1972-05-08

OFFICIAL REPORT


[Stage Direction]
21 Elizabeth II

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Published under the authority of the Speaker of the House of Commons by the Queen's Printer for Canada Available from Information Canada, Ottawa, Canada
25316- 11
[Stage Direction]
Monday. May 8, 1972


Mr. Colin D. Gibson (Hamilton-Wentworth):: Mr. Speaker, I rise on a question of personal privilege. I wish to deny the error made by the right hon. member for Prince Albert (Mr. Diefenbaker) when he falsely stated that I asked a planted question on the subject of Canada Day in the House, as quoted in the Hamilton Spectator of Friday, May 5. Actually, the foundation for the question was my own private members' bill which has been filed and has been before parliament since last October. I request-


Mr. Speaker:: Order, please. The hon. member must know that he has to give the Chair the required notice in writing before raising a question of this kind. No notice, to my knowledge, has been sent to my office; therefore the matter cannot be pursued.



ROUTINE PROCEEDINGS


Mr. John Burton (Regina East):: Mr. Speaker, I wish to move a motion under Standing Order 43. I would move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instruct the Standing Committee on Regional Development to invite the Minister of Regional Economic Expansion to appear before the committee this week in order to provide answers to questions posed at previous meetings on grants and other related matters concerning McCain Foods Limited, the distribution of industrial incentive grants by province, and the failure of the Department of Regional Economic Expansion to maintain an adequate check on the impact of its grants on other industrial operations.


Mr. Speaker:: Order, please. I am not sure whether this motion has not already been put to the House. I appreciate there is nothing in the rules to indicate that a motion cannot be put ten times on the same day or ten times on ten consecutive days, but I think that would be an abuse of the rules. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: The motion cannot be put.



CANADA ELECTIONS ACT


Mr. David MacDonald (Egmont) moved: for leave to introduce Bill C-202, to amend the Canada Elections Act (prisoners enfranchised).


Some hon. Members:: Explain.


David Samuel Horne MacDonald: Mr. Speaker, the purpose of this bill is to permit inmates of jails and penitentiaries to vote in federal elections. It is submitted in the belief that prisoners must, to the greatest degree possible, exercise responsibility in the democratic process if their re-entry into society is to be successful.
<1410)


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

[DOT]


Hon. Gerard Pelletier (Secretary of State) moved: for leave to introduce Bill C-203, an Act to amend the Representation Commissioner Act.


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


[Stage Direction]
On the order: Government Notices of Motions:
The President of the Privy Council:
That the Standing Committee on Veterans Affairs be authorized to hear evidence from spokesmen for:
1.	The Hong Kong Veterans Association of Canada,
2.	The National Prisoners of War Association, and
3.	The Dieppe Veterans and Prisoners of War Association, concerning disability pensions of members of the armed forces who were prisoners of war.
Mr. Speaker:: Pursuant to section 2 of Standing Order 21, this notice of motion is transferred to and ordered for consideration under government orders at the next sitting of the House.

May 8, 1972
Questions


Mr. Knowles (Winnipeg North Centre):: I rise on a point of order, Mr. Speaker. Would the House not consent to passing this motion now without debate?


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


Hon. Allan J. MacEachen (President of the Privy Council) moved:: That the Standing Committee on Veterans Affairs be authorized to hear evidence from spokesmen for:
1.	The Hong Kong Veterans Association of Canada,
2.	The National Prisoners of War Association, and
3.	The Dieppe Veterans and Prisoners of War Association, concerning disability pensions of members of the armed forces who were prisoners of war.


[Stage Direction]
Motion agreed to.
David Samuel Horne MacDonald: I rise on a point of order, Mr. Speaker. I wonder whether the government House leader has yet had a chance to confer with the Secretary of State (Mr. Pelletier) with regard to the establishment of a committee to look into matters related to youth, as agreed earlier by the Secretary of State. Has there been any progress, and when will the government House leader be in a position to take some action on this matter?


Allan Joseph MacEachen: Mr. Speaker, I have not yet reached a decision on it and I am not so certain whether a decision would be material at this point.



QUESTIONS ON THE ORDER PAPER


Mr. Marshall: How many claimant kits were sent to UIC offices in the following cities in the Province of Newfoundland (a) St. John's (b) Gander (c) Grand Falls (d) Corner Brook?


Hon. Bryce Mackasey (Minister of Manpower and Immigration):: We are interpreting claimant kits as applications received from claimants, (a) St. John's received 3,576 applications in February, 1972. (b) There is no office in Gander, (c) The service office in Grand Falls does not process applications, (d) Corner Brook received 947 applications in February, 1972.


FEDERAL PENITENTIARIES-JUVENILE OFFENDERS
Mr. Orlikow: 1.	How many juvenile offenders are now in federal penitentia"ies?
2.	In how many cases did the court have pre-sentence recommendations from social workers, probation officers, psychiatrists, etc.?
3.	What facilities, if any, are there for segregation of these juveniles from the adult inmates?


Hon. Jean-Pierre Goyer (Solicitor General):: 1. Onewithin the meaning of Section 21 of the Penitentiary Act.
2.	One-for the same young offender.
3.	This young offender is confined under the provisions of section 21 of the Penitentiary Act in an area within the confines of the Drumheller Institution, Drumheller, Alberta, where a Young Offender's Program is in effect.
(Questions answered orally are indicated by an asterisk.)


UNEMPLOYMENT INSURANCE BENEFITS
Mr. Laprise: 1.	Prior to receiving unemployment insurance benefits, have applicants had to wait and, if so, how many of them have had to wait (a) three weeks or more (b) four weeks or more (c) five weeks or more (d) six weeks or more?
2.	How many employees of the Unemployment Insurance Commission in Montreal and Rouyn had to work overtime during the months of October. November and December 1971?
3.	How many hours of overtime did these employees work?


Bryce Stuart Mackasey: 1. Continuing figures on speed of service have not been kept.
2. Number of employees who worked overtime
October November December 1971	1971	1971
Regional Office, Montreal - District Office, Rouyn	
3. Number of hours of overtime
Regional Office, Montreal.... District Office, Rouyn	
410	541	54430	28	37October	November	December1971	1971	19715,559	9,314	1,1228799	649	750


INFORMATION REGARDING EMPLOYEES IN FORMER DEPARTMENT OF TRADE AND COMMERCE
Mr. Burton: 1.	How many full-time employees were there in the former Department of Trade and Commerce before its amalgamation with the Department of Industry?
2.	How many of these were earning more than $15,000 annually, distributed according to $1,000 intervals?


Mr. Bruce Howard (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: 1. The number of full-time employees in the former Department of Trade and Commerce, as of March, 1969, was 1,961.
2.	Records are not maintained in such a manner as to readily provide information concerning salary ranges. However, the number of employees earning more than $15,000 per annum in March 1969 was 170.


INFORMATION REGARDING EMPLOYEES IN FORMER DEPARTMENT OF INDUSTRY
Mr. Burton: 1.	How many full-time employees were there in the former Department of Industry before its amalgamation with the Department of Trade and Commerce?
2.	How many of these were earning more than $15,000 annually, distributed according to $1,000 intervals?
May 8, 1972


Bruce Andrew Thomas Howard: 1. The number of full-time employees in the former Department of Industry, as of March, 1969, was 768.
2.	Records are not maintained in such a manner as to readily provide information concerning salary ranges. However, the number of employees earning more than $15,000 per annum in March, 1969, was 157.


STEPS TAKEN TO CONTROL INFLUX OF HEROIN INTO CANADA
Mr. Yewchuk: 1.	What recent steps have been taken by the government to control the influx of heroin into Canada?
2.	During the last year (a) how many persons were arrested for smuggling heroin into Canada (b) what was the country of origin for each of the persons arrested?


Mr. J. A. Jerome (Parliamentary Secretary to President of the Privy Council):: 1. The Department of National Revenue, Customs and Excise has embarked on a wide and varied training program for customs officers over the last three years. This program has proven most successful in the training of customs officers to identify narcotic materials and training in the methods of apprehending narcotic smugglers. As a matter of policy, all narcotic seizures made by customs officers are turned over to the Royal Canadian Mounted Police for action under the Narcotic Control Act.
The Royal Canadian Mounted Police work closely with the Customs Department who are very active in the suppression of illegal drug importation at ports of entry. A close association exists with the International Criminal Police Organization (Interpol) and this affiliation permits a reciprocal exchange of information on international drug trafficking. In recent months, the R.C.M. Police joined in a continuing tripartite meeting with France and the United States which is aimed specifically at increasing the exchange of information between the three countries involved.
Close co-operation in this area has always existed between Canada and the United States and, in addition, recent tripartite meetings on the ministerial level have taken place to establish closer liaison between Mexico, the United States and Canada.
2. (a) During the calendar year 1971, 14 individuals were charged by the R.C.M. Police for illegal importation of heroin into Canada.
(b) Country of Origin (Birth)	Number arrested
of persons arrested
Algeria	1
Canada	4
Egypt	1
France	1
Israel	1
Italy	4
Lebanon	1
Taiwan	1
Questions


ROYAL CANADIAN MOUNTED POLICE CENTENNIAL
Mr. Nielsen: 1.	Has a committee been established to plan for the celebration of the centennial of the Royal Canadian Mounted Police to occur in 1973 and, if so, what are the names and addresses of the members of the committee?
2.	What arrangements, if any, have been made with the governments of Manitoba, Saskatchewan and Alberta to enable those provinces to participate in the planning of the centennial?


Jean-Pierre Goyer: 1. Yes. A Centennial Steering Committee has been established to make plans for the centennial of the Royal Canadian Mounted Police in 1973. This committee chaired by Mr. Guy Fournier, 361 Place Royale, Montreal 125, Quebec, consists of Mr. John Rowand, 69 Academy Park Road, Regina, Saskatchewan; Mrs. Marie-Josee Beaulac, Solicitor General's Office, Ottawa; Sub/Inspector J. C. Y. Tur-geon, Royal Canadian Mounted Police, Ottawa; Mr. Steve Evans, 154 University Avenue, Toronto.
2. All western provinces have been consulted with regard to the Centennial of the Royal Canadian Mounted Police. They have all been made aware of the objectives of the centennial along with the proposed projects that the Steering Committee has developed. We have invited their comments and suggestions and a permanent liaison has been established with the provinces through the divisions of the Royal Canadian Mounted Police.


ACQUISITION OF ROCHDALE COLLEGE AS HOME FOR SENIOR CITIZENS
Mr. Robinson: Will the government consider the takeover of Rochdale College to utilize the premises as a senior citizens home?


Hon. Ron Basford (Minister of State for Urban Affairs):: In accordance with the announcement made by the Minister of State for Urban Affairs on August 4, 1971, Central Mortgage and Housing Corporation has taken foreclosure action againts the owners of Rochdale College. While it has been hoped that the courts would grant an early order for possession, to permit CMHC to obtain financial and operating control, this possession has been refused by the courts and CMHC solicitors have therefore been instructed to seek an early trial date on the main foreclosure action. We are pursuing the foreclosure action with all due diligence.
As CMHC does not have legal possession of the building, consideration cannot be given to other uses at this time.


FEDERAL FUNDS FOR STORM SEWERS IN LARGE MUNICIPAL AREAS
Mr. Robinson: Is the government considering the advisability of providing funds for storm sewers and sanitary system facilities for the large municipal areas of Canada such as Montreal, Toronto, Vancouver, Winnipeg, Hamilton, Calgary, Edmonton, Ottawa and Quebec?


Stanley Ronald Basford: Loans may be made under the National Housing Act to any province or municipality for the construction or

May 8, 1972
Questions
expansion of trunk sewer collector systems and sewage treatment plants. This provision does not include loans for storm sewers. While the government has the program under continuing review, there are no immediate plans to expand the scope of the work that may qualify for these loans.


CREDIT INFORMATION
Mr. Robinson: 1.	What action does the government propose in order to keep credit information about Canadians (a) in Canada (b) confidential and restricted?
2.	Will the government consider ways and means of controlling the credit information collected by credit bureaus from being given to the public generally?


Hon. Robert K. Andras (Minister of Consumer and Corporate Affairs):: 1. The responsibility for supervising the operations of agencies which collect and disseminate information concerning the credit rating of individuals rests with the provincial legislatures. Several provinces have passed or tabled legislation designed to regulate the activities of such agencies.
2. Answered by No. 1.


OPEN-SHOP MOVEMENT FOR THE CONSTRUCTION INDUSTRY
Mr. Robinson: Will the federal government consider introduction of the principle of the open-shop movement for the construction industry?


Hon. Martin P. O'Connell (Minister of Labour):: No.


LOCAL INITIATIVES PROGRAM
Mr. Knight: 1.	What was the total number of applications under the Local Initiatives Program for the constituency of Assiniboia?
2.	What was the total number of dollars requested in these applications?
3.	How many approvals were granted to Local Initiatives projects on the constituency of Assiniboia and what was the cost of those projects?
4.	How many Local Initiatives projects in the constituency of Assiniboia were turned down, what were the names of these projects and what was the total amount of money requested for them?


Bryce Stuart Mackasey: 1. Records of applications under the local Initiatives Program have not been maintained by constituency.
2.	Not available.
3.	Twelve projects were approved under the Local Initiatives Program in the constituency of Assiniboia at a cost of $1,075,183.
4.	Not available.


IMMIGRATION
Mr. Robinson: Has the government considered how many additional people will be encouraged to emigrate to Canada as a result of fewer births due to increased number of abortions?


Bryce Stuart Mackasey: No. The assessment criteria under the immigration regulations which govern the size of the immigrant intake were designed in such a way that they would not ordinarily be influenced by one demographic factor such as the rate of abortion.


PARLIAMENT HILL-SPEED LIMIT
Mr. MacRae: 1.	What is the speed limit for vehicles on Parliament Hill?
2.	Who is responsible for enforcing this speed limit?
3.	For how many infractions have there been convictions since January 1, 1972?


Jean-Pierre Goyer: 1. Fifteen miles per hour.
2.	The Royal Canadian Mounted Police.
3.	Nil.


LOCAL INITIATIVES PROGRAM
Mr. Orlikow: 1.	How much of the $50 million for community organizations and other organized groups in the program announced by the Minister of Finance in the House on October 14, 1971, has been allocated?
2.	What is the allocation, by province, of money under this program?


Bryce Stuart Mackasey: 1. The $50 million for community organizations and other organized groups in the program announced by the Minister of Finance in the House on October 14, 1971, was subsequently increased to $100 million on January 11, 1972, and has been allocated.
2. As of March 14, 1972, the allocation by province under the program was:

	Private
Newfoundland	6,603,143
Nova Scotia	7,775,356
Prince Edward Island	1,524,687
New Brunswick	6,654,816
Quebec	39,008,426
Ontario	14,277,652
Manitoba	3,428,396
Saskatchewan	2,557,885
Alberta	4,240,750
Northwest Territories	602,839
British Columbia	9,171,991
Yukon Territory	312,269
May 8, 1972


CANADA MANPOWER PROGRAM-ALLOCATION OF $15 MILLION PROGRAM
Mr. Orlikow: 1.	How much of the $15 million for expansion of the existing Canada Manpower program announced by the Minister of Finance in the House on October 14, 1971, has been allocated?
2.	What is the allocation, by province, of money under this program?


Bryce Stuart Mackasey: 1. All of the $15 million allocated for the expansion of the Canada Manpower program has been allocated.
2. The allocation by province, including the payment of training costs to provincial authorities and the payment of allowances to trainees, is as follows:
Newfoundland		$ 330,000
Nova Scotia		403,500
Prince Edward Island		88,000
New Brunswick		428,500
Quebec		5,995,000
Ontario		4,700,000
Manitoba		115,000
Saskatchewan		863,000
Alberta		484,000
Northwest Territories		48,000
British Columbia		1,449,000
Yukon Territory		96,000
	Canada	$15,000,000


PROFITS TAKEN THROUGH INTEREST CHARGES ON ACCOUNTS
Mr. MacKay: Does the Department of Consumer and Corporate Affairs have any information on the profits taken by (a) Eatons (b) Simpson's (c) Simpsons-Sears (d) Shell Oil Co. (e) Gulf Oil Co. (f) Chargex through the practice of charging interest at the rate of 1 j per cent per month, 18 per cent per annum on revolving charge accounts?


Robert Knight Andras: The Department of Consumer and Corporate Affairs does not have any information on the profits taken by business firms through Chargex or revolving charge accounts.


BRANDON STUDENT RESIDENCE
Mr. Dinsdale: 1.	Will the Brandon Student Residence (formerly the Indian Residential School) be closed as of June 30, 1972 and, if so for what reasons?
2.	Was the Manitoba Indian Brotherhood consulted before this decision was made and, if so, did it concur in the decision?
3.	Was extensive remodelling carried out in the Residence last year and, if so (a) at what cost (b) for what purpose (c) what use is planned for the building?
4.	Will there be any loss of jobs arising from the closing of the Residence and, if so, how many?
Questions
5.	Where will the native children living in this Residence and attending school in Brandon be accommodated in the future?


Hon. lean Chretien (Minister of Indian Affairs and Northern Development):: 1. Yes. After documented study, it became evident that the Brandon Residence was surplus to our present requirements.
2.	The Manitoba Indian Brotherhood was consulted, provided with copies of pertinent material and concurred in the decision to close the Residence.
3.	No. (a) N/A; (b) N/A; (c) Crown Assets Disposal Corporation will be asked to arrange for its sale or transfer to another government Department.
4.	There were 35 continuing employees at the Brandon Student Residence, three of these employees were scheduled to retire this June and will therefore be unaffected by the closing. One other employee has been placed with this department in Brandon. Of the remainder, five are not mobile and therefore it may be difficult to find alternative federal government employment for them. The others are being and will continue to be considered for suitable assignments both in the Department of Indian Affairs and Northern Development and in other federal departments.
5.	Eighty students currently live at the Residence. Of this number 60 will be accommodated in their own homes. The remaining 20 will be placed in other residences or boarding homes in consultation with parents and child care agencies.


NATIONAL DEFENCE-PAY SCALES OF STAFF SERGEANTS
Mr. Godin: 1.	In 1960, what was the pay scale of a staff sergeant (a) group 4 (b) group 3 (e) group 2 (d) group 1?
2.	For the same rank and groups, what is the pay scale in 1972?


Mr.   J.-R. Comtois@Parliamentary Secretary to Minister of National Defence: 1 and 2. A staff sergeant in 1960 is now known as a warrant officer, and the monthly rates of pay shown are those paid on March 31, 1960 to a staff sergeant in the Canadian Army and on March 31, 1972 to a warrant officer in the Canadian Forces.
Automatic	Automatic	AutomaticAfter	After	AfterGroup	Basic	3 Yrs.	6 Yrs.	9 Yrs.1	
229	234	239	2442	
247	252	257	2623	
271	276	281	2864	
289	294	299	304
31 March, 1972 PAY-
FIELD	BASIC	INC 1 INC 2	INC 3 INC 4A	775	785	795	805	815B	814	824	834	844	854C	891	901	911	921	931
1970

May 8, 1972
Inquiries of the Ministry
("INC" Indicates Pay Incentive Category) (Incentive pay is based on performance and is to encourage individual motivation and to recognize, by annual pay increments, a high degree of proficiency and concomitant value to the Forces.)


INDIAN HOUSING-SASKATCHEWAN
Mr. Korchinski: 1.	In the past four years, how many houses were built in Saskatchewan for Indian families?
2.	How many of these homes were in the constituency of Mackenzie?


Mr. Allen B. Sulatycky (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: 1.
1,388.
2. 283.


TRACKING FACILITY AT POUCH COVE, NEWFOUNDLAND
Mr. Robinson: 1.	What is the estimated cost of the temporary tracking facility to be located near Pouch Cove, Newfoundland?
2.	How much of the initial cost will be paid by Canada?
3.	How much of the yearly operational cost will be paid by Canada?
4.	Will the federal government through the National Research Council have any control over the facilities when installed?


Hon. C. M. Drury (President of the Treasury Board):: In
so far as the National Research Council of Canada is concerned the answer is as follows: 1. $248,156. For building and preparation of site.
2.	Nil.
3.	Nil.
4.	No, but the station must comply with Department of Transport regulations concerning use of radio frequencies.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Orlikow: 1.	How many federal correctional institutions are there in Canada?
2.	What are the names of the Wardens of each of these institutions, and how long have they been in their positions?
3.	What, if any, are their professional qualifications?
Return tabled.


ORAL QUESTION PERIOD
Mr. Stanfield (Leader of the Opposition):: Mr. Speaker, I had some questions for the Minister of National Health and Welfare, who I believe has the Prime Minister's permission to be here today. Perhaps he will be here a little

later, in which case I shall direct my questions to him then.


INDIAN AFFAIRS
Mr. David Lewis (York South):: Mr. Speaker, I have some questions for the Minister of Indian Affairs and Northern Development arising out of a report that he met with representatives of the Indian people of northern Quebec in connection with the James Bay development. Can the minister inform the House briefly what requests the delegation made to him and what his replies were?


Joseph Jacques Jean Chrétien: Mr. Speaker, when I met the Indians of the province of Quebec on two occasions last week, they asked me to take part in the discussions with the Quebec authorities on the James Bay development; I told them I should be happy to do so. Since then I have been in touch with Quebec Premier Bourassa. We are to meet next Monday to discuss the situation and ensure that the Indians will be consulted on every aspect of the project that concerns them.


David Lewis: Would the minister inform the House whether the delegation did not also speak to him about some court suits they have started and ask him for financial and other assistance with respect to these court actions?


Joseph Jacques Jean Chrétien: Mr. Speaker, the Indians and Eskimos of northern Quebec told me that they had taken it upon themselves to bring legal action before the superior court so that it might give a ruling on the constitutionality of the act setting up the James Bay corporation. I told them our services were at their disposal but that the suit would have to be financed with the funds they have already received from us and other institutions.


David Lewis: May I ask the minister whether he did, in fact, offer additional financial assistance or any legal assistance to the Indians and Eskimos in connection with these cases-

-or if they have funds available for use?


Joseph Jacques Jean Chrétien: Mr. Speaker, they asked me whether we could grant them more funds for research. I replied that we have the matter under review and that I believed we could help them a little more in this field.


David Lewis: May I ask the minister whether the delegation indicated to him that they intend to proceed with these court cases or whether they were taking these actions simply as a symbol to dramatize their rights? If
May 8, 1972

they intend to proceed with the court actions, is he not prepared to give them legal as well as financial assistance?


Mr. Speaker:: It seems to me that this is a repetition of a question already asked.


Mr. G. W. Baldwin (Peace River):: In light of the fact that in accordance with chapter 45 of the Statutes of 1912 the province of Quebec placed itself in the same position as the federal government with respect to the rights of the Indians and thereby became the guarantor of those rights, would the minister not consult with his colleague the Minister of Justice and other colleagues so he might be prepared to intervene as protector of the rights of the Indians and Eskimos in connection with this matter?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, the hon. member should know that there is a great deal of communication between different departments of this government.


JAMES BAY HYDROELECTRIC PROJECT-COST OF TRAVEL TO MONTREAL FOR PROTECTING INDIANS
Mr. Rene Matte (Champlain):: Mr. Speaker, I have a supplementary.
Could the minister tell us whether his department paid the travel expenses of the Indians who went to Montreal for a demonstration against the James Bay project?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not have that information. The Indians receive funds from our department and from other agencies, which they use for the best possible purposes. Concerning expenses for that particular trip, I cannot say whether or not they were paid for by our department or any other agency, but I must recognize that it is their right to hold a demonstration.


RESIGNATION OF DIRECTOR OF NON-MEDICAL USE OF DRUGS DIRECTORATE-REQUEST FOR STATEMENT-PROVISION OF ADDITIONAL FUNDS
Robert Lorne Stanfield: Mr. Speaker, I have a question for the Minister of National Health and Welfare in relation to the resignation of Dr. William Craig, the head of the federal directorate dealing with the non-medical use of drugs. Does the minister propose to make any statement in the House with regard to the resignation of this very senior official?


Hon. lohn C. Munro (Minister of National Health and Welfare):: I had not intended to do so, Mr. Speaker. Dr. Craig submitted his resignation, indicating at the time that he had no comment to make. I take it that as a public servant he has a right to submit his resignation at any time, and that is what he has done.
Inquiries of the Ministry


Robert Lorne Stanfield: Is it the intention of the minister to make any additional funds available in the hope that a suitable successor to Dr. Craig can be appointed who feels he can carry on this useful work?


John Carr Munro: Mr. Speaker, I believe very useful work can be carried on now under the present allocation of funds. If the priorities are such that further initiatives have to be taken in this area, the government would be prepared to respond in such circumstances.


DATE OF PUBLICATION OF FINAL REPORT OF LE DAIN COMMISSION
Robert Lorne Stanfield: Would the Minister of National Health and Welfare tell the House when the full and final report of the Le Dain commission will be tabled and whether the report is now in the hands of the government?


John Carr Munro: Mr. Speaker, to answer the latter part of the question first, no, the report is not in the hands of the government. I cannot be very explicit as to when the final report will be submitted. The chairman has indicated that there will be another instalment of the report dealing with marijuana and I expect it fairly shortly. The final report, which will include all the research studies and the complete findings covering the entire area under the commission's mandate, I expect to be some months away.


NON-MEDICAL USE OF DRUGS DIRECTORATE-REQUEST THAT MINISTER APPEAR BEFORE COMMITTEE
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I have a supplementary question for the Minister of National Health and Welfare. In view of the internal strife, if I may use that word, that is going on, would the minister be prepared to appear before the Standing Committee on Health, Welfare and Social Affairs to explain the situation to the committee and relieve the concern of Canadians?


John Carr Munro: Mr. Speaker, first, I do not agree with the premise of the hon. member with respect to strife. Second, when I appear before the committee in the normal course of events to explain my estimates, committee members will have ample opportunity to ask me any questions they wish.


NATIONAL PARKS
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I should like to put a question to the Minister of Indian Affairs and Northern Development.
25316-2)

May 8, 1972
Inquiries of the Ministry
Did the minister have recent discussions with the Quebec authorities in connection with the proposed national park in Temiscamingue and it so, is he in a position to tell us where they stand?


Joseph Jacques Jean Chrétien: Mr. Speaker, I did get in touch with the Hon. Guy St-Pierre Friday last in that connection. We discussed it in general terms, but we hope to meet soon to discuss it more specifically.


EXTERNAL AFFAIRS
David Samuel Horne MacDonald: Mr. Speaker, my question is for the Secretary of State for External Affairs. In view of the worsening situation in Viet Nam with both escalation of the bombing and the potential fall of South Viet Nam, can the minister indicate whether or not Canada has taken any initiatives with the Soviet Union, China or the United States in the hope of obtaining a ceasefire?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: No, Mr. Speaker. I did answer a similar question last week and the answer is no.


David Samuel Horne MacDonald: Mr. Speaker, I think the minister will admit that the situation grows appreciably worse. In view of the offer made earlier by the Secretary General of the United Nations to make his good offices available, may I ask whether or not we have had any communication with the Secretary General with a view to the Secretary General taking some responsibility in this area?


Mitchell William Sharp: Mr. Speaker, I did support the initiative of the Secretary General. He has not been in direct communication with us, but I felt it desirable to support him in his offer of good offices. As the hon. gentleman knows, however, neither of the Viet Nams is a member of the United Nations so he would have to intervene in his personal capacity. However, I hope that he is successful.


David Samuel Horne MacDonald: In view of the crisis having a very serious effect on the great powers and, in particular, on the level of stability in Southeast Asia, would the minister be prepared to make a statement shortly on the government's own attitude with respect to the situation and any potential initiatives or intiatives that the government has already taken?


Mitchell William Sharp: Mr. Speaker, I do not think much purpose would be served by my making a statement on the very serious situation in Viet Nam at the present time. I might reiterate, however, the offer of Canada to act as an observer or in any capacity in which we could be useful. I doubt very much, if the Secretary General of the United Nations is unable to act as an intermediary, whether the Secretary of State for External Affairs of Canada would be successful.



FINANCE


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my question is directed to the Minister of Finance. In light of the fact government holdings of United States dollars have now reached $4,227 billion, can he say what exchange rate for the Canadian dollar this massive intervention is aimed at?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the Canadian dollar is continuing to float.


Sylvester Perry Ryan: As the Bank of Canada's monetary policy has been designed to avoid any undue appreciation of the Canadian dollar, according to the Economic Review, can the minister inform the House what the government means by "undue" and whether the present appreciation is acceptable or undue?


Mr. Speaker:: Order, please. I have serious doubts about this kind of question.


Sylvester Perry Ryan: It is a very good question.


Mr. Speaker:: The question may be of interest and important, but I think it is so broad it should normally be answered by way of a statement on motions or perhaps during consideration of the budget.
DELAY IN B.C. MUNICIPAL PROJECTS BECAUSE OF CONSTRUCTION INDUSTRY	DISPUTE-REQUEST	FOR



EXTENSION OF FORGIVENESS PERIOD UNDER FEDERAL FINANCING

Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I have a question I should like to ask the Minister of Finance who, from what I can see, is his usual cheerful and generous self, particularly today. In the lower mainland of British Columbia a construction industry dispute has stymied a number of federally aided municipal projects, resulting in the danger of municipalities suffering losses because of their inability to get the projects in operation and thereby benefit from the forgiveness clause in federal financing. Will the minister look into the matter to see whether it is possible to extend the period within which municipalities can qualify for this aid?


John Napier Turner: I will certainly look into that, Mr. Speaker.



INFORMATION CANADA


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Labour and has to do with the announcement by Information Canada of an expansion program costing several millions of dollars for the provision of computerized information and the like. Recently I have found that people who have written to Information Canada asking for a picture of the

May 8, 1972

Queen have received a document in reply headed "Publications, Information Canada" and stating "publication permanently out of stock". Will the minister look into this to find out whether this is another step along the way to demoting the monarchy?


Abram Ernest Epp: Mr. Speaker, I would be very glad to receive from the right hon. gentleman the communication from which he has read and to look into the matter immediately.



REGIONAL ECONOMIC EXPANSION


Mr. James A. McGrath (St. John's East):: Mr. Speaker, perhaps I might ask for your indulgence before asking my question to refer to the presence in your gallery of a former member of this House, now the Premier of Newfoundland, and a distinguished delegation from the Newfoundland government.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: My question is directed to the Minister of Regional Economic Expansion. Can he assure the House that funds under the Regional Development Incentives Act are not being used to undermine the luggage industry in Canada through grants being paid to companies that are importing cheap luggage into the country?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: I read the same piece of news, Mr. Speaker, and I have just asked the department to inquire about it. This was the first time I heard about it. I do not know whether the situation is as described. As soon as I receive a report I will tell the hon. member.


James Aloysius McGrath: By way of a supplementary, Mr. Speaker, and in view of the interest of some of my hon. friends in the affairs of the minister and his department, would he agree to appear before the committee this week even though he is not scheduled to appear until next week?


Jean Marchand: My appearance before the committee has been arranged by the steering committee, and I am going to follow that arrangement, Mr. Speaker.



POST OFFICE


Mr. Thomas M. Bell (Saint John-Lancaster):: Mr. Speaker, I wish to direct a question to the Minister of Labour. In the talks with the postal unions has the government in fact made a formal offer on wages and job security?
Inquiries of the Ministry


Abram Ernest Epp: Mr. Speaker, that question ought properly to be addressed to the President of the Treasury Board.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: 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?


Mitchell William Sharp: Mb'. 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.



REGIONAL ECONOMIC EXPANSION


John Stratford Burton: Mr. Speaker, I wish to direct a question to the Minister of Regional Economic Expansion. In view of the conflict between his department's figure of 1,278 new jobs for the Michelin plant expansion which his department is assisting and Premier Regan's estimate of 700 new jobs, can the minister tell the House which figure is correct and exactly how many new jobs are expected?


Jean Marchand: Mr. Speaker, I think that the apparent contradiction has been explained by Premier Regan. If the hon. member takes the trouble to read the second press release, he will realize that the statistics of the department are right.



INCENTIVE GRANT TO MICHELIN TIRE-POSSIBLE EXEMPTION FROM CUSTOMS DUTIES FOR CERTAIN IMPORTS

John Stratford Burton: Mr. Speaker, I should like to direct my supplementary question to the Minister of Finance. Has the Michelin Tire Company been granted an exemption from customs duties for certain imports? If so, when was this put into effect, is it now in effect, when will it expire, and has there been any change in the status of the exemption?


John Napier Turner: Mr. Speaker, the government has not authorized any duty-free entry of

May 8, 1972
Inquiries of the Ministry
certain types or certain sizes of tires for the Michelin Company, nor has any decision been reached as to when such a remission would come into effect.



SUGGESTED BAN ON USE OF DIETHYLSTILBESTROL IN MEAT PRODUCTION

Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. In view of the fact that diethylstilbestrol has been sharply attacked as a cancer-causing agent, and that recently two environmental organizations filed a lawsuit against both the United States Food and Drug Administration and the Department of Agriculture to demand that the use of this synthetic hormone in cattle feed be prohibited, will the government give our people the same protection as 21 other nations that have already banned the use of this material in meat production?


John Carr Munro: I will have to look into the matter, Mr. Speaker, and report to the hon. member later.



OPPORTUNITIES FOR YOUTH PROGRAM-REQUEST THAT REASONS FOR REFUSAL OF PROJECTS BE GIVEN

Mr. A. D. Hales (Wellington):: Mr. Speaker, I should like to direct my question to the Secretary of State who is the minister responsible for the Opportunities for Youth program. Is it his intention to change the content of the letters which are being sent to applicants whose projects have been rejected in order to give them more concrete information or definite reasons as to why their projects have been rejected?


Mr. Speaker:: I believe this question was asked last Friday, but I may be wrong. Perhaps the minister might reply if the information was not given to the House then.


Gérard Pelletier: No, the question has been asked, Mr. Speaker-you are perfectly right-and I explained at length that we must send a concise letter which is necessarily too short and unexplicit so that young people whose projects are rejected can receive this letter as soon as possible and look for another job. But young people who insist on having specific details and individual letters can ask for them if they are patient enough to wait for the reply.



OPPORTUNITIES FOR YOUTH PROGRAM-INQUIRY RESPECTING RESIGNATIONS IN ADDITION TO THAT OF MR. BUREAU

David Réal Caouette: Mr. Speaker, my question is for the Secretary of State.

Since the resignation of a few young people engaged in the administration of Opportunities for Youth, is the Secretary of State in a position to indicate whether there have been other resignations after those and if so, how many there were?


Gérard Pelletier: Mr. Speaker, since the last ones, there have been no others.


David Réal Caouette: Mr. Speaker, I understand that the Secretary of State is being funny, but he knows perfectly well what I mean.
Since the resignation of "Bureau and Company" last week or ten days ago, have there been other resignations?


Gérard Pelletier: Mr. Speaker, there is no organization incorporated under the name "Bureau and Company", and therefore I cannot be sure of what the hon. member means. And I am happy that for once he thinks I am funny.



CONSUMER AFFAIRS


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. It relates to a matter which was dealt with in a recent news release issued by his department. Will he inform the House whether those children's car seats and harnesses dealt with in that communique, which according to its contents failed to comply with the standards mentioned therein, will be withdrawn from the market and, if not, why not?


Robert Knight Andras: Mr. Speaker, it is our intention in the enforcement of the regulations that those will not be made available for sale. There are some inventories that in fact probably will have to be scrapped. We regret that, but the choice to me was obvious and we made the decision that they should not in fact be distributed.



FINANCE


Mr. Max Saltsman (Waterloo):: Mr. Speaker, I wish to direct a question to the Minister of Finance. It concerns the announced borrowings of the government of Ontario, both for itself and the Ontario Hydro Commission, amounting to between $800 million and $900 million. In view of the stated intention of his department that borrowings be conducted in Canada rather than abroad, can the minister indicate whether he has held discussions with officials of the government of Ontario to encourage them to borrow in Canada, and is he prepared to make some arrangement to assist them in that borrowing?
May 8, 1972


John Napier Turner: Yes, Mr. Speaker, I had discussions two months or more ago with Mr. Darcy McKeough, Provincial Treasurer of Ontario, when he indicated to me what his borrowing intentions were. I repeated what I said at Jasper, namely, the request of the federal government to all provinces, made by my predecessor, that they seek accommodation where they could in the Canadian market. He assured me that would be done and that he would go to foreign markets only where he needed to do so. A good deal of the foreign borrowing to which the hon. member refers is in the form of roll-over and reinvestment of funds and does not involve the total exchange that he has mentioned.


Max Saltsman: In the minister's conversations with officials of the government of Ontario did he give any indication to them that he was willing or prepared to take action with the Bank of Canada to lower interest rates in Canada, in order to accommodate their borrowings in this country?


John Napier Turner: Mr. Speaker, even if I had outlined this I would not at this stage make it known.



CANADIAN BROADCASTING CORPORATION


René Matte: Mr. Speaker, I should like to put a question to the Secretary of State.
Could he say whether he has been requested to intervene in the present dispute between station CBOFT and the team responsible for the broadcast "Sur le vif"?


Gérard Pelletier: No, Mr. Speaker.



BARLEY-SUGGESTED ADJUSTMENT IN ASSESSMENT OF FREIGHT CHARGES AGAINST ALBERTA GROWERS

Mr. Stan Schumacher (Palliser):: Mr. Speaker, I wish to direct a question to the Minister of Justice in his capacity as the minister responsible for the Canadian Wheat Board. Is the minister considering any adjustment in assessing freight charges against Alberta barley growers in view of the fact that most of the barley is shipped through Vancouver rather than the Lakehead, which results in Alberta producers paying an average of six cents per bushel more than they should pay?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, the hon. member's figures are in error. This matter has been discussed frequently by myself with the Wheat Board. The Wheat Board has indicated to me on a number of occasions that at any time when more Alberta barley appears to be moving through Vancouver than through the Lakehead a change in rate structure may be sought.
Inquiries of the Ministry
Of course, for that to happen a change in legislation may be required, and the co-operation of the House in putting through the amendments to the Wheat Board Act now on the order paper may be of assistance in that regard.



FUTURES TRADING-POSSIBLE UPDATING OF ACT TO PROVIDE FEDERAL SUPERVISION

Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the minister in charge of the Wheat Board. Has the government any intention of updating the Grain Futures Act, passed years ago but not proclaimed, in order to provide federal supervision over trading in futures on the Winnipeg Grain Exchange?


Otto Emil Lang: Mr. Speaker, the committee I set up to study rapeseed marketing referred to this matter and it has been under review by us. The existing Grain Futures Act would not be of much use in connection with rapeseed trading. Therefore the question we will have to put before the House is what kind of amendments may be required to make the act effective.



UNEMPLOYMENT INSURANCE


Jack Marshall: Mr. Speaker, my question is for the Minister of Manpower and Immigration. In view of the continuing problems in regard to the delays in payments to claimants under the Unemployment Insurance Act, particularly in the province of Newfoundland because of the distance between the office there and Moncton, would the minister indicate to the House whether any action is being taken to correct this problem and to relieve the pressure?


Bryce Stuart Mackasey: Mr. Speaker, the hon. member has raised this question on several occasions, and as a result of representations made some time ago I asked for a study to be made on the feasibility of an alternate computer service which would be available in Newfoundland. I should have that report this week, and I hope it is a positive one.



DELAY IN PAYMENT OF BENEFITS-ACTION TO PREVENT LOANSHARK OPERATIONS

Mr. Doug Rowland (Selkirk):: I have a supplementary question for the Minister of Manpower and Immigration, Mr. Speaker. A while ago there was some trouble with loansharking associated with unemployment insurance cheques. At that time the minister's parliamentary assistant who was being questioned in the House indicated that legislation might be prepared by the government. Is the government considering the preparation of such legislation and if so, what form will it take? Will it be by amendment of the Small Loans Act?


Bryce Stuart Mackasey: Mr. Speaker, preliminary investigation shows

May 8, 1972
Inquiries of the Ministry
that if there is any weakness in the act or law it lies in the provincial jurisdiction. We are suggesting now that perhaps we should be concentrating in that area, with the co-operation of the provinces of course, in order to bring an end to this type of situation.


Douglas Charles Rowland: May I suggest to the minister that he take a look at Bill C-187 and see if that might solve the problem?


Mr. Speaker:: Order, please. That is a representation, not a question.



INQUIRY OF THE MINISTRY

Gerald William Baldwin: I have a question for the Prime Minister, Mr. Speaker. In view of the obvious concern of Her Majesty's loyal opposition about the TAPS tanker route and the departure of the hon. member for Esquimalt-Saanich for greener pastures, can the Prime Minister advise who will be the minister who will be taking over the responsibilities heretofore exercised by the hon. member?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I am glad to see that the opposition has a high regard for the future of the Liberal party in British Columbia. We share that regard.


Some hon. Members:: Hear, hear!



TAXATION


David Lewis: Mr. Speaker, I have a question for the Minister of Finance arising out of some questions I asked him some time ago with respect to the $6 million remission to Great Canadian Oil Sands Limited. In view of the fact the latest report from that company shows that in its last fiscal year it made profits of $152 million, would the Minister of Finance now ask the company to return the $6 million remitted to it by the government on pleas of having lost money?


John Napier Turner: Mr. Speaker, those were not the grounds on which remission was made, and similar treatment was accorded that company by the government of Alberta.


David Lewis: My supplementary question is directed to the Prime Minister, Mr. Speaker. A few weeks ago I asked the Prime Minister whether he would inform the House about any other grants or remissions which Great Canadian Oil Sands Limited had received from other departments of the government and he said he would. Perhaps he has the information now.


Pierre Elliott Trudeau: I do, Mr. Speaker. I have had the information for almost a month

now. I have to refresh my memory and see what the information is in detail or else read a long paragraph to the House. In short, Mr. Speaker, may I say that no other department has made any grants of the nature in which the hon. member is interested.


David Lewis: Mr. Speaker, perhaps I did not hear the Prime Minister correctly but he seemed to say that there were no grants of such a nature as might interest me. Would he be good enough to tell me exactly what that means? Were there no grants or were there other grants in which the Prime Minister thinks I am not interested?


Pierre Elliott Trudeau: What I meant to exclude were such programs as PAIT and other programs which apply to all industries. I am not certain that there was no such program applying to that particular company, but on the basis of the inquiries I have made the answer is that no grant has been made by the government to Great Canadian Oil Sands Limited or Sun Oil Company Limited or any subsidiary of these companies. This is the answer to the question as the hon. member asked it, but as I said it does not exclude the possibility of other programs that apply across the country for which perhaps some demand has been made by this particular company.



SUGGESTED REMISSION OF SALES TAX TO BRITISH COLUMBIA HYDRO

Sylvester Perry Ryan: I have a supplementary question for the Minister of Finance, Mr. Speaker. Is the government considering the remission to British Columbia Hydro of the same tax in respect of the millions of dollars it has spent on developments over the relevant period?


John Napier Turner: I do not see
any immediate connection between the two subjects, Mr. Speaker.



WHEAT-SUGGESTED INTERNATIONAL AGREEMENT ON PRICES-GOVERNMENT POSITION

John George Diefenbaker: Mr. Speaker, my question is directed to the Minister of Justice in his capacity as minister in charge of the Wheat Board. In view of the strong statement made by 11 major United States and Canadian farm organizations which met at St. Paul with reference to wheat prices, namely, that recent prices for wheat have not been satisfactory to farmers and have not given them any financial benefits from the increasing world wheat markets, and their suggestion that we should press for an international agreement under which prices would be fixed that would bring the farmers a reasonable return, would the minister say what the present situation is, whether the government of Canada is pressing for an international wheat agreement, and what are the hopes for early signature being secured by both the producer and consumer nations?
May 8, 1972


Otto Emil Lang: Mr. Speaker, the sentiments of producers referred to by the right hon. member seem to follow exactly the lines of my own as expressed in a speech in Minneapolis. We have made our position very clear to the world that we are eager for orderly marketing and support price levels in the International Grains Arrangement which are adequate to recover the cost of production of producers all over the world. We have made this known to other participants and potential participants in such an agreement and we are watchful for the right opportunity to come back to discussions on such arrangements.


John George Diefenbaker: I thank the minister and I should like to ask him whether or not, in view of his general acceptance of the suggestions made by these major farm organizations, he agrees that farm prices for wheat today are so low as not to give farmers any financial benefits from increasing world markets?


Mr. Speaker:: I have serious doubts regarding the form of the question. The right hon. gentleman is asking the minister whether he agrees with a statement made outside the House in certain terms. I would not think that is in order.


John George Diefenbaker: I will ask the question more directly, Mr. Speaker. Is the minister of the view, shared by these various companies and organizations, that today the Canadian farmer, who is getting $1,731 at Fort William for top grades, is receiving a price that does not secure for the farmer any return even though there are massive increases in the sales of wheat?


Otto Emil Lang: Mr. Speaker, it was our view of the level of international prices that led us to hold the domestic price at $1,951 and at a later date to introduce the two-price system. I have no hesitation in saying that the recent price levels in international trading have been too low from the point of view of the over-all cost of production. As I indicated in my speech in Minneapolis, that is exactly the point which leads me to believe that the nations of the world should agree on price levels which are fairer to everybody over all, both to buyer and seller.



INDUSTRY


Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, I should like to direct a question to the minister in charge of the Wheat Board with regard to the proposed closing of the Quaker Oats plant in Saskatoon and the representations made by the mayor of that city. Has the minister been in consultation with the Minister of Industry, Trade and Commerce and are they preparing to meet with officials from Saskatoon to discuss this matter and see what action can be taken to protect this industry?


Otto Emil Lang: Mr. Speaker, no meeting such as that referred to by the hon. member is
Inquiries of the Ministry
planned at the present time. We are of course looking at the total potential use of this particular plant and some discussions along those lines are taking place.


Mr. Speaker:: The hon. member for Cape Breton-East Richmond.


Alfred Pullen Gleave: A supplementary, Mr. Speaker-


Mr. Speaker:: I apologize to the hon. member. Perhaps he might allow a supplementary to the hon. member for Saskatoon-Biggar. We will then return to the hon. member for Cape Breton-East Richmond.


Alfred Pullen Gleave: Is an investigation under way to determine whether this foreign-owned company is entitled to move its operations out of Saskatoon without consultation with the government and the Minister of Industry, Trade and Commerce?


Otto Emil Lang: Mr. Speaker, I really do not think that question raises any doubt that requires investigation. Our objective, of course, will be to see if any alternatives are available.



CANADA PENSION PLAN


Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. In view of the fact a Crown corporation is discharging men on the basis of disability and they are required to apply for a disability pension under the Canada Pension Plan, and in view of the procedures followed of application, appeal and review committees, why is the minister holding up payments in cases considered to be worthy?


John Carr Munro: Mr. Speaker, I am not aware of the specific instances to which the hon. member is referring. If he would care to elaborate or give me specific cases, I shall look into the matter to see whether there is indeed any delay.


Donald MacInnis: Would the minister mind reading the mail he has been signing these last few days?



UNEMPLOYMENT INSURANCE


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
Since a number of southeastern Quebec maple sugar producers experienced numerous difficulties last season

May 8. 1972
Inquiries of the Ministry
in hiring the required manpower, thus suffering considerable losses, can the minister say whether he has received representations from the directors of the Cooperative des producteurs des produits de l'erable requesting that changes be brought to regulations under the Unemployment Insurance Act so as to allow recipients to work a few days during the maple sugar season without any prejudice concerning their entitlement to benefits?


Bryce Stuart Mackasey: Mr. Speaker, the law as it is presently written permits people in that situation to supplement their unemployment insurance by 25 per cent which is more than ample for the sugaring season. I shall be glad to draw that particular section to the hon. member's attention so that he can send it to his constituents.



AIR TRANSPORT


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, in the absence of the Minister of Transport I should like to direct a question to the Secretary of State for External Affairs. What response has Canada made to requests from France and Great Britain that in future their airlines be permitted to fly SST aircraft through certain corridors over Canada at supersonic speeds?


Mitchell William Sharp: Mr. Speaker, I shall consult with my colleague the Minister of Transport and ask him to answer the hon. gentleman.


Mr. Speaker:: Orders of the day.


James Aloysius McGrath: Mr. Speaker, a point of order, since Thursday last when the government was questioned on government business a new order has appeared on the order paper, namely, government order 25 which concerns educational rights for the Pentacostal Assemblies of Newfoundland under the British North America Act and consequential amendments thereto. Since the same order appeared on the order paper last session, may I ask the government House leader whether he can inform the House when this order will be brought forward, bearing in mind the limited duration of the present session of parliament?


Mr. Speaker:: Order, please. The hon. President of the Privy Council will be allowed to reply, but that is not a point of order, it is a question which might properly be asked during the question period. Having said this, and the question having been asked, the President of the Privy Council might reply.


Allan Joseph MacEachen: Mr. Speaker, I will be meeting with the House leaders tomorrow, I hope. It should be possible for us to consider this and other items to which the House might wish to give priority.
[Mr. Lambert (Bellechasse).J



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, May 5, consideration of the motion of Mr. Olson that Bill C-5, to amend the Farm Credit Act, be read the second time and referred to the Standing Committee on Agriculture and the amendment of Mr. Korchinski (p.1872) and the amendment to the amendment (Mr. Knight) (p. 1903).
Mr. Rod Thomson (Battleford-Kindersley):: Mr. Speaker, the other day when I was speaking on this bill I suggested that, while my impression of the Farm Credit Corporation had been quite favourable and that while I felt it had performed a useful service, I also had the impression that upon occasion it became a little overenthusiastic about lending money to buy land at inflated prices. In the years 1968 and 1969, the Russians and Chinese were buying a lot of grain so farmers in the prairie provinces sometimes got a little carried away and paid too much money for farm land in expectation of continuing high prices for their products. It seems to me that officials of the Farm Credit Corporation got a little carried away too, and were prepared to lend too much money for the purchase of these farm lands. This is to be regretted because many farmers now find themselves saddled with a debt out of proportion to the productive value of the land at the present time. I think the corporation should be careful not to extend credit to the point where farmers will get in trouble.
The $100,000 limitation proposed in this bill may help inflate the price of farmland. This might be an advantage to those who wish to sell land but the Farm Credit Corporation, when lending money, should consider the productive capacity of that land in relation to the projected crop price. I am somewhat concerned about the possible duplication of services in respect of that portion of the bill concerned with the small farm adjustment program. At the moment, some provinces are providing advice and counselling to farmers on management questions and it seems to me that this bill will bring the Farm Credit Corporation into this area as well. It seems to me there is also some duplication with regard to the possible establishment of a land bank for the assembly of land. I do not think this would be useful, and in addition it would mean that the federal and provincial governments would be doing practically the same thing. I suggest that the Minister of Agriculture (Mr. Olson), who is not in the chamber, and the parliamentary secretary look carefully at this aspect of the bill. Instead of going ahead on its own, I suggest that the government should continue to press for an agreement between the provinces and the federal government.
The problem of land ownership, land tenure, mortgages and absentee landlords has plagued many countries for centuries. Those problems have been the cause of much political unrest, especially in older countries where there was not enough good land to go around. The result was
May 8, 1972

that exorbitant rents were charged by absentee landlords. In some ways the difficulties in this country are similar. Often, passing farmland from one generation to another is difficult. Industry has evolved a system under which industrial shares are bought and sold on the market. I think there is room for similar action in connection with land ownership. Land banks are being established; one hears of land assembly programs; the government makes loans available for farmers, and the size of farms is increasing. The government is actually advocating the elimination of certain farms.
Although this may not be the proper debate in which to raise this subject, I cannot help but feel that we have not sufficiently studied the side effects of enlarging the size of farms. In our towns and cities social difficulties are increasing. Crime and pollution are showing upward trends. There are transportation difficulties in urban areas. All these social evils are being created in the name of economic efficiency. These are the consequences that flow from encouraging our people to leave the countryside and move to the cities for the sake of some of these so-called other advantages. We have not looked carefully enough at this aspect of our problems.
I have conducted some studies with regard to land ownership, because I wanted to see what was being done in other countries. These studies, unfortunately, are not yet complete. If they had been completed I would have brought forward some recommendations in my speech. Perhaps I can do this another time. In the meantime, may I suggest that we examine this bill carefully in committee. Let us call witnesses and see what farmers themselves as well as other interested people think may actually happen to land prices if credit is expanded to $100,000 per farm. How many do they think will take advantage of this scheme and what will it do to land prices. As I said, I suggest that the Standing Committee on Agriculture call witnesses and hear the farmers' point of view on what may happen in rural communities if this program is implemented.


William Gordon Ritchie: Mr. Speaker, in speaking on this bill and on the amendments to it, may I say that, to me, it seems this is largely a housekeeping bill, providing for credit to be expanded to $100,000 for individual farmers and for a certain broadening of the act to allow the Farm Credit Corporation to step in and perhaps manage farms under certain circumstances. I do not think the principle under which farm credit is to function is materially different from the principle under which it functioned in the past. Here we see merely a continuation of expanded policies that have largely the same thrust as previous policies.
I am sure that it would be of value if I were at this time to assess the impact of farm credit on agricultural production and assess, particularly, the effect on grain production in my riding. Since farm credit, either from the provincial or federal viewpoints, seems to be a vehicle by which land changes hands, I think we need to consider the situation in this light and to ascertain what the impact of farm credit on the agricultural community in general has been and on the farms of western Canada in particular. A recent news report suggested that agricultural credit had allowed a greater consolidation and a better adjustment
Farm Credit Act
for farmers. It is difficult to gauge what should be considered that better position in which the farmer should be.
In going around my riding and discussing the impact of farm credit on the economy, nearly all people agree generally, that farm credit has raised the price of land and inflated land values. Such credit has created problems connected with overcapitalization, particularly for young farmers who, in view of current, reduced grain prices, have been finding a great deal of difficulty in meeting their payments. Certainly, a survey of the value of grain marketings in western Canada would indicate that the higher prices paid for land are not really related to the productive value of land. For instance, in 1952-53, grain receipts totalled $1,132 million. In 1960-61, they amounted to $708 million. There was a gradual rise in prices, to the peak of $1,353 million in 1966-67, which was followed by the disastrous decline to $860 million in 1968-69. There has been little change since then. We are told that record numbers of bushels have been sold and are being shipped from our ports.
An examination of the money involved will show that few additional dollars are available to the farmer, for reasons that are quite obvious. The record is being set in barley. If the estimate of 250 million bushels is reached, the value per bushel will be small. In addition, the price of wheat on the world market has been substantially reduced in recent years. Even if we reach the estimated figure of 400 million bushels, not a great deal of additonal money will be involved. The situation of the farmer is being made worse by the steadily rising cost of production. This has put him into an economic squeeze and has prevented him from attaining what he considers to be his right.
May I say, Mr. Speaker, that the tax policies of the three levels of government are increasing the farmer's costs of production. Our basic tax structure is having that effect. The effect of the low price of grain on farm credit is very great indeed. The western grain farmer, finding his price set in the world markets at a time when those prices are dropping, is in a particularly difficult position. That position can be made worse by the sort of sales failure encountered in 1968-69 or the sort of price failure that has occurred in recent years.
The problem of farm mortgages has been with the western Canadian farmer almost since the beginning of the grains industry in this country. Those who remember the so-called "dirty thirties", when mortgage companies foreclosed on many farmers, also remember that it was necessary for the government to pass the debt adjustment act to safeguard farmers and save a portion of our farming industry. Since then, conditions have improved. However, at present, in view of low cash incomes, farmers are again in difficulties, particularly those with high capitalization problems who may have encountered, for various reasons, an unfortunate set of circumstances.
I think we can now examine what the effect of all these factors has been on the farm grains industry. First, we are considering an industry which is using newer farming methods. The advent of the tractor enabled the farmer to dispense with his four or six horses and use the equivalent of 30, 60, or even 120 horses available with his tractor. This being so, it is quite obvious that the individual

May 8, 1972
Farm Credit Act
farmer could cultivate more acres than previously. Of necessity, many grain farms had to be consolidated into larger units. However, a survey of any given group of farmers will show widely differing circumstances affecting the individuals within that group. Some of the farmers to whom I refer might be small farmers working with a quarter or a one half section of land. Some might be young farmers; in many cases, the farmers would be older. If a farmer were displaced by a neighbour who used farm credit to buy him out, in many cases the farmer who left the farm was too old to acquire a good skill or job in the industrial field. On the other hand, perhaps he was too young to retire.
The use of farm credit, which has brought about the quick consolidation of farms within about 20 years, has had a profound effect in that it has helped to depopulate the rural prairies. In my own area, according to the latest census, between 1961 and 1970 the population has dropped by about 5,000 people. Considering the size of the villages and towns of my area, one can well say that the rural population has decreased severely. Perhaps farm credit should not be entirely blamed for this because the advent of consolidated schools many miles away in the village or town has also had a profound effect. There were lesser things which had an effect, too, such as the closing of small post offices and the building of hospitals in larger communities as a result of which older retired people were closer to medical services. These and many more factors had a profound effect on the rural population on the Prairies. I am sure there will be widespread disagreement about whether this has been beneficial.
My observation of the rural Prairies has been that more than anything else, the agricultural farm credit has been very useful in the consolidation of land and, apparently, in making farmers more productive. However, it has created a significant social problem. Even without farm credit, there would have had to be a consolidation of farms in the grain areas, but the use of farm credit has hastened that process. Farm credit has not been as beneficial as it might have been. I think the reason lies in the fact that farming is not a monolithic industry, such as pulp and paper, mining or some manufacturing industries. It is made up of many small and relatively insignificant economic units. It varies from a few acres to many thousands.
A family farm provides the basic needs of food and shelter for many people. It is interesting to note that relatively small farms with a quarter or half section provide the farmer with a standard of living that in many ways seems comparable with that of his neighbour who farms on a much larger scale and whose farm is apparently much more productive. The reason seems to be that much of the efficiency and productivity of the larger farm is lost as a result of his higher costs. This may indicate that when an individual farmer increases his acreage, and thereby the production of his farm, with the same amount of manpower, the displaced farmer moves further up the ladder to the feed mill in town or into the retail end of selling food. Statistics indicate that the number of people involved in the passing of food from the farmer to the consumer has remained relatively constant at about 30
|Mr. Ritchie.]
per cent of the people engaged in our economy. One of the most significant consequences of the use of farm credit is that loans would be given out in such amounts that they would, in effect, amount to a subsidy to farmers extending their operations by buying out their older neighbours. If farm credit should be used as a subsidy, it would not entirely improve the lot of the farmers.
An interesting editorial in the Manitoba Co-operator of June 3, 1971 entitled "Dubious Objective?" discussed the findings of Charles L. Schultze of the Brookings Institute in the United States. This study dealt with the effects of the United States farm price support program on the farm economy, but the findings could be applied to many programs being attempted or proposed for this country. Dr. Schultze showed that it is difficult, if not impossible, for the United States farm price support program to increase the farmers return on his own labour and investment to the point where it would be equal to what he could earn in a non-farm enterprise.
The Brookings economist found that in the long run, farm subsidy programs, related as they are to the production of farm commodities, tend to benefit farmers chiefly in their role as land owners and not in their role as farm operators. It seems that too many farmers will accept a less than parity return on their own labour while still remaining in agricultural production. Dr. Schultze wrote, and I quote:
If this is true, then any attempt to increase income above that level by a price-support program will result in a rise in land rents which will gradually be capitalized into higher land prices-
In turn, with higher land prices, a subsequent calculation of parity income will show that price support programs have not improved the relationship between actual and parity income, since the parity rate of return, applied to the higher land prices, raises the level of parity income right along with the rise in actual income.
In essence, where there was a price support policy, first generation owners captured the benefits in the form of capital gains when they sold the land. Second generation owners lost many of these benefits through high carrying charges. If there is any removal or reduction of price supports or subsidies, there will be substantial losses to second generation land owners who are paying sizeable carrying costs in the form of mortgage interest. What the economist was saying was that where subsidies are given, they clearly do not have the required effect because of the basic conclusion that most farmers will accept a less than parity return on their own labour in order to stay in agriculture.
If farm credit has many virtues, it seems it also has significant dangers. Perhaps the most significant responsibility lies with the official of the Farm Credit Corporation who must decide whether a particular individual should receive a loan. One of the most significant decisions he must make is whether or not a particular farming enterprise will be a viable operation, and whether the farm credit will increase the viability of that operation. Obviously, this is extremely difficult because what was an obviously viable farm operation in 1966 may not now be a viable operation.
As far as the grain industry is concerned, those who grant farm credit lean towards making the medium sized farm larger, but tend to shy away from increasing the size
May 8, 1972

of the small farm. Perhaps this is because the small farm cannot show the initial capital, and the management skill of the farmer is doubted by the farm credit official. The farm credit official must make judgments and must often make loans to quite young farmers. Unfortunately, many of these young farmers have not yet attained the ability or management skill to cope with a change of circumstances such as an unexpected fall in prices or a crop failure. Also, the young farmer or perhaps his wife may not wish to remain on the land and this creates some difficulty.
One of my greatest concerns is the lack of diversity available to the prairie grain farmer should there be bad times for his grain growing enterprise. In the past, a grain farmer could keep some pigs, milk cows, turkeys or cattle to supplement his income and have a truly mixed farm. One of the advantages of low capitalization where a farmer's labour content was high was that he could change over his barn to keep hogs, chickens or milk cows at a small expense. However, in recent years, this avenue has been closing for the individual farmer. The proliferation of marketing boards, quotas and so on has seriously reduced the elbow room which enables a farmer to change his farming ventures and keep his head above water.
By means of quota restrictions, the Canadian Dairy Commission enthusiastically and effectively moved the farm separated cream industry out of western Canada and gave the quota to the province of Quebec. We now have the situation where the province of Manitoba is a dairy deficient area, into which seven million pounds of butter are shipped at the taxpayers' expense and where many farmers are asking for a cream quota. The answer of the Dairy Commission is that a small producer of 600 or 700 pounds a year is inefficient, and that these people would be better off if they where phased out. Their quota should be reserved for the larger and more efficient operator. But the fact that a producer milks cows by hand for a few hundred pounds of butterfat each year does not mean he is inefficient, particularly when it helps to keep groceries on the table. In my own riding failure to obtain a quota has meant that some families have left agriculture when they might well have remained on the farm. This has been particularly so over the past few years when returns from grain have been so poor.
In Bill C-176, the government has paved the way for the establishment of marketing boards which will control the industry by means of quotas. As I see it, imports will also need to be controlled in order to keep the market stable. It will, of course, be necessary to ensure that quota holders are reliable and able to produce the amount their quota calls for. This inevitably means that the small producer will get short shrift from marketing commissions and boards, because the commission will require reliability. The bother of supervising many small producers will be too great for them. In my own province of Manitoba, a person cannot turn to cream production at the present time because there are virtually no quotas available. The few which do become available are from farmers who retire or who sell their farms.
The number of turkeys which a producer is allowed to raise without applying for a quota is somewhere between
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200 and 300. Again, in the area of broiler production, efforts at curtailment appear likely, and, obviously, under the direction of a national marketing broiler board, the farmer who might be primarily a grain farmer but who wished to augment his income by broiler or chicken production will be out of luck, especially if his operation is of the so-called family farm size. The operations of the egg marketing board will have a similar effect. Regulations in the interest of public health further restrict a producer's ability to move into egg production.
The hog commission in Manitoba is already instituting a quota system. In this case, hog producers will not be able to get quotas from their neighbours by buying them, or being given them. The commission seems intent on maintaining the privilege of allotting quotas. What does this mean? It seems that quotas will be given, not on the basis of fitness or ability to produce, but at the whim of the head of the commission. He may turn down a farmer because he does not like him personally, or because he is of a different political stripe, or because he wears a green tie. This, again, will seriously restrict the ability of a farmer to diversify his income should he encounter difficulty in meeting his loan payments. Cattle raising remains. But with the passage of the marketing bill, it appears it will only be a matter of time before the supply of finished cattle from western Canada is reduced in order to allow more of the finishing to be done in eastern Canada.
What remains for a farmer whose grain growing operations are in a bad way and who is unable to meet his loan payments? What alternatives are available to him? Obviously, the only real alternative, if he does not possess a quota entitling him to produce, is to work off the farm or to send his wife out to work. I do not think this is the best means of retaining a viable and efficient farming industry. It occurs to me that by establishing marketing boards, applying quota restrictions and so on, we are building up a bureaucratic apparatus which will not serve us very well. We ought to look at what is happening in the European Common Market. Farm marketing there has been so beset by fees, quotas and so on that the resulting situation is one of the prime reasons for the predicted head-on trade war between ECM and the United States market. In Europe, even the manufacturers are complaining that high agricultural prices are reducing their ability to compete in the world market. We ought to be very careful before moving further in a similar direction.
As to the operations of the Farm Credit Corporation, as far as they affect the grain industry, may I express the hope that loans from the Corporation are not the only means whereby farmers are able to acquire land. I would hope that conventional lending agencies such as banks, credit unions and mortgage companies, continue to have a share of the business. Should the Corporation assume what amounts to a monopoly in connection with farm mortgages, this, to me, would indicate that it is being too generous in its mortgage policy. It would seem to me that a case could be made for giving young farmers, at least once in a lifetime, some assistance in starting a farm either by allowing them a low interest rate for a specific number of years, or in some other manner.

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Farm Credit Act
There is one other suggestion I have to make in connection with mortgages. At the present time it seems that a farmer who applies for a loan is required to mortgage all his property in order to qualify. It appears to me to be more logical that each parcel of land should stand on its own. Farmers might then tend to be more careful when borrowing money, and loans would be more directly related to the actual productivity of the land. There would be a further advantage. If a farmer were so unfortunate as to be in danger of losing his land and going into bankruptcy it might be possible for him to salvage, say, one quarter of the land; he would not lose his farm completely. At present there seems to be no way in which a farmer who has fallen on hard times can salvage something in compensation for his labour. There may be areas of farming in which the limit of $100,000 on any single loan is a reasonable one. I doubt, however, whether a loan need be as large as this in the grain industry today. In my view it would not be good for a large proportion of our agricultural land to become mortgaged to the state.
Whatever else may be wrong with Canadian agriculture it is certain that individual farmers here are much more efficient than their counterparts in a state-run economy such as Russia, and able to produce a great deal more. It is generally agreed that the agriculture industry in Russia should perform much better than it seems to be doing; in this context it is significant that some 40 per cent of the Soviet people are still working on the land. It is my belief that the mortgaging through the Farm Credit Corporation of an increasingly large proportion of our farmland will eventually amount to government control of agriculture with a consequent loss in efficiency. Many of the so-called land bank schemes will, in fact, work in this way. The leasing of land from government sources seems to result, inevitably, in inefficiency, causing an increase in food prices without, however, benefiting food producers to any significant extent.
In conclusion, I suggest that this bill should be given a thorough examination in committee, bearing in mind that the making of large government loans to individual farmers, creating a heavy capitalization, carries with it many social and economic implications of which we are only now becoming aware.


Douglas Charles Rowland: Mr. Speaker, by way of beginning I will say that I am not going to be very long so that whoever is to come after me may prepare accordingly. If there is a theme to what I am about to say it is this: with the possible exception of clause one and the related clauses of this bill, I find myself to be in agreement with its provisions and I would say it is a reasonably good piece of legislation.


Some hon. Members:: Hear, hear!


Douglas Charles Rowland: However, and this is the point, farm credit legislation, even good farm credit legislation, is useless unless farmers are in a position to take advantage of it, and today they are not. The farm economy is so depressed and the farm cash income so low that too many farmers are already finding great difficulty in meeting their obligations to the Farm Credit Corporation. The experience of the last three years will, I predict, make farmers extremely reluctant to take advantage of the changes in
(Mr. Ritchie.]
the legislation provided in this bill. If the measure is ever to have the effect the government intends, then the government must first take action to improve the dollar return to the farmers and to introduce an element of stability into farm cash income. And any such stabilization plan must be based on net, not gross, farm income.
If this legislation is to have beneficial effects, the government must first remove the farmer from the effects of the cost-price squeeze in which he now finds himself trapped by taking, in addition to the measures I have just suggested, immediate action to implement the major recommendations of the Barber Commission on Farm Machinery, for example. That is the point I wish to make. However good farm credit legislation may be, it is doomed to be ineffective, indeed useless, unless conditions are first created which will permit those for whom it is intended to use it. Those conditions do not now exist in the agricultural sector of our economy, and despite the fact that this government has been in office for four years it has done very, very little to create those conditions.
To illustrate, may I read into the record two questions placed on the order paper by my colleague the hon. member for Battleford-Kindersley (Mr. Thomson) and myself respecting the Farm Credit Corporation as it is presently constituted, and the replies that we received to those questions. First, my question No. 402, answered on Wednesday, April 19, asked:
What percentage of farmers having loans with the Farm Credit Corporation have been unable to meet their obligations to the Corporation during the past two years?
The answer was as follows:
The percentage of all borrowers in arrears increased from 6.4 per cent in 1968 to 9.9 per cent in 1969 and to 15.1 per cent in 1970.
Then I asked:
Of those farmers who have successfully met their obligations, what percentage have been forced to borrow money from other sources in order to make their payments to the Farm Credit Corporation?
The answer to that question was "information not available". Then, I asked:
If the information requested in part 2 is not now available, is any attempt being made by the Farm Credit Corporation or any other government department or agency to obtain such information?
The answer to that was:
No. The Corporation does not believe it should, nor does it have the power to, require borrowers to declare the source of funds with which they make their payments.
It is well known to all of us with any association with rural communities that a great many farmers are paying back Farm Credit Corporation loans by borrowing money from their families, relatives and friends, and their debt position is increasing. The figure of 15.1 per cent would be considerably higher if farmers did not have families, relatives and friends to draw on in times of difficulty.
The question of my colleague from Battleford-Kindersley asked:
What percentage of Farm Credit Corporation loans were in arrears in each province in the years 1969,1970 and 1971?
May 8. 1972

The reply was as follows:
The Farm Credit Corporation advises that as of the end of the fiscal years the amount remaining in arrears as a percentage of the amount due during the year was as follows:
Then followed a table for the three fiscal years. In the year 1969-70, the amount in British Columbia was 15.5 per cent; in Alberta, 19.3 per cent; in Saskatchewan, 11.6 per cent; in Manitoba, 14.0 per cent; in Ontario, 7.8 per cent; in Quebec, 3.8 per cent; in New Brunswick, 4.9 per cent; in Nova Scotia, 10.2 per cent; in Prince Edward Island, 11.3 per cent, and in Newfoundland 7.8 per cent. I will skip the intervening year, but in 1971-72 British Columbia showed a slight decrease to 14.9 per cent, Alberta increased to 21.0 per cent, Saskatchewan to 21.1 per cent, Manitoba to 24.7 per cent, Ontario dropped to 7.0 per cent, Quebec increased to 4.5 per cent, New Brunswick to 6.2 per cent, Nova Scotia down to 7.5 per cent, Prince Edward Island increased to 14.3 per cent and Newfoundland to 13.9 per cent. Those figures are staggering and they demonstrate just how greatly depressed is our farm economy, especially in the west. They also, I submit, cast severe doubt upon the ability of the farming community to avail itself in any significant manner of the improvements in the farm credit legislation which the bill represents.
To give the devil his due, there are, as I have said earlier, a number of provisions in this bill which I look on with favour and I might mention some of them. I like the idea of changing the word "necessary" in the act, with respect to when loans may be provided, to the words "will facilitate", so that loans may be made for any reasonable purpose related to the acquisition, operation, maintenance or development of a farm business. I like the idea that the provisions of the Farm Credit Corporation Act will apply only to Canadian citizens or landed immigrants. I like the idea of increasing the amount of money available to farmers. Even single farm operations nowadays grow large enough to require the amount of capital input that this act will now make available.
I like the idea of the Farm Credit Corporation making money available to farmers to undertake an enterprise on their farm that is not directly related to agriculture, so they can supplement their farm income and stay on the land. I like the idea of allowing persons to remain on the land for a period not exceeding their lifetime or the lifetime of their spouse if the land should pass from their hands. I also like the idea of making the age of majority, according to the legislation, correspond with provincial legislation since many provinces have now reduced the age of majority.
Indeed, as far as the actual provisions of the bill are concerned-I speak of its contents, not those things which it omits to include-I can find very little with which to quarrel. However, I am somewhat troubled by clause 1 of the bill, as I said earlier, which provides that section 11 of the act be amended by adding after subsection (1) the following:
The Corporation has all the powers necessary to carry out such duties or functions as may be assigned to it by the Governor in Council in relation to the administration of any agricultural program or as are assigned to it pursuant to any other Act of the Parliament of Canada.
It is apparent from the minister's remarks when introducing the bill for second reading that the section is
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designed to enable the Farm Credit Corporation to administer the farm adjustment program, the minister's conception of how to help the small family farm. We do not yet know the details of that program, we do not know how it is to operate. Indeed, most of us have gained at best only a fuzzy understanding, from the minister's statements to date, of the principles which will govern the operations of the plan. Passing this clause of the bill as it now stands gives the government carte blanche to operate as it chooses in the area of farm adjustment, and that is the kind of power that any legislature would be mad to give the executive arm of government except in the most exceptional circumstances. I know that clause 1 will come under intensive scrutiny by the Standing Committee on Agriculture when the bill comes before the committee, but I would urge the minister to accept the fact that such scrutiny is entirely warranted in view of the magnitude of the powers he is requesting for himself and his cabinet colleagues. I urge this view on the minister, especially in light of his repeated assertions that he wishes the legislation to have hasty passage.
For example, it would seem from the minister's statements on the farm adjustment program that the program will actively discourage the part-time farmer, the man who may have a marginal farm but who enjoys farming and wishes to stay on the land and to supplement his income by working in a town, in industry or in commerce. I stand to be corrected if that is not the purpose of the minister's farm adjustment program, but that is the understanding that I gained from reading his speech. If this is the case, if the minister does actively wish to discourage the part-time farmer, then I wonder if this kind of policy is wise. There is already an over-concentration of population in our cities, and this concentration is increasing. I am wondering whether we should not be doing everything possible to arrest or to reverse this trend till such time, at least, as our cities are able to cope with the problem that is generated by this massive increase in population, this massive influx of people in their late forties and early fifties who are looking for work and have been trained to work on farms, not in industry.
It would seem to me there is a practical virtue in doing everything possible to reduce the flow of people from rural parts of this country to the urban parts, at least until such time as we know how to cope with the concentration of population in the urban areas which we do not know how to do at the present time. If I am correct in the assumption that it would be best to arrest that flow, and if I am correct in assuming that the minister's adjustment plan would actively discourage the part-time farmer, and it would seem to me these two ideas are in conflict, the minister should have another look at the adjustment program, and this House should consider it and discuss it before any action is taken. This bill would allow the minister to put the program into effect virtually through order in council. That was really an aside, and I shall now return to the main theme.
I very much fear that this legislation, which is reasonably good when you look at what the bill includes and not what it excludes, will not accomplish the objectives the minister desires simply because the necessary steps have

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Farm Credit Act
not been taken to assure farmers of the kind of stable level of income necessary to permit them to take advantage of the plan.


John Angus MacLean: Mr. Speaker, in rising to take part in this debate I find myself with many of the apprehensions about the present course of farm policy just expressed by the hon. member for Selkirk (Mr. Rowland). I suppose, therefore, I should thank him for making part of my speech for me.
Having regard to the amendments themselves, in light of the philosophy from which derives most government farm policy in Canada at the present time, I have few serious reservations about them. I feel it is appropriate under the circumstances that the maximum amount of a loan should be raised and that the restrictions, in some cases, placed by the present legislation on farm improvement loans applications, should be repealed. The increase in the total capital of the corporation from $56 million to $66 million is no doubt appropriate and will allow the corporation to have lent to it 25 times that amount, which is something like $1.4 billion. As the hon. member for Selkirk has pointed out, loans should be made in cases where they will facilitate the operation of a farm and not only where they are necessary for that operation. It is important as well that the maximum loan, regardless of the type of ownership, should be at the same ceiling of $100,000.
There are other good factors such as the continued use of the home, not including the buildings on the farm establishment, for security of the loans, and the adjustment or flexibility in respect of the age of persons making loans, considering the changes which have recently been taking place in some provinces in respect of the age of legal majority.
I support the amendment proposed by the hon. member for Mackenzie (Mr. Korchinski) as I believe it will improve the bill. Having said that, I have grave doubts about the whole direction farm policy is taking at all levels of government in Canada at the present time. Farmers generally have an overwhelming apprehension about the fact that their fate is being sealed by some mysterious backroom boys in the apparatus of government who have little real understanding of or sympathy for the rural way of life, or any understanding or appreciation of the rich rural culture that has contributed so much to Canada up to now and which is now being blotted out. Whether it is being done overtly, unintentionally or represents a change in conditions I do not know, but we should have some control over whether or not that should be the trend. Whether we could have complete control, of course, is another thing.
Coming from Prince Edward Island as I do, I am fully aware that we down there have been sort of the guinea pig for the policies which the theorists would undoubtedly apply to the whole of Canada if they had the chance. When one reads government farm policy he sees that it frequently compares favourably with a treatise on how the New York Rangers should be coached, written by a self-appointed expert of ice hockey who has never been out of Tahiti in his life. I do not think it is necessary that this should be so, nevertheless it is the case.
|Mr. Rowland.]
Let me quote briefly from a statement made by Theodore Geiger, Head of the International Studies Section of the National Planning Association of the United States. This is Written in Dialogue and is from volume 4, 1971. He states:
The need to be aware of the wide range of social and cultural factors, not commonly taken into account in devising government programs, and the fact that this knowledge depends largely on empirical investigation rather than on a priori reasoning, make the problem of involving the small farmers effectively in the economic growth process one of the most difficult in development strategy. Moreover, many political leaders and government officials are inclined to shirk this task not only because of the lack of knowledge of how to do it, but also because they tend to identify the rural commercial-subsistence part of the private sector with the rejected traditional past and to see only its urban industrialized portion as the desired, modern future.
That expresses well the problem which Canadian farmers are up against. Their future and farm government policy it would seem are being devised and brought into being by people who neither understand nor appreciate the value of that type of life or the complexity of problems farmers face. There seems to be among these theorists a worship of bigness. They have over-estimated out of all proportion the economic benefits of scale, and they have pushed the utterly false assumption that if a farmer increases his efficiency he will reap the benefits. This has not been the case. As a matter of fact in the last 20 years or so the agricultural industry has increased its efficiency more than any other industry in Canada, but the farmer is not any better off. He is worse off. This is neatly illustrated in an article in the current issue of Reader's Digest, written by H. Gordon Green, former editor of the Family Herald, who gives an example of what I am talking about. Dealing with dwindling profits he writes:
The story of Winston Hansen of New Denmark, N.B., is typical. Hansen grew up in one of Canada's best potato-growing regions at a time when potatoes were planted by hand. The labor to pick the potatoes and put them into barrels was supplied largely by the owner's family and schoolchildren. 'A man who planted 20 acres of potatoes, and had a fair crop, figured he had a good year,' Hansen says. 'The machinery he needed didn't cost much: a couple of hundred would get you a mechanical potato picker,-
I think that should read "a mechanical potato digger".
-and if you couldn't afford that, you could use a horse and plow.' But those were the days when a 165-pound barrel of potatoes sold for $4. or $5. At that price a man could make his payments and still have a bit of money to put into the bank.
The last $5 year for the New Brunswick potatogrower, however, was 1950-about the time when Hansen, like many other enterprising young farmers, began his struggle to make up for an ever dwindling margin of profit by becoming bigger and more efficient. Today he plants 225 acres, owns $55,000 worth of the latest equipment, has his own storage cellars and grading tables. A shrewd soil conservationist, he spends $60 an acre on fertilizer alone.
'It costs me $2.50 to produce a barrel of potatoes." he says. Yet the price for top-grade potatoes at harvest time in fall 1970 was only $2.25 a barrel.
That was 25 cents below the cost of production, and the sum he received continued to decline until the end of the crop year.
I represent a constitutency in Prince Edward Island where there is a big number of large potato growers. Most of these are family farms in a technical sense, but they are
May 8, 1972

large, highly mechanized operations. They have followed the same course as is cited in this article. Some 20 years ago they were getting along and making a living. Now I know of family farms that have followed the advice of the experts and have done what they were told would bring them profits. They have grown more, and become more efficient, but today some of these farms are in debt to the tune of as much as $120,000. Their assets in used machinery would not begin to cover their debts.
I am convinced, Mr. Speaker, that if a farmer's cost of production per unit for any product is $1 and the market price is 95 cents, and if he were able to double his efficiency and produce the same unit at a cost of 50 cents, given the present marketing situation his selling price would be only 45 cents, and he would be no better off. But the consumer would not be paying any less for his food, because the gains made through increased efficiency by primary producers have been swallowed up by increased costs of distribution and processing. This is also illustrated in the article in Header's Digest, and I quote:
-few city people have any idea of how small a percentage of their food dollar goes to the farmer. For instance, top-quality green peas in July 1971 brought a Quebec grower only $120 a ton shelled and ready for the can-a mere six cents a pound. In 1971, Ontario farmers in Essex County got only $1.50 a bushel for sweet corn. The magnitude of the gap between such a price and what the housewife pays for the finished grocery item is best illustrated by the farmer who bought enough corn flakes to fill a bushel basket- and found that it cost him $26.75!
Of the $2.1 billion spent on Canadian food in 1949, farmers received $1.2 billion, or 57 per cent. In 1969, when consumers spent $6.4 billion, farmers received $2.9 billion, or only 45 per cent. Clearly, an ever-increasing percentage of the food dollar is going into the food-processing and marketing industry, whose 1969 revenue was $3.5 billion-half a billion dollars more than the farmers were paid for providing the basic product.
It is frequently said that in the average restaurant, depending on the content of a meal, the waitress who puts the meal on the table gets more as a tip than the primary producer gets for the food which makes up the meal.


Mr. Osier:: She is usually better looking, too.


John Angus MacLean: Yes, but farmers are not in business for their looks.


Mr. Whelan:: But there are an awful lot of good looking farmers,


John Angus MacLean: To show the percentage of the housewives food dollar that goes to the primary producers, these are some figures for the year 1971. They show that the average cost to the consumer of a 16 ounce loaf of bread was 21 cents, of which the farmer received two cents. The price of pork per pound to the consumer was 59 cents to 95 cents, and the producer got only 22 cents. The cost of a dozen of eggs to the consumer was 47 cents, of which the producer got 25 cents. A 42-pound box of apples cost the consumer $5.50, and the producer got only $1.92. A 48-ounce tin of apple juice cost the consumer 40 cents, but the producer got only seven cents. For milk, the consumer paid 35 cents per quart, of which the farmer got 17 cents.
It seems to me that many of the planners of our present agricultural policies, whoever they may be, are getting most of their ideas from textbooks that were discarded in
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eastern Europe about ten years ago. The huge, industrialized collective farm, which was the fad in eastern Europe, has not proven to be as desirable or as profitable as theoretician economists would have us believe.
Again, I quote from Mr. Green's article:
Perhaps our agricultural planners should cease to encourage the survival of the fittest for a moment, and remember that Danish agriculture, perhaps the most progressive in Europe, is still pretty much in the hands of the family farm; that the Soviet Union, for all its emphasis on collective farming, has had to permit farm workers to cultivate individual plots of land for private use and profit; that the strength of the new China derives largely from the production of peasants who still retain a share in the land.
The so-called benefits of scale are not the only way in which the problems of the farmers can be tackled. I maintain that it is not the only solution. I go even further and say that it is not a solution at all. I believe that time will prove me to be correct. Farmers have increased their productivity in the last 20 years more than almost any other industry, yet they have not benefited, nor has the consumer gained, because the savings of the farmers have been swallowed up in the skyrocketing costs of transportation and distribution. These costs are higher in cases where there is a great deal of specialization. For instance, in Prince Edward Island people eat carrots which were grown in Texas and turkeys which came from California. I would say that the benefits do not accrue so much to the highly mechanized farmer in California or to the consumer in Prince Edward Island but they go rather to the transportation and distribution system.
Agricultural elephantiasis does not make for increased efficiency either, I believe. Large areas under one crop are an abhorrence to nature and invite epidemics of every conceivable disease that a plant might have. They invite epidemics of insect pests which have to be dealt with by excessive uses of insecticides and other dangerous chemicals in most cases. It follows that in mass production of food, so far as perishables are concerned, the food must be subjected to excessive processing to preserve it. The result is that more and more of the consumers in North America eat highly processed food which-and I believe nutritionists will agree-is not as beneficial to humans as is fresh produce. I believe that there is room, as is the case in Europe, for the production of specialized perishable foods near the areas where they are to be consumed so that the consumer will have the benefits of a fresh product rather than frozen or more highly processed foods. The larger is the area that is used for one crop only, especially if it is not in rotation, the more the balance of nature is disturbed, forcing an excessive use of chemical fertilizers, insecticides, fungicides and other chemicals which in the long run poison the whole biosphere.
I am leery of the much heralded small farm assistance program, because we have had a sample of it in my province where the experts who believe that the solution of everything is bigness are offering to buy out marginal farms. This is beneficial to many farmers who are at the end of their productive years, and certainly they are entitled to any benefits they can receive, but in my humble opinion this will not serve to solve the agricultural problems in Prince Edward Island or anywhere else. There is a program to reduce the number of farmers in Prince

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Edward Island from something like 6,000 to 2,500. If this is done, I predict that the 2,500 farmers who are left will be working harder, producing more food for less benefit, living a more unsatisfactory type of life, and going more deeply into debt than do the present 6,000 farmers. In addition to that, the ecology of the agricultural land in Prince Edward Island will be considerably more damaged than it is at present. I believe that the solution will not be found in expanding the size of the farms.
The benefits which may accrue from the economics of scale have, in most cases, been reached at the stage where reasonable mechanization could take place. To go on far beyond that stage, such as to 150 horse power tractors which cost many thousands of dollars, is, in my judgment harmful, unless the intention is to destroy the family farm entirely. If that is the intention, I think the situation is grave. Let us not forget that this country was built in the last century and in the pioneering era on what were family farms. It is the family farms which have contributed more than their share toward building this country, raising families who have contributed more than their share to the professions, to the sciences, to education, to religion and to many other endeavours in this country than have their city brothers.
As the hon. member for Selkirk said, surely we must not encourage too greatly the migration of rural people to urban areas, at least until such time as we can design and bring into being an urban area that is liveable for everybody in it, where everybody can have a job, and where everybody can aspire to a reasonable quality of life. That is not the situation at present. However, I have hopes that lessons will be learnt in time to prevent unfortunate trends from continuing unduly.
I should like to quote again from Mr. Geiger as follows:
Evidence from all parts of the developing world suggests that small farmers will adopt technological improvements in response to price and income incentives under conditions that do not threaten certain other values and objectives important to them. As the "green revolution" is showing, small farmers at or close to minimum subsistence income levels will endeavour to increase production and productivity in response to satisfactory prices (a) if the necessary innovations in agricultural inputs and cultivation techniques are available and within their means; (b) if such changes do not significantly increase the customary risks that affect the probability that they can continue to raise at least the minimum output essential for maintaining their families; and (c) if a sufficient percentage of the increased income thereby generated will accrue to their benefit and not to that of landlords, moneylenders, merchants and tax collectors.
I think that is the key to the whole thing, Mr. Speaker. At the present time farmers are encouraged to borrow up to $100,000; at current interest rates of, say 8j per cent, that would cost $8,500 per year. If a farmer had $100,000 in hard cash, I doubt if he would invest it in more machinery and land. Under present conditions he would be more likely to continue farming on a small scale and buy $100,000 worth of securities-perhaps even federal government bonds-and live happily ever after.
I am reminded of a story about three people who held winning tickets on the Irish sweepstake. The first was a taxi driver and when asked what he would do with his $125,000, he said that he was going to pay off his mortgage and send his children to college. The next winner was a
(Mr. MacLean.]
widow who said that she was going to pay off all her debts and then buy a nice home for herself and her children. The third winner was a farmer and when asked what he was going to do with this $125,000 he said "I guess I will just keep on farming until it is all gone".


Some hon. Members:: Hear, hear!


John Angus MacLean: Mr. Speaker, my remarks may have sounded pessimistic and I have reason to be pessimistic. However, I am also optimistic in that I think the rising generation will have a better standard of values than we. The young people in our universities are already indicating a greater appreciation of enduring values and I think in their hands a suitable solution will be found. If I may quote again from Mr. Green's article in the Reader's Digest, it reads:
The concern of youth. The new generation, with its growing interest in conservation and the simple life, may ultimately play the greatest role of all in determining what is to happen to farming. And if our youth should decide that the production of our food is much too important an industry to surrender to millionaires and cartel farming, and that the green acres still left in this country are too precious to entrust to a sort of landed gentry, all the professional predictions about the inevitability of our farms growing continually bigger and fewer won't mean a thing.
Thank you, Mr. Speaker.


Eugene Whelan: Mr. Speaker, I do not intend to speak very long in this debate, but as one who has had some personal experience with farm credit and Farm Credit Corporation, and who has listened to a lot of farmers tell how they think it should operate, I must say that I think the Farm Credit Corporation and farm credit in Canada has come a long way. However, when one compares what has been done in this country with what has been done by countries in direct competition with us, to aid their farmers, it is evident that our Farm Credit Corporation has a long way to go yet.
Some years ago, a suggestion was made that farmers whose application for a loan had not been allowed should be able to proceed to an appeal board if they felt they had been dealt with unfairly. These appeal boards were fairly good but did not go as far as many members of parliament and farmers thought they should in aiding those whose applications had been turned down by the Farm Credit Corporation.
It is my contention that the Farm Credit Corporation did not follow the intent of the original legislation which was to lend money to those farmers who could not get it any place else-those farmers whom nobody else would trust. A study of the loss ratio over the years shows that the Farm Credit Corporation took very little risk. In the last three or four years the loss ratio has been practically nil. A comparison with farm loan associations in other countries shows that we have a long way to go to meet what they have done to aid their farmers. I am thinking specifically of the U.S.A., with whose farmers ours compete, and where the standard of living is comparable to ours.
I have visited farm loan associations in the U.S.A. to learn how they operate, and I have suggested that the same thing should be done here. There was one example of a young couple who wanted to buy a farm but they did
May 8, 1972

not have the money, although they had a farm picked out. They went to their local farm loan association and their adviser suggested they should look around to see if there was not something which suited them better. They found another farm which needed a lot of work. The loan association improved the land by terracing. They improved the house, the buildings, the drainage system, equipped it, stocked it and said to the young couple "Now, you are ready to go farming under our supervision". One of the amazing things is that the farmers like this type of supervision.
The young couple were supposed to pay a certain amount off their loan and then eventually apply for a different type of loan in order to allow the money they had borrowed originally to be turned over to someone else in circumstances similar to theirs. We have not done this in Canada and I think this is one of our problems. I feel that when loan applications are appraised, the human need is not always considered. I have already explained this to some degree in the example of buying the farm which needed so much improvement and turning it into a productive economic unit. Our Farm Credit Corporation does not seem to have recognized the value, in human terms, of restoring property as have some farm loan associations in other countries. We need that type of close working relationship to make our loan association what many farmers think it ought to be.
We hear much talk about rates of interest, about our lending too much money to the agricultural producer and that if we lend him as much as this bill contemplates we shall get into trouble. May I read a telegram sent to me by the Canadian Federation of Agriculture. It reads:
The Canadian Federation of Agriculture believe it important that the upper limit on farm loans in Bill C-5 (an act to amend the Farm Credit Act) be raised to DLRS250.000 for partnerships, family-held corporation and co-operatives. Beyond this the Federation approves the changes in the bill. This policy request was made by the CFA Board of Directors at a recent meeting.
It is also standing policy of the CFA that in the interests of assisting orderly developments of agriculture and transfer of farm properties in this high capital cost and rapidly changing industry, that the interest rate on loans under the Farm Credit Corporation should be set at 5 percent.
Perhaps the interest rate should be set at 5 per cent. I know that farmers in one province of Canada do not even pay 5 per cent on farm loans. A former premier of Quebec introduced a provincial farm loan program under which farmers who borrowed $15,000 or less did not pay all the interest, the government paying part of it. A farmer who borrowed did not pay all the interest, but only 21 per cent. The provincial government of Quebec paid interest over and above the first 2 i per cent. Actually, in many cases, producers paid only 21 per cent on loans taken out in that province. Those producers are at an advantage, as compared with producers in other provinces who must compete with them. Considering that a farmer on the Quebec side of the Ottawa river can get a loan more cheaply that a farmer on the Ontario side of the Ottawa river, how can anyone say that farmers in Canada are treated equally? When one considers interest rates farmers have to pay, I submit that our national frontiers are not the only frontiers farmers must consider. I have always maintained
Farm Credit Act
that if I were going in for broiler production now, and I have said this in the standing committee, I would go over to the Quebec side because I could produce them more cheaply than in Ontario. I could get my feed more cheaply and my money more cheaply. When I first talked about this, nobody paid much attention to me except the feed companies. The smart operators moved to Quebec and, by producing cheap broilers, for a time created chaos in the broiler industry.
I well remember before becoming a member of this great institution, Mr. Speaker, buying the farm next door to me. I made the down payment and applied for a farm credit loan. Three days before the election I received a letter pointing out that, under some particular section of the act and I do not remember which one, I was not eligible for a loan. I was told that I could not get a loan because I was running for parliament and, according to the law, it was illegal for a Queen's representative to obtain a loan from the Queen. I was not what you would call a Royalist at that time, but after receiving that letter my feelings, I tell you, were even more lukewarm than they had been. Actually, my wife did not show me the letter until after the election. So, I won the election, but lost the loan.
The interest that I am paying on the mortgage, which is still running, is at 7 per cent. Also, I am paying 9 per cent on other money, because I am a member of the House of Commons. I do not know whether one could say I am being discriminated against. At any rate, I cannot go along with the suggestion of the Farm Credit Corporation that the interest rate should be set at 5 per cent. I do say, however, that the rates for agricultural producers should be no higher than those that our city cousins are called on to pay because, in some instances, farmers are paying much higher rates of interest.
In the booklet, Federal Farm Credit and Related Statistics, 1971, some interesting comparisons are set out. These statistics reveal that Farm Credit Corporation loans for 1969, on average, bore interest at 8.2 per cent; Industrial Development Bank loans bore interest at 11 per cent; supply companies are shown as charging 16 per cent; the rate for private individuals was 8 per cent, on average. Bank loans, other than farm improvement loans, are shown as bearing 9.5 per cent, and farm improvement loans made by banks are shown as bearing 8.3 per cent. On the other hand, finance companies lending money for cars and trucks charged 18 per cent, and the treasury branches in Alberta charged 9 per cent. So, one can see that although the rates of interest charged by the Farm Credit Corporation are probably higher than one would like, they are probably not all that bad.
I agree with both the speakers who preceded me who suggested that the wrong people are deciding how much credit should be extended to a farmer under a farm credit corporation loan. I think this is true. Too many of the wrong people are making these decisions, and I condemn them. I have said in this House and in the committee that too many economists are involved in these matters. I have not known one to be right and I have not known one to make a humane decision. Economists make the crudest decisions one can think of and I say that the Farm Credit Corporation bill lacks the humane approach. There seem

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to be few humane considerations in the criteria governing loans. I would welcome any move which would make the Farm Credit Corporation legislation a more humane piece of legislation than it is at present. Perhaps this will happen when we discuss the bill in committee and learn something about its background and what is intended. In the meantime, I do not see very much wrong with raising the limit of loans on family-held corporations and co-operatives to $250,000.
I did not realize that, since I am over 45, I am not eligible for a Farm Credit Corporation loan, as proposed here. Why should this provision be included in the bill? After all, I can borrow from the International Development Bank without difficulty. Little restriction is placed in one's way. That is not so with the Farm Credit Corporation. I think we are being a little sticky with this age limit, because there is a suggestion here that we are not placing too much faith in our agricultural industry. We should place more confidence in our agricultural industry. Surely, it is realized that farmers today are healthier than they were years ago, and that they probably will live longer than Farm Credit Corporation officials think they will. In time they might even pay off their mortgages. Even if they do not pay them off, the farm units will still be there. I know many farmers in my area are still active and expanding their holdings. They are still trying to get ahead of costs by becoming more productive. The hon. member for Prince Edward Island who spoke just now about agriculture was quite correct. I do not know how our city cousins view agriculture, but I do know that in no other part of our society are the returns smaller on any given investment. Few industries are more productive than the agricultural industry.
You know, Mr. Speaker, we talk about serving our country, and about the great deal of money we are putting into agriculture. Really, when you consider it, the amount of money to be put into the Farm Credit Corporation is infinitesimal. As I say, the amounts we are to make available to our farmers are infinitesimal when we compare them with the amounts we are giving to industry. Do not forget that in Canada over 50 per cent of our people earn their livelihood from the food producing and associated industries. Yes, 50 per cent of Canadians earn their livelihood from these industries.
When I look out of my window at home, I can see a $30 million plant that was put there by some of the most highly educated people in Canada, if you measure education in terms of the PhD. This plant never really got into production before going bankrupt because the owners had not done their homework properly. The system did not work. If the Farm Credit Corporation showed a loss of $31 million, there would be newspaper articles written all across this land stating that the farmers do not pay their debts. The government had invested $11 million in this plant, and the remainder was provided by Canadians who invested in stock. They probably will not get five cents on the dollar for their investment.
Why do I make this comparison? I do so because many people do not understand that this type of thing is happening. However, when a little bit of money is given to the farmers, everyone hollers bloody murder because the

agricultural producers are again being given a subsidy. The province from which I come produces one third of this nation's wealth, but my part of the province receives the least subsidy of any agricultural part of Canada. These are efficient producers. All they want is a chance.
I wish to make a comparison of the loans made to farmers in the area I represent and the area right next door to me. These loans are made by the Farm Credit Corporation for every kind of farm corporation that exists in Canada. I give them marks for doing this. In our area we have vegetable farming, fruit farming, greenhouse farming, that is farming under glass, grain farming of every description, mushroom farming and whatever else you can name. The Farm Credit Corporation had the foresight to lend these people the limit allowed under the present act. Many farmers in that area who applied for loans were turned down. A tremendous number of the people to whom the Farm Credit Corporation makes loans are new Canadians. The Farm Credit Corporation recognizes them as capable technicians. However, people in another part of the government of Canada do not think these people can make a way of life for themselves which will qualify them to become landed immigrants. Some of the most successful farmers in that area came here after the last war.
We do not know how many of these people are discouraged from applying for loans, even to the extent of being told not to send in $10 for an application. There are no statistics to show how many of these people have become successful by borrowing from Shylocks and paying a very high rate of interest. I am concerned about people who borrow from the Farm Credit Corporation and must pay inflated prices for farm land. Many successful people, especially in some of the technical types of farm operations, did not borrow from the Farm Credit Corporation. They paid a higher interest rate than people are paying today on loans they obtained from the Farm Credit Corporation. I think the Farm Credit Corporation has a long way to go. The wishes and desires of the Canadian Federation of Agriculture must be authentic or they would not be making these representations which, I am sure, represent a certain point of view of many Canadians. They ask the government to go even farther than this bill does at this time.
I think Bill C-5 is a step in the right direction or the Canadian Federation of Agriculture would not be asking for it. If I had any further criticism of the Farm Credit Corporation and the bill presently before the House, it would be that the bill does not go far enough. However, I commend the minister for bringing forward this bill in its present form. At least it is a step in the right direction.


Mr. A. C. Cadieu (Meadow Lake):: Mr. Speaker, I am very pleased to take part in this debate. I have been interested in the Farm Credit Corporation for a long time. I have become aware of many of the problems which the Farm Credit Corporation has had to face, not because of a lack of efficiency on the part of its staff, but because many farmers who made loans were forced to accept such low prices for their produce. Many farmers have had their backs forced against the wall, and been unable to meet their obligations. I think the increase in the amount of the farm credit loan may work out very well. However, with-
May 8, 1972

out this amendment, I do not understand just what these changes will accomplish.
Many owners of small farms, including young men and women, cannot make a loan of any kind in order to get started. They cannot obtain assistance through the Farm Credit Corporation. Many of these people have spent all their lives in agriculture. However, because they do not have anyone to back them up or give them a tract of land which the Farm Credit Corporation can use as security, these young people have been unable to obtain a farm. The Farm Credit Corporation has been of great help to many people, but someone has had to provide the security in order for them to obtain a loan. Therefore, I can understand the need for this increase. No doubt it will help many people. However, without the amendment, this program will do away with many more small farmers, and this is what we want to avoid. Many of us see the need for small farmers, whether this government does or not.


An hon. Member:: Oh, oh!


Albert C. (Bert) Cadieu: The member opposite says "oh, oh". I wish to quote some unaudited figures as of March 31, 1972. These are for the area I represent. In my area there are 561 active loan accounts. Of these, 110 are in arrears. This represents 19.6 per cent of the total active loans. Of that number, 41 are less than one annual payment in arrears; 47 are one annual instalment in arrears; 19 are two annual instalments in arrears and three are three years or more in arrears. In all of Saskatchewan, there are 19,810 active loans. Of these, 3,930 are in arrears. This represents 19.8 per cent of the total accounts. I think this proves the necessity of the amendment.
Something has to be done about the present rate of interest. In many cases, the rate is as high as 8.5 per cent. With the prices these people receive for their commodities, I do not see how they can carry on. They are receiving less for their grain and other produce than at any other time in the past 20 years. Today, the dollar will only buy a little over 50 per cent of what it did 20 years ago. The farmers are in serious trouble. If we have enough confidence in agriculture, we should pass this amendment.
This government has given large amounts of money to other industries through forgiveness of loans. If we do not do something about this high rate of interest, many people will be in a lot worse trouble than at present. When we see that 19.2 per cent of the loans are in arrears, we realize that something must be done. Other industries have been given interest free loans to establish themselves. Many young people are trying to pay for their farms. If this amendment is not accepted, many of them will be forced to enter the labour market. This important fact has already been placed on the record on two or three occasions. I am sure all hon. members have read the amendment. Unless there is some forgiveness of many of these loans, we will be doing just what this government has been accused of doing, regardless of whether or not it has been doing it. However, it appears as if the government is going a lot farther toward eliminating the family farm.
Farm Credit Act
I don't care where you want to go, I am sure you will find the same thing as I found. Some districts possibly had better crop conditions, there were different varieties or something, but when you take the percentage of land that is under development and when you go back to look it over, that is how it appears to me. I had the pleasure of being a supporter of the government which set up the Farm Credit Corporation and when I look back on that time, and what we were getting then by way of profit-yet we were only paying 5 per cent interest-I think this is what we must take a look at. We must come up with something in the way of forgiveness of some of this interest. I cannot see what point we are coming to. If they cannot pay when they are only able to get up to $40,000- and many get much less-and we are now making it possible for them to borrow up to $100,000, it is absolutely no good. It is good only for the monied guys, because anybody who is going to borrow $100,000 has to be worth 25 per cent of it before he can get it, and this is what we are up against today with the young people.
I know lots of young people who are anxious to get land to take up farming, but because they do not have fathers who are rich enough to give them 25 per cent as security, they cannot get loans. So, what are we going to do? We are going to eliminate the little farmer. The little fellow is the guy who is going to get it in the neck. He will have to go into some other industry. I think it is a shame that we have to throw these boys and girls off the farm without giving them some opportunity to get set up in farming. I believe it can be done. I do not see any reason in the world why it should not be done, if we can give away good money the way this government has been doing on some propositions. I cannot for the life of me see why these young farmers should not be recognized and given some consideration so that we can keep them on these farms, because they are the ones who should be on them. I am telling you, Mr. Speaker, that if something is not done a good many more of them will be forced off the farms because they cannot carry on at the prices they have to pay for everything they must buy to operate these farms and go on paying the interest on these loans. I think it is the right time now to give some consideration to their needs. I am sure the Minister of Agriculture (Mr. Olson) could come up with some forgiveness of some of these interests payments and we could make it far more encouraging, through other forms of loans, to help these young people get started.
I am not saying anything against the Farm Credit Corporation or the efficiency of their operations. They are only doing what they are supposed to do. The government should step in and do something to make it possible for boys and girls who are being forced off the farm into other industry, with the unemployment situation such as it is today, to remain on the farm by using some other method. I cannot for the life of me see why we cannot figure out some way of doing this, and this amendment to the bill is a start. Unless we can come up with something on these lines, then, as I say, I cannot see much point in the bill, because many people have got much less than $40,000 yet they find themselves in grave trouble. How

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Farm Credit Act
much better is $100,000 going to be to them if there is that much more interest to be repaid?
There has been so much repetition that I will not continue at length on this subject, though I could do so. The Farm Credit Corporation is a good organization and there might be a place for Bill C-5. Nevertheless, I believe this amendment warrants consideration.


John Stratford Burton: Mr. Speaker, a major feature of the bill before us is the provision which would serve as a vehicle for the government's small farm consolidation program. As such, it is an important measure and it is one which has received a good deal of consideration in recent years. Many proposals have been put forward and there have been many alternatives suggested in terms of how to deal with the situation which has developed in the farm economy and in rural societies in Canada.
As we are aware, the small farmer finds himself in many instances unable to garner an income which is in any way comparable with that to be expected in other sectors of the economy and other parts of our society. He is unable to mobilize the resources necessary to develop his enterprise in such a way as to secure an adequate income. The farmer is basically in a poor bargaining position in our economy. He is not able to bargain with the same effectiveness as other entrepreneurs when it comes to securing a fair share of the national income. This is a serious situation and one which is reflected in the deterioration we are presently witnessing in rural Canada where we find a process of disintegration taking place which is resulting in the demise of many family farm enterprises and of many rural communities. The outlook is bleak and there is no prospect of any change in the basic situation.
I see very little in this bill which would bring about basic change in the situation though I have to acknowledge there is some recognition of the problem. Nothing has been done, however, to put forward a satisfactory solution. The government has produced nothing more than the old, piecemeal type of approach to which we have been accustomed for so long. It seems that the government has taken note of its own program in this field. It is not only in the Department of Agriculture that there has been recognition of the problem. The fact is that the Department of Regional Economic Expansion is also interested in the question of small farm units as it relates to poverty in Canada, and this has been recognized in some of the ARDA programs. The department has made some play of the fact that it is engaged in a program of assistance to small farm units. But I am at a total loss to understand what co-ordination there is between the small farm program that is being carried out under ARDA and the small farm consolidation program that is proposed in this legislation and which will be administered by the Farm Credit Corporation.
It also seems to me that there is some conflict here, certainly a potential conflict. As I read the legislation and as I understand the government's proposals to the extent they have been elaborated on, I have no clear idea about what the government is doing. To the extent that what the government is doing can be determined, it seems that the

government is interested in consolidating farm units, in creating larger farm units, in throwing people off the land, in doing away with farm units and cutting down on the number of farmers in rural Canada. Through this legislation the federal government is paying homage at the altar of size, of bigness. It is saying that the only solution to the problem it is trying to grapple with is to increase the size of farm units. This is the kind of approach that has been taken for 30 to 40 years in this country and it still has not produced any solution. I suggest that the legislation before the House will bring us no closer to a solution to the small farm problem than has any other legislation in the past. This is a repetition of the same old approach-a little bit of tinkering with the program to try to grapple with the new situation. There is nothing fundamentally new here. There is no basic change or new approach. The government is bankrupt of any imaginative ideas with regard to dealing with the problem, one that must be of concern to all Canadians.
We have here a conflict in what would appear to be a program that the government is trying to promote through ARDA to help small farm units improve their income position. Two departments are carrying on programs in this field. Are they co-ordinated? Are they working together? Have the two programs been reconciled? We have seen no evidence to suggest that this is the case. In addition, we also have the fact that a number of provinces are interested in this problem and are taking action. In my own province of Saskatchewan some initiative is being taken in the passage of legislation to provide for the establishment of a land bank to buy out farm units which are available for sale at a reasonable price and then either leasing them to young farmers, people new to farming, or eventually disposing of them if this is the wish of the farmer. The province of Saskatchewan is to be commended for launching such an imaginative new program as embodied in the land bank legislation.
From what I have read in the press, an attempt was made to see whether this program could be worked in with the proposals of the federal government as embodied in this legislation, but the federal government was not interested in what the province was attempting to do. The only thing the federal government was interested in was in buying up land and selling it off, burdening farmers with the debt of land costs, as has been the case throughout the history of Canadian agriculture. The federal government was not prepared to go along with any new proposal or concept, or even to give it a chance to work with its own program. I suggest such a government is not worthy of the confidence of the Canadian people, and the sooner we turf it out, the better.
We must also keep in mind the role played by the farm credit program in the over-all picture of the agricultural economy. I think some years ago the concept was that one of the main ways of helping the farm economy was through the provision of more adequate credit facilities. This was advocated by everyone concerned about the situation and who had any knowledge of farming. The farm credit program has been in effect now since the later 1950's and there is no question at all that it has been of assistance to many farmers.
May 8, 1972

However, we are still no closer to a solution to the over-all problem of farm income than we were when this program was commenced. We are still facing the same basic questions, and I think this demonstrates the fact that the solution to our farming problems does not rest with any one, single program. Rather, what we need is a variety of programs. We need more than simply a farm credit program, quite apart from the inadequacy of the present legislation, as I mentioned a few minutes ago. What we need is a farm credit program that has a proper thrust and focus, one that is directed toward ensuring that farmers have adequate income, that they have adequate prices, that their costs are kept under some sort of reasonable control. All of these elements are required if we are to produce an adequate solution to our farming problems.
To translate this idea into mathematical terms, two times nothing ends up as nothing. Two times nothing times nothing still ends up as nothing, as one big zero. Even with an adequate farm credit program we would not be brought closer to any basic solution to our farming problems. A farm credit program can only do the job expected of it if it is developed in concert with an adequate income program, an adequate pricing program, a program that will ensure that our farmers are able to secure their goods and materials at reasonable cost and that adequate services will be available to them.
I see it is five o'clock, Mr. Speaker, and that you are pressing forward in your chair. Might I call it five o'clock?


The Acting Speaker (Mr. Boulanger):: Would the hon. member also adjourn the debate?


John Stratford Burton: Yes, Mr. Speaker, I move that the debate be adjourned.


[Stage Direction]
Motion agreed to.


The Acting Speaker (Mr. Boulanger):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Regina East (Mr. Burton)-Manpower-Local Initiatives Program-Funds allocated, amounts spent, applications received, by provinces; the hon. member for Moose Jaw (Mr. Skoberg)-Transport-Proposed linking of Kootenay and Elk railway to U.S. line-Request for action to prevent movement of coal to U.S. ports.
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.
Improvement Program for Aged



PRIVATE MEMBERS' MOTIONS


Barry Mather: ;
That, in the opinion of this House, the government should give immediate consideration to initiating an Opportunities for Age program designed to improve the health, economic, occupational, recreational, social and cultural opportunities of the senior citizens of Canada, and that in the organization and administration of such a program the senior citizens' associations be consulted and involved.
He said: Mr. Speaker, having in mind the non-political nature of what I propose and the great deal of support it has received from senior citizens and their organizations in many parts of the country as well, I might add, as having in mind the indication of interest and in some cases support from members of the present government, I intend to make my presentation of this proposal very brief. I shall urge my colleagues to allow it to proceed for detailed consideration to the appropriate committee, which in this case I would think would be the Committee on National Health and Welfare.
In brief, what this proposal calls for is the adoption and utilization of the same principle parliament has applied in respect of opportunities for youth. This would be applied in an appropriate way to opportunities for the aged. There is no doubt in my mind that if this were done, and I believe something of this nature is already under consideration by the government, it would result in great benefit not only to many of our senior citizens who have a wealth of experience not being utilized in employment or occupation, but also to the many communities in which these people reside.
In my opinion, and I am sure many other hon. members share it, there is both the need and opportunity in Canada at this time to improve the living as well as the economic condition of our senior citizens. I especially urge old age pension and superannuate organizations to play a part in developing the administration of a federally initiated program of this type to combat the isolation of the older people. This would have a beneficial result to the community as well as to the people concerned. This would be particularly so if, in line with the proposed opportunities for the aged occupational program, we had a substantial increase in the basic old age pension such as the hon. member for Winnipeg North Centre (Mr. Knowles) and myself have urged for many months. We should increase the basic pension to at least $150 per month. When we mention that figure of $150 per month today, let us keep in mind that the Canadian dollar, as a result of inflation, has lost almost half its purchasing power of 1950. This gives a better perspective as to the value of $150 old age security pension.
Among the senior citizens of Canada there are a million men and women with ability, experience and a desire to be of use to themselves and others. Their potential

May 8, 1972
Improvement Program for Aged endeavour as a resource should be studied and co-ordinated for the benefit of all. I urge that a decision be made to establish an opportunities for the aged program at an early date, and that a conference be held in Ottawa of federal, provincial and regional people in that field, plus a representation of the old age pensioner organizations. There is a need for improvement in the health, economic, occupational, recreational, social and cultural opportunities of the senior citizens in Canada. Such a conference would emphasize and coordinate the efforts of the many and growing government departments and agencies already at work in this area. This would be of great interest to senior citizens and those people who will soon be in that category.
Some of the more immediate and obvious benefits which might accrue through this type of conference of organizations across the country would be to the old age pensioners or senior citizens. One such very obvious benefit would surely be a stimulation of the financing of low-cost travel by senior citizens. There are thousands of empty seats in aircraft flying across the Atlantic every week, and there are thousands of senior citizens in Canada who come from old countries in Europe and elsewhere who would like to make one trip to their earlier land. This could be very easily organized by such a procedure, thus providing opportunities for an aged project.
Other countries are ahead of us in this endeavour. In the United Kingdom, for example, I am told that for many years now there has been a program in operation under which retired people with special experience or skills are taken on contract by the British government for a year or perhaps two years and sent out to developing countries. In these places, the skills and experience of the British senior citizens have been of particular value to those countries to which they have been sent, and this has been of great benefit to the citizens themselves.
I have a report which indicates that in the state of New York alone there are now 38 such programs in operation in 19 counties involving 750 senior citizen volunteers. This program is called the "Serve Program" and is supported by the Health, Education and Welfare Department of the United States government. Let me quote from this report as follows:
Unique to the SERVE programs is the group approach. Volunteers are recruited in groups to serve, in individual assignments, on the same day each week at a given agency. In most programs, this makes it possible to provide group transportation from one or two central pick-up points to the agency and back. Regular group discussion meetings provide continuous in-service training. This group association gives the older volunteers an opportunity for social contact and to form new friendships.
SERVE volunteers in different communities perform varied assignments in general hospitals, hospitals for the mentally ill, schools for the retarded, homes for the aged, children's institutions, schools, libraries, museums, and other social, health, and welfare agencies.
There are many other endeavours they undertake which I will not take up the time of the House to enumerate. With the earlier retirement age coming, and already here in some instances, with some increase in social security over what was so 40 or 50 years ago, and with automation displacing older workers as well as keeping the young off the labour market, we have a general situation in Canada which would benefit by a federally initiated program of

opportunities for the aged. This could operate in conjunction with the provinces and old age pension organizations to the benefit of both the individuals and the areas involved.
I mentioned that I was encouraged last year by some response from the government side of the House. I mention this particularly for the encouragement of my colleagues in the government benches, and so they will not talk this matter out this afternoon. I received a letter from the Prime Minister (Mr. Trudeau) in which he said:
The basic proposition appears to have fair support and I am interested to find out more about what could be achieved in this respect.
I have been told by the Minister of National Health and Welfare (Mr. Munro) that this is a good idea. My prize support from the government side came from the former Minister of Justice, now the Minister of Finance (Mr. Turner). He is in a very good position to help promote this program I am urging.
He says:
I, too, have received a great number of letters from across the country expressing interest in the proposal that you mentioned. I still think it was a great idea and will do my best to persuade my colleagues when we are discussing this sort of thing.
With that sort of support I can hope, if I cannot get a green light for the motion, that I can at least get an amber one so that the subject might be allowed to idle to the appropriate committee.


Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, I begin by commending the hon. member for Surrey-White Rock (Mr. Mather) for presenting this excellent notice of motion for our consideration. The hon. member has a most enviable record for proposing important, interesting and worthwhile new ideas and programs for the consideration of parliament and the government of Canada. He certainly is to be commended for this particularly valuable notice of motion now before us.
In recommending an Opportunities for Age program I note that the hon. member subscribes to the basic concepts which are embodied in the Opportunities for Youth program, and that he is enthusiastic and excited about the general over-all success of that program. Now he wishes to see it extended so that we may provide more opportunities for other persons in our society. I agree with him.
I think that the concept of encouraging innovative ideas and projects which involve people in performing socially beneficial tasks ought to be expanded into a year-round all-inclusive opportunities for people program. But maybe before going that far, what we should do, as the hon. member suggests, is to test a little farther the validity of the concept and make it available to another age group which is also potentially very rich with ideas for projects that deserve to be encouraged and supported with public funds. Here I am talking about that age group which is usually referred to as our senior citizens.
Some observers of the passing scene have suggested that what exists in our society now is a cult of youth. Hooked on an apparent youth binge, we tend to ignore the special needs of our aged. Our preference for youth
May 8, 1972

causes us to shun those who remind us of growing old, to isolate them wherever possible into ghettos or reserves called nursing homes or homes for the aged. It is something of a shock to realize that as a nation we collectively spend more money on preparations to keep ourselves looking young than we do in assisting our senior citizens. We shove them out of useful careers whenever we can and as soon as possible. Then we go on to ignore their needs as well as their potentialities.
In Canada, there are nearly two million citizens over 65 years of age. I think that the hon. member for Surrey-White Rock was using different statistics than I am using. He mentioned a figure of one million. Recent information from Statistics Canada shows that there are two million citizens older than the age of 65 years, or just over 8 per cent of our population, and it is estimated that Canada will have more than 3 million persons aged 65 and over by 1991. Of that number, Mr. Speaker, only about one-tenth have a physical or mental handicap, and only 5 per cent of them are in institutions. There is a heavy obligation on our society to provide a wide range of suitable services for these persons, and more adequate pensions for those who need them. But even more than that, there is an obligation to make opportunities available to these people, whereby our senior citizens can themselves continue to serve the communities in which they live and in which they themselves have worked.
Our country, it seems to me, could be immeasurably wealthier in social and human terms if we were wise enough to mine this rich vein of talent, ability and dedication that exists among our citizens 65 years and over. Generally speaking, if an older person makes a serious effort to remain in society and participate actively with the rest of us, we do our best to make his or her short time as miserable as possible with compulsory retirement, inadequate pensions, lack of community services for senior citizens, and little opportunity to use the skills and knowledge gained during an entire lifetime. This is the common lot of many of our senior citizens, and it is not right that it should be so. A psychiatrist who specializes in problems of the aged said recently that one-third of our senior citizens are living in quiet despair, stemming both from physical and spiritual poverty, that in turn stems from the chilling realization of powerlessness and non-participation.
The country is moving toward earlier retirement at the same time that the life expectancy of the population is increasing. I do not argue against the trend toward earlier retirement, but it seems to me that we must recognize and appreciate that there are related social problems. Although the problems accompanying retirement have long been recognized, little has been done either to provide new opportunities for work after retirement, or to prepare people for the period following an active career.
There is one program which does exist and which I think deserves some mention here. I am referring to the Canadian Executive Service Overseas, which is a nonprofit organization operated by a group of Canadian business leaders with the support of the Canadian government through its Canadian International Development Agency, known as CIDA. The Canadian Executive Service Overseas, abbreviated to CESO, recruits Canadian
Improvement Program for Aged volunteers-and this is important-either retired or active, who have technical, professional or executive skills and are willing to go abroad to work in developing countries in either the public or private sector. The tour of duty is for a maximum of six months.
In 1967-68 there were 31 volunteers. In 1969, 115 persons accepted the challenge. I do not have more recent statistics, Mr. Speaker, but I think it is very plain to see that the program, although a very modest one, meets important needs not only for the developing countries, which I am sure it does, but also for the volunteers themselves. I think that what we have here is the germ of a proposal which could involve thousands rather than just hundreds, and involve these people not only abroad in developing countries but right here in our own country in the very communities where these people have been active for most of their working years.
Psychiatrists point out that enforced retirement and the absence of social roles often affect the mental health of those over 65. The incidence of psychopathology rises with age, as do depression and suicide. Older people need, and they want a chance to remain a part of the working world. Many, of course, require the additional financial resources which come from such endeavour. There are those as well who have deeper needs: the need to be needed, the need to do something worth while, to enjoy the experience of warmth, understanding and companionship, all of which comes from joining with others in designing a useful project and accomplishing some specific task.
It is rather interesting to note that federal funds have been granted under the Opportunities for Youth program, and under the Local Initiatives Program for studies of the needs of the aged. In the main these studies have discovered what has long been known, in other words very little that is new has come from these studies so far as I have been able to detect. Perhaps if we assisted some of our senior citizens to do their own studies there would be some startling breakthrough in our understanding of the aged as well as some solutions to the most pressing of their social, psychological and economic needs.
The majority of the senior citizens in Canada were active before retirement and they continue to be active in one way or another after retirement, and yet, many of these people have unfortunately become isolated and helpless. Efforts must be made to draw our senior citizens more fully into the mainstream of life. Most of these active persons need continuing opportunities to be active. Society must learn to involve its older members so that they may continue to have normal opportunities for self expression, intellectual stimulation, service to others, and joy in living. There is no doubt that such a goal is a challenge to governments and also to the senior citizens themselves. The success of such a program depends on our willingness to allow older adults to participate in the planning, the organization, and the implementation of programs which will serve the aged and in which the aged themselves can and should serve.
Wherever this approach has been tried, in Canada or elsewhere, it is encouraging indeed to observe the inven-

May 8, 1972
Improvement Program for Aged tiveness being displayed in using the time and the talents of the older members of the society. It is equally encouraging to find more and more adults in Canada asking what they can do to help themselves, what they can do to help each other, and what they can do to serve the communities in which they live. Those who are seriously asking these questions are the same people who are actively engaged in trying to find some of the answers. They deserve to have the interest and support of the government and, as the hon. member for Surrey-White Rock (Mr. Mather) said, they deserve a specific opportunities for the aged program. For them it could be a very appropriate answer indeed in meeting some of the needs that have been considered and to which the hon. member has referred in his motion.


Jack Marshall: First, Mr. Speaker, I wish to compliment the hon. member for Surrey-White Rock for having introduced this motion which is so relevant to our Canadian society today. I also wish to compliment the hon. member for Thunder Bay (Mr. Penner) on his meaningful statements.
One of the things about which I wonder as I experience parliament is why we seem to want to cast aside the senior citizens in our country just because they have reached the age of 65. Many of our senior citizens are contributing to our economy, our culture and to every phase of Canadian life. I can think of some people right here in the House of Commons who are dedicated members, such as the hon. member for Fort William (Mr. Badanai) with whose contributions in the committees of the House I am familiar. If there ever was a man who was dedicated in his participation in the House of Commons and in his representation of his constituents it is he. He is an example for our senior citizens in Canada whom we should be considering instead of casting aside.


Some hon. Members:: Hear, hear!


Jack Marshall: The idea of an opportunities for the aged program is an excellent one, and I can only say that I feel rather envious that I did not put forward this motion today.


Roderick J. (Rod) Thomson: Jealousy will get you nowhere.


Jack Marshall: Our senior citizens are only as weak as their strength and they can contribute much to our economy. About three or four days ago I was present at the opening of a senior citizens home in my district. I felt very humble on seeing the 32 or 33 senior citizens who for one reason or another are not able to contribute to our society. I must compliment the government for providing funds for the building of senior citizens homes so that not too great a burden is placed on those who wish to help our aged citizens. What is so distressing in our society today is the fact that there are so many disabled older citizens. I refer to veterans and those who have aged prematurely because they could not obtain help and could not take advantage of opportunities in certain parts of our country. More direction should be given in providing homes so as to give some comfort to these people as they reach their twilight years.

I will not spend much more time speaking on this motion because it should not be talked out. We live in an age of participatory democracy and we should give an opportunity to our older citizens to participate in producing programs and help for themselves as well as in contributing to the greatness of our nation. I agree with the motion. I know that there are other members who wish to speak on it, and I hope that we will pass this motion in a non partisan way. Again, I compliment the hon. member for Surrey-White Rock for putting the motion forward for the betterment of our nation.


Mr. Guy LeBlanc (Rimouski):: Mr. Speaker, I do wish to join with the previous speakers to congratulate the hon. member for Surrey-White Rock (Mr. Mather) for the motion he has just presented. This motion concerning those people 65 and over who are usually known as senior citizens, is a most valid one not only if we intend to help them, but also if we consider that a good many of them can be useful to Canadian society through their contribution to programs which, as the hon. member has suggested in his motion, can be known as Opportunities for Aged or Opportunities for Senior Citizens programs. However, I think it should be recognized that senior citizens have not been forgotten by the present government, at least by the members of the Liberal party, who have suggested the implementation of an Opportunities for Senior Citizens or Opportunities for Aged program.
The Liberal party has always paid marked attention to senior citizens. Indeed, it is the Liberal party which first initiated last year, in our society, the Opportunities for Youth program which could also be called "Initiatives for Youth".
Other equally promising programs will be set up this year. They concern youth, though the underlying principles are the same. The aim is to call upon the initiative of the unemployed or the neglected to help them earn money and to instil into them a feeling of pride in their work.
With regard to the Local Initiatives Program, developed during the winter, it has been a success and, in every part of Canada, especially in the region I am proud to represent, this program proved to be very effective and very useful to the Canadian people.
At the present, we even begin to speak about the Opportunities for Citizens Program, which could include all other programs, including the one which the hon. member for Surrey-White Rock mentions in his motion.
I am interested, as well as most Canadians I believe, in the fact that by developing such programs, one applies the work incentive principle about which many politicians and sociologists have been talking about for several years. It is a good thing to provide social assistance to the "have-nots", to help increasingly our elderly people, but it is also necessary to help young students who, during summer holidays, do not find any work and are concerned about how to finance their studies. However, when giving such money, one must not forget to use all possible means to encourage these groups to do a meaningful job.
May 8, 1972

We often say that we are living in a free enterprise society, but because of developments and rapid changes in our society, one must admit that the application of a kind of socialization, convincing above all the recipients of the pride and worthiness of work, is necessary, as far as possible, as one commonly says. These people must be interested in being helped to earn their living when they are able to do it.
With regard to "Opportunities for Age" Program, I suggest that one should rather say in French-I do not want to be accounted a purist since I am not one-one should rather say "Opportunities for Old People" or "for Old People of 65 and more", because, Mr. Speaker, as other hon. members in this House, I am in my middle years but I have not reached yet the official old age, that is of 65 or more.
As I said earlier, this motion is quite commendable. The Opportunities for Age program should be included in a more comprehensive scheme. As for its application, senior citizen organizations and persons interested should be consulted. Older people could no doubt give good advice to those who would set up and administer this program as well as their co-operation for such an organization and administration.
Would it not be better to include all those programs under a single one that could be called "Opportunities for Citizens" or "Initiatives for Citizens"? I believe the word "initiative" implies a suggestion of another kind that would enable Canadian citizens, regardless of their age or social position, to show some initiative or creativeness in order to be most useful to society.
"Opportunities" suggests "expectancy". One thinks of those poor people on welfare who spend their time waiting to get everything from other people and from the government. The government has responsabilities towards welfare recipients and older people, I agree. But if they are always asked to wait, they might develop a bad habit.
The comprehensive program I mentioned could include students, unemployed adults or welfare recipients and older people who are still efficient and alert.
However, considering the achievements of the last two years, I believe we must take care to ensure the best organization and the best administration for programs, according to well-established general and specific standards and criteria. It might be better for the government, in the case of a comprehensive program, to train a team of experienced, specialized and permanent officials, of course with the temporary co-operation of the people concerned, students, unemployed, welfare recipients and older people, concerning implementation of those programs. Because of the convictions of several-I would even say most-members of this House, and because of the misery and hardship which prevail in some areas and within certain groups, a formula that I would rather call socialization has to be applied. However, those principles must not be applied in a socialistic spirit, since we must not forget that for most of us, respect for the principles of free enterprise, of liberalism in the fullest sense of the word, is somewhat synonymous with respect for the freedom of the individual. In the main, we should implement those programs along the lines of a socialization concept
Improvement Program for Aged
which would be a lesser evil in some respects, because of the yet unadjusted effects of our technological society, of our changing society.


Stanley Howard Knowles: Question.


Heath Nelson Macquarrie: Mr. Speaker, I can assure the venerable member for Winnipeg North Centre (Mr. Knowles) that I will not talk out this bill. In looking over the order paper this is one motion that I find interesting and worthwhile. It is, seemingly, always necessary that we sloganeer and make use of euphemisms and expressions such as "opportunities for age" and "opportunities for youth," but regardless of the nomenclature I think the idea put forth by the hon. member for Surrey-White Rock (Mr. Mather) is worthwhile and practical.
I do not know that I would go so far as to agree with those who say that what we really want is an opportunity for everyone. Of course we do; but if I have it in proper perspective, what the mover of this motion wants is some special effort made because of the special needs of people of advanced years. It seems to me that if you make everything special, you make everything general. This is what took place in large measure with reference to the designated areas program. When you designate practically the whole country, the special incentive for areas to participate becomes vitiated and weakened.
I agree with the hon. member for Thunder Bay (Mr. Penner) who suggested that in this age we must think young. I think the high calibre of our youth is a source of pride. The situation today is somewhat different from that which existed in earlier societies when the expression "your elders" had an impact on the rest of society which was somewhat more sacrosanct than the impact of today. You venerated those who were aged just because they were aged. Conditions have changed now and all too frequently the aged are the recipients of less attention. In earlier ages they were the recipients of great attention and veneration. We must remind ourselves, as Ulysses did long ago, that old age hath yet its honours and its toil. We must recognize that there is room for government involvement through legislation at both ends of the scale, for youth and for the aged.
In some ways life has become such more depersonalized than it was before. The family unit is less integrated and less intense than it used to be. So we find that people, as they reach a certain age, respond to something less personal and perhaps less warm than the family unit. There are many reasons for this, but I will not this afternoon enter into a long sociological dissertation.
The hon. member who introduced this notice of motion suggested that older people should be given the opportunity to fly across the ocean to their former homelands. That, I think, is an excellent idea. I think, also, we should act on the ideas of the hon. member for Thunder Bay, perhaps under the CESO program. Some of the young people in the CUSO program used to call the CESO group the paunch corps. They were referring to people of advanced years, as they were seen to be by those 19, 20 or 21.
25316-3!

May 8, 1972
Improvement Program for Aged
I have been very interested in the CUSO program. Many leading figures in developing countries, having heard me laud the young volunteers in CUSO have pointed out almost invariably that these young people are not in the country nearly long enough. They say it takes almost one year for them to learn the nuances of the language spoken, even though it may be English. They are getting under way in the second year and becoming most effective, when they are withdrawn. I wonder if there is not a program for involving some of our people in CESO for fairly lengthy operational periods in other countries. I can think of some fine school teachers in this country who retired merely because they reached retirement age. Many of them are possessed of wonderful administrative experience and I think they would be of great value in helping many developing countries establish a good educational program.


Stanley Howard Knowles: There are people like my hon. friend.


Heath Nelson Macquarrie: My hon. friend from Winnipeg North Centre suggests that I could serve too. When I am a little older, I would be delighted to do so. I cannot depart in my prime.
I have always borne great affection for private members' hour, and it is appropriate for an hon. member such as the hon. member for Surrey-White Rock to bring our attention to this matter. Having shown interest in the subject before, he is being consistent on this occasion. In an age that thinks it is smart if you think young, which uses medical science and the whole field of geriatrics to prolong human life, we should do everything possible to enrich that prolonged life. As was said earlier, as more and more people reach retirement age it will be inevitable that more and more of them will want to live a richer life. There is no reason why in an advanced society like ours your life must suddenly change from one of routine labour to one of lassitude.
I think careful thought should be given to this matter. I will stand up with the Minister of Finance (Mr. Turner) and vote in favour of this notice of motion being given further study. In that way the House of Commons could examine the best way to adopt the practical and clearcut suggestions made in the notice of motion and all would see the very fine motivation which is behind the motion, which I salute most heartily.


Stanley Howard Knowles: Question.


Mr. Lloyd Francis (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, I regret that there is only hour for dealing with the number of interesting issues and proposals suggested by this notice of motion. The hon. member for Surrey-White Rock (Mr. Mather) went through the usual exhortation of saying, as he said once before, that if we want this matter to become effective we need simply refrain from participating in debate, that the notice of motion will pass and something will be achieved.
Not long ago the hon. member for Winnipeg North Centre (Mr. Knowles), who is a good friend of mine and for whom I have the greatest respect, tried to move a motion which would have added, if passed, $1.5 billion to

government expenditures annually. There were 30 hon. members in the House at that time. Today there is a good attendance. I see three or four hon. members of the party of the hon. member who introduced this motion, there are three Creditistes, several members of the official opposition, and others.
The fact is that after debate of one hour for which about 30 hon. members attended, the hon. member for Winnipeg North Centre tried to add $1.5 billion to government expenditures and it was hardly reasonable to expect the government to accede to his proposal. The Canadian Press carried a story to the effect that with one minute to go, the hon. member for Ottawa West jumped to his feet and talked the bill out, thus guillotining the hope of senior citizens across the country.


Stanley Howard Knowles: Canadian Press was right on the beam.


Cyril Lloyd Francis: Subsequently, a number of abusive letters were forwarded to me because of my intervention in that debate. I support this notice of motion and want to say a few words on it. I had hoped that the hon. member introducing the matter would in his speech tell us in more specific detail how his idea could be implemented.


Barry Mather: That can be done in committee.


Cyril Lloyd Francis: I was, therefore, disappointed at the lack of originality and imagination displayed by the hon. member. He seemed to think that all old people want only to take a trip back to their homeland or travel a little and look around. I think he was selling our senior citizens short. I should like to hear from senior citizens organizations across Canada what sort of community services they would like. I should like them to examine the guidelines we have used in connection with Opportunities for Youth, a most successful program, and tell us what they want to do. The hon. member was right when he said we should consult with senior citizen organizations. Of course we should. We would be delighted to consult with them. We look to them for impetus in the creation, adoption and extension of public policy in this area.
We can make great contributions in private members' hour. I share the feelings of my hon. friend who preceded me who said he has great affection for this hour. It permits many members of the House to express ideas which are free, independent and go toward the development of policy. After all, policy does not come about because a motion was passed at a certain hour on a certain day. Policy is created by public opinion, with public debate. It is created when there is pressure for measures that I am sure will come.
I should like to know, Mr. Speaker, the area in which the senior citizens of Canada think they can make their greatest contribution. They do not want to be put aside. They do not want necessarily to compete with young people in other parts of the world. They do not want to be forgotten. In addition to their pension rights and economic security they want an opportunity to contribute in the community. They want the opportunity to show that they can do just as much as the young people in contributing to the health, welfare and well-being of other citizens.
May 8, 1972

We have paid our tributes to them today. We have all said pious things. We have talked about how great they are and about the great debt we owe the senior citizens of Canada. Yet more is required if we are to serve them. We must give them the opportunity to help themselves, and the first thing we must do is help them to tell us about the kinds of projects they can undertake. If we could adopt the sort of guides that have been used in the Opportunities for Youth program, extend them and innovate in this respect. The government, I am sure, will be happy to consider the suggestions of our senior citizens.


Mr. Robert P. Kaplan (Don Valley):: Mr. Speaker, before I direct myself to the terms of the motion before us I wish to say a few words in support of the point made by my distinguished colleague, the hon. member for Ottawa West (Mr. Francis). It should be recognized by all members, certainly the senior members of this House, who were catcalling while he was speaking, that private members' hour is more an opportunity to put forward and build support for ideas than a time for passing resolutions. I think much is achieved if members on all sides of the House speak in favour of a resolution. Support is built up and their interest in the subject is drawn to the attention of the country and the government. It is mean for hon. members opposite to exploit any of us or this hour to allege that we have ulterior motives in speaking on the motions before us. I am sure they will agree that we have the same rights as them.


Some hon. Members:: Hear, hear!


Robert Phillip Kaplan: Let me now turn to the resolution before us. In very large measure, the aged of Canada, our senior citizens, already have been considerable beneficiaries of the Opportunities for Youth program. It is true they have not received payments under it and they have not been hired under any of the programs toward which Opportunities for Youth is directed. That was not the intention of the program.
I have reviewed a large number of these projects and many are directed toward their needs and problems. I do not have time to give many examples. In my constituency there was an Opportunities for Youth program that provided free for senior citizens the services of young people to carry parcels from shopping areas to their homes, assist with repairs to senior citizens' property and generally support them in their role in the community. This is a very desirable benefit that senior citizens received from the Opportunities for Youth program.
Why did the Opportunities for Youth program not direct itself toward the employment of senior citizens? I think the reason is easy to understand: the Opportunities for Youth program was directed primarily toward providing employment for people who were badly in need of an interested in obtaining work. Statistics make it very clear that the unemployed of Canada are largely young people between the ages of 18 and 25. I understand that through this program the government was not trying to create employment in the public sector for its own sake; rather, it was directing itself toward two objectives. One was to try to combat the serious problem of employment among
Improvement Program for Aged
young people-in this dimension the program was very successful-the other was to enrich life in Canada by providing services to communities through our young people. The benefits achieved by the Opportunities for Youth program were very considerable. There were no handouts or grants. The money the young people received was earned through work which the community in which they lived agreed was valuable and ought to be done.
One other point about the Opportunities for Youth program is that its costs, when set out in a balance sheet, exclude a very major factor that commends the policy. The balance sheet does not show the fact that many of the people who came into the Opportunities for Youth program were on welfare. All of them were unemployed. Although not all of them were receiving unemployment insurance payments, many of them were. When you look at the absolute figures as a ground for condemning the program, you should bear in mind that the cost was offset by considerable savings not only in federal programs, such as unemployment insurance and welfare, but in savings to provinces and municipalities which bear part of the cost of welfare.
I believe this program should be extended so that senior citizens may use their imagination and initiative-I think the resolution states it very well-to enrich their communities and become active in projects. I repeat, much of the cost of this program can be offset by savings in the guaranteed income supplement, unemployment insurance and welfare benefits. The program is not as expensive as it seems. Notwithstanding the special reasons for limiting the program in the past to participation by youth, it should now be extended to the aged. They have a contribution to make.
In conclusion I wish to direct one point to the government. It is too easy for a government to be crisis-oriented, to consider responsibility as putting out fires and dealing with despair, confrontation and demands of sectors of the country which are prepared to put their case in terms of ultimatums. The senior citizens of Canada do not do that; nor do some other segments of society. It is important for the government to recognized that running the country and responding to its needs is more than a matter of dealing with crises and putting out fires: it is also a matter of recognizing that there is an element of good will among people who want to serve society. There are many people with enthusiasm, energy and good will toward their fellow men and their communities. They want to help and have ideas for helping. There must be room in the government's list of priorities to utilize this tremendous Canadian resource.


Mr. Harding:: Will the hon. member permit a question?


The Acting Speaker (Mr. Boulanger):: Does the hon. member agree?


Robert Phillip Kaplan: No, Mr. Speaker. I will answer the question after.


Stanley Howard Knowles: After what?


Robert Phillip Kaplan: It is very easy to respond to crises. The government must respond to crises. But in many countries, particularly our neighbour to the south, we see the

May 8, 1972
The Budget-Hon. John N. Turner withering of good will in society, the growing of despair and a recession of the spirit as it has been called. This recession of the spirit can come to Canada. There is no inherent reason why it should, but it could very well come here. I urge the government to not only think about crises but about opportunities that exist in the hearts and minds of people and their desire to serve society. Opportunities for the aged will go a long way toward achieving this goal.


The Acting Speaker (Mr. Boulanger):: The hour set aside for private members' business having expired, I do now leave the chair until 8 o'clock, when the Minister of Finance will submit a ways and means motion to the House.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


John Napier Turner: That this House approves in general the budgetary policy of the government.
He said:
Mr. Speaker, my first words to this House as Minister of Finance last February were that my most urgent priority was jobs. This remains my first priority. No economy is working as well as it should if there are men and women in this country seeking work who cannot find it. The search for jobs is a human problem. The main thrust of this budget is to deal with this problem; to buttress the Canadian economy-to provide incentives for Canadian industry to grow and compete and provide jobs.
The only realistic solution for matching the tremendous yearly increase in our work force, which will continue at the present rate for the next several years, is greater growth in the economy. It is growth that will create jobs. I mean growth in the private sector. I mean real jobs, not temporary jobs. I mean jobs that last and satisfy. I believe that we have to look to expansion of Canadian industry and the commitment of business to provide those jobs.
What makes it important to take stock of our position now is the fact that the world is caught up in the midst of far-reaching changes, the outcome of which is not easy to predict. The already rapid rate of advances in technology continues to accelerate, bringing about vast changes in our lives, in our way of producing goods, and in our way of doing business. Multinational corporate giants have to come to assume an increasingly dominant role on the

world economic state and in the Canadian economy. I fear that the world is in the process of being transformed into massive trading blocs, which in itself is of immense significance to Canada as a major trading nation. Moreover, the relative competitive position of the various nations is also undergoing a pronounced change. This was the hard fact that lay behind the international monetary crisis which came to a head last summer when the United States adopted a series of measures to halt the deterioration in its own competitive position.
Because all of these developments have far-reaching implications for the future of our own country, it is only sensible and realistic for us to take a new look at our situation and to consider what policies will best serve our long-term interests.
What I shall strive to do tonight is to set the stage for Canadian industry to be competitive in world markets. Our ability to gain access to world markets is a prerequisite to the success of any industrial policy that focuses on growth and jobs.
I am hoping to achieve industrial growth at a pace that will not aggravate the inflationary impulses in the economy and escalate the cost of living. This government is committed to reasonable price stability. I am committed tonight to propose ways to render justice to those people in our community who have been hurt by the rise in the cost of living and who have no way of fighting back. I am speaking of those Canadians who have retired, whose working days are over, and of our veterans and their dependants.
I said once before to this House that a Minister of Finance is not an economic czar. It is true that through its fiscal policies the federal government can and must play a central role in guiding the course of the economy. It is important to understand, however, that there are some very real constraints on the ability of the federal government alone to ensure that the economy remains precisely on course at all times.
The policies and programs of the provinces and municipalities have a major impact on the economy, their combined revenues and expenditures now significantly exceeding those of the federal government. Then, too, in our free enterprise system the way in which our economy moves is determined in a fundamental way by the day-today decisions taken in the market-place by millions of Canadians. Of course, our economy is also strongly influenced by forces from abroad. The difficulty of anticipating and responding to the impact on the economy of all these forces is further compounded by the universal limitation of economic information. For all these reasons, it makes good sense for the government to stand ready to make periodic adjustments in its fiscal policies as the need for them becomes evident.

But there are also occasions when budgets must have a broader perspective and look further into the future. There are times when they must deal with more fundamental and longer-term problems related to the structure of the economy itself. In my budget tonight, Mr. Speaker, I shall propose an important revision in our fiscal system
May 8, 1972

to strengthen the capacity of our economy to serve the needs of the Canadian people in the years ahead.
Budgets, however, need to be concerned not only with the economy as a whole. They must also be directed to improve the well-being of individual Canadians, especially those who find themselves in less fortunate circumstances. Over the years, we have made great progress in Canada in developing a social system to provide equitable and just treatment for all our citizens. We must make still more progress in the years ahead.

I turn now to a review of the economy. I propose to be brief since a comprehensive economic review has already been tabled for the information of members. There is a great deal of information in this document and I trust the members of the House will find it a useful reference document. This evening I propose to touch only on some highlights of our recent experience.
The Economy
The Canadian economy provided a substantially bigger increase in the goods, services and jobs available to Canadians in 1971 than it did in 1970. This improved performance owed a great deal to the expansionary policies of the government.
Personal incomes grew more rapidly in 1971 because of higher employment, higher wage rates and higher farm incomes. The cuts in personal taxes during the past year meant that the net incomes at the disposal of Canadians after allowance for taxes rose even more rapidly than their gross incomes. An increase in payments by government under various social assistance, cultural and educational programs contributed to this growth. The improvement in the financial position of our people permitted them to borrow more and to spend more. This they did. But while consuming considerably more, at the same time they increased their savings and reduced their debt relative to their incomes. Thus, in spite of greatly increased consumption, their financial position was significantly stronger at the end of the year than at the beginning. This means that consumers are likely to spend even more this year.
Housing starts in 1971 broke all records. CMHC concentrated on housing for low-income groups. Private financing of housing increased dramatically and provided a vigorous forward thrust in this sector of the economy.

Mr. Speaker, exports grew again in 1971 in spite of declining rates of growth in our major European and Asian markets and in spite of menacing developments in the international commercial environment during the second half of the year. The extraordinary growth of 1970 was not duplicated. That could hardly be expected, but the growth in exports of many commodities such as iron and steel, automobiles, oil and gas, lumber and wheat was particularly noteworthy.
Imports responded to the rising pace of activity in the Canadian economy and grew at a very fast clip. This speeding up was shown by a wide range of goods, including fuels and lubricants, industrial materials, and materials for home consumption. Imports of machinery and
The Budget-Hon. John N. Turner
equipment remained sluggish in the first half of the year, but spurted ahead in the latter half.
This fast rise in imports resulted in the decline in our surplus on merchandise trade in 1971. At the same time, our traditional deficit in services continued its steady increase. Taking goods and services together we had a current account surplus in 1971 for the second year running but distinctly smaller than in 1970. With the United States there was a moderate increase in our current account dificit, which in 1971 amounted to over a third of a billion dollars.
Last year we saw a rise in productivity, but we also saw a considerable acceleration in the growth of employment. We saw, too, as the year progressed some considerable pick-up of inventory investment. The ratio of inventories to sales still remains low by previous standards, even allowing for the fact that new technology permits some economizing in inventories. The rise of demand had not yet progressed to the point, however, of inducing a major expansion of business fixed investment.
Although the number of new jobs created in 1971 was twice the number created in 1970, it was only in the latter part of the year that job creation outpaced the very rapid growth in the labour force. Since September the unemployment rate has been on a downward trend. It is still unacceptably high, and the first priority of this government is to bring about a further substantial reduction in unemployment.

Prices and incomes showed mixed trends last year. Labour income per employed person, for the second year in a row, grew at a lower rate than in the previous year. This rate was, however, still greater than the rate of increase of productivity and the cost of living combined. Profits increased from their depressed levels of the previous year. The consumer price index was dominated by the strong increase in food prices, which were held down in the earlier part of the year by a price war among food chains, but rose at rapid rates after that. Even apart from food prices, however, there was unmistakable evidence as the year drew to a close of a quickening pace of price advances.
The over-all fiscal policy of the government has continued to be expansionary. In this it has been supported by the monetary policy. This policy last year created credit conditions conducive to economic expansion and relief of upward pressures on the value of the Canadian dollar. There was a large expansion of the money supply. Interest rates, which varied somewhat over the course of the year, were on the average distinctly lower than during the previous year and lower at the end of the year than at the beginning. This year the fast expansion of the monetary aggregates has continued. Recently there has been some increase in interest rates both in Canada and the United States. On balance, the value of the Canadian dollar continues to be strong.
Summing up, the Canadian economy is expanding firmly and steadily. This in spite of the fact that as last year began, there was widespread uncertainty as to the future. This uncertainty was reinforced by the interna-

May 8, 1972
The Budget-Hon. John N. Turner tional economic crisis which beset us last August. The Smithsonian agreement of last December did much to dispel that uncertainty. Other factors contributed, particularly the expansionist measures introduced by my predecessor, now the Minister of National Defence. The mood of the country is one of growing confidence. I believe this confidence is well founded. I do not express this belief in any idle way, unmindful of some very real problems. We must continue to press for lower levels of unemployment. Price increases must be kept in check. But there is no question that the economy is advancing and gaining strength. Confidence is contagious and I believe it is spreading.

Mr. Speaker, the government this year will expand its program of summer employment for young people. We are dealing here with a challenging problem. In recent years, there has been a great upsurge in the number of students who pour out of school in the late spring to seek interesting and well-paying jobs. This year there are about 1,400,000 students of 16 years and over who will become potential job-seekers or look to the community for interesting and meaningful summer activity. This is almost three times the number only ten years ago. Most of these young people will be absorbed in productive jobs in the expanding private sector of the economy. For a second year, however, a diverse range of programs in the federal opportunities for youth plan, aided by a number of similar provincial programs, will help to fill gaps in the supply of jobs this summer.
I should draw attention, also, to the significant improvements which the government has now proposed to the manpower training program. These amendments will extend its flexibility and efficiency. In that connection, the experimental program of on-the-job training introduced last fall was enthusiastically received, and the government has provided a total of $50 million for this purpose. I fully anticipate that on-the-job training will become a permanent and increasingly effective part of our overall manpower training policy.

Let me turn now to a brief review of some important, current developments in federal-provincial fiscal relations. The most significant of these, of course, has been the recent enactment by parliament of the new Federal-Provincial Fiscal Arrangements Act. The passage of Bill C-8 brought to fruition a long and intensive period of consultations with the provinces.
We have now extended in time and content the framework within which the federal and provincial governments jointly share the personal income tax field on a co-operative basis. Taken together with previous announcements by Quebec and other provinces, the recent budget announcement by the Ontario government that it will bring into conformity its corporation income tax on essential fundamentals with the reformed federal act, also assures continued tax co-ordination across Canada.
Most important of all, however, we have renewed the equalization arrangements which are so vital to national unity in Canada. In recent weeks, I have been speaking on
[Mr. Turner (Ottawa-Carleton).J
this criticial issue on several occasions, stressing that national unity is not just a question of language, important as that undoubtedly is.
National unity has a great deal to do with equality of opportunity-equality of opportunity for Canadians, no matter where they happen to be born or where they happen to live in our country. Equality of opportunity, in turn, means equalizing the ability of all the provinces to provide a national standard of services to Canadians. Our style of unity contemplates diversity and not uniformity. We are together as a united community of people in a unified, but not unitary, state. This is not to say that we want to pursue an inward-looking or narrow nationalism. Rather, as Canadians, we want to maintain and strengthen our sense of unity, our identity and our independence. With that goes the need to achieve a desirable regional balance across this beautiful land, to deepen the sense of belonging to a community and a nation, and to enhance the opportunities for meaningful participation in the collective decisions which affect our daily lives.
Equality of opportunity means a common standard of services to Canadians everywhere. National unity means sharing money and resources and this is the burden of our fiscal arrangements legislation. This is why the fiscal relations between Ottawa and the provinces are the cornerstone of confederation. It doesn't do anything for our country to try to do fine calculations of gains and losses, of who pays more and who receives more, because national unity cannot be calculated on a balance sheet.
Although equalization transfers are paid to provincial governments, it is obvious that their benefit is directed primarily toward the lower-income people in the receiving provinces. Without this sharing of national wealth, millions of Canadians would be deprived of the health, education, welfare and development services which are as much a part of income in a civilized society as the cash to buy three square meals a day. Equalization, taken together with shared-cost programs, provides much of the underpinning for social equity across the country.
Look at what parliament has done in the past few years to improve the lives of Canadians: medicare; increased supplementary pensions for the aged; the elimination of one million lower-income Canadians from the income tax rolls; the proposed fundamental reform and major increases in family allowances; the huge increase in federal contributions for education and student loans; a doubling of financial assistance for our native people; the broadening of unemployment insurance.
I should like now to speak briefly of certain features of our economic situation from a wider perspective.
Canada has a very fast-growing labour force, both because of the age structure of our population and because more and more women want to work outside the home. The population and the work force are concentrating in urban areas. That is where most people want to be, that is where they want to work and that is where jobs must be provided for them.
In an urban society people provide fewer and fewer services for themselves and they therefore demand more services in the market. Over the past quarter-century and more our service industries have grown substantially. By
May 8, 1972

their very nature, most of our service industries are sheltered from foreign competition and are continuing to do very well.
Canada's resource industries are very strong and the outlook for them is bright. We have been blessed with a rich abundance of most natural resources to meet not only our own needs, but the growing demands from the rest of the world. They continue to be accorded favourable treatment under our reformed income tax system.
In agriculture, a very rapid rise in productivity with a corresponding decline in the need for farm workers, has necessitated a continuing process of adjustment. Here a wide range of federal programs have been put in place, including price supports, organized marketing, long and short-term credit, favourable tax treatment, and production development aid. New measures only recently introduced have improved all of these programs. Last year, farm net income rose by almost 25 per cent over 1970. The dairy industry is currently benefiting from a substantial firming in world price levels, and this year exports of grain and cereals from Western Canada will surpass all previous records. Much the same can be said of the fishing industry, where a number of important new programs have been implemented to improve productivity and stability and to raise the incomes of fishermen.
Our manufacturing industries are the largest single source of employment in Canada, providing jobs for more than one-fifth of all working Canadians. But by contrast with other sectors of the economy, this important sector is the one that is most exposed and most vulnerable to the challenge of change and international competition.
During the postwar period, the output of our manufacturing industries has not kept pace with the growth of the economy as a whole. Employment in the manufacturing industries has declined moderately as a proportion of total employment in Canada during this period.
In our trade in manufactured goods, we run a very large deficit, importing substantially more than we export. Excluding cars and parts, which are a rather special case, our trade deficit in manufactured goods increased by approximately $1 billion between 1965 and 1970.
Canada's manufacturing industries have been particularly hard pressed during the past few years. Unit costs of production have risen more rapidly than those in the United States. The problem has been further compounded by the appreciation of the Canadian dollar, which has reduced the cost in Canada of imported manufactured goods and at the same time increased the cost of Canadian manufactured goods abroad. Our manufacturing sector has also been exposed to growing competition from the new industrial giants-Japan and the expanding European Economic Community. It has been further jeopardized by export subsidies and protectionist measures adopted or contemplated in the United States.
The manufacturing sector is of crucial importance to our economy. We depend on it to provide a growing number of productive, interesting and well-paying jobs for Canadians in the urban centres where they want to live and work. We rely on it to keep us in the forefront of technological changes. It is important to the development
zmis-4
The Budget-Hon, John N. Turner
of a balanced and stable economy, one that is not excessively exposed to the sharp swings that take place from time to time in demand abroad for raw materials. It is important, too, because of the support it provides to the other major sectors of the economy.
It is, therefore, essential for us to take whatever steps are necessary to promote the development in Canada of manufacturing industries that are dynamic, vigorous and resourceful, that are unceasing in their efforts to innovate, that develop new and better products and that are aggressive in their efforts to expand their markets in Canada and abroad. In short, we must do everything we can to promote the development of Canadian manufacturing industries that are fully capable of meeting and surpassing competition from other countries.
Budget Measures
Let me now get down to specifics. The thrust of the measures that I will propose to the House tonight has a two-fold purpose. The first set of measures is designed to strengthen the competitive position of our economy in order to promote the faster growth of production and employment. These measures are medium and long-term in their nature and structural in their impact. They are also intended as a permanent incentive. But they will also help to add new momentum immediately and in the months ahead to the already strong expansion now under way in the Canadian economy. The second set of measures is designed to promote greater social justice by relieving the financial burden that is being borne by particular groups or individuals in our nation. The new expenditures they entail will also add prompt stimulus to the economy.
As a major step in the development of a new industrial policy for this country I am bringing forward measures of a fundamental nature to revitalize the manufacturing and processing industries. These measures will help this sector improve its competitive position in the world and will thus protect existing jobs and provide well-paying new jobs for Canadians in and near the urban centres where they want to work. Moreover, these proposals will further reinforce growth throughout the economy by stimulating an early expansion in capital investment.
First, I propose that the cost of all machinery and equipment purchased after tonight by a taxpayer to be used for the purpose of manufacturing or processing goods for sale or lease in Canada may be written off in two years. A new capital cost allowance class will be established and a taxpayer will be entitled to claim as depreciation up to 50 per cent of the cost of the asset in the year in which it is acquired and the unclaimed balance in any subsequent year.
Second, commencing January 1, 1973, the top rate of corporate tax applicable to manufacturing and processing profits earned in Canada will be reduced to 40 per cent. Similarly, the effective rate of corporate tax applicable to manufacturing and processing profits earned in Canada eligible for the small business deduction will be reduced from 25 per cent to 20 per cent. In order to give effect to these rate reductions, it will be necessary to provide rules to enable a corporation to distinguish its manufacturing and processing income from other kinds of income, such as investment income, wholesaling and retailing income

May 8, 1972
The Budget-Hon. John N. Turner and natural resource income. Special rules for this purpose will be included in the bill and in the regulations.
The natural resource industries will not qualify for the two-year fast write-off or the special reductions in the rate of corporate tax because there are already in existence other incentives better suited to the needs of these industries. However, I am introducing tonight a further incentive to encourage more processing of our mineral resources through smelting and refining in Canada. I propose that the class of expenditures which earn depletion be extended to include all equipment acquired after tonight for the purpose of processing in Canada mineral ores after extraction and up to the prime metal stage. This will include all processing, whether or not related to a new mine or a major expansion, as well as custom processing. Furthermore, I propose that all of the income from such processing operations be considered as income against which depletion may be claimed and in respect of which the 15 per cent provincial abatement will apply.
Of course, as mineral resources are processed beyond the prime metal stage and oil and gas are refined beyond the crude stage, these further activities will be considered manufacturing and processing and will, therefore, be eligible for both the fast write-off and the rate reduction.
Most machinery and equipment is now written off for tax purposes at a 20-per-cent rate on a declining balance method. Tonight's proposal will permit machinery and equipment required for manufacturing operations to be written off within two years. It will replace the measure introduced in December, 1970, whereby manufacturing and processing enterprises were permitted to value new investment in depreciable assets at 115 per cent of their actual cost.
These measures will serve to increase substantially the cash flow of manufacturers and processors. Until the present, manufacturing and processing companies in Canada have borne a considerable weight of the corporate income tax. The ratio of tax paid to the value of their output has been much higher for corporations in this field than for other goods-producing companies. The changes proposed tonight will, I believe, put them in a more equitable position.
.
The tax treatment of companies engaged in manufacturing and processing will now compare very favourably with that in other nations, particularly the United States and the enlarged Common Market countries. Accordingly, it is to be expected that these measures will provide a substantial incentive for the establishment in Canada of new manufacturing enterprises and the expansion of existing enterprises by increasing the return that can ultimately be realized on capital investment.
The increase in the flow of funds available to these industries will strengthen their ability to compete with foreign manufacturers in a variety of ways. They make use of these expanded resources to finance new research and development, to finance an expansion of productive capacity, to introduce new product lines and to finance the development of new cost-reducing methods.
The improved financial position of these enterprises should also significantly enhance their ability to meet

foreign competition in terms of price. With respect to those industries where there is at present a marked difference between Canadian and foreign price levels, I expect the savings permitted by these measures to be used to bring about a substantial reduction, and ultimately the elimination, of these price differentials.


David Lewis: What is the expectation based upon?


John Napier Turner: Members of the House may ask what guarantee there is that this added cash flow will be used by our manufacturing industries for business expansion or to reduce prices, and not merely for higher profits. My answer is that I am confident that businessmen will see and recognize the underlying purpose of the government. Certainly we want to encourage a reasonable return on investment. But we also expect competitive prices, both at home and abroad. We expect the money to be used for new equipment and to replace equipment that is obsolescent. I expect business to get out and hustle, to grow, to compete, and to build jobs for Canadians. I am sure that the business community will justify this confidence and prove me right.
The measures which I am proposing to reinforce the expansion of manufacturing industries will be of benefit to all regions of the country. They will, of course, help to stimulate the growth of manufacturing in those areas of the country where it is already well developed. But they will also facilitate the establishment of new plants in those regions now relying heavily on resources. These regions are actively seeking to broaden their industrial base by promoting the development of manufacturing and processing.
This radical revision of the corporate tax system as it affects manufacturers and processors will require us to forego revenue amounting to about $500 million in a full year. But these measures should not be regarded so much as a cost to the federal treasury as a major investment by the nation that over time will more than repay itself in terms of increasing jobs for our workers and increasing prosperity for all Canadians.
I also wish to announce tonight an extension for one year of the existing provisions permitting a fast write-off of capital expenditures made by manufacturers or producers to provide air and water pollution control. Thus, such machinery and equipment purchased at any time before the end of 1974, and buildings to house pollution control equipment which are started before the end of 1973, will be eligible for the fast write-off. These fast write-off provisions will also be broadened to cover the costs of buildings, machinery and equipment acquired by independent companies providing pollution control services.
I turn now, Mr. Speaker, to other proposals again directly affecting the welfare of individual Canadians.
Over a period of some months, growing concern has been expressed both by members of this House and the public generally about the threat posed to the financial security of some Canadian citizens who have little or no ability to protect themselves from the burden of rising living costs. I have in mind particularly the elderly, a large proportion of whom are women, those veterans receiving pensions to compensate them for disabilities suffered in
May 8, 1972

the military service of our country and families of veterans receiving the war veterans allowance.
Hon. members will recall that when the old age security program was amended and the guaranteed income supplement introduced six years ago, provision was made for the automatic escalation of both allowances up to a maximum of 2 per cent a year to offset increases in the cost of living.

Last year, further changes were made in the Old Age Security program and the supplemental allowance was raised substantially to provide greater assistance to those most in need. This rise in the supplemental payment made possible a real increase in the income of those eligible for the allowance because it more than compensated for increases in living costs prior to that time. At the same time, the provision for automatic escalation up to two per cent annually was retained for those qualifying for the combined Old Age Security and Guaranteed Income Supplement allowances. The universal Old Age Security pension was, however, fixed at $80 a month in keeping with the move by the government to channel public funds in a more selective way in order to provide income support for those most in need.
During the past few months we have been re-examining two features of the present program that have become a matter of public concern, the limitation on the annual increase in the combined Old Age Security and Guaranteed Income Supplement of two per cent annually and the pegging of the universal Old Age Security pension alone at $80. There are many elderly people who do not require the supplemental allowance to maintain a reasonable standard of living because they were able to make some provision for their own retirement during the period they were working. Even with the Old Age Security pension, however, the income of such elderly Canadians is in many cases already quite moderate and its purchasing power continues to be reduced by the rising cost of living.
Those receiving the Guaranteed Income Supplement are also in a difficult position. If prices rise by more than two per cent a year-which has been the case recently- their real incomes will deteriorate unless there are periodic amendments to the legislation to provide for regular increases in these benefits.

In the long-term interests of the economy as a whole, it is essential for us to continue our efforts to maintain reasonable price stability in Canada. But these elderly Canadians are by no means responsible for the cost pressures that develop in our economy. On the contrary, they are the chief victims of inflation because they are the least able of any group in our society to protect themselves against it. We have come to the conclusion, therefore, that we have a duty as a nation to ensure that the elderly and veterans will be relieved of the hardship of a declining standard of living by helping them to meet the burden of the rising costs. I think everyone would agree that these are very special groups.


Some hon. Members:: Hear, hear!
25316-4)
The Budget-Hon. John N. Turner


Mr. Muir:: When did you discover that?


John Napier Turner: In order to provide the needed relief and assistance to elderly Canadians, the government is proposing a number of measures. First, we shall seek authority to provide that the old age security pension should increase in accord with the full increase in the cost of living. This change would be made effective as of January 1, 1972, with the monthly payment being escalated by the percentage increase in the consumer price index in the fiscal year 1971-72 over the fiscal year 1970-71.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: How much is that?


John Napier Turner: Beginning next year, the monthly pension would be adjusted on April 1 of each fiscal year to reflect the full rise in the cost of living during the previous calendar year.


Robert Muir: Pierre said inflation was over.


John Napier Turner: Second, the advance in the economy and the national income now makes possible a further across the board increase in the guaranteed income supplement for needy, elderly Canadians. As of January 1, 1972, the maximum monthly benefit payable under a combined old age security/guaranteed income supplement would be raised from $135 for a single person to $150, and for a married couple from $255 to $285.


David Lewis: That's the only good thing in the budget.


John Napier Turner: Further, the present ceiling of 2 per cent on the annual escalation index would be removed, so that on April 1 next year, this maximum benefit would also be increased in step with the full increase in the cost of living.
My colleague, the Minister of National Health and Welfare, will introduce amendments to the Old Age Security Act to bring these changes into effect.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: It's about time!


John Napier Turner: Third, the special
exemption allowed persons 65 years of age and over for income tax purposes, which was recently increased by this government from $500 to $650, will be raised still further to $1,000.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: What about that, George?


Mr. Lambert (Edmonton West):: They are delirious.


Mr. Horner:: It's a good thing an election comes every four years.


An hon. Member:: We should have an election every year.

May 8, 1972
The Budget-Hon. John N. Turner


John Napier Turner: This increased exemption will also be extended to taxpayers who are confined to bed or a wheelchair, and to the blind. I also wish to announce a further measure related to the blind and persons who are confined to bed or a wheelchair.


Mr. Jamieson:: The Tories!


John Napier Turner: To the extent that a blind or disabled person cannot make use of the $1,000 exemption, his or her spouse will be entitled to claim the otherwise unused portion of that exemption. Both of these measures will be effective from January 1, 1972.
In a full year the added expenditures resulting from the full escalation of the pensions for the aged, together with the increase in the maximum OAS/GIS benefit and the increase in the exemptions for the elderly, the blind and the disabled will cost about $350 million.
The government's concern for elderly persons has also led us to consider whether some fresh, new approach should not be undertaken on their behalf. It is obviously important that the growing number of men and women reaching retirement years should have opportunities to continue to participate in the life of the community in a meaningful way. Towards this end, my colleague, the Minister of National Health and Welfare, will shortly announce details of an experimental program to be known as New Horizons for the Aged.
Like the elderly, many of those Canadian veterans who made sacrifices in defence of our country-and their families-also find it difficult, if not impossible, to defend themselves against rising costs of living.
There have been periodic increases in the war veterans pension and war veterans allowances, the most recent being only last year. But the real income provided by these payments is in danger of being eroded by mounting prices. It is only fair and reasonable that we should stand ready to protect veterans and their families against such hardship as a matter of right.


Some hon. Members:: Hear, hear!


An hon. Member:: It took you four years to realize that.


John Napier Turner: I propose, therefore, that effective January 1, 1972, pensions and allowances paid to war veterans also be increased from year-to-year in accordance with the full increase in the cost of living. We estimate the cost of this step will be about $25 million in a full year.
My colleague, the Minister of Veterans Affairs, will shortly be introducing amendments to the Pensions' Act and the War Veterans' Allowance Act to give effect to these changes.
I am convinced the vast majority of Canadians will welcome these improvements, particularly those who will benefit directly-the elderly and veterans and their dependants-and those sons and daughters and other relatives who help to support them. I am sure that all members of the House will give wholehearted support to these important changes. With respect to escalation of pensions for the elderly and veterans, I want to stress again that these are very special groups and the same case

cannot, in my judgment, necessarily be made for other groups.

I come now to a further area of public concern. This has to do with the growing financial burdens that must be carried by students-or by their husbands or their wives or their parents, as the case may be-in meeting the rising costs incurred in pursuing higher education or training for a vocational career.
It has been customary to think of education and training in terms of that undertaken largely by young Canadians as a necessary preparation for subsequent employment. Increasingly, however, education and training is becoming a continuing process. More and more adult men and women are resuming their studies to advance their education or training or to engage in re-training for new occupations in order to meet the requirements of our rapidly changing industrial society. This is particularly true of married women, who in growing numbers want to become qualified to obtain interesting, well-paying jobs after the early years of raising their families.
At the present time, of course, students may, for tax purposes, deduct from their annual earnings the full amount of their tuition fees. However, there are other costs of increasing importance which are not taken into account in any way. First there is the loss of income that might otherwise have been earned by a student. This forgone income is a major consideration in the decision whether to undertake or continue education or training. Second, there is the problem of the immediate cash costs that must be carried-of ordinary living, transportation, books and so forth. These costs have been climbing and there is evidence to suggest that they are weighing heavily against decisions to proceed with education or training.
To be sure, there have been valid concerns expressed about the very sharp rise in the amount of money which governments have had to pour into the educational system to cope with expanding enrolments and increasing costs. But a large part of this can be traced to the age structure of our population, which has resulted in a large inflow of students. This demographic phenomenon is now reversing, and we need to ensure that over the longer run Canada places an adequate emphasis on the development of our human resources. Taking this longer view, the federal government has concluded that some steps should be taken through the tax system to encourage the effort of individual students and their families to invest in further education and vocational training.
I therefore propose a new deduction related to the cost of obtaining education, which will be in addition to the existing deduction for tuition fees. This new measure will be a deduction of $50 per month per student for each month in the year during which the student was in fulltime attendance at certain educational or training institutions. It will be applied to full-time attendance in a qualifying educational program at educational institutions providing courses at the post-secondary level and also at educational institutions certified by the Minister of Manpower and Immigration in connection with the present tax provision affecting tuition fees. For these purposes, a
May 8, 1972

qualifying educational program will mean a program of not less than three consecutive weeks' duration that requires the student to work not less than 10 hours per week at work related to the program. Those eligible for training allowances or whose courses are paid for by their employer will not be eligible for this deduction.
The deduction will be available to the student, but to the extent that she or he cannot make full use of the deduction, it will be available to the student's parent, husband or wife. This deduction will be effective as from January 1, 1972. It will involve a revenue cost of about $50 million in a full year.

Mr. Speaker, a further proposal affecting individuals relates to medical expenses. For most taxpayers, the introduction of publicly-financed programs for hospital amd medical care has greatly reduced the number of cases whereby medical expenses place an unusual burden upon a taxpayer. None the less, this is an area which requires continuing surveillance to make sure that the hardship cases are dealt with quickly and adequately.
In keeping with this policy, I wish to announce two new measures. First, I propose to include as a medical expense for tax purposes an amount paid as remuneration for a full-time attendant to care for a taxpayer, his spouse, or other dependant, in a domestic establishment in which the cared-for person resides. This will be available upon certification by a doctor that the person is incapable of self-care for what is likely to be an indefinite period.
Secondly, I propose to include as a deductible medical expense amounts paid to commercial transport services for transportation of a taxpayer or his spouse, or dependant, and an attendant if necessary, to and from a hospital, clinic or doctor's office to which the individual has travelled a distance in excess of 25 miles to obtain medical services not otherwise available nearer home.
Both of these measures that I have just announced will help to relieve financial hardship associated with illness.

A number of the income tax measures I have just outlined and others related to tax reform that I will outline shortly will have an effect on the revenues of all provinces which have harmonized their tax systems with ours for purposes of tax collection agreements. These effects may be quite substantial. However, we have already provided a guarantee to these provinces that their revenues will be maintained for five years at a level at least equal to that which they would have received under the former tax system. This guarantee was offered as a part of tax reform and is contained in the fiscal arrangements legislation recently enacted by Parliament. The guarantee means that the federal government will absorb any revenue cost that the provinces otherwise would have borne, if the combined effect of tax reform and the new measures proposed tonight reduces provincial revenues below the yield of the former tax system. I am confident, moreover, that the provincial governments will welcome these measures as contributing both to the longer-term growth of their respective provinces and to fairness in taxation.
The Budget-Hon. John N. Turner
I am bringing forward certain proposals tonight regarding the sales tax, most of which involve items that are of concern to those Canadians who are physically handicapped. I also wish to announce that in order to provide a further measure of support to industrial research and development in Canada, scientific research equipment purchased by manufacturers after tonight for use in the testing or development of new products will be exempt from sales tax. Details of these proposals will be found in the Ways and Means Motion that I will table later.
I would like to turn now to the Customs Tariff. The terms of the Canadian offer of tariff preferences for developing countries were announced in the House on November 14, 1969. The proposed Canadian system is also set out in the Ways and Means Motion which I am tabling tonight. It proposes the establishment of a "General Preferential Tariff" which, subject to appropriate safeguards, will provide for lower tariffs on most of the semimanufactured and manufactured goods which we import from developing countries.
There is also provision for lower rates on selected agricultural products and industrial raw materials. This will be enabling legislation; it will come into force only after enactment and on a date to be fixed by proclamation. This is a contribution by Canada to a global effort to help the developing countries improve their exports to world markets.
There are a number of other tariff changes which I am proposing. Most of these are relatively minor in their economic impact; the details are set out in the Ways and Means Motion. I should mention one which is of importance to the textile industry. The duty on knit goods from Britain is to be increased from a net rate of 18 per cent to 25 per cent; the rate on knit goods from other countries entitled to the benefits of the British Preferential Tariff will remain the same. This proposal derives from negotiations following upon the implementation by Britain on January 1 this year of increased rates of duty on cotton textiles from Commonwealth sources, including those from Canada. The purpose is to restore the balance of our concessions in our trade agreement with Britain. It should benefit our textile industry, which was damaged by the increased British tariff on cotton textiles.
It should be noted that as Britain begins to alter preferential access to its market by its entry into the European Economic Community, Canada will no longer have an obligation to extend preferential rates on British goods.
As in previous budgets, all the changes-except those relating to the proposed General Preferential Tariff-are to come into force tomorrow.

Mr. Speaker, I should now like to refer to tax reform. Last December, Bill C-259 received royal assent and on January 1, 1972, the amended Income Tax Act came into effect. Only a few months have passed, but as a general observation, I am pleased to note that, except in a few specific areas, debate about broad policy issues seems to have run its course.
This is not to say that everyone is satisfied with tax reform and I myself am concerned about some of the provisions which have produced anomalies or which are

May 8, 1972
The Budget-Hon. John N. Turner working in unintended ways. I believe that part of my responsibility in this portfolio is to take a hard look at the rough edges of tax reform and I intend to see to it that the rough edges are smoothed out.
I want to say that I welcome the representations and suggestions I have received. It is inevitable in the course of a major tax reform that problems will arise. It has always been, and it will continue to be, the policy of this government to respond as quickly as possible to these problems as they become known. The discussions I have had with persons from all walks of life have been most helpful to me in identifying and finding solutions to many of these problems.
In a moment, I propose to announce a number of important amendments to the Income Tax Act arising out of tax reform, but first I wish to make a few general comments. The particular amendments have been selected either because they affect large numbers of taxpayers or because the government is already committed to make them. There are a few other amendments which I have been contemplating, but I have not included these in this budget because I am still considering the best solution to the particular problems. I mention this because many people have made sensible suggestions to me, but it is not possible to deal with all of them tonight.
I also want to say that I have given careful consideration to the debate in this chamber and in the other place and to the undertakings my predecessor made to both Houses of Parliament. He undertook to make certain amendments and to review other troublesome areas. I believe you will find that I have met the specific commitments and, as I have previously indicated, I am re-examining all areas which are having unintended effects.
I want to assure this House and all Canadians that it is my intention to continue to scrutinize the tax reform and to make such changes as may be necessary from time to time.
Finally, by way of general comment, I should say that I have not attempted in these remarks to describe all of the amendments which I wish to introduce tonight. I will refer only to those measures of general interest or of particular importance, and then only in a general way. However, the ways and means motion I am tabling will contain reference to all of the proposed amendments and members may review that document to obtain full details.
I want to discuss now the specific amendments, all of which will be effective January 1, 1972, unless otherwise indicated. First, some important amendments in the area of personal income.
One problem of particular concern is the impact of the new tax measures on charitable donations. Notwithstanding the increase in the annual limit on the deductibility of charitable donations from 10 per cent to 20 per cent of income, there seems to be a general fear that gifts and bequests of appreciated property will be discouraged if there is a deemed realization of the capital gain. This issue was carefully considered by the government during the course of the tax reform debate and my predecessor has explained on several occasions the problems and concerns which led to this decision.
I believe that the basic decision was correct, but I am persuaded that in one particular situation, the rules should be relaxed. In those cases where the property to be gifted is not a substitute for money-that is, where the property gifted to the charitable organization is suitable for actual use in its charitable activities-I propose that the deemed realization rules be qualified. I have in mind here such examples as the bequest of an art collection to a public art gallery or the gift of a piece of real property intended to be used as a camp or a hospital. Some taxpayers who donate property that has increased in value may prefer to value the gift for purposes of both the deemed realization rules and the charitable deduction rules at its market value rather than its cost. I propose, therefore, that a taxpayer who gives or bequeaths appreciated property of this nature to a charity shall have the choice of valuing the donation for purposes of both these rules at an amount anywhere between its cost and its fair market value.
I also wish to announce a second amendment in this area. The act will be amended to provide that any bequest to a charity will be regarded as having been made in the taxation year in which the taxpayer died. This measure will permit the value of the gift to be deducted from the taxpayer's income in the year of death, subject to the normal limit.
Individuals who earn income that is not subjected to deductions at source are required to pay instalments during the year as a payment against their tax liability for the year. In order to ease the financial and paperwork burden facing many of our low income taxpayers, especially pensioners, I propose that henceforth instalments will not be required if the individual's federal tax liability for the preceding year did not exceed $400.
Under the present law, the tax treatment of income derived from certain damage awards payable to children is not entirely clear. For example, children who have suffered damage as a result of thalidomide have received awards which are being held in trust for their benefit until they attain their maturity. Under the law as it now reads, the income from these trust funds, which is being accumulated and held for the benefit of these children pending maturity, may be subject to tax. This, to my mind, is not a desirable result. Therefore, I propose an amendment which will exempt from tax the income derived from funds and annuities resulting from personal injury damage awards up to the time that the injured person attains age 21.
I have received a number of representations asking that some form of special treatment be extended to persons who receive lump sum payments from a deferred profitsharing plan. Some plans have asked that the special form of averaging previously available under the old act be reinstated and other plans have sought some form of special treatment for capital gains realized or distributed by these plans. I find this problem particularly difficult. First, let me say that I am in no way opposed to profitsharing plans; in fact, I can see many advantages in this approach-for example, increased incentive and a sense of collective effort. However, I am not persuaded at this time that a lump sum payment out of a deferred profitsharing plan should enjoy any special treatment. It seems

May 8, 1972

to me that payments out of such a plan should be treated in much the same manner as payments out of pension plans and registered retirement savings plans. All three of these types of plans have in common the deferral of income tax on the contributions to and the income of the plan. The government has previously indicated that it is conducting a general review of the taxation of retirement income plans. I have, therefore, concluded that this specific problem concerning the deferred profit-sharing plans should be considered as part of this general review.
A major feature of tax reform was the introduction of a tax on capital gains and I am pleased to note that these new provisions are, by and large, working well. None the less, some refinements are required. At this time, I wish to announce one important amendment and to mention that there are several other technical amendments to be found in the ways and means motion.
The important amendment concerns the provisions dealing with deemed realization of capital gains at death. It is intended to assist taxpayers who might face a heavy tax liability at a time when their assets might be illiquid. The amendment will provide that the payment of taxes occasioned by this circumstance may be paid in six equal annual instalments, together with interest. This provision is similar to the provision contained in the former Estate Tax Act and should relieve hardship which a taxpayer might otherwise face.
Next I want to announce several amendments relating to the taxation of corporations.
All corporations and certain individuals are obliged to pay instalments during the year in respect of their tax liability for the year. Under the present rules, taxpayers could base their instalment payments either on their estimate of the current year's liability or, alternatively, on a computation involving the prior year's income and the current year's tax rates. It has become increasingly difficult in recent years for taxpayers to use the "prior year" formula and this problem was exacerbated by the shift from the old system to the new system. In order to simplify the basis of instalment payments, I propose an amendment whereby taxpayers will be able to base their instalments on their estimate of the current year's liability or on taxes payable for the preceding year.
Where it is necessary to adjust the prior year's taxes payable in order to reflect certain specific changes in tax rates, simple adjustments will be prescribed by regulation. In this way, corporate taxpayers will be relieved of tedious calculations and yet the fiscal objectives can still be achieved.
Under the provisions relating to taxation of private corporations, one-half of the taxes paid on account of certain types of investment income are refunded at the time of payment of dividends. The purpose of this refund is to eliminate the artificial distinction between an individual "investing" directly or through his corporation.
It now appears that this provision may be open to some abuse and I believe that the government should correct this situation quickly, before taxpayers come to rely on an unintended loophole. The particular situation which troubles me arises in those cases where, within a corporate group, business income is converted into investment
The Budget-Hon. John N. Turner
income in order to take advantage of the refund provision. To eliminate this loophole, an amendment will be made which will apply to certain kinds of investment income received by a corporation in taxation years commencing after 1972 from an associated corporation. The effect of the amendment will be to preserve the "business income" character of these particular receipts in the hands of the recipient.
In connection with the taxation of business and property income, I want to mention two problems which I will not attempt to solve tonight, but which are being given intensive examination. First, I am concerned about the taxation of certain property rights which were purchased before 1972 and which are subsequently sold. These rights are often called "nothings". In the event of a sale of these rights under the new system, a taxpayer could find himself facing a tax liability even though he has suffered a net cash loss on the purchase and sale. One example of this type of property is the agricultural products quota, such as the milk quota. In this regard, I have already established in co-operation with the Minister of State attached to the Department of Finance an interdepartmental committee of officials to examine this problem as well as other aspects of the taxation of agricultural producers.
Secondly, I am concerned about the new provisions designed to permit Canadian corporations to deduct exploration and development costs incurred in searching for natural resources in foreign countries. It appears that the reality of the international situation is that Canadian companies must often incorporate subsidiaries in the local foreign jurisdiction in order to carry out this type of work and it may then be difficult to utilize the new provisions.
The answers to these two problems will be difficult, but work is under way to see if appropriate and realistic solutions can be found.
I come now to the treatment of income earned abroad by Canadians. As I mentioned previously, this is an area which the government has undertaken to review. I personally am particularly concerned that the new measures do nothing to interfere with the success of our exporters, our Canadian based multi-national corporations and our international entrepreneurs. It is only a few months since the new act was passed and we have not completed our review. Although most of the measures affecting taxpayers in this area do not take effect immediately, I am well aware that corporations often must make decisions today which will commit them to a course of action for several years to come. Therefore, I want to announce a few measures which I believe will improve significantly the taxation of international income, but I also want to assure you, Mr. Speaker, and the House that I attach a high priority to the completion of our review.
I have had a number of meetings with taxpayers concerned with the rules for the taxation of foreign accrual property income, and I am persuaded that these rules, as now drafted, may produce unintended results in particular cases. However, this is a difficult area and I am not satisfied that we have yet found appropriate solutions

May 8, 1972
The Budget-Hon. John N. Turner
which will eliminate the difficulties, while preserving the basic thrust of the reform. The foreign accrual property income rules are scheduled to become effective for taxation years commencing in 1973, but in order that no taxpayer be unfairly or unintentionally prejudiced, I propose that the starting date for these rules be postponed for two years-that is, they not become effective until taxation years commencing in 1975.
When a taxpayer relinquishes his status as a Canadian resident, he must include in his income any accrued capital gains as if he had sold all his capital property. Under the act, a taxpayer has the right to postpone this deemed realization but if he chooses this right, in any year in which he actually disposes of the particular capital property, he must report his income as if he had continued to be a Canadian resident. I have concluded that these rules may be too harsh in some circumstances and that some relief should be provided.
Therefore, amendments will be introduced to change the rules applicable in these circumstances. A first option will permit a taxpayer to pay the tax attributable to any deemed realization of his capital property in six equal annual instalments with interest, subject to the provision of satisfactory security. Alternatively, a taxpayer may elect to have any particular capital property treated as taxable Canadian property, in which event he will be taxed only when the property is disposed of and only on the actual gain realized.
Also in this regard, I believe that some special measure is required to deal with foreigners who come to Canada for a period. It is essential that we maintain a hospitable climate so that people with valuable skills are not discouraged from working in Canada for a period. Therefore, an amendment will be introduced to the effect that where a person has not been resident in Canada for more than 36 months over the preceding ten years, any accrued gains on property which he owned when he entered Canada will not be subject to tax when he leaves.
Let me discuss now the financial position of the government and our borrowing requirements. In respect of the fiscal year just ended and for which the books are not yet closed, we anticipate that budgetary revenues will amount to $14,145 million and expenditures to $14,745 million. These figures imply a budgetary deficit of $600 million. Net non-budgetary requirements amount to $1,003 million, apart from $485 million required to finance foreign exchange transactions. Total cash requirements thus amount to $1,603 million, excluding the financing of exchange acquisitions, or $2,088 million overall.
The strength of the economy has been such as to produce larger revenues, budgetary and non-budgetary, than were anticipated when estimates for 1971-72 were given to the House in October of last year. Budgetary expenditures were also somewht higher than forecast, mainly on account of higher fiscal transfers to provinces. Nonbudgetary outlays were lower than anticipated six months ago because of lower advances to certain crown corporations. Outlays on exchange were substantial owing in the main to the large purchases made during the course of the world monetary crisis in the closing months of 1971.
On balance, however, the surge in revenues resulting from the pick-up in incomes and sales in the economy was

responsible for the fact that our need to borrow funds was less than had been anticipated when the position was last reported to the House.
I wish now to indicate the order of magnitude of the government's cash requirements for the current fiscal year. Mr. Speaker, this is not an easy task and I am anxious to avoid leaving a false impression of precision. As I emphasized in my first address to this House upon assuming my present portfolio, there are severe limitations upon the present capacity of economic and fiscal science to provide accurate projections of cash requirements. Even in the realm of population projections, where perhaps the technique of forecasting is today best developed, we find that deviations of forecasts from census counts by province can be sufficiently great to produce errors in excess of $100 million in estimates of equalization payments, which depend on provincial population.
To take another example, revenues of the government amount to a figure of the order of $16 billion. Given the dependence of revenues upon the state of the economy, and the imprecision in official estimates of the GNP, even after the event, it would be totally unrealistic to expect a revenue forecaster to forecast within 2 per cent of the total. But 2 per cent of total revenue is some $320 million. This year we shall have particular difficulty in revenue forecasting owing to the fact that we have no experience of tax collections under the reformed tax system. I could cite many more examples.
I will offer to the House now the best estimates we are able to make of the cash requirements in 1972-73. I regard these estimates as the mid-points of rather wide ranges. I would urge hon. members to regard them in the same way.
For the current fiscal year, taking into account the effects of the measures I have announced tonight, we estimate that budgetary revenues will be $15,670 million, expenditures $16,120 million and the budgetary deficit $450 million. Net non-budgetary requirements are expected to be $1,550 million apart from any net source or use of funds in exchange transactions. Thus we calculate that we shall have to borrow, or finance through changes in cash balances, a total of $2,000 million.
While this figure is somewhat lower than the cash requirements which resulted from last year's operations, including the purchases of official reserves, it does not imply a significant reduction in the stimulus to the economy through fiscal injections from that provided last year. In my judgment, stimulus of this order is appropriate in our present economic circumstances.
Mr. Speaker, with the permission of the House, I should like now for the information of members to include as an appendix to today's Hansard, a budget paper entitled Review of Government Accounts 1971-72. I should also like to include in today's Hansard supplementary tables showing government of Canada cash requirements, federal government revenues and expenditures on a national accounts basis, reconciliations of these figures with those compiled on a public accounts basis, and details of the budgetary revenues. The information in these tables applies to the fiscal years 1971-72 and 1972-73.
May 8, 1972


Mr. Speaker:: Order. The minister has suggested that certain documents be appended to Hansard: Is this agreed?


Some hon. Members:: Agreed.
[Editor's Note: For budget paper entitled "Review of Government Accounts 1971-72", see appendix.
The tables above referred to are as follows:]
GOVERNMENT OF CANADA FINANCIAL REQUIREMENTS (Millions of Dollars)
	1971-72 Prelim- inary	1972-73 Forecast*
Budgetary Transactions Revenues	
Expenditures	14,145 -14,745	15,670 -16,120Surplus (+) or Deficit (-)	-600	-450Net Non-Budgetary Transactions Excluding Foreign Exchange Transactions	-1,003	-1,550Total Government of Canada Financial Requirements Excluding Foreign Exchange Transactions	-1,603	-2,000Amount Required to Date to Finance Foreign Exchange Transactions	-485	+24")Total Government of Canada Financial Requirements Including Foreign Exchange Transactions.	-2,088")	-1,976* Numbers in this column should be interpreted as mid-points of ranges of estimates. (l)The "Total Financial Requirement" differs from "Overall Cash Requirement" as per Public Accounts because of the inclusion under Non-Budgetary Transactions of the change in the special non-marketable bonds held by the Unemployment Insurance Commission. In the Public Accounts the change in these holdings is reflected in the net change in Unmatured Debt Outstanding. As of April 30, 1972.	FEDERAL GOVERNMENT REVENUE AND EXPENDITURE ON A NATIONAL ACCOUNTS BASIS (Millions of Dollars)	1971-72 Preliminary	1972-73 Forecast*A-Revenue Direct Taxes, Persons	
Direct Taxes, Corporations	
Direct Taxes, Non-Residents	
Indirect Taxes	
Other Current Transfers from Persons. ... Investment Income	
Capital Consumption Allowances	8,475 2,410 280 4,640 5 1,520 270	9,600 2,350 305 5,100 5 1,590 300Total Revenue	
B-Expenditure Current Goods and Services	
(Non-Defence)	
(Defence)	
Transfer Payments to Persons	
Subsidipc	17,600 4,830 (2,930) (1,900) 5,050 570	19,250 5,510 (3,570) (1,940) 5,720 620
The Budget-Hon. John N. Turner
Capital Assistance	
180	250Current Transfers to Non-Residents....	240	260Interest on the Public Debt	
2,080	2,260Transfers to Provinces	
4,280	4,580Transfers to Local Governments	
140	150Gross Capital Formation	
630	700TOTAL EXPENDITURE	
18,000	20,050C-Surplus (+) or Deficit (-). -400	- 800
Numbers in this column should be interpreted as mid-points of ranges of estimates.



FEDERAL GOVERNMENT REVENUE

[Stage Direction]
Public Accounts and National Accounts Reconciliation (Millions of Dollars)
1971-72	1972-73
Preliminary	Forecast*
1.	Budgetary Revenue	
Deduct
2.	Budgetary Return on Investment	
3.	Post office Revenue	
4.	Other Non-Tax Budgetary Revenues...
5.	Corporate Income Tax, Excess of Accruals (+) over Collections (-)	
Add
6.	Government Pensions and Social Security Receipts	
Government Investment Income
7.	Interest on Loans, Advances and Investments	
8.	Interest Receipts on Social Insurance
and Government Pension Funds	
9.	Profits Before Taxes (Net of Losses) of
Government Business Enterprises...
10.	Capital Consumption Allowances...
11.	Miscellaneous* 1 2')	
12.	Total Revenue, National Accounts
Basis	
14,145	15,670
-1,095 -400 -116 (-1.611)	-1,160 -460 -140 (-1,760)
-8	-200
3,175	3,530
620	650
475	510
425 (1,520) 270 104	440 (1,600) 300 110
17,600	19,250
Numbers in this column should be interpreted as mid-points of ranges of estimates.
'''These miscellaneous adjustments represent special tax revenues from insurance companies, miscellaneous indirect taxes, miscellaneous transfers from persons and adjustment for the supplementary period. In the national accounts, revenue in the supplementary period is shifted into the following fiscal year.

[Stage Direction]
(Millions of Dollars)
1971-72	1972-73
Preliminary Forecast*
1. Budgetary Expenditure	 14,745	16,120
Deduct
2.	Budgetary Transfers to Funds and
Agencies'"	 -632	-570
[Stage Direction]
May 8, 1972
The Budget-Hon. John N. Turner
3.	Post Office Expenditure	
-412	-4604.	Deficit of Government Business Enterprises	
-98	-1005.	Reserves and Write-Offs	
-52	-506.	Purchase of Existing Capital	Assets. ..	-30	-107.	Budgetary Revenue Items OffsetAgainst Budgetary Expenditure®	-69	-60(-1,293)	(-1,250)
Add
8.	Government Pensions and Social Security Benefits	 3,565	4,170
9.	Expenditure of Government Funds and
Agencies111	
610	66010.	Capital Consumption Allowances	270	30011.	Miscellaneous131	
103	5012.	Total Expenditure, National AccountsBasis	
18,000	20,05013.	Surplus (+) or Deficit (-), NationalAccounts Basis	
-400	-80014.	Surplus (+) or Deficit (-), BudgetaryBasis	
-600	-450
'Numbers in this column should be interpreted as mid-points of ranges of estimates.
(11In the National Accounts, budgetary appropriations to various funds and agencies are replaced by the expenditure actually made by these funds and agencies.
l21This item mainly consists of revenue from sales of goods and services by the government. These sales appear as final expenditure of the private sector and are deducted to avoid double counting.
<31This item includes the supplementary period adjustment. In the National Accounts, expenditures on goods and services in the supplementary period are divided between adjacent fiscal years; most other expenditures are shifted entirely to the next fiscal year.
GOVERNMENT OF CANADA BUDGETARY REVENUE (Millions of Dollars)
	1971-72	1972-73
	Preliminary	Forecast*
Personal Income Tax	
5,949	6,850Corporation Income Tax	
2,200	2,320Non-Resident Tax	
280	300Estate Tax	
135	100Customs Duties	
970	1,080Sales Tax	
2,000	2,240Other Duties and Taxes	
1,000	1,020Total Taxes	
12,534	13,910Non-Tax Revenues	
1,611	1,760Total Budgetary Revenues	
14,145	15,670
Numbers in this column should be interpreted as mid-points of ranges of estimates.
John Napier Turner: Looking ahead, now, first in the broad perspective of the world economy, there are encouraging prospects. First and foremost are the prospects for our trading partners. In the close-knit world in which we live, Canada cannot prosper if other countries are in decline. Our expectation is that the economy of the United States will grow much more strongly this year than it did last. In the procession of cyclical phases, that country seems to be a phase ahead of Europe and Japan, speaking generally. Even so the rate of growth in

those countries is also expected to be rather faster this year than it was last. These factors will contribute to the advance in our own economy.
There is, of course, unfinished business arising from the financial and commercial crisis of last fall. While more stability has returned to exchange markets generally, the fundamental reform of the international monetary system has yet to be worked out. The Canadian government attaches high importance and priority to this work. We are looking for reform in the evolutionary sense rather than for an entirely new system, though we anticipate some major changes nonetheless. It is our view that the complicated discussions and negotiations that are required on several planes, can best be carried out within the aegis of the International Monetary Fund. Canada expects to play its full part in this work and I will be speaking on this subject at the International Monetary Conference in Montreal tomorrow evening.
There is also unfinished business in respect of trade arrangements. There is now an undertaking by the major industrial countries to commence comprehensive trade talks next year. Canada will participate in these talks as constructively as possible, ever cognizant of the advantages to us of freer, multilateral trade. There are also specific bilateral trade issues between the United States and ourselves which need to be settled at the earliest opportunity.

Turning more particularly to the Canadian economy, we anticipate that our growth will be stronger than it was last year. In 1971 we grew at a rate in excess of the long-term trend. We will better that this year. I have spoken of the basic financial strength of consumers. This will yield a strong growth in consumer expenditures. I expect that investment in inventories, which are now at below-normal levels, will be substantial. I expect that capital investment by business will be greater than was indicated in the recently published figures of intentions, and having in mind the stimulus provided in this budget tonight it will be greater than it was last year, especially in machinery and equipment. All signs point to another strong year in housing.
Exports, too, will be higher than last year as a consequence of the growing economic strength of the countries to which we sell our products. However, the advance of our economy will boost our imports and our trade balance will, in all likelihood, be lower than it was this year, and our current account will be in deficit.
We are expecting a large increase in employment and all signs to date this year give credence to this anticipation. In March this year there were 330,000 more Canadians working than one year ago.
I expect that unemployment will fall on the average in the course of this year, though the extraordinary month to month fluctuations in the size of the labour force will likely continue and be reflected in an uneven movement in the unemployment rate.
There are mixed tendencies in the price picture. The growth of demand and rather lower productivity will
May 8, 1972

make for price increases. The cost of imports may well rise less than last year. We do not expect that food prices will rise as fast this year as last and their current tendency encourages us in this expectation.
In summary, I expect that progress will be made this year in reducing unemployment. The growth in jobs should be considerably larger than last year. More goods and services will be produced and consumed by Canadians. Indeed, I am expecting that our real rate of growth in 1972 will be of the order of 6 to 6 J per cent. In short, I am expecting a year of considerable progress.
During the past few years, Mr. Speaker, virtually every industrial nation in the world has been going through a difficult and painful adjustment process. Canada was no exception. On the whole, however, the record shows that we weathered the storm better than most. Among the ten leading industrial nations, the growth of Canada's real output during 1971 exceeded that in every other country except Japan and was twice the increase in the United States. The rise in prices was significantly lower than that of any other industrial nation. The growth in employment last year of 2} per cent was far greater than that of virtually any other industrial nation and was four times the percentage increase in employment in the United States. But given the rapid growth in our labour force, this was still not good enough.
Over a period of two years now, the growth of the economy has been steadily accelerating in response to the strong fiscal and monetary stimulus injected by the federal government. A further boost has been provided by a variety of provincial policies and programs. The evidence available on every hand indicates that there is a newfound sense of confidence among Canadians generally and among businessmen in particular about our prospects for continued strong economic growth in the year ahead.
I believe this sense of confidence in the future will be further strengthened by the measures which I have announced in the budget tonight. This applies with particular force to the substantial reductions which I have proposed in the tax load carried by the critically important manufacturing and processing sectors of our economy. This new thrust will provide a major boost to these hardpressed industries. These measures will provide our manufacturers and processors with incentive to expand employment, production and capital investment. I and other Canadians will now be counting heavily on them to fulfil the promise of this budget.
Millions of Canadians will also benefit individually from the changes I have proposed tonight to raise the supplementary pension allowance, to enable the pensions of the elderly and of veterans to keep pace with the cost of living, to increase further the tax exemption for the aged, the blind and disabled, and to provide significant tax relief from the heavy financial burden of education and training.
Mr. Speaker, I wish I could do everything at once and I am sure that each member of this House, were he standing in my place, would have a long list of priorities of things he would want to change, of inequities he would want to cure. The bare fact of the matter is that we cannot do everything at once. We simply don't have the resources. There are limits to the scope of fiscal policy. There are
The Budget-Hon. M. Lambert limits to stimulus and readjustment. I have been conscious of the bounds within which I have been constrained: to do everything I can to stimulate the economy, to encourage growth for more jobs, to right injustices- but in a way and at a pace that does not inject too much fuel into the economy. I have had to resist a good many well-intentioned temptations lest I run the risk of firing inflation. That is what I meant when I said that I would be striving for a responsible budget, a budget that would reconcile growth and jobs with reasonable price stability.
1	am confident that the measures I have proposed to this House of Commons tonight are within the realm of responsible fiscal action. I believe the measures that I have announced tonight will help to meet those demands which deserve the highest priority-the easing of some of the financial hardship of many individual Canadians and the creation of permanent, well-paying jobs. I now wish to table the ways and means resolutions and I commend the budget to this House of Commons.
[Editor's Note: For notice of ways and means resolutions, see Votes and Proceedings of today's date.]


Marcel Joseph Aimé Lambert: Mr. Speaker, I would certainly commend the Minister of Finance (Mr. Turner), whom I have known for many years-I first knew him as a student many years ago at the same institution of learning-on a very voluminous budget, though I am afraid he had an embarrassment of choice. One of my colleagues said that this was not necessarily the responsible budget the minister spoke about but, rather, a "repair the damage" budget and that is where its scope lay.
On a much more serious note, I think that when we get out of this chamber all of us will realize that while the minister was speaking on a very important subject, one that affects Canada, others were speaking on other events that may make much of this quite irrelevant and the potential of those other events belittle much of what the minister has said tonight. May I say I am referring to events taking place outside this country. I do not want to get into any speeches which have been made elsewhere or to advert to the very delicate international situation that is now arising as a result of action being taken by the United States government. That is something we will learn much of later.
This budget message contains a lot of suggestions to repair the damages and make good the deficiencies which have existed for a long time. I am very sorry the minister's predecessor is no longer in the House because I should have liked him to hear these remarks. If one were not very charitable, one would be very cynical about the budget. I might suggest there would not be anything in this budget if this were not an election year. Members opposite, from the Prime Minister (Mr. Trudeau) down, have repeatedly in the last two years voted down resolutions emanating from the opposition in respect of old age pensions and the
2	per cent escalation clause, limitations on the guaranteed income supplement, veterans pensions and the 2 per cent supplement in that regard.They have constantly voted down these measures and belittled them in speeches both in and out of the House.


Some hon. Members:: Hear, hear!

May 8, 1972
The Budget-Hon. M. Lambert


Marcel Joseph Aimé Lambert: Tonight, in their desperation to recapture some popularity in the country, they have clasped these proposals to their breasts and have gone into a frenzy of applause for the new Minister of Finance as though he had thought up these things. I sometimes believe that the minister must blush as red as the tie he wears.
The minister faces the problems of people on low and fixed incomes, yet the remarks which appear in this document represent an outright condemnation of the administration of which he has been a member for the last three years. With callous disregard, the government has ignored the effects of inflation on pensioners, whether they be veterans or senior citizens, and has rejected at every turn proposals from the opposition and from groups outside this House in respect of alleviating the effects of inflation.
At page 12 of the minister's remarks we find this statement:
Like the elderly, many of those Canadian veterans who made sacrifices in defense of our country-and their families-also find it difficult, if not impossible, to defend themselves against rising costs of living.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: Did this government just find this out? Did this not apply last year or the year before? What did the government do about it then? The government sat on its hands and did nothing. As I say, this is a "repair the damage" budget. There are other remarks in purple prose in the more flamboyant passages the minister read. He did not write it, because he is not possibly capable of such atrocious language as we have heard tonight.
I suggest we are seeing again this new found concern about the inroads and hardships of inflation. This is an election year and, if you will forgive me for being cynical, Mr. Speaker, we cannot buy this response of distribution, hitting certain high points across the country and causing great concern for the public. Last week this government brought forward its policy, if you can call it that, in respect of foreign ownership. It is merely limited to takeovers and does nothing to encourage Canadians to own enterprises. Since that time, members on the government side and others have said we should wait until Monday night for the budget when the government will come through with something to give Canadians encouragement to own their own industries. What did we get? I suggest we got one big, fat zero and that is all. There is not even a misplaced comma in this address that deals with foreign ownership. There is not one iota of encouragement.
What we are to have is repression, with some form of screening agency dealing in matters which may or may not be constitutionally within the powers of the agency. I will not discuss that matter further until the bill comes before us. We hope that will be soon unless, of course, the Prime Minister decides he is going to pull the chain and call an election.
The Minister of Finance still faces the same problems of inflation and unemployment. Let us talk about some of the percentage rates of inflation. If the minister wants to study tables, let him look at absolute increases in the cost

of living index and he will see they have been in the nature of 4.8 per cent rather than 3 per cent or something like that. As the cost of living escalates year by year, we receive claims by the government that the inflation increase amounts to only 3 per cent, 3.2 per cent or something like that, when the actual increase is more in the nature of 5 per cent to 6 per cent in some years.
We have heard it said that the problem of inflation was licked. I am sure that statement is not recorded in the book of sayings of the Prime Minister. Last October in the Throne Speech, as well as in June in the budget speech, we heard about all kinds of measures the government intended to take to stimulate the economy and reduce unemployment-but the figures are still the same; they have not gone down in total amount. The government has not reduced the percentage of unemployment and we see inflation returning again at the same rates of a year ago.
What has the minister done with regard to unemployment and incentive to industry? He has done some things which are generally in the right direction, but the choice of things was so wide it was hard for the minister to miss everything of which one could approve. Certainly the increase in respect of old age security and the lifting of that ironclad ceiling which was imposed last year on basic pensions is a step in the right direction.
The increase in the guaranteed supplement is a step in the right direction. The increase from $650 to $1,000 in personal exemption to those over 65 merely accentuates the difficulties which a flat rate imposes. This was pointed out during the debate on Bill C-259. It is far better to have tax credits. After all, the high income recipient who is also an old age security recipient benefits much more from the $350 in personal exemption. His marginal rate is much higher. Therefore, the real thrust of the relief which the government wishes to give is missed on this occasion, but that is because the members of the government have been rather stubborn about the tax structure and the type of exemption they want to grant.
With respect to the incentives for manufacturing and processing, I wish to quote as follows from the document entitled "Supplementary Information on the Budget":
In general, the incentive will apply to operations within the ordinary meaning of the term "manufacturing or processing". Thus, machinery and equipment used in industries such as metal fabrication, chemicals, electrical products, pulp and paper, and textiles-to mention only a few examples-would qualify. On the other hand, assets of taxpayers in the service industries and in wholesale trade, retail trade, financial institutions, transportation, communications, construction, and public utilities would not qualify except to the extent that manufacturing and processing activities are carried out.
Agriculture, fishing, logging, operating an oil or gas well and extracting mineral resources would be excluded. Apparently we are to see a great deal of encouragement across the country, but in those areas where the corporation tax is levied by the province and collected by the province I would ask the minister, what incentive is there for the province? What incentive is there for the province of Quebec with regard to this, unless the minister is able to come to some agreement with the province and force it
May 8, 1972

to follow suit? This will be a very interesting point in Quebec and possibly in Ontario.
There are many other things that we will be going into, Mr. Speaker, but I think we have had enough for tonight. I want to commend the minister on delivering one of the longest budget speeches that we have heard in years and for receiving a very interesting return before an adulating crowd. It was as though he were at a town hall meeting of his constituents. On that note, so that people may understand how the government has not been able to alleviate
The Budget-Hon. M. Lambert
the mistakes it has made in the past, I move, seconded by the hon. member for Oxford (Mr. Nesbitt) that this debate be adjourned.
On motion of Mr. Lambert (Edmonton West) the debate was adjourned.


Mr. Speaker:: Is it the wish of the House that we dispense with the adjournment proceedings?


Some hon. Members:: Agreed.
At 9.55 p.m. the House adjourned, without question put, pursuant to Standing Order.
May 8, 1972



BUDGET PAPER

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presented by
the Honourable J. Turner, M.P.
Minister of Finance
for the information of Parliament in connection with the Budget for 1972-73
May 8, 1972

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The purpose of this Paper is to present a preliminary review of the Government Accounts for the fiscal year ending March 31, 1972.
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May 8, 1972

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May 8, 1972
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Table of Contents
Page
Introduction	 2020
Highlights of the government's financial operations during 1971-72	 2020
Budgetary transactions	 2024
Revenue	 2024
Expenditure	 2031
Assets and liabilities as at March 31, 1972	 2049
Summary	 2050
Asset accounts	 2050
Liability accounts	 2057
Net debt	 2057
The cash position	 2065
The public debt	 2068
Supplementary detailed tables	 2072
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May 8, 1972

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This review presents in summary form the financial operations of the Government of Canada for the fiscal year 1971-72. The fiscal year of the government ends on March 31 but the books must remain open for some time after that date to record adjusting entries and to take into account section 30 of the Financial Administration Act which permits payments made up to April 30 to discharge debts incurred before March 31 to be included in the accounts for the fiscal year. The figures used in this review are based on eleven months actual and one month estimated.
The financial operations of the government include the raising of tax and other revenues and their allocation to departmental and other expenditures; such operations are provided for in its annual administrative budget. In addition, the government undertakes other transactions which do not enter into the calculation of its budget surplus or deficit. These transactions include all receipts and payments leading to changes in the assets or liabilities of the government. Among such receipts and payments are those arising from debt operations and changes in the bank balances of the Receiver General; these types of operation are undertaken to finance the deficit or dispose of the surplus arising from all the other operations of the government, whether budgetary or non-budgetary. Accordingly, in what follows, debt operations and changes in the bank balances of the Receiver General are distinguished from other non-budgetary transactions.

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This section outlines the financial operations of the government in 1971-72 giving a brief summary of the budgetary and non-budgetary transactions, unmatured debt transactions and changes in the cash
position and the debt position during the fiscal year. More detailed explanations are given in subsequent sections of this review.
May 8, 1972

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THE FINANCIAL OPERATIONS OF THE GOVERNMENT (in millions of dollars)
Fiscal year ended March 31 1971	1972 (preliminary)
Budgetary transactions-
Revenue-
Tax	
11,346	12,534Non-tax	
1,457	1,61112,803	14,145Expenditure	
13,182	14,745Surplus or deficit (-)	
-379	-S09
Non-budgetary transactions-
Social security accounts-
Old age security fund	
Canada pension plan	
Unemployment insurance account	
Other annuity, insurance and pension accounts Loans, investments and advances-
To crown corporations	
To others	
Foreign exchange reserves	
Provincial tax collection agreements account.. Other transactions	
7	-86
43	24
13	-10
68	-72
687	884
-1,121	-1,249
-243	-513
-1,364	-1,763
-1,317	-703
-88	115
210	365
Net amount required available from or required for (-) non-budgetary transactions	
-1,809
-1,173
Overall cash requirements to be financed by increase in unmatured
debt or decrease in cash balances	 -2,188
-1,773
Unmatured debt transactions-
Marketable bonds	 678
Treasury bills	 840
Canada savings bonds	 1,226
Other	 -133
95
1,945
Increase or decrease (-) in unmatured debt
2,611
2,090
Net increase or decrease (-) In Receiver General bank balances
317
Receiver General bank balances at beginning of year	
833	1,256Receiver General bank balances at close of year	
1,256	1,573
May 8, 1972
Budgetary transactions
Revenue at $14,145 million for 1971-72 is $1,342 million or about 11 per cent more than 1970-71 revenue of $12,803 million. The increase of $1,342 million was the result of a rise of $1,188 million in tax revenue and an expansion of $154 million in non-tax revenue. The yield from personal income taxes (including the social development tax) is $686 million higher, from corporation income tax it is $19 million less and from return on investments it is $95 million higher than in 1970-71.
Expenditure at $14,745 million for 1971-72 is $1,563 million or 12 per cent higher than in 1970-71. The major changes between 1970-71 and 1971-72 expenditures are increases of $172 million in public debt charges, $200 million in fiscal transfer payments to provinces, $176 million in payments in respect of
the Medicare Act, $116 million in outlays under Hospital Insurance and Diagnostic Services Act, $71 million under the Canada Assistance Plan and $62 million for post-secondary education.
Given revenue of $14,145 million and expenditure of $14,745 million, there will be a budgetary deficit of $600 million as compared with a deficit of $379 million in 1970-71.
Non-budgetary transactions (excluding unmatured debt transactions)
The three social security accounts are those for the Old Age Security Fund, the Canada Pension Plau and the Unemployment Insurance Account. Summaries of the transactions in these accounts for 1970-71 and 1971-72 are given in table 2.

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SOCIAL SECURITY ACCOUNTS (in millions of dollars)
Receipts	1970-71	1971-72	Outlays	1970-71	1971-72
(preliminary)	(preliminary)
Old Age Security Fund
Income tax	 Sales tax		. 1,340 . 574	1,450 Old age pensions	 670 Guaranteed income supplement		.. 1,634 .. 273	1,681 525
			1,907	2,206
	1,914	2,120 Surplus of receipts		.. 7	-86
		Canada Pension Plan		
. 813 . 211 (I)	.. 92	144Investment income	
Other	275 Administration costs	
(') Investments	.. 20 .. 869	23 910981	1,0771,024	1,101 Surplus of receipts	.. 43	24Unemployment Insurance Account^	Contributions	. 594	663 Benefits	
Administration costs	.. 758	1,122 23Investment income	. 29	14	758	1,145Investments realized	
Advance from government	
Other	. 142	315 Surplus of receipts	
100 43	.. 13	-10. 6	771	1,135	
O) Less than $500,000
(2>
Formerly the Unemploy men tlnsurance Fund.
May 8, 1972
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The Old Age Security Fund is financed by tax receipts. These receipts are $2,120 million, an increase of 11 per cent over their level in 1970-71. Payments rose to 12,206 million in 1971-72, $86 million more than receipts. In 1970-71, receipts of $1,914 million exceeded payments by $7 million.
Canada Pension Plan receipts of $1,101 million in 1971-72 exceeded disbursements of $167 million. The greater part of the excess of $934 million was invested in purchasing $910 million of provincial and federal government bonds.
Unemployment Insurance Account receipts at $1,135 million were $10 million less than disbursements resulting in a balance of $15 million in the account at March 31, 1972 compared with a balance of $351 million at March 31, 1971. In 1970-71 receipts were $771 million and benefits paid were $758 million.
Other annuity, insurance and pension accounts include the superannuation accounts of the public service, the Canadian Forces and the Royal Canadian Mounted Police, the government annuities account and certain other accounts of a similar nature. Net receipts from these accounts at $884 million are $197 million more than in 1970-71.
The greater part of loans, investments and advances are made to crown corporations and the remainder made to provincial governments, governments outside Canada, international organizations, private businesses and individuals. In 1971-72 net loans and investments of $1,249 million to crown corporations are $128 million more than in 1970-71; other loans, investments and advances in the net amount of $513 million are $270 million more than in 1970-71.
Foreign exchange operations to finance increases in Canada's international reserves include receipts from Special Drawing Rights (SDR's) issued by the International Monetary Fund and payments arising from subscriptions of capital to the International Monetary Fund, advances to the Exchange Fund and the redemption of non-interest-bearing notes
payable to the International Monetary Fund. During 1971-72 net disbursements arising from these operations in the amount of $703 million include net receipts of $117 million from SDR's, a net increase of $846 million in advances to the Exchange Fund Account and net disbursements of $260 million from transactions in respect of the International Monetary Fund. In 1970-71 net disbursements were $1,317 million, $1,358 million in net advances to the Exchange Fund and a net increase of $349 million in subscriptions to the International Monetary Fund, partly offset by an increase of $271 million in noninterest-bearing notes payable to the International Monetary Fund and the issuance of $119 million of SDR's by the International Monetary Fund.
Collections of provincial income taxes in the amount of $2,138 million exceed payments to the provinces of $2,023 million. In 1970-71 collections were $1,858 million and payments were $1,946 million. Net receipts from other operations are $365 million compared with net receipts of $210 million in 1970-71.
Unmatured debt transactions
The net cash requirements of $1,773 million arising from budget transactions, operations of social security funds and other operations was met by net issues of marketable bonds, treasury bills and Canada savings bonds. In 1971-72 there was a net issue of $359 million of marketable bonds compared with $678 million in 1970-71, a net issue of $95 million in treasury bills compared with $840 million in 1970-71 and a net issue of $1,945 million in Canada savings bonds compared with $1,226 million in 1970-71. Other borrowing produced a net payment of $309 million compared with $133 million in 1970-71.
Change in cash position
A summary of all these operations is given in table 1 which shows that their net effect was to increase the bank balances of the Receiver General, including
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May 8, 1972
those in foreign currencies, by $317 million from $1,256 million at March 31, 1971 to $1,573 million at March 31, 1972.
Change in debt position
As a result of all operations just described, the gross public debt increased by $4,658 million to $47,633 million at March 31, 1972, net recorded assets increased by $4,058 million to $29,711 million and the net debt increased by $600 million to $17,922 million.

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(in millions of dollars)
	Balance at March 31		Increase or decrease (-)
	1971	1972 (preli- minary)	
Gross liabilities	
Less recorded net assets	
42,975 	
25,653	47,633 29,711	4,658 4,058Net debt	
17,322	17,922	600

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Total budgetary revenue for 1971-72 is estimated $14,745 million and the budgetary deficit at $600 at $14,145 million, total budgetary expenditure at million.

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(in millions of dollars)
Surplus or deficit (-)
Revenue	Expenditure	As a
Fiscal year ended March 31	

 

 percentage
Amount	Per cent change	Amount	Per cent change	Amount	of expenditure1963	
5,878.7	2.60	6,570.3	0.76	-691.6	10.531964	
6,253.2	6.39	6,872.4	4.60	-619.2	9.011965	
7,180.3	14.83	7,218.3	5.03	-38.0	0.531966	
7,695.8	7.18	7,734.8	7.16	-39.0	0.511967	
8,376.2	8.58	8,797.7	13.74	-421.5	4.791968	
9,076.6	8.36	9,871.4	12.20	-794.8	8.051969	
10,191.1	12.28	10,767.2	9.07	-576.1	5.351970	
12,323.9	20.93	11,931.3	10.81	392.6	3.211971	
12,803.0	3.88	13,182.1	10.48	-379.1	2.881972 (preliminary)	
14,145.0	10.48	14,745.0	11.85	-600.0	4.06
Prior year figures have not been adjusted in this table to account for vote-netting.
Revenue
Budgetary revenue at $14,145 million is $1,342 million or 11 per cent higher than the total received in 1970-71. Tax revenue of $12,534 million accounts for 89 per cent and non-tax revenue of $1,611 million
accounts for 11 per cent. The main changes are increases of $844 million in personal income taxes, $293 million in sales tax, $156 million in customs import duties and $95 million in return on investments.
May 8, 1972

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Fiscol Years Ended March 31
1968	1969	1970	1971	1972*


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For Fiscal Year Ended March 31,1972
1.	Includes additional interest in respect of the Public Service, the Conadian Forces and the R.C.M.P. superannuation accoi
2.	Does not include payments out of old age security fund.
2026
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May 8, 1972

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(in millions of dollars)
Fiscal year ended March 31	Increase
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or
Source	1971	1972 (preliminary)	decrease (-)	Amount	Per cent	Amount	Per cent	Amount	Per centTax revenue-	Income tax-	Personal(1)	4.696.5	36.7	5,540.0	39.2	843.5	18.0Corporation(1)	2,218.5	17.3	2,200.0	15.5	-18.5	-0.8On dividends, interest, etc., going abroad	258.2	2.0	280.0	2.0	21.8	8.4Social development tax	566.3	4.4	409.0	2.9	-157.3	-27.8Excise taxes-	Sales01	1,707.5	13.3	2,000.0	14.1	292.5	17.1Other	403.2	3.2	395.0	2.8	-8.2	-2.0Customs import duties	814.5	6.4	970.0	6.8	155.5	19.0Excise duties	561.0	4.4	605.0	4.3	44.0	7.8Estate tax	119.9	1.0	134.7	1.0	14.8	12.3Other taxes	0.3	0.3	11,345.9	88.7	12,534.0	88.6	1,188.1	10.5Non-tax revenue-	Return on investments	1,000.2	7.8	1,095.0	7.8	94.8	9.5Post Office-net postal revenue	337.6	2.6	400.0	2.8	62.4	18.5Other non-tax revenue	119.3	0.9	116.0	0.8	-3.3	-2.81,457.1	11.3	1,611.0	11.4	153.9	10.612,803.0	100.0	14,145.0	100.0	1,342.0	10.5
All amounts are net after deduction of refunds and drawbacks.
(1>
Excluding credits to the Old Age Security Fund:	1970-71	1971-72 (preliminary)
Personal income tax.... Corporation income tax Sales tax	
1,132.5	1,237.0
207.9	213.0
573.8	670.0

1,914.2	2,120.0
Tax Revenue
The effect of the tax changes announced in June and October was to moderate the growth in revenue which ordinarily would accompany a period of rapid growth in the economy.
The tax reform amendments which became effective January 1, 1972 had little effect on budgetary revenue in 1971-72. The old age security taxes were eliminated after 1971 but the old age security fund remains and amounts determined by reference to the previously existing old age security tax rates are credited to this fund.
Federal-provincial tax collection agreements
Under fiscal arrangements, that became operative in 1962, the federal government withdrew in part from the field of direct taxation and left the vacated area to the provinces. The federal government has entered into tax-collection agreements under which it collects the provincial personal income taxes of all
provinces except Quebec and the provincial corporation income taxes of all provinces except Ontario and Quebec.
During the year collections were $2,138 million and payments to the provinces were $2,023 million.
Tax on personal incomes
As is shown in table 5, income tax is again the largest source of government budgetary revenue. The yield (excluding the old age security tax) is $5,540 million or 39 per cent of total budgetary revenue. In 1970-71 the yield was $4,697 million or 37 per cent of total revenue. The increase is due mainly to a higher level of personal incomes during the fiscal year. The tax on personal incomes credited to the old age security fund is estimated to be $1,237 million compared with $1,133 million in 1970-71.
Corporation income tax
Corporation income tax is the second largest source of budgetary revenue. The yield (excluding the old
May 8, 1972
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1968	1969
* Preliminary.

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Fiscal Years Ending March 31 Billions of Dollars

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**

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1972*
age security tax) is $2,200 million or 16 per cent of t'otal budgetary revenue compared with $2,219 million or 17 per cent in 1970-71. The decrease of $19 million is due partly to the tax reduction passed in 1971 and partly to the exercise by corporations of their option to base tax instalments on the income of the previous year. The tax on incomes of corporations credited to the old age security fund is estimated to be $213 million compared with $208 million in 1970-71.
Taxes on dividends, interest, etc., going abroad
Revenue in this category is derived from taxes withheld from dividends, interest, rents, royalties, alimony, and income from estates and trusts paid to non-residents. Collections of $280 million in 1971-72 are $22 million more than in 1970-71.
Social development tax
This tax first took effect for the taxation year 1969 and was discontinued effective January 1, 1972 under the new income tax provisions. The tax, which was
imposed on individuals, was the lesser of 2 per cent of taxable income or $120. During 1971-72 the yield is $409 million compared with $566 million in 1970-71.
Excise taxes
Excise taxes including the sales tax total $2,395 million or 17 per cent of total budgetary revenue compared with $2,111 million or 17 per cent in 1970-71.
From a revenue standpoint the general sales tax is the most important tax levied under the Excise Tax Act. Receipts (excluding the amount credited to the old age security fund) of $2,000 million are $293 million more than in 1970-71.
The sales tax credited to the old age security fund is $670 million compared with $574 million in 1970-71.
The yield from other excise taxes is $395 million, of which $331 million is in respect of tobacco products. In 1970-71 the yield was $403 million of which $319 million was in respect of tobacco products.
25316-5!
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May 8, 1972
Customs import duties
Receipts of $970 million from this source are $156 million more than in 1970-71.
Excise duties
Excise duties are levied on alcoholic beverages (other than wines) and tobacco products. (Additional taxes on tobacco products are levied under the Excise Tax Act.) Net receipts of $605 million in 1971-72 are $44 million more than in 1970-71.
Gross receipts of $389 million from duties on alcoholic beverages consist of $229 million in respect of spirits and $160 million in respect of beer and are $31 million higher than receipts of $358 million in 1970-71 of which $209 million was in respect of spirits and $149 million in respect of beer. Gross receipts of
$226 million in respect of tobacco products are $14 million higher than in 1970-71.
Refunds and drawbacks of $11 million are $1 million more than in 1970-71.
Estate tax
Revenues in this category are derived under the Estate Tax Act. This Act does not apply in the case of the death of any person whose death occurred after 1971. Net receipts of $135 million are $15 million more than in 1970-71.
Other taxes
Revenue under this heading of $300,000 is approximately the same amount as in 1970-71.
4 -
2 -


[Stage Direction]
Fiscal Years Ended March 31 Billions of Dollars

[Stage Direction]
0
0
May 8, 1972
[Stage Direction]
Non-Tax Revenue
Non-tax revenue in the amount of $1,611 million is $154 million more than in 1970-71. The main changes are increases of $95 million in return on investments and $62 million in net postal revenue.
Return on investments
These receipts amounting to $1,095 million consist of income derived from loans and advances made by the government and from investments by the government in productive or earning assets. In 1970-71 receipts were $1,000 million.
Receipts from crown corporations at $778 million are $73 million more than in 1970-71 due mainly to increases of $15 million in Bank of Canada profits paid to the government and $48 million in payments by the Central Mortgage and Housing Corporation.
The yield from other loans and investments at $317 million is $21 million more than in 1970-71. The main changes are increases of $19 million in profits of the exchange fund account and $16 million in interest on Receiver General deposits with the chartered banks.

[Stage Direction]
(in millions of dollars)
Non-Tax Revenue -	Fiscal year ended March 31	Increase or decrease (-)	1971	1972 (preli- minary)	Amount	Per centReturn on investments	1,000.2	1,095.0	94.8	9.5Post Office-net postal revenue.	337.6	400.0	62.4	18.5Refunds of previous years' expenditure	23.0	22.0	-1.0	-4.3Services and service fees	17.1	17.0	-0.1	-0.6Proceeds from sales	14.0	13.0	-1.0	-7.1Privileges, licences and permits	26.3	26.0	-0.3	-1.1Bullion and coinage	19.9	19.0	-0.9	-4.5Premium, discount and exchange 	0.8	1.0	0.2	25.0Other	18.2	18.0	-0.2	-1.11,457.1	1,611.0	153.9	10.6

[Stage Direction]
(in millions of dollars)
Return on Investments
Fiscal year ended March 31 

 Increase
1972	or
(preliminary) decrease (-)
Loans to, and investments in, crown corporations-
Bank of Canada-profits	250.3	265.0	14.7Canadian Broadcasting Corporation	7.4	9.0	1.6Canadian National Railways	58.4	54.0	-4.4Central Mortgage and Housing Corporation	266.0	314.0	48.0Export Development Corporation	13.9	19.0	5.1Farm Credit Corporation	67.0	72.0	5.0Northern Canada Power Commission	11.4	16.0	4.6The St. Lawrence Seaway Authority	12.9	14.0	1.1Other	17.5	15.2	-2.3704.8	778.2	78.4Other loans and investments-	National governments	24.3	23.0	-1.3Provincial governments	3.3	5.5	2.2Exchange Fund Account	175.5	194.0	18.5Interest-bearing deposits with chartered banks	25.2	41.0	15.8Municipal Development and Loan Board	14.6	14.0	-0.6Soldier and general land settlement loans and Veterans Land Act advances..	22.0	23.0	1.0M iscellaneous	30.5	16.3	-14.2295.4	816.8	21.41,000.2	1,095.0	94.8
May 8, 1972
Post Office revenue
Gross receipts from Post Office operations are $483 million but authorized disbursements from revenue for salaries and rent allowances, other allowances and commissions at semi-staff and revenue offices, commissions at sub-offices, transit charges on Canadian mail forwarded through and delivered in foreign countries, etc., in the amount of $56 million and revenue credits of $27 million to expenditure result in net revenue of $400 million. In 1970-71 comparable amounts were gross receipts of $418 million, authorized disbursements of $55 million, credits of $25 million to expenditure and net revenue of $338 million.
As is shown in the section on budgetary expenditure the net costs of operating the Post Office during 1971-72 (excluding the $83 million charged to revenue) are $412 million. Given net revenue of $400 million, there is an operating deficit of $12 million. In 1970-71 net costs of $369 million and net revenue of $338 million resulted in an operating deficit of $31 million.

[Stage Direction]
(in millions of dollars)
	Fiscal year ended	
Post Office Revenue	March 31	Increase or
		
	1972	decrease
	1971 (preli-	<->
minary)	
Postage-
In Canada	393.9	459.0	65.1From foreign countries	9.1	6.6	-2.5Money orders	9.9	11.4	1.5Rental of post office boxes	5.1	5.4	0.3Other	0.2 418.2	0.6 483.0	0.4 64.8Less- Credited to appropriations	-25.5	-27.0	-1.5Credited to revenue-	Salaries and allowances-	Revenue post offices	-13.4	-12.0	1.4Semi-staff post offices	-29.6	-29.5	0.1Sub-post offices	-6.4	-7.2	-0.8Postage and transit charges to or through foreign countries	-4.5	-4.8	-0.3Other	-1.2	-2.5	-1.3-80.6	-8S.0	-2.4337.6	400.0	62.4
Refunds of previous years' expenditure
Refunds of $22 million include $3 million in receipts by the Department of National Defence (mainly from adjustments to cost audits and contracts with the United States government) and $4 million in receipts by the Department of Veterans Affairs (mainly from refunds of veterans pensions, allowances and reestablishment credits). In 1970-71 refunds totalled $23 million.
Services and service fees
Revenue of $17 million from this source includes $9 million received by the Department of Agriculture (mainly for services for the inspection, weighing, storage and elevation of grain) and $3 million received by the Department of Consumer and Corporate Affairs (mainly from inspection fees in respect of weights and measures, and electricity and gas). In 1970-71 revenue totalled $17 million.
Proceeds from sales
Revenue of $13 million includes receipts of $7 million by the Department of Supply and Services ($4 million from the sale of surplus crown assets and $3 million from sales of publications). In 1970-71 revenue totalled $14 million.
Privileges, licences and permits
Revenue from this source in the amount of $26 million includes $7 million in receipts by the Department of Indian Affairs and Northern Development (mainly in respect of oil, gas and gold), $7 million in receipts by the Department of Public Works (mainly from rentals) and $9 million in receipts by the Department of Consumer and Corporate Affairs in respect of patents, trade marks, charters, etc. In 1970-71 revenue from this source was $26 million.
Bullion and coinage
This revenue which is derived from transactions in the bullion and coinage working capital advance is $19 million compared with $20 million in 1970-71.
Premium, discount and exchange
These transactions reflect net revenue of $1 million compared with $1 million in 1970-71.
Miscellaneous non-tax revenue
Miscellaneous revenue is $18 million approximately the same as the previous year.
May 8, 1972
[Stage Direction]
Expenditure
Budgetary expenditure for 1971-72 is estimated at $14,745 million, $1,563 million more than the 1970-71 total of $13,182 million.
The main changes are increases of $390 million by the Department of Finance, $99 million by the Department of Industry, Trade and Commerce, $82 million by the Department of National Defence, $376 million by the Department of National Health and Welfare and $140 million by the Department of the Secretary of State.

[Stage Direction]
Fiscal Years Ending March 31 Billions of Dollars
1972'
* Preliminary.
1.	Includes additional interest in respect of the Public Services, the Canadian Forces and the R.C.M.P. superannuation accounts.
2.	Does not include payments out of old age security fund.
[Stage Direction]
May 8, 1972

[Stage Direction]
BUDGETARY EXPENDITURE CLASSIFIED BY FUNCTION (in millions of dollars)
Fiscal year ended March 31
Function	1968	1969	1970	1971	1972 (preliminary)Amount Percent	Amount Percent	Amount Percent	Amount Percent	Amount Percent
General government
services	376	4	411	4	505	4	576	4	662	5Foreign affairs	217	2	227	2	243	2	281	2	309	2Defence	1,759	18	1,762	17	1,791	15	1,775	14	1,837	12Transportation and communications	951	10	910	8	893	8	940	7	1,021	7Economic development and support	1,473	15	1,527	14	1,776	15	1,857	14	2,108	14Health and welfare(1).	2,142	22	2,372	22	2,734	23	3,192	24	3,600	25Education assistance..	114	1	287	3	315	3	462	4	558	4Culture and recreation.	280	3	244	2	376<"	3	264	2	338	2Fiscal transfer payments	738	8	867	8	932	8	1,229	9	1,429	10Public debt	1,301	13	1,480	14	1,717	14	l,920's>	15	2,122<*	14Internal overhead expenses	439	4	643	6	639	5	686	5	761	59,790	100	10,730	100	11,921	100	13,182	100	14,745	100
("Payments out of the Old Age Security Fund, the Canada Pension Plan and the Unemployment Insurance Account are not included.
("Includes write-off of EXPO deficit.
("Includes additional interest in respect of the Public Service, the Canadian Forces and the R.C.M.P. superannuation accounts.

[Stage Direction]
Fiscal Years Ended March 31
Prelim inary
1.	The unshaded areas of ihe columns in the chart lor heath and wellare repreient payments out of old age security lund not charged to budgetary expenditure.
2.	Includes additional interest in respect of the Public Service, the Canadian Forces and the R.C.M.P. superannuation accounts .
May 8, 1972

[Stage Direction]
(in millions of dollars)
		Fiscal year ended March 31				
Department	1971	1972 (preliminary)	Increase or decrease (-	-)Amount	Per cent	Amount Per cent	Amount Per cent	Agriculture	
277.0	2.1	292.0	1.9	15.0	5.4Communications	
13.9	0.1	21.0	0.1	7.1	51.1Consumer and Corporate Affairs	
20.2	0.2	24.0	0.1	3.8	18.8Energy, Mines and Resources	
149.5	1.1	177.0	1.2	27.5	18.3Environment	
172.9	1.3	199.0	1.3	26.1	15.0External Affairs	
281.6	2.1	309.0	2.1	27.4	9.7Finance	
Governor General and Lieutenant-Governors	
3,139.6 	
1.2	23.8	3,530.0 1.2	24.0	390.4	12.4Indian Affairs and Northern Development	
350.6	2.7	416.0	2.8	65.4	18.6Industry, Trade and Commerce	
250.6	1.9	350.0	2.4	99.4	39.6Justice	
22.7	0.2	28.4	0.2	5.7	25.1Labour	
13.5	0.1	17.0	0.1	3.5	25.9Manpower and Immigration	
748.8	5.7	793.0	5.3	44.2	5.9National Defence	
1,817.9	13.8	1,900.0	12.8	82.1	4.5National Health and Welfare	
2,338.0	17.8	2,714.0	18.4	376.0	16.0National Revenue	
158.8	1.2	182.0	1.3	23.2	14.6Parliament	
27.2	0.2	34.4	0.2	7.2	26.4Post Office	
368.6	2.8	412.0	2.8	43.4	11.7Privy Council	
13.0	0.1	15.0	0.1	2.0	15.4Public Works	
330.7	2.5	343.0	2.3	12.3	3.7Regional Economic Expansion	
297.8	2.2	316.0	2.3	18.2	6.1Secretary of State	
707.9	5.4	848.0	5.7	140.1	19.7Solicitor General	
222.8	1.7	265.0	1.8	42.2	18.9Supply and Services	
74.7	0.6	80.0	0.5	5.3	7.0Transport	
433.8	3.3	494.0	3.4	60.2	13.8Treasury Board	
463.4	3.5	445.0	3.4	-18.4	-4.1Urban Affairs and Housing	
75.4	0.5	112.0	0.6	36.6	48.5Veterans Affairs	
410.0	3.1	427.0	2.9	17.0	4.113,182.1	100.0	14,745.0	100.0	1,562.9	11.8
Agriculture
Expenditures of the Department of Agriculture together with those in respect of the Canadian Dairy Commission, the Canadian Livestock Feed Board and the Farm Credit Corporation total $292 million compared with $277 million in 1970-71.
Outlays for production and marketing at $159 million are $5 million higher than in 1970-71 due to larger payments for farm income maintenance. The charge to expenditure to cover the net operating loss of the Agricultural Stabilization Board is $127 million compared with $126 million in 1970-71.
Research costs are $49 million compared with $48 million in 1970-71; expenditures for the health of animals program are $27 million compared with $24 million; and expenditures in respect of the Canadian Livestock Feed Board are $20 million compared with $21 million in 1970-71.

[Stage Direction]
(in millions of dollars)
	Fiscal year ended March 31		Increase
1971	1972 (preli- minary)	decrease (-)Department-Production and marketing- Agricultural Stabilization Board.	126.4	127.0	0.6Other	27.3	32.0	4.7153.7	159.0	5.3Research program	47.8	49.0	1.2Health of animals	24.0	27.0	3.0Canadian Grain Commission	10.7	13.0	2.3Administration and general	11.0	14.7	3.7247.2	262.7	15.5Farm Credit Corporation-net operating loss	8.6	8.4	-0.2Canadian Dairy Commission	0.4	0.5	0.1Canadian Livestock Feed Board	20.8	20.4	-0.4277.0	292.0	15.0
2034
[Stage Direction]
May 8, 1972
Communications
Expenditures for the Department of Communications are $21 million compared with $14 million in 1970-71. The increase is due mainly to higher outlays for communications and space applications which are $16 million compared with $12 million.
TABLE 12 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (preli- minary)	
Communications and space application research and development	12.4	16.4	4.0Management of the radio frequency spectrum	6.1	7.3	1.2Administration and development	4.0	5.6	1.622.5	29.3	6.8Revenue credited to the vote	-8.6	-8.3	0.313.9	21.0	7.1
Consumer and Corporate Affairs
Expenditures of the Department of Consumer and Corporate Affairs are $24 million, $4 million more than in 1970-71, due mainly to higher outlays of $1 million for consumer affairs and $2 million for corporate affairs.
TABLE 13 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (preli- minary)	
Consumer affairs	7.5	8.8	1.3Corporate affairs	7.2	8.8	1.6Combines investigations and competition policy	1.6	2.2	0.6Prices and Incomes Commission	2.1	1.8	-0.3Administration and general	1.8	2.4	0.620.2	24.0	3.8
Energy, Mines and Resources
Expenditures of the Department of Energy, Mines and Resources including those in respect of Atomic Energy of Canada Limited, the Atomic Energy Control Board and the National Energy Board total $177 million compared with $150 million in 1970-71.
Outlays of $30 million for the earth sciences program are $9 million higher, outlays of $48 million for the mineral and energy resources program are $6 million higher and outlays of $89 million in respect of atomic energy are $12 million higher than in 1970-71.
Upon the establishment of the Department of Environment, the water resources branch was transferred from the Department of Energy, Mines and Resources to that department. Prior years figures have been adjusted accordingly.
TABLE 14 (in millions of dollars)
Energy, Mines and Resources -	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (preli- minary)	
Earth sciences-			
Research satellite	0.6	6.0	5.4Field and air surveys	13.4	13.8	0.4Geological research	1.3	2.8	1.5Research in geophysics	4.0	4.2	0.2Other	1.3	2.6	1.320.6	29. L	8.8Mineral and energy resources-	Energy development	6.6	6.9	0.3Mineral development	14.5	16.2	1.7Mining and metallurgical investiga-	tion and research	9.3	10.6	1.3Geological research and surveys	10.5	13.3	2.8Other	1.2	1.0	-0.242.1	48.0	5.9Administration and general	7.7	7.6	-0.170.4	85.0	14.6Atomic Energy Control Board	7.7	12.0	4.3Atomic Energy of Canada Limited. .	69.0	77.0	8.0National Energy Board	2.4	3.0	0.6149.5	177.0	27.5
Environment
This is a new department and is comprised of the former Department of Fisheries and Forestry, the water resources program from the Department of Energy, Mines and Resources, the Canadian wildlife service from the Department of Indian Affairs and
May 8, 1972
[Stage Direction]
Northern Development, the public health engineering and air pollution services from the Department of National Health and Welfare and the meteorological services from the Department of Transport. Prior years figures have been adjusted for comparative purposes.
Expenditures of $109 million for the environmental quality program include $62 million in respect of water resources and $25 million in respect of meteorological services. In 1970-71 expenditures of $88 million included $43 million for water resources and $37 million for meteorological services.
Expenditures of $83 million for the renewable resources program include $38 million in respect of fisheries, $23 million in respect of forestry, $15 million in respect of aquatic renewable resources and $7 million for Canadian wildlife service. In 1970-71 expenditures of $81 million included $35 million for fisheries, $23 million for forestry, $19 million for aquatic renewable resources and $5 million for Canadian wildlife service.
TABLE 15 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Environmental quality- Fisheries and forestry	7.0	19.8	12.8Water resources	43.2	62.2	19.0Atmospheric sciences	1.6	2.5	0.9Meteorological services	36.6	24.7	-11.988.4	109.2	20.8Renewable resources- Fisheries management and development	34.5	38.2	3.7Aquatic renewable resources	18.7	14.7	-4.0Forestry research and services	23.2	22.9	-0.3Canadian wildlife service	4.7	7.6	2.981.1	83.4	2.SAdministration	3.4	6.4	3.0172.9	199.0	26.1
External Affairs
Expenditures of the Department of External Affairs, including the Canadian International Development Agency and the International Joint Commission,
total $309 million compared with $282 million in 1970-71.
Expenditures of the department in the amount of $94 million are $23 million higher than in the previous year and include $60 million for foreign operations ($43 million in 1970-71) and $16 million for membership and support of international organizations ($16 million in 1970-71).
Expenditures of the Canadian International Development Agency of $215 million are $5 million higher than in 1970-71. Economic assistance at $102 million is $27 million less than in the previous year and international emergency relief at $23 million is $19 million more than in 1970-71.
TABLE 16 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Department- Foreign operations	43.4	60.0	16.6Membership in and support of international organizations	15.5	16.2	0.7Administration and general	12.3	17.8	5.571.2	94.0	22.8Canadian International Development Agency- Economic assistance	128.7	102.0	-26.7Technical assistance	36.0	38.0	2.0Grants to multilateral international assistance programs	23.9	29.0	5.1Contributions to development assistance projects of Canadian organizations	8.5	11.0	2.5International emergency relief	3.3	22.5	19.2Other	9.5	12.0	2.5209.9	214.5	4-eInternational Joint Commission	0.5	0.5	281.6	309.0	27.4
Finance
Expenditures of the Department of Finance including those of the Auditor General, the Department of Insurance and the Tariff Hoard total $3,530 million compared with $3,140 million in 1970-71.
25316-6'
[Stage Direction]
May 8, 1972
The main changes are increases of $200 million in fiscal transfer payments to provinces and $172 million in public debt charges.

[Stage Direction]
(in millions of dollars)
Finance	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Public debt charges	
1,822.8	1,995.0	172.2Fiscal transfer payments	
1,228.9	1,429.0	200.1Municipal grants	
54.1	58.0	3.9Guaranteed loans	
21.5	33.0	11.5Administration and general	
7.7	9.5	1.83,135.0	3,524.5	389.5Auditor General	
3.1	4.0	0.9Insurance	
1.0	1.0	Tariff Board	
0.5	0.5	3,139.6	3,530.0	390.4
Public debt charges
Public debt charges consist of interest on public debt, the annual amortization of bond discounts and commissions, the cost of issuing new loans and other costs incurred in servicing the public debt. These charges in the amount of $1,995 million include interest of $1,948 million of which $1,573 million is in respect of unmatured debt and $375 million in respect of other liabilities.
The increase of $168 million mainly reflects an increase in unmatured debt.
When considering the magnitude of these public debt charges and the burden they place upon the public treasury, it must be borne in mind that a substantial portion of the debt is attributable to, or is invested in, productive or earning assets. Therefore, in calculating the net burden of the government's annual interest charges, the income derived from loans, investments and other productive assets must be taken into account. For 1971-72 this income is $1,095 million as shown in the non-tax revenue section under "return on investments". This amount deducted from the gross total of $2,075 million as shown in table 19 leaves a net amount of $980 million compared with a net of $878 million in 1970-71. Measured as a percentage of net debt, the burden of the net annual interest charges is 5.46 per cent in 1971-72 compared with 5.06 per cent in 1970-71. As a percentage of the gross national product for the calendar year ending within the fiscal year, the relative burden is 1.06 per cent compared with 1.04 per cent in 1970-71.
TABLE 18 (iu millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
Pubuc Debt Charges	1971	1972 (prelim- inary)	Interest on public debt- Unmatured debt including treasury bills- Payable in Canadian dollars	1,405.6	1,556.0	150.4Payable in foreign currencies	18.7	17.0	-1.71,424.3	1,573.0	ns. 7Other liabilities- Annuity, insurance and pension accounts*1*	347.7	362.0	14.3Deposit and trust accounts	7.5	13.0	5.5Refundable portion of corporation income tax	0.1	-0.1SS5.S	375.0	19.7Total interest on public debt(1)	1,779.6	1,948.0	168.4Other public debt charges- Annual amortization of bond discounts and commissions	39.0	41.0	2.0Cost of issuing new loans	2.9	4.0	1.1Servicing of public debt	1.3	2.0	0.743.2	47.0	3.81,822.8	1,995.0	172.2
^Additional interest of $45.7 million in 1970-71 and $59.0 million in 1971-72 is included in National Defence expenditures; $49.5 million in 1970-71 and $65.0 million in 1971-72 in Treasury Board expenditures; and $2.3 million in 1970-71 and $2.6 million in 1971-72 in Royal Canadian Mounted Police expenditures.
TABLE 19 (in millions of dollars)
Fiscal year ended
March 31	Increase
Net Burden of

or
Annual Interest Charges	1971	1972 (prelim- inary)	decrease (-)Total interest on public debt	
Less return on investments	1,877.7 1,000.2	2,074.6 1,095.0	196.9 94.8Net interest cost	877.5	979.6	102.1Net interest cost as a percentage of net debt	5.06	5.46	
Fiscal transfer payments to provinces
These payments total $1,429 million, $200 million more than in 1970-71.
Payments of $1,128 million under the Federal-Provincial Fiscal Arrangements Act are $141 million higher than in 1970-71.
Payments of $273 million under the Established Programs (Interim Arrangements) Act to the Prov-
May 8, 1972
[Stage Direction]
ince of Quebec are in respect of compensation to that province for its opting out of the following programs: hospital insurance and diagnostic services, old age assistance, disabled persons allowances, blind persons allowances, unemployment assistance, and the Canada Assistance Plan; and, in part, the general health grants program. Payments were $213 million in 1970-71.
Subsidies to provinces payable under the British North America Acts and other statutory authority are $34 million, $2 million more than in 1970-71.
The transfer of certain public utility tax receipts in the amount of $25 million are $1 million more than in 1970-71 and represent the transferable portion of income tax received from corporations whose main business is the distribution to, or generation for distribution to, the public of electrical energy, gas and steam.
The Federal-Provincial Fiscal Revision Act, 1964, provides that where, in any fiscal year commencing on or after April 1, 1964, the federal savings in respect of a province providing schooling exceeds the federal revenue abatement in respect of that province for the taxation year ending in that fiscal year, the Minister of Finance may, out of the consolidated revenue fund, pay to that province in respect of that fiscal year an amount equal to the excess and where for a taxation year ending in any fiscal year commencing on or after April 1, 1964 the federal revenue abatement in respect of a province providing schooling allowances exceeds the federal savings in that fiscal year in respect of that province, the amount of the excess may
be deducted from any payment to that province under the Federal-Provincial Fiscal Arrangements Act or under any subsequent Act of the Parliament of Canada substituted therefore, or may be otherwise recovered as a debt due to Canada by that province. The abatement for the taxation year 1971 and the revised abatement for the taxation year 1970 in respect of the Province of Quebec exceeded the federal savings by $32 million which has been recovered from payments to that province under the Established Programs (Interim Arrangements) Act. In 1970-71 the abatement for the taxation year 1970 exceeded the federal savings by $28 million and was recovered.
TABLE 20 (in millions of dollars)
Fiscal year ended
Fiscal Transfer Payments -to Provinces	March 31	Increase1971	1972 (prelim- inary)	decrease (-)Payments under the Federal-Provincial Fiscal Arrangements Act	<*987.4	1,128.4	141.0Payments under the Established Pro-	grams (Interim Arrangements) Act	213.1	<[DOT]>273.2	60.1Statutory subsidies	31.8	33.8	2.0Transfer of certain public utility tax	receipts	24.1	25.4	1.3Federal-Provincial Fiscal Revision	Act (youth allowances)	-27.5	-31.8	-4.31,228.9	1,429.0	200.1
<*) Gross prior to recovery of an excess abatement under the Federal -Provincial Fiscal Revision Act (youth allowances) to the Province of Quebec.
TABLE 21 (in millions of dollars)
Fiscal Transfer Payments		Fiscal year ended March 31, 1972 (preliminary)				
Payments under Fiscal Arrange- ments	Payments under Interim Arrange- ments Act	Statutory subsidies	Recovery under the Federal-Provincial Fiscal Revision Act (youth allowances)	Transfer of certain public utilities tax receipts	TotalNewfoundland	. 120.5	9.7	i.i	131.3Nova Scotia	. 98.8	2.2	1.7	102.7Prince Edward Island	. 23.2	0.6	0.2	24.0New Brunswick	. 98.5	1.8	0.1	100.4Quebec	. 571.1	273.2	4.5	-31.8	3.2	820.2Ontario	. 25.7	5.6	11.2	42.5Manitoba	. 63.5	2.1	0.8	66.4Saskatchewan	118.5	2.1	(1)	120.6Alberta	. 8.6	3.1	6.4	18.1British Columbia	2.1	0.5	2.6Yukon and Northwest Territories...	0.2	0.21,128.4	273.2	33.8	-31.8	25.4	1,429.0
'"Less than $50,000.
[Stage Direction]
May 8, 1972
Governor General
Included in these expenditures arc the salaries of the Governor General of Canada and the Lieutenant-Governors of the provinces and other expenses of these offices. Expenditures of $1 million are approximately the same as in 1970-71.
Indian Affairs and Northern Development
Expenditures of this department of $416 million are $65 million more than in 1970-71. In 1971-72 the Canadian wildlife service was transferred from this department to the Department of Environment; previous years figures have been adjusted for comparative purposes.
TABLE 22 (in millions of dollars)
Indian Affairs	Fiscal year ended March 31	IncreaseNorthern Development	1972 1971 (preliminary)	decrease (-)
Indian and Eskimo affairs-
Education	104.9	111.0	6.1Community affairs	97.7	109.0	11.3Economic development	10.1	14.0	3.9Other	15.0	17.0	2.0m. r	251.0	23.SNorthern development-	Northern economic development...	22.01	43.0	11.5Territorial relations	9.5 /	Grants and contributions	50.2	65.0	14.881.7	108.0	26.3Conservation-	National parks	22.2	31.0	8.8Historic sites	8.2	12.0	3.8Other	3.1	5.0	1.9SS.5	48.0	14.5Administration and general	7.7	9.0	1.3350.6	416.0	65.4
Expenditures of $251 million for Indian and Eskimo affairs include $111 million for education, $109 million for community affairs and $14 million for economic development. In 1970-71 expenditures of $228 million included $105 million for education, $98 million for community affairs and $10 million for economic development.
Expenditures of $108 million for northern development include $65 million for grants and contributions (mainly to the Yukon and Northwest Territories), $43 million for nothern economic development and territorial relations. In 1970-71 expenditures of $82
million included $50 million for grants and contributions, $22 million for northern economic development and $10 million for territorial relations.
Expenditures of $48 million for the conservation program include $31 million in respect of national parks and $12 million in respect of historic sites. In 1970-71 expenditures of $34 million included $22 million for national parks and $8 million for historic sites.
Industry, Trade and Commerce
Expenditures of the Department of Industry, Trade and Commerce including those of Statistics Canada total $350 million compared with $251 million in 1970-71.
Outlays of $182 million for the trade-industrial program are $38 million higher than in 1970-71 and include $67 million for technological capability ($58 million in 1970-71), $30 million for general incentives to industry ($30 million in 1970-71) and $15 million for capital subsidies for the construction of commercial and fishing vessels ($14 million in 1970-71).
Costs of the grains program of $88 million are $34 million higher than in 1970-71. Statistics Canada expenditures of $69 million are $30 million more than in the previous year due mainly to costs of the 1971 census.
TABLE 23 (in millions of dollars)
Fiscal year ended
	March 31		Increase
Industry , 1 kade and Commerce	1971	1972 (prelim- inary)	decrease (-)Trade-industrial program- Technological capability (defence).	45.1	38.8	-6.3Technological capability (nondefence) 	13.0	28.1	15.1Capital subsidies for the construction of commercial and fishing vessels	13.7	15.0	1.3General incentives to industry	30.1	30.0	-0.1Administration and general	42.0	70.0	28.0US. 9	181.9	38.0Tourism program	11.2	11.0	-0.2Grains program	53.6	88.0	34.4World exhibitions	2.9	0.1	-2.8211.6	281.0	69.4Statistics Canada	39.0	69.0	30.0250.6	350.0	99.4
May 8, 1972
[Stage Direction]
Justice
Expenditures of the Department of Justice are $28 million compared with $23 million in 1970-71.
Judges' salaries and allowances are $16 million compared with $11 million and outlays for legal services are $9 million compared with $7 million in the previous year.
TABLE 24 (in millions of dollars)
Justice	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Legal services	... 6.7	9.0	2.3Judges' salaries and allowances	... 11.2	16.4	5.2Administration and general	... 4.8	3.0	-1.822.7	28.4	5.7
Labour
Expenditures of the Department of Labour are $17 million, $4 million more than in 1970-71.
Expenditures in respect of the Unemployment Insurance Commission which in previous years was included under the Department of Labour are now shown under the Department of Manpower and Immigration.
TABLE 25 (in millions of dollars)
Fiscal year ended
	March 31		Increase or decrease (-)
	1971	1972 (prelim inary)	
Program expenditures	9.5	13.0	3.5Payments of compensation respecting public service employees and merchant seamen	4.0	4.0	13.5	17.0	3.5
Manpower and Immigration
Included under this heading are the Department of Manpower and Immigration and the Unemployment Insurance Commission.
Expenditures of the department at $630 million are $59 million more than in 1970-71. Development and utilization of manpower costs of $585 million are $56 million more than in the previous year and include $490 million for employment and training services ($352 million in 1970-71) and $76 million for cooperation with the provinces in the provision of training facilities ($170 million in 1970-71). These latter expenditures represent the federal government's terminal commitments under the training facilities agreements. Costs of immigration services at $23 million are approximately the same as in the previous year.
Expenditures in respect of the Unemployment Insurance Commission, which were included under the Department of Labour in 1970-71, total $163 million compared with $178 million in 1970-71.
TABLE 26 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Development and utilization of manpower- Employment and training services.	352.2	490.0	137.8Co-operation with the provinces in the provision of training facilities.	170.3	76.0	-94.3Administration and general	7.0	19.0	12.0629.5	685.0	55.5Immigration- Recruitment selection	13.6	13.0	-0.6Enforcement and control	7.3	9.0	1.7Administration	1.9	1.0	-0.922.8	28.0	0.2Program development	6.1	7.0	0.9Immigration Appeal Board	0.7	1.0	0.3Administration and general	11.7	14.0	2.3570.8	630.0	59.2Unemployment Insurance Commission- Government's contribution to the unemployment insurance account.	99.0	89.0	-10.0Administration and general	79.0	74.0	-5.0178.0	168.0	-15.0748.8	793.0	44.2
May 8, 1972
National Defence
Expenditures of the Department of National Defence in the amount of $1,900 million are $82 million more than in 1970-71.
Expenditures of $1,821 million for defence services include $1,396 million for operating expenses, $206 million for capital outlays and $219 million in respect of military pensions and other benefits. In 1970-71 expenditures were $1,744 million and included $1,299 million for operating, $219 million for capital and $226 million in respect of pensions.
Outlays in respect of military pensions, pension contributions and other benefits include $74 million for the government's contribution to the Canadian forces superannuation account, $66 million for amortization of deferred charges and $59 million for additional interest in respect of the superannuation account. In 1970-71 the government's contribution was $70 million, amortization of deferred charges was $89 million and additional interest was $46 million.
Defence research costs of $47 million are $1 million more than in 1970-71.
TABLE 27 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Defence services-			
Operating expenditures	1,298.5	1,396.3	97.8Capital expenditures	218.7	205.8	-12.9Military pensions, pension contributions and other benefits- Superannuation account-	Government's contribution	70.4	73.8	3.4Amortization of deferred	charges	89.4	66.0	-23.4Additional interest	45.7	59.0	13.3205.5	198.8	-6.7Other pensions, contributions and	benefits	20.8	20.6	-0.21,743.5	1,821.5	78.0Defence research	45.9	47.3	1.4Mutual aid to NATO countries including contributions towards mili-	tary costs of NATO	14.4	14.4	Civil emergency measures	5.0	5.0	Defence Construction (1951) Limited.	2.2	2.7	0.5Administration and general	6.9	9.1	2.21,817.9	1,900.0	82.1
National Health and Welfare
Expenditures of the Department of National Health and Welfare including those of the Medical Research Council are $2,714 million compared with $2,338 million in 1970-71. In 1971-72 expenditures in respect of air pollution and the public health engineering division were transferred from this department to the Department of Environment; 1970-71 figures have been adjusted for comparative purposes.
Outlays for welfare services are $1,105 million compared with $1,031 million in 1970-71; for health insurance and resources $1,482 million compared with $1,193 million; for medical services $47 million compared with $45 million; and for the Medical Research Council $35 million compared with $34 million.
Family allowances, family assistance and youth allowances
These expenditures total $617 million of which $555 million is family allowances, $60 million is youth allowances and $2 million is family assistance. In 1970-71 the total was $619 million of which $558 million was family allowances, $58 million was youth allowances and $3 million was family assistance.
Family allowances are payable in respect of all children under 16 years of age, resident in Canada, with minor exceptions such as children of immigrants who must reside in Canada one year before family allowance is payable. The monthly allowance is $6 if the child is under 10 years of age and $8 in the age group 10 to 15.
Family assistance is payable at the same rates on behalf of children of immigrants and settlers during their first year of residence in Canada.
Youth allowances are payable at the rate of $10 per month in respect of persons resident in Canada who have attained the age of 16 years and have not attained the age of 18 years and who are in full-time attendance at a school or university or are by reasons of mental or physical infirmity precluded from attending school or university. No payments were made in respect of persons resident in the Province of Quebec. However, under authority of the Federal-Provincial Fiscal Revision Act, abatements in federal income tax otherwise payable by individuals resident in that
May 8, 1972
[Stage Direction]
province were allowed in compensation of the fact that the payment of youth allowances had been assumed by the province and to allow for the imposition of the required provincial income taxes.
TABLE 28 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Welfare services-			
Family allowances	557.9	554.5	-3.4Youth allowances	58.0	59.8	1.8Family assistance^)	2.7	2.2	-0.5Canada assistance plan-payments to provinces	391.6	462.4	70.8Other	20.3	26.1	5.81,030.5	1,105.0	7 4.5Health insurance and resources-	Government's contributions under the Hospital Insurance and Diagnostic Services Act	734.3	850.6	116.3Health resources fund	37.5	37.0	-0.5Medical Care Act	400.5	576.5	176.0General health and construction grants to provinces	19.6	16.0	-3.6Other	1.4	1.9	0.51,193.3	1,483.0	288.7Medical services	45.4	47.0	1.6Health services	6.5	8.0	1.5Food and drug services	15.6	19.0	3.4Fitness and amateur sport	5.3	8.0	2.7Administration and general	7.0	10.0	3.02,303.6	2,679.0	375.4Medical Research Council-	Scholarships and grants in aid of research	34.0	34.5	0.5Administration	0.4	0.5	0.134-4	35.0	0.62,338.0	2,714.0	376.0
(1)For comparative purposes, Welfare Grants in 1970-71 are included in other welfare services.
TABLE 29 (in millions of dollars)
Fiscal year ended March 31, 1972 (preliminary)				
Family allow- ances	Family assist- ance	Youth allow- ances	TotalNewfoundland	... 17.0	(1)	2.1	19.1Nova Scotia	... 20.9	(1)	3.2	24.1Prince Edward Island....	... 3.1	(1)	0.5	3.6New Brunswick	... 17.7	(1)	2.8	20.5Quebec	... 155.9	0.3	156.2Ontario	... 191.8	1.2	28.7	221.7Manitoba	... 24.7	0.1	3.9	28.7Saskatchewan	... 24.1	(1)	4.0	28.1Alberta	... 44.5	0.2	6.6	51.3British Columbia	... 53.1	0.4	7.9	61.4Yukon and Northwest Territories	... 1.7	(1)	0.1	1.8554.5	2.2	59.8	616.5
<!>Less than $50,000.
Canada Assistance Plan
Payments to the provinces under the Canada Assistance Plan are $462 million compared with $392 million in 1970-71. The Canada Assistance Plan Act which was enacted in 1966 authorizes the federal government to enter into agreements with the provinces for sharing the costs of assistance and welfare services provided by the provinces, territories and municipalities to persons in need. The rate of the federal contribution is 50 per cent of the shareable costs; the rates of assistance granted and the specific conditions of eligibility applied are determined by the provinces and their municipalities and take into account the budgetary requirements as well as the income and resources of the applicants. Contributions under this plan have replaced certain contributions which formerly had been made under the Old Age Assistance Act, the Disabled Persons Act, the Blind Persons Act and the Unemployment Assistance Act. Under a federal-provincial agreement the Province of Quebec has opted out of a major portion of this program.
[Stage Direction]
May 8, 1972
TABLE 30 (in millions of dollars)
Canada Assistance Plan	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- imary)	
Newfoundland	. 22.0	24.8	2.8Nova Scotia	. 16.7	19.5	2.8Prince Edward Island	. 3.8	4.3	0.5New Brunswick	. 15.2	18.7	3.5Quebec	0.4	0.4Ontario	. 176.4	211.3	34.9Manitoba	. 28.2	35.4	7.2Saskatchewan	. 20.6	24.7	4.1Alberta	. 39.3	44.6	5.3British Columbia	. 68.2	76.8	8.6Yukon and Northwest Territories...	. 1.2	1.9	0.7391.6	462.4	70.8
Hospital Insurance and Diagnostic Services Act
Contributions of $850 million to the provinces in 1971-72 under this Act are $116 million more than in 1970-71. Under federal-provincial agreement the Province of Quebec has opted out of this program.
TABLE 31 (in millions of dollars)
Fiscal year ended
Government's Contributions UNDER THE Hospital Insurance and Diagnostic Services Act	March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Newfoundland	24.0	27.3	3.3Nova Scotia	37.5	42.9	5.4Prince Edward Island	4.8	5.2	0.4New Brunswick	28.1	33.7	5.6Ontario	368.8	434.0	65.2Manitoba	46.9	53.4	6.5Saskatchewan	44.0	49.9	5.9Alberta	82.5	91.4	8.9British Columbia	95.5	110.0	14.5Yukon and Northwest Territories	2.2	2.8	0.6734.3	850.6	116.3
Medical Care Act
The Medical Care Act authorizes the payment of contributions by Canada towards the cost of insured medical services incurred by provinces pursuant to provincial medical care insurance plans.
The Provinces of Saskatchewan and British Columbia became participating provinces effective July 1, 1968; Nova Scotia, Newfoundland and Manitoba
effective April 1, 1969; Alberta effective July 1, 1969; Ontario effective October 1, 1969; Quebec effective November 1, 1970; Prince Edward Island effective December 1,1970; New Brunswick effective January 1, 1971 and Northwest Territories effective April 1,1971.
Payments of $576 million are $176 million higher than in 1970-71.
TABLE 32 (in millions of dollars)
Contributions to Provinces under the Medical Care Act	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Newfoundland	. 12.3	14.4	2.1Nova Scotia	. 17.8	20.7	2.9Prince Edward Island	. 0.8	2.9	2.1New Brunswick	. 3.4	16.2	12.8Quebec	. 56.1	159.8	103.7Ontario	. 174.4	203.7	29.3Manitoba	. 23.2	27.5	4.3Saskatchewan	. 22.5	25.4	2.9Alberta	. 38.1	45.0	6.9British Columbia	. 51.9	60.0	8.1Northwest Territories	0.9	0.9400.5	576.5	176.0
Health resources fund
The Health Resources Act provides for the establishment of a health resources fund to assist provinces in the acquisition, construction and renovation of health training facilities and research institutes.
Expenditures are $37 million, approximately the same as in 1970-71.
TABLE 33 (in millions of dollars)
Fiscal year ended
Contributions to Provinces UNDER THE Health Resources Fund Act	March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Newfoundland	0.1	0.7	0.6Nova Scotia	
Prince Edward Island	0.4 (i)	1.2	0.8New Brunswick	0.2	-0.2Quebec	8.7	7.6	-1.1Ontario	19.5	17.0	-2.5Manitoba	0.8	0.7	-0.1Saskatchewan	1.7	2.9	1.2Alberta	4.8	4.6	-0.2British Columbia	1.3	2.3	1.037.5	37.0	-0.5
(''Less than $50,000.
May 8, 1972
[Stage Direction]
National Revenue
Expenditures of the Department of National Revenue are $182 million compared with $159 million in 1970-71.
Outlays of $85 million in respect of the collection of customs import duties, excise taxes and excise duties are $10 million higher and outlays of $97 million in respect of taxation are $13 million more than in 1970-71.

[Stage Direction]
(in millions of dollars)
National Revenue	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Customs and excise	.... 74.4	84.5	10.1Taxation	.... 84.0	97.0	13.0Tax Review Board	.... 0.4	0.5	0.1158.8	182.0	23.2
Parliament
Costs of Parliament of $34 million are $7 million more than in 1970-71.
TABLE 35 (in millions of dollars)
Parliament	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
House of Commons	
21.0	27.8	6.8The Senate	
5.1	5.3	0.2Library of Parliament	
1.1	1.3	0.227.2	34.4	7.2
Post Office
Gross expenditures of the Post Office Department total $495 million in 1971-72 compared with $449 million in 1970-71.
Salaries and allowances are $361 million, $30 million higher than in 1970-71 and costs of transportation of mail are $98 million, $2 million higher than in 1970-71.
However, as authorized by the Post Office Act, remuneration of postmasters and staffs at revenue and semi-staff offices and certain other disbursements are paid from revenue. These payments amounted to $56 million in 1971-72 ($55 million in 1970-71). Also, Post Office vote 1 authorized that revenue arising from services provided thereunder be credited thereto; this amounts to $27 million compared with $26 million in 1970-71.
Consequently net expenditures charged to budgetary appropriations are $412 million compared to $369 million in 1970-71.
TABLE 36 (in millions of dollars)
	Fiscal year ended March 31		Increase
Post Office	1971	1972 (prelim- inary)	decrease (-)Operating expenditures- Salaries and allowances- Headquarters, regional and district offices, staff post offices and railway mail services	281.8	312.5	30.7Postmasters and staff-	Revenue offices	13.4	12.0	-1.4Semi-staff offices	29.6	29.6	Sub postmasters	6.4	7.2	0.8SSI. 2	S61.S	S0.1Transportation of mail- Rail	11.6	10.9	-0.7Land	51.5	52.3	0.8Air	27.1	28.8	1.7Water	1.5	1.3	-0.2Payments to foreign postal administrations 	4.5	4.8	0.396.2	98.1	1.9Other	17.0	28.5	11.5444.4	487.9	43.5Capital expenditures	4.7	7.0	2.3Grants and contributions	0.1	0.1	Gross expenditure	449.2	495.0	45.8Less:	Revenue credited to appropriations.	-25.5	-27.0	-1.5Revenue charged to expenditure under the Post Office Act	-55.1	-56.0	-0.9Net expenditure	368.6	412.0	43.4
May 8, 1972
As net Post Office receipts total $400 million as shown in the revenue section of this report and net expenditures are $412 million there is a net operating deficit of $12 million for 1971-72. In 1970-71 net receipts of $338 million and net expenditures of $369 million resulted in a net operating deficit of $31 million.
However, it is to be noted that post office expenditures do not reflect any charges for premises occupied by the Post Office nor for certain accounting and miscellaneous services provided by other departments, nor does post office revenue reflect any receipts from the franking privilege covering parliamentary and departmental mail or other miscellaneous services provided for other departments and agencies.
Privy Council
Expenditures for the Privy Council, including those for the Chief Electoral Officer, the Commissioner of Official Languages, the Economic Council of Canada, the Public Service Staff Relations Board and the Science Council of Canada, total $15 million, $2 million more than in 1970-71. Expenditures in respect of Central Mortgage and Housing Corporation which were reported under Privy Council in 1970-71 are now reported under the Department of Urban Affairs and Housing.
TABLE 37 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Privy Council	7.2	8.2	1.0Chief Electoral Officer	1.2	1.2	Commissioner of Official Languages..	0.4	1.0	0.6Economic Council of Canada	1.7	1.7	Public Service Staff Relations Board	1.3	1.6	0.3Science Council of Canada	1.2	1.3	0.113.0	15.0	2.0
Public Works
Expenditures of this department total $343 million compared with $331 million in 1970-71. Expenditures for accommodation services at $264 million are $45 million more than in the previous year and contributions to provinces under terms of Canada Highway Act at $2 million are less than in 1970-71.	the Trans-$38 million
TABLE 38	
fin millions of dollars)
	Fiscal year ended	
	March 31	Increase
Public Works		or
	1972	decrease
	1971 (prelim-	(-)
	inary)	
Accommodation services-
General purpose buildings	152.9	178.8	25.9Single purpose buildings	58.0	72.7	14.7Other	7.5	12.0	4.5Transportation and other engineering services-	218.4	288.5	45.1Contributions to provinces under terms of the Trans-Canada Highway Act	39.6	2.0	-37.6Other	12.4	14.0	1.652.0	16.0	-36.0Marine services	34.6	34.6	Professional and technical services. ..	13.5	15.2	1.7Administration and general	12.2	13.7	1.5330.7	343.0	12.3
Regional Economic Expansion
Expenditures for the Department of Regional Economic Expansion, including those for the Cape Breton Development Corporation, total $316 million compared with $298 million in 1970-71. Expenditures in respect of the National Capital Commission which were reported under this heading in 1970-71 are now reported under the Department of Urban Affairs and Housing. Departmental expenditures are $276 million compared with $261 million in 1970-71 and include $97 million for industrial incentives ($62 million in 1970-71), $81 million for social adjustment and rural economic development ($76 million in 1970-71), $78 million for infrastructure assistance ($107 million in 1970-71) and $20 million for development planning ($15 million in 1970-71).
Payments to the Cape Breton Development Corporation total $40 million compared with $37 million in 1970-71.
May 8, 1972
[Stage Direction]
TABLE 39 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Department- Development planning	15.4	24.9	9.5Industrial incentives	62.0	97.0	35.0Infrastructure assistance	107.1	65.1	-42.0Social adjustment and rural economic development	76.0	89.0	13.0260.5	276.0	15.6Cape Breton Development Corporation- Payments to the corporation covering mining losses	25.8	28.0	2.2Payment to the corporation under sections 19 and 24 of the Act	11.5	12.0	0.5S7.S	1,0.0	2.7297.8	316.0	18.2
Secretary of State
Included under this heading are expenditures of the Department of the Secretary of State and those in respect of the Canada Council, the Canadian Broadcasting Corporation, the Canadian Film Development Corporation, the Canadian Radio-Television Commission, the Company of Young Canadians, the National Arts Centre Corporation, the National Film Board, the National Library, the National Museums of Canada, the Public Archives, the Public Service Commission and the Office of the Representation Commissioner.
Expenditures total $848 million compared with $708 million in 1970-71.
Post-secondary education payments to provinces of $450 million are $62 million higher than in 1970-71, expenditures for the bilingualism development of $74 million are $21 million higher and expenditures for the citizenship development of $37 million are $29 million higher than in 1970-71.
TABLE 40 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Department- Post-secondary education payments to provinces	388.2	450.0	61.8Bilingualism development	53.4	74.1	20.7Citizenship	8.1	37.0	28.9Arts and culture	6.8	1.0	-5.8Translation bureau	8.6	10.4	1.8Centenary of British Columbia....	0.2	9.0	8.8Administration and general	2.9	3.0	0.11,68.2	581,. 5	116.SCanada Council	24.2	26.0	1.8Canadian Broadcasting Corporation..	166.0	181.0	15.0Canadian Film Development Corporation 	1.0	1.0	Canadian Radio-Television Commission 	3.3	4.0	0.7Company of Young Canadians	1.9	1.9	National Arts Centre Corporation	2.6	2.8	0.2National Film Board	10.4	11.0	0.6National Library	2.5	4.0	1.5National Museums of Canada	8.2	10.0	1.8Public Archives	3.7	3.7	Public Service Commission	15.8	18.0	2.2Office of the Representation Commissioner	0.1	0.1	707.9	848.0	140.1
Solicitor General
Expenditures of the Department of the Solicitor General including net expenditures for the Royal Canadian Mounted Police total $265 million, $42 million more than the 1970-71 total. Gross expenditures of the Royal Canadian Mounted Police are $227 million but receipts of $49 million arising mainly from policing services provided to certain provinces, territories and municipalities result in net expenditures of $178 million. In 1970-71 gross expenditures were $188 million, receipts were $42 million resulting in net expenditures of $146 million.
Expenditures of $85 million for correctional services are $10 million higher than in 1970-71.
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May 8, 1972
TABLE 41 (in millions of dollars)
	Fiscal year ended March 31		Increase
SoLiciiuh General / /	1971	1972 (prelim- inary)	decrease (-)
Royal Canadian Mounted Police-			
Law enforcement-			
Police services under contract	76.4	91.0	14.6Enforcement of federal statutes and executive orders	40.3	52.0	11.7Administration	18.8	21.6	2.8Support services	13.0	15.4	2.4National police services	8.2	14.0	5.8156.7	194.0	S7.SPensions and other benefits- Pensions	7.1	7.1	RCMP superannuation account-	Government's contribution....	9.1	11.3	2.2Amortization of deferred charges	11.2	10.3	-0.9Additional interest	2.3	2.6	0.3Other	1.7	1.7	SI.4	SS.O	1.6188.1	227.0	38.9Less: Receipts and revenue credited to appropriations	-41.8	-48.6	-6.8146.3	178.4	32.1Correctional services-	Care of inmates	51.9	56.0	4.1Rehabilitation of inmates	12.9	16.6	3.7Parole and community services..	4.6	6.0	1.4Administration	5.7	6.4	0.776.1	85.0	9.9Administration	1.4	1.6	0.2222.8	265.0	42.2
Supply and Services
Expenditures under this heading including those for the Department of Supply and Services, Information Canada, the Canadian Commercial Corporation and the Canadian Arsenals Limited total $80 million compared with $75 million in 1970-71.
Expenditures of the supply component of the department are $22 million the same as in 1970-71 and for the services component are $42 million compared with $37 million.
TABLE 42 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Supply- Purchasing	11.7	11.6	-0.1Material management	4.9	4.9	Program administration	3.4	3.4	Other	1.6	1.6	SI.6	SI.6	-0.1Services- Program administration	11.5	13.0	1.5Pay and employee benefit administration 	8.5	10.0	1.5Management services	5.5	6.0	0.5Payment and reporting services	2.8	3.0	0.2Social and economic assistance payments administration	6.9	8.0	1.1Government of Canada Accounting.	1.3	2.0	0.7S6.5	4S.0	5.5Administration	4.2	4.0	-0.262.3	67.5	5.2Information Canada	7.0	7.5	0.5Canadian Commercial Corporation...	3.9	3.5	-0.4Canadian Arsenals Limited	1.5	1.5	74.7	80.0	5.3
Transport
Expenditures of the Department of Transport including those in respect of the Canadian National Railways, the Canadian Transport Commission, the National Harbours Board and The St. Lawrence Seaway Authority total $494 million compared with $434 million in 1970-71. In 1971-72, meteorological services, formerly under the air services program, were
May 8, 1972
[Stage Direction]
transferred to the Department of Environment. Prior year's figures have been adjusted for comparative purposes.
Department
Expenditures of $100 million for marine services are $9 million higher than in 1970-71, $72 million for surface transportation are $22 million higher and $157 million for air services are $33 million higher.
Canadian National Railways
The 1971 deficit of the Canadian National Railways at $24 million, to be charged to budgetary expenditure, is $6 million less than the 1970 deficit of $30 million which was charged to budgetary expenditure in 1970-71.
Canadian Transport Commission
Expenditures of the Commission in 1971-72 in the amount of $110 million are $8 million less than in 1970-71. Payments under the National Transportation Act are $52 million ($66 million in 1970-71), contributions to the railway grade crossing fund are $20 million ($20 million in 1970-71) and payments under the Maritime Freight Rates Act are $14 million ($14 million in 1970-71).
National Harbours Board
Non-active advances to the Board to be charged to budgetary expenditure are $2 million, approximately the same amount as in 1970-71.
The St. Lawrence Seaway Authority
Budgetary expenditures in respect of the Authority are $14 million, $4 million higher than in the previous fiscal year. The 1971 operating deficit of the Welland Canal of $9 million, charged to budgetary expenditure, is $1 million more than the 1970 deficit charged in 1970-71 and other expenditures of $5 million are $3 million higher than in 1970-71.
TABLE 43 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Marine services- Administration	3.7	4.0	0.3Terminal facilities*1*	-1.8	-2.0	-0.4Way facilities	84.5	93.0	8.5Marine regulations	4.3	5.0	0.790.9	100.0	9.1Surface transportation- Ferry services (C.N.R.)	32.0	35.2	3.2Supplementary pensions	6.2	8.1	1.9Other	11.4	28.3	16.949.6	71.6	tt.OAir services- Airports and associated ground services 	32.2	38.0	5.8Air navigational services	63.2	93.6	30.4Regulatory services	13.1	9.0	-4.1Construction services	7.0	8.0	1.0Administration	9.0	8.8	-0.2194.5	157.4	St.9Transportation development	5.0	5.0Administration	8.5	10.0	1.5273.5	344.0	70.5Canadian National Railways operating deficit	29.7	24.2	-5.5Canadian Transport Commission- Payments under the National Transportation Act	65.7	52.3	-13.4Contributions to the railway grade crossing fund	20.0	20.0	Steamships subventions for coastal services	6.0	6.0	Maritime Freight Rates Act	14.0	14.0	Subsidies to regional air carriers. . .	1.8	2.0	0.2Other	10.5	15.7	5.2118.0	110.0	-8.0National Harbours Board	2.5	2.2	-0.3The St. Lawrence Seaway Authority-Welland canal deficit	8.2	8.9	0.7Other	1.9	4.7	2.810.1	IS.6	3.5433.8	494.0	60.2
<*>
Negative amounts as vote-netting revenue exceeds expenditure by amounts shown.
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May 8, 1972
Treasury Board
Expenditures of the Treasury Board, including those in respect of the National Research Council, are $445 million compared with $463 million in 1970-71.
The government's outlays in respect of the public service pension accounts are $270 million, $20 million more than in 1970-71. Contributions to the public service superannuation account, in an amount equal to the estimated current and prior service payments of individuals, are $88 million compared with $86 million in 1970-71. A further amount of $86 million, to cover the annual amortization charge in respect to actuarial deficiences arising out of salary increases and the actuarial deficiency revealed by the quinquennial evaluation made as at December 31, 1967, is included in budgetary expenditures. In 1970-71 amortization charges were $85 million. Also included in 1971-72 expenditures is $65 million for additional interest in respect of the superannuation account; in 1970-71 additional interest was $50 million.
Expenditures in respect of the Canada and Quebec pension plans total $19 million the same as in 1970-71.
Contributions of $20 million in respect of public service social insurance are $3 million higher than in 1970-71.
An amount of $15 million was included in budgetary expenditure and credited to the liability account "reserve for salary revisions" to cover salary revisions in respect of 1971-72 and prior fiscal years. The comparable amount in 1970-71 was $65 million. The provision for the reserve included in Vote 5, Appropriation Act No. 3, 1971 has been cancelled by Vote 5b, Appropriation Act No. 1, 1972.
National Research Council
Expenditures of the National Research Council are $129 million compared with $123 million in 1970-71.
Outlays for scholarships and grants and assistance towards research in industry total $75 million, $3 million more than in 1970-71.
TABLE 44 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Public service pensions-			
Superannuation account-			
Government's contribution	85.6	88.0	2.4Amortization of deferred charges	84.8	86.0	1.2Government's contribution to sup-	plementary retirement benefit	plan	8.2	8.8	0.6Additional interest	49.5	65.0	15.5228.1	247.8	19.7Canada and Quebec pension plans. .	18.8	19.0	0.2Other	3.8	3.6	-0.2250.7	270.4	19.7Public service social insurance	17.0	20.0	3.0Reserve for salary revisions	65.0	15.0	-50.0Administration and general	7.8	10.6	2.8340.5	316.0	-24.5National Research Council of Canada	Operating expenditures	46.6	48.0	1.4Capital expenditures	4.7	6.0	1.3Grants and contributions	71.6	75.0	3.4122.9	129.0	6.1463.4	445.0	-18.4
Urban Affairs and Housing
This is a new department and includes budgetary expenditures in respect of Central Mortgage and Housing Corporation and the National Capital Commission.
Expenditures in respect of Central Mortgage and Housing Corporation at $62 million are $15 million more than in 1970-71 and expenditures in respect of the National Capital Commission at $48 million are $19 million more than in 1970-71.
May 8, 1972
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TABLE 45 (in millions of dollars)
	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 prelim- inary	
Ministry of State for Urban Affairs... Central Mortgage and Housing Corporation- Housing research and community	2.0	2.0planning	
Public housing projects and land	4.7	6.0	1.3development	
Municipal sewage treatment assist-	9.4	14.9	5.5ance	6.9	16.0	9.1Urban renewal assistance	26.0	23.5	-2.5Loss on mortgage sales	2.0	2.0National Capital Commission-	47.0	62.4	15.4Operating expenditures	
Payment to the national capital	11.3	12.0	0.7fund	17.1	35.6	18.528.4	47.6	19.275.4	112.0	36.6
Veterans Affairs
Expenditures of the Department of Veterans Affairs total $427 million compared with $410 million in 1970-71.
Costs of the pensions program at $239 million are $22 million higher than in 1970-71; outlays for welfare services at $99 million are $11 million less; and outlays for treatment services at $71 million are $5 million higher than in 1970-71.
TABLE 46 (in millions of dollars)
Veterans Affairs	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 prelim- inary	
Pensions program- Pensions	... 212.9	234.6	21.7Administration	... 3.5	4.0	0.5216.4	238.6	22.2Welfare services	... 109.8	99.3	-10.5Treatment services	... 66.4	70.9	4.5Veterans land administration	... 10.1	11.4	1.3Administration	... 6.3	5.8	-0.5Bureau of Pensions Advocates	... 1.0	1.0	410.0	427.0	17.0

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The government's asset and liability account balances at March 31, 1972, as now estimated, the balances at March 31, 1971 and the net increases or decreases during 1971-72 are summarized in the following table:
TABLE 47 (in millions of dollars)
Balance 	
at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)Liabilities Current and demand liabilities	2,135.2	491.0	2,626.2Foreign exchange reserve accounts	888.4	252.0	1,140.4Deposit and trust accounts	439.2	130.7	569.9Annuity, insurance and pension accounts- Social security accounts	4,597.0	838.0	5,435.0Superannuation accounts	7,760.4	898.0	8,658.4Other	1,445.3	-13.8	1,431.513,802.7	1,722.2	15,524.9Undisbursed balances of appropriations 	266.6	-74.4	192.2Refundable corporation tax	3.0	-3.0	Provision for compound interest on Canada savings bonds	18.6	35.4	54.0Deferred credits	216.8	9.2	226.0Suspense accounts	4.1	0.9	5.0Unmatured debt	25,201.2	2,093.8	27,295.042,975.8	4,657.8	47,633.6Assets Current assets- Cash accounts	1,630.7	236.2	1,866.9Other	56.9	0.1	57.01,687.6	236.3	1,923.9Departmental working capital advances	215.6	6.5	222.1Foreign exchange reserve accounts- Advances to the Exchange Fund Account	4,578.4	963.0	5,541.4Canada's subscription to the International Monetary Fund	1,148.9	-7.6	1,141.35,727.3	955.4	6,682.7Canada pension plan investment fund	3,701.2	910.0	4,611.2Investments held for retirement of unmatured debt	6.9	4.1	11.0Advances, loans and investments- Domestic	12,191.4	1,630.0	13,821.4External	1,706.9	132.0	1,838.913,898.3	1,762.0	15,660.3Securities held in trust	124.5	10.9	135.4Deferred charges	743.6	172.6	916.2Capital assets	(1)	(1)Inactive loans and investments	94.8	94.8Total recorded assets	26,199.8	4,057.8	30,257.6Less: Reserve for losses on realization of assets	-546.4	-546.4Net recorded assets	25,653.4	4,057.8	29,711.2Net debt represented by excess of liabilities over net recorded assets..	17,322.4	600.0	17,922.4
<*>
Shown at nominal value of $1.
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May 8, 1972
Summary
The gross liabilities of the government are $47,633 million at March 31, 1972 compared with $42,975 million at March 31, 1971. The increase of $4,658 million is due mainly to increases of $2,094 million in unmatured debt and $1,722 million in annuity, insurance and pension accounts.
Net recorded assets at $29,711 million are $4,058 million higher than at March 31, 1971 due mainly to increases of $1,762 million in advances, loans and investments, $910 million in the Canada pension plan investment fund and $955 million in foreign exchange reserve accounts.
The net debt of Canada, or the excess of liabilities over net recorded assets, is $17,922 million at March 31, 1972 compared with $17,322 million at March 31, 1971.

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Current assets
These accounts consist of various cash accounts and the securities investment account.
Total current assets at $1,924 million are $236 million more than at March 31, 1971. The main changes are an increase of $317 million in Receiver General current deposits and a decrease of $81 million in cash in hands of collectors and in transit.

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Fiscal Year Ending March 31 Billions of Dollars


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30 25 20 I 5 10 5 0
# Preliminary
1. As shown on table "Summary of assets and liabilities". This chart does not reflect the reserve for losses on realization of assets.
May 8, 1972
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TABLE 48 (in millions of dollars)
		Net	Balance
Balance	trans-	atCurrent Assets	at	actions	March 31,March 31,	1971-72	19721971	(prelim-	(prelim-inary)	inary)Cash accounts	Receiver General current deposits-	Canada	1,233.2	316.9	1,550.1Foreign countries	21.7	0.3	22.01,254.9	817.2	1,572.1Receiver General special deposits-	Canada	1.4	1.4Foreign countries	0.2	0.21.6	1.6Other cash accounts-	Cash in hands of collectors and in	transit	320.7	-81.0	239.7Moneys received after March 31 but applicable to current year.. Post Office-cash on hand and in	35.6	35.6transit	17.1	17.1Miscellaneous	0.8	0.81,630.7	236.2	1,866.9Securities investment account	56.9	0.1	57.01,687.6	236.3	1,923.9
Departmental working capital advances
These accounts record advances outstanding at the close of the fiscal year for working funds for certain departmental activities. The balance of $222 million is $6 million higher than at March 31, 1971.
Bullion and coinage consists of separate accounts for bronze, gold, nickel and silver in which are recorded transactions in respect of purchases and sales. Debits include the cost of all coin and bullion purchased from the Royal Canadian Mint. Credits represent the face value of all coin issued to, and gold bullion transferred to, the Bank of Canada and sales of silver bullion. The balances at March 31, 1972 total $13 million compared with $12 million at March 31, 1971.
The defence production revolving fund records the cost of materials procured for use in the manufacture of defence equipment until such time as they are billed to the Department of National Defence or sold to defence contractors for use in the manufacture of defence equipment, as well as working capital loans and advances for their production. The balance at March 31, 1972 is $26 million, $10 million less than at March 31, 1971.
The stockpiling of uranium concentrates account records the acquisition of uranium concentrates in accordance with contracts entered into with the approval of the Governor in Council by Eldorado Nuclear Limited on behalf of Her Majesty in right of Canada with certain mining companies. The balance of $113 million is $12 million more than the balance at March 31, 1971.
TABLE 49 (in millions of dollars)
Balance Departmental at Working Capital Advances March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (prelim- inary)Bullion and coinage	12.0	1.0	13.0Canadian government supply services	2.9	6.1	9.0Defence production revolving fund...	36.3	-10.0	26.3Miscellaneous departmental imprest and standing advances	14.6	14.6Miscellaneous departmental accountable advances	28.0	28.0Stockpiling of uranium concentrates..	101.2	12.0	113.2Transport stores account	8.7	-1.7	7.0Other	11.9	-0.9	11.0215.6	6.5	222.1
Foreign exchange reserve accounts
Included in this category are those accounts which record transactions which affect Canada's holdings of international reserves. These accounts are advances to the Exchange Fund Account and Canada's subscription to the International Monetary Fund.
Advances to the Exchange Fund Account
Advances to the exchange fund are made for the purchase of gold and foreign exchange. Also included in this account are Special Drawing Rights (SDR's) issued by the International Monetary Fund.
During 1971-72 there is an estimated net increase in advances of $846 million. Additional SDR's during the year of $117 million bring the total SDR's to $370 million at March 31, 1972 and an overall balance in the account to $5,541 million compared with $4,578 million at March 31, 1971.
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May 8, 1972
Canada's subscription to the capital of the International Monetary Fund
This subscription is Canada's quota in the International Monetary Fund. In this organization, member's quotas are set in U.S. dollars and are normally paid in gold (25 per cent) and the remainder (75 per cent) in the member's currency. If the fund does not require a currency, this portion of a member's quota may be paid in the form of non-interest-bearing notes payable on demand. These notes are recorded in the government's liabilities. The balance at March 31, 1972 is $1,141 million compared with $1,149 million at March 31, 1971. The increase is due to revaluation adjustments.
Investments held for retirement of unmatured debt
Recorded herein are the government's holdings of the 5§ per cent loan issued August 1, 1962 and maturing August 1, 1980. These total $11 million compared with $7 million at the previous year-end.
Advances, loans and investments-Domestic
Balances in this category at March 31, 1972 total $13,821 million of which $12,004 million is in respect of crown corporations. At March 31, 1971 balances totalled $12,191 million of which $10,755 million were in respect of crown corporations.
Canada Pension Plan Investment Fund
This investment fund records securities purchased under the Canada Pension Plan and the sale of these securities. The amount by which the operating balance of the Canada Pension Plan Fund in any month exceeds the estimated amount required to meet all payments in the following three-month period is available for the purchase of securities of participating provinces; securities of Canada shall be purchased with the excess remaining after purchasing securities of each province as required. The holdings of $4,611 million in this account are $910 million more than at March 31, 1971.
TABLE 50 (in millions of dollars)
Canada Pension Plan Investment Fdnd	Balance at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)
Securities of-			
Newfoundland	... 70.3	17.6	87.9Nova Scotia	... 142.7	35.8	178.5Prince Edward Island	... 13.9	3.6	17.5New Brunswick	... 108.8	26.8	135.6Quebec	... 12.8	6.6	19.4Ontario	... 2,062.4	499.3	2,561.7Manitoba	... 217.8	53.7	271.5Saskatchewan	... 174.7	42.7	217.4Alberta	... 341.1	87.1	428.2British Columbia	... 535.9	131.2	667.1Government of Canada	... 20.8	5.6	26.43,701.2	910.0	4,611.2
TABLE 51 (in millions of dollars)
Balance Advances, Loans and at Investments-Domestic March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)Loans to, and investments in, crown corporations- Canada Development Corporation.	25.0	25.0Canadian National Railways	2,122.0	203.0	2,325.0Air Canada	240.7	27.0	267.7Central Mortgage and Housing Corporation	5,038.1	668.0	5,706.1Farm Credit Corporation	1,176.8	30.0	1,206.8The St. Lawrence Seaway Authority	618.6	54.0	672.6Atomic Energy of Canada Limited	504.3	113.0	617.3Export Development Corporation..	354.4	106.0	460.4National Harbours Board	270.3	3.0	273.3National Capital Commission (excluding Greenbelt)	23.4	1.6	25.0Canadian Broadcasting Corporation	9.0	9.0Other	248.5	-7.5	241.010,606.1	1,223.1	11,829.2Recovery likely to require parliamentary appropriations- Canadian Broadcasting Corporation 	111.0	26.0	137.0National Capital Commission (Greenbelt)	38.1	-0.1	38.0149.1	25.9	175.010,755.2	1,249.0	12,004.2Loans to provincial governments	360.0	109.0	469.0Unemployment insurance account....	100.0	100.0Veterans Land Act Fund	492.3	12.0	504.3Municipal Development and Loan Board-advances	263.6	-10.0	253.6Miscellaneous	320.3	170.0	490.312,191.4	1,630.0	13,821.4
May 8, 1972
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Canadian National Railways (including Air Canada)
Outstanding advances and loans of $2,593 million to the Canadian National Railways (including Air Canada) are $230 million more than at March 31, 1971.
During 1971-72 the government made available $228 million to the Canadian National Railways and $27 million to Air Canada and received payments of $24 million from the C.N.R. and $1 million from Air Canada.
The government made advances of $177 million to the C.N.R. for capital purposes and loans of $14 million to Air Canada for capital purposes.
To assist the C.N.R. to finance further capital expenditure during the year, the government purchased $37 million of the 4 per cent preferred stock of the company. This stock is issued under the authority of the Canadian National Railways Capital Revision Act, 1952 in an amount equal to 3 per cent of the gross revenue of the company.
At March 31, 1971 temporary loans of $20 million were outstanding to the C.N.R. in respect of its 1971 deficit. Additional loans of $13 million were advanced during the year for its 1971 operations. The 1971 deficit of $24 million will be charged to the 1971-72 budgetary expenditure by parliamentary approval leaving a balance of $9 million.
TABLE 52 (in millions of dollars)
Advances to Canadian National Railways (Including Air Canada)	Balance at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)Canadian National Railways- Capital Revision Act, 1952- Preferred stock	1,204.1	36.8	1,240.9Twenty-year obligation	100.0	100.0Refunding Act, 1955	541.1	172.4	713.5Financing and Guarantee Acts	197.4	197.4Interim financing of income deficit.	20.0	-11.0	9.0Loans for maintenance, repair and acquisition of passenger equipment	1.6	-0.2	1.4Temporary loans-acquisition of bonds	40.8	5.0	45.8Canadian government railways	17.0	17.02,122.0	20S.0	2,825.0Air Canada- Financing and Guarantee Acts	239.8	14.0	253.8Interim financing	0.9	13.0	13.9240.7	27.0	267.72,362.7	230.0	2,592.7
TABLE 53 (in millions of dollars)
	Fiscal year ended	
Advances to, and Repayments by, Canadian National Railways	March 31	Increase or
		
(Including Air Canada)	1972	decrease
	1971 (prelira-	(-)
	inary)	
Advances-
Purchase of CNR preferred stock..	33.5	36.8	3.3Temporary loans to CNR	9.5	5.0	-4.5Refunding of debt (CNR)	40.0	172.4	132.4Financing and Guarantee Acts (Air Canada)	117.0	14.0	-103.0Interim financing-	Air Canada	3.9	13.9	10.0Canadian National Railways	22.0	13.2	-8.8225.9	255.3	29.4Repayments-	Maintenance, repair and acquisition of passenger equipment	-0.4	-0.2	0.2Interim financing-	Air Canada	-9.6	-0.9	8.7Canadian National Railways. . . .	-12.0	-24.2	-12.2-22.0	-25.S	-S.S203.9	230.0	26.1
At March 31, 1971 temporary loans of $1 million were outstanding to Air Canada in respect of its 1971 operations and have been repaid by the company. An additional $14 million was advanced during the year for its 1971 operations.
Central Mortgage and Housing Corporation
The balance of $5,706 million at March 31, 1972 is $668 million more than at March 31, 1971. Loans and advances of $870 million are partly offset by repayments of $202 million.
Advances include $731 million for direct lending, limited dividend and public housing, $61 million for sewage treatment projects, $39 million for university housing projects, $31 million for federal-provincial projects and $8 million for urban renewal.
Repayments include $172 million for direct lending, limited dividend and public housing, $19 million for sewage treatment, $6 million for federal-provincial projects and $1 million for university housing projects.
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May 8, 1972
TABLE 54 (in millions of dollars)
Advances to Central Mortgage and Housing Corporation	Balance at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)Direct lending, limited dividend and public housing	4,129.0	559.0	4.668.0Federal-provincial projects-housing..	228.8	25.4	254.2Loan and mortgage fund	4.7	-0.2	4.5Municipal sewage treatment	236.2	41.8	278.0University housing	339.1	37.1	376.2Housing projects	60.5	-2.3	58.2Urban renewal	14.8	7.2	22.0Capital stock	25.0	25.05,038.1	668.0	5,706.1TABLE 55 (in millions of dollars)	Advances to, and Repayments by,	Fiscal year ended March 31	Increase or decrease (-)Housing Corporation	1971	1972 (prelim- inary)	Advances-	Direct lending, limited dividend	and public housing	579.0	731.1	152.1University housing projects	30.0	38.5	8.5Federal-provincial projects	9.0	31.5	22.5Urban renewal	61.0	8.0	-53.0Housing projects	63.0	-63.0Municipal sewage treatment	61.0	61.0742.0	870.1	128.1Repayments-	Direct lending, limited dividend	and public housing	-122.6	-172.1	-49.5University housing projects	-6.8	-1.4	5.4Federal-provincial projects	-0.5	-6.1	-5.6Urban renewal	-1.9	-0.8	1.1Housing projects	-11.4	-2.3	9.1Sewage treatment projects	-2.3	-19.2	-16.9Loan and mortgage purchase fund..	-0.2	-0.2	-145.7	-202.1	-56.4596.3	668.0	71.7
Farm Credit Corporation
The government provides loans to the corporation which makes loans on farm property. The balance of $1,207 million consists of the crown's investment of $46 million in the corporation and $1,161 million in loans. At March 31, 1971 the balance of $1,177 million consisted of $45 million [DOT] capital and $1,132 million in loans.
The St. Lawrence Seaway Authority Outstanding obligations of $673 million in this account consist of $506 million in interest-bearing loans, $75 million in interest-free loans and $92 million in deferred interest. At March 31, 1971 outstanding obligations were $619 million and consisted of $460 million in interest-bearing loans, $75 million in interest-free loans and $84 million in deferred interest.
Atomic Energy of Canada Limited The balance of $617 million compared with $504 million at March 31, 1971. Included in these balances is $15 million in capital stock.
Export Development Corporation The outstanding balance of $460 million in this account includes $15 million in capital stock, $15 million for working capital and $430 million for loans under section 29A of the Export Development Act. Comparable amounts at March 31, 1971 were $15 million in capital stock, $15 million in working capital and $324 million for loans.
National Harbours Board
Expenditures for capital purposes at harbour sites under the jurisdiction of the National Harbours Board fall into two general categories: (a) non-active loans charged to the net debt of Canada, and (b) investments included in the active assets of the Government of Canada.
At March 31, 1972 active assets of $273 million are $3 million more than at March 31, 1971.
National Capital Commission
Outstanding loans to the Commission to acquire property total $63 million, of which $38 million is in respect of the "Greenbelt" section of the National Capital Area. These latter loans are likely to require parliamentary appropriations in subsequent fiscal years. At March 31, 1971 outstanding loans were $61 million of which $38 million was for "Greenbelt" property.
Canadian Broadcasting Corporation
There is no change in the working capital, the balance remaining at $9 million. Loans to the Corporation for capital purposes total $137 million compared with $111 million at March 31, 1971. Recovery of these loans is likely to require parliamentary appropriations in subsequent fiscal years.
Other domestic loans
Loans to provincial governments in the amount of $469 million are $109 million higher than the March
May 8, 1972
[Stage Direction]
31, 1971 balance. The increase is due mainly to the Federal-Provincial Loans Program, 1971 for the purpose of assisting in the creation of employment. Advances under the Veterans Land Act at $504 million are $12 million more than at March 31, 1971, advances under the Municipal Development and Loan Act at $254 million are $10 million less than at March 31, 1971 and advances of $100 million to the unemployment insurance account were made in 1971-72 for which there were no comparable amounts in the previous fiscal year.
Advances, loans and investments-External
Balances in this category total $1,839 million compared with $1,707 million at March 31, 1971.
The United Kingdom repaid $21 million of the $1,185 million loan made under the United Kingdom Financial Agreement Act, 1946, reducing the principal to $997 million at March 31, 1972.
Advances under Part II of the Export Credits Insurance Act to Belgium, France and The Netherlands to assist them in the purchasing of goods in Canada are reduced by payments of $2 million by Belgium, $8 million by France and $5 million by The Netherlands bringing the balance to $85 million at March 31, 1972.
TABLE 56 (in millions of dollars)
Balance Advances, Loans and at Investments-External March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)Loans to national governments- United Kingdom	1,017.7	-20.9	996.8France	59.2	-8.5	50.7The Netherlands	27.5	-4.5	23.0Belgium	13.8	-2.3	11.5Special loan assistance to developing countries	287.7	144.0	431.7Other	0.2	0.21,406-1	107.8	1,613.9Canada's subscription to capital of- Asian Development Bank	13.4	13.4Caribbean Development Bank	1.8	1.8International Bank for lteconstruc tion and Development	85.0	85.0International Development Association 	164.7	50.0	214.7International Finance Corporation...	3.5	3.5m.4	50.0	318.4Working capital advances and loans to international organizations	6.6	6.6Investments in United States dollar securities issued by other than the Government of Canada	25.8	-25.8	1,706.9	132.0	1,838.9
Special loan assistance to developing countries increased by $144 million during the year to $432 million and Canada's subscriptions to the capital of international organizations increased by $50 million to $318 million.
Securities held in trust
Recorded herein are the security holdings in connection with various deposit and trust, and annuity, insurance and pension accounts. The balance at March 31, 1972 is $135 million compared with $125 million at March 31, 1971.
Deferred charges
These consist of the unamortized balances of actuarial deficiences in the superannuation accounts and unamortized loan flotation costs. The balances in these accounts total $916 million compared with $744 million at March 31, 1971.
Unamortized 'portions of actuarial deficiencies
These accounts record the unamortized portions of the actuarial deficiencies in the superannuation accounts in respect of the public service, the Canadian forces and the Royal Canadian Mounted Police. Actuarial evaluations are made quinquennially, the next of which is being made as at December 31, 1970 for the Canadian forces superannuation account, as at December 31, 1972 for the public service superannuation account and as at December 31, 1969 for the RCMP superannuation account. Any actuarial deficiencies revealed when the evaluation is made will be credited to the superannuation account and charged to unamortized actuarial deficiencies and amortized to budgetary expenditure in five equal annual instalments commencing in the fiscal year in which the credit has been made to the superannuation account. Also, the cost for benefits payable under the superannuation acts as a result of the authorization of salary increases is credited to the superannuation accounts and charged to unamortized actuarial deficiencies and amortized over a period of five years commencing in the year in which the increase is authorized.
The unamortized portion of the actuarial deficiency in the public service superannuation account is $400 million compared with $311 million at March 31, 1971. During the year $240 million was charged thereto as a result of salary increases and $151 million was amortized as a charge to budgetary expenditure of which $65 million was charged to interest on public debt.
[Stage Direction]
May 8, 1972
The unamortized poition of the actuarial deficiency in the Canadian forces superannuation account is $331 million compared with $227 million at March 31, 1971. During the year $229 million was charged thereto as a result of salary increases and $125 million was amortized to budgetary expenditure of which $59 million was charged to interest on public debt.
The unamortized portion of the actuarial deficiency in the RCMP superannuation account is $17 million compared with $30 million at March 31, 1971. During the year $13 million was amortized to budgetary expenditure of which $3 million was charged to interest on public debt.
TABLE 57 (in millions of dollars)
Deferred Charges	Balance at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)Unamortized portions of actuarial deficiencies- Superannuation accounts- Public service	311.2	89.1	400.3Canadian forces	227.2	103.9	331.1Royal Canadian Mounted Police.	30.0	-12.9	17.1568.4	180.1	748.5Unamortized loan flotation costs	. 175.2	-7.5	167.7743.6	172.6	916.2
Unamortized loan flotation costs
This account records the residual balances of discounts, commissions, redemption bonuses and conversion premiums on loan flotations that have not been charged to budgetary expenditure. The balance of $168 million is $7 million less than at March 31, 1971.
Cost of new loans issued during 1971-72 and charged to the account total $72 million, of which $32 million in respect of treasury bills discounts will be charged to interest on public debt in 1972-73. Credits to the account were $79 million, of which $45 million is a charge to the budgetary expenditure category "annual amortization costs" and $34 million (representing discount applicable to 1971-72 on treasury bills issued in 1970-71) is a charge to the budgetary expenditure category "interest on public debt".
TABLE 58 (in millions of dollars)
	Fiscal year ended March 31 1972 1971 (preliminary)	
Balance at beginning of year			 182.8	175.2
New loan flotation costs to be amortized-		
7% May 1, 1970-February 1, 1971 -	0.5	
71% May 1, 1970-April 1, 1975		2.1	
7% May 1, 1970- September 1,1977...	1.6	
61% July 1,1970-April 1, 1972		0.6	
61% July 1, 1970-July 1, 1973		1.1	
71% July 1,1970-July 1, 1975	 71% August 15, 1970-December 15,	3.4	
1975		1.8	
6j% October 1, 1970-July 1, 1973. . .. 5\% December 15, 1970-December	0.3	
15, 1972		0.3	
6% December 15, 1970-June 15, 1974. 6f% February 15, 1971-February 15,	0.9	
1989		2.4	
Adjustments		0.6	
Treasury bills discounts	34.5	32.0Canada savings bonds	18.0	22.1h\% August 1,1971-December 1,1974 5\% August 1, 1971-December 15,	1.11972	0.15% April 1,1971-April 1, 1974	1.45j% April 1, 1971-October 1, 1976. . .	5.26i% April 1, 1971-April 1, 1980	2.95|% June 1, 1971-June 1, 1976	1.765% June 1, 1971-June 1, 1979	1.46J% August 1, 1971-August 1, 1976. .. 5i% October 1, 1971-December 1,	1.01973	
4J% December 1, 1971-December 1,	0.11974	
5f% December 15, 1971-December	0.515, 1979	2.4Less- Amortization charges- Canada savings bonds and general	68.1	71.9loans	
Discounts on treasury bills charged to	-38.7	-44.8interest on public debt	-37.0	-34.6-75.7	-79.4Increase or decrease (-) during year...	-7.6	-7.5Balance at end of fiscal year	175.2	167.7
Capital assets
Assets of the government such as land, buildings, works and equipment, etc. that are charged to budgetary expenditure at the time of acquisition or construction, are included in this category and are shown on the statement of assets and liabilities at a nominal value of $1.
May 8, 1972
[Stage Direction]
Inactive loans and investments
Loans and investments which are not currently revenue-producing or realizable are recorded herein. Included are the loans of $49 million to China under the Export Credits Insurance Act, loans totalling $24 million and $7 million made to Roumania and Greece, respectively, in 1919-20 and 1920-21 and advances of $15 million in respect of the implementation of guarantees (Ming Sung Industrial Company Limited).
Reserve for losses on realization of assets
There has been no change in this reserve since the fiscal year 1956-57. The balance is $546 million.
Net Debt
The net debt of Canada, or the excess of liabilities over net recorded assets, is estimated at $17,922
million as at March 31, 1972 compared with $17,322 million at March 31, 1971. The increase of $600 million reflects the 1971-72 budgetary deficit.
Liability Accounts
Current and demand liabilities
These liabilities, which consist of obligations of government payable currently or on demand, total $2,626 million compared with $2,135 million at March 31, 1971.
Outstanding cheques at $630 million are the same as at March 31, 1971 and accounts payable at $696 million are $114 million more than at the previous fiscal year-end.
Interest due and outstanding at $575 million is $249 million higher and interest accrued at $560 million is $64 million higher than at March 31, 1971.

[Stage Direction]
Fiscal Years Ending March 31 Billions of Dollars
1% OTHER LIABILITIES 2% FOREIGN EXCHANGE RESERVES 1% DEPOSIT AND TRUST ACCOUNTS CURRENT AND DEMAND LIABILITIES

[Stage Direction]
* Preliminary
30
10
25316-7
[Stage Direction]
May 8, 1972

[Stage Direction]
(in millions of dollars)
Current and Demand Liabilities	Balance at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (prelim- inary)Outstanding cheques	630.3	630.3Accounts payable	
Non-interest-bearing notes payable to	582.3	114.0	696.3international organizations	7.1	50.0	57.1Interest accrued	495.6	64.0	559.6Interest due and outstanding	325.6	249.0	574.6Matured debt outstanding	32.7	32.7Other	61.6	14.0	75.62,135.2	491.0	2,626.2
Foreign exchange reserve accounts
Included herein are $770 million in non-interestbearing notes issued to the International Monetary Fund to cover that portion of the government's subscription to the IMF not required in cash, and $370 million to cover Canada's liability for Special Drawing Rights issued by the IMF. At March 31, 1971 comparative figures were $635 million in notes and $253 million in respect of SDR's.

[Stage Direction]
(in millions of dollars)
Balance Deposit and Trust Accounts at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (prelim- inary)Deposit accounts- Provincial tax collection agreements account	86.7	115.0	201.7Guarantee deposits	119.3	15.7	135.0Crown corporations deposits	38.0	11.0	49.0Contractors holdbacks	15.9	0.1	16.0Canadian Dairy Commission	19.7	-2.0	17.7National Harbours Board	23.9	23.9Instalment purchase of bonds, public service	17.7	17.7Other	19.6	-3.0	16.6$40.8	136.8	477.6Trust accounts-	Indian band funds	31.0	-1.0	30.0Canadian Pension Commission	13.3	-0.3	13.0Prairie Farm Emergency Fund. . ..	15.2	-2.2	13.0Veterans Care Trust Fund	9.8	-0.4	9.4Other	29.1	-2.2	26.998.4	-6.1	92.3439.2	130.7	569.9
Deposit and trust accounts
Sundry funds deposited with, or held in trust by, the Receiver General for Canada for various purposes are recorded in these accounts. Total balances of $570 million are $131 million higher than at March 31, 1971.
The main change is an increase of $115 million in the provincial tax-collection agreements account bringing the balance in the account to $202 million at March 31, 1972. During the year collections of provincial income tax credited to the account totalled $2,138 million and payments to provinces charged to the account were $2,023 million.
Annuity, insurance and pension accounts
This category records the government's liability in respect of various annuity, insurance and pension accounts. These fall into two classes: social security accounts, which are the Canada Pension Plan Fund, the Old Age Security Fund and the Unemployment Insurance Account; and other accounts which include the superannuation accounts, the government annuities account and sundry insurance accounts.
TABLE 61 (in millions of dollars)
Balance Annuity, Insurance and at Pension Accounts March 31, 1971		Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)
Social security accounts-			
Unemployment Insurance Account(l)	351.3	-336.3	15.0
Less investments in bonds and ac-			
crued interest	-326.3	326.3	On deposit with Receiver General.	25.0	-10.0	15.0Canada Pension Plan Account	3,843.6	934.0	4,777.6Old Age Security Fund	728.4	-86.0	642.44,697.0	838.0	6,435.0Superannuation accounts-	Public service	3,990.0	487.0	4,477.0Canadian forces	3,570.7	388.0	3,958.7Royal Canadian Mounted Police...	199.7	23.0	222.77,760.4	898.0	8,658.4Government annuities	1,313.8	-13.8	1,300.0Miscellaneous	131.5	131.513,802.7	1,722.2	15,524.9
(1>Formerly the Unemployment Insurance Fund.
May 8, 1972
[Stage Direction]
Unemployment Insurance Account
The Unemployment Insurance Act, 1971, authorized the establishment in the accounts of Canada of an account to be known as the Unemployment Insurance Account and that the balance of the amount standing to the credit of the Unemployment Insurance Fund under the former Act on June 27, 1971, together with interest accrued thereon to that day, be credited thereto.
The Act also provides that all amounts received under the Act as or on account of premiums, fines, penalties, interest and repayment of overpayments of benefits, and all amounts collected by the Commission for services rendered to other government departments or agencies or the public, shall be paid into the Consolidated Revenue Fund and shall be credited to the Unemployment Insurance Account; that any other amounts provided out of the Consolidated Revenue Fund for any purpose related to unemployment insurance that is authorized by an appropriation by Parliament and the administration of which falls to the Commission shall be credited to the Unemployment Insurance Account; that the
Minister of Finance may authorize, in accordance with such terms and conditions and at such rates as he may prescribe, the payment of interest on the balance in the Unemployment Insurance Account, and such interest shall be credited to the account; and that there shall be charged to the account all amounts paid as or on account of benefits under this Act and the costs of administration of the Act.
The balance in the Unemployment Insurance Fund at March 31, 1971 was $351 million and consisted of $25 million on deposit with the Receiver General and $326 million in investments in Government of Canada securities plus accrued interest. As at June 27, 1971 the balance in the Fund was $272 million and consisted of $15 million on deposit with the Receiver General, $21 million on deposit with chartered banks and $236 million in investments in Government of Canada securities plus accrued interest. As of June 27, 1971 the investments were liquidated and the balance in the Fund ($272 million) was transferred to the Unemployment Insurance Account. Subsequent transactions during the year bring the balance in the account as at March 31, 1972 to $15 million.
TABLE 62 (in millions of dollars)
Unemployment Insurance Account*1'		Fiscal year ended March 31			
	1968	1969	1970	1971	1972 (preliminary;
Receipts-					
Contributions-					
Employees and employers	.... 347.4	433.1	491.8	495.2	573.0Government	.... 69.5	86.6	98.4	99.0	90.0Net income from investments	.... 15.9	18.9	27.5	29.2	14.0Advance from government	100.0Other income<2>	.... -4.3	-0.9	5.3	6.2	32.0Disbursements-	428.5	537.7	623.0	629.6	809.0Benefit payments	.... -388.6	-459.1	-542.1	-758.1	-1,122.0Administration costs	-23.3Excess of receipts ot disbursements (-)	.... 39.9	78.6	80.9	-128.5	-336.3Balance at beginning of year	.... 280.4	320.3	398.9	479.8	351.3Balance at end of year	.... 320.3	398.9	479.8	351.3	15.0Investment in bonds and accrued interest	.... -303.9	-386.8	-468.0	-326.3	Balance on deposit with the Receiver General	.... 16.4	12.1	11.8	25.0	15.0
(,)Prior to June 27, 1971 this account was known as the Unemployment Insurance Fund. <2>This item is mainly the change in unredeemed warrants and deposits from employers.
25316-7.'.
[Stage Direction]
May 8, 1972
Canada Pension Plan Account
The balance of $4,778 million is $934 million higher than the March 31, 1971 balance of $3,844 million.
Credits to the account of $1,101 million include $826 million in contributions under the Act, $270 million in interest from investments and $5 million in interest on the operating balance on deposit with the Receiver General. Charges of $167 million include $144 million in benefit payments. In 1970-71 receipts were $1,024 million and disbursements were $112 million of which $92 million were benefit payments.
The amount by which the operating balance in the account in any month exceeds the estimated amount required to meet all payments in the following three-month period is available for the purchase of securities of participating provinces. Securities of Canada shall be purchased with the excess remaining after purchasing securities of each province as required. It is estimated that securities totalling $910 million will have been purchased bringing the balance to $4,611 million at March 31, 1972.

[Stage Direction]
(in millions of dollars)
		Fiscal year ended March 31			
Canada Pensiun Plan Account	1968	1969	1970	1971	1972 (prelim- inary)
Receipts-					
Contributions	640.2	698.0	745.7	812.4	826.0Interest on investments	42.2	84.4	139.7	206.9	270.0Interest on operating balance	1.4	2.4	3.8	4.0	4.6Other	0.9	0.2	0.4	0.4	0.4684.7	785.0	889.6	1,023.7	1,101.0Disbursements-	Benefit payments	-1.3	-15.6	-47.4	-91.9	-144.0Administration expenses	-11.5	-14.4	-17.7	-20.5	-23.0-12.8	-30.0	-65.1	-112.4	-167.0Excess of receipts over payments	671.9	755.0	824.5	911.3	934.0Balance in account brought forward	680.9	1,352.8	2,107.8	2,932.3	3,843.6Balance at credit of account	1,352.8	2,107.8	2,932.3	3,843.6	4,777.6Less investments in securities held in the Canada Pension Plan	investment fund	-1,280.8	-2,023.0	-2,832.8	-3,701.3	-4,611.2Operating balance on deposit with the Receiver General	72.0	84.8	99.5	142.3	166.4
Old Age Security Fund
The Old Age Security Act, 1951, directed that this fund be established and that credits to the fund should consist of a 2 per cent sales tax, a 2 per cent (maximum tax $60) on individual incomes and a 2 per
cent tax on corporation incomes, and that pension payments of $40 per month be paid to all eligible persons over 70 years of age. Payments were effective from January 1952.
May 8, 1972
[Stage Direction]
Amendments to the Act have increased these tax rates: on individual incomes to 4 per cent effective January 1, 1964 (maximum tax $120 increased to $240 effective January 1, 1967); on corporation incomes to 3 per cent effective January 1, 1959; and on sales to 3 per cent effective April 10, 1959.
The Old Age Security Act was amended effective January 1, 1972 to provide for the repeal of these taxes and for the crediting to the fund of an amount estimated to be equal to what would have been credited to the fund had those taxes not been repealed.
Pension rates also have increased by amendments to the Act to $75 per month effective October 1, 1963, to $76.50 per month effective January 1, 1968, to $78 per month effective January 1, 1969, to $79.58 effective January 1, 1970, and to $80 effective January 1, 1971.
The Act was further amended to authorize pension payments effective January 1966 to all persons who had satisfied the residence requirements of the Act who had attained the age of 69 years on or before January 1,1966; the age limit being reduced by one year on January 1st
of each subsequent year until 1970. A further amendment in 1966-67 authorized the payment of a montly guaranteed income supplement to eligible pensioners. The amount of the supplement that may be paid to a pensioner for a month is 40 per cent of the amount of the pension that may be paid to him for that month dependent upon the amount of his income for the preceding year. The most recent amendment in 1970 fixed the maximum basic supplement at $55 per month for 1971 but provided that this maximum would be increased each year so that the combination of the universal payment of $80 and the supplement would be increased by the same percentage as the index under the Canada Pension Plan.
During 1971-72 pension payments of $2,206 million exceed receipts of $2,120 million by $86 million reducing the balance in the account to $642 million at March 31, 1972. Receipts consist of $670 million from sales tax, $1,237 million from the tax on personal incomes and $213 million from the tax on corporation income. In 1970-71 receipts of $1,914 million exceeded payments of $1,907 million.
TABLE 64 (in millions of dollars)
Old Age Security Fund		Fiscal year ended March 31			
	1968	1969	1970	1971 1972 (preliminary)	
Receipts-					
Sales tax	
544.5	528.1	577.4	573.8	670.0Personal income tax	
800.1	915.0	1,026.5	1,132.5	1,237.0Corporation income tax	
150.0	183.0	227.1	207.9	213.0[DOT]	1,494.6	1,626.1	1,831.0	1,914.2	2,120.0Disbursements-	Pension payments	
-1,153.3	-1,296.8	-1,467.0	-1,634.2	-1,681.0Guaranteed income supplement	
-234.8	-244.5	-263.5	-273.0	-525.0-1,388.1	-1,541.3	-1,730.5	-1,907.2	-2,206.0Excess of receipts over disbursements	
106.5	84.8	100.5	7.0	-86.0Balance in fund brought forward	
429.6	536.1	620.9	721.4	728.4Balance at credit of fund	
536.1	620.9	721.4	728.4	642.4
May 8, 1972

[Stage Direction]
(in millions of dollars)
Old Age Security Payments*1'	Fiscal year ended March 31		Increase or decrease (-)
	1971	1972 (prelim- inary)	
Newfoundland	. 39.7	47.0	7.3Nova Scotia	. 83.0	96.8	13.8Prince Edward Island	. 14.7	17.1	2.4New Brunswick	. 62.7	73.1	10.4Quebec	. 464.5	546.4	81.9Ontario	. 681.1	777.1	96.0Manitoba	. 106.5	122.7	16.2Saskatchewan	. 104.7	120.8	16.1Alberta	. 129.9	150.5	20.6British Columbia	. 218.8	252.8	34.0Northwest and Yukon Territories...	. 1.6	1.7	0.11,907.2	2,206.0	298.8
(''Includes $525 million in 1971-72 and $273 million in 1970-71 for
guaranteed income supplement.
The Public Service Superannuation Account The balance of $4,477 million in this account is $487 million higher than at March 31, 1971. Receipts of $606 million include employees contributions of $103 million, the government's contribution of $88 million, interest of $163 million, $240 million to provide for additional liabilities arising from salary increases and contributions of $7 million by crown corporations. Contributions by the government and crown corporations are equal to the estimated current and prior service payments by individuals in 1970-71. Disbursements of $119 million include $106 million for payment of annuities and $12 million for withdrawal of contributions.

[Stage Direction]
(in millions of dollars)
Public Service Superannuation Account		Fiscal year ended March 31			
	1968	1969	1970	1971	1972 (preliminary)
Receipts- Contributions- Employees-					
Government	... 66.0	71.6	84.9	88.1	95.0Crown corporations	... 5.2	5.1	5.3	7.4	7.6Government	... 59.6	66.0	73.5	85.6	88.0Crown corporations	... 5.0	4.8	5.3	6.6	7.4Interest	... 110.9	118.0	131.0	147.7	162.4Actuarial liability	... 21.5	121.0	215.1	161.8	244.2Other	... 2.2	3.0	1.8	1.1	1.4270.4	389.5	516.9	498.3	606.0Disbursements-	Annuities	... -68.2	-74.7	-83.3	-95.0	-105.5Withdrawals of contributions	... -10.8	-10.3	-10.5	-11.4	-12.0Other	... -5.1	-1.9	-2.1	-1.3	-1.5-84.1	-86.9	-95.9	-107.7	-119.0Excess of receipts over disbursements	... 186.3	302.6	421.0	390.6	
.0Balance in account brought forward	... 2,689.5	2.875.8	3,178.4	3,599.4	3,990.0Balance at credit of account	... 2,875.8	3,178.4	3,599.4	3,990.0	4,477.0
Canadian Forces Superannuation Account
The balance of $3,959 million in this account reflects an increase of $388 million during 1971-72.
Receipts of $489 million include $41 million in contributions by personnel, $74 million in contributions by the government, $145 million in interest and $229 million to provide for additional liabilities arising from salary increases. Government contributions are
made at the rate of if times the current and prior service contributions by personnel.
Disbursements of $101 million include $94 million in pensions and retiring allowances and $7 million in cash termination allowances and return of contributions.
In 1970-71 receipts totalled $353 million and disbursements totalled $89 million.
May 8, 1972

[Stage Direction]
(in millions of dollars)
Canadian Forces Superannuation Account
Fiscal year ended March 31
Receipts-
Contributions-
Personnel	
Government...
Interest	
Actuarial liability. Other	
Disbursements-
Pensions and retiring allowances	
Cash termination allowances and return of contributions. Other	
Excess of receipts over disbursements.
Royal Canadian Mounted Police Superannuation Account
The balance of $223 million in this account is $23 million higher than at March 31, 1971. Receipts of $25 million include $6 million in contributions by personnel, $8 million in interest, and $11 million in government's contribution. Government contributions
1968	1969	1970	1971	1972
				(preliminary)
. 33.1	33.9	38.7	39.2	41.0. 58.4	57.0	65.6	70.4	73.8. 105.2	112.1	124.4	135.6	145.0159.6	129.0	107.5	228.9. 1.4	0.1	0.1	0.1198.1	362.6	357.8	352.8	488.8. -45.7	-55.2	-67.4	-81.3	-93.5.. -6.0	-7.0	-7.5	-7.2	-7.1. -0.1	-0.1	-0.1	-0.1	-0.1-51.8	-62.3	-75.0	-88.6	-100.7. 146.3	300.3	282.8	264.2	388.1. 2,577.0	2,723.3	3,023.6	3,306.4	3,570.6. 2,723.3	3,023.6	3,306.4	3,570.6	3,958.7are made at the rate of if	times the current ai	
service contributions by personnel.
Disbursements of $2 million consisted of annuities, allowances, cash termination allowances and return of contributions.
In 1970-71 receipts were $35 million and disbursements were $2 million.
TABLE 68 (in millions of dollars)
Fiscal year ended March 31					
Superannuation Account	1968	1969	1970	1971	1972 (preliminary)
Receipts-					
Contributions-					
Personnel	2.8	3.4	4.2	5.2	6.0Government	4.2	6.6	7.4	9.1	11.3Interest	3.5	4.5	5.5	6.9	8.0Actuarial liability	10.1	12.7	19.2	14.2	20.6	27.2	36.3	35.4	25.3Disbursements-	Annuities and allowances	-0.8	-0.9	-1.0	-1.2	-2.0Cash termination allowances and return of contributions..	-0.2	-0.2	-0.3	-0.3	-0.3-1.0	-1.1	-1.3	-1.5	-2.3Excess of receipts over disbursements	19.6	26.1	35.0	33.9	23.0Balance in account brought forward	85.1	104.7	130.8	165.8	199.7Balance at credit of account.	104.7	130.8	165.8	199.7	222.7
May 8, 1972
Government Annuities Account
The balance of $1,300 million is $14 million less than the balance of $1,314 million at March 31, 1971.
Undisbursed balances of appropriations to special accounts
This category records the undisbursed balances of appropriations to special accounts from which disbursements may be made for authorized purposes. They fall into two classes. The first of these, comprising the majority of the accounts, consists of cases where parliament has appropriated moneys for specific purposes. The other class consists of accounts to which is credited moneys received from the sale of materials, supplies, equipment, land, works and buildings and which are available for purposes of the Department of National Defence.
The balance of $192 million is $74 million less than at March 31, 1971.
The main changes are decreases of $62 million in the reserve for salary revisions and $15 million in the reserve for wheat inventory reduction payments.
TABLE 69 (in millions of dollars)
Undisbursed Balances of Appropriations to Special Accounts	Balance at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)
Reserve for wheat inventory pay-			
merits	.. 42.4	-15.4	27.0Reserve for salary revisions	.. 99.2	-62.0	37.2International assistance account....	.. 82.6	5.0	87.6Surplus crown assets	.. 23.0	-4.0	19.0Railway grade crossing fund	.. 3.4	2.0	5.4National capital fund	.. 13.5	13.5Other	.. 2.5	2.5266.6	-74.4	192.2
Refundable corporation tax
This account recorded the refundable corporation tax on cash profits of businesses paid by all corporations not exempt from tax under section 62 of the Income Tax Act and by certain types of trusts on specified types of income.
The balance of $3 million at March 31, 1971 was repaid during 1971-72.
Provision for compound interest on Canada savings bonds
This account records the estimated amount for the prorated provision for the special compound interest feature applicable to certain Canada savings bonds. The balance of $54 million is $35 million higher than at March 31, 1971.
Deferred credits
Recorded in these accounts are amounts due to the government in respect of which payment is deferred. These are contra accounts to corresponding items under the asset categories "advances, loans and investments".
The balance of $226 million is $9 million more than at March 31, 1971.
TABLE 70 (in millions of dollars)			
		Net	Balance
Balance	trans-	atDeferred Credits	at	actions	March 31,March 31,	1971-72	19721971	(prelim-	(prelim-inary)	inary)Deferred interest-	United Kingdom Financial Agree-	ment Act	101.1	101.1The St. Lawrence Seaway Author-	ity	84.1	7.9	92.0Northern Canada Power Commis-	sion	16.9	0.8	17.7Atomic Energy of Canada Limited.	0.2	0.2202.8	8.7	211.0Balances receivable under agreements	of sale of crown assets	0.2	0.2Crown Assets Disposal Corporation..	12.6	0.2	12.8Unamortized premium on loans	1.7	0.3	2.0216.8	9.2	226.0
May 8, 1972
[Stage Direction]
Suspense accounts
These consist of balances where some uncertainty as to disposition exists. The balance of $5 million is SI million more than at March 31, 1971.
Unmatured debt
The unmatured debt of Canada at $27,295 million as at March 31, 1972 is comprised of $26,959 million payable in Canadian dollars, $262 million payable in U.S. dollars and $74 million payable in German deutsche marks.
At March 31, 1971 unmatured debt was $25,201 million and was comprised of $24,864 million payable in Canadian dollars, $263 million payable in United States dollars and $74 million payable in German deutsche marks.
Details of the various loan transactions resulting in the net increase are described more fully in the section "The Public Debt".
TABLE 71 (in millions of dollars)
Unmatured Debt	Balance at March 31, 1971	Net trans- actions 1971-72 (prelim- inary)	Balance at March 31, 1972 (preliminary)Payable in Canadian dollars- Marketable bonds	12,988.6	365.0	13,353.6Non-marketable bonds- Canada savings bonds	7,804.6	1,945.0	9,749.6Canada pension plan	20.8	5.6	26.4Unemployment insurance fund. ..	315.0	-315.0	Treasury bills	3,735.0	95.0	3,830.024,864.0	2,095.6	26,959.6Payable in United States dollars(1>...	263.3	-1.8	261.5Payable in German deutsche marks(1)	73.9	73.925,201.2	2,093.8	27,295.0
(1) Marketable bonds converted at official parity rates.

[Stage Direction]
The government's cash account represents balances of current and special deposits to the credit of the Receiver General for Canada in the Bank of Canada, chartered banks in Canada and certain banks in London, New York, Brussels, Bonn, Frankfurt and Rome.
The cash position of the government is affected not only by budgetary transactions but also by changes in the government's unmatured debt and other nonbudgetary transactions. Non-budgetary transactions are those which affect the government's asset and liability accounts and must be taken into account when considering the full scope of the government's financial operations.
On the asset side, the non-budgetary transactions consist, for the most part, of loans and advances to, and repayment by crown corporations and other government agencies and funds, national, provincial and municipal governments, international organizations and other borrowers. On the liability side they relate mainly to receipts and payments in connection with the many deposit and trust accounts, and annuity, insurance and pension funds held or administered by the government.
The following statement summarizes both the budgetary and non-budgetary transactions in 1971-72 and indicates how they affected the government's cash position. For purposes of comparison the corresponding figures for 1970-71 are also shown.
2066
[Stage Direction]
May 8, 1972

[Stage Direction]
(in millions of dollars)
Fiscal year ended March 31			
Change in Cash Position	1970-71		1971-72
			(preliminary)
Budgetary transactions-			
Revenue	12,803	14,145Expenditure	-	-13,182	-14,745-379	-660Non-budgetary transactions (ex-	eluding unmatured debt transactions) (net)-	Receipts and credits	893	1,582Disbursements and charges	-2,702	-2,755-1,809	-1,173Overall cash requirement to be fi-	nanced by increase in unmatured debt or decrease in cash	balances	
Unmatured debt transactions-	-2,188	-1,773Marketable bonds	631	363Canada savings bonds	1,226	1,945Canada pension plan	5	6Unemployment insurance fund. . .	-138	-315Treasury bills	840	95Securities investment account.... Investments held for retirement	40	of debt	7	-42,611	2,090Net increase or decrease (-) in Receiver General bank balances.. Receiver General bank balance at	423	317beginning of year	833	1,256Receiver General bank balances. ...	1,256	1,573
In 1971-72 an estimated deficit of $600 million in budgetary transactions and an estimated net requirement of $1,173 million for non-budgetary transactions (excluding unmatured debt transactions) will result in an overall requirement of $1,773 million. As transactions in unmatured debt during the fiscal year are expected to result in an increase of $2,090 million in outstanding unmatured debt, Receiver General bank balances will increase by $317 million. In 1970-71 the budgetary deficit of $379 million and net requirements of $1,809 million for non-budgetary purposes resulted in an overall requirement of $2,188 million. As there was an increase of $2,611 million in outstanding unmatured debt, Receiver General bank balances rose by $423 million.
The implication of the level of cash balances at any given time can be misinterpreted because of their wide fluctuations throughout the year, as is illustrated in the following table. Furthermore, because many cheques are issued at the end of a month and are not redeemed until the first few days of the following month whereas the largest percentage of receipts are not received until later, cash balances may drop in the early days of each month by as much as $125 million to $300 million.

[Stage Direction]
Government of Canada Canadian Cash Balances
(in millions of dollars)
		Fiscal year ended March 31			
1968	1969	1970	1971	1972April	594.7	609.7	713.0	527.0	1,217.0May	866.7	458.4	804.1	540.0	1,476.3June	650.4	328.6	879.8	311.8	1,373.2July	686.7	248.4	874.4	345.9	1,378.7August	661.5	381.2	841.9	433.8	1,242.5September	367.0	190.8	636.4	296.0	1,021.0October	194.9	391.8	479.0	262.3	927.8November	607.1	995.0	1,537.0	1,345.5	2,825.8December	650.1	706.6	1,377.0	1,446.6	2,286.5Januarv	1,065.2	853.5	1,440.7	1,629.9	2,506.0February	940.6	761.2	1,366.7	1,723.3	2,279.4March (prelim inary)	997.2	587.0	808.4	1,233.2	1,550.1TABLE 74 Government of Canada Foreign Cash Balances (converted to Canadian Dollar Value) (in millions of dollars)	At En	Fiscal year ended March 31	1968	1969	1970	1971	1972April	
15.1	13.1	22.7	25.6	6.1May	
18.2	14.6	23.5	32.7	9.3June	
19.3	19.3	22.2	33.3	8.9July	
16.7	20.4	23.3	30.6	1.5August	
24.5	22.9	20.4	27.6	19.3September.	
19.8	26.8	16.8	23.1	23.5October. ...	
21.3	18.2	24.8	28.0	24.9November.	
13.0	24.6	25.2	24.7	23.5December..	
17.1	14.4	24.8	30.0	26.5January	
25.5	18.1	23.8	24.5	23.9February...	
15.6	20.7	20.8	27.0	20.3March (prel	iminary)	
18.8	14.5	24.8	21.9	22.0
May 8, 1972
[Stage Direction]
Non-budgetary receipts and credits (excluding unmatured debt transactions)
Non-budgetary receipts and credits of $1,582 million include net receipts of $812 million in respect of annuity, insurance and pension accounts, $36 million in repayments of loans and $734 million from other accounts.

[Stage Direction]
(in millions of dollars)
Non-budgetary disbursements and charges (excluding unmatured debt transactions)
Non-budgetary disbursements and charges total $2,755 million and include $1,804 million for loans, investments and advances, $703 million in respect of foreign exchange reserve accounts and $247 million for other accounts.

[Stage Direction]
(in millions of dollars)
Receipts and Credits (Net)
Fiscal year ended March 31
1971 (preliminary)
Disbursements and Charges (Net)
Fiscal year ended March 31
1971 (preliminary)
Repayments of loans, investments and advances-
Municipal Development and Loan Board... Investments in United States securities issued by other than the Government of Canada	
Annuity, insurance and pension accounts- Social security funds-
Canada Pension Plan Account	
Canada Pension Plan Investment Fund...
Old Age Security Fund	
Unemployment Insurance Account(1)	
Superannuation accounts-
Public service	
Canadian forces	
Royal Canadian Mounted Police	
Other	
Other receipts and credits-
Outstanding cheques	
Accounts payable	
Interest accrued	
Interest due and outstanding	
Non-interest-bearing notes-International Development Association	
Provincial tax-collection agreements account Compound interest on Canada savings bonds Cash in hands of collectors and in transit... Other	
Loans, investments and advances-
Atomic Energy of Canada Limited	160.9	113.09.2	10.0	Canadian Broadcasting Corporation	-1.0	26.0Canadian National Railways (including Air	Canada)	203.9	230.025.8	Central Mortgage and Housing Corporation.	596.3	668.0Farm Credit Corporation	49.1	30.0Export Development Corporation	80.9	106.0The St. Lawrence Seaway Authority	55.9	54.0Provincial governments	40.3	109.0911.3	934.0	Unemployment Insurance Commission	100.0-868.5	-910.0	Veterans Land Act advances	20.2	12.07.0	-86.0	Yukon and Northwest Territories	14.1	21.013.3	-10.0	National Governments	78.2	107.8International organizations	28.0	50.0Airport capital loans	41.2	85.0390.6	487.0	Regional economic expansion loans	22.0264.3	388.0	Canada Development Corporation	25.033.9	23.0	Telesat Canada	10.0	20.0-2.2	-13.8	Other	7.7	25.5749.7	812.2	1,385.7	1,804.3Foreign exchange reserve accounts-	Exchange Fund Account-	114.4	Advances	1,239.0	846.0-20.3	114.0	Special Drawing Rights in the Interna-	61.6	64.0	tional Monetary Fund	119.0	117.0164.0	249.0	International Monetary Fund-	Government's equity	348.9	-7.6-9.6	50.0	Allocation of Special Drawing Rights....	-119.0	-117.0-87.6	115.0	Non-interest-bearing notes	-271.0	-135.0-1.7	35.4	1,316.9	703.4-124.4	81.0	Other disbursements and charges-	5.8	25.9	Undisbursed balances	6.8	74.4102.2	7 34.3	Deferred charges	-7.0	172.6893.4	1,582.3	-0.2	247.0
(^Formerly the Unemployment Insurance Fund.
2,702.4	2,754.7
2068
[Stage Direction]
May 8, 1972

[Stage Direction]
Gross debt, net recorded assets and net debt
The gross debt of Canada, or the total of liabilities as recorded on the statement of assets and liabilities, is estimated to be $47,633 million at March 31, 1972, an increase of $4,658 million over the total at March 31, 1971. The main changes are increases of $2,094 million in unmatured debt and $1,722 million in annuity, insurance and pension accounts. Unmatured debt at $27,295 million represents 58 per cent and annuity, insurance and pension accounts at $15,525 million represents 33 per cent of the total. At March 31, 1971 unmatured debt at $25,201 million was 59 per cent and annuity, insurance and pension accounts at $13,803 million were 32 per cent of total liabilities.
The government's net recorded assets are estimated to be $29,711 million at March 31, 1972, an increase of $4,058 million over the total at March 31, 1971. The main changes are increases of $1,762 million in
advances, loans and investments, $910 million in the Canada Pension Plan investment fund and $955 million in foreign exchange reserve accounts. Advances, loans and investments at $15,660 million represent 54 per cent, foreign exchange reserve accounts at $6,683 million represents 22 per cent and the Canada Pension Plan investment fund at $4,611 million represents 15 per cent of the total. At March 31, 1971 advances, loans and investments at $13,898 million were 54 per cent, foreign exchange reserve accounts at $5,727 million were 22 per cent and the Canada Pension Plan investment fund at $3,701 million was 14 per cent of the total.
Based on the above figures the net debt of Canada will be $17,922 million at March 31, 1972 compared with $17,322 million at March 31, 1971. The increase of $600 million is equivalent to the 1971-72 estimated deficit.

[Stage Direction]
Fiscal Years Ended March 31

[Stage Direction]
Billions of Dollars
May 8, 1972

[Stage Direction]
Statement of Public Debt, Unmatured Debt, Net Recorded Assets and Net Debt of Canada
(in millions of dollars)
Gross public debt	Less	Increase
[Stage Direction]
net	in net debt
Unmatured Other	recorded	Net	duringAs at March 31	debt	liabilities	Total	assets	debt	fiscal year1968	
20,579.9	12,344.3	32,924.2	16,164.4	16,759.8	794.81969	
22,101.0	13,818.3	35,919.3	18,583.4	17,335.9	576.11970	
22,637.2	15,512.9	38,150.1	21,206.8	16,943.3	- 392.61971	
25,201.2	17,774.6	42,975.8	25,653.4	17,322.4	379.11972	(preliminary)	
27,295.0	20,338.6	47,633.6	29,711.2	17,922.4	600.0
Unmatured debt
Total unmatured debt of $27,295 million is $2,094 million more than at March 31, 1971.
The government's holdings of its own securities as at March 31, 1972 at $68 million are comprised of $57 million in the securities investment account (of which $45 million is Canada savings bonds held in respect of the employees instalment purchase plan) and $11 million in investments held for retirement of unmatured debt. This is an increase of $4 million over the previous year-end total, when holdings were $57 million in the securities investment account ($45 million in respect of the employees instalment purchase plan) and $7 million in investments held for retirement of unmatured debt.
Of the total unmatured debt, $26,959 million is payable in Canadian dollars, $262 million is payable in U.S. dollars and $74 million is payable in German deutsche marks. Securities payable in foreign currencies have been valued at official parity rates.
Summary of security issues, maturities, cancellations, conversions and redemptions
Excluding the refunding of treasury bills, the government will have issued securities in an amount of $4,863 million and will have retired $2,769 million.
Net sales of Canada savings bonds series 26 of $2,503 million and additional sales of series 25 of $1 million exceed maturities and redemptions of $559 million by $1,945 million bringing total Canada savings bonds to $9,750 million at March 31, 1972.
Treasury bills of $3,830 million are $95 million more than at March 31, 1971 and consist of $2,340 million in three-month bills, $1,090 million in six-month bills and $400 million in special bills.

[Stage Direction]
(in millions of dollars)
	Fiscal year ended March 31			
	1971		1972 (preliminary)	
Balance at beginning of fiscal year. . .		22,637		25,201
New issues-				
Non-marketable bonds-				
Canada savings bonds		2,144		2,504	
Unemployment Insurance Com-				
mission bonds 		81			
Canada Pension Plan bonds		5		6	
	2,230		e,5io	
Marketable bonds	2,600	2,258	Treasury bills (net)	840	95	5,670	4,863	Maturities, redemptions, cancellations	and conversions-	Non-marketable bonds-	Canada savings bonds	918	559	Unemployment Insurance Com-	mission bonds	219	315	1,137	874	Marketable bonds	1,969	1,895	3,106	2,769	Increase	2,564	2,094Balance at close of fiscal year	25,201	27,295
May 8, 1972

[Stage Direction]
Debt Matured, Redeemed, Converted or Cancelled During the Fiscal Year Ended March 31, 1972 (estimated)
(in millions of dollars)
	ReMatured deemed		Con- verted	Can^ celled	Total
Marketable bonds-					
CT 15	350	350F 17	285	285T 28	350	350F 20	225	225F 31	200	200F 35	200	200F 45	170	170F 46	38	38F 49	75	755% 1962-87	NY	2	21,505	l	58	S60	1,895Non-marketable bonds-	Canada savings bonds	(S13-25)	32	527	559Unemployment Insurance	Commission	315	3151,537	844	38	350	2,769
Interest rates
The average interest rate on the government's unmatured debt as at March 31, 1972 is estimated at 5.88 per cent compared with 6.03 per cent at March 31, 1971. The average yield on three-month treasury bills was 3.57 per cent at tender on March 29, 1972
compared with 3.02 per cent at tender on March 25, 1971; on six-month bills it was 3.86 per cent at tender on March 29, 1972 compared with 3.08 per cent at tender on March 25, 1971; and on special bills it was 4.39 per cent at tender on February 10, 1972 compared with 4.98 per cent on February 11, 1971.

[Stage Direction]
New Securities Issued During Fiscal Year Ended March 31, 1972 (in millions of dollars)
Total
amount
issued
Marketable bonds-
51% 1971-74	F	14	755}% 1971-72	F	59	1258% 1971-86	F	47	385% 1971-74	F	62	35051% 1971-76	F	63	39561% 1971-80	F	64	20051% 1971-76	F	65	12561% 1971-79	F	66	1006}% 1971-76	F	67	35051% 1971-73	F	69	15041% 1971-74	F	70	1255f% 1971-79	F	71	225
t.tBS
Non-marketable bonds-
Canada savings bonds-
Nov. 1, 1970-Nov. 1, 1981	S	25	1Nov. 1, 1971-Nov. 1, 1980	S	26	2,503
S,50i
Canada Pension Plan	 6
Treasury bills (net)	 95
4,863

[DOT]v:
[Stage Direction]

May 8, 1972

[Stage Direction]
Treasury Bills Average Yields at Tender
High Fiscal year ended March 31 	 per cent		Low per cent	Last issue per cent
Three-month bills-			
1968	3.96	6.981969	5.48	6.581970	
7.83	6.54	7.001971	2.99	3.021972	2.96	3.57Six-month bills-	1968	
7.02	3.97	6.981969	
7.01	5.43	6.801970	
7.93	6.74	6.761971	
6.82	3.08	3.081972	
4.27	3.13	3.86Special bills-	1968	
5.65	5.65	5.651969	5.90	5.901970	
8.01	7.46	8.011971	4.77	4.981972	
4.39	3.60	4.39
Indirect debt or contingent liabilities
In addition to the direct debt set out in the statement of assets and liabilities, the government has assumed certain indirect or contingent liabilities. These consist of securities of the Canadian National Railways, guaranteed as to principal and interest, and a number of miscellaneous guarantees, the chief of which are the guarantee of insured loans made by chartered banks and other approved lending institutions under the National Housing Act, advances under the Export Development Act, bank loans under the Canada Student Loans Act and the Farm Improvements Loans Act and bank loans to the Canadian Wheat Board.

[Stage Direction]
Contingent Liabilities
(in millions of dollars)
Amount of guarantee
Amount
outstanding
Railway securities guaranteed as to principal and interest-
Canadian National 3}% due February 1, 1974	
Canadian National 2J% due June 15, 1975, U.S. *6,000,000<'>
Canadian National 5% due May 15, 1977	
Canadian National 4% due February 1, 1981	
Canadian National 51% due January 1, 1985	
Canadian National 5% due October 1, 1987	
Grand Trunk Western Railroad Company	
Other outstanding guarantees and contingent liabilities-
Loans made by lenders under Part IV of the National Housing Act, 19J
home extension and improvements11*	
Insured loans made by approved lenders under the National Housing Act,
1954WO*	
Liability for insurance and guarantees under the Export Development Act<'*_
Loans made by chartered banks under the Farm Improvement Loans Act.... Loans made by chartered banks and credit unions under the Fisheries Improvement Loans Act	
Loans made by chartered banks under the Small Businesses Loans Act	
Loans made by chartered banks and credit unions under the Canada Student
Loans Act<*>
Loans made by chartered banks to the Canadian Wheat Board®	
Loans made by lenders under the Cape Breton Development Act	
Loans made by lenders under the General Adjustment Assistance Program...
200.0	200.0
6.0	6.0
77.1	77.1
300.0	300.0
90.0	90.0
143.3	143.3
5.4	5.4
821.8	821.8
30.0	22.8
16,000.0	9,225.0
1,150.0	605.5
207.9	92.4
3.7	2.5
34.4	20.1
638.4	588.0
725.0	327.0
100.0	30.0
250.0	17.2
19,961.2	11,752.3
Loans maintained by approved lending institutions under National Housing Acts
prior to 1954 Act	
Unstated	IndeterminateGuarantees to owners of returns from moderate rental housing projects®	
Unstated	Indeterminate
<l)Liability is subject to exchange rate in effect June 15, 1975.
(,*As of December 31, 1971.
<3,As reported by approved lenders as of December 31, 1971.
® Includes contingent liability in respect of alternative payments to non-participating province.
1 As of December 31, 1971, funds totalling $6,504,237 were held by the Central Mortgage and Housing Corporation for the purpose of settling claims. In 1971 rental contracts totalled $4,288,000.
[Stage Direction]
May 8, 1972
SUPPLEMENTARY DETAILED TABLES Revenue Expenditure
Annual Changes in Loans and Investments
Unmatured Debt
May 8, 1972

[Stage Direction]
(in millions of dollars)
	1967-68	1968-69	1969-70	1970-71	1971-72 (preliminary)
Tax revenue-income tax-					
Personal(1)<n	
2,849.6	3,356.4	4,085.1	4,696.5	5,540.0Corpora tion(I)(2>	
1,670.6	2,030.0	2,612.0	2,218.5	2,200.0On dividends, interest, etc., going abroad	
220.5	205.6	248.5	258.2	280.04,740.7	5,598.0	6,945.6	7,178.8	8,080.0Social development tax	63.0	476.5	566.3	409.0Excise taxes-	Sales tax(1)<J>	
1,601.1	1,569.8	1,716.9	1,707.5	2,000.0Other taxes-	Cigarettes, tobacco and cigars	
266.7	304.2	295.8	319.4	330.8Jewellery, watches, ornaments etc	
10.2	9.5	10.4	10.2	11.6Matches and lighters	
1.2	1.1	1.1	1.1	1.2Television sets, radios and phonographs	
32.6	35.3	40.8	38.6	14.2Toilet preparations	
17.9	18.6	19.7	21.4	23.2Wines	
5.3	5.9	7.0	8.1	9.5Sundry commodities	
1.5	1.7	2.6	4.0	2.0Interest and penalties	
2.2	2.4	2.2	2.1	3.6Less refunds	
-0.6	-0.8	-1.2	-1.7	-1.1887.0	877.9	878.4	408.8	895.0Customs import duties	
746.4	761.7	818.3	814.5	970.0Excise duties-	Spirits	
180.5	185.4	194.7	209.4	229.6Beer	
120.2	135.0	139.4	149.1	159.8Cigarettes, tobacco and cigars	
194.6	196.6	193.8	212.2	226.2Less refunds	
-6.7	-7.7	-9.1	-9.7	-10.6488.6	509.8	618.8	561.0	605.0Estate tax	
102.2	112.4	100.6	119.9	134.7Miscellaneous tax revenue	
0.3	0.3	0.3	0.3	0.3Total tax revenue	
8,016.3	8,986.4	10,955.4	11,345.9	12,534.0Non-tax revenue-	Return on investments	
612.3	697.2	860.0	1,000.2	1,095.0Post office-net postal revenue	
261.5	288.4	354.8	337.6	400.0Other	
104.7	182.0	144.0	119.3	116.0Total non-tax revenue	
978.5	1,167.6	1,358.8	1,457.1	1,611.0Total revenue	
8,994.8	10,154.0	12,314.2	12,803.0	14,145.0^Excluding credits to old age security fund-	1967-68	1968-69	1969-70	1970-71	1971-72 (preliminary)Personal income tax	
800.1	915.0	1,026.5	1,132.5	1,237.0Corporation income tax	
150.0	183.0	227.1	207.9	213.0Sales tax	
544.5	528.1	577.4	573.8	670.0<*>Net after deduction of refunds and drawbacks as	well as transfers to the old age security fund.	
May 8, 1972

[Stage Direction]
(in millions of dollars)
1967-68	1968-69	1969-70	1970-71	1971-72
(preliminary)
Agriculture-
Administration and general	109.6	115.5	114.7	120.8	135.7Agricultural commodities stabilization account-net operating loss...	139.7	145.4	136.3	126.4	127.0Wheat inventory reduction payments	
Canadian Livestock Feed Board	21.6	18.2	100.0 22.2	20.8	20.4Farm Credit Corporation-net operating loss	3.8	6.0	8.7	8.6	8.4Canadian Dairy Commission	0.3	0.3	0.4	0.4	0.5275.0	285.4	S8S.3	277.0	292.0Communications	14.5	12.9	13.4	13.9	21.0
Consumer and Corporate Affairs-
Administration and general	
12.9	13.8	16.1	18.1	22.2Prices and Incomes Commission	0.6	2.1	1.812.9	IS.8	16.7	20.2	24.OEnergy, Mines and Resources-	Administration and general	
4.2	4.9	6.5	7.7	7.6Atomic energy	
69.3	72.6	74.9	76.7	89.0Dominion Coal Board	
33.6	7.2	8.8	6.0	Minerals, energy and earth sciences	
53.9	54.8	56.7	56.7	77.4National Energy Board	
1.6	1.5	1.9	2.4	3.0162.6	141.0	148.8	149.5	177.0Environment	
147.7	159.2	164.8	172.9	199.0
External Affairs-
Administration and general		48.5	53.7	59.7	55.7	77.8
Assessments, contributions and other payments to international organizations and international multilateral economic and special					
programs	16.7	15.3	13.3	15.5	16.2Canadian International Development Agency	150.1	156.8	168.7	209.9	214.5International Joint Commission	0.4	0.4	0.5	0.5	0.5215.7	226.2	242.2	281.6	509.0Finance-	Administration and general	
EXPO 1967-deficit	36.4	23.7	19.3 122.9	29.2	42.5Grants to municipalities and provinces in lieu of taxes	41.5	45.1	49.5	54.1	58.0Public debt charges	1,300.8	1,480.0	1,716.9	1,822.8	1,995.0Fiscal transfer payments to provinces	737.5	867.1	932.4	1,228.9	1,429.0Tariff Board	0.5	0.4	0.4	0.5	0.5Auditor General	2.3	2.4	2.9	3.1	4.0Insurance	0.4	0.4	0.6	1.0	1.02,119.4	2,419.1	2,844.9	S.1S9.6	5,550.0Governor General and Lieutenant-Governors	1.0	1.0	1.1	1.2	1.2
Indian Affairs and Northern Development-
Administration and general	
Conservation program	
Indian and Eskimo affairs	
Northern development	
Industry, Trade and Commerce Statistics Canada	
5.3	5.8	7.5	7.7	9.027.4	30.6	32.2	33.5	48.0139.4	165.2	204.1	227.7	251.050.9	55.0	57.5	81.7	108.022S. 0	256.6	SO 1.3	350.6	416.0163.9	179.2	263.7	211.5	281.022.5	24.0	32.4	39.1	69.0186.4	203.2	296.1	250.6	350.015.4	16.9	19.7	22.7	28.4
Justice
May 8, 1972

[Stage Direction]
(in millions of dollars)
1967-68	1968-69	1969-70	1970-71	1971-72 (preliminary)Labour	10.9	11.1	12.1	13.5	17.0Manpower and Immigration-	Administration and general	20.6	23.4	10.0	12.4	15.0Development and utilization of manpower	342.3	337.4	399.4	529.5	585.0Immigration	21.6	29.4	24.3	22.8	23.0Municipal winter works incentive program	30.5	21.5	0.4	Program development	2.9	4.4	5.4	6.1	7.0Unemployment Insurance Commission-	Administration and general	37.6	38.8	45.0	79.0	74.0Government's contribution to the fund	69.5	86.6	98.4	99.0	89.0525.0	5J,1.5	582.9	748.8	793.0National Defence-	Administration and general	24.7	24.9	26.8	29.9	32.4Canadian forces superannuation account-	Government's contribution	58.4	57.0	65.6	70.4	73.8Amortization of deferred charges	72.6	104.5	92.2	89.4	66.0Additional interest	45.7	59.0Defence services	1,528.3	1,507.7	1,540.6	1,517.2	1,602.1Defence research	40.6	44.1	44.1	45.9	47.3Mutual aid to NATO countries	18.0	15.3	14.1	14.4	14.4Civil emergency measures organization	8.0	6.3	5.0	5.0	5.01,750.6	1,759.8	1,788.4	1.817.9	1,900.0National Health and Welfare-	Administration and general	3.9	4.2	11.0	12.3	18.0Food and drug services	7.9	9.1	12.2	15.6	19.0Health insurance and resources-	General health grants to provinces	
Government's contributions under the Hospital Insurance and	46.0	44.0	69.1	19.6	16.0Diagnostic Services Act	468.6	561.9	635.9	734.3	850.6Health resources fund	32.7	33.9	34.4	37.5	37.0Medical Care Act	33.0	181.0	400.5	576.5Other	1.3	1.6	1.2	1.4	1.9Health services	7.6	6.7	7.0	6.5	8.0Medical services	36.5	39.2	40.6	45.4	47.0Welfare services-	Family allowances	558.8	560.2	560.1	557.9	554.5Youth allowances	49.4	52.4	55.1	58.0	59.8Unemployment assistance	6.1	1.1	0.7	Canada assistance plan	225.6	256.8	293.6	391.6	462.4Other	36.6	30.2	22.6	23.0	28.3Medical Research Council	20.7	27.2	31.2	34.4	35.01,501.7	1,661.5	1,955.7	2,338.0	2,714.0National Revenue-	Customs and excise	56.7	59.5	70.1	74.4	84.5Taxation	58.1	60.2	74.2	84.0	97.0Tax Review Board	0.3	0.3	0.3	0.4	0.5115.1	120.0	144-6	158.8	182.0Parliament-	House of Commons	14.3	14.3	17.6	21.0	27.8Senate	3.4	3.6	4.6	5.1	5.3Library of Parliament	0.6	0.7	0.8	1.1	1.318.S	18.6	23.0	27.2	64-4
May 8, 1972
STATEMENT OF EXPENDITURES BY DEPARTMENTS AND MAJOR CATEGORIES FOR THE LAST FIVE FISCAL YEARS (in millions of dollars)
Post Office
Privy Council
Privy Council	
Economic Council of Canada	
Chief Electoral Officer	
Commissioner of Official Languages.. Public Service Staff Relations Board Science Council of Canada	
Public Works-
Administration and general	
Accommodation services	
Marine services	
Trans-Canada highway-contributions to provinces
Regional Economic Expansion Cape Breton Development..
Secretary of State-
Administration and general	
Bilingualism development program	
Education support program	
Canada Council	
Canadian Broadcasting Corporation	
Canadian Film Development Corporation. Canadian Radio-Television Commission...
Centennial Commission	
Company of Young Canadians	
National Arts Centre Corporation	
National Film Board	
National Library	
National Museums of Canada	
Office of the Representation Commissioner
Public Archives	
Public Service Commission	
Solicitor General-
Administration and general	
Correctional services	
Royal Canadian Mounted Police
Supply and Services-
Administration and general	
Services	
Supply	
Public Printing and Stationery..
Information Canada	
Canadian Arsenals Limited	
Canadian Commercial Corporation
1967-68	1968-69	1969-70	1970-71	1971-72 (preliminary)281.7	319.5	340.5	368.6	412.08.1	6.3	6.9	7.2	8.21.5	1.5	1.6	1.7	1.70.7	13.5	0.3	1.2	1.20.4	0.4	1.01.0	1.1	1.2	1.3	1.60.4	0.4	1.2	1.2	1.311.7	22.8	11.6	1S.0	15.048.4	43.4	38.2	38.1	42.9133.8	172.0	190.5	218.4	263.543.9	32.1	31.3	34.6	34.664.7	37.3	26.8	39.6	2.0290.8	284.8	286.8	330.7	343.0134.7	125.7	179.4	260.5	276.01.7	30.1	32.7	37.3	40.0136.4	155.8	212.1	297.8	316.028.8	24.5	16.4 1.7	26.6 53.4	60.4 74.1108.2	276.6	301.4	388.2	450.016.9	20.6	23.7	24.2	26.0143.3	148.3	166.0	166.0	181.00.2	0.4	1.0	1.01.0 31.2	1.9	2.8	3.3	4.02.4	1.9	1.9	1.9	1.91.0	1.1	2.5	2.6	2.89.3	10.0	10.5	10.4	11.01.6	1.7	2.0	2.5	4.06.7	7.1	7.3	8.2	10.00.1	0.1	0.1	0.1	0.12.0	2.2	2.4	3.7	3.712.7	12.9	14.1	15.8	18.0365.2	509.1	553.2	707.9	848.00.9	0.5	0.9	1.4	1.664.9	63.6	70.0	75.1	85.087.7	101.8	113.2	146.3	178.4153.5	165.9	184.1	222.8	265.03.0	4.3	4.0	4.2	4.032.8	34.6	40.7	36.5	42.021.5	21.6	28.2	21.6	21.54.7	3.5	4.0	1.5	7.0 *	7.50.4	0.3	0.5'	1.5	1.52.0	2.1	3.4	3.9	3.564-4	66.4	82.3	74.7	80.0
May 8, 1972
[Stage Direction]
STATEMENT OF EXPENDITURES BY DEPARTMENTS AND MAJOR CATEGORIES FOR THE LAST FIVE FISCAL YEARS (in millions of dollars)
	1967-68	1968-69	1969 70	1970-71	1971-72 (preliminary)
Transport-					
Administration and general	
7.1	7.9	7.4	8.5	15.0Air transportation program	
104.0	115.4	109.0	124.5	157.4Marine transportation program	
92.0	91.5	95.6	90.9	100.0Surface transportation	
58.7	41.1	47.3	49.6	71.6Canadian National Railways-deficit	
35.8	29.2	24.6	29.7	24.2Canadian Transport Commission-	Administration and general	
3.6	4.2	10.3	10.5	15.7Payments under the National Transportation Act	
126.0	93.7	79.6	65.7	52.3Contributions to the railway grade crossing fund	
15.0	15.0	15.0	20.0	20.0Maritime Freight Rates Act	
14.2	13.9	14.6	14.0	14.0Steamship subventions	
11.1	12.2	6.0	6.0	6.0Subsidies to air carriers	
1.2	1.3	3.4	1.8	2.0National Harbours Board	
4.8	6.6	8.6	2.5	2.2The St. Lawrence Seaway Authority	
10.6	11.4	10.5	10.1	13.6484-1	443.4	431.9	433.8	494.0Treasury Board-	Administration and general	
38.3	43.2	45.4	55.6	62.0Reserve for salary revisions	120.5	58.7	65.0	15.0Public service superannuation account-	Government's contribution	
59.6	66.0	73.5	85.6	88.0Amortization of deferred charges	
60.6	84.8	91.8	84.8	86.0Additional interest	
National Research Council	
101.0	117.8	121.7	49.5 122.9	65.0 129.0259.5	432.3	391.1	46S.4	445.0Urban Affairs and Housing-	Department	
Central Mortgage and Housing Corporation	
23.1	29.7	43.6	47.0	2.0 62.4National Capital Commission	
23.2	25.0	24.0	28.4	47.646.3	54.7	67.6	75.4	112.0Veterans Affairs-	Administration and general	
10.1	10.1	4.7	7.3	6.8Welfare services	
114.2	112.9	112.6	109.8	99.3Pensions	
205.6	223.3	222.3	216.4	238.6Treatment services	
61.4	71.6	72.1	66.4	70.9Veterans land administration	
9.5	9.7	10.7	10.1	11.4400.8	427.6	422.4	410.0	427.09,789.6	10,730.1	11,921.6	13,182.1	14,745.0
May 8, 1972

[Stage Direction]
Date of maturity	Rate per cent	Amount of loan	Annual interestPayable in Canadian dollars-	$	$Loan of 1936	
P	1	Perpetual	3	55,000,000	1,650,000Loan of 1969	
F	37	1972	Apr.	i	71	235,000,000	17,037,500Loan of 1970	
F	53	Apr.	i	6j	215,000,000	13,975,000Conversion loan, 1958	
T	28	Sept.	i	41	717,203,100	30,481,132Loan of 1970	
F	59	Dec.	15	5i	225,000,000	11,812,500Loan of 1969	
F	43	1973	Feb.	1	8	110,000,000	8,800,000Loan of 1970	
F	50	Feb.	1	7	150,000,000	10,500,000Loan of 1968	
F	25	Apr.	1	7	475,000,000	33,250,000Loan of 1970	
F	54	July	1	61	150,000,000	9,750,000Loan of 1970	
F	58	July	1	61	200,000,000	13,500,000Loan of 1965	
CT	17	Oct.	1	5	275,000,000	13,750,000Loan of 1967	
F	11	Oct.	1	5	200,000,000	10,000,000Canada savings bonds, 1958	
S	13	Nov.	1	4.	14,135,000	590,747Loan of 1967	
F	22	Dec.	1	61	225,000,000	14,062,500Loan of 1971	
F	69	Dec.	1	51	150,000,000	7,875,000Loan of 1969	
F	38	1974	Apr.	1	71	125,000,000	9,062,500Loan of 1971	
F	62	Apr.	1	5	350,000,000	17,500,000Loan of 1968	
F	28	June	15	7	250,000,000	17,500,000Loan of 1970	
F	60	June	15	6	200,000,000	12,000,000Loan of 1969 and 1970	
F	46	Oct.	1	8	424,912,000	33,992,960Canada savings bonds, 1964	
S	19	Nov.	1	51	47,992,000	2,639,560Loan of 1967	
F	14	Dec.	1	5}	175,000,000	9,625,000Loan of 1971	
F	70	Dec.	1	41	125,000,000	5,312,500Loan of 1908	
F	32	1975	Apr.	1	61	200,000,000	13,000,000Loan of 1970	
F	51	Apr.	1	71	225,000,000	16,312,500Loan of 1970	
F	55	July	1	71	260,000,000	18,850,000Loan of 1959	
T	36	Oct.	1	5)	310,361,000	17,069,855Loan of 1965	
CT	24	Oct.	1	51	50,000,000	2,750,000Loan of 1967	
F	9	Oct.	1	51	70,000,000	3,850,000Canada savings bonds, 1963	
S	18	Nov.	1	5)	51,299,000	2,821,445Loan of 1970	
F	56	Dec.	15	71	450,000,000	32,625,000Loan of 1960	
T	38	1976	Apr.	1	51	436,198,000	23,990,890Loan of 1954	
T	11	June	1	31	247,046,500	8,029,011Loan of 1971	
F	65	June	1	51	125,000,000	7,187,500Loan of 1971	
F	67	Aug.	1	61	350,000,000	21,875,000Loan of 1971	
F	63	Oct.	1	51	395,000,000	20,737,500Canada savings bonds, 1962	
S	17	Nov.	1	51	80,397,000	4,421,835Loan of 1970	
F	52	1977	Sept.	1	7	500,000,000	35,000,000Canada savings bonds, 1965	
S	20	Nov.	1	5	45,280,000	2,264,000Loan of 1953 and 1958	
T	5	1978	Jan.	15	31	207,911,500	7,796,681Loan of 1969	
F	41	July	1	8	125,000,000	10,000,000Special replacement series	
SRS	Oct.	1	7	210,812,000	14,756,840Canada savings bonds, 1969	
S	24	Nov.	1	8	4,239,595,000	339,167,600Loan of 1971	
F	66	1979	June	1	6£	100,000,000	6,500,000Loan of 1954	
T	13	Oct.	1	3}	343,246,500	11,155,511Canada savings bonds, 1966	
CS	Nov.	1	51	212,521,000	11,688,655Loan of 1971	
F	71	Dec.	15	51	225,000,000	12,937,500Loan of 1971	
F	64	1980	Apr.	1	61	200,000,000	12,500,000Loan of 1962	14	Aug.	1	51	104,822,500	5,765,238Loan of 1966	26	Aug.	1	51	73,831,500	4,060,732Loan of 1966 and 1967	
F	3	Aug.	1	51	158,271,000	8,704,905Canada savings bonds, 1967	
S	22	Nov.	1	51	113,681,000	5,974,252Canada savings bonds, 1971	
S	26	Nov.	1	51	2,,503,000,000	143,920,000Canada savings bonds, 1970	
S	25	1981	Nov.	1	71	1,764,041,000	136,671,750Canada savings bonds, 1968	
S	23	1982	Nov.	1	61	466,540,000	31,491,450Conversion loan, 1958	
T	29	1983	Sept.	1	41	1,992,679,450	89,670,575Loan of 1969 and 1970	
F	47	1986	Oct.	1	8	88,000	7,040Loan of 1963	
AT	21	1988	June	1	5	100,000,000	5,000,000Loan of 1964	
CT	9	June	1	5	50,000,000	2,500,000Loan of 1971	
F	61	1989	Feb.	15	61	150,000,000	10,125,000Loan of 1964 and 1965	
CT	12	1990	May	1	51	225,000,000	11,812,500Loan of 1967	
F	12	May	1	51	125,000,000	6,562,500Loan of 1966 and 1967	
F	6	1992	Sept.	1	51	225,000,000	12,937,500
May 8, 1972

[Stage Direction]
Date of maturity		Rate per cent	Amount of loan	Annual interest
				$	$
Payable in Canadian dollars-Conclxded					
Loan of 1968	
F 33 1995 Oct.	1	6)	100,000,000	6,500,000Conversion loan, 1956	
T 15 1998 Mar.	15	3!	197,045,000	7,389,188Three-month treasury bills	2,340,000,000	79,794,000Six-month treasury bills	1,090,000,000	38,964,000Special treasury bills	400,000,000	15,963,000Canada Pension Plan bonds	various	26,400,000	1,807,00026,959,309,050	1,587,574,852Payable in United States dollars-	Loan of 1949	
1974 Sept.	1	2}	48,755,627	1,340,780Loan of 1950	
1975 Sept.	15	21	30,301,591	833,294Loan of 1962	
1987 Oct.	15	5	74,378,304	3,718,915Loan of 1968	1	61	108,108,000	7,432,425261,543,522	13,325,414Payable in German deutsche marks	1	6!	73,844,250	4,984,48727,294,696,822	1,605,884,753
The interest shown is a projection for one year on the principal amounts outstanding at March 31, 1972. Where various rates of interest are applicable during the term of a loan the interest rate in effect at March 31, 1972 has been used. Bonds payable in foreign currencies have been converted at official parity rates.
[Stage Direction]
May 8, 1972

[Stage Direction]
(in millions of dollars)
-	1967-68	1968-69	1969-70	1970-71	1971-72 (preliminary)
Loans to, and investments in, crown corporations-
[Stage Direction]
Air Canada
[Stage Direction]
0.6
[Stage Direction]
50.1
[Stage Direction]
71.3
[Stage Direction]
111.3
[Stage Direction]
27.0
[Stage Direction]
Atomic Energy of Canada Limited
[Stage Direction]
32.9
[Stage Direction]
68.5
[Stage Direction]
136.0
[Stage Direction]
160.9
[Stage Direction]
113.0
[Stage Direction]
Canada Deposit Insurance Corporation
[Stage Direction]
29.4
[Stage Direction]
-5.9
[Stage Direction]
7.0
[Stage Direction]
-19.1
[Stage Direction]
-1.0
[Stage Direction]
Canada Development Corporation
[Stage Direction]
25.0
[Stage Direction]
Canadian Arsenals Limited
[Stage Direction]
-0.5
[Stage Direction]
Canadian Broadcasting Corporation
[Stage Direction]
18.4
[Stage Direction]
18.3
[Stage Direction]
19.6
[Stage Direction]
-1.0
[Stage Direction]
26.0
[Stage Direction]
Canadian Commercial Corporation
[Stage Direction]
6.5
[Stage Direction]
-1.0
[Stage Direction]
Canadian Corporation for the 1967 World Exhibition
[Stage Direction]
30.0
[Stage Direction]
-57.0
[Stage Direction]
-148.0
[Stage Direction]
Canadian Dairy Commission
[Stage Direction]
22.1
[Stage Direction]
19.8
[Stage Direction]
3.2
[Stage Direction]
-21.8
[Stage Direction]
-23.0
[Stage Direction]
Canadian National Railways
[Stage Direction]
163.2
[Stage Direction]
150.3
[Stage Direction]
102.0
[Stage Direction]
92.6
[Stage Direction]
203.0
[Stage Direction]
Canadian Overseas Telecommunication Corporation
[Stage Direction]
2.6
[Stage Direction]
-3.1
[Stage Direction]
-3.4
[Stage Direction]
-3.6
[Stage Direction]
-2.0
[Stage Direction]
Cape Breton Development Corporation
[Stage Direction]
5.2
[Stage Direction]
4.8
[Stage Direction]
-2.0
[Stage Direction]
-4.0
[Stage Direction]
4.0
[Stage Direction]
Central Mortgage and Housing Corporation
[Stage Direction]
633.9
[Stage Direction]
385.2
[Stage Direction]
481.2
[Stage Direction]
596.3
[Stage Direction]
668.0
[Stage Direction]
Eldorado Nuclear Limited
[Stage Direction]
17.2
[Stage Direction]
9.8
[Stage Direction]
5.0
[Stage Direction]
Export Development Corporation
[Stage Direction]
34.7
[Stage Direction]
32.5
[Stage Direction]
41.9
[Stage Direction]
80.9
[Stage Direction]
106.0
[Stage Direction]
Farm Credit Corporation
[Stage Direction]
169.2
[Stage Direction]
128.2
[Stage Direction]
77.8
[Stage Direction]
49.1
[Stage Direction]
30.0
[Stage Direction]
Freshwater Fish Marketing Corporation
[Stage Direction]
2.2
[Stage Direction]
2.6
[Stage Direction]
5.0
[Stage Direction]
National Capital Commission
[Stage Direction]
0.8
[Stage Direction]
-9.2
[Stage Direction]
1.3
[Stage Direction]
-5.6
[Stage Direction]
1.5
[Stage Direction]
National Harbours Board
[Stage Direction]
27.8
[Stage Direction]
11.1
[Stage Direction]
4.5
[Stage Direction]
4.6
[Stage Direction]
3.0
[Stage Direction]
Northern Canada Power Commission
[Stage Direction]
2.9
[Stage Direction]
8.5
[Stage Direction]
2.6
[Stage Direction]
4.7
[Stage Direction]
2.0
[Stage Direction]
Northern Transportation Company Limited
[Stage Direction]
2.0
[Stage Direction]
[DOT] 8.0
[Stage Direction]
6.1
[Stage Direction]
1.0
[Stage Direction]
Royal Canadian Mint
[Stage Direction]
2.0
[Stage Direction]
-1.0
[Stage Direction]
St. Lawrence Seaway Authority(2)
[Stage Direction]
26.7
[Stage Direction]
28.8
[Stage Direction]
41.5
[Stage Direction]
55.9
[Stage Direction]
54.0
[Stage Direction]
Other
[Stage Direction]
0.3
[Stage Direction]
1.3
[Stage Direction]
2.0
[Stage Direction]
1.5
[Stage Direction]
1,206.9
[Stage Direction]
832.2
[Stage Direction]
866.7
[Stage Direction]
1,120.7
[Stage Direction]
1,249.0
[Stage Direction]
Loans to national governments-
[Stage Direction]
United Kingdom
[Stage Direction]
-19.2
[Stage Direction]
(3,18.1
[Stage Direction]
-20.0
[Stage Direction]
-20.4
[Stage Direction]
-20.9
[Stage Direction]
Export Credits Insurance Act
[Stage Direction]
-2.3
[Stage Direction]
-2.3
[Stage Direction]
-2.3
[Stage Direction]
-15.3
[Stage Direction]
-15.3
[Stage Direction]
Special loans to Colombo plan countries to finance the purchase of
[Stage Direction]
wheat and flour from Canada
[Stage Direction]
-0.3
[Stage Direction]
Loans to India for the purchase in Canada of aircraft and associated
[Stage Direction]
spare parts and equipment
[Stage Direction]
-2.7
[Stage Direction]
-1.3
[Stage Direction]
Special loan assistance-developing countries
[Stage Direction]
29.1
[Stage Direction]
48.5
[Stage Direction]
81.1
[Stage Direction]
114.0
[Stage Direction]
144.0
[Stage Direction]
Other
[Stage Direction]
-0.1
[Stage Direction]
0.1
[Stage Direction]
-0.1
[Stage Direction]
-0.1
[Stage Direction]
63.1
[Stage Direction]
58.7
[Stage Direction]
78.2
[Stage Direction]
107.8
[Stage Direction]
Other loans and investments-
[Stage Direction]
Subscriptions to capital of, and working capital advances and loans
[Stage Direction]
to, international organizations-
[Stage Direction]
Canada's subscription to capital of-
[Stage Direction]
Asian Development Bank
[Stage Direction]
2.7
[Stage Direction]
2.7
[Stage Direction]
2.7
[Stage Direction]
2.6
[Stage Direction]
Caribbean Regional Development Bank
[Stage Direction]
1.1
[Stage Direction]
0.7
[Stage Direction]
International Bank for Reconstruction and Development
[Stage Direction]
International Development Association
[Stage Direction]
15.0
[Stage Direction]
27.1
[Stage Direction]
27.0
[Stage Direction]
24.9
[Stage Direction]
50.0
[Stage Direction]
Working capital advances and loans to international organizations
[Stage Direction]
-0.3
[Stage Direction]
-0.3
[Stage Direction]
-0.2
[Stage Direction]
-0.2
[Stage Direction]
Loans to provincial governments
[Stage Direction]
64.2
[Stage Direction]
82.6
[Stage Direction]
49.3
[Stage Direction]
40.3
[Stage Direction]
109.0
[Stage Direction]
Municipal Development and Loan Board
[Stage Direction]
48.5
[Stage Direction]
1.6
[Stage Direction]
-8.5
[Stage Direction]
-9.2
[Stage Direction]
-10.0
[Stage Direction]
Veterans Land Act advances
[Stage Direction]
71.5
[Stage Direction]
38.7
[Stage Direction]
50.4
[Stage Direction]
20.2
[Stage Direction]
12.0
[Stage Direction]
Advances to Unemployment Insurance Commission
[Stage Direction]
100.0
[Stage Direction]
Airports-capital loans
[Stage Direction]
5.1
[Stage Direction]
41.2
[Stage Direction]
85.0
[Stage Direction]
Development of space and terrestrial communications
[Stage Direction]
9.9
[Stage Direction]
-9.9
[Stage Direction]
20.0
[Stage Direction]
Investment in shares of Panarctic Oils Ltd
[Stage Direction]
13.6
[Stage Direction]
6.8
[Stage Direction]
8.0
[Stage Direction]
Loans to manufacturers of automotive parts in Canada
[Stage Direction]
7.9
[Stage Direction]
1.1
[Stage Direction]
12.1
[Stage Direction]
6.5
[Stage Direction]
2.0
[Stage Direction]
Other
[Stage Direction]
21.7
[Stage Direction]
15.6
[Stage Direction]
39.4
[Stage Direction]
53.7
[Stage Direction]
29.2
[Stage Direction]
231.2
[Stage Direction]
169.1
[Stage Direction]
201.9
[Stage Direction]
177.6
[Stage Direction]
405.2
[Stage Direction]
Net total of changes in loans and investments
[Stage Direction]
1,442.6
[Stage Direction]
1,064.4
[Stage Direction]
1,127.3
[Stage Direction]
1,376.5
[Stage Direction]
1,762.0
[Stage Direction]
(uFormerly the Export Credits Insurance Corporation. <2,Includes deferred interest.
(3>
Deferred interest.
[Stage Direction]
Tuesday, May 9, 1972