1972-06-20

PRIVILEGE


Mr. Frank Howard (Skeena):: Mr. Speaker, I desire to rise on a question of privilege of which I have given Your Honour notice. My question of privilege relates to the use of United States of America postage stamps to mail certain material within Canada.
As a prelude I think I should indicate that the Post Office Act passed by this Parliament defines what is a postage stamp. Without quoting the section, it is whatever stamp or impression is authorized by the Postmaster General. Further, the act also provides that the Postmaster General may prescribe the conditions under which mailable matter will be mailed within Canada.
I have in my hand a postcard and it is necessary for me to read the very first sentence, though no other part. It reads:
May we ask your co-operation in a special survey of Time subscribers?
It is signed by a Ralph P. Davidson, associate publisher of Time International of Canada. It is postmarked Montreal at 1 p.m. on the 18th day of June and has a Canadian post office cancellation mark on it. The stamp is a United States of America six-cent stamp.
I am sure the Postmaster General did not authorize, as is his right under the Post Office Act, use of that particular stamp as an official stamp to be used within Canada, but for Time International to use that stamp to mail material-


Mr. Speaker:: Order, please. The hon. member should indicate as quickly as he can how he thinks parliamentary privilege is affected. From what the hon. member has said up to now I think there is not even a remote connection between the grievance that he has and parliamentary privilege.


Frank Howard: Mr. Speaker, in order to try to argue that there is a question of privilege I thought it worth while to put forward what this Parliament has said should be the law. I think that the privileges of Parliament have been offended. The Post Office Act was passed by this Parliament. The Postmaster General is charged with authority in postal matters and, if nothing else, he has been embarrassed by the use by Time International of a United States stamp to mail material within Canada, quite apart from it being offensive to Canadians as a whole.
If Your Honour finds that there is a prima facie question of privilege and that the matter should be inquired
into, I should like to move, seconded by the hon. member for Timiskaming (Mr. Peters):
That the question of the use of United States of America postage stamps by Time International of Canada to post mail within Canada be referred to the Standing Committee on Privileges and Elections.


Mr. Speaker:: I have to repeat what I said a moment ago, that there is not even a remote connection between the circumstances described by the hon. member and parliamentary privilege. I will not abuse the time or the patience of hon. members by repeating what parliamentary privilege is for the guidance of hon. members. I am sure the hon. member for Skeena, who has been here for many years, knows this at least as well and probably better than I. I am sure he will not require a long speech from the Chair to be convinced there is not a prima facie case of privilege. The hon. member may have a complaint or a grievance, but I fail to see how it is related in any way to his privileges as a member of this House.



ROUTINE PROCEEDINGS


[Stage Direction]
Fifth report of Standing Committee on Labour, Manpower and Immigration-(Mr. Portelance).
[Editor's Note: For text of above report, see today's Votes and Proceedings.]


Hon. Ron Basford (Minister of State ior Urban Affairs):: Mr. Speaker, I have the honour to present in both official languages the summary report on inflation, unemployment and economic policy of the Prices and Incomes Commission received today.
External Affairs PARLIAMENT HILL

June 20, 1972



TABLING OF ANNOUNCEMENT REGARDING PROMENADE TO BE BUILT AROUND BASE

['Agreed.']
Stanley Ronald Basford: Mr. Speaker, pursuant to Standing Order 41(2) I have the honour to table in both languages an announcement regarding a promenade to be built around the base of Parliament Hill.



Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, in view of the impending French nuclear test in the Pacific I seek, under Standing Order 43, unanimous consent of the House to move a resolution in similar terms to the one adopted by this chamber in particular reference to the Amchitka test by the United States.
Therefore, I move, seconded by the hon. member for St. John's East (Mr. McGrath) that:
Whereas the continued testing of nuclear warheads by the nuclear powers adds to the dangers of the nuclear arms race and may seriously pollute the human environment, this Canadian House of Commons again calls on all nuclear powers to cease all testing of nuclear devices and particularly calls on the government of France to cancel the latest of its tests in the Pacific Ocean.


Mr. Speaker:: Hon. members have heard the motion proposed by the hon. member for Hillsborough. Under the terms of Standing Order 43 this motion requires unanimous consent. Is the hon. minister rising on a point of order?


Mr. MacEachen:: Yes, Mr. Speaker. I would be quite happy to consent to the putting of the motion if, in order to protect the opposition day, we can agree not to debate it at this time.


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


Mr. Speaker:: I am not sure what the position of the House is at the moment. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: There appears to be unanimity, and the motion will therefore be put.


Mr. Baldwin:: Mr. Speaker, may I say, with respect, that I understood there was a condition to the motion being put.


Allan Joseph MacEachen: Yes, without debate.


Gerald William Baldwin: Without debate, that is the condition attached.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the order: Introduction of Bills.
June 16, 1972-Mr. Broadbent-Bill intituled: "An Act to amend the Regional Development Incentives Act".
Mr. Broadbent:: Stand.


Mr. Speaker:: While the hon. member for Oshawa-Whit-by requests that this notice of introduction of a bill to amend the Regional Development Incentives Act stand, I think I should at this time enter a caution by indicating to the hon. member that in the view of the Chair there may be some procedural difficulty in respect of this motion in that there might be financial implications. It seems to the Chair that the hon. member is attempting to redirect funds which have been allocated by Parliament on the basis of a royal recommendation. As the hon. member well knows, this is not in order. In any event, we will allow the matter to stand for the time being and whenever it is called the hon. member may wish to argue the procedural point at that time.



AMENDMENT TO ENSURE PROPER EVALUATION OF EFFECTIVENESS OF DISBURSEMENTS

Mr. Bill Knight (Assiniboia) moved: for leave to introduce Bill C-216, to amend the Regional Development Incentives Act.


Some hon. Members:: Explain.


William George Knight: The purpose of the bill is to ensure that the effectiveness of disbursements from the public purse is properly evaluated and that improvements in the grant system can be made promptly on the basis of such an evaluation.


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

William George Knight: for leave to introduce Bill C-217, to amend the Regional Development Incentives Act.


Some hon. Members:: Explain.


William George Knight: The purpose of the bill is to ensure that applicants for federal grants under the Regional Development Incentives Act use accurate information and data which are subject to public scrutiny, so as to have public
June 20, 1972

scrutiny of questionable grants such as $3 million to Noranda Mines Limited, $2 million-


Mr. Speaker:: Order, please. The hon. member knows that Standing Order does not allow an explanation of the type he is attempting to give at this time.


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


William George Knight: for leave to introduce Bill C-218, to amend the Industrial Research and Development Incentives Act.


Some hon. Members:: Explain.


William George Knight: The purpose of this bill is to require the Minister of Industry, Trade and Commerce to make monthly reports on the operation of the Industrial Research and Development Incentives Act, indicating the names of the companies and the amounts of the grants in the same way the Minister of Regional Economic Expansion is supposed to make reports under section 16 of the Regional Development Incentives Act, thus ensuring-


Mr. Speaker:: Order, please. The hon. member knows he can give only a brief explanation by virtue of Standing Order 68(2).


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


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister. Was the Minister of State from Calgary South expressing government policy when he said outside the House on June 11 that, while the government had contingency plans for dealing with the expected increase in inflationary pressures, price and wage controls were not part of those plans because he did not think they would work? Was the minister expressing government policy when he indicated that price and wage controls were not part of the contingency planning of the government with regard to the control of inflation?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I would have to check exactly what was said by the minister, but to the extent he has been quoted correctly by
Inquiries of the Ministry
the Leader of the Opposition it is not government policy. There are contingency plans and these are part of them.



INFLATION-TERMINATION OF PRICES AND INCOMES COMMISSION-CONTINGENCY PLANNING BY CONTINUING GROUP

Robert Lorne Stanfield: Has the government authorized the continuance of a contingency planning group, perhaps a remnant of the Prices and Incomes Commission or, in any event, a continuing planning group, to carry on research on the role of a prices and incomes policy with regard to inflation, and is the planning of such a prices and incomes control policy within the terms of reference of that group?


Pierre Elliott Trudeau: With regard to the first part of the question, Mr. Speaker, yes. I recall answering a similar question in the House several weeks ago. I said then that after the Prices and Incomes Commission had reached the end of its mandate there would be kept in the government a small group of people who would be dealing with the problem on a continuing basis. One of the aspects, I am sure, of their work will be to keep various contingency plans updated in the event that the government might want to use them.


Robert Lorne Stanfield: Is a contingency plan for wage and price controls specifically within the terms of reference of that group? Can the Prime Minister also tell the House to what minister that group will be reporting and to what minister the government will be looking for recommendations with regard to anti-inflationary measures and the development of contingency plans?


Pierre Elliott Trudeau: With regard to the first part of the question, Mr. Speaker, the terms of reference are generally as I stated them in my first answer. With regard to the second part of the question, the Prices and Incomes Commission will continue reporting to the same minister, at present the Minister of State for Urban Affairs, until such time as it finishes its work. The small working group which will be kept on will be an assignment of some minister whom I have not yet determined.



REASON FOR POSTPONEMENT OF HEARING BY UNITED STATES TREASURY BOARD ON MICHELIN CASE

John Edward Broadbent: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. Can the minister inform the House as to the reasons for the postponement of the hearing on the Miche-lin case by the United States treasury board and, more particularly, whether the postponement was at the request of the government of Canada? If so, does the government intend to make public its own brief on the subject?


Hon. Jean-Luc Pepin (Minister of Industry. Trade and Commerce):: Mr. Speaker, the secretary of the treasury board in the United States is free to allow any period of

June 20, 1972
Inquiries of the Ministry
time for the receiving of representations in cases of countervailing action. He had given a one month period. At our request, and in view of the complexity of the matter that period has been extended for another month until July 12.



MICHELIN TIRE COMPANY-REQUEST FOR INFORMATION ON AMOUNT OF GOVERNMENT FINANCIAL AID, PROJECTED CAPITAL COST AND EQUITY PROVIDED BY COMPANY

John Edward Broadbent: Mr. Speaker, I gave the minister notice this morning of my supplementary question. I hope he has the information. Will the minister inform the House (a) as to the amount of financial assistance the Michelin Company of Nova Scotia has received from the federal and provincial governments in the form of grants and loans, whether already paid or agreed to, (b) the projected capital cost of these facilities and (c) the amount of equity the Michelin Company has actually provided?


Mr. Speaker:: Order, please. Perhaps I will allow the minister to reply to the first part of the question. The hon. member is asking for statistical information. This is not normally the type of question that is allowable at this time. The hon. member indicated that he gave the minister notice of his intention to ask the question. I am not sure that brings him within the rules. In any event, the minister will be allowed to reply if he has the information.


Jean-Luc Pepin: Mr. Speaker, I answered the previous question because it fell under my jurisdiction. This other aspect of the Michelin case, if you want to call it that, falls under the jurisdiction of the Minister of Finance. He is aware of the hon. member's request which has been made previously. I presume that in due course he will deny or confirm the information available from the press on this subject.


John Edward Broadbent: Mr. Speaker, I asked the minister because I understand his department is responsible, directly or indirectly, for carrying this case before the United States government, and so he may have the answer to my final question. Can the minister inform the House whether or not it is a fact that, of the approximately $90 million that has been so far allocated for this project of the Michelin Company, less than 10 per cent of the capital was put up by the company itself?


Jean-Luc Pepin: Mr. Speaker, it will be the responsibility of the Minister of Finance to answer that.


Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, while the minister is securing that information for the>
hon. member for Oshawa-Whitby would he be good enough to ascertain who is more opposed to industrial progress in Nova Scotia, the straight NDP, the Lewisites, or the Waffle?


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.



AWARENESS BY UNITED STATES OF CANADIAN POSITION RESPECTING USE OF COUNTERVAILING DUTIES

Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, has the minister made it very clear to the government of the United States that to embark upon a program of countervailing duties, as might be the case in this instance, would be a very serious step for the United States government to take? Are the Americans quite well aware of our stand in this regard?


Jean-Luc Pepin: Yes. The representations we will make will cover all aspects of this question in terms of what is needed to undertake regional development in Canada, and in terms of comparing the situation of Canadian business with American business. American businessmen can enter the Canadian market much more easily than we can normally enter the U.S. market, in view of the fact that Canadians have to have quite a high export content in order-


Mr. Speaker:: Order, please.


Jean-Luc Pepin: -to develop viable plants.


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


George Harris Hees: Mr. Speaker, may I ask a further
supplementary?


Mr. Speaker:: Order, please. We will return to the hon. member in a moment after we have completed the first round of questioning.


George Harris Hees: As a further supplementary, Mr. Speaker, in view of the fact that the government has known all about this very serious case for many months, is it a fact that the government has not already made a very serious presentation to the United States government, or is it waiting until some time in the future to make a vague presentation?


Jean-Luc Pepin: Mr. Speaker, I have in front of me a number of clippings of previous answers where I made that very point.



AGRICULTURE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture.
Referring to an answer published in yesterday's Hansard concerning the production of eggs, may I ask the minister to say-without naturally giving any figures- whether the production of eggs in Canada meets the needs of the domestic market?
June 20,1972


Hon. H. A. Olson (Minister of Agriculture):: Yes, Mr. Speaker, and it is slightly larger than the demand on the domestic market.


Joseph Adrien Henri Lambert: Mr. Speaker, I should like to put a supplementary question.
Can the minister tell the House why Canada imported eggs in 1971?


Horace Andrew (Bud) Olson: I suppose because the prices were higher here, the same motivation that caused us to export about 180,000 cases in some years.



INSECTICIDES


Mr. G. W. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. Is the government considering the controlled introduction of DDT for residential and recreational spraying of mosquitoes and black flies? I ask this question because of certain reports that have been circulated.


Horace Andrew (Bud) Olson: Mr. Speaker, there may be some consideration going on from time to time by an interdepartmental committee respecting this matter because it is charged with the responsibility of looking at alternatives, but I know of no action that is contemplated immediately in this regard.


Gordon Harvey Aiken: Has an effective alternative or substitute for DDT been developed and is the minister's department working on an alternative?


Horace Andrew (Bud) Olson: We are, Mr. Speaker, but it is too simple to say it is an alternative because there are alternative products for some purposes and there are no satisfactory alternatives for other purposes.



EXCHANGING OF RESEARCH INFORMATION WITH UNITED STATES ON CONTROL OF DDT AND SEARCH FOR ALTERNATIVES

Mr. A. P. Gleave (Saskatoon-Biggar):: I have a supplementary question, Mr. Speaker. In view of the very severe ban the United States has placed on the use of DDT, is there cross-research between the two countries? Are we exchanging research information on the control of DDT and on the search for alternatives?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker, and I should remind you, Sir, and the House that we did restrict the purposes for which DDT could be used by about 90 per cent only a few months ago.
Inquiries of the Ministry NATIONAL DEFENCE



ALLEGED INADEQUATE QUOTA FOR NEWFOUNDLAND IN PROVISION OF WORK UNDER STUDENT SUMMER EMPLOYMENT PROGRAM

Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is directed to the Minister of National Defence. In view of the continuing serious need for employment for students, particularly in the Atlantic region, would the minister investigate the reasons for the fact that the Newfoundland share of the 15,000 opportunities under the student summer employment program in the Department of National Defence was less than half of one per cent, other than militia training which is an ongoing program, and would the minister review the quotas allocated with a view to showing equality to all the provinces?


Hon. E. J. Benson (Minister of National Defence):: Mr. Speaker, I will be pleased to look into the matter.



INDUSTRY


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Industry, Trade and Commerce regarding the application of Dominion Aircraft Corporation which is seeking to build planes in the lower mainland of British Columbia. I believe the minister indicated some time ago that consideration was being given to their application under PAIT. May I ask whether a decision has been reached and, if so, what that decision is?


Jean-Luc Pepin: Mr. Speaker, I replied a few days ago to the hon. member for Peace River that I would be in a position to announce the decision in a week or two. I hope I still have a few days left under that statement.



AIR CANADA


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is directed to the Minister of Transport. In view of the growing imbalance in tourist account between Canada and the United States, can the minister inform the House whether Air Canada is planning any excursion fares that would encourage Canadians to travel in Canada?


Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, I was informed this morning by a letter from the chairman of the board of Air Canada that he has on their way to me in the mail, or they will be here in a short time, some proposals for fare revisions. He did not indicate the nature of these proposals, but as soon as I receive them

June 20, 1972
Inquiries of the Ministry
and discussions take place I shall be glad to inform the House.


Walter Gilbert Dinsdale: When the minister reports, will he indicate whether the double discount family fare, which is restricted to Air Canada flights to the United States at the moment, will apply to Canadian domestic flights as well?


Donald Campbell Jamieson: I will certainly take that up with the officials of Air Canada, Mr. Speaker.



LABOUR RELATIONS


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, the Minister of Labour being absent, I shall direct my question to the right hon. Prime Minister.
Still with regard to the longshoremen's strike in Montreal, I hear the minister has had consultations with the maritime association, and today with the union. Did the right hon. Prime Minister receive a telegram this morning from the Montreal Port Authority and, if so, has he sent a reply and what was it?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I believe I did receive such a telegram from the Montreal Port Authority. I just read it on my way to the House. No reply has yet been sent except for acknowledging it, I believe.



QUEBEC-LONGSHOREMEN'S STRIKE-RESULTS OF MEETING BETWEEN MINISTER AND PARTIES

David Réal Caouette: I should like to put a supplementary question Mr. Speaker.
Does the Prime Minister know what are the results of the meetings held yesterday and this morning with the Minister of Labour and is the settlement of that conflict expected in the near future?


Pierre Elliott Trudeau: Mr. Speaker, I understand that the Minister of Labour is now trying to settle that conflict by meeting with the parties involved in Montreal. I do not have any further report for the moment.



QUEBEC-LONGSHOREMEN'S STRIKE-SUGGESTED ESTABLISHMENT OF TRUSTEESHIP AS SOLUTION TO DISPUTE-POSITION OF GOVERNMENT

Mr. Georges Valade (Sainte-Marie):: Mr. Speaker, I have a supplementary for the right hon. Prime Minister.
In view of the suggestion made by the Montreal Port Authority, in a telegram sent to the Prime Minister this morning, of trusteeship as a solution to the conflict, can the Prime Minister tell us whether he is considering this possibility?


Pierre Elliott Trudeau: Once more, Mr. Speaker, I was apprised of the telegram only a few moments ago and I have not yet sent a reply.


Georges-J. Valade: Mr. Speaker, since the Montreal Port Authority does recommend trusteeship in the telegram and since I am informing the Prime Minister of this position of the Montreal Port Authority, may I ask the Prime Minister whether he considers that the action recommended is likely to settle the conflict?


Pierre Elliott Trudeau: Mr. Speaker, I tell the hon. member again that I have just been apprised of the telegram. Therefore, I have not yet considered the reply to be made nor the other matter mentioned by the hon. member.



QUEBEC-LONGSHOREMEN'S STRIKE-POSSIBLE INTERVENTION OF QUEBEC MINISTER OF LABOUR-POSITION OF PRIME MINISTER

Georges-J. Valade: Mr. Speaker, I should like to put a supplementary question.
Because of the absence of the Minister of Labour, I should like to ask the Prime Minister whether it was the statement of the Quebec Minister of Labour to the effect that he would intervene personally if the conflict was not soon settled, which has incited the federal government to act and take remedial measures immediately.


Pierre Elliott Trudeau: Mr. Speaker, all I can say is that the Quebec Minister of Labour, judging by his past performances, could not be very useful to us in this matter.



ADMINISTRATION OF JUSTICE


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to ask the Solicitor General a very serious question. What grounds and what formula were used in granting a temporary release to Charles David Head who was convicted on May 26, 1967 and sentenced to life for the rape of a six-year old girl and given a five-year concurrent sentence for attempted rape of a nine-year old girl and prior to that time had two charges of rape and indecent assault on a six-year old girl and was given life imprisonment and declared criminally insane and given an indeterminate sentence? On what grounds was this man given a temporary release under the plan the Solicitor General seems to be using and which is contrary to section 684(3) of the Criminal Code?


Hon. Jean-Pierre Goyer (Solicitor General):: For the
simple reason, Mr. Speaker, that he is still a man and a citizen of this country.


Eldon Mattison Woolliams: He may be a man and a citizen of the country but I would assume that Tanya Bush of Vancouv-

June 20, 1972

er who was recently found dead, probably due to foul play, is also a girl and a citizen of this country.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: Mr. Speaker, I see that the Prime Minister wants to get into the act. If he wants to tell the House the formula-


Pierre Elliott Trudeau: Are you linking the two? Are you making an accusation?


Mr. Speaker:: Order, please. The hon. member was given the floor for a supplementary. Perhaps he might ask it now.


Eldon Mattison Woolliams: I should like to put the question again. Under what formula and what rule of law-I am not asking a question of law, I am asking a question of fact- was this man given temporary release and was his release signed properly by anyone in the proper office or was it a forged release?


Jean-Pierre Goyer: Mr. Speaker, this great lawyer from western Canada should know that one does not make reflections which can cause people to bear judgment on a man's actions before this man appears before the courts. This is the law of this country, and this great lawyer should respect it.


Mr. Ricard:: Don't be so smart. Give an answer.


Mr. Maclnnis:: You are breaking the rules here. You can't even live up to the rules of the House.


Eldon Mattison Woolliams: I should like to ask one further question, Mr. Speaker. 1 do not mind the insinuations or insults. I am seeking information on a serious matter. There are certain rules and laws laid down in the Criminal Code and the Penitentiary Act in reference to temporary release. I am asking the Solicitor General-if he does not care to answer that is his prerogative and I appreciate that-on what grounds was this man released? What were the grounds?


Mr. Diefenbaker:: This fine citizen!


Jean-Pierre Goyer: Mr. Speaker, this citizen has been granted temporary release for the third time and we have no evidence to date that he has not behaved properly; on the contrary, all evidence goes to show that he has behaved very well. In the past, over a period of four years, we have granted temporary release on 133 occasions to 25 of these inmates convicted for sexual offenses and we have had not one serious case to deplore.


Eldon Mattison Woolliams: Mr. Speaker, may I ask one more supplementary question?
Inquiries of the Ministry


Mr. Speaker:: Order, please. The hon. member might ask a supplementary and then we might go to the next subject.


Eldon Mattison Woolliams: Would the minister make a full statement on motions in reference to the granting of the temporary release, indicating whether there was any supervision after the man was released and also setting out the rules, the law and the grounds by virtue of which this person was released in those circumstances?


Jean-Pierre Goyer: Mr. Speaker, I do not see any reason why I should comment on the private life of an individual at this time. If circumstances warrant it, I will do so then.



PUBLIC SERVICE


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the President of the Treasury Board. On May 9, in response to a question of mine, the minister referred to the possibility of consultations being held with the representatives of the public service employees with respect to the escalating of the pensions of retired public servants in accordance with the full increase in the cost of living. Can the President of the Treasury Board say whether those consultations are taking place and, if so, how they are progressing?


Hon. C. M. Drury (President oi the Treasury Board):: Mr. Speaker, there was some discussion about the particular form these discussions should take. I think it has now been agreed what the appropriate form should be and they are now in progress.


EXTERNAL AFFAIRS
Heath Nelson Macquarrie: Mr. Speaker, may I direct my question to the Acting Secretary of State for External Affairs or to the parliamentary secretary. Has the government any information on the present whereabouts of the Canadian-owned and Canadian-skippered ship, Greenpeace IIP. Also, has the government of France been asked for any information on the location of this vessel and the well-being of its crew?


Mr. Paul St. Pierre (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, the government does not know the exact location of Greenpeace III at this time. If I may respond to the second part of the hon. member's question, the government of France has, we understand, publicly stated that it will not permit the occupants of Greenpeace III to place themselves in a position of danger.

June 20,1972
Inquiries of the Ministry


Heath Nelson Macquarrie: May I ask whether it is the view of the government of Canada that the government of France has the right to arrest ships on the high seas in these circumstances ?


Mr. Speaker:: Order, please. The hon. member is asking for a legal interpretation and I doubt that the question is in order.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Prime Minister. I am interested in what compels Marc Lalonde, the right hon. gentleman's principal private secretary, to make the rounds of Time Magazine and the Toronto Sun and suggest by letter and interview that these journals have been unduly critical of the right hon. gentleman.


Some hon. Members:: Oh, oh!


Mr. Bell:: Explain.


Mr. Fairweather:: A supplementary question, Mr. Speaker. I think the country is entitled to know whether the Prime Minister's concept of democracy is so fragile that it only accepts that rare remnant of comment that is favourable.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.



CANADIAN CONSTITUTION


Mr. Roch La Salle (loliette):: Mr. Speaker, I would like to ask a question to the right hon. Prime Minister.
Last June 19, the Health Minister of the Province of Quebec stated at the Canadian Welfare Conference that it was imperative to renew negotiations about the constitution.
Would the Prime Minister tell the House if, on the one hand, the Premier of Quebec has advised him of such a wish and, on the other hand, if he himself is ready to renew these negotiations?


Pierre Elliott Trudeau: Mr. Speaker, on this subject, I have always said to whoever wanted to hear that the last series of constitutional conferences was not successful because the Province of Quebec did not agree with all the other provinces and the federal government. If this province wants to renew constitutional debates, it should do so from a clear, definite and known position and I hope that there would be then some chance of success.



INDUSTRY


Mr. lack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, I wish to direct my question to the Minister of Industry, Trade and Commerce. Has the minister received recommendations from the Textile and Clothing Board regarding its investigation into three important areas of Canada's foreign trade, acrylic yarns for use in machine knitting operations, double knit and warp knit fabrics, and broad woven polyester filament fabrics? If so, will he give the House the substance of these recommendations and his reaction to them?


Mr. Speaker:: Order, please. I hope the minister can reply to that question briefly. Normally the answer ought to be given by way of a statement on motions. The minister will be recognized for the purpose of giving a brief answer.


Jean-Luc Pepin: Mr. Speaker, if my memory serves ma well, I have received reports on the first two items mentioned. These reports will be tabled in due course.


John (Jack) McIntosh: May I ask the minister what safeguards are provided by the minister to ensure that the operations of the board are not detrimental to the Canadian policy of freer world trade, a policy to which the minister so often gives lip service?


Jean-Luc Pepin: Mr. Speaker, it is very simple-


Mr. Speaker:: Order, please. The question, in those terms, is not in order. I believe the right hon. member for Prince Albert has a supplementary to the previous question.



CANADIAN CONSTITUTION


John George Diefenbaker: Mr. Speaker, my question is directed to the Prime Minister. Is he giving consideration now to the reconvening of a Canadian conference on the constitution? I should like to know what his position is because I seem to recall that all these problems were going to be solved under his regime.


Pierre Elliott Trudeau: Mr. Speaker, I am not, as I said just a moment ago in answering the question of the hon. member for Joliette, giving consideration at this time to reconvening the constitutional conference, and I seem to recall, too, that back in the early sixties all these problems were going to be solved.


John George Diefenbaker: Mr. Speaker, I am amused because the Prime Minister is rewriting history. That statement is false.


Some hon. Members:: Oh, oh!
June 20, 1972


John George Diefenbaker: If any conference were to be called, would the Victoria charter provisions be the general base from which to start? I should like to ask what the Prime Minister's views are in that regard and whether he has not found, since Premier Bourassa turned down the Victoria charter, that Mr. Bourassa was right in his stand?


Mr. Speaker:: Order, please. I suggest that is debate.


John George Diefenbaker: Mr. Speaker, I would not want debate.


Some hon. Members:: Hear, hear!



INDUSTRY


Mr. lames A. McGrath (St. John's East):: Mr. Speaker, I have a supplementary to the previous question that was directed to the Minister of Industry, Trade and Commerce. May I ask the minister whether he has designated the textile industry as one of the sensitive industries and is he recommending or has he recommended to the Minister of Regional Economic Expansion that a moratorium be placed on grants to new textile plants or for expansions until markets have had a chance to stabilize?


Jean-Luc Pepin: Mr. Speaker, the philosophy of the textile policy, as announced in May of 1970, is that there are a number of viable sectors in this industry and that these only should be encouraged. That is why, through our regional development subsidies or otherwise, we have concentrated on these viable sectors. The Textile and Clothing Board helps in identifying these sectors and the quality of the plans developed and it makes recommendations to the Canadian government as to the degree of protection that might be needed at that time. The commission does not make policy; it makes recommendations on trade policy in textile matters.



TRANSPORT


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, my question is directed to the Minister of Transport. In view of the recent decision of the Supreme Court of Canada regarding the Kootenay and Elk Railway, and the announcement in the House by the minister that the matter was being studied, may I ask the minister whether this study has been completed and when a report will be made to the House?


Donald Campbell Jamieson: Mr. Speaker, the judgment has been studied. The position, of course, is that the decision of the Supreme Court left an option open to the applicant company to reapply to the
Inquiries of the Ministry
Canadian Transport Commission. To my knowledge they have not done so so far. Simultaneously, incidentally, with the action before the Supreme Court of Canada an appeal was filed with the CTC on different grounds or under a different process. Both these matters are still pending. Presumably the next step is up to the applicant railway.



LEGALITY OF LICENSING OF KOOTENAY AND ELK RAILWAY BY GOVERNMENT OF BRITISH COLUMBIA

Randolph Harding: Has the department investigated the licensing of the Kootenay and Elk Railway by the government of British Columbia to ascertain whether the terms of the Railway Act have been contravened, bearing in mind the international purpose for which this spur railway line is to be used?


Donald Campbell Jamieson: I will have to take notice of that question, if the hon. member does not mind. It is quite complicated in law and I should like to get a legal opinion.



RESPONSIBILITY OF RAILWAYS TO PEOPLE OWNING


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, I have a supplementary question for the Minister of Transport. When the Canadian Transport Commission grants to railways the right to abandon service on certain lines, does this include the abandonment of responsibility to the general public owning land along the right of way with regard to the upkeep of fences-


Mr. Speaker:: Order, please. That is debate or argument rather than a question. At this point I think I should bring to the attention of hon. members that there are about six minutes left before the end of the question period and there are at least 20 members seeking an opportunity to ask questions. When 50 members enter the House and rise at two o'clock all thinking they are going to ask questions, I suggest that hon. members should look around them and notice what is happening and resign themselves at that point to the fact that they are not all going to have an opportunity to ask a question on every day. It just cannot work that way.


Almonte Douglas Alkenbrack: Ten o'clock, Mr. Speaker.



AIRPORTS


Mr. Colin D. Gibson (Hamilton-Wentworth):: Mr. Speaker, I have a question for the Minister of Transport. To avoid uncertainty and to clear up many rumours, can the minister inform the House whether a meeting with regional representatives of the Mount Hope, Hamilton, Ancaster and Binbrook areas has been scheduled in connection with the details of proposed airport expansion plans at Mount Hope airport?

June 20, 1972
Inquiries of the Ministry


Donald Campbell Jamieson: preliminary meeting has been held which was attended by the regional director and, I believe, by representatives of the air administration. Within a few days I shall have, I think, three alternatives-if one can have three alternatives-which will be submitted to the county councils or the group of councils to which the hon. member has referred.



NATIONAL HARBOURS BOARD


Robert Lorne Stanfield: Mr. Speaker, I have a question for the Minister of Transport with regard to the annual report of the National Harbours Board which is required by statute to be tabled by March 30 each year. Why has the report not been tabled this year? Has it been certified by the Auditor General?


Donald Campbell Jamieson: It will be tabled, I believe, tomorrow. I had a letter from the Auditor General two or three days ago in which he indicated there were certain things with regard to the report which did not enable him to give it the necessary authorization or certification. But it will be tabled this week along with the Auditor General's letter and comments.


Mr. A. D. Hales (Wellington):: When the minister tables it, will there be a financial statement certified by the Auditor General?


Donald Campbell Jamieson: Rather than seek to answer the question in that form I will simply table the letter along with the documents which have been provided by the National Harbours Board. As I understand it, it is not certified in the sense the hon. member has mentioned, but I am not absolutely certain about the exact use of that word.



MANPOWER


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I should like to direct a question to the Minister of Manpower and Immigration.
Since the federal on the job training program is often frustrated by the by-laws governing the building trade in Quebec, I should like to ask the minister if he is aware of that and if he intends to open talks with the Quebec representatives in order to settle this problem and make this program really efficient in all cases?


Hon. Bryce Mackasey (Minister of Manpower and Immigration):: I must confess I am not aware of any contradic-

tion. I certainly have no meeting planned with my counterpart in the province of Quebec.



TRANSPORT


Robert Muir: Mr. Speaker, my question is directed to the Minister of Transport. In light of the most recent freight rate increase in the Atlantic provinces and in view of a statement by a spokesman for General Instruments of Canada Limited that the potential advantages of being located in Cape Breton are slowly diminishing as a result of increased freight rates, may I ask what proposals the hon. gentleman can offer this employer of close to 1,000 people to alleviate the situation so that this operation is not placed in jeopardy as stated by the same spokesman?


Donald Campbell Jamieson: would have to know the details but if the hon. member would be good enough to let me see the item in question I would be glad to talk with the company concerned.


Robert Muir: I thank the minister for his reply; I shall be glad to provide him with information. In view of the fact there have been 12 domestic freight rate increases since 1968 when the Sydney Steel Corporation came into being, and bearing in mind that this company employs close to 3,000 people, what relief can the minister offer this corporation so that it will not be forced out of business?



CONSUMER AFFAIRS


Mr. Robert Simpson (Churchill):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs with reference to a recent survey of food costs carried out in 21 northern Manitoba communities under the authority of the medical services branch of the Department of National Health and Welfare. The report states that the average cost of food in these 21 communities is 73 per cent higher than the cost of comparable food in Winnipeg. I should like to ask the minister whether this report has been brought to his attention and whether he intends to look into this unacceptable situation.


Hon. Robert K. Andras (Minister of Consumer and Corporate Affairs):: Frankly, the report has not been brought to my attention. I appreciate the hon. member raising the matter in the House, and I will look into it.
June 20, 1972



TRANSPORT


James Aloysius McGrath: Mr. Speaker, I should like to ask the Minister of Transport when he will be in a position to announce the appointment and the name of the independent consultant to carry out the study in connection with surface transportation in Newfoundland as announced by the Minister of Transport through the Canadian Transport Commission during the examination of the estimates of his department in committee?


Donald Campbell Jamieson: would hope to be in a position next week to announce, if not the name of the consultant, then certainly the terms of reference. That has been the cause of the delay-the determination of the terms of reference.



PROPOSED MACKENZIE VALLEY GAS PIPELINE-POSSIBLE PARTICIPATION BY PANARCTIC IN CONSORTIUM

Mr. Rod Thomson (Battloford-Kindersley):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Is it the intention of the government to encourage Panarctic Oils to join the consortium recently formed in Calgary to build the Mackenzie Valley pipeline?


Hon. Donald S. Macdonald (Minister of Energy. Mines and Resources):: Not at the moment.



AGRICULTURE


Mr. R. R. Southam (Qu'Appelle-Moose Mountain):: Mr. Speaker, I have a question for the Minister of Agriculture. It is one which has been asked a number of times but has never received a positive answer. Bearing in mind that the final report of the Barber Commission on the prices of farm machinery and repair parts was tabled in the House over a year ago, can the minister tell us whether the government plans to take any action with regard to some of the recommendations contained in this report before the twenty-eighth Parliament ends?


Horace Andrew (Bud) Olson: I am not sure we can give any reports respecting this matter further than those already given. I am sure the hon. member will recall that several positive steps were taken shortly after the first recommendations came out.
Inquiries of the Ministry TRANSPORT



FUTURE OF SAINT JOHN-DIGBY FERRY IN LIGHT OF FREIGHT RATE INCREASES

Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I have a question for the Minister of Transport with reference to the specific freight rate increases involving the Saint John-Digby ferry. I know this has been brought to the minister's attention, but I wonder whether he has had an opportunity to consider some of the information on his desk and whether he is prepared to make a statement on the future of the ferry in view of the fact that freight rate increases amount in some cases to 50 per cent, the tourist season is upon us, the ferry lost over half a million dollars last year, and there is no federal subsidy paid?


Donald Campbell Jamieson: As
often happens, there are a great many parts to the hon. member's question. The short answer is that my officials are in discussion with representatives of Canadian Pacific on all these subjects at the present time.


Thomas Miller Bell: Would the minister assure us that he will take into consideration in this review the fact that there is a competing ferry which receives a subsidy from the government amounting to more than a million dollars?



IMMIGRATION


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is to the Minister of Manpower and Immigration. I am wondering whether the investigation into the Alicia Wiercioch case has resulted in pinpointing those people who misinformed him. Has it been completed and, if so, how many persons are involved and what has happened to them?


Bryce Stuart Mackasey: It is safe to say there has been some internal discussion between myself and the officials at headquarters about the type of information provided to be used in the question period in order that the House may not be unintentionally misled.



NATIONAL REVENUE


Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, my question is for the Minister of National Revenue and it arises out of reports that more than one million tax returns submitted this year contained errors and must be processed at least twice by the department. In view of the increased complexities of the new tax legislation, would the minister say whether he has made any projection of

June 20, 1972
Employment Incentive Programs the requirement for additional services to assist taxpayers in submitting proper returns next year?


Mr. Speaker:: Order, please. I would think that question should be placed on the order paper or discussed at the time of the adjournment. I apologize to the hon. member for Humber-St. George's-St. Barbe, the hon. member for Winnipeg North Centre and others. Perhaps they might be given some priority tomorrow. Orders of the day.



GOVERNMENT ORDERS


Mr.   Hees. Prince Edward-Hastings@for Mr. Baldwin: This House regrets that the government's expenditures for incentive programs have failed to stimulate production and trade in Canadian goods and services and to open increased opportuni-tite for productive employment to Canadians.


Mr. Speaker:: Order, please. I believe the hon. member for Winnipeg North Centre seeks the floor on a point of order.


Stanley Howard Knowles: Mr. Speaker, I hesitate to rise if someone in the official opposition is going to do so, but I thought there was an agreement about the length of speeches today. I think the agreement was 30 minutes for the mover of the motion, 30 minutes for the member replying for the government, 20 minutes for the first speaker of the two parties at this end of the chamber and 15 minutes for everybody else.


Thomas Miller Bell: I am sorry, Mr. Speaker, but our House leader did try to get complete agreement on this matter. However, it was not possible because some members had prepared their speeches on the basis of the time allotted by the Standing Order. Therefore, I would suggest we leave it the way it was proposed yesterday, that all the rules stand, but if at six o'clock it looks as though some members are being deprived of opportunities, then we will negotiate on that basis.


Stanley Howard Knowles: Fair enough; I agree.


André-Gilles Fortin: Agreed.


George Harris Hees: Mr. Speaker, the most accurate measure of a government's performance in stimulating production and jobs is the figures produced each quarter by Statistics Canada which show the real growth in output during that three month period. These figures are arrived at by subtracting the increase in inflation from the increase in the gross national product, and the resultant figure shoes the increase in real economic growth that has taken place during that period of time.

I suggest that we begin this afternoon by examining the figures over the past ten years in order to judge the performance today compared with the industrial effort this country has made during the past ten years. During 1962, the first of those ten years and the last year the Conservative government was in office, the real output achieved in this country increased by 6.8 per cent. The average yearly increase during that ten year period has been 5.5 per cent. The figure released last Friday by Statistics Canada shows that during the first quarter of this year real output in this country increased at an annual rate of only 4 per cent, following a similar rate of increase during the last quarter of 1971. So we see, Mr. Speaker, that our industrial performance today is considerably below the performance over the past decade, and it gives a clear indication why unemployment remains well above the 6 per cent level. The natural question that arises is this: Why should our performance today be so far below what it has been in recent years? The obvious answer is that the government has failed to introduce adequate measures to stimulate the economy.
The next logical question is: What should those measures be? In answering that question, I suggest that we first take a look at the proposal the government made on May 8 last for stimulating the economy. The Minister of Finance (Mr. Turner) announced a reduction in corporation income tax paid by manufacturers and processors, to come into effect on January 1 next. However, this tax reduction will be largely nullified by two important tax increases which are to come into effect on that very same day. I think it is interesting to note that in his budget address the Minister of Finance made no reference whatsoever to these two tax increases. One member on the government side, who was recently a member of the cabinet, suggested the other day that the Minister of finance simply did not know that these taxes existed, but that, of course, is nonsense. The Minister of Finance must have known. Obviously he did know, and he did not mention either of these tax increases on that occasion simply to avoid embarrassment.
The first of these tax increases is the additional 5 per cent corporation tax that will be paid by all companies other than manufacturers and processors on January 1 next. As hon. members very well remember, last October the former Minister of Finance reduced all corporation income taxes in an attempt to stimulate business in general, but this tax reduction was only effective until January 1, 1973. On that date the amount of corporation income tax payable by all companies, other than manufacturing and processing companies, will go up by 5 per cent. Since businesses, other than manufacturing, comprise 65.8 per cent of the Canadian economy, this 5 per cent tax increase can be counted upon to slow down the pace of the economy to a considerable extent since these companies will have less capital with which to expand their operations. This impending tax increase is today slowing down any plans these companies might otherwise have had to expand their operations at this time.
Second, all personal income taxes will be raised by 3 per cent on January 1 next. When he brought in his budget last October, the former Minister of Finance lowered personal income taxes by 3 per cent until January 1, 1973, when they will return to their former level. It is obvious
June 20, 1972

that this increase in personal income tax will take an important amount of money out of the pockets of the Canadian buying public from January 1, 1973 onward. Sales and production will be slowed down by the amount of purchasing power taken out of circulation, and this knowledge is at present slowing down plans for expansion by all businesses because these companies know they will all be adversely affected by this brake on purchasing power.
What is needed to get the economy going is a shot in the arm right now, not sometime six months hence, eight months, 10 months or a year. We are facing very serious unemployment today and the economy of this country has been moving very sluggishly for at least three years. The kind of government actions needed to bring about such a shot in the arm right now to get the economy moving again are the following. First of all, the government should make the reduction in corporate income tax for manufacturers and processors effective on July 1 next instead of waiting until July 1, 1973, so that important segment of the economy will be encouraged to expand its operations now, not six months, nine months or a year from now.


Jean-Luc Pepin: We need time to plan and put it into effect.


George Harris Hees: The Minister of Industry, Trade and Commerce (Mr. Pepin) queries that statement. This government has introduced, on the average, two budgets a year for the past three years. It has brought in these budgets because each budget was supposed to stimulate the economy and get it moving, but a couple of months following the presentation of each budget it was found they were not able to do the job. The government had to start all over and bring in another budget to stimulate the economy. A couple of months later it was found that the measures introduced did not do any better, and so there were tax changes galore. This government never knows where it is going and it desperately grabs at anything on which it can get its hands. It changes taxes in every way it can, and the manufacturers and processors of this country have no way of knowing whether in two or three months time the government will find that this move is unproductive and change the whole tax structure again, so what they are planning on now will simply not come into effect. That is why these tax reductions should have been made available on July 1 next, not on January 1, 1973.
The second thing the government should do is announce that corporation income taxes for all businesses, other than manufacturing and processing, will not be restored to their former level on January 1, 1973. As I have said, at that time those taxes will increase by a little more than 5 per cent.
The third thing the government should do is announce immediately that personal income taxes will not be restored to their former level on January 1, 1973, but will be reduced by a further 5 per cent on July 1 next. Such a move is very much needed now to put the additional purchasing power needed today into the hands of the Canadian buying public so it can increase purchases, which in turn will increase production, get the economy
Employment Incentive Programs
moving and create the jobs so very badly needed in this country today. That increase in personal income tax will take a very severe bite out of the purchasing power of the Canadian people and will materially slow down the orders factories receive from stores where customers place their orders. When this comes into effect, it will have a very serious impact on our economy.
The fourth thing this government should do is introduce a massive export drive to greatly increase sales of Canadian products in the markets of the world where sales have been decreasing.


Jean-Luc Pepin: You are asking us to do things we have already done.


George Harris Hees: The minister interjects by saying he is doing this. As a former minister of this department I have followed his moves very carefully, indeed. If he knew how dejected the members of his department are, from the top to the bottom, about the inadequacy of the juvenile approach he is taking to this whole matter as compared to what they know is needed he would be shocked. The effort today can only be described as very inadequate.
I have been hoping for a long time that the department would finally get into gear, that the minister would get the spirit of the thing and we would see a massive trade drive moving forward. That drive has not materialized. The minister has called some of his trade commissioners back to Canada and asked them what they thought should be done. They have told him what they think should be done, but he has not done anything. There does not seem to be any indication that the minister will do anything about this. My purpose today is to try to prod him into doing something. These men know what is needed to increase sales of Canadian products in the markets of the world. Many of them were in the department 10 years ago when exactly what I am suggesting was done. A massive trade drive took place and in one short year the 10 years of Liberal trade deficits were turned into our first trade surplus. Our sales abroad increased year after year and laid the foundation for the prosperity of the 1960's. Those men were here then and know this can be done. They know what must be done and they have asked the minister to do it.
My information is that the minister has taken these propositions to the Cabinet, and I give him credit for this, but the cabinet has turned him down as they would involve spending money. Certain of his colleagues have said they want to see the government spend money in other directions rather than in this way, or that is my information.


Jean-Luc Pepin: Be specific, otherwise I cannot judge.


George Harris Hees: I am trying to give the minister the best of it. I am trying to picture him in the best possible light. If he does not want to be pictured in that way, I would simply say he has to take full responsibility. I think he has done his best. I am told he has gone to the Cabinet but cannot sell his ideas to his colleagues. He is a very frustrated minister. If he has not done what I am told he has done, then 100 per cent of the blame rests on his shoulders.

June 20, 1972
Employment Incentive Programs


Jean-Luc Pepin: I cannot judge because no specific suggestions have been made.


George Harris Hees: The fifth thing the government should do is introduce tax incentives to induce greater productivity and, by reducing costs and selling prices, make our products more competitive both in Canada and in the world markets. In this way, our Canadian products would sell in greater volume in Canada and in markets of the world and, as a result, production would be increased and jobs created. These tax incentives would be paid on the basis of increased productivity in individual plants and would give industrial leaders in this country the incentive they need to persuade them to buy expensive new plant equipment and production systems necessary to get costs down, making it possible to sell Canadian products at more competitive prices.
Now, having told the government what it should do, the question is what are the chances of the government adopting these very sensible suggestions. The answer I am afraid is that the chances of that happening are very slight. There seems to be ingrained in all Liberal governments a certain arrogance which makes it impossible for them to accept suggestions from anybody else. When I was here before we formed the government, when the St. Laurent government was in power, Mr. Howe, Mr. Harris and all the others would not consider a suggestion. They did not realize how wrong they were until they woke up around eleven o'clock on June 11, 1957 and found they were out of office. Now, I see exactly the same situation developing again on the other side of the House. There is the same arrogance, the same conceit and the same unwillingness to accept any suggestion, no matter how constructively it is put forward.
I see the Prime Minister (Mr. Trudeau) in the next couple of months once again having the same tremendous debate in his own mind concerning whether he will have the election this fall or put it over until next spring. The story about what went on here a few weeks ago is well known. The Prime Minister was all set to go. He thought he had it in the bag for the Wednesday, and then he received the polls from across the country which showed he would lose a great many seats. His pollsters told him they were not sure whether the result would be a minority Liberal government or a minority Conservative government. So, at the last moment, the Prime Minister decided not to go to the country. He gave the vague excuse we all heard and laughed at. He simply turned tail and ran.
What is to happen when the government will not accept these sensible suggestions so that the economy could get going during the summer or early fall? The Minister of Finance (Mr. Turner) had hoped his incentives which were introduced on May 8 would do the job. They will not for the reasons I have mentioned. We will see the Prime Minister trying to decide once again whether he should hold the election in the fall, as he did when he tried to decide about the spring election, or hope that things will get a little better next spring. I say things will not get better, and for a very good reason. I say that reluctantly because I would like to see things get a whole lot better in this country.

The incentives of the Minister of Finance will not work for the two reasons I mentioned earlier. Two matching tax increases will take place simultaneously. His tax increase for all companies, other than manufacturing and processing, largely nullifies the benefit of the decrease to manufacturing and processing industries, and for a very good reason. In the minister's proposition which he mentioned on the night of May 8, there is absolutely no requirement that business spend the benefit from that tax reduction granted to manufacturers and processors in the way the government wishes them to which is to increase their production and provide more jobs for the Canadian people. These manufacturers and processors can take that tax reduction and do any one of three things with it. First, they can do what the government and the country wants, which is increase their operations, increase their production and make it possible to provide jobs for the people in Canada who want to work. Second, they can pay out the benefit from the tax increase in the form of annual dividends or, third, they can put the benefit from the tax decrease into the company reserves.
There is no indication at all concerning what the manufacturers and processors of this country will do with the windfall which will come to them starting January 1 next. The government is reducing taxes to one segment of the economy which means that another part of the economy will have to make up the loss. The general taxpayer will have to make it up in some way or other. Any businessman will tell you that if you want businessmen to do something you do not simply hand them a lump sum of money, as this government is doing, and trust in God that they will do what you want them to do. A good many businessmen in this country are laughing up their sleeves at the Minister of Finance today. There is no requirement that they spend the money in the way the government wants them to do.
What the government should have done, and should do now, is say to businessmen that this is what we want you to do; if you do it you will be rewarded generously at the end of the year in exact proportion to the way in which you carry out the government's wishes. In other words, the government should say to them that if they increase production and increase jobs in their plants to a certain percentage they will receive a proportionate tax rebate; the more they do this the greater the tax rebate they will receive. In that way, business is being paid when it has done what the government wants it to do rather than being given the money ahead of time in the hope that it will do it. That is the kind of thinking fuzzy-minded theorists do and believe will work. It will not work because many manufacturers and processors in this country simply will not use that reduction in the way in which the government wishes, and there is absolutely nothing the government can do about it.
I am afraid the government will not accept these very sensible, business-like suggestions. There is no member on the other side of the House who could claim for a moment that any one of the suggestions I have made is not sensible, straightforward and businesslike in respect of getting the economy going. Because the government will not accept these suggestions, I am afraid we are destined to see the economy move along in the same sluggish and ineffective way it has been for three years
June 20, 1972

now. I am afraid also that the Prime Minister, as he discusses the situation with himself, will be putting to himself the proposition of whether he should have an election now or put if off until the spring in the hope that some improvement will take place. What a prospect! We will just have to look forward to such a discussion going on and the prospect of going through another year of Liberal misrule and mismanagement as well as very poor economic conditions. This is something the government of this country has no right to impose on the people of the country.
Once again, I say the government should forget its arrogance and for heaven's sake for once accept some sensible suggestions and get the economy of the country going, so that we will be in a position where the Prime Minister can have sufficient confidence to go to the country next fall. Let us have the economy of this country run well for the first time in many years.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the failure of the government's various incentive programs is proven by the state of the economy. From the fiscal year 1968-69 up to and including the present fiscal year, the government will have paid out in hand-outs to corporations in this country the staggering sum of $2,162,217,000. The Canadian people have a right to ask what they are getting for this very large gratuity. What is the situation in the economy? We now have over half a million unemployed. If you add to that those on manpower training, those temporarily employed, in Opportunities for Youth and the Local Initiatives programs, the unemployment figure is probably closer to three quarters of a million.
The figures just issued by the government show that in the first quarter of this year the rate of growth in real terms is only 1 per cent. It is significant to note that each year the handouts by the government have increased. For example, in 1968-69, the grants were $390,593,000. They went up each year until this year they are $530 million. One would have expected that these increased grants would have resulted in declining unemployment, but that is not the case.
In 1968, the seasonally adjusted figure for unemployment was 4.8 per cent. In 1971, it had reached 6.4 per cent. While the government has poured out more money, the state of the economy has not improved. Unemployment has gone up. Our rate of productivity has remained more or less stagnant and the economy is lagging far behind its potential. That is why I say the people of this country have a right to ask why these incentive programs have been a failure.
I suggest there are three reasons why they have been a failure. The first is that incentive grants by themselves are not the answer. Both the Liberal and Conservative parties have a great deal of faith in the trickle down theory. They believe that if you pump in enough money at the top, it will trickle down to the people at the bottom. It has not worked that way.
Employment Incentive Programs
As a matter of fact, the corporate sector of the economy does not particularly need great financial assistance. Figures have just been issued for the first quarter of 1972.
A survey made of 426 firms shows that after taxes, I repeat after taxes, profits rose by 36.2 per cent. Last year the chartered banks made record profits. Of the eight banks surveyed, they showed an increase in the first quarter of this year of 41.3 per cent. What the government has failed to do has been to recognize that this economy needs stimulation by increasing the aggregate demand.
The New Democratic Party has been telling the government in season and out of season that if they want to get the economy moving and if they want to provide jobs for our people, instead of pouring money in at the top, very little of which trickles down to the people, they should put the money where it will create a demand for goods and services. We recommended many things, such as the reduction of personal income tax in the middle and lower income groups. We suggested lowering interest rates, making money available for low cost housing and making large sums of money available to the provinces and municipalities for socially useful projects. Even if the government wants to give some incentives to industry, as the Minister of Finance (Mr. Turner) has done in his budget to the tune of $500 million, those incentives ought to be given on the basis of labour intensive industries rather than capital intensive industries. Giving accelerated depreciation and reduced taxes to large corporations does not guarantee that they will use those savings to create jobs. If the government wants to provide an incentive, let it do so on the basis of jobs created rather than on the basis of profits made.
The second reason this incentive program has failed is that there has been an unequitable distribution of these grants across this country. For some time members in this party have been trying to find out the formula upon which industrial incentive grants are given. I must confess that that formula is like the peace of the Lord, it passeth all understanding.
If we take the period from July 1969 to June 1971, we find that in the province of Quebec there were 37.2 per cent of the unemployed in Canada. They received 38.8 per cent of the money paid out. In my opinion, that is fairly equitable distribution. However, in the province of British Columbia in the same period we had 12.6 per cent of the unemployed people in Canada and we received one half per cent of the money paid out.
If one turns to the period from July 1971 to February 1972, the picture is even worse. We find that the province of Quebec, where they had 35.7 per cent of the unemployed, received 61.1 per cent of the money paid out. In the province of British Columbia, where we had 11.8 per cent of the unemployed in Canada, we received 3 per cent of the money paid out in incentive grants. It will be said that Quebec has very high unemployment, and it has. However, I point out that British Columbia, according to the figures for May 1972, has exactly the same unemployment rate as the province of Quebec, namely 8.1 per cent. That is exceeded only by the Atlantic provinces which have a seasonally adjusted rate of unemployment of 9.7 per cent.

June 20, 1972
Employment Incentive Programs
As an illustration of the tendency of this government to forget the west and be completely oblivious to the needs of British Columbia, I point to the case of Dominion Aircraft Corporation about which I asked the minister a question this afternoon. This company is seeking to manufacture STOL aircraft with the prospect of providing employment for between 400 and 500 persons on the lower mainland in the Sea Island plant it hopes to open there. I do not have the technical competence to say whether this is a good or marketable aircraft, but the company claims that it has firm orders for 23 aircraft, and it has orders held in abeyance for 17 aircraft at $130,000 per aircraft.
This company did not ask for a grant. They merely asked the government to guarantee their loan from the bank for a figure, I believe, of some $3.5 million. Their application was rejected. They have now been told to apply under PAIT. This company has been waiting months for an answer. The minister told me this afternoon that he expects to be able to make an announcement regarding the decision of his department within a week or two. This group has been waiting for months. When I recall that the two aircraft industries in central Canada, De Havilland and Canadair, have had grants totalling $90 million, I find it extremely difficult to understand why the government could not underwrite a bank loan of $3 i million to put 300 or 400 people to work in the lower mainland of British Columbia and to provide western Canada with an aircraft industry.
It is passing strange that of the more than $2 billion we have paid out in incentive programs over half of it has gone to foreign-owned and controlled multinational corporations. We have been able to spend hundreds of millions of dollars helping foreign companies to come into Canada, acquire a stake in this country and take over part of our economy, but when a Canadian company seeks to get started in Canada the government seems to have no facilities to help it.
That brings me to the third reason why I think this incentive program has been a dismal failure, and that is that it has completely ignored small Canadian companies and small Canadian businessmen. After all, Mr. Speaker, these small Canadian businesses, these retail merchants and wholesalers and those in the service industries, provide employment for hundreds of thousands of Canadians in the cities, towns and smaller communities of Canada. They are being discriminated against. First of all, they are being discriminated against in the matter of taxation. Under the recent budget they are going to pay the full corporation tax, whereas the manufacturing and processing sectors of the economy will have their tax frozen at 40 per cent. And when the tax cuts of last December expire, as they will on December 31 of this year, and personal income tax goes up by 3 per cent and corporation tax goes up by 7 per cent, the small businessmen, the retailers, wholesalers and those in the service industries will find that in 1973 they will be paying a tax rate 20 per cent higher than the manufacturers and processors.
As the hon. member for Duvernay (Mr. Kierans) has pointed out, it is not only a matter of higher tax rates. It is also a matter of the higher or accelerated depreciation and depletion allowances that are given to the capital

intensive industries. He pointed out that a retail merchant pays taxes on 90 per cent of his book profits whereas the metal mining industry pays taxes on only 13 per cent of its book profits, and the oil and gas industries on only 5.7 per cent of their book profits.
The small businessmen are also discriminated against in that they do not have access to the capital markets to secure the money they need to expand their operations. Big corporations have little difficulty in this regard. They are able to borrow money. The lastest figures show that the corporate sector of the economy in the last year increased its demand on term loans with the banks at a rate of 30 per cent annually. That has forced the Bank of Canada to increase the money supply at a rate of 25 per cent annually. That in turn has pushed up interest rates. It has encouraged short-term capital to move into Canadian banks, and pushed up the value of the Canadian dollar with disastrous results for Canadian exports.
As a matter of fact, what has happened has been that the corporations have been monetizing their debts. But what happens to a small businessman when he wants capital? Mr. Speaker, never in all the years that I have been in public life have I had so many communications from small businessmen and entrepreneurs asking how they can get some assistance to secure adequate capital to meet their needs.
The Small Businesses Loans act is a farce and everyone knows it. All of this was completely substantiated in the statement made by the newly elected president of the Canadian Manufacturers Association, Mr. Daniel Sprague, when he said:
If we want to maintain small Canadian companies then a source of capital definitely has to be created .. . Perhaps the new Canada Development Corporation could fulfil this function, but it would be better if the private sector took on the responsibility ... In fact, the large private holders of funds, such as banks and trust companies, could devote some portion of their energies to supplying venture capital to Canadian companies.
I am not very hopeful that the trust companies and the banks will supply that venture capital.
There are three possibilities. The first is that the Canada Development Corporation will do it, but only if the government is prepared to remove the provision that an applicant must have assets of $1 million or over. The second possibility is that the government will require the banks and lending institutions to set aside a portion of their liquid assets to help finance small business and housing. The third is that the government set up an agency to make capital available to these small entrepreneurs.
I want to point out that these small entrepreneurs, if they are able to expand, will provide jobs. They will provide jobs in many of the communities that the big corporations do not locate in and, even more important, these companies of Canadian citizens, if they are assisted in their development, will enable us to retain a greater degree of Canadian control of the economy. It seems to me that the government has to rethink its various incentive programs. It has to stop depending upon handouts to large corporations. The results prove that this has done nothing either to stimulate the economy or to provide jobs. Even more serious, it has done the opposite because half the money has gone to enable foreign corporations to
June 20, 1972

develop in this country at the expense of Canadian companies.
The time has come for the government to think in new terms, to think in terms of putting these large sums of money where they are needed to create aggregate demand, higher pensions, municipal and provincial works, housing programs, and assistance to small Canadian companies and Canadian businessmen, so that they can play the part they are prepared to play if given a chance in developing this country and making it a prosperous nation.


David Réal Caouette: Mr. Speaker, once again the House has before it this ever present motion aiming at providing meaningful employment in Canada, and I quote:
This House regrets that the government's expenditures for incentive programs have failed to stimulate production and trade in Canadian goods and services and to open increased opportunities for productive employment to Canadians.
Mr. Speaker, it is disheartening to note the extent to which members, and even political parties, can be irrational. Only a few days ago, the Minister of Regional Economic Expansion (Mr. Marchand) was in Cabano which, two years ago, was promised that a cardboard industry would be established there. Both federal and provincial authorities had then suggested to the citizens of Cabano and its surroundings to undertake a subscription campaign in order to collect the necessary funds after which the federal and provincial governments would provide grants for building a plant in replacement of the Irving facilities.
Mr. Speaker, to this day the citizens of Cabano have saved up almost $700,000. It should be stressed that these people are workers, farmers, settlers, small merchants and a few professionals who have subscribed this amount to win over the participation of the governments through grants. Last Sunday, however, the Minister of Regional Economic Expansion speaking before 2,000 people, declared in substance the following: Gentlemen, as there is no available market for the cardboard you intend to produce, we are not interested in providing grants. After two years during which they have saved $700,000, people are disappointed to hear the government simply say: For the moment, we are not interested, we are going to proceed with our studies to see whether it is possible to export the production of the intended industry.
Mr. Speaker, there are too many products on the market and the official opposition blames the government for its failure to create new jobs to increase production. It is not production that is lacking in any field of economic activity, for we have plenty of everything. Let us take, for instance, farm machinery, of which you can see thousands of items of all kinds at the Massey-Ferguson Industries Limited. There are lots of them, and we go and subsidize the company in order for it to maintain employment, while those who need farm machinery would buy it if only they had the necessary purchasing power.
It is not production which is lacking, be it in the clothing industry, the food industry, or any other, but rather the
Employment Incentive Programs purchasing power of consumers. Yet, instead of tackling that problemm, we keep talking about creating new jobs, or discussing a program of subsidies designed to create temporary jobs. But what happens afterwards? Unemployment again.
We spend $150 million on the Local Initiatives Program. It is like a drop in the ocean. This is why some grants are refused. I think that out of some 18,000 LIP projects, 5,700 have been approved by the government; about 12,000 have been turned down because the government had no money left. Thus, $150 million have been spent on the Local Initiatives Program for the period which will end on September 30 next. What will happen after that date? Unemployment. People will then be encouraged to apply at manpower centres, where they will be told: Come and be trained again. In fact, we spend our time training, retraining, and untraining people under the pretense of creating productive jobs. This is really mocking people to their faces. We have spent $150 million on the Local Initiatives Program. Yet, I know very well that in all constituencies some of the projects have been turned down.
Here is a case which I noted in my own constituency. The town of Noranda gets its water supply from a certain lake called Lake Dufault, in which the people who live in the northern part of the town dump their rubbish, polluting the waters of the lake which supplies both towns of Rouyn and Noranda. We asked for assistance under the Local Initiatives Program. Moreover, Quebec City as well as Ottawa wish to fight pollution. Now then, here is a case in which pollution might be fought and at the same time something lasting could be created, but we come up against a refusal. The government has no money for this project, while it approves some which are much less important. Anyway, $150 million were earmarked for the Local Initiative Program, and more than that has already been spent.
The retraining program costs $15 million; on-the-job training, $50 million; federal-provincial loans for job development program, $100 million; works which imply a large proportion of labour, $80 million; the agricultural exhibitions loan program, $10 million; accelerated housing assistance program, $113 million. They altogether amount to $578 million, which are used to train manpower, retrain workers and provide jobs which cannot be filled. But, the amounts engaged are nevertheless spent.
Mr. Speaker, it is sad to see to what extent we lack seriousness or ability.
The other day, I was talking of another case which occurred in my constituency, in Temiscamingue, where the Canadian International Paper was closing down, laying off 540 workers. The government cannot do anything about this. An office is opened in Temiscamingue once a week in order to invite those who were laid off to come and follow a retraining course, so that they may engage in a new job. But, there is no other industry in this area! And the Canadian International Paper has already closed down.
Mr. Speaker, subsidies are however granted to a plant at Port Cartier which will produce exactly the same thing that the Temiscaming plant was producing. The government will perhaps grant $3, $5, $8 million or more to create a new industry which will produce exactly what the

June 20, 1972
Employment Incentive Programs CIP company alone was producing at Temiscaming. Now a business is allowed to close on the ground that it will not be able to resume its operations before two or three years. The minister says: The market might be better then. Today there is no market, but the minister or the government is prepared to grant millions of dollars to build new industries.
Thus unemployment insurance benefits would be paid from the funds of the government which come from taxpayers; those funds would be used to pay unemployment insurance benefits to the citizens of those two towns. Such is the inconsistency or incompetence of a government or of ministers who do not go to the root of the problem.
I mention those two localities, but let us take the case of Domtar, in Trois-Rivieres, where 800, 900 or perhaps even more workers were laid off because of poor market conditions.
This afternoon, my colleague for Bellechasse (Mr. Lambert) put a question to the Minister of Agriculture (Mr. Olson). There is a surplus of eggs in Canada. My colleague asked the minister why we import eggs from other countries. The minister replied that we do because eggs are less expensive elsewhere. My colleague figured out that imported eggs cost us $1.20 a dozen, while they only bring in 20 cents a dozen to the producers. The ministers lie to us shamelessly in every field of production.
In 1971, Canada produced some $90 billion in goods and services. That is not peanuts. Still, the total Canadian income amounted to $67 billion. Mr. Speaker, it is not necessary to be a wizard at figures to understand that $67 billion cannot buy a production of $90 billion. There is therefore $23 billion worth of production which we are unable to purchase, because of a lack of purchasing power. The people are without purchasing power.
We hear the Minister of Finance (Mr. Turner) tell us: "To give new impetus to the economy, we must spend more." The hon. member for Duvernay (Mr. Kierans) stated yesterday, I believe: "Canadians must spend more, if we want our economy to regain some strength and if we are to recover control of it instead of allowing it to be dominated by foreign interests".
Mr. Speaker, I think that we must set up a program which would enable the Canadian people to finance their own production and keep full control over their economy. However, we must take the necessary means. It is not by begging and pestering the United States for loans to develop our country or to create new industries that we will succeed, but by using our own resources. In order to produce in Canada we do not use American labour but Canadian labour and Canadian brains. This is what we use for our production. But, when comes the time to control the nation's credit, we are faced with inefficient people who say: We must take the international market into account. The needs of the Canadian people are never taken into account. This is why we always say: Let us use our financial institution called the Bank of Canada. One million or 578 million written with Canadian ink and a Canadian pen on the desk of Louis Rasminsky, Governor of the Bank of Canada, are figures based on our own wealth, on our own production, these figures are just as good as those we are asking for in New York, Chicago, Washington or San Francisco. What is the difference

between credits of five, six or seven million issued in Canada, based on Canada's wealth or similar credits issued in the United States based on the same wealth, credits on which we have to pay interest? Why not use the services of the Bank of Canada where we could borrow at a rate of interest that would be no higher than the operating costs of the Bank? That is a solution. But no, the ministers-there is not even one in the House now-when we talk of these matters, say that they are most busy trying to find new jobs.
That is how serious they are. One minister is present. I apologize for my mistake. How many are they now? Thirty-six?


An hon. Member:: Twenty-nine.


David Réal Caouette: Twenty-nine. That is too many given the results that we see. Three ministers would be enough.
Mr. Speaker, the same problem existed ten years ago, when the Progressive Conservatives were in power. They were doing what the Liberals are doing now. They went on their knees in pilgrimage to New York City, borrowing from the Americans, begging for permission to develop this country, Canada. However, the problem is still not one of production or creation of productive jobs; this is a matter of giving Canadians consumers a purchasing power enabling them to get available products. And when products are being sold, the industries will not need subsidies to maintain themselves because they will profitably sell their products and be able to administer themselves.
All government grants are now monopolized by the big industries, by corporations, as the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) said with reason a few moments ago. We voted against the government which put forward a bill to help industries. It consisted in establishing a program of $80 million to offset the American surtax which was abolished about two months after its implementation and the government went on allocating the remaining of these 80 million even after the surtax had been repealed. They continued to subsidize corporations and the most important which received the $80 million are subsidiaries of American corporations.
This does not mean that we should say to the Americans: Yankee, go home. No, Mr. Speaker, this is not what we want to say. We want to regain control over our economy instead of thinking only of creating productive employment. If we cannot sell out products we have to organize part of consumption. Let us organize Canadians to enable them to spend more, not to the benefit of finance companies but through credits which would be theirs.
This is why we say that the difference between the $90 billion worth of production and the $67 billion of revenues, i.e., $23 billion, should be created and distributed to the people-not to companies-who will go and buy companies which will compete to give us better services, and which will thus create jobs to sell their production. It would be a production ordered, organized and managed not by the government, but by consumers, who are masters in a country like ours.
June 20, 1972

Then, Mr. Speaker, not only would we have less disorder in this country, but we would find more co-operation and, above all, more understanding. We would have an efficient government instead of a noodle government which sets objectives for itself but never gets any results. Those noodles are not even good enough to make nice soup.
Mr. Speaker, those are the few remarks I wanted to make on the motion before the House. The Progressive Conservatives do not propose anything, they only blame the government for not doing what they themselves failed to do 10 years ago. Let us find an answer: instead of playing from red to blue and from blue to red, let us play "Social Credit", and things may then take a turn for the better.


Hon. Alastair Gillespie (Minister of State for Science and Technology):: Mr. Speaker, I listened carefully this afternoon to the affable hon. member for Prince Edward-Hastings (Mr. Hees) and listened particularly to hear if he would speak to the motion his party has brought before the House. I was not surprised he did not choose to speak to the motion, as I suspect he realized that his party had made a ghastly mistake. The hon. member for Prince Edward-Hastings is a man who, if he has nothing else, has a well tuned political sense. Nor was I surprised that other opposition spokesmen chose to ignore the motion in their speeches. After all, they are opposition party spokesmen and it is not their function to draw attention to the progress of the country. I think the hon. member for Prince Edward-Hastings knew he would do this if he discussed the motion, and that is why he chose not to debate it. He sensed that the motion would focus attention on the considerable achievements we have witnessed in the country in the last few years.
I am not sure whether the hon. member reads newspapers. He may, and this may have had something to do with his reluctance to deal with the issue. For instance, I am looking at yesterday's Ottawa Citizen. There is a story entitled, "Production up-manufacturers go on a binge". Let me read one paragraph:
Manufacturers went on a sudden binge in April boosting output by 2.6 per cent, or an annual rate of increase of 30 per cent. At the same time, they received orders worth 7.3 per cent more than orders in March.
A similar surge in exports occurred in both April and May, up 7 per cent from March.
I am delighted to see that the hon. member for Prince Edward-Hastings has resumed his seat. Newspapers reports are replete with stories of increased production, expanded export shipments, higher sales of durable goods. I see a headline here "April Shipments of Paperboard up 19.3 per cent". Here is another. This is from the Montreal Gazette; I am quoting from the issue of June 13.
Canada experienced an export boom last month, with shipments to all countries rising 21.6 per cent to $1.89 billion from $1.56 billion in May last year.
They brought the cumulative total of exports for the first five months of this year to $7.78 billion, up 10.5 per cent from $7.05 billion a year ago.
Employment Incentive Programs
There was a 21.5 per cent boost in shipments last month to the most important market, the U.S., rising to $1.29 billion from $1.06 billion in May, 1971.
Exports to the United Kingdom rose 25.9 per cent to $167.7 million last month from $133.2 million a year earlier. Japan was again Canada's third best customer last month, with shipments there rising to $107.5 million, up 59.5 per cent from $67.4 million in May, 1971.
I can give many examples of this kind of progress. I intend to give a few more in the course of my remarks, but first I should like to deal with some of the assertions made by the spokesman for the Conservative party. His analysis seemed to go along these lines: there is likely to be a serious problem with respect to slackness in consumer demand-aggregate purchasing power may not have been his phrase; I know it was the phrase used by the spokesman for the New Democratic Party, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). Well, in my opinion one of the best indices of aggregate demand is retail sales. I have just seen the figures for April. I want to cite these figures and then ask hon. members whether they think there is any weakness in aggregate demand. Retail sales jumped 6.3 per cent on a seasonally adjusted basis in April, the largest monthly gain ever recorded; I repeat, the largest monthly gain ever recorded.


Some hon. Members:: Hear, hear!


Alastair William Gillespie: I ask the hon. member. Is that evidence of weakness of demand? The hon. member then went on to suggest that because he senses this weakness, we should lower taxes on manufacturers immediately as of July 1, without waiting for the end of the year. I have already cited some of the export figures and some figures with regard to the retail trade. Figures respecting sales of durable goods show similar increases and, as I say, I will put further figures on the record in due course.


George Harris Hees: May I ask the minister a question?


Alastair William Gillespie: I think the hon. member wants some figures with respect to industrial output. I will put these on record in the course of my remarks.


George Harris Hees: What I did want to ask the minister was whether he would put on record the latest unemployment figures and then tell me whether he is satisfied with them.


Alastair William Gillespie: The hon. member has had his opportunity to speak-


George Harris Hees: All the question requires is a yes or no answer.


Alastair William Gillespie: Nobody in this House is satisfied with the unemployment figures.


George Harris Hees: Well, then, don't tell us everything is fine.


Some hon. Members:: Oh, oh!


Mr. Deputy Speaker:: The minister has the floor. I invite hon. members to direct their remarks through the Chair.


Alastair William Gillespie: The hon. member for Prince Edward-Hastings is an affable person. He is also a compulsive
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Employment Incentive Programs debater; and he is also, I think a confused debater. I say this for a number of reasons. He seems to find difficulty coming to terms with the tax reduction afforded to the manufacturing industry. On one hand he suggests we advance it to July 1, in a few days time, because industry needs the stimulation at this time as a result of concern about consumer demand. Well, Mr. Speaker, I have shown how weak, false and transparent his position is in that respect.
He then went on to say he was not sure whether there should be any tax reduction accorded to the manufacturing industries. He thought we should in some way allocate the funds associated with this reduction to the manufacturers on the basis of the number of jobs created. I ask the hon. member whether he is not taking a leaf out of the NDP book and suggesting a massive exercise in government intervention in the course of which auditors would go in to check the number of persons employed by a company on one day, and the number employed on another day. Perhaps that is what he wants-a job creating bureaucracy.


Thomas Clement (Tommy) Douglas: You could not get a bigger bureaucracy than the one you have already.


George Harris Hees: It would be very simple.


Alastair William Gillespie: The motion reads:
That the House regrets that expenditures for incentives programs have failed to stimulate production and trade in Canadian goods and services and to open increased opportunities for productive employment to Canadians.
I submit this motion is based on three false premises. The first is that incentive programs are expenditures which should be considered in the light of an instant response-that one should expect an immediate pay-off. Surely, on reflection, hon. members on the other side will realize that incentives are an investment in the future.


George Harris Hees: I have been waiting for four years and nothing has happened.


Alastair William Gillespie: I will give you the figures. The hon. member for Prince Edward-Hastings had a lot to say about export figures. He seems to forget that when his party was in power between 1957 and 1962, we were running deficits on our trade accounts in the first four years; there was a small surplus in the last two. But in every year save one since the Liberals took over the surplus in the trade account has been greater than in the best year under the Conservatives.


Some hon. Members:: Hear, hear!


Alastair William Gillespie: In 1970, this country had a trade surplus of just under $3 billion, roughly 15 times as great as the best single year under the administration of which the hon. member for Prince Edward-Hastings was a member. He had the nerve, I thought, to suggest that what this government should do is to mount an export drive, and at a time when the figures show clearly beyond any doubt that this government and previous Liberal governments since he was minister of trade and commerce have had surpluses on trade accounts unparalleled in the history of this country. He took a short-sighted look at incentives, as

if today's incentives are going to produce something big tomorrow. Everyone who knows what an incentive is and how it should operate knows that it takes time for incentives to work. It is a seed which is planted and then flowers. It is not improved by the use of a watering can in times of drought.
I was reminded of the story by Robert Townsend in a book which perhaps some hon. members have read called "Up the Organization!", in which he referred to the impatient younger executives with whom he had come in contact. He liked to describe their particular actions as rather like the actions of a man who pulled out the flowers to see how the roots were growing. In a major way I think that is the attitude that the Conservative party has taken to incentives. They are not prepared to see the incentives go to work as seed that is planted and then grows.
The second false premise, I submit, is that somehow or other incentive programs operate in a vacuum, that they are separate from all other government policies, that they are separate from tax policies or from in-plant training policies, that they are separate in some way from vocational training or from monetary policies. I think the opposition party has misjudged the nature of incentives and how they work alongside other policies. Some of our incentive policies are aimed at regional disparities-the question of location of employment. Some are concerned with modernization and the question of scale. Some are concerned with new technology and new products. Some are concerned with new markets. All of these incentive programs are aimed at sharing the risk with the manufacturer, in line with a national objective.
There are also incentives policies with respect to savings, and in this regard I should like to refer to some remarks made last week by the Minister of Finance (Mr. Turner) to the Investment Dealers Association at Winnipeg. He said:
While we frequently hear voices complaining about an alleged lack of sufficient incentive for saving in this country, the fact is that the proportion of savings by Canadians is extraordinarily high. During the latter half of the 1960s, total savings in Canada averaged 24 per cent of national income, compared to 18 per cent in the United States and the United Kingdom during the same period. In 1971 alone, personal savings increased by more than 25 per cent and the assets of our major financial institutions rose by 13 per cent.
I mention that only because savings is one aspect of incentives. Others on the government side will deal with our incentive programs in the course of this debate.
There are three other matters I should like to touch on with respect to what I have described as the false premises in this particular motion, one that might best be described as being the wrong subject chosen for the wrong reasons at the wrong time. The motion refers to the need to stimulate production and trade as well as employment. First, let me deal with the premise that employment opportunities in Canada have been sluggish, which I think was the word one or two members opposite used. Surely by now hon. members opposite must know that this government has a record that is second to none in the world when it comes to job creation. More jobs have been created in Canada during the last three years, in relative terms,
June 20, 1972

than in any other industrialized nation. For example, Japan has a population of 100 million and is rated as one of the strongest industrial countries of the world, a country of enormous growth. During the four year period 1967-71 the increase in the Japanese labour force was 741,000. During the same period the increase in the Canadian work force-not labour force but work force- was 700,000, a shade under that of one of the most powerful industrial nations in the world.
As far as job creation is concerned, what has been the history in Europe? How many new jobs have been created by the United Kingdom in the last four years? The answer is that no new jobs have been created; there has been a net reduction of over 600,000. How many new jobs have been created in Germany during the last four years? The answer is no new jobs; in fact, just under 200,000 fewer jobs now exist. How many new jobs have been created in the last four years in Italy? The answer is 164,000, and Italy has a population a shade under three times that of this country. If hon. members have not totalled up the figures, the increase in the Canadian work force within the last four years has been greater than the combined increase in the labour forces of the Common Market countries, the United Kingdom and Sweden.
I think this is an important statistic in light of this resolution, which refers to opening "increased opportunities for productive employment to Canadians". I compliment the drafter of the resolution because it is a positive way of putting it, though I suspect the hon. member for Prince Edward-Hastings did not compliment his colleague. I can only assume that he chose to ignore the positive aspect of the resolution which emphasizes employment opportunities. As I have said, no industrialized country has a better record than this country regarding job creation.
Turning to the two other aspects of this resolution, may I deal with the question of production and trade, issues that were raised by the lead-off opposition spokesman. He dodged very quickly over the question of price performance. I think he would acknowledge that Canada's price performance is an important part of keeping Canadian goods competitive in world markets. After all, he should know; he was minister of trade and commerce at one time and I have already indicated that his record as minister does not compare with the record of my colleague today. One of the reasons it does not compare is, perhaps, that Canada's price performance during the last three years has been better than most, if not all, of our industrial competitors. The increase in prices in Canada last year was 2.9 per cent.
Let me give the House the history of the last three years. The increase in 1969 was 4.5 per cent, in 1970, 3.4 per cent and in 1971, 2.9 per cent, a very reassuring trend. In 1970, the increase in the United States was 5.9 per cent compared to our 3.4 per cent, and in the United States last year it was 4.3 per cent. The tussle with prices is not one that is ever concluded; it is a continuing one. There is no question that there are many in Canada, including the members of this government, who are concerned about keeping rising prices under control. The preliminary figures I have show that the Canadian performance compares with the best in the world. Every member on this
Employment Incentive Programs
side of the House would compare himself only with the best in the world.
Incidentally, I was interested in the fact that opposition speakers did not seem to want to deal with the Canadian performance in comparison with the performance of other countries. They did not seem to be ready to compare the success story of Canada with the performance of other countries, and perhaps for all too obvious reasons.
Let us deal with the output of goods and services in 1970. There was a general recognition of a slowdown in the international economic community during that period. Canada, being as highly dependent as it is on international trade and the economies of other countries, was not immune. For example in 1970 the increase in real gross national product, that is the over-all real domestic product, amounted to only 2.6 per cent, but that still compares favourably with an actual decline in the United States of around one-half of one per cent.
What about the temporary pause we noted in the first quarter of 1972? Let us not forget that this followed an exceptionally fast growth in 1971. In the most recent half year, the seasonally adjusted volume of industrial production was expanded at an annual rate of 7 J per cent. For manufacturing output alone, the rate of expansion was 6.7 per cent. There was an increase in the industrial production annual rate of 71 per cent and a manufacturing output of 6.7 per cent. Let me draw the attention of the hon. member for Prince Edward-Hastings, who raised this question, to the fact that both these output rates, manufacturing and industrial production, are well above the average for either the 1960's or the most recent five-year period. Again, it seems to me that the hon. member has chosen to bury himself in his papers rather than acknowledge that important fact.
I have dealt with industrial production, manufacturing output, employment and prices. I could go on at some length in respect of how our index of the volume of industrial production compares with that of other countries. In the United States, for instance, the increase was only 3.7 per cent. In Canada in the first four months of this year it was 6.5 per cent, well above the United States performance. Similar comparisons for the recent 12-month period show an increase of 4.3 per cent for Japan,
1.2	per cent for Germany, so by almost any yardstick the performance of the Canadian economy has to be rated number one, the best in the world.
Let me briefly touch on trade figures. In 1971, we had a surplus of approximately $2.9 billion. We had a trade surplus in the most recent months which was still running at a seasonally adjusted annual rate of $1.4 billion. Now, what about this matter of the end product which the hon. member for Prince Edward-Hastings raises from time to time? There has been a suggestion that our manufactured content is not as high as it should be. Let me give these figures. Apart from undeniable success in the promotion of external trade, Canada has also had considerable success in upgrading the proportion of its goods being sold in finished form. The proportion of end products in Canada's total exports has gone up from 12.3 per cent in 1961 to 38.8 per cent a decade later. Thus far in 1972 the propor-
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June 20, 1972
Employment Incentive Programs tion has edged up further to 41.9 per cent of total domestic exports for January-April.
In summing up, it seems to me that not only was this resolution chosen perhaps inadvertently, or certainly mistakenly, it was chosen in respect of the wrong subject, for the wrong reasons and at the wrong time. It has revealed little understanding of the role of incentives in our manufacturing, commercial and industrial economy; and an unbelievable ignorance in respect of the health of our economy.


James Aloysius McGrath: Mr. Speaker, this is the fourth or fifth of the six consecutive opposition days in a row designated by the government. This is an important motion before the House today. Unfortunately, because of the rather peculiar rules under which we now operate, this motion will not be resolved but will be left up in the air.
I listened to the Minister of State for Science and Technology (Mr. Gillespie) reply on behalf of the government, and I wondered as I listened to him where his colleagues were; the Minister of Industry, Trade and Commerce (Mr. Pepin), who has a great deal of responsibility and certainly the minister to whom this motion is most applicable, and the Minister of Regional Economic Expansion (Mr. Marchand), who has a great deal of responsibility in respect of the whole area of incentives. I am sure both these hon. ministers try to do a good job and probably have very good excuses for not being here. I believe debates of this nature which, after all, are intended to replace the traditional supply motions the government had to move from time to time to be in a position to pay its bills, are important. These motions allow us to place grievances, for that is what they are, before the ministers, but they are not in their places to hear the suggestions made by various members who participate. For that reason, I regret the absence of those two ministers today, without meaning to take away anything from the speech made by the Minister of State for Science and Technology.
That minister, in his speech, forgot to mention the fact that we were talking primarily about incentives. When he did touch upon that subject he seemed to be under the illusion that incentives were something new, something brought about by this government in the last budget. The fact is that incentives have been around for a long time. This government has probably used incentives of one kind or another in every single budget it has introduced in the last four years. Likewise its predecessor, the Pearson government, used various kinds of incentives. It is in the light of the experience of these past 10 years that we must examine the results of the various incentive programs of the government. I should like to look particularly at the incentives under the Regional Development Incentives Act as that is the main incentive program of the government.
A few days ago the Minister of Regional Economic Expansion (Mr. Marchand) rose in this House to announce that he was extending the life of the designated areas in Canada by another 12 months and in some cases by another 18 months. He made no attempt whatsoever to deal with the criticism levelled at the program, to respond
to the critics of his department or indeed to deal constructively with any of the arguments presented. Instead, he took the easy way out. He announced that the life of all designated areas in the country would be extended for another 12 months. We have been saying repeatedly, and we believe it, that there are too many designated areas in this country. We believe the incentives under the Regional Development Incentives Act are too generally applied and, as a consequence, are in fact non-productive in terms of creating jobs, and particularly in terms of ending regional disparity in this country which they were supposedly designed to do.
The Minister of State for Science and Technology talked about the record number of jobs which have been created by his government. He forgot to mention the fact that this was in response to record unemployment created by the same government. We have record-high unemployment in this country. The fact is that the government's incentives program, and more particularly the government's regional economic development program, have failed to respond to the situation. We have, for example, the May figures which show that national unemployment is in excess of 6 per cent. In my own province, the unemployment figure is in excess of 12 per cent. One can examine any designated area across the country in which this incentive program was supposed to be operative and find that it has had appreciably little effect on the unemployment in the region.
An economist who appeared before the Standing Committee on Regional Development, Dr. David Springate, in his evidence as a consequence of a doctoral thesis said that a large number of firms which received grants under the Regional Development Incentives Act were not influenced by these grants in respect of where they located. That paradox, so far as I am concerned, is a complete negation of what this program was intended to do. It was intended not to cope with national unemployment, because after all that can be adequately dealt with only by the fiscal program of the government, but was intended to end regional disparity in this country which is probably a greater threat to the continuing existence of Confederation. It has failed to do that because the government has failed to apply incentives in a way which would influence industries to establish where the need is greatest, where unemployment is greatest and where regional disparity is probably more apparent. That evidence presented to the committee by Dr. Springate has been largely ignored by the government. Instead, the government continues its present program, in spite of criticism from every sector of the economy, from agencies charged by statute with providing the minister with advice-I am thinking of the Atlantic Development Council and the Canadian Council on Rural Development-and from other agencies such as the Atlantic Provinces Economic Council and the Canadian Chamber of Commerce.
In spite of all the criticism, the minister insists on continuing with this program which has not been effective in meeting the needs of the nation because the regional disparities in the less fortunate areas of this country are being ignored. The theory underlying this program has been described, in my opinion inadequately, as the manure theory. This theory of the government was touched upon by the Minister of State for Science and

June 20, 1972

Technology. He referred to the fact that the opposition is not prepared to allow these incentives, which represent seeds, to grow. I suggest to the minister that probably the basic weakness of the program and the manure theory, as presented by the minister, is that the designated areas in this country stretch from one end of the country to the other, in all ten provinces. The incentives available under the Regional Development Incentives Act are spread so thinly and so broadly that nothing happens.
The government believes that by spreading a little money here and there something will grow every year. That is the manure theory. It may be that a new industry is established here and a new industry is established there. That may very well be one result, but perhaps another result of the present program is the transferring of unemployment from one end of the country to another. That has happened in many cases. I can cite the example of a company called Acme Seeley. On May 24, during a meeting of the Committee on Regional Development, the hon. member for Lanark-Renfrew-Carleton (Mr. McBride) tried to knock down the argument of Dr. Springate. He waited until this very important witness was not present in the room, then recited a story which he claimed would show the naivete of Dr. Springate's theory. I should like to read exactly what the hon. member said. This is taken from the Minutes of Proceedings and Evidence of the Committee on Regional Development, issue No. 12, for May 24, 1972, at page 12:46:
On May 12 within my constituency a company had an opening, the name of the company is Acme Seeley. It received more than $800,000 from DREE. The president of that company got up at the opening and said he had come to Renfew because it was a beautiful town and the people were nice people and other very pleasant things. He made no reference to the federal government. He was followed by the mayor of the town, Mayor Carswell. He praised the community; he praised the fine people in the new company and the fact that his town officials had brought in this new company.
-None of them in my opinion were forthright enough to state the obvious, namely that the difference in that community was not the mayor nor the industrial commissioner nor anything else; it was that the federal government had brought in grants.
So, let us examine the facts. This story, if it shows anything, shows the na'ivete not of the witness before the committee but of the hon. member for Lanark-Renfrew-Carleton because the facts are as follows: In March, 1971, the Department of Regional Economic expansion announced an offer of $862,850 to Acme Seeley if it would establish a $2,255,000 plant in Renfrew to create 137 new jobs. On May 12, we have the plant opening that the member described. On May 30, we have an announcement in the Globe and Mail business section that Acme Seeley had moved its head office and manufacturing to Renfrew, consolidating operations formerly carried on at plants in Hamilton and Toronto. Checking the Scotts Industrial Directory for 1970-71, we find that these two plants employed 136 people. What then has been the result of the $862,850 DREE incentive grant of which the member was so proud? It has resulted in the loss of jobs for 136 people in Hamilton and Toronto. It has created one net new job in the hon. member's constituency of Renfrew. We can only come to the conclusion that the cost of that one job was $860,000. That is just one instance.
Employment Incentive Programs
There are many cases in which grants are made to induce industries to locate in various parts of the country at the expense of established industries in other parts of the country. In other words in many instances the result of the program has been the transference of unemployment from one end of the country to the other within designated areas. There is a case currently before the department concerning a grant for a sugar refinery to establish in Cornwall, Ontario. It is a very substantial grant. There are six existing sugar refineries in Canada. Five of them are located in designated regions, four in the city of Montreal and one in the city of Saint John, New Brunswick. Nobody would deny the need which exists in the city of Cornwall which has been struck by industrial shutdowns, plant pullouts and consequent unemployment which is probably the highest in the country. Nobody will deny the need which exists in Cornwall. It is great.
What I am saying, and I have not been satisfied with the answers to questions directed to the minister in committee, is that the opening of this sugar refinery in Cornwall as a consequence of a very substantial grant under the Regional Development Incentives Act, could have adverse effects on the four refineries in Montreal or the refinery in Saint John, New Brunswick. It could very well result in these plants having to cut back operations and laying off men. The net result may be we will be transferring unemployment from Cornwall to Montreal or Saint John, New Brunswick.
There are other examples too numerous to mention and there are probably many which will never come to light. They emphasize what I consider to be one of the basic weaknesses of the program. The concept is good, and it is one which is supported by every member in the House. When the legislation was brought in setting up the Department of Regional Economic Expansion, it passed the House unanimously. The Regional Development Incentives Act also received unanimous support in the House. Under this act, the minister was given wide discretionary powers. What we are saying is that the Minister of Regional Economic Expansion has failed to use these wide discretionary powers wisely and well. An examination of the record will lead any objective observer to come to that conclusion. All that the minister has done in extending the life of the designated areas under the Regional Development Incentives Act for another 12 or 18 months has been to carry on with this concept which statistics prove has been unsuccessful in meeting the problem it was supposed to meet, namely regional disparity and the unemployment that is consequent upon that situation.
In my own province of Newfoundland, the unemployment situation continues to be critical. It continues to be the highest of any province in the country. The May figures show that the province of Newfoundland had a rate of unemployment in excess of 12 per cent. In other words, over 20,000 members of the work force in Newfoundland were out of work. The province of Newfoundland has received the least benefits under the Regional Development Incentives Act or any other incentive program under the Department of Industry, Trade and Commerce or the Department of Finance for accelerated depreciation and capital write off.

June 20, 1972
Employment Incentive Programs
The province of Newfoundland failed to benefit under the Regional Development Incentives Act to such an extent that the Atlantic Development Council felt obliged to commission a study, which they did. This study was released last week. It highlights what we have been saying for a long time, namely that the government's blanket approach, shutdown approach and manure approach to the problem of regional disparity in this country, and the attempt to cope with that problem by thinly spreading incentives all across the country have failed. The study commissioned by ADC has recommended what we have been saying for some time, namely that there are areas in this country which should receive special consideration.
This study points out that Newfoundland could become a regional development laboratory in which the government could try out new innovations and programs. Obviously, the present programs are not working. The study highlights the serious problems which make it impossible for the present policy to work effectively. It highlights the transportation problems which we have in Newfoundland as a consequence of our isolation. These problems are not peculiar to Newfoundland. The four Atlantic provinces have transportation problems. We have these problems and the government fails to respond with a proper regional transportation policy. Instead of that, we have continuous increases in freight rates.
Canadian National Railways have been allowed seven or eight increases in freight rates since the freeze on freight rates under the Maritime Freight Rates Act was lifted two or three years ago. Transportation is obviously a problem. In this regard, I hope that my colleague from Newfoundland, the Minister of Transport (Mr. Jamieson), will read this report. I think it is a good report in what it says about transportation and the effect that transportation has on our position in confederation, as well as the lagging behind of our economy compared with the rest of the country. I hope the minister will be sufficiently impressed by this report to establish a task force to examine the effect that present transportation policies have on regional development programs and all of the other incentive programs the government may devise. The fact is we are just not in it.
The study also recommends that the government give consideration to what I describe as regional tariffs. That is not to suggest that we should have free trade areas all across this country. For example, I consider the auto pact a regional tariff because it only benefits Ontario. It is an agreement that affects Ontario and the Great Lake states. We could, for example, negotiate regional tariff programs between the Atlantic provinces and the New England states. We could have New Brunswick potatoes go into the state of Maine or New England in exchange for something in the state of Maine or New England. We could have Newfoundland processed fish going into the New England market and so on. These are examples of what I consider to be regional tariffs.
Unfortunately my time has expired. I hope that on another occasion I can continue this argument.


Some hon. Members:: Hear, hear!
(Mr. McGrath.]



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: Order. It is my duty pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Nanaimo-Cowi-chan-The Islands (Mr. Douglas)-Energy-Possible pipeline through eastern Arctic-Assurance of majority Canadian ownership-Hypothecation of gas to United States; the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack)-Transport-Responsibility of railways to people owning land along lines on which service abandoned; the hon. member for Assiniboia (Mr. Knight)-Veterans Affairs-Inquiry as to amendment of Veterans Land Act.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Hees (for Mr. Baldwin):
This House regrets that the government's expenditures for incentive programs have failed to stimulate production and trade in Canadian goods and services and to open increased opportunities for productive employment to Canadians.
Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. There have been some discussions and I think you will find there will be agreement that from this point on speeches be limited to 15 minutes.


The Acting Speaker (Mr. Laniel):: Hon. members have heard the proposal of the hon. member for Winnipeg North Centre (Mr. Knowles). Is this agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Laniel):: It is so ordered.


Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry. Trade and Commerce):: Mr. Speaker, I enter the debate today somewhat amazed at the failure of opposition members to deal with the motion. I compliment the hon. member for St. John's East (Mr. McGrath) who actually spoke to the motion before us today. I want to tell him that later this day the Parliamentary Secretary to the Minister of Regional Economic Expansion (Mr. Roberts) will be dealing with many of the items he has raised.
The hon. member for St. John's East referred to the fact that some of the grant programs are not sufficiently extensive and do not benefit Newfoundland as much as other parts of the country. We regret that industry in Newfoundland has not developed in the past 25 years since that province came into confederation. However, I want to remind the hon. member that the fact that the
June 20, 1972

economy of Newfoundland is behind that of the rest of the country is compensated to some extent by the fact that Newfoundland gets the highest per capita grants under the equalization grants formula. The government is not, therefore, insensitive to the needs of Newfoundland and has made special assistance available to that province.
In passing I also want to mention to the hon. member that the Minister of Industry, Trade and Commerce (Mr. Pepin) was unable to be present in the House for this debate today for the very good reason that he is attending the Standing Committee on Finance, Trade and Economic Affairs which is dealing with the bill on foreign takeovers.
I want to say something too, about the points raised by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). He dealt, as usual, with the subject of unemployment. The Minister of State for Science and Technology (Mr. Gillespie) has fully replied to his comments on unemployment, and has reminded the House that Canada is indeed a very fortunate country in that we have had the highest rate of employment growth of any of the western industrial nations. Our employment growth rate is about double that of the United States. It has not been a failure of government policies on incentive programs that has resulted in high unemployment in Canada. The hon. member knows, as well as everyone else in this House, that unemployment is caused by the fact that we have a very high rate of input into the work force. It is not a failure of the incentives programs. If it is a failure of anything, perhaps it is a failure of our birth control programs 20 years ago.
I want to comment on the hon. member's remarks concerning Dominion Aircraft of Vancouver. He said he was not familiar with the technical aspects of this application. I want to assure him that he is right, that he is not familiar with the technical aspects but that did not discourage him from commenting very fully on the application. I want to tell him that his facts are wrong. The government does not discriminate against the province of British Columbia on the applications of aircraft companies for assistance. I want to remind him of the Trident aircraft that is in production in Vancouver at the present time as a result of incentives offered by the government to that company, and as a result of a good deal of special assistance given to that company in order that it might make an effective application under the PAIT program. So, Mr. Speaker, it is not a matter of where a company is located in Canada, and I resent the fact that a British Columbian would stoop to that kind of thing in this House. I resent that he would use innuendo of that kind to suggest that a company from some other part of Canada would get assistance rather than a company from British Columbia.
The hon. member went on to say that small businesses are not getting their fair share of the incentives programs. I have some figures in front of me and I want to refute that statement. Here are the figures under the PAIT program. This is for companies with volumes of sales under half a million dollars. Under the PAIT program, 19 per cent of the grants have gone to companies with sales volumes under half a million dollars. These are small companies. Under the PEP program, 7 per cent of the grants have gone to companies with sales under the half a
Employment Incentive Programs million dollar volume. Under the IDAP program, 41 per cent of the grants have gone to companies with volumes of sales under half a million dollars, and under the GAAP program, 19 per cent of the grants have gone to companies in that range. These are respectable figures which thoroughly refute the point which the hon. member for Nanaimo-Cowichan-The Islands attempted to make. It is not a point that he can make. It is not substantiated in fact.
I want to comment on another point that the hon. member made, and which he reported to the House with his usual lack of accuracy, that small businesses in Canada pay the full tax and do not get any special benefits from the government. I want to remind him of the special tax incentives that are available under the budget passed a few months ago, which provide that small companies pay a 25 per cent income tax up to the point where they accumulate profits on their books of $400,000. This special incentive was put in for the benefit of small companies and small companies only, to allow them the opportunity of accumulating profits within their businesses, in order that those businesses could expand and become big businesses.
I also want to comment on the points raised by the leader of the Social Credit party. He spoke about a special program that the government used last year to combat the U.S. surtax. He remarked that the program had been in effect for 1J months. I want to tell him that that is not accurate. The surtax program in the United States was in effect from August 16 last year to December 19 last year. The hon. member went on to say that the government is still making payments under this program. I want to tell him that that also is not true. The payments were finished as of April this year, and the reason they were continued to that point was that all payments were made after the end of the benefit period. It was necessary to determine whether a company had lived up to its commitments on employment before payments could be made.
In passing, I would like to tell the hon. member about eggs, and to correct the record. He made some comment about eggs being imported into Canada at over $1 a dozen. This was for good reason, Mr. Speaker. The reason they are imported at a price of over $1 a dozen, and some eggs are imported at $5 a dozen, is that these are eggs that are used for breeding purposes. They are not available in Canada, and they are imported to improve breeding stocks for Canadian farmers.
Now, I wish to deal with some of the incentives programs offered by the Department of Industry, Trade and Commerce to show the effect they have had on the economy of Canada, the employment they produced, and the increase in business that we have been able to determine has resulted from these very effective programs. The mandate given to the Department of Industry, Trade and Commerce has been to promote the establishment, growth and efficiency of manufacturing and processing industries in Canada, to contribute to sound development and productivity generally, and to foster the expansion of Canadian trade. This mandate recognizes that efficient, productive and economically viable industry is the cornerstone of secure long-term employment.

June 20, 1972
Employment Incentive Programs The incentives and assistance programs of the department are designed to contribute to the creation and support of competitive industry by stimulating companies to develop technologically advanced products that, because of their unique properties, will hopefully find ready markets at home and abroad. These are the PAIT program, the DIP program, IRDIA program, the IDA program and the PEP program. We have come up with two new ones recently, one called CASE, which was released within the last couple of months. It is a program designed to provide managerial experience and assistance to managers of small businesses who are in need of such assistance. We also have a new management training program that will assist societies involved in management training programs to update their programs and bring along a better class of management personnel in Canada.
Then, we have the EDC, which is designed to encourage companies to get into the export field and provide them with the marketing assistance and financial guarantees that they need in that field. We also have the machinery program called MACH which permits machinery users to acquire capital equipment at the lowest possible cost. It should be noted that these are primarily related to making firms more innovative. Employment is a subsidiary benefit in the programs that I have mentioned. I am now going to speak of some other programs that are designed to improve employment in Canada, programs like GAAP, the automotive assistance program and the shipbuilding assistance program, STAP, that has been so successful. These are all employment promotion programs. The DIP program, defence industry section, has been remarkably successful and produced a total of $6.3 billion in sales which is an estimated sales to government investment ratio of 30 to one.
I should like to speak about the PAIT program because this is what the motion deals with when it indicates that the government programs have been ineffective. The PAIT program is younger but indications are that it will be as successful as DIP. So far. 180 projects involving a PAIT contribution of $15.2 million have been completed and it is anticipated that sales to the end of 1976 will be $475 million. That is a sales to government investment ratio of 31 to one. By 1976, that program is expected to produce directly 5,000 jobs.
Let me take another special example of this program. Lockheed Petroleum Services is carrying out a PAIT funded program. The company has developed and is now testing a system whereby oil production workers can toil in their shirt sleeves at wellhead on the ocean floor. This should interest hon. members from the Maritimes who are trying to get into the oil business. If this program is successful it should be a major advance in technology in a $7 billion market. This would not have come about without the PAIT program.
Another PAIT program gave support of $50,000 to Procor Limited to develop a new bulk-carrying railway car for which the company has received a $3 million leasing contract. Procor leased 100 of these units to the CNR and 25 to the British Columbia Railway over a 20 year period.

I could go on with numerous examples-IRDIA and IDAP for instance, all programs that have been successful in promoting jobs in a commercial activity in Canada. I am amazed that members of the opposition would promote a resolution of this kind which to me sounds like Don Quixote riding into the windmill-


George Harris Hees: Just remember 6.2 per cent.


Bruce Andrew Thomas Howard: Mr. Speaker, when the hon. member was absent from the House, the Minister of Science and Technology (Mr. Gillespie) and other members referred to the fact that Canada has the largest rate of new employment in the western world-of any nation in the world.


George Harris Hees: It is a very simple figure to keep in your mind.


The Acting Speaker (Mr. Boulanger):: Order, please. The time of the hon. member has expired. The hon. member for Kent-Essex.


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, we on this side of the House become increasingly tired of listening to the speeches of members of the government trying to defend their record. From time to time we try to bring to the attention of those hon. gentlemen some of the problems facing this country, but when they take part in the debate the sum total of their rebuttal is that Canadians have never had it so good.


George Harris Hees: That is what C. D. Howe used to say before 1957.


Harold Warren Danforth: The hon. member for Okanagan Boundary (Mr. Howard) expressed shock and anguish that we on this side of the House would dare to think that perhaps some areas of this country were getting more incentives, more money, more help than others. Mr. Speaker, how ridiculous can he be?
I am only going to quote two or three figures to show exactly what is happening. I have before me the records of his own department and they show that from its inception to December 31, 1971, of the offers of help extended by this government under regional development initiatives and special area legislation, 1,088 were accepted. The province of Quebec received 55 per cent of these offers. In other words, in the province of Quebec 557 offers were accepted and grants given while in Ontario, the next largest province, the number was 76. Let the hon. parliamentary secretary show his anguish now.
In the last four years this program of incentives has cost the Canadian people in excess of $2 billion. Taken with special tax concessions, and accelerated write-offs, the amount given out to stir the economy and provide jobs is astronomical.


Bruce Andrew Thomas Howard: Would the hon. member permit a question?


Harold Warren Danforth: When I have finished my speech. Mr. Speaker, they boast of their record. The minister who spoke earlier representing the government mentioned the 700,000 jobs that had been created in this country and
June 20, 1972

compared that to the poor records of Germany, Italy and Great Britain.


Bruce Andrew Thomas Howard: What about Japan?


Harold Warren Danforth: I will include Japan, but that is not comparing the same thing. In Japan, they do not grant money and incentives for people to count canaries crossing a road or to photograph the cooking of spaghetti in colour. In that country, jobs are counted on the basis of productivity and this is where the difference lies. If we had a comparison of job to job and productivity to productivity, this would not reflect credit on the government.
One of the reasons we are in trouble in this country as far as this program of incentives is concerned is that government departments seem to be working at cross purposes. The hon. member for St. John's East (Mr. McGrath) brought up the matter of sugar refineries. We have the Department of Revenue criticizing the sugar refineries because they are a cartel and may be fixing prices. Then, we have the Department of Industry, Trade and Commerce chastising the sugar companies because they are only running from 62 per cent to 68 per cent capacity. There is a third policy under which the Department of Regional Economic Expansion is granting thousands of dollars for the promotion of new sugar refining capacity in this country. There are three different policies coming from three different departments, so naturally there is uneasiness and confusion.
Mr. Speaker, under the coherent and complete industrial policy suggested by my leader we could make some progress. We are not making progress now because this government is not consistent. Imports of food into this country are growing. Agriculture is a large industry which employs a lot of people, but under the policy of this government we have imports from offshore and labour from offshore and large expenditures of Canadian money are spent in this manner. The policies do not help the industry of agriculture to compete. Indeed, the policy of this government is one of retreat. They say "If we cannot compete let us move the farmers off the farms". They say, "Let us cut down the agricultural industry; let us withdraw support. Let us retreat until the agricultural industry can live with all this importation."
The same may be said of the textile industries. The government thinks it provides incentives to the textile industry when it says, "You cannot compete with the producers of other nations; we will determine what textiles you should produce; and whether your factories may expand and employ more people. Any difficulties with tariffs you may bring to us, and we will determine if you are to be allowed to make a certain product." That is the type of incentive program this government has embarked upon. On programs like that, Canadian taxpayers spend millions of dollars. Actually, we spend $2 billion on incentives, a great deal of money. Mr. Speaker, nobody can imagine $1 billion. I cannot imagine $1 billion. I do not know if you would need a box car or a house to store $1 billion in dollar bills. I know this, however: If you put a person of 18 to work counting $1 billion, and he counted, say, one dollar bills at the rate of 100 per hour, he could
Employment Incentive Programs
retire at 65 without having counted half that money. That is how much $1 billion is. In this country, we have spent $2 billion on incentives. What did we get for our money except the highest unemployment Canada has ever seen. That is what we got.


Some hon. Members:: Hear, hear!


Harold Warren Danforth: Mr. Speaker, we have spent $2 billion, or $100 for every man, woman and child in Canada. That is what this country invested in this government's program, and it is not working. The government has criticized us for bringing forward this motion and for being critical of the incentive program.


Alastair William Gillespie: Can the hon. member name one country that has done better than Canada?


Harold Warren Danforth: The minister asks me to name one country that has done better. If we were as interested in Canadians as we are, and as interested in Canada's future, we should all be better off. Mr. Speaker, I am interested in Canadian jobs, not Japanese jobs, not Italian jobs, not British jobs, not German jobs; I am interested in Canadian jobs, as the government ought to be.


Some hon. Members:: Hear, hear!


Mr. Faulkner:: This is the House of Commons, not a campaign platform.


Harold Warren Danforth: We are buying catastrophe with the money spent. We are telling industries to go where they would not normally establish themselves, because economic conditions are wrong. And what will happen, Mr. Speaker?


James Hugh Faulkner: I doubt if the hon. member can answer that.


Harold Warren Danforth: Once we stop giving grants to induce factories and industries to move to submarginal areas, and once economic conditions return to normal, those factories and industries will not stay, because economic conditions will be against them. Every businessman in Canada knows this. I cannot understand why this fact has escaped the government.
My colleague showed that we are not creating new jobs, merely transferring jobs. We increase employment in one region and decrease it in another region, proof of which is this: Our total unemployment is not falling. I suspect we are not being given the true unemployment picture in this country, and this bothers me.


Mr. McCutcheon:: Aha! Now, we come to the nub.


Harold Warren Danforth: The government talks about a 6 per cent unemployment rate. That figure represents only those who are drawing unemployment insurance. Does it include those who are being retrained? I believe 90,000 people are undergoing retraining. Does it include students who are looking for jobs, who have never worked and who, therefore, are not registered as unemployed? Although the government talks about 500,000 or 600,000 people being unemployed, I have as much right as hon. members opposite to suspect that one million Canadians
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June 20, 1972
Employment Incentive Programs today are unemployed. That figure, I suspect, is closer to the truth than the 600,000 figure.
This government embarked on a policy that no other Canadian government has ever embarked upon. It has used taxpayer money to buy people off the unemployment rolls. That is what it has done-it has bought people off the unemployment rolls. You can say to the government you are mobile and willing to move from A to B, and you will be eligible for an incentive grant because the government wants to take you off the unemployment rolls. It does not matter if the project is productive, if it will add to the gross national product. The government is interested in one thing only, its public record just before an election.


Some hon. Members:: Hear, hear!


Harold Warren Danforth: The people of Canada know this. That is why we are debating the matter. Certainly, the opposition is not always right; but it is not always wrong, either.


Some hon. Members:: Hear, hear!


Harold Warren Danforth: We resent the attitude of this arrogant government which says that everything it does is right and not open to challenge. It is because of the government's attitude that we are in our present trouble. It will not accept the simple truth that it may be wrong and that not all its policies are correct.
Government members say the people of Canada never had it so good. I suggest, instead, that never before have they been so uneasy and unsure of their future. The minister said that the people in Canada are spending more money than ever on consumer goods. We know why. In view of the government's tax policies, it does not pay to save. The more you save, the more the government will take of your savings. It is small wonder the people are saying, "We may as well live today, because we will be persecuted tomorrow."


Mr. Hugh lames Faulkner (Parliamentary Secretary to Secretary of State):: Mr. Speaker, the hon. member's contribution was a remarkable contribution, although I am not sure to what. Certainly, it was indicative of the style we may expect the hon. member to use time after time in his campaign; however, I remind him that this is the House of Commons and we are debating a specific motion. Perhaps he followed the questionable example shown by the hon. member for Prince Edward-Hastings (Mr. Hees) who showed, I suppose, some sort of political acumen in avoiding the whole question.
The motion is specific. It says that the government's incentive programs have failed.


Harold Warren Danforth: They have.


George Harris Hees: Hear, hear!


James Hugh Faulkner: That, of course, is the characteristic position of the opposition. Its record is one of complaints and criticisms, indicting the government, without respite, from the very beginning for everything it has done. I suggest to the opposition that, for the sake of its own credibility, it might say once in four years that the government may have done something right.

The opposition again today brought forward one of those negative indictments of the government and government programs. I was interested to note how carefully hon. members opposite avoided dealing with incentive programs, the subject we are debating. I happen to represent an industrial constituency. A number of major plants are to be found in Peterborough, including those owned and run by Canadian General Electric, Outboard Marine and De Laval, Fisher Gauge and many others. I have argued strenuously for more incentive type programs. I have argued that way since first arriving here in 1965 and still remember the discussions that took place in committee at that time. We said the government should support the secondary manufacturing sector. That is what the government has done, and done reasonably effectively. No one on this side of the House, as the hon. member for Kent-Essex (Mr. Danforth) tried to intimate, says that every one of these programs is perfect or could not be improved. I repeat, no one on this side says that; so, let us dismiss that nonsense and save it for the hustings and campaign platforms because, certainly, it is nonsense. There is no place for such nonsense in the House of Commons.


Some hon. Members:: Hear, hear!


Harold Warren Danforth: The hon. member did not listen to the minister.


James Hugh Faulkner: During the past four years this government, with incentive programs, has tried to help the secondary manufacturing sector of the economy become more efficient and compete more effectively in order that it may make inroads in export markets and provide the level of employment that we want for Canadians. If the opposition is arguing that these programs have failed, it is incumbent upon them to show where they have failed. Which programs are they talking about? Which programs did the hon. member who moved this motion mention? Not one. It was one of those airy, vague, fuzzy, confused speeches intended for the hustings.
What does the opposition think about some of these programs? What, for instance, does it think about the Adjustment Assistance Program? Is this a program we should scrap, or should it be revised? And if so, in what way? What about the BEAM program? I can remember when this was introduced by the President of the Treasury Board (Mr. Drury). It was applauded by the opposition. There was no mention of that this afternoon, no word about any way in which it might be improved.
What about the program providing for the remission of duty on new machinery coming into the country to support Canadian manufacturers? Is this a program which should be scrapped, or should it be revised? Not a word, not a suggestion, and no advice from the opposition. What do they think about programs to increase productivity? That is an incentive program, a program developed by the Department cf Industry, Trade and Commerce. Is that a program which should be scrapped or changed? Again, not a word.
It does seem to me as one member who represents an important industrial sector of the economy, as a member
June 20, 1972

who has consistently advocated an enlarged government role in a support position and as one who has consistently declared himself in favour of programs such as PAIT and IRDIA, that this is an excellent use of tax dollars. I would put this to a vote in the city of Peterborough at any time. I could put it to a vote of members of local 524 of the UE.
I could put the question to the steel workers: Do you believe the PAIT or IRDIA should be abolished? Not one of them would agree with such a proposition. They know they are able to place in foreign markets such as Brazil and Botswana the products they are producing because the government has come into these schemes. I would say to the ministers concerned: Keep it up. That is what the people of Peterborough want. They are not concerned with all this nonsense we have heard today from the other side of the House.
I wish to spend a few moments considering one or two areas of effort which particularly concern me. The first is the work of the Export Development Corporation. This may not be described as an incentive program but it is certainly a support program. In 1971, Canadian General Electric-I am thinking particularly of the Peterborough Branch-was financed to the extent of $3.5 million by the agency.
Let us look at the record of the EDC. Exports insured in 1971 amounted to about $392 million in value. These are operations under section 24 of the act. Under section 27, exports insured amounted to a value of $89 million. Speaking from the base I represent, one of the things which has plagued us continually is the problem of concessional financing. The government has gone a long way to meet this difficulty under section 79. In area or export financing, the value of contracts signed amounted to $240 million. Under section 31, the value of contracts signed was $100 million.
At the present time Canadian General Electric Company is seeking to make major inroads into the export market, particularly in the heavy electrical field, and I think it can be said that the Department of Industry, Trade and Commerce, and the Export Development Corporation in particular, have played an important support role in this effort. Some of these business propositions involve very difficult markets-Roumania, Israel, Poland and New Zealand, for example-and the arrangements which can be made in respect of the financing are often critical in ensuring success.
We are very optimistic about the possibilities of the deal now contemplated with Roumania. The role the corporation and the department are playing has become critical to the success of these ventures. I would therefore have expected to hear more from the opposition with regard to the operations of the Export Development Corporation as one agency with which the government has been associated.
I wish to consider briefly, now, the role played by PAIT. The Parliamentary Secretary to the Minister of Industry, Trade and Commerce (Mr. Howard) has touched on it. Again, it is fair to say that in the case of the Canadian General Electric Company, support under PAIT and IRDIA has been offered and accepted. This has led to the carrying out of work for which we are peculiarly adapted
Employment Incentive Programs in Canada and which has put us in the forefront of technological progress in a number of areas.
I think of the Eel River power development; I think of the work done jointly by the New Brunswick Power Commission and the Canadian General Electric Company; I think of the new high voltage direct current technology which was developed and installed in large measure as a result of the support given to the company by the Department of Industry, Trade and Commerce under the IRDIA program. Other companies in my area have received the benefit of similar support, including the de Laval Company and the Fisher Gauge Company, a small, totally Canadian-owned and highly successful venture. Again, they have been assisted by the Program for Advancement in Industrial Technology.
In my judgment, these programs put forward by the government have worked to support Canadian manufacturing and Canadian technology. They have made it possible for Canadian manufacturers not only to compete at home against offshore competition but to find new markets abroad. In doing so they have provided the employment with which all of us are deeply concerned. If there is criticism to be directed against these programs, it can only be that they have not gone far enough.
I have studied the development of PAIT. In 1965, PAIT, it seemed to me, was a defective program. It was not as good as it is today. It has been improved. That is true of some of the other programs. If the debate today were to serve any useful purpose, the opposition should have taken a hard look at these programs and produced suggestions for improving them; I am sure the mind of the government is open with respect to considering ways in which they could be improved. To my mind, the debate has been a failure because of the refusal of the opposition to deal specifically with the programs they have brought before the House for criticism. I now turn to a subject I have raised before in this House. I think specifically of the position of the heavy electrical industry of this country. The government's recordin support of the heavy electrical industry has been pretty clear. Some of the financing that we have made available to the utilities in the various provinces, and the conditions attached to such financing to the effect that they support Canadian technology, have in fact served the interests of Canadian technology. But the fact remains that the utilities are the creatures of the provinces. Their main interest is to get the generators, the switch gears and whatever heavy electrical equipment they need at the lowest possible price, and apparently up to this point, with very few exceptions, they have been unwilling to really support Canadian technology, Canadian workmen and Canadian manufacturing to the extent they should.
Let me examine the Peace River project. Out of a total of $49 million spent on that project, foreign firms from Japan, the United Kingdom, Switzerland, Sweden and France took over 50 per cent of the orders. I should like to ask, when was the last time Canadian heavy electrical manufacturers were successful in bidding in any of those countries? When was the last time Canadian heavy electrical manufacturers were able to bid in Japan, Sweden or Britain? They are closed markets. They do not accept,
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June 20, 1972
Employment Incentive Programs through various means, devices and ruses, our manufactures of these products. Yet here are we offering open hunting to these offshore suppliers.
Let us take the Nelson River project. These figures may be dated, but it appears that out of a total of $65.3 million spent, foreign firms have taken over 65 per cent. Even though these figures can be updated, I suspect the proportion is the same. Some years ago Mr. Walter Ward, who at that time was executive vice-president of Canadian General Electric Company, in a very interesting speech entitled "Urgent Need for Co-operative Effort" suggested that the utilities, the federal government and Canadian industry should co-operate in support of the Canadian heavy electrical industry because it was a key industry in this country. I suggest-


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


John Edward Broadbent: Mr. Speaker, it is distressing for me today to speak in this debate with the full knowledge that neither the Minister of Industry, Trade and Commerce (Mr. Pepin) nor the Minister of Regional Economic Expansion (Mr. Marchand) is present. One would have thought that when their departments were being subjected to criticism they would try to be here to reply to the points that are made, that they would try to defend the government's record. I think it is important that they be here and I regret their absence.
In the brief period available to me I want to make some specific criticisms and suggestions. The Minister of State for Science and Technology (Mr. Gillespie) took great pride in the fact that the job creation rate in Canada was something to behold in this modern world. He was followed by the Parliamentary Secretary to the Minister of Industry, Trade and Commerce (Mr. Howard) who was just as euphoric in telling us that we must be doing a good job in terms of making grants and tax concessions to further regional development in this country, because after all we are creating a lot of jobs.
I suspect that both the minister and the parliamentary secretary were referring to the OECD study some time ago which provided comparative information about our performance compared with other countries in the western industrial world. It would have been very interesting had he revealed the full import of that study. For example, he covered the last quarter of 1971, but what he neglected to tell us was that in West Germany, for example, one of the countries surveyed, a country governed by a social democratic party, there was an unemployment rate of 0.5 per cent. Indeed, West Germany imported two million foreigners because they have more jobs available than workers to fill them. But the hon. gentleman neglected to mention that.
He also neglected to mention that in Sweden only 2.7 per cent of the population were unemployed. Sweden is another country that is governed by a social democratic party. He could also have mentioned Norway, with unemployment at 1.4 per cent-again, coincidentally perhaps, governed by a social democratic party. However, the point is that their unemployment rates are very low indeed, the lowest in the world, so it would be absolutely absurd for them to have a very high job creation rate. Canada has to

have a high job creation rate because we have the highest level of unemployment of all industrial countries in the world. I suggest it is absolute idiocy to say that these other countries do not have the same job creation rate that Canada has, since they have virtually full employment.
During the last quarter of 1971, for example, in the countries surveyed in western Europe there were 1,502,000 unemployed. However, 1,163,000 jobs were available for them. This means that obviously those countries do not need to create more jobs because they have virtually full employment. There was almost one job available for each man looking for a job. The countries in western Europe to which I referred have the highest level of employment, I argue, in man's history. To suggest that their job creation rates are not as good as Canada's is a very poor argument. We need a high job creation rate because we have such high unemployment, for which the government is directly responsible.
Let me refer to some other interesting figures relating to the multitude of programs offered by the Department of Industry, Trade and Commerce to assist private enterprise, the kind of programs that made George Bain write recently in his column in the Globe and Mail that if the welfare state exists in Canada at all, it exists for the corporate sector, not for the ordinary citizen.
I have a list of programs offered by that department, 12 in number, for which the private sector can receive outright grants from the government. During the period 1968-69 you will find that spending under those programs to assist private corporations amounted to $390,593,000. The following year it increased to $399,481,000. In the period 1970-71 the amount was $370,004,000. Last year the government gave out $472,136,000 to the corporate sector. The estimate for 1972-73 is $530 million. This makes a grand total of $2,162,217,000 outright grants to the poor, struggling, private enterprise sector, companies which like to say-out of the other side of their mouths, of course-that everyone should be rugged individualists and that government should not interfere in the daily lives of citizens, except, of course, when giving handouts to them.
A look at the unemployment statistics for that period reveals, not a positive correlation between money going into the private sector but a negative correlation. Average unemployment figures for the previous five-year period reveal that in 1967 the rate of unemployment was 4.1 per cent. In 1968 the rate was 4.8 per cent, in 1969 it was 4.7 per cent, in 1970 it was 5.9 per cent and last year it was 6.4 per cent.
I say to those two ministers who have been boasting so much about job creation as a result of this spending that they should check their statistics. We have spent over $2 billion, and we have an increasing rather than a declining rate of unemployment. I suggest that not only are we providing fantastic sums of money, supposedly for regional development programs intended to create jobs but which do not have any significant impact and conceivably, in some cases, have a negative impact-we in Canada are experiencing a phenomenon that has concerned Senator McGovern of the United States.
June 20,1972

I for one hope Senator McGovern gets the nomination, wins the presidency of the United States and goes on to do what he says he will do, because he is moving marginally in the direction about which we are talking in Canada. He recently referred to the "corporate rip-off" in the United States, indicating that the average and poor American citizen is subsidizing the corporate empire in that country to a fantastic degree. If he is elected president, he intends to change that situation.
I suggest this is not occurring just in the United States. If you look at what has happened in the shift of the tax burden in Canada since 1950, what will be seen is a trend that anyone with minimal concern for equity should view with apprehension. In 1950 the personal income tax share of the total tax burden was 26.7 per cent, while the corporate share was 28 per cent, or just about even. In 1953 the personal share went up to 33.5 per cent, while the corporate share went down to 24.3 per cent. In 1956 the corporate share went down to 23.9 per cent, while the personal share remained at 33.5 per cent. In 1957, the last year of Liberal government before the change, the personal share of the total tax burden went up to 37.1 per cent, while the corporation share went down to 20.6 per cent.
Then we had a change of government. We moved from the bad old Liberal days to the good Conservative days! One would think that under the right hon. member for Prince Albert (Mr. Diefenbaker), coming from the populace that he did, we would have seen a significant shift in the tax burden, with the average citizen paying less and the corporation paying more. We did not see that shift; the same inequitable trend continued. In the first year of the Diefenbaker government the corporate share was 21.8 per cent and the personal share 35.6 per cent. In the next year, the personal share was 38.4 per cent and the corporate share 20.1 per cent. The corporate share declined again in the subsequent year of the Diefenbaker government.
Then we had another switch and the Liberals came back into power. Everybody thought that with a change in government we would get a change in the tax burden. But the same trend continued. The amount of tax paid by corporations in Canada began to decrease significantly.
What is the present situation? Remember that in 1950 corporations were paying 28 per cent of the tax burden and ordinary citizens, through personal income tax, paid 26.7 per cent. In 1973, based on tax rates now, the corporate share of the tax burden will go all the way down to
12.2	per cent, while the personal share of the tax burden will go up to 49.9 per cent. This is a complete reversal in terms of trend which can be noted by anyone who is really concerned about tax equity in Canada. The Liberal government has made no progress in this regard over the preceding Tory government, which in turn made no progress over the Liberal government which preceded it.


Stanley Howard Knowles: The more things change, the more they are the same.


John Edward Broadbent: We have, in very significant proportions, what can only be called a corporate tax rip-off in Canada about which neither of the traditional parties in this country seems to be concerned.
What has happened in respect of DREE programs? These have been referred to today as programs to provide
Employment Incentive Programs
jobs but they are having little success. We have spent $1.2 billion on them since 1969. The only study that has been made of DREE programs and is now publicly available suggests this money is being wasted. The study indicates that the money is not being spent in the way it was intended.
The study was made of 72 per cent of the 25 corporations with assets of $20 million or more as of March last year. It was determined conclusively that these corporations were getting a windfall profit. The decisions made to locate in one part of Canada as opposed to another had absolutely nothing to do with the grants being provided by the taxpayers of Canada. In short, the corporations intended to locate where they did locate, but cooked the books and prepared a nice case to get handouts from this government. That is some regional development program and some waste of the taxpayers' money!
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. John Roberts (Parliamentary Secretary to Minister of Regional Economic Expansion):: Mr. Speaker, I listened with great interest to what other speakers have said today in this debate. Unfortunately, I was not able to be here for all of it. Of the speech of the hon. member for Prince Edward-Hastings (Mr. Hees) there is not much that need be said, nor indeed much that could be said. Perhaps the kindest, and cruelest thing that could be said of it is that it was up to his usual standard. The speech of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) was one with which I confess I had some sympathy, particularly the hon. member's emphasis on the necessity of doing more to assist the position of the smaller businessman in our society.
I know the Parliamentary Secretary to the Minister of Industry, Trade and Commerce (Mr. Howard) has already spoken in relation to this problem. I suggest it is not a problem which can be dealt with only through tax concessions in relation to profits made by small enterprises. There are real problems in Canada in finding and providing for small businesses the seed capital which they require to establish themselves. It is all very well to give tax benefits to those who overcome the obstacles of establishing themselves. What we need, however, for I believe our financial system has been inadequate in providing such capital, Eire institutions supported by government which meet seed capital requirements. Perhaps we might look more closely at what is being done in the United States to make available to business more of the kind of capital needed in what are necessarily high-risk operations.
There was one point made by the hon. member for Nanaimo-Cowichan-The Islands on which I should like to comment. He implied-perhaps this is understandable in a British Columbian member-that there is a bias against British Columbia in the making of grants. It was not clear exactly what kind of incentives he was discussing; it was

June 20, 1972
Employment Incentive Programs
not clear whether he was referring to operations under the Department of Industry, Trade and Commerce or under the Department of Regional Economic Expansion.
He contended, for instance, that British Columbia did not receive its fair percentage of grants in comparison to levels of unemployment. In so far as he was referring to the Department of Regional Economic Expansion, I put to him that the functions of the department in an incentive program are not simply to combat immediate problems of unemployment. Unemployment is certainly an important factor which we look at in designing our programs. However, there are many other factors which are also important in designing those programs. For instance, there is the extent of investment in an area or province or the per capita level of income in a province. British Columbia, on a per capita basis, is the third richest province in Canada. The fact of that relative wealth must be taken into account when considering where regional development incentives should be concentrated.
I should like to spend some time this evening discussing the comments of the hon. member for St. John's East (Mr. McGrath) who has had a long and continuing interest in the activities and programs of the Department of Regional Economic Expansion. In the first part of my remarks you will understand, Mr. Speaker, if I reply to some of the charges he has made. The first was that the minister made no attempt to respond to the criticisms of the department's program. In fact the minister appeared, and so did his departmental officials, at a multiplicity of hearings of the standing committee dealing with this subject.
The committee met 14 times, with a variety of appearances by senior officials and by the minister. Indeed, the committee met so often and the minister met with it so often that the hon. member for St. John's East himself complained that the committee might as well cease its hearings, since the subject had been lengthily covered.
The hon. member for St. John's East contended the government has created record unemployment. No economy in an industrially developed country has a better record in the creation of jobs than Canada over the past four years. It is true that we have high levels of unemployment. However, these are not the result of immediate government policies but are a reflection of structural problems in the Canadian economy, particularly the problem of the very high rate of entry of young people, and increasingly of married women, into the labour force. Indeed, if you look at the job creation side of the Canadian economy, one would have to conclude that the government has done a good job.
But there is perhaps a more fundamental objection to that comment by the hon. member for St. John's East. It is basically this. The problems of regional development, the disparities in regional development in this country have been with us now for something over a century. The activities of the Department of Regional Economic Expansion were not constructed in the belief that we could, through a magic wand, somehow overcome immediately these deep-seated, long-term disparities. The minister has often said he believed it would take perhaps up to 15 years before we could determine whether or not we were having a fundamental, significant impact on the removal of economic disparities in this country.

The charge that the Department of Regional Economic Expansion has been operating for three years and that its programs have been a failure is a misunderstanding and a misapprehension of the nature of our approach to the structural problems of regional development. We have never contended that we could, through the immediate application of our programs, raise almost overnight the Atlantic region, from which the hon. member comes, to the level of Ontario or some of our other more developed provinces. We recognize that this is a long-term struggle and is not one which can be solved overnight, not even in these short years.
The hon. member spoke a great deal about what he calls the Dr. Springate thesis. He referred to the brief presented to the regional development committee by Dr. Springate of the University of Tennessee. The conclusions of a study are only as good as its methodology. Dr. Springate himself, volunteered to the committee that he was not satisfied with the methodological base on which his study was made. It was simply too small. The subject groupings were too small and the interview technique was too imprecise. The amount of information he was able to collect was done on the basis of subjective interviews. He made no attempt to cross-check them with objective information that was available. All of this Dr. Springate clearly admitted.
Dr. Springate commented, as did Dr. Brewis who appeared with him before the committee, that he was dismayed with the kind of political use being made of the findings of his thesis. In effect, Dr. Springate's thesis is as valuable to us as a colour landscape painted by a colourblind man. It indicates some shadowy areas where further study could be usefully carried out. It shows some patches which could be examined in more detail, and more rigorously, than Dr. Springate had time to do. For the hon. member for St. John's East to use this academic document as a universal condemnation is a disservice both to Dr. Springate and to the programs of the department.
The hon. member for St. John's East raised one main point of criticism of the department. He suggested that various groups such as the Atlantic Development Council and the Atlantic Provinces Economic Council had been critical of the department's programs. It is true that on occasion they have been critical of some of the operations we have undertaken. However, in many ways they have expressed their approval for the principles of what we have been doing. They have also suggested ways in which we could improve our activities. Their support for the program is well known, as indeed the hon. member for St. John's East admitted when he said he felt that the concept of the department was a good one.
The hon. member suggested that the incentive areas were spread too thinly across Canada. I can understand that one might reach this conclusion if one simply looks at a map and regards the coloured areas as areas which are eligible for regional development incentives. But we do not simply concentrate on a geographic base in terms of square miles. We concentrate on areas where there are problems of deep-seated economic disadvantage. In fact, a very large degree of our efforts have been undertaken in the Atlantic provinces.
June 20, 1972

The hon. member referred to two specific cases, one of which was the location of Acme Seely in Renfrew and the other was the project of establishing a sugar refinery in Cornwall. Perhaps I might deal first with the question of locating a sugar refinery in Cornwall. I doubt, Mr. Speaker, whether anyone in this House would be able to convince you that the location of a sugar refinery in Cornwall would not be of some assistance in dealing with the problems of that area. I am sure there is no one in this House more aware than Your Honour of the personal problems which have been created by the very high levels of unemployment, virtually 20 per cent which now exists in the Cornwall area.
I was moved by the eloquent plea of the hon. member for St. John's East who spoke at length and with great sincerity about his concern for the plight of the people in the Cornwall area. He said that he wanted to make it clear he was in no way opposed to assisting the people of Cornwall. He was against the sugar refinery, but he was certainly concerned about the plight, concerns and problems which resulted from the very high level of unemployment in the Cornwall area.
I ask the hon. member, as a member of the Conservative party, if he is not able to contact his colleagues at the level of the provincial government of Ontario. Because at the federal level we have been prepared to assist in the establishment of an Uncle Ben's brewery in the Cornwall area with great financial support from the federal government. We are concerned about the levels of unemployment in that area. It is the hon. member's colleagues in the Conservative government at the provincial level who have refused to come to the joint assistance of that area by supporting that program. I would be more impressed by the crocodile tears which the hon. member shed if he would give us some indication as to whether he will bring pressure to bear on the members of his party who, temporarily I hope, hold the position of government in Ontario.
I hesitate to become too political on an occasion like this, particularly when we have someone from Cornwall in the chair who might find it difficult to bring me to order when I am so eloquently defending the interests of his area.


Mr. Winch:: You did not point out that the offer of help came from a British Columbia government.


John (Moody) Roberts: We appreciate help from wherever it comes, even from such a strange place as the British Columbia government. The hon. member for St. John's East also referred to Acme Seeley and its location in the Renfrew area. Because he made his speech after five o'clock I was unable to get the details of that specific case. However, if the implication of what he suggested is that the effect of regional incentives is not to create new jobs but to take jobs away from one area and place them in another, that insinuation is entirely unwarranted.
It can sometimes be the case that an operation is considering closing down in one area regardless of the assistance that might be provided to it. There have been occasions when assistance under the Regional Development Incentives Act has prevented an operation from leaving a province or the country entirely. I will undertake to get a
Employment Incentive Programs
more specific reply with regard to Acme Seeley. I will make sure the hon. member receives more accurate details than he was able to present to the House.


Mr. Speaker:: Order, please. The hon. member's time has expired.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in speaking on this motion moved by the hon. member for Prince Edward-Hastings (Mr. Hees), I feel that in assessing the government's handling of our monetary and fiscal policies there is no better way to start than by referring to the latest figures issued by Statistics Canada. Statistics Canada forecast in large part where our economic problems lie, with considerable evidence that the coming months will not provide the economic growth to absorb the anticipated new entries into the labour force. Until the trade sector improves there does not seem to be any real hope of reducing the relatively high unemployment level of the past year.
I realize that the rate of entry into the labour force is due to drop unless, of course, there is massive immigration, and that within a few years, with a decrease of entrants into the labour force, providing employment, particularly for the youth of our country, will be much easier. However, until that happens Canada must have a high economic growth. The increase in population in the mid-1950s was almost 500,000 per year, while last year it was only 220,000 on a considerably larger population basis.
Statistics Canada shows that our gross national product in real terms expanded by only 1 per cent in the first quarter, which was lower than in any quarter of 1971. The recovery that began in the early part of last year lost its momentum, with the October to March periods being very slow, giving us a high unemployment rate of 6 per cent in the first quarter, indeed in the first five months of this year. In order to meet the forecast growth of nearly 6 per cent, activity will have to increase substantially. Unless there is a considerable increase during the balance of the year, this expected goal will not be met.
One of the weakest areas is our merchandise trade, where the surplus amounted to only $263 million for the first five months of this year, compared with $694 million for the corresponding period last year. Then there has been a slippage in housing starts. All this added up to an increase in unemployment in May over April. There is no doubt that the trade sector is the chief drag on the economy. Imports are being drawn more rapidly into the country. This is evidently due to the 10 per cent appreciation in the exchange rate of the Canadian dollar over the past two years. To no one does the strengthening of the Canadian dollar bring such bad news as it does to the prairie grain producers. As a result of this situation, farmers are getting a much lower price for their exported grain, and selling Canadian grain will prove to be more difficult.
Canada's recent wheat sales to China were in pounds sterling. With most other countries buying in American dollars, the purchasing power of both currencies has been declining in relation to the Canadian dollar. In the past

June 20, 1972
Employment Incentive Programs three weeks the British pound has declined 5 cents and the American dollar 11 cents. Mr. Lockwood, second vicepresident of the Saskatchewan Wheat Pool said:
The money lost in exchanging the currencies for Canadian money means farmers will get less for their exported grain. Foreign countries don't buy Canadian grain with Canadian money because they don't have enough of it, if any.
Since the Canadian dollar was unpegged two years ago from 92 i cents U.S., the farmer has lost between 15 cents and 16 cents a bushel on exported grain. This has resulted from the rising value of the Canadian dollar on world markets. On sales of approximately $1 billion per year our farmers lost well over $100 million on the sale of grain last year, this at a time when the bushel value of grain was at an all-time low in the markets of the world. This also means it will be more difficult to sell grain because it will be more expensive on the markets of the world. Our grain trade produces for Canada well over $1 billion a year in foreign exchange. If our trade in automobiles and automobile parts is left out, because it largely amounts to an exchange, this shows that our grain trade accounts for almost 10 per cent of our over-all trade. Further, it is especially valuable because it goes to world markets outside continental North America.
We can talk about all the great things we should be doing and how we could work out a great industrial strategy that would bring us prosperity, but unless Canadians show a willingness to get on with the everyday business of doing their job, all our great plans will come to naught. The Montreal port strike is one of the very great question marks in the movement of grain to world markets at this time. Mr. Vogel, the chief commissioner of the Wheat Board, has been quoted in an interview this week as saying, "It has been calamitous to our (grain) movement. Every time there is a delay, we lose a possible further sale." Sales of grain to traditional customers have assured that our export ports will be working to capacity at least until May, 1973. In addition there have been experiments conducted to obtain greater flexibility in sales to other countries.
The continuing strike by the longshoremen has cut by half our grain handling capacity through the St. Lawrence. Last week there were nine boats waiting to be loaded at Sorel, another nine at Baie Comeau and 13 at Port Cartier. These ports have been attempting to take the grain diverted by the strike at Montreal. In this case the vessel owners and buyers of grain are losing millions of dollars, because the Wheat Board is not liable for the cost. As I say, the strike could well cost Canada the loss of future sales. The Montreal port strike has prevented the movement of grain from this country. Now it is almost certain there will not be the record that was anticipated earlier this year. Considering that the price of our grain on world markets is so low, failure to move the grain is all the more disastrous.
The much touted industrial strategy of curbing the export of raw materials or semi-processed materials and replacing them with manufactured goods has a long way to go before it is a viable alternative in the Canadian economy. The government has mismanaged the fiscal policies of the country to a great degree. The Minister of Finance (Mr. Turner), having set a limit on what the banks can pay for funds, has brought about a situation in which

the banks will not have as much money to lend as they had previously. Almost certainly this will mean rationing of money for the major corporate borrowers. Presumably they will not have the ability to go to the banks but will have to bid in the market for outside funds.
The Bank of Canada has been expanding the monetary supply at an annual rate of 25 per cent since the beginning of the year. This follows a two-year stretch in which the expansion of the money supply was estimated at 18 per cent. This monetization of corporate debt, involving the creation of huge liquid claims against the banking system, which forms part of the public money supply, in turn raises the spectre of accelerating inflation. In contrast, the money supply in the United States has been kept down to a much reduced rate of increase of approximately 7 per cent. This in turn has meant that interest rates there have not been raised.
A comparison shows that a rise in the American economy is being successfully carried forward. Using the expansion of the money supply to the extent that it has, our central bank inevitably invites the sort of excesses apparent in an excessive loan demand situation. The banks have taken corrective steps, but the more demanding requirement is for production to catch up to the funds available for financing it.
The conclusions of the Senate Standing Committee on Finance in its report on growth, employment and price stability are of particular interest. The committee concluded: (1) the three big levers of monetary, fiscal and exchange rate policies remain central and indispensable in stabilizing the Canadian economy; (2) co-ordination of fiscal monetary policies and close co-operation between the Department of Finance and the Bank of Canada in the exercise of these policies are essential; (3) the Bank of Canada cannot operate monetary policy on the basis suggested by some monetarists. It must be concerned with such important matters as interest and exchange rate levels, liquidity, and the financing of federal government debt. However, it should give more relative emphasis to steadying the growth of the money supply and it should guard against the tendency to be overly reactive to shortterm indicators. The Senate Committee also said:
-in reviewing with our witnesses the post war record of monetary policy in Canada and noting the sometimes quite frequent sharp swings of policy direction within relatively short periods, we are led to question whether there has not been a tendency on the part of policy makers to be overly reactive to short-term indicators and to fall somewhat into the pitfalls of fine-tuning with a blunt instrument.
Needless to say, these views strengthen my contention that the Department of Finance and the Bank of Canada must carefully co-ordinate and control the increase in the monetary supply with an eye to its long-term economic implications.
The Senate Committee also noted as follows:
Recently many central banks in the free world have shifted their efforts towards controlling monetary aggregates such as the supply of money. This move, in my opinion, offers the first ray of hope, that the present world wide inflation will be brought under control.
June 20, 1972

Finally, the Senate committee said they would-
-confess to having been much impressed by the thrust and conviction with which monetarists are able to put forward their views, by the obvious scope of their empirical research, ... and by their undeniable impact on the whole field of professional economics and on the psychology of financial markets.
Mr. Speaker, I contend that this government has not provided a reasonable and good monetary policy.


Mr. Guy LeBlanc (Rimouski):: Mr. Speaker, I find it hard to understand that the opposition can express, as it has today, such indictions of the government's economic policy, specially considering that since the first months of 1970 the government's monetary and fiscal policy has been definitely geared toward development and expansion in Canada and that the government has had to bear a very heavy load of expenses in order to stimulate the economy.
Furthermore, the government brought down, early in May, a budget designed explicitly to cope with the defects mentioned in the motion now before us.
Before considering specific programs, it is appropriate to recall some figures and facts related to our economy. Last year, for instance, our economic growth rate was 51 per cent and the rate estimated for 1972 is approximately 6 per cent. This growth was certainly felt in the field of good and services.
Reference to figures for 1964 reveals that the value of our exports of finished products was $1,400 million for that year whereas in 1971 this figure was $6,600 million. The difference between those two amounts represents an average annual increase of 25 per cent. Canada's commercial surplus in 1971 was $2,100 million and was second only to that of 1970, which was the highest ever.
If you also consider housing starts for 1971, you realize that 233,000 units were produced, which was an unprecedented achievement.
As a matter of fact, the government has taken very wise measures concerning the economy. However, what many people will not recognize is that sometimes business does not respond immediately to economic indicators and incentives used by governments or by the most aggressive groups in this country.
When economic conditions become more encouraging, there is first an increase in business and industrial productivity, in an attempt to keep pace. However, a certain period of time has to elapse usually before the increase will result in investments and expenditures. I believe it is very important to take into account the adjustment period that extends from the beginning of an economic revival to the beginning of the upswing in investment.
But there is evidence that the economy is in progress and that the government measures show their good effects when we consider that companies report a 36.2 per cent increase in profits for the first quarter of 1972.
As far as the incentives programs are concerned, it is good to look at some of them within the framework of the Department of Regional Economic Expansion policy, which usually highly interests the members of this House.
Employment Incentive Programs
Under the incentives program to industry, a program which promotes and encourages the manufacturing industry in the Atlantic provinces, for instance, at the beginning of February last, 249 grant offers had been accepted.
Under the Regional Development Incentives Act, capital expenditures amounted to approximately $201,000,000, thus contributing to the creation of 9,800 jobs, equal to 19 per cent of the total number of jobs expected under the program for the whole of Canada. This percentage is much higher than the unemployment rate of the Atlantic regions compared with the rest of Canada.
What is unusual is that everybody-liberal members and the liberal government prove it every day-is highly interested in reducing the rate of unemployment and in creating new jobs. It is recognized that the unemployment rate is much too high. In fact, we talk about a rate of 6 per cent but we never mention the other Canadians-the 94 per cent who are employed. We are wont to discuss only what goes wrong, yet there are many people working in Canada and living very well, a fact that makes Canada one of the most advanced countries in the world, and a fact that we are not ashamed to discuss with our colleagues nor with the citizens or groups of citizens of other countries which we occasionally visit.
I would like to mention the FRED program as it applies to northeastern New Brunswick and which is under way for the greater welfare of this area, and the Prince Edward Island development program which, according to the 1969 agreement, provides for a grant of $118,500,000 by the Regional Economic Expansion Department.
In Quebec, the province where I live and where the constituency of Rimouski is located, under the grants to industry program, at the beginning of February, 671 grant offers had been accepted, following attractive requests from industries whose capital expenditures amounted to about $600,000,000, in order to create 29,800 jobs.
In Quebec also, I think we must consider the five special zones created. As to the various community services, under the agreement creating these special zones, in this province as well as elsewhere in Canada, financial arrangements have been agreed upon within the program of assistance to provide secondary services in communities in view of helping already established industries and of attracting new ones; as at last March, these grants amounted to $142,800,000.
I would also like to say a word about what has been accomplished in the Lower St. Lawrence and Gaspe regions towards rural and social development. Instead of being designated "special", that region has been called a "pilot region"; in this way it benefits from a number of grants applicable to special regions; but according to a specific agreement, it is designated as a "pilot region" for the purposes of the FRED program as applied to the Lower St. Lawrence and Gaspe regions. In 1971, when the agreement came under review, the Department of Regional Economic Expansion pumped into it an additional amount of $153 million.
Many other places, too numerous to name, also enjoy similar benefits. I think of the Prairie provinces which, in 1972-73, will receive grants and take advantage of loans;

June 20, 1972
Employment Incentive Programs
one can also consider the cost of what is known as the farm assistance, which represents about $21 per person. That can be compared with similar per capita amounts- $22 or $28 according to the situation-paid in some regions of Quebec. An amount of $97 per person is granted in the Atlantic region.
Insofar as I know, the Prairie provinces have also benefited from the industrial incentive programs; if one considers the statistics for February, 214 offers had been accepted, taking into account an investment of $180 million, thus creating about 8,150 jobs.
For the whole of Canada, if we consider the old industrial incentives act, administered by the Minister of Regional Economic Expansion for the benefit of certain regions, 19,600 jobs have been created. The difference between the number of jobs created and the number anticipated is below 2 per cent, which is a very interesting result.
One could also consider the achievements, the programs and the policy established within the jurisdiction of the Department of Industry, Trade and Commerce. According to one of the latest reports of that department, the budget earmarks an amount of $75,400,000 for grants and various contributions.
There are other statutory programs, of which the general incentive program IRDIA representing $30,100,000, the Automotive Assistance Program, $11 million and the DIP program, to help modernize the Canadian defence program, amounting to some $6,700,000.
Those grants and subsidies amount to a total of $123,200,000.
I shall only mention as well the program the same department adopted to help shipbuilding in Canada; everyone knows that this Department of Industry, Trade annd Commerce program was of immeasurable assistance to the workers in Canadian shipyards.
In closing, I should like to mention an important detail: it seems strange that hon. members of the opposition always seem to see the gloomy side of Canada, while other countries-and the OECD for instance-consider that Canadian economic growth in 1971 ranked amongst the highest in the world. One of the leading newspapers in England, the Times, gave Canada first prize for the best general economic evolution amongst all industrialized countries in the western world.


Lincoln MacCauley Alexander: Mr. Speaker, I am pleased to have the opportunity of becoming involved in this debate because I think the motion before the House is meaningful. May I bring to your attention, Sir, something I learned as a result of being involved with the Standing Committee on Labour, Manpower and Immigration when it was dealing with Bill C-183.
When I was asked to become involved in the debate on this motion it suddenly dawned on me that a strange anomaly has developed in this country. On one hand the Department of Industry, Trade and Commerce has earmarked millions of dollars for innovation-or technologi-
[Mr. LeBlanc (Rimouski)J
cal change, if you will-and has been saying to industry and manufacturers, "Come and see us; we will grant you money in order to make you more competitive in domestic and international markets." On the other hand, because technological changes, as defined in the act, are being encouraged the government has said that collective agreements which have been closed may be reopened. In other words, the effects of technological change may be looked into and if labour and management do not reach a new agreement a strike may ultimately result.
That is the anomaly to which I refer. On one hand the government gives money to industry in order to place it in a more competitive position, while on the other hand and at the same time it is strangling industry. If a collective agreement which is closed, is opened and no new agreement is reached, labour can use its ultimate weapon, the strike-the weapon which is being increasingly questioned.
We are all concerned about full employment and economic growth. Now and again, however, we must place our finger on and be concerned about-I say this with all due respect-those who are directly involved in this process. We have discussed this question at length. As you know, Mr. Speaker, I come from an industrial city of which I am proud. Voluminous legislation is produced affecting those in business who must decide how to increase productivity. Businessmen tell me that almost every time they turn around, a new law comes down. For the big company this is fine; it has the wherewithal for high-priced lawyers, accountants, public relations men, lobbies, and so on. Big companies can afford to sit down, peruse and analyse government legislation as it is passed almost each month.
I am concerned about the small chap, the businessman who does not have that sort of wherewithal. How is he to survive? Where is he to get his advice? From the Globe and Mail? From the Hamilton Spectator? Will those newspapers tell him how he is to move and what his rights are? I am greatly concerned about the type of legislation this government passes. I will not discuss this question at great length; I merely Wish to put on record my thoughts. This government is hypocritical. It has indicated that it supports full employment, economic growth and helping the helpless whether they be individuals or organizations in the corporate structure; at the same time, however, it has passed legislation that is bound to create frustration, confusion, disenchantment-


Mr. Munro:: And consternation.


Lincoln MacCauley Alexander: -and consternation, as the minister says.


An hon. Member:: What's his name?


Lincoln MacCauley Alexander: Yes, what's his name?


Mr. MacKay:: The minister of wealth and hell fare!


Lincoln MacCauley Alexander: Bills such as the one I referred to, which deal with labour matters, give rise to consternation. I thank the minister for suggesting the word.
Something else bothers many people, particularly those this government expects to carry the load in the private
June 20, 1972

sector. It is this: People feel they are never listened to. They have developed theories and rational arguments which, if heeded, would put this government on the right road. But the government does not listen. I am looking at the Minister of Veterans Affairs (Mr. Laing) and I ask, what happens to most of these suggestions? I suggest they wind up in the wastepaper basket. People who try to set this government straight or give it the benefit of their wisdom are engaged for the most part in an exercise in futility.
I am particularly interested in DREE as it affects the city of Hamilton. If we look at the report from the other place, which deals with issues such as this, we find the following:
It appears to the committee that a policy designed to distribute industrial growth more evenly around the regions, desirable as it undoubtably is, should be conceived within the framework of an overall industrial and technological strategy. For instance, using government subsidies to destroy or weaken firms well located in one region by creating new competitors artificially located in another is not in the long term national or regional interest. These artificial growths can damage prosperous areas without establishing a solid basis for industrial expansion in less developed regions, since they cannot be subsidized permanently. In Canada and elsewhere experience shows that this kind of approach leads to a waste of public funds, rising expectations and eventually bitter disillusion in the areas eligible for special assistance.
That applies to instances where industry is brought in to compete with industry which is already established. What concerns me is that the government should have no qualms whatsoever about removing industry from one place in order to create employment in another, thereby causing unemployment in the city from which the industry was taken. Here I make specific reference to Hamilton. The first instance was Aerovox, the second is of recent vintage. This is the one involved with Acme Seeley Business Systems Limited of Toronto.
The hon. member for York North, or from one of the other constituencies in that area, appeared puzzled that the hon. member for St. John's East (Mr. McGrath) should question the government in this connection. I want to let hon. members know what really happened. Acme Seeley Business Systems, as a result of a DREE grant of $862,000 or more, has created 137 jobs in Renfrew. But what did they do? Do hon. members know what was done in the city of Toronto? The subsidiary is Jackson Metal Industries. Through this subsidiary, 136 jobs were involved in Toronto and in Hamilton before the company moved to Renfrew. So what was the gain? One job is gained in Renfrew, and 136 people are turned out of work.
I am here today to raise objection on behalf of the City of Hamilton and other cities throughout the country which have experienced this sort of thing. I see the Minister of the Environment (Mr. Davis) smiling. I do not know whether he is acquainted with this situation but he is a responsible minister, to some extent, and I hope he understands what I am trying to put across. It is impossible for a government to do this sort of thing and remain credible.
The issue which arises is wider than the two cases I have mentioned. How many other cases are there of a similar nature? How many millions of dollars of public funds are being used to deprive people in non-designated
Employment Incentive Programs
areas of their jobs? This is a legitimate question and I hope that at some time it will be answered. If I can give two illustrations arising within the cities of Hamilton and Toronto, it is likely that a great many more can be found within our society.


Mr. Whelan:: The environment is better in Renfrew.


Lincoln MacCauley Alexander: Does the hon. member wish to speak? The hon. member for Essex-Windsor (Mr. Whelan) can always do so if he wishes.
In the past, when such instances came to light, the minister always managed to give an explanation which he hoped would sound plausible. He would say the firms would have gone out of business had the department not helped them. No doubt we shall get further, supposedly plausible explanations in the days to come, because I understand the minister has a fertile mind.
But why should well-placed, well-established firms find difficulty in surviving? It is not, I suggest, because of their own incapacity; it is primarily the result of the policies of the government. After all, if a manufacturer is producing in a city where housing costs are rising, where confrontation between management and labour rather than negotiation is the rule, where food costs are rising, where property taxes are rising, these are circumstances which have to be met by salary increases. If governments do not move in to alleviate the situation, industry will move to a lower-cost region. So don't let members opposite tell me industry had to move because otherwise it would have gone under. It is up to them to tell me why it would have gone under.
It seems to me that on an increasing number of occasions DREE grants are being used to transfer employment from one region to another. This gives cause for serious concern. One possible deterrent to this being done would be to deduct from the incentive grant an amount based on the reduction of employment at a company's other plants. If within a two-year period following the initial payment of a grant a company were to reduce its employment levels elsewhere in Canada, the repayment of part or all of the grant should be required. At present, a company is only required to make repayments if it reduces employment at the facility in respect of which the grant was made.
Let me deal, now, with another area affecting the Department of Industry, Trade and Commerce. It is noted that grants to industry to stimulate innovation have increased from approximately $58 million in 1968-69 to $114 million in the current fiscal year. That amounts to an increase of about 94 per cent in only four years. These grants primarily affect transportation, the metal industries and electrical concerns. But the significant fact, as revealed by Statistics Canada, is that there has been little increase in research and development expenditures by industry since 1969. As a matter of fact, efforts in this direction have been decreasing. In the electrical, transportation and machinery sectors we find that innovation expenditures have fallen from $176 million in 1969 to a predicted $162 million this year. Remember, it is in these sectors that the majority of the grants have been concentrated.

June 20, 1972
Employment Incentive Programs
These figures demonstrate the failure of the incentives program to stimulate innovation. This should not surprise us, since the greatest stimulus to innovation is a high level of demand for a company's product. The government has failed to provide this stimulus. The recent budget epitomizes this failure by doing very little to increase consumer demand. We on this side continue to say this could have been achieved by reducing personal income tax payable by the lower and middle income groups. The government can allocate all the grants and subsidies in the world, but if there is no demand for a product it is wasting its time. How is demand to be created? We say it can be done by cutting taxes and putting the money back into the pockets of consumers. But the government says no. To my mind, small firms, even if they could take advantage of incentive and development programs-


Mr. Speaker:: Order. The hon. member's time has expired.


Mr. John M. Reid (Kenora-Rainy River):: Mr. Speaker, I have been paying attention to this debate and I want to commend the opposition for having raised this particular subject. I would have thought they would have taken advantage of the opportunity to display their knowledge of the subject and to provide alternatives to the existing programs of the Department of Regional Economic Expansion. Unfortunately, they have been barren in their speeches in putting forward possible alternatives. They really come down to merely repeating monotonous criticisms as if they actually believe they are true.


Lincoln MacCauley Alexander: You did not listen to my speech.


John Mercer Reid: When people do not have anything to say, they tend to repeat themselves over and over again so that the full weight of their ignorance can be displayed.
This motion suggests that the Department of Regional Economic Expansion, along with all the other incentive programs that are operated by the federal government, have failed to stimulate production and trade. Yet we know that according to the most recent monthly report to Parliament, the net accepted offers under the Regional Development Incentives Act have helped to induce in the designated regions of Canada planned capital expenditures in manufacturing facilities totalling over $1.2 billion.
In addition, the motion also suggests that the incentives program has failed to open up increased opportunities for productive employment. Yet according to the same monthly report, a copy of which all hon. members of the opposition have had, including the hon. member for Hamilton West (Mr. Alexander), the projects supported by accepted offers of grants under the Regional Development Incentives Act are expected to create almost 59,000 direct, new jobs. If anything, this is a conservative estimate because it makes no allowance for off-site jobs directly related to assisted projects or for the indirect or multiplier effects on employment, though economists are generally agreed that these are of significant benefit.
We all know that the Department of Regional Economic Expansion was created in 1968 to do a number of things. First of all, it was designed to bring under one roof a

melange of programs that had been built up, such as ARDA, FRED, the Atlantic Development Council, and so on, in order to try to provide some measure of co-ordination and to make sense out of a variety of approaches that had been developed to meet ad hoc needs.
In addition to the new act that was passed, the government introduced an incentives program to deal with disparity existing between the rich and the poor regions of Canada. Basically, the rich areas of Canada are Ontario, the strongest and richest province of all, British Columbia and Alberta. The main focus of the program was to be on the maritime provinces and that part of Quebec east of Quebec City, including Trois-Rivieres.
A look at the figures reveals precisely what the government has done over the last four years. Let me give the House an example. Breaking down the budgetary figures for the Department of Regional Economic Expansion in the year 1971-72, out of a total of $410 million, 42 per cent was devoted to the Atlantic provinces of Newfoundland, Prince Edward Island, Nova Scotia and New Brunswick, to an amount of $172 million. In the province of Quebec, 26 per cent of the total budget was spent, amounting to approximately $100 million. In the western provinces, 18 per cent of the budget was spent, amounting to $73 million. In Ontario, 8 per cent of the budget was spent, to a total of $32 million.
Looked at on a per capita basis, this expenditure becomes much more interesting. In the Maritimes approximately $85 per capita was spent by the Department of Regional Economic Expansion. On a per capita basis the figure drops to about $18 in the province of Quebec, to about $14 in the western provinces and to about $5 in Ontario. So I think these figures bear out the claim that the government has concentrated its funds where the greatest need and largest area of unemployment has been historically, and still is today; areas where there are extremely severe structural problems both in regard to long-term employment opportunities and in terms of an economy that is losing some of its natural resource base. There is no easy way out of this problem, but I think the government has taken a great deal of unnecessary political criticism for doing precisely what it said it was going to do in order to deal with what is clearly a distinct problem that is unique to Canada.
I should like to make a number of criticisms of this department as I have seen it in operation, notwithstanding the fact that it has been very useful. My criticisms are threefold. The first has to do with the way in which the department was established. When the act was passed establishing the department, a great deal of power was concentrated in the hands of the minister. The argument for this was that it would allow the minister to be more flexible, that it would allow the department to be more flexible, that it would allow programs to be tailor-made for all areas of Canada.
What has been the result of this? In my opinion the department has become the most regulation-bound and least flexible of all departments of government. The reason is that too much power is concentrated in the hands of the minister. The minister is afraid to use his power and to be as flexible as he would like because of the severe political barrage he has been under from mem-
June 20, 1972

bers of the opposition during the last four years. What members of the opposition have succeeded in doing is to destroy whatever flexibility was built into the act, and consequently we now have a department that has all the appearances of being able to travel at a fast speed but which in point of fact has a governor on the throttle, which makes the department travel at 50 miles an hour whereas it should be travelling at 150 miles an hour.
It seems to me that the original concept of the department, one that was accurate and precise, of flexibility has given way to political reality and in the result we now have a department that is far less flexible than we desire. It may well be that we should begin to look again at this whole concept and perhaps remove this built-in flexibility so that, paradoxically, the department can be made much more flexible in its approach.
Another criticism that I have is that the incentive program is designed in a way that favours large corporations, not only with regard to the $600,000 application level but also, and perhaps more importantly, because of the way the department have structured their application procedure and the way in which they decide who shall and who shall not receive an incentive grant. This places host communities in a rather unfortunate position. It is true that before a large company comes into an area, the area is suffering from lack of employment opportunities. However, when a sufficiently large company locates in the area, the employment opportunities that are opened up are of a limited kind, usually semi-skilled or unskilled, and perhaps a few skilled positions. But participation in the managerial exercise of operating the company is a prospect that is denied to the community, for the people who run such an organization are imported; the local people do not penetrate the higher echelons of the company.
In other words, while we are providing employment opportunities of a limited kind that are welcome, needed and desirable for the area, in point of fact we are not providing opportunities for communities to develop a cadre of local people with initiative who are sufficiently skilled to set up other businesses in the area. One of the effects of this is that the community that a company enters is left the poorer because there is no opportunity to develop that high level of expertise for which modern management calls. Thus, the host community does not strengthen the economy of the country.
It seems to me that the Department of Regional Economic Expansion, in conjunction with the Department of Industry, Trade and Commerce, ought to be paying far more attention to the encouragement of local entrepreneurs. It is often said that three factors are required to make business work-land, labour and entrepreneurship. Unfortunately, in many communities, such as my own for example, the level of entrepreneurship is not highly developed. The dilemma that these people face in obtaining sufficient markets for their products is almost overwhelming.
Unfortunately, because of the way in which our system operates the smaller operator is not given the opportunity of getting that extra expertise. It strikes me there are two
Employment Incentive Programs
approaches to be taken here. One is a management development program in the Department of Industry, Trade and Commerce, and particularly restructuring in such a way that grants to smaller firms could be handled through the Department of Regional Economic Expansion.
It seems to me this could be done in a number of ways. First of all, by expediting grants and demanding, perhaps, less completed work. If you are applying for a loan at the present time, you must have gone to a bank or financial institution for the money in order to get into commercial production. It would be a lot simpler if you were to give smaller operators the money as their plants were in the process of developing, thereby cutting down the expenses they have to incur in order to get loans from Canadian commercial banking facilities.
I have one more point to make. It concerns both large and small companies and their relationship with the Canadian financial community, particularly the Canadian banking system. At the present time these companies which come in with non-Canadian financial support are treated in exactly the same way as those which come in and make an application to DREE with only Canadian financial support. I argue that this discriminates against the company that comes in with only Canadian financial support.
We all know that it is a fact of life that in Canada the financial community is not sufficiently strong to give these people enough financial backing. If you treat those who come in with strong, solid United States financial support in the same way as you treat the companies who have only Canadian financial support, the one with U.S. support will be much stronger. The Canadian financial system is not sufficiently strong and is not prepared to put the kind of money that has to be put into these areas covered by DREE.
I am told that these companies are perfectly sound in that they are building big banking buildings in Toronto and Montreal. But our banking system is perfectly lousy when it comes to financing secondary industry in the outer fringes of Canada, particularly in those areas designated under DREE. Therefore, it seems to me that any company coming to the Department of Regional Economic Expansion with the misfortune of having its financial support in Canada ought to be given a special grant under DREE, perhaps an increased grant of 15 per cent to 20 per cent would be an appropriate figure, in order to help compensate that company whose only source of capital is Canadian.
This is one of the traditional problems of the outer fringes. They are unfortunately faced with lack of capital to begin with, and when they do get that capital it is not even sufficiently strong that the financial institution will support the project to the bitter end, even if it does involve making money. The Canadian banking system is perfectly able to cut losses and run.
In making these criticisms I certainly do not want to deny the very good work the department has done. I do want to point out that to some extent the restriction in terms of secondary industry limits the effectiveness of operations in northern Ontario and northern Quebec where it is not likely that a strong secondary manufactur-

June 20, 1972
Employment Incentive Programs ing industry will suddenly emerge. It seems to me that if we are going to provide assistance through the federal government to these areas, we will have to widen and improve the opportunities available under DREE. For example, I would suggest expanding the section in respect of secondary industry to include tertiary industries such as the tourist industry, hotels and motels in these regions, because this seems to be one of the bright spots in the growth pattern of these particular regions.


Mr. John Burton (Regina East):: Mr. Speaker, I think it is very useful that a motion has been brought forward today which attempts to take an over-all view of the whole range of the government's incentive programs as they are applied through a number of government departments. It can be said that the government's incentive programs do not represent a co-ordinated or a planned program and this is really one of the basic deficiencies. What we have is a patchwork approach which involves the constant plugging of loopholes.
Usually these programs brought forward represent a response to a particular problem or situation. In every case we see demonstrated the government's faith in the infallibility and reliability of private corporations to keep the economy healthy. I suggest there is a very basic conflict in government involved in this situation. On one hand we see that it still wants to demonstrate its faith in corporate capitalism, while on the other hand it has to recognize that it cannot escape the fact that in today's world government must accept final responsibility for the performance of the economy. Of necessity, and no matter whether the government likes it, there has to be a degree of government intervention in the economic affairs of the nation.
Tonight I should like to deal with one particular aspect of the government's incentive program, namely, that carried out through the Department of Regional Economic Expansion. We see in this department one of the best examples of the folly of the government's approach. This department, which was created in 1969 in keeping one of the promises made by the Prime Minister (Mr. Trudeau) during the last federal election campaign, was designed to do something about the problem of regional disparity in Canada. Over the past three years this department has spent $1.2 billion, and during the current fiscal year it will incur an expenditure of another $500 million. Certainly this department has not had to contend with any restrictions in its budgets. It should be noted that the expenditures to which I refer include millions of dollars spent on programs the government now admits it has to overhaul or has had to overhaul.
Perhaps I should first make reference to some comments of the Parliamentary Secretary to the Minister of Regional Economic Expansion (Mr. Roberts). I took careful note of his comments. He was rather critical of our criticisms about the lack of progress in overcoming regional disparity. I think I quote him correctly when I say he suggested that this will take a period of years. None of us has any quarrel with that statement, but surely after three years in operation and the expenditure of the sums of money I have mentioned we have cause to take a look at the progress being made by the government? Is it making any progress in overcoming regional disparity?

We want something in the way of a progress report. On any number of occasions evidence and information has been given to this House to show that the governments policy is not solving regional disparity.
I took note of what the parliamentary secretary said about Professor Springate's testimony before the regional development committee this spring. The comments of the parliamentary secretary represent the first objective analysis of that presentation that I have heard from anybody on the government side of the House. I want to make it clear that I am not necessarily holding a brief for the comments of the hon. member for St. John's East (Mr. McGrath), but I would have to agree with what the parliamentary secretary said, that one cannot draw conclusions from Professor Springate's study. Rather, he opened up areas which require further study and investigation. He posed some very serious questions about the operation of the department which require further analysis.
After Professor Springate presented his critical analysis to the committee, with all the qualifications outlined by the parliamentary secretary, the Minister of Regional Economic Expansion (Mr. Marchand) and government members on the committee did everything they could to belittle Professor Springate's thesis and the PhD he obtained at Harvard University. As a matter of fact, their efforts went to the extent of even calling into question the qualifications and capabilities of the tutoring he received in writing his thesis at Harvard University. That is how desperate government members were to discredit this person who made such a useful contribution in an examination of the government's program in respect of this department.
I think the principal area of criticism of the department's program concerns the industrial incentives program carried on under the Regional Development Incentives Act. This, of course, received top priority in the department's program. In many ways it has been the cornerstone of the department's program. Under this act $250 million have been committed by way of special grants to the end of April. I suggest that the program has been disastrous in its over-all impact. It has not made any significant contribution toward overcoming regional disparities.
I want to make clear that I do not question that there is some place for an incentives program. But if we are to get the best possible value for our money, I suggest such a program should be developed within the framework of a well planned, national, economic plan. I suggest there have been many harmful and inadequate features of this program. In the first place I think it has had the effect of distorting, ruining and hampering many of the other worth-while programs which are being carried on by the department. The industrial incentives program has had top priority on the basis of the minister's statements and on the basis of statements by officials of the department. There have been lavish handouts to industry.
There are other programs such as the Multiplex program in New Brunswick which we would like to see given greater priority, and the agriculture service centre program in the Prairies. These are the type of programs which could make a basic contribution toward establishing a better economic framework to enable the various
June 20, 1972

regions of Canada to overcome the disadvantages they now face.
What happens? In dealing with some of these other programs which are worth while, the department haggles over a few thousand dollars in carrying on negotiations or in reaching agreement, while on the other hand it gives out money by the bucketful to private industry in the giveaway programs. I suggest that if there were more emphasis on infrastructure programs, more planning, more co-ordination and more emphasis on programs of social adjustment, we would have better results.
Certainly we must criticize the passive nature of the program. We wait for private corporations to take the initiative. This program is based on the premise that if given encouragement, private industry will do the rest of the job. In many instances private corporations have created the problem the department is now attempting to correct. There is no plan of action either for regions of this country or for the country as a whole. No program can succeed until there is an adequate framework. We have called for this ever since the department was formed.
I suggest we must criticize this program because of the grants to foreign-controlled firms. I think it has been demonstrated through government studies and various evidence that the high degree of foreign ownership in our country has in fact contributed to regional disparities. It has not helped some of the disadvantaged areas and in fact it has contributed to disparities. Now we find, on the basis of the legislation which is being brought forward, that we have a continuance of handouts to foreign-con-trolled firms to carry on business as usual.
After a long study we have had the Gray report brought before the House. Then we have the measly foreign takeover review bill which is now before the committee. Let us look at the implications for the regional development program with this foreign takeover review bill. I ask what foreign concern, what foreign firm, would want to take over or merge with another Canadian firm when it can expand its present operations or start new operations with the type of generous help it can obtain under our Regional Development Incentives Act? In addition, they have over half the country to pick from when choosing a location for their operations. The government has completely ignored this, while even the province of Ontario has eliminated its forgiveable loans to foreign-controlled firms.
I suggest that we look at the nature of the program itself and what is happening to it. First, I believe it has become clear from evidence presented that all that happens is that the program speeds up decisions which would otherwise have been taken by firms: it does not affect the basic yes or no decision; all it does is have some influence on the timing. More than that, I raised the question of the legality of the grants, because section 7 of the act specifies that no development incentive may be authorized if it is probable that the facility would be established, expanded or modernized without the provision of such incentive.
Two deputy ministers have said that grants are merely likely to accelerate decisions rather than affect a negative decision. The minister has told us that no legal opinion has been obtained from the Minister of Justice (Mr. Lang)
Employment Incentive Programs
on whether grants can be given under these circumstances, and he gave no undertaking that such legal opinion would be given. In addition, it states in the legislation that grants can be given on the basis of the creation of jobs. I understand "creation of jobs" to mean the bringing in of new jobs which were not there before. In other words, it means that something new is to be done to develop the country.
We find, however, that in some instances this is not the case. This came to light last week when I asked questions in the House of Commons concerning a grant given to Maniwaki Forest Products Limited. I want to make it clear that I have great sympathy for the situation in Maniwaki. I know this situation has concerned the people in that community and their representative in the House of Commons, my friend the hon. member for Pontiac (Mr. Lefebvre), who certainly has attempted to do something for his constituency.
I raised this matter in the House of Commons last Thursday because it was stated by the manager, in spite of the announcement that 74 new jobs would be created, that he did not know anything about 74 new jobs and all he knew was that the 74 jobs which are now there will be retained. I asked questions in the House about this and dealt with it during the adjournment debate; therefore I shall not go into the background. I am not questioning the validity of providing help to this firm, but I am questioning the basis on which the government gave $1,500 for each of the 74 jobs that were to be created by this project. I submit this is false, on the basis of the act under which grants are provided.


An hon. Member:: You are all wet.


John Stratford Burton: The fact, as I have said, is that I have no quarrel with the argument that assistance for this firm is valid and warranted. What I am questioning is the way in which the minister is operating this act, because I believe he is bringing the whole program and the administration of the act into question by the manner in which he is applying it. Not just in this particular case; I am not picking on this particular case. There are a number of cases. The minister and many members on the government side, including the hon. member for Kenora-Rainy River (Mr. Reid) said that through the program under the Regional Development Incentives Act, 59,000 new jobs have been created and not just kept in existence. No new jobs were created in that case and I suggest we should look at the operation or we may have other problems in respect of the administration of the act.


André-Gilles Fortin: Mr. Speaker, I was very interested by today's speeches and I am rising for a few minutes only to remind my colleagues of certain facts which they seem to have forgotten.
The government tabled today a summary report of the Prices and Incomes Commission, on inflation, unemployment and economic policy. This report states and I quote:
As compared with most countries, there is in Canada an extremely high number of young people entering the labour market and meeting great difficulties in finding adequate full-time

June 20, 1972
Employment Incentive Programs occupations; moreover, a high percentage of worKers are salaried people. A high turnover rate and the seasonal nature of employment are further characteristics of Canadian labour markets. And yet we believe that the most important and baffling aspect of this problem is the continuance of regional disparities in unemployment in Canada.
This is a contradiction and a condemnation of what was said today in connection with government policies or initiatives to create employment.
The statement on page 7 is significant:
Moreover, the possibility of ever increasing inflation will exist if people and their elected representatives have an exceedingly optimistic vision about the extent to which this critical unemployment phase has been reduced.
I therefore appeal to reason and realism.
Finally I would like to quote a last sentence condemning the culprit. I am quoting from page 12:
Since governments are responsible for the whole administration of our economy, it is obvious that if they allow any excessive inflation of demand, they must bear the responsibility, whatever might be the direct impact of public expenses as such.
Mr. Speaker, this is something that should give us food for thought.
I said I will not take very long. I wanted only to remind my hon. colleagues that they have all received today a copy of this publication, in both official languages, and that we should well understand that the so-called twin problem of unemployment and inflation still persists in spite of the $578 million granted under the special government program aimed at creating employment and the actions and efforts he has made to this effect.
The government has trodden the wrong path and, today, we recognize that it is mistaken, that it has travelled the wrong track since it favoured an increased production while this has already reached the $100 billion mark, according to information published today by a Montreal newspaper. The problem does not exist at the level of production, but at the level of the ability of Canadians to market it.
I have said and I repeat, Mr. Speaker, that the problem in Canada is not one of production or of creation of jobs, but one of consumption. Canadians should have enough purchasing power to buy the products available on the market.
The global purchasing power, the total income of Canadians amounts to $67 billion and the gross national product $100 billion. How is it possible to buy a production worth $100 billion with $67 billion? That is mathematically impossible, Mr. Speaker, and as long as the government will continue to increase those $100 billion and refuse to spend as much effort to increase the consumption power, it will always find itself in the same situation as it is now.
During the weekend, Mr. Speaker, the Minister of Regional Economic Expansion (Mr. Marchand) said at the Cabano in front of 2,000 persons that he could not meet their request for the establishment of a pulp and paper plant. He told them that he was not sure, according to the studies which he had, that those products alone would sell on the market. Yet, that same government asked those very workers to invest in that industry, to set it up to replace Irving.

Mr. Speaker, today the government says: We cannot help you because we are not sure. Why is the government not sure? It is sure Canadian workers can work, that the goods, the equipment are there. The workers even invested $700,000 of their savings in that new company. The government is not sure the goods will sell on the Canadian market.
If, Mr. Speaker, the problem does not lie in the hearts of the workers of Cabano, in the equipment, in the pulp and paper, but obviously, as the minister said, in the demand, then why not invest as much in the demand as has been invested in the production in the last three years?
Mr. Speaker, there are not two ways open. Again recently, the government announced the sale of bonds for a total of $400 million, asking Canadians to invest in their country. Here is the saddest and, in a way, most extraordinary part: the government sells this $400 million worth of bonds strictly in order to pay back the bonds which have now matured. This means that this government's whole financial policy consists in borrowing in order to pay its old debts, so that the debt of the country, that of the provinces and that of individuals grow heavier.
As a consequence, no matter how many millions the government throws right and left in order to have a clear conscience, it remains that poverty will go on increasing in Canada, that regional disparity will still be an awful reality, that those programs will be nothing but plasters applied to little sores, to what shows most, while obviously nothing will be done about the underlying disease which causes those superficial sores.
Mr. Speaker, we of the Social Credit party do not want to play politics by taking up any more of the time of the House with this matter. I ask my colleagues to give serious consideration to the fact that after four years in power, after establishing boards, one of which condemns it today, after encouraging production in order to curtail inflation and unemployment, the government has met with complete failure.
Several million dollars are paid out to Canadians in order to try and reduce unemployment and inflation. If Parliament is acting in good faith, let it then give to Canadians the opportunity of really sharing in the economic growth of their country so that they may afterwards share in its social development, by giving the Canadian people what is lacking to dispose of the production which we are so anxious to increase, that is the illogical and unacceptable gap between the total national income and the gross national product. If the government ever understands this, we will eliminate the regional disparities from coast to coast, because we will have given to every Canadian, regardless of his language, an equal chance to really participate in the economic growth of his country.
In conclusion, I point out that the motion moved by the Progressive Conservatives blames the government for its failure to stimulate production. This motion makes me laugh because the Conservatives today blame the Liberals for failing to do what they themselves have not done, and they cast a stone at one another.
I hope that in the near future solutions will really be produced in this House, instead of mere criticisms. The
June 20, 1972

Social Credit party suggests an effective solution: giving Canadians sufficient purchasing power to dispose of the production which I trust Canadian industry will supply.


Mr. Florian Cote (Richelieu):: Mr. Speaker, today's proceedings emphasized all the shortcomings of the present government as a result of a motion brought forward yesterday. I became aware of it only at noon and I saw that it blamed the government for its inability to face its responsibilities during the past four years. In fact, it is said that the money made available to industry for the purpose of coping with regional disparity had not successfully settled the problem of unemployment.
I know there are problems, those which every country has to face for its development are similar to those we have in Canada. However, the Minister of Supply and Services (Mr. Richardson) mentions the efforts made by the Canadian government in the field of employment and in this field we are second to no other country. We have made noble endeavours even though we still have a long way to go. In fact, if it had not been for the present government, the unemployment rate of 6 per cent-which some like to bring up to 7 and 9 per cent-might be 10 or 15 per cent as in other countries.
If we consider some of the formulas suggested today by the movers of the motion, I do not see there, if I understood well, any real solutions; they merely pointed out what they think is wrong with government policies.
Industry was blamed because it did not do well enough in Canada. But industry-and this is normal-is somewhat like a human being; it is born, it can be sick and it can die. What can the State do to avoid this difficulty? It establishes and tries to establish industries in depressed areas in order to keep there those who are seeking a job not too far from their environment.
Therefore, we try to create some new industries. In fact, I have not heard a member of the opposition criticize this policy of the Department of Regional Economic Expansion, nor have I heard of anyone refusing the grants and saying: "I refuse these grants because they are not advantageous for my area" Opposition members knew as well that it was impossible for the government to fill up everything it wanted to and that there would still be a bit of room for criticism.
I was somewhat disappointed to hear the hon. member for Kent-Essex (Mr. Danforth), of whom I have a very high opinion, begin his speech by saying that he was tired to hear members of the present government repeat what the government had been doing. It is unfortunate that he be tired, Mr. Speaker. I would like him to get some rest, so that he may come back to us in form, after the next election which will certainly take place within a year. I wish he will not be tired enough to fall apart during the election period, because I have a lot of respect for him. If he came back, he might be of some help to us.
He mentioned in his speech the weakness of the agricultural policy as well as the program concerning industrial investments. Now, I noted, during the meetings of the committee on agriculture, which I attended whenever possible, that a proportion of Canadian industries are not as flourishing as I would like them to be, but that they had
Employment Incentive Programs
made tremendous progress, despite the very difficult conditions that agriculture, in every part of the world, had to suffer. We can be proud, as Canadians, to have an agricultural industry that survived somewhat better than elsewhere.
But in order to make this industry even more flourishing, we introduced truly good measures, and provided the establishment of the Marketing Board. Even if my colleagues from the Social Credit party opposed this bill from the beginning, they were compelled to approve it later because farmers have exerted pressures in order to have it passed as soon as possible. This bill was passed within less than one year. We might then have spared this industry some difficulties, assisted it with more effective marketing of products, given farmers a greater purchasing power, as my hon. friends from the Social Credit party usually say. We wanted to do so, but it was not always easy, because the government's policy was ill-understood by the opposition. I would not blame them, because everyone does not possess the ability to grasp and understand the meaning of everything. However, had we enjoyed a little more cooperation there would be fewer hon. members complaining in the House and our constituents would feel a little more proud of us. I admit all these weaknesses.
Mr. Speaker, I am a bit inclined to talk about the Social Credit party, and the reason is not that the other parties are brighter, since they did not show any recognition of the government's efforts. The leader of the Social Credit party for Canada (Mr. Caouette) has not even dealt with the motion. He preferred to rave about the Bank of Canada and his own philosophy, and ended his speech by asking us to play "Social Credit" even though the hon. member for Lotbiniere (Mr. Fortin) thinks that we do nothing but play in this House. Nobody would forgive us that kind of game.
I feel we must not misinterpret statistics if we are to come to the right conclusions. I fear that the hon. members whom I had already asked to give me figures may misinterpret them. I saw two possible interpretations. Either those figures were misunderstood, or their full meaning was not grasped. I was right. All this came up in the agricultural committee, where I did a great deal of work, as well as in the committee on finance, trade and economic affairs.
After dealing with agriculture, I will now turn to the question of grants during the few minutes which I have left.
My constituency has taken advantage of our programs, although no more so than other constituencies in the country. I was a bit hurt at hearing today the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) criticize the government for investing several million dollars in Eastern Canada, while it failed to do the same for Western Canada.
Mr. Speaker, whenever a committee sits, or this House discusses a bill, we are given the chance of helping any part of the country. I went out of my way last spring to urge this House to vote as soon as possible the $65 million to be given as grants to the Western Provinces, for I was convinced that Western Canada needed that money more than any other regions. However, whenever Eastern

June 20, 1972
Employment Incentive Programs Canada obtains some grants, the sword of Damocles is dangling over our heads, which is deplorable.
In my constituency, industry and commerce are perhaps thriving. The shipyards, thanks to the new policy of the Minister of Industry, Trade and Commerce (Mr. Pepin), have provided employment and are in a position to compete against many others who are unable to outdo us. The reason is that in my constituency the government has carried out a policy which makes it possible to meet labour costs and which has created 3,700 jobs last year alone.
I do not therefore understand why we do not give more serious consideration to the programs set up by the government. When government members rise in this House, I wish they could have at least 30 or 45 minutes. This might be fastidious for those listening to us, but we could then at least once or twice a year, tell opposition members what the government is doing and they could in turn go and ask their constituents whether they are really satisfied. Then, the farm organizations which visit the ridings of opposition members-which I, for one, did-would not be so disappointed to find out that citizens are not informed at all about all that the country is doing for them. This is deplorable, and I do think that those who are indulging in political games in this House may soon find out that the achievements of this government prove that the motion introduced today was in no way justifiable.


Maclyn (Mac) Thomas McCutcheon: Mr. Speaker, I shall take part in the debate briefly because the area that I represent feels that it has been disadvantaged by the application of the DREE legislation. In this area we feel that we suffer from unfair competition, with many other parts of the country, because of this government's transportation policy. Our railroad costs are high, and now we feel our problem has been compounded by the DREE program.
Many of the points I wish to make have been covered, some of them very well, by the hon. member for Kenora-Rainy River (Mr. Reid). In his forthright manner he has a habit of hitting the nail on the head. It was refreshing to have him come out with the honest statement that the DREE legislation was drafted in an effort to discriminate against wealthy areas. As I have said, the people in the area I represent feel that DREE discriminates against them. I think this is completely wrong, Mr. Speaker. Abraham Lincoln was right when he said over a hundred years ago, and I paraphrase him, "You don't necessarily help the poor by tearing down the rich". I would point out to this government that tearing down the "have" parts of the country does not necessarily build the "have-not" parts in view of the conflicts that take place and the wasted effort.
A few nights ago, during private members' hour, the hon. member for Lanark-Renfrew-Carleton (Mr. McBride) introduced a bill. He told us that in Carleton Place, which is a non-designated area, the Findlay Foundry has shut down completely, with a loss of 200 jobs. It transferred its production to the province of Quebec, in a designated area. Ostensibly, 200 jobs have been created in Quebec

but of course there are 200 less in Ontario, so the net gain to the nation as a whole is nil. Indeed, the net loss to the nation as a whole, in my humble opinion, would be the amount of the DREE grant.
I read in a newspaper recently of a $685,000 grant to Catelli Foods, a subsidiary of the American firm, General Foods. This grant was to enable them to build a plant to produce tomato paste from tomatoes imported from Portugal, Spain and Yugoslavia. Mr. Speaker, the area I come from is one of the prime tomato producing areas in Canada, but there it is impossible for a farmer to get a contract to grow tomatoes. However, the government is now subsidizing a company in Montreal to process imported tomatoes.
Farmers from my area have been coming to Ottawa to meet with officials of the Department of Industry, Trade and Commerce and the Department of Agriculture in an effort to re-establish the sugar beet industry. So far they have not been successful. But there is some discussion of a new sugar refinery to be built at Cornwall, Ontario, which is a designated area, in order to process imported cane sugar. That mill might have gone to Oshawa, Ontario, except that Oshawa is not a designated area. These are the things, Mr. Speaker, that lead the people in my area to feel that we have been discriminated against and, as the hon. member for Kenora-Rainy River pointed out tonight, perhaps this was the purpose behind the legislation.
In the 30 seconds remaining to me I should like to ask some questions about the Opportunities for Youth program and the Local Initiatives Program. What is their purpose? Are they make-work programs? Are they to be permanent? I do not criticize them except to say that I am afraid in many instances they do not encourage positive production. If we had a booming economy, perhaps then we could enjoy that luxury.
May I call it ten o'clock, Mr. Speaker?


[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
Thomas Clement (Tommy) Douglas: Mr. Speaker, on June 7 last, as reported at page 2937 of Hansard, I asked the Minister of Energy, Mines and Resources (Mr. Macdonald) two questions with respect to the operations of Panarctic Oil Company Limited. As hon. members know, this is one of the commendable things which the Minister of Veterans Affairs (Mr. Laing) accomplished when he was minister of Indian affairs and northern development. He set up a consortium of Canadian companies with the government of Canada, which has enabled the Canadian people to hold 45 per cent of the equity in Panarctic Oil Company Limited.
June 20, 1972

Unfortunately, its operations have been completely shrouded in secrecy. We have not been able to get a copy of the TENNECO agreement under which gas has been hypothecated for export to five American companies. We have not been able to get information about farmouts of some property owned by Panarctic to various other companies.
The two questions I want to ask about this matter are as follows. Since Panarctic has announced that it now has sufficient gas in place to warrant doing an aerial reconnaissance with a view to building a pipeline, who is to build that pipeline: will it be Panarctic? Also will the people of Canada have a 45 per cent equity in that pipeline, apart from any loan capital which may be involved- I am dealing now with equity capital-or is another consortium to be formed in order to build the pipeline and obtain the main benefit from any gas found by Panarctic Oil: will the Canadian people find that the money they have put up to develop Panarctic is to benefit mainly some other consortium?
Also, I want to know what disposition will be made of the gas in the event that it is found, that the pipeline is feasible and that the supply of gas in place is adequate to justify the construction of a pipeline. An article in the Globe and Mail of June 2 which refers to the aerial reconnaissance Panarctic has undertaken reads in part as follows:
Mr. Hetherington said market considerations indicate that much of the gas involved would go to the United States.
Mr. Hetherington is president of Panarctic Oil. I want to know if the Canadian taxpayers are to be asked to put their money into the expansion of Panarctic Oil. Are we to be asked to put up money for the building of a pipeline in order to hypothecate gas to the United States when, according to the annual report of the National Energy Board, as of June 30 last year there was a deficit in our reserves of natural gas of 1.1 trillion cubic feet?
It will be useless for the parliamentary secretary or a minister of the government to tell me that this matter will be decided when this question is heard by the National Energy Board. The National Energy Board can only deal with those who make an application. If the application is made by a consortium of companies apart from Panarctic Oil, or by a consortium in which Panarctic Oil and the government have a small equity, all the board can do is say yes or no.
The government has the responsibility, first, for deciding what its policy is to be. Is it to continue maintaining a 45 per cent equity not only in Panarctic but in the pipeline as well? Second, it has the responsibility for ensuring that this gas is retained in sufficient quantities in Canada to meet the needs of Canadian gas consumers.


Mr. Benjamin:: That will not happen if the Liberals have anything to do with it.


Thomas Clement (Tommy) Douglas: We all remember what happened one year ago last October when the National Energy Board allowed the export of 6.3 trillion cubic feet of natural gas to the United States. A year later it was raising its hands in horror because we had to ration gas and were unable to
Proceedings on Adjournment Motion
take orders in certain parts of Canada for customers who wanted gas.


Leslie Gordon Benjamin: Shame.


Thomas Clement (Tommy) Douglas: So we have a right to know in advance what the government's policy is to be. If the government does not know, if it is just blundering in the dark, it should tell us. I for one will keep insisting that the government tell us what is going on in connection with Panarctic Oil. So long as that venture was a doubtful proposition, there was no objection on the part of the oil industry to the government's putting up 45 per cent of the equity. Now that Panarctic has come across what promises to be one of the best gas finds in the world, I suspect the government is likely to be crowded out of the picture.
I want a definite statement from the government to the effect that it will stay in the picture, that the Canadian taxpayer will have an equity not only in Panarctic but in the pipeline, and that the gas will be hypothecated mainly for Canadian requirements and will not be diverted before Canadian needs are adequately met.


Mr. Lloyd Francis (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, the questions raised by the hon. member are at this stage hypothetical. As soon as a specific application is placed before the National Energy Board for the Development of a pipeline, the board will need to make certain decisions. The first decision it will have to make is whether there is sufficient gas for Canadian requirements and for export. This decision will be made in light of the best technical knowledge available and there is no reason to question the competence of the board in this respect. I note that the hon. member did not do so.


Thomas Clement (Tommy) Douglas: The board cannot make policy.


Cyril Lloyd Francis: The fact is that the decision will be made in the first instance by the National Energy Board. After that decision is made, the question of the merits of the application before the board will have to be considered.
The government has made abundantly clear, through its participation in Panarctic and in other ways, its concern for Canadian ownership in the pipelines which will ultimately be built to bring gas and oil from northern Canada. At the time the applications are received it will be the responsibility of the Energy Board to make a recommendation. In the first instance this recommendation will come from the board and then the government will have an opportunity to review the situation. It is certainly premature at this time to announce in detail, as the hon. member apparently anticipates, what policies will be followed. Only a general outline of the principles followed by the government can be given at this stage.


Almonte Douglas Alkenbrack: Mr. Speaker, I raise a matter tonight pertaining to my question this afternoon to the Minister of Transport (Mr. Jamieson). In effect, I asked him whether permission

June 20, 1972
Proceedings on Adjournment Motion given to the railways to abandon service and rights of way also implied permission to abandon their responsibility toward farmers and landowners with respect to the maintenance of fences and drainage and the cutting of weeds.
I speak tonight on behalf of thousands of Canadians who have been inconvenienced and financially wronged by the frequent failure of the railways to fulfil their responsibilities to the farmers and landowners along rights of way when it comes to the maintenance of fences. I speak especially on behalf of farmers and landowners in the counties of Lanark, Frontenac, Lennox and Addington, as well as Hastings, whose properties border the now defunct and abandoned CP line from Glen Tay to Tweed.
I say to the minister, through you, Mr. Speaker, that when Mr. Pickersgill and his Canadian Transport Commission, or the Canadian Railway Transport Commission, both of which bodies adjudicate with respect to the abandonment of railway lines, allow railway companies to abandon a line, they should not allow them to abandon their responsibilities to their neighbours along the line. Robert Frost said that good fences make good neighbours. This is true. I have received many complaints from local farmers about the poor condition of the fences, as a result of which cattle stray and are lost. They complain that the railway no longer keeps the fences in order, that it no longer does its share of repair work. One man lost two head of steer.
When I drive along the right of way which is adjacent to No. 7 Highway I think of this strange, new, slack society of which this government is part, and the strange anomalies which result. Here we have a multibillion dollar corporation like the CPR-I used to be one of its great admirers, Mr. Speaker, having spent my early childhood in a community served by that line at Kaladar-branching out into many other lucrative lines of business, luxury hotels, mines and smelters, airlines serving the world, but taking a cavalier and careless attitude to local responsibilities. Fence posts are allowed to rot and break off. In addition, the company neglects to cut the weeds and the seeds are allowed to spread to adjacent farms.
Throughout the area, municipal councils are very concerned about this situation as are the conservation authorities, in particular the member municipalities of the Moira Conservation Authority. The representative for Kaladar township, Mr. Claude McArthur, has given me information in this regard. It has also been pointed out that the railways, along abandoned lines no longer devote any attention to drainage or to keeping ditches and key water courses operable and open. This complete dereliction of duty can no longer be tolerated by the neighbouring farmers and landowners.
Some time ago it was brought to my attention that the CPR intended to give this right of way to the Ontario Department of Lands and Forests to operate as a snowmobile trail. Who would then be responsible for the fences, Mr. Speaker? I cannot go along with this scheme because I do not think the stretch of right of way is adaptable for this purpose. I say that the land should be returned to the farmers and landowners along the right of

way, each one to receive the land that fronts along his property.
I do not know what the railway paid for this land in 1880 when their charter was granted, but it should be given back to the farmers for a nominal fee of, say, $1 per parcel to make it legal. Then they could join up their fences across the right of way and have use of what is their land just as their forefathers did before the building of the railway. In that respect, Mr. Speaker, I remind the minister that the deeds to the farmlands pre-date the federal charter to the CPR for this line. Moreover, the right of way land, because of its present condition, is not worth as much as before the line was built.
I respectfully ask the minister to convey my thoughts to the CRTC, the CTC and the CPR in order that this inconvenience to my constituents may be allayed and that justice for them may be obtained.


Mr. Gerard Duquet (Parliamentary Secretary to the Minister of Transport):: Mr. Speaker, as the hon. member is proficient in both languages, he will certainly pardon me for replying in French, as he will easily understand my explanations.
As the question he asked today was much more general in scope than that which has been discussed tonight, my answer will not be as precise as he would have liked it to be and as I should myself have wished to make it.
In the meantime, I have been able to contact the officials of the Canadian Transport Commission to check on the limits of its jurisdiction in view of the right of ownership which could affect the discontinuation of railway transport.
When a railway is in operation, it is required by statute-in this case, under section 214 of the Railways Act- to put fences on each side of the track in order mainly to prevent animals to wander into the railway's property.
I want to make it clear that the matter involves farm lands located in rural areas. The purpose of this measure is to protect the land owner. The railway company is also responsible for destroying weeds on its own property and, in some circumstances, it must also insure the protection of animals.
Mr. Speaker, before the Board allows a rail service to be discontinued, it must bear in mind the representations made by the land-owners as well as by any other persons living along the railroad, who believe they are entitled to some consideration.
The major factor is that the abandonment of a rail line cannot affect the rights and responsibilities of farmers nor those of the railway company, since they are joint owners.
There may be some responsibilities resulting from continuing relationships between the railway company and its neighbour, as joint owners, that the Board may be authorized to control.
Had the hon. member had in mind this afternoon more specific points such as those he mentioned tonight, I should have been very happy to reply more adequately to his question, but since it was general in scope, I had to answer in the most appropriate way possible.
June 20, 1972


William George Knight: Mr. Speaker, on June 2, as reported at page 2803 of Hansard, I ask the Minister of Veterans Affairs (Mr. Laing) the following question:
In view of the fact that the Minister of Agriculture has introduced a bill to amend the Farm Credit Act which will increase the limit on loans, can the minister inform the House whether he will be proposing any amendments or changes to the Veterans Land Act?
The minister responded as follows:
Mr. Speaker, there has been a disinclination on the part of the Department of Veterans Affairs to extend and expand the opportunity for veterans to go into farming. It has been regarded as a phase-out operation.
It is an over-all policy of this government to be disinclined to promote farming, including farming by veterans. The government must come to a full recognition that our veterans sacrificed so much for my generation in order that I might grow up in a democratic society. I would point out to those who may wonder why I speak on this topic that I am the first in four generations of my family who has not had to put on a military uniform to serve in the defence of Canada.
This government should have recognition for the people brought into such service and should consider a number of changes in dealing with veterans, including an amendment to update the Veterans Land Act to cover the veterans of the Korean war. Along with that there should be a number of other changes in the method of dealing with veterans in our society. There should be a greater increase in benefits for the 29,000 war veterans under age 65 whose allowances were increased by only 3.6 per cent in the Turner budget. That is one area in which there could be real improvement.
There should be a change in the Old Age Security Act in terms of reducing the age from 65 to 60 for veterans and non-veterans alike. This would further help enhance employment in Canada. Administration in the department for handling applications should be increased to meet the present backlog of applications before the pension commission. I talk of a backlog of some 7,000 applications which have not been dealt with by that department. In addition a single, 100 per cent war disability pensioner receives $3,500 per year. This should be raised to $4,500 as suggested by the Royal Canadian Legion. Along with that there should be increased domiciliary care facilities for disabled veterans within reasonable distance of their residences. These are some of the things that should be done by the Department of Veterans Affairs.
Proceedings on Adjournment Motion
Though the years keep extending the distance from the days when these gentlemen served the needs of this country, ours is the generation and the government that should not forget the services they rendered to Canada. The government should be concerned with bringing in changes to ensure that these people are taken care of in this part of the twentieth century.


Cyril Lloyd Francis: Mr. Speaker, I listened with a good deal of interest to the various charges against the government by the hon. member. I sat as chairman of the committee which last year was responsible for a report, on the basis of which the government substantially rewrote the veterans' charter. I am of a generation that did serve in the last war. The hon. member said he was the first in four generations of his family who had not been obliged to do so. I hope he is never obliged to do so.
This government has by no means forgotten its obligation to veterans. Let me refer, for example, to Bill C-215, to amend the Pension Act, which will increase the number of staff of the pension commission to deal with the backlog of applications of which the hon. member spoke.
As far as the Veterans Land Act is concerned, this was a specific measure introduced after World War II, designed as part of a package for the rehabilitation of veterans, and it has very substantially served that purpose. Many thousands of veterans have been settled on the land as a result of its provisions. But now the decision has been made to phase it out as a specific veterans measure. As the minister indicated in the House, those measures designed to encourage Canadians to go into agriculture are within the responsibility of the Minister of Agriculture (Mr. Olson). That legislation has been amended, changed and brought up to date but a terminal date has been put on the Veterans Land Act provisions.
In view of the many thousands of applications under the Veterans Land Act, and the government's decision to phase out this aspect of the legislation, it would not be fair to those who have gone before to have changes brought in for those who come in just under the wire, getting the benefit of substantial changes in ceilings, terms and conditions. I think it is only fair and appropriate that measures designed to encourage Canadians to go into agriculture should be dealt with in that context.
There are other measures benefiting veterans. The hon. member touched upon a wide range of them. If I had had a little notice of the range of points he intended to raise, I might have brought more information to the House. But I want to assure the House that Canada has not forgotten its veterans. Canada is well aware of its debt to its veterans and intends to honour it.
Motion agreed to and the House adjourned at 10.24 p.m.

Wednesday, June 21, 1972