph Aimé Lambert: Does the Prime Minister anticipate that it will be easier to get changes once Congress has taken the necessary action to implement the DISC program or does he feel that the government of Canada should make its views known now with regard to that program? Has the Minister of Finance been instructed to put forward the views of the government in contacts with the appropriate American government officials whom he will meet during the course of the conference in the next two weeks?


Pierre Elliott Trudeau: Mr. Speaker, it is apparent to the country that on the totality of the President's announcement in August representations were made by the ministerial mission which went from Canada to Washington and subsequently in meetings at official levels. We are not making any representations in international forums at the GATT level on something which has not yet become a matter of law or policy of the United States government but we have talked at some great length, as the House knows, although not always with the approval of the members of the opposition, to the people in Washington.


Marcel Joseph Aimé Lambert: A further supplementary-


Mr. Speaker:: Order, please, the hon. member has had two supplementaries.


Marcel Joseph Aimé Lambert: Others had three.


Mr. Speaker:: The Chair will recognize the hon. member for Annapolis Valley and the hon. member for Temis-camingue and return to the hon. member for Edmonton West and other hon. members with further supplementaries, including the hon. member for Prince Edward-Hast-ings.



PROPOSED UNITED STATES DISC PROGRAM-CANADIAN PROPOSAL TO GROUP OF TEN RESPECTING CO-ORDINATED REPRESENTATIONS TO IMF MEETING

Mr. J. P. Nowlan (Annapolis Valley):: My supplementary is also directed to the Prime Minister. Can we assume from his earlier answer, Mr. Speaker, that, whatever the contingency plan is, Canada has no firm proposal for the meeting of the Group of Ten to combine the other nations of the Group of Ten in a co-ordinated strategy against the DISC proposal so that representations in a co-ordinated, collective way can be made when the International Monetary Fund meets a week later?


Pierre Elliott Trudeau: No, Mr. Speaker.


Mr. Speaker:: The hon. member for Temiscaminque.


John Patrick (Pat) Nowlan: A further supplementary, Mr. Speaker.


Mr. Speaker:: As I suggested to hon. members, at this point the Chair will recognize the hon. member for Temis-camingue subject to returning to the hon. member in a moment.



UNEMPLOYMENT INSURANCE


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I have a question for the Minister of Labour.
Has he received representations from the municipal authorities of Rouyn concerning miners laid off at the Quemont mine in view of the Unemployment Insurance Commission's refusal to pay them benefits on grounds that the mine is paying them a severance allowance for their 20-odd years of service?
Can the minister tell us whether unemployment insurance benefits will be paid to those miners?


Bryce Stuart Mackasey: Mr. Speaker, I will have to check with the Unemployment Insurance Commission to see precisely whether the $750 that some of these miners have received in the form of severance pay is considered in relation to income. Usually what happens is that the moneys are considered as wages or deferred wages and these people become eligible for unemployment insurance only after the moneys received as severance pay or holiday pay have been apportioned
September 13, 1971

over so many weeks. In any event, I will make representations this afternoon to the Unemployment Insurance Commission on this problem.



NATIONAL DEFENCE


Hon. George Hees (Prince Edward-Hastings):: I would like to direct a question to the Prime Minister. Before doing so, may I take this opportunity to welcome him back after his foray on the weekend into certain ridings in Ontario which was made to promote the interests of those who will be running as Liberal candidates in the next election-


Mr. Speaker:: Order, please.


George Harris Hees: -and made possible by the use of several military aircraft-


Mr. Speaker:: Order.


George Harris Hees: -at considerable cost to the taxpayers.


Mr. Speaker:: Order, please. The hon. member was recognized for the purpose of asking a question. He has attempted to make a speech. That is not the purpose of the question period.


George Harris Hees: I was trying to be polite and welcome back the Prime Minister and cheer him up. He looks a little disconsolate because of the reception he received there. Is it the intention of the government to accede to the request of the National and Provincial Parks Association, in a recent letter to the Prime Minister, that the agreement which was signed recently by the Canadian and British governments for the use of Suffield military reserve in Alberta by the British army by submitted to the appropriate committee of Parliament for study and recommendation? Does the government intend to accede to that request&


Pierre Elliott Trudeau: Mr. Speaker, I do not remember reading such a letter. It may have been addressed to another minister. I will look into the matter and see if an answer has been given.


George Harris Hees: I will send it across to the Prime Minister.


Mr. Speaker:: Order, please. We will return to the supple-mentaries that were interrupted a few moments ago.



THE CANADIAN ECONOMY


Marcel Joseph Aimé Lambert: My question is for the Prime Minister. In light of the apprehension of the Minister of Finance disclosed yesterday that thousands upon thousands of Canadian jobs will be lost if American subsidiaries in Canada were called back to the United
Inquiries of the Ministry
States by American parent companies, can the Prime Minister tell us whether the government intends to take action now in light of the apprehension of the Minister of Finance, perhaps in the same way it took action in another case of apprehension?


Pierre Elliott Trudeau: Mr. Speaker, this is really the same question in another form. I have repeatedly told the House that the government is studying contingency plans in the eventuality that this particular action of the government was not enough, but I am not in a position to announce what we would do if these events developed as apprehended.



PROPOSED UNITED STATES DISC PROGRAM-CANADIAN PROPOSAL TO GROUP OF TEN RESPECTING CO-ORDINATED REPRESENTIONS TO IMF

John Patrick (Pat) Nowlan: In order to try to clarify the position of the government and without playing any cat and mouse game, is it fair to assume from the answers of the Prime Minister today that as part of the contingency plans the Minister of Finance has a firm proposal he is trying to develop before the Group of Ten so that these countries can react if the DISC proposal becomes law in the United States, especially in view of the fact that the Group of Ten is meeting just a week before the IMF meeting which will determine the whole state of the currency and imbalance-balance problem of the United States and the world?


Pierre Elliott Trudeau: Generally speaking, I suppose it is fair to assume that. I can say that the Minister of Finance is going to the meeting of the Group of Ten with specific things he wants to say to all the other members at that meeting. In that sense we are making specific proposals, but we do not guarantee anything as to the way in which they will be received or as to what will be done by the other members of the Group of Ten, of course. For that reason we see no advantage in being more precise about the type of thing the Minister of Finance is going to be saying in Europe.



PROPOSED UNITED STATES DISC PROGRAM-MAINTENANCE OF EXISTING SAFEGUARDS UNDER AUTOMOTIVE AGREEMENT

Mr. Edward Broadbent (Oshawa-Whitby):: I have a supplementary question for the Prime Minister. Following the unclear answer by the Minister of Industry, Trade and Commerce last week and the announcement over the weekend of the introduction again of the DISC proposal before the American congress, will the Prime Minister now assure the House that in any subsequent or continuing negotiations with the Americans the Canadian government will insist on the maintenance of the existing safeguards in the Canada-United States automotive agreement?


Pierre Elliott Trudeau: Mr. Speaker, I really do not have anything to add to what the Minister of Industry, Trade and Commerce, who is responsible for the application of this act, said to the House last week.

September 13, 1971
Inquiries of the Ministry


John Edward Broadbent: Following his answer, will the Prime Minister inform the House if my interpretation is correct? Is the Prime Minister saying to the House-that the government is not willing to commit itself to the maintenance of the safeguards that currently exist in the Canada-U.S. auto agreement?


Pierre Elliott Trudeau: As in all negotiations, Mr. Speaker, there are some important issues and some which are less important. I will not say that the Canadian government is not at all times prepared to discuss with the United States the application of the auto pact as the pact provides. As far as it is concerned, the federal government has no intention to draw away from any of the benefits which have been so great under the auto pact initiated by a previous Liberal government.



UNITED STATES IMPORT SURTAX-REPEGGING OF CANADIAN DOLLAR

Gerald William Baldwin: I have a supplementary question for the Prime Minister. In view of the statement made by the Undersecretary of the Treasury to the Senate committee this morning in Washington that certain fundamental conditions will have to be met before the import surtax is removed, has it been made known to the Canadian government that the repegging of the Canadian dollar at a rate satisfactory to the IMF or the United States government is one of those fundamental conditions?


Pierre Elliott Trudeau: This question was asked last week, Mr. Speaker, and answered in the negative by the Minister of Finance.



CANADIAN EXPORT ASSOCIATION REQUEST FOR DOMESTIC EXPORT CORPORATION AND TAX REDUCTIONS

Mr. S. Perry Ryan (Spadina):: I have a supplementary question for the Prime Minister. Is the government going to accept the request of the Canadian Export Association of Montreal that the government establish a domestic export corporation of its own and immediately reduce personal, corporate and sales taxes to improve the export price of our products and stimulate domestic demand as well?


Pierre Elliott Trudeau: I have not seen that suggestion, but if the proposal is that we do so even before the United States acts the answer of the government would obviously be no. At the very outset of this whole affair we said that we were not prepared to embark upon a trade war, and certainly we would not want to start one by the establishment of such a proposal. The government cannot regret the setting up of such an institution by other countries and then proceed to do the same itself.



MEASURE TO ASSIST INDUSTRIES AFFECTED BY CANADIAN DOLLAR APPRECIATION AND UNITED STATES TAX CREDIT MEASURE

Sylvester Perry Ryan: As suggested by the general manager of the Canadian Electrical Manufacturers Association, is the government considering measures to assist industries that have been damaged by the 8 per cent appreciation of the Canadian dollar and the 10 per cent disadvantage caused by the United States tax credit measure and, if so, when will an announcement be made?


Pierre Elliott Trudeau: The answer to the first part is no, Mr. Speaker. With regard to the second part, the hon. member knows there is a bill before the House, now in committee, which is the government's answer to that.


Mr. Speaker:: Order, please. There are six or seven members seeking supplementaries. If we are going to consider other subjects, I suggest to hon. members that for a few moments we might try to touch on other matters of interest to hon. members and attempt to return to this subject later. For the moment the Chair will recognize the hon. member for St. John's East.



EMPLOYMENT SUPPORT BILL-EQUITABLE DISTRIBUTION OF FUNDS AMONG PROVINCES

Mr. James A. McGrath (St. John's East):: My question is for the Prime Minister. In view of the fact the House has given approval in principle to Bill C-262, can the Prime Minister assure the House that an equitable method of distribution will be figured out for the money available under Bill C-262? I am thinking now of the statement made over the weekend by Premier Bourassa in which he predicted that the province of Quebec would be receiving approximately one-third of the funds under this bill.


Pierre Elliott Trudeau: The answer is yes, Mr. Speaker.


James Aloysius McGrath: Does the Prime Minister or does the Minister of Finance intend to sit down with the heads of governments in Canada, particularly with the Atlantic premiers and the premiers of the western provinces, to discuss an equitable distribution of these funds so they can plan accordingly?


Pierre Elliott Trudeau: There has been a great deal of consultation, particularly with those responsible for the industries concerned. As was said earlier this session, I have talked with some of the premiers about the provisions of the bill and I am sure that various ministers have also talked with their opposite numbers. There has been any amount of consultation at the request of the parties involved. I do not know whether the hon. member is suggesting particular meetings in addition to those which have already taken place.


James Aloysius McGrath: A further supplementary question, if I may. Can the Prime Minister assure the House that other parts of the country in addition to Quebec and Ontario will receive just consideration in connection with this bill?

September 13, 1971



IMMIGRATION


Mr. Harold E. Winch (Vancouver East):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. May I preface it by saying that the young Russian who swam ashore on the British Columbia coast has been transferred from Vancouver to Quebec City detention cells on the excuse, according to a Vancouver immigration officer, that better accommodation is available to him there.


Some hon. Members:: Oh, oh!


Harold Edward Winch: Will the minister assure the concerned citizens of Vancouver that this sailor has not been moved from an area where his case is well known to a city more than 3,000 miles away so he can be quietly deported and not be an embarrassment when Premier Kosygin visits Canada?


Hon. Otto E. Lang (Minister of Manpower and Immigration):: My information also, I am sorry to tell the hon. member, is that the accommodation is better in Quebec City than it is in Vancouver, and this is the reason for the transfer. I should like to assure him that the board of inquiry, should it be reconvened, would almost certainly sit in Vancouver, so there would be no problem in connection with representation. I can also say that at the present time I am fairly confident that a variety of problems associated with this young gentleman's stay in Canada may be settled and it may not be long before he has legal status here.


Some hon. Members:: Hear, hear!


Harold Edward Winch: May I say we greatly appreciate the information as to the question of legal status. In view of the answer the minister gave to the first part of my question, may I ask him when he intends to improve the detention cells in Vancouver?



ILLEGAL ENTRY BY RUSSIAN SAILOR-DETENTION PENDING DISPOSITION OF CASE

Mr.  R. Gordon L. Fairweather@Fundy-Royal: I have a supplementary question to ask concerning the holding of Mr. Kourdakov in jail. Was this the consequence of a decision by the minister? Further, may we expect the sailor to be released pending disposition of the hearing?


Otto Emil Lang: In the first instance the detention of the Russian sailor was simply a routine procedure reflecting the manner of his arrival in the country. At the present time discussions are going on concerning his various applications. He is being maintained in what are now fairly comfortable quarters. I hope this matter can be settled satisfactorily fairly soon.


Mr. Fairweather:: Is this Russian sailor able to leave these comfortable quarters, be they in Vancouver or in Quebec City, or is he under detention?
Inquiries of the Ministry


Otto Emil Lang: I am not sure the question has arisen in terms of any request to go anywhere other than where he is. He is comfortably housed at the moment.


Mr. Woolliams:: Is he in custody? Of course he is.
s|e *	*



FINANCIAL ASSISTANCE TO BUGLE AND OTHER BANDS TO VISIT FOREIGN COUNTRIES

Mr. W. M. Howe (Wellington-Grey-Dufferin-Waterloo):: have a question for the Secretary of State. Has the minister's attention been drawn to the fact that over the weekend the National Bugle Corps championships were held in Ottawa? I am particularly interested because for the second year in a row the Durham Bugle Band won the national drum corps junior standstill title. My reason for asking this question is not only to pay tribute to this band but to point out that when the world's fair was held in Japan there was great difficulty in getting assistance from the Department of the Secretary of State for bugle bands of this type which would have been wonderful ambassadors for Canada with their bright, shining faces-


Mr. Speaker:: Order, please.


William Marvin Howe: I ask the Secretary of State whether he will give consideration-


Mr. Speaker:: Order, please. I think the Chair will need a bugle band for assistance in maintaining order at times.


William Marvin Howe: On a question of privilege, Mr. Speaker, many members will recall that we have a number of excellent school bands who at the time of the world's fair needed assistance to go to Japan. They had been invited to go but there was no assistance available-


Mr. Speaker:: Order, please. That, of course, is hardly a question of privilege.



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

Donald Frank Mazankowski: My question is directed to the Minister of Justice, Mr. Speaker. Have he or officials of his department undertaken to determine whether the provisions of the Temporary Wheat Reserves Act are being contravened by the government's failure to pay to the Canadian Wheat Board some $61 million for the crop year 1970-71 plus a further $26 million, approximately, for the crop year 1971-72?


John Napier Turner: We are
apprised of the matter.


Eldon Mattison Woolliams: The Minister of Justice may be apprised of the situation but will he now refer the matter to the legal officers of the Department of

September 13, 1971
Inquiries of the Ministry
Justice to determine whether the executive of this country can usurp the law?


Gerald William Baldwin: And advise the minister of the penalty for doing so. He may be in that jail in Saskatoon yet.


Mr. John Burton (Regina East):: A supplementary to the minister in charge of the Wheat Board. Since the government is following a course of action which assumes that clause 33 of Bill C-244 providing for the repeal of the Temporary Wheat Reserves Act is now in effect, is the government considering following the same course of action with respect to clause 32 of that bill by paying out the $100 million provided for transitional payments in that bill?


Otto Emil Lang: Until the money has actually been appropriated by Parliament it would be impossible to pay the $100 million. The position with regard to clause 33 and the $60 million is that if this amount had been paid to the Wheat Board it would have been necessary for them to hold it in trust pending the passage of the bill; it would have been strictly a bookkeeping entry.


John Stratford Burton: Since the minister is responsible to Parliament for the actions of the board, may I inquire whether he has taken any steps to ask the Minister of Justice for a legal opinion as to the propriety of the government's failure to pay out these funds, in other words, respecting the failure of the Minister of Finance to pay them out? I ask this in view of the fact that the Wheat Board itself submitted a requisition to the government for the funds in question.


Otto Emil Lang: We have obtained an opinion on the question of the requirement to repay the money should it have been paid and should Bill C-244 subsequently be passed.


Eldon Mattison Woolliams: In view of the fact that the Minister of Justice, who is charged with the administration of justice, remains silent on such an important matter, may I ask him whether he intends to permit the executive to usurp the law of Canada or whether he is prepared to recommend to the cabinet that it be carried out?



LABOUR CONDITIONS


Mr. John Lundrigan (Gander-Twillingate):: I have a question for the Prime Minister arising from the domestic unemployment problem in Canada. Can the right hon. gentleman indicate whether there is any major contingency plan in the hands of the government to fight the unemployment expected this winter, and whether such plan will be made public?


Pierre Elliott Trudeau: As in other matters, if there is any policy announcement to be made I will make it in due course.


John Howard Lundrigan: Can the Prime Minister indicate whether the government has made any projections of expected

unemployment levels in Canada this year? Can he indicate whether the projections are expected to exceed one million Canadians, whether the government has set any goals for expected levels of unemployment and whether they will be made public?


Pierre Elliott Trudeau: Mr. Speaker, I am afraid I cannot answer these statistical questions.


John Howard Lundrigan: A point of order, Mr. Speaker.


Mr. Speaker:: Order. The hon. member is rising on a point of order.


John Howard Lundrigan: Perhaps the Prime Minister did not understand my question. I asked him whether the government had made any projections and set any goals. That is not a very statistical question. Can the House and the country be made aware of the expected projections and goals?



CORNWALL-GOVERNMENT PLAN TO ALLEVIATE UNEMPLOYMENT

George Harris Hees: A supplementary question, Mr. Speaker. Did the Prime Minister advise the people of Cornwall when he spoke there Saturday night of any plan that the government had to overcome the 20 per cent unemployment that now exists in that city? If so, would he outline what the plan is?


Pierre Elliott Trudeau: Mr. Speaker, I will try to see if a transcript of my remarks can be handed over to the hon. member.


George Harris Hees: I have seen the transcript and there is nothing there. I wondered whether I had missed something.


Mr. Speaker:: Order, please. We are running short of time. Perhaps the Chair might recognize the hon. member for Edmonton Centre who has been trying to ask a question for a little while.



THE CANADIAN ECONOMY


Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Prime Minister. Is the government considering designating a minister of state to organize an economic secretariat to co-ordinate all government departments affecting the the economy?


Pierre Elliott Trudeau: No, Mr. Speaker.


Steve Eugene Paproski: A supplementary question-


Mr. Speaker:: Order, please. I will recognize the hon. member again, but I have been attempting to give other hon. members a chance to ask questions on other subjects. We have had so many supplementaries on this subject that we will soon be running short of time, but since
September 13, 1971

the hon. member has been very patient I will recognize him for the purpose of asking a supplementary.


Steve Eugene Paproski: Thank you, Mr. Speaker. Is the Prime Minister satisfied, as was once intimated by the former minister of communications, that the date of the next federal election is a sufficient instrument to co-ordinate this government's economic policies?


Mr. Speaker:: Order, please.



INQUIRY OF THE MINISTRY

Mr. Maurice Foster (Algoma):: Mr. Speaker, I have a question for the Prime Minister. In view of the very chummy behaviour of the Progressive Conservative member for Prince Edward-Hastings toward the Prime Minister on his visit to Picton fair last Saturday, does the Prime Minister have any other indication that the hon. member wishes to change his party allegiance to the Liberals?


Some hon. Members:: Oh, Oh!


Mr. Speaker:: Order, please. That question is, of course, not in order.


George Harris Hees: A question of privilege, Mr. Speaker.


Mr. Speaker:: I gather that the hon. member is seeking the floor on a question of privilege.


George Harris Hees: Yes, Mr. Speaker. When the Prime Minister arrived in my riding he looked so downcast that I felt somebody had to cheer him up, so I did my very best.



THE CANADIAN ECONOMY


Mr. Derek Blackburn (Brant):: Mr. Speaker, I have a question for the Prime Minister. Will the Canadian representatives discuss today with the Japanese the possibility of a joint approach to soften up the impact of the United States import surtax and other U.S. economic steps designed to restrict imports into that country?


Pierre Elliott Trudeau: I am rather certain that this matter will come up in the discussion, Mr. Speaker.



EXTERNAL AFFAIRS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Prime Minister in reference to the plight of East Pakistan refugees in India and the ominous portents of famine in East Pakistan. Can
Inquiries of the Ministry
the Prime Minister advise whether the Canadian delegation to the United Nations General Assembly has been instructed to take any initiative in bringing about major and concerted United Nations action in regard to this very tragic situation?


Pierre Elliott Trudeau: Mr. Speaker,
I agree with the hon. member to the extent that this very tragic circumstance can only be handled if there is a great deal of international co-operation. I cannot at this time talk of any special initiative to be taken by the Canadian delegation but it is something that we will consider.


FISHERIES
Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I should like to direct my question to the Minister of the Environment. Will the minister report to the House on the results of the research done on mercury contaminated fish in respect of their availability as safe animal food?


Hon. Jack Davis (Minister of the Environment):: I will, Mr. Speaker.


REGIONAL ECONOMIC EXPANSION
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion. In view of the signing last Friday of a federal-provincial agreement between the government of Quebec and the Department of Regional Economic Expansion, can the minister inform the House of the reasons for extending the former agreement with the Quebec government, and will he undertake to make a statement on motions in the near future on the results achieved under the first agreement?


Mr. Speaker:: Order, please. I believe both parts of this question ought normally to be answered by a statement on motions.

Unless the minister wants to answer the question briefly.


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, the agreement was extended because, for reasons which it would take too long to explain, we were unable to bring the first agreement into operation.


Lorne Edmund Nystrom: In view of reports that the first agreement was of little direct help to the people of the Gaspe, can the minister inform the House what steps he intends to take to

September 13, 1971
Inquiries of the Ministry
ensure that the additional federal funds provided will be spent for the direct benefit of the people of that area?


Jean Marchand: Mr. Speaker, the hon. member only has to read both agreements in order to see the difference between the two.


RENEGOTIATION OF AGREEMENTS WITH PROVINCES OTHER THAN QUEBEC
James Aloysius McGrath: Mr. Speaker, I have a supplementary question. In view of the fact that existing agreements with other provinces have failed to meet their objective of creating jobs, may I ask the minister whether he intends to renegotiate existing agreements with other provinces with a view to making an agreement similar to the new agreement signed with Quebec?


Mr. Speaker:: Order. The hon. member will recognize that his question was prefaced by a statement of fact or alleged fact. Questions really should not be asked on this basis, but the question having been asked the minister might be allowed to reply to it.


James Aloysius McGrath: Then may I rephrase my question since the minister does not appear willing to reply to that particular question. Does the minister now intend to renegotiate agreements with other provinces in view of the failure of those agreements to create employment?


Jean Marchand: I humbly submit to the House that this is not true. The agreements we signed did not serve their purpose.


CRIMINAL CODE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the Minister of Justice. Can he tell the House whether there are any new developments with regard to the procurement of a suitable and practical container to enable a person charged under the so-called breathalyzer section of the Criminal Code to have a sample of his breath for his own private analysis?


Mr. Speaker:: Order. Again I think this type of question ought normally to be asked in writing but, since there are a few minutes left before the end of the question period, with the consent of the House the minister might be allowed to reply.


John Napier Turner: Yes, Mr. Speaker, the Royal Canadian Mounted Police are, shall I say, field testing some sample containers.


POLLUTION
Mr. Randolph Harding (Kootenay West):: Mr. Speaker, I have a question for the Minister of the Environment. During the visit of the minister to Washington last week, were discussions held on policy and standards to be set for the cleaning up of pollution in the Great Lakes? If so, would the minister inform the House of the progress made?


John (Jack) Davis: Mr. Speaker, this was discussed among other matters. As the hon. member knows, the standards and objectives for the Great Lakes for 1975 have already been agreed upon. Our main consideration was to extend agreements of that type to other parts of North America.


Randolph Harding: Did the minister discuss with the United States authorities Canada's opposition to the proposed oil tanker route down the west coast of British Columbia and, if so, what was the result of such discussion?


John (Jack) Davis: Mr. Speaker, the main purpose of our discussing environmental problems with the officers of the Council of Environmental Quality and the Environmental Protection Agency was essentially administrative in character. We were talking about long-term policy alternatives and administrative procedures. We did, however, brush on several important matters, including our opposition to tanker movement of oil into Juan de Fuca Strait and the Strait of Georgia on the west coast.


Mr. Speaker:: Orders of the day.


GOVERNMENT ORDERS
Hon. Herb Gray (for the Minister of Finance) moved: that Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, be read the second time and referred to the committee of the whole.


Marcel Joseph Aimé Lambert: Mr. Speaker, I rise on a point of order, and I believe the minister may have had an indication from his colleague, the Minister of Finance (Mr. Benson) that I would be rising on a point of order at this time. Frankly, I do not know how this has come about, but if we follow the steps which have taken place since June 18 we will see where we are with Bill C-259 at this time.
The burden of my argument is that Bill C-259 contravenes an order of the House made on June 30, and in effect also violates Standing Order 69 in that there was purported to be brought forward an imperfect bill. On June 18, 1971, the Minister of Finance laid upon the table,
September 13, 1971

pursuant to Standing Order 60(1), four Notices of Motions in respect of ways and means budget resolutions. I am only concerned with those dealing with the Income Tax Act. If I may read them, they are as follows:
An act to amend the Income Tax Act and other acts that it is expedient to introduce a measure to: (a) amend the Income Tax Act and to make certain provisions and alterations to the statute law related to or consequential upon the amendments to that act in accordance with Schedule "A" (printed separately), (b) amend the Income Tax Act to provide certain transitional rules related to or consequential upon the amendments described in paragraph (a) in accordance with Schedule "B" attached hereto, and (c) amend the Income Tax Act to provide certain tax changes to become effective in 1971 in accordance with Schedule "C" attached hereto.
I am only concerned with paragraph (a). There is no complaint about paragraph (b), and paragraph (c) has no relationship at all to the argument this afternoon.
It will be observed that under paragraph (a), the amendments to the Income Tax and the changes in the related and consequential statute law are restricted by the limitation "in accordance with Schedule A". It follows that the legislative measure incorporated in these amendments and changes, other than those under paragraphs (b) and (c), must literally follow the contents of Schedule "A". If we look at Schedule "A" this is confirmed, because the proposed amendments and alterations are not put forward in a general way but in an ultimate, literal and legally finished form. There is the document and it is in bill form, complete as to citation of the regnal year and parliamentary session, with marginal and explanatory notes. It could not be a better example of a bill.
During the debate that followed June 18, the House was given an opportunity to debate and then vote upon the amendments and other changes proposed in the Income Tax Act as set out in Schedule "A". On June 30, following upon the budget debate and pursuant to Standing Order 60(10), the order was read for consideration of the ways and means motion referred to earlier. The Minister of Finance moved for concurrence and the question being put, the motion was agreed to by the House on division.
In accordance with the rules, there was neither debate nor amendment of the motion due to the prohibition of debate or amendment under Standing Order 60(10). The House can only adopt or repudiate the motion. The House adopted the motion.
Here I come to a point I have raised with Your Honour before. I have in mind whether Your Honour is able to accept motions in the same form twice in the same session. As we know, under the ancient and consistently enforced parliamentary rule, any reference to a matter already before the House in the same session is forbidden. That decision by the House stands for the remainder of the present session.
Standing Order 60(11) then provides that:
That the adoption of any ways and means motion shall be an order to bring in the bill or bills based on the provisions of any such motion.
A motion was brought in and the bill must be based upon the provisions of the ways and means motion in accordance with Schedule "A". Quite frankly, we must look at Bill C-259 because it is not in accordance with Schedule "A". If Your Honour will look at this monumental bill you will see there is attached to it a fly-leaf containing three pages of noted changes. I have gone through a
Income Tax Act
number of these changes and find that some of them are of a very minor editorial nature, but others are changes in substance.
Regardless of what good intentions there may have been, what has happened here is that we have had an order from this House directing the minister to bring in a bill according to a certain schedule which ultimately became available, but when the bill was printed, or between the presentation and tabling of Schedule "A" and the printing of the bill, the drafters were still at work. Finally, the bill was brought in in an amended form. I do not know whether it is the same bill.
Either the government has the right to bring in amendments through a ways and means motion which has been adopted or it does not. I put it to you, Your Honour, that if the government has this method open to it then so have private members. We do not know whether the government, during the course of committee meetings, or between now and the time the committee has completed its study, will bring in further amendments, but it is my understanding that amendments of substance are going to be introduced.
I suggest there are two questions to be answered. We should require some form of motion to correct the difficulties which have arisen since June 30 in order to regularize Bill C-259, and I think the House would be quite prepared to agree with that. It seems to me that has to be done. If that cannot be done, then I put it to you that the bill would have to be withdrawn. I am not asking for that, but those are the alternatives open to the House in this regard.
The other point-and this one is even more interesting- is that the government adopted the procedure it did in tacking on all those provisions dealing with the form of tax reform or tax changes in the Estate Tax Act or Income Tax Act and, having tacked on all those budgetary provisions and having had those budgetary provisions agreed upon in general by this House and bearing in mind we cannot come back to a decision taken by this House in this session, is it open to anyone, either the government or any private member be he in the opposition or on the government side, to make any amendment which might disturb the ways and means? Further, it might not disturb the totality of ways and means. We must bear in mind Your Honour's decision-and this is where I think Your Honour may have to rethink the position- taken on a previous occasion with regard to the airline ticket tax proposal at which time Your Honour disallowed an amendment I had put forward which would not have disturbed the ways and means but would merely disturb the incidence of the tax. Your Honour based his decision on some citation in May's. With the greatest respect I suggest that May's was in error. This eminent work is misleading in that it is a misreading of the decisions of two different deputy chairmen in the British House at the time of World War I.
Therefore we come to this final point. Even if it is impossible to change the ways and means because the ways and means has been adopted in this House, is it possible to bring forward any amendments to this bill in committee? I pose those three questions. I am afraid we

September 13, 1971
Income Tax Act
will have to have answers. I would be quite prepared, with regard to the first point, to get to work to devise some form of motion which would regularize, shall we say, the purpose of Bill C-259 in the form in which it is before us as against the form it is in Schedule "A". I am speaking only of the first 11 clauses of Bill C-259; that is, the first 602 pages because clauses 12 to 76, which represent another 100 or so pages, are the transitional rule under Schedule "B". I put the point before Your Honour, and although there is no complaint about that portion, I would hope the government could give us an answer on this particular point. Perhaps Your Honour would like to mull over the points I have made with regard to the remainder, because I put it to you that the government has outsmarted or outfoxed itself in the way it handled the budget and the tax proposals.


John Napier Turner: Mr. Speaker, I am rising on behalf of the House leader, the President of the Privy Council (Mr. MacEachen) in order to address the government's argument to the points just raised by the hon. member for Edmonton West (Mr. Lambert) on behalf of the official opposition. First of all, I submit to Your Honour that there can be no question that the pith and substance of a tax bill must not differ from the terms defined by the original notice of ways and means. That of course we concede, and it is found in citation 276, paragraph 5, Beauchesne's Fourth Edition at page 225. With the indulgence of Your Honour I should like to read this to you:
Debate and amendment on the stages of the Finance Bill or other Bills imposing taxes are governed by the ordinary rules of relevancy and, if any of the provisions of the Bill should be found to go beyond the resolutions of the Committee of Ways and Means or other committee of the whole House, as agreed to by the House on report upon which the Bill is founded, a further resolution must be passed by the Committee of Ways and Means or other committee of the whole House, and agreed to by the House before those provisions are considered in Committee on the Bill, or the Bill must be amended so as to conform to the resolutions to which the House has agreed.
Of course, the Committee of Ways and Means to which the citation of Beauchesne refers has been abolished and the original resolutions have been replaced by concurrence in notices of ways and means as found in Standing Order 60 to which the hon. member referred. In other instances, Your Honour, we have had occasion to address ourselves to the current effect of a notice of ways and means or in other instances of a recommendation from the Governor General in limiting the ultimate scope of a bill introduced either pursuant to the recommendation or to a notice of ways and means. The purpose as I understand it, and as I submit to Your Honour, of the old Committee of Ways and Means and the resolutions passed by that committee, was to provide guidelines to the draftsmen of a tax bill as to the substance of the bill. I suppose historically the purpose of both the recommendation of the Governor General or of the Crown and the resolutions in committee of ways and means was to force the Crown to come first to Parliament for the authority to incur expenditure or to set the terms under which expenditure might be incurred on the one hand, or the tax imposed on the other hand against the people of the country.
Now that responsible government operates through an executive responsible to Parliament and that executive

depends for its continuing mandate upon the authority and support of Parliament, it would appear today that gradually we are seeing an elimination of the relevancy of the recommendation on the one hand, or even the concept of the limiting function of ways and means on the other. In any event there is no question that the taxation provisions of a tax bill must be explicitly founded upon a ways and means motion. However, I take issue with the learned member for Edmonton West because there is no ground whatsoever upon which one can claim that the precise verbal formulations or the precise words adopted by the draftsmen of the bill cannot differ from those used in the ways and means motion. My submission to Your Honour is that we are dealing with the pith and substance of those resolutions as compared to the pith, substance and purpose of the bill. Certainly, the substance must be the same, but there is no other limitation on the form.
Bill C-259 was based upon a notice of ways and means tabled by the Minister of Finance (Mr. Benson) on June 18 this year. The active part of that notice of ways and means read to the effect that it is expedient to introduce a measure to amend the Income Tax Act and other acts in accordance with Schedules "A", "B" and "C" which were annexed to the notice. The schedules contained a comparatively detailed description of the substance of the bill that was to be introduced upon the concurrence by the House in the notice of ways and means. Between June 18 and June 30, the day ordered for consideration of the notice of ways and means, the drafting of the actual bill was of course completed. The drafters were guided by the terms of the notice of ways and means and produced a bill based on those terms, the provisions of which in my submission to Your Honour are in accordance with the schedules to the notice of ways and means.
In the process of drafting, needless to say, the draftsmen found it necessary to make alterations in the verbal formulations used in the schedules. My learned friend referred to a glossary of changes which accompanied the bill when it was distributed to members of the House. I submit that these changes are primarily technical, but even if some of them were to amount to changes of a more substantial nature I would submit that does not disturb the ways and means but merely the incidence of the tax within the general umbrella of ways and means.
No doubt when the committee of the whole examines Bill C-259, it too will see fit in certain instances to make alterations or amendments in the verbal formulation of the bill, but these alterations will be subject to precisely the same limitations imposed upon and followed by the drafters of the bill when they completed the drafting, namely, that the bill must always remain in accordance with the ways and means motion.
The crux of the argument is: what do the words "in accordance with" mean? I submit that those words do not mean "precisely the same as". No student of language and surely no dictionary can support that claim. Indeed, the Oxford English dictionary gives the definition of the phrase "in accordance with" as "in agreement or in harmony with". As an illustration of this point, Schedule C to the notice of ways and means might well be considered. Unlike Schedule A, which was in a semi-bill form,
September 13, 1971

Schedule C was in the traditional narrative form attached to most budget bills or income tax bills. In Bill C-259, the provisions of Schedule C are worded in the legal language of a bill. These provisions or descriptive words of Schedule C necessarily had to be converted into the more precise legal terminology suitable to a bill and suitable to legal interpretation. These provisions are not worded precisely the same as the ways and means provisions, but they are in agreement or in harmony with, that is, in accordance with the ways and means motion.
Surely, if Bill C-259 is to be held out of order because it is not precisely the same as Schedule A of the ways and means motion, it also would have to be out of order because it is not precisely in the same form as Schedule C of the ways and means resolution. But this formulation in Schedule C is in the traditional form that has received hallowed approval by this House over many years and has unquestionably been held in order. In other words, the transference from the traditional descriptive language of a ways and means resolution, the narrative or descriptive form, to the precise wording of the bill, with all the necessary alterations that the transfer from narrative to legal precision may mean, have always been held in order by the Speaker and by the House. Indeed, I submit to Your Honour that it has been accepted for the entire history of the Canadian Parliament as correct procedure that a tax bill, while being in accordance with the ways and means resolution, need not be precisely the same as the verbal formulation of the ways and means motion.
Let us consider the situation in which the House of Commons or the committee of the whole would find itself if it were to be restricted in the fashion implied by the learned member for Edmonton West. It would mean really that the ways and means resolution, if we were to follow his argument to its ultimate conclusion, would be so binding on the formulation of a bill that amendments put to the committee of the whole could not be allowed if they strayed from the precise terms of that resolution. Of course that cannot be so because it would hamstring the operation of the committee and, through the committee, of the House.
I submit to Your Honour that what we are dealing with here is something that is in general harmony and agreement with the resolutions. I submit to Your Honour that the bill qualifies under that description and, moreover, that we are dealing less with ways and means than with variations in the incidence of tax within the general umbrella of ways and means. For both these reasons I submit to Your Honour, when you take it under deliberation, if that is the way you wish to deal with it, that these arguments confirm the procedural validity of the bill.


Stanley Howard Knowles: Mr. Speaker, the hon. member for Edmonton West (Mr. Lambert) raised three points of order. The Minister of Justice (Mr. Turner) dealt with only one of them. I suppose that that was appropriate because only one of the points of order is really before us at this moment. I think my friend, the hon. member for Edmonton West, would admit that the other two are hypothetical, but at some point they will have to be faced.
I would like to say a few words about the point that is actually before us at this moment, namely, the variations
Income Tax Act
between the ways and means resolution and the bill. In plain talk this boils down to variations between Schedule A to the notice of ways and means resolution and Bill C-259. Let me say quite openly that the suggestion was placed before the House leaders that instead of the government being asked to prepare a ways and means resolution that was in paragraph style and that would take 1,000 or 2,000 pages to draft, it would be just as appropriate to submit as a ways and means resolution Schedule A which, in effect, would be an advance printing of the bill.
We, the House leaders, are reasonable, sensible people and since this suggestion made common sense we agreed to it. Now, we are not going to turn around and say that because we agreed to it we are going to insist that the precise wording of Schedule A must not be altered in any respect in Bill C-259. After all, we have to treat Schedule A as a resolution, as laying down the general lines that Bill C-259 must follow. I am afraid we are imposing a rather monumental task on the Chair and the table. I hope you have some spare time to go through these volumes, and you will need some extra staff to carry them around with you as well. However, I do think that each of the changes will have to be looked at to see whether Bill C-259 does carry out the terms that were prescribed in Schedule A. I will not quarrel for one moment with changes that were corrections of errors or changes that are improvements in language, but I submit that there are at least a few examples where there are important changes in substance. When that happens, it seems to me that if our rules apply at all a way will have to be found to validate such changes.
Let me quote just one example to support my contention that there are changes that are matters of substance. Clause 123 in Schedule A reads as follows:
The tax payable by a corporation under this Part upon its taxable income or taxable income earned in Canada, as the case may be (in this section referred to as "the amount taxable") for a taxation year is, except where otherwise provided, 50% of the amount taxable.
It is as clear as can be that the corporation tax for a taxation year-and I think that means any taxation year after this clause comes into effect-is 50 per cent of the amount taxable. But when I pick up Bill C-259 and look at clause 123, this is what I find:
The tax payable by a corporation under this Part upon its taxable income or taxable income earned in Canada, as the case may be, (in this section referred to as the "amount taxable") is, except where otherwise provided,
(a)	for the 1972 taxation year, 50%,
(b)	for the 1973 taxation year, 49%,
(c)	for the 1974 taxation year, 48%,
(d)	for the 1975 taxation year, 47%, and
(e)	for the 1976 and subsequent taxation years, 46%, of the amount taxable.
Now, Mr. Speaker, that is no mere correction of an error; that is no mere refinement of what was intended in clause 123 of Schedule A, but is a change from a proposal that the corporation tax be set at 50 per cent so long as this law is in effect, to a proposal that it be 50 per cent in 1972 and then graded down during the next several years.

September 13, 1971
Income Tax Act
If the government has the right to make that kind of change between Schedule A and Bill C-259, I claim the right to make the opposite kind of change, and suggest that the corporation tax should be 50 per cent in 1972, 51 per cent in 1973, 52 per cent in 1974, 53 per cent in 1975, and 55 per cent in 1976.


Some hon. Members:: Agreed.


Stanley Howard Knowles: Carried already.


John Napier Turner: You are carried away.


Stanley Howard Knowles: I know that if I try that I won't get anywhere. I will be told about the balance of ways and means, and the limitations that apply to private members moving things that cost money or affect the balance of ways and means. But if that rule is going to apply to us, then I suggest that the rule that the Minister of Justice accepts, namely, that the bill must carry out the general principles of the ways and means resolution, must apply to the government. I repeat that I have no interest in quarreling over changes in wording, over improvements in language, over making things more precise, but where there is a change in substance I submit that something has to be done to validate it or we are just going to be in trouble from here on down the line.
We are in a new ball game with this new way of doing things. We are taking this brand new tax bill into committee of the whole. We have accepted this procedure of using Schedule A as the ways and means resolution, and I think we had better get off on the right foot. If the House will take my word for it, Mr. Speaker, there are other cases where there are substantial changes. The House won't be surprised that I picked out this one, without saying who directed it to my attention, to demonstrate the fact that there are changes of substance. Perhaps we have need to pass a new resolution. Maybe each time in committee of the whole we come to one of these clauses in the bill that is different from the clause in Schedule A there will have to be unanimous consent, or maybe we will have to get some blank cheque recommendation from His Excellency the Governor General to cover these things. But it seems to me we will have to face up to this situation.
The Minister of Justice quite rightly points out that the picture is changed now that we do not have a committee of ways and means before the bill is introduced. But it was quite deliberate on the part of the Committee on Procedure and on the part of the House when we kept alive the requirement that there be a ways and means resolution even if, by itself, it is not debateable in the House. Since we have that resolution, I think we have to stick with the rule that the bill must carry out its intention. Pardon me for repeating myself, but I say again that there is no quarrel about changes of wording or refinement of meaning, but where there are changes of substance I suggest that these are matters with which we have to deal.
Because the other two points raised by the hon. member for Edmonton West were hypothetical, may I refer to them just briefly. I think his point about this being a second budget debate in the session, with a second motion having been made and so on, is well taken. We cannot deny the right of the government to bring in two budgets

in a session. It has been done a number of times, and the language of Standing Order 60 contemplates the fact there could be more than one budget in a year.
But I think the hon. member for Edmonton West is perfectly correct when he says that, if it is open to the government to re-open the whole question of its fiscal, financial or budgetary policy and to bring before us a motion identical to a motion put before the House previously, the opposition should have the same right to make the same kind of motion it made in that respect earlier in the session. That, of course, is hypothetical. We can deal with it when such an opposition amendment happens to be before the House.


Marcel Joseph Aimé Lambert: But how about going back to a decision taken? This is the point that arises then.


Stanley Howard Knowles: The whole question about what we do about decisions previously taken is, as I say, related to the fact that twice in this session we have taken the same decision on the government's initiative, namely, "that this House approves the government's fiscal policy". If that kind of decision can be taken twice in the same session, surely other matters related thereto can also be subject to a second try by members of the opposition.
With respect to the third question as to our rights in committee of the whole when we seek to make amendments to the bill, I think that here the hon. member for Edmonton West has a good point. However, I think that the best time to deal with this issue is when such amendments are made. No doubt he will make amendments to the bill in committee of the whole, and I will support his right to make them even though I do not agree with them, just as he will support my right to seek to increase rather than decrease the corporation tax.


James Alexander Jerome: Mr. Speaker, I wish to intervene very briefly in the debate. I know that Your Honour is anxious to deal with this rather important point, just as we are anxious to have it dealt with so that we can get on with this rather important legislation. But I would beg leave to take the time of the House for just a few moments to make one or two observations on this question which is really deciding, or attempting to decide whether the points raised by the members opposite are questions for debate or whether, in fact, they go to the correctness of the measure that it is proposed we debate today.
In that regard I would first draw Your Honour's attention to the specific wording of Rule 60(11) on page 63 of Standing Orders which says:
The adoption of any Ways and Means motion shall be an order to bring in a bill or bills based on the provisions of any such motion.
Surely, Mr. Speaker, if it were the intention of that rule to say something other than a "bill based on the provisions of the motion"-which I submit certainly is not the confining language which hon. members opposite have contended-that rule would be differently worded. It would say something along the lines being put forward by members on the other side of the House, that is to say, that the bill that is be brought in must be exactly as the
September 13, 1971

ways and means motion is worded. That is not seriously urged today.
We then come to Beauchesne's reference, which the Minister of Justice (Mr. Turner) cited, dealing with the case if any of the provisions of the bill should be found to go beyond the resolution. I would submit, Your Honour, that the operative words are "going beyond," and with respect in fact I submit that there are two blatant weaknesses in the argument put forward by the hon. member for Winnipeg North Centre (Mr. Knowles). The first is that he has singled out a tax relieving provision, and not a provision that seeks to impose or increase the tax. Since the section that he has referred to tends to graduate the relieving provision downward, it can scarcely be argued that it goes beyond the resolution. It is going in exactly the opposite direction, so certainly does not go beyond the resolution as he has argued.
I would submit, Mr. Speaker, that the most telling argument against the hon. member's suggestion is contained on page 9 of schedule B that was tabled with the ways and means resolution. In the middle of that page there is a paragraph dealing with corporations and their shareholders, and precisely the language now contained in section 123 of which he complained is contained in the schedule. Obviously, in his examination of the legislation his customary care was not taken. While he is usually noted for his precision in these matters, he obviously did not get as far as schedule B or else overlooked that paragraph.
At this point in the argument, I submit that while certain changes have been made between the ways and means resolution and the bill now before us, those changes were advertised completely and accurately when the bill was distributed to all members of this House. Whatever that language is, it fulfils the obligation of the government completely and absolutely, unless it can be shown to you that that language goes beyond the ways and means resolution. I submit that no one who stood up this afternoon for the opposition has shown a single example where the language of this bill goes beyond the wording of the resolution. I submit we should go ahead with the debate, Mr. Speaker.


Mr. Speaker:: I should like to indicate immediately to hon. members that the point raised by the hon. member for Edmonton West (Mr. Lambert) has such vast implications that I should like to reflect on the situation. I suggest that perhaps for the time being the House should be allowed to go on with the consideration of second reading of the bill.
As the hon. member for Winnipeg North Centre (Mr. Knowles) has suggested, it is somewhat of a monumental task that is proposed to the House, that is, to study the schedule which is in itself a monumental document, and compare it with the bill now before the House to determine whether there are substantial changes and whether, in fact, what we have before us now is a document which effectively goes beyond the terms of the resolution which has been adopted by the House.
I might say that I am somewhat puzzled by the fact that the novel procedure being followed in this instance is the result of consultations with representatives of the parties
Income Tax Act
of the House. It seems that hon. members, on behalf of the respective parties, got together and agreed that a new policy would be followed, but it seems that perhaps those hon. and learned gentlemen had not foreseen all the difficulties which might result from the agreement under which they were prepared to proceed. I am wondering whether it should not be their penalty to get back together and find an answer to the problem which they have caused for the Chair. I am saying this, perhaps somewhat wistfully, but with a degree of seriousness. If it is found by the Chair that there are some things irregular about the procedure we are now following, and if my conclusion is that certain aspects of the bill would preclude it from being considered by the House in its present form, I think there must be a responsibility on certain hon. members to get together and find a solution to the problem. This might perhaps be in the form of a motion which might be adopted by the House without the necessity of another six day debate before we proceed with second reading of the bill based on the schedule or the motion.
This being said, I appreciate all the advice that has been given to the Chair; it is very learned advice. Within the next couple of hours, I shall look into the matter and try to look at all aspects of the schedule and of the bill. An example was given by both hon. members of where there might be substantial changes between the two documents which might indicate that there is procedural difficulty about having the bill before us in its present form. When I have done that, I will be glad to come back to the House and give a ruling which may be that I would need to consult with hon. members before reaching a decision. The House knows that this is part of the responsibility of the Chair when faced with a particularly difficult situation, to seek the advice of the learned members. I know that all hon. members are, in essence, learned but some have a bit more experience than I, so I may seek their advice and guidance before a ruling is made and before we decide what course of action may be followed later on. For the moment, I suggest we proceed with consideration of the motion now before the House.


Herbert Eser (Herb) Gray: Mr. Speaker, I am opening this debate on second reading of this bill on behalf of the Minister of Finance (Mr. Benson). As the House knows, it is necessary for him to take part in an important Canada-Japan ministerial meeting, and then to go on to take part as chairman of an equally important meeting of the Group of Ten.
Mr. Speaker, the past two and a half months have been busy ones for everyone interested in the reform of the Canadian income tax system. On June 18, the Minister of Finance tabled a ways and means motion providing for the most comprehensive reform of the system since it was started in 1917. Following the final vote in the budget debate, first reading was given to this Bill C-259. The motion was more detailed than usual in order to provide members of the House and Senate and the public with as much information as possible during the budget debate itself.
It also meant that the legal and accounting professions could set to work immediately reviewing the proposals. Representatives of these professions traditionally review tax legislation for technical and linguistic deficiencies

September 13, 1971
Income Tax Act
between the time of a budget and the passage of the bill in the House. The complexity and length of this bill required even closer consultation and co-operation. Earlier this year officials of the Department of Finance were in touch with the Canadian Bar Association and the Canadian Institute of Chartered Accountants. These organizations and the Canadian Tax Foundation formed special committees which later prepared briefs for submission to the government. They also met many times with officials of the Department of Finance during the summer. I should like to thank these organizations, as well as other organizations which have submitted briefs, for their good work. Submissions from other organizations are still arriving. As a result, technical deficiencies requiring amendments are being continuously brought to the Minister of Finance for decision and sent to the law officers of the Crown for preparation of amendments. These will be moved by the government during the clause by clause study following the second reading vote.
During the summer, the Minister of Finance also discussed the implications of federal tax reform for the provinces with his provincial counterparts. This was followed up by meetings between federal and provincial officials. A main goal of tax reform has been to achieve a federal system which the provinces would find acceptable. The legislation reflects many of the important representations made by the provinces following the publication of the white paper on tax reform.
At their meeting in July, the Minister of Finance reminded the provincial treasurers and finance ministers that those provinces which harmonize their income tax systems with the federal system will receive the same amount of revenue between 1972 and 1974 as they would under the existing system. Income taxes are being reduced for most taxpayers and the federal government is prepared to bear the cost; it is not our intention to force the provinces to share the cost of these reductions. But while it is felt that the provinces should not suffer financially from the federal tax cuts, it is also felt neither should they gain. Therefore, the provinces were informed that the federal undertaking to guarantee provincial income tax revenues if their systems are harmonized with the federal system is conditional upon the provinces establishing rates on January 1, 1972 which, when applied to the new tax base, will result in provincial income tax revenues no higher than during the current year. After that date, the provinces will be free, subject to the provisions of the tax collection agreements, to adjust their rate as they wish.
[DOT]	(4:10 p.m.)
In seeking approval in principle for this bill, I should like to review what we feel the goals of a good tax system should be.
[DOT]	(4:10 p.m.)

A good tax system must be responsive to the economic and social needs of the country. It must also distribute the tax burden fairly, and it must convince most taxpayers that fairness has been achieved. This means that persons in similar circumstances should share similar tax loads, and those with the lowest incomes pay a smaller share of
their incomes in taxes. There must be as few loopholes as possible, and in a complex commercial and industrial society this requires fairly complex tax laws.
A good tax system must be capable of efficient, economical and objective administration. And, as I mentioned earlier, in a country such as Canada the federal tax system must be capable of being harmonized with provincial tax systems to avoid a tax jungle.

As the House knows, some of the measures in the June budget are already in effect. A further stimulus to the economy was provided by the abolition as of July 1 of the 3 per cent surcharge on personal and corporate incomes. The abolition of the personal surtax alone will add about $90 million to the buying power available to Canadian families and individuals during the second half of the year.
The lowest rates of federal tax were changed to eliminate taxes after July 1 on persons with taxable income of less than $500. This change was accomplished in the main by relieving taxpayers with $500 or less taxable income from liability for the whole year under Part I of the Income Tax Act. The guaranteed income supplement for persons 65 and over was exempted from tax, retroactive to January 1 of this year. These latter two changes meant an end of income taxes after July 1 of this year for more than three quarters of a million persons.
The bill, providing it is approved by Parliament, will bring further tax relief to millions of individual Canadians on January 1 and in subsequent years. Personal exemptions are raised to $1,500 from $1,000 for single taxpayers and to $2,850 from $2,000 for married taxpayers. This is the most fundamental form of tax relief provided in the tax reform proposals. There are several measures to help hundreds of thousands of elderly Canadians. The existing $500 extra exemption for persons 70 years and over is increased to $650 and extended to all persons 65 and over. This and the removal of the guaranteed income supplement from taxable income means that all single taxpayers 65 years and over will be exempt on $2,250 of income.
For the six out of seven Canadian taxpayers who are wage earners there is a new employment expense allowance permitting deductions of up to $150 a year; a deduction of up to $500 per child and up to $2,000 per family for child care expenses and new broad deductions for the expense of moving to a new job. Also, unemployment insurance premiums will be deductible, although the benefits will be made taxable.
There are other changes in personal income taxation. Payments made to a school for the care and training of mentally handicapped persons or disabled persons will now be deductible. While medical expenses paid by a medicare plan will no longer be tax deductible, premiums will be deductible if paid to a non-government medical or hospital plan. The limit on charitable donations is increased to 20 per cent from 10 per cent of a taxpayer's income. Donations to registered national athletic associations are to be deductible.
Two new forms of income averaging are provided and these will be available to large numbers of Canadians. An important measure to encourage savings and to permit

September 13, 1971

Canadians to better provide for their retirement raises the deduction limit for contributions to pension plans, deferred profit-sharing plans and registered retirement savings plans.
Passage of this bill by Parliament will mean that 1 million taxpayers who would have paid taxes next year will be removed from the tax rolls. We estimate also that taxes will be reduced for 4,700,000 taxpayers, and will be changed by less than 1 per cent for another 2 million taxpayers.
There are changes in the definition of income, the most important of which results in a capital gains tax. Half of a capital gain will be taxable at the taxpayer's personal rate, while half of capital losses will be deductible. Accrued capital gains will be taxed at death, and as a companion measure federal gift and estate taxes are to be abolished. A taxpayer's home and an acre of land will be exempt from the capital gains tax and personal property is exempt unless the selling price is more than $1,000. For corporations and their shareholders, the general tax rate for corporations is 50 per cent in 1972. The continuing tax cuts will drop this rate 1 per cent a year, reaching 46 per cent in 1976.
To help the growth of smaller Canadian controlled private corporations, the tax rate is 25 per cent on the first $50,000 of business income. A reformed dividend tax credit, 33.33 per cent to be included in income, makes the credit of greater value to lower income shareholders.
For mining and petroleum industries, substantial incentives are continued, but they will be more efficient and less costly to other taxpayers. Automatic percentage depletion will continue until 1976 when it will be replaced by a system of earned depletion. The three-year tax exemption for new mines will be withdrawn and be replaced by a system of fast write-offs. The federal tax on mining profits will be reduced to 25 per cent from 40 per cent in 1977 to take account of provincial mining taxes. Important changes affecting business and property income include a provision to make deductible interest paid by Canadian corporations on money borrowed to buy shares in other corporations.
The rules applying to business and entertainment expenses are to be tightened. Taxpayers in professions such as law and medicine will bring amounts into income as fees are billed.
I think it is again important to note that several features of the proposals will help encourage Canadians to acquire equity in Canadian enterprise. As I already said, Canadian corporations will be permitted to deduct as an expense, interest on funds borrowed to finance the purchase of shares in other corporations. This measure will take away a disadvantage which Canadian corporations have had in competing with foreign corporations in take-over bids. There will be a 10 per cent limitation on foreign assets of pension funds and retirement savings plans and this will have an important influence in channelling the funds of these large intermediaries to Canadian investment. The lower tax rate for small business will be available only to Canadian-owned companies and tax savings afforded by this incentive will be recoverable should the ownership of companies which have benefited from them pass to nonresidents. Also, the form of the dividend tax credit makes
Income Tax Act
the incentive to invest in shares of Canadian corporations more attractive for most Canadians.
In the international field, our tax treaties will be expanded to seek competitive tax treatment for Canadians investing abroad. The withholding tax on investment income paid to non-residents will remain at 15 per cent until the end of 1975. At that time it will be increased to 25 per cent in non-treaty countries. Pensions will be subject to withholding tax after January 1, 1972, but all old age security pensions and $1,290 of Canada and Quebec pension plan benefits will be exempt.
Finally, there are changes in administrative procedures to recognize more fully in law the rights of taxpayers.

Mr. Speaker, it has taken more than 10 years to bring about this reform. The process began in the late fifties with the clamour from the business community for reform. The response by the former Conservative government was the Carter Commission which was established in 1962. Each stage of the process-the royal commission hearings, the commission report, the ensuing debate; then the production of the white paper and the debate on that-contribute to the shaping of public opinion and, indeed, to our knowledge of what a good tax system is all about.

The period since the budget was presented I submit has shown that a good consensus about tax reform has developed in Canada. I also submit that this consensus is reflected in the bill and I therefore urge on this House its passage into law.


Marcel Joseph Aimé Lambert: I would suggest to the minister, who appeared to sigh with deep relief as he ended his peroration by saying that a good consensus among Canadians is expressed in the bill now before us, that the Canadian economic body consisting of the entire citizenry has, indeed, heaved a great sigh of relief. But there is a difference. It is the relieved sigh of a man who, suspecting he is suffering a deep-seated ailment, receives a diagnosis which says: yes, we regret to say you do have cancer in the lung, but you have it in one lung only.
We are looking at the Canadian economy in the light of the tax picture as it now appears, and of the changes which will be brought about by Bill C-259. Since the present government took over, the Canadian economy has experienced many rebuffs. It has been constantly plagued by inflation, and a good deal of that inflation was built into the system by the sins of omission and commission of the previous administration. A considerable number of those who sit on the treasury benches today were members of that administration and they cannot shuck off their responsibility. They were responsible for the Pearson decisions which drove inflationary factors deep into the economy. We have not yet got rid of the effects of those decisions, notwithstanding the fact that the present administration has over-reacted in the last 15 to 18 months by taking action which has resulted not in containing inflation but merely in increasing unemployment.

September 13, 1971
Income Tax Act
I will say that in 1968 the Canadian economy encountered another major setback through the adoption by this chamber of a new estate tax act, a measure as punitive and as depressing as could ever be devised. The net result is that after three years the government has finally realized it must get rid of that legislation. Thus, we have before us a proposal that the Estate Tax Act and gift tax provisions shall expire as of December 31, 1971. Well, to this extent I suppose one can give a mild hurrah. But it will be only a mild cheer because, as in the old shell game, there has been a great deal more change in appearance than there has been in substance. I say this because there has been a real sand trap or, shall I say, quicksand left in three of the major provinces. It is all very well for the minister to say we intend to get rid of the estate tax because, frankly, we only retained 25 per cent of it except in the case of the provinces of Quebec and Ontario which collect their own. That is precisely the point. The government is giving away nothing, yet it is imposing upon the people of Ontario, Quebec and British Columbia a capital gains tax in return for which there is no compensation whatsoever. This is part of the shell game which has been going on under these provisions. It really does not matter, I suppose, to a bona fide resident of Alberta who was paying 25 per cent estate tax, because in due course there was a 75 per cent refund-that portion which the federal government re-allotted to the province in about the third year after the death of the estate owner. This amount was passed back to the estate upon application. All right. So there is no estate tax and no refund. The Albertan says this is good. But he suddenly finds himself facing a capital gains tax, an additional tax.
With regard to the situation of the man in Ontario and in the Province of Quebec, may I say that admittedly there was a dovetailing of the two acts, the federal and the provincial. The estate tax gave credit for succession duty paid and, subject to some minor differences, it was in effect the same. Now, the federal government says: We are going to be good boys, and we intend to cancel the estate tax. But residents of Quebec, Ontario and British Columbia must still pay succession duty and in addition, as taxpayers, they are to be faced with a capital gains tax. What have they gained in consequence of this shell game? The net result is that a new capital gains tax has been added to their burdens. Let us consider this for precisely what it is. It is an additional tax, and the fact that estate tax has been removed means precisely nothing in the case of three provinces because succession duty will continue to be exacted.
It was a fateful day, that day in November, 1970, when the government white paper on taxation was unveiled for examination. They called it tax reform but no, it was not tax reform at all. It involved tax changes in connection with income tax. There was a great propaganda effort made, and I remember the debate was scheduled to begin on the Friday preceding the Grey Cup game. What the minister had to say as well as the Leader of the Opposition (Mr. Stanfield) and others who had criticisms, by then apparent, of the white paper was completely lost in the discharge of euphoria over the Grey Cup weekend.

Then, we started the debate in December in this House, which lasted until December 19-in fact, I think it went on even longer than that-to refer the contents of the white paper to the finance committee. The Leader of the Opposition then went from one end of the country to the other on a blitz campaign to get people interested in what would happen to them if the government's proposals in the white paper were adopted. Though these were government proposals, they were known by the minister's own name. However, he has been a poor martyr. The proposals should have been known under the government's title.
In the result, of course, there was a big public uprising against the proposals. As a member of the finance committee, I can assure hon. members that there was wave upon wave of protest sent to the committee. I am not talking of the inarticulate protest which may sometimes arise from the natural reaction one has against paying taxes. No one likes to pay taxes. I am referring to intelligent, cogent criticisms. We were able to examine government officials and those who supported certain aspects of the proposals, such as integration and a number of the other, shall I say, rather sophisticated but unreal proposals that are made in the white paper.
I am sorry that on this occasion we are not going to have the opportunity of at least a limited examination of these protests. The Minister of National Revenue (Mr. Gray) has told us that representations have been received by the Minister of Finance (Mr. Benson) in regard to Bill C-259. Outside of the brief of the Canadian Bar Association, which has been discussed publicly, very little by way of criticism has reached the members of this House. We have had a fragmentary presentation of objections from certain categories of co-operative societies, but we have not seen what the Canadian Institute of Chartered Accountants has prepared, which I gather is a very telling document.
As I said on my previous argument on the point of order, this debate is bound to generate amendments of substance; otherwise the government is going to find this bill amending the Income Tax Act unworkable. This is why I intend to read extensive portions from the brief of the Canadian Bar Association which indicate just what is wrong in the approach taken to this bill.
As I have said, the Canadian economy has suffered a number of rebuffs, and it will continue to suffer rebuffs because of the uncertainty surrounding the tax changes. Mercifully, we may be getting to the end of this period of uncertainty, but why did this uncertainty arise? It was not because the members of the opposition or the Canadian public took a long time to convince the government that it was in error. It is now 22 months since the publication of the white paper, which frankly was like the government putting a fox among the chickens. Although schedule A to the June budget papers had the effect of calming people down, frankly some people had already made the decision not to invest and had taken their money out of the country. I am sure the Minister of National Revenue would be very interested to learn how many people have decided to take their money out of the country during the past year in light of the white paper proposals.

September 13, 1971
In addition to that, our reputation in the overseas investment market has gone as a result of these foolish steps that were taken. The uncertainty created has also had a great effect upon the Canadian economy. As a matter of fact, the effect of these proposals may be just as bad as the effect that some of the fiscal and monetary restraints proposed by the government have had on creating unemployment.
The government has now seen the error of its ways and has brought back many changes. As a matter of fact, when we look at the schedule containing the comparative tables showing the present law, the white paper proposals, the recommendations made by the House of Commons committee and the proposals contained in the present bill, we find a welcome number of changes which parallel the recommendations of the committee. I suppose that as a member of the committee I should feel gratified, but this seems to me an awful way to run the shop. The economy of this country has been through some 18 months of convulsions, and now the government has come back along the same general path in its return to a little sanity.
Yet that is the exercise we all went through. There has been unemployment and restrictive government policies, both monetary and fiscal. There has been premature acceleration of Kennedy round cuts. I should like to know whether the Parliamentary Secretary to the Minister of Finance (Mr. Mahoney) or the Minister of National Revenue is able to tell this House whether these premature cuts did the employment situation in the chemical industry any good. This industry has been driven to its knees as a result of the action of the government. It would have faced a good deal of difficulty with the unpegging of the Canadian dollar, which would have meant an immediate increase in its prices of 7 to 8 per cent. In view of the narrow margins on which so many of our export industries work, it is not difficult to realize the effect on this industry of the action taken by the government.
Since August 15 we have had proposals by President Nixon for the restoration of the United States economy which are very unsettling to Canadian industry and the whole economy of Canada. There is the 10 per cent surcharge, the DISC program and the further upward pressure on the Canadian dollar. We may see an attempt to force the Canadian dollar up to the $1.03 or $1.04 level. Again, this will put people out of business in the export market.
Then, we come along with these tax changes. Are they going to do anything to help the Canadian economy? We realize that many of the changes will be beneficial and welcome, including the increase in personal allowances. The government has not answered in any satisfactory way why it would not have been more beneficial to low income groups, including low wage earners and pensioners either on low personal pensions or on public superannuation allowances, to have instituted the system of tax credits.
A bill was introduced today in respect of income security plans. The same could have been achieved through tax credits with better results and effectiveness and with less injustice than is now apparent under this system. I understand the standard allowance will be $2,850 for a married couple. This exemption of $850 in personal exemptions to
Income Tax Act
a married couple will be of greater benefit in respect of a taxable income of $10,000 than a taxable income of $5,000.
In any event, with these changes we are caught with a question of timing and of complexity. There is no doubt in my mind that this House would be far better occupied in dealing with the major economic problems which now exist. I have in mind unemployment, trade and the terribly complicated relationships with the United States. Instead of that, we are going to be in the committee of the whole dealing with a bill some 600-odd pages long. This is a terribly complex bill, but the whole machinery is related to Bill C-259.
The only way we can deal with Bill C-262, once it comes out of committee, is by suspending our consideration of the tax changes and dealing with the report stage and third reading. All I can say is that in preparing its original white paper the government can only be compared to an engineer, an architect or contractor who, in putting up a building, completely misjudged the necessity of appropriate excavations or footings and foundations. He starts to construct his building and finds that the excavations for his footings and foundations are far too deep and too wide. He has to pull down what he has put up and begin filling and compacting in order to re-establish his foundation. That is all the government has been doing in the past several months in respect of these tax changes. It has been filling and compacting in order to arrive at a much better footing for these tax changes.
Let us consider some of the major provisions. There is no way I could go into all the aspects of this proposal. The House will take some satisfaction from the proposed increases in personal exemptions. They are acceptable as far as they go. Of course, there will be a difference of opinion as to the level at which the increases in exemptions are established. Some might suggest $1,500, others $1,800 and even others $2,000, but the government has proposed $1,500 and that is its responsibility.
There are two areas where I believe some changes in respect of exemptions might have been made had the government been in favour of dispensing entirely with a tax credit system, and one relates to allowances in respect of post-secondary education. Percentages in respect of post-secondary levels in Canada are insufficient and we have been advocating for years that every effort must be made to get children through some form of post-secondary education. We have many community colleges and technical schools where people are improving their qualifications to hold down better jobs, but not one blessed penny of the tuition a taxpayer pays can be recovered through an allowance on his ordinary income. The cost of sending a daughter, a son or even a wife to university in order to obtain a higher level of education is treated in the same way as the cost of taking a trip, in that neither are allowed as an exemption. Certainly, if a student has summer earnings or a personal income he can deduct his education fee on an approved scale, but this is only a minor thing. It seems to me we could have done better with fewer complications by adopting this idea of allowing as a deduction from gross income the cost of tuition for post-secondary education. Many people think that post-secondary education is a prerogative of the more effluent in this country. That is not true and quite contrary to the facts.

September 13, 1971
Income Tax Act
In my riding there are many landed immigrants who have come within the last three years. In many cases, the husband and the wife have gone out to work. Many of them speak very little English. They have obtained their citizenship because the president of the citizenship court has admired their guts and determination. Their children are going to university, or in some way are obtaining superior education. Why could we not have rewarded those people and given them encouragement for sending their sons and daughters to university in order to improve themselves. I find it incomprehensible that we somehow feel that an attempt to achieve success must be penalized. Then, we have the case of the Chinese market gardener whose son becomes a doctor in zoology. The father worked with his hands through long hours for years and yet we do not give a damn about him. This is the sort of thing that tax reform should mean for the betterment of Canada. Everyone of those people contribute a great deal more. Not only that, but then we turn around in these proposals and say we are going to tax anyone who wins a scholarship or bursary which will help him in his higher education. We are going to bring in that provision.
Some people will say I am an elitist. Of course I am. I will forever reinforce success and encourage competence and excellence. As Canadians, we should do that. This does not work to the disadvantage of those who do not have those qualities. You are not doing them any good by pulling down the others. You know, we will not build a nation or an economy by merely insisting on a fair share of mediocrity for all. So, it seems to me that in that area the government could have done a lot better. There are complexities. This is referred to in the 76-page brief of the Canadian Bar Association. I should like the government to release the briefs it received from the Canadian Chamber of Commerce, the Canadian Institute of Chartered Accountants and many others. If the Canadian Labour Congress has put forward a studied brief on this, that is fine; I should like to be able to see it and any others which are of a competent nature and which try to improve this law. That is why as I say it would have been better to have sent this bill to the Finance Committee where these people could be heard, and their views examined. Then, it could have been brought back here in due course. But, no. Let me read what the Canadian Bar Association had to say:
Accordingly, we have tried to avoid in this brief, the expression of views on questions of broad social policy. We have attempted to focus on questions of policy only when the proposed legislation appeared either to depart from what we understand to be the expressed intention of the government or where our particular expertise and experience with legal concepts indicates that the proposed changes may have unforeseen consequences.
At the outset, we must stress that we regard this brief as inadequate. Many of the concepts in the proposed legislation are novel in the sense that the implementation of even previously announced goals has been accomplished by the introduction of concepts which never existed in Canadian tax legislation before, if indeed they have ever previously existed. We are impressed by the attempted integration of these concepts throughout the statutory framework. This has been largely accomplished, however, at the cost of instituting a completely new taxation vocabulary, the mastering of which may be likened to the difficulty of learning a new language. Over and above the vocabulary problem, we also have problems with the extremely complex and detailed provisions, utilizing that vocabulary, which have been considered necessary

to implement the desired goals, including permitting necessary exceptions where hardships or overlapping would otherwise occur. The transitional provisions were not available until the beginning of July, the outline of the resource industry regulations and the international income regulations were even later.
I would suggest to you, Mr. Speaker, that if the Canadian Bar Association was handicapped in its examination of these proposals, then the Members of Parliament have been handicapped even more so. I say through you, Mr. Speaker, to the government that it is indeed unfortunate we are to now have this whole complicated package tossed before us, because frankly those who will have to swallow or digest this very indigestible material will not be in a position to deal with it one way or the other. Surely to goodness these tax changes are highly important to the Canadian economy. We can destroy it. The parliamentary secretary just before his peroration-I apologize to the Minister of National Revenue (Mr. Gray). Mind you, I knew him very well as Parliamentary Secretary to the Minister of National Revenue and as Chairman of the Finance Committee. This was old habit. We will go back to the Bank Act sometime to see Row we get along. The minister spoke about equity, justice and parity. Of course, a tax system must produce some revenue. I suppose it should incidentally, according to the government I think, maintain and promote economic growth.
Well, we are now being asked to put something on the back of the Canadian public when, frankly, no one, least of all the government, knows what it will do. The Canadian Bar Association complains about the shortness of time and I do, too. The Canadian Bar Association goes on to say:
We do feel confident that for every problem or mistake, we have found in the statute, there are ten we have missed. In addition, we are sure that some of the possible problems or mistakes hereinafter referred to will, upon further study of the reform legislation, prove not to exist.
I gather that already officials of the Department of Justice have started to take apart this brief and, in places, have found the Canadian Bar Association or the authors of this brief were in error. Such is always the case, particularly when the job has to be rushed. The brief continues:
We do not feel one can commend legislation of such complexity without a fuller assessment of the benefits it will bring than we have had an opportunity to make in the time available to us. In the same vein, we do commend for your consideration the rewording of definitions which are a complete misnomer.
I shall not go through all that they say about the necessity of rewording all definitions, but they conclude with this:
Furthermore all defined terms should be put in capital letters to alert the reader to the fact that, in this legislation, words are often defined in strange ways.
Anyone who has had experience with taxation statutes would wonder if there is not some different version of the English language, one reserved specifically for tax statutes.
Many provisions of the bill are virtually unintelligible at first reading because their purpose is often obscured by the method of presentation. This problem should not be dismissed as being unimportant as the legislation should be understood by-
September 13, 1971

And I trust all hon. members of this House qualify under this definition.
-an intelligent reader and not only by specialists.
Reference is made by the authors to the internal revenue code of the U.S. being written in a much more readable form. They finish their recommendation by saying:
We commend for your consideration, the setting forth of a general rule at the start of every subdivision where possible. In many instances it is now difficult to tell whether a section in the bill contains a general rule or is dealing with an extraordinary circumstance, special exception or loophole. We have indicated in this submission, several places where reciprocity of treatment is not afforded to both sides of a transaction-
And this, I trust, will be corrected, Mr. Speaker.
-as where a selling price is deemed to be some amount but the purchase price is not deemed so to be. We are sure we have overlooked many places where this will be a problem in the legislation and we suggested a general section might be included to the effect that such reciprocity will always exist unless explicitly excluded in the statute.
In other words, if you sell a car for $5,000, somehow or other that is not the purchase price for the buyer under the circumstances explained in the act. The intelligent reader would say: "Now, come on, let us have a little sense and let us get a little sense". Now, Mr. Speaker, this will create some problems later on. I referred to this in my remarks in the point of order I raised. I do not think it is any secret that the Department of Finance has an armload of amendments ready for this House on this bill. I know that some of them are to be of substance, and I am wondering. I think there is a way out but I wonder whether the government is prepared to take it. However, this cannot be brought about by shuffling amendments.
May I conclude the introduction of the presentation of the Canadian Bar Association:
In view of the complexity of the draft legislation, we are certain that in the course of the next two or three years, many situations will come to light where the technical application of the legislation will be most unfair to taxpayers. We are equally certain that many "loopholes" will become obvious.
But here is that query: why are the dice always loaded in favour of the government?
We assume that it is for the latter reason that the tax collector has retained a broad discretion in cases where the equities clearly dictate a tax should be imposed, even if such a tax is inconsistent with the technical words of the Act. Surely, in fairness, this should be broadened so that the taxpayer has a similar right if he can convince the courts that to levy a tax would be a manifest inequity.
I have not been able to find that particular section, one of those broad discretionary powers given to the Minister of National Revenue that always loads the dice in favour of the tax collector. The hearings of the Finance Committee on the tax proposals, the hearings of the committee of the other place, the representations in the press and the letters to the press all demonstrated one thing, if nothing else, that the Canadian public are in fact the people more affected than the government. Gracious me, you would think sometimes that the government and the people were enemies, but certainly those who line themselves behind the bureaucratic walls consider the public to be the enemy, to be the body that has to be plucked. This white paper of the government was supposedly founded on the main principle of equity; in other words, a sort of neutrality between taxpayers. This was the darling of the aca-
Income Tax Act
demies, so many of the obscure economists who have been writing about this in some dusty journals.
I majored in economics, Mr. Speaker. Perhaps one would never know this, but those were my better subjects in my undergraduate years, and I won a scholarship on the basis of that. But many of those things drove me away from that fate which I thought was worse than death. Many economists have become enlightened, but we have talked about this equity as between taxpayers which was supposed to be the first principle of the white paper. The Canadian public, to a man almost, said that equity is as between me, the taxpayer, and the government. That is where equity shall lie. That is where I say it should lie. As between government and taxpayer there shall be equity, and as between taxpayer and government there shall be equity. There is no equity between those to whom I referred last. Gone are the days of these prerogatives. Many of them are carryovers from the rights of the lords to all sorts of privileges over the persons and property of the subjects they governed. These rights have been translated into government. But I would suggest to you that people are saying no, and after all I do not think that the people of this country exist for this government to govern but that this government exists to govern over the people.
Now, let us turn to other matters. There is the matter of the capital gains tax. It is a very complex matter. We have used the phrase "a can of worms". I have used it many times. It has become a trite phrase. In fact, I think it is a barrel of worms. Some good may come out of it, but it certainly has differing effects in various parts of Canada. I want to point out quite clearly that a case can be made for a capital gains tax with regard to gains in the stock market, provided adequate provisions are made for allowances for losses. Personally, I have always felt that that has been one of the unfortunate features of the financial history of this country. By reason of the absence of a reasonable capital gains tax, with compensating allowances for losses, we found that the average Canadian simply could not afford to lose, and so he allowed the other guy to come in who, under another country's law, had a way of compensating for his losses. As a result, the Canadian invested in savings accounts and government bonds, but not in equities.
Then, we had the principal occupation rules that were insisted upon, contrary to reality. Our foreign friends really were invited to come in to take over many of our natural resources because of a stupid stubbornness to insist upon the purity of the main principal occupation rule.


An hon. Member:: You tell them, Marcel.


Marcel Joseph Aimé Lambert: A lot of nonsense has been written in the newspapers about capital gains. So far as hon. members opposite are concerned, I can certainly tell them that during the years when I was on that side of the chamber, and connected with National Revenue, there was a degree of inflexibility in the thinking about these matters. Like hon. members opposite now who find themselves in the same position, we were struggling against some kind of official position as inflexible as dry wood.

September 13, 1971
Income Tax Act
When you put too much pressure on it, it does not bend; it cracks.
Another reason for this inflexible attitude was that the oil patch was too far away from central Canada. Because oil development was happening a long way off, those people here who were making the decisions did not understand what was involved. The Department of Finance officials did not understand the difference between conventional oil production and the production of oil from tar sands. In their original conception, both forms were lumped together in the most amazing way. Maybe now, after some exposure, we will get a better understanding of the matter.
A lot of people claim that foreigners are making capital gains, that somehow or other this is totally wrong, and that they should not escape free. Should a Canadian firm be taxed because it develops an industry in a foreign land?


Some hon. Members:: Sure.


Marcel Joseph Aimé Lambert: These people here, Mr. Speaker, are the original goose killers, without understanding whether the eggs are made or laid.


Stanley Howard Knowles: Even the geese are off the gold standard now.


Marcel Joseph Aimé Lambert: I have seen some rather naive discussions in some newspaper columns with regard to these tax proposals. Look at the volume of comment that has developed with regard to Imperial Oil, lamenting that we cannot go and tax Standard Oil of New Jersey because of the increases in Imperial Oil assets. Of course, you are never going to be able to do that under a Canadian capital gains tax. The man who wrote that sort of stuff should start back at square zero.
During the committee hearings on capital gains we made a great attempt to bring some fairness and reality into the original proposals. Mr. Speaker, you may recall that the principal residence was going to be subjected to tax, after some allowances. It is true that a principal residence will still not be entirely free from attracting capital gains tax at this time, although in some cases it may do so, but the proposed rates have been halved.
I remind hon. members opposite that when I moved an amendment to exempt farm lands and ranch lands from capital gains tax when sold for bona fide farming purposes, the Liberal majority on the committee voted against my amendment and defeated it. We will have to return to that matter. There is a complete failure to understand the problem when, out of the blue, the government thinks it can institute capital gains tax on farm lands with any degree of equity towards the people who have farmed those lands, or towards those who intend to farm the lands.
We have had quite a reaction to this bill from the co-ops. I do not know what the house is going to decide, but it seems to me that the government has advanced its proposals after looking at some of the largest co-ops in the country, organizations which have lost their co-operative origins, that operate in the hundreds of millions of dollars class, their boards of directors being far removed from the ordinary members, in the same way as the boards of

the biggest multinational corporations are far removed from the shareholders.
Unfortunately the government's proposals gather up into the same net hundreds if not thousands, of small local co-operatives. I am speaking of co-operatives organized on a local self-help basis.


John Edward Broadbent: You are defending socialism now.


Marcel Joseph Aimé Lambert: If the hon. member thinks that socialism is the co-op movement organized on a local basis, he is one of those academics who got lost in the economic woods.
Then there are the proposals with regard to child care expenses. Unfortunately, there are a number of limitations proposed that will disappoint a great many people. There is the necessity for people who do the child caring to furnish receipts, and there are provisions with respect to income tax, the Canada Pension Plan, and blood relatives under the age of 21 years. I ask, why is the age of 21 years stipulated since a number of provinces now insist that people are adult at the age of 18 years? The federal government has not kept in tune with Alberta, Manitoba and Ontario, in which persons aged 18 are now adults. Under the federal government proposal, persons between the ages of 18 and 21 years are somehow left in the land of limbo, and apparently under these proposals any blood relative under the age of 21 is going to be disqualified. We will find inequities in working allowances and moving allowances. I can think of some office bulding in the centre of this city where there may be a large law firm with a number of young staff lawyers. They will be entitled to working allowances but a young man or woman out of the same graduating class, who may be in a struggling partnership in one of the less attractive sections of the building, will not be entitled to those same working expenses, even though they be incurred. This does not make sense.
.20 p.m.)
Next, we come to medical benefits. In the provinces of British Columbia and Alberta, if medical premiums are paid by the employer, as they and other fringe benefits are under many collective agreements, they become additional income and are taxable. While the payment of premiums is taxable, the benefits, or shall we say the expenses, that are paid on behalf of the individual are disallowed under the medical expense allowance. A lot of people have not heard about that.
With regard to small businesses, we have here a partial unveiling of the government's policy with regard to foreign ownership. The differential in favour of small business is limited to Canadian owned business. All foreign held business of a corporate nature, even though it may be just a small distributing agency, is disallowed from the more favourable rate. I know of scores and scores of businesses, Mr. Speaker, which are small subsidiaries of foreign firms-French, Belgian, British, or even American-that have been domesticated and are presently entirely Canadian. One could be the distributor for an English firm of tool manufacturers, but the net result is that the business will be closed and I suppose the government will be proud of that.


Eldon Mattison Woolliams: They have a fair record in that regard.
September 13, 1971


Marcel Joseph Aimé Lambert: This is going to be part of some of that bludgeoning that they do. Some of it is bull-headed, but it is bludgeoning, in order to correct some minor type of inequity. Are we going to tell the Canadian president or manager of a foreign-held subsidiary producing a product which we do not make, that we are putting him out of business, that we are going to tax him at 50 per cent from now on?
I find that the tax changes at this time are inadequate for many reasons, Mr. Speaker. We are being caught up in this tangle whereby this House cannot deal with economic issues unless we swallow this whole bill in one indigestible gulp, acknowledging to the government that, through necessity of dealing with other matters, we will skip over this. That is what they would like. If that is the case I am going to move, seconded by the hon. member for Saint Hyacinthe (Mr. Ricard):
That all the words after "that" be struck out and the following substituted:
This House deeply concerned with unacceptable levels of inflation, persisting unemployment and stagnant industry and conscious of the necessity for meaningful tax reform declines to give second reading to a bill which does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts and incentives, does not contain adequate tax exemptions and is not calculated to materially improve business and labour conditions in Canada now or in the foreseeable future.
Subject to your views with regard to the nature of this amendment, Mr. Speaker, I would like to continue my remarks after we have had a consideration of it. If Your Honour wishes to put the amendment, I will be quite happy to conclude my remarks after you have done so, but in the interval I would hope that I could continue my remarks.


Mr. Speaker:: Before putting the amendment to the House, it would be helpful if the hon. member or anyone else interested might enlighten the Chair as to the acceptability of the proposed amendment. I might say, prima facie, it looks like a substantive proposal rather than an amendment, but I would be pleased to hear what hon. members have to offer to the Chair by way of guidance.


Marcel Joseph Aimé Lambert: Thank you, Mr. Speaker. I welcome the opportunity to try to assist you in accepting this amendment.
First of all, may I repeat an argument that I made the other day, that we are under new rules and that reasoned amendments should be acceptable at second reading. It must be remembered that on this bill this is the first opportunity for debate. This bill had its origin in a resolution passed before this House without debate or amendment. The provision of rule 60 is such that the minister is empowered to bring forward a bill. That is the motion; it is not the budgetary proposal that antedated it. The motion starts with the ways and means resolutions which were not the subject of debate. This, then, is the first opportunity for debate.
I put it to you, Mr. Speaker, that in order to have debate there must be a joinder of issue; there must be an alternative to the principle. There is a joinder of issue when we consider the matter of the principle of second reading of this particular bill. These I have outlined. We declined to read the bill and from a procedural point of view I find it
Income Tax Act
extraordinary that this type of amendment in this House would not be accepted, whereas in the procedure from which we draw our inspiration or, shall I say, our origin, this type of amendment is a commonplace. I would say that certainly the House can express its concern about "unacceptable levels of inflation, persisting unemployment and stagnant industry". That does not introduce a new principle into this particular bill.
.30 p.m.)
We come to the tax bill being conscious of the necessity for meaningful tax reform, but we decline to give second reading to this bill because there is insufficient stimulus to industry contained in the provisions and the amendments to the tax bill. I find it difficult to understand how one could give reasons for being opposed to the bill and still be penalized. This is the point we were making the other day when the hon. member for Winnipeg North Centre (Mr. Knowles) presented a reasoned amendment on another matter.
Is a six months hoist a reasoned amendment? I ask that question in a rhetorical way. Is a motion that the bill be not now read a second time, that the contents be referred to not another committee but to committee of the whole, a reasoned amendment? When a reason for an amendment were added to one of those referral amendments the other day, that portion was chopped and the referral accepted. I find this difficult to understand.
Under these rules, Mr. Speaker, Beauchesne is of little help. I say this with fond memories of the position Your Honour is occupying at the present time and the difficulties I faced in those earlier historic times deciding how far Beauchesne should or should not be used. The interpretations of the rules contained therein go back to a time that even my grandfather would not have known.
If we consider the changes in the House and in the rules today, I submit that now is the time when reasoned amendments can and should be put forward. At the report stage of a bill the amendments to individual clauses are put forward for consideration. That is the change that can be made at that time. On third reading the only amendments that can be made are a six months hoist or referral back to a particular committee for study, not a reasoned amendment such as we are now putting forward.
I hope I have covered some of the ground to assist Your Honour in determining whether this type of amendment is acceptable. Some of my colleagues and other members of the House wish to express themselves, so I will yield the floor.


Mr. Speaker:: The hon. member for Peace River (Mr. Baldwin).


Marcel Joseph Aimé Lambert: On a point of order, Mr. Speaker, I am yielding the floor only on the point of order.


Mr. Speaker:: I realize this. I appreciate that the hon. member has further remarks of substance to make.


Gerald William Baldwin: Mr. Speaker, I see that I have outfumbled the parliamentary secretary. We are back on the old battleground which we have traversed so often. I think this time we are on pretty good ground. We

September 13, 1971
Income Tax Act
have our artillery, infantry and cavalry at strategic points. Hopefully, Your Honour will recognize and give effect to the glorious batallion of words used by my friend the hon. member for Edmonton West (Mr. Lambert), which I think will be supported by other members.
We come back to citation 382. I will deal with that in a little detail and relate it to this amendment. It provides:
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, or differing from, the principles, policy, or provisions of the bill-
I stop there. I draw to Your Honour's attention the words "any special reasons". These must be reasons which persuade a member of this House to take steps over and above the usual remedy which he might have when voting on a bill or proposing a six months hoist. There must be some scope for him, if we are to have meaningful, clearcut, precise debate on issues brought forward on, as my hon. friend said, a joinder of issues. There must be special reasons for not wanting the bill to be passed standing by itself, not by voting against it and not by proposing a six months hoist but by saying that (a), (b), (c), (d) and (e) are the special reasons he is advancing for, using the words of the citation-
-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-
The hon. member for Edmonton West has included in this resolution special reasons for not agreeing to second reading of the bill. He makes this quite plain in his amendment which uses these words:
This House deeply concerned with unacceptable levels of inflation . . . declines to give second reading to a bill which does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts-
They are the special reasons. They are squarely within the four corners of citation 382 which the hon. member has used in an effort to persuade the Chair that he does not agree, and that other hon. members should join Mm in not agreeing to second reading of this bill. A resolution which he is entitled to move pursuant to this citation is as follows:
-a resolution declaratory of some principle adverse to, or differing from, the principles, policy, or provisions of the bill-
Obviously, in a bill as lengthy, as complex and covering as many subjects, as Bill C-259 there cannot be said to be one single principle. On that aspect, it is not easy for a member to use this as a peg on which to hang his argument. In addition to that the citation covers:
-the principles, policy, or provisions-
I pluck out of this citation the word "provisions". The hon. member for Edmonton West is stating his reasons for not agreeing to second reading of Bill C-259. He has moved an amendment adverse to or differing from the provisions of the bill. Within the four corners of an amendment of this kipd you cannot fill in all the details and particulars as to clauses. Even if the hon. member tried to do that, Your Honour would probably rule him out of order.
The hon. member has said that because he does not like the over-all provisions of this bill he is asking the House to

join with him in an amendment which disagrees with the provisions of the bill because it does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts and incentives, and does not contain adequate exemptions. In this way the hon. member is putting on record a resolution that is declaratory of a principle adverse to the provisions of the bill. I quote further from citation 382:
-or otherwise opposed to its progress-
My hon. friend is saying, I suggest, that because the bill fails to provide sufficient stimulus to the economy by using appropriate tax cuts and incentives, and because it does not make provision for adequate tax exemptions, we are opposed to its further progress. How much further can we go in attempting to place before the House in clearcut terms an opportunity for the House to divide?
It is all very well to say that hon. members can express these views in the course of debate, but I think the House is entitled to have the opportunity to consider motions which will divide the House and compel the government to take a stand, to declare that it approves or disapproves. Obviously, in light of what has already been said by the minister and his supporters, and judging from government policies in the past, members opposite will vote against the amendment and no doubt it will be defeated. But that is not the point. It is our right, I contend, to place the government in a position from which it cannot easily extricate itself through its continued objection to reasoned amendments.
We have reached a point at which there is increasingly little opportunity for hon. members, on second reading, to direct consideration to the reasons for which they believe the principle of a bill should be opposed. There is little opportunity for them to put forward motions of this kind, making it clear why in their view bills coming before the House ought not to be supported.
The other day, speaking to a point of order raised by the hon. member for Winnipeg North Centre (Mr. Knowles) I had occasion to put on record two reasoned amendments which had been accepted in the United Kingdom parliament. I have other examples I should like to place before the House now. While we are not bound, of course, by these U.K. precedents, I think I am entitled to say that the origin of our practice here is the practice in the United Kingdom. In recent years the practice in the United Kingdom has gone a great deal further than was originally allowed. In 1948, Mr. Churchill moved the following as a reasoned amendment:
This House, while recognizing the necessity for an equitable scheme of redistribution, declines to give a third reading to a bill which repudiates agreed recommendations of Mr. Speaker's Conference, 1944, and disregards for the purpose of party advantage the findings of the Boundary Commission, thereby bringing discredit on ministers of the Crown and lowering the traditional standards of our public life.
In 1961, on second reading of a bill dealing with Commonwealth immigration, the following amendment was moved and accepted as a reasoned amendment:
This House declines to give a second reading to a bill which, without adequate inquiry and without full discussion at a meeting of Commonwealth Prime Ministers, removes from Commonwealth citizens the long standing right of free entry to Britain, and
September 13, 1971

is thus calculated to undermine the unity and strength of the Commonwealth; gives excessive discretionary powers to the executive without any provision for appeals; will be widely regarded as introducing a colour bar into our legislation; and, though providing for health checks and for the deportation of those convicted of certain criminal offences, fails to deal with the deplorable social and housing conditions under which recent Commonwealth immigrants and other subjects of Her Majesty are living.
In 1964, in connection with the resale prices bill the following was moved and accepted as a reasoned amendment:
That this House declines to give a second reading to a bill which may threaten the livelihood of many small independent traders without attempting at the same time to deal with restrictive practices by large commercial monopolistic organizations and trade unions which have a far more profound effect on the national economy.
In connection with the bill dealing with race relations, the following was moved and accepted as a reasoned amendment:
This House deplores discrimination whether on racial or religious grounds but declines to give a second reading to a bill which introduces criminal sanctions into a field more appropriate to conciliation and the encouragement of fair employment practices while also importing a new principle into the law affecting freedom of speech.
The following amendment was moved and accepted as a reasoned amendment when the land commission bill was under discussion:
This House, deeply concerned to secure an increased supply of land for building, while thinking it right that a reasonable charge should be imposed on increased values resulting from the grant of planning permission, declines to give a second reading to a bill which seeks to set up a land commission which is wholly irrelevant to the collection of a levy and which will reduce and make more expensive the supply of building land, so retarding the housing of the people and essential building programs.
Here is another amendment accepted as a reasoned amendment to the motion for second reading of the prices and incomes Bill:
This House, believing that price stability can only be achieved by a comprehensive economic policy which would include the sharpening of competition, the reform of trade union law and the removal of harmful restrictive practices, and accepting that a productivity, prices and incomes board has a useful function in such a policy, declines to give second reading to a bill which makes no contribution to the solution of the serious problems facing the nation caused by the collapse of the economic policy of Her Majesty's government and which introduces a measure of compulsion which will inevitably lead to state control of prices, wages, dividends, and to direction of labour.
I conclude on this note. I ask Your Honour to the extent you exercise a judicial function, to take judicial notice of the fact that debates in this House have tended to decline in quality mainly as a result of the introduction of new rules which have failed to provide adequate compensating factors to private members, particularly members of the opposition. I believe it is in the interest of strong and healthy debate to provide as many opportunities as can be found within the four corners of the rules for expressing disagreement, and that the discretion given to the Chair should be exercised as far as possible on the side of permitting opportunities for clearcut and decisive debate and decision. With respect, Mr. Speaker, this can only be done-


Mr. Mahoney:: By changing the opposition.
Income Tax Act


Gerald William Baldwin: -by providing an opportunity for amendments of this kind to be considered, in order that we in the opposition and private members on the other side, if they have the intestinal fortitude to do so, may put forward amendments containing reasons for opposing a bill on second reading-a resolution declaratory to some principle adverse to the bill the government is introducing.
Mr. Speaker, we are concerned now about the economic situation. It cannot be argued that a budgetary measure of the kind before us, legislation which extends beyond the usual budgetary matters to questions of tax reform, will not have a major impact on the economy. Indeed, from speeches which have been made both inside and outside the House we gather that the point of the bill is to improve the economic situation of the country generally. Concern with the economic situation is the gist of the first part of the motion, that we decline to give second reading to a bill which fails to provide the stimulus the economy needs.
I suggest that there is no way in which we can do more to bring ourselves within the scope of citation 382. I urge Your Honour to exercise the discretion that you have in allowing this amendment, hopefully to initiate not a spasm of these amendments-because I realize that they must be reasoned amendments-but to bring about beneficial debate in this House. I know that Your Honour cannot go beyond the rules that the House has given you, but in light particularly of precedents in the United Kingdom I suggest that the time has now come when we should enlarge opportunities for debate on second reading by moving reasoned amendments.


James Alexander Jerome: Mr. Speaker, I will take only two minutes to say that, if I read correctly between the lines of the remarks made by the hon. member for Peace River (Mr. Baldwin), I am sure what he is really saying is that he knows perfectly well that this amendment goes totally beyond the rules as we understand them but that he wishes it did not.


Gerald William Baldwin: No. On a point of order, Mr. Speaker, if the argument that the parliamentary secretary is going to make conforms with his first remarks, then I think he might as well sit down now.


James Alexander Jerome: Well, Mr. Speaker, I am sure the hon. member will agree with me that it is extremely clear under our rules that an amendment should be just that-a proposal to change the motion presently before the House in some way, not completely to negative it. Obviously, the effect of this amendment that he so seriously argues is, he must agree, directly to negative the motion for second reading by saying that the House votes against the motion. The first part of the amendments sets out the mood of the House and the latter part gives reasons why the measure itself is not acceptable and why in the opinion of the opposition it is inadequate.
Although these are interesting questions for debate, surely we are not being asked to come to the stage where what is passed off as a reasoned amendment on second reading is nothing more than a description of the reasons why the opposition rejects the motion for second reading.
7766

September 13, 1971
Income Tax Act
Certainly the amendment before the House is clearly and simply just that.


Stanley Howard Knowles: Mr. Speaker, the only thing I find wrong with this amendment is that it contains a split infinitive, which is something up with which I find it difficult to put.


Gerald William Baldwin: That is a very serious accusation that you make.


Stanley Howard Knowles: It is. I am glad my hon. friend recognizes that. However, despite the error I regard the amendment as being one of substance which we can support, and I should like to join with the hon. member for Edmonton West (Mr. Lambert) and the hon. member for Peace River (Mr. Baldwin) in urging Your Honour to give very serious consideration to it.
It seems to me we are getting to the point where reasoned amendments have become more difficult to move than they ever were, though they have always been difficult. I confess that when I take note of the rulings that we have had from the Chair on reasoned amendments in recent times, especially those that have been negatived, I have had to agree that those rulings were based on precedents and on reasons and that therefore I could not appeal the rulings even if that right still lay with us.
However, if we are going to keep alive the phrase "reasoned amendment" it must be possible to make some kind of amendment under that heading. I am not floored by the comment just made by the Parliamentary Secretary to the President of the Privy Council (Mr. Jerome) that this amendment is just a statement of opposition to the bill plus reasons for so being opposed. I think that is a pretty good description of a right that we ought to have.


Marcel Joseph Aimé Lambert: And do have.


Stanley Howard Knowles: In fact, I think that is what a reasoned amendment is supposed to do. We already have the right to say yes or no to a bill. We have the right to propose a hoist, which is really just another way of saying no. We also have the right to seek a reference of the subject matter rather than the bill to a committee, which again does not permit any reference to any reasons or any alternative ideas.
In some of the previous debates that we have had on this question it has been said by those on the other side, or by the Chair, that if certain reasoned amendments were allowed the House would find itself discussing, not what the government has put forward but what the opposition has put forward.


Gerald William Baldwin: Terrible!


Stanley Howard Knowles: Not if what the opposition has put forward is in the same area. Indeed, if all that the opposition puts forward is a set of reasons for being opposed to the government's measure, it seems to me that we ought to have the right to have that sort of discussion.
I do not want to be regarded as pleading that we open up the whole business, that we get to the point where anything that might be a substantive motion and which normally requires notice can be dragged in under this

heading. But I do confess to some concern lest we are going in the other direction and getting ourselves in the kind of box where we will not be able to make any reasoned amendments at all.
Citation 382 of Beauchesne has been read, and those of us who take part in these little discussions have read it so often that we know it by heart. So instead of picking up Beauchesne's Fourth Edition, today I have decided to pick up May's seventeenth edition. It is a little unfair to my late friend Dr. Beauchesne to do this, because one sees where he got many of the things that he wrote in his book. But in his seventeenth edition May says the same things that are in citation 382 of Beauchesne's Fourth Edition, namely, that a reasoned amendment can be declaratory of some principle adverse to or differing from the principles, policies or provisions of a bill.
The hon. member for Peace River pointed out that that is what this amendment proposes to do. By the way, Beauchesne does not use the words "reasoned amendment", but May does. At the bottom of page 526 there is a paragraph with the heading "Reasoned Amendment" which goes on to say:
It is also competent for a member who desires to place on record any special reasons for not agreeing to the second reading of a bill, to move what is known as a "reasoned amendment".
My concern today relates not only to the amendment now before the House, which I should like to see allowed, but as to where we are going in this whole area. There is a lot more on pages 526 and 527 that I could read, but Your Honour has probably read those pages time and time again. However, I should like to draw attention to the material at the bottom of page 528 and the top of page 529 of May's seventeenth edition, the section under the general heading of "Effect of carrying a 'Reasoned Amendment'." That heading in itself carries a very interesting implication; it suggests that there are times when a reasoned amendment, even though it takes the House away from what the government wants to discuss, might be carried.
Mr. Speaker, I should like another four or five minutes. Does the House want me to continue now, or at eight o'clock?


An hon. Member:: Eight o'clock.


Stanley Howard Knowles: All right; let me call it six o'clock.


Mr. Speaker:: Is it understood that we will rise at this point and pursue the argument at eight o'clock?


Stanley Howard Knowles: We can resume the discussion then.


PROCEEDINGS ON ADJOURNMENT MOTION
Mr. Speaker:: Pursuant to Standing Order 40, the following matters will be discussed this evening at the time of
September 13, 1971

adjournment: the hon. member for Hillsborough (Mr. Macquarrie)-External Affairs-transmission to United States Secretary of State of third report of environmental pollution committee and concurrence of House; the hon. member for Yorkton-Melville (Mr. Nystrom)-Agriculture-prairie provinces-action to improve net farm income.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Gray (for Mr. Benson) that Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequential upon the amendments to that act, be read the second time and referred to a committee of the whole.
Mr. Speaker:: Order. When the House rose earlier today, hon. members were debating the procedural acceptability of an amendment proposed by the hon. member for Edmonton West (Mr. Lambert). We heard from a number of learned colleagues. I remember well the hon. member for Winnipeg North Centre (Mr. Knowles) had the floor, and still has the floor for the purpose of enlightening the Chair.


Stanley Howard Knowles: Thank you, Mr. Speaker. As Your Honour has just pointed out, when we rose at six o'clock we were discussing the procedural aspects of the amendment proposed by the hon. member for Edmonton West. I had occupied the time of the House for a few minutes, indicating not only my support for the procedural admissibility of this amendment, split infinitive and all, but also my belief that the House as a whole should take a new look at the whole question of reasoned amendments.
I begun to point out-and I was going to quote a bit more from May's seventeenth edition-that one of the arguments that is sometimes made from the other side is that if a reasoned amendment is allowed, the House can find itself discussing a proposition which differs from the proposition put before the House by the government. I see nothing wrong with that; in fact, I think there is everything to be said for it. I believe we have to stay within the rules of relevancy: if the government brings down a bill having to do with elephants, we must not try to switch to a discussion about kangaroos. However when the government brings in a bill having to do with so-called tax reform, surely we have the right to alter that discussion so long as we stay within the general ambit of tax reform. Therefore, I suggest the argument that a reasoned amendment produces a slight turn in the debate on the floor of the House is not a valid one.
Income Tax Act
It is also sometimes argued from the other side that if a reasoned amendment were to carry, certain dire consequences such as the defeat of the government would follow. On this side of the House we do not regard that as a dire consequence; we regard it as something devoutly to be desired.


Robert Gordon Lee Fairweather: A merciful delivery.


Stanley Howard Knowles: I should like to remind the House there have been, certainly in the United Kingdom Parliament, a number of occasions when some pretty far reaching consequences have been the result of reasoned amendments. As I pointed out just before six o'clock, there is a section in May's seventeenth edition, beginning at page 528, which carries the heading, "Effect of carrying a Reasoned Amendment". I do not think the first paragraph is quite so important because it deals with amendments which try to achieve additions to the bill which could be put in the bill in committee, and it tends to frown on that kind of amendment; it states that that kind is really not a reasoned amendment. However, there are examples of even that kind of amendment having been allowed. It is the second paragraph to which I refer and which I should like to read:
It must be borne in mind, however, that the amendment-
This is a reasoned amendment.
-if agreed to, does not necessarily arrest the progress of the bill, the second reading of which may be moved on another occasion. The technical effect of such an amendment is to supersede the question for now reading the bill a second time: and the bill is left in the same position as if the question for now reading the bill a second time had been simply negatived or superseded by the previous question. The House refuses on that particular day to read the bill a second time, and gives its reasons for such refusal: but the bill is not otherwise disposed of.
That is precisely what we have in the amendment which is before us. It is a statement that this House does not want to give second reading to this bill, together with the reasons for asking the House not to do so.
I emphasize the fact that these paragraphs in May's seventeenth edition carry with them the implication that because a reasoned amendment can result in something that is not planned by the government is no reason for not allowing such a reasoned amendment.
Then let me draw attention to some of the examples that are on these pages. Granted, some of these go back in history a bit.


Mr. Benjamin:: How far?


Stanley Howard Knowles: The first was 110 years ago. This is recent history. It reads:
In 1861, the second reading of the marriage law amendment bill having been superseded by a resolution, the Speaker, on an appeal from the mover of the bill, suggested that the best course would be to withdraw the bill and introduce another in harmony with the expressed opinion of the House.
There is a footnote to tell us where that can be found. But the point of reading it is to tell the House that here was an occasion when a reasoned amendment was
24319-3}

September 13, 1971
Income Tax Act
allowed and was carried. Things did not fall apart. The Speaker just said to the mover of the bill that it would be a good idea to bring in another one paying attention to the views that the House had just expressed. That is what my friend the hon. member for Edmonton West is suggesting, that we not give second reading to the bill that the government has brought in, in its present form. I suggest that if that amendment were carried, two things could happen, one might be an election, the other might be a decision on the part of the government to pay some attention to what the House has said by its vote.
The next paragraph in May goes on to say:
The practical result of carrying such a resolution varies according to its character and importance, the support it has received, and the means there may be of meeting it, and on certain occasions has had far reaching political effects.
I emphasize these few sentences because of the fact that it is so often said from the other side that if a reasoned amendment were allowed, were voted on and were carried, it would be the end of this Parliament, we would have to have an election. Listen to this:
For example, the amendment to the second reading of the conspiracy to murder bill, in 1858, being also a vote of censure, was not only fatal to that measure, but caused the immediate fall of Lord Palmerston's ministry; and the amendment to the second reading of the representation of the people bill of 1859 was decisive as to the bill and led to a dissolution.
So there have been occasions when reasoned amendments were not only allowed but were voted on, were carried and resulted in the fall of the government of the day. I am not predicting that that would be the result of the amendment that is before us, for I suspect that the majority on the other side of the House is still loyal enough to the government that this amendment would be defeated. But I present these points in support of the argument that I am putting forward, namely, that one cannot contend that the results that would flow from a reasoned amendment are a basis for denying the admissibility of such an amendment.
As I have said two or three times now, some of us are concerned about the developments that have taken place in connection with reasoned amendments. We know that on the opposition side of the House we always go as far as we can with our amendments. We would like to take control and tell the House what it is going to debate. We have to be held in check. We have to see to it that matters that are really new are submitted as substantive motions with proper notice, and we must not break the rule of relevancy. But so long as we stay within the four corners of the subject matter of a government bill which is before us on second reading, I think we should have the right to move, as a reasoned amendment, a proposition to the effect that we do not agree to the second reading of the bill in its present form. We should be allowed to state our reasons for opposing it, our alternative propositions, and such a matter should come to debate on the floor of the House.
Therefore, I not only support the procedural admissibility of the amendment now before us but I hope that we may find ways and means of developing a little more satisfactory experience with regard to reasoned amendments generally.


John Napier Turner: Mr. Speaker, it is all very well for the hon. member for Winnipeg North Centre (Mr. Knowles) to suggest that this is a welcome opportunity for Your Honour to redefine the scope and ambit of reasoned amendment but I submit to Your Honour that you and the House are bound by the rules as you find them and the precedents as you read them. I want to attack the admissibility of the amendment introduced by the hon. member for Edmonton West (Mr. Lambert) on a number of grounds but primarily on the ground of relevance. I know that the citations are quite familiar to Your Honour, but for the record and in order that you might have in some convenient form the arguments before you I would like to cite Beauchesne's fourth edition citation 203 (1) which reads as follows:
It is an imperative rule that every amendment must be relevant to the question on which the amendment is proposed. Every amendment proposed to be made either to a question or to a proposed amendment should be so framed that if agreed to by the House the question or amendment as amended would be intelligible and consistent with itself.
The law on the relevancy of amendments is that if they are on the same subject matter with the original motion, they are admissible, but not when foreign thereto.
Beauchesne's citations also refer to May and when the hon. member for Winnipeg North Centre starts bringing in May we know that the big guns are out. I want to introduce some citations of May which have received the approval of the Chair in this Parliament and indeed the approval of previous Speakers. On reasoned amendments I refer Your Honour to May's seventeenth edition, pages 526 and 527. May at this juncture is describing what a reasoned amendment is. Here is what he said:
It Is also competent for a member who desires to place on record any special reasons for not agreeing to the second reading of a bill, to move what is known as a "reasoned amendment". This amendment is to leave out all the words in the main question after the word "that" and to add other words: and the question proposed upon the amendment is, that the words proposed to be left out stand part of the question. A reasoned amendment is placed on the paper in the form of a motion and may fall into one of several categories.
May lists three main categories of a reasoned amendment. The first is:
It may be declaratory of some principle adverse to, or differing from, the principles, policy or provisions of the biU.
The second is:
It may express opinions as to any circumstances connected with the introduction or prosecution of the bill, or otherwise opposed to its progress.
The third is:
It may seek further information in relation to the bill by committees, commissioners, the production of papers or other evidence.
I submit to Your Honour that the third illustration does not apply here; there is nothing in the amendment that seeks further information in relation to the bill, either by committees, commissioners or the production of papers. I submit, further, that there is nothing in the second category that pertains to this amendment because there is nothing in the afhendment expressing an opinion
September 13, 1971

as to any of the circumstances connected with the introduction or prosecution of the bill.
So we are left with the first category, that is to say, that the amendment may be declaratory of some principle adverse to or differing from the principles, policy or provisions of th'e bill. There really is nothing in the amendment presented by the hon. member for Edmonton West that does that, because there is no position taken adversely to the principle of the bill. Irrelevant and additional matters are brought in. The amendment reads:
This House deeply concerned with unacceptable levels of inflation-
That is matter foreign to the bill.
-persisting unemployment and stagnant industry and conscious of the necessity of meaningful tax reform declines to give second reading to a bill which does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts and incentives, does not contain adequate tax exemptions and is not calculated to materially improve business and labour conditions in Canada now or in the foreseeable future.
If you take the amendment, Mr. Speaker, in its terms there is nothing attacking the principle of equity or reform contained in the bill, but only matters foreign to the bill. The use of a tax bill as a vehicle in the economy or as a fiscal weapon, admittedly within the terms of this amendment, are alluded to, and so there are references in the amendment to inflation, to labour and management, to economic stimulus. But on the face of the bill and within the terms of the bill I submit to Your Honour that there is nothing in the amendment stating a principle adverse to the principle of the bill.
After setting forth those three categories, May goes on to say-and I submit to Your Honour that the amendment does not fall within those categories:
The following rules govern the contents of reasoned amendments :-
The first is the one Beauchesne was referring to in the citation that I gave to Your Honour, 203(1). Here is what May says at the bottom of page 527 of his seventeenth edition:
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", and must not include in its scope other bills then standing for consideration by the House.
These words have been approved by the Chair on several occasions in this Parliament, and I refer Your Honour to a very recent decision of the Deputy Speaker, in fact made last week, relating to Bill C-262. I quote from Votes and Proceedings of September 7, 1971, at page 779 as follows:
Mr. Lewis, seconded by Mr. Knowles (Winnipeg North Centre), proposed to move in amendment thereto,-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.


Stanley Howard Knowles: Hear, hear!
Income Tax Act


John Napier Turner: I am not going to argue the substance of that amendment. I am trying to argue the relevancy of that amendment and I want to draw to the attention of Your Honour the similarity between the amendment introduced by the hon. member for York South (Mr. Lewis), seconded by the perennial hon. member for Winnipeg North Centre, and the present amendment proposed by the hon. member for Edmonton West. I use the word "perennial" with respect to the hon. member's membership in this House and also with respect to his support for this type of amendment which, I suggest to Your Honour, does not usually receive the approbation of the Chair.
I draw Your Honour's attention to the references in both amendments to stimulation of the economy. I agree that this is a very laudable objective, but it is foreign to the substance of this particular bill. What did the Deputy Speaker say on that occasion? He said:
-an amendment must clearly oppose the principle of a bill.
The Deputy Speaker referred to May and went on to say, as recorded at page 779:
The second point I should like to make is that an amendment must stay within the four comers 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 could go on with these precedents, but my first submission to Your Honour is that this amendment as reasoned amendment does not qualify within the essential categories May specifies as a reasoned amendment. I bring in May because the hon. member for Winnipeg North Centre did so, but more particularly because even if it were a reasoned amendment, which I submit it is not, it does not qualify because it is irrelevant.
There are two other citations from Beauchesne that I would like to draw to Your Honour's attention. Going to citation 203, I submit that paragraph 3 is relevant. It reads:
An amendment setting forth a proposition dealing with a matter which is foreign to the proposition involved in the main motion is not relevant and cannot be moved.
I submit to Your Honour that if you read "bill" for "motion," then the principle of foreign and irrelevant matter again would go to exclude the amendment.


Marcel Joseph Aimé Lambert: Are "sufficient stimulus" and "tax cuts" also foreign?


An hon. Member:: You are getting to him.


John Napier Turner: Yes, I may be reaching the hon. member for Edmonton West. In the third place, may I draw Your Honour's attention to citation 203(5):
An amendment was ruled out because it raised a new question which could only be considered on a distinct motion after notice.
I submit that the matter raised in this amendment dealing with inflation, unemployment, industry, stimulus of the economy, incentives, methods calculated to materially improve business and labour conditions in Canada, are sufficiently wide and sufficiently foreign to the bill before the House that they would deserve to be included

September 13, 1971
Income Tax Act
in the substance of a distinct motion that might be made on another occasion.
There is one further remark I would like to make, with Your Honour's indulgence and that of the House. The hon. member for Winnipeg North Centre sought to cushion the effects of what you might decide to do by submitting to Your Honour that if a reasoned amendment were to be found admissible and were to carry, the result would not be as catastrophic as one might think. He quoted from May at page 528 in the seventeenth edition. I think he was quoting through Beauchesne-


Stanley Howard Knowles: No, I have got my May too.


John Napier Turner: Well, he has got May
too.


David Lewis: That sounds like the first words in a new rock song.


John Napier Turner: It is permissive anyway, not compulsory.
It must be borne in mind, however, that the amendment, if agreed to, does not necessarily arrest the progress of the bill, the second reading of which may be moved on another occasion.
That is an isolated paragraph from a larger quotation on page 528. I submit that if you are going to get the complete context of that paragraph on the effect of carrying a reasoned amendment, Your Honour might direct your attention to the entire paragraph.


Stanley Howard Knowles: On a point of order, Mr. Speaker, I read the entire paragraph and three or four more after it. Where was the minister?


John Napier Turner: I am just drawing to Your Honour's attention that the paragraph begins with these words:
According to modem practice, it would appear to be unlikely that, after a reasoned amendment had been carried on the second or third reading of a bill, any further progress would be made.
The last paragraph on the page is even more-


Stanley Howard Knowles: Read all of that paragraph.


John Napier Turner: I will read the whole passage, and I will do my own underlining. How would that suit?
If it is merely desired to draw attention to a matter incidental to the legislation intended by the bill-
What it is not.
-or to affirm a principle which could be incorporated in the bill at a later stage-
Which it is not here.
-this purpose could probably be better effected by an instruction or an amendment moved in committee.
That is fine.
It must be borne in mind, however-

These are the words recited by the hon. member for Winnipeg North Centre.
-that the amendment, if agreed to, does not necessarily arrest the progress of the bill, the second reading of which may be moved on another occasion.
I add, parenthetically, that that has to be read with the opening words of the passage where May says that according to modern practice it would be unlikely that any further progress on the bill would be made.
The technical effect of such an amendment is to supersede the question for now reading the bill a second time: and the bill is left in the same position as if the question for now reading the bill a second time had been simply negatived or superseded by the previous question.
Of course, I say parenthetically that that is technically right, but in terms of practical parliamentary procedure any hoist or negative of second reading or any motion following second reading in effect kills the bill.


Mr. Speaker:: I understand that the hon. member for Annapolis Valley (Mr. Nowlan) wishes to rise on a point of order.


John Patrick (Pat) Nowlan: Yes, Your Honour, I do, with respect. I am hoping the Minister of Justice (Mr. Turner) is trying to convince the Chair of the point, not the hon. member for Winnipeg North Centre (Mr. Knowles), because he will never do that. I think he should direct his remarks to the Chair.


John Napier Turner: The hon. member is right; but I believe the Chair is omnipresent in this chamber and so I am always speaking to the Chair, and through the Chair, to members.


John Patrick (Pat) Nowlan: But when he said "May", Mr. Speaker, I thought he was getting too close to the hon. member for Winnipeg North Centre; he was getting too intimate.


John Napier Turner: I think the hon.
member knows from his active days of practice at the bar that although he addresses the judge, he rubs elbows with counsel at the bar.


Stanley Howard Knowles: Please leave me out of this.


John Napier Turner: The hon. member for Winnipeg North Centre did not enjoy that last metaphor, Mr. Speaker. I want to go on with that passage and give it its full amplitude.
The House refuses on that particular day to read the bill a second time, and gives its reasons for such refusal; but the bill is not otherwise disposed of.
Technically, I suppose that is right, but in practical parliamentary terms that bill is dead. Then there is a citation in respect of the marriage law amendment bill. I will not read that now, but this is the paragraph I want to draw to your attention:
The practical result of carrying such a resolution varies ccording to its character and importance, the support it has eceived, and the means there may be of meeting it, and on ertain occasions has had far reaching political effects.
September 13, 1971

Now, what about the character and importance of this particular piece of legislation?


Stanley Howard Knowles: I read all that.


John Napier Turner: Starting with the
Carter report about nine years ago, followed by the white paper which involved more informed public discussion than probably any other measure in this Parliament or, indeed, as far as I can recall in active public life-


Marcel Joseph Aimé Lambert: That bill didn't.


John Napier Turner: I suggest that because of the far reaching nature of this particular measure, any reasoned amendment, if it were permitted and carried, would have far greater impact than the hon. member for Winnipeg North Centre was willing to concede.
May I say one thing further, Mr. Speaker, on the general subject of relevancy and the responsibility for introducing business. I suggest to Your Honour that the government has the responsibility under our parliamentary system to bring the business before the House.


Robert Gordon Lee Fairweather: That is one of our problems.


John Napier Turner: And it is going to remain one of your problems. That being so, Parliament has held throughout the years that in order to keep the discussion pertinent and relevant, amendments must stay within the four corners of the business of the House. That is my argument, Your Honour.


Mr. Speaker:: I thank hon. members for the advice and guidance they have provided the Chair in relation to the very difficult ruling which has to be made on the procedural acceptability of the amendment moved by the hon. member for Edmonton West (Mr. Lambert).
Hon. members have recognized that it is difficult for the Chair to rule on the procedural aspect of reasoned amendments. Hon. members who have participated in this very interesting procedural debate have suggested, or some of them have, that it is becoming increasingly difficult to propose acceptable reasoned amendments. I cannot agree entirely with this suggestion. If hon. members will look into the records of our House of Commons they will note that during most of our parliamentary history so-called reasoned amendments have been proposed on rare occasions only. It seems that only during the last few years have members started to use this device, that is, the device of reasoned amendment, on second or third reading of bills.
I agree that more such amendments have been ruled out of order in recent years. That is, of course, because many more than before are now proposed for consideration by the House. In other words, if 25, 40 or 50 years ago only one or two such amendments were proposed every session, not many of them were ruled out of order-perhaps one or two every session.
It seems to me from my experience, which is very limited in comparison with that of many other hon. members of this House-and I go back only to the days when I was Deputy Speaker-that I had the impression
Income Tax Act
that very few people understood a reasoned amendment. It is only in recent years that the use of that kind of device has flourished-


Marcel Joseph Aimé Lambert: That is progress.


Mr. Speaker:: -for the benefit of hon. members and a nightmare for the Chair. Because there has been a tendency in that direction, I have intended for some recent weeks and particularly in recent days to study very closely all our precedents in relation to these motions. This is a study which I admit is not yet completed. When it is, I feel I will be in a much better position to set down rules which will take into account not only British but relevant Canadian precedents.
Briefly, hon. members know, from my having quoted them on a number of occasions, which rules govern the content of reasoned amendments. These are enumerated in May's seventeenth edition at page 527. As suggested by the hon. member for York South (Mr. Lewis), I am sorry to have to disappoint hon. members but I have got May too. Among other rules, it is required that such amendments should be "declaratory of some principle adverse to, or differing from, the principles, policy or provisions of the bill".
Looking at the amendment proposed by the hon. member for Edmonton West, I find it difficult to identify any such principle-in other words, that the amendment is "declaratory of some principle adverse to, or differing from, the principles, policy or provisions of the bill". Other conditions expressed by Sir Erskine May are enumerated at page 527 of his seventeenth edition. I doubt whether there is any purpose in my reading paragraphs 1, 2 and 3.
Looking at this question closely, I appreciate that in many respects the amendment proposed by the hon. member and now before the House quite seems to meet some of the requirements proposed by Sir Erskine May. The most important of these, of course, is that the principle of relevancy should govern every such motion. This is the point which was made very clearly and cogently a moment ago by the Minister of Justice (Mr. Turner) in suggesting to hon. members that relevancy is the cornerstone of parliamentary debate. There can be no effective parliamentary debate, there can be no logical debate without the application of this principle by the Chair and, I should add, without respect for the principle by all hon. members who take part in the debate.
As my colleagues will recognize, it is a most difficult task, and a great responsibility for the Chair to insist that hon. members address themselves to the question before the House, not to stray too far and to try to limit contributions to the motion before the House. It is a basic principle that there can be debate only when there is a motion before the House, and contributions should always be limited to what we have before us. Otherwise I suggest there can be no meaningful debate in the House.
It is the responsibility of the Chair to invite hon. members to limit themselves to what is before the House at the time. It is the duty of the Chair to suggest to hon. members that amendments should be relevant to motions

September 13, 1971
Income Tax Act
before the House. Again, I say it is the responsibility of hon. members also to co-operate with the Chair in this respect.
In connection with reasoned amendments, the same as in connection with all other amendments and motions, it is the duty of the Chair to enforce the principle of relevancy and it is the responsibility of members, as active participants in the parliamentary process, to respect that principle. That is why it is so difficult for hon. members to propose a reasoned amendment which in effect is not an expanded negative. If an amendment, reasoned or otherwise, is only an expanded negative it is, of course, out of order because it is well known that the way for hon. members to express their objection to a motion before the House is to vote against it. If it is much more than that and goes beyond the four corners of the motion before the House, then it offends the principle of relevancy.
Therefore, in my view hon. members should not be surprised that it is so difficult in practice, from a procedural standpoint, to propose procedurally acceptable reasoned amendments. I think that hon. members expect the Chair to ensure that Parliamentary debates remain logical, meaningful and relevant from a procedural standpoint. Because of this the Chair has to look with extreme caution on so-called reasoned amendments.
The hon. member for Peace River (Mr. Baldwin) suggested that the time has come to enlarge the opportunity for debate. I suggest to him and all hon. members that this is not the responsibility of the Chair. If hon. members wish the rules to be changed to provide for enlarged debate, they will themselves have to change the rules which guide the Chair.
Having said all this, I am prepared to look at the amendment with considerable sympathy. The hon. member for Edmonton West, having heard me go into some detail to explain why the amendment is perhaps out of order and the reasoned amendment should not be accepted, will probably be surprised if I tell him that I am ready to accept it. The reason is that this is perhaps a borderline case. I admit that it is very difficult. It has been very difficult in recent weeks and months to determine which reasoned amendments ought to be accepted and which ought to be refused. This one, I suggest to the House, is a borderline case.
In view of the fact that the whole matter of reasoned amendments is being reviewed by the Chair, perhaps hon. members will want the Chair to exercise some leniency and allow debate to continue on the reasoned amendment. At the same time, I would like to stress that hon. members should not think that the way has been opened for all possible reasoned amendments, which would make Parliamentary debate just about impossible.
I might say I suspect that whether or not we have this amendment before us, the debate which will take place tonight and perhaps in subsequent days will pretty well turn around the points which have been raised in the amendment. It would be very difficult for the Chair to
rule out of order considerations which relate in some way to the substance of the reasoned amendment now before us.
We may have a test as to whether we are making a mistake by accepting this kind of reasoned amendment by a subamendment which may be proposed later and which might indicate how far away we would be getting from the motion now before the House. However, that could be a test which might be useful as a guide for the Speaker on future occasions.
Having said all this and having invited hon. members to realize the difficulty with which the Chair is faced in this situation, I feel in the circumstances that I should allow the amendment and put it to the House.
I repeat to hon. members that in the next few days I will continue to consider the general matter of reasoned amendments. The next time one is submitted we may have a set of rules which will establish when, how and in what circumstances such amendments can be accepted. I am afraid it might make it a little more difficult for hon. members to propose amendments which will be acceptable in view of the precedents.
If hon. members will allow, I will now read for the benefit of the House the motion proposed by the hon. member for Edmonton West, seconded by the hon. member for Saint-Hyacinthe (Mr. Ricard):
That all the words after "That" be struck out and the following substituted:
"this House deeply concerned with unacceptable levels of inflation, persisting unemployment and stagnant industry and conscious of the necessity for meaningful tax reform declines to give second reading to a bill which does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts and incentives, does not contain adequate tax exemptions and is not calculated to materially improve business and labour conditions in Canada now or in the foreseeable future."
Before the hon. member for Edmonton West is given the floor I would like to refer briefly to the procedural objection he took this afternoon to some aspects of the bill now before us. The difficulties with which the Chair is faced in this situation were also referred to this afternoon by the hon. member for Winnipeg North Centre. He and the hon. member for Edmonton West suggested that the bill before us is in a substantive way different from the provisions of the schedule attached to the ways and means motion. He is probably right. I say "probably" because it will take the Chair a long time to analyse the 560 or so pages of the bill and collate them with the schedule attached to the ways and means motion. I suggest to hon. members that the Chair should not be requested to do this. I do not think it is the duty of the Chair to perhaps suspend the sitting of the House for a few weeks while I take this huge book, try to compare it with the schedule attached to the bill and see. whether there are substantive differences.
Perhaps the difficulty we are faced with arises from the fact there has been agreement among responsible representatives of the parties of this House that we should follow a new system. Instead of having a generally termed ways and means resolution, it was agreed between representatives of parties that we should have

September 13, 1971

for consideration by the House by way of a ways and means resolution, a draft bill.
If the House of Commons accepts this procedure and adopts as part of the ways and means resolution a draft bill, I do not see how any amendment can be adopted or suggested to the House at any time thereafter either by the government or the opposition, because the objection can be very well made at any time an amendment is made by the government, the opposition, a member of the opposition or any individual member of the House that this amendment is not in keeping or in accordance with the terms of the ways and means resolution. It will not be, of course, because it is different from the draft bill which has been submitted. I think the House got itself into a bit of a bind and difficulty by following this procedure. I think it should be for the House to find a way out of it. For the moment, I suggest to hon. members that we proceed with the bill before us.
One solution is that there be a further meeting between representatives of the parties to agree on a motion which might rectify the situation. This solution has been proposed by hon. members who took part in the debate. If this is not done, the bill will eventually go to committee and hon. members may make an objection to the effect that the amendment is not in order, actual clauses of the bill now before the House are not in conformity or in accordance with the provisions of the ways and means resolution or the schedule to the ways and means resolution. That would be a good argument. I rather suspect the chairman of the committee of the whole would agree and would refuse to have the committee consider that amendment or clause. But that might cause difficulty for members on both sides of the House, so I suspect it will be an advantage for both sides of the House to get together very soon and try to find a solution to the problem which some of our distinguished leaders have caused for us.
In the circumstances, I think the bill should be allowed to proceed and hon. members given an opportunity to pursue debate on it.


Marcel Joseph Aimé Lambert: I am very grateful to Your Honour, particularly in the face of the difficult problem that was facing the Chair in considering the arguments put before Your Honour with regard to this amendment.
I should like to complete my analysis of the bill as far as I can. Many of my hon. friends will be discussing particular aspects of the measure and making other general observations on second reading. There is one further point, however, I think should be made; it is one which has been made many times. The bill before us continues to accept the philosophy that the government knows best how to dispose of the public's money. An ever increasing share of the gross national product, an ever larger share of the nation's increased productivity is to be collected and distributed by the treasury.
This philosophy is not limited to the federal government. More and more is being taken by provincial gov-
Income Tax Act
ernments; more and more is being taken by municipalities. The figure is now, I suppose, up to 38 or 39 per cent of the gross national product, give or take a fraction of a percentage point. It is this that goes against the grain of the majority of Canadian citizens. No matter how hard they struggle, no matter how hard they work, no matter how much risk they take, the government says to them: Give us a bigger share of what you make, because we know how to dispense it.
Look at the size of the national budget in 1963-$6.4 billion. Now, nine years later, it is in excess of $15 billion in proposed expenditures.


Mr. Francis:: What about the GNP?


Marcel Joseph Aimé Lambert: The GNP has gone up, but it has not doubled or more since that time. One has only to look at the percentage figure. And, of course, the GNP is measured in terms of ever escalating dollars, in cheaper dollars.


Cyril Lloyd Francis: So are taxes.


Marcel Joseph Aimé Lambert: Yes, they are, but the government tends to improve its position because its sales tax and customs duties are all imposed on an ad valorem basis.


Cyril Lloyd Francis: May I ask the hon. member a question?


Marcel Joseph Aimé Lambert: No. I will finish my speech and the hon. gentleman can speak later if he wishes. Then, through a system of progressive income tax, as it is called-I do not think it is progressive; I believe it is a regressive form of taxation-the government takes an ever increasing proportion of salaries, wages and profits. In many cases, increases in these sources of income merely mark time in terms of constant dollars, but because of the incidence of inflation an individual finds himself in a higher tax bracket and taxed at a higher rate.
The same applies in the sphere of sales tax and customs duties. The same applies in the case of ever escalating municipal taxes. Having served on a city council, the hon. member for Ottawa West (Mr. Francis) can tell us just how far within this city municipal taxation has increased in terms of real dollars-


Cyril Lloyd Francis: Not federal taxes.


Marcel Joseph Aimé Lambert: Federal government taxation has certainly increased by a great deal. Members opposite describe this as tax reform, but the person with a low salary, the person living on a low income who is paying little or no income tax asks, "What will this do for me?" The answer is that it will do nothing, or really very little.
There has been no tax reform proposed within the field of these ad valorem taxes. Real reform in this area and in the area of realty taxation has proved beyond hon. members opposite. These are the areas to which we refer. They call this tax reform, but the principles of taxation have not changed. There is provision for increased
7774

September 13, 1971
Income Tax Act
exemption, there is a proposal for a capital gains tax. Some tinkering has been carried out here and there, but the principle is the same. I maintain that the opportunity for true tax reform has been missed. There is no question in my mind that the elimination of the estate tax in no way compensates for the imposition of the capital gains tax. The capital gains tax is certainly new. It hits everyone, and most people are still saddled with the equivalent of an estate tax. I urge the House to adopt my amendment.


Mr. Max Saltsman (Waterloo):: Mr. Speaker, if we look at the progress of the debate today we get some indication of the affection in which this bill is held by the opposition. We have heard a short statement by the minister and a somewhat longer statement by the hon. member for Edmonton West (Mr. Lambert) whose amendment would have the effect of killing this measure.
The legislation before us is thoroughly bad legislation and it does not represent tax reform. When the Minister of Finance (Mr. Benson) referred to it in his budget speech, he and his hon. friends were crowing; they thought they had pulled off the grand coup. Here was finagling to end all finagling, a juggling act to disguise the fact that after nine years during which the country had been looking forward to tax reform, the government had betrayed it by producing, not tax reform at all but merely some tinkering with existing provisions. At that time, when the budget was introduced members on the government side were saying, "Let's call an election. Now we really have an act to go to the people with."
I said at that time, as did some of my hon. friends, that they must have thought the Canadian people fools to buy the stupid legislation they were introducing. The Canadian people are not fools, and they have not bought it. They see right through the sham measures contained in this so-called tax reform proposal.
Today we have a rather subdued group of people on the government benches. They are not hooting and hollering as they were on budget night, they are not nearly so confident of themselves as they were then, because a look at the legislation of which they were so proud a few months ago reveals that these so-called increased exemptions will do little more than restore the purchasing power of the old exemptions which were introduced many years ago. In other words, they are doing today- inadequately, I might say-that which should have been done progressively over the last ten years at the very least, namely, raise exemptions along with the increase in the cost of living, in fairness to the taxpayers of Canada. This was not done. The government put if off and put if off in order to enable them to put it all together in a little package and to pretend that they had accomplished something substantial. But this has been seen through completely. It is a sham and everyone can see it for what it is.
In many cases the so-called benefits that the taxpayer, particularly the working-class taxpayer, was supposed to receive, if you look at the tables, will not be felt. It is
[Mr. Lambert (Edmonton West) .1
claimed that these taxpayers will be paying $100 less in taxes, in some cases $110 less. However, the government do not take into account, or they pretend not to take into account, the fact that many of these taxpayers will really be paying more taxes, not less, as a result of the increased exemptions.
For the first time unemployment insurance is going to be part of taxable income. Therefore, those who have been receiving unemployment insurance benefits in the seasonal industries will find that they are worse off under these provisions than they were under the old legislation. Those who have been receiving allowances for manpower retraining programs will also find they are worse off, because all their allowances will now be taxable and as a result they will pay more tax, not less. In many cases trade unionists who have negotiated contracts with their employers to include in their wage packages payment of medicare fees, which in many cases were included in the wage packet in lieu of increased wages, will find that these payments are now taxable and will have to be reckoned as taxable income, the amount of which may be far greater than the so-called increase in exemptions that has been granted. So all in all, as a result of just the few examples I have mentioned many of our working men will find they are worse off than they were before. This is why we are quite happy to support this amendment, and we congratulate the hon. member for Edmonton West and all those who participated in preparing the amendment for moving that the bill be not now read the second time.
One must also ask why tax reform was dropped. Why, after all these years during which we had the Carter commission, the white paper, the House of Commons committee report and the Senate committee report, did the government capitulate completely to those who are against tax reform and virtually drop every progressive measure from the tax package? My hon. friend from Edmonton West suggested that it was because there was a large public outcry. I ask him, a large public outcry from whom? The Liberal bagmen were the only ones who were crying out, because they were going to be paying more tax.
I conducted a survey in my riding on the white paper and sent out a questionnaire. Questionnaires usually return about 400 answers in my constituency, but the questionnaire on the white paper returned 500 answers, 300 from those who freely admitted that they did not understand what was in the white paper, the remaining 200 objecting. The truth of the matter is that most people in this country are not opposed to tax reform since it is they who would have benefited substantially from such reform. The people who are opposed to it are those who always "had it made", those who are satisfied with things as they are, those who are getting their money from capital gains, those who are escaping taxation through depletion allowances and shares in resource industries, those who are getting the 20 per cent tax credits: in other words, the very small group at the top.
I am surprised that my hon. friend from Edmonton West says that there was a large public outcry. Perhaps the large public outcry was from friends of his. I under-
September 13, 1971

stand that there may have been a large public outcry in the circles in which he moves. I am sure there was a large public outcry in the circles in which the Liberal backbenchers move, because the biggest enemies of tax reform were the Liberal party.
I would remind hon. members on the government side that for an opposition party we were very restrained during the discussion of tax reform. There were many things contained in the Carter report that we did not like. There were also many things contained in the white paper that we did not like. But on the whole we thought it was at least a step toward tax reform and we tried to avoid excessive criticism of those reforms in the hope that perhaps this government would bring in some reforms. But, of course, the government did not need our criticism because their own backbenchers were "knifing" the minister every day in the House. When they were not knifing him in the House I understand they were knifing him in the caucus.
As I say, the reason we did not get tax reform was because those who have always "had it made" did not want it. Certainly it was not because of a large public outcry; it was because some people decided that equity in the tax system was not for them. So once again the Liberal party, rather than respond to the mass of people in this country, responded to this very small group who support them in office through their bagmen. I can find no other way to describe the situation.


Mr. Alexander:: The only word you can use is bagmen.


Max Saltsman: Looking at this great volume one may well wonder what it is all about. There are close to 700 pages in it and it is a very imposing kind of document. If anybody ever digs it up 10 to 15 years from now they will marvel at the ingenuity of the government party that devised something that was so beyond the comprehension of even the tax experts of the country. I am sure it must be even beyond the comprehension of those who had to write the document.
We have a large unemployment problem in this country with over 6J per cent of the population unemployed. But, Mr. Speaker, the Liberal party has ensured one thing: it has ensured that there will be no unemployment for accountants and tax lawyers. The government has guaranteed that these people will have enough work from this piece of legislation to keep them going forever, because it defies the mind of man to understand it.
I recently attended a number of tax seminars along with people who were experts in the field, and not one of them really knew what was in this legislation or understood its import. One of the reasons for the establishment of the Carter commission was that our tax system had become so complex and open to misinterpretation that it was felt necessary to find a way of evolving a tax system that could be readily understood not only by the experts but by the population of this country. That was one of the terms of reference of the Carter commission, quite aside from the question of equity and general fairness.
Instead of coming up with legislation that would have simplified our tax system, as the Carter recommendations
Income Tax Act
would have, by including all kinds of income within the tax base, the government has so distorted, twisted, picked and plucked at the Carter commission as to make its report unrecognizable and the entire tax legislation even more unintelligible than it was before. This is quite an accomplishment. It took nine years and a great deal of expertise to accomplish this minor miracle of making what was already so totally bad even more so.
I sometimes wonder what the historians, political scientists or archeologists will think when they dig up this little document, this gift from the Liberal party to the people of Canada. What will they think about our civilization and the value judgments of the society of today? A tax system as much as anything else tells us what is important, what is not important, who gets rewarded and who gets punished.
The tax system outlined in this bill very clearly defines the philosophy of the government of today. It tells us, for instance, that the tax system will continue to be unfair as between the manufacturers of goods and the exporters of raw materials. It indicates that the privileges industry has always enjoyed and the privileges the mining industry has always enjoyed are to be continued, albeit in a new form, but no more acceptable than the old form. The point is, the tax system is still biased and loaded in favour of the development of raw materials against the development of the indigenous manufacturing industry.
When they dig up this document it will also show that this government did not think very much of public expenditures. It will show this government was convinced in its mind that any kind of private expenditure, however meagre or unsatisfying, was far more valuable than the roads we built collectively, than the parks we built collectively, and even far more important than the medical services, hospitals and other things which make life civilized in a society. Obviously, this government feels that private needs are more important.
If one looks at the measures proposed he will see there is an advantage to those who possess equities in private corporations as against those who buy bonds in government-financed projects. More important, the historians will see that this government has made a value judgment in respect of the ordinary man. They will find that the government has said to the ordinary man who works with his hands and his skills, "Your wages, your salaries and your income are not terribly important because every cent you earn is subject to tax. You are the people who will pay the entire shot in taxation on your income."
This applies as much to the university professor as it does to the man who works in the construction of a building. However, if one has capital, no matter how he has acquired it, he can invest that capital without working very hard and the income will only be subject to partial tax. Instead of a 20 per cent dividend tax credit he will receive a 33 J per cent tax credit. In addition, that capital gain will only be subject to half taxation; he will not have to pay the entire amount.
That is an important value judgment on this society; it shows that those who have money are far more impor-
24319-4*

September 13, 1971
Income Tax Act
tant than those who contribute their skill and intelligence to society. In our view that is a shoddy judgment which we cannot accept. I should like to remind this House that the Carter commission rejected that judgment when it said everyone should be taxed on an equal basis. It suggested everyone should be taxed on total income no matter where that income was derived. This government has seen fit to reject that recommendation based on the concept of equity.
In a primitive society one might accept the proposition that equity should be put aside in the interest of growth, as desirable as the principle of equity may be. The Minister of Finance has said this in similar words; he has said we would like to have equity but we cannot because we must have growth. Let us consider that proposition. The Carter commission pointed out that we have one of the most inequitable tax systems in the world, yet this country has heen plagued repeatedly and cyclically by unemployment. We have been plagued repeatedly by slow growth. Therefore, our inequities in the tax system have not helped this country develop.
There is really no argument to be made for a trade-off as between growth and equity. On the contrary, it would seem that equity and growth go hand in hand. After all, one of the things that determines growth is the willingness of ordinary people to work. An investor always invests. There is no merit in the suggestion that we must give special concessions to investors. What will they do with their money except invest it?
History will bear out the fact that there are opportunities when people have purchasing power. If a country is prosperous, the investor will find a way to invest and satisfy the needs of society. After all, that is his role. There is very little evidence to suggest that an investor has to be stimulated over and over again by tax concessions which create a climate of unfairness.
Let us again consider the concept of growth and equity requiring separate things. Let us consider the middle-income earner who is the skilled workman, the school teacher, those who work in hospitals and others. Let us remember what the Carter commission had to say about this group. This is the most mobile group in our society. The point the Carter commission made was that this group could emigrate most easily but was the group being hit hardest by our tax system.
This country is in dire danger of losing some of its most skilled and intelligent people unless we provide a fairer tax system. We have not done so. Nothing will kill incentive in this country faster than the feeling that the people who work with their hands and their brains are being penalized and disparaged while those who invest money are being rewarded. If we are to have growth in the labour and professional groups in this country, then we must recognize their talents and adopt a tax system they consider to be fair. One does not trade off growth against equity. When you have an equitable society, growth is very often the product rather than competition.
Let me repeat some figures I have used before to indicate the manner in which people are discriminated against in our society. I intend to use some tax tables
prepared in the summer of 1971 in respect of tax reform legislation. I have in mind table No. 2 on page 17 of this report. I obtained these figures from government representatives, so I assume they are reasonably accurate. I asked what a person would pay in tax if he were receiving personal income in the form of wages or salary, or perhaps interest on bonds such as Canada bonds, compared with what he would pay on his income from money invested in equities of a Canadian corporation. Let us consider the line which is headed, "From $5,000 to $7,000". If the money he made is received in the form of wages or salary, the tax is $1,280.50. However, if that money is received in the form of dividends, the tax would be $200. This is about one-sixth of the amount paid by a wage earner.
But that tells only part of the story, because if those dividends carried in them an element of capital gain the tax could very well be half that amount. If we go to the figures here of from $11,000 to $14,000-this inequity does not apply only to the lower or somewhat above average wage earners; it applies to people on salary generally-we are speaking perhaps of some teachers, and if the teacher receives the whole of his income from teaching he pays in tax $3,230.50. If that teacher happened to be smart enough to acquire a rich father-I suppose he should be awarded for the intelligence to have chosen a rich father rather than a poor one-and was able to take the rewards of his efforts and invest it, he would have to pay only $1,350 in tax. Again, if those dividends came to him with a major element of capital gain in them, the tax would be lower.
How does society go on with a tax system of that kind? How does it say to its people that they should work hard because their country needs them, it is advantageous to them and they will be rewarded? It is things of this kind which create tremendous dissatisfaction in society. It is things of this kind which put the lie to this government proposal which is called tax reform.
Therefore, let me sum up the kind of message which we get from this great document the geniuses on that side have devised. First of all, it says that the holders of capital shall be rewarded more than others, even to the extent that if you leave a great deal of money or any money when you die there is no tax on it; it can be transferred without any tax whatsoever. I could understand giving consideration to a person enjoying the rewards of his own labour or the fruits of his own labour, if you wish to be poetic, during his lifetime and even to the extent of perhaps passing it on to his wife without taxation, because very often wives contribute very substantially to the acquisition of wealth of this kind. What argument, however, is there for taking this wealth and passing it on to those who have never lifted a finger to earn it? Some of it should go to the heirs, but why should all of it go to them without taxation?
How can such a situation be considered just, when ordinary wage earners have to pay tax on every cent they make excluding their exemptions? How can we develop a country when we insist on promoting the
[Mr. Saltsman.l
September 13, 1971

development o f raw materials in that country and provide substantial tax benefits for that purpose? At the moment we face a very severe situation. The United States has put on a 10 per cent surtax. There is threatened protectionism growing in the United States. The only thing they want to admit into their country free of this surcharge and other protectionist devices is raw materials because they are either running short of them or they are becoming too costly for them to develop. We are being drained, and through our taxes are encouraging this drain. This is not a national policy, it is national suicide. I know of very few developed countries that would follow this kind of development policy.
Voices have been raised, and fortunately one voice in particular has been raised. I refer to the hon. member for Duvernay (Mr. Kierans) who spoke from the other side of the House with great intelligence. His comments have received enormous attention across this country; perhaps they have received more attention than the comments of some of my colleagues. But he is not suspect; he is not a member of the opposition. He is a member of the government and, so far as we can see, a loyal party member. His criticism is therefore more pungent or more acceptable when he makes his case against the export of raw materials and the bonus in our tax system to these industries. In making comments both inside and outside this House he has pointed out that in some cases they pay a tax of less than 10 per cent on their earnings as against the manufacturing industry which pays virtually a 50 per cent tax on its earnings.
So everything conspires in this country-the tax system and the public policies of this government-to make us little more than an underdeveloped colony, a servant to a giant industrial state that has run out of many raw materials itself and is now draining our country of them. Surely at a time when we are talking about tax change this is one item the government should immediately alter in order to remove these special advantages and privileges of the resource industries.
This is one reason I have no hesitation in wanting to see this bill killed. The bill deserves to be killed, because I would far rather see it go under than see some of the continuing ill-effects this kind of philosophy will have. It is a policy of "The future be damned. Let us live it up today and get rid of the resources as quickly as we can; we have no obligation to posterity or those who come behind us. Let us get rid of these resources"-and when they are all gone, all that will be left to us will perhaps be to seek on bended knee some kind of a quiet attachment to some other country.
This bill does almost nothing in terms of providing a measure of full employment. By stimulating the resource industries it does not provide the employment required in this country. I know the resource industries are arguing that employment is provided through an overflow into other industries. No one argues that this is not the case. We argue, however, that there are infinitely better ways to provide more employment than is provided by the resource industries.
I saw some figures in respect of the Iron Ore Company of Canada which indicate that for every $900,000 they
Income Tax Act
create one job. When we consider the number of new labour force entrants, something like 400,000 every year, plus the 6J per cent unemployment, where in the world does there exist enough capital to provide jobs from these resource-based industries? It does not exist. Our only hope is that we can develop the manufacturing industries along with other industries to achieve a proper balance in order to provide employment in this country.
There was a time in our society when people were not as concerned about the environment, when people were not as concerned about things like public transit, crowded cities, health and education, and when unrestrained growth was everything. I am pleased to say there are now very strong signs that Canadians no longer have this attachment to growth for the sake of growth alone. They want a little more quality to their life; they want a little more quality to their society. They want to say that some things are more important than others.
How, then are we to achieve this growing feeling in our society if we have a tax system which encourages private expenditure each time rather than providing some incentive to people to invest in public projects through government bonds? How are we to build these public transit systems which we talk about, create the parks that we want so much, improve our hospital facilities or medical research if everything is to go to the private sector, because the private sector, whatever its value may be and however useful are some of the things it produces, does not produce what to me are some of the most essential things of civilized society. The answer is obvious. We want to be able to do it and we will need genuine tax reform to accomplish some of these objectives.
Therefore, it seems to me that this tax bill for which we have waited so long really has not been worth the effort. It is sad to think that it should be put aside and a fresh start made because the government have made such a mess of it. That is what they have done. They have wasted nine years of searching for a proper system of tax reform, and it will have to begin all over again-if not the search, then certainly legislation that will reflect some of the wisdom that came out of the search already undertaken is badly needed in this country.


The Acting Speaker (Mr. Laniel):: Is the House ready for the question?


Gerald William Baldwin: Do I understand, Mr. Speaker, that you are about to put the question? I have a few words of wisdom on this motion. I regret I was not here, but I thought that on an amendment as momentous and as important as the one introduced by the hon. member for Edmonton West (Mr. Lambert) at least someone from the government side would have risen to defend the government's record and to indicate whether or not they intended to support this amendment.


Marcel Joseph Aimé Lambert: Is the muzzle on over there?

September 13, 1971
Income Tax Act


Gerald William Baldwin: Spontaneity, intelligence and validity are the trademarks of this party. I wish I could say as much for my hon. friends opposite. Even the very interesting meeting held in the city of Peterborough not long ago did not produce these qualities. I say that with deference to my hon. friend for whom I have due admiration, but I must say that the meeting which was dreamed up there was sadly lacking in these important qualities. This debate has revolved around an amendment moved by the hon. member for Edmonton West. I think it goes to the root of the problems which face this country today. I am given to understand that on Thursday of this week figures will be released with regard to the economic situation, the cost of living index and unemployment. We all hope that despite the absurd and ridiculous economic policies which have been pursued by this government there in fact will be an improvement shown in these particular industries. But in light of the incompetence demonstrated by this government, in light of its incapacity to fulfil the primary function of government today to provide an economic climate within the framework of which the ordinary citizen can expect to find that standard of living to which he is entitled-and in my view this has not been the case-we have been met with procrastination, with delay, with evasion and with a series of proposals which have not met the root problem which we face.
The very basis upon which this budget was formulated and the extent to which it is being reflected in the bill we have today is founded on false premises. The statements of the Minister of Finance (Mr. Benson), of the Prime Minister (Mr. Trudeau) and of the Minister of Industry, Trade and Commerce (Mr. Pepin) as to the healthy economic condition which we can expect to find in this country have been demonstrated to be completely false and we are facing, even without any international action, another winter of discontent. But we have a situation which has been brought into this country primarily by the action of the President of the United States and, to a lesser extent, by other countries, so that our economic situation is being aggravated to a point where it will be beyond the capacity of many of the ordinary people of this land to bear the heavy burdens which will be imposed upon them during the course of this winter.
We had the message of the President of the U. S. with regard to the surtax. What was the reaction of the government? As one newspaper said, they were running around like a lot of headless chickens. When the master returned there was a little clarification, there was a more even disposition, but basically no valid proposals were made which would give to the people of Canada some aid and comfort with regard to the situation which was being inflicted on this country as a result of the presidential action.
But it has not stopped there. We find that just today a senior official of the United States treasury, Mr. Volcker, the Undersecretary of the Treasury, made a categorical, firm statement at a Senate subcommittee hearing in Washington at which he said quite plainly that in case of any attempt in Canada through the use of the Employment Support Act or regulations under it which would

have the effect of creating a situation where in the opinion of the U. S. government the provisions of their particular legislation dealing with countervailing duty laws were breached, they would feel free to impose a further charge added to the surcharge which would nullify in its entirety the effect of the employment support measure.
The leader of this party when speaking in this House on the day we came back, September 7, asked during the course of his speech a question of the Minister of Industry, Trade and Commerce. He asked whether it was not a fact that this possibility existed and that the measure of the value of the Employment Support Act would be to a large extent determined by the reaction of the U. S. government. He mentioned this particular opportunity existing under the U. S. legislation.
What was the reaction of the Minister of Industry, Trade and Commerce? He said, "Oh no. The Americans would not dream of exercising their right under this legislation." But repeating what I said before so that it may be brought home to this lack-lustre government, a senior official of the American government today made it absolutely plain that in his view if an examination of the employment support bill, Bill C-262, and the regulations which would be enacted under it made it clear that there was a conflict with the provisions of the American legislation, then the American government would act immediately. This relates directly to the amendment introduced by my hon. friend from Edmonton West because in his amendment there is a requirement for the government of this country, through the medium of this tax legislation and through other means, to introduce an adequate stimulus to our lagging economy.
Under those conditions we find this specific threat. All the very meagre and limited reactions which this government can provide to the serious problem posed by the American presidential action, all it has to offer, will be negated or can be negated by further American action.
I am not intending during the course of this speech to involve this party, and hopefully this chamber, in what could become a very serious situation if these two countries became concerned in what would be only retaliatory action, which could have no other result than to damage our economy very seriously. But I do suggest in all seriousness that the government has a duty to go beyond the sort of pap dished out by the Prime Minister today in response to my question when he said, "Oh, we are going to wait until we find out what the government of the United States is really going to do, but this is all hypothetical." What nonsense, when there is a specific statement by the Undersecretary of the Treasury that the American government is going to act!


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


Gerald William Baldwin: Delighted.


Charles Terrence Murphy: I am wondering if the hon. member is suggesting that the government should bring its draft
September 13, 1971

legislation to Washington for approval before submitting it to this House?


Gerald William Baldwin: What utter, piffling nonsense. I am suggesting that this government cudgel whatever limited brains it has to try and come up with a number of reasonable alternatives in the form of contingency plans which would be of some benefit to the hard pressed people of this country faced with damaging, serious, crippling unemployment and inflation through the actions of the government in not bringing to the country what remedies it needed under normal circumstances, and now aggravated beyond all endurance by what will be the result of the actions of the United States. That is what I have to suggest.
Has the government anything to suggest? I asked the Prime Minister today, and he replied, "Oh, we will wait a little while. We will wait and see what will happen, whether this is going to be more than hypothetical." Mr. Speaker, how much drivel can we afford to listen to from the right hon. gentleman and his colleagues? I think it is a shocking situation and obviously my hon. friend opposite, for whom I have the greatest admiration except when he makes interjections of this kind, has not bothered to examine with some clarity what no doubt will be the result in his own constituency. Further, Mr. Speaker-


John Napier Turner: You have 15 minutes more to kill.


Gerald William Baldwin: Fifteen minutes? Mr. Speaker, the Minister of Justice (Mr. Turner) should be informed that behind me are battalions of hon. members seeking an opportunity to debate this very important legislation and the amendment.


John Napier Turner: What a team!


Gerald William Baldwin: Later today there was a report filed by a presidential commission which should give some pause to our government, a report which indicated that there was a recommendation going forward to the American government that a great many of the U.S.-Canada arrangements should be rescinded. This included, as I understand it, the Canada-U.S. auto pact and a recommendation that there should be no more discussions of a bilateral nature, and only on the basis of multilateral international discussions should further agreements be worked out.
In addition there are proposals introduced in the American Congress under the DISC act which would also have an exceedingly detrimental effect on this country. Under those circumstances it surely is the right of hon. members to ask for, and the duty of the government to provide some assurance that the government has plans, has programs, has alternative proposals which will meet the situation which is inevitably going to develop during the ensuing winter months.
Under those conditions it is quite obvious that the amendment of my hon. friend from Edmonton West, which I may say was conceived some time before today, achieves added significance and importance. There is a
Income Tax Act
need for the government to bring before this country and this Parliament meaningful and realistic policies which will result in a stimulation of the economy. There must be consideration given to tax cuts of a kind calculated to improve the economy, to regenerate the kind of confidence which has been lost over so many years through the dissatisfaction of the people of Canada with the procrastinating proposals of the Minister of Finance. There is a need to consider reasonable increases in tax exemptions of further kinds which will add to the purchasing power of the people of this country. No motion could be better calculated at this time to engage the interest of the people of this country and get their support.
I say this more in sorrow than in anger to the members of the government. We know they are the ones who can initiate policies. We hope they will do so. I assure them now that if they bring forward policies and proposals which will have the effect of achieving what my hon. friend, on behalf of this party, has laid down in his amendment, they will secure our support.
I know there are other hon. members who wish to speak. I will not take my full time because I know there are hon. members on this side seeking the opportunity to advise the House of additional reasons to support this amendment. I hope that before this debate is concluded some members on the government side may have the fortitude to stand up and indicate their position with respect to the amendment.


John Patrick (Pat) Nowlan: Mr. Speaker, after nine years of gestation I think all members of the House are ready, willing and able to speak at the drop of a hat on tax reform. If this bill of over 700 pages, which certainly will help the pulp and paper industry even if it does not help the average Canadian taxpayer, were tax reform in the full sense of the word, then I think we would likely have moved on with second reading and voted on the very stirring amendment advanced by the hon. member for Edmonton West (Mr. Lambert) and allowed by His Honour, which pinpoints in a general way some of the ills which are besetting this country and where tax changes should be directed to help a very stagnant and stuttering economy.
Unfortunately, Mr. Speaker, while this bill has the complexity of the Medes and Persians in all their doctrines of ages ago, it is not tax reform. Indeed, it will just create a tax jungle, and from tax jungles you do not get tax justice. From a tax jungle you will not have tax reform.
It is for that reason and a multitude of others, Mr. Speaker, that I have the privilege to stand in my place tonight, where I hope to stand other nights and other days as we go through these 700-odd pages, to try to impress upon the government the error of their ways so that this country in time may have legitimate tax reform that conforms more to the principle, so-called, of a just society than within a tax jungle which will make a jest of the just society. It is for that reason, in a very general way, that I stand here tonight.

September 13, 1971
Income Tax Act
In opening, some of my remarks will be of a general philosophical nature. I have followed with interest all the task forces and commissions, the Carter report and reports of the Commons committee and the Senate committee that delved into this very detailed subject. Mr. Speaker, this mytosis developed over nine years ago, before I came to this chamber but it may be going on when I leave-who knows in this day and age of political mortality?


Patrick Morgan Mahoney: Yes, indeed.


John Patrick (Pat) Nowlan: I will put my political mortality against that of the hon. member for Calgary South (Mr. Mahoney) any day of the week, and I certainly have no hesitation in putting my political mortality as far as this tax bill is concerned against the member for Calgary South any day of the year.
I should like to go back in a serious way to this general point, which has surprised me. Every conceivable suggestion for reform has been made. Different schemes have been advanced, proposals have been considered, we have had the white paper and now the tax bill. There is only one group of people who will benefit from this bill, and they are the professionals, be they the professional tax lawyer or professional tax accountant. I do not think even they welcome it, though, because they are still pretty confused about what it means.
In all this gestation period no one has mentioned something that I have wondered about. When I mention it I know there will be catcalls from the other side. I say we are going back to the dark ages. I submit that if tax reform is going to be so complex that the average taxpayer will be left so far out in the field and lost in the tax jungle that he cannot fill out his income tax return, we have to be more fundamental than Mr. Carter was in his tax report. I suggest that instead of a tax bill that has so many exemptions, exceptions and rules and regulations as to make it almost beyond comprehension, we will have to start at square one.
We will have to watch and question why it is not possible in this day and age of advanced social concern, when we have plans and programs to help and protect the individual in health, in welfare and areas of government involvement which were not even considered when income tax was introduced during the First World War, to go back to square one as far as income tax is concerned. I predict that before I am dead and gone some type of straight line tax policy will be adopted by some government, rather than a progressive income tax with all the exemptions, exceptions and bewilderment that this document contains.


An hon. Member:: Not likely.


John Patrick (Pat) Nowlan: Some one says "Not likely," and at first blush some obviously could say it is not. By straight line tax rates I mean some flat percentage across the board, without exemptions, without exceptions, without deductions, without expenses that can be fiddled with. It is not so unreasonable, Mr. Speaker, because where government has involved itself so necessarily in the affairs of the
individual in order to provide the basics I think we should be able to look anew at this whole question of tax reform.
In other days when someone suggested a flat rate or straight line tax rate it was regarded as heresy because at that time it obviously benefited the rich and did not help those without financial means. The Prime Minister (Mr. Trudeau) has shied away from government support programs and an integrated income incentive program. He is as scared of that as a colt is with a kitten. Where government has necessarily and legitimately involved itself in health plans, welfare plans and pension plans, providing the basics with a proper income incentive plan or a negative income tax plan to provide a base level for an individual, we should look at the other side of the scale. Instead of getting a tax bill that will only benefit those who can employ a professional tax man or a corporation that can set up a tax plan to avoid income tax to work around almost any tax plan, we should start at square one when trying to review our tax system.
In the area of capital gains, I wonder why there cannot be discrimination in favour of Canadians so that there is no capital gains tax for Canadians investing in Canada, rather than the cumbersome, complicated and wholly inadequate means set out in this bill.



PROCEEDINGS ON ADJOURNMENT MOTION

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

['Mr. Speaker, in answer to the hon. member for Yorkton-Melville (Mr. Nystrom), I would first like to pick up one of his remarks to the effect that I would probably blame the opposition for the bad situation because they are the ones who prevented Bill C-244 from being passed. Well, I am afraid I will disappoint him a little for I had no intention whatsoever to deal with the legislative steps.\nThe hon. member pointed out, very eloquently I must admit, the difficult situation of agriculture in the Prairies, and particularly in his own province of Saskatchewan which was more affected than the two others by losses in grain sales over the last three years.\nI should like to point out that he is asking the Prime Minister to make a statement on a new policy the government could propose with a view to solving the problem. It must be recognized that the government has made numerous efforts to that effect in the last few years and that, if the problem has not been solved to the satisfaction of the hon. member and western farmers, it certainly is not that the government has remained idle. After all, it must be agreed that we are dependent of international factors which are beyond our control for all practical purposes and the government must act under such circumstances.\nNow last year was excellent, since our sales reached a record figure. Indeed, according to the data obtained up to now, we have sold this year over 600 million bushels of various kinds of grain. We recognize that even if this is a record in the history of grain sales in Canada-those are only exports-the prices were not as high as expected and the amount paid will probably be equivalent to that of the best previous year. But to that, one must add the sales made in Canada, and the prices paid last year were necessarily higher than those of the previous year. The serious problem is that the farmers, having gone into debt during the two preceding years, having even received advances for the crops they reaped and stored, and obviously having paid part of this debt, surely do not have the cash they would like to have.\nHowever, some legislation is now being prepared. The hon. member mentioned an act on price stabilization. Certain other legislative proposals are being drafted and I feel that, within a few months, the economic situation of the western provinces will have improved. It will come back to the level it had reached some three years ago, when there had not yet been any reduction in prices.\nMotion agreed to and the House adjourned at 10:17 p.m.', 'Tuesday, September 14, 1971']
Heath Nelson Macquarrie: Mr. Speaker, on June 23 I asked the Secretary of State for External Affairs (Mr. Sharp), following representations by myself and others, if he would communicate to the Secretary of State of the United States the report of the Committee on Environmental Pollution, a special committee of this House unanimously approved by this chamber, and if, in reference to the proposed trans-Alaskan pipeline with all its hazards for Canada the Secretary of State for External Affairs would present to the United States government this powerful indication that someone in Canada cared about the matter and that the people's representatives herein assembled supported them in their views. It was a very serious question.
We live in an age where there is some concern, thank God, about the exploitation of our environment by those of us who enjoy it and live upon it; but as is often the case, the people were and are more sensitive on this matter than their government and the legislative body, more alert than the power-loving executive of this nation. The report of the Special Committee on Environmental Pollution, a document of first-class importance

September 13, 1971

and vital significance, commanded very little respect on the part of the government of this country, with the minister cleverly and evasively refusing to reveal to the House and to me that he thought it of such significant import that he would communicate its contents to the government of the United States on a question of crushing importance to this country.
The minister gave me a most evasive answer and, indeed, it would be a clever one if obfuscation is to be regarded as a prime virtue; but his answer was surely not a helpful or meaningful reply to a very serious question, one which can have profound dangerous implications for Canadian citizens in our time and in ages yet to come. I thought for a moment that the minister and the government might have thrown off the cloak of omniscience and recognized that the members of this House might have, through their special committee which was very ably led, come up with something that would have strengthened the hands of the government as they discussed this very important matter with the government of the United States.
I thought they might have realized that there was value and strength in this approach and that their representations might have been powerfully backed had they indicated to Washington that the point of view that Canada apparently heretofore had tentatively presented was backed by the representatives of the Canadian people in this chamber.
All too often, I fear, those now in power in this land forget the principles of representative government and that the people in this chamber collectively represent all the people of Canada. When that truth is lost, the underpining of parliamentary democracy has been forsaken. What troubles me now and what troubled me on June 23 was whether the government really tried, really exerted and asserted itself to build a case. I wonder if they vigorously compiled and presented powerful arguments against the dangers of the trans-Alaskan route.
I have become deeply disturbed by the timidity and tepidity of the representations that this country makes to other countries on matters affecting in a vital way the interests of Canadian citizens. The other day I heard the Prime Minister (Mr. Trudeau) say in reference to a matter, "I do not think I will make special representations. They know what we think." Do they really? Should a head of government not assert to another head of government matters of this importance? Very often we hear that the French know what we think about arms, the Americans know what we think about Amchitka and the Skagit Valley...but is there no place where the Canadian government presents its case clearly?
I fear that in this pusillanimous correct!tude, which is no substitute for vigorous, impressive statesmanship that the government might provide, the land might benefit if from time to time they would drop the cloak of omniscience and look at this chamber and the committees of this House for some help and guidance.
In times past, they who represented this country in the councils of the world found the courage to speak boldly and were able to assert themselves without obfuscation.
Proceedings on Adjournment Motion
Macdonald did it; Borden did it. I should like to think that in this twentieth century we could produce someone who would do it as well as a special committee did.


Patrick Morgan Mahoney: Mr. Speaker, I do not suppose it would make any difference to the colourfully expressed views of the hon. member had he chosen to check his facts between June 23 and today. He would no doubt be interested to learn that the report to which he has referred was transmitted to the Secretary of State of the United States by the Canadian government late last June with the advice that the House had unanimously concurred in the committee's recommendations.



Lorne Edmund Nystrom: Mr. Speaker, on May 7, I directed a question to the Prime Minister (Mr. Trudeau) arising out of statistics issued by the Dominion Bureau of Statistics in May concerning net farm income. When I first saw those statistics I noted that net farm income in Canada had fallen drastically between 1968 and 1970, particularly in my province of Saskatchewan. Net farm income there had fallen from about $462 million to $202 million in a two-year period. This represents a decline of 56.2 per cent.
In these circumstances, and because of my knowledge of the hardships faced by western farmers, I asked the Prime Minister the following question:
In view of the fact that farm income in Saskatchewan has dropped by 56 per cent over two years and in view of the fact that the bills now before the House will do little to alter that situation, is the Prime Minister contemplating any emergency action to try to improve the farm income picture in western Canada?
I would point out again that this decline of 56 per cent represents net income, what the farmer gets as his take-home pay. This alone must indicate to all of us that there is something really wrong with the western economy and that real hardship is facing the farmer. After all, if our income as Members of Parliament, or as private citizens in whatever capacity were to drop by 56 per cent, I believe we would all recognize we were faced with a real emergency. This is the situation of the western farmer. This is why I asked my question and this is why I want to say a few words about the subject tonight.
The parliamentary secretary may get up and say, "Well, we have a stabilization bill before the House and there is $100 million for farmers in that bill." The bill was first introduced in the House on October 29 of last year. The farmers of western Canada want the $100 million. All political parties realize this. On June 8 of this year my hon. friend from York South (Mr. Lewis), on behalf of our party, introduced a bill designed to divide the stabilization bill into two parts and enable the $100 million to be sent out unconditionally to the farmers of western Canada.
On many occasions we and other members of the Conservative party have asked the government to divide the

September 13, 1971
Proceedings on Adjournment Motion
bill in such a way that farmers could have $100 million in cash, because the money is needed immediately. Many other things are needed right now to salvage the family farm in western Canada. Action cannot be put off indefinitely because the longer it is delayed, the fewer farmers will be remaining on the land. In Saskatchewan last year more than 30,000 left the province, most of them as a direct result of the slump in the agriculture industry.
We need to take many steps if we are to save the family farm. We need a two-price system for grain, for example, which will give the farmer a certain price for wheat that is sold domestically and another price for wheat sold internationally. We must do something about the high cost of farm machinery, about implementing many of the recommendations made by the Barber commission on the high cost of farm machinery. Most of all, as a Parliament we must try to convince the government that they must listen to farmers and farm organizations. This they have not done in the past. It is about time democracy was made more meaningful and the government listened to the farmers, instead of having an election every four years and forgetting about them in the interval.
The National Farmers Union, the Federation of Agriculture, the wheat pools and other organizations are unanimous with regard to many recommendations that have been made to the government. One thing they all call for is emergency action, and this call has been made for the last year or two. Let us not put this action off any longer. They need the $100 million and they need it now, so why does the government not listen to them?
The farm unions also want us to debate the stabilization plan because many of the provisions contained therein are not what the farmers want. Why does the government not listen to the farmers for a change, instead of dictating to them? These are some of the steps we shall have to take to stimulate and encourage a way of life that is a very meaningful one, the rural way of life. But instead of this we have hassles about the government withholding payments under the Temporary Wheat Reserves Act which should be made to the Wheat Board for storage. These payments should be made. The farmers should be helped, not hindered.
I anticipate that the parliamentary secretary will stand up and talk about the stabilization bill and say that we are holding it up. I would remind the House once again that we have moved to separate this bill. All members on this side of the House want the bill separated so that the $100 million can be paid out. When the parliamentary secretary rises, I hope he will have something constructive to say. If not, then I am afraid that the Minister of Agriculture (Mr. Olson) will be afraid to participate in the Assiniboia by-election that will be held on November
8, because at that time the farmers will have a chance to pass judgment on the government's agricultural policies.


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, in answer to the hon. member for Yorkton-Melville (Mr. Nystrom), I would first like to pick up one of his remarks to the effect that I would probably blame the opposition for the bad situation because they are the ones who prevented Bill C-244 from being passed. Well, I am afraid I will disappoint him a little for I had no intention whatsoever to deal with the legislative steps.
The hon. member pointed out, very eloquently I must admit, the difficult situation of agriculture in the Prairies, and particularly in his own province of Saskatchewan which was more affected than the two others by losses in grain sales over the last three years.
I should like to point out that he is asking the Prime Minister to make a statement on a new policy the government could propose with a view to solving the problem. It must be recognized that the government has made numerous efforts to that effect in the last few years and that, if the problem has not been solved to the satisfaction of the hon. member and western farmers, it certainly is not that the government has remained idle. After all, it must be agreed that we are dependent of international factors which are beyond our control for all practical purposes and the government must act under such circumstances.
Now last year was excellent, since our sales reached a record figure. Indeed, according to the data obtained up to now, we have sold this year over 600 million bushels of various kinds of grain. We recognize that even if this is a record in the history of grain sales in Canada-those are only exports-the prices were not as high as expected and the amount paid will probably be equivalent to that of the best previous year. But to that, one must add the sales made in Canada, and the prices paid last year were necessarily higher than those of the previous year. The serious problem is that the farmers, having gone into debt during the two preceding years, having even received advances for the crops they reaped and stored, and obviously having paid part of this debt, surely do not have the cash they would like to have.
However, some legislation is now being prepared. The hon. member mentioned an act on price stabilization. Certain other legislative proposals are being drafted and I feel that, within a few months, the economic situation of the western provinces will have improved. It will come back to the level it had reached some three years ago, when there had not yet been any reduction in prices.
Motion agreed to and the House adjourned at 10:17 p.m.

Tuesday, September 14, 1971