1972-06-13

ROUTINE PROCEEDINGS


Mr. David MacDonald (Egmont):: Mr. Speaker, I rise under the provisions of Standing Order 43. Although young people constitute roughly a quarter of the labour force, figures released today reveal that 48.7 per cent, or almost half the number of unemployed Canadians, are under the age of 25, indicating a six percentage point increase in youth unemployment over the previous month involving some 269,000 young people who cannot find work. Therefore under Standing Order 43 I move, seconded by the hon. member for Huron (Mr. McKinley):
That this House
(1)	direct the Minister of Manpower and the Secretary of State to review immediately special employment programs of their departments with a view to achieving interim expansion and maximum effectiveness;
(2)	require the interdepartmental committee responsible for youth employment policies to appear before an appropriate committee of the House;
(3)	urge the government to arrange a special consultation with the provinces and industry to develop immediate and long-term programs to meet this grave national crisis.


Mr. Speaker:: The hon. member's motion requires unanimous consent. Is there unanimity?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity. The hon. member's motion cannot be put.


David Samuel Horne MacDonald: On a point of order, Mr. Speaker, since it has been some months since this interdepartmental committee was supposedly established, I wonder whether the Prime Minister or the government House leader could indicate when there will be a statement with respect to the progress made by this committee?


Mr. Speaker:: Order, please. That is not a point of order.



WELFARE


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity which has come about as a result of the provinces and municipalities having to pay several million dollars for welfare last winter because of the delays in the issuance of unemployment insurance cheques. Further, no arrangement has been made between most of the provinces and the federal government for the reimbursement of this money. I believe that the province of Ontario has spent some $3 million of which $1J million should be repaid. Accordingly I would move, seconded by the hon. member for Saint John-Lancaster (Mr. Bell):
That this House urges the Treasury Board to direct the Auditor General of Canada, pursuant to section 62 of the Financial Administration Act, to inquire into and report to the House upon the failure of the government to pay back to the provinces and municipalities the millions of dollars paid out by them during the winter in welfare payments and administration costs due to default of the government and the Unemployment Insurance Commission; and further to inquire into and report upon the failure of the government to offer arrangements, suitable to all the provinces, with regard to the assignment of unemployment insurance cheques in future and similar circumstances.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: The motion cannot be put.



DEPARTMENT OF THE SOLICITOR GENERAL BILL


[Stage Direction]
On the order: Introduction of Bills.
June 2, 1972-Mr. Howard (Skeena)-Bill intitled: An Act respecting the Department of the Solicitor General (correctional services program).
Mr. Howard (Skeena):: Mr. Speaker, having found a procedurally correct way to cut out the fat in government I wonder whether I may have permission to withdraw this bill?


Mr. Speaker:: Has the hon. member leave to withdraw the bill?

June 13, 1972
Labour Conditions


Some hon. Members:: Agreed.	ORAL QUESTION PERIOD
Order discharged and bill withdrawn.



MOTION TO ADJOURN UNDER S.O. 26 LABOUR CONDITIONS LATEST UNEMPLOYMENT FIGURES

Mr. David Lewis (York South):: Mr. Speaker, I ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the unemployment figures released today which show the utter failure of government programs to improve the situation and which require the immediate introduction of new policies and programs to create jobs if the situation is not to become more desperate, particularly for our young people, in the months and years ahead.


Mr. Speaker:: The hon. member for York South has served the necessary notice required under Standing Order 26. This has given me an opportunity to consider the several procedural aspects of the matter which the hon. member feels should be brought forward by way of a debate under this rule.
There is no doubt that the question proposed for consideration by the hon. member is of major concern to the members of the House and to the country at large. The Chair, however, has to make a ruling in terms of the procedural acceptability of the proposed topic in relation to the requirements of Standing Order 26. In passing it should be noted that the question proposed by the hon. member for York South has been before the House on a number of occasions during the current session. I would refer the House to one such occasion which occurred when the hon. member for York South moved a subamendment to the address debate on February 18, 1972.
My main reason, however, for being unable to find that this is an appropriate subject for an emergency debate at this time lies in the specific requirements of Standing Order 26 itself. As hon. members know, in determining the matter of urgent consideration the Chair must under section 5, take into account the probability of the matter being brought before the House within a reasonable time by other means. Today is June 13. During the current supply period there are 14 sitting days. Of those 14 days, under the Standing Orders there still remain seven days to be allotted to the business of supply and there remains also the final day of the budget debate today. Therefore, between now and the conclusion of the current supply period more than half of the time available to the House must be ordered for debate on topics to be brought to our attention by hon. members. That being the case, it would seem that there will be ample opportunity for this important matter, and others, to be dealt with. For these reasons the Chair cannot entertain the proposed motion of the hon. member for York South.



THE CANADIAN ECONOMY


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to address a question to the Minister of Finance arising out of the shocking unemployment figures issued today by Statistics Canada. In light of these figures is the minister considering any new measures other than those proposed in his budget which he presented to the House early in May? In particular, instead of allowing the income tax to increase on January 1 is he considering some reduction in income tax, and is he also considering some inducements to investment which would be more meaningful in the formation of new companies, thus bringing more employment through investment in Canada?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, in the budget address which I made to the House on May 8 I warned that there would be monthly variations in the figures. I have been appraising the figures for this month. I am not happy with those figures, but wish to state to the House that I see no reason to change the basic view I then expressed. The economy is in an expansionary phase. It is strong and growing, and this has been reflected in the report of Statistics Canada which stated that there were 260,000 new jobs between April and May.


Robert Lorne Stanfield: The minister is aware that this is only the normal increase in employment between those two months. Now that he has had his present responsibilities for several months, may I ask whether he tolerates the present level of unemployment because of his concern with inflation? Is that why the minister tolerates this level of unemployment?


John Napier Turner: Mr. Speaker, I am sure the Leader of the Opposition heard me on the first occasion I had the opportunity to speak in the House as Minister of Finance, and again in the budget debate, when I said that my No. 1 priority was jobs. That remains the No. 1 priority.


Robert Lorne Stanfield: Mr. Speaker, perhaps the Prime Minister has the answer. In view of the vast number of unemployed with nearly 50 per cent being under the age of 25, representing some 269,000 people or nearly 11 per cent of the total number of Canadians in the work force, is the Prime Minister going to propose any new programs or any expansion of existing programs in light of this alarming social phenomenon, or does the Prime Minister know of enough unfilled jobs which can meet this need?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, it seems to me the Leader of the Opposition is asking me the same question that he asked the Minister of Finance.


Mr. Baldwin:: To which he did not get an answer.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Let's get Ben back.

June 13, 1972



UNEMPLOYMENT-NEW POLICIES TO PROVIDE JOBS NEXT FALL AND WINTER-PROVISION OF EMPLOYMENT FOR YOUNG PEOPLE THIS SUMMER

David Lewis: Mr. Speaker, I am rising on a supplementary question, but perhaps it would be fair if I were to suggest that Your Honour could consider it my main question. In view of the inevitable time lag which always occurs between the planning for jobs and the investing which is undertaken in order to create jobs eventually, and in view of the underlying trend which has kept the unemployment rate at about 6 per cent or over for 24 consecutive months, are the Minister of Finance and the government considering additional policies to be introduced immediately in the hope that they will produce jobs next fall and winter so as to reduce the level of unemployment?


John Napier Turner: Mr. Speaker, I am confident that that very concept of a time lag between the institution of an economic policy and the results, a time lag which I think has been underestimated in the past by economists, will now work in favour of the country, because the expansionary policy of the government and the expansion of the economy have now been operating for a sufficient length of time that we should soon feel the results.


David Lewis: Is the minister so complacent about the situation-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member knows he cannot preface a question that way. Perhaps he might ask the question directly.


David Lewis: Mr. Speaker, this is so serious a subject and the minister's-


Some hon. Members:: Oh, oh!


David Lewis: -answers are so irating that I think the comment was justified. In view of the obvious and utter failure of the government's policies and programs such as Opportunities for Youth, LIP and so on to have any affect on the level of unemployment in this country, may I ask whether any new policies are being prepared at least to meet the needs of our young people this summer so that their discouragement and frustration may be somewhat alleviated?


John Napier Turner: Mr. Speaker, I assure the hon. member that he has no monopoly on concern for the unemployed of this country.


David Lewis: Then show some.


John Napier Turner: Mr. Speaker, I have directed my attention primarily to that subject. I will not be satisfied until the expansion of the economy is reflected not only in higher employment, which is already the case in the number of new jobs, but in an appreciable reduction in the number of unemployed.
Inquiries of the Ministry


David Lewis: Mr. Speaker, may I then ask the minister this question. In view of the fact that the policies to date have not had the effect of reducing the seasonally adjusted numbers of unemployed, in view of the fact that the growth in the labour force has been a constant factor for many months, indeed, for some years, and, finally, in view of the fact that today is the last day of the budget debate, is the minister at last prepared to reconsider his policies and introduce today an over-all substantial personal income tax cut for the lower and middle-income groups in Canada so that aggregate demand may be increased immediately and the economy stimulated adequately?


John Napier Turner: Mr. Speaker, I stand behind the budget policies and I assure the hon. member I have confidence that they will be justified.



SUGGESTED REPEGGING OF CANADIAN DOLLAR TO INCREASE EXPORTS AND CREATE JOBS

Mr. William Skoreyko (Edmonton East):: Mr. Speaker, I have a supplementary question for the Minister of Finance. Will the minister give consideration to repegging the Canadian dollar so as to expand our manufacturing complex and therefore expand the export market which would create more jobs?


John Napier Turner: Mr. Speaker, I am not sure that the suggestion of the hon. membe~ would have the result that he seeks. The Canadian government has decided to maintain the floating dollar until the international monetary situation stabilizes sufficiently.



UNEMPLOYMENT AMONG YOUNG PEOPLE-INQUIRY AS TO REPORT AND DECISIONS OF INTERDEPARTMENTAL COMMITTEE

David Samuel Horne MacDonald: Mr. Speaker, I have a supplementary question for the Prime Minister. Inasmuch as almost one year ago the Prime Minister indicated that the government was alarmed at the growing and continuing numbers of unemployed young people, and in view of the fact that some time ago he indicated there had been established an interdepartmental committee to look at the whole question of youth employment policies, can the Prime Minister indicate whether that committee will be reporting shortly or whether it has arrived at any specific decisions with regard to this very serious situation?


Pierre Elliott Trudeau: Mr. Speaker, I am not sure to which committee the hon. member is referring. I would have to look up the reference he has suggested. Obviously the government has taken steps with regard to young people in our employment programs. It is as a result of government initiative that we have the Opportunities for Youth and Local Initiatives Programs.

June 13, 1972
Inquiries of the Ministry SUGGESTED ACCEPTANCE OF REJECTED



OPPORTUNITIES FOR YOUTH PROJECTS TO PROVIDE JOBS

David Samuel Horne MacDonald: With regard to these various programs and the actual increase in youth unemployment that took place during the past month, will the Prime Minister and the government give consideration to reviewing their policies again with regard to the Opportunities for Youth program in view of the fact that so many projects were not accepted which might be immediately funded in order to stimulate a certain amount of increased youth employment where it is so desperately needed?


Pierre Elliott Trudeau: Mr. Speaker, I thank the hon. member for his constructive suggestion. The government is considering these matters all the time.



UNEMPLOYMENT-SUGGESTED CHANGING OF ADVISERS TO MINISTER OF FINANCE

Frank Howard: Mr. Speaker, I wish to direct a supplementary question to the Minister of Finance. In view of the fact that government policy in the field of employment in this country has for some years rested on the advice of certain individuals in the Bank of Canada and the Department of Finance, does the minister have any plans to change his advisers?


John Napier Turner: Mr. Speaker, I have confidence in the men and women who advise me. If there are to be any changes, I would certainly want to discuss them with the hon. member.



WELFARE


Lincoln MacCauley Alexander: Mr. Speaker, I wish to direct a question to the Prime Minister on the basis of the motion under Standing Order 43 moved by me earlier this afternoon. Why has the federal government not attempted to reimburse the provinces and municipalities which expended certain moneys for welfare as a result of issuance of unemployment insurance cheques being late during the winter months?


Pierre Elliott Trudeau: Mr. Speaker, I would have to study the suggestion with greater care, but the way it came out it seemed to me that the hon. member did not bring much attention to bear on the fact that unemployment cheques were late in many cases without the federal government in any sense being responsible for that.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: In many cases it was because applicants themselves did not fill out the forms correctly or because employers did not provide the right kind of advice.


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: Would the Prime Minister explain to the House why the Unemployment Insurance Commission, which has offered agreements to all the provinces in connection with the future assignment of its cheques, has been unable to formulate an acceptable agreement with seven of the provinces, and why no new agreements have been signed since early March in spite of the fact that the agreements with Nova Scotia and Newfoundland are proving extremely effective? Why has no agreement been signed with any of the other provinces?


Pierre Elliott Trudeau: I apologize to the hon. member but I missed the first part of his question because of the noise coming from his own benches.


Lincoln MacCauley Alexander: I will rephrase the question. In view of the fact the federal government now has agreement with three of the provinces with respect to reimbursement for and assignment of welfare cheques issued in consequence of late payment of unemployment insurance benefits, can the Prime Minister tell us what is the hold-up with respect to concluding agreements with the seven provinces which have not yet entered into such an arrangement?


Pierre Elliott Trudeau: I have not been dealing with this matter personally, but the minister who has been doing so may wish to look at the question and provide an answer.



CLOSING OF GENTILLY ATOMIC PLANT-SHORTAGE OF HEAVY WATER-MEASURES TO SOLVE PROBLEM

Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Energy, Mines and Resources.
As the Gentilly thermal station threatened some time ago to close down because it has a hard time finding heavy water, can the minister tell the House whether or not that problem has been solved to the satisfaction of the officials of the plant?


Hon. Donald S. Macdonald (Minister oi Energy, Mines and Resources):: I regret to say no, Mr. Speaker. Because of the shortage of heavy water in this country, which will continue for another two years, the supply of heavy water will not be sufficient to enable us to avert the proposed close-down of Gentilly in September. In this case, however, the close-down will coincide with the period set aside for maintenance and refitting. We would hope that at some time toward the end of 1973 the plant would be able to get into production again.
June 13, 1972



AIRPORTS


Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Transport. Would the minister take the first opportunity on motions to tell the House why the government is planning to construct a second Toronto airport when the second air terminal building, due for completion in a few days, and the construction of a second north-south runway at Malton would more than double the present capacity of the airport, and the completion of a third air terminal building as originally planned-


Mr. Speaker:: Order, please.


George Harris Hees: -would enable the airport to handle the forecast traffic for another 20 years?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, it is obviously impossible for me to answer that question in detail.


George Harris Hees: On motions.


Donald Campbell Jamieson: There is, however, voluminous documentation relating to all portions of the hon. member's question and I will see he gets copies of everything.


George Harris Hees: While the minister is considering that matter will he also consider, and tell us in the same answer, the reason the new airport at Ste. Scholastique in Quebec is to be 23 times as big as the present Toronto airport and 12 times as big as the airport which serves all the needs of the giant city of Chicago and which will be able, it is forecast, to handle air traffic there for many years to come?


Mr. Speaker:: Order, please. The hon. member for Peace River.


Pierre Elliott Trudeau: Do you want it, or not?


George Harris Hees: I want some answers. I want to save the country a lot of money.


An hon. Member:: Resign!


George Harris Hees: I am against make-work programs.


An hon. Member:: What about unemployment?


Mr. Speaker:: Order, please. The hon. member for Peace River has been recognized for the purpose of asking a question and he should be allowed to do so.


Gerald William Baldwin: Thank you. I just wanted to defer to the wisdom of my hon. friend.


An hon. Member:: God help you!
Inquiries of the Ministry INDUSTRY



DOMINION AVIATION-REQUEST FOR REVIEW OF APPLICATION FOR DEVELOPMENT GRANT

Gerald William Baldwin: Mr. Speaker, I wish to address a question to the Minister of Industry, Trade and Commerce. Some days ago I inquired about an application by Dominion Aviation, a western Canadian company involved in the development of a STOL aircraft. The minister said that he would look into this and I have not pressed him since because I realize he has had problems to deal with that have been created by his colleagues. Will he look into the matter, and is he prepared to review the application by this company for an assistance grant in light of the fact that there is an opportunity to decentralize the development of the Canadian aviation industry into western Canada?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, I recall very well that the application was received on April 11, but I do not know whether a decision has been made since. I will find out and let the hon. member know.


Gerald William Baldwin: Will the minister try to answer this question within the next few days in view of the limited life of this part of this Parliament?


Jean-Luc Pepin: I will do so on the next occasion, Mr. Speaker.



HOUSING


Mr. John Burton (Regina East):: Mr. Speaker, I should like to direct my question to the Minister of State for Urban Affairs. Can he indicate whether consultations were held with the provinces prior to the preparation and introduction of the amendments to the National Housing Act, and would the minister indicate what was the response of the provinces to any consultations that might have been held?


Hon. Ron Basford (Minister of State for Urban Affairs):: Mr. Speaker, discussions were held on policy proposals as one step in the consultative process. I have indicated to the provinces that we will require some further discussions with them in terms of regulations and administration of any new housing policies. I cannot in the question period capsulize all of the provincial comment except to describe it as favourable.


John Stratford Burton: May I ask the minister specifically how many provinces approved in general of the government's policy proposals or approach to this matter, and would he also indicate how many provinces have not expressed any view or have not responded or been able to respond to any consultations held?

June 13, 1972
Inquiries of the Ministry


Stanley Ronald Basford: Mr. Speaker, the nature of this kind of discussion is confidential. I am not in a position to speak for the provinces. They will undoubtedly be making their views public at some point regarding these proposals and on the regulations, and I am ready to discuss all aspects of the policies with the provinces.



INQUIRY AS TO AGREEMENT BETWEEN CONSORTIUMS TO BUILD MACKENZIE VALLEY GAS PIPELINE-POSSIBILITY OF GOVERNMENT APPROVAL

Right Hon. I. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. Has an agreement now been arrived at between two consortiums to build a Mackenzie valley gas pipeline from the Arctic?


Donald Stovel Macdonald: Mr. Speaker, at the moment I have received no formal notification of an agreement. There has been an informal indication that an agreement was close but, as I say, at the moment I have had nothing formal.


John George Diefenbaker: Having regard to the information, even though unofficial, that the minister has received, which apparently indicates the consortiums have come to an agreement, is it a fact that it would be highly unlikely that the government would approve a gas pipeline across Canada from Alaska if the United States rejected Canada's view and approved a trans-Alaska pipeline?


Donald Stovel Macdonald: Mr. Speaker, it would depend on the nature of the application. I do not think that, a priori, one can say that such application would not be approved. I think it is also fair to point out, however, that, given the terms of Secretary Morton's statement indicating that a permit would be issued for a trans-Alaska pipeline, the government of Canada would not accept with respect to a gas pipeline the conditions that the secretary put on his authorization of an oil line. Any United States condition of that sort in relation to a gas pipeline would be unacceptable to Canada.


John George Diefenbaker: Did the hon. member for Esquimalt-Saanich have any basis for the statement he made in Washington-


Mr. Speaker:: Order, please.


John George Diefenbaker: -that Ottawa would not approve a gas pipeline unless-


Mr. Speaker:: Order, please. Perhaps the question might be considered as having been asked directly and the minister might reply.


Donald Stovel Macdonald: Mr. Speaker, I should make it clear that the hon. member, both in that particular comment and generally, and except where he was quoting me directly, was speaking for himself.


John George Diefenbaker: Then that gives me the opportunity to ask: Did he have any authority from the minister to make the statement that he did?


Donald Stovel Macdonald: As I have just said, Mr. Speaker, the hon. member was speaking for himself.



AGRICULTURE


Mr. R. E. McKinley (Huron):: Mr. Speaker, I had a question for the Minister of Agriculture but in his absence I shall direct it to his parliamentary secretary. I believe that representations have been made to the Department of Agriculture in this regard. Is the government giving consideration to having protein content and mineral phosphates for the manufacture of feed included under the feed freight assistance act?


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I am not properly aware of this, but the matter has been under study for a certain time and the minister should be in a position soon to make a statement in this regard.



NATIONAL DEFENCE


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question for the Minister of National Defence. In light of the very tragic accident over the weekend at the air show in Trenton, is the minister assured that this aerobatic team has had in the past and will continue to have ample and adequate resources to ensure that their planning and training standards are maintained at the highest safety level?


Hon. E. I. Benson (Minister of National Defence):: Mr. Speaker, I am sure that all members of the House will join with me in extending sincere sympathy to Captain Water-er's wife and relatives. I should like to indicate that an inquiry has been instituted at my instructions and when the results of the inquiry are known to me I shall be pleased to make them public. I believe that adequate funds have been provided for training purposes, but this question will be examined as well. I should point out that since aeronautics shows have been taking place during the past 24 years featuring performances of this kind there have been only seven accidents involving aircraft.
June 13, 1972



UNITED STATES DISC PROGRAM-REQUEST FOR LIST OF AMERICAN COMPANIES MAKING USE THEREOF-POSSIBILITY OF COUNTERVAILING ACTION AGAINST AUTO FIRMS

Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. Is the minister in a position to provide the House today with a list of all those corporations in the United States that have established DISCs?


Jean-Luc Pepin: No, Mr. Speaker, and I thought I had provided an explanation why I could not.


John Edward Broadbent: Is the minister in a position to tell the House how many DISCs have been established since he last reported to the House?


Jean-Luc Pepin: Mr. Speaker, I thought I had given that answer last week. The figures are, as at the end of February, 1,150, as at the end of March-


Mr. Speaker:: Order, please. I was under the impression that this kind of information had been given to the House, at which time I suggested, or I suggest now if I did not suggest then, that this kind of statistical information should normally not be given at this time. Perhaps the hon. member would like to rephrase his question.


John Edward Broadbent: I did say since the last report, Mr. Speaker, but I will go on to my final question. Is the government considering taking countervailing action against firms in the auto industry which are importing under DISC along the following lines, namely, is the government considering applying financial penalties against those companies equivalent to their DISC benefits in determining their annual commitments made under the Canada-U.S. auto pact?


Jean-Luc Pepin: Mr. Speaker, I thought I had answered that question in my speech on the budget but I will repeat what I said. The financial measures introduced by the budget were brought in to make up in great part at least for the situation that has been created in the United States and elsewhere in the world by export subsidies. But obviously there are bound to be specific situations where the government would like to go farther. I also indicated at that time that we were trying to develop a method by which we would be better informed-we are working on this method now-about the abnormal advantages that foreign countries are giving their exporters.


John Edward Broadbent: A further supplementary question, Mr. Speaker.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Oshawa-Whitby for a last supplementary and then we must move on.


John Edward Broadbent: Mr. Speaker, since the Ford Motor Company is the only major company currently importing cars and products into Canada under DISC, is the minister
Inquiries of the Ministry
prepared to take any specific action against this clear violation of the Canada-U.S. automotive agreement?


Jean-Luc Pepin: Not as of now, Mr. Speaker.



POLLUTION


[Stage Direction]
Hon. ]. A. MacLean (Malpeque): Mr. Speaker, I should like to pose a question to the Minister of Transport. Is it a fact that the government has decided not to let a contract during the current year to remove the Irving Whale from the Gulf of St. Lawrence, although it is a known threat?
Mr. Speaker:: Order, please. The question is not in order. The minister will be allowed to reply, but hon. members know it is better to ask a question directly rather than ask a minister to confirm or deny a report. The Chair is prepared to assume that the question has been asked directly, and the minister can reply in those terms.


Donald Campbell Jamieson: Mr. Speaker, the answer is yes. In other words, there will not be a contract awarded during the current year unless some new information comes to light that would ensure that the job could be carried out with absolute safety. I have written to a colleague of the hon. member and I will be glad to send him a similar letter explaining the circumstances.


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


Mr. Matte:: Mr. Speaker-


Mr. Speaker:: I apologize to the hon. member for Champlain to whom I shall give the floor in a moment, but the hon. member for Malpeque would like to put a supplementary question.


Mr. MacLean:: Mr. Speaker, I should like to ask the minister whether he has other contingency plans to cope with this pollution threat in some other way?


Donald Campbell Jamieson: Not on a permanent basis, Mr. Speaker, other than to ensure that it is contained. If an underwater inspection has not been carried out yet, it will be within a matter of a few days to ensure there is no threat, to use my hon. friend's word, at the present time. We do not want to move it until we are absolutely certain we can bring it up without creating an additional hazard.

June 13, 1972
Inquiries of the Ministry



HOUSING


René Matte: Mr. Speaker, I should like to put a question to the minister responsible for housing.
As he tabled a bill yesterday, the minister indicated that the provinces had generally reacted favourably to it and that he intended to have new consultations with them; can he therefore tell us what position the Quebec government has adopted towards that bill?


Hon.   Ron. Basiord@Minister of State for Urban Affairs: Mr. Speaker, that would have to come from the Quebec government.



PROPOSED AMENDMENTS TO NATIONAL HOUSING ACT-APPLICATION OF LOANS TO HOUSES BUILT UNDER CMHC

Mr. Roland Godin (Portneuf):: Mr. Speaker, I should like to put a supplementary question.
Since the new bill provides that the Central Mortgage and Housing Corporation could grant loans to restore family dwellings, could the minister say whether those loans could be used under CMHC supervision to repair badly built houses?


Mr. Speaker:: I have the impression that the member is already starting a debate which could be held when the bill will be introduced in the House.



TRANSPORT


Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, my question is for the Minister of Transport. In view of the fact an application will be made by Canadian National Railways to the Canadian Transport Commission of June 19, for selective freight rate increases in the Atlantic provinces, will the minister give consideration to initiating a meeting with the four Atlantic premiers at the earliest possible date, if they have not already requested one with him, to attempt to determine some method to overcome the severe problem being created for the Atlantic provinces business community by this eighth freight rate increase since September, 1969?


Donald Campbell Jamieson: Mr. Speaker, I think that is a very good idea. I indicated to the House the other day that I had met with the Atlantic Provinces Transportation Commission, which represents some of the provinces, but a direct face to face meeting with the premiers would be a very good idea. I will explore the possibility of that today.



NATURE OF PROPOSED MACKENZIE VALLEY PIPELINE-CONSORTIUMS INVOLVED IN POSSIBLE APPLICATION-POSSIBILITY OF OIL LINE

Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, when the Minister of Energy, Mines and Resources spoke on Friday, he said, as recorded on page 3011 of Hansard, that there was an application pending or he had an indication of an application by a number of companies or consortiums to build a pipeline. Just previously he had been talking about the carriage of crude petroleum by TAPS. Was he talking about a pipeline for natural gas or a pipeline to carry crude petroleum? Second, what are the names of these consortiums, and are they United States companies or Canadian enterprises?


Donald Stovel Macdonald: Mr. Speaker, the pipeline I was referring to involves two consortiums, Norwest Project and Gas Arctic. This is in relation to a possible gas pipeline with the dual objective of bringing Canadian gas from the Canadian delta and possibly Prudhoe Bay gas down to the southern Canadian market. Quite a number of companies, including Canadian companies, are involved in both, and I would be glad to give the hon. member a brief of the two firms involved.


Eldon Mattison Woolliams: Mr. Speaker, if this is an application to build a gas line, will the minister explain to the House what assistance or help that would be as far as the question of serious pollution of the west coast is concerned, because that pollution would be caused by crude petroleum? Is there any arrangement at this stage? That is what I tried to find out on Friday and have been for the last three years. Is there any arrangement, suggestion or plan in reference to building a pipeline to carry crude petroleum down the Mackenzie delta? That is the point.


Donald Stovel Macdonald: Mr. Speaker, I tried on Friday to convey to the hon. member the fact that for some considerable time the government of Canada has tried to persuade the United States to ship not only gas but oil down through the Mackenzie delta system. However, the United States government has indicated, through Secretary Morton, that it has decided otherwise. We would still be happy to make provision for this. The research we have carried out in respect of Arctic ecology and the Mackenzie Valley generally would apply in respect of both possible gas and oil pipelines.


Mr. Speaker:: The Chair will recognize the hon. member for another supplementary question, but I think we have reached the point when I must bring to the attention of hon. members that there is not much more than five minutes left before the end of the question period and there are some 20 or 25 members still seeking the floor.


Eldon Mattison Woolliams: Mr. Speaker, I will make my question short. May I take it from the minister's answer that in the negotiations between Canada and the United States regarding the piping of crude petroleum Canada's efforts have been a complete failure?
June 13, 1972


Donald Stovel Macdonald: No.


Mr. Speaker:: Order, please.



CAPITAL PUNISHMENT


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, notice of this question has been given to the Minister of Justice and the Solicitor General by both the hon. member for Peace River and myself. Will the Solicitor General cause to be brought up to date the helpful study of all aspects of capital punishment, commissioned by the late Mr. Favreau, in view of the fact this or the next Parliament will have to face the issue before Christmas?

Hon. ]ean-Pierre Goyer (Solicitor General): Mr. Speaker, my officials are now updating the statistics and the contents of the study published earlier by the Department of Justice and, in due time, I will be pleased to make it public when the House will be dealing with the matter.


Gerald William Baldwin: Mr. Speaker, will the minister do what the late Mr. Favreau very competently did, make this document available to members of all parties in order to make sure that impartiality and objectivity are retained?


Mr. Goyer:: Mr. Speaker, I will readily consider that suggestion.



ALLEGED CUT IN CANADIAN SUPPLY TO CHERRY POINT REFINERY

["I think that if the committee is interested in knowing what the government's policies are the ministers are there to speak on them."]
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Energy, Mines and Resources arising out of a statement by a spokesman for Atlantic-Richfield to the effect that the only reason his company is importing foreign oil by tanker to Cherry Point is that their oil quota has been cut by the Canadian supplier. I should like to ask the minister whether he :s having discussions with this company and the oil industry generally to ensure an adequate supply of Alberta crude to the refinery at Cherry Point so that tanker importation will be unnecessary?


Donald Stovel Macdonald: Yes, Mr. Speaker, I have had discussions with officials of Trans-Mountain Pipeline. They have pointed out that the United States refineries, particularly Atlantic-Richfield, have refused to take Canadian oil on a long-term contract beyond the next several years, so the increased pipeline capacity which would be necessary to supply the Paget Sound refinery cannot be financed. We
Inquiries of the Ministry
would be quite happy, as would Trans-Mountain, to provide additional oil supplies with additional pipeline capacity to Atlantic-Richfield, but they have refused to give this undertaking. Therefore it has not been possible at the moment to expand that system.


Thomas Clement (Tommy) Douglas: Mr. Speaker, in view of the fact that Atlantic-Richfield has already said it might not be necessary for it to use Alaska crude if it could get adequate supplies of Canadian oil, will the minister undertake to meet with officials to determine whether this guaranteed supply could be made available, thereby removing much of the hazard that has been troubling Parliament in respect of the use of Cherry Point?


Donald Stovel Macdonald: Mr. Speaker, if officials of Atlantic-Richfield have been saying that it is a direct contradiction of what they have been saying both to officials of the government of Canada and of Trans-Mountain Pipeline. I would be glad to check to see whether that is, indeed, the company's position now.



Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, my question concerns the unseasonable frost last weekend which caused great damage in southern Ontario to tobacco, small fruits and other cash crops. The matter was brought up by a number of hon. members yesterday, and I put this question to the Parliamentary Secretary to the Minister of Agriculture. Will the investigation that is now being carried on by the department be completed in the immediate future, and will the government undertake to make an announcement as soon as possible as to whether or not any assistance will be provided to the farmers concerned? The reason I bring this matter up. Sir-


Mr. Speaker:: Order, please. We are running short of time. Perhaps the hon. member might allow the parliamentary secretary to reply, following which the hon. member may ask a supplementary question.


Marcel Lessard: Mr. Speaker, I can tell the hon. member and his colleagues that the Department of Agriculture is aware of the situation, that officials are on the spot and that we are working in close co-operation with the Ontario government in order to estimate damages caused to several crops by the frost which took place over the weekend. When this study is over, the Department of Agriculture will be able to decide what steps should be taken further to those already taken under existing legislation.


Wallace Bickford (Wally) Nesbitt: Would the parliamentary secretary assure the House that the statement, whatever it may be, will be
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June 13, 1972
Inquiries of the Ministry
made just as soon as possible inasmuch as replacement of these crops must be done at once because of the lateness of the season?


Marcel Lessard: Mr. Speaker, I should like to assure the hon. member that this decision shall be taken in the very near future, because I agree that this is something which cannot be delayed.


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


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I have a supplementary question.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Hillsborough in a moment, but first we might allow the hon. member for Timiskaming to ask his supplementary question.


William Arnold Peters: I should like to ask the parliamentary secretary, Mr. Speaker, whether efforts will be made by the department to ensure that replacement stock will be provided at a reasonable price and that there will be an even distribution among those who suffered this disaster?


Marcel Lessard: Mr. Speaker, I hope that the representations of the hon. member will also be taken into consideration, in all fairness to the stricken farmers.


EXTERNAL AFFAIRS AND NATIONAL DEFENCE
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to ask the Prime Minister whether he has been advised of an invitation to Mr. Ivan Head to appear as a witness before the Standing Committee on External Affairs and National Defence, and can he advise the House whether he is facilitating the appearance of that important gentleman before that illustrious committee?


Pierre Elliott Trudeau: Mr. Speaker, I missed the first part of the question, but Mr. Head is presently at the United Nations in New York. If the hon. member would ask the relevant part of the question again, I might be able to answer it.


Heath Nelson Macquarrie: The question was whether the Prime Minister was aware of an invitation being extended to Mr. Ivan Head by the committee for that gentleman to appear before it.


Pierre Elliott Trudeau: I was aware of that invitation. I understand that the committee did extend the invitation, and of course I would not want to interfere in the procedures of the committee. If the hon. member is interested in my point of view, I think it is a very dangerous precedent if people in ministers' offices who are exempt staff are to be invited to speak on the ideas of the government or the

policies of a minister. If such were the case, there would be no objection to summoning the research staff of opposition parties in order to question them, and so on.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I think that if the committee is interested in knowing what the government's policies are the ministers are there to speak on them.



BUSINESS OF THE HOUSE


Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is for the President of the Privy Council. On June 2 I asked, in the government House leader's absence, a question regarding item No. 25 on the order paper, a measure to amend the British North America Act standing in the name of the Minister of Transport. I asked when it would be brought forward for action by the House. At that time the acting House leader promised a reply at the next sitting.
To date there has been no reply. Could the minister give the information today?


Hon. Allan J. MacEachen (President of the Privy Council):: The chances of this item being called at an early date are rather slim.


Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the minister who introduced the resolution. Would he use his considerable influence on his cabinet colleagues to ensure that this resolution will be passed before the summer recess?


Mr. Speaker:: Order, please. That is a representation.



NATIONAL DEFENCE


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of National Defence. In view of the fact that aircraft of the United States Strategic Air Command are to fly practice exercises over western Canada today and tomorrow and the concern that is being voiced over this, will the minister make representations to the United States authorities not to use Canadian air space over inhabited areas for such practice flights in the future?


Edgar John Benson: Mr. Speaker, when flights take place over Canada it is after consultation with the Canadian government.


Lorne Edmund Nystrom: Mr. Speaker-
June 13, 1972


Mr. Speaker:: Order, please. We have just about reached the end of the question period. The hon. member may ask a quick supplementary and then I will recognize the hon. member for Edmonton Centre for a quick question, followed by the hon. member for Joliette.


Lorne Edmund Nystrom: Can the minister assure the House that compensation will be paid to anyone who might suffer damages from a sonic boom, for example?


Edgar John Benson: These NORAD training flights take place continuously.



INDUSTRY


Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce or the Prime Minister. Does the minister know of any connection or relationship between Rene Levesque's visit to France and the proposed closing of the Renault assembly plant in St. Bruno, Quebec?


Jean-Luc Pepin: Mr. Speaker, I do not know of any. While I am on my feet, may I answer-


Mr. Speaker:: Order, please. We have gone beyond the question period. Perhaps the House might allow the minister to reply to the question which he was about to answer and might also allow the hon. member for Edmonton Centre to ask a supplementary question.


Steve Eugene Paproski: Is the minister aware of the fact that it costs $200 less to assemble a Renault in France than it does to do so in Quebec?


Mr. Speaker:: Order, please.



DOMINION AVIATION-REQUEST FOR REVIEW OF APPLICATION FOR DEVELOPMENT GRANT

Jean-Luc Pepin: Mr. Speaker, I just wanted to provide further information to the bellicose member for Peace River on the subject of the Dominion Aircraft application for PAIT support. The decision will be taken in a week or two.


Mr. Speaker:: As I indicated a moment ago, we might take ten seconds to allow the hon. member for Joliette, who has been waiting patiently for a few days, to ask a question.
Inquiries of the Ministry



LABOUR RELATIONS


Mr. Roch La Salle (Joliette):: Mr. Speaker, I wish to direct a question to the Minister of Labour.
Since the Chairman of the port of Montreal Authority forwarded a telegram yesterday to the Minister of Labour, the Prime Minister and the Minister of Justice urging them to take the necessary steps to end the conflict which has been lasting since May 16, may I ask the minister whether it is his intention to answer in the affirmative to that telegram, or if he will keep advocating arbitration?
[Englishl


Hon. Martin P. O'Connell (Minister of Labour):: Mr. Speaker, the necessary measure to take to resolve the dispute is for one party or the other, not waiting on the other party, to take this dispute to arbitration as is provided in the Canada Labour Code and in the collective agreement. For me to take any other position would be to open a precedent that I do not think any member of the House would wish to see, that closed agreements can be reopened at the initiative of the minister when there are other procedures provided in the agreement.


Lincoln MacCauley Alexander: I have a supplementary question, Mr. Speaker.


Mr. Speaker:: Order, please. Hon. members will realize that we have now gone a few minutes beyond the question period. I allowed the hon. member for Joliette to ask a question because he had been waiting for a few days and I felt he should be recognized. I doubt whether we can go much farther now. Perhaps these supplementary questions might be asked tomorrow. Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, June 12, consideration of the motion of Hon. John N. Turner (Minister of Finance) that this House approves in general the budgetary policy of the government.
Robert Jardine McCleave: Mr. Speaker, later tonight we will be asked to register our approval or disapproval of the first budget presented by the Minister of Finance (Mr. Turner). Much as many of us admire the hon. gentleman, indeed like him very much, I will have to say now on behalf of my colleagues and myself that the official opposition will be voting against the minister's first budget.
In 1971 the economy, according to the estimates of the Economic Council of Canada, operated approximately $3
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June 13, 1972
The Budget-Mr. McCleave
billion below its potential. It appears that in 1972 the economy will operate from $2 billion to $3 billion below its potential, and that in 1973 the economy will operate at least $2 billion below potential. This is quite an indictment of the measures that the right hon. Prime Minister (Mr. Trudeau) and his government have brought in for the conduct of the country. These figures alone, Sir, would justify anybody in not having confidence in the economic and financial policies of the government.
The figures released today by Statistics Canada-perhaps it should be renamed Unemployment Canada-show there were 9,000 more people unemployed last month than there were in the same month a year ago. This fact again casts a pitiless spotlight upon the economic climate in which the country is operating. I suggest, Sir, that the budget brought in by the Minister of Finance will simply not provide the stimulus to create demand for goods and services which would increase production sufficiently to reduce the number of unemployed. I will go into that argument at somewhat greater length in the first part of my speech.
We are faced with a seasonally adjusted figure of 6.2 per cent unemployment, and all this in the light of what the Minister of Finance has said today about the priority for the creation of jobs, and what he said on February 24, as recorded at page 217 of Hansard:
I see our first priority to be to provide good jobs for Canadians seeking work.
And later we find this:
I fully recognize that statistics are no substitute for jobs.
At page 214, the minister's statement reads:
My first and most urgent priority is to provide continuing and well-paying jobs for those Canadians seeking them.
But still we are faced with the dreary litany of the performance of the economy with regard to the provision of jobs.
One of the measures the minister seeks to use in the budget is the reduction of corporate taxation from a top rate of 49 per cent down to 40 per cent. This is done in the hopes of stimulating investment. First, I think the mistake that is being made is that the government, having fallen so badly out of favour with the business community, now uses this rather large carrot to try to get back some good will unto itself. I do not know whether or not this will work.
I think business invests productively when it believes a market exists for more goods. Can any businessman believe that the reaping of advantages to himself and his shareholders is really going to accomplish that purpose, or does he not look to his traditional customers, the public who buy, and ask: what is the budget doing to put more money in their pockets, more money which can be used to buy the goods of business? I think the government has used the wrong approach, and in doing so has made a monumental gaffe. Business would expand its activities if it had confidence in the future. And when the economy is stimulated by adequate consumer demand, job producing economic expansion is assured.
Some points can be made about the introduction of the new class of capital cost allowances. This entitles a taxpayer to claim as depreciation up to 50 per cent of the cost

of an asset in the year it was purchased or acquired, and the unclaimed balance in any year following. This is for machinery and equipment to be used for the purpose of manufacturing. There are five criticisms that should be noted in regard to this measure in the budget. First, the machinery may in fact replace present workers. If the aim of the budget is to create more jobs, then this is certainly self-defeating. Second, the machinery may have a high non-Canadian labour content. Third, the machinery may displace less skilled operators who are particularly susceptible to prolonged periods of unemployment. Fourth, the form of the incentive does nothing to favour the disadvantaged regions, and in those disadvantaged regions we have pockets of very high unemployment. Fifth, the employment effects of tax incentives for business are slow to appear in comparison with the effects of a comparable personal or sales tax reduction.
I suggest that corporate income tax cuts do not provide investment and employment stimulus for firms without profits. That is rather obvious. If you do not have money to invest and you are in difficulties, then anything done for your wealthy cousin down the street will not help you a bit, but may increase your misery, (a) by making you feel envious, and, (b) by increasing his competitive advantage over you. Corporate tax cuts provide no reliable stimulus to expand jobs and investment unless the recipient corporations are assured of expanding markets. The tax cuts do not even provide indirect stimulus to such labour intensive sectors as service industries and construction.
Also even assuming for the moment that the government's proposals increase investment, it must be recognized-and this is certainly being well scouted in one of the standing committees at present-that 40 per cent to 50 per cent of all investment goods are imported from the United States. Therefore one half of the effect of the government's policies will be felt in the United States. Therefore, by a curiosity, these measures may do more to stimulate the American economy than they will do for ours. I think this point should be made with regard to the long-range effects of this particular proposal in the minister's budget, that accelerated write-offs for capital equipment purchases lower the price of capital equipment relative to the price of labour. This has the economic effect of encouraging firms to substitute labour for capital in the production process. That sounds good on the face of it because it can cause a little output and employment to increase, but in the long run such a policy will result in a more capital intensive manufacturing sector. The swing will go the other way. The government may be buying a few jobs at present at the expense of even higher and more stubborn unemployment in the future.
I would like to suggest a few things that should have been in the budget, and that my colleagues and I would have liked to see in it. The report of the Carter Royal Commission on Taxation makes the point as well as anybody, and this after very considerable study, about changes in the personal income tax. I quote from volume 2, chapter 3 of that report as follows:
The impact of a change in personal income tax upon the take-home pay of workers is quick. Across-the-board changes in personal income tax rates provide the most effective single tax instrument for changing aggregate demand to achieve full employment
June 13, 1972

and price stability. Changes in corporate income tax rates and in sales tax rates are much less useful.
In all the studies that the Carter Commission made into the subject of stimulating the economy through the process of tax changes, they made the very strong point that it was the reduction of the income tax of the wage earner of Canada that was the quickest way of putting money into the pocket of the worker and thus into the economy. That, of course, is the quickest way of enabling more people to buy goods made in Canada which in turn increases our productivity and ultimately the well-being of all citizens. So I suggest, Mr. Speaker, that the most serious indictment that can be levelled against the minister, and against the government of which he is an adornment, is that the wrong course has been taken with regard to the measures needed to stimulate the economy and to get us closer to the potential that the Economic Council of Canada suggests for us.
There are other methods that could have found their way into the budget, Mr. Speaker. There could have been employment support assistance for labour intensive industries; investment tax credits for manufacturing, processing and service industries; guaranteed low-interest loans for export firms severely affected by DISC and, in concert with other nations, countervailing tariffs on DISC'S. Measures could have been taken with regard to housing programs and in a moment I shall deal with the announcement of the Minister of State for Urban Affairs (Mr. Basford) in that regard.
For long-range measures to strengthen the economy, there should have been a reformation of tax revenue sharing to reduce the present burden on the provinces and municipalities. As suggested by the Leader of the Opposition (Mr. Stanfield) in a recent speech made in Toronto, there could be a new formula applied to the taxation system. This formula has been the subject of some lively discussions. As I have said, there should be a taxation system which does not make a bonanza of inflation but which gives the government the incentive to do what it can with the powers of taxation.
There should be measures to reduce the present levels of sales tax on consumer goods primarily produced in Canada. There should be a reorganization of legislation and monetary policy to ensure that Canada has a capital policy which provides easier money and access to more venture capital for Canadian entrepreneurs. What we are doing is erecting barricades when there should be some method by which Canadians could take greater pride in investing money in their own country. There should be acts to provide low-interest loans for housing and we should use full employment budgeting techniques to provide a more realistic and honest basis for assessing the expansionary or deflationary impact of federal budgets on the Canadian economy.
Yesterday, in a burst of optimism, the Minister of State for Urban Affairs (Mr. Basford) brought in his version of the stone tablets containing the changes to the National Housing Act. A massive document was brought in at this stage of the parliamentary session and I am sure nobody in this Chamber, with the exception of the minister, could
The Budget-Mr. McCleave
believe that this would be part of the law of the land by summertime.
There are some new techniques in the measures suggested by the hon. gentleman but if we are to do our job adequately, four or five of the important proposals should be examined closely and not simply taken at face value. This kind of legislation should have been presented to us some considerable time ago. According to a report on the CBC this morning by a correspondent of the Globe and Mail, this legislation was ready in January or February when the present Minister of Consumer and Corporate Affairs (Mr. Andras) had conduct of this strange Department of Urban Affairs. If that report is correct, then we are being treated to flim-flammery, a sort of public relations exercise by which the minister hopes a lot of people in run-down neighbourhoods are going to be aroused. I would like to think that this housing legislation would be in effect by July 1. I think it would be a real lifesaver in many parts of Canada and I could see it operating usefully within my own community. But the way it is being brought in is like offering a person a full-course meal with no time to tackle it, only having time to gulp down hot dogs and root beer.
I should like to make the following comment on the proposals advanced by the minister. A few days ago when taking part in the housing debate, I mentioned the effect that the removal of sales tax on building materials could have on the cost of homes. Calculating it by the process of amortization, for approximately every $1,000 saved that way, like $3,000 or $4,000 is saved in long-range interest and carrying charges. That is a significant saving but even more pertinent is the suggestion that by cutting the cost of homes by as much as $1,000 or $1,500, more housing is put within the reach of those who at the moment cannot quite achieve that goal.
If we look upon more housing for low-income people as a desirable social goal, and I think every member in this House shares that view, then the way to achieve it is to ensure that housing costs less. I know there are some who say that if we tackle the cost of land this will be the result, but I am a little pessimistic about that, Mr. Speaker. Land has a habit of appreciating in value. If some speculative elements are eliminated, then it might be possible to hold down the cost of land a little but in the end I do not think land cost makes much difference. If we had to tackle the land cost problem, I think we would not do it through the land bank assembly plan but rather impose taxes on land that is held in order to make it unprofitable over a long period. I will not elaborate on that at the present time, but rather will explore it if, as and when this legislation gets into committee.
If we really wanted to tackle land costs, it would be a matter of getting the land serviced early so that it would be suitable for building, rather than serviced late so that it would stand idle, incurring taxes and bank charges. On the outskirts of cities such as Toronto, the value of land that is idle is rocketing sky high. I am sorry that the Minister of Finance could not have brought in a measure to repeal the sales tax on building materials so that we could have made one positive gesture towards bringing home costs within the reach of the tens of thousands of

June 13, 1972
The Budget-Mr. McCleave
Canadians who are now almost able to reach the goal of having their own home, but not quite able to close the gap.
May I comment on the proposals the minister made yesterday. The rehabilitation of some old neighbourhoods, as a substitute for urban renewal, commends itself to me and I support the idea, though only up to a point. I do not think the minister should altogether cut out urban renewal because, in some cases, it is needed. Urban renewal projects in some parts of Canada, and I am thinking particularly of one in downtown Halifax, are proving their value. Nevertheless, I think communities should be given the option of choosing whether they want to rehabilitate old neighbourhoods, or say, "This neighbourhood is beyond recall; all the carpenters, plumbers and workmen in the world cannot bring these buildings up to modern standards. This neighbourhood is simply not good enough and it must be renewed." On the other hand, there are places where the concept of urban renewal has been used, I think quite wrongly.
I remember between 1963 and 1965 searching titles and taking part in property transactions that involved older homes in Halifax. They were to be levelled to make way for large apartment buildings. This was a matter of expropriation and involved the building of public housing. I know that the provision of public housing was beneficial for some. However, it irked me, on looking at the title of a home that had been built 75 years ago and that was still a perfectly sound property, although perhaps in need of improving by the use of home improvement loans of a sort different from those we now grant, to find it was to be torn down. True, it was in a neighbourhood somewhat run down, but quite liveable. I was annoyed to think of those families that were to be uprooted and sent packing, that houses costing between $15,000 and $20,000 were to be torn down to make way for the construction of apartment buildings.
In the name of public housing, we were committing several crimes. We were committing the economic crime of putting people into apartments that we expected would cost up to $30,000 each, and that cost could never be recovered; we were committing the crime of removing homeowners-I guess I have a prejudice towards home ownership-and dislocating them from their neighbourhood. Actually, I know of people who sat with a shotgun on their knees waiting for the approach of the bulldozer. If the bulldozer had made an early appearance outside their door, I am sure the matter would have ended in the criminal courts. After a little persuasion and the granting of a little extra money, these people were induced to move away and these crises passed.
I was offended because our urban renewal programs then were so terribly sweeping and did about as much harm as good. Now, there is a danger that the pendulum may swing completely the other way; we may consider rehabilitating those parts of cities that ought to be cleared away. Understandably, there is no provision in this measure for dealing with commercial rehabilitation; therefore, I shall put in another blow for some of my favourite characters, the mammas and papas of this country who run small businesses. There ought to be no qualms about rehabilitating some of these small family businesses. I see
[Mr. McCleave.1
nothing wrong with that in principle. If people do not want to work downtown in some big factory, in a large crowd, they should be given the chance to run their own lives and run their own small businesses.
I ought to note for the record several of the points made on this subject by the newly elected president of the Canadian Federation of Mayors and Municipalities, Desmond Newman. He said that the minister's proposals may not be of advantage to some municipalities, because the municipalities do not have any extra money with which to operate. Some of those difficulties may be cleared up at the tri-level government conference scheduled for November. He suggests that the municipalities would like to get in on the ground floor, while these matters are being talked about and considered, before changes are made. He also makes the same point about the lack of policy relating to commercial rehabilitation that I have just made.
Then, also, he says, significantly, that there is still a gap between what an elderly couple may receive under government programs and the minimum they require if they are to own a home. I think in this area there is a serious defect in the legislation and I hope the minister, if he is to deal with this matter before the end of June, will consider it seriously. The right of our elderly people is a right for which we shall fight. I do not see why an elderly couple cannot enjoy the right to home ownership just as younger people do.
I wish to make a final point; I see that only two minutes of my time remain. Perhaps, I will not deal with it now but will deal with it when the labour bill is considered later. I think the government should take steps that will give Canadians the opportunity for greater participation in the offshore mineral and oil search, and particularly that search taking place off the coast of Atlantic Canada. Perhaps measures could be enacted dealing with work permits. I have already been in correspondence with the director general in the Atlantic region in this regard; he may be able to act on the matter so that I may be able to achieve my aim without making this a public issue. I think there ought to be more opportunities for Canadian people to participate in the offshore oil and mineral exploration process.
When the opportunity arises later, in the present session, I want to take a look at the British Commonwealth Maritime Shipping Agreement. I think it is shameful that governments, past and present, have not brought that agreement up to date, because now Commonwealth ships from other countries operating in Canadian coastal waters are not required to pay Canadian wage rates or Canadian unemployment insurance and are not required to give their seamen the benefits which flow from Canadian legislation. Once that measure has been brought up to date, it will mean that more Canadian seamen will be engaged in that coastal trade. I have not the time to elaborate on this now, although I want to do so in future.
My main point now is this: I do not think the budgetary measures of the Minister of Finance are adequate and we shall show our displeasure with them when the vote is called this evening.
June 13, 1972


Gerald William Baldwin: On a point of order, Mr. Speaker, there has been some discussion among members of the House with regard to the furtherance of this debate. Since there are still many members who wish to speak in the time available, it has been suggested that hon. members might agree to a limitation which would curtail speeches to 20 minutes. Some hon. members are prepared to agree to this suggestion, although they prepared fairly lengthy speeches. I think they would be prepared to make this sacrifice if the agreement were to be extended to other hon. members.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.


Mr. Guy LeBlanc (Rimouski):: Mr. Speaker, I am happy to have this opportunity to comment in my name and especially in the name of my electors of the constituency of Rimouski, on the budget presented on Monday, May 8 last by the hon. Minister of Finance (Mr. Turner).
I wish to congratulate once more the hon. minister.
No doubt most of my fellow-citizens, from the constituency of Rimouski as well as from eastern Quebec, share my view in this respect.
That budget comes under the Liberal party's program announced since 1968 and is entirely consistent with the central theme of the throne speeches and budgets we have had since then. There is in all that a sense of unity, wisdom and drive of which we are proud. Political beliefs have proved correct and the hopes of the Canadian people have not been shattered.
That budget is being examined by the House and the hon. minister has undoubtedly foreseen that it would be a butt for criticism. Such criticism should be constructive in order to ensure progress in this country. Negative criticism-we all know that-has never been useful. The critical faculty should be developed not the spirit of criticism. That may be the difference between an ideal and utopia.
It is obvious that in his speech, the hon. minister tried to show that we should first stimulate the Canadian economy while supporting at the same time efforts on the part of industry, in order to progress in the midst of competition and create employment. Thus we see that the government can reach its goal which is to encourage the dynamic role of our human, active and business generating capital. It wants to encourage the militants, the creative people, through incentives to free enterprise.
Secondly, we can see that the government, despite criticism from the opposition, shows a serious concern for social justice, in keeping with the purest democratic tradition. We have only to consider the announcement of measures designed to boost the income of those who suffer the most from increased prices and the high cost of living.
That is evidence that the government recognizes the value of men and the usefulness of some groups of citizens who might be said inactive, if considered in a certain light, on account of their age, their state of health and the
The Budget-Mr. G. LeBlanc
length of their training for a career. Those citizens, whether disabled veterans or blind people, could be called upon to take part in the evolution of society. Even the aged could keep up with the adventure of life, share in Canada's progress and look toward an ever better future.
Spreading out our economic forces and assuring the poor of a more adequate income, such is the immediate or middle term goal. Therefore, this budget can be called a growth or expansion budget.
In 1972-73, economic growth can only result from this budget. Such growth should be felt at two levels; first, supply being what it is, an increased demand should result from the fiscal and social benefits being granted to various groups of citizens. Secondly, no doubt the benefits resulting from growth should have some repercussions in the industrial sector.
In fact, the minister told us of some new advantages related to write offs and tax abatements which can but profit manufacturers. This might encourage people to invest in the industrial sector and thereby improve our industrial situation and increase employment opportunities.
Some opposition members will certainly suggest, as they have already done, that nothing has been done to relieve the burden of the average taxpayers. I think that indirectly-and the impact will be as good as direct aid but more normal in a free society-the average taxpayer, who does not seem to be encouraged or protected, will benefit by increased demand. Increased demand can but improve the situation of merchants, small industrialists, small shopkeepers, gas station owners, etc. Generally increased demand stimulates economic activities.
I saw a case in point in my region recently where three local initiative projects have been approved and completed. These projects involved a low-income region of the Lower St. Lawrence. Even though those who benefited by it indirectly do not like to boast about in public, it remains that following confidential or private information I was told that during the implementation of these projects the small merchants, the small grocers, and the gas station owners noticed the effects of an added injection of money during the winter. These local initiatives projects did their business a lot of good even though they were not directly involved.
If I did not misunderstand the criticisms voiced earlier by the hon. member for Halifax-East Hants (Mr. McCleave), he said that the tax reductions granted to companies only increase their profits, do very little to improve the well-being of the average taxpayers, do not create employment, etc.
And yet I have met this morning one of my friends, president and sole owner of an average industry employing almost 250 skilled workers, and he told me that a few days after the budget speech he bought $80,000 worth of equipment. In the next two years, he can reap the benefits of depreciation and tax rebate. He foresees for next year a $20,000 tax saving and he intends to reinvest this amount in his company. This means therefore that his industry and working conditions will improve, his production increase and that he will provide jobs for more than 250 people in Rimouski, the town where I live.

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The Budget-Mr. G. LeBlanc
It seems therefore that the provisions concerning the corporate tax rebate and the benefits regarding depreciation will be to everyone's advantage.
If we consider also the second area where the effects of the expected growth will be felt, that is to say the very precious group formed by average Canadian taxpayers, we can assume that it is going to be encouraged. Thanks to the forecast investments and to a rational control of employment level, the pulse of the economy indicates a normal trend. And as the increase in demand can be an element of progress and well-being for average Canadians, such also could be the effects of investments on industry.
Therefore, it can be stated that not only pensioners, invalids, veterans, citizens with fixed income, secondary and consumer industries will benefit from this budget, but also average Canadians. The same as when a serum injected in one limb benefits the whole body, those two advantages that are granted to industries and those Canadians unable to face the rising cost of living will benefit Canadian society as a whole.
It is probably true to say that since 1968 the government has had to wage a severe battle against inflation and the emphasis it has now put on growth will re-awaken the inflationary trend, but this battle was necessary. We are told that other countries, including the United States, have had to wage the same fight. Everyone knows that the fight against inflation was predicted with candour and sincerity in a program which was not a compendium of wonderful and gilt-edged promises.
Important people from foreign countries state that, among all industrialized countries, Canada has had the greatest success in its fight against inflation.
As a matter of fact, in accordance with its commitments, the government has endeavoured to correct various traditional weaknesses of our economy that are due to the rapid changes that are taking place in this, the electronic age. Apart from fighting inflation, the government has tried to lighten the tax-load of low-income people and has implemented a degree of tax reform. This firmness, for which some have criticized the government, was simply a realistic and true expression of the power and the authority that have been bestowed on the government by the Canadian people.
The men who make up the present cabinet are undoubtedly the most qualified and consequently the most worthy of confidence and they have all the ability required to administer Canadian affairs for many more years to come. The cabinet is surely the best director general of Canadian affairs.
We believe that the government is doing its best to carry out its program and to achieve the human ideal of all Canadians, an ideal of liberty and civilization.
However, everyone knows that there is some room for improvement and that there always will be. With each step forward, new horizons appear.
We know that since it came to power, the Liberal government has always paid a great deal of attention to those aspects of Canadian policy which need to be improved
[Mr. LeBlanc (Rimouski).J
constantly to allow for better implementation of such policy.
Following the budget speech, we know that the government wants to, and does, improve the fate of senior citizens. Some of our elderly constituents in the province of Quebec often come to tell us about their problems. For instance, the man who is over 65 years of age and who used to receive $135 or $137 a month will now get $150, which is at last a good increase. But it happen that his wife, who is under 65 and whose situation is under the jurisdiction of the Quebec government, receives almost nothing. There is a difference in being only 60 to 65 years of age, but from a social standpoint, I cannot see any real difference between those people and those who are 65 or over. The wife's situation comes under provincial legislation and regulations, but we hope that this problem can be solved in the near future-if necessary, in a joint effort by the federal and the Quebec governments.
Also, I cannot help but congratulate the government for its new policy on Initiatives which has already been in effect for the past two years and is designed to provide an incentive to work. The Opportunities for Youth and Local Initiatives programs are already in existence. An Opportunities for Age program has been mentioned some time ago. Following a report presented several weeks ago, there has been talk of an Opportunities for Citizens program. Maybe the government could consider grouping all those programs under a single structure which could be called Citizens' Initiatives or, possibly better, Opportunies for Citizens, and would be administered by a single department.
Experience acquired in the implementation of these projects has led to some soul-searching and to the realization that the government, more than ever, should concentrate on selecting competent administrators for these programs. It might also be suitable to decentralize analyses of projects and resorting at the area, sub-area and sector levels to various social agencies and contacting municipalities which have already submitted projects in the same fields, in order to avoid duplication.
It might be well to consider reducing slightly the number of projects with social and cultural aspects-in themself excellent and highly commendable-to some 10 to 15 per cent.
Young people should be involved in Opportunities for Youth programs allowing them to carry out projects with some relationship to industry, commerce, general economy, applied sciences, trades or crafts, without conflicting with free enterprise, in order to accustom them to becoming increasingly realistic and keep both feet on the ground, as the saying goes.
In my opinion, this would benefit a lot our country and such regions as that of the Lower St. Lawrence and Gaspe, where I live, and about which the Canadian government has made special agreements; we are all pleased to co-operate and to take full advantage of them for the good of the whole people of Canada.
Mr. Speaker, I wish I could make many more remarks about these aspects of the federal policy which concern my fellow citizens: regional development, unemployment insurance, agricultural policy, in particular with regard to
June 13, 1972

feed grains, which eastern Canada enjoys. Considering the agreement we reached twenty minutes ago, I hope I shall have another opportunity of dealing again with these matters.


Mr. Rod Thomson (Battleford-Kindersley):: Mr. Speaker, yesterday the Minister of Supply and Services (Mr. Richardson) spoke in this House and indicated that purchases by his department would be spread around Canada rather than all of them being made in central Canada. I am not saying that all government purchases should be made in the Maritimes or the Prairies or in British Columbia, but since the people in those regions are taxpayers, and since the minister is spending public money, the policy the minister referred to is a logical one, and I wish to compliment the hon. gentleman on his announced intention. I feel that our business people have as much right to bid on this kind of business as do businessmen in Ontario and Quebec. I am not knocking the businessman of Ontario and Quebec when I say that; I merely wish to compliment the Minister of Supply and Services. The minister's new department has roughly $1 billion purchasing power, so I suggest that quite a bit of thought and care must be exercised. For example, his department has decided to buy salt from the United States, and as the representative of an area of Saskatchewan that has a salt mine I am not very happy with this decision. I have been protesting vigorously to the minister. The effect on local people of financial decisions made by the government is not always appreciated.
I cannot understand why the Minister of Finance did not think a little more about the farmers when he made these adjustments in his budget. I was a farmer before coming here and my equipment depreciated every year by several thousand dollars. If the minister thinks that farmers make a contribution to our economy, then he might consider giving them a 50 per cent depreciation rate on some of their equipment. This, to my knowledge, he has not done. Businessmen would also appreciate the benefits that would flow from such an adjustment.
I think we should also consider the position of some of our processors. The other day the hon. member for Fraser Valley East (Mr. Pringle) complimented the government for making the same concession to processors of farm products as it made to some other industries, and I am wondering whether the Minister of Finance would take another look at the farming industry with that point in mind. Perhaps the conception of farming held by Ottawa is a little removed from what it really is. Certainly, farming in my part of the world is quite industrialized. It is a cash basis operation; this is no longer subsistence agriculture. Farming is an industrial process and the farmers must realize an adequate income. They charge depreciation against their machinery and in most cases keep books. It is quite a commercial operation and I should like to think the Minister of Finance considers it as such.
I should like also to talk about one or two other things that have happened recently in relation to the Canadian economy. I refer specifically to the 2,000 boxcars ordered by the government. So far, there ha= been no decision on
The Budget-Mr. Thomson
who is going to pay for them, or by what method. I did notice that they are not provided for in the estimates.
I noticed, too, that the cost of improvements to the port of Prince Rupert does not appear in the estimates, either. If some announcement regarding grain storage is going to be made shortly, or there are some improvements to be made to the rail line to the west coast, then I cannot help but wonder whether these will be another example of the ad hoc planning of this government, particularly before election time. I do not think that this sort of planning is good for the country. The growth in trade to Asian rim countries has been fairly steady and consistent for some little time, so the government should have been taking steps to handle this trade over the years rather than waiting for an emergency and doing something in a crisis situation. It is said that politicians react to situations rather than act in advance, and I must say that it appears to me this is the way the government is acting. There is too much ad hoc planning.
I should like also to comment on the present value of the Canadian dollar which has an effect on trade in my area. The Canadian dollar has been rising to $1.02 or $1.03 U.S.,
, which means that the price of wheat will be affected since it is priced on the basis of the U.S. dollar. Every time the dollar goes up in value, it means that the problems of the people in my area increase. I asked the minister, the hon. member for Calgary South (Mr. Mahoney), how far the government was willing to go in backing the Canadian dollar, but he said he did not know. I should like to ask the Minister of Finance at this time how high he is going to let the Canadian dollar rise in value compared with the U.S. dollar before he will take some action. This is a question about which we are all concerned.
I also asked the hon. member for Calgary South whether any planning was being done in case the Canadian dollar reached too high a point, and he told me, "no". If the Minister of Finance cares to look at the minutes of the committee he will find that is on the record. If the minister has any plans in case the value of the Canadian dollar goes too high, he has certainly not disclosed them to us. Again, I am afraid an ad hoc decision will be made without any advance thinking being done; perhaps this will be for the best and perhaps not.
I should like to talk for a few moments about the economic development of western Canada. I do not want to be parochial because I should like to see economic development in all of Canada, but I feel more at home when talking about development in my home area. It seems to me that if we are to encourage industry to expand, we should either have a market that is already there or will be there, and we should produce a product for which there is a ready sale at hand. I am not suggesting that grain or beef or any other product that we are selling abroad are not important; rather, I am thinking of new industries. There are products that are in good local supply and these could satisfy either the local or a foreign market.
I am not absolving the provincial governments or local businesses from any responsibility in this connection, but I do want to talk about federal involvement in such developments, as I see it. I want to speak specifically about the oil industry and pipelines that will be built from northern

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The Budget-Mr. Thomson
Canada to southern Canada and the United States. I attended an oil show recently in Calgary and saw a sample piece of 48-inch pipe that was made in Regina. I was told that this was the only pipe company in Canada that made pipe that large. There was also a 48-inch valve to fit the said pipe, and this particular one was made in Alberta, a complicated but excellent product. The man who detnonstrated it to me was quite proud of the fact that it was a locally produced product.
I also saw some samples of track-truck machinery and other equipment that works well in northern Canada, some of which we have managed to sell to Russia. However, I should like to talk specifically about pipe for the moment because it is produced in my own province and we will need a lot of it in the immediate future. Eventually, there will be gas and oil pipelines down through the Mackenzie valley. It was recently announced that the Minister of Indian Affairs and Northern Development (Mr. Chretien) was going to have a survey made this summer of a possible gas pipeline route either east or west of Hudson Bay. We are talking in the order of a million tons of pipe when we talk of a pipeline along the Mackenzie valley. That is a lot of pipe. I should like to see Canadian business, including steel firms and other suppliers, put in a position to take advantage of this particular item. Had the government shown some ability to plan for the future in respect of transportation to the west coast, I would feel easier about it also doing something in this connection. This is why I am quite concerned that we look ahead. To make sure business in Canada will continue to supply jobs and provide economic activity, it should be in a position to take advantage of any natural development as a result of pipeline construction.
We have had too much ad hoc planning in the past. Let us not have more in the future. Let us look ahead. The federal government should give some direction to provincial governments in this regard, and it should give direction to business. It seems to me the government is not taking an over-all look at the problem, particularly when one considers that the market for oil and gas is to be found to a large extent in southern Canada and in the United States, while oil fields are in northern Canada. These prospective pipelines will have to cross several territories, provinces and states as well, and it is only reasonable to assume that responsibility for them will lie with the federal government. It is logical to assume that any province or individual business would be in a difficult position in attempting to assess what this project would mean to us.
A source of iron ore on the Prairies would be of great advantage to the economic development of that part of the country. We have a source of iron ore in northern Saskatchewan, although I am not prepared to suggest it is an economic source. I am not in a position to say, and no one else seems to know. The federal government should assume some responsibility for the development of a product to serve a market which already exists. I do not think this is being done. In fact, iron could be supplied to a steel industry on the Prairies and perhaps the west coast as well.
In addition to the development of pipeline services, there are a lot of other services that tend to grow as a result of the establishment of a steel industry. This development of a local steel industry would have a multiplier effect in western Canada. This has been the case in the past. When western Canada has money, it usually ends up with the manufacturing industries here in eastern Canada. This is one country, and when we do well in one part this tends to be reflected throughout the rest of the country as well.
I suggest we should do something along these lines in connection with pipelines because a great deal of time is required before an industry is capable of supplying pipe or anything else in volume. We are not going to build these pipelines all at once. We should look far enough ahead that we will be in a position to accept part of the order for pipe or other things that will be needed in the future. Let us not be in the position of having to import these items from Japan, the United Kingdom or Europe. Regina is not very many miles from Hudson Bay via the Churchill railroad, and it could be in a position to supply pipe to a great part of northern Canada. I can envisage that even a prairie industry would have a chance to compete on a local basis.
I have not kept track of my time, Mr. Speaker, but I presume you will call me to order in due course. I should like now to talk for a moment about scientific research in Canada. Scientific research is very important to the industrial development of Canada. I have suggested to the Minister of State for Science and Technology (Mr. Gillespie) that if we are to develop an industrial strategy we should make a selection of logical products for development here. I have also mentioned the steel industry with a pipeline industry as a satellite. The minister should make representations to the government in respect of things of this kind. It does not seem reasonable that we rush madly all over the place giving grants for research in all areas. Of necessity, much of the future development of Canada must be related to cold weather. The minister should be prepared to recommend expenditures in respect of obvious things, such as the development of rubber to withstand the cold, and steel that does not crystallize with frost. Surely a battery could be developed that would work better in cold weather. These are just examples of things which should be considered. I have experienced problems in respect of these items.
It would seem reasonable to spend money on the development of better products for use in cold weather. I have made this suggestion before and will continue to do so until such time as some obvious move is made in that direction. We need these things for our own use. A cat-truck has been developed in Canada and actually sold to Russia. The skidoo was developed in Quebec. This is another winter vehicle which has enjoyed great sales in the United States and has helped tremendously with our dollar surplus. These are only examples of things that can be developed, instead of spending a lot of money developing products warm weather countries have already developed. We should concentrate our research expenditure on problems which have not yet been solved. It seems reasonable that we should at least look at these problems.

June 13, 1972

Industrial strategy should be related to research efforts in the scientific field, because much of our development in the 20th century has depended on scientific research. If the government has not yet done so, it should establish a committee to study these problems and make firm recommendations as to those areas of manufacturing in this country on which we should concentrate our research. Logically we are not going to compete with countries which produce cotton cheaply. We should concentrate on those things which have a natural advantage here. A university professor in Saskatchewan said to me that we should spend more money on research in the area of wood products because of our natural source of supply. I suggest the government should look very carefully in this direction.


Mr. Walter Deakon (High Park-Humber Valley):: Mr. Speaker, in taking part in this budget debate I should first like to congratulate the Minister of Finance (Mr. Turner) on the presentation of his first budget. I had the privilege of a close association with the minister during his tenure of office as Minister of Justice. During that time he did an outstanding job, had the respect of all and was held in high esteem by members of all parties on the Committee on Justice and Legal Affairs. I wish the minister well in his new responsibilities, and I am confident he will continue his good work in his new portfolio.
During the time allotted me I should like to express some of my views on various matters, most of which have been discussed in the House but many of which were brought to my attention by constituents in the riding of High Park-Humber Valley. Knowing the congenial nature of the hon. minister, I trust he will give at least some of them consideration.
I was indeed pleased that the new budget escalated the universal old age pension in step with the cost of living changes, retroactive to January 1, 1972, and also provided an increase in the guaranteed income supplement by $15 per month, thereby raising the old age security pension for those in need from $135 to $150 for single persons and from $255 to $285 for a married couple, also retroactive to January 1, 1972. These increases were long overdue, and although I still feel more can be done to alleviate the hardships suffered by some of our elderly citizens, nevertheless it is a step in the right direction. These increases, coupled with the special tax exemption for persons 65 and over as well as the increase in exemptions for the blind and the disabled to $1,000 from $650 retroactive to January 1, 1972, will indeed be welcomed by our senior citizens.
There are, however, some other situations to which I hope the minister will give consideration. One is the situation of a husband who is physically infirm and obtaining an old age pension while his younger wife is not and, because of the disability of the husband, the wife has to look after him so, is unable to work. Unless the couple have some savings, this situation creates undue hardship on the family unit and deserves further consideration. Consideration should also be given to those on old age pensions who have saved and skimped in their younger years, denying themselves some of the better things in life
The Budget-Mr. Deakon
in order to secure protection for their later years. Often they have purchased a home and have been paying constantly increasing realty taxes. I would recommend for them that at least that portion of realty taxes allotted for educational purposes, which is the greater part of the taxes, should be permitted as a deduction from their income tax return.
Since unemployment is still our number one issue, I was happy to note that in the budget we cut corporation taxes to 40 per cent for Canadian manufacturers and processors, to be effective January 1973. The tax rate is also reduced to 20 per cent from 25 per cent on the income of manufacturers and processors eligible for small business incentive, to be effective from January, 1973. These are indeed welcome measures, but in view of the fact its effective starting date is January, 1973, corporations that are tempted by the tax cuts to expand their operations will probably not do so this year, while still others may resist the temptation, preferring to use the tax cuts to increase the dividends to their shareholders. Steps should be taken by the government to ensure that these tax cuts are employed for the purposes for which they were intended, namely the creation of jobs. The government should apply the budget's provision for a two year writeoff on the total cost of machinery and equipment to 125 per cent or 140 per cent of the cost of new capital equipment, so firms will go out and purchase machinery and equipment and put people to work now.
The government's announced increase in public spending on housing is also a welcome measure and should assist, not only in providing accommodation but also in providing employment. It is regrettable that although the money supply in Canada has gone up by 78 per cent since 1970, and last year new funds grew by $16.5 billion, so the country appears to be prosperous, nevertheless we have failed to reduce significantly the ranks of the unemployed and appear to have created an illusion of economic revival.
In this budget, we have endeavoured to help the elderly citizens and lower income groups as well as large corporations and small businesses, but regrettably we have neglected that group which pays the bulk of the income and property taxes, the ones who are supporting the economy through their purchases of homes, cars and appliances, and yet are constantly neglected and ignored. I refer to the middle income group. They pay the high cost of the educational system and, in essence, subsidize the education of the children of the poor and wealthy alike. However, their children do not qualify for student loans or grants. They work hard all their lives and subsidize those who will not work. They skimp and save to provide security in days of illness and retirement, and at the same time subsidize others who will not provide for themselves. They pay for the high cost of police supervision at demonstrations, rock festivals and for the protection of dignitaries, yet when they get into trouble with the law they receive no legal aid but have to pay their own lawyer's fees. Indeed, in some cases their opponents in court are represented by legal aid lawyers whose fees they are paying. It is this group which has been ignored too long by all levels of government, and it is they who are now entitled to serious consideration. Even when nations compete in offering tax breaks to business, the middle income

June 13, 1972
The Budget-Mr. Deakon
taxpayer gets it in the neck. The less you collect from corporations because of these tax breaks, the more you are going to take directly from this group.
I recommend that the minister seriously consider increasing the basic tax exemptions to $2,000 for single persons and $3,850 for married couples. I would also recommend that realty taxes up to $750 be deductible from income tax, together with interest paid on mortgage loans. In essence, this is double taxation and is repressive. In the case of interest on mortgage loans, the tax system is ridiculous. If I sell my home and, I am unable to obtain the full sale price in cash so take back a mortgage, I am required to declare all interest which I obtain on the mortgage as income. However, if I purchase a home to provide accommodation for myself and my family and give back a mortgage, I am not entitled to deduct the interest paid on that mortgage as an expense. I submit that these further tax concessions, by placing more funds in the hands of the consumer, would be an added stimulus to the economy.
I am glad to learn that our government, unlike the government of the United States, encourages the awareness of ethnic backgrounds. I trust that this is only a secondary aim, and that the main aim is to make us all good Canadians. I trust that our policy on multiculturism is indeed a genuine one and will not create national ghettos in this country which would be examples of old world rigidities. Whatever may be our national origin it is in our best interest not to divide but rather to draw together, remaining proud of our country of origin but also striving toward an integrated, united nation in which the aspirations and values which bind us are far more important than the things that divide us.
In the field of immigration, it was indeed refreshing to note that the Minister of Manpower and Immigration (Mr. Mackasey) has decided to increase the number of special inquiry officers needed to process the backlog of immigration cases. Occurrences such as the recent suicide of a young Polish woman wishing to obtain landed immigrant status illustrate the genuine need for immigration reform. Immigration officials cannot be blamed for all these pitfalls, and I personally can state that in dealing with the large number of immigration cases brought to my attention I have had the fullest co-operation of the officials of the Immigration Department. The fault lies mainly with our immigration laws. In this regard I should like also to bring to the attention of the law societies of the various provinces the fact that numerous notaries-I am not referring to the Quebec situation here-and travel agents are holding themselves out as immigration experts and milking large sums of money from these unfortunate immigrants, while at the same time providing incorrect or inadequate advice. This practice must be stopped.
At this time I am also pleased to state that as a result of the Prime Minister's (Mr. Trudeau) visit to the U.S.S.R. last year, and of representations made during and after the visit, I have been successful in reuniting a great number of families whose members previously resided in countries such as Czechoslovakia, Poland, Lithuania, Estonia, Latvia and the Ukraine.


Some hon. Members:: Hear, hear!


Walter Cyril Deakon: In some cases these families have been separated for more than 30 years. I am still continuing my efforts in this field, as well as carrying on negotiations for visitors' visas and the release of political prisoners presently imprisoned in the Soviet Union.
I submit further that amendments to the Citizenship Act are long overdue. There are presently gross injustices in the act preventing many residents in Canada who wish to obtain Canadian citizenship from obtaining it. The age and residence requirements should also be revised.
In view of the leading role of Canada at the environmental conference in Stockholm, may I recommend to the Minister of the Environment (Mr. Davis) that he take whatever measures are deemed necessary, in conjunction with the province of Ontario, to curtail and ultimately eliminate the pollution in the Humber River, which flows through the riding of High Park-Humber Valley into Lake Ontario, a navigable waterway.
In conclusion, Mr. Speaker, may I state that I really appreciated this opportunity to express some of my thoughts, and regardless of the criticisms, which I hope were constructive, I reiterate what I have said on many other occasions, that this land of ours, Canada, is the greatest country in the world. To realize and appreciate this one need only travel abroad, and on returning one will kiss the ground he walks on.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, first I should like to congratulate the minister for having remained in the House during the whole debate.
I wish to take the opportunity of this last day of the budget debate to deal with three matters which are very controversial in my riding and which remain one of the causes for the general displeasure showed by all of my constituents toward the administration of the present government.
I should like to call the government's attention, and in particular the minister's attention to the ever increasing problems in the area of unemployment insurance, particularly since November 1971.
When we had offices in every large community, we also had some problems, notably that of being unable to gather all the stamps of a worker who had had several jobs during the previous 104 weeks. Nevertheless, we had preserved the human contact, which is essential to any civilized society. But it seems that today, we have so much emphasized centralization that we have completely lost this human contact, and this is the most serious aspect of the problem.
They were able in my constituency to recover the services of two people who come to the offices in Dolbeau and Roberval for a few hours each week, but this is only window dressing. In fact, the problem is as serious as it ever was and it is the member of Parliament who has to act as a go-between in serious cases, which are numerous, since I have myself dealt with more than 1,000 cases since the beginning of this year. Fortunately, I get the co-operation of the whole staff in Chicoutimi, which makes every effort to give the best service possible.
June 13, 1972

But the final settlement does not rest with the staff in Chicoutimi. The Montreal office which has the computer covering the whole province of Quebec is responsible for 95 per cent of all the problems that we have to face presently. I have always held that it is dangerous to rely on one computer for issuing the cheques, without maintaining an emergency service against the possibility of machine breakdowns.
That is why we were not at all surprised to be given the same old reply: the electronic brain is out of order. Should it not be agreed that the change was made too quickly? And while the unemployed were waiting for their cheques weeks after weeks their anger fell on the officials of the Chicoutimi office, the only one left in the whole region. Indeed the local people had to get in touch with someone and this is the only office they can reach right now. I want the people to know at least where the trouble is and who are the persons really responsible for the ever-growing delays the unemployed have to put up with.
Mr. Speaker, I want to say to the government and to the minister in particular that when a worker has paid his unemployment insurance contribution, he is entitled to receive his insurance-and I do say "his insurance"- because it is not the government that pays this contribution; it has been withheld at the source without asking for any permission. This is the new democracy. And after generously helping itself, the government does not take the means to honour its contract. As a matter of fact, it resorts to any possible means to delay the payment.
If there are deficiencies in the way these benefits are paid, there are also some very serious ones in the acceptance of these same payments. How many hundreds of cases I have had to work out on this subject. The Unemployment Insurance Act is essentially quite good, but the regulations derived from it often cancel its effects and make them null and inefficient.
To prove my point, I shall give two or three examples. Take the case of work stoppage on account of illness. The act says that the insured is entitled to a maximum of 15 weeks of illness.
But is it known, Mr. Speaker, that there are regulations which determine for how long-two, three or ten weeks, depending on the type of operation or illness-a patient may receive benefits? But there is something which is even more serious: even a physicians's prescriptions are powerless against these regulations. Therefore, it is a civil servant who is neither a physician nor an orderly who will decide how many weeks an unemployed person should be ill.
I have seen many cases where even the intervention of the attending physician or specialist were of no avail. Is this situation normal in a civilized country which is sometimes considered a democracy? Really, this is the element which causes the most problems, namely, whether the decision of a civil servant, based on ridiculous regulations, should have more weight than the prescriptions of a physician.
The payment of benefits to retired workers is another litigious issue. They say that a worker will be entitled to benefits provided he refuses the Quebec pension. In any
The Budget-Mr. Gauthier
case, it is clearly specified in the act that if a man aged 65 voluntarily withdraws his Quebec pension plan he will not be entitled to receive at the same time any unemployment benefits. It is a glaring injustice which shows how deceitful a law can be. Note that this worker was obliged to contribute to the Quebec pension and the unemployment insurance plans; the premiums were nevertheless pocketed. In this field, governments are experts. To the worker compelled to abide by the two contracts they will say: we had you contribute to both plans, but we forgot to warn you that you were entitled to only one type of benefits. You have been had. I think it is the policy of any government to gull everybody for a while, but I am sure that they will not always be able to do so.
I shall mention now the case of those who leave their employment voluntarily; it is another contentious issue, Mr. Speaker. When a worker is not happy with his work or his salary, it often happens that he is forced to quit his job, and I do say "he is forced". I have seen really distressing cases; I pleaded them and I lost because the civil servants were right.
Some employers take advantage of that, particularly in springtime when jobs are rare, to have work done by employees under inhuman circumstances at excessively low salaries because they know that the workers cannot leave; if they do, they will no longer be entitled to unemployment insurance benefits or they will be deprived of them for four, five or six weeks depending upon the whim of the civil servant.
In my opinion, that section of the law is simply ridiculous because it gives every discretion to the employer over the employee and multiplies unfair practices. I simply ask the minister to consider the Unemployment Insurance Act and I am sure that he will move the amendments requested by the workers.
Furthermore, such a worker having been said to leave his job of his own free will, he is punished, as a child at school might be made to kneel in the corner, by being deprived of benefits for four, five or six weeks. He is not the one being punished, Mr. Speaker. His family will not get a penny for four, five or six weeks. Because the father could no longer endure his working conditions he had to leave his job and the whole family will have to suffer because he refused to put up with the bad treatment or poor working conditions the employer wanted to inflict upon him.
I wanted to bring this to the attention of hon. members, although I could give several other examples, but for lack of time I shall just limit my remarks. Their purpose was to call hon. members' attention to some shortcomings of the Unemployment Insurance Act.
I should like to deal briefly with another matter I hold dear because it concerns everyone in my riding. The hon. member for Fraser Valley East (Mr. Pringle) beat me to it by drawing it to the attention of the Minister of Finance yesterday. In fact, as reported in Hansard on June 12th, 1972, the hon. member said, and I quote:
However, I am disapppointed that adjustments were not announced which could correct some of the unfair anomalies relating to excise tax and sales tax. For example, tea, coffee and powdered drinks are exempt from federal sales tax. Ice cream cones, popsicles and the like are free of federal sales tax.

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Mr. Speaker, the tax on soft drinks originated simply from a wrong interpretation of the terms "food products". I find it strange that tea and coffee, for instance, as served in hotels, etc., as well as ice cream cones and powdered drinks should have been classified as food products, while soft drinks were not.
One could think the government was not well informed enough but, I feel the contrary to be true after having looked into the inquiries the government itself commissioned and having done some reading on the subject. I am referring to the 1966 report of the Carter Royal Commission of Inquiry on Taxation, from which I quote the following:
Consumption statistics reveal that expenditures on food are regressive because they represent a substantial proportion of the total expenditures of the lower income groups. If food were exempt from tax the most regressive element in a general sales tax would be eliminated. It is clear that the need for sales tax exemption of food is strong and that the need increases with family size. Moreover, a tax on food would create administrative difficulties where farmers sell produce directly to consumers-
We believe that, to avoid regressiveness, there should be no sales tax on food. Furthermore, we consider that, to avoid discrimination between food products and for ease of administration, the exemption contained in Schedule III to the Excise Tax Act should be extended to the remaining taxable food products, including margarine, confectionery products and soft drinks-
And in the Smith report, we read the following:
Using similar language to that found in the Carter report, the Smith report in Ontario also recommends that soft drinks be reclassified and exempted from the sales tax.
It states:
Ontario Committee on fiscal affairs, 1967-
We have found that, in order to avoid that the tax be a heavy burden for the low-income and large families, the exemption for food products must be maintained, in spite of the fact that, at the present time, this exemption reduces tax revenue by more than 40 per cent. But the present definition of food products is a complex one which contains many anomalies. For instance, buttered popcorn is exempted from the tax, but sugar-covered popcorn is not ... all food products for human consumption should be exempted. As we shall explain further, we see no serious inequality of treatment in the continuing taxation of prepared meals and alcoholic beverages. Accordingly, we favour exempting all edible food products, including marginal products such as candies, confectionery, soft drinks, vitamins, food supplements, diet supplements, saccharin, insulin, etc.
So, we can say that the government was perfectly well informed in this respect and I still wonder why it has not complied with numerous requests to consider soft drinks as ordinary food.
I do not think this changes a jot in the act because it is simply a matter of redefining what is a soft drink to classify it among ordinary food items.


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, in rising to speak on the first budget brought in by the new Minister of Finance (Mr. Turner), I feel compelled to make an observation that might help to explain some of its shortcomings. I should say at this point, Mr. Speaker, that the Minister of Finance has the sympathy but not the support of all members on this side, at least in my party. It is not easy for an aspirant to the leadership of his party to wear the mantle of Minister of

Finance in such a way as not to tarnish his image. I am convinced he was thrown to the wolves, and that is unfortunate. He might have brought a measure of human dignity to the leadership of the Liberal party, if he had been given the opportunity, something that has been sadly lacking in that party.
On April 27, the Leader of the Opposition (Mr. Stanfield) asked the Prime Minister (Mr. Trudeau) if he had given the Minister of Finance permission to bring down a budget. As usual, the Prime Minister avoided answering the question. On the following day the Minister of Finance announced, in answer to a question asked by the hon. member for Edmonton West (Mr. Lambert), that he would bring down a budget and table the budget papers on May 8. He had about ten days in which to throw together a budget, have it printed and drum up a little enthusiasm for what most people expected would be an election budget. I am not saying it was done in exactly that way, although it certainly looks as if it were.
If this really is an election budget, Mr. Speaker, then I am all for it. In all my years in Parliament, and I will have been here ten years next Sunday, June 18, the anniversary date of the 1962 federal election, I have never seen a budget that so clearly vindicates the Leader of the Opposition. I must say that while this budget vindicates our leader and our party in its tax reduction measures, it does not go nearly as far as we should like; however, that is understandable. This government has drifted so far from the realities of present day Canadian life and has so completely lost touch with the people, that this budget must appear to it as the great cure all. It cures nothing, Mr. Speaker, being just a palliative.
What will be the effect of this budget on the youth of our country? I am particularly concerned, because this budget has done nothing for youth, nothing for those categories of young people who are still in school or just leaving secondary school and not yet employed and who are without any present hope of obtaining employment. The Opportunities for Youth and Local Initiatives Programs are mere stopgaps; these schemes are without stability or security. Benefits for recipients are neither stable or secure. When the money the government has allocated to these programs has been spent, and do not forget that these are short term programs, Mr. Speaker, the few in each community who have been recipients of this money will be no better off, except to this extent: they will have been given two months pay. At the end of that time they will not have learned enough from those brief programs to enable them to acquire steady jobs, which need a certain amount of knowledge and limited skill if they are to be retained. And, so, these people will wander through the swamps of idleness and unemployment; they will despair of their ambitions; their spirits will be dulled and, in many cases, destroyed.
In this country, Mr. Speaker, we need an apprenticeship system for our youth similar to the old, well tried and proven English system under which young people were taught certain skills. After finishing, they stood a good chance of earning a decent living. What I am saying is borne out, I submit, by an editorial which appeared recently in the Ottawa Journal, from which I wish to
June 13, 1972

quote. The headline reads, "The Young Don't Want To Live on Welfare". The editorial reads in part:
The Canadian Council on Social Development reports startling increases in the numbers of young people on welfare-
Most of the young persons told interviewers they rejected welfare as a way of life; 97.3 per cent said welfare was only a temporary form of relief for them. More than a third considered it 'a big trap; once you get into the welfare rut, it is really hard to get away from it.'
Why are so many young people who don't want to be there, in danger of being trapped in the welfare jungle? In March, the unemployment rate for the under-25s was 11 per cent, compared with a 4.2 per cent unemployment rate for Canadians 25 and over.
This is a most depressing and worrying situation. Somehow our society in the private as well as government sectors must shape itself so that the young can go to work. If they do not it will mean far more than so many statistics about unemployed-it will mean the people who will compose the future of this nation are soured and frustrated, and their spirit no less than their citizenship will bear blighted fruit.
I sincerely hope that that possibility will not materialize. In fairness to the new Minister of Finance, I must admit that this budget is a beginning, albeit a small begining. Pensions for the elderly have been increased, no doubt in response to the urgings of the Leader of the Opposition. However, this measure stopped short of parity. To begin with, the basic pension has fallen far behind the rate of increase in the cost of living. The government appears to be hung up on the means test for the income supplement, and has again applied the modest increase to the supplement rather than to the basic pension. In addition, the government failed to take into account the abnormal rise in the cost of living which has taken place since it has been in power. The increase should, really, have reflected that rise, which has certainly been more than one of 3 i per cent. However, I would not stand in the way even of this slight increase, Mr. Speaker. Elderly pensioners in this country have waited long enough. I would not want them to wait until the government changes hands in the next few months; this, apparently, will happen.
Let me mention the efforts we have made to have pensions increased. Those of us who have been fighting for increased pensions for veterans would not mind campaigning on this budget. We could point out that, although the government has offered the veterans 3} per cent extra, their basic pension rate is still $1,000 below the level established by a previous government. Some years ago, the basic pension was set at the level of the average, annual wage of an unskilled labourer. Today, that level is at $4,500 per year. Nevertheless, the veteran's basic disability pension has been allowed to drop to $3,500. The government previous to the present one allowed this to happen, and the present government has apparently not considered the matter important enough to take corrective action.
The pledge to maintain the basic veteran's pension at the level of the annual wage of an unskilled labourer was given by an earlier parliament. As a Member of Parliament I feel bound by that pledge. It is a responsibility I cannot pass off as lightly as hon. members opposite seem able to do. When this basic level was adopted, veterans' organizations approved it as being as realistic as they could hope for and they were prepared to live with it. If the veteran's basic pension were to be raised to that level,
The Budget-Mr. Alkenbrack
the increase proposed in this budget would be acceptable. Until that is done, Mr. Speaker, I cannot accept a total increase that resembles a gratuity more than a decent living for those who have sacrificed so much for their country.
I now turn to housing, Mr. Speaker. The 11 per cent sales tax on building materials remains, despite appeals from all over Canada for its removal. Now the government, more callous than ever, has announced a new housing program which it knows it can not implement before the next election. Government members know this. This is only an attempt to get support from a great segment of the Canadian public that no longer has confidence in the Trudeau administration.
The main thrust of this budget, Mr. Speaker, is the group of measures designed to stimulate the economy by offering incentives to industry and business, and here again the Leader of the Opposition has provided the guidelines. However, Mr. Speaker, the government has once again jumped off the boat before it reached the dock. Again, we have a token gesture on the part of the government in an area that has suffered the most in our system, the free-enterprise sector.
I can agree wholeheartedly with any measures that will compensate for the shortsighted policies that have resulted in a general slowdown in the industrial and business sectors over the past four years, with a resultant escalation of unemployment. Not only is it imperative that we take steps to revitalize the economy in order to create new jobs, it must be done in order to protect jobs that presently exist. We have had no evidence of that, particularly during the past couple of weeks. While I agree in principle with the measures in the budget to encourage production, I cannot accept the government's view that they have provided the answers to the problems that exist. I do not think they have gone far enough, and I do not think that there are enough built-in incentives to create jobs as well as increase production. Jobs are not created automatically when production increases, nor are jobs created in proportion to production increases.
While I quarrel with the substance of the incentives in the budget for industry and business, I reject out of hand the spurious argument of the leader of the New Democratic Party. I do not think it is evil to make it possible for industry and business to turn a reasonable profit. Profit is the stimulus that keeps our economy vital and promotes healthy economic growth. The incentive to realize a profit from one's investments creates jobs, and that is the way jobs are created in our system. I remind the leader of the NDP that the majority of Canadians like our capitalist, free-enterprise system. Indeed, it would be well for both the Liberals and the NDP to take some notice of the rejection by the Canadian people of socialism and government control of every aspect of daily life. We in this country respect the right of free choice and the sanctity of the individual. We do not need socialism, and we do not want socialism. It would be a poor substitute for what we have now.
As with every budget tabled by this government since they gained control of our country, this budget is more

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The Budget-Mr. Alkenbrack
significant and remarkable for what is missing than for what is present. There is no mention in the budget of measures to establish a more equitable schedule of disbursements from the coffers of the Department of Regional Economic Expansion. This greatest pork barrel in the history of Canada keeps growing larger, more cumbersome and the department becomes less equitable in its approval of projects.
DREE is a political football unmatched in magnitude in the annals of Canadian government. It is a comedy of errors and, more correctly, a tragi-comedy. It is a tragedy because the money being disbursed by this department is tax money. It belongs to all Canadians. It is tragic because it is being used by this government to attempt to build political strength in areas where that strength, or support, has to be bought. It is tragic because this government cannot buy respect and support from any part of Canada with dollars, however many they are willing to spend. No government can buy respect and confidence. It must earn the confidence of the people and respect will follow. This can only be done if a government demonstrates that it is prepared to listen to the people, heed the people and govern for the people.
The mandate won by the government in the last election is not in any way reflected in this budget, Mr. Speaker. The mandate of the official opposition is, in some facets, reflected in this budget and there is a measure of poetic justice in the fact that the government is on the point of going to the Canadian people for a new mandate. There is a distinct possibility that the government will hesitate to put this budget forward as an election budget. In that case, we can expect a new one in the not too distant future, Mr. Speaker, and I can suggest what the government might put in that budget. First, it should go all the way on the recommendations of the Leader of the Opposition on old age pensions instead of stopping short of parity. There is no parity in a measure that does not take into account the rise in the cost of living, or of the fact that inflation is now out of control. I suggest that in the next budget the government restore the schedule of veterans' pensions whereby the basic pension is equal to the annual wage for unskilled labour. No one could accept a level that is lower than that for unskilled labour.
If the government is really serious about wanting a new mandate, Mr. Speaker, and I cannot imagine them wanting to give up the keys to the kingdom at this point, I suggest that they include in their election budget measures to eliminate the incredible waste that has marked their years of misrule. They should abandon the wasteful projects that are siphoning off the hard-earned tax dollars of our citizens and fire the ministers who have been handling them. They have had their fun and nothing can last forever. Just tell them that there comes a time when all good things have to end. Since the present government has been in power, just four years, the cost of government has doubled while the national budget has increased by 50 per cent. Using that as a yardstick, if the present government is returned to power, Canadians can expect their national budget to be double what it was in 1968. No one can deny that the present government is playing a dangerous game of brinkmanship with our economy. Every year that the present government is in power, we move closer to national bankruptcy. While such a prospect would play

into the hands of the socialists in our midst, it is cause for alarm for the rest of us.
I wish to refer to an editorial in today's Ottawa Journal pertaining to our National Debt. I will quote from it presently. This is a vital question. The minister has completely ignored that most onerous item, the cost of carrying the total public debt which now stands at $2,022 million for the fiscal year. We are now paying 14 per cent for our money. No home owner in Canada would accept this rate for a first mortgage on his or her dwelling. Accordingly, they ought not to tolerate a 14 per cent mortgage rate on our country. I now quote from the Ottawa Journal:
The net national debt at March 31 was $17,922,000,000, an increase of $600,000,000 compared with March 31, 1971. The gross national debt, which includes assets such as government loans, advances and investments, was $47,633,000,000, an increase of $4,658,000,000 in the year.
The cost of carrying the total public debt, chiefly in interest, rises year by year-$1,301,000,000 in 1967-68; $1,480,000,000 in 196869; $1,717,000,000 in 1969-70; $1,920,000,000 in 1970-71 and $2,122,000,000 in 1971-72.
This means that each Canadian has an interest bill of some $100 staring him in the face each year. Interest charges are not an abstraction. In 1971-72 the public debt costs were 14 per cent of the budgetary expenditure and exceeded the bill for defence.
Every government can spin a tale on how it can not help increasing debt. Yet it still seems daft always to be paying more and more in interest when money could be employed-if debt were reduced-in improving the amenities of life and reducing taxes.
If one increases the debt, one increases taxes. We must reduce our public debt to a level more in keeping with the taxpayers ability to bear it. No one can really fault a brand new Finance Minister for adopting a protectionist posture when tabling his first budget, especially if the minister concerned aspires to lead his party. However, we have reached a point at which a budget, any budget, is of paramount concern to the average Canadian citizen. We have reached a point at which a budget must reflect the government's confidence in its ability to solve serious problems and face up to the realities of Canadian life. A shrug of the shoulder is not a good substitute for concerned leadership. Nor is a budget of this sort an answer to the longstanding ills in our economic system or to the inequities suffered for so long by the disadvantaged, the elderly and the veterans. I would not say this is a budget of confidence. I call it pussyfooting around the issues.
I had hoped I would find evidence in this budget that the government plans to decelerate its reckless program of spending and direct its fiscal strength toward productive benefits for our troubled nation. The government has not done so.


Mr. Speaker:: Order.


Mr. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, the budget debate provides Members of Parliament with an opportunity to discuss important economic issues. Today, I should like to discuss what I and many of my constituents consider to be the most serious economic issue facing the country today. I refer to the problem resulting from unsatisfactory labour relations and, in particular, to the right to strike in essential industries and in the public service.
June 13, 1972

Since the beginning of this year, my city of Montreal has been plagued by a continuing wave of serious strikes. There was the common front strike of 210,000 provincial employees which lasted for 11 days. Taking part in this strike were teachers, hospital workers, court employees, hydro workers and so on. This dispute has not yet been settled. There was also a strike of blue collar workers which started back in February. The men were ordered to return to work but the strike is presently being continued. Taking part in this strike are garbage workers, traffic maintenance men, sewer workers and the like. I might also add that there were garbage strikes in Toronto and Vancouver. All these strikes are, of course, within the provincial sphere of responsibility, but I draw attention to them because they have an impact on the entire national economy and are interrelated with labour relations in the federal field.
On the federal scene we have witnessed a strike of air traffic controllers, the NABET strike and, now, the strike of longshoremen in Quebec and the St. Lawrence ports. Both the air traffic controllers strike and the longshoremen's strike have been marked by serious economic consequences not only to Quebec but to the whole nation. As a result of this experience, people in all parts of this nation at all economic levels are seeking a better way to resolve disputes between labour and management. Labour, management, government, blue collar workers, white collar workers and all serious labour analysts are reaching the conclusion that nobody gains from a long strike. This is particularly true of strikes involving essential services which enjoy a monopolistic position.
It is evident that in most strikes more is lost by the strikers than is ever gained through wage increases and better working conditions. And we must take into account losses suffered by employers, the loss of markets, sometimes permanent, loss of work in related industries, loss of production and the loss to the community as a whole. It is my opinion that the strike is an outdated weapon in accomplishing legitimate economic goals and that where essential services are involved it is a form of anarchy, a kind of warfare between vested interests. It is very often a form of blackmail directed toward the general public, a conflict which recognizes that might is right with little concern for justice or social needs.
What I say with respect to the right to strike I apply as well to the unlimited right of lock-out. The distinguishing feature of our strikes in the public service is that the public service is monopolistic and, moreover, paid for through taxation. When a certain segment of the public service goes on strike, it is in effect, attempting to reallocate the expenditure of tax money, sometimes unjustly. Alternatively, the general level of taxation is forced up. For example, a government could be forced to spend relatively more on television services than on medical care, even though a parliament or a legislature might have decided that it was more important to spend money on medical care than on television.
There are other serious side effects of strikes in essential public services. The consumer is directly affected. Society as a whole bears the brunt of such strikes twice over, first by being deprived of certain goods or services for the duration of the strike and, second, by being made
The Budget-Mr. Allmand
to pay in the form of higher prices the cost of the gains made by the unions. There is also the inflationary impact on the economy to be considered. In order to discourage public servants from striking, governments are often compelled to grant large pay increases with the object of placating the unions. Both the Economic Council of Canada and the Public Service Commission have admitted that this practice encourages prices to follow wages and contributes to the inflationary spiral.
There are other serious spill-over effects. For example, the 12-day strike by air traffic controllers in 1972 was the consequence of a $3 million difference between the government and the union. But the loss to the economy as a whole as an indirect consequence of the strike has been estimated at $150 million. So what was originally a dispute over $3 million resulted, due to the strike, in a loss to the general economy of $150 million.
I should like to refer, now, to some of the public opinion polls in connection with strikes in essential services. I shall read first the results of a public opinion survey published in the Ottawa Citizen on April 29. The question was as follows:
Some people believe the right to strike has outlived its usefulness and that before any strike is permitted both management and labour should agree to abide by a voluntary arbitration decision for at least a year. Do you favour or oppose such a plan?
On a national basis, 78 per cent were in favour, 12 per cent opposed and 10 per cent undecided. In labour homes, 74 per cent were in favour, 16 per cent opposed and 10 per cent undecided. In executive and professional homes, 81 per cent were in favour, 13 per cent opposed and 6 per cent undecided. The results of a national Gallup Poll were published in the Montreal Star on May 15. The following question was asked:
What about strikes in occupations where the public is seriously inconvenienced-such as strikes by employees of the postal service, airlines, railroads or the telephone service; do you think they should or should not be permitted to strike?
On a national basis, 32 per cent said they should be permitted, 57 per cent said they should not and 11 per cent were undecided. In union homes, the corresponding figures were 48 per cent, 41 per cent and 11 per cent and in non-union homes, 61 per cent, 28 per cent and 11 per cent.
Another poll was carried out by the Canadian Institute of Public Opinion and the results were published in the Ottawa Citizen on April 19-these are all recent polls. The question read:
As you know, there have been a number of strikes recently. In general, how serious do you think such strikes are for the Canadian economy?
I shall summarize by simply saying that in non-union homes 68 per cent of those asked described the effect as very serious, 25 per cent as fairly serious and 4 per cent as not very serious.
I should like to refer as well to some statements made recently by Mr. George Meany, head of the AF of L-CIO in the United States. According to Mr. Meany, labour should voluntarily replace strikes with reliance upon binding arbitration for a one year period. He said that the strike is a 19th century tactic, and with the advent of corporate giants and correspondingly super-unions, strikes become even-matched struggles which drag on for

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The Budget-Mr. Allmand
weeks, radiating economic shock waves far beyond the limits of the actual conflict. That is what Mr. George Meany, one of the top union executives in the world today, has said about strikes. While it is easy to recognize the frustration of management, of labour and the public with respect to such strikes, it is not easy to find workable solutions. Extremely complex problems are involved and there are no panaceas. The suggestion that we can solve the problem merely by making strikes illegal is totally unrealistic. The mere passage of a law declaring a strike illegal may not settle anything.
The present longshoremen's strike in Montreal is illegal. The Montreal policemen's strike which took place a few years ago was illegal. We have had many serious strikes which were not legal. In Australia, where there is compulsory arbitration, there are five times as many illegal strikes as there are legal strikes in Canada.
The problem with illegal strikes is to find an appropriate sanction that will deter such strikes or prevent them happening. Some suggest fines against the union, the union leaders or the strikers, but it is not always easy to enforce execution of such a provision. Others suggest that we put strikers or union leaders in jail; but we cannot jail all the strikers in a large strike, and even if we could this would not provide us with the services needed. We cannot pick men off the street to fill highly skilled and difficult jobs. With regard to jailing union leaders, we have seen that such a measure can easily lead to an escalation of the dispute and perhaps to serious political confrontation. Others suggest decertification, withdrawal of the checkoff provision, or similar sanctions.
Many would argue that the most effective sanction and the greatest incentive to settle a dispute is loss of wages to workers and loss of revenue to employers. Many believe that this is the most important sanction that will lead both sides to negotiate a settlement. I shall point out later that many experts today question that particular means of settlement in certain public service and essential services disputes.
Even if we could legislate men to stay on the job, we cannot guarantee that we will get better results. We may still be faced with work to rule situations, slowdowns, wildcat strikes, product sabotage, rotating strikes and study sessions. All these tactics have been used by unions when they have deep founded grievances and no other method of settling them. In recent years there has been great concern voiced by many Canadians on this subject and there have been several studies, royal commissions and legislative provisions. In 1967 this Parliament passed the Public Service Staff Relations Act after exhaustive committee hearings. This law gave the public service unions the right to organize, to carry on collective bargaining and to strike. The right to strike was provided for, except in the case of designated employees whose duties were necessary for public safety and security. I presume the groups covered by that provision were the RCMP, the armed forces and other similar groups.
It was stipulated in that law that unions could opt for one of two routes; either for binding arbitration or for the right to strike. The majority of the unions opted for the

arbitration route at the beginning, and I should like to refer to the percentage that did so. During the initial stages after passage of the Public Service Staff Relations Act in 1967 there were 81 occupational groups that applied for certification. Of those 81 groups only 10 opted for the strike route; all the others opted for the arbitration route. However, as of March 1972 the number of groups opting for the strike route had increased from 10 to 18, with the number of employees involved rising from 38,000 to 64,000.
We might ask what is the reason for this change from 10 to 18 groups in favour of the strike route as opposed to the arbitration route. Some have argued that those who originally chose the arbitration route found that they got smaller settlements than unions in the private sector who had the right to strike. Businessmen and others in the private sector should remember this when they criticize different governments for giving the right to strike to the public service. They cannot expect workers in the public service to accept smaller wage increases through arbitration procedures when they see their co-workers in private industry negotiating higher settlements with the threat of a strike hanging over the whole issue.
In 1967, the government of Lester Pearson appointed the Woods commission task force on labour relations. I should like to give the House some of the findings that commission made with respect to strikes in essential services and in the public sector. The commission said that in their view collective bargaining was the most acceptable form of resolving disputes. They said that this "antagonistic co-operation" must be contained, however, in the interests of labour, management and the public. They recommended that the services of a conciliation officer be imposed on the parties before they are permitted to engage in a strike or lockout. They also said that it was extremely difficult to say in advance in what industry resort to strike our lockout should be curtailed, and that the length of a strike or lockout is frequently the critical factor in such an assessment. They felt that we should have a flexible approach and that the determination that a given stoppage of work should be terminated in the public interest was a political decision. They said this political element is an inducement to the parties to drive them to settle their dispute.
I wanted to go into the whole subject, which I consider to be most important, in great detail, Mr. Speaker, and I was going to refer to the experience of other countries. However, since preparing my remarks the time of speeches has been reduced from half an hour to 20 minutes, so I shall have to skip a lot of what I was going to say. Therefore, I will come to my concluding remarks since I have only a few minutes left.
One of the principal points that I want to make is that in addition to the right to strike and the right to lockout there should be a right to service, especially essential services. The basis of the right to strike, which is that the cost to both union and to management will eventually force both to arrive at a compromise, I submit is no longer valid since, first of all, the cost of many strikes is now borne by the public, particularly in the service industries such as transport, education, garbage removal and so on. Second, in other cases the cost of a strike is carried by
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suppliers and sellers of a product. For example, a recent cannery strike ruined many small tomato growers, while only inconveniencing the union and the management of the cannery. There may have been no cost to management or labour.
The spread of techniques to save management from loss is shown in the agreement that when one airline is struck the extra revenue gained by other airlines is given, after deduction of costs, to the struck airline, or management can simply raise prices. Workers can often expect to make up their lost wages in overtime. In a recent New York school teachers' strike, the teachers demanded the opportunity of extra teaching time, even if much of it were useless. In short, the cost of most strikes is now paid by the public. Consequently, we must recognize a new right, the right to public services. I believe firmly what we must do is make the arbitration provisions in our Public Service Staff Relations Act more attractive so that more of our unions in the public service field will resort to arbitration rather than to the strike.
We should also assure that there are better grievance, conciliation and mediation facilities. We should provide for continuous bargaining to get to the trouble spots well in advance. In respect of essential services where a strike may seriously affect the economy, public health or safety, there must be provisions to prevent or end such strikes. Such provisions now exist in the act, but maybe they should be extended. It is merely a question as to where we draw the line. Parliament has always reserved the right to pass special legislation to end a strike and this has been done on several occasions. The question arises again as to whether this right may be left with Parliament or whether it should be delegated to the government to use as it sees fit.
Before I conclude, I should just like to emphasize these points. We must seriously re-examine our labour laws, especially those relating to essential and public services. We must admit that some factors do not apply today as they applied in the 1920's, 1930's and the 1940's, when labour was poorly organized and often exploited; nor is management organized in the same way. We must recognize the public's right to services, especially the right to basic essential services such as security, safety, health care and so on. We must recognize the right of elected officials to determine the priorities in allocating tax funds and the general level of taxation in order to serve the general needs of all the population, not just the demands of organized labor.


The Acting Speaker (Mr. Boulanger):: Order, please. I regret that I must inform the hon. member that his allotted time has expired.


William Skoreyko: Mr. Speaker, I thank you for giving me the opportunity this afternoon to participate in this debate. I am delighted to participate for a number of reasons, but first because there was so much time spent in the committee and, indeed, by this House dealing initially with that voluminous document. I am delighted to participate because the new Minister of Finance (Mr. Turner) is sincerely trying to find a work-
The Budget-Mr. Skoreyko
able plan in the mess he inherited from the former minister of finance.
Before I get to the budget itself, I should like to take the opportunity to congratulate the hon. member for Edmonton Centre (Mr. Paproski) and the hon. member for High Park-Humber Valley (Mr. Deakon), both of whom dealt rather extensively with the inadequacies of our immigration laws as they exist today. I intended initially to deal with some of the anomalies of that act, hoping to give those Canadians, seven million in number, who are of European or other extraction than English or French an opportunity of feeling they are part of the Canadian community. I think those two gentlemen covered the inadequacies of that act, so I will not deal with it further.
Referring to the budget itself, sometimes referred to as the pride of the Liberal party, it is amazing to recognize how quickly this government points out that there are so many thousands of Canadians who will not pay any tax at all, or will indeed have their tax reduced, while at the same time they say nothing about the thousands who will pay much more. I liken this budget to FISP and other family allowance programs recently before this House because the Liberals went across the country publicizing the fact that, under these plans, 1.5 million Canadians would get more, but they said not one word about the 1,200,000 who would get nothing.
It is true that through the budget the government has reduced corporate taxes, but it has said nothing about how it is going to maintain that tax reduction. This is a temporary measure, of course, to say the least, in the absence of any consultation with the provinces about proposed reductions in their corporate income tax. These proposed reductions depend entirely on provincial governments not changing their corporate tax structure. I should like the minister to indicate whether he has had consultation with provincial governments in this regard. I should like to know whether he has dealt to any extent with the 30 per cent credit for dividends from taxable corporations which would only have effect if provincial governments do not change their structure or grant similar credits. Will the minister consult provincial governments in this regard so the corporate structure of Canada can be made aware of provincial attitudes?
There is something wrong with government fiscal and monetary planning when we find small businessmen feeling pinched day after day, many of whom have been going out of business because there was nothing for them in the budget. There is something wrong when we find municipalities arranging their financing needs or borrowings out of the country in order to make a saving. They can get reduced interest rates. There is something wrong when we find municipalities begging for funds and assistance to establish land banks for future use. Whatever money is available to them now for this purpose comes from foreign countries. There is something wrong with the budgetary processes and policies of this government when in urban centres in Canada it is virtually impossible to build a modest home for under $18,000; when the cost of living in this country is going up constantly, and when unemployment is increasing rather than decreasing. There is something wrong when the Minister of Finance, new as he is, stands pat on a budget which is devoid of

June 13, 1972
The Budget-Mr. Skoreyko
remedies for the ills of our economy. There is something wrong when the government has to resort to stop-gap measures such as LIP and the Opportunities for Youth program instead of creating the kind of economy which would provide the long-term jobs that the youth of our country are looking for and need.
Getting back to what the minister may or may not have done with the provinces, I should like to pursue this matter a little further to find out what undertakings he has received from various levels of government across the country. In the absence of such undertakings, the tax proposals in this budget could further widen the regional economic gap in Canada. One can foresee corporations phasing out their operations and moving from one area or province to another to take advantage of the absence of estate or gift taxes. In spite of DREE, these moves will take place, particularly in circumstances where existing plant facilities have been fully depreciated. One major move out of any number of regions in Canada could create untold hardship on the citizenry.
I would like to know if the minister, since taking over the Benson brainchild, has given the fullest consideration to the impact on the free enterprise posture of the country of the imposition of the capital gains tax. Has the minister seen what has happened to the corporate profit structure in the country since 1968? I wonder if he is aware that the best performance of the corporate structure in Canada was before the 1968 general election. I wonder, also, if he is aware of the impact on entrepreneurs of the dividend tax credit proposals. Is he aware that the industrial structure of this country which is most capable of buying Canada back has had, by these tax measures, its appeal to making investments in Canadian corporations made less attractive than ever before?
I wonder if the minister is aware of what has happened to taxable income in the rural communities, the farming enterprise of our country, in recent years. Is he aware of the declining total tax payable by the agricultural sector of our country? Does he know that since 1968 the agricultural economy of the prairie provinces has dropped and is staying at that low level, yet there is nothing in the budget to ease the burden of the farmer? I am expecting, Mr. Speaker, that the attitude of the new Minister of Finance may not be the same as that of the former minister toward the western provinces.
Another strikingly strange development in the House over the months has been the silence of those who expounded views on Canadian nationalism and economic nationalism. Almost daily in this House, and certainly two or three times a week, the NDP asked the government what they were going to do about buying Canada back. Suddenly there was DISC, and suddenly there was a surtax. Just as suddenly, the NDP and the Liberals who spoke about the possibility of buying Canada back clammed up; there was no more interest in economic nationalism.
What would be the result if foreign investment withdrew from the country? I would not suggest that the nation would go bankrupt immediately, but certainly the standard of living would drop to anywhere between 40 per

cent to 60 per cent of what it is now. I ask how many Canadians are prepared to give up 10 to 15 years of this standard of living to buy back foreign-owned Canadian industry. However, there are reasonable alternatives and solutions with a minimum of impact on foreign investors which would at the same time encourage Canadian investors to invest in Canada more.
For a nation that is some 100 years old in terms of governing ourselves, the lack of attention given to corporate law is most deplorable. I have no qualms about attracting foreign investment to Canada. Let us invite the wealthy nations of the world to bring in all the capital they can spare. We need all the capital we can get. That is how Canada was built in the first place. But we need rules and guidelines.
Let us deal for a moment with a hypothetical situation and take Germany as an example. That country invests in Canada $100 million in German marks deposited in Canadian banks. They would have to search out our export and import markets in the hope of selling and buying goods from Canada, because for a number of reasons they would have a major investment in Canada and would have to negotiate a trade arrangement to get back some of the invested money.
What is needed is a set of foreign investment laws or guidelines so that the multinational corporations would know what they have to live with. The foreign investor will not, and cannot be expected to invest in Canada or in any other country where there is any threat of nationalization or takeover. Assurances must be given that the laws governing foreign investors can be tolerated. I give the example of a law passed in Mexico not many years ago under which it became illegal for any foreigner to own more than 49 per cent of a corporation or business in that country-51 per cent had to be Mexican owned. Yet in the long run that legislation has not stopped foreign investment in Mexico.
On the other hand, let us examine the example of the Bahama Islands. The picture is entirely different. Foreign investment has dried up almost totally there because of the government's negative attitude toward foreign investors. Surely the minister knows that acceptable foreign investment guidelines and laws can be formulated. The present foreign takeover policy, the Gray report, is meaningless and gutless. It reflects only the incompetence of this government to deal seriously with the problem. In the absence of a sound, long-term policy in this area the government has had to resort to political gimmickry in an attempt to dupe the Canadian people into believing that they have taken serious steps in an area of great concern to many Canadians when in fact they have done nothing.
I want to see a great deal of foreign investment in Canada, but I want to see it here in cash. I want to see multinational corporations with established credit bring cold, hard currency into this country and put it to work. I do not want to see multinational corporations borrowing from our leading institutions, because of their multinational credit ability, so as to acquire Canadian companies. In far too many cases the acquisition of Canadian industry by the transfer of shares and the acquisition of necessary credit from Canadian banks has resulted in a Canadian-owned company becoming foreign controlled.
June 13, 1972

I do not find withholding taxes offensive. I am sure that most corporations cannot dispute the validity of a just withholding tax. The other disaster, of course, as it has its impact on the Canadian corporate structure and is the direct responsibility of this government, is the floating of the Canadian dollar. The long-term adverse consequences of that move have not yet been fully realized.
There are other serious government instrusions into the corporate sector of the country. We have the competition act and the new labour act. Some of the strangest thinking emerges from this government on occasion. Millions of dollars are poured into the Canadian industrial complex to stimulate the economy, to stimulate business activity, to create jobs and to create business stability. DREE is trying to do all this, and the government after all this effort then introduces the competition act. The explanatory notes or preamble state that a dynamic and efficient market economy is the basis of the Canadian economic system and that the purpose of the competition policy is to keep the market as efficient as possible. Those are beautiful words. But what is necessary for a good and orderly market economy? There are a number of things necessary. There is the right of people to produce, the right of people to buy, the right of people to sell, the right of people to distribute goods and services of their own choosing, the freedom of an individual to do what he wants to do and how he wants to do it.
If you subject our industrial complex to rules and regulations that govern all aspects of commercial life, if the restrictions are so all-encompassing, so restrictive, so extensive as to regulate individual action, then those rules are no longer defensible. The sum total of restrictive legislation is that it leaves no area of freedom. The competition act is not only highly complicated but it is an administrative nightmare; it is unworkable from the business point of view. Instead of promoting efficiency and more vigorous competition, the reverse will be the end result; we will get less efficiency, less competition and less production.
A more serious effect could be that the industrial complex in Canada will have to seek greater integration with the United States of America and surely will be compelled to develop very different economic policies both domestically and internationally. I presume my time has expired, Mr. Speaker.


Mr. Bill Knight (Assiniboia):: Mr. Speaker, I take part in this debate to outline some of the concerns I have about the government's proposals within the budget. I begin by complimenting the hon. member who has just finished speaking for outlining the basic philosophy taken by the Conservative party. He outlined a policy on the one hand of saying the government does not go anywhere in terms of its foreign ownership legislation, and on the other hand of calling for absolutely no restriction on foreign investment. I suppose, Mr. Speaker, that they are trying to walk a middle line. Sometimes this works for some groups, but I suggest to Her Majesty's Loyal Opposition that the people of Canada are waiting for some direct and comprehensive policies on their part and not a continuation of
The Budget-Mr. Knight
their trying to walk a middle line, trying to go in two different directions at the same time.
This budget was introduced as one-
-to buttress the Canadian economy, to provide incentives for Canadian industry to grow and compete and provide jobs.
The document entitled "Budget Highlights" described permanent incentives to strengthen the competitive position of our manufacturing and processing industries as follows:
General corporate tax rate reduced to 40 per cent on Canadian manufacturing and processing income only, effective January 1, 1973.
Tax rate reduced to 20 per cent from 25 per cent on manufacturing and processing income eligible for small business incentive, effective January 1,1973.
Two year write-off introduced for machinery and equipment... for manufacturing or processing in Canada.
That was assumed to give the Canadian economy the incentive to create employment, to go ahead in terms of benefits with jobs for Canadians, With all due respect, may I point out to the government that there is no guarantee that tax cuts of this nature will go into the development of more jobs for Canadians, that in fact the only role this kind of budget plays is in fattening the profits of corporate interests. There is no guarantee in the budget of one more job being created. One can only wonder who are the types who can praise this type of budget. I note that in the Toronto Globe and Mail of June 7, the president of the Canadian Manufacturers Association was reported as saying:
This is a Minister of Finance who speaks our language ... he did not deliver more than was necessary, but he did deliver, and come next January we will feel the beneficial effects.
I wonder who the "we" will be. I assume it will not be the vast majority of the Canadian people. The "we" will be the corporate interests in the Canadian Manufacturers Association. That is a fundamental point in describing the philosophy of the government toward multinational corporations. It is coupled with a piecemeal, loose, totally irrelevant piece of legislation concerning foreign ownership. In the finance committee today we were given a complete outline of how this legislation is worse than useless. That will be a committee report which every member of this House should read.
What did the budget do in terms of the agricultural sector of the economy? It did nothing. As a matter of fact, in terms of manufacturing and processing, in terms of who will have their taxes reduced, the ways and means resolutions accompanying the minister's speech provide as follows:
-for the purposes of this provision "Canadian manufacturing and processing profits" of a corporation for a taxation year means the amount, determined under rules prescribed for that purpose by regulation made on the recommendation of the Minister of Finance, of a corporation's income for a taxation year from the manufacturing or processing in Canada by it of goods for sale or lease except that, for the purposes of this provision, the manufacturing or processing of goods for sale or lease does not include
(e)	farming or fishing including the processing of any produce of
farming or fishing for the purpose of preparing that produce for
marketing,
(f)	logging including the processing of timber in the course of
logging operations-

The Budget-Mr. Knight
Farming and fishing, including the processing of any produce of farming and fishing for the purpose of preparing the produce for marketing, will not be included. When he was questioned in the agricultural committee, the Minister of Agriculture (Mr. Olson) showed that he was not even aware of this particular aspect of the budget. His government has given no answer to the question as to whether this tax cut will in any way be related to the agricultural industry.
At the same time as that problem develops, we see at page 22 of the booklet entitled "How Your Tax Dollar is Spent" that two cents of each tax dollar will go to the agricultural industry. In terms of the importance and significance of this industry, that is a disgusting, almost irrelevant situation created by the government which offers nothing more than corporate tax write-offs without dealing with the basic problems of the individual, of the personal income taxpayers who include the farmers.
At the same time as this government introduces fantastic cuts in corporation taxes, we remember how over the years they have proposed to introduce so-called tax reform. Last fall they claimed there would be a more equitable tax system and that they would be carrying out the recommendations contained in the Carter commission report, the concept that a buck is a buck. Then they backed down, and we still have a tax system of special privilege where a single person earning $10,000 a year in wages or salary pays $2,285 in taxes, the individual making $10,000 a year through capital pays $833 in taxes, and the individual earning $10,000 in dividends from a Canadian corporation pays a mere $193 or less. Under this Liberal government that is what is called a just society. But in the spring they brought in a budget which further reduces taxes paid by corporations. They have the gall to call this equity in our tax system.
Mr. Speaker, there has been some suggestion that the cut in corporation taxes will help our industries to react to the United States DISC program. However, it is interesting that in the finance committee today it was learned that a company can very easily keep the manufacturing of auto parts in the United States and set up the assembly plant in Canada, thus benefiting from the DISC program in the United States and the corporation tax cuts in this country. This is an atrocious manner in which to run a government and it is an atrocious claim that employment will be created through this kind of activity.
Today we have seen the unemployment figures and note no substantial change. This budget is not an answer to the unemployment problem. What is the alternative that the Tory party has been suggesting in the last couple of years for the more equitable distribution of income and the creation of full employment? All we have is a greater cry for some kind of incentive, a greater cry for a further reduction in corporation taxes, a greater cry to treat the large corporate interests in an easier manner than even this government has done. But Mr. Speaker, that is even less of a solution than what is proposed in this budget.
As time goes on we must decide the economic policy of this country. We need to develop an industrial strategy related to the creation of full employment while at the

same time attacking the problems of inflation. Until the government develops a full industrial strategy instead of merely putting band aids on those parts of the economic system that keep splitting, we will not develop anything like a just society or the kind of society where each knows that the other is paying his fair share of taxes.
This government could easily have used the money provided to the corporations by way of tax cuts to reduce the taxes of the individual taxpayer in the lower and middle-income groups. This would create considerable consumer demand for goods, thus creating employment and providing for the money to flow back into the economy. But neither this government nor, I would suggest, the official opposition are going to forget their friends who sit in the corporate boardrooms and cry for concessions in order to make greater profits.
There has been considerable talk in this budget debate, Mr. Speaker, about foreign takeovers and direct investment, particularly by members of the Tory party. They say that if foreign investment were curtailed it would be a disaster for Canada, ignoring the sound economic statement made by the hon. member for Duvernay (Mr. Kier-ans) who pointed out that investment in this country is not so much the problem as is the expansion of foreign firms already operating within the Canadian economy. If we are to survive in the twentieth century as an independent nation, this is the problem we must come to grips with. This budget does not deal with the farmer, the small businessman, the ordinary citizen of Canada; it deals mainly with the corporate interests and the self-interests of the party in power.
May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Boulanger):: It being six o'clock, 1 do now leave the chair until eight o'clock.
At 6 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
William George Knight: Mr. Speaker, just before six o'clock when the House adjourned for the dinner hour I was discussing the fallacy behind the corporation taxation cuts, suggesting they would not affect the ordinary citizen of Canada. I referred to the economics relating to those cuts and suggested it was a fallacy to assume that such cuts would be instrumental in creating jobs for Canadian citizens. I submit they will merely provide additional profits for the corporations involved.
I said that in the last few years our tax system has been changing constantly. The Carter commission's report was brought down, then the white paper was presented by the former minister of finance. The House debated the so-called tax reform bill in the previous session. Amendment were moved to that bill, and then those amendments were amended. Now the government has introduced a budget which totally disregards equity in our tax system. So we have seen considerable changes. One might say this situa-
June 13, 1972

tion can be compared to a caterpillar turning into a butterfly: the butterfly is not half as pretty as one might expect. We live in a society that is still full of inequities. These extend to our tax system and to the special privileges this government has given to the private, corporate sector of the economy.


Mr. Maurice Dupras (Labelle):: Mr. Speaker, I wish first of all to commend the Minister of Finance (Mr. Turner) for his budget, which has been realistic in all respects, taking into account the difficulties of our times and tending to create employment, something which we greatly appreciate.
The welcome given that budget by the Canadian people is a good indication that the minister, who has been holding his portfolio for only a short while, will be as successful in his new functions as he has been in his capacity as Minister of Justice.
As I said the measures which he announced in his speech have been welcome by most Canadians who have judged them objectively. For that matter some have already been passed and more than 1,800,000 Canadians are taking advantage of them.
Those measures are consistent with the spirit of the white paper tabled recently by the Minister of National Health and Welfare (Mr. Munro), which set objectives for those Canadians who are concerned about creating a more viable social environment. It is therefore natural that sufficient income should be guaranteed everyone within a federal state.
The budget speech also announced fiscal measures to stimulate the economy, measures that I should like to dwell upon at greater length to bring out those elements capable of promoting the creation of new jobs. All the advantages stemming from those measures are possible and are given the Canadians without tax increases.
The minister has been accused of having brought down an election budget. Mr. Speaker, the same accusations were made by the hon. member for Prince Edward-Hast-ings (Mr. Hees) in june 1971, when the Minister of Finance (Mr. Benson) brought down his budget. The hon. member was so convinced he was right at that time, that he even had the audacity and arrogance of betting that a general election would be held in the fall of 1971. Each budget, over the past two years, has brought forth the same reaction from opposition members. They clamour that an election is close at hand. How can they, on the one hand, accuse the government of introducing an election budget, then on the other say there is nothing in the budget? The only ones to be taken in by that little game, Mr. Speaker, would seem to be the press, who trumpet forth that there will soon be an election, because a number of opposition members say so.

Among the social meausres indicated in the budget speech is the escalation of the basic old age security pension to the full increase in the consumer price index, effective January, 1972, and the increase in the maximum payment under the combined old age security guaranteed
The Budget-Mr. Dupras
income supplement by $15 per month for a single person and $30 for a married couple as of January, 1972, with full escalation after April, 1973.
The announcement of these measures, together with the special exemption for taxpayers aged 65 and over to $1,000 from $650, along with a similar exemption for the blind and those confined to bed or wheelchair, came as a consequence of the will of the government to enlist the economy of the country in reaching the objectives of human development and social justice. In this endeavour the measures announced are a step in the right direction.
The increase in the old age security guaranteed income supplement is a recognition of the important contribution the people receiving it today brought to our country in their productive years, a large number in wartime, working long hours in war plants or on farms, contributing with their income tax to finance their country's total war effort. They were in the front line as active participants in the development of our country. They helped bring into being this great Canada that has so much to offer to the young generation, and they did it without many of the social benefits which today we take for granted. I have no resistance to giving our senior citizens a better life. There is no conflict in my mind as to the distribution of social assistance. While I recognize that we must give some priority to youth, we must not neglect our senior citizens.

The budget, Mr. Speaker, justifiably I believe, has been called a budget for old people, young people and industry. First of all, it seeks to restore the competitive potential to Canada's manufacturing industry. It also aims at neutralizing the impact on the country's economy of recent changes which have taken place on the international scene, such as the emergence of new trading powers like Japan and the nations belonging to the extended European Economic Community, or the protectionist trend imparted by the Nixon administration to the commercial policy of the United States. Furthermore, it aims at improving the economic status of several more or less marginal groups of citizens: old people, veterans, students, people who require medical care and those in need of transportation for the purpose of receiving medical treatment. Finally, it is aimed at speeding up as a result the creation of permanent and lasting employment.
Those announced measures are an indication that the minister has faith in the Canadian industry. The effect of those provisions on the economy is largely dependent on the willingness of the industry in each province to take advantage of the proposed tax concessions. It is also an act of faith in the economic potential of the country which has succeeded in creating more employment than several European industrialized countries combined.
The tax concessions granted to the manufacturing and processing industries will from now on quite favourably compare with those already granted abroad, especially in the United States' and the member countries of the European Common Market.
Consequently, it is to be expected that those measures will surely become substantial incentives for the establishment in Canada of new manufacturing plants or for the expansion of existing facilities by allowing the increase of

June 13, 1972
The Budget-Mr. Dupras
the income to be produced finally by the capital they will have invested.
Those measures may also be a first step towards the adoption of a national industrial strategy taking into account the needs of the various industrial sectors in our country. In our view, the best industrial policy would be to concentrate our efforts on those fields in which we are already successful.
The number of our achievements in industry may be most impressive, but we must still concentrate on traditional activities which have enabled us to demonstrate our capabilities to all other countries.
Among these activities, there is, for instance, the pulp and paper industry which is still recovering from last year's slump which was one of the worst in the past 40 years. Seldom have so many adverse factors come together in such a short time, in one particular industry: precipitation of the Kennedy Round tariff agreements, increase in value of the Canadian dollar which has now gone up nearly 10 per cent compared to 1970; finally, the 10 per cent American surcharge imposed last August, and a slowdown of the economic activity.
As a result, plants in Canada have been forced to reduce production to avoid the accumulation of excessive inventories whereas during the previous years many of them had increased their production capacity so as to be in a position to meet a world demand which was expected to be higher than it has really been. Many of these companies have had to establish large-scale programs to cut all non-essential expenses and consequently they have had to reduce to less than $50 million in 1971 their expenses for new machinery, compared with an annual average of $150 million over the previous ten years.
Another field in which we excel is aeronautics. The aircraft industry is one of the most important employers in this country, particularly as far as the production of the short take-off and landing aircraft (STOL) is concerned.
The products of this important industry are very popular throughout the world and we see Caribou, Otter and Beaver aircraft used both in highly industrialized countries and in the bush of under-developed countries.
If we want our sales promotion campaign to be successful, we must necessarily demonstrate the great merits of the STOL aircraft. It is up to us, the manufacturers, to use it, to show its great usefulness to the best advantage and to advertise its relatively low cost.
Mr. Speaker, I do not understand the remarks the hon. member for Duvernay (Mr. Kierans) made and which can be found in Hansard for June 5, on page 2847, while dealing with the act on the review of acquisitions of control of Canadian business by foreigners. I quote:
Technology for what? To produce things people do not want. It may be the moon, supersonic aircraft or technology to provide services the people do not want. They have the same priorities for destroyers, CF-5's or hydrofoils. Now, the current one going on is that somehow there is a technology of STOL aircraft-
-for Short Take-Off and Landing-

-which might place Canada in the forefront.
Mr. Speaker, our interest in this aircraft is quite obvious: both in the development and sale of such aircraft, we should consider the possibility of giving a Canadian industry a development which would place it among the most important in the world. Our intention to use these aircraft between Montreal and Ottawa to test their value and that of other electronic devices connected with this type of operation is justified.
Again, I don't understand why the former minister is questionning the wisdom of the government in establishing this type of service between Montreal and Ottawa.
I do not think it is aimed at saving a few minutes to hon. members and other travelers, but by helping an industry which has given proof of its efficiency it is a way of demonstrating that the aircraft has a wide range of possibilities.
Neither do we intend to underestimate the importance of the manufacturing and service sectors in which we excel; we must also encourage the development of the primary industry. We could hardly expect the establishment of an expansion-oriented policy without national development in this field of activity. We obviously need a balanced expansion and we should move toward a national strategy.
In drawing up this industrial policy, we should take into account that belief which is of concern to our fellow citizens to the effect that we exercise a kind of monopoly over our natural resources and that we can exact a ransom from all other countries by using such resources as a bargaining tool in international trade negotiations.
I believe, Mr. Speaker, that nothing can be farther removed from the truth than this belief and I find this argument utterly absurd. We are surely the largest producers of some metals such as nickel and zinc. As for other important metals, our reserves are considerably smaller.
Moreover, Mr. Speaker, the statement that the rest of the world would use up its mineral reserves thus increasing the value of ours is not true in terms of mineral products, since the possibilities of new discoveries on land, apart from the sea bottom, continue to exist. Land and sea contain unlimited amounts of most metals. Technology will certainly make these reserves available to us.
Indeed, our mineral resources are only valuable when they are discovered, mined and developed and if we do not reach this goal, we run the risk of losing our position on the world market. Those who believe we should spare our natural non-renewable resources should take into account that the need for some of them can disappear. Without running the risk of using up our present reserves, it would be unwise on our part not to develop them and, later on, possibly face the situation where the demand for such supposedly limited reserves of the mineral could progressively decrease on world markets.
I think for instance of coal which is mined in the eastern part of the country but which is needed increasingly less.
The changes in technology indicate that it is not impossible that natural non-renewable resources which we consider so important today because of their value can be
June 13, 1972

replaced tomorrow by others of easier extraction and cheaper development.


Mr. Melvin McQuaid (Cardigan):: Mr. Speaker, I welcome the opportunity to participate for a few minutes in this debate. I feel that at the outset I should warn Your Honour that my remarks will be of a somewhat parochial nature inasmuch as I propose to deal with the serious economic situation facing the Atlantic area. I make absolutely no apology for this approach, because the economy of the Atlantic provinces is a system upon which depends the livelihood of more than two million people in the region. We did enjoy a period of great prosperity during the first half of the nineteenth century. Our fish was sold in the British West Indies, our timber found a ready market in Britain, we carried on an extensive shipbuilding industry and in general the economy was not too bad.
Unfortunately, the basis of our prosperity was undermined when ocean transportation was gradually replaced by air and rail transportation. The Royal Commission on Dominion-Provincial Relations made this clear in its report, from which I quote the following:
With the cheapening of transportation and the growing advantages of large-scale production, industry was drawn nearer to the rapidly increasing populations of western Canada and the central provinces and nearer to the centre of United States industry which financed and controlled so many of the Canadian manufacturing enterprises.
In other words, we could not compete and an increasing number of small establishments in the Maritimes were compelled to close down. As a result, many of our people were obliged to leave for other areas. It is alarming to note that between 1961 and 1969, a period of only eight years, 150,000 people left the Atlantic area. Of these, 36,000 were from Newfoundland, 7,300 from Prince Edward Island, 58,000 from Nova Scotia and 49,000 from New Brunswick.
Perhaps the most alarming aspect of this trend is the fact that two-thirds of the 150,000 persons who found it necessary to leave were between the ages of 15 and 34, the really productive years. As a result, in my own province of Prince Edward Island today 44.2 per cent of the population are either under 15 or over 65. I notice, according to figures released a few days ago, that our province, proportionate to its population, has among its citizens more voters over the age of 65 than any other province in Canada. In the province of Newfoundland, 45.2 per cent of the population are either under the age of 15 or over 65. In Nova Scotia, the percentage is 41.4 per cent, and in New Brunswick 42.7 per cent. The Canadian average is 39.4 per cent.
Thus, we in the Atlantic area are well above the Canadian average in terms of people who have not yet reached, or who have gone beyond, the really productive years of their lives. I suggest that a lowering of the level of migration can only be achieved through the generation of employment at a sufficiently high level of income to make remaining in the area an attractive proposition.
The key to regional development is to narrow the income gap between the Atlantic provinces and the rest of
The Budget-Mr. McQuaid
Canada. But this is a key which unfortunately nobody has apparently yet been able to turn. I would ask the Minister of Finance (Mr. Turner) to take note of the fact that without question we are the backward area of the nation. The main impetus for development in the Atlantic provinces must come, I suggest, from the establishment of secondary manufacturing industries. It has been estimated that we need 170,000 new jobs in the next ten years in order to encourage our people to stay in the area. It has also been estimated that in order to achieve this objective the total capital investment required will be in the vicinity of $25 billion.
The people in my province are dependent to a great extent on agriculture, but unfortunately our farms are becoming fewer and fewer in number. From 1961 to 1966, a period of five years, the number of farms declined by 2.5 per cent in Newfoundland, 13.3 per cent in Prince Edward Island, 23.1 per cent in Nova Scotia and 26.1 per cent in New Brunswick. I suggest this is a very serious situation in an area so dependent upon agriculture.
Our farm labour force has declined. In 1956 there were 49,000 people engaged in farm labouring, but by 1969 it had dipped to 26,000, which represents a drop of 53 per cent. During the past 25 years some 6,000 farmers have been forced off the land by economic circumstances that unfortunately continue to plague us even today.
I was interested in some figures recently released by Statistics Canada showing that the net income of a farmer in British Columbia is the highest in Canada. After all deductions are made, the net income of a farmer in British Columbia is $4,260, compared with the net income of a farmer in Prince Edward Island of $913. In other words, the farmers of British Columbia receive five times the net income of farmers in Prince Edward Island. Therefore, how can you expect young men to enter agriculture? Indeed, how can you expect anybody to continue farming when they have a foreseeable net income of only $913? Farm income is decreasing. Last year, 1971, there was a decrease in farm income in Nova Scotia of $5.5 million, a decrease of $6.3 million in New Brunswick, $7.2 million in Prince Edward Island, for a total decrease for all three provinces of $19 million. This compares with an increase in the prairie provinces of $400 million.
Our per capita income is low. In my own province in the year 1969 it was $1,818, compared to the Canadian average of $2,913. In other words, we are a little over $1,000 below the Canadian average. The Senate Committee on Poverty found that the level of income in 68 per cent of the families on P.E.I. was less than $3,000 a year. That, again, is a very serious situation.
I suggest to the members of this government that we in the Atlantic area are not getting our fair share of money under programs such as LIP. Out of a total of almost $160 million last year, the Atlantic provinces received only $41,517,000. On the other hand, the province of Quebec received almost $63 million. I suggest that $41,517,000 is insufficient in an area so badly in need of assistance as ours. My own province of Prince Edward Island received just over $2 million. We are thankful for what we have received, it has been a help to us; but I suggest in all seriousness that it is not enough.
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Spokesmen for the government tell us that we in Prince Edward Island are being taken care of under this famous development plan. Under the development plan as it is presently set up, $725 million will be spent over a 15-year period. At first sight that sounds very good, but let me remind you, Mr. Speaker, that of that $725 million only $225 million is being contributed by the federal government, the rest has to be contributed by the province itself.
Therefore I ask, where is this $500 million the province must contribute going to come from? There are only 111,000 people in the province of Prince Edward Island and today our direct debt is $110 million, about $1,000 for every man, woman and child in the province. According to the latest figures released by our finance department, to service that debt alone will cost about $11 million, which is about $100 for every man, woman and child in P.E.I. So before the government can turn the wheel at all it must raise from the taxpayers-who are not able to pay-$11 million just to pay the interest on what they owe.
I always maintain that governments are very little different from individuals. I can go to a bank and borrow a certain amount of money. However, there comes a day when the banker says to me, "I am sorry; I just cannot go along with you any longer. You do not have the assets to back up your loan". As sure as I am speaking here tonight, Mr. Speaker, unless the situation changes this is what we will be facing in the Atlantic provinces. People will not buy our bonds because they will say there are insufficient assets to stand behind them. Recently, student researchers conducted a survey and out of 1,841 questionnaires that have been evaluated, 1,136, or 62 per cent, see the plan killing small farms and businesses. Only 667, or 36 per cent, are satisfied with the direction the plan is taking. In all seriousness again I suggest that the development plan is not the solution to our problems.
Let me repeat that the problem confronting all four of the Atlantic provinces is that of slow economic growth. The manifestations of this slow economic growth are lower per capital income levels than the national average, higher unemployment rates, and substantial migration. The ultimate objective must be the fullest and most efficient use of the human and material resources of the region. The opportunity for productivity, for productive work, must be made available to all our people; and our greatest hope is access for maritime manufacturers to the markets of Ontario and Quebec.
In this connection, I was particularly pleased yesterday to hear the Minister of Supply and Services (Mr. Richardson) announce that tenders for the supplying of commodities to the federal government would be considered f.o.b. factory. This is what he said as recorded at page 3040 of Hansard:
A proposal which I intend to discuss further with my colleagues is the establishment of a policy under which any Canadian who wishes to sell to his national government can bid on the basis of his costs at his plant, that is his bid will be judged f.o.b. plant rather than f.o.b. destination which would of course then include transportation costs to destination.
There is no question but that this is very admirable and will probably help us in the Atlantic area, because we cannot compete by reason of high transportation costs.

Let us not lose sight of the fact that this is not the only cost, that is, moving the product out of the Atlantic area; we also have the cost of moving raw materials in. In a great many of our manufacturing plants the raw materials must be brought in. In my own province, where we have been denied the causeway, the cost of bringing raw material in is a very material factor added to the cost of the finished product. Consideration should also be given to that factor, but the fact that bids will be considered f.o.b. factory will be of help. I suggest we must not forget the cost of bringing raw material in, because it increases the cost of production.
During the years immediately following the last war the Canadian economy enjoyed one of the greatest expansions in its history. But the Atlantic provinces shared only to a very limited extent in this prosperity, and it is beyond dispute that the rapid expansion of the Canadian economy as a whole has not improved the relative position of the Atlantic provinces within our national economy.
We in the Atlantic area want to contribute productively to the national output. We do not want to be dependent on any of the provinces of Canada. We do not want to be a poor relation. I know that some of the richer provinces of Canada are beginning to complain because they have to contribute to the poor provinces such as my own. We do not want to be dependent on handouts to stay alive.
There is no doubt that we have potential in the Atlantic provinces. We are well located in relation to the large markets on the eastern seaboard of the United States. We have an intelligent and hardworking labour force. Unlike many other provinces, we are free of serious problems of congestion, and our problems of pollution are very small. In fact, they are minimal and in the few cases where pollution does exist it is much easier to control. We have the potential; all we need is impetus. We need money poured into the area to encourage industry to settle there. I suggest seriously that industry will not settle in that area, because of the obvious disadvantage of transportation costs, unless help is given by the federal government.
I say, therefore, without fear of successful contradiction, that with an improved program for regional development we can and will be self-sustaining. Give us the tools and we will do the job.


Mr. Walter Smith (Saint-Jean):: Thank you, Mr. Speaker, for this opportunity to take part in the debate on the budget presented to and digested by people all across Canada. It was a very good budget and I can assure you it was well received by citizens in the county of Saint-Jean, which I have had the pleasure of representing since the last election. I should also like to congratulate the Minister of Finance (Mr. Turner) and wish him much success in the portfolio he now occupies, which he is fulfilling in a magnificent manner.
Let me quote from Mr. Gerard Filion, president of the Canadian Manufacturers Association. He was praising the federal government for coming around to industry's position on a number of economic matters, the free enterprise system for the high level of material benefits it bestowed, and the Canadian Manufacturers Association for its strength in vigilantly pursuing the manufacturers' cause. He said:
June 13, 1972

This is a Minister of Finance who speaks our language . .. He did not deliver more than was necessary, but he did deliver, and come next January we will feel the beneficial effects.
The opposition has not surprised me in the least in its ocmments during this budget debate. It seems its hon. members are determined to criticize practically everything the government proposes. There is never a word of praise or of constructive criticism.
This government has increased old age pensions and supplement pensions for our senior citizens. The maximum supplement has been increased $15 for single people and $30 for married couples. The tax exemption was increased from $650 for citizens over 65 to $1,000. I suggest that the opposition is constantly criticizing the government for the high unemployment rate. In the five-year period from 1965 to 1970, more than one million jobs were created. This figure exceeds the total number of new jobs created in the same period in Belgium, Germany, Italy, France, the Netherlands, Sweden and the United Kingdom combined. The total population of those seven countries, about 12 times as great as Canada's, had fewer jobs created than Canada. This momentum is continuing in Canada.
This government created the Department of Regional Economic Expansion and has spent over $900 million in the past three years in creating new jobs in the regions of Canada in greatest need. In the county of Saint-Jean many industries have taken advantage of federal subsidies for the construction of new industries and for the expansion and modernization of others. This county has been declared a designated area since December, 1970. The Minister of Regional Economic Expansion (Mr. Mar-chand) extended the deadline from June of this year to June, 1973.
The county of Saint-Jean welcomes this extension because it will encourage more industry to our cities and towns. We find Canadians of different origins, French, English, Scottish, German, Chinese and many other ethnic groups working together as Quebeckers and Canadians. Many new jobs have been created in my riding under the Local Initiatives Program. This program has been well received. Unfortunately, some of the projects submitted were not accepted. Close to $1 million have been allocated to date under this program in the county, and many thanks go to the officials of the Department of Manpower and Immigration who have approved constructive projects. The officials of the local Manpower centre in Saint-Jean and others have been very helpful in preparing and suggesting projects to be created which correspond with the local needs of each section of the county.
Many new projects were accepted this year under the Opportunities for Youth program which had much success last year when it was first started. Students welcome such initiatives and it is hoped that many worthwhile projects have been accepted for this summer, permitting students to earn enough money to continue their studies next fall.
Agriculture is very important in the county, and the dairy industry perhaps employs more people than any
The Budget-Mr. W. Smith
other. Only two years ago this industry was not too healthy, but thanks to the dairy commission and the federal-provincial marketing plan which was put forward and accepted by the dairy producers, today they have nothing but praise for the government's guidance in the production and marketing of dairy products. The price of butter, milk, cheese and milk powder has increased in the past year. My congratulations are extended to the industry for their co-operation and understanding.
Market gardens occupy an important sector of the county, especially in the area of rich, black soil where each year several thousand acres are sown to potatoes, carrots, turnips, onions and many other small vegetables. Nevertheless, more protection should be given to producers of green vegetables during the fall season by imposing better controls over imports from the United States at that time of the year. Most of the carrots and turnips in the region find a good market in the United States and Great Britain.
Thanks should be extended to the Minister of Industry, Trade and Commerce (Mr. Pepin) for his understanding and good judgment of the textile industry which only two years ago was threatened by imports. Much improvement has been noted in this industry in the past year and more employment has been created in the past few months. The Canadian Textile Institute has admitted that the government's policy has stimulated investment and restored confidence in the industry. However, more improvements are necessary because the industry accounts for slightly more than half the total market of textile products and our imports are higher per capita than those of Great Britain, the United States and the European Community; so the situation leaves something to be desired.
In the county of Saint-Jean there are over 100 industries manufacturing many products such as carpets, household equipment, building supplies, prefabricated homes, cables, and many others. In the past year the cities of Saint-Jean and Iberville have seen the construction of a multipurpose school erected in each city. I was happy to learn that the federal government's contribution to each was close to $2 million.
I have noticed that I am running out of time, Mr. Speaker. There are many other subjects on which I wanted to comment. However, before my time expires I would like to say a few words regarding an important problem which Saint-Jean, Iberville and many smaller municipalities have encountered each spring, especially in the past three years, namely, the flooding of the Richelieu River.
Thousands of acres of land on each side of the river are flooded every spring, and good farmland is being eroded and damaged to the extent that several acres cannot be cultivated and sown in agricultural products until late July. Damage to homes has been very high in the past three years. Last spring the water level remained high for about six weeks and millions of dollars of damage was suffered by the residents of the area.
The rock between Iberville and Saint-Jean is apparently the cause of the flooding, delaying the excess flow of water which comes from the Adirondack Mountains and Lake Champlain in the United States. In the mid 1930's when the Friers Dam was built below Saint-Jean, I am informed that plans were made to remove the rock, thus
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June 13, 1972
The Budget-Mr. Tetrault
permitting the water to flow downstream toward Sorel into the St. Lawrence River, but because of the war in 1939 this project was not realized.
I understand that a joint committee has now been created jointly by the province of Quebec and the federal government to discuss the possibility of removing the rock in front of the city. The construction of a dam just below the rapids is also under consideration. This dam would allow the lowering of the water level in Lake Champlain during the winter months, thereby eliminating much of the surplus water that flows down the Richelieu toward the St. Lawrence. I would like to thank my colleague, the hon. member for Brome-Missisquoi (Mr. Forest) for his interest and continued support in finding a solution to this grave problem.
May I conclude my remarks by saying that the government has resolved several of our problems. I hope this government will be re-elected to finish the job which we undertook a little over three years ago, to resolve all the present problems and those that may arise in the future.


Mr. Oza Tetrault (Villeneuve):: Mr. Speaker, I see that the Minister of Finance (Mr. Turner) is in his seat, and we are pleased to make a few recommendations concerning the budget he brought down here on May 8.
Mr. Speaker, I must congratulate the Minister of Finance for having had the courage to read out the budget speech with a broad smile, but I hardly believe the taxpayers will accept it with a broad smile. Reading between the lines, we realize that this budget again benefits those who control our economic blood.
Mr. Speaker, the minister did not mention the increase in the national debt, nor the increase in the interest rate citizens will have to pay. He did not mention that individuals will pay an extra billion dollars in taxes. He did not breathe a word about the federal government's constant deficits, nor of the rising cost of living nor, finally, of the decreased purchasing power of the dollar.
The government seems to be in a permanent state of deficit, particularly since the years 1961-62, when deficits reached $791 million and for 1972-73 the anticipated deficit is $800 million, all these deficits, since 1961, totalling $6,285 million.
Mr. Speaker, our national debt has increased over six years: in 1967, by $421 million; in 1968, by $784 million; in 1969, by $576 million; in 1970, by $392 million; in 1971, by $417 million and in 1972, by $552 million.
I shall now indicate the figures of interest payable yearly and daily on our financial burden. In 1970-71, interest on the national debt reached $1,800 million, representing $5,150,680 a day. In 1971-72, interest paid totaled $2,030 million, representing $4,561,643 a day. And in 1972-73, the figure will be $2,260 million, representing $6,191,100 a day.
Mr. Speaker, the government is rather generous for the controllers of our economic blood while over the year in interest alone we pay $6,191,000 every day to help financiers go on crushing us.
The government suggests that we now have a problem of overproduction. Accordingly the government tries to boost its trade on international markets and if a country

has no money to buy our products, the government generously hands it an interest-free loan over a 50-year term and if necessary it grants it an extension of 10 years; in other words, that country can take 60 years to pay the loan back.
Here are the names of a few countries to which the government has granted low-interest loans over 50 years or more: Ceylon, 10 loans for a total of $15,500,000 at 3 per cent interest; India, 24 loans for a total of $265,333,000, interest-free; Pakistan, 17 loans for a total of $123,238, interest-free; Jamaica, 15 loans for a total of $11,500,000, interest-free; Brazil, two loans for a total of $10,167,000 at lj per cent interest; Tunisia, three loans for a total of $56,000,000, interest-free.
Mr. Speaker, I could go on listing 12 other countries to which the government has granted interest-free loans. If it is possible to grant interest-free loans for a period of 50 years to all these countries for building roads, bridges, dams, water works, schools, hospitals, why does the government not want to do the same in Canada for Canadians to build everything that is related to public services through loans granted by the Bank of Canada, as we say so often?
Mr. Speaker, charity begins at home.
The budget provides that the government will collect $1,125 million more in personal income tax than in 1971.
As to the so-called gifts of the government to the corporations, I do not believe in them.
The government will pay $500 million more to our senior citizens and $425 million more to our veterans, that is, a total of $925 million. This means that the government will on the one hand distribute $925 million more, while on the other hand collecting $1,125 billion more from the taxpayers. What a gift! Once again, the taxpayers in the middle income bracket will be the big losers.
As an example, Mr. Speaker, I shall refer to our neighbour the United States which has adopted nearly the same monetary system as Canada and which is regretabbly facing problems somewhat similar to ours.
Today, the world's wealthiest country is broke. Last year, the American economy reached a new high of $1,000 billion; however, the administration of their 21 most important cities lack funds to pay their policemen, their firemen, their teachers and other employees. Because of a shortage of funds, the New York Civic Library will have to cut by half its time of operation: it will remain open 40 hours a week only instead of 78 hours, as previously.
The city of St. Louis cannot hire the policemen or firemen it needs. The city of Boston is on the verge of bankruptcy and cannot replace its 102-year-old wooden sewers. Mr. Speaker, such are the wrongdoings of our present system.
I noticed that several members dealt with the budget but that nobody, except the Creditistes, said a word about our famous limping monetary system.

Who has the right to create money?
June 13, 1972

Meyer Amschel Rothschild is credited to have said, "Give me the right to create the money of a nation and I don't care who makes its laws."
Who has the right to create money? The answer to this question is quite simple and should be obvious to everyone. Because money today represents goods and services, the people who create the goods and services should have the right to monetize them. The main reason why so many people have the wrong conception of money, what it is, and who should have the right to create it is because, for many centuries, gold and silver were used as a medium of exchange. This creates a lot of confusion among people today. The reason for this confusion is that gold and silver were not only a medium of exchange but were also commodities, because they had intrinsic value, the same as tea, furs and many other commodities that have been used as money in the past. On the other hand our modern money, paper currency and bank deposits, have no intrinsic value; they only represent goods and services. This is so important that I must emphasize it again. Paper money and bank deposits have no value in themselves. They only represent value.
I think this is quite clear, Mr. Speaker.
Here are a number of quotations from the Standing Committee on Banking and Commerce. During the session of 1939 the committee held 30 meetings. Its proceedings covered 850 pages. These are questions and answers made by Mr. Graham Towers, the Governor, at the time, of the Bank of Canada. How money is created by banks:
Banks issue a substitute for money.
Q. When you allow the merchant banking system to issue bank deposits-with the practice of using cheques-you virtually allow the banks to issue an effective substitute for money, do you not?


Mr. Towers:: The bank deposits are actually money in that sense.
Q. ... As a matter of fact they are not actual money but credit, bookkeeping accounts, which are used as a substitute for money?


Thomas Gordon Towers: Yes.
Q. Then we authorize the banks to issue a substitue for money?


Thomas Gordon Towers: Yes, I think that is a very fair statement of banking, (p. 285)
I think this is quite clear, Mr. Speaker. That matter was discussed in this House of Commons.

Mr. Speaker, although there are enough resources in Canada for everybody to live decently, one realizes that there is much poverty. Indeed, two or three Canadians out of five live in poverty. In my constituency-and I believe it is the same everywhere-the 50, 55, 60 and especially 65 year-old people are the ones who are suffer most. They do not have enough income to make both ends meet.
Recently I met a 69 year-old man whose wife is 63 and who gets only $135 a month for both of them. And recently, the provincial government told them they would not get any welfare when old age pensions are increased to $150 a month.
I see that one of the government members finds that funny, but older people do not think it is funny.
I hope the hon. Minister of Finance will take notice of our recommendations.


Mr. Grant Deachman (Vancouver Quadra):: Mr. Speaker, in the last moments of this debate I want to refer, not in a very sensational way, to what to some might not believe to be a very sensational subject, that is, some matters concerning my own riding which are affected by
The Budget-Mr. Deachman
federal expenditures. Before doing so I want to join with others in this House who have extended their congratulations to the Minister of Finance (Mr. Turner) on assuming his new portfolio, and to congratulate him in particular on the introduction of his first budget.
The riding of Vancouver Quadra is a city riding, a slice out of residential Vancouver. It has no industry, no great commerce. It is essentially a riding made up of residences and has, in fact, very few new high-rise towers. It is really an old-fashioned residential district. It has, however, within its boundaries some institutions to which, over many years the federal government has made very substantial contributions.


Some hon. Members:: Hear, hear!


Grant Deachman: I refer to the University of British Columbia, situated at Point Grey in the city of Vancouver. Let me give you an idea of the size of this university, Sir. On a year-round basis, 50,000 people work or teach or learn on this campus. During the daytime it has the population of a small city. Despite the fact that it is essentially a provincial institution, the impact of the federal government upon it is substantial. I shall not refer at length to the per capita grant formula, to student loans and to other ways in which federal funds go toward the support of the university and the students, but in particular to a few projects which are remarkable and which I think should be drawn to the attention of the House.
One such project is the health sciences centre which has been under development of the University of British Columbia for the past decade. When completed, this health sciences centre, combining all the disciplines of medicine and paramedicine in the University of British Columbia, will have a teaching hospital of some 350 beds, research and teaching facilities involving the teaching of 450 medical students and 600 nursing students. In addition, an estimated 3,000 students of allied health professions will receive part of their training in the university hospital. The allied health professions include rehabilitation, dentistry and dental hygiene, social work, pharmacy, psychology, home economics and physical education. If you were to visit the University of British Columbia today you would see buildings housing these various teaching, research and healing institutions in the process of construction or already constructed on the campus.
The contribution of the federal government, which is to be matched by the provincial government, toward the construction of the health sciences centre was recently announced at $24,389,533. The press release which made that announcement went on to say that $36,272,788 has been contributed to the University of British Columbia for the health sciences centre since the establishment of the health resources fund in 1966.
Almost equal in size, and eventually to be almost equal in impact, is a little known project now under construction at the University of British Columbia called TRIUMF. The letters stand for Tri-University Meson Facility. Essentially, what that means is a cyclotron into which has gone some 5,000 tons of steel. It looks like a battleship being built on the promontory at Point Grey. The steel for it was fabricated at the Davey shipyard in Lauzon, Quebec.

June 13, 1972
The Budget-Mr. Deachman


Some hon. Members:: Hear, hear!


Grant Deachman: This yard was the only one in Canada capable of handling pieces of steel of the required size. The problem of shipping this steel to British Columbia and assembling the pieces on the campus of the University of British Columbia was enormous. The federal contribution to this cyclotron is $23,300,000. This is one of the three meson factories now under construction in the world; the others are at the Swiss Institute for Nuclear Research near Zurich, and the Los Alamos Scientific Laboratory in New Mexico. Less powerful accelerators for somewhat similar purposes are being constructed at Columbia University in New York, at the European Centre for Nuclear Research at Geneva, and in the U.S.S.R.
When TRIUMF is completed and in operation, the experimental work there will combine scientists of many disciplines-physicists, chemists, biologists, therapists, metallurgists and others-in a common new research facility that will be unique in the world. It should also be stressed that TRIUMF will welcome research workers from all across Canada. Indeed, proposals for use of the facility have already been received from the provinces of Saskatchewan, Manitoba, Ontario, Quebec, Newfoundland as well as the neighbouring province of Alberta.
I wish also to refer, Sir, to some other projects of interest which are under construction or just recently completed on that campus. Through the agency of Central Mortgage and Housing during the years 1970 and 1971, loans have been made for the construction of new student residential towers in the amount of $12 million. To an increasing extent students are being housed on the campus. This is made possible through the resources of CMHC.
I refer, also, to a new and very interesting project in which I recently played a small part.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: We do not want to embarrass the hon. member, but he might appreciate a little applause.


Grant Deachman: Mr. Speaker, on May 20 I had the pleasure of going to the University of British Columbia with a cheque in my pocket for $2,500,000.


Robert Lorne Stanfield: Hear, hear!


Grant Deachman: This was part of the $10 million contribution of the federal government to the B.C. centennial celebration of 1971.


Robert Lorne Stanfield: Does the government issue all its cheques in B.C.?


Grant Deachman: I had the pleasure of carrying this one, sir. The $2,500,000 was given for the construction of a museum on the campus of the University of British Columbia. It will be a showcase for the university's collection of artifacts and northwest coast Indian art. The archaeological collection contains 70,000 pieces-
(Mr. Deachman.]


Robert Lorne Stanfield: The museum will be a good place to bury the remains of the Liberal party.


Grant Deachman: -mostly from B.C. sites, which are important to the study of North American pre-history and which, incidentally, are not now being displayed, most of them being stored in boxes. The northwest Indian art collection of 10,000 items includes the most comprehensive Kwakiutl collection of any museum of the world. A major part of the museum's art collection will be donated by Walter Koerner of Vancouver, a member of the board of governors of the university and former board chairman.


Robert Lorne Stanfield: The museum would be a good place to house the artifacts of the Liberal party.


Grant Deachman: Since he came to Canada from Czechoslovakia in 1938, Mr. Koerner has been collecting master-works to illustrate the achievements of tribal art. These collections altogether will make this museum which is to be constructed on the university campus one of the most outstanding archaeological museums in Canada.
Sir, if time permitted I would describe the impact on the University of British Columbia of a number of national health grants, of grants made by the Fitness and Amateur Sports Council, of grants in the field of architecture made by Central Housing and Mortgage Corporation, and of aid extended by agencies such as the Canada Council which has contributed much to the development of scholars, teachers and people from all walks of life at my university.


An hon. Member:: And Members of Parliament.


Grant Deachman: I include Members of Parliament because there are some in this chamber tonight who are graduates of that university.


Some hon. Members:: Hear, hear!


Grant Deachman: In closing, Mr. Speaker, may I say something that every member of this House knows who represents a constituency in which there is a university, teaching institution or institution of higher learning. Sometimes we are prone to forget the impressive impact of federal spending in the shaping of the role of universities in Canada and in the shaping of men and women who attend those universities and who want to teach and to learn.


Some hon. Members:: Hear, hear!
Hon. Hugh ]ohn Flemming (Carleton-Charlotte): Mr. Speaker, I appreciate this opportunity, even though only a few minutes remain, to take part in the debate on the budget. I have always felt it a great privilege to be given the chance to speak on the budget. In the budget debate, of course, we learn the ways and means by which the minister proposes to tax people and to achieve those objectives which the government thinks are desirable. I have always felt that it is a great privilege to speak in a debate like this, because if there are things you do not like about the budget you can pick them out and tell the minister what you think.

I congratulate the minister for the budget speech he made and trust that some of the objectives he has set for this government will be met. He said that it was his aim and objective to bring down a budget that would provide more jobs. Those words did not fall on deaf ears so far as I am concerned. Everyone in the chamber applauded his statement. We all hope, trust and pray that the minister's objectives in that respect will be realized.


Mr. Bell:: We want more jobs.


Mr. Flemming:: However, I have some misgivings about the budget; they have arisen principally because I have found it is difficult to find people who will do certain jobs which require to be done. I believe that many jobs are available which could furnish employment but that people are not anxious to take them. Forestry work is a case in point. To my knowledge, people can earn an excellent wage by working in the woods and cutting trees into logs which in turn are processed into lumber. The lumber is then processed and used for housing and industrial uses.
People are saying, "Why should I take a job when I can get more from welfare than from working?" I know something about wages and salaries and I question the assertion that people can get more money if they are on welfare. However, that is what some people think and that is what they say to me.
When I spoke recently to a man from New Brunswick he was terribly concerned because he could not get help. He had to move his equipment 200 miles because the people needed to furnish the raw material he used were not available. It seems to me there ought to be better co-ordination among various departments of government so that available jobs are advertised and made known to people who under ordinary circumstances should be able to perform the work. I should think that Statistics Canada in Ottawa could furnish unemployment figures and, as well, figures relating to the available jobs in various categories. It seems to me that these figures could be produced from information that could be made available from Manpower offices.
The other day in New Brunswick I was told of a plant-I can tell the minister its name if he wishes-that may be forced to shut down in mid summer, when unemployment is supposed to be lowest, because not enough people were available to supply the raw material necessary to keep the plant going. So it seems to me that the government should try to bring about better co-ordination among the activities of various departments so that we might know what jobs are available and which people are available to fill them.
I have never thought that people should be able to choose between working and living on welfare. I do not think we ever intended people to be given that choice. I do not believe anybody ever intended that the productive ability of our people should be disregarded. What makes the matter worse is that a good many of us are being taxed to provide the welfare that is paid to some people as an alternative to working.
What am I recommending to the minister, Mr. Speaker? I think he ought to use his intelligence and great influence with the government and see that common sense is
The Budget-Mr. Flemming
applied at the administrative level. I suggest that steps should be taken so that all local activities coming under the auspices of Manpower, the Unemployment Insurance Commission and social welfare programs are carried on in the same office. Steps must be taken so that there is frequent, almost continuous consultation among the officers in charge of each of these divisions. Available jobs must be advertised; there must be publicity in this regard. Also, there must be publicity with regard to the general category in which people available are willing to work. There must be information as to their physical strength and willingness to perform the tasks stipulated. Experience in this field will soon be acquired, I suggest because our people soon acquire skills. Personally, I believe people prefer to work rather than not work. Also, the health of the worker would improve and his self-respect would be greatly enhanced. If the minister is to achieve his objective of providing more jobs, he must get down to a grass roots examination of the problem and make up his mind that the provision of handouts is not a permanent remedy.
I believe there is definite satisfaction with the increase in the old age security pension for people who have no other means of income. As for the veterans' pensions, I always thought that veterans who volunteered their services, fought the country's battles, risked their lives in various theatres of war when a great deal was at stake, were entitled to the most generous consideration possible. We voted that way. I am sure everyone within the sound of my voice is pleased that that bill carried.
Then there is the matter of the reduction of the general corporate tax rate. Also, the first $50,000 of corporate income is reduced by 5 per cent. Both these reductions are on manufacturing and processing income. I am not certain what will be considered manufacturing and processing but I assume that any business which changes raw material of any type by manufacturing and processing, thereby enhancing its value, will be eligible. Usually secondary industry is established, at least in my part of the world, because someone has vision. As a general rule, someone has vision and wants to do something. We have an outstanding illustration of that in the constituency I have the honour to represent. I refer to McCain Foods.
I believe I should give the House and the country some very pertinent information relative to McCain Foods and the contribution it makes to the general well-being of that part of Canada in which it is located, which happens to be my native New Brunswick, my own county of Carleton, and to our country in general due to the volume of its production which is exported to the United States. The grant which they received, which has received some publicity since the Minister of Regional Economic Expansion (Mr. Marchand) appeared before the committee, has contributed to the tremendous expansion of McCain Foods. This has had beneficial results in a part of Canada which is suffering from economic disparity. That grant will result in the creation of 770 jobs or it will not be paid.
The grant was based on a total capital expenditure of over $17 million and was, I am satisfied, entirely in accordance with the terms of the act and not due to any special treatment. It was much more justified than was the expenditure of a great deal of the taxpayers' money

June 13, 1972
The Budget-Mr. Flemming
by this government. In fact, the spending of many millions of dollars is completely unjustified when one thinks of the wasting of $150 million last winter on local projects and $30 million more this summer, the cost label being put on without any call for tenders or anything. If I had enough time I could give details that would scare hon. members. With this sort of expenditure one cannot help but wonder where it will all end. I suggest to the minister that if he wants to go down in history as being a great Minister of Finance, he should keep better watch than has been the case so far on this whole question of expenditures.
While on this subject I wish to go into the history of the events leading up to the establishment of McCain Foods. I know a good deal about it, for various reasons. During 1956 the government of New Brunswick was approached by four McCain brothers. They presented to the government, of which I was the premier, figures to show that we were importing certain foodstuffs, especially french fried potatoes, to such an extent that a local industry providing it would have good prospect of success. As a basis for the government of that day guaranteeing their bonds, they undertook to provide substantial equity financing to the full extent of their financial ability and of any credit they were able to obtain. They carried out their commitment to the letter.
The government of the day complied with their request and guaranteed their bonds. That decision has turned out to be a good one. It has never cost the people of New Brunswick one penny. It has been a success story from the start. The business has never ceased to expand. It is still expanding. It has spread into the United Kingdom where they have established a branch plant. It has spread into Australia with another branch plant established there. But it retains its head office in Florenceville, Carle-ton Country, New Brunswick, Canada. They have gone north into Grand Falls where they have established another plant. The direction for this worldwide empire comes from the head office in Florenceville.
But, Mr. Speaker, the end is not yet. These young men are not through expanding the business. With the research which they have established and is available to them, and the experience they have acquired, they are prepared to expand further. Indeed, they advise me that already they have made progress with certain plans for further expansion at Florenceville which in time will be discussed with the government. I for one recommend to this government that they be given the utmost consideration in accordance with the provisions of the statute under which the Department of Regional Economic Expansion operates.
In closing, let me quote the progress made by McCain Foods in a comparatively short time, about 16 years. I have secured information in this regard. This company, in business less than 20 years, now has the following achievements to its credit which I am pleased and proud to place on the record of this House. The minister knows about this New Brunswick plant because the McCains are not particularly strong Conservatives. As a matter of fact, it is quite the opposite. That makes no difference to me at this moment in bringing their accomplishments to the attention of the House.
The value of farm products purchased by McCain Foods in the year 1971-72 was $6,400,000. The average

daily purchase of farm products by McCain Foods is $40,000. The number of employees in New Brunswick working for McCain Foods is 1,607. Altogether, in all their enterprises, they employ over 3,000 people. McCain Foods is the largest food processor in the world, excluding the United States. The value of McCain Foods exports of foodstuffs for the year 1971-72 was $3,040,000 processed in New Brunswick. The total value of the New Brunswick potato crop is $15 million: McCain's purchase a substantial portion of it every year. McCain Foods process 21 different food products. At Florenceville and Grand Falls, New Brunswick, their two plants represent a capital investment of $29,500,000 and cover an area of 211 acres. This is the story of McCain Foods.
These are the things I would like to bring to the attention of the minister. By encouraging this sort of enterprise the minister will achieve his objective of supplying more and more jobs for the people of Canada. This is a part of the country that has the very definite label of disparity on it. Through you, Mr. Speaker, I give the minister this information because I feel he should be in possession of the facts.
I do not need to tell members of this House of my complete confidence in this company and the McCain brothers who direct its activities. The government of which I had the honour to be the head indicated its confidence in 1956 by guaranteeing their bonds. That is the acid test of confidence, is it not-to guarantee bonds for a substantial amount of money? Our government indicated this confidence in 1956. That confidence has been completely justified by subsequent progress and success. So far as the officers, management staff and personnel of McCain Foods is concerned, I have the greatest respect for every member of the organization including the McCain brothers themselves. Their ability has been demonstrated and their personal capacity and integrity I have never doubted or questioned.
Whatever criticism I have of the government for waste and extravagance, I include none at all for the assistance they have given to this industry located in a part of Canada generally recognized to be suffering from what is known as regional disparity and handicap. I can think of no better way to bring about an improvement in economic conditions in this or in other areas than by assisting an industry such as McCain Foods Limited. I reiterate my recommendation to the government that it continue to extend the utmost consideration to any planned future expansion of this outstanding industrial undertaking.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Boulanger):: Order. It being 9.45 o'clock p.m., it is my duty, pursuant to section (8) of Standing Order 60, to interrupt these proceedings and forthwith put every question to dispose of the motion now before the House. The question is on the motion of the Minister of Finance (Mr. Turner).

The House divided on the motion (Mr. Turner, Ottawa-Carleton) which was agreed to on the following division:
June 13, 1972

Division
Messrs:
(Division No. 29)
++YEAS
Messrs:
Tolmie	Walker
Trudeau	Watson
Trudel	Weatherhead
Turner (London-East)	Whelan
Turner (Ottawa-Carleton)	Whicher
Wahn	Whiting-112.
Allmand
Badanai
Barrett
Basford
Bechard
Beer
Bliouin
Borrie
Boulanger
Breau
Caccia
Cafik
Chappeill
Clermont
Cobbe
Corriveau
Cot6 (Longueuil)
Crossman
Cullen
Cyr
Danson
Deachman
Deakon
De Bane
Drury
Dube
Dupras
Duquet
Ethier
Faulkner
Forest
Forget
Foster
Francis
Gendron
Gervais
Gibson
Gillespie
Goode
Goyer
Guay (St. Boniface)
Guilbault
Howard
(Okanagan Boundary) Hymmen Isabelle Jerome Kaplan Laflamme Laing
(Vancouver South) Lajoie
Lang (Saskatoon -
Humboldt)
Langlois
Lanlel La Salle
Leblanc (Laurier)
++NAYS
Messrs:
LeBlanc (Rimouski) Lefebvre	Aiken	MacDonald (Egmont)Legault	Alexander	Maclnnis (CapeLessard (LaSalle)	Alkenbrack	Bretcm-East Richmond)Lessard	Baldwin	Maclnnis (Mrs.)(Lac-Saint-Jean)	Barnett	MacKayL'Heureux	Beaudoin	MacLeanLoiselle	Bell	MacquarrieMacdonald (Rosedale)	Benjamin	MacRaeMacEachen	B re win	McCleaveMacGuigan	Broadbent	McCutcheonMcBride	Burton	McGrathMcNulty	Cadieu	McKinleyMahoney	Carter	McQuaidMajor	Coates	MatherMarceau	Crouse	MatteMarchand	Danforth	Mazankowski(Langelier)	Dinsdale	MonteithMarchand	Dionne	Muir(Kamloops-Cariboo)	Douglas	NesbittMorison	Fairweather	NystromMunro	Flemming	OrtikowNoel	Forrestall	PaproskiO'Connell	Gauthier	PeddleOrange	Gilbert	PetersOsier	Gtteave	RicardOtto	Godin	RitchieOuellet	Grills	RockPelletier	Gundlock	RodriguePepin	Hales	RondeauPortelance	Harding	RosePringle	Horner	RowlandPrud'homme	Howard (Skeena)	RyanReid	Howe	RynardRichardson	Knight	SaltsmanRoberts	Knowles (Winnipeg	ScottRobinson	North Centre)	SkoreykoRochon	Knowles (Norfolk-	SouthamRoy (Timmins)	Haldimand)	StanfieldSharp	Korchinski	Stewart (Marquette)Smith	Lambert	Tetrault(Northumberland-	(Bellechasse)	Thompson (Red Deer)Miramichi)	Lambert	ThomsonSmith (Saint-Jean)	(Edmonton West)	(Battleford-Kindersley)Stafford	Laprise	Woolliams-83.Stanbury	Lewis	Stewart (Cochrane) Sulatycky	Mr. Deputy Speaker:	I declare the motion carried.Sullivan Thomas	Motion agreed to.	(Maisonneuve-	At 10.10 p.m. the House adjourned, without question	Rosemont)	put, pursuant to Standing Order.	
Wednesday, lune 14, 1972