1972-05-29

ROUTINE PROCEEDINGS


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, it is my sad duty to inform the House officially of the death yesterday of His Royal Highness the Duke of Windsor.

In view of the very great affection many Canadians bore the Duke of Windsor and the enthusiasm with which they always greeted his visits to us as Prince of Wales, I have sent the following message to Her Majesty the Queen's private secretary:

I should be grateful if you would convey to Her Majesty and other members of the Royal Family this expression of sympathy on behalf of the government of Canada and all Canadians on the death of His Royal Highness the Duke of Windsor.
His Royal Highness occupied a very special place in the hearts and imaginations of Canadians who displayed their affections openly during his visits to Canada as Prince of Wales. On those occasions the personal warmth and youthful spirit of the man were communicated vividly to the people of this country. All Canadians and especially those who remember him in that role now grieve at his death.
I humbly request that Her Majesty extend to the Duchess of Windsor our heartfelt condolences on this sad occasion.

Mr. Speaker, I have not the slightest doubt that all hon. members will wish to subscribe to this message of sympathy.


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, may I associate myself and my colleagues with the expressions of grief and the condolences which the government has extended to Her Majesty the Queen and to the Duchess of Windsor.
As the Prime Minister has said, the Duke of Windsor had a long association with Canada as Prince of Wales and was held in great personal affection by the people of Canada. I therefore wish particularly to associate myself and my colleagues with the condolences the Prime Minister has expressed on behalf of the people of Canada.


Mr. David Lewis (York South):: Mr. Speaker, the cable which the Prime Minister sent was so well phrased that it
said everything that needed to be said. I merely wish to join my colleagues and myself in the message of condolence to Her Majesty and to the Duchess of Windsor.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, we want to join the right hon. Prime Minister and all members of this House in presenting our most sincere condolences to the Royal Family on the occasion of the death of the Duke of Windsor.
Upon someone's death, we attempt a retrospective glance at his life. The memories we do retain of the Duke of Windsor are of his loyalty to his country, the forthrightness of his decisions and above all his sincerity towards himself. Such are the most outstanding qualities which specially characterize him.


Mr. Gleave:: Mr. Speaker, I rise on a point of order. Before we leave motions, is the minister in charge of the Wheat Board not going to make a statement on the announcement of the government that it has decided to purchase 2,000 hopper cars at a cost of $42 million-


Mr. Speaker:: Order, please. That is not a point of order. If the hon. member wants to ask a question, he may ask it during the question period.



PUBLIC ACCOUNTS


[Stage Direction]
On the order: Government Notices of Motions:
May 25,1972-The President of the Privy Council:
That the Public Accounts for the year ended March 31,1971 and the Auditor General's report thereon be referred to the Standing Committee on Public Accounts.
Mr. Speaker:: Pursuant to section 2 of Standing Order 21 this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the House.



QUESTIONS ON THE ORDER PAPER

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
[Stage Direction]
May 29, 1972
Questions

Mr. Ryan: 1.	Was a lease obtained for 7.8 acres of CNR land at the Southeast corner of Danforth Avenue and Main Street in Toronto and, if so (a) how was the lease obtained (b) what was the date of commencement of the lease (c) for what purpose was the lease obtained (d) who obtained the lease?
2.	(a) Did the lessee pay a lump sum for the right of obtaining the lease (b) what were the original terms of the lease (c) have any assignments and amendments been made and, if so, what are they?
3.	Did Victoria Wood Development Corporation Limited sign a document that gave it lease-rights for the land on which Main Square Development is located and, if so, on what date?
4.	Is the lease renewable and are the terms of the lease re-negotiable upon the initiative of the CNR?
5.	Did CMHC put a value on the lease held by Victoria Wood and, if so (a) what was the value (b) who determined the value (c) what criteria determined the value?
6.	(a) Did Victoria Wood apply to CMHC for a loan for its Main Square Development and, if so (i) what was the date of the application (ii) on what date were indications given that the loan would be approved (iii) on what date were the loan commitment papers signed (b) was an existing building mortgage registered against the land by any private interest or was any commitment to make such a loan outstanding (c) in calculating the amount of the loan, what amount of equity, apart from the lease, did CMHC consider Victoria Wood to have in the project and what was the form of this equity?
7.	What were the construction costs for Victoria Wood's Main Square Development?
8.	What stage of development was Victoria Wood's Main Square project at when it applied for assistance under the innovative housing program and what were the criteria upon which the corporation was made eligible for assistance?
9.	What stage of development was Victoria Wood's Main Square Development at when the commitment papers for its loan from CMHC were signed?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: I am informed by Canadian National Railway and Central Mortgage and Housing Corporation as follows: 1. (a) In January 1966 the Railway, pursuant to its usual practice, invited proposals by public advertisement for the development of 7.848 acres of railway land at Danforth and Main Streets, Toronto, (b) January 1, 1968. (c) A high rise apartment development with commercial element, (d) Victoria Wood Corporation Limited.
2.	(a) No. (b) It is not the practice of the Railway to disclose terms and conditions of transactions with other parties, (c) No.
3.	Yes. January 1, 1968.
4.	The lease is not renewable but the rental thereunder is subject to review by the Railway at various periods throughout the lease term.
5.	Yes. (a) $1,000,000. (b) The valuation resulted from an appraisal made by a private firm of professional appraisers and was supported by a CMHC appraisal, (c) Normal appraisal methods and techniques were applied in determining the leasehold interest of Victoria Wood.
6.	(a) Yes. (i) December 10, 1969. (ii) Statement of intent to make loan issued May 22, 1970. (iii) July 16, 1970. (b) A building mortgage was not registered against the Main Square land at the time the CMHC solicitor searched title

prior to registering the CMHC mortgage, nor was CMHC aware of any prior commitment by any other lender to finance the project, (c) Victoria Wood equity consisted solely of its leasehold interest in the land.
7.	CMHC estimated the building costs to be $13,892,460.
8.	At the time of the announcement of the innovative programme, the Main Square Development had not proceeded beyond the stage of presentation of plans in support of its application to CMHC for a loan. The Major criteria considered by CMHC were: (a) Good location in relation to public transportation and amenities, (b) Favourable rental structure, (c) Comprehensive nature of development which includes residential, commercial and recreational elements, (d) Early start capability.
9.	See 8 above.


CMHC-STUDIES BY PROFESSORS CHARNEY, CARREAU AND DAVIDSON
Mr. McCleave: 1.	What terms of reference were given to Professors Charney, Careau and Davidson of the University of Montreal by Central Mortgage and Housing Corporation or by any task force set up by that Corporation?
2.	What were the qualifications of each for the assignments they undertook?
3.	What payments have or will be made to each?


Hon. Ron Basford (Minister of State for Urban Affairs):: 1.
In March, 1971, the Task Force on Low Income Housing commissioned Professor Melvin Charney, in collaboration with Professor Serge Carreau and Professor Colin Davidson to carry out a study, the terms of reference of which involved an investigation of the problem areas in the production and adequacy of low income housing, including such matters as supply factors and the capability of the industry, levels of productivity, quality and maintenance of stock, demand factors, patterns of need, and utilization.
2.	Qualifications: Melvin Charney, M.R.A.I.C., Professor, School of Architecture, University of Montreal; Serge Carreau, M.R.A.I.C., Associate Professor, University of Montreal, consultant on community housing systems; Colin Davidson, M.A.R.I.B.A., Associate Professor, University of Montreal, consultant on industrialized building systems.
3.	Professor Charney was paid a total of $30,552.14, and out of this sum payments were made by him to Professors Carreau and Davidson.


NATIONAL DEFENCE-CATERING SERVICES FOR NEW HEADQUARTERS
Mr. Orlikow: Has a contract been awarded for the provision of cafeteria catering services at the new NDHQ in Ottawa and, if so (a) was this contract the subject of public tender (b) did the lowest bidder receive the contract (c) what was the amount of the lowest bid (d) if the lowest bidder was not awarded the contract, for what reason?


Mr.   J.-R. Comtois@Parliamentary Secretary to Minister of National Defence: No, there was no public tender for a
May 29, 1972

contract for the provision of cafeteria catering services at the new National Defence Headquarters Building in Ottawa. The cafeteria will be operated by the Administrative Unit of the National Defence Headquarters, (a), (b), (c) and (d) not applicable.


COST OF PUBLICATION &quot;HOW YOUR TAX DOLLAR IS SPENT&quot;
Mr. Crouse: 1.	How many books entitled, "How Your Tax Dollar is Spent 1972-73", under the signature of Hon. C. M. Drury, were printed?
2.	How many of these books were distributed?
3.	What was the cost to the government of printing this book?


Hon. C. M. Drury (President of the Treasury Board):: 1.
558,820.
2.	As of May 11, 1972, 378,811 copies had been distributed either directly to the public or to departments and agencies of government for subsequent public distribution.
3.	$72,625.73.


CANADA'S AMBASSADOR TO UNESCO
Mr. Thompson: Did Canada's new Ambassador to UNESCO work for the Department of External Affairs between the years 1942 and 1945 and, if so (a) what were his duties (b) for what reasons were his services terminated (c) on what date were his services terminated?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: A check of the records has shown that Canada's new Ambassador to UNESCO did not work for the Department of External Affairs between the years 1942 and 1945. Supplementary questions (a), (b) and (c) are therefore not applicable.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Robinson: 1.	What is the rate of unemployment on Indian reservations generally?
2.	What programs are in effect to deal with unemployed Indians?
3.	To what extent have the federal and provincial governments co-ordinated their efforts to reduce unemployment among Indians?
4.	Does Canada Manpower provide services on Indian reservations?
Return tabled.
__________________________________2623
Inquiries of the Ministry



ORAL QUESTION PERIOD


Robert Lorne Stanfield: Mr. Speaker, may I direct a question to the right hon. Prime Minister further to the one addressed to him by the hon. member for Prince Edward-Hastings on Friday last. Now that the Prime Minister has had some time to look into the question of a possible conflict of interest, can he say whether or not he has made inquiries and can he now advise the House whether there was a conflict of interest in the position of the chairman of the federal anti-dumping tribunal who resigned recently?


Pierre Elliott Trudeau: Mr. Speaker, I did check into my memory on this and I discovered that, while I said I had received the letter of resignation some days before, it was actually a few weeks before, early in May. Also, the letter was sent to the Minister of Finance who was the proper minister to receive such a letter. That is all I can report, Mr. Speaker. The Minister of Finance will be in the House and he may want to comment on this further.


Robert Lorne Stanfield: Can the Prime Minister advise the House whether any inquiries have been made or are being made into the question of conflict of interest in the position of the chairman of the federal anti-dumping tribunal who has resigned? Has any such inquiry been conducted? Is any such inquiry being conducted? Does the government intend to have any such inquiry conducted?


Pierre Elliott Trudeau: Mr. Speaker, the Minister of Justice replied in a general way on that matter in the House on Friday and indicated that he had caused the matter to be brought before the courts. Therefore it is obvious that some inquiry had been made. The Leader of the Opposition might want to address further questions to the Minister of Justice.


Robert Lorne Stanfield: Yes, Mr. Speaker. I address this question to the Minister of Justice but not specifically with regard to the question answered by him on Friday. I would like to ask him whether he is conducting or is causing to be conducted any thoroughgoing inquiry into the matter of conflict of interest, not merely in relation to the case to which he referred on Friday but in more general terms?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, naturally the instant case which is before the courts has raised some questions about whether any other matter should be looked into further, and some further examinations are therefore taking place. The only one, however, which has reached any stage for action on our part is in the case of the anti-dumping tribunal's decision in regard to glass. There we have instituted proceedings, and the basis for our proceedings is, of course, a matter of record in our motion before the Federal Court.

May 29, 1972
Inquiries of the Ministry


Robert Lorne Stanfield: In view of the minister's answer, could he indicate very briefly the scope of the inquiries being conducted, and could he also indicate when the House will be informed as to the outcome of these inquiries?


Otto Emil Lang: No, Mr. Speaker, I do not think anything would be gained by attempting to describe the internal workings of an inquiry of this general nature. Needless to say, when proceedings are begun it becomes a matter of record and therefore known to the public. It is not usual for the minister to indicate to the House when proceedings have been instituted. I did not do so in this case and I am not likely to do so in any future case, but it becomes a matter of public record at that stage.



PURCHASE OF HOPPER CARS BY GOVERNMENT- RESPONSIBILITY FOR DEPRECIATION, MAINTENANCE AND REPAIR COSTS-PAYMENT FOR USE

Alfred Pullen Gleave: Mr. Speaker, may I direct a question to the minister in charge of the Wheat Board or the Prime Minister. In view of the statement of the Prime Minister in Winnipeg that it is the intention of the government to purchase 2,000 hopper cars involving an expenditure of $42 million, and in light of the fact the Prime Minister also stated that the Canadian Wheat Board will purchase and operate these cars, can the minister inform the House whether the Wheat Board will be responsible in future years for the depreciation, maintenance and repair costs of this rolling stock?


Otto Emil Lang: No, Mr. Speaker. The Wheat Board itself will not ultimately be responsible for any part of the purchase and therefore any part of the depreciation costs but will, rather, be reimbursed for this by the government. The Canadian Wheat Board will be the titular owner of the hopper cars, but the actual operation of the hopper cars will, of course, be organized by the railways which will have to provide the appropriate locomotive power to haul the cars from grain elevators to grain terminals. The additional 2,000 cars are designed to allow us to achieve even higher export records than we have achieved at the present time.


Some hon. Members:: Hear, hear!


Alfred Pullen Gleave: Since this is a new departure in transportation policy and since the railways are required to transport grain for export within the Crowsnest Pass rates as the maximum charge, can the minister tell the House whether the railways will be required to pay for the use of these cars in the form of a lease or rental agreement or in any other manner? Are they going to be required to pay for the use of this rolling stock?


Otto Emil Lang: Mr. Speaker, the exact relationship between the railways, the Wheat Board and the government in connection with costs involved in hauling this extra movement of grain remains to be settled finally in future discussions. I should say, however, that there was a clear

difficulty in persuading the variety of parties, whether the elevator companies or the railways, to take the necessary steps to ensure that we could get the movement of say 900 million bushels of grain, with each saying that with changes on the part of the other the necessary grain could be handled. It was our desire to see that the grain was in fact handled without waiting to see whether that argument could be settled. In other words, we wanted to be sure the grain would be moved without trying to rely on the fact that difficulties between the parties would be an adequate excuse to explain why it was not.


Alfred Pullen Gleave: Does the minister wish to leave the impression with the House that the railways were unready to transport the grain and, indeed-


Mr. Speaker:: Order, please. I wonder whether that might not be debate. For the moment the Chair will recognize the hon. member for Marquette on a supplementary. We might return to the hon. member for Saskatoon-Biggar if he has a further supplementary.



GOVERNMENT PLANS TO INCREASE PRICES

Mr. Craig Stewart (Marquette):: Mr. Speaker, my supplementary arises out of the Prime Minister's statement in Winnipeg that the federal government will assist in purchasing 2,000 railway hopper cars to move grain. I should like to ask the minister responsible for the Wheat Board if he can tell the House whether the government has any effective plans to alleviate the most pressing problem facing western farmers, that is, the low price at which the government is selling grain?


Mr. Speaker:: Order, please. That question, I would think, is not quite in order. The hon. member is inviting the minister to make a statement of policy which normally ought to be made on motions. The hon. member might like to rephrase the question or ask a supplementary to that previously asked by the hon. member for Saskatoon-Biggar.


Donald Craig Stewart: Thank you, Mr. Speaker. Can the minister advise the House as to what plans the government has to alleviate the low price of grain that is causing western farmers difficulty at the present time?


Mr. Speaker:: Order, please. The hon. member's second question resembles the first. I suggest to the hon. member and to the minister that the question invites general statement which ought to be made on motions. However, the minister might reply briefly to the question, and I will then recognize the hon. member for Regina East on a supplementary.


Otto Emil Lang: Mr. Speaker, needless to say, the grain which is being sold is being sold in international markets at the best possible price which can be obtained for it. Such programs as two-price wheat and the willingness to purchase 2,000 hopper cars are clear additions to the income cause of the farmers.


Donald Craig Stewart: A supplementary question, Mr. Speaker.
May 29, 1972


Mr. Speaker:: Order, please. We are obviously getting into a debate. However, the hon. member for Marquette may ask a supplementary and the Chair will then recognize the hon. member for Regina East.


Donald Craig Stewart: Mr. Speaker, I appreciate the minister's answer, but I was referring to a program, other than the two-price system for wheat, which would cover all grains and provide for more active participation by the government than the minister has so far indicated?


Otto Emil Lang: Mr. Speaker, I would ask the hon. member whether he thinks we should charge high prices and sell no grain?


Mr. Speaker:: Order, please. Obviously, the hon. member for Marquette is initiating a debate. We ought to return to the original question. The hon. member for Regina East may ask a supplementary.



PURCHASE OF HOPPER CARS BY GOVERNMENT-PREVENTION OF WITHDRAWAL OF ROLLING STOCK BY RAILWAYS

Mr. John Burton (Regina East):: Mr. Speaker, may I direct my supplementary question to the minister in charge of the Canadian Wheat Board. Can the minister indicate what assurances have been given by the railways that they will maintain their present quantity of rolling stock engaged in grain movement in that particular type of movement and whether the government or the Canadian Wheat Board will be maintaining control over that situation to make sure that the railways simply do not move some of their present rolling stock out of grain movement? Can he also indicate whether steps are being taken to overcome the traffic conditions encountered in winter months between the west coast and the Prairies, particularly in the-


Mr. Speaker:: Order, please. The second part of the hon. member's question clearly invites the minister to make a general statement on what steps are being taken to overcome transportation difficulties during the winter months. Clearly, that kind of information should be given on motions and not at this time.


Otto Emil Lang: Mr. Speaker, on the first part of the question, it would be very much the purpose and intention of the government to make sure that the hopper cars put into use in this fashion are additional to other rolling stock made available for the movement of grain. The railways have made clear their acceptance of the basic proposition that they have to supply rolling stock for any ordinary or predictable move-ri%nt of grain. The key question was whether additional rolling stock was required in certain circumstances and whether the railways were obligated to supply it if the elevator companies were not willing to move to a seven-day week, and so on. It was to overcome that argument that we felt additional rolling stock should be put in place. I assure hon. members it will be very much our intention to make sure that this is additional rolling stocks and not a mere substitution for other rolling stock.
Inquiries of the Ministry


Robert Lorne Stanfield: Mr. Speaker, may I direct a supplementary question to the minister. Am I to infer from the minister's answer that, to date at least, the railways have given no commitment that these hopper cars will be in addition to existing equipment and that the equipment now in use will be maintained? In other words, am I correct in assuming that so far no agreement has been reached with the railways?


Otto Emil Lang: No, Mr. Speaker, the Leader of the Opposition is quite incorrect in thinking that. The railways have had very firm discussions with the Canadian Wheat Board on the amount of rolling stock they have available which is to be dedicated to grain. These 2,000 hopper cars will be additional to that rolling stock.


Mr. Paproski:: A supplementary question-


Mr. Speaker:: Order, please. For the moment the Chair will recognize the hon. member for Bellechasse and return to this subject later.



AGRICULTURE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I have a question for the Minister of Agriculture.
Considering that the feed grain problem is still with us, although slightly improved, may I ask the minister whether he will soon make a statement in this House concerning the new government policy with regard to feed grains in order that eastern farmers may get their supplies at prices comparable with those in western Canada?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I hope so, although I am unable to give a precise date now because the difference in price has very largely, if not completely, been corrected by the trade and by the supply-demand ratio in western Canada. Eastern feeders would like, however, to be assured that this wide discrepancy will not be repeated at some future time. We hope that before long we will be able to give some definitive reply to that question.


Joseph Adrien Henri Lambert: Mr. Speaker, may I ask the
honourable minister if at the departmental level talks are going on about this between the federal Department of Agriculture and the Quebec Department of Agriculture and whether his Quebec counterpart has made some representations?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker, but I do not think he has in the past few days. I would like to advise that discussions have taken place and are continuing on a much wider basis, including the trade and representatives of producer

May 29, 1972
Inquiries of the Ministry
groups in addition to agencies and representatives from both levels of government.


Mr. Speaker:: The hon. member for Edmonton Centre has a supplementary to the previous question.


Steve Eugene Paproski: Mr. Speaker, my supplementary arises out of the remarks made by the Prime Minister in Winnipeg. Will the Prime Minister please advise the House what he meant when in his speech on Friday in Winnipeg he emphasized the need to prevent feelings of alienation and suggested that non-Liberal members-


Mr. Speaker:: Order, please. In my way of thinking, that is not supplementary to the matter we were discussing a moment ago which I thought was related in some way to the movement of grain. The hon. member for Nanaimo-Cowichan-The Islands has a supplementary to the previous question.


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my supplementary question to the minister in charge of the Wheat Board arises out of the question asked by the hon. member for Saskatoon-Biggar. Since the minister has indicated he cannot assure the House that the railways will cover the capital costs and depreciation of these cars which are being purchased by the government, can the minister assure the House that if there is any degree of subsidization the government will, as a quid pro quo, get some reduction in the freight rates on grain shipped to the coast?


Otto Emil Lang: Mr. Speaker, the actual ambit of that question perhaps goes beyond the jurisdiction of my department, but I think I can assure the hon. member that in our discussions about arrangements with the railways we will try to be sure that every possible benefit in fact flows back to the grain producers for whom this help is really intended.


Thomas Clement (Tommy) Douglas: Can the minister tell the House whether there will be any degree of subsidization or, indeed, whether the railways will pay the full capital costs and the depreciation through lease fees for these hopper cars?


Otto Emil Lang: Mr. Speaker, that is a double question which is not capable of having the same answer. There will be no degree of subsidization. That is certainly our intention. However, that does not necessarily mean that the conclusion drawn in the second part of the question is true.


Mr. Jack McIntosh (Swift Current-Maple Creek):: Mr. Speaker, I have a supplementary question for the minister in charge of the Wheat Board. Will the minister make

public the agreement to which he referred that exists between the government and the railway companies so we will have the answers rather than trying to obtain the information from him during the question period?


Otto Emil Lang: Mr. Speaker, the agreement to which I referred was the understanding arrived at between the Canadian Wheat Board and the railways in connection with the movement of grain in the next immediate period. I will certainly discuss with the Wheat Board whether the transportation document which is normally used in connection with such discussions can be made available to hon. members.


John (Jack) McIntosh: In other words, I take it from the minister's remarks that there was no agreement?


Otto Emil Lang: Mr. Speaker, that is quite wrong. I indicated that there was an agreement.


Mr. Speaker:: Order, please. We will try another subject. Perhaps we might get away from the debate on which we are embarking once again.



POST OFFICE


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is to "the Prime Minister or the Acting Postmaster General. Does the government plan to accept the proposal of the Public Service Alliance of Canada that national rather than regional rates of pay should be offered to its postal employees?


Pierre Elliott Trudeau: Mr. Speaker, I can take notice of the question on behalf of the Postmaster General, but I would be surprised if he would want to negotiate publicly at this stage of the negotiations. Therefore he perhaps will not be in a position to answer the question of the hon. member.


Robert Jardine McCleave: In light of the recommendation by the Toronto local of the Letter Carriers Union that a national strike vote be held to protest the current proposals of the government, is the government planning to develop new proposals?


Pierre Elliott Trudeau: Mr. Speaker, I think you will recognize that we have consistently refused to negotiate in public with the unions by the intermediary of questions from tfle opposition.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a supplementary question. Does the Prime Minister not agree that really the terms of the negotiations are evidence of a special status for several parts of this country and does not the government resist such a concept?
May 29, 1972


Pierre Elliott Trudeau: The question is a bit too esoteric for me. Perhaps the hon. member could write an essay and I will read it.



INQUIRY OF THE MINISTRY

Steve Eugene Paproski: Mr. Speaker, my question is for the Prime Minister. Will the Prime Minister please advise the House what he meant when in his speech on Friday in Winnipeg he emphasized the need to prevent feelings of alienation and suggested that nonLiberal Members of Parliament had helped to create such feelings?


Mr. Speaker:: Order, please. I remind the hon. member and the House in general that questions about statements made by ministers outside the House, including the Prime Minister, can only be put to inquire whether the statements represent government policy. I wonder whether it is traditional or according to our practice to ask what was meant by a speech made outside the House. It is sometimes difficult enough to find out what is meant by a speech made inside the House without trying to ascertain what was meant by speeches made by members outside the House. I would think this is a rather fruitless exercise. The hon. member might like to rephrase his question.


Steve Eugene Paproski: Would the Prime Minister be more specific about what he meant in his speech on Friday in Winnipeg when he emphasized the need to prevent feelings of alienation and suggested that non-Liberal Members of Parliament had helped create such feelings?


Pierre Elliott Trudeau: Mr. Speaker, I should have thought the point was well illustrated today when, after the government had announced the purchase of 2,000 new hopper cars, the opposition took a purely negative view and-


Mr. Speaker:: Order, please.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I would think that both the question and the answer show why this rule regarding speeches outside the House is so valuable. I am sure that every Monday we could spend the whole question period discussing speeches made over the weekend by members on both sides of the House. I suggest that is not the purpose of the question period. Questions about speeches made outside the House should be restricted to inquiries * whether certain statements represent government policy. That will certainly save us the trouble we are getting into in relation to the hon. member's question.


Steve Eugene Paproski: Mr. Speaker, I regret that I must rise on a question of privilege. I suggest that at a time when this country is being held together by some very thin threads the Prime Minister of this country should not be stooping to blanket condemnation of Members of Parliament who do not belong to his party.
Inquiries of the Ministry


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: Let me say that if it had not been for the many great non-Liberal members in this assembly, this country would be divided.


Mr. Speaker:: Order, please. The rules are perfectly clear that if an hon. member wants to raise a question of privilege he has to give notice of his intention to do so. This is not a question which relates to a debate that has just taken place in the House, but rather to something which took place outside the House before the last hour. Therefore the hon. member had ample opportunity to give the Chair the notice which is required by the Standing Order.


John (Jack) McIntosh: Mr. Speaker-


Mr. Speaker:: Order, please. The hon. member will have to ask a different question because that question was certainly not in order.


John (Jack) McIntosh: Mr. Speaker, I rise on a question of privilege concerning the insinuation left by the Prime Minister with regard to members of the opposition. Surely the Prime Minister knows parliamentary procedure well enough to know that it is the duty of opposition members to inquire into transactions such as this when they are announced outside the House and not explained in the House. As Members of Parliament it is our duty to make the Prime Minister explain the details of the deal. We do not know whether the farmers are ultimately going to pay for this or whether it will be the people of Canada.


Mr. Speaker:: Order, please. Obviously we are not talking about the same thing. The hon. member's question did not relate to the point raised originally by the hon. member for Saskatoon-Biggar. I may be at a disadvantage because I did not have the privilege of reading the speech to which all these questions allude. I do appreciate the point raised by the hon. member for Swift Current-Maple Creek. The questions which were asked in relation to this matter were certainly in order and I am quite willing to recognize further questions on the point. However, I thought the question of privilege raised by the hon. member for Edmonton Centre referred to a different part of the speech.


John (Jack) McIntosh: My question of privilege had nothing to do with the Prime Minister's speech in Winnipeg. It had to do with his remark in the House a few moments ago implying that members of the opposition were not doing their duty in asking these questions and that it is not our privilege to do so. I think the Prime Minister should know better than to make such suggestions that provoke this type of discussion.


An hon. Member:: Cheap politics.


Mr. Speaker:: Order, please. The question period is quickly going by on these points of order and questions of privilege which may be entirely justified. I would think they are grievances rather than questions of privilege. The hon. member has made his point and I hope we can

May 29, 1972
Inquiries of the Ministry
get on to another subject. If the hon. member for Annapolis Valley is rising to ask a supplementary question, I suggest that it might be a different question rather than a supplementary. I do feel that the original question asked by the hon. member for Edmonton Centre was not entirely, completely or absolutely within the four corners of the rules.


Mr. Nowlan:: Because I agree with Your Honour's preliminary ruling, I rise on a point of order-


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: -to help clarify the program ahead in this warm, prosperous, election-free springtime and summer. For the enlightenment of the Chair and members of the House, perhaps we could be given the itinerary of the Prime Minister for the next weekend in this election-free summer-


Mr. Speaker:: Order, please.


Horace Andrew (Bud) Olson: What about your own leader?


John Patrick (Pat) Nowlan: We will put you into the hopper, too.


Mr. Speaker:: Order, please. We have obviously started on the wrong foot this week. Things can only get better from this moment.


Some hon. Members:: Oh, oh!


Alfred Pullen Gleave: Mr. Speaker, further to the point raised by the hon. member for Swift Current-Maple Creek, I specifically requested a statement on motions for the information of hon. members. This has been denied and the minister in charge of the Wheat Board has failed to give the House the necessary information. Then we are accused by the Prime Minister of abusing our privileges-


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



HOUSING


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question involves a change of subject. I address it to the Minister of State for Urban Affairs. I have asked the hon. gentleman several times to table the Dennis Report on low-income housing. I understand that this report has been available to the Central Mortgage and Housing Corporation for two weeks and that Professor Dennis is now away on holiday. I now repeat my request that this important report be tabled in the House.


Stanley Ronald Basford: Professor Dennis was preparing the report for publication. I will determine whether it has been handed in.



LABOUR RELATIONS


Mr. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, I have a question to direct to the Minister of Labour. Will the minister state whether he was able to meet personally over the weekend with representatives of labour and management in connection with the strike of longshoremen in Montreal which is now in its fourteenth day, and whether any moves have been made by the government to settle this strike?


Hon. Martin P. O'Connell (Minister of Labour):: On
Friday last I did have an opportunity of meeting informally and in an exploratory way with representatives of management and labour in the offices of the department in Montreal. The senior federal mediator is working with the two parties on a daily basis to seek a settlement of this dispute.


Mr. Lincoln M. Alexander (Hamilton West):: I should like to direct a question to the Minister of Labour concerning the same subject. Has the minister taken into his confidence the Minister of Manpower and Immigration who had so much success in the past in this field?



NATIONAL SECURITY


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: My
question is to the Solicitor General, Mr. Speaker. In view of the statement made by a former cabinet minister that extensive subversive activities are taking place in Canada and that the report of the Royal Commission on Security did not give all the facts, would the minister tell us whether he intends to make a statement-


Mr. Speaker:: Order, please. I will not object to the minister replying to the question asked by the hon. member, but I suggest it ought to be asked directly. A few minutes ago I had occasion to refer to the rule we are attempting to recognize and respect that questions may be asked about statements made outside the House by ministers only to inquire whether they represent government policy, but my understanding of the rule is that it does not apply to former ministers of the Crown. This having been said, perhaps we could assume that the question has been asked directly, and the minister might reply.


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, paragraphs 15 and 16 of the abridged report of the Royal Commission on Security give a very clear description of the communist subversive activities in Canada. The description is still generally valid.
To reply more directly to the hon. member's question, I would say that the following can be read in the same abridged report and I quote:

May 29, 1972

Note: The Report of the Royal Commission on Security as originally submitted to the Governor in Council in October 1968 included some material which in this published version has been omitted or amended in the interest of national security.
These changes are of small significance in the context of the Report as a whole-


Mr. Speaker:: Order. I must interrupt the minister, because he is making a statement which should normally be made on motions. I think that he should try to answer as briefly as possible the hon. member's question. If the latter wishes to put supplementaries, he could do so afterwards. If he must give a long answer, the minister should ask the consent of the House to revert to motions, in order to make a statement on which representatives of the opposition could make some comments.


Jean-Pierre Goyer: Mr. Speaker, with all due respect, the remainder of my answer will only require five seconds.
These changes are of small significance in the context of the Report as a whole, and the Royal Commissioners agree that they do not affect the substance of the Report or its recommendations.


Jack Marshall: In order to clear up this matter, would the minister make a statement on motions and, in addition, consider asking his hon. friend from Trinity to appear before the appropriate committee with respect to the assertions he has made?


Jean-Pierre Goyer: Mr. Speaker, I do not intend to make further remarks on this question. However, I can inform the hon. member that the commissioner of the RCMP and the Director of Security Services have assured me that the situation is under control and, if the hon. member for Trinity (Mr. Hellyer) wants to break his oath or hide behind it to arouse suspicion, it is up to him-


Mr. Speaker:: Order, please.


Robert Lorne Stanfield: Mr. Speaker, I have a related question for the Prime Minister concerning the massive security provided for the right hon. gentleman at the Liberal fund-raising dinner. I am not objecting to that, of course; I would not want to see anything happen, naturally, to my right hon. friend. But I should like to ask him whether that massive security was intended to protect him from these subversive elements or from the Liberals who were attending that dinner?


Some hon. Members:: Oh, oh!



CONSUMER AFFAIRS


Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I should like to direct a question to the Minister of Consumer and Corporate Affairs. In view of the policy motion endorsed this morning by the million-member Canadian
Inquiries of the Ministry
Automobile Association urging action at the federal level to protect consumers of Canadian motor vehicles with better warranties at the workmanship and parts levels, will the minister give early consideration to this request?


Hon. Robert K. Andras (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I thank the hon. member for the notice of his question which I received just after coming into the House. I have not had an opportunity to see the policy statement to which he referred, but I will examine it and, to the degree that federal jurisdiction does apply, I will be most interested in pursuing the suggestion therein.



PURCHASE OF HOPPER CARS BY GOVERNMENT- ASSURANCE THAT COST WILL NOT BE CHARGED TO FARMERS

Donald Craig Stewart: Mr. Speaker, my question arises from the reply of the Prime Minister to the hon. member for Edmonton Centre. I should like to ask the minister responsible for the Canadian Wheat Board whether he can assure the House that no part of the cost of the 2,000 hopper cars for grain movement will be met out of the farmer's Wheat Board account?


Otto Emil Lang: Yes, Mr. Speaker, that is what the Prime Minister said.



EXTERNAL AFFAIRS


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, in the absence of the minister I should like to direct this question to the Parliamentary Secretary to the Secretary of State for External Affairs. It concerns the recent UNCTAD conference and the position of the Canadian delegation which has been described by Canadian church observers there as non-committal, cynical, tightfisted and disruptive. Can he advise why, in respect of the motions put forward by developing countries to assist their economies, Canada found it necessary to vote against nine and abstain on four of these important resolutions?


INDIAN AFFAIRS
Mr. Roch La Salle (Joliette):: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development.
In view of his intended meeting last Thursday with the premier of Quebec for discussions concerning the James

May 29, 1972
Inquiries of the Ministry
Bay project and possible agreements between the federal and provincial governments, could the minister advise the House of the gist of these discussions? If both governments have reached an agreement, can he tell us something about it?


Hon. lean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, we have had an excellent meeting with the Quebec premier; we have agreed to continue to explore the possible ways of solving the problem. However, we are not in a position to make concrete proposals at this time, because we shall have to hold talks with the Indians of the province of Quebec. Some weeks and even months may elapse before we can announce concrete proposals.


URBAN AFFAIRS
Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my question is directed to the Minister of State for Urban Affairs. In view of Premier Bourassa's decision to have his government choose the two Quebec municipal delegates to the tri-level urban conference and the resulting impairment of the conference's purpose, will the minister now state whether the effect will be to reduce the conference to a two-level conference?


Stanley Ronald Basford: Mr. Speaker, the method of choosing municipal representatives was set out in the report in which I understand the province of Quebec concurred.


Sylvester Perry Ryan: Mr. Speaker, is the minister content that the provincially picked delegates from Quebec will act-


Mr. Speaker:: Order, please. That question is clearly out of order.


Sylvester Perry Ryan: May I rephrase the question?


Mr. Speaker:: Would the member resume his seat. The hon. member is inviting the minister to indicate whether he is content, satisfied, pleased or happy with something. That is not a proper question. The question should be asked directly.


Sylvester Perry Ryan: The premier is reported to have said that these delegates will act only as advisers to the Quebec government at the conference. Does this statement come within the guidelines to which the minister has just referred?


Stanley Ronald Basford: Mr. Speaker, I think this is a matter for consultation between the province of Quebec and the municipalities concerned. I am ouite sure we will have a successful conference.


CONSUMER AFFAIRS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. In view of the increase in the cost of food by 71 per cent between April 1971, and April 1972, and the simultaneous increase in the profits of food companies, Dominion Stores 300 per cent, and Weston's nearly 50 per cent-


Mr. Speaker:: Order, please. I suggest that the hon. member is making a speech. The purpose of the question period is for hon. members to seek information, not to convey information to the House. The hon. member should ask his question.


Lorne Edmund Nystrom: In light of these two facts, will the minister refer this important issue to a special committee of the House for investigation?


Robert Knight Andras: Mr. Speaker, I would not be empowered to do so. I might advise the hon. member that this same question was asked by two members of his party previously, and I do not think my answer has since changed.


Lorne Edmund Nystrom: Mr. Speaker, will the minister make a statement on motions some time this week informing us of the action he is taking on this important issue?


Robert Knight Andras: Mr. Speaker, I would refer the hon. member to the answer I gave, which I think is clearly printed in Hansard.


AGRICULTURE
Mr. Murray McBride (Lanark-Renfrew-Carleton):: Mr. Speaker, my question is for the Minister of Agriculture. In view of the continued difficulties in the egg producing industry and the desperate financial straits in which Ontario egg producers in particular find themselves, will the minister be in a position soon to make a statement in the House indicating what the future will be for egg producers in Ontario?


Horace Andrew (Bud) Olson: Mr. Speaker, discussions took place in Ottawa almost all of last week among producer organizations from across the country. As a result they have come to a tentative agreement. Meetings are starting today and telecommunications with the provincial representatives, including the provincial ministers, which hopefully will result in an agreement some time later today. If necessary, we will call a wider meeting of provincial ministers because we want to resolve this problem as quickly as possible.
[Mr. La Salle.)
May 29, 1972


LABOUR CONDITIONS
Lincoln MacCauley Alexander: Mr. Speaker, I should like to ask the Minister of Labour a question concerning his regard for the minimum wage as it now exists. Will he advise the House whether he has in fact had an opportunity to meet with his provincial counterparts? If so, without disclosing the figure will he say whether a figure has been reached, and is it the intention of the minister to bring in legislation in this regard in the very near future?


Abram Ernest Epp: Mr. Speaker, I have not had the opportunity of meeting the provincial Ministers of Labour. I might say in addition that the question of minimum wages is under continuous consideration by the government.


Lincoln MacCauley Alexander: Arising out of the answer of the minister, may I ask whether it is his intention to take a new approach with his provincial counterparts in order that he can come to the House with legislation making the minimum wage more equitable? Is this his intention in the very near future?


Mr. O'Connell:: Mr. Speaker, it is not my present intention to seek meetings with the provincial Ministers of Labour on this subject.


Mr. Speaker:: Order, please. With that last supplementary question we have give beyond the end of the question period. Perhaps further supplementaries might be kept until tomorrow. Orders of the day.



GOVERNMENT ORDERS


Hon. lean-Luc Pepin (Minister of Industry. Trade and Commerce) moved: that Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, the objective of the bill we are studying today is to ensure that foreign takeovers of Canadian corporations take place only when such takeovers will bring appreciable benefits to Canada. This bill is also designed to increase such benefits as much as possible.
In fact, Bill C-201 provides that all proposed takeovers in excess of a certain amount, will have to be drawn to the government's attention, after this bill is passed. The gov-
Foreign Takeovers Review Act
ernment will be empowered to assess these takeovers and determine how they contribute to the welfare of Canadians. It would also empower the government to negotiate changes liable to increase the benefits that might be derived from those takeovers.


Mr. Speaker:: Order. I hesitate to interrupt the hon. minister but with the discussions which are taking place in the rear of the House it is difficult to follow the hon. minister's remarks. I would suggest to the hon. members who want to proceed with these conversations to do so behind the curtains.


Jean-Luc Pepin: Mr. Speaker, I was saying that this bill empowers the government to negotiate changes which might increase the benefits that might be derived from these takeovers. Finally, the bill empowers the government to reject any takeover which would not bring appreciable benefits to Canada.
In other words, this bill gives the government the right to know of, to assess, to negotiate, to allow or to stop takeovers above a certain level.
This measure, Mr. Speaker, is complementary to that already taken by previous governments in order to stimulate Canada's economic development and independence. I deeply regret that some commentators have not placed the new measure in its wider context, which I will of course attempt to do today.
Previous governments have, indeed, created a group of corporations: the Canadian National, Air Canada, the Polymer Corporation, Eldorado Nuclear Limited, the Northern Transportation Corporation Limited, the Northern Canada Power Commission, Panarctic Oils Limited, Telesat, the Canada Development Corporation.
Those same governments have limited foreign investment in some major financial sectors: banks, insurance companies, loan companies, and finance companies.
Some of our major cultural industries-radio, newspapers, magazines-are also subject to regulations which oppose foreign control, successfully in most cases.
The tax system, reinforced by last year's fiscal reform, also contains provisions to encourage Canadians to invest more in Canada than abroad.
However, Mr. Speaker, until now some of the most important sectors of our economy-manufacturing, raw materials, and many service industries-have depended on ad hoc decisions or have quite simply been ignored.
Bill C-201 is therefore designed to facilitate-I emphasize "facilitate", for it is not going to solve everything-the lessening of some of the problems created by foreign investment, and also the improvement of the advantages, the positive aspects, of foreign investment in those important sectors.
Mr. Speaker, the major aspects of this bill have already been announced to the public as well as to the House by the hon. Minister of National Revenue (Mr. Gray) in his statement of May 2 last. I shall therefore confine myself to answering some very important questions which have already been raised both in this House and by the public at large.

May 29, 1972
Foreign Takeovers Review Act
For instance, why does Bill C-201 apply only to acquisitions of control? Why not implement a policy to extend and enlarge general restrictions in key sectors, all questions that are dear to the hon. Leader of the Opposition (Mr. Stanfield)? Why a reviewing or screening process and other similar questions?

I find it difficult to answer the first question which has been raised. Some people have asked: why not exclude all foreign investment? I think no modern country can afford to deprive itself of the benefits associated with foreign investment in terms of capital inflow, in terms of technology, in terms of markets and in terms of employment. No country today can afford to join an economic nunnery. Markets, technology and capital move around the world these days very rapidly with foreign investments. It seems to me it would not be particularly intelligent to deprive ourselves of these contributions. The technologically richest and most advanced country of the world, the United States, takes more and more foreign investment. I was looking at the statistics a moment ago and found that the United States in 1970, has experienced an increase of 11.8 per cent in foreign investment over the previous year compared to an increase of 8 per cent in Canada. This would indicate that the greatest and most powerful country in the world in terms of material wealth, is also taking a lot of foreign investment because of the technology and other advantages which come with foreign investment. So, the question to me is not one of should we or should we not. To me, it is a question of how, what are the acceptable means and methods.
The second question which has been raised in recent days, and which has been bothering many people I must admit, is the following: why include only takeovers in Bill C-201? Why not include other forms of direct foreign investment such as new investment, re-investment of earnings, for example. There are three or four good reasons for this. I think they are good. The first is that of all the various forms of foreign direct investment, Canadians have been most concerned mostly about takeovers, and rightly so, because they do not necessarily-there are exceptions of course-add much to the Canadian productive capacity. Another argument concerns the economic consequences of foreign investments. What would have been the economic consequences of including more than has been included in Bill C-201?
The extension of the review process to other forms of foreign direct investment could slow down the creation of new industry, partly through reduced business confidence at home and abroad and partly through the disruptive effects such a major intervention could cause, resulting in fewer jobs being created. On the subject of business confidence I find the opposition is divided, as is not too uncommon.


An hon. Member:: So is the government sometimes.


Jean-Luc Pepin: I meant as between parties. Perhaps it is true also within parties. We will find that out later in this debate. Some members complain that the government does things which contribute to economic uncertainty, even if those things should be in the interest of the greater objective of justice, national unity or independence of the

country. Strangely enough, in this particular instance, some people such as the hon. member for Prince Edward-Hastings (Mr. Hees)-and I regret his temporary absence, because I like to speak at him when I speak of him-seem to be saying things rather different from the usual line taken.
In this particular instance, the hon. member for Prince Edward-Hastings seemed to be saying that the government had not taken a sufficiently dynamic or aggressive line. He seemed to regret that we did not go any further. At least that is what I heard him say over the CBC on the night of May 2. I tried very hard to obtain a copy of his remarks because I like to be fair in reporting opinions heard. My hon. friend was flying very high that night. He might have been on a Concorde or a rocket. He said, in his usual subdued, non-emphatic tone, that the government had not been very energetic on that particular day. I would appreciate it if he would let me have a copy of what he said on that occasion.
Some other Members of Parliament openly do not give a hoot about the business community. They love to antagonize it. They think that uncertainty is fabricated to influence the government and used by politicians to justify their cowardice. This was the word which was used recently by the hon. member for York South (Mr. Lewis), and which he addressed to me. Such is the comfort of opposition benches. I am not complaining, I am just observing. Each time the opposition has been accused of irresponsibility I have heard the answer thrown at us, usually the hon. member for Peace River (Mr. Baldwin) is leading the attack, that governing is our responsibility and that they are not here to do our work. I say to that: fair enough.
In this particular instance, so far as Bill C-201 is concerned, we are governing in the interest of all Canadians, labour, management, owners, white collar and blue collar workers, hard collar, soft collars, too, striped pants, blue pants, hot pants and whatever you want. We did take into account public opinion. I must say that the polls, which will probably be quoted here, indicate quite clearly that Canadians are in favour of more Canadian control over their economy; there is no doubt about that. But at the same time we see Canadians-and I do not blame them- wanting a better standard of living, more security, more industrial growth, more and better jobs, better pensions, etc. If public opinion wants a responsive government, I suggest that public opinion also wants a responsible government and that is what we are providing in this bill.
The government had to consider how much intervention would be practical and workable. On these grounds, it chose to limit the review process to that part of foreign direct investment where, in the broad public view, there exists a genuine and clear consensus. We also took into account, when deciding on our policy, the views of the provinces, the theories of some of the provincial leaders and the practices of others. I must say that it is not easy to interpret all this. In a few cases, and I am not generalizing, there are slight differences between the theories and the practices of the same provincial leaders. Some who are generally favourable to foreign investment take restrictive action against it, and some who are generally
May 29, 1972

unfavourable to foreign investment travel extensively abroad to attract it in one form or another.
Be that as it may, I think everybody here will at least agree that there was a division between provincial leaders on the degree of acceptable control in Canada, and the federal government had to bear this in mind. We had been cautioned to do so, and to illustrate this point I can find no more useful a source than the Leader of the Opposition (Mr. Stanfield) himself. In a speech to the Progressive Conservative Association in Nova Scotia, written in his own hand, which he gave on February 5 of this year he said:
I want to warn the government that, as far as we are concerned, any policy that pins its faith exclusively on the restriction of investment in Canada in order to protect our identity as Canadians is bad for this country and would be disastrous in terms of national unity.
Frowning heavily, I presume, he added:
I want to warn this government that any such policy, far from protecting our identity, would turn region against region, province against province, and Canadian against Canadian.
I want to warn this government that we in the Progressive Conservative party shall fight hard against any policy that would have the effect of cutting off sources of investment to the provinces that are still in need of capital.
Frowning even more, I presume, he said:
I want to warn this government that we shall fight to the end any policy that would hamper the fight against unemployment and weaken the Canadian economy.
After saying that, the Leader of the Opposition has no speech to make. I think he can hardly disagree with this bill. I anticipate that he will not. I am quite sure that he will be talking about other things that we might have failed to do. But I am talking about this bill. If he wants to talk about other things, that will be his choice.
So much for some hon. members in the House who normally fear uncertainty. Others, both inside and outside the House, say that Bill C-201 does not go far enough. Presumably, in their view, the government has paid too much attention to public opinion, to provincial leaders, business leaders, etc. They are taking an absolutist line. I have heard their statements on the radio: full steam ahead, damn the torpedo, damn the economic torpedoes, damn the regional torpedoes, damn the constitutional torpedoes. These gentlemen say they are the true democrats. They know what is best for the Canadian people. They will force Canadians to be free. I was listening to one this morning and, in my view, that is aristocratic government, possibly even foolish government. Good government is progressive government-Liberal progressive of course; good government is evolutionary government. As has often been said, the best revolutions are evolutions. Let me put it in a nutshell, Mr. Speaker. This is why we included only take-overs in the screening process.
The next question which was raised was, why screening? Why not the general restriction approach, 50 per cent of this, this being ownership, and 75 per cent of that, that being the number of Canadians on boards? Some ask why the general restriction approach was not taken, why not add to the key sector, new areas where foreign investments would be either excluded or regulated. As I said at the beginning of my remarks, these methods have been used in the past in Canada, I mean the general restriction
Foreign Takeovers Review Act
method and the key sector approach. In my view that was the right approach in areas of unqualified national importance. I want to emphasize that. This approach might still be used in the future, but in the particular areas about which I am talking now, particularly manufacturing and resources, it was felt that using the key sector approach, so dear to the Leader of the Opposition, was too blunt and too automatic a means.
Why is that so? Because foreign participation in these areas in general brings clear benefits as well as obvious costs. Things were clear, one-sided, in some of the cultural areas that were singled out for the key sector approach. There was no great interest in having foreign investment and control. But I repeat that it is not so clear in the areas of manufacturing and resources. Here a more flexible and a more selective approach is needed. To use a useful cliche, we need in these areas not necessarily to exclude but to exclude only if necessary. I am not ashamed of using Mackenzie King's style. Those were wise words. He was trusted by the Canadian population for 23 years. To use a useful cliche again, Mr. Speaker, in these areas it is necessary to maximize the benefits while minimizing the disadvantages. That is the very purpose of the screening process.
Let me insist. To use the expression of the main character in Fiddler on the Roof, on the one hand a takeover can reduce Canadian participation in Canadian industry and provide nothing in the way of new activity in the economy; it may even result later in the closing up of Canadian business and the consequent loss of jobs. But then, on the other hand, a takeover may provide the means to rejuvenate a declining business or provide expansion to an already viable enterprise through the infusion of new capital, new technology, improved management and expanded market opportunities at home and abroad. It can also bring lower prices to Canadian consumers. The first, on the one hand, should be blocked, should be excluded; the second, on the other hand, should be allowed, and improved if at all possible. So much for key sectors, Mr. Speaker.
Then the next question is why not-


Mr. Crouse:: Would the minister entertain a question at this point? Is he not aware that the key man in "Fiddler on the Roof" also held his hands up to heaven and cried, "Good Lord, why must you visit all this on me!"


Jean-Luc Pepin: Mr. Speaker, I only have one daughter to marry off, so I don't have to worry as much as Topal seemed to worry.


Some hon. Members:: Oh, oh!


Jean-Luc Pepin: I was trying to answer the question, why not more key sectors? I hope the Leader of the Opposition will take account of the remarks I have made.
The next question is: why not have general rules of Canadian participation? Why not a 51 per cent ownership formula? Why not a 75 per cent of directors formula? Why not the 90 per cent of management formula, and so on? These have been recommended by a good many people.
2634

May 29, 1972
Foreign Takeovers Review Act Mr. Speaker, the main purpose of this bill, and I will admit it, is not to increase Canadian participation, and I underline that, although, and I underline the "although" also, participation will be a factor in the screening of takeovers. It is one of the five factors that will have to be borne in mind. I refer to participation by Canadians both within the particular enterprise being subjected to takeover, and participation in the industrial sector where that enterprise is located. I believe that an increase in Canadian participation will come mainly through other policies, some of them presently existing and some others to be added in the future. Those now in existence are the tax system, the Canadian Development Corporation, and that sort of thing. And, as the Minister of National Revenue (Mr. Gray) said in his statement of May 2, the government is looking at other possibilities to enhance the Canadian interest, such as better use of Canadian capital markets, increased development of indigenous technology, and management development. On the latter subject my department, has recently created two modest programs for the improvement of Canadian management. I hope hon. members opposite have noticed this. Reference to these programs is to be found in communique No. 33/72, but I will not read it now.
Mr. Speaker, might I suggest that a policy that would focus primarily on Canadian participation without considering performance first could bring about rather strange results. A simple, automatic, general requirement of 51 per cent ownership, 75 per cent of directors, and 90 per cent of management would not necessarily produce the results we are all seeking. Having seven Canadian directors out of nine on the board does not give you much if the seven are treated like figureheads. And 90 per cent Canadian management does not mean much if all the decisions are in fact made abroad. Having 51 per cent Canadian ownership does not give you much if, in that particular enterprise control can be exercised with 10 per cent ownership. I am just saying here that one should not be fooled by appearances. These are not black and white situations to be solved once and for all by legislative action. There is a brief passage in Montesquieu-I am sure everybody has read it-where he calls at least for some countries, for the primacy of mores, customs and conventions over laws. This is where he says that very often changes in realities are more important than changes in law.
What is the importance of this bill, of this screening of takeovers? The leader of the NDP, the hon. member for York South (Mr. Lewis) says, "One big zero." I disagree of course.


David Lewis: You can make it two.


Some hon. Members:: Oh, oh!


Jean-Luc Pepin: We are establishing here a new principle, the principle that future takeovers will be screened and that, to be approved, there must be significant benefit to Canada. Incidentally, Mr. Speaker, I am told that takeovers represent 5 per cent to 20 per cent, depending on the year, of foreign investment in Canada.
By monitoring the forward plans of individual enterprises in this way the government is breaking new
[Mr. Pepin.)
ground. It is in effect inserting its influence in an area of business planning reserved until now to private decision making. Not only will allowed takeovers be more beneficial to the Canadian economy, but the objectives and criteria imbedded in this bill will influence the nature and direction of other forms of direct foreign investment in Canada. This will be done in an orderly, evolutionary, rational way.
As the screening process gains experience and builds up a history of negotiations and decisions, foreign investors will be able to see the kinds of goals that Canadian authorities are striving for on behalf of the Canadian public and, in a typical, practical business-like way they will adjust to them. I might also add that in any such process major administrative problems arise, and unless they are carefully and systematically worked out they could well create disruption. So much for the philosophy, Mr. Speaker. I do not want to go into too many of the details of the administrative end of the bill, as this can best be done in committee, but I would like to outline some of the major administrative concepts.
A central feature of the new measure is the concept of significant benefit, how is this to be determined? Hon. members are already aware of the five factors set forth in the bill. First, there is the effect of the takeover being screened on the level of activity as reflected in production and employment. If, for example, a takeover sustains the life of a declining enterprise which would otherwise close down, the promise of continued production and jobs would constitute an important positive benefit. Similarly, high marks would be given to a takeover which held genuine promise of expanded operations and job creation.
A second factor is the effect on productivity, innovation, technological development, and other such factors resulting in the more effective use of productive resources. Higher productivity may give rise to higher returns to producers in the form of higher salaries and higher profits, better value to consumers in the form of lower prices or better quality, and spin-off benefits to the economy at large, such as the dissemination of new technology and management techniques.
A third factor is the favourable effect upon competition in Canada. The takeover may have a very favourable effect through more vigorous and productive operations.
The fourth factor does not necessarily involve an identifiable economic benefit. This is the matter of participation by Canadians, and I have already dealt with that.
A fifth factor to be considered is, of course, the need for a takeover to be compatible generally with established policies, national, industrial and economic policies, for example; the existing program for rationalization within the textile industry, within the footwear industry, the need for wider markets in the chemical industry, the aerospace industries, etc.


Robert Lorne Stanfield: Before the minister gets off that subject, and in connection with the competitive aspect, the minister has mentioned that an increase or decrease in competition would be a factor to be considered. Is it intended that this will be the sole finding on this matter, or is it contemplated that the takeover would also have to be classed, perhaps by a tribunal established under the Competition
May 29, 1972

Act? Would the minister clarify the confusion that seems to exist there?


Jean-Luc Pepin: Mr. Speaker, I prefer to go into that in committee because any short sentence or two that I give now might not be clear enough, but the general philosophy is that the two considerations will have to be reconciled. We will look at that in committee, supported by experts on that point.


Mr. Fairweather:: That is the Pepin two step.


Jean-Luc Pepin: Another basic aim of the bill is to deal with control rather than ownership. As everybody knows, these are not necessarily the same thing. For example, a widely held corporation can be controlled by a very few people. Consequently, throughout the bill reference is made to control. Now, control is more difficult to establish than ownership and this is why a system of presumption is to be found in the bill. This is a bit complicated, I will admit. There are two categories of presumptions in the bill. One is to help determine who must go through the review process before acquiring a Canadian company, and the other is to help determine when a takeover has taken place.
These presumptions are designed to simplify the administration of the law, both for the government and for business. They permit the responsible minister to look at the proportions of share ownership in the hands of foreigners and draw certain tentative conclusions. These tentative conclusions can be rebutted by the corporation. The reason for these presumptions is that while it would be relatively easy for the minister to determine the number and proportion of shares held in a corporation by various persons, only the individuals themselves know whether or not they have control. So, the procedure is that the minister will presume control in certain important cases and permit the individuals to rebut that presumption.
Cabinet looked at this problem at length, for at first glance it appears that the law would assume that a party was guilty until he proved himself innocent. But any alternatives we looked at could create greater difficulties. Since the individuals are the only persons who know who controls a company, the only alternative would be for the government to set up a rather elaborate investigative apparatus to snoop-to use a favourite word of the hon. member for Prince Albert (Mr. Diefenbaker)-into company records. This would be inimical to the Canadian way of life. It was decided to put the onus of proof on the acquirer of the enterprise being taken over. It should be relatively easy for the purchaser to satisfy the minister as to who really has the control of his company. There are several ways to do this. Filing shareholders lists is one way, the records of annual meetings is another and the presentation of affidavit evidence of the location of control of the company is still another way. The bill provides authority to the government to give advance opinion on such matters. Any decision by the minister about control should be challenged before the courts.
Speaking of these presumptions, I know that a number of Canadian controlled companies have been concerned
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about the provision that where 5 per cent of the voting rights are held by foreigners, a company is presumed to be foreign controlled unless the contrary can be established. Some Canadian controlled companies have read this to mean that they cannot take over another Canadian controlled company without first consulting the minister. I am informed that this will not be the case. As long as the company knows that if challenged it could readily show that control lies in Canada, it does not need to consult or inform the minister.

Mr. Speaker, to conclude my comments, the government hopes that Parliament will be able to adopt this legislation before the summer recess and once it is promulgated, the screening process will obviously become operative. We know that there will be some disagreements on certain aspects of the bill. However, I think we will unanimously, or almost, recognize that it is, as a whole, useful and should be implemented as soon as possible.
My friend the hon. Minister of National Revenue begins today his consultations with provincial authorities. He will explain the bill's provisions to the provincial premiers and request their opinion on the matter. Their views, together with those of hon. members and other outside parties will be taken into consideration when the bill is referred for study to the committee.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, it is significant that the Minister of Industry, Trade and Commerce (Mr. Pepin) is introducing this bill and not the Minister of National Revenue (Mr. Gray). If we wanted to search for the rationalization of the government's approach to the whole matter, perhaps the fact of the minister's imprimatur on the bill would provide the answer.
The minister speaks about division in the country. He mentioned particularly division amongst provincial leaders, but I do not think he mentioned the most significant division of all and one which we have watched for the last two years, the division in the Cabinet of this country.


Some hon. Members:: Hear, hear!


Robert Gordon Lee Fairweather: What underlines this division, of course, is the fact that the Minister of Industry, Trade and Commerce was successful and the Minister of National Revenue now finds himself in the position of disassociating himself in a general way, and he said publicly, with the document entitled "Foreign Direct Investment in Canada"-


Jean-Luc Pepin: Why is it then that he has been sent to the provinces to explain the bill?


Robert Gordon Lee Fairweather: I think we should discuss all the divisions, that is all. I should like the record to be clear.
The minister says that the government is looking at other measures in the foreign investment field. The problem is that when this government looks at other measures, it continues the uncertainty that is endemic with this government in the whole economic field. The minister discussed the essayist Montesquieu. I think he said some-

May 29, 1972
Foreign Takeovers Review Act
thing to the effect that "changes in realities are more important than changes in the law". I think it is a pity that Montesquieu is not here to see some of the nonsense that goes on and perhaps if he were here he would say that the reality is that there is very little change in the law and very little change in our mores.
The debate in Parliament and the country about the very large foreign presence in the Canadian economy, and the capacity of Canada to make her own decisions about Canadian economic policy, is surely in no way joined by Bill C-201, the Foreign Takeover Review Act. The bill we are considering today has been variously described in the following terms, some of which have been trotted out by the minister himself, I suppose in anticipation of what we will say in this debate. It has been described as "one big zero", as being a surprisingly modest first step, as being just plain modest, as being hesitant, as being a little nibble, of failing to come to grips, of being weak and so on. I have exhausted my energy, but I can assure you that the record is filled with adjectives about the bill. One of the most interesting appeared in the New York Times which said that "the reaction of American business is one of satisfaction". This must surely rank as one of the understatements of this year.
If I read the newspapers correctly, the Minister of National Revenue has announced, and the Minister of Industry, Trade and Commerce alluded to this a minute ago, that there will be meetings with provincial premiers. What we must know is whether the comments and views of the provincial premiers might mean that changes will be made in the legislation. The Minister of National Revenue (Mr. Gray) said that it would be more a consultation and that we could not anticipate any changes in the legislation. This is a sort of bow to the cliche of participatory democracy. Surely, if the Minister of National Revenue is to be believed, the bow is accompanied with a slap. He says, "We will meet you my dear premier, but nothing in the bill will be changed because of the meeting."
On May 2, the Minister of National Revenue made his momentous announcement about how the government intended to deal with the phenomenon of foreign ownership of the Canadian economy. The minister tabled a document entitled, "Foreign Direct Investment in Canada." I find it curious that the document and bill should have come forward at the same time. The bill, presumably, arose as a result of this document, but really has nothing to do with the warnings which are received if one analyses carefully the document. The document thoroughly confuses the public, and one wonders why legislation dealing with a small aspect of the problem came so late, is so weak and will accomplish really very little. The foreign takeover legislation is well and good, provided it is carefully drafted, contains adequate appeal provisions and has, as an essential component, provision for strong provincial inputs on decisions as to whether a specific takeover is of significant benefit to Canada.
May I say this: the man who works in the pulp mill at Bathurst, New Brunswick, if he is lucky enough to hold the job, is not as interested in the debate on the Canadian life style as he is in his bread and butter. It really does not matter to the man working in that mill in Bathurst wheth-

er the capital behind the Bathurst mill is based in Montreal or in New York. We should remember this when discussing the whole question of investment; also, provincial assistance, direction and advice is necessary in order that there may be, pursuant to clause 2(2) of this bill, assessment in determining that any acquisition or control of a Canadian business enterprise is or is likely to be of significant benefit to Canada. Unless the provinces take a great part in the evaluation and formation of policy considerations that the minister enunciated both in that clause and in his speech today, the whole matter will fall flat.
It is small wonder that the Minister of National Revenue, I suggest with great respect to him, is anxious to dissociate his name from the report. Presumably, as a loyal member of cabinet, he supports the policy itself, because that is the only way he can continue in cabinet. He spent two years developing the policy in this area and has since seen most of his work shelved, as most hon. members would admit, or nicely wrapped in red and white.


Mr. Gibson:: Step by step, merely.


Robert Gordon Lee Fairweather: Step by step? Step by faltering step.


Colin David Gibson: No, step by careful step.


Robert Gordon Lee Fairweather: By two steps? Which step?


Colin David Gibson: No, no.


Robert Gordon Lee Fairweather: What step?


David Lewis: Half step.


Robert Gordon Lee Fairweather: By half step; that is no step.


Robert Lorne Stanfield: By a hop step, or a Russian steppe.


Robert Gordon Lee Fairweather: I hesitate to take the advice of the hon. member, whose usual routine, to say the least, is to take a double step or two-step. I have something to say, if the hon. member can refrain from talking about steps, because this is a half step or, putting it in another way, not really a conclusive step. I hope the Hansard reporter is enjoying this, because our interchange is not adding anything constructive to this lamentably inadequate provision. I suppose, as parliamentarians, we should stand in some awe of the government's agility to sidestep the real decisions which ought to have been made as a result of the two-year study.


Colin David Gibson: It is the opposition that does the real sidestepping.


Robert Gordon Lee Fairweather: I hope that the hon. member will be able to make a speech-


Mr. Speaker:: Order, please. The hon. member for Fundy-Royal (Mr. Fairweather) has the floor and should be permitted to make his speech.


Robert Gordon Lee Fairweather: Mr. Speaker, the tragedy is that the hon. member invited me to buy his lunch today, and here he is taking a half step, or obviously a no step or non-step. Sidestepping may be one of the attributes of this government, but it is a quality I deplore; and, when the government is engaged in what I suspect is pre-election preening, it leaves it open to the charge of being two-faced upon this
May 29, 1972

issue. Tokenism has found an admirable ally in this government.
In the minister's statement of May 2 last, as reported at page 1829 of Hansard, he made brief reference to a most important aspect of foreign direct investment and multinational enterprise, and the need for international action. Actually the official opposition and the House in general, I suggest, would be reassured if some positive elements of such a policy were spelled out.
It is interesting to note that the minister identified this problem in his statement. It was also identified, if I may say so modestly, when the Standing Committee on External Affairs and National Defence considered this measure. At that time we heard an interesting witness, Mr. George Ball, former undersecretary of state in the United States. During the questioning, I urged upon him and on the committee the view that there was a need for the government to show leadership in this field. Canadians tend to look at the issue as one between the United States and Canada, whereas many countries in Europe and, indeed, around the world are feeling the effects of the multinationals, many of whom are more powerful than most of the governments which are members of the United Nations. I happen to believe that multinationals must be accountable to some regime; I suggest that regime should be an agency of the United Nations; for, the activities of these multinational enterprises, despite any evidence of good corporate citizenship, are of such a nature that they must be beholden to some governments or the regime of many governments. Canada, it seems to me, is in an especially advantageous position to take the initiative here, and I suggest we should proceed forthwith to host a conference of countries in the world which are affected by the undertakings of the multinational corporation. A beneficial side effect would be that debate would move away from a United States-Canada discussion and become, if I may use the word, internationalized. At least, the discussions would be internationalized and, hopefully, agreement about remedies would be reached on some international aspects of the matter.
As Douglas Fisher and others have noted, the fashionable phrase this season is "industrial strategy", as I think the minister knows,. In a sense, we are caught up with cliches. They come on the scene, are worked to death, and pass away. The one in vogue currently is industrial strategy. We are often in danger, it seems to me, when we coin or over-use words and phrases and put more meaning into them than the plain, ordinary meaning of the words can bear. If I have learned anything in public life, it is that sloganeering is a poor substitute for action and that the debasing of the language is a poor antidote for our economic ills. Mr. Fisher reminds us that using terms such as "industrial strategy" leads us into the danger of glibness and I am sure the minister, more than any other minister, avoids glibness.
Mr. Fisher said:
If we are to have an industrial strategy declared for Canada it must be easily understandable. It will be meaningless unless it has with it all the majesty and support of governments.
Foreign Takeovers Review Act
That is plural, governments. There can be no industrial strategy for Canada that does not have a provincial component. Anyone who thinks otherwise is not a federalist. Mr. Fisher continued:
That is, the assertion of it by Ottawa alone, without the positive agreement of the provinces, is almost certain to doom it.
I can add an "amen" to Mr. Fisher's comment and say that decisions about whether any acquisition of control of a Canadian business or enterprise is or is likely to be of significant benefit to Canada must have an essential provincial element as the decision process goes forward. Otherwise, and surely the minister will agree, the purpose of the bill will be doomed to failure.
Canadians must have leadership from governments in enunciating to them a very clear exposition of national, industrial and economic policies. Here I am using the language of the bill. It is fine to have this type of language embodied in the bill, but if I heard his speech correctly, the minister admits that this type of enunciation of clear guidelines is a key element in the decision about whether or not a takeover is beneficial. We have to be assured that the decisions are taken on the basis of economic considerations and not on the basis of political considerations. I am sure this must be a major source of worry for the minister. There is so much discretion left with him that he will be under some pressure. I have already watched this with the Canada Development Corporation. People have all sorts of little catalogues of things that the CDC should take up.


Jean-Luc Pepin: You mean partisan. You do not mean political.


Robert Gordon Lee Fairweather: I mean partisan political. If the minister means by his question the socio-economic aspects of the company which have to do with the political life of the country in the wide general term, of course that is the consideration. I will add the word "partisan" if it makes my speech clearer. The minister should be free of partisan political considerations when the decisions are being made by virtue of this bill.
The foreign takeover review policy must be understood as being a trading policy. The involvement of the Minister of Industry, Trade and Commerce is made clear because it is a trading policy. The government, on behalf of Canadians, extracts a price for permitting the acquisition. The minister's language may differ a bit from mine, but he said the price will include such things as promises of jobs, technological improvement in the company, plant improvement, increased exports, more indigenous research and development and so on.
What if all these elements are present and then a few years hence the company trots in and says "Sorry, we have accomplished the takeover, but we are now about to close plant A and plant B." I suppose this would put the minister and his department into the area of forecasting which is perhaps better left to those of us who try to doubleguess the Prime Minister (Mr. Trudeau) about when he will be prepared to face the country in an election. The minister may be as good a forecaster as I, or perhaps even a bit better.

May 29, 1972
Foreign Takeovers Review Act
The Prime Minister said the government will use moral suasion in this aspect. I am anxiously waiting for another speaker from the government to delineate for me the Prime Minister's meaning of moral suasion. I think mortal man has many suasions morally, the Prime Minister none the less than the rest of us. It will certainly make most interesting jurisprudence if we see moral suasion as enunciated by the Prime Minister put into the body, so to speak, and made part of this whole takeover review board. This is an anxiety with which I will have to put up for a while. Surely, one of the spokesmen for the government will be telling us about the moral suasion which will form part of the government's policy. I hesitate to use the word nebulous, but in answer to a question of mine today, the Prime Minister said the point I was making was esoteric. I wonder if anything can be more esoteric than moral suasion. However, we will leave that consideration to other government spokesmen.
We will require a much more clearly defined and public set of guidelines because it will be our obligation, and I presume the bill is drafted in this form, when Parliament is debating at some future time whether or not a takeover comes within the ambit of this clause of the bill. This will be a public matter. In fact, there will have to be a great deal of publicity, not hurtful in the sense of income tax matters that are restricted by laws, but Parliament must not be caught in the bind that there will be "secret" stamped on some of the policy considerations that go into the decision about whether an enterprise is likely to be of significant benefit. This, of course, is a subject for another debate. However, we must, in considering this bill and the takeovers that will or will not be permitted under it, not get ourselves into the position of being hamstrung by the fact that a good deal of the information is marked "secret".
I want to discuss for a minute or two some of what I might call the worrisome aspects of the working out of the bill in its technical sense. I hope that when the bill reaches committee some of the procedures can be tested, if I can put it this way, against the philosophy behind the Canadian Bill of Rights. I suggest there are some incursions in the way the bill is now drafted. Presumably, the minister and the department, which it is obligated by law to do, has received the advice of the Minister of Justice (Mr. Lang) that the bill is in fact not contrary to the Canadian Bill of Rights. This brings me to another point.
It is a pity that the Committee on Scrutiny has not yet got around to beginning its work. It might be very opportune to have the committee activated so that the regulations that flow from this act can be examined by that committee. There has been a great deal of fanfare about the committee on scrutiny. In a way, it is rather like this whole matter of foreign investment; heap big smoke but very little fire. I hope that smoke will be cleared away and that that committee can do some useful work in this and other aspects of the examination of regulations.
As I reminded the House, Section 3 of the Bill of Rights requires the Minister of Justice to examine the bill. I am running over this quite quickly. Presumably, the minister has done that and has seen that there is no inconsistency between that bill and this legislation. It should be noted that a condition precedent to the exercise of certain of

these investigative procedures is that the minister, upon an ex-parte application to a court, obtains an order authorizing their exercise. I suggest the superficiality of this requirement will have to be examined. Perhaps it would be easier to do so in committee, but the minister and the department, I feel, are entitled to some warning. Clause 14(1) empowers the minister, where he has reasonable grounds to believe that a non-eligible person or group is proposing to acquire, or has acquired, control of a Canadian business enterprise without having given due notice, and so on, to cause an investigation to be made in connection with the matter. Subclause (2) authorizes the minister to designate any person he sees fit to carry out these investigations.
I suggest, as an aside, though a relevant one, in relation to the conduct of an investigation affecting the rights of a private citizen, that the structure of the investigative process does not set standards and qualifications or provide, at least, for the acquisition of qualifications through experience. The minister may vary his decisions from order-in-council to order-in-council; the investigator may be changed at the whim of a minister or his successor. For this reason the proposal in the bill is more alarming than might otherwise appear, because if a straightforward proposition to establishing a tribunal had been made we would at least have known the names of those appointed as members. Other misgivings have been expressed about the structure of the review arrangements, but I shall not go into them at this point since the House has been generous to me in allowing me time in which to speak. My hon. friends may wish to discuss them later on in the debate.
I feel Bill C-201 in no way goes to the root of the problems created by direct foreign investment in Canada. This is not to say it is not a partial solution. I have not been persuaded by that part of the minister's speech wherein he dealt with arrangements for a minimum allotment of shares for Canadians. We should like to know a great deal more about this aspect. Then again, despite the minister's hesitancy when he spoke about the efficacy of Canadian directors, I believe it would be a good policy decision, if only from a symbolic aspect, to provide for some Canadian directors. Rules with regard to full disclosure on the part of foreign corporations should be rapidly implemented. Also, as I suggested earlier, we must take parallel initiatives internationally to develop a system of accountability applicable to multinational corporations. To be fair, the Minister of National Revenue (Mr. Gray) mentioned this parenthetically at the end of his statement on May 2.
I do not resist in any way, and neither does my leader, the notion that key sectors should be expanded, though I have not discussed this matter widely. It has been said, for instance, that publishing, or the distribution of books, might well be made responsive to a much greater degree of Canadian control.


Jean-Luc Pepin: You could get to it through the word "participation" in the bill.


Robert Gordon Lee Fairweather: The government keeps adding "participation" to concepts like democracy. Then, it avoids
May 29, 1972

both participation and democracy. I would feel safer with the straight word democracy. Perhaps the minister would like to see the essay that the Prime Minister wrote upon the subject. My dilemma is that I have no Ivan Head to collect my essays. Not yet, anyway. Had I an Ivan Head, we might begin writing a series of essays about the denigration of the word democracy and the dilemma the government has created by announcing a new concept of participatory democracy, and then avoiding both.


Jean-Luc Pepin: I read your essays.


Robert Gordon Lee Fairweather: Witness the airport at Pickering. There is a fine example of throwing out the phrase participatory democracy and then running back into the hangar.
As I had begun to say before the minister interrupted me, bargains will have to be extracted by the minister in connection with the use of Canadian services and supplies wherever possible. This is now being done, I understand, by tne government of Alberta. There has been some grumbling by the foreign corporations concerned, but the government succeeded in extracting certain promises in return for licensing Exploitation of the Alberta tar sands. This was a positive provincial initiative and it indicated an area in which a provincial government could be helpful to the minister as he establishes his jurisprudence.
A word in connection with the tribunals under the proposed competition act and the review process in that legislation. It is all very well to say that any differences can be reconciled in committee but it would help us in the committee and it would be useful in the remaining stages of this debate if we knew just how this minuet is to be carried on. Will it be done in the fashion of Arthur Murray, or will it be a Jean-Luc Pepin step? In any event a great deal more interpretation is called for, and I hope the information is given us before we get into committee. Otherwise, people may be required to go through both processes, and it is hard enough to go through one process at the present time when dealing with the government, let alone a double one.
Those are the principal points I have to make at this stage. It was flattering to see the minister making notes of them; I guess he cannot wait to get the "blues". In the light of all the shortcomings I have mentioned, and because the bill is such a weak approach to the whole field, I move, seconded by my hon. friend from Halifax-East Hants (Mr. McCleave) whom I have been able to persuade of the correctness of this approach:
That Bill C-201 be not now read a second time but that it be resolved that in the opinion of this House the government should consider introducing more comprehensive and more constructive measures which will increase Canadian participation in and control of the Canadian economy.


Mr. Deputy Speaker:: The hon. member for Fundy-Royal (Mr. Fairweather) has proposed what he described as a reasoned amendment. He and other members may be able to convince me otherwise, but with great respect I think it is not a reasoned amendment as we know it within the rules and precedents of the House. I might indicate to the hon. member that one of the requirements of a reasoned amendment is that it oppose the principle of the bill. The
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hon. member has indicated that he does not oppose the principle, but suggests that the government should introduce far more comprehensive and, as he described it, more constructive measures. I will hear argument if the hon. member would like to present it.


Robert Gordon Lee Fairweather: With great respect, Mr. Speaker, I might have been better off had I said nothing when introducing the amendment. This is a very important procedural point you have raised, Sir. When the rule changes were made two or three years ago, we changed the status of the second reading stage of a bill from one in which the House accepted the principle, to one in which a whole different series of considerations apply. Therefore, I respectfully suggest it is not out of order to propose an amendment which does not foreclose future action by any group within Parliament. This is the case because of the rule changes made in 1968. We should not be foreclosed, and cannot be foreclosed from this course of action because of the new setup which is inherent in the various stages a bill now goes through; that is discussion now, delineation in the committee, report and then third reading.


Mr. Deputy Speaker:: The hon. member for Fundy-Roy-al, in proposing a reasoned amendment, has referred to the rule changes. If the hon. member can give me authority or precedent to indicate that the rules in respect of reasoned amendments have been changed as a result of the rule changes I will be guided by that. However, it is my opinion that considerations as to the procedural acceptability in respect of reasoned amendments have not been changed by the rule changes. Many hon. members who are learned in procedural matters have argued that this is the case, but because hon. members argue that to be the case does not make it so. With respect, I feel there is no authority vested in the Chair to alter the established principles outlined by Beauchesne and other authorities who have guided us for some time. In my respectful opinion, the rule changes have not changed the considerations I must apply as to whether or not the Chair should accept a reasoned amendment. For that reason, and the reasons I mentioned earlier, I regretfully must come to the conclusion that this is not a reasoned amendment and, therefore, it cannot be put to the Chamber.


David Lewis: Mr. Speaker, I think it was clear to everyone who listened to the minister that he was engaged in a defensive speech, defending the bill and a policy he knew had very little meaning for Canada and for the future of this country. During his speech he put himself in the role of Tevyah in "Fiddler on the Roof". I should like to remind the minister that the first fiddler was Nero, and that is the role that fits the minister much better. It is a much more appropriate role for him in this case, because he is fiddling while Canadian independence is being continuously eroded. That is what this is all about, Mr. Speaker.
If I heard the minister correctly, he expressed the hope there would be unanimous support for the bill. I want to tell him now that there is not. This is a poor bill and a poor substitute for action to protect our country and its future, so we do not intend to support such a useless step as the minister has proposed.

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The minister said there was opposition to the bill from members of this House. I think it is useful to put on record quotations from three editorials in newspapers which I do not think have the same political bent. In an editorial in the Windsor Star of May 3, 1972 we find this:
The government is guilty of misleading the people of Canada. It promised to bring forth a foreign ownership policy. It didn't bring forth a policy, it brought forth a pitiful joke.
I am sometimes accused of using strong language, but I do not think I could have used any stronger language than that used by the editor of that paper.
The Toronto Star of May 3, 1972 had this to say:
What the Trudeau government produced yesterday, after two years of huffing and puffing, is only a pitiful embryo of a Canadian policy on foreign ownership. The mountain that laboured to bring forth a mouse did a noble day's work by comparison.
To call this a policy on foreign ownership is an insult to the intelligence of Canadians. This is no more than a feeble, timid gesture that will bitterly disappoint many Canadians who cherish their country's independence-
The Edmonton Journal of the same date stated:
But what itsy-bitsy legislation it really is! Why it took Ottawa all these months to come up with a mere 14-page bill is a puzzle. The mountain has clearly laboured and brought forth a mouse.
This has been the reaction of everyone concerned about Canada's independence and the future of our country. As far as my colleagues and I are concerned in this debate, it is not the details of the bill or its inadequacies for the purpose for which it is produced that bother us. The real issue facing this Parliament, as it faces all the people of this country, is the preservation of the Canadian identity, the ability of Canadians to choose their own goals and to plan their own distinctive future and society. What is at stake, and this is merely a small part of the whole problem, is the very future of this country, the jobs of Canadians in years to come, the question as to who will make priorities for investment in Canada, and the question as to who will decide the direction of Canada's economy in coming years, based on our experience that decisions in a large sector of our economy have in the past been made by multinational corporations, by boards of directors and by management outside this country.
The hon. member for Fundy-Royal (Mr. Fairweather) spoke of multinational corporations. The important thing for us in Canada to realize is that the global interests of multinational corporations make Canada's interest secondary. When the interests of a corporation conflict with the interests of the Canadian people, there is simply no doubt about what the decision of the corporation will be. It is the interest of the multinational corporation that will take precedence.
I remind hon. members of this House, because I feel so deeply about this matter, that this issue of Canada's independence is older than Canada itself. History has taught us that confederation itself was the result of the collective desire of people in this part of North America to be independent of the expanding republic at the southern border. That is the purpose for which Canada was created, and that is the purpose which successive governments of this country and successive business corporation leaders in Canada have, in my view, eroded. That is why I believe this bill must be opposed. Our history as a country

has been marked by repeated efforts to resist absorption by the United States.
When those of us who urge self-reliance for Canada, a greater independence for this country, do that we are often accused of being anti-American. I want to make clear again, as I have on many occasions, that I do not blame the United States at all. I reject some in my party, not in this caucus, who accuse the United States of doing all sorts of things to Canada. One of the phrases they use is that the United States has raped Canada. I am lawyer enough to know that you cannot have rape when there is invitation and consent. The fact is that successive Canadian governments and successive Canadian business leaders have invited the United States corporations to come in and exploit our resources, have invited them to set up branch plants in this country and have deliberately sold a large part of our economy to the multinational corporations even before they became as powerful as they are now. I suggest this is not being anti-American. This is merely recognizing the fact that at this stage in our nation's history we have reached another one of those historical moments when action is required to stem the tide of United States domination. I say this requires immediate action which starts now, for none of these things can be accomplished overnight.
This process will take years. At some point, under an imaginative federal government, a comprehensive beginning must be made. The time is rather too late than too early. The New Democratic Party has therefore repeatedly expressed its determination that Canadians regain control of their economy. Later in my remarks I shall propose at least some steps which should be taken now. What really depresses me is that the minister said in his speech,-as I am sure all members of the Liberal party know-and has admitted it is so, that a majority of Canadians want greater independence for the economy. Then, the minister, and I hope he will forgive me, ended up with a pitful defence of nothing. There is a desire on the part of the Canadian people for greater economic independence. The Liberal party admits that people want this but chooses to do not much, if anything, about it. The government and its predecessor, also a Liberal government, have had two task forces. There has also been a parliamentary committee. Very definite recommendations were made but almost all the recommendations have been ignored and swept under the rug.
The government set up a task force through a member of its cabinet to produce a policy. The policy, when it reached the floor of Parliament, did not even scratch the surface of the Gray report let alone the issue of foreign control of our economy. I remind, you, Mr. Speaker, that the Gray report set out five channels of foreign penetration of our economy. This bill deals with only one of these, takeovers of existing Canadian firms. It deals with this one of the five, the least important which covers the smallest part of the foreign capital investment in this country. The minister stated that it represents 5 to 20 per cent, of foreign investment, but in most years it is closer to 5 per cent than to 20 per cent. That is the only part of the problem with which this bill and the government deal.
May 29, 1972

I want to say that from the statement the Minister of National Revenue (Mr. Gray) made on May 2 and from the statement the Minister of Industry, Trade and Commerce (Mr. Pepin) made this afternoon, it is clear that it is not the intention of the government to stop or even limit foreign takeovers. The intention is merely to give the minister and his department or whoever else deals with big corporations an opportunity to bargain for what the minister calls a better deal of significant benefit for Canada.
I am not prepared to buy this sham. I say to the minister that what he is saying is utter and complete nonsense. There is absolutely no guarantee that a deal he is able to negotiate today in respect of a takeover would be honoured a year, two years or three years from today. What would the minister do then? Would he unscramble the takeover that has already existed? This idea of negotiating for a deal is a phoney attempt to try to justify a bill which does nothing in respect of foreign ownership because there is no way in which the minister and his department or any agency of the minister or of his department can get a guarantee for the future of Canada's economy in any deal he makes. If circumstances were such that after a year or two the plant closed down, Canada would be in the soup under this bill because the minister would not be able to do anything about it. Even at this point the government has fallen down on the job by its failure to provide for the period between introduction of the bill at the beginning of this month and its proclamation. It has given its corporate friends a breather in which they can make their takeover bids quickly without any review.
I do not know whether or not such a thing has happened, but the bill will not come into effect until proclaimed by the government and what will happen remains to be seen. I ask, what about the other areas in which the Minister of National Revenue's report said that legislation might require registration with the review agency? What of direct investment in new companies by foreign owners? What of new licensing and franchising arrangements? What of major new investments by existing foreign-con-trolled corporations in Canada? These are the important areas of possible further encroachment on Canada's economic independence. The takeovers the minister's bill deals with are picayune compared to the total problem the Gray report brings to Parliament and the people of Canada. What about these areas? The fact is that the government, like all its continentalist predecessors, is turning a blind eye on the really important parts of the problem, which threatens Canada's future. Limiting its legislation to takeovers is like hunting big game with a popgun. It will not work here any more than in the actual situation.
The Prime Minister (Mr. Trudeau) has openly admitted the inadequacy of this measure. Confronted by the outcry of commentators and the public, he blithely tossed the problem to the provinces and said: Let them fill in the gaps. As are other Canadians, I am shaken by the Prime Minister's abdication of a clear federal responsibility. I say that one of the fundamental and essential duties of a central government in a federation like ours is to safeguard the integrity of the nation, of the state. The Prime Minister surely would not suggest that the military defence of Canada is anything but a federal responsibili-
Foreign Takeovers Review Act
ty. I say, on behalf of the New Democratic Party that the economic defence of Canada is equally a federal duty and a federal responsibility . I say to you, Sir, that economic conquest is as destructive of a nation's identity as is military conquest, even if it is a great deal less painful.
I cannot help but note that the statement of the Prime Minister is a long way from what he wrote in Cite Libre about foreign ownership in the days of 1958 when he said:
Shall we suffer passively our situation of economic domination? ... It could be better to be annexed outright by the United States than be exploited without limits.
That is what Pierre Elliott Trudeau wrote.


Mr. Francis:: He still believes in it.


David Lewis: A Liberal member says he still believes it. He may have some secret knowledge of what the Prime Minister believes. All I know is that the policy for which the Prime Minister is responsible is a betrayal of the words he wrote in 1958. But I am not speaking today for the purpose of underlining the mutations of the Prime Minister since he tasted power. My purpose rather is to point out how this government, after years of research, after two task forces and a parliamentary committee, has dashed the hopes of Canadians. It is also to express again the determination of my party, the New Democratic Party-a determination which, I am convinced, is shared by millions of Canadians inside and outside our party-that control of the economy must be returned to Canada and that the steps in this direction must be begun now.
It is therefore my intention to suggest a number of steps that we want taken immediately. One of the first steps we have urged on this government for some time has been illustrated in the last few days by the government of the province of Ontario which accepted the Prime Minister's challenge to the provinces to act, much to my surprise, I must confess, and only, from what I have seen, under prodding by members of the NDP in the provincial legislature, when it announced discontinuation of forgivable loans to foreign corporations. In any case, just last week the Ontario government admitted that there was no way of showing that its so-called forgivable loans, that is grants which are given in another name but which smell just as sweet to the corporations, influence the location of industry. As a result, the government of Ontario has suspended these forgivable loans to foreign-owned corporations. I ask you, sir, to contrast this with the situation in the federal arena. Each year and for the future, so far as the policy of the government is concerned, the federal government continues to hand out many millions of dollars to foreign-owned corporations.
Permit me, Sir, to put a few relevant figures on the record. In recent years, 39 per cent of all grants under the Industrial Research and Development Incentives Act, referred to as IRDIA, has gone to foreign owned corporations. In the case of the Program for the Advancement of Industrial Technology, known as PAIT, it has been 45 per cent. Under the Defence Industry Productivity Program, known as DIP, it has been a staggering 86 per cent. A fifth of all shipbuilding subsidies and half or more of all DREE grants have gone to foreign-owned corporations. We have
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May 29, 1972
Foreign Takeovers Review Act not only invited foreign capital to come in and take us over but by deliberate policy and deliberate laws, we continue to give them the wherewithal to continue their expansion of ownership and control of Canada's economy.
To sum up, in the last four years more than $200 million have been paid under these programs to foreign-owned corporations, and there are commitments for tens of millions of dollars more that have not yet been handed out. Remember that all of this is in addition to the hundreds of millions of dollars that the foreign-owned corporations that control our minerals and our energy resources receive in tax incentives and concessions, in depreciation and depletion allowances.
Let me say that so long as this policy is continued by this government or by a Conservative government-as I am sure it would be if the Conservatives came to power- all this talk about trying to protect Canada's independence, is, in my profound conviction, just words that mean nothing. We invite these publicly owned corporations to use public funds, the money of Canadian taxpayers, to go on expanding their control of the economy, and they take advantage of it now as they will in the future. I say as my first suggestion that the government must put an end to this give away to corporations controlled outside Canada and use the money in the creation of jobs in Canadian controlled enterprises, whether under public auspices or in private enterprise, or a combination of the public and private enterprise.
There are merchants of doom and gloom who claim that regaining control of our economy would lower our standard of living. Indeed, this is what the minister suggested in his speech today. He suggested it gently but obviously. I reject that proposition. I cannot accept it because I believe it is not true. I just cannot believe that a people like the Canadian people, who hacked this nation out of a rocky wilderness, are unable at this stage of this country's development to fend for themselves without the help of so much foreign capital, foreign managers, and foreign know how. Indeed, some of our most reputable economists have clearly shown that there is enough capital in Canada, there are enough savings in this country, for us to develop our industry and to buy back some of the important industries that are now in the hands of outsiders.
There is simply no evidence to suggest that we would lose jobs if we insisted on controlling our own economy. On the contrary, there is much evidence that foreign ownership of our economy costs Canadian jobs every year. For example, recently we were threatened with a shutdown of the Ford plant in Canada because Ford in the United States had not complied with American regulations. Please note that Ford did not break any Canadian rules, yet its Canadian plant could be shut down along with the American plants and for no other reason than that it is controlled from outside Canada.
Our economic dependence on the United States has also made us particularly vulnerable to DISC and other American protectionist measures. As Canadians, we should note that these protectionist American measures affect all trading nations and affect Canada as a trading nation, but where Canada is concerned it affects us much

more profoundly because DISC threatens our well-being not only through a reduction in trade but even more directly it threatens Canadian jobs. Branch plants of American controlled corporations will obviously be tempted and induced to reduce their operations in Canada and to concentrate their production in the United States under DISC. Our economic dependence on the United States therefore makes us doubly vulnerable, perhaps ten times more vulnerable to American protectionist policies than any other country that is concerned only with its trade to the United States and across the world.
If I had the time I could cite numerous other examples, particularly of shutdowns of branch plants in this country in the last few years that have cost Canadians thousands of jobs now and will in the future. This is the kind of thing that foreign ownership means in terms of the life of the people in the pulp mill in Bathurst that the hon. member for Fundy-Royal (Mr. Fairweather) mentioned or the people working under any other foreign-owned corporation in this country. The fact is that their destiny, their jobs and their future are not under Canadian control, not even under government control so long as the power of the foreign corporation remains.
I make a second suggestion as earnestly as I can, and that is that Canada's present foreign exchange reserves of almost $5 billion worth in both gold and U.S. currency lying idle in the vaults of the Bank of Canada should be used to begin the job of repatriating our economy, buying into some key industries in the resource sector and in other sectors that will have a key role in our future development. This is what we ought to use our foreign exchange reserves for now. I urge the government to take such a step immediately in order to plug the gaping holes it has left in its foreign ownership policy.
Third, I urge that the government should strive to force the interest rates in Canada down to half a point, or perhaps a full point below those in the United States. So long as we play the game that the government and the Bank of Canada have played for years of deliberately keeping our interest rates above the level of those in the United States, then so long are we inviting and inducing foreign capital to invade our country. I repeat that my third suggestion is that we bring interest rates down below the American levels. This would not only slow down the inflow of foreign capital but it would have significant social consequences in Canada. It would make domestic capital far more easily available for housing and for all the other needs of the Canadian people. It would also work to reduce the foreign exchange value of the Canadian dollar, thus helping Canadian exports in international markets and creating more jobs in our export industries. This is another way in which we should attack the problem of foreign ownership.
Fourth I urge, as we have suggested for a long time, that the tax and other concessions granted to the oil and mining industries, which are overwhelmingly foreign owned, should be withdrawn both in order to stop this concentration in foreign hands of our resource industries, which are capital intensive and do not create sufficient jobs in this country, and in order to make our tax system a great deal more equitable. I know that there are some
May 29, 1972

hon. members on both sides of the House who will disagree with these suggestions, but I make them without qualification because I believe they point the road along which, so far as we can see, this country ought now to travel.
My fifth suggestion is that the government should levy export taxes on all raw materials and energy resources that leave the country. These vital resources are often exported to the United States and other foreign markets at below world prices. Export taxes would curb the inflow of foreign capital to our resource industries, making it possible for us to divert investment capital in more socially useful directions, and at the same time would increase activity in the processing sector and open up opportunities for thousands of new Canadian jobs.
Sixth, Mr. Speaker, I urge that the government should also join the provinces in establishing standards of resource planning and development, including requirements for processing raw materials in Canada.
My seventh suggestion is repeating what I said, if I remember correctly, on May 2, that this control or screening agency must have real power to limit the further expansion of foreign ownership and control in all its forms in all the fields set out in the Gray report. It must at least have the power to obtain all relevant information, to investigate particular industries and practices, and to limit the establishment of new companies by foreign owners and the expansion of ones already controlled outside Canada, as well as the taking over of existing enterprises. Without these powers in all these directions it would be, as it is a toothless exercise.


Jean-Luc Pepin: Do I understand the screening as defined by the hon. member, would have the objective of preventing, of limiting? If so, when would foreign investments be allowed through the screening process that the hon. member has in mind?


David Lewis: Mr. Speaker, my short answer to the minister's question is that, so far as we are concerned, it would be allowed where it is clear that there is not Canadian investment capital to do the job. It would not be based on any negotiating of a deal for certain advantages which cannot possibly be guaranteed over the years. It would be allowed only if there is not Canadian investment capital to do the job, and it does not matter whether Canadian investment capital is invested through public enterprise, through private enterprise, or through a combination of both.


Jean-Luc Pepin: Does it matter-


David Lewis: I cannot hear the minister.


Jean-Luc Pepin: As the hon. member said there was plenty of money lying around in Canada, then obviously it would be a very exceptional case when foreign investments would be allowed. It would be most exceptional, in fact an accident, if I can judge from what is said.


David Lewis: Mr. Speaker, I do not quite get the thrust of the minister's question. I say to him that we believe it ought to be the government's objective to limit foreign investment in all spheres.
Foreign Takeovers Review Act
I am not suggesting that there should be a 100 per cent prohibition because that is silly, since there may be areas where it would be useful. But it should be the government's intention in law and in policy to limit foreign investment, and to limit the expansion of foreign-con-trolled corporations already in Canada. Actually, the minister's question takes me to my next point, which appeared in my notes earlier, but I delayed dealing with it until now.


Otto Emil Lang: Mr. Speaker, I wonder if I could ask the hon. member a question before he gets to his next point.


Mr. Deputy Speaker:: Is the Minister of Justice rising to ask a question?


Otto Emil Lang: Yes.


Mr. Deputy Speaker:: Hon. members may, of course, ask questions if the hon. member for York South wishes to respond to them, but I would hope this would not be too often. The hon. member for York South has that option.


David Lewis: Certainly, I will accept the question, Mr. Speaker. I am, as you know, a very courteous member.


Otto Emil Lang: I thank you. I appreciate that courtesy from the hon. member. Referring to the hon. member's suggestion regarding the imposition of export taxes, would he not agree that export taxes on such items as potash, oil and gas might limit the power of the provinces to exact certain amounts of revenue from these resources? And going to a fairly different field, in respect to the hon. member's suggestion of trying to encourage processing, would this mean imposing a tax on the export, of wheat in order to encourage its processing into flour in Canada?


David Lewis: Mr. Speaker, if the minister had stopped with the first question he asked I might have been tempted to answer politely, but his second question destroys that temptation. He knows perfectly well that no one in this House or in Canada would suggest that. This is the kind of partisan and rather cheap barb that I cannot take the time to answer just now.


Some hon. Members:: Hear, hear!


Otto Emil Lang: So, you ignore the first part.


David Lewis: Mr. Speaker, out in Saskatchewan I have had the pleasure of telling the people what this minister has done for agriculture, this Minister of Justice who undoubtedly was given the title of that portfolio because the injustice of his agricultural policies was so evident. I will deal at the appropriate time with what he has done to western agriculture, but I do not propose to take the time now to answer that kind of cheapness.


Otto Emil Lang: I thought it was relevant.


David Lewis: There is, of course, a real problem in Canada so far as the provinces are concerned. The Prime Minister, other ministers, and members of the official opposition keep on referring to the fact that the provinces want development and some of them, or all of them therefore, object to any limitation of foreign investment. I do not
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blame them under the present circumstances, Mr. Speaker. That is why the New Democratic Party, ever since it was founded in 1961, has emphasized the need for an agency in Canada that would give alternative sources of investment to the provinces and to industry in this country. That is why in 1961 we proposed the Canada Development Fund, which has since been appropriated by the government as the Canada Development Corporation and, having appropriated it, destroyed the idea in the CDC that it has set up.
It was precisely our knowledge that if you are going to limit investment from outside you must provide an alternate source of investment that made us suggest-and the idea has been torn to shreds by the Liberals as usually happens to our ideas-a Canada development fund or Canada Development Corporation that would not be the toothless thing we have now. When I want to ask a question about it, I must first ponder which minister should answer because this is not a Crown corporation but an independent company which is now spending all its time buying up corporations such as the Connaught Laboratories in Toronto. In this case we now find that instead of a Canadian agency distributing a certain drug for a certain animal disease, the Canada Development Corporation uses an American controlled distribution agency. That is the kind of thing that the CDC is doing now. If it had been formed according to our suggestions, which would by law require a certain percentage of the reserves of all corporations in Canada to be invested at a certain return in the Canada Development Corporation as well as having individuals in Canada invest in it and thus had billions of dollars at its disposal, it would then be possible to tell the provinces that they should not go to foreign markets for investment capital. We would have Canadian funds available for the development of the resources and the economy of the provinces. In this case, the provinces would not object to limitations placed on foreign investment because there would be an alternative source.
The Canada Development Corporation must be revamped to meet this need. It must have a mandate both to invest in new industrial development and to buy into existing multinational corporations. It must have the authority and duty to expand the public sector of the economy, either through Crown corporations or through consortium arrangements with private concerns. One thing is sure, a publicly owned enterprise in Canada will remain Canadian; it will not be sold as privately owned corporations frequently are.
The CDC should engage in heavy research and development spending independently or in partnership with private corporations. I underline that we are not being doctrinaire about this in the slightest. It does not matter whether it is a public enterprise, a private enterprise or a combination of both, as long as the doctrinaire private enterprisers do not stop the expansion of the public sector in Canada in areas where private enterprise simply will not go or to which they will not go without hundreds of thousands or millions of dollars in grants when this money could be used to develop Canada instead of to increase the profits of foreign-owned corporations. One of the principal objectives of the CDC must be to encourage

new initiatives and develop Canadian technology so that our dependence on multinational corporations for knowhow is reduced.
Finally, Mr. Speaker, I suggest that all of our economic conversations here will have relatively limited use unless we have the imagination and courage to introduce a program of rationalization and specialization in Canadian manufacturing. Our branch plant situation, as a result of foreign ownership, has meant that an unplanned, unbalanced and unspecialized number of branch plants of foreign corporations meet in the international market. Our aim should be to meet more of our domestic demand, thus relying less on imports, and to change our trading pattern away from a single predominant market in the United States.
Mr. Speaker, I am about to conclude but I should like to say that we also need a government export agency to ensure that all corporations in Canada promote trade in accordance with Canadian laws and policies and that they do not submit to foreign laws and policies.
Finally, on the question of plant shutdowns of branch plants of foreign corporations, Mr. Speaker, on behalf of my party I demand full disclosure of all the facts before this is allowed by either the federal or a provincial government. In this way, the appropriate government could take the necessary steps to avoid the loss of jobs. This would include taking over plants threatened with shutdown when their operations are economically sound and socially useful. Mr. Speaker, it has been my-


Mr. Deputy Speaker:: Order, please. The hon. member indicated that he was finishing, and I have given him an extra minute, but his time is now up. Hon. members may wish to extend his time but I must bring this to their attention. Is there consent for the hon. member to continue?


Some hon. Members:: Agreed.


David Lewis: Mr. Speaker, I am afraid this is a bit anticlimatic because I was merely going to do a short peroration-


Robert Jardine McCleave: Perorate away!


David Lewis: I just want to say through you, Sir, to members of Parliament and the people of this country that as I travel across Canada I get the impression that, perhaps more than any country in the world, Canada can realistically reach for greatness. I never travel across this country but I am impressed by the wealth with which we have been endowed, by the very great beauty in all parts and by the devotion and commitment of all of Canada's people. We have the resources, we have the skills to build in Canada a really humane society, a really compassionate society from which poverty is eliminated and from which inequality is withdrawn in which all Canadians have a sense of being, a sense of self-respect and dignity in their old age as well as throughout their lives. This is the kind of country we have, and I resent with all my heart that we have been so short sighted and so anxious to make a fast buck as to sell our great wealth out to organizations that do not have the interest of Canada at heart and to put a large part of our economy in the hands of
May 29, 1972

corporations that have so many worldwide interests that the objectives and priorities of Canadians mean very little to them. I think we are less than we ought to be in failing to take steps to regain control of our own social and economic destiny in view of the greatness which Canada can achieve if governments had the courage and the imagination to let Canadians do the job.


Some hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: 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 Hillsborough (Mr. Macquarrie)- External Affairs-Bangladesh-Establishment of Facilities in Dacca for Canadian Plenipotentiary; the hon. member for Dartmouth-Halifax East (Mr. Forrestall)- Pensions-Alleged threat of loss of allowances of blind persons working on LIP projects.
It being five o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions and public bills.



PRIVATE MEMBER'S MOTIONS


Robert Jardine McCleave: That, in the opinion of this House, the government should consider the advisability of declaring as rapidly as feasible a 90-10 formula of cost-sharing with the Atlantic provinces, of the highways program formerly carried on with those provinces by the Atlantic Development Board, and of joining with Nova Scotia and New Brunswick in the Fundy Trail project, and of joining with Nova Scotia in building a crossing across the Shubenacadie River.
He said: The resolution that I have presented for debate today is similar to one that was debated approximately 14 months ago. However, because it deals with an important matter, the development of Atlantic transportation, I do not hesitate to bring it forward again and, until the objectives of the motion are attained, I will be inclined to bring this matter forward on future occasions.
The most important thing that I can do as a federal representative for the East Hants part of my constituency is obtain some form of crossing, either causeway or bridge, across the Shubenacadie River. I shall devote most of my speech to giving reasons for my support of a Shubenacadie River crossing. I understand that other
Foreign Takeovers Review Act hon. members have dealt with or will deal with the missing links of the Fundy Trail in New Brunswick.
The Shubenacadie River crossing is a dream entertained for more than 40 years by a group of citizens. A committee is actively promoting this idea, its chairman being one G. McLellan who lives in East Hants. The crossing concept is supported by the maritime provinces Chamber of Commerce, the municipalities of East Hants, West Hants and Colchester, the towns of Truro and Ste-wiacke, the Tourist Council of Central Nova Scotia, the Annapolis Valley affiliated boards of trade, the Truro Industrial Commission, the Fundy Vacation Trail committee of Nova Scotia and New Brunswick. It is supported by the Nova Scotia Federation of Agriculture, as well as by other bodies. This idea finds general political support in the area. Perhaps of more appeal to the government is the support given by the East Hants Liberal Association.
The crossing may be either a causeway or bridge. The causeway has some advantages in that it would create a vast inland lake which could be used for recreational purposes and provide a water supply for several important towns. The disadvantages of the causeway would be the effect that it, would have on wildlife. After I made my speech in the House on this subject some 14 months ago, I received half a dozen letters from various wildlife groups who said that the causeway would play hob with wildlife along the Shubenacadie River. On the other hand, building the causeway would enable land to be reclaimed for agriculture. So, those two factors must be weighed. I am not particularly taking sides on this issue at present. I am merely arguing in support of a crossing.
There are several advantages to a Shubenacadie River crossing. First, the crossing would fill in one of several unfinished links in the Fundy vacation trail. The Fundy vacation trail would be a natural railway for tourists, most of whom, as we say in the Maritimes, come from the Boston States. They enter southern New Brunswick and travel to Digby or Yarmouth in Nova Scotia, most of their trip being within sight of the Bay of Fundy. Second, truck traffic into and out of the Annapolis Valley, which is increasing, would have a shorter route in that it could cut across that part of northern Nova Scotia by Truro, and go up to New Brunswick, if that were desired. Third, there would be important advantages for agriculture, both in East Hants and in the Annapolis Valley.
Some day, Sir, Fundy tidal power will be developed, and the Shubenacadie River crossing will enable tremendous savings to be made in the transportation of materials used in the development of Fundy tidal dams. So, there will be savings of millions of dollars in transportation alone for that massive development, if and when it comes about.
I have just given the fourth reason. Fifth, personal amenities would be increased. The crossing would increase the ability of the young people of East Hants to travel to and from schools at Truro and go home for the evening without needing to travel 30 or 40 additional miles, as at present, in order to obtain their education. Shoppers would derive the same advantage, and a more adequate provision of health services would be an additional, important factor to be considered.

May 29, 1972
Maritime Highways
In the submission made some years ago, the then chairman of the Shubenacadie River crossing committee, G. H. MacDuffie, made this point:
In this same area there is one of the highest infant mortality rates in Nova Scotia chiefly because more easily accessible medical and hospital services are not available.
The proposed crossing would put these people 30 miles or more or a good part of an hour, closer to the medical, dental, clinical, ambulance and hospital services which now make a 60-mile round trip.
Mr. MacDuffie and others made that submission to the Nova Scotia cabinet. I ought to say that the natural capital of East Hants really is not Halifax but, rather, the town of Truro.
The sixth point in favour of the Shubenacadie River crossing is that great savings would be realized in transportation. The Margeson Study of 1964 indicated savings over a 20-year period of 24.25 million travelled miles and 546,000 man or woman hours. Putting it another way, if you allowed 10 cents per mile for driving, which is a low figure in today's circumstances, the savings would be greater than $3 million. Those figures, of course, are out of date; if brought up to date, the savings would be considerably larger than those I have mentioned.
When the Standing Committee on Transport and Communications visited Nova Scotia some years ago and studied Atlantic transport needs, I arranged for the Shubenacadie River crossing committee to ask Mr. MacDuffie to make an appearance before my colleagues on that committee. The committee met with representatives of the Shubenacadie River committee. Subsequently, when the committee wrote its report for the House of Commons, it said as follows:
It is further recommended that the government should consider the advisability of instituting a five-year program of federal assistance to highways in the Atlantic provinces, $30 million to be the maximum federal contribution in any one year. This program should be financed on a 90-10 basis.
That is the formula I set out in my notice of motion. I continue:
The provinces would be required to submit plans for a defined network of all-weather highways, chosen for their effect on competition among transportation modes in the Atlantic provinces, and for their contribution toward the economic development of the Atlantic provinces.
That part of the report of the Standing Committee on Transport and Communication, drawn up on June 17, 1969, is found at page 39 of issue No. 28 of the proceedings of the committee for that year.
It may also be interesting to put on record part of the document drawn up by Atlantic premiers in March, 1969, dealing with the basic elements of the Atlantic provinces transportation policy. Three new premiers have taken the places of those three who helped to draw up this report. As I understand it, Atlantic transportation is generally dealt with by the Maritimes Transport Commission, in Moncton. Furthermore, the views that were then expressed would undoubtedly be the views of the present governments of the four Atlantic provinces.
After saying there should be a detailed assessment of the network needs of the individual provinces, the premiers proposed, as shown at pages 17 and 18 of The Basic

Elements of an Atlantic Provinces Transportation Policy of March, 1969, that:
The length of this program should be ten years with the first five years fixed and the balance renegotiated and reconsidered prior to the conclusion of the first five years. The federal share of total costs, including acquisition of right of way, should be 90 per cent for the first five years. Prior to the end of ten years, a further program should be negotiated, if needed.
That is found at pages 17 and 18 of the report to which I have referred. There is no doubt that the federal government has made substantial payments toward Atlantic transportation. This was first done through the Atlantic Development Board and, laterally, through special agreements with the different provinces. As the Minister of Transport (Mr. Jamieson) said in the House of Commons on Tuesday, March 14 this year, and I quote:
At the peak of this program-
That is the road construction program in the Atlantic provinces.
-this support was at the level of about $571 million a year.-
Last year new agreements were negotiated with New Brunswick, Nova Scotia and Newfoundland totalling $60 million. Over the past seven years, therefore, federal support for Atlantic Province Highways has averaged about $45 million a year, or over the period some $315 million, with many projects being funded entirely by the federal government.
I do not quarrel with the amounts that have been spent on what I think are very basic, essential services for my part of Atlantic Canada. What I suggest is that it be on a formula basis so that the provinces will know that it will be done on a 90/10 basis and they can then proceed to develop their plans on a somewhat different basis from the one now used.
In pursuing the goal of the Shubenacadie River crossing, I have considered the alternative methods by which it could be achieved. At one time I thought that the Department of Regional Economic Expansion could play a role in helping to provide the crossing, but I gather that the department is now concentrating its efforts on growth centres. Therefore, it seems that this role might be minimal and the important role will be shared between the province of Nova Scotia and the federal Department of Transport. This is the way I have developed my strategy in trying to do the best I can to keep this matter in the limelight and to ensure that eventually the federal and provincial governments have a serious discussion about providing that link across the Shubenacadie River.
Before the Department of Regional Economic Expansion concentrated on growth centres and while the Atlantic Development Board was still alive and well, I had a discussion with some of its economists about the formula that might be applied to justify a Shubenacadie River crossing. The board then used a 7 per cent economic funding of a project such as the river crossing. It estimated that the benefit figure should be between $280,000 and $350,000 per year. They looked at the Margeson report, which I mentioned earlier, that dealt with the transportation benefits. They felt that the economic benefit of the Margeson report would have been somewhere around $117,000 a year. They estimated that the agricultural marketing benefit would be around $24,000 a year.
May 29, 1972

These figures, particularly the second, seem to be ridiculously low. However, I quarrel with them because in the fluxion of time those figures should be substantially increased. In any event, that is the reason the Shubenaca-die River crossing has been considered to be a marginal matter and why there is no crossing over the Shubenaca-die in the Maitland area.
In concluding my argument on this point, I would like to say that I do not care much for the figures involved or for the economic considerations that can be set down on paper in black and white. I have a hunch. The reason is that at one time East Hants was one of the great parts, not only of Nova Scotia, but of North America. The shores of the Shubenacadie River rang with the hammers of those building some of the greatest ships of all time. In fact, the largest four masted vessel, the W. D. Lawrence, was built in the Maitland yard. If you go to that area today, where the largest of all vessels of this type was built, you will find a peaceful meadow by the side of the Shubenacadie River. I believe in historical ups and downs of areas. They can have their periods of difficulties and then come back.
I suggest, and this is going to be a large part of any political arguments I ever make for the rest of my time in politics, by building a Shubenacadie River crossing, both the provincial and federal governments would not only be doing a vast service to that particular part of my constituency, but they would get a return many times over. Anyone who would go there and look at the prosperity which would flow from this project would feel they had taken a wise and statesman-like step.


Mr. C. Terrence Murphy (Sault Ste. Marie):: Mr. Speaker, I wish to congratulate the hon. member for Halifax-East Hants (Mr. McCleave) upon the argument he has put forward for a crossing over the Shubenacadie River. It was an impressive argument indeed. If it is followed and accepted, hopefully the people of that area will know after whom to name that crossing. The hon. member cited a number of groups which support this concept. Although I was listening closely, I did not hear him mention the involvement of the provincial government. There is no doubt that that government supports it to some degree, but I would like to know what type of priority it attaches to that particular crossing. It seems to me that a bridge of this nature within a province is something which should be dealt with primarily, at least at the outset, by the provincial government involved. The initiative should come from the provincial government.
It is my understanding that there is an ongoing shared-cost program between the Department of Regional Economic Expansion and the Atlantic provinces, and that that program was negotiated with all of the Atlantic provinces. I understand it concerns itself specifically with highways and bridges. It is also my understanding that up until this time at least, none of the provincial authorities who are parties to this agreement have asked for either of the proposals which have been put forward by the hon. member. The hon. member may think it strange for a member from northern Ontario to become involved in a debate on a crossing of the Shubenacadie River, a debate which he suggests is on cost-shared programs between the federal government and the Atlantic provinces.
Maritime Highways
One of the reasons I entered this debate was to draw to the attention of the hon. member and the House the fact that it is not only in the Atlantic provinces that problems exist with regard to highways, bridges and so on. Very specifically, if the federal government is getting into this field, I would like it to take a look at Highway 17 as it wanders from Ottawa, through Sudbury and on to Sault Ste. Marie, which happens to be my constituency. I do not suggest that members of the government drive that route because the dangers are so great that it might well be these officials might never return to their work in Ottawa.
Just before the last Apollo moon shot, the Americans thought fit to send their astronauts into the Sudbury area to look at the landscape, which is supposed to be something like that on the moon, and to study the rocks and craters in that area. Even now, they are sending more of their astronauts there for the same purpose. There is no doubt in my mind that when these astronauts reach the area they will have no need to go into the districts surrounding Sudbury; all they will need to do will be to drive on the stretch of highway between Sudbury and Sault Ste. Marie, where they will find craters the like of which they will never see on the moon. No one would dare take that route in a small car because he would get the impression, after descending into some of these craters, that he was driving in the Grand Canyon.
There is a bridge connecting Sault Ste. Marie, Ontario with Sault Ste. Marie, Michigan and during the summer tens of thousands, if not hundreds of thousands of tourists use this bridge to drive across into Canada. If they turn left after crossing the bridge, and go west, there is a good highway to Thunder Bay. But if they decide to run left to take a look at eastern Canada, and travel over that part of highway 17 to which I referred earlier, their next thought is to get out of Canada as quickly as possible. Canadians who are attempting to cross Canada using Highway 17, which is the trans-Canada highway, flee into the United States as soon as they hit Sault Ste. Marie and continue the rest of their journey using the United States highway system.
So, it is not only in the Atlantic provinces that there are areas in which the federal government should be more closely involved. The federal government should review its position with respect to roads and highways throughout Canada. It is time we formulated a national highway policy, defining exactly the nature and extent of federal involvement in the construction and maintenance of roads, highways and bridges such as those referred to by the hon. member for Halifax-East Hants (Mr. McCleave). All parts of Canada would benefit from a policy of this type. Each government would know exactly where it stood vis-a-vis the federal government. Each would know precisely what assistance it could expect. Hopefully, the federal government would become involved in such a way as to help develop a first rate road transportation system, one of which both Canadians and visitors could be proud as they travel from coast to coast across this country.


Mr. Thomas M. Bell (Saint lohn-Lancaster):: Mr. Speaker, I want to support the motion in the name of my friend, the hon. member for Halifax-East Hants (Mr. McCleave). I

May 29, 1972
Maritime Highways
have spoken on similar motions, and on this subject generally, on many occasions both inside and outside the House.
I do not find it strange that the hon. member for Sault Ste. Marie (Mr. Murphy) should take part in this debate. I think we are getting somewhere when members, other than those directly affected in the Maritimes, take part in the discussion of this subject. I subscribe to the thoughts contained in this motion. I am in favour of what my hon. friend has said in connection with the Shubenacadie crossing, and I agree with the formula he proposed in connection with the building of this route. I hasten to assure hon. members that we do not have any super highway in mind. This is merely to be a vacation trail in line with the modern trend to get out into the country, camping and moving slowly around the beautiful rocky coastline characteristic of the Bay of Fundy.
I presume this motion will be talked out, so there is no misgiving on that score, but there is a pertinent question I should like to ask of someone in the government. I should like to know what has happened to the report which was commissioned through the Atlantic Development Council. My information is that the federal Department of Public Works, through its offices at Frederiction and Halifax, agreed to carry out a study of this Fundy trail proposal and report to the Atlantic Development Council. It was expected that the report would be submitted in the fall of last year, but so far there has been no sign of it. I understand, through the grapevine, that the concept has been recommended as a good one and as a viable proposal. But that is all the information I have. This is one question which might be answered; the reply would give us an idea of the thinking of the government on this matter at the present time.
The hon. member for Sault Ste. Marie mentioned the position taken by the provincial governments. Well, the provincial governments concerned are interested in this project. I refer to the present and previous governments of both New Brunswick and Nova Scotia. It is a tremendous undertaking, in terms of money, for them. Nobody is trying to hold a gun to their heads in this regard. The New Brunswick section of this trail would go around the Bay of Fundy. Picture entering Canada at the United States border, at St. Stephen, and then taking the beautiful vacation trail completely around the Bay of Fundy down to the tip of Nova Scotia. This is a 500-mile trail we are talking about.
As I say, no one expects the provincial governments, regardless of their political complexion, to fork out $100 million. We want their support, and they have indicated their general approval. It is now a question of finding a means to proceed. Again, nobody is talking in terms of hundreds of millions of dollars for a new super highway. This proposal is not meant to take money away from the construction of other roads; we are hoping just to get approval of a start being made. The part in which I am most directly interested, the stretch of the Bay of Fundy from the Bay of Saint John up to the Fundy National Park, could be completed by using the device of increasing the park boundaries. The Fundy National Park is actually one of the smaller national parks. If the area along the coast were increased, the federal government

would become responsible for the roads in the enlarged area. The National Parks Commission evidently has an unlimited amount of money to spend on projects in park areas. By adopting a device of the kind I have mentioned, we could make funds available to complete at least one of the parts of this highway.
With all this in mind, I call upon the government, either today or on a later occasion, to let us know its thinking concerning the Fundy Bay vacation trail proposal, specifically in connection with my suggestion that the boundaries of the Fundy Park be enlarged in order that the federal government might become involved.
There is one other aspect I wish to mention. Despite the lack of interest on the part of the federal government, in spite of the fact we have been obliged to go slow, people are gradually making their way through this country and cutting out, as it were, a trail of their own along the lines of the old Shepody route which existed many years ago. This was the old highway that followed the coast from Halifax to Saint John. Campers and young, energetic Boy Scouts are cutting trails there now. In spite of lack of interest on the part of politicians and the fact we have not been able to produce any concrete plans, the highway is going ahead. This is a good sign for the future.
I support the motion put forward by my friend the hon. member for Halifax-East Hants (Mr. McCleave). I think his suggested 90-10 formula, which has been used in the past in respect of some roads in the Maritimes, is a good one. It should be followed for this type of highway project so as not to take away funds from other needed resource highways. In this way it would mean a great deal to the tourist industry. I hope someone will let me know what has happened to the survey undertaken by the Department of Public Works which was to be made available to the new Atlantic Development Council.
In closing, may I say that the Fundy vacation trail project has stirred the imagination of many minds for over 100 years. It is a great challenge for the provinces of New Brunswick and Nova Scotia. With tourism the big business it is now, this would be in the nature of a selfhelp program which would produce lucrative returns and certainly would be in the public interest. If it helped the tourist industry it would keep some of the promises made to these provinces at the time of confederation. It would be an impetus to employment throughout the Atlantic provinces. As I have done for nearly 20 years, I ask the support of hon. members for something that makes a great deal of sense to me.


Mr. Albert Bechard (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, at the outset of my remarks on the resolution moved by the hon. member for Halifax-East Hants (Mr. McCleave) which in brief, calls for 90 per cent participation from the federal government, I readily support him since the province where I live-especially the area where my constituency lies-has an urgent need of appropriate highways.
Considering the tremendous length of highways everywhere throughout the province of Quebec, on account of
May 29, 1972

Considering the tremendous length of highways everywhere throughout the province of Quebec, on account of the increasing needs in the field of transportation and the development of technology, the development of modern techniques in highway construction has become necessary.
It is obvious that provincial budgets cannot sustain the exhorbitant costs of highway construction. This is why it was with satisfaction that the provinces welcomed the federal Trans-Canada Highway project although our province-mine and yours, Mr. Speaker,-under the aegis of the then Union Nationale government and saddled for too long with duplessism, had refused to subscribe to the agreement for the construction of the Trans-Canada Highway until another Quebec government was fortunately elected which practiced autonomy otherwise than in name, which practiced "totonomy", the Liberal government of Mr. Lesage.


An hon. Member:: This is an old story.


Albert Béchard: Maybe, but it turned nevertheless to our advantage.
Since the agreement of the Trans-Canada Highway, technology has evolved and traffic has considerably increased.	[DOT]
The motion tabled by the hon. member for Halifax-East Hants (Mr. McCleave) refers however to a specific project involving federal financial assistance. As the mover of the motion and other hon. members have pointed out, it is not the first time that such a motion is placed before the House, since not later than last year, in February 1971, the same hon. member expressed an identical wish in a resolution which reproduces verbatim the one that is now before us.
I believe that this clearly shows, Mr. Speaker, how important the project is, not only for the hon. member who moved the motion, but especially for the people of his province and that part of Nova Scotia which he represents in the House. The rather hefty and compelling file which he disclosed on this question during the 1971 debate, clearly detailed the numerous representations he had made to several federal and provincial authorities.
The review, though cursory I admit, Mr. Speaker, I have made of the subject under debate, that is the Fundy Trail project and the construction of a bridge over the Shubenacadie River, has revealed to me the great importance of these two projects.
Mr. Speaker, however important this project may be, the hon. member will readily admit that provincial roads, including bridges, unless they connect two provinces, are exclusively under provincial jurisdiction. Therefore, the wish expressed by the hon. member for Halifax-East Hants in his resolution raises this question of the federal government's financial contribution to the building of highways.
As I said in my opening remarks, Mr. Speaker, I represent an area which badly lacks highways that meet the modern needs of 1972, and I completely agree with this principle of federal aid to highway construction. The agreement on the construction of the Trans-Canada highway having now expired, another tool is left to the prov-
Maritime Highways
inces for obtaining the federal government's financial participation, which is, the Department of Regional Economic Expansion, which, incidentally, is being strongly criticized by members from the Atlantic provinces, and especially from Newfoundland. Fortunately, some provinces benefit from the funds made available to them by the Department of Regional Economic Expansion for the development of certain areas, and not all of those regions are represented by members who are over-critical.
In the kind of agreements which exist, incidentally, with all provinces, including those mentioned by my hon. colleague, and particularly his own province of Nova Scotia, the priority and importance of projects is first established by the provinces themselves, which decide to have them included in the development agreement. Thus, the area of the lower St. Lawrence, the Gaspe peninsula and the Iles-de-la-Madeleine presently enjoys the benefits of the 1968 agreement for development of that area, an agreement which was negotiated again by the Ottawa and Quebec governments in September 1971.
As the project mentioned by the hon. member for Halifax-East Hants is very important and deals with a matter falling under the exclusive responsibility of the province of Nova Scotia, I suggest that provincial authorities might include the Fundy Trail project as well as the river Shubenacadie bridge project in the preparation of a possible agreement with the government of Canada under the ARDA legislation or in new negotiations. The hon. member will understand that problems of this kind are more familiar to local governments than to the government of Canada. This is why this area falls under the provincial jurisdiction only.
The hon. member was reminded, in 1971, during a debate on a similar resolution put forward by the hon. member for Northumberland-Miramichi (Mr. Smith) that no priority had been given to the 1969 brief, to which the hon. member, as well as the hon. member for Saint-Jean-Lancaster (Mr. Bell), referred a moment ago. In fact, in the premiers' brief presented to the Minister of Transport (Mr. Jamieson) by the four Atlantic provinces, no priority has been given to the Fundy Trail project, nor to the development of the river Shubenacadie bridge. And this brief, called "Transportation Modes-Highways", did not hold the attention of the last governments of Nova Scotia, which had, if I recall correctly, the same political affiliation as the hon. member who presents this motion today.
As a conclusion, I shall recall that the province of Nova Scotia has derived great benefits, as did other provinces, from federal-provincial agreements, for the development of highways; indeed, under the agreement concerning the development of the Trans-Canada Highway, this province has received $78,354,422. Mr. Speaker, we heard a great deal during certain election campaigns in the province of Nova Scotia, not of the federal contribution, but of the way this money could profit the provincial government which was under the leader of the official opposition (Mr. Stanfield) who is now a member of this House.
So, Mr. Speaker, I entirely support the resolution of the hon. member for Halifax-East Hants, but I ask him to use the normal procedure. As this comes under the jurisdiction of the province of Nova Scotia, this province would first have to submit its priorities to the Department of

May 29, 1972
Maritime Highways
Regional Economic Expansion, which could include it in an agreement between the two governments.


Mr. G. A. Percy Smith (Northumberland-Miramichi):: Mr. Speaker, it is a pleasure to take part in this debate on the motion introduced by the hon. member for Halifax-East Hants (Mr. McCleave) on February 23 this year. As has been said, a similar motion was introduced on a previous occasion by this hon. member. I congratulate him for his persistence in bringing this important subject to the attention of the House.
I shall be very brief because I spoke on this subject about 14 months ago and my remarks today will be somewhat in the same vein. The motion introduced by the hon. member contains two parts; one part relates to the Fundy trail and the other to a crossing of the Shubenacadie River by a bridge or, as he says, possibly a causeway that would link the two communities of South Maitland and Princeport. I have not yet heard any estimate of the cost of such a crossing. However, since bridges and highways normally are the responsibility of the provincial government, I am assuming the cost is very great and is beyond the financial ability of the province of Nova Scotia.
If this is the case-I do not wish to be facetious, because I could list other bridges in New Brunswick, in my constituency, and even in Nova Scotia which seriously require attention-the fact is that in our Atlantic provinces, where the population in most areas is sparse and where very extensive networks of highways and bridges are required, it is practically beyond the ability of the provinces to finance the necessary construction. It is a very important part of the effort to elevate or improve the economy of the Atlantic provinces to have an adequate transportation system, which certainly includes roads and bridges.
The Trans-Canada Highway has been completed through the Atlantic provinces. This, however, is only one highway. I agree with the hon. member for Sault Ste. Marie (Mr. Murphy) that the government of Canada should take a hard look at developing a policy to assist the development of secondary roads, especially in sparsely populated areas which are unable to finance the construction of highways and bridges.
As I have said, bridges are a provincial responsibility. Nevertheless, the government of Canada, through the Department of Regional Economic Expansion, and New Brunswick, for example, entered into a special highways agreement in respect of a secondary road. The road covered by this agreement runs between the cities of Moncton and Campbellton and traverses the entire east coast of New Brunswick. Rather than the 90-10 formula of costsharing mentioned by the hon. member for Halifax-East Hants, under this agreement the government of Canada will pay 110 per cent of the cost of this very important highway, the additional 10 per cent being for engineering and incidental costs of that nature. The province itself is faced only with the responsibility of providing the land for the roadbed.
Work on this highway is proceeding, although rather slowly; in fact, the portion in my constituency between Chatham and St. Margarets, which is in extremely poor

condition, I am advised will not be proceeded with this year because the province has not yet completed the necessary engineering work to enable contracts to be let. The government of Canada, as I believe all members will agree, has conceded the fact that we have serious transportation difficulties in the Atlantic provinces. Recently the Department of Transport granted a 17 per cent subsidy on trucking with the idea that a viable trucking industry should be built up in those provinces.
The government of Canada also appreciates the necessity of our having an adequate transportation system and is carrying out an extensive transportation study in many areas including northeastern New Brunswick. This will relate not only to highways and bridges but to transportation by water. Hopefully, it will lead to a long awaited project, namely, the dredging of the Miramichi River to a depth of 36 feet. This dredging would connect the highway leading to Renous, Plaster Rock and would give direct access from the eastern part of New Brunswick to Montreal, thus cutting down the distance by about 100 miles.
I said I would be brief. I know that other speakers wish to take part in this debate. However, I recall that when this motion was debated about a year ago it was stated- and I have not heard of any change made since-that no request had been made by the province of Nova Scotia for a Shubenacadie River bridge or causeway. The hon. member for Halifax-East Hants mentioned the many groups directly affected in the vicinity who have gone on record as supporting such a crossing.
I suggest that if neither the previous nor the present government of Nova Scotia requested this crossing-normally they would do so through the joint planning committee under the Department of Regional Economic Expansion-then it would appear that they have not placed on it as high a priority as the hon. member who introduced the motion. Normally, if the government of Canada wished to build a bridge or highway in the province it could not be done without the consent and agreement of the provincial government. As I said before, last year when we spoke on this subject such a request had not been made to Ottawa and as far as I know the situation has not changed and the request has not yet been made.
I know the importance of the Fundy trail. The supper hour is fast-approaching and I will not make any further comments on this matter, but basically I support anything that will improve transportation in the Atlantic provinces. However, I realize, as I believe the hon. member does who introduced the motion, that this must be part of an overall scheme developed by the government of Canada to assist all the provinces in the construction of secondary highways.


Hon. Hugh John Flemming (Carleton-Charlotte):: Mr. Speaker, I will take only a moment or two of the time of the House to make some observations relative to the motion presented with conviction and eloquence by my friend the hon. member for Halifax-East Hants (Mr. McCleave). I associate myself with the supporting remarks which have been made from all quarters of the
May 29, 1972

House and certainly with those of the hon. member for Northumberland-Miramichi (Mr. Smith).
The mover of the motion indicated specifically to members within sound of his voice the formula which he feels should be adopted-a 90-10 cost-sharing formula. This brings to mind an association which I had in the period 1952 to 1957 with a previous administration-which held office with a degree of distinction-led by the right hon. Mr. St. Laurent. At that time the minister of public works was the Hon. Robert Winters. I remember him asking us to come from New Brunswick to discuss speeding up the construction of the Trans-Canada Highway in that province. We arrived and we had a conference with the Hon. Robert Winters who was not niggardly in his proposition, neither was he partisan in his approach. In my opinion he was a great minister and I pay tribute to his memory tonight.


Some hon. Members:: Hear, hear!


Hugh John Flemming: He told me then that the finishing of some parts of the highway would be quite expensive and he realized that our province had many demands on its treasury for funds to maintain existing highways. He thought the federal government should go a long way in encouraging us to get this work completed as soon as we could. He said that to that extent they were prepared to contribute on a 90-10 basis, the federal government contributing 90 per cent and the provincial government 10 per cent.
It seems to me somewhat strange, and perhaps coincidental, that another distinguished Nova Scotian should come today with a motion which specifies exactly the same formula which should be used by the federal government in dealing with the Atlantic provinces, especially Nova Scotia and New Brunswick. Therefore, I rose only for the purpose of indicating to you, Sir, and to members of the House my complete support of the motion. I hope we will all see our way clear to uniting on it.
So far as the Fundy trail is concerned, I was impressed with the eloquence of my friend the hon. member for Saint John-Lancaster (Mr. Bell) because the Fundy trail is close to his constituency and close to his heart. I was impressed by his words. I rose only to indicate my complete support of the motion and to go back in time to show the interesting coincidence in that the Hon. Robert Winters had put forward the same formula as that proposed this afternoon by the hon. member for Halifax-East Hants.


Mr. Joseph-Phillippe Guay (St. Boniface):: Mr. Speaker, I should like first to commend the hon. member for Halifax-East Hants (Mr. McCleave)-

I wholeheartedly agree with him. I believe that a bridge in the area which he mentioned, namely, the Bay of Fundy and the Shubenacadie River, is a necessity. It is a beautiful area and I wish I had the time to say a few words about it. However, I should like to bring to your attention the fact that there is a similar problem in my area. On one side of the Red River is St. Adolphe, a nice town with about 500 inhabitants, and across the river-
Foreign Takeovers Review Act


The Acting Speaker (Mr. Boulanger):: Order. As the hour set aside for the consideration of private members' business has expired, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Hon. Jean-Luc Pepin that Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Joseph Adrien Henri Lambert: Mr. Speaker, I should like to make a few comments on Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons.
As a result of the growing concern of a number of Canadians about foreign investment in Canada, the Gray report made certain recommendations on which the government based its bill which in my opinion does not go far enough. We must at least admit that the government is aware of the danger, of the unfavourable Canadian position and that it has decided to take some steps to check that evil which is spreading from year to year.
You will remember that early in May the Minister of National Revenue (Mr. Gray) made a statement in this regard recalling that governments in the past had taken certains steps, and announcing the introduction of a new measure in these terms, and I quote:
Parliament will now be asked to add an important new measure to these policies. Foreign companies seeking to buy out or take over an existing Canadian business above a certain size will be required to demonstrate that the purchase will result in significant benefit to Canada.
This statement is praiseworthy and I am convinced that if the government and the minister in charge of the administration of the act take the means required to study seriously the takeover proposals, they will have the opportunity to act before purchase is completed.
The minister also added, and I quote:
The government is introducing legislation to establish a review process under the authority of the Minister of Industry, Trade and Commerce (Mr. Pepin). In general terms the purpose will be to examine proposals for takeovers of Canadian businesses, to

May 29, 1972
Foreign Takeovers Review Act
approve those that, on balance, will be of significant benefit to Canada, to negotiate with the proposed acquirer in those cases where he can reasonably be expected to make a greater contribution to Canadian development, and to refuse to allow those takeovers that would not bring significant benefit to Canada.
Here is in a few lines, I feel, the scope of Bill C-201.
I have before me an article from an American weekly, the Manchester Guardian Weekly, of December 9, reporting on the situation in Canada. This article is entitled: "Canada-An economic colony."
I think that this government and all serious-minded Canadians are aware of this situation. And when one can read such remarks on this situation in an American magazine, this should incite us to take an even more effective step, to make sure not only that foreign investment will be to the advantage of Canada, but also that a serious study is made to find out to what extent this could be also profitable to those who invest in our country.
Here is what one can read in the Manchester Guardian Weekly:
In the Schulz report, it has been suggested that for every dollar invested in Canada for oil extraction, 71 cents come back to the United States as investment return in the course of the first year of investment. There is no reason to doubt that the same investment income is derived from all other forms of energy operation or mining industry, whether it is natural gas, hydroelectric power or common metals.
We are not the ones saying that. It is published in the magazine I just mentioned. Therefore, if it is profitable for foreign capitalists to invest in our country, mining or processing our natural resources, it would be all the more so for Canadians. I suggest that the government should take the necessary steps to promote Canadian investment in really Canadian companies, in order that we may, instead of remaining an economic colony, become real Canadians, masters of their fate.
The government is increasingly aware of this. It is indeed of the highest importance for us to control the takeover of our Canadian companies and our natural resources. That is why the government is introducing Bill C-201. I suggest that, in view of the endeavours of all governments, federal and provincial, to produce Canadians capable of managing businesses, Canada is now mature enough, I think, to control our whole economy.
We have in Canada truly qualified people who often remain unemployed due to lack of businesses operated by Canadians. Operations are sometimes controlled by foreigners who bring in people from their own country to fill the best posts and we are neglected. We are doing the right thing in attempting to draw the Canadians' attention to this matter. We are proceeding with caution and I imagine that is the way to do it. And I do not think that we will be accused of intolerant nationalism if we act like that.
In fact I feel that will be taken as a display of national self-respect since finally self-respect is required in all fields and it is not forbidden to feel proud as a nation without at the same time being considered narrow-minded as this sometimes happens.

This afternoon, the Minister of Industry, Trade and Commerce (Mr. Pepin) said in his speech that this bill could not be a cure-all for all our problems. This is true. I consider it as a first step which should encourage the government and hon. members to make suggestions so that we continue in this direction in order to make Canadians real experienced businessmen, able to administer real Canadian enterprises, and in order that some investment from abroad remain in these businesses, as long as they are controlled, that these businesses are directed by Canadians and that they produce a good profit for Canada first. In my opinion, you may then accept foreign investment. However, they should be carefully considered.
The minister also referred-and this was of great interest to me-to discussions with provincial governments about this subject matter. In my opinion, this is again a policy which deserves praise. Actually, the federal government must hold discussions on such important matters with provincial governments because, even quite recently, one could hear the premier of the province of Quebec-I think this was yesterday-state to the fighting wing of his party that the most serious problem of his administration and what the province was in greatest need of, was capital. He said that the authority to administer is rather secondary, but that the province needs credit in order to develop.
Such is the situation, for instance, as regards the James Bay development project. This is a very wide territory to be developed, and to achieve this objective, much attention will be required. The objective is not to develop a territory and its natural resources just for the sake of doing it. This will have to be done very carefully in order not to contribute to spoiling another part of our economy through pollution of a territory and water which we desperately need.
One of the great problems which the Quebec government has to face is to find the necessary funds. Therefore, the government is seriously thinking of turning to the Americans and to other countries and inviting them to invest in the province. In this connection, I would ask the Minister of Industry, Trade and Commerce when he is having discussions with the Quebec government to seek, first, to promote Canadian investments in order that Canadians may find some advantages in investing in Canadian owned industries. This might enable the Quebec government to take positive action and to reach a really commendable goal without having to make commitments that would benefit other countries, those whose interest it is to invest here.
I believe, Mr. Speaker, we should take a new departure in our financing policy in this sector, in order that the development and the operation of our natural resources be effected by our own people and as far as possible with Canadian capital.
I heard this afternoon the hon. member for York South (Mr. Lewis) talk about the possibility of finding capital in Canada. I agree with him provided that people who have money to invest are shown the advantage of investing in Canadian companies. This could be done through adver-
May 29, 1972

tising and information of such a nature as to attract interest for this.
Another danger which we have to face continuously is that big foreign corporations which have subsidiaries in Canada always tend as a matter of course to first protect the parent company and the subsidiaries have second choice. If at any time, for commercial reasons, a company has to reduce its operations or to change them in any way, it will first think of protecting the parent company and the Canadian subsidiaries will be served last, which means that Canadian workers who work for these subsidiaries will be sacrificed in turn and become unemployed.
For all these reasons, Mr. Speaker, I should like, by way of a conclusion, to urge the minister and the federal government to create new credits which would be reserved to the Bank of Canada. This possibility should be carefully examined. When we talk about the Bank of Canada, sometimes people think that this is a joke, a routine, a formula that we use at every turn.
I think that this angle of our financial system should be reviewed completely, in order that the Bank of Canada, an institution established for Canadians, may open new credits which would be channelled through chartered banks towards the development of our natural ressources, thus reducing the interest rate, lowering the production cost, and placing Canada at a competitive level on the markets of the world. This way, Canadians would be given another means to become really masters in their own country.
People had a lot of fun for some years by teasing the Prime Minister of Quebec whose election slogan was "Masters in our own house". If we examine this election slogan carefully, we discover that the purpose is excellent-provided we use the means which are necessary to work it out.
The Canadian Parliament has this opportunity, this means, whereas provincial governments do not. The Canadian government has the sovereign right to direct the creation of credit based on the real credit of our country, on its wealth and it should take the necessary steps to have credit channelled by the Bank of Canada, to the benefit of the areas where the need for capital grows ever bigger, which would allow Canadians to be really masters in their own house.
Being masters in our own house, we can command the respect of the citizens of other countries. The title of an article I referred to previously will perhaps be changed from "Canada-An economic colony" to "Canada, an autonomous country of Canadians proud to be masters in their own house".


Mr. D. Gordon Blair (Grenville-Carleton):: Mr. Speaker, because of the great respect which I and many members of this House have for the hon. member for Fundy-Royal (Mr. Fairweather), I sought, unsuccessfully, to find parts of his speech of this afternoon which are worthy of comment. I must say that there are points on which I agree, one being that the procedure, which is to apply under this
Foreign Takeovers Review Act
new law, should be carefully examined in committee. I also feel that he performed a service to this House by telling us that the important Committee on Statutory Instruments of which he and I are members, has not yet been called into session. One of the high points of his speech was the news that he had purchased lunch for the hon. member for Hamilton-Wentworth (Mr. Gibson). Having said that, I must record my disappointment that as a spokesman of his party he did not contribute anything of significance to this debate.
When people read the record of this debate I think their opinion of it will be summed up by the ruling that was made on the amendment moved by the hon. member for Fundy-Royal. Essentially, it was ruled out of order because it did not take a stand on the issue before the House. On the one hand the hon. member, speaking for his party, said the legislation did not go far enough; yet every time he said that he also said, "Don't go any further because you might antagonize the provinces or other interests."


Robert Gordon Lee Fairweather: This is great.


Duncan Gordon Blair: That kind of approach to this problem is in part the approach of the Conservative party and, as well, reflects the fears and concerns of many Canadians. They want to approach this problem in a positive and even dramatic fashion, but on studying it carefully they see it must be approached with caution unless we are to do considerable violence to our economic system and body politic. I would point in passing that one of the questioning left unanswered this afternoon by the hon. member for Fundy-Royal was, what does moral suasion mean? Implicit in that question was the question, what relevance does it have in a debate like this?


Robert Gordon Lee Fairweather: The leader of the hon. member's party used that term. He might not have been relevant, but I think I was.


Duncan Gordon Blair: Mr. Speaker, I suggested that the question asked by the hon. member was, what relevance does it have? Having been caught making an esoteric utterance this afternoon, perhaps he will bear with me while I explain. I think moral suasion is an important ingredient in our parliamentary and legal systems. Really, it is the appeal which ideas have for reasonable men to act decently and in the public interest. Unless that kind of spirit motivates our laws we cannot function satisfactorily, and I do not think anyone on either side of the House will quarrel with that assertion.
I regret that the hon. member for York South (Mr. Lewis) is not here, because he delivered a flag-waving speech which deserves comment. I imagine he wishes to occupy the shoes of those in our history who in 1878, 1891 and 1911 took the stand that we must damn the Americans forever and a day. I suspect that behind the furious rhetoric of the hon. member for York South is an unpleasant reality that he would not like to see exposed in this chamber. After all, he speaks here in order to paper over the great split in his party on this subject and his rather immoderate language does not in any way match the immoderate policies of the Waffle group in his party. Indeed, one wonders who is the "waffler" when one hears

May 29, 1972
Foreign Takeovers Review Act the hon. member for York South speak, as he did today, and try to play down that determined group of people in his party who are trying to take it over from him.
It remains a matter of wonder that a person could speak for 40 minutes in condemnation of all things American and of American intrusions in our economy without mentioning once the subject of American control of many important trade unions in Canada. I must say that the speech of the hon. member for York South did not contribute much to the debate on this important measure. He brought forward his tired recitation of eight points which on other occasions have been six points or five points. His is a sure-fire way of attracting applause from a partisan audience: take away the tax privileges of the mining and oil companies and expose them to export tax!


Mr. Orlikow:: You do not believe in that?


Duncan Gordon Blair: There was no concern about the effects these measures would have on the operation of those companies. There was no concern about the jobs which they provide. There was no suggestion as to how these activities might be transferred elsewhere in the community. There was simply a flat, out and out assertion that these things should be done, can be done and must be done- irresponsibly and in defiance of the best interests of this country.
Over and above that, the hon. member talked about high finance and how interest could be lowered, without referring to inflation which looms before us always. He talked without showing concern as to how this action might encourage foreign equity owners to do even better in our capital markets than they do at present. He did not say how foreign exchange reserves might be used, by whom or in what fashion to buy back the Canadian economy.


Cyril Lloyd Francis: Five billion dollars worth is involved.


Duncan Gordon Blair: As my friend from Ottawa West (Mr. Francis) mentions, $5 billion could be devoted to that purpose. It is pie in the sky, as hon. members sitting behind the Leader of the Official Opposition (Mr. Stanfield) well know. However, it serves the purpose of obscuring from our view the fact that there is serious division in the party of the hon. member for York South which really attacks the credibility of any assertion which he may make in the House on this important problem at the present time.
We are talking about one of the most abrasive problems in our history. It is a problem, which, if not properly handled by this Parliament, could set province against province in Canada. It could set poor areas against wealthy areas. All this was foretold in the remarkably clairvoyant address of the Leader of the Opposition from which the minister quoted earlier this afternoon.
From time to time in Canada we have been prone to fall before the determined drive of patriotic talk. We had a high tariff imposed in this country in its early days. On a famous occasion in 1911, the opportunity to modify that tariff was lost. These discussions were carried on and all these economic issues were settled on the basis of emotionalism, appeals to patriotism and appeals to national loyalty. We must all face the fact that one of the reasons we have the problem of foreign ownership in our country is that the economy, which was created pursuant to these other economic policies, was one which became vulnerable to foreign ownership. It was an economy which consisted of enterprises which were structurally weak, which were not as efficient as they should have been and which in one way or another lacked the resilience to stand up against takeover bids and other incursions from abroad.
We developed an economy in this country which was not overly venturesome. No one knows this better than people like myself who come from western Canada and can remember when the great oil boom started in Alberta just after the war. Albertans had to go outside of Canada to find the money and people who had the confidence to invest in Canada's future. I see the hon. member for Palliser (Mr. Schumacher) nodding his head in agreement. This marks an historic occasion in this House.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: And Edmonton Centre.


Duncan Gordon Blair: I am almost overcome by the hon. member for Edmonton Centre (Mr. Paproski) agreeing. The "Eskimos" may win this year.
Let us face the fact in this chamber that in many parts of Canada there are people who have a deep resentment about what the financial and industrial interests centred in Montreal and Toronto did to and for this country. When I was a boy in Saskatchewan we did not waste our time worrying about foreign owners; we talked about those awful people who inhabited Bay Street and St. James Street. I do not think a case can be made that the domestic proprietors of our economy, then or now, have always performed in a fashion satisfactory from the standpoint of Canada as a whole. Therefore I have always felt that discussion on foreign ownership as it has emerged is one which is to a degree false and misleading.
There is much evidence to show that whether or not enterprises have been owned in Canada is irrelevant to their performance in the interests of Canada. In fact, there have been many studies, starting with that of Professor Safarian in 1966, going through the Watkins report and the Gray report, as we call it, and other documents of this kind.


Donald Craig Stewart: Tell us about when you left the Conservatives?


Duncan Gordon Blair: I will come to that. All these documents show conclusively that if there is any difference in the performance of enterprises in Canada, it is that perhaps the foreign-owned ones have performed rather better, taking into account all the criteria by which we measure that performance. However, we are now faced with a situation where there is a growing consensus that we have to look, not at the ownership of our economy but the way in which it is controlled and the performance it delivers in our society.
I repeat that it is impossible to argue that foreign ownership by itself is all bad or all good. The question which increasingly engages Canadians is, what are the effects of
|Mr. Blair.]
May 29, 1972

foreign ownership? I think we have to look at these effects industry by industry and company by company.
As Canadians, we now have priorities which are quite plain for all to see. We want an economy which will provide employment. We want an economy which will be directed as much as possible to using Canadian sources of supply for its factories, and Canadian experts as its advisers. We want an economy which will promote research and which will lay the ground-work for our participation in the technologically developing age of the future. We want an economy which will develop in this country management skills of a high order which can be used all over Canada for the advantage of everyone.
When we consider the kind of tangled nature of our industrial society in Canada, whether the companies are owned domestically or from outside the country, we can conclude that there are deficiencies. We do not really derive from our economy all the advantages which we think we should derive.
Having said this, Mr. Speaker, the question arises whether or not the steps which we are now being asked to consider will make a solid contribution to our future. Everyone who speaks on this subject comments on the fact that we are being asked to direct our law against only one aspect of the extension of foreign ownership in our economy. That is the aspect which is described as a takeover bid from outside Canada.
I do not intend to go over all the ground which was so well covered by the minister this afternoon. However, clearly in terms of our recent history and our understanding of this matter, the takeover of an existing Canadian company by a foreign corporation appears as a most dramatic and unwelcome incursion into our economy. I think it is quite proper to enact as a law that from now on that kind of activity coming from outside should be one which would become us only where it is justified in all aspects of our national interests. Having said this, I should point out that already during the lifetime of this Parliament we have seen two vital industrial concerns protected from foreign takeover. The cases of Dennison Mines and Home Oil are fresh in the minds of many people. The noteworthy success of the actions of the Canadian government in both these cases should encourage us to believe that this law is one which can work satisfactorily for the benefit of Canada.
The question most often raised is, why should we stop here; why should we not go further and enact a law which would contain other aspects of foreign expansion in our economy whether by direct investment, by joint ventures, by expanding existing subsidiaries or in other ways? It is my opinion that the step we are now being invited to take is one which by all the standards of our history is an epic one. It is a departure from the previous policy of laissez faire toward investment in the industrial and resource sectors. It is one which, in itself, will be digested not without difficulty. It is also one which is least likely to attract attack on constitutional grounds. One must recognize that these are areas which trench upon fields of economic activity which the provinces have traditionally believed to be their own.
Foreign Takeovers Review Act
I was not impressed by the assertion of the hon. member for York South that the government habitually runs away from these difficult problems by suggesting there are constitutional difficulties. That they do exist, and that they are real no one can deny. If we were to go further at this stage and seek to embark upon a complicated regulatory scheme such as would have to be operated were an attempt made to deal with direct investment, joint venturing, the expansion of subsidiaries, and so on, we should be creating not only a big bureaucratic machine of doubtful efficacy but we should be risking constitutional challenges which might defeat a detailed attempt to regulate the economy in the national interest.
It seems to me that it is far better to proceed prudently along lines which have been well marked out and to go on, in the best Canadian tradition, to explore with the provinces areas which invite further regulation while considering the effect of this new law upon our industrial economy. Only after we have done this ought we to determine whether further steps should be taken.
In the interim, it is wrong to think that no protection exists for the Canadian economy against foreign intrusion. In areas where the federal Parliament has been paramount, protection has been provided for many years. The minister said something about this today. In areas where the federal government has undoubted jurisdiction, such as banking, finance, transportation, communications, and so on, laws and regulations have preserved the integrity of these essential parts of our economy.
In addition, we have created, as a federal Parliament, the Canadian Development Corporation which is likely to play a significant role in the re-ordering of our industry and commerce. The tax policies approved by this Parliament and its predecessors have encouraged investment in Canadian companies. Last December, for example, changes which were made in the tax laws provided, among other things, for the deductibility of interest on loans used to acquire other corporations; the limitation at 10 per cent of the amount of the portfolio of savings in pension funds which could be invested in foreign corporations; the provision that the lower tax rate for small businesses should apply only to Canadian corporations; the continuing provision that the dividend tax credit should apply only to dividends from Canadian corporations all of which will have a significant effect in encouraging Canadian enterprise.-
I do not think there are many in any quarter of this House who would quarrel with the general proposition that we could accomplish much more to the benefit of our country for the extension of Canadian control, for the prevention of harmful foreign interference in our economy by positive, constructive measures rather than by more negative prohibitions.


Robert Lorne Stanfield: Hear, hear!


Duncan Gordon Blair: I therefore believe we should move forward to refer this important bill to the committee without delay. Knowing the committee, I am sure it will give the measure very careful study. As a member of the committee, there are details upon which I shall seek further information and, possibly, recommend changes. I believe this is forward-looking legislation and the kind of bill we should

May 29, 1972
Foreign Takeovers Review Act
pass as quickly as possible in order to enable it to operate for the benefit of our country.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, we are beginning today in this House a debate which has been raging for years, with varying degrees of intensity, outside this chamber-in universities, in high schools, in newspaper columns, on television. From time to time we have heard certain strident, shrill voices describe this problem of foreign ownership as though it were peculiarly Canadian-la plaie Canadienne. Not a bit of it. Look at what has happened in Britain since the Second World War. One has only to read the book by Serven Schriever to understand the problems presented by foreign ownership in France.
One sees that each of these countries has adopted various methods to try to keep a reasonable grip on things. I find it rather ludicrous that many people make shrill cries about improper behaviour and the improper or almost immoral nature of foreign ownership, while on the other hand they want Canadian firms to go abroad and do business. What is there about Canadians going abroad? Are they like St. George, pure of heart? Let somebody from Great Britain, a German, a Frenchman or an American come to Canada and he is accused of being a conniving, scheming individual about to depose Canadians. This is ludicrous.
The Minister of Finance (Mr. Turner) was hopeful when putting forward his mistaken tax bill. We have not yet reached this point because as a good deal has to be done in the way of amending the international, industrial part of the bill. But hopefully the Minister of Finance will be successful in getting Canadian firms to move abroad and compete. How will they compete? By standing offshore and firing long-distance cannons? Of course they cannot do that. They must go ashore, into foreign countries and establish subsidiaries, partnerships or some other form of business enterprise.
One is almost tempted to say that what is sauce for the goose is sauce for the gander. If we as Canadians want to get out and carry on what is vital to our economy-that is, our export business-we must go to other countries and establish connections. I am sure the Minister of Industry, Trade and Commerce (Mr. Pepin) during his almost quarterly peregrinations to Japan has been urging the Japanese to open up opportunities for Canadian investment in that country.
I am sure he has been asking them to relax the long list of conditions in respect of industries in Japan which have been closed over the years to all foreign participation. He is not doing this just for the pleasure of doing it but so that Canadian businessmen can establish healthy working relationships for trade with the Japanese and other Pacific countries. All this is an attempt to guarantee Canadian jobs. Where do all these people around la plaie Canadienne, with their shrill cries about foreign ownership, think jobs will come from if firms have to close down and Canadian industry is dormant?
It was highly amusing this afternoon to listen to the hon. member for York South (Mr. Lewis) go through the litany

of hamstringing operations that Canadian industry encounters, each one of which adds more and more to the cost of production so that even in the domestic market they cannot compete unless one imposes controls and rationing or so-called economic reduction. Let us consider the doctrinaire strait jacket imposed on Britain after the war. I experienced three years of it, and I assure you it was sheer hell and agony. I have in mind the economic reduction imposed by Sir Stafford Cripps. There were rules, regulations and restrictions, with everything directed by him.
With democracy in Canada-and I will not refer to individuals-many people say the proportion of people employed by government is far too high. But if we had to follow even half the suggestions put forward by the NDP this afternoon, the size of the national civil service would be more than doubled. There would be no problems of unemployment, I suppose, but everybody would become an official shuffling papers. Everybody would be engaged in so-called economic reduction. That is one aspect of the problem. Of course, the NDP has its Waffle wing.
Mr. Paproskie Stanley Knowles!


Marcel Joseph Aimé Lambert: No, I will not accuse the hon. member for Winnipeg North Centre (Mr. Knowles) of being a member of the Waffle group, because that is not possible.


Mr. Knowles (Winnipeg North Centre):: The hon.
member may think I am awful, but I am not "a-waffle."


Marcel Joseph Aimé Lambert: I will accuse the hon. member of all sorts of things, but not of that. We have another organization composed of sincere people, I suppose. I refer to the Committee for an Independent Canada. They are all good and well intentioned people. They have members from the NDP, members who are pseudo-Liberals and a former Liberal who I suppose could be referred to as the financial Moses of the Liberal party, Walter Gordon. That former hon. member for Dan-forth, when he was minister of finance ten years ago brought us a great deal of trouble with his 30 per cent takeover tax. If we look at the problems of today and consider some of their historical aspects, we will see that a good deal of foreign ownership in this country started in those days.
I do not want to go too far back in the memories of hon. members, but the institution of the British preferential tariff wall within the Commonwealth formed one of the earlier trading blocs. Our United States friends established French subsidiaries in Canada in order to get within that British preferential tariff wall. That was perhaps good business at the time. But has anyone been studying what is happening in France and in Germany? Does anyone know what is going to happen in Britain and elsewhere within the common market? Canadians and Americans have been establishing plants in these countries in order to get within that high common market tariff wall.
Why did Polymer go over to France years ago? I use that as an example of only one industry, but each one that went to France did so because of foreign ownership. They are having troubles in France because of foreign owner-
May 29, 1972

ship and the common market. We have inherited that position. It started in the early 1930s but it has its roots in the establishment of a great deal of Canadian industry and other business in this manner, particularly in those halcyon days when we had hundreds of millions of dollars annually in deficits on commodity account and hundreds of millions of dollars on non-commodity account.
The money that was owed abroad was encouraged to remain here, to be invested in Canada. It was loose money available for investment in Canada. And how it was invested! The government of the day boasted about it. Canadians benefited by, shall we say, changing the nature of our economy from basically a resource and agricultural based economy to one of manufacturing and secondary industry. There has been a complete revolution in the Canadian economy since the end of World War II. This was accomplished by the use of much of the foreign money which Canada should have been paying out. But no, we invested it, allowed it to be invested or induced it to be invested here in Canada. So every dollar that was then invested became a dollar of foreign ownership.
If one tabulated all or even a proportion of the commodity account deficit from 1945 through to 1958-59, one would see why the United States was able to invest so much here in Canada. Why is there always United States money around here for takeovers? Our ludicrous, stupid estate taxes and the high level of succession duties-here I do not excuse any provincial or federal administration- have contributed to fire sales of Canadian businesses. The money was there, available to take over businesses. I never saw anything that was so penny wise and pound foolish. It was a case of selling one's birthright for a few measly million dollars of succession duties.
There may be some social justification for the estate and succession duties, but let us see what the consequences are from an economic point of view. We will see who the people are who are around to pick up a business that is about to be sold because it has an estate tax or succession tax problem, or which is about to be sold because someone who was the dominant or principal shareholder in the family business suddenly died and millions of dollars must be found to settle the estate because there is a succession duty problem.
How many businesses have been driven into the arms of foreigners? Each of us who engaged in the practice of law during those years is well aware of this fact, yet for a certain stated social reason this was the price one had to pay for foreign ownership. Of course, the party to my left would drive it all to a low level; there would be no buyers of companies because of the confiscatory levels of taxation, or if there were no restrictions on foreigners they would be around picking them up like kiddies picking up pennies at a penny-throw. That is how long-headed they are. They are very, very shortsighted.
There is another point, however, which must be considered along with the degree of foreign ownership in this country. There are many statistics emanating from Statistics Canada which are bandied about freely in the press and in this House to the extent that it would seem that the whole of our industry is owned by foreigners. But that is
Foreign Takeovers Review Act
not the case. In many industries only 75 per cent or 65 per cent of the shares of a company are owned outside the country, and yet this appears as a 100 per cent foreign-owned company.
The Canadian taxpayer has been placed in a position of inferiority vis-a-vis the chief competitor, the United States taxpayer. We know about the principal occupation rule and how the Canadian petroleum industry has suffered as a result of it. When the situation was ripe for individuals to move in, the United States citizen, on an individual basis had the advantage over the Canadian operator principally because of the principal occupation rule. There has been partial relief in this respect, but the minister might give some throught to the fact that the principal occupation rule exists to the extent of 80 per cent: one can write-off only 20 per cent. It is still an albatross around the neck of the Canadian investor.
If we are to do something concrete and positive about the problem of foreign ownership, the Canadian investor must be placed in a position of equality or even priority. I would discriminate in favour of a bona fide Canadian taxpayer when it comes to, say, resource development or whatever formula is adopted among incentives for Canadians to own their businesses. There is no question about buying back: even if we let the Creditistes loose for a year we could not print enough money to attempt to buy back Canadian industry. Nor would the New Democrats, with all their Wafflers, try to force people to invest. To invest in what? Would they invest in government bonds? Nothing has been suggested there as a practical solution.
Certainly there can be an improvement in the situation. One classic example is the moving of the headquarters of the Hudson's Bay Company from London to Winnipeg. In a matter of three years this has resulted in an increase of shareholdings by Canadians from 6 per cent to 47 per cent. It is under Canadian management. Canadians have been prepared to buy and now have an opportunity to buy stocks here in Canada.
Why do Canadians not buy stocks in Canada? Why is it Canadians have $3 per capita more invested in the United States than is invested by United States citizens in Canada? People are shocked by that thought. In fact, per capita Canadians have three times as much money invested in the United States as their American counterparts have invested in Canada. Of course, by reason of the fact that we have only 22 million people, the totality of the Canadian investment in the United States, in that whole big economic machine, is only a small corner. On the other hand, the impact of United States ownership in Canada provides quite an economic crunch and they have that much more leverage. I will tell you where they have more leverage; and this is the point Servan Schriever makes in his book with regard to American ownership in Europe.
It is not the degree of ownership, but managerial skill that counts. This means a great deal and it is something that has not existed so far in Canada. It is improving, but what is necessary is really competent managerial skill, which can be learned only by experience and by training; it is not something that one develops from the seat of

May 29, 1972
Foreign Takeovers Review Act one's trousers. They have it in a much higher proportion than we. As I said, it is a matter of tax laws, a matter of managerial skill.
What is the answer to all of this? Well, it was to be in the so-called Gray report which was leaked in a Canadian publication last November. Let us look at the objectives of the memorandum, which read in part as follows:
1.	To set up the alternatives available to the government in presenting its foreign investment policy to parliament and public;
2.	To consider what should be done about foreign takeovers of Canadian firms in the period between the day of the policy announcement and the enactment of the necessary legislation;
3.	In the light of the first two objectives, to consider the advantages and disadvantages of early legislation to screen foreign takeover; and
4.	To consider what should be done about certain other issues- the status of the criteria which will guide the review agencies, the sanctions for non compliance-either with decisions of the review agency or with the terms of deals made with it, the definition of foreign takeover and control, and details of the administrative machinery, including the question of thresholds for registration and screening.
At that time, also, there were strong suggestions that foreign investment would be controlled, that there would be restrictions on foreign personnel acting in Canada. It was going to be a real "made in Canada" operation. But all that has come out of it, outside of a great deal of uncertainty and unhappiness with Canada among our friends in foreign lands, has been Bill C-201 which is to create an agency to screen takeovers.
I am not yet satisfied as to the constitutional jurisdiction of the government of Canada in this respect. How will it block, disallow or somehow negate the transfer of shares from one provincial company to another provincial company all of whose operations are within the confines of one province? I will be very interested to hear the minister tell us how they propose to do that. Or are some of these suggestions made in the bill of the same nature as those that were incorporated in the Canada Corporations Act which are pure window-dressing? They are non-effective for the purposes that were given as an explanation of their inclusion in the amending bill. Page after page of them has served no useful purpose except to add more red tape and a lot more expense for people in business. They affect only a very small segment of Canadian corporations.
If the minister will say that this will affect only those companies under the Canada Corporations Act, then that is one thing. But if he says this will operate to limit the takeover of a privately-owned cement company in British Columbia by another company operating in British Columbia where the degree of foreign ownership is sought by the mathematical formula in this bill, that is another thing. Will the minister tell us whether that is the intention? Is there any means whereby the Parliament of Canada can legislate to do anything in that regard? Will the review board be able to do anything about that, and will the minister, as the minister responsible under this bill, be able to report a yea or a nay to his colleagues so that an order in council may be issued dealing with the company or companies which are entirely Nova Scotian in their aspects?
In any event, I join other hon. members who have said something about what will happen in committee. We will

see. Perhaps we will get some very illuminating explanations. I have a suspicion that this bill is a tiny field mouse that has been produced after eight years' gestation and was simply brought forward because there had been a leak and the government had to explain that documents did exist and that something was being done.
I want to speak about an industry that is much quoted as being one of those that is very much under foreign domination, that is, the Canadian mining industry. I will quote a paragraph from the address of the president of Noranda Mines at its annual meeting in April of this year. It must be remembered that 92 per cent of Noranda's 34,000 shareholders are Canadians owning a similar percentage of the outstanding stocks, so this is not the president of an American-dominated or foreign-dominated corporation reporting to his foreign shareholders. This is what Mr. Powis said:
The last point to consider is the question of foreign ownership of the Canadian mining industry. A great deal is made of the figures produced by Statistics Canada which purport to show, for example, that 80 per cent of our smelting and refining capacity is foreign-controlled. However, as indicated previously, these figures are fragmented and highly misleading. The fact is that Canadians control 67 per cent of our copper refining capacity, 70 per cent of zinc capacity and 100 per cent of lead capacity. It is only in aluminum and nickel that so-called foreign control is predominant, and this is because Alcan and International Nickel are considered to be foreign companies because somewhat less than half of their shares have been owned in Canada. However, if the trend of increasing Canadian ownership of these two companies continues, a majority of their shares will soon be held in Canada and the statistics will then show that all major sectors of the smelting and refining industry are overwhelmingly controlled in this country.
You see what a little encouragement, from the tax point of view, for the Canadian investor will do? If Canadians investing in International Nickel tip the scale to 50 per cent plus one, then those industries would be dominated by Canadian-controlled companies. This is how and why the statistics that are so often quoted are misleading. They leave out the most pertinent parts of the information that would affect us.
I have no time to put on the record a quotation from an excellent publication entitled "Performance of Foreign-Owned Firms in Canada." I will do so at another time. This is a study taken under the sponsorship of the Canadi-an-American Committee headed by Professor A. E. Safarian of the University of Toronto. I commend this little book to hon. members. It contains some very illuminating conclusions with regard to the performance of foreign-owned firms in Canada.
Dealing with solutions, Mr. Speaker, the hon. member for Grenville-Carleton (Mr. Blair) complained about a lack of counter-proposals. There is an over-all problem of foreign ownership and it has many facets. I did not hear the minister this afternoon, but to be strictly relevant to the bill he should have talked about foreign takeovers only and about reviewing them. I have already spoken about one of the solutions which I think the majority, if not all, of my colleagues in the official opposition advance. It is that the Canadian taxpayer must be given the proper incentives. He must not be placed in any position of inferiority under our tax law when compared with
May 29, 1972

other taxpayers with whom he is competing. This is solution No. 1.
Secondly, Mr. Speaker, we must have an integration of succession duty and capital gains tax. Then I think it is possible for the federal government and the governments of the provinces to act on a pro-Canadian basis. I can give you an example, and I am sure there are many others. The most recent one that comes to mind was when Syncrude, in my own province, obtained an enlargement of its permit and the administration imposed a number of conditions which were pro-Canadian in their thrust. Everybody recognizes their purport. It did not require lengthy statutes to say this or that must be done. This was action taken by government in regard to a particular industry.
My colleague from Fundy-Royal this afternoon dealt at some length with a partial solution dealing with the key sector. That is now in existence. As I say, Mr. Speaker, I do not think there is one complete solution to the problem. I am concerned that this bill is being put forward as a very brave answer to the problem even though it may deal with only a very tiny segment of it. I am very uneasy about a lot of the takeovers and about the ease with which they are undertaken. But, Mr. Speaker, I say that we Canadians have created the climate for them. We have created the conditions that led to these takeovers.
One solution tried in the past was a restriction on the sale of shares. I remember the case of Alberta Gas Trunk Pipe Line whose shares were to be sold in limited amounts first to Albertans. That sale was really oversubscribed. But, Mr. Speaker, the general public has not yet been educated to hang on to its investments. This was a good investment, but many of the people who had never held shares before sold them as soon as they rose $10 or $15. The shares were placed immediately on the market. The company is still controlled in Canada but I suggest a significant number of the shares are held by investors abroad.
I also remember when Rainbow Pipe Line was being incorporated here. All the companies involved were foreign-owned or foreign-controlled and in fact the dominant interest in one of them, Aquataine, was held by the French government. I suggested that the shares in Rainbow Pipe Line be placed on the market with the same kind of restriction as applied to Alberta Gas Trunk Pipe Line. That is a solution to that particular type of monopoly.
I see no hope for the Canadian Development Corporation in this field, not one iota. I do not want to traverse old ground, but the Canadian Development Corporation so far as I am concerned is a dead duck. It was ruptured the day it was born. It will never operate for the Canadianiza-tion or preservation of Canadianization of industry.
So, Mr. Speaker, we will examine this bill in committee. I am opposed in principle to the screening of takeovers. I am uneasy about them, as I have said. I do not think this bill will go very far, but let us see how far it goes and then we can get to the problem. We do not have a monopoly of this problem; it is worldwide. We must remember that if we place restrictions on foreign owners, then similar restrictions may be placed on Canadians operating abroad. We must live and let live, and to that extent the problem becomes more complex.
Foreign Takeovers Review Act


Mr. Norman A. Cafik (Ontario):: Mr. Speaker, I am very pleased tonight to be able to address a few remarks to the chamber on second reading of Bill C-201, the purpose of which is to provide for review of foreign takeovers in Canada. I would like to confess immediately that I class myself as an economic nationalist. I feel quite strongly that we have to take strong steps in order to preserve our national identity and economy and to maximize the economic control that Canadians ought to have over their own affairs; but at the same time I recognize that this is a very complicated problem.
There are many regional influences involved, and provinces within their own jurisdictions are rightly concerned with the amount of foreign investment that they can attract. We live in a federal system, and when we have a federal policy that is too stringent it can have disastrous effects upon the underdeveloped regions of Canada which are much concerned with the problem of attracting foreign investment to their respective areas. We must stimulate the economy to create the maximum number of jobs for the fastest growing labour force in the world. I feel that our policy has to be a responsible one directed to maximizing employment and at the same time seeing to it that there is no further erosion of Canadian ownership. I think this bill is a step in that direction.
Personally, I am not convinced that this legislation is as far as we ought to go, but I would like to say a few words on the subject which the committee after second reading might bear in mind. For a moment I would like to examine the reactions of the various premiers across Canada, to see what they think of this bill. In the province of Newfoundland, to my knowledge the new premier has not really made a definitive statement, but in Prince Edward Island, Premier Campbell has stated quite clearly-


Steve Eugene Paproski: He was just sworn in.


Mr. Deputy Speaker:: Order, please. The hon. member for Ontario (Mr. Cafik) has the floor.


Mr. Benjamin:: That's the whole problem.


Norman Augustine Cafik: In Prince Edward Island, Premier Campbell has clearly indicated that as far as he is concerned the origin of funds is not the major concern; rather, it is to make sure that the federal government does not take steps to minimize the amount of foreign investment and job creation in the area. In New Brunswick, as far as I can see Premier Hatfield has indicated that this policy is acceptable to him. In Quebec, Gerald Levesque, the former minister of trade and commerce in that province, indicated that they did not want the federal government to close the door on any investment which would create jobs.


Steve Eugene Paproski: Who is that-premier Rene Levesque?


Norman Augustine Cafik: Premier Davis, in the province of Ontario has warned the federal government and the people of Ontario against plunging blindly into programs that would produce greater domestic control of the economy but would divert foreign investment from Ontario. He has said that Ontario still needs investment from outside its borders.

May 29, 1972
Foreign Takeovers Review Act
"We cannot live as a province or as a nation unto ourselves". He added, "We must be involved in the total world community; Ontario cannot act in isolation." So it appears that Premier Davis, in what I believe to be one of the richest provinces in Canada, thinks that we have to be careful even there in terms of controls on foreign investment.
Premier Schreyer of Manitoba indicated that he considered the proposal for a review board to be a positive one. He said that provided it does not get too bureaucratic, it can only help and cannot do any harm.


An hon. Member:: Go on, finish it.


Norman Augustine Cafik: Premier Allan Blakeney in Saskatchewan has taken a different stance and as far as I can see from his statements has indicated that he would like to see a stronger stand taken in respect of foreign control.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: In Alberta, the Minister of Industry, Mr. Peacock, has said that he does not oppose Ottawa's examination of foreign investment as long as the federal government does not hamper the province's access to new capital. As far as British Columbia is concerned I really could not give a report. They do not seem to have made any statement in this regard.


Steve Eugene Paproski: We are just a new Conservative government there. Give us a little time.


Norman Augustine Cafik: I should like to talk for a moment about the present components of foreign investment policy. To deal first with banking institutions, in 1967 the Bank Act was amended to ensure that banks would be 75 per cent Canadian controlled. No person or group, foreign or Canadian, may hold more than 10 per cent of a bank's voting shares. One foreign-controlled bank in Canada at that time, the Mercantile Bank, was not permitted to grow above a certain size without government permission regarding ownership requirements.
In the insurance, loan, trust and sales financing fields, seven years ago the government introduced amendments to the Loan Companies Act, the Trust Companies Act and the Canadian and British Insurance Companies Act to prevent foreign investment takeovers of federally incorporated companies covered by the legislation. The proportion of shares which non-residents could hold was limited to 25 per cent and no single foreigner could hold more than 10 per cent. The law was not made retroactive, but existing foreign-owned holdings above 25 per cent were not allowed to increase.
Last year, in 1971, the Investment Companies Act was amended to prevent further foreign acquisition of sales finance firms covered by the act. The federal law covering these financial institutions does not cover the establishment of new firms, nor does it cover provincially incorporated firms although at least one province, Ontario, has enacted legislation which parallels that of the federal government.
The government has acted to limit foreign ownership in the case of Telesat Canada. Legislation requires that ownership shall be divided between the federal government

and its agents, approved telecommunications carriers and other Canadian citizens and, apart from their holdings, not more than 20 per cent of Telesat's outstanding shares may be held by non-residents. In the field of uranium the government has adopted a policy whereby ownership by non-residents of voting shares in Canadian uranium producing properties will be limited.
In the oil, gas and mining fields, although not a major restriction on foreign control of Canadian investments in these industries, steps have been taken applying to oil, gas and mining leases in the north and offshore. This already covers oil and gas leases in the Yukon, the Northwest Territories and offshore and mining leases in the Northwest Territories and offshore. A current bill would extend coverage of mining leases to the Yukon as well.
The Canadian participation provisions of the Canada oil and gas land regulations, the Canada mining regulations pursuant to the Territorial Lands Act, the Public Lands Grants Act and the Yukon minerals bill restrict leases to Canadian citizens, to corporations which are 50 per cent beneficially owned by Canadians or to companies whose shares are listed on a recognized Canadian stock exchange and in which Canadians have a chance to participate in the ownership and financing. Federal government investment, in partnership with private interests in Panarctic, has helped ensure a significant Canadian element in the development of the oil industry in Canada's north.
In the broadcasting field, under regulations pursuant to the Broadcasting Act foreign-controlled firms holding broadcasting licences are being required to sell to Canadian citizens or to eligible Canadian corporations. To be eligible, the corporation must be incorporated in Canada, the chairman and directors must be Canadian citizens and at least 80 per cent of the voting shares and shares representing in aggregate at least four-fifths of the shares of the paid-up capital must be beneficially owned by Canadian citizens or Canadian-controlled corporations. In addition, regulations respecting Canadian program content are also in force.
In the field of newspapers and periodicals, seven years ago in 1965 amendments introduced to the Income Tax Act provided that firms may not deduct as a business expense the cost of advertising directed primarily at the Canadian market in non-Canadian magazines or periodicals. Exemptions were made for foreign-controlled publications already operating in Canada, notably Time and Reader's Digest. An amendment to the Customs tariff had the effect of prohibiting entering of non-Canadian periodicals containing advertising directed at the Canadian market.
A word about the Canada Development Corporation which I think is one of the components of a Canadian ownership policy. The CDC was established to help develop and maintain strong Canadian-controlled and Canadian-managed firms in the private sector of the economy and to give Canadians greater opportunities to invest and participate in the economic development of Canada. It is expected to invest in enterprises in which it expects have a substantial holding of shares carrying voting rights and in which the total value of shareholders equity would
May 29, 1972

exceed $1 million. The CDC is not expected to make investments that do not meet a profitability criterion.
In regard to tax policy, last June the budget featured several proposals to increase the attractions to Canadians, relative to non-residents, to acquire equity in Canadian enterprises. The then minister of finance listed four main features as follows:
First, Canadian corporations will be permitted to deduct as an expense, interest on funds borrowed to finance the purchase of shares in other corporations . .. (eliminating) a disadvantage which Canadian corporations have had in competing with foreign corporations in takeover bids. Second, the 10 per cent limitation on foreign assets of pension funds and retirement savings plans will have an important influence in channelling the funds of these large intermediaries to Canadian businesses. Third, the lower tax rate for small business will be available only to Canadian-owned companies . . Finally, the form of the dividend tax credit makes the incentive to invest in shares of Canadian corporations even more attractive than it has been for most Canadians.
In addition to this there has been a public investment policy and attendant regulations. Government investment in rail and air transport, telegraph facilities, atomic energy and, at the provincial level, in electricity generating and other utilities has had the effect in increasing and maintaining a high level of Canadian ownership in these areas.
Government regulation in the transportation and communications fields, among others, are also helping to ensure behaviour by national firms that is consistent with national objectives. I think that although public investment and regulations have not been designed primarily as an element of foreign investment policy, they have in some industries ensured a Canadian presence and, in other industries, behaviour consistent with Canadian policy.
May I, for a moment, look at controls that other countries impose on foreign capital investment. Of all the western developed countries, including Japan and Mexico, none has such a high proportion of its economic production controlled by non-nationals as this country. In countries where foreign ownership is at all significant, the foreign owners hre usually from several other countries; but in Canada four-fifths of direct foreign investment comes from one country, the United States, the most industrially powerful country in the world.
Governments use various methods to control and direct foreign investment, including screening processes, exchange controls, control over access to domestic savings, mandatory rules over share transfers, ownership of real property by non-nationals and participation on boards of directors and management. In addition, all countries elaborate specific key sectors in which foreign investment will be prohibited or severely restricted. In cases where specific sectors are not elaborated, an implicit sector approach is often utilized by the general screening process.
The United States, the Netherlands, West Germany and Denmark have very few restrictions on direct foreign investment. The United Kingdom, Australia, Belgium, Italy and France welcome foreign investment but bargain with the potential investor in order to ensure that the
Foreign Takeovers Review Act
foreign investment will meet the needs of the host country. Performance, location and type of industry are all discussed and negotiated in those countries. Sweden and Norway, despite the absence of major formal restrictions, protect key sectors rigidly. Similarly, Italy, Austria, France and the United States exclude foreign investment from significant sectors of their economy. Mexico and Japan follow an actively nationalistic policy. In Mexico the principle is that new foreign capital should be seen as a supplement to internal savings. In Japan foreign participation is not allowed until the industry is seen to be ready to compete internationally.
These countries have used a number of policies to control foreign participation. Some countries have adopted a general screening process whereby all foreign investment requires government approval. This vehicle is used by the United Kingdom, Norway, France, Japan and Mexico. To a lesser extent, often in the guise of exchange controls, Italy, Belgium, Sweden, Denmark, Austria and Australia use this process. Certain countries also use such exchange controls and limit access to domestic savings. Foreign takeovers are often financed by the host countries.
In Canada I believe this is one of our real difficulties. To avoid this France, for example, requires that all or part of an investment requirement must be financed from abroad. In the United Kingdom all takeovers must be financed from abroad. Frankly, I think we ought to move in this direction as well. I think it is inappropriate for foreign people to come to this country and buy up our industries with our money. They do this by borrowing money from our banks and lending institutions. I think the committee must look carefully at this area.
Another technique is limiting share transfers and the percentage of real property which can be held by nonnationals. In Sweden, companies can prevent the sale of their shares to non-nationals. Switzerland and Japan use different categories of shares for foreign nationals, and thus control remains in the hands of nationals, that is, in the hands of citizens of the host country.


Leslie Gordon Benjamin: What does the hon. member think of that?


Norman Augustine Cafik: Switzerland, Norway, Denmark and Sweden do not allow non-nationals to purchase real property. Also, some countries limit participation on boards of directors and in management. For example, the Scan-divanian countries insist that there be a majority of nationals on each board. Other countries, such as Japan, insist that management remains entirely in the hands of citizens of that country no matter what percentage is owned by foreigners. Britain and Australia prefer to see a majority of their nationals on boards of directors. Generally speaking, this is another bargaining point to be settled by those countries.


Leslie Gordon Benjamin: Where does the hon. member stand?


Norman Augustine Cafik: All countries, whether they formally assume a liberal or very nationalistic stance, use the key sector approach in this field to some extent. I have enumerated some of the approaches that have been adopted by other countries. When the committee reviews this bill it ought to take those factors into account and consider, particularly,

May 29, 1972
Foreign Takeovers Review Act the question of people coming into this country, taking over our companies and financing those takeovers, so to speak, at our expense. It seems to me that something ought to be done and that the committee should look at this particular problem.
When the committee considers the bill, I hope it will look into another point I am about to raise. On April 23, 1970, when I spoke in the House on foreign investment, I spoke of what I thought was an important area that must be considered. I said we borrow a great deal of our loan capital from our federal and provincial institutions-for instance, we take money from funds set aside for the unemployment insurance fund, and so on-but that equity capital is brought in from abroad, usually from the United States. It seems to me, if we need foreign investment, we need it in the form of loan capital and not in the form of equity investment.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: I believe the Canadian people want more Canadian control in this area and would be willing to authorize their federal and provincial governments to allow public moneys to be used in equity purchases, even though some risk may be involved. At present our legislation prohibits the federal and provincial governments from using these masses of money except for perfectly safe loan ventures. That course, I believe, has had the tendency of maximizing the degree of foreign control in this country because it has forced people to seek equity money abroad.


Mr. Rowland:: Read the Manitoba legislation.


Norman Augustine Cafik: I believe the Canadian people are willing to so authorize their governments and I believe they are willing to take the gamble. If they are willing to do so, I think we ought to encourage them. The same kind of problem is encountered with other financial institutions such as-


Leslie Gordon Benjamin: The Liberal party.


Norman Augustine Cafik: -our finance companies and insurance companies which are prevented by law from investing in equities except to a limited degree. I think we ought to do something in that area as well. Legislative changes need to be made. I think something ought to be done in both these areas to help maximize Canadian control over the economy.
I believe the present policy is a step forward, although in my view and in the view of many Canadians it is not a very brave step forward. On the other hand, this is the responsible approach since at this time we must not do anything that will jeopardize our ability to create jobs. I think we must take more courageous steps in future. I hope that once we get our people back to work in the Canadian economy the government will give serious consideration to further measures which will maximize our control over our economy.


Mr. David MacDonald (Egmont):: Mr. Speaker, I appreciate the opportunity to say a few words this evening, and

presumably a bit more tomorrow, with regard to the legislation presently before us. When the Minister of Industry, Trade and Commerce (Mr. Pepin) spoke earlier today I was somewhat surprised, as I am sure others were, that the Minister of National Revenue (Mr. Gray) could not find it possible to lead off for the government on the need for the evolution of policy on this issue.


Jean-Luc Pepin: Why were you surprised?


David Samuel Horne MacDonald: I thought he was the minister who was chiefly responsible. But we are gradually getting the picture that this legislation is to be nothing more than a piece of face-saving material.


Jean-Luc Pepin: We split the work. I do the bill, he does the tour of the provinces. What is wrong with that?


David Samuel Horne MacDonald: I am glad that he is still in the government. I thought perhaps he had taken the route of some ministers who decided that the government was not responsible, and resigned.


Jean-Luc Pepin: That is our business.


David Samuel Horne MacDonald: If the minister wants to speak again, I would be quite happy to let him do so.


Jean-Luc Pepin: Say something intelligent.


David Samuel Horne MacDonald: The only intelligence the minister has displayed so far is the ability to be concerned about an issue that is important, but there was certainly not anything in what he said this afternoon to show that the government is prepared to come to grips with this problem.
It is rather surprising that the government has the ability to be at the opposite end of the emotional spectrum when the other response is required. I am impressed by the ability of this government to appeal for balance when strong measures are needed, and then caution against halfhearted measures when unnecessary overreaction characterizes its activity. I do not think I have to spell that out for the minister; I think he knows exactly to what I am referring.	[DOT]
There is very little dispute between members of this House on the present financial difficulties facing our country. Indeed, the difficulties seem to indicate that any activity of a reporting nature with regard to financial institutions and transactions in this country should be considered with full care and caution. Well, caution is not lacking in the law we are discussing this evening. As a matter of fact, the bill before us is almost smothered in and suffocated by it.
The long, arduous, shrouded-in-secrecy study of the government and its policy development is broken only by the odd leak. This is one case when the leaks were better in some instances than that which was eventually produced. There was a great feeling of suspense. The final product is much like the egg that was sat on too long; all we have for policy is a bad yoke. I suspect the smell will be with us for some time to come.
No government that has been so callous about the necessity of creating employment has the moral right to
May 29, 1972

hide behind the issue of jobs needed. It is more than a little inconsistent to hear government speakers tell us that we must be so concerned about the issue of jobs, yet that is what we are hearing from them. Indeed, we are not hearing a strong statement of support of the bill before the House but, rather, a continuous apology for a policy for which apologies cannot be made.
The previous speaker, the hon. member for Ontario (Mr. Cafik) spent most of his time suggesting alternatives. He really gave us quite a tour. It was almost like a combination of the encyclopaedia and the Canadian geographic magazine; he went all across Canada, all over the world and threw in his ideas. He seemed to forget the matter before us is government legislation which, if he is still a member of the government, he is supporting. It is just another indication of lack of support.
There is also a reflection of lack of leadership on this particular issue. Nowhere has there been any less indication of leadership than on this issue. If one wants, as some government speakers have done, to refer to the Canada Development Corporation as another part of the positives, it certainly is a part of the positive: it is establishing a new game of Crown corporation musical chairs where we, presumably, will permanently see a collection of various odds and sods of institutions, all of a governmental or quasi-governmental nature, being taken over by the CDC with absolutely no relationship to the question of economic self-determination for Canadians.
We in this party are well aware of the need to encourage development in Canada, especially in areas where economic conditions are depressed. We in this party have no hang-ups or misconceptions about a healthy attitude toward foreign investment.


An hon. Member:: What does that mean?


David Samuel Horne MacDonald: Just listen and I will get to it. Where we differ and find cause to belittle this bill and its child's step, instead of what should be a mature solution, is in the complete reluctance to realize the firm need for some very clearly stated guidelines on foreign investment and Canadian development for this country. I find it passing strange for the government, with a straight face, to produce a report such as was presented to this House a few short weeks ago and then follow it up with this kind of bizarre piece of legislation that the minister spoke of this afternoon.


Jean-Luc Pepin: You have already said that three times.


David Samuel Horne MacDonald: Maybe it needs to be said more often if the message has not reached the minister's ears. Presumably that is one of the points of debate.


Jean-Luc Pepin: I am waiting for ideas.


David Samuel Horne MacDonald: There will be plenty. I hope the minister took note of those that were presented today. I am sure he did. There must be some understanding of what the government's role will be with respect to investment generally. There is no indication whatsoever of what the government has in mind. Indeed, all we are getting from this government in the matter of investment is a conflicting signal.
Proceedings on Adjournment Motion
The greatest enterprises which involve the largest number of Canadians must be shaking their heads in vain about what the government is really up to with regard to the Canadianization of economic activity. I am referring to the activities that took place last fall with regard to the taxation of co-operatives and credit unions. Both inside and outside this chamber we witnessed hamhanded attempts to limit the effectiveness of the most Canadian institutions that we have. It was only after considerable pressure that the government finally and reluctantly reverted to the previous legislative situation which in effect provided an effective framework for co-operatives and credit unions to flourish in this country. What could be more important to the future development of Canadian involvement and control of commercial activities than these two very important enterprises?
Since it has reached ten o'clock I will not take up any more time this evening. However, I will present some concrete suggestions tomorrow afternoon and I hope the minister will be in the chamber to hear them and respond. May I call it ten o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

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

['No. This is a general policy which can be applied by the province under the existing regulations. It could apply to this year or any period in the future. The officials of the Department of National Health and Welfare have been in touch with officials of the department of public welfare in Nova Scotia and their understanding is that the problem regarding blind persons employed on LIP projects will be favourably settled.\nMotion agreed to and the House adjourned at 10.16 p.m.\n-45', 'Tuesday. May 30, 1972']
Heath Nelson Macquarrie: Mr. Speaker, on May 8 I asked the Secretary of State for External Affairs (Mr. Sharp) the following question:
Mr. Speaker, I should like to ask the Secretary of State for External Affairs a question. Inasmuch as the distinguished High Commissioner for Bangladesh has arrived in Ottawa, can the minister report on whether or not facilities have been acquired in Dacca for the Canadian plenipotentiary to perform his duties, and when that official will in fact be performing his duties in Dacca?
The reply was:
Mr. Speaker, I shall have to take the question as notice. I am not certain whether our new High Commissioner has yet appeared in Dacca. As the hon. member knows, there is a double accreditation to this post.
I may say I have had no further response to this question which the minister took as notice. Needless to say, Mr. Speaker, I was aware of the fact that the chief Canadian representative to Dacca had accreditation at another capital. It was this very situation which I protested a good many weeks ago.
This situation is doubtless another aspect of the withdrawal syndrome reflected in the government's white paper on foreign policy. There are in Ottawa today representatives of ten countries at whose capitals Canada has no accredited plenipotentiary. The House will have heard me make frequent mention of the little Commonwealth country of Barbados which has had a fine mission here in

May 29, 1972
Proceedings on Adjournment Motion Ottawa for some years. Yet Canada, a nation of 21 million, cannot seem to find the interest or the funds to reciprocate by opening a mission in Bridgetown. I must cite a recent announcement by the minister indicating that there is now an intention to open a mission in Barbados and five other areas by 1974. But why are we lagging? Does austerity clutch the external affairs department with its icy hand long after it has relaxed its grip on other free spending departments, for example, that of the Secretary of State?
Bangladesh is the second largest country in the Commonwealth and is one to which we should extend not only recognition, as we have, but to which we should send a high commissioner accredited to that great land and to it alone. So horrendous has been its suffering, so immense are its problems and so great our opportunity for assisting a fellow Commonwealth state that Canada should feel humiliated at its incapacity to upgrade its mission. We should have a full time high commissioner there and an adequate office and staff in Dacca. There is much to do in Bangladesh and I cannot believe the people of Canada want their government pennypinching on this issue. Nor can I believe we do not have adequate personnel to staff such an office.
I am not especially enamoured of the insensitive approach to the problem by the minister when he reported on May 15 that Bangladesh would prefer more aid rather than a resident Canadian high commissioner. This, I think, begs the question in a somewhat gauche and condescending manner.


Mr. Ray Perrault (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, I would remind the hon. member that the Secretary of State for External Affairs (Mr. Sharp) announced on April 10 cabinet approval for the opening of six new posts. The proposed new posts will enable Canada to achieve more effectively its national objectives relating to its political, commercial, economic, aid, immigration and consular interests.
Embassies or high commissions will be opened in the following countries: Barbados, Hungary, Korea, Morocco and Zambia. A Canadian consular office already exists in Budapest, and Canadian development offices in Lusaka and Rabat. I would remind the hon. member of this when he comments on the alleged failure of the government to be more active in this field. A consulate general will be opened in Atlanta, Georgia. The posts should all be in full operation in 1974. However, the majority will likely be in partial or full operation sooner, as some elements of the posts are already in place or will be transferred from existing nearby posts. Preparations for the opening of these new posts will begin as soon as possible.
Diplomatic relations were established with Bangladesh on March 20 when our ambassador in Bangkok, Mr. Gordon Cox, in his capacity as representative of the government of Canada to Bangladesh, arrived in Dacca for his first visit. Bangladesh having become a member of the Commonwealth on April 18, our representative has been designated as High Commissioner of Canada to Bangladesh and is expected to present his credentials in that capacity almost immediately. He is probably en route to Dacca at this very minute.

A Canadian development team has been assigned to direct the Canadian assistance program in Bangladesh and the first member, who is also a member of the staff of the Canadian representative, has been in Dacca since mid-March. Another member has joined him, to make two on the ground in Dacca. An additional first secretary is being appointed to the embassy in Bangkok to assist the ambassador in his responsibilities toward Bangladesh. He will be spending an increasing amount of time in Dacca, and the facilities available to the development team will be increased so as to permit the operation of a full diplomatic mission as soon as budgetary considerations permit.



[Stage Direction]
Mr. ]. M. Forrestall (Dartmouth-Halifax East): Mr. Speaker, I find it regrettable that neither the minister nor his parliamentary secretary, the hon. member for Papi-neau (Mr. Ouellet), are here this evening. I do not like to suggest that this is a measure of the seriousness with which the government takes the question I raise this evening, but very obviously it is.
Cyril Lloyd Francis: There is good reason why he cannot be here.


Mr. Forrestall:: If the hon. member has something to say, he may respond. If either of those hon. members are here, then I apologize to both. But it is my understanding that the hon. member for Papineau is the minister's parliamentary secretary and I do not see the minister or that hon. member here. I may be wrong in choosing-


Cyril Lloyd Francis: Mr. Speaker, by arrangement with the hon. member, who has good reason for not being here, I am prepared and will endeavour to reply.


The Acting Speaker (Mr. Laniel):: Order, please. The hon. member knows that points of order cannot be raised at this time. The practice and procedures are quite clear in this regard. Members are given the opportunity at this time to make their arguments, and the parliamentary secretary will have the opportunity to reply in due course.


J. Michael Forrestall: The only comment I wish to make is that while there may have been arrangements made, they were not made in consultation with me. I appreciate the distinguished gentleman being here this evening to respond.
My question is quite brief and relates to the difficulty faced by people receiving blind pension allowances when they enter into LIP projects. It is quite clear that blind pension allowances are directly within the jurisdiction of provincial governments. I have no illusions about that, but I make no apology for raising the matter of protecting people on blind pension allowances.
The fact is that under existing legislation the federal authority is compelled to recover overpayments to people receiving blind pension allowances. Any income over and above the $900 allowance, plus $600 which they are allowed to earn, must be recovered. I am also aware that if these people were receiving benefits under the Canada Assistance Plan they could receive up to $1,900 before this
May 29, 1972

recovery provision came into play. My concern is that while the problem has been resolved for at least this year, will the government be prepared to continue to protect people in receipt of pension allowances in the event that the level of income is affected by programs falling entirely within federal jurisdiction? I refer to programs such as those which in fact operate on the basis of direct injection into the economy of taxpayers' dollars-programs such as LIP.
I am sure the hon. gentleman opposite understands my concern. I wonder, at the same time, whether the government might consider in a realistic way and in consultation with the provinces a total and effective review of the blind persons allowance inasmuch as we are all aware that under the Canada Assistance Plan people who have this type of disability are, or could be under other circumstances, entitled to income up to $1,900 before impairment of that program begins to take place, whereas under the existing program they are limited to $600 over and above the amount they receive.
I hope the hon. gentleman will comment on this matter of interest and concern people who are in receipt of the blind persons allowance. I am sure they and the provinces would welcome a clear demonstration of understanding of the difficulties which arise under programs such as LIP. In short, I believe they would welcome clarification on where they will stand next year. I think this is a most important matter and I would appreciate my colleague's comments.


Cyril Lloyd Francis: Mr. Speaker, by arrangement with the hon. member for Papineau (Mr. Ouellet) I have undertaken to make a reply this evening. The hon. member has made his brief and material available to me.
The Blind Persons Act provides for federal sharing, under agreement, of 75 per cent of the amounts paid by the provinces for allowances to blind persons 18 years of
Proceedings on Adjournment Motion
age and over. The provinces pay allowances to recipients under authority of provincial legislation but in accordance with the provisions of the federal act. The act specifies that payments to a province shall be made only in respect of a recipient whose annual income, inclusive of allowance, does not exceed $1,500 for a single person-the hon. member pointed this out-or $2,580 for a married couple. If both spouses are blind, the income must not exceed $2,700.
Income for this purpose includes all earnings, gratuities and contributions received whether in cash or in kind. This is the requirement under the act. However, under the Blind Persons Act it is general practice for provinces to disregard earned income during the period that the allowance is suspended, except in the case of regular seasonal employment, provided the person advises the province at the time he commences employment and requests suspension of his allowance.
Similarly, when earnings cease, the person may have his allowance reinstated without taking into consideration the amount earned during the period the allowance is suspended. Although federal officials have encouraged this practice, it is at the discretion of the province whether or not the practice is adopted. Under these circumstances, blind persons who have been employed on projects such as those under LIP could have earnings without creating an overpayment or affecting future payment of allowances.


J. Michael Forrestall: For this year only.


Cyril Lloyd Francis: No. This is a general policy which can be applied by the province under the existing regulations. It could apply to this year or any period in the future. The officials of the Department of National Health and Welfare have been in touch with officials of the department of public welfare in Nova Scotia and their understanding is that the problem regarding blind persons employed on LIP projects will be favourably settled.
Motion agreed to and the House adjourned at 10.16 p.m.
-45

Tuesday. May 30, 1972