1971-09-15

ROUTINE PROCEEDINGS


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I should like to table, under Standing Order 41(2), a letter from Premier Bourassa concerning family allowances, as requested yesterday by the hon. member for Winnipeg North Centre (Mr. Knowles).


Mr. MacDonald (Egmont):: Mr. Speaker, I rise on a point of order. In view of the importance of this letter I wonder whether the House would agree to have it printed as an appendix to Hansard?


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: For letter referred to above, see
Appendix.]



TABLING OF COMMUNIQUE ISSUED FOLLOWING SIXTH MEETING OF JAPAN-CAN ADA MINISTERIAL COMMITTEE

Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, I should like to table a copy of a joint communique issued at the conclusion of the sixth meeting of the Japan-Canada ministerial committee held in Toronto.



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

Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I wish to propose a motion pursuant to Standing Order 43. This motion arises from a very urgent, pressing and serious necessity because of the continuing failure of the Minister
of Finance (Mr. Benson) to discharge his administrative responsibilities by failing to pay out of the consolidated revenue fund to the Canadian Wheat Board certain moneys to cover the costs of storage of wheat in accordance with the provisions of the Temporary Wheat Reserves Act, which still remains Canadian law. These moneys amount to many millions of dollars which rightfully belong to and by now should have been distributed to the farmers of Canada. Therefore I propose to move, seconded by the hon. member for Calgary North (Mr. Woolliams):
That this Parliament authorize and direct the Canadian Wheat Board to sue the Minister of Finance for his failure to pay to the said board for each day in the crop year 1970-71 and that portion of the crop year 1971-72 an amount equal to the portion of the said stocks that exceed 178 million bushels of wheat at the commencement of the crop year multiplied by the carrying charge rate paid by the board at the end of the immediately preceding crop year, as required by the Temporary Wheat Reserves Act, chapter 2 of the 1956 Revised Statutes of Canada.


Mr. Speaker:: This motion requires the unanimous consent of the House. Is there unanimity?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity; therefore the motion cannot be put.



REGIONAL ECONOMIC EXPANSION


Hon. lean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, pursuant to Standing Order 41(2), I wish to table copies of the agreements signed recently between the Canadian government and the province of Alberta, under ARDA.



INDIAN AFFAIRS


Mr. Frank Howard (Skeena):: Mr. Speaker, I seek leave of the House under Standing Order 43 to move a motion and to give a brief explanation of the necessity thereof. On September 8, as shown on page 7619 of Hansard, the House passed the following motion:
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September 15, 1971
Withholding of Grain Payments
That an Order of the House do issue for a copy of the report of the interdepartmental committee, the establishment of which was announced on March 29, 1965, which studied the question of fish and game laws as they relate to native Indians.
The adoption of that motion was contingent upon a statement made by the Parliamentary Secretary to the President of the Privy Council with regard to the authorization of the government authorities concerned. Yesterday a return was tabled pursuant to that order which states as follows:
This motion was accepted on September 8, 1971, subject to provincial concurrence. We have been informed that the province of British Columbia will not concur in the tabling of this report.
The motion I seek to move is seconded by the hon. member for Vancouver-Kingsway (Mrs. Maclnnis). I might add that it is not my desire to enter into a debate about the matter and cut into government business, but we think an expression of opinion by the House concerning this matter is most necessary and urgent in the circumstances because of the importance of this report to the Indian people of British Columbia. The motion I should like to move is as follows:
This House regrets very much that the government of the Province of British Columbia refuses to concur in the tabling in this House of the Stanbury-Fields report.


Mr. Speaker:: The House has heard the motion proposed by the hon. member for Skeena which requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity. The motion cannot be put.



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

Mr. John Burton (Regina East):: Mr. Speaker, I ask the unanimous consent of the House to move a motion under Standing Order 43. My motion arises from certain answers given by the minister in charge of the Wheat Board on Monday afternoon in the House concerning the government's attitude toward the Temporary Wheat Reserves Act. My motion is self-explanatory. I move, seconded by the hon. member for Regina-Lake Centre (Mr. Benjamin):
That this House notes with concern the failure of the minister in charge of the Canadian Wheat Board to take action to protect the interests of wheat producers in western Canada by reason of his acknowledgement that a legal opinion was not requested on the government's action in not making payments under the Temporary Wheat Reserves Act since August 1, 1970.


Mr. Speaker:: Under the terms of Standing Order 43 this motion requires the unanimous consent of the House. Is there unanimous consent for the putting of the motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Since there is not unanimity the hon. member's motion cannot be placed before the House.



DEPARTMENT OF JUSTICE ACT


Mr. Andre Fortin (Lotbiniere) moved: for leave to introduce Bill C-265 entitled "An Act to amend the Department of Justice Act (Annual Report)".


Some hon. Members:: Explain.


André-Gilles Fortin: Mr. Speaker, the purpose of the bill which I have the honour to introduce today is to compel the Department of Justice which is the only department not reporting to Parliament to do so.
This amendment is therefore aimed at correcting that anomaly to ensure better parliamentary control on that department and to improve its efficiency.


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

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

Mr. McCleave: 1.	Did Catalina Exploration and Development Limited suggest to the government any remedies to enable more Canadian participation in exploration for oil off the East Coast and, if so, what were they?
2.	If any such suggestions were received, what action was taken on each recommendation?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: 1. Catalina Exploration and Development Limited, in conversations with departmental officials, suggested to the Department of National Revenue, Customs and Excise, that the full rates of customs duty applicable under the law be charged against foreign seismic exploration vessels entering Canadian territorial waters.
2. The Department of National Revenue, Customs and Excise, charges the rates of customs duty properly payable under the law and the representative of Catalina Exploration and Development Limited was so informed.


EXPENSES FOR THE PRIME MINISTER'S OFFICE
Mr. Nystrom: 1.	What were the total expenses for the Prime Minister's Office in 1970 (a) his official expenses (b) his staff expenses?
2.	What were the total expenses for the Prime Minister's Office in 1967 (a) his official expenses (b) his staff expenses?
September 15, 1971

3.	What were the total expenses for the Prime Minister's Office in 1962 (a) his official expenses (b) his staff expenses?


Mr. Barnett J. Danson (Parliamentary Secretary to the Prime Minister):: (a)	Prime Minister's
expenses
(b)	Prime Minister's
staff expenses
1	2	31970-71	1967-68	1962-63$ 71,963	$ 64,808	$ 49,496$866,239	$293,531	$181,550
NOTE: (i) Fiscal years are used instead of calendar years, (ii) Answer under 3(b) does not include officers seconded from other government departments. Answers under 1(b) 2(b) and 3(b) do not include personnel under contract, (iii) Expenses shown under 3(b) do not include travel expenses for which records are not available.
*
* *


QUESTION PASSED AS ORDER FOR RETURN
Mr. Lambert (Bellechasse): From April 1, 1970 to March 31, 1971 (a) what was the value of sales of textile products in Canada (b) what was the total value in Canadian dollars of imported textile products (c) from what countries were the products imported?
Return tabled.


MOTION TO ADJOURN UNDER S.O.26 GRAIN WITHHOLDING BY GOVERNMENT OF PAYMENTS UNDER TEMPORARY WHEAT RESERVES ACT
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, this is a proposed motion to adjourn under Standing Order 26. Pursuant to Standing Order 26 I ask leave to adjourn the House to discuss a specific and important matter requiring urgent consideration. In view of the fact that the hon. member for Vegreville (Mr. Mazankowski) set out the details in his motion today under Standing Order 43, it is not necessary for me to go into the details in reference to my motion. I merely say that we have never had an opportunity to discuss this matter. Therefore I move, seconded by the hon. member for Vegreville:
That this House adjourn to discuss the violation of Section 3, Temporary Wheat Reserves Act, Chapter 2, Statutes of Canada, by the Minister of Finance in his failure to pay out of the consolidated revenue fund to the Canadian Wheat Board as requested by invoice by the said board in accordance with the law amounts payable for crop year 1970-71 and monthly payments to date for crop year 1971-72 which adds to the Canadian farmer pool account with the said board.


Mr. Speaker:: As required by the terms of Standing Order 26 the hon. member for Calgary North filed with the Chair the required notice. Since then the Chair has
Withholding of Grain Payments
given careful and serious consideration to all aspects of the matter raised in the proposed motion.
Hon. members know that two similar motions have already been proposed for the consideration of the Chair and in each instance I had considerable difficulty in reaching a decision; again I have had some trouble in determining whether the motion proposed by the hon. member for Calgary North should be allowed. I want to take into consideration that if Standing Order 26 has a purpose it is for the Chair from time to time to give hon. members an opportunity to discuss a matter which is of urgent importance and is of obvious interest not only to the members themselves but to the people they represent.
The difficulty I have had with the previous motions and, I must say, with the one now put forward by the hon. member, is that it is, as I have said in the instance of the motion proposed by the hon. member for Regina East and the motion sponsored by the hon. member for Vegreville, essentially a censure motion, and the practice is well established that a censure motion should not be introduced in the House under the terms of Standing Order 26 or, alternatively, in the form of a substantive motion or non-confidence motion. I have said, in conformity with previous rulings, that a non-confidence motion should not be brought for the consideration of the House under the terms of Standing Order 26. That is why I would find it very difficult, in view of my previous rulings, to reverse these rulings and to say that at this point an opportunity should be given to the House to discuss the matter.
I suggest respectfully to the hon. member for Calgary North and to the hon. members who have shown a continuing interest in this very important matter that if the suggestion were made to the Chair that we consider at this time or later-I am not sure whether I should put any ideas into the minds of hon. members-the plight which might result from the fact that certain actions are not taken either by the government or by the Wheat Board, then that might be an entirely different situation. I would no longer be faced with the question whether a motion of censure has been proposed to the House under Standing Order 26 which, even if it were proposed every day, I would have to turn down daily.
I do suggest therefore that the motion proposed in those terms, now before me and which was before me when the matter was suggested previously for consideration by the other hon. members, is not acceptable. Having said that, I think I must reach the conclusion that I cannot, at this time at least, accept the motion proposed by the hon. member for Calgary North.


Eldon Mattison Woolliams: Mr. Speaker, may I rise on a point of order. In view of your judgment to which I listened very carefully I would now like to give verbal notice that I will endeavour to take a second strike at the ball tomorrow.


MOTIONS FOR PAPERS
James Alexander Jerome: Mr. Speaker, may I ask that Notices
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September 15, 1971
Inquiries of the Ministry
of Motions for the Production of Papers be allowed to stand?


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


ORAL QUESTION PERIOD
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I would like to direct a question to the right hon. Prime Minister. In view of the increased importance of diversifying the markets for Canadian manufactured products I would like to ask the Prime Minister what specific program his government has to enable Canadian manufacturers effectively to secure a larger share of the Japanese market for manufactured goods in those areas of the Japanese market that have already been liberalized?


Pierre Elliott Trudeau: Mr. Speaker, this is an interesting proposal that I had occasion to discuss last Saturday night in front of a section of the Canadian public. I am sure it is something which came up in the ministerial meetings between Canada and Japan. I will ask for a report from the ministers who were at those meetings and see if any progress was made.


Robert Lorne Stanfield: Mr. Speaker, since the Secretary of State for External Affairs was present at those meetings, perhaps I could ask him that question.


Mitchell William Sharp: Mr. Speaker, I think a perusal of the communique which I have just tabled in the House would indicate that this was one of the most important subjects of discussion. We believe the Japanese are making progress in the liberalization of their import restrictions. The Minister of Industry, Trade and Commerce expressed his eagerness to take advantage of the new opportunities and is pressing Canadian businessmen to do so.


Robert Lorne Stanfield: Mr. Speaker, may I clarify my question and make it very clear to the Secretary of State for External Affairs that I am asking what specific program the government has in mind with regard to increasing Canadian exports of manufactured goods, and therefore creating jobs in Canada, in those areas of the Japanese economy that have already been liberalized, whereas the communique related rather to the increase of areas to be liberalized?


Mitchell William Sharp: Mr. Speaker, the Leader of the Opposition seems to lack confidence in the ability of Canadian businessmen to compete in the Japanese market. I do not share his lack of confidence.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I notice that the hon. member for York South is anxious to ask a supplementary, but for the moment the Chair recognizes the Leader of the Opposition.


Robert Lorne Stanfield: Mr. Speaker, I simply lack confidence in this government.


Some hon. Members:: Hear, hear!


THE CANADIAN ECONOMY
Robert Lorne Stanfield: Mr. Speaker, I would like to ask the Secretary of State for External Affairs whether the Japanese officials at the meeting expressed any opinion to the Canadian ministers with regard to the policy review under way with respect to foreign investment in Canada? For example, did they express any concern about this policy review that has been going on seemingly just about as long as the Zieg-field Follies?


Mitchell William Sharp: No, Mr. Speaker, the Japanese ministers did not express concern. They themselves have been engaged in a review of their foreign investment policy and we have been encouraging them to become more liberal, as we are. I am sure the Leader of the Opposition would agree that this is desirable. We also assured the Japanese ministers that Japanese investment in Canada would be welcome and that we hoped it would be in the form of a minority interest.


INITIATIVE BY CANADA AND JAPAN RESPECTING ACTION TO OFFSET UNITED STATES ECONOMIC MEASURES
Mr. David Lewis (York South):: Mr. Speaker, I do not know whether my question is supplementary, but I noticed it was stated in the communique issued following the Canada-Japan ministerial meeting that the ministers of the two countries discussed the various items of present American economic policy, both those policies which have already been implemented and policies which are contemplated such as DISC, export tax credits and so on. I want to ask the Secretary of State for External Affairs whether the discussion resulted in any agreement by Canada and Japan to take the initiative in international measures by these two countries and the European Common Market to withstand the effect of the protectionist American policies?


Mitchell William Sharp: Mr. Speaker, both Canada and Japan have been very active in the various international forums that have been discussing these matters. I think it is fair to say that the United States has been isolated and the countries of
September 15, 1971

the world have joined in asking the United States to remove the surcharge and not to proceed with the other protectionist measures it is contemplating.


David Lewis: I have no doubt that urging will go on, Mr. Speaker, but I was wondering whether there was any discussion at the meeting of ministers of particular steps that could be taken by the rest of the world to counter the American protectionist policies. In relation to that, would the Secretary of State for External Affairs also tell the House why the communique refers to the fact that "the stability and growth of the United States economy is vital to international stability and economic growth", without reference to the fact that the same is true for the economies of Europe and other parts of the world?


Mitchell William Sharp: I would have assumed, Mr. Speaker, that all countries of the world and nearly all politicians would agree it is important that such an important economy as that of the United States should be stable and prosperous-


David Lewis: Any more important than Japan?


Mitchell William Sharp: That must be very helpful to all of us. That is not to say that we do not want Europe and Japan to be prosperous.


Eldon Mattison Woolliams: How generous can you be?


THE CANADIAN ECONOMY
David Lewis: Mr. Speaker, we are grateful to the Secretary of State for External Affairs for his generosity about Europe and Canada but I would now like to address a supplementary to the Prime Minister. In view of the fact that the present economic situation in Canada is the result of American policies and emphasizes the vulnerability of the Canadian economy because of foreign ownership of a large part of it, may I ask the Prime Minister what stage of development the government's policy on foreign ownership has reached and whether we can expect some statement of government policy in this field very soon?


Pierre Elliott Trudeau: Mr. Speaker, this is at an advanced stage and we expect to have a report fairly soon. I might point out to the hon. member, however, something that he will realize, that even if there were no foreign investment in Canada and if we were in a position of trading 25 per cent of our GNP with the Americans, we would still be facing this difficulty.


David Lewis: A supplementary, Mr. Speaker-


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for a last supplementary at this time and then recognize the hon. member for Abitibi. The hon. member for York South.


David Lewis: Mr. Speaker, I have a supplementary which follows from the Prime Minister's lecture on economics. I
Inquiries of the Ministry
should like to ask the Prime Minister whether he is seriously suggesting that if our economy was not so largely owned and controlled by American corporations the present state of our export trade would exist?


Pierre Elliott Trudeau: When I was a teacher, Mr. Speaker, that was called a rhetorical question.


CRIMINAL CODE
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to direct a question to the Minister of Justice.
Considering the frightening increase in crime and homicides in Canada, does the government intend to bring forward some legislation soon to re-introduce the death penalty for murderers?


Pierre Elliott Trudeau: Mr. Speaker, I missed part of the question, but if it refers to the impending announcement of a new program, the answer is no. The government knows of course that the legislation was adopted for a five-year period and before it expires we shall be ready to state the government's position for the renewal or repeal of the legislation.


André-Gilles Fortin: Mr. Speaker, I have a supplementary. Can the right hon. Prime Minister tell us whether during the period of application of the law, it will be constantly under review in order to ascertain whether it is truly meaningful?


Pierre Elliott Trudeau: Mr. Speaker, the reply is that studies have been carried out and are certainly regularly updated since the government, when making its decision, must take sociological facts into consideration.
 * *



NATIONAL SECURITY


Eldon Mattison Woolliams: Mr. Speaker, may I direct a question to the Prime Minister. Would the Prime Minister be prepared now to set a day aside, as he promised, for a debate on security and, in particular, debate on the report of the commission in reference to security matters, which up to now has not taken place.


Pierre Elliott Trudeau: Mr. Speaker, this is not unlike the question about the day to be set aside for abortion, which was asked some days ago by a member of the New Democratic Party. My answer is much the same. We have not in this session been able to advance all the legislation and the policies that the government announced in the Speech from the Throne and throughout the session. It should be obvious to hon. members that we are running short of time. We have already

September 15, 1971
Inquiries of the Ministry
spilled over into this part of the year with a session which normally should have ended in June. This is because the government, of course, is not able to allot time in a definitive way. My answer to the hon. member, much as it was to the other hon. member the other day, is that if the opposition will help us try to set a reasonable time for debate on each piece of legislation or policy which was mentioned in the Speech from the Throne, we will guarantee to cover all subjects.


Some hon. Members:: Oh, oh!


Eldon Mattison Woolliams: In light of the lengthy answer and because of the seriousness of the matter, would the Prime Minister now advise the House and country why Mr. Donald Wall, assistant secretary to the cabinet, I believe, and Mr. Donald Bevis, who I believe was secretary to the security panel or cabinet committee, were relieved of their responsibilities recently on matters connected with security and why, if not, they are not forming part of Colonel Bourne's "headless" group?


Pierre Elliott Trudeau: Mr. Speaker, this is a matter of internal organization of the government.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: The question really does not make sense to me. I will try to answer, if I can read into the mind of the hon. member. It is as though he were asking me why a lawyer who is working with the Department of External Affairs did not stay in the Department of Consumer and Corporate Affairs. Mr. Wall and Mr. Bevis have their duties in respect of cabinet matters and Colonel Bourne's group has its duties in regard to the Solicitor General's office. The answer is as simple as that.


Eldon Mattison Woolliams: Mr. Speaker, may I ask one further question. Perhaps it will clear the air. Were these two men not removed from office because the government had over-reacted with the War Measures Act last fall? Is that not one reason?


Mr. Speaker:: Order, please. I doubt whether that question as asked is in order.


Mr. Nielsen:: A supplementary question, Mr. Speaker-


Mr. Speaker:: Order, please. That supplementary question was not in order. I will allow the hon. member for Yukon to ask a supplementary to the first question.


Erik Nielsen: Mr. Speaker, in view of the far-reaching importance of the royal commission's report on security and in view of the fact that in April, 1970, the Prime Minister gave his undertaking to the House to set aside a full day for a debate on that report, will he not reconsider and set aside that day at this time?


Pierre Elliott Trudeau: Mr. Speaker, I repeat, if the opposition House leaders will sit down with the government House leader and arrive at a sensible schedule for the next months-


Mr. Lambert (Edmonton West):: That means sensible for the Prime Minister.


Pierre Elliott Trudeau: -to dispose of the measures which are before the House, including the one that the hon. member just mentioned, then we will be very grateful. We believe that all these measures should be decided either positively or negatively after a reasonable period of debate. I might add, Mr. Speaker, that the allegations in the previous question by the hon. member for Calgary North are completely false.


Mr. Baldwin:: Mr. Speaker, I rise on a point of order. Twice the Prime Minister has made suggestions or pointed insinuations as to the extent to which the opposition may be at fault in regard to the proceedings of the House.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Gerald William Baldwin: I want to point out that there has been between the House leaders, save only when the Prime Minister has unnecessarily intervened, a fair amount of co-operation, and that it is the disastrous disorganization of the government that has been responsible for any wasted time.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


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


Eldon Mattison Woolliams: Mr. Speaker, I rise on a question of privilege.


Mr. Speaker:: The hon. member seeks the floor on a question of privilege. He will recognize that as a result of questions of privilege raised yesterday we got into some difficulties. The Chair takes its share of the responsibility in this respect. We missed out on a number of questions yesterday which I am sure would have been of interest to all hon. members. I trust we will not spend too much time today on questions of privilege or order, or disorder.


Eldon Mattison Woolliams: Mr. Speaker, my question of privilege is very simple. When the Prime Minister was answering the question put to him by the hon. member for Yukon, he gratuitously said that my allegations were false. I made no allegations. I merely asked the Prime Minister for information which he has and nobody else has. He refused to answer the question or to set a day for the debate.


Mr. Speaker:: Order, please.


Pierre Elliott Trudeau: Mr. Speaker, on the same question of privilege-


Mr. Speaker:: Order, please. I suggest to the Prime Minister that it would not be the same question of privilege because I do not think there is a question of privilege at all. I respectfully suggest that we are really engaged in debate at this point. It might be helpful to all concerned if we went to the hon. member for Selkirk and gave him a chance to ask his question.

September 15, 1971



TAXATION


Mr. Doug Rowland (Selkirk):: Mr. Speaker, my question is for the Prime Minister. Has he yet replied to the letter which he received from the first ministers of the provinces in which they asked for a deferral of one year on the estate and gift tax proposals now before the House? If he has replied, what is the nature of the reply?


Pierre Elliott Trudeau: Mr. Speaker, no substantial reply was sent as far as I know.


Douglas Charles Rowland: Does the government intend to send a substantial reply to the first ministers?


Pierre Elliott Trudeau: Mr. Speaker, the best reply would be the position the government takes in the House when the bill is passed. We cannot reply to the hypothetical situation as to what will happen if the bill is delayed past January 1, the date that the premiers mentioned in their letter to me.



SHIPPING


Marcel Joseph Aimé Lambert: Mr. Speaker, my question is for the Minister of Transport. Because of the unprecedented volume of traffic in and out of Vancouver Harbour due to the strikes in United States Pacific coast ports, and in view of persistent reports of priority being accorded to the movement of commodities destined to or emanating from the United States, to the detriment of Canadian goods, would the minister report to the House just what the situation is because, as he is well aware, many western newspapers have become very concerned about this matter and the Canadian public are writing and asking whether they are second-class citizens?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I was in Vancouver yesterday and discussed this matter at length with the marine representatives of my department there and I asked for a full report. On the basis of the verbal replies that were given to me at that time I think I can say that I am satisfied that no preference is being given to American shipments. I have asked for a written report and will make it available to the House and to the hon. member as soon as it is received, which should be within a few days.



REGIONAL ECONOMIC EXPANSION


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Regional Economic Expansion.
Inquiries of the Ministry
As it is getting more and more obvious that Chemcell Limited is definitely going to close its plant at Montmag-ny, can the minister tell the House whether any business firm has asked for a grant toward the purchase of the Chemcell buildings in order to set up some other type of production in Montmagny, which would benefit the local workers?


Jean Marchand: I am not aware of that, Mr. Speaker. I shall look into it and inform the hon. member.



AIRPORTS


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my question is for the Minister of Transport. Is the federal government working closely with the government of Quebec to develop a strategy to accelerate Montreal's growth and make Montreal into a North American distribution centre for all types of air cargo? If so, when will a statement be made?


Donald Campbell Jamieson: Mr. Speaker, in so far as the specific matter of co-operatiori is concerned, I know that discussions have been going on with my officials but I do not have too many details with regard to them. I can tell the hon. member, however, that we are working closely with Chambers of Commerce and other groups in Toronto, Calgary, Edmonton and Vancouver and all major centres to facilitate all these airports and make them as effective and beneficial to their areas as possible.


Sylvester Perry Ryan: As many of the major airlines want to have the Toronto international airport site developed for both passenger and air cargo services, and therefore the Ste. Scholastique site in Quebec may become a white elephant, will the government postpone any commitment to the government of Quebec and the Montreal Urban Commission in this regard until the economic feasibility is thoroughly proven?


Donald Campbell Jamieson: Most emphatically no, Mr. Speaker. We will proceed with the development of Ste. Scholastique at the most rapid rate possible, as we will with development in the southwestern part of Ontario. When people speak of white elephants, I remind the House and the hon. member that ten years ago they told us we were out of our minds for building as large as we were in both Toronto and Montreal and we all know what has happened.


Some hon. Members:: Hear, hear!

September 15, 1971
7836__________________________________
Inquiries of the Ministry AIR TRANSPORT



IMPENDING PRICE WAR AMONG TRANS ATLANTIC CARRIERS-GOVERNMENT APPROVAL OF PARTICIPATION OF AIR CANADA AND CPA IN PRICE-FIXING MEETING

Mr. Stanley Haidasz (Parkdale):: I have a supplementary question. On behalf of the air travelling public, I ask the Minister of Transport whether he has any report to make to the House about the impending price war among transAtlantic air carriers and also whether Air Canada and CPA participated with the approval of the federal government at a price fixing meeting in Montreal last month?


Mr. Speaker:: Order, please. I suggest to the hon. member that is hardly a supplementary question. However, the hon. member would have been recognized in due course so the minister might be allowed to reply. I will then return to the supplementaries.


Donald Campbell Jamieson: Mr. Speaker, only a short time ago I learned of the final breakdown of the IATA talks with regard to getting unanimity on a fare structure for the North Atlantic. The government and I personally regret this very much. It may be that in the short term a price war, as the hon. member has called it, will be beneficial to travellers, but in the long run it would seem to me, and I think this view is shared by virtually all members, it would be far better if we had an organized arrangement. We will continue to press for this and try to get reasonable fares for the Atlantic, lower indeed than are in existence in most cases now.


Mr. Speaker:: The hon. member for Spadina on a supplementary to the previous question.



AIRPORTS


Sylvester Perry Ryan: My supplementary is again for the Minister of Transport. Will the government undertake to deal with an even hand between the Montreal airport site and the proposed Toronto international airport site both with regard to air passenger service and air cargo?


Donald Campbell Jamieson: I can
give that assurance without the slightest qualification, Mr. Speaker. I am personally convinced that both Toronto and Montreal have excellent futures in terms of the air traffic business, and we will see that facilities are provided at both airports.



WINNIPEG-DEVELOPMENT OF AIR CARGO SERVICE

Hon. W. G. Dinsdale (Brandon-Souris):: My supplementary, Mr. Speaker, deals with the situation at the Winnipeg airport. Can the minister give the same assurance-
[Mr. Jamieson.J


Mr. Speaker:: Order, please. I suggest to the hon. member that again this is hardly a supplementary. The hon. member for Parkdale asked a supplementary. I did not think it was a legitimate supplementary. I suggest to hon. members that a question does not become a supplementary mainly because it deals with the same department. With the consent and co-operation of the hon. member for Brandon-Souris, I invite the hon. member for Spadina to ask his supplementary and the Chair will then recognize the hon. member for Brandon-Souris on a different question.


Sylvester Perry Ryan: I do not have a further supplementary, Mr. Speaker.


Walter Gilbert Dinsdale: Mr. Speaker, my supplementary arises from the reply of the minister to the effect that negotiations on cargo matters are taking place in respect of all the major points in Canada. In light of that comment, I wish to ask the minister if the negotiations have taken into consideration the fact of the gradual erosion of the importance of the Winnipeg airport in air transportation matters. Can the minister give assurance that this erosion will not now be carried only into the air cargo field?


Donald Campbell Jamieson: Mr. Speaker, I made a tour of the Winnipeg airport the day before yesterday. My colleague, the Minister of Supply and Services, reminded me that I left Winnipeg out of the list I gave a few moments ago. I can assure you that it was inadvertent. The volume of traffic through Winnipeg is actually higher, not so much in terms of landings but in larger type aircraft. Passenger movement is higher. The number of technical stops has increased. As I have said on a number of occasions, the bilateral arrangements with the United States which we are now working on lay heavy emphasis on western Canada, including Winnipeg, Edmonton, Calgary and Vancouver.


Some hon. Members:: Hear, hear!



BUSINESS OF THE HOUSE


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the President of the Privy Council in his capacity as government House leader. In view of the fact that a number of opposition days are left over from June and in view of the very strong desire on this side of the House to discuss the non-payment by the government of certain moneys specified in the Temporary Wheat Reserves Act, will the government House leader make arrangements for an early opposition day, perhaps the first of the week, so we can have a discussion on this important matter?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, we may arrange for this to include abortion, security and the Temporary Wheat Reserves Act.
September 15, 1971



RESUMPTION OF DEBATE ON AGRICULTURAL STABILIZATION BILL

Donald Frank Mazankowski: I wonder if the House leader can give any indication when the stabilization bill, C-244, might be presented to the House for further consideration?
Hon. Allan ]. MacEachen (President of the Privy Council): Yes, Mr. Speaker. This session.



FAMILY INCOME SECURITY


Mr. Roch La Salle (loliette):: Mr. Speaker, I should like to put a question to the right hon. Prime Minister.
Recognizing the fact that the federal government is responsible for setting up minimum family allowance standards for all Canadians, I would ask the right hon. Prime Minister to tell the House whether his government would agree to granting the provinces certain legislative powers that would take into account the credits allowed by the federal government to that end?


Pierre Elliott Trudeau: Mr. Speaker, the question is not simple. It is not a question of the federal government granting legislative powers to the provinces because it is clear, under the constitution, that the provinces already have them.
The only question which came up again and again was whether the federal government, which has been making payments for family allowances since 1944, may continue to do that or not. Of course, the answer must be yes: we have to continue these payments for family allowances. That has nothing to do with the letter of Mr. Bourassa in which he proposed an administrative agreement which would not change the constitution or the legislative power of the various levels of government, but would only be an administrative agreement based on the present constitution.
Again, Mr. Speaker, the answer is not any simpler than the question.


Roch La Salle: May I ask a supplementary, Mr. Speaker?
Keeping in mind that minimal standard set up by the government, that is federalism, and considering that funds earmarked for family allowances would not represent the total amount with regard to this standard, I would like to ask the right hon. Prime Minister whether the provinces could not legislate on the budget surplus according to their needs.


Pierre Elliott Trudeau: There is no budget surplus, Mr. Speaker. The money which is derived from taxes is distributed through our various programs.
The province of Quebec is asking for an agreement which would suit them, and which we are interested in considering. However-I asked Mr. Bourassa this question, which I am now repeating in this House-we want to know whether the federal government is expected to sign
Inquiries of the Ministry
one agreement after another without ever being told what the province of Quebec has in mind when it talks of a clearer definition of jurisdiction in the sphere of social security. We want to know, through this agreement, what Quebec is trying to achieve in respect of constitutional amendments.



PROVISION OF FREE DRUGS TO OLD AGE PENSIONERS AND GRADED PAYMENTS BY THOSE ON LIMITED INCOMES

Mr. P. B. Rynard (Simcoe North):: My question is for the
Minister of National Health and Welfare. In view of the Ontario government's decision to provide free medical and hospital care for old age pensioners and the poor after January 1 of next year, is the federal government prepared to give immediate consideration to a national drug care bill which will provide free drugs for all persons receiving old age pensions and graded payments for those on limited incomes who are now covered by medicare?


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, as I have indicated, we are already paying half the cost of free drugs for residents of Ontario, as we do for residents of all other provinces who are in need. We share that cost with the provinces.


Philip Bernard Rynard: I realize that the minister is doing so in part and that there is no compulsion, but this government did bring in national medicare and I am now asking whether this will be completed by adding national drug care.



CANADA-JAPAN MINISTERIAL MEETING-CONCLUSIONS REACHED ON METHODS TO INCREASE CANADIAN SHARE OF MANUFACTURED GOODS IMPORTED BY JAPAN

['Mr. Speaker, the views of the House have been very well expressed by members on all sides. I have\n\nconveyed those views to the Secretary of State and he knows our position. He knows that we are all unanimously and strongly opposed to this test.']
Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Secretary of State for External Affairs whether he can tell the House what conclusions the Canadian and Japanese ministers reached when they discussed methods that might be adopted to increase Canada's share of manufactured goods being imported by Japan? I ask this question in view of the fact the minister said that this matter had been discussed and there is no mention of it in the communique.


Mitchell William Sharp: Mr. Speaker, there is mention of it in the communique. We pressed the Japanese to make it possible for Canadian manufacturers to sell in Japan. In the course of the discussions, as reflected in the communique, the Japanese said that they were liberalizing trade and were decreasing the number of items under import restrictions. The Minister of Industry, Trade and Commerce said that Canadian manufacturers were very anxious to get into
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Inquiries of the Ministry
the Japanese market, and his department is engaged in helping them. Therefore it is my view that we are creating conditions that are most favourable for the sale of Canadian manufactures to Japan.


Robert Lorne Stanfield: Am I correct in assuming that there was no discussion between the ministers of the two countries as to how Canadian manufacturers could increase their share of the market where quotas had already been removed?


Mitchell William Sharp: Mr. Speaker, if the hon. gentleman is suggesting that we should pay subsidies on the export of manufactures to Japan, we are not going to do so.


Robert Lorne Stanfield: Mr. Speaker, I rise on a point of order. I asked the minister a question earlier in the question period and he said that these very matters had been discussed at the meeting. It now turns out that they were not discussed at all and that the Canadian ministers had no intention of discussing them there, or here.


Mitchell William Sharp: Mr. Speaker-


Mr. Speaker:: Order, please. Perhaps the minister is rising on his own point of order, but I would suggest to the minister that the point raised by the Leader of the Opposition is hardly a point of order and on that basis I doubt that the matter should be pursued.



Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I have a question I should like to ask the Secretary of State for External Affairs. Having in mind today's report from Washington that, despite Canada's representations to the contrary, preparations for the explosion of a massive nuclear device at Amchitka are proceeding on schedule, will the government give consideration now to expressing new and more tangible opposition to this dangerous and useless test?


Mitchell William Sharp: Mr. Speaker, the evidence that we have from Washington is that the opposition to this test is growing daily. Even the Congress of the United States has passed a bill in opposition thereto. I hope all concerned, including my hon. friend and members in all parts of the House, will support the government in its opposition to the test and make their views known very strongly.


Frank Howard: A supplementary question, Mr. Speaker. In view of the proximity of this proposed blast to Canada and the effect that it might have upon us, and in view of our concern about enlargement of the nuclear arms race, would the Secretary of State for External Affairs be prepared to introduce a motion in the House so Parliament can express its view on this matter and communicate it to the President?


Mitchell William Sharp: Mr. Speaker, the views of the House have been very well expressed by members on all sides. I have

conveyed those views to the Secretary of State and he knows our position. He knows that we are all unanimously and strongly opposed to this test.



WELFARE


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Secretary of State of which I have given his office notice. Will the minister make available copies of a report prepared by Mr. Robert Hebert of the minister's Moncton office about exorbitant rental and repair charges to the provincial government on behalf of welfare recipients?


Hon. Gerard Pelletier (Secretary of State):: Mr. Speaker, the notice given me by the hon. member for Fundy-Royal has just allowed me to get very slightly acquainted with the question he mentioned. I will have to get information on the documents and their origin. Then I shall probably be in a position to answer him.



POLLUTION


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Minister of Transport while he is in an accelerating mood. Would he advise as to the progress being made by his department in its efforts to stimulate the movement upwards of the tanker Irving Whale which has been at the bottom of the Gulf of St. Lawrence for over a year?


Donald Campbell Jamieson: Mr. Speaker, I believe it was on Friday I sent a letter to the hon. member's colleague from Prince Edward Island and I shall be glad to send a copy to him. It is an up to date report on the situation. I can only emphasize at this time that we want to make absolutely sure that the maximum number of safety precautions are taken before anything is done, but I will see that the hon. member gets a copy of the letter.


David Samuel Horne MacDonald: A supplementary question, Mr. Speaker. I have received the letter referred to by the minister but obtained therefrom no more information than was given to the House some days ago. Can the minister assure the House that action will be taken this year to remove this very great pollution threat, as was earlier indicated by the minister and the Premier of Prince Edward Island? If it is not going to be removed in the near future, can the minister indicate at what date or within what time frame we can expect to have this threat removed?
September 15, 1971


Donald Campbell Jamieson: Mr. Speaker, as briefly as you will allow me may I say,first of all, that the difficulty is that we are prepared and willing to remove it at the earliest possible moment. However, as my hon. friend knows, we are experiencing a series of hurricanes at the present time, so this is hardly the time for us to start the work. The experts are now examining whether there will be an appropriate time before winter conditions set in to raise the vessel. If that is not the case, we will leave it until the best time available in the early part of 1972. But we shall do it at the best possible time.


Mr. Speaker:: Order. I bring to the attention of hon. members that there are only about three minutes left before the end of the question period. Therefore I wonder whether we should have too many supplementaries.


David Samuel Horne MacDonald: Mr. Speaker, I have a further supplementary question, but first on a question of privilege may I direct the attention of the House to the presence of a distinguished citizen of Prince Edward Island in the gallery, the former premier of Prince Edward Island, the Hon. Walter R. Shaw.


Some hon. Members:: Hear, hear!


David Samuel Horne MacDonald: Since this matter is of grave concern to all Prince Edward Islanders, I wonder whether the minister can indicate for what reason the various steps that he outlined to us here in the House and in the letter to me last week were not taken earlier?


Mr. Speaker:: Order, please. That is debate.



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 fact that last week another agreement was signed in connection with the Gaspe between his department and the province of Quebec, will the minister make a statement on the results achieved under the first agreement between his department and that province?


Jean Marchand: That is not my intention, Mr. Speaker.



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, may I direct my question to the President of the Treasury Board. In light of the white paper on defence and in order to uplift the spirits of the members of the Canadian Armed Forces, would he comment on whether or not they can expect their pay raise before the end of this month?
Inquiries of the Ministry


Hon. C. M. Drury (President of the Treasury Board):: would not like to comment on that, Mr. Speaker. An announcement, when appropriate, will be made by the Minister of National Defence.



CANADIAN BROADCASTING CORPORATION


Mr. Herb Breau (Gloucester):: Mr. Speaker, I would like to ask a question of the Secretary of State.
Could he tell the House if the CBC has suggested a solution for improving the French television service in northwestern New Brunswick, following the CRTC statement that such service was not satisfactory?


Gérard Pelletier: Yes, Mr. Speaker, a CBC proposal is before the government in this connection.



NATIONAL PARKS


Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I should like to direct this question to the Minister of Indian Affairs and Northern Development. Will he give his support to the National and Provincial Parks Association in respect of their representations to the Department of National Defence for the release for the purpose of park development of properties it has vacated?


Mr. Speaker:: Order, please. I suggest this question might well have been placed on the order paper, but perhaps the minister might reply as briefly as possible.


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, this question is being very seriously considered and I am pleased to tell the House that this summer we had the privilege of signing with Ontario an agreement for the establishment of a new national park.



THE CANADIAN ECONOMY


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I should like to direct a question to the Prime Minister. As a result of the recent United States measures and other proposals aimed at increasing United States domestic production, can he now inform the House what steps, if any, will be taken by the government to prevent production
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Inquiries of the Ministry
shifts from U.S.-owned subsidiaries in Canada to parent firms in the United States?


Pierre Elliott Trudeau: Mr. Speaker, I missed part of the question, but I will look into the matter and see whether I can provide a reply.



PROTECTION OF GOVERNMENT INVESTMENTS IN UNITED STATES-OWNED SUBSIDIARIES TO PREVENT PRODUCTION SHIFTS

Leslie Gordon Benjamin: Mr. Speaker, while the Prime Minister is looking into the matter I should like to ask the Minister of Regional Economic Expansion whether he will inform the House what steps have been taken or will be taken to protect the investments of the federal government in production plant subsidiaries owned by United States corporations in order to prevent production shifts to parent plants in the United States.


Jean Marchand: Mr. Speaker, I think that I have stated many times in the House that American concerns had no special status in so far as my department is concerned and that they were treated simply like another industry.


Leslie Gordon Benjamin: Mr. Speaker, is it the government's intention to suspend future grants to all United States-owned corporate subsidiaries in Canada under the Industrial Research and Development Incentives Act?


Jean Marchand: No, Mr. Speaker.



REGIONAL ECONOMIC EXPANSION


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I should like to ask the Minister of Regional Economic Expansion whether he has had an opportunity to evaluate the effects of the United States import surtax on the over-all regional economic expansion policies of the government?


Jean Marchand: Mr. Speaker, the Department of Finance has carried out such an evaluation. It gives us a general idea of the potential impact of the surcharge on slower-growth regions.


James Aloysius McGrath: Mr. Speaker, does the government intend to continue the regional industrial incentive grants during its examination of the surtax and the measures it proposes adopting to counteract this tax?


Jean Marchand: Mr. Speaker, I believe that if slow-growth regions are somewhat affected by the sur-

charge, the government would not want to increase that impact by abolishing grants.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, September 14, consideration of the motion of Mr. Gray (for Mr. Benson) that Bill C-259, to amend the Income Tax Act and to make certain provisions and alterations in the statute law related to or consequent upon the amendments to that act, be read the second time and referred to the committee of the whole, and the amendment thereto of Mr. Lambert (Edmonton West) (p. 7763).
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, in my remarks last night I condemned the government's proposals in respect of tax changes and made the charge that what is proposed does not represent tax equity. To summarize, the major recommendations of the Carter commission, appointed by a Conservative government, are very far removed from the provisions of this bill. There are tremendous concessions in terms of what can be charged off against income tax as incentives, that is, business and entertainment expenses of self-employed people, compared with the picayune concessions amounting to $150 per year permitted to the ordinary working man.
There are other anomalies in the proposals put forward by the Minister of Finance (Mr. Benson). A person who earns $5,000 a year in wages will save only $14 per year in income tax under the new schedule. A person earning $7,000 per year will be paying $78 per year more in income tax. A person who has an income of $100,000 per year will pay $1,000 less in income tax than under the old arrangement. Only a Liberal government and a finance minister of the kind we have could suggest that this kind of arrangement is fair.
Let me point out some of the anomalies in the proposal to illustrate its inequity. The minister proposes to increase the limit on tax exemptions in respect of moneys paid into registered retirement plans. The proposed limit will be $4,000 per year. The deferred profit-sharing plan under a registered pension will be limited to $2,500 per year, maximum, compared with $1,500. I point out to hon. members that only people in the upper income bracket are in a position to invest this amount of money in such a pension plan, so the minister's proposal will not mean much in the way of tax exemption.
During my remarks on the budget I referred to what I considered to be the most inequitable proposal in the minister's proposed tax changes. I have in mind the proposal of the minister and the government to eliminate estate and gift taxes. Surely we in this country, as in most modern countries, believe in the principle that a tax system should be designed to provide greater equity in the lives of the people.
Most Canadians who compare this proposed tax system with systems which exist in South American countries
September 15, 1971

will be disheartened by the fact that we have a very small percentage of people who are extremely wealthy, most of whom pay no tax at all, and that perhaps 95 per cent are living in abject poverty. We like to think we have a very fair and equitable tax system. This year the government proposes to eliminate one of the basic features of every progressive tax system, namely, gift and estate taxes.
I said on another occasion that we must give consideration to encouraging people to work hard, using their intelligence and adding to our productivity. We must be prepared to protect them in order to benefit from their ability, intelligence and hard work. We now have a proposal which will permit the transfer of an estate of $1.2 million to the surviving children with no tax at all. These children will reap the benefits of someone who has amassed such a fortune, without contributing in any way to the productivity of this country.
If a person should have an estate of $1 million, let us say, he could turn over to his wife and three children $250,000 each without any tax being payable on it. Invested in a very conservative way, $250,000 can give a person an income of $15,000 to $20,000 a year in perpetuity. To me this is a shocking and disgraceful proposal that the Minister of Finance has made.
The hon. member for Winnipeg South Centre (Mr. Osier) in his speech last night implied that the speeches made by members of our party in respect of this bill were different from the type of speeches made by members of the government of Manitoba. I have here the text of a statement made by the Premier of Manitoba, Mr. Schrey-er, the day after the Minister of Finance made his budget speech. I wish to place on the record some specific comments made by the Premier of Manitoba at a meeting in Hamiota so that the hon. member for Winnipeg South Centre will know, if he did not know when he made his speech, that what I and other members of the New Democratic Party have said in reference to the budget is precisely in line with what the Premier of Manitoba said. I shall place on the record part of what the Premier said:
More specifically, now Manitoba would like to ask where is there equity or fairness in a tax system when:
1.	Salary and wage earners will be taxed at 100 per cent of their earnings while capital gains will be taxed, but only on half of those gains, and windfall gains will not be taxed at all.
2.	Unemployment insurance benefits and manpower training allowances are now taxable but business, entertainment and related expenses continue to receive the same favourable treatment in deductions from taxable income.
3.	The three year tax relief for new co-operatives is withdrawn, but the business tax credit to shareholders is increased from 20 per cent to 33 1/3 per cent.
4.	The 'single person' individual receiving a salary of $100,000 a year will now pay $1,000 less in personal income taxes, compared to the person earning $5,000 in wages but pays $14 less in personal income tax-further compared to an individual receiving a salary of $11,000 who now, under the new proposals, will be paying $78 more in income tax.
5.	A wage-earning employee is limited to $150 a year in expenses, but high-income executives will be permitted broad deductions for the expenses involved in moving to new jobs.
6.	There will be many Canadians paying personal income taxes whose incomes are well below the poverty levels, set out by the Economic Council, while a man or woman will now be permitted
Income Tax Act
to transfer his or her original $1 million estate to heirs or friends without paying any taxes.
I believe it should be obvious to anyone-but possibly the hon. member for Winnipeg South Centre hears only what he wants to hear-that what we have been saying is precisely what the Premier of Manitoba has been saying.
I should like to spend a few moments making clear to members of the House and the public that what we say in our criticism of the tax proposals made by the Minister of Finance is not simply criticism made for partisan political reasons by members of this party. I suggest the Minister of Energy, Mines and Resources (Mr. Greene) should take the trouble to read what I believe is perhaps one of the most important speeches made in recent years by any public figure. I refer to the speech made by the hon. member for Duvernay (Mr. Kierans), the former Minister of Communications, on June 3, 1971, to the Canadian Economics Association.
That speech was endorsed by 300 top academics in business, labour, government and economics in this country and when the speech was concluded it received a 12-minute standing ovation, something unheard of in the history of the Canadian Economics Association.


Mr. Greene:: They never heard one of your speeches; that is the only reason.


David Orlikow: Mr. Speaker, I like to be realistic. I know I am not the economist the hon. member for Duvernay is. The only difference between me and the Minister of Energy, Mines, and Resources is that he does not have the brains to know he is not in the same class as the hon. member for Duvernay.


John James Greene: That is not the way you spoke about him when he was in the government.


David Orlikow: When he was in the government he did not talk about economic matters but only things like the Post Office, about which he is not as well versed as he is in economics. I am not one of those members who is not prepared to give credit where it is due, even if the person deserving of it is not a member or supporter of our party. I would even like to give the minister who interrupted some credit, but unfortunately he very seldom says anything deserving of credit. I should like to place on the record a few of the observations made by the hon. member for Duvernay in his speech to the Canadian Economics Association:
Taxation allowances have been used so extensively in Canada since 1949 that the Dominion Bureau of Statistics has been forced to issue two sets of financial figures, the one based on the annual reports of corporations to the shareholders, the other drawn from the reports filed with the Department of Revenue for tax purposes by the same corporations.
In 1968, for example, book profits reported to shareholders amounted to $8,350 million while taxable income reported to the revenue department amounted to $5,021 million.
The hon. member for Duvernay gave some extremely interesting figures in the form of tables which I cannot place on the record because I do not have the time. However, I believe I can summarize some of them. These figures are available to all Members of Parliament through the annual reports issued by the Dominion Bureau of Statistics. If you compare the book profits

September 15, 1971
Income Tax Act
before taxes and taxable income by selected industries for the year 1965 to 1968, you will see that the book profit of the metal mining industry was $1,707 million while their taxable income was only $222 million. In other words they paid taxes on only 13 per cent of their income.
In the mineral fuels field the book profit was $795 million while the taxable income was only $45 million. They paid taxes on only 5.7 per cent of their profits. Under the heading "Other Mining" the book profit was $374 million while the taxable income was $120 million. They paid taxes on only 32 per cent of their taxable income. In respect of manufacturing we have the point the hon. member for Duvernay has repeatedly been making. In the manufacturing industry the book profits were $12,745 million while the taxable income was $8,052 million. They paid taxes on 63 per cent of their profits. The retail trade, however, made a profit of $1,620 million while the taxable income was $1,445 million. They paid taxes on 90 per cent of their profit.
Is it any wonder that we are in trouble? Is it any wonder that Canadian and foreign money has been increasingly funnelled into the mining industry, the oil industry, the gas industry and the extractive industries which are capital-intensive and employ a relatively small number of people? Is it any wonder that Canadian and foreign money has not been channelled into the manufacturing industries which employ large numbers of people?


Mr. Speaker:: I apologize to the hon. member, but I must interrupt him since his time has expired. He may continue with the unanimous consent of the House.


Some hon. Members:: Continue.


Some hon. Members:: No.


Mr. Speaker:: There does not appear to be unanimous consent. Is there unanimity?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: I regret to advise the hon. member that there is no unanimity.


Mr. William Skoreyko (Edmonton East):: Mr. Speaker, I am delighted to have this opportunity to participate in the debate, particularly because the Prime Minister (Mr. Trudeau) seemed to indicate today-at least I thought he did-that he sensed a long and protracted debate. I do not believe that to be true. But I believe that time should be allowed for the opposition parties to project their arguments as far as they possibly can.
I congratulate the hon. member for Edmonton West (Mr. Lambert) for having proposed the amendment before the House. It gives the official opposition the opportunity to bring to the government's attention the seriousness of the economic situation of our country. A measure as important as tax legislation traditionally has revealed and should reveal remedies to cure ailments from which our society suffers. Nothing in this tax bill, at least so far as I am concerned, counters any of the problems facing our country today. This administration appears so far to have

been so administratively inept that none of the provisions included in this tax measure could do anything for the unemployed.
This is a measure on which the government, if they have confidence in it, could justify an election. Only the good Lord knows how an election could possibly be justified in the third session of this Parliament with a record as bad as that which can be charged to this administration. If any measure could prompt a government into some kind of action, it is this one. It is apparent that this one-man administration is completely oblivious of the problems of the unemployed, of business big and small, of agriculture, of fishing-you name it, Mr. Speaker.
The $50,000 over an eight-year period for a total of $400,000 in earnings before a 50 per cent tax is applied to small businesses is, to small business in this country, a devastating piece of legislation. Over and over again we hear about the money that is reserved in the Temporary Wheat Reserves Act. Surely that would help the farmers of western Canada. I have a serious suspicion that this may be held out as a pre-election dole.
So many things have happened to and with this government since the third session of this Parliament began. The third session began with all kinds of glowing promises, and all of a sudden a unique situation developed and the War Measures Act was invoked. Every member of this House of Commons knows that the essence of law and order is the federal government's responsibility. Yet the federal government invoked the War Measures Act, turned that act over to the Attorney General of the province of Quebec to administer and then picked up the $12 million tab-but there is no money for the unemployed!
Immediately after the Quebec crisis was over, inflation was the next thing with which the government had to deal. In a sloppy attempt to curb inflation the government created chaos, massive unemployment, doubt on the money market, impeded industrial development, impeded industrial expansion and created doubt in the minds of international investors in Canadian industries. We witnessed a most inept and incompetent administration at work-ministers leaving, others resigning. But before all this came the white paper, then the amendments, then the bill and then the amendment before us.
I want to deal with this amendment for a moment. The amendment reads:
-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.
I think it is one of the most appropriately worded amendments presented to this House in a long time.


Some hon. Members:: Hear, hear!


William Skoreyko: One thing that concerns me somewhat is that a number of hon. members on the other side of the House had a great deal to say when the white paper on income tax was before the committee, but one does not hear much from them today. Surely they must have something to say either for or against this measure, but they sit
September 15, 1971

silent on the other side of the House. I should like to hear from some of the competent speakers on the other side, from somebody like the hon. member for Don Valley (Mr. Kaplan), the hon. member for Etobicoke (Mr. Gillespie), the hon. member for Grenville-Carleton (Mr. Blair), the hon. member for Ontario (Mr. Cafik). What about the vociferous member for Okanagan Boundary (Mr. Howard), the hon. member for Middlesex (Mr. Lind) and that ever-loving member for Calgary South (Mr. Mahoney) who can shirk off any kind of problem with a crooked smile?
These members perhaps finally realize that the minister has completely left the world of reality and that they cannot possibly support this kind of measure. Again, why cannot they support it? Well, they sit and listen to No. 1 as good mummies or good dummies. They cannot understand how the Liberal Party's divine right to govern could ever be challenged. They say, "What difference does it make if we make mistakes; we are Liberals?" You remember, Mr. Speaker, not too many years ago the six-buck boys. Does this not remind you of the old gang, Mr. Speaker? They were defeated in 1957 and they said to the House of Commons that had a minority government sitting on the other side, "Give us back our jobs". After the next election, based on the past performance of this administration, cannot you just see that group over there saying, "Give us back our jobs"?
I want to summarize this legislation. The government, in its desire to overhaul the tax system of Canada-and they cannot be blamed for that-made their first serious mistake at a cost of $44,000 to the Canadian public when the minister brought out the white paper on tax reform. What a masterpiece that was! Even Mr. Pickersgill is incapable of that kind of deceit. Almost immediately members on both sides of this House reacted, expressing a great deal of concern, with the sole exception of the socialists who said, "It does not go far enough".
I wonder how many of the socialists who belong to the Blakeney bunch, or even those who sit in this House have had the guts to go to the western Canadian farmer in Saskatchewan and really explain what Carter wanted to do for the western Canadian grain farmer? Not many of them did, although in the last few weeks they have had much to say about economic nationalism. The Leader of the Opposition (Mr. Stanfield) immediately set out to inform Canadians, as did Mr. Bullock and Mr. Asper. I do not need to remind the crowd over there who Mr. Asper is, but he reacted violently and went so far as to publish a book attacking the white paper proposals.
What was the end result? There was withdrawal, retreat, a backing away-and then the introduction of Bill C-259 which is so far removed from the original proposals that, if compared, any similarity between the two could not even be recognized. The government wisely interpreted the hundreds of thousands of objections pouring into Parliament Hill offices as the end of the Trudeau regime unless it backed off. I say to you, Mr. Speaker, that after spending $190,000 to answer this criticism, backing off cannot now save the government. What are some of the objections? My first objection is to the $44,000 spent on the white paper, paid by the taxpayer, and to the $190,000
Income Tax Act
spent to answer the criticisms, paid by the taxpayer. Then, as I say, there was retreat and withdrawal. Members of the government said, "We made a mistake. Sorry you feel that way, Mr. Voter, but we will change".
This measure gives nothing to those who most need assistance-dry bread, a little water, not even butter on the bread, not even peanuts any more, and it threatens the co-op movement with double taxation. The share structure of co-ops is unique, Mr. Speaker, and I hope the government will review that part of the legislation. Business is concerned with the ambiguity of the tax reform legislation. The Canadian Chamber of Commerce wants more time to study the legislation. I hope it is granted.
Let us look at some of the points that make up the criteria for acceptable legislation. What was it that the minister wanted to do? Canadians in the lower income tax brackets face a heavy total tax burden. In recent years sales taxes and property taxes have been increased substantially. Where changes in the income tax can provide relief it must be given to those with lower incomes. The minister said that the government proposes increases in the exemptions to ease the burden on these individuals and families.
Mr. Speaker, let us look at what is shown in the "Summary of 1971 Tax Reform Legislation" published under the authority of the Minister of Finance (Mr. Benson). If a man has a taxable income of $1,200 a year, under these proposals he will not have to pay $15 tax, $1.25 a month, any more. If a man earns $8,000 a year he saves $3 in tax, about 35 cents a week. If a man earns $15,000 a year he will pay $64 more. If he earns $20,000 he pays $39 more. If he earns $25,000 he actually pays $3 less. If he earns $30,000 he pays $26 less. If he earns $50,000 he pays $163 less. If he earns $75,000 he pays $377 less. If he earns $100,000-and this man really needs it!-he pays $1,011 less.
The second point that the minister makes in this booklet is that important forms of income and benefit escape taxation. The government proposes to bring them into taxable income. In particular, a tax on capital gains is proposed. The minister has somewhat backed off that; I suppose mounting pressure has been the reason for his doing so. Later in my remarks I shall deal at some length with capital gains.
The third point that the minister seemed to be concerned about was that through clever devices tax can be avoided under the present law. The reform must close loopholes now available to those with the wealth and expert advice to use them. No one can argue that point. But where are the changes that close these loopholes? The minister also pointed out that wage earners are unable to deduct many legitimate expenses from taxable income. This is an interesting point. He said that new deductions would be introduced to benefit employees and working mothers. That is generous, Mr. Speaker, but what about allowing a man who earns $5,000 a year $150 toward the equipment that he must buy in order to keep his employment, and then taxing his son on any bursary or scholarship over $500? The Minister of Finance may please a few bachelors who would be happy with that kind of allowance, but most married people will not give it their support.

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The minister went on to point out that corporations are taxed in ways that are open to abuse and that fail to recognize their differing relationships with shareholders. This appears to be necessary and I am willing to go along with that proposal. The minister also said that the mineral industries enjoy special tax benefits which have existed for many years but which are unnecessarily costly and inefficient. Assistance to mineral exploration and development must do its intended job in a more direct way that is less costly in terms of revenue. I suppose one way is to make it more efficient by reducing depletion allowances; I really do not know. But anyone who thinks that incentive allowances and depreciation allowances are peculiar to Canadian industry is wrong.
There is much concern that the accelerated allowance will not apply to used assets if those assets are recovered from unsuccessful or abandoned mines. If those assets are acquired in such a way that the taxpayer had not used their cost to earn depletion and executed an election, in proper form, to waive his right to use these costs to earn depletion, used equipment or assets should be subject to the allowance. Where is the reasoning here?
The petroleum industry in western Canada, indeed in Canada generally, is expanding its activities to new frontiers in the northern areas where it will require substantial funds to develop the industry, having regard to the competition from and experience of American industry in this area. As an example, the resource development in the Mackenzie delta will require our companies to compete for funds against companies which are developing the Prudhoe Bay area. It is essential that our companies can operate within a fair and reasonable tax structure, giving the industry desired tax benefits equal to those of foreign competitors. In order for our people to reap the benefits of this kind of development, our industry must be able to generate and attract vast amounts of capital for these ventures. Some people argue that the tax incentives are generous and that it is the duty of the government to keep our companies in a competitive position.
Offshore exploration is another area at which the government should be looking. This kind of development has interested the United States government for some time. I would not want to see this administration put obstacles in the way of our exploration companies in this regard. As I have mentioned, incentive schemes are not peculiar to Canada, as some seem to think. I have here an article which appeared in the Vancouver Sun on July 8, 1971, and I should like to put on record one or two of its paragraphs.
Unfortunately, many of the incentive schemes have been unsuccessful and none has been as successful as those offered to mining.
This is true in spite of the fact that the Canadian mining incentives are less generous than those offered in other countries with whom we compete for investment capital, notably Australia and the United States.
It must be recognized that the mining industry in western and northern Canada faces problems that competitor countries do not face.
Examples are the extreme climates, severe topographic conditions, vast unpopulated areas where mine development includes construction of townsites and transportation systems, no domestic markets and great distances from international markets, high
[Mr. Skoreyko.J
labour costs, low-grade ores, dependence on world market prices that we are unable to influence, to name a few.
The Canadian policy of granting incentives to many industries is unique. Incentives to mineral development, on the other hand, are universal throughout the world.
The key to a successful oil and gas operation is the productivity of its exploration program. Without exploration no new oil or gas would be found. Some of the greatest incentives for searching for oil and gas in Canada, however, are not created in Ottawa or the provinces but come from Washington, for Americans. To illustrate, under Canada's present tax laws no real incentive or encouragement is given to Canadians to participate in a risk-taking venture such as oil or gas exploration. Quite to the contrary, however, American tax laws favour the use of essentially private capital in such ventures. These laws provide a means by which well-to-do Americans can find relief from high taxes by means of drilling funds. A drilling fund is essentially a pool of risk-taking money collected from well-off professionals such as doctors, lawyers and others who may be paying 50 per cent of their top layer of income in tax. Millions of dollars are pouring into Canada from such U.S. drilling funds.
The key to the success of the American drilling funds is that the fund guarantees a 92 per cent tax write-off. On an initial investment of $10,000, $9,200 is deductible. Eight per cent is commission on the purchase of fund units and is non-deductible. The investor thus saves $4,600 in tax, making his net cost only $5,400. If oil or gas is found, the investor has an additional source of income from the newly discovered oil or gas well. If the investor now makes an annual income of $10,000 from this well, he has to declare this additional income, which is of course taxable. However, this time the investor is given a 22 J per cent depletion allowance, leaving a taxable income of only $7,750. If the same investor reinvests the $7,750 in the drilling fund he can again get a 92 per cent relief and claim $3,875 as a tax write-off, and so on.
There are two examples of the kind of investment that has barely touched its potential. The first is the Canadian-American Resources Fund, Inc.-Can-Am-an off-shoot of American Quasar Petroleum Company. Each investor in Can-Am buys his participation in $5,000 units as a partner in a venture, not as a shareholder. Can-Am makes drilling money available to Quasar Petroleum Limited of Calgary, the Canadian subsidiary of American Quasar. The profits from this joint venture are split 60 per cent to the fund's partners and 40 per cent to Quasar. For the individual fund partner, success means income and failure means success because of a lighter tax burden through write-offs.
The second is Husky Oil, a well-known company in western Canada. According to Gene Roark, president of the company, Husky was able to raise $32.5 million in the United States through its drilling fund at a time when the stock market was severely depressed. Much of this money will be spent in Canada on Husky's extensive nationwide exploration program. Implementation of Bill C-259 as presently proposed will continue to favour those elements in the tax structure which have led to the foreign domination of Canada's oil and gas industries.
At a time when public concern favours Canadian nationalism in this area, serious changes are warranted
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that would at least provide parity incentives for Canadian investors in the oil and gas industries. Perhaps the only solution to this problem is that tax laws in Canada should provide the same basis for at least fair competition with foreign concerns. This objective could be achieved in one of two ways, namely, provide a shelter for Canadian companies or change tax laws that would provide a true incentive for Canadians to participate in risk ventures and the ultimate development of our own resources, regardless of the tax position of these industries relative to other industries in Canada.
At a time when economic nationalism was the byword, Mr. Speaker, the socialists talked about it every day. Where are they now? Did Mr. Nixon scare them off? It is all right to talk about economic nationalism because it gets a few votes, but on analysis economic nationalism is not nearly as attractive with its accompanying hardships.
I know a socialist who earns $27,000 a year and whose wife earns $10,000, making the family income in the neighbourhood of $37,000 before taxes. A free car and expense account bring the total closer to $40,000. With that kind of salary it is nice to be political and espouse the virtues of socialism, but don't cut the socialist's salary to the level of those he is trying to convert: and they say Carter did not go far enough! Economic nationalism is the order of the day. It is nice to be a socialist at times because that is the kind of talk that puts them on the pedestal. Move a socialist out of a government job and put him into business for himself and all at once he becomes a free enterprise.


Mr. Cote (Longueuil):: Who appointed him?


William Skoreyko: If the minister does not know that by now, there is no point my telling him. Surely the government knows as well as anyone else that in a democracy the most destructive political force is communism and the greatest threat to free enterprise is socialism. Is it not strikingly strange, Mr. Speaker, that this government has set up the Canadian Development Corporation-which cannot get out of the diaper stage-talks about buying Canada back from foreign investors, and then proposes a tax structure which will make every taxpayer tax poor? It seems to me that at a time when Canadians want to own more of their country tax cuts would have been more in order.
What about unemployment in relation to the bill? In that area this government has little to be proud of. Half a million people are out of work, and this government wishes to impose a capital gains tax, increase taxation generally and buy Canada back, to say nothing of the massive expenditures proposed by the Minister of Labour (Mr. Mackasey) in connection with unemployment benefits.
Is there not something wrong when we consider the money we have wasted-millions on the Company of Young Canadians over the years and $68 million on the Opportunities for Youth program which was bungled in a mad desire to create something for youth today because there was no other way the government could find jobs for them: it is a nightmare that the minister will be living with for a long time.


Gerald William Baldwin: He is living with lots of other nightmares in the cabinet.


William Skoreyko: Then the government adopted the recommendations of the B and B commission in one of the most divisive pieces of legislation in the history of the country; it was not surpassed even by the flag and unification issues. Mr. Speaker, 48 pieces of legislation received royal assent before we broke off for the summer holidays and not one piece of it was designed to assist businessmen, the unemployed, farmers, fishermen, lumbermen or people like that.


Gerald William Baldwin: Shame! That was terrible.


William Skoreyko: I wonder if some hon. members on the other side of the House know what it is like to be unemployed. You may have a family, you may have to make car payments, mortgage payments and probably furniture payments, and have no prospect of a job: you lack training and there is nobody to look to. Then the government says to you, "We did not promise you anything in 1968," which really means, I suppose, "We do not have to do anything for you." The fact is that the government has a responsibility to the people of Canada. It must refer this legislation to the Standing Committee on Finance, Trade and Economic Affairs and allow the committee all the time that is needed to hear from witnesses and from all Canadians wishing to give evidence before the committee. If the committee should recommend the withdrawal of the legislation, it ought to be withdrawn.


André-Gilles Fortin: Mr. Speaker, I felt it was my duty to take part in the debate concerning the motion on second reading of Bill C-259 entitled "An Act 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".
This bill is dense in more ways than one because its 710 pages are very difficult to understand and its complex contents has given rise to the rightful indignation of several co-operatives and Canadian taxpayers. It certainly deserves our special consideration.
I would like to deal more particularly with certain provisions of the bill concerning the co-operative movement in Canada.
Mr. Speaker, with reason, the co-operative movements in Canada are very concerned and dissatisfied with the provisions of Bill C-259. Let us state first of all, so that there be no misunderstanding, that the Canadian co-operative movements are not asking the federal government for any special treatment and, secondly, that they want, in all fairness, to be recognized for what they are.
On reading some provisions of this bill, one wonders if the government has understood the meaning and the definition of a co-operative. The Canadian co-operative movement is a growing financial force in Canada, its importance being on the increase both economically and socially. The Canadian co-operative movement belongs to its members, and not only to the small group of people who are at its head. It belongs to our fellow-citizens from Canada and Quebec, and not to the Americans, nor to foreigners, not to Mr. Nixon nor to the Prime Minister (Mr. Trudeau). It truly belongs to Canadians. It is a movement that derives its strength from its base, from its

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members, and, consequently, it deserves to be understood and to be treated according to its merits.
The careful reader will realize that the provisions in the bill are unfair to co-operatives, and savings and credit unions, because they are not consistent with their judicial structures, basic operating principles and financing systems. Therefore, co-operatives are facing an extremely serious situation, so much so that we can foresee the disappearance of several of them within five years, ten at the most, however deep-rooted and useful to the country they may be.
The normal development of co-operatives would be greatly jeopardized by taxation such as proposed by the present government that does not respect the characteristics of co-operatives. The problem arises because the present government treats alike using the same standards, co-operatives and companies, the big corporations which are in entirely different conditions. Without discussing the provisions dealing with large companies, at least I wish to speak in the name of co-operatives and farm organizations and others in the riding of Lotbiniere and say to the government that it has no right to treat co-operatives and large corporations alike.
I have received from my constituency many telegrams which all say practically the same thing. I will not read them all but they come from various places. I have one here from Clement Houle, president of the Meunerie cooperative agricole, of Victoriaville, which clearly sets out the problem to be solved. I quote:
The Meunerie cooperative agricole of Victoriaville is deeply disappointed with the decision of the Minister of Finance to maintain the concept of the capital employed as the basic principle of taxation for co-operatives.
This concept is contrary to the co-operative principle and becomes even more unfair through new Section 135 of Bill C-259 which alters the computation method for capital employed. We believe nowhere else in the world is such a concept of capital employed applied in a tax system. Adoption of this concept will weaken financial structure of our co-operative and decrease possibility of ensuring fair return to our members. We are not asking for special treatment but request that tax system respect structure and operation of co-operatives.
The Meunerie cooperative agricole of Victoriaville is affiliated with the Cooperative federee de Quebec and was represented by the delegation which met the Minister of Finance on August 11, 1971 to suggest alternative taxation method for co-operatives that would not threaten the very existence of those institutions. We request your support with Minister of Finance to obtain amendment of proposed bill along lines already suggested by co-operatives.
Mr. Speaker, I have other similar telegrams, one from the president of a co-operative in Saint-Jacques de Paris-ville, from Mr. Claude Cliche, the president of a co-operative in Saint-Agapit and another from Mr. Donat Paul Bissonnette, president of the Saint-Apollinaire cooperative.
Some will say, Mr. Speaker, that this is of minor importance, and I will reply that this is of fundamental importance. I will go even further: members and directors of co-operatives are extremely concerned, and they are cognizant with the problem involved.
As an example, I will read to you a very short and significant letter from Manseau signed by Mr. Maurice

Desrosiers, president, Mr. Clement Lemay, vice-president, and Mr. Albert Geoffroy, manager of a co-operative. I quote:
The Societe Cooperative Agricole strongly objects to the amendment to Section 135 of the Income Tax Act as proposed by Bill C-259.
The Societe Cooperative Agricole will be unable to gather the necessary funds to repay the capital and to pay returns within the new provisions of Section 135.
That means, Mr. Speaker, that co-operatives, the existing institutions which militate, work, labour in most of the Quebec ridings, and increasingly in other provinces particularly in western Canada, will find themselves unable to discharge their commitments with their shareholders since their inception, within the meaning of the legislation which appears in the Appendix to the brief presented on August 11 to the Minister of Finance (Mr. Benson).
Messrs. Desrosiers, Lemay and Geoffroy clearly say in that same letter dated September 1, what it means:
It is obvious that if our co-operative must disburse more money than it receives, it will of necessity have to cease its operations within a few years.
Societe Cooperative Agricole (Manseau) supports the requests made by the Conseil Canadien de la Cooperation and the Cooperative Union of Canada as they were presented on August 11 last.
Mr. Speaker, this is the situation at this time. The life of co-operatives is threatened merely because the government does not understand the meaning, the value and the importance of co-operatives. Things must be made clear: what is the co-operatives' position; what do they want? They want to continue to exist and pursue their activities in order to protect private enterprise, to preserve the sense of possession of the members and to enjoy the encouragement they deserve so that this country becomes ours for ever. That is what they propose. Now I would like to quote from a memorandum they have presented and which was published in the newspaper Ensemble of August 27, 1971:
One could consider section 136 in order to establish a specific way of taxing the annual operating surplus of the co-operatives. Co-operatives solicit permission to distribute to their members annual operating surpluses resulting from business transacted with such members and imposition of the balance of revenues paid into the reserve fund at the rate applicable to corporate tax. This proposal is subject to the following limits and terms-
-which Canadian co-operatives consider to be desirable.
1.	That the co-operative withhold at the source and pay a tax on all distributions taking the form of patronage dividends;
2.	That the tax thus levied be credited to the member receiving the dividend. Should that member be exempt from taxation, he could claim reimbursement when producing his personal income tax return;
3.	That dividends allowed be limited to revenues obtained from transactions carried out with members and that any revenue obtained from non-members be taxed at the appropriate rate for other corporations, unless dividends are also paid out to non-members;
4.	That the entire undistributed annual income affected to the reserve fund be taxable at the co-operative level at the rate applicable to corporations.
The movement, Mr. Speaker, claims that this proposal for the assessment of annual operating surpluses of cooperatives should be accepted. It acknowledges the nature of co-operatives and this is why I want to act as their
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spokesman and strongly insist that the Minister of Finance should reconsider his position. As for the answer that he should have given to the representatives of the 800,000 Canadian members on August 11 last, he should give it right now. He should review his position in that connection to enable caisses populaires, credit unions and the co-operative movement in general to develop and continue to serve Canada.
The heart of the matter is as follows: We have a choice to make as to the proposed tax reform. According to the Minister of Finance, the government is introducing tax reform in order to make the tax system more equitable, in respect of Canadian citizens as well as companies.
The government should not hesitate to change this system in order to protect the interests of Canadians. The basic problem is to know whether the tax system proposed by the Minister of Finance really preserves the interests of Canadians, or whether it will, on the contrary, result in a gradual disappearance of small businesses in Canada.
Is the proposed tax system likely to encourage small businesses, individuals who still believe in private enterprise, or is it, rather, going to discourage people who do their utmost in order to survive and to succeed?
Could it be that the tax system is rather a socializing measure designed to cause small businesses and co-operatives to disappear all the sooner? I must answer this question in the affirmative, because if one reads carefully clauses 135 and others which deal with the co-operative movement, one finds out that this government has no other purpose but to implant extreme socialism in Canada, by bringing about as fast as possible the disappearance of the right of private ownership for Canadians.
The Canadian co-operative movement is based on the wish of every person to be the owner. Indeed, each member is part owner of his co-op, can actively participate through his work, his savings, his sacrifices and his presence, and decide as to his co-op's future since he has voting rights.
There is, in the co-operative, another important principle that one must not neglect in considering this new legislation: it is that in a co-op, all members are equal and are not judged according to the thickness of their wallet, but rather on their value and their understanding of the co-operative movement.
That is why, Mr. Speaker, when one reads the tax proposals of the Minister of Finance, one soon realizes that the government, in putting large companies and cooperatives on the same footing, is obviously but in a devious way seeking to do away with small businesses and the feeling of ownership of co-operative members. That is a very serious matter, especially when we are going through an economic depression, even though it existed before the 10 per cent American surcharge was imposed. The government is using President Nixon's decision as an excuse for its lethargy, its total failure in the field of economics.
But, Mr. Speaker, one fact remains: the policy of the government of the right hon. Prime Minister has entailed shut-downs and bankruptcies in a great many Canadian
industries, in the riding of the Minister of Indian Affairs and Northern Development (Mr. Chretien) in that of the Minister of Industry, Trade and Commerce (Mr. Pepin) as well as in other constituencies. One also finds that this backward and ineffective policy of this government brings about an increase in unemployment and decreased motivation among the population to participate in our national growth, since this is a disincentive policy instead of an incentive policy.


Mr. Bechard:: This is sheer demagoguery!


André-Gilles Fortin: Mr. Speaker, when one looks at the tax policy and relates it to the ineffective policy of this government which was elected in 1968, it is then possible to understand the hidden though conspicuous intents of this government, namely eradicating the sense of ownership in order to control citizens better.
We will never build a country, Mr. Speaker, we will never build our country-


An hon. Member:: Not with this type of speeches!


André-Gilles Fortin: -with this type of policy.
Mr. Speaker, I apologize for this interruption, but I would be very grateful if you would kindly call to order the hon. government members who are deliberately being disrespectful.


Albert Béchard: We are listening.


André-Gilles Fortin: They should at least have the kindness to listen, if they do not have enough heart to speak also.
As I was saying, this government has no economic policy to stimulate the economy and build this country, and the tax proposals show that the government is lost among its masses of papers and its endless inquiries.
They also show how important it is to warn the government, as objectively as possible, so that it may revise its positions and take into consideration the suggestions made by the co-operatives and the credit unions, in order to make of this tax measure something that will truly serve the interests of Canadians.
When in the crisis initiated by Mr. Nixon's decision the government puts $80 million at the disposal of large companies to assist them provided they export to the United States over 20 per cent of their production, it acknowledges the principle of helping those companies to hold their own, in order to maintain the employment level and to promote private enterprise.
If this assertion is true for large companies, how truer for co-operative institutions and small enterprises which abound in Canada and which try to survive regardless of all the problems facing them. We know that Mr. Nixon's decision affects a great many Canadian industries and entails an enormous financial loss to Canada. But I will not be led to believe that that decision is the direct cause of the slump. That is not true.
The direct cause of unemployment and of many other economic problems in Canada is the lack of government policies designed to stimulate, intensify and encourage development of private enterprise in Canada. Furthermore, the government has no policies aimed at assisting consumers, who wield and use purchasing power to

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absorb goods. Under co-operative methods, members own a share of the co-operative and derive certain benefits therefrom. They are able to buy products at favourable prices.
Let us consider what happens in a general way. If Canadians are really to be able to participate in the economic development of the country, it is certainly not through a disrupted fiscal scale. That is just not so. The principle is false from the start. There should be no taxation when there are no earnings.
Mr. Speaker, when we know that three out of five Canadians are directly dependent on unemployment insurance and social welfare, it is not surprising that their ambition loses its edge and their interest in participation fades out.
As a matter of fact, three out of five Canadians are waiting for the monthly pittance offered by the government to keep them alive, but they don't have any interest because they do not participate in the economic development of our country.
In the case of co-operatives, 800,000 Canadians have made great efforts to attempt to invest in Canada and bring in benefits to their fellow citizens. It is hoped that, at least, the government will not kill this movement, drive it to the wall, but that it will deign answer in the affirmative to the leader of the co-operative movement in Canada by bringing in the required changes to this law which, unless it is amended, will be far from being a forward step.
For the government, it will be a tremendous reform since it sees in it another step towards socialization and the disappearance of private enterprise. But for all Canadians who believe in the value of the human being, in his freedom and his right to achieve his own ideal, for all those who still believe in private enterprise, the legislation represents a step backwards instead of progress.
Therefore, once again I strongly urge the Minister of Finance-who is not here but should be since he is the mover of the bill-to reconsider the parts of the bill relating to the Canadian co-operative movement so that the government will prove to us at least once that it is for private enterprise.


Mr. D. Gordon Blair (Grenville-Carleton):: Mr. Speaker, it is my submission that the amendment proposed by the hon. member for Edmonton West (Mr. Lambert) which the House is now debating should be disposed of immediately. It reopens matters that were raised in the budget debate which took place in June. It attempts through the back door, as it were, to reintroduce matters that have been discussed both inside and outside the House throughout the course of this year. I also say, with respect, that it attempts to capitalize on the fiscal and commercial difficulties faced by Canada and all other trading nations as a result of recent United States action in order to create some political advantage for the opposition party. It is, in effect, an attempt to stave off decision on this important bill to amend the Income Tax Act. It is a stall and nothing more than that, and it is in that light that it should be disposed of.
We all know that the question of tax amendment and tax reform has been before the Canadian public for a long time-a great number of people think, for too long. The

fact that this matter has been under consideration for over ten years has resulted in uncertainty as to what will finally be decided. It has, I think it can be easily proven, delayed important decisions in the private sector. In the last year or so the imminence of major amendments to our tax legislation has created an atmosphere wherein some people have delayed taking decisions of a business nature that should have been taken earlier and which are important to the development of Canada.
What I am saying, Mr. Speaker, is that we are now seized in this House with a major proposal for the reform of the Canadian tax system and we must address ourselves to that proposal. It is in the interest of Canada and all our fellow citizens that we now proceed with a detailed consideration of this major tax reform measure, and we should permit no political party or expediency to divert us from that purpose.
We are now approaching the point where I hope a vote can be taken on second reading. I trust it is within the wisdom of hon. members to agree with me that the amendment of the hon. member for Edmonton West should be given short shrift, and I hope we can then proceed with the important vote on second reading. We all know that this is merely a step along the way in the legislative process. The significance of second reading is that it advances this important measure to the next stage, consideration by committee of the whole.
At that stage we, as individual members of this House, can perhaps make our best contribution for many months. We can express our opinions on the detailed provisions of this important tax amending bill. It is beyond question that many of the detailed provisions of this immense statute will require careful consideration. We are all aware of the size of the statute; it is in excess of 700 pages and it contains hundreds of clauses, many of a very complex and detailed nature, which touch on and deal with every aspect of our taxation system.
The whole question of tax reform has been before the Canadian public for many years. Since the publication of the white paper in 1969 there has been intense public discussion. The publication of the budget proposals in June of this year brought the discussion to a head, gave it a new direction and, more importantly, incorporated the suggestions of the government in the form of a draft bill which now has been extended in Bill C-259 which is before us.
It is no wonder that people with great knowledge of the taxation system and its implications for the whole of Canadian life are making detailed and responsible criticisms of the contents of this bill. Many hon. members are aware that important submissions have been made to the government by public organizations, by co-operative movements in Canada, by credit unions, by the Canadian Manufacturers Association, by the Canadian Bar Association, by the Canadian Institute of Chartered Accountants and by many others who have a more particular interest in different industries and businesses in this country.
As a result of the consideration given to this bill by our fellow citizens and these important organizations, many good proposals have been made for change and improvement. In any case, I have no doubt that hon. members of
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this House, whether they be in the government or in the opposition, have developed ideas as to amendments as a result of their perusal of this draft bill. Certainly, at this stage the important thing for Parliament to consider is the enactment of amendments to the Income Tax Act which will be of assistance to the taxpaying public.
We may never be able to agree on the intent or principle of every amendment that is made, but one thing upon which we can all agree is that whatever is enacted by this Parliament should be clear and expressed in as simple language as possible. I suggest that in the rather arduous days which lie ahead, when we consider these changes page by page and line by line our aim should be to attain clarity and achieve simplicity.
One is tempted at this stage to refer to the important proposals which have been made for amendment, for improvement, for simplification and for clarification. When considering this measure in committee of the whole, hon. members will have an opportunity to speak on the sections of the bill which most interest them or are of greatest significance to their constituents. For myself, at this stage I ask the indulgence of the House to discuss for a few moments the same questions which were discussed by the hon. member for Lotbiniere (Mr. Fortin) during the speech which preceded mine.
I refer to the apprehension, the concern, the alarm and the fear which has been caused by the proposals in clauses 135, 136 and 137 of Bill C-259, with specific reference to the taxation of co-operatives and credit unions. These proposals have been received by co-operatives and credit unions with some consternation. I am in a position to speak rather personally and with knowledge of the effect of these proposals on such organizations. Perhaps I am compelled by our parliamentary rules to say again, as I have said previously, that before my entry into Parliament, when I was practising law I was for many years solicitor and counsel to the Co-operative Union of Canada as well as many other co-operative organizations and credit unions. During the time I held this professional responsibility for co-operatives and credit unions I was directly involved in discussions both public and private on representations presented to the Carter commission, and in discussions with government officials.
Throughout our history the proper basis for a tax system of co-operatives and credit unions has been a controversial matter. I do not now intend to go over all that history except to say that one good principle has been retained in Bill C-259, a principle that has been in Canadian income tax legislation since it was first enacted in 1917. That principle is that not all taxpayers are treated as though they were the same kind of person. There are many examples of this. Throughout the history of this legislation co-operatives and credit unions have been treated differently, for tax purposes, from ordinary corporations because they are in fact different. They are different in their structure, they are different in their operation and they are different in the way in which they allocate their savings and their gains.
For this reason I approve of the philosophy behind Bill C-259 which recognizes it is not the function of the tax legislation of this country to put all taxpayers in the same
mould, to attempt to treat them as if they were all the same kind of people, but to recognize there are differences in taxpayers, be they corporate or individual, arising from their structure, the type of business they conduct and the operational pattern they follow. That important principle having been established, it remains only to determine whether the proposals contained in Bill C-259 are a proper way of treating the income of co-operatives and credit unions for tax purposes.
Most members of the House will have received detailed presentations from credit unions and co-operative movements which indicate beyond any doubt that there is a flaw in the present proposals. I do not intend to deal with this problem in detail, but I think it can be clearly said that if these proposals are persisted in they will have one of two effects. First, if co-operatives and credit unions continue to do their business as they have been doing it for many years, they will be forced out of business in a short time by the new tax system.
The only other alternative for co-operatives and credit unions is to change radically their method of operation so that they will become like ordinary corporations. If they should do that they would continue in business but would cease to serve the important social purposes which they now serve. These points have been made forcefully through many representations which have been placed before the government by co-operative organizations and credit unions in Canada.
During the vacation, on August 11, a major presentation was made to the Minister of Finance (Mr. Benson) by the Co-operative Union of Canada and Le Conseil Canadien de la Cooperation. These two organizations represent cooperatives of French-speaking and English-speaking Canada. Representations of a parallel nature have been placed before the government by the credit unions of Canada, the English-speaking credit unions being represented by the National Association of Canadian Credit Unions and the French-speaking unions being represented by Les Federations des Caisses Populaires.
I point out to hon. members that these are popular organizations. The membership of co-operatives is in the order of 1,700,000. The membership of credit unions is in excess of that figure. These are people's organizations and the people of Canada, be they English-speaking or French-speaking, have united through the co-operative movement, credit unions and many other activities over the years. I think we should bear this fact in mind.
I should like briefly to summarize the position which was put before the government by the representatives of the co-operative movement of Canada on August 11. I read from Co-op Commentary of September 9:
Mr. Benson was told by the delegation headed by W. B. Melvin, president of the Co-operative Union of Canada and Martin Legere, president of Le Conseil Canadien de la Cooperation, that the proposed tax laws would force co-operatives either to pay taxes according to a capital employed formula, considered wrong and discriminatory, or to distribute earnings as interest on member investment rather than rebates on member purchases. The net effect of either of these choices would be to force co-operatives to change their method of financing, their method of dealing with members and their very structure if they are to avoid what would amount to penalties for carrying on as they have from their beginning.

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The news release concludes by stating that the Minister of Finance asked for, and received, additional documentation on the co-operatives' position. It reads further:
He agreed to review the situation but pointed out that changes in proposed legislation after first reading may only be introduced by the government at the second reading.
In the same vein, I should like to read to the House part of a letter I received from the leading co-operative association of this province, the United Co-operatives of Ontario. The letter is from its secretary, Mr. R. J. Wright, dated August 24, 1971, and reads in part as follows:
We are at a critical point on the future of co-operatives. It is not that the many thousand people interested in co-operatives are asking the government of Canada to help co-operatives. The request is that co-operatives not be hindered in Canada in ways that they are not impeded in other countries.
United Co-operatives of Ontario feels that section 135 of the Income Tax Act amendments as proposed in Bill C-259 is discriminatory against co-operatives and would be harmful in a manner not used against co-operatives in any other country. Everywhere in the world it has been recognized that co-operatives, owned and controlled by their members, should be able to pay or allocate to patrons any savings or final payments at the end of the year. The proposals in the new tax legislation would have the effect of limiting, and in many cases, prohibiting such refunds by application of an increasing rate of discriminatory capital employed tax.
For years members of co-operatives have instructed their organization to allocate patronage returns into a revolving capital plan as a major part of member financing. Provision is made in these plans for early redemption of such member investment before maturity date in case of special circumstances such as settling of estates or old age. The proposed escalation of the tax rate on capital employed will inhibit the accumulation of sufficient funds to meet this capital redemption obligation. If this occurs, the operations of co-operatives will be greatly weakened and in many cases they will be forced out of business.
UCO was part of a co-operative delegation which met Mr. Benson on August 11 and proposed an alternative method of taxing co-operatives which would not jeopardize their continued existence.
I am sure that what I have said, coupled with what hon. members on all sides of this House have said on this important subject, is sufficient to convince all hon. members that the provisions dealing with the taxation of cooperatives and credit unions must be carefully reviewed and revised. I am hopeful that the government, after the consideration of these briefs which the Minister of Finance promised the delegation, will appreciate the necessity and the wisdom of making major changes in these clauses. I believe it would be unthinkable for Parliament to accept amendments which would have the effect of destroying important social organizations in this country.
I could say a great deal-as other hon. members could, and some of them have-about what the co-operative movement has done in Canada. But we must realize that by and large the co-operative movement in our country remains a service for the agriculture and fishing industries. It is a mainstay in many agricultural and fishing communities. It is an important part of the fabric of the lives of Canadian farmers and fishermen. They have enough problems without our contemplating in any-way measures which would have the effect of disturbing one

of their financial and commercial mainstays, the co-operative movement.
The credit unions operate in a wider area, not only in the country and in the rural areas, not only among farmers and fishermen but to a much greater extent than co-operatives in the urban areas of Canada. There is hardly a major factory in this country, hardly a major commercial establishment which does not have a credit union-and who here would not say that credit unions have done nothing but good for their members over the many years they have been in existence? Therefore, I say that all of us should take very seriously the representations which have been made to the government and to members of this House about the effect of this tax legislation on co-operatives and credit unions. I hope that, using our influence collectively, we will be able to achieve a result which will enable these organizations to carry on the service to Canadians which they have performed over many years.


Walter Gilbert Dinsdale: Mr. Speaker, I would like to speak to the amendment that is before the House, put forward by the official opposition. So that hon. members of the House will be fully conversant with the amendment, and particularly in light of the remarks made by the hon. member for Grenville-Carleton (Mr. Blair), that it has been put forward irresponsibly and for the purpose of creating mischief rather than having any sincere function in this debate, I would like to reiterate what the opposition is attempting to do. We are stating that-
-this House deeply concerned with unacceptable levels of inflation, persisting unemployment and stagnant industry and conscious of the necessity for meaningful tax reform declines to give second reading to a bill which does not provide sufficient stimulus to the economy of Canada with appropriate tax cuts and incentives, does not contain adequate tax exemptions and is not calculated to materially improve business and labour conditions in Canada now or in the foreseeable future.
I submit that this amendment is very carefully devised to put a stop to the camouflage ritual through which the government is proceeding to deal with the important matter of fundamental tax reform. The whole exercise of carrying out a comprehensive reform of Canada's income tax system, both personal and corporate, began some nine years ago. At that time it was anticipated that there would be a serious attempt on the part of the government to carry out just that purpose, that is, a major tax reform.
The whole gestation period has been a long, tortuous and devious one. The royal commission did not report until 1965 even though it was set up in 1961. The response of the government of the day to the challenge of the report of the royal commission, popularly known as the Carter commission, was to produce a white paper which had such startling innovations that it has caused untold damage to the Canadian economy in the intervening years.
The hon. member for Grenville-Carleton accused the opposition of being frivolous and irresponsible in putting forward this amendment. I see that the Minister of Energy, Mines and Resources (Mr. Greene) obviously concurs in the hon. member's suggestion in this regard. I would suggest to both those hon. gentlemen and to the government as a whole that the effect of the white paper as it pursued its long, tortuous course has caused greater
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damage to the Canadian economy than anything that could ever be put forward at this stage. The threat of valuation day which hung over the entrepreneurs of Canada, for example, resulted in lost production, lost wages and lost development which is reflected in the twin spectres of unemployment and inflation which have been hanging over the economy of Canada ever since the Trudeau administration came into power in 1968.
I would say that the government's approach to a fundamental and basic tax reform might best be compared to the sort of Liberal tinkering that went on in the famous Walter Gordon budget of 1963. It had a serious impact on the economy even though the total budget was dismantled by stages in later years. The process of economic disintegration that began with the Gordon budget was continued by the uncertainty that was engendered by the long discussion and consideration of the white paper.
It is obvious that the Canadian economy has been worsening in recent years. This has been demonstrated by the recent forays of the right hon. Prime Minister (Mr. Trudeau) into certain parts of Ontario. Even the electronically-generated charisma is not powerful enough to conceal the growing disenchantment of the Canadian public with the policies, or lack of policies of the present administration. Perhaps this is the reason why members speaking for the government are concerned that we get on with haste-undue haste, I would say-with the completion of this preliminary discussion of a major piece of government legislation. They are afraid of the continuing deterioration reaching the point of no return, and certainly, as I shall point out later in my remarks, this situation is quite possible when we consider that we are now faced with the economic blockbuster that came from south of the border just a few weeks ago.
It is obvious in the legislation that is before us, and in the budget that was proposed last June, that the government has no solutions, no plans and no policies for dealing comprehensively with the economic problems of Canada. Just last week on the hustings, the Prime Minister told the good citizens of Cornwall that he had nothing to offer. He did not even use the phrase "blood, sweat and tears" that Churchill used during the difficult days of war. He only said he was nonplussed and had nothing further to offer than already had been advanced.
This tax reform bill should be stalled in its tracks at this time, as is suggested by the amendment, because it is a sudden reversal of the whole direction of government policy and tax reform that was outlined in such precise detail in the famous white paper. Now, that white paper has turned out to be an exercise in futility. Along with the budget that was brought down almost simultaneously, Mr. Speaker, the immediate public reaction was a sort of euphoria, so much so that many commentators were referring to these measures as the sunshine economic initiatives that would bring about a new upsurge in the Canadian economy.
I think the reason for the temporary euphoria that followed in the wake of the government's initiative in respect of the budget and tax reform was something like that given by the gentleman who repeatedly used to bang his head against a wall, and when he was asked why he
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engaged in this inexplicable procedure he replied it was because it felt so good after he stopped. The situation seemed so bad that anything seemed to be an improvement on what had been taking place, at least in so far as those who are suffering from chronic unemployment are concerned.
The two major economic and fiscal initiatives that have been brought forward by the government are best described as an election budget and an election tax reform bill. It is the action of politicians who are being pushed into a corner by their own inadequacies and indecisiveness. This is a viewpoint that is being expressed not only by members of the opposition. In the past few weeks we have been inundated with careful and thoughtful analyses of the proposals contained in Bill C-259, analyses which have already reached almost heroic proportions in terms of quantity and size.
I have been going through several voluminous documents containing closely reasoned arguments which attempt to analyse the complexities of the government's tax bill and I shall quote from one which I think provides a very excellent summary of the essence of the bill. I refer to the Canadian Tax Reform Review which was circulated by Riddell, Stead and Company, a firm of chartered accountants, in August, 1971. The following is a quotation from the introductory statement to the analysis:
The outcome of the "great Canadian debate on tax reform" that commenced in 1962 is reflected in Bill C-259 "An Act to amend the Income Tax Act... " This prosaic title may well be a more fitting description of what has emerged than the more grandiloquent "Tax Reform Bill".
In other words, Mr. Speaker, they are saying that it is full of sound and fury, signifying nothing.
When the time, talent, effort and money (both private and government) that have been poured out in the last nine years are considered in relation to the end result, its justification may be questioned. If the debate was required to condition the public mind to accepting taxation of capital gains (already accepted by most industrialized nations), it was an expensive process.
At the outset, it must be stated that the provisions of the bill are extremely complex, particularly in the areas of corporate and international taxation. Many of them undoubtedly reflect the conversion into legal language of computer formulae designed to produce the desired result with as little leeway for error or manipulation as is possible.
That points out a theme that has emerged from the discussions and the deliberations which have arisen from the presentation of this bill to Parliament and to the people of Canada. The consensus is that the bill is complex, confused and does nothing to deal with the problems that require fundamental and basic tax reform, problems that have resulted in the present unhappy slack in the economy.
As a matter of fact, Mr. Speaker, as a layman depending on the expertise of the lawyers, the chartered accountants and the economists, I think the bill could best be summarized in these simple terms, that any improvements that it does achieve are in the realm of the ordinary, orderly housekeeping that you would expect from year to year as governments face problems in income tax legislation. And most of the housekeeping that you find in the bill has been necessitated by the fact that there has been a continuous and constant erosion in the value of the Canadian dollar under the growing inflationary pressures which have ope-

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rated in the Canadian economy since 1963. There was no need to usher in a grandiose, so-called fundamental tax reform bill if you were merely dealing with ordinary, minute housekeeping measures which arise from the erosion of the value of the Canadian dollar.
The bill has another major purpose, as I view it, which is to attempt to plug gaps in the income tax-in other words, to try to catch income tax evaders. Going back to the previous point I was making, raising the income tax exemption levels is an example of the housekeeping changes to which I have referred. With respect to plugging the gaps in income tax avoidance we might mention such things as the surplus stripping that was going on, particularly in resource corporations, in recent years and the proliferation of corporations that was being used as a device to achieve low corporation tax levels. But this is not the fundamental reform that was intended when the whole process of tax review began some nine years ago. Neither does this measure, as I understand it, deal with the basic necessity of achieving the goal of equity as between taxpayers.
I shall endeavour to demonstrate, as will other hon. members, that rather than removing inequities as between taxpayers, the bill increases them in certain important areas of the Canadian economy. On that basis alone I would suggest that the amendment proposed by the official opposition is more than justified. This is not fundamental income tax reform; it is propaganda, electioneering and tinkering with the Canadian economy. This has been the custom and the policy of two recent Liberal administrations from the time of the honourable Mr. Gordon to the present regime of our Minister of Finance (Mr. Benson).


Gerald William Baldwin: What is his name?


Walter Gilbert Dinsdale: He has various names but I will not use them other than to refer to him in this House as the Minister of Finance.


Mr. Muir:: Thirty-buck Ben.


Walter Gilbert Dinsdale: We have another major reason for supporting this amendment since the United States government shocked Canada and the whole international monetary community with its initiatives to save the value of the American dollar. If the government of Canada was confused before this event, its reaction since can only be referred to as a state of panic or chronic shock. The Financial Times referred to the reaction of the government in face of this unanticipated event. It might have been anticipated in light of the goading by the Minister of Energy, Mines and Resources in his famous Denver speech not too many months ago, but obviously the government had not anticipated the response of the United States.
The Financial Times writes that the government was "bleating like lambs in the midst of a world cataclysm". The Toronto Telegram used a similar figure of speech. There is a certain uniformity in this because it is drawn from the animal kingdom. It described the government's reaction as "running around like chickens with their heads cut off".
The government might have anticipated what was going to happen. The Leader of the Opposition (Mr. Stanfield) had been warning the government and Canadians generally that the situation with respect to the American dollar and the American economy would require rather emergent action on their part. The government of Canada had been adopting an attitude of shrill nationalism that was bound to bring some sort of reaction from the government of the United States.
I can recall in recent months direct and continuous hints of barriers being raised against United States capital as well as United States culture. There was a discussion in the parliamentary Committee on Broadcasting, Films and Assistance to the Arts about the content restrictions being imposed on the media by the regulations of the Canadian Radio and Television Commission. The initial regulation would have made it impossible for Canadians in isolated Communities to receive by means of cablevi-sion signals emanating from broadcasting stations in the United States. This was a direct assault on American culture in Canada and shows the confused thinking of the government.
Seventy-five per cent of the people in Canada, particularly in major centres like Montreal, Toronto, Quebec, Hamilton and most of the major urban centres in eastern Canada could pick up these signals directly from the air. The only way to implement the program would be by electronic jamming, a method usually resorted to by totalitarian states. Apparently it was only the rather isolated communities in western Canada that had to be protected from the painful influences of American culture.
This regulation has been changed and we hope that by debating these measures in the House of Commons the government will be persuaded that what it has done in the economic sphere is similar to what was happening in the cultural sphere. It was flying in the face of reality. With this in mind if we are to resolve the chronic economic dilemma precipitated by the American economic initiatives we shall have to take the realities of the situation into consideration.
The Minister of Energy, Mines and Resources is in the House this afternoon and offers comment from time to time. Perhaps he will take part in the discussion. If he does not, I hope he will return to the United States and undo the damage caused by his famous, or infamous Denver speech. As one newspaper commentator put it, "He indulged in the game of kicking the Yankees on the shins". This is fine and legitimate as a political game. Speaking as a westerner, I am all for Canadians developing a reasonable degree of nationalism. Western Canadians do not have the same attachment to the emotionally shrill nationalism that has been doing so much damage to the Canadian economy as do certain other parts of Canada.
The Canadian government has been blowing hot and cold in these matters. There is a Biblical phrase that says, "Because you are neither hot nor cold I will spew you out of my mouth". The government must take a stand; it cannot be vacillating from one pole to another on this matter of nationalism. At one time when the Prime Minister speaks on behalf of Canada he sounds like a continental isolationist, and at another time when the Minister of Energy, Mines and Resources speaks he sounds like a

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continentalist. But when the Minister of Indian Affairs and Northern Development (Mr. Chretien) made a speech shortly after the one made in Denver, he took a much more moderate stand.
The unilateral action taken by Canada in certain important matters of mutual defence, such as NATO and NORAD, have their reaction in the dove cotes of government in the city of Washington. When the American government responded with similar isolationism, Canada was caught on the horns of a dilemma. Here we find, as the Financial Times has pointed out, the government "bleating like lambs in the midst of a world cataclysm" and rushing to Washington in the hope of persuading the Americans to adopt that closer relationship and buddy-buddy attitude that Canada and spokesmen for the government were so vehemently repudiating a few months ago.
I should now like to deal with a few specific problems that are generated by this bill and to further the argument that we should delay its second reading at this time, particularly since we are considering it in the atmosphere of a pre-election Parliament. We do not want electioneering on the fundamental and basic question of financial and tax reform. The proposals put forward in Bill C-259 are out of touch with the needs of western Canada. The hon. member for Winnipeg South Centre (Mr. Osier) last night dealt with this subject. He is one of the few members supporting the government who has taken part in this debate. Either government supporters have been completely brainwashed into thinking that this is the best possible legislation to deal with the matter, or they have been told to be silent because the government wants to rush this confused, complex and totally inadequate piece of legislation through the House. I see the hon. member for Peterborough (Mr. Faulkner) shakes his head. I hope he will enter this debate, because we want to hear viewpoints from all parts of Canada on this matter and he represents a constituency that ought to be greatly concerned about some proposals in the legislation.
The hon. member for Winnipeg South Centre, speaking as a Manitoban, spoke not as one indulging in basic criticisms but as an apologist for the government. He said, as has the Minister of Supply and Services (Mr. Richardson) on many occasions, that the federal government is neglecting the interests of western Canada, that it is not in tune with the needs of western Canada but that it is doing its best under the circumstances. I will take a much stronger stand and suggest that the Trudeau government is completely out of touch with the needs of this important part of Canada. This has been reflected at the polls in recent provincial elections. The Liberal leader in Manitoba has re-echoed these sentiments. For the past several months he has been preaching for a call. He is leading a party in the legislature of Manitoba that has been reduced to three members.


John James Greene: What happened to the Tories out there?


Walter Gilbert Dinsdale: The Minister of Energy, Mines and Resources (Mr. Greene) asks what happened to the Tories. I presume he is interested in hearing the reply.


John James Greene: Oh, yes.
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Walter Gilbert Dinsdale: Mr. Speaker, the explanation is quite simple. I would think that most of the Liberals voted NDP in the 1969 election, with the result that the NDP representation in the Manitoba legislature rose from a rather insignificant number of members to become the government with a very slim majority. They had about one more seat than the Conservative official opposition. I trust that answers the minister's question. The leader of that province's Liberal party does not even have a seat in the legislature. This is a most unhappy state of affairs because it inevitably results in political provincialism, and nothing is worse for the interests of national unity in this country.
Although Mr. Asper has no seat in the legislature and therefore no platform in the legislature, he is a well-known commentator on tax matters. I trust the government is reading Mr. Asper's writings in the Toronto papers respecting the legislation now before the House. He described the white paper in a major critique as "the Benson iceberg". That description applies with equal force and validity to the bill before the House. It is still an iceberg. The old figure of speech really says that what appears on the surface is only a small part of what is involved; it is just the tip of the iceberg that you see.
From my reading of the comments of experts and professionals, they are saying, "We do not understand what the government is trying to do in this legislation." The Canadian Bar Association has said this; chartered accounts have said it. Experts who know something about this field are saying, "Beware; there are all sorts of booby-traps in the legislation". In these circumstances members of the House ought to vote for a second, serious, sober review of the legislation.
One reason it militates against western Canada is that it will destroy the family farm. The economic basis of the prairie farming economy has been seriously undermined in the past several years by Liberal administrations in this country. I travelled about my constituency during the summer months and learned that there has been tinkering and experimenting to such an extent that farmers who have been farming for years are throwing up their hands and saying they can no longer survive; the policies of the government make it impossible for them to remain economically solvent.
There has been an improvement in grain sales recently. This is vital to the prosperity of the Canadian economy. These sales normally would result in an upsurge in the economy and in a more buoyant feeling on the part of prairie farmers. That has not happened. These sales have made no impact because farmers have been living for the past two or three years on cash advances, and the first charge on any grain delivered in a period of greater activity in terms of grain deliveries is upon the grain delivered. So farmers are running to keep pace with the unhappy economic position in which they find themselves.
I hope we have a debate on this matter and cover that point specifically, especially in view of the extremely precarious position of long-established prairie farms and grain farmers in particular. The government is breaking the law. I cannot for the life of me think why it will not pay out the $81 million, I think it is, which it is obligated to pay to prairie farmers under the Temporary Wheat

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Reserves Act. This has been a holdback and has been accumulating for a year. Surely the warning of recent elections across Canada, especially since the Liberal party in the western provinces has all but disappeared, must be plain. If members of the government have any political sense at all they ought to be aware that this is a major storm signal and that it does not auger well for the future national stature of the great, traditional Liberal party.
The Prairie premiers under the initiative of the Hon. Duff Roblin a few years ago organized what has become known as the prairie provinces economic council. From time to time the premiers of the three prairie provinces get together to discuss problems of mutual concern and to decide on policies which will improve the general economic condition of their provinces. It is significant, Mr. Speaker, that recent meetings of the prairie provinces economic council, or of the premiers' economic council have more and more become complaint sessions in which council members have complained against the inexplicable and incomprehensible policy initiatives, or lack of them, on the part of the federal government in dealing with special problems of the prairie economy.
I wish to pinpoint some of these problems that will be exacerbated if this legislation is implemented, particularly if the whole process is carried out in haste. The government has failed to introduce a tax reform bill that integrates the taxing functions of the resources of the three levels of government. Surely it is elementary in this country that tax reform which hopes to achieve a basic reform must co-ordinate with the taxing responsibilities and functions of the provincial governments. There is nothing in the bill that provides for this basic necessity.
The second fundamental inadequacy with regard to provincial responsibilities in this matter is that the bill reduces, rather than expands, the tax bases of the provinces. The whole matter of constitutional reform is another of the initiatives of this government. Over the past three years we have been talking about constitutional amendments with increasing intensity. There has been a parliamentary committee going from community to community and city to city with this question. It has been pointed out that the problem is economic, not constitutional; the provinces do not have sufficient funds to meet their obligations.


The Acting Speaker (Mr. Laniel):: Order, please. I regret to interrupt the hon. member, but his time has expired. He may continue only with the unanimous consent of the House. Does the House give unanimous consent to the hon. member for Brandon-Souris (Mr. Dinsdale) continuing his remarks?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Laniel):: There does not appear to be unanimous consent.


Mr. Bell:: Mr. Speaker, could we have it on the record that the government has refused to give us time to discuss this bill at this stage?


The Acting Speaker (Mr. Laniel):: Order, please. The Chair can only abide by the rules. There was not unanimous consent and the Chair can only recognize the hon. member for Timiskaming (Mr. Peters).


Walter Gilbert Dinsdale: I rise on a point of order, Mr. Speaker. I regret that hon. members will not allow me to complete my remarks with regard to the difficult position in which this legislation places the western provinces in particular, but I think the answer of the west-


The Acting Speaker (Mr. Laniel):: Order. The hon. member has made his point of order. The Chair has recognized the hon. member for Timiskaming.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, for a long time the Canadian public has been faced with the proposition of tax reform. All the discussions that have taken place, including the Carter commission, the Gordon commission and the Benson white paper, have raised a great deal of controversy in the minds of the Canadian public as to what tax reform should be implemented in this country and what the tax structure should be in terms of equality between the rich and those not nearly so affluent. As other members have pointed out, this has cost the taxpayers a great deal of money.
Looking at the size of the amendments now before us and examining the effect of those reforms, one wonders what it is all about. If these tax reforms were general enough to affect the vocal segments of our economy, I am sure the general public would demand equality as between the large corporations and families with two or three children. They would demand that the tax structure would do the things which they felt were necessary. I am sure they would also demand some say in the way matters are handled on their behalf. They would also say that many of the expenditures supposedly made on their behalf are really not made on their behalf but for others who do not need that kind of consideration.
The hon. member for Grenville-Carleton (Mr. Blair) objected to the Conservative amendment on the basis that it was a delaying tactic. He was not doing this in opposition to the amendment but making a plea for a job that he had previously and to which he might return. He was interested in a number of changes. Surely he did not intend to say that the tax proposals that were before us in June had any relation to the present situation.
I often disagree with the Conservative party because I do not understand where they are going. It is very easy to watch the Liberals. They make all kinds of noise, such as they have done on this occasion. They present all the opportunities to get everyone stirred up and they give the least necessary to win the next election without hurting any of their friends in the process. That is the difference between a Liberal and a socialist. I believe there should be a certain amount of principle involved. Either you believe in tax reform and try to do something about it, or you are just looking toward the next election and the cheapest way of becoming elected on the taxpayers' money. That is certainly shades of Mackenzie King. I was interested in the new CBC series on Canadian content, but what do they have in the background to satisfy the Liberals? They have a beautiful, big picture of Mackenzie King. Many
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who were in the army and have passed on to their reward would, I am sure, roll over in their graves.
What about the Tory position? In this debate the Tories have talked about tax reform as though any change, no matter what field it is in, will be terrible. They have not been able to discriminate against their big business friends. The previous speaker talked about westerners being different from anyone else. I do not believe that is the case. His party believes in the free enterprise system. I asked a Conservative friend what a free enterpriser was. When I asked if this went back to Adam Smith, he said no, it just went back to Adam. When I asked how he related the two, he said that Eve was free and Adam was free enterprising.


Some hon. Members:: Explain.


William Arnold Peters: This may be true, Mr. Speaker; this may be their position, but it seems to me very surprising, when they talk of tax reform, to say that any tax reform should be bad reform.


Walter Gilbert Dinsdale: No.


William Arnold Peters: The hon. member says no, and perhaps I exaggerate. I suppose they would agree that a few of the personal exemptions were good, but they have made a lot of noise about the reforms that were bad, reforms that seem to me to be only a small step in the direction of tax reform, just as the personal exemptions were only a small step in that direction. Members cannot have it both ways, of course.
I am surprised when they talk about socialists in terms of Carter being a socialist. I thought that Carter was a Conservative. Even a little further politically removed, he might have been a Liberal. However, I can assure hon. members that nothing that Carter has ever said has convinced me he is a socialist. Certainly the report of Carter and the members of his commission is not the socialist doctrine of the next century.
Many of us accept the proposals of Carter because they resulted from a comprehensive examination of our tax structures. What he decided, very simply, was that a buck is a buck. I agree that a buck is a buck. Money I receive by way of family allowance consists of bucks. If I make money on the stock exchange, that seems to me a buck too, which is just as easily spent as any other buck. It buys as much beer as my family allowance buck.
It seems to me that Carter's proposals represented a fairly fundamental change. If the Liberals were interested in change they would have paid some attention to these proposals. Although they might have lost some public support, they had the opportunity to make these changes. Not in the third year of their term of office-we have all seen the little pamphlet describing the first three years of the present government-but they could have made these changes in their first year. They did not have to go into all this "b.s." of the white paper. They did not have to have dialogue with the Canadian public; they do not listen to the general public anyway. All they needed to do was to find out which segments of the public vocally opposed certain sections of the report and then modify those sections.
If the Carter proposals have any merit at all, anyone who studies them will agree that that merit stems from the acceptance of all the propositions put forward as a total package, not the adoption of bits and pieces. No doubt some of the Carter proposals are detrimental to certain segments of the economy, there is no question about that, but on balance I think everyone would agree that the Carter proposals are true tax reform. They could have been implemented holus-bolus and Canada would have been the better for it; but adopted piecemeal, Canada is the worse for it.
I am wondering why propositions put forward by those I will call free enterprisers, for want of a better word, always assume that if their proposals are supported by industry or by mining companies then they are good proposals. I know many miners across the country who do not think their proposals are good. In the town of Kirkland Lake there are no mines being operated today. The mines have extracted about half of the wealth of a generation and shipped it to other parts of the world for the generation of wealth there, and at the same time have done absolutely nothing for the Kirkland Lake community. They did not even build the people a community hall. In a similar position is the town of Cobalt, the cradle of Canadian mining. The people of that town were provided over a period of years with a very substandard type of living.
Most of the mining operations of the present day have ceased and the employees have been laid off. The companies say they are waiting for something to happen. What I should like to see them make happen is to get the government to decide to build a smelter in Canada instead of sending our concentrates to Texas or St. Helena. These mining companies are being given a three-year write-off. The uranium industry has been given a total write-off on their expenditure over a ten-year period. A full profit is given on whatever money they spend, over a period of five years in this case. But these measures are not necessarily good for the people of Canada who are still paying a debt to Central Mortgage and Housing for expansion in this particular area.
Many miners have been unable to relocate when laid off. They have established for themselves a standard of living that they have not been able to duplicate and probably never will. It is not always wise to expand industry holus-bolus, because when industry does expand it is usually at the expense of somebody else. Let me give the House an example. Not long ago a gold mine in my region indicated it was going to close down. The company concerned is extensively connected with Panarctic, and I believe they are trying to get $11 million out of the treasury for investment in other developments being carried out by Panarctic. They do not care about the 300 or 400 employees that they had in the Kirkland Lake area; it has been decided that this money is required in order to make a profit somewhere else. The Canadian public is given no consideration.
I think the situation in Canada has now changed drastically as a result of the surtax imposed by the United States. The situation today is different from the situation six months ago. In addition, I think it is time our tax structure reflected a little more our national interest, to enable us to be economically independent of the United

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States. Has it not surprised you, Mr. Speaker, that the representatives of ten countries are meeting in Europe now to decide what is the best way for the international monetary system to operate, and that Canada, one of the ten participating nations, will have but one vote to the nine votes of the United States? In other words, the United States is going to tell the rest of the world that everybody else is out of step but them.
This reminds me of the story of Mrs. Smith whose son joined the army. One day the army came to town and she, along with all the other people in the town, watched the army go marching by. As she did so she turned to the lady standing next to her and said, "My! The whole army is out of step except my son". This is similar to the attitude of the United States. They have told the world that they are not going to revalue their currency, that every other country of the world will have to revalue theirs. Although the United States says it may be going bankrupt, it wants every other country to get to the same state of bankruptcy so the United States will not suffer.
Not long ago President Nixon stated he was going to take the United States off the gold standard. That statement surprised me because I thought we came off the gold standard after the First World War. I have seen them come off the gold standard twice since then.


Mr. Francis:: You mean the gold exchange standard.


William Arnold Peters: I do not know what the gold exchange is. I do not know what the gold standard is. All I know is that the United States seems to have control of it. It is they who declare that gold is worth $35 U.S. an ounce and that the world will have to pay that price for it. That becomes the standard. Is it not time that this stupid government that we have and the Canadian public in general said to themselves and to the world that what we need is an international standard that reflects the true worth of a nation?
In my opinion the Canadian dollar is now worth $1.25 in United States currency. We are probably working hard to try to keep it down to par value. We do not owe any great amount of money as individuals in this country compared to citizens of the United States. The United States has told Japan that it must change the value of its currency in order to match U.S. currency. The United States has told Germany that it must revalue its currency, bringing it to favourable terms with the American dollar.
Is it not time that we sat down with representatives of the civilized nations of the world and agreed upon an honest value for an international unit that would be suitable and stable in every country? No matter how much money the United States needs, it finds a source. It accelerates spending as a result of the Viet Nam war. The United States makes a big name as a result of give-away programs. The United States is like a big-time gambler; it bets heavily and throws away its chips. When it finds it does not have enough money, it revalues its currency in relation to our currency and that of other countries. We must be absolutely stupid if we allow the United States to do this. This change in currency has taken place since the budget was presented. We are changing the Income Tax Act by this measure. This is a matter we should consider

very seriously. It would not be difficult for me to balance my budget if I followed this course. It would be difficult for me to do so if the bank manager said he approved a big loan today, so my money is only worth half what it was worth yesterday, and did so in order to maintain the bank reserves. The bank could manage very well by suggesting that everyone's money was worth half as much and the bank's reserves remained the same. The banks can get away with this, but this would only happen once before I changed my bank and, hopefully, I would change before it happened.
We will not decide on a tax structure which affects individual businesses and people unless we know where our economy is going. We recently gave second reading to a bill to provide $80 million to one sector of our economy. The industries which will benefit are mainly controlled by foreign interests. We will in fact be saying to the United States that because of our unemployment we are going to take arbitrary steps and force these companies to operate whether it is economical to do so or not. We are going to provide the money to accomplish this end. This money will go to the United States in any event, but perhaps it will not do much in the way of assisting President Nixon's program. We are making a donation. Apparently we are not particularly worried about the unemployment problem because we did not provide $80 million last year to create new jobs; we did not make $80 million available in credit to industries.
Many interested people are attempting to redirect Canadian economics and are suggesting interventions in respect of foreign-owned companies in order to do something about our developing unemployment problem. It may be that we will have to subsidize certain industries. I am sure there is not a member in this House who would stand and say that if 40 men were laid off at a plant in his constituency they should not be compensated through existing measures or by special grants from Parliament. I am sure we would all be prepared to make part of the $80 million available for this purpose. These companies are not interested in making that kind of concession in order to enable United States parent companies with subsidiaries in Canada to operate in competition. These parent companies are not interested in making their Canadian subsidiaries competitive with their United States counterparts.
There are many aspects of this bill which will receive serious and conscientious consideration. One of the new proposals in the bill is that workers will be given the opportunity to write off $150 in expenses in respect of personal equipment. What can you buy for $150? Have any of you ever purchased sockets for use in mechanical work? Have any of you ever purchased meters for use in the electrical field? Have any of you ever bought dental equipment such as is used by a dental technician? We are not living back in the 1920s, we are living in an affluent society in which the tools and equipment required by workers are expensive. I was told by a bush worker the other day that he uses three chain saws per year and that they cost him about $300 each.
If I were the head of a corporation I might suggest that a meeting of salesmen be held in Hawaii during the Christmas holidays. This expense can be written off. I do not blame corporations for doing this, but I do not think it
September 15, 1971

is fair that corporations can arrange such sales conferences in plush surroundings while the average Canadian taxpayer is carrying the load. Every time I go to a restaurant I find that the cost of a meal has increased. While I sit in the restaurant I see people ordering full course meals. Many of them are being subsidized by the taxpayer. We are paying for many of these meals because they are being written off as expenses. The individual paying the tab is likely to be a salesman offering someone a proposition. The average worker is the guy who pays the income tax in this nation. This government suggests we should allow him $150 as a deduction for which he does not have to provide receipts.
When I worked in the mines I had to buy oilers, boots, gloves and equipment which was absolutely necessary but I was not allowed to deduct that cost as a legitimate expense on my income tax. If a large corporation today had to purchase special equipment there would be no argument about deducting its cost. There is no question in respect of a farmer writing off expenses. But when it comes to the individual worker who receives a T-4 slip, he cannot write off anything except these concessions made by the government.
The average individual will consider the $150 exemption as a concession of little or no value. That is about half the price of a chain saw, four or five replacement sockets or a good quality speed wrench. That is a big deal! This government should have made a decision to tax on a pro rata basis and not continue this stupid arrangement we have which discriminates against the worker in almost every area.
I cannot think of a case in which a worker has been given a break by the revenue department. I heard of a case the other day involving a young girl 17 years of age, who was with another family and did not think she had to make a declaration to customs. It turned out that she had $23 worth of goods. The goods were seized and a charge of $9 was levied against her, the car was also seized and there was a charge of $10 before it could be returned. That is a hell of a cheap way to get money. The man driving the car, her uncle, did not think he could make the exemption for her because she was a child. They nailed her for $9 or $10 in respect of goods worth $23. If some big businessman were smuggling-and I know of several cases-into Canada articles worth $5,000, $6,000 or $20,000, a deal would be made and he would pay maybe half the charge or one quarter, or perhaps he would promise not to do it again and would be given a break. But the worker, the little person, does not get a break. Surprisingly, it is the little people who have the largest say in an election but they are not capable of or are not willing to make the decision on their own behalf.
This is the kind of tax reform we are getting. It encourages the little fellow to vote against himself. Really no one will get hurt, despite the cries which members of the Conservative party are making at this time. I could relate some of the things which have been said about the amendment in terms of full employment. I believe full employment is a criterion. I think any Minister of Finance who would consider that less than full employment was the optimum would be at least very derelict in his duty. Those
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people who are on welfare today, who are receiving unemployment insurance, who are receiving disability pensions and those who are, shall we say, in the category which should at least have established for them a basic annual income which would provide them with a decent standard of living, are not, and should not be, paying income tax.
I am sure there will always be some people in this category. But when we see a situation such as there is in Cornwall where, as was reported the other night by the CBC, there is an average unemployment of 22 per cent, this certainly is not in the interest of the nation. In my opinion any unemployment is not in the interest of a nation. But when you have a segment of the population which is not paying tax, then obviously those who are paying it will have to pay more in order to keep those who are unable to find employment.
We have embarked on a scale of government-oriented unemployment such as this country has never known before. There have been times when the government decided to cut back on unemployment and did so as a matter of policy. However, in Canada I do not believe there has ever been an occasion when government policy decided that a large proportion of the public would be unemployed for the simple reason that there would be less spending power, less money circulating and fewer dollars chasing the goods, so that the government would be able to implement reform and solve inflation. Those who are of that opinion follow the Adam Smith theory. That type of thing is long gone.
It is interesting to note in the pattern of purchases of young people today, as well as many of those who are on assistance of various kinds, that the expenditures they make very often are not in the category which would eliminate inflation. Many of their purchases are in areas which increase inflationary and are causing much of the difficulty. One of these, of course, is housing which produces one of our most inflationary trends. It is inflationary simply because of the necessity for people to have housing and their willingness to pay exorbitant prices for it. This is one field, if we were interested in winter works programs or in other works programs, in which we would be able to expend a very small amount of money-it does not require very much money to get such a program started-reduce the interest rate and provide a guarantee to the lending institutions which have a surplus of money, in order to encourage them to move into the field of housing. If this would increase the supply of housing within the next year or so to the extent that it would meet the continuing growth of the nation and cut into the backlog of poor and inadequate housing such as we have had in this country for the last ten years, it would do a great deal to improve the employment picture of this nation.
It seems to me that anyone looking at tax reform must look at the various measures that are necessary to stabilize the economy of the nation, to relate the economy of the nation to the production and economy of the other nations of the world and to provide for employment in areas where there is a social need.
I would refer to the speech of the hon. member for Duvernay (Mr. Kierans) in which he suggested it must be a foolish government that is thinking about providing money to downgrade the industrial potential of industries

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which a short while ago it provided money to develop. I think if we look at our economy in terms of the amendment we will come to the conclusion that we should accept
the amendment, look at the economy again and then take steps to do something to improve it.
At six o'clock the House adjourned, without question put, pursuant to Standing Order.
September 15, 1971



APPENDIX &quot;A&quot;


[Stage Direction]
LETTER FROM QUEBEC PREMIER TO PRIME MINISTER [Translation]

[Stage Direction]
September 2, 1971
Right Honourable Pierre Elliott Trudeau Prime Minister of Canada Parliament Buildings Ottawa.
Mr. Prime  Minister@: You have already stated your Government's intention to table, as soon as Parliament reconvenes this month, a bill involving far-reaching changes in family allowances and other youth allowances.
The Government of Quebec has also announced that it would table in the fall a bill amending the provincial legislation on family allowances, in accordance with the income security policy it put forward in January 1971.
While it has not been possible at the recent Victoria conference to reach an agreement on the constitutional aspect of the whole matter of income security and, consequently, family allowances, the Quebec Government feels it is essential at the present time to find a way of averting a conflict in this particular area of family allowances. To this end, the Quebec Government believes that it would be advisable to include in your proposed bill provisions to the effect that family allowances granted by the Government of Canada in a province must be granted in accordance with any existing terms, conditions and regulations of the family allowance legislation of that province, such as those concerning the recipients, the nature and the amount of the allowances, the decreasing scale of benefits, up to the total amount payable to the citizens of that province under federal legislation.
In our view, the inclusion of such provisions in the bill to be introduced by your Government would meet the provincial priorities and the social objectives which are involved, I therefore urge you to give this request your earnest consideration.
The Government of Quebec would also like to inform you that, in its opinion, there would be great advantages to using the same approach in dealing with both manpower centres and adult vocational training.
Yours truly, Robert Bourassa

Thursday, September 16, 1971