1972-05-30

ROUTINE PROCEEDINGS


[Stage Direction]
Third report of Standing Committee on Finance, Trade and Economic Affairs-Mr. Kaplan.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I seek the unanimous consent of the House under Standing Order 43 on a matter of urgent necessity. The serious claims by all segments of transportation and communications and particularly by railroad workers that Canadian National Railways is deliberately downgrading rail passenger service, and their demands for the reinstatement of rail services, emphasize the need for reassessment. Since these claims contradict the announced direction of government transportation policy made known to the Transport Committee and in the promotion campaigns of Canadian National Railways, I move, seconded by the hon. member for Gander-Twillin-gate (Mr. Lundrigan):
That the government place a moratorium on all pending applications for discontinuance of rail passenger service and that they instruct the Canadian Transport Commission to initiate an independent study to assess the management capabilities of CNR and the effect of CNR decisions on the Canadian public.


Mr. Speaker:: This motion is proposed under the terms of Standing Order 43 and requires unanimous consent.

Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Consent is not unanimous. Therefore the motion cannot be put.



ORAL QUESTION PERIOD


Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Finance, but first I should like to welcome him back to the House after his important trip to Europe. In view of the fact that the Canadian dollar has now risen to $1,017 U.S., and gives every indication of continuing to rise and making it increasingly difficult to provide a satisfactory Canadian export picture, is the government planning to introduce any measures in the near future to aid our exporters to overcome the very serious situation they are facing in increasing degree day by day?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the government has already introduced some stimulus through the budget of May 8 by way of accelerated depreciation and a substantial reduction in corporate tax for manufacturers and processors, which I think will go a long way to compensating for any international disadvantages they may suffer.


George Harris Hees: Is it the view of the government that measures which will not become effective for more than seven months will be effective in helping exporters who are facing this very serious problem right now in an increasing degree day by day?


John Napier Turner: Yes, Mr. Speaker, it is our view that they will be of immense help. To begin with, the accelerated depreciation was immediately effective as of May 8, and the reduction in corporate tax for processors and manufacturers will allow those industries to plan on the basis of that measure.


George Harris Hees: As Canadian manufacturers seem singularly reluctant to indicate how they are going to spend the tax reduction they will receive seven months from now, or to give any indication that they will carry out the plans that the Minister of Finance expressed for them in his budget, can the minister indicate to the House now what effect these plans are expected to have when they do become effective-


Mr. Speaker:: Order, please.


George Harris Hees: -or how effective they will become in the next seven months?
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Inquiries of the Ministry


Mr. Speaker:: Order, please. The second supplementary asked by the hon. member is, of course, a very important question, but I would think it is rather broad in scope and would invite a statement which ought normally to be made on motions or during the budget debate.



INQUIRY AS TO EXTENSION OF ACCELERATED DEPRECIATION TO FARMERS

Mr. A. P. Gleave (Saskatoon-Biggar):: As a supplementary question, Mr. Speaker, may I ask the Minister of Finance whether he is going to extend the provision for accelerated depreciation to primary producers of farm products, more specifically grain, since they are being equally hurt?


John Napier Turner: Mr. Speaker, the answer to that question will have to await publication of the regulations pursuant to the bill that will be introduced.


Alfred Pullen Gleave: Did I understand the minister to say that this depends on the promulgation of the regulations? Has the policy not been decided?


John Napier Turner: The policy is decided; the hon. member will have to await the publication of the regulations.



POSSIBLE AGREEMENT WITH UNITED STATES RESPECTING ACCEPTANCE OF CANADIAN DOLLAR

Mr. Speaker:: Is the hon. member for Temiscamingue rising for a supplementary?


Mr. Real Caouette (Temiscamingue):: Yes, Mr. Speaker.
In view of the number of agreements to be entered into with the United States concerning agriculture and other subjects, and of the fact that I am just back from the United States, could the minister-


An hon. Member:: Welcome to Canada!


David Réal Caouette: I went into a health clinic, for the information of my colleagues.
I notice, Mr. Speaker, that the American dollar is accepted without question in Canada. Could an agreement be entered into with the United States government whereby the Canadian dollar would receive the same treatment in the United States?


John Napier Turner: Mr. Speaker, I believe acceptance of the dollar, American or Canadian, depends on the reactions of shop keepers.



UNITED STATES DISC PROGRAM-REQUEST FOR LIST OF AMERICAN COMPANIES MAKING USE THEREOF

Mr. David Lewis (York South):: Mr. Speaker, I wish to put to the Minister of Industry, Trade and Commerce a question I have asked once or twice before which he has not yet answered. Is the minister now in a position to inform parliament and the Canadian people of the names of the number of firms in the United States that have registered for DISC and are carrying on business under that scheme now or propose to do so?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, my answer is the same as on the previous occasion. I have a number of names of United States companies which have decided to use the DISC facility. As to some of them I have firm information because the Canadian subsidiary has informed us; in other cases it is hearsay based on articles read in newspapers. There is no scientific character at all to the list I have and consequently I will not provide the list that I have now.


David Lewis: Is the minister in a position to inform the House whether the number is the same as he mentioned during a speech some weeks ago, less than 1,500, I believe? Has the number remained the same or does he know whether it has increased to any extent?


Jean-Luc Pepin: Mr. Speaker, I have not been informed of any addition to the previous number but I will check.


David Lewis: In view of the fact that this is a very important matter for Canada-I am sure the minister shares that view-can he inform the House whether he has made official requests of the United States authorities to make such a list available at least with respect to those corporations that have subsidiaries in Canada, and if he has made such a request what has the answer been?


Jean-Luc Pepin: Mr. Speaker, some unofficial moves have been made to obtain these names and have not been successful.


David Lewis: Mr. Speaker, I have a further, very short, supplementary. I knew there had been unofficial moves taken because that was suggested to us on previous occasions. I am asking the minister whether he is ready now to make a formal request for that list so that Canadians will know exactly what firms in Canada are likely to be affected, or is he still of the view that he does not wish to make such a formal request?


Jean-Luc Pepin: Mr. Speaker, my parents have taught me it is not wise to ask for something you are not sure of receiving. I have already indicated to the House on two or three occasions that we were looking at ways and means by which we could obtain the information on DISC users from the customs import applications.
May 30, 1972



FINANCE


Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I have a question for the Minister of Finance which is related to one asked by my colleague earlier in regard to the pressure on the Canadian dollar. In view of the upward pressure on interest rates in this country, is the minister having consultations with the presidents of the chartered banks to ensure that the interest rate structure will not also go up?


John Napier Turner: Mr. Speaker, I stay in touch with the chartered banks and will be meeting with the Canadian Bankers' Association in Winnipeg next week.


John Patrick (Pat) Nowlan: I am glad that the minister is to meet with these important gentlemen next week, but is he going to put forward any proposals or propositions to them so that we do not have an increase in the interest rate structure which is already too high?


John Napier Turner: Mr. Speaker, I will be discussing the underlying situation with the banking association.



LOWERING OF INTEREST RATES AS MEANS OF REDUCING PRESSURE ON CANADIAN DOLLAR

Mr. Doug Rowland (Selkirk):: Mr. Speaker, I have a supplementary question for the Minister of Finance. In his conversations with the bankers next week will he be presenting any suggestions to them on behalf of the government for the lowering of interest rates as another means of reducing pressure on the Canadian dollar?


John Napier Turner: Mr. Speaker, I think the banking association understands that proposition.


An hon. Member:: Do you?



DIFFERENCE IN BANK INTEREST RATES ON LOANS

Mr. Eldon M. Woolliams (Calgary North):: I have a supplementary question for the Minister of Finance. When he is having conversations with the presidents or officials of the various banks would he discuss with them why certain people can get loans at the prime rate, probably 71 per cent, when the majority of people in the lower income bracket have to pay 12 per cent and sometimes 14 per cent?
Inquiries of the Ministry



POLLUTION


Hon. Hugh John Flemming (Carleton-Charlotte):: Mr. Speaker, my question is for the Minister of the Environment. Has the minister's attention been directed to the report that a sugar beet refinery in the state of Maine, located on the Presquile River, a tributary of the Saint John, is to start up again. I might say that this is the industry that was responsible for the pollution of the Presquile River some years ago that caused a tremendous amount of hardship for people in that particular locality.


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, the answer is yes, and we are expressing our concern about it.



GOVERNMENT PROPERTY


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I have a question for the Minister of National Defence. As the taxpayers have already paid for the Jericho base land which Vancouver needs so badly for an ocean-side park, will the government, instead of squeezing Vancouver for nearly $1 million, lease it-


Mr. Speaker:: Order, please. The hon. member knows that a question cannot be asked in those terms. The hon. member has to ask a question and not present argument.


Winona Grace MacInnis: Mr. Speaker, I was using the minister's own words for greater accuracy. Will the government lease this land to the city, as it did with Stanley Park, and once more earn the undying gratitude of the citizens of Vancouver and visitors from across Canada and beyond?


Mr. Speaker:: Order, please. I suggest to the hon. member that the question in those terms is out of order. The hon. member is making a suggestion or representation to the minister.


Winona Grace MacInnis: Mr. Speaker, may I phrase it again?


Mr. Speaker:: Order, please. I suggest to hon. members again that they ought to phrase their original questions in accordance with the rules. It takes time to ask a question that is not in order and then rephrase it so that it is acceptable procedurally. Hon. members should have only one chance, not two. However, considering many things, I will recognize the hon. member and permit her to rephrase the question.


Winona Grace MacInnis: I trust, Mr. Speaker, that you will consider that I am not the only transgressor. However, I appreciate your ruling. Will the government give consideration to leasing the Jericho park lands to the city of Vancouver instead of selling them?

May 30, 1972
Inquiries of the Ministry


Hon. E. J. Benson (Minister of National Defence):: Mr. Speaker, an arrangement was made with the city of Vancouver whereby 78 acres of waterfront land was transferred to the city, for the sum of $1. Part of that deal was that the remaining property be sold. I have indicated to representatives of the city of Vancouver that if they wish to talk about the whole deal again I will be pleased to meet them and discuss it.


Winona Grace MacInnis: Is the figure of nearly $1 million that the government has set the rock-bottom price for the property-


Some hon. Members:: Oh, oh!


Winona Grace MacInnis: -and can the minister assure us that, pending Vancouver raising the necessary money, the property will not be sold to private developers?


Edgar John Benson: Mr. Speaker, I have indicated that we are not going to sell the property presently to private developers. I have not indicated a price or been asked for a price for the whole property. I have simply said to the representatives from Vancouver who were here that I would be glad, if they do not want the original bargain, to meet them and change the whole deal.



FISHERIES


Mr. Alexandre Cyr (Gaspe):: Mr. Speaker, I should like to put a question to the Minister of Fisheries.
Can he tell the House whether he has reached an agreement with the province of Quebec with regard to the banning of commercial salmon fishing in Gaspe and part of the north shore comparable with the one now in effect in the Maritimes?


John (Jack) Davis: Mr. Speaker, I have had a discussion with the Minister of Tourism, Fisheries and Game of the province of Quebec and I understand that the province will be instituting a ban on the commercial salmon fishery and that a similar program of compensation will be available to the commercial fishermen in that province.



CLOSING OF SALMON FISHING IN GASPE- ARRANGEMENTS FOR PAYMENT OF COMPENSATION

Alexandre Cyr: A supplementary, Mr. Speaker.
Will the compensation the minister speaks of be paid Gaspe fishermen by the federal government or by the government of the province of Quebec?


John (Jack) Davis: Mr. Speaker, as the fisheries in that province are administered by the

province of Quebec, a financial arrangement will have to be reached between the provincial and federal governments in this connection.



ATLANTIC SALMON-INQUIRY AS TO AGREEMENT WITH DENMARK RESPECTING ITS HIGH SEAS FISHING OPERATIONS

Mr. John Lundrigan (Gander-Twillingate):: I have a supplementary question, Mr. Speaker. Now that the Minister of Fisheries has reached agreement with the province of Quebec, can he tell us whether any agreement has been reached with Denmark as a result of the meetings now being held in Washington.


John (Jack) Davis: Mr. Speaker, as the hon. member knows, a meeting of nations concerned with fisheries in the North Atlantic is under way this week, and I do not expect that a final resolution of that problem will be reached before Friday.



NATIONAL SECURITY


Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Prime Minister and is in connection with the recent charges and allegations made by the former deputy prime minister, the hon. member for Trinity. I am wondering whether the Prime Minister is giving consideration to establishing a committee made up of Privy Councillors of the present Parliament to meet with the hon. member for Trinity and consider the information he may have to present, and then indicate to the House any recommendations or actions the government is prepared to take?


Right Hon. P. E. Trudeau (Prime Minister):: No, Mr. Speaker, I have not considered that eventuality. I am sure that some members of the House might want to meet with the hon. member for Trinity to discuss this subject with him, but I see no cause to do so. Some of his allegations are apparently based on some things he got from cabinet. These communications are certainly privileged and under oath of secrecy.


David Samuel Horne MacDonald: In view of the seriousness of his statements and, as the Prime Minister just indicated, there is the matter of his oath as a Privy Councillor, will the Prime Minister give consideration to a meeting of Privy Councillors who are members of this House in order that this form of non-partisan committee might give adequate consideration to these serious charges?


Pierre Elliott Trudeau: Mr. Speaker, at least once a week in cabinet there is a meeting of Privy Councillors who want to discuss matters relating to the government. As for Privy Councillors sitting on the other side, I might add that when the royal commission report came out in its original form I offered the Leader of the Opposition the opportunity to read it under his oath as a Privy Councillor, and
May 30, 1972

for reasons which I respect he preferred not to read it. However, I think this is as far as we can go in communicating the original version. As the Solicitor General pointed out to the House, a slightly abridged version was approved by the commissioners as containing all the essence of the main report.


David Samuel Horne MacDonald: Since much of the work of the Royal Commission on Security was done prior to the time the hon. member for Trinity suggested some of these actions may have taken place, and in view of the public concern and the importance of having any difficult situation like this clarified, will the Prime Minister give consideration to a meeting of Privy Councillors who are members of the House in order to clear the air once and for all on all these matters?


Pierre Elliott Trudeau: Mr. Speaker, it seems to me that I answered this question the two previous times it was asked by the hon. member today. He might want to consider getting together a group of Members of Parliament from the broadcasting committee, who studied one of the matters discussed by the hon. member for Trinity. I believe the hon. member for Trinity suggests that this committee whitewashed the whole proceedings. Perhaps the hon. member opposite might want to look into this matter. He is a Member of Parliament.


David Samuel Horne MacDonald: A further supplementary-


Mr. Speaker:: Order, please. The hon. member has asked three questions. He will be recognized for one further supplementary. The Chair is still waiting for an opportunity to recognize a member from the group to my extreme left. They have not yet had a chance to ask a question.


David Samuel Horne MacDonald: Mr. Speaker, I apologize to the Chair and the House for raising these supplementar-ies. I do so simply for clarification. I wonder whether the Prime Minister does not see a difference between those who have taken the Privy Council oath of office and those who sit as Members of Parliament in the House?


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



MANPOWER


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to direct a question to the Minister of Manpower and Immigration.
Since tomorrow is the deadline for local initiative projects which were denied any extension, may I ask the minister if to date a decision has yet to be taken about local initiative projects which could be granted an extension?
Inquiries of the Ministry


Hon. Bryce Mackasey (Minister of Manpower and Immigration):: Mr. Speaker, I have already announced that projects that are municipally sponsored can be extended beyond tomorrow's date under the local initiatives program because of the fact that in some instances climatic conditions played a part in delaying the beginning of projects. We have had little or no demand for extension of privately sponsored projects. We have placed at the disposal of some of the projects that are in existence some $30 million more so that approximately 1,200 local initiative projects will be continued beyond tomorrow's date until September.



LOCAL INITIATIVES PROGRAM-INCLUSION OF INDIAN BAND PROJECTS IN EXTENSION OF DEADLINE FOR COMPLETION

Mr. Frank Howard (Skeena):: Mr. Speaker, I should like to ask the minister a supplementary question. Does he include within the designation of municipally sponsored projects those that are sponsored by Indian band groups as well, and will they have the benefit of the extension?


Bryce Stuart Mackasey: I cannot say categorically, but I would hope so because I believe these local programs sponsored by Indian bands have been a very welcome initiative this winter. If a firm decision has not been reached on this issue, I would personally be inclined to consider them as municipally sponsored.



FINANCE


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Minister of Finance in connection with a related program. Is consideration being given to an extension of the federal-provincial loan forgiveness program for the same reasons inasmuch as many such requests have been made?


John Napier Turner: Mr. Speaker, the government will ask Parliament for the authority to extend to June 30 the period during which it contributes 75 per cent of the wage and salary costs of projects financed under the federal-provincial employment loans program. Bad weather, labour disputes and other unavoidable factors have made it difficult for provinces and municipalities to complete projects in time to qualify for the full $35 million of loan forgiveness allocated under the $160 million dollar loan program announced last October.

May 30, 1972
Inquiries of the Ministry CANADIAN NATIONAL RAILWAYS



ALLEGED DOWNGRADING OF PASSENGER SERVICE-REQUEST FOR INVESTIGATION BY TRANSPORT COMMISSION

Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have a question for the Minister of Transport, but in his absence I will direct it to the acting minister. Incidentally, the minister was supposed to be here today. In view of the accusation made by the London, Ontario, and District Railway Workers Council that Canadian National Railways has embarked on a deliberate plan to discourage people from using passenger trains by providing terrible service, will the minister request the Canadian Transport Commission to investigate this charge immediately?


Hon. James Richardson (Minister of Supply and Services):: Mr. Speaker, the Minister of Transport is away from the House on government business. I will see that the hon. member's question is brought to his attention.



POST OFFICE


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the President of the Treasury Board. Now that the Toronto local of the Letter Carriers Union has publicly rejected the government's offer in the long drawn-out negotiations for a new contract, particularly the proposal for regional pay scales, and has also recommended the holding of a national strike vote, may I ask what action the government has taken to ease the growing tension?


Hon. C. M. Drury (President of the Treasury Board):: The
easy answer is that we are continuing to negotiate. I think the hon. member will understand that the publicly-announced action of one of the locals of the Council of Postal Unions does not necessarily govern the entire council.


Walter Gilbert Dinsdale: Has the government now decided to draw upon the expertise available in the Department of Labour and appoint a special skilled negotiator?


Charles Mills (Bud) Drury: The answer, Mr. Speaker, is no.



PUBLIC SERVICE


Mr. David Orlikow (Winnipeg North):: I should like to ask the President of the Treasury Board whether it is now government policy to shift wage payments from national to regional rates, not just in the Post Office but in the operational categories of employees and possibly later in the administrative categories?


Charles Mills (Bud) Drury: This is the direction in which the federal government in any event has been moving for some years. The proposal made to the postal workers is one small further step along this particular road.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I ask the President of the Treasury Board a supplementary question. In view of the serious implications of this shift in policy, will the government consider bringing the matter before Parliament to ascertain whether Parliament approves of the shift from a national to a regional rate structure?


Charles Mills (Bud) Drury: Probably the most effective mechanism for examining this subject in Parliament would be to use one of the supply or opposition days for the purpose. I repeat that this is not a shift in policy; it is merely the continuation of a policy which has been in operation for some years.



GOVERNMENT REGIONAL RATES OF PAY POLICY-POSSIBLE IMPEDIMENT TO SETTLEMENT OF NEGOTIATIONS

Mr. Mark Rose (Fraser Valley West):: I should like to ask the President of the Treasury Board whether this move to establish pay rates on a national as opposed to a regional basis, particularly in the Post Office and the operational groups in the public service, is the major impediment to the settlement of negotiations?


Charles Mills (Bud) Drury: I am
not sure which negotiations the hon. member has in mind. In any case it is difficult to indicate unilaterally what is the major stumbling block in the way of agreement, if indeed there be any.


Mr. Speaker:: The Chair will recognize the hon. member for Fraser Valley West for a last supplementary on this subject. I owe it to hon. members to bring to their attention that there are quite a few members who are seeking to be recognized before the end of the question period. Obviously a number of them will be disappointed, so we should try to limit supplementaries.


Mark Willson Rose: I recognize the difficulty caused by the general nature of my question. I should therefore like to refer specifically to the operational groups in the public service, for instance, stationary engineers and firemen. Is the issue of regional versus national pay rates the major impediment to agreement at the moment?


Charles Mills (Bud) Drury: In some instances, although this is rather difficult to measure from time to time, the question of regional rates of pay appears to be of major concern. In others it is the general level of pay and related regional rates.
May 30, 1972



FOREST FIRES


Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Minister of National Defence. Bearing in mind the serious forest fire situation in many parts of Canada, particularly in northern Ontario, is the Department of National Defence considering the establishment of a fleet of firefighting aircraft to act as a standby force to assist provincial and territorial governments in emergency forest fire situations?


Edgar John Benson: No,
Mr. Speaker. However, the department does stand ready to aid provinces in fighting forest fires when called upon to do so, though the responsibility is basically that of the province, within its provincial boundaries.



FINANCE


Hon. J. A. MacLean (Malpeque):: Mr. Speaker, I should like to pose a question to the Minister of Finance. Has he invited the provincial governments to give him information in advance concerning their plans to float large loans in the United States so that his department may take action to compensate for the effect of loans on the exchange rate of the Canadian dollar?


John Napier Turner: I have said to the House before that I reiterated the request of my predecessor that provincial governments should, where possible, use the Canadian capital market to accommodate their financial requirements. I might say that most of the provinces are keeping in touch with me. Whether or not the federal government can take compensatory action to balance provincial borrowings is hypothetical. It is a question which is under continuing review.



NATIONAL SECURITY


Eldon Mattison Woolliams: Mr. Speaker, I should like to ask the Prime Minister a question arising out of questions addressed to him earlier by my hon. friend from Egmont. In light of his answers today, and since the statement made by the hon. member for Trinity was based on facts gathered inside or outside the cabinet, may I ask whether the security planning group, the new group which was set up by the Solicitor General to act as a liaison body between the government and the RCMP, has been informed of the information in possession of the hon. member for Trinity? Second, does the Prime Minis-
Inquiries of the Ministry
ter take the position that his hon. friend from Trinity has broken his oath of office?


Pierre Elliott Trudeau: Perhaps the Solicitor General can answer the first part of the question. The second part of the question could, I suppose, be answered by anyone as well as myself, including the hon. member for Calgary North.


Eldon Mattison Woolliams: With the greatest respect to the Prime Minister, he is the head of the government; he sits in cabinet and I do not.


Some hon. Members:: Oh, oh!


Eldon Mattison Woolliams: Hon. members over there can yell and shout if they want to. Let them go ahead. Bring on the chorus. I think the only man who can answer my question properly is the Prime Minister. I ask him now: does he take the position that the former deputy prime minister of this country, a former member of his government, broke his oath of office?


Pierre Elliott Trudeau: The hon. member is really asking me for a legal opinion. I would not find it proper under the rules to give that opinion. Second, I could not answer, even if I wished to do so, because I do not know exactly what the hon. member said. I have not read or heard exactly what he said. Perhaps the hon. member knows.


Eldon Mattison Woolliams: Since the Prime Minister invited me to pass the first part of my question to the Solicitor General, I should like to put that question to the Solicitor General. Has the group that he set up, this new security planning group that we have never been able to find out about, been informed of the information the hon. member for Trinity alleges he has with reference to danger to the security of Canada?


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, we do not know any more than what has been reported in the papers.



INDUSTRY


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I should like to put a question to the Minister of Industry, Trade and Commerce.
Can he say whether his department has made a study of the effects of the import of textile products from Rou-mania on the maintenance of the employment level within the UTEX Corporation at Victoriaville? If so, does he intend to publish the findings of this study?


Jean-Luc Pepin: Mr. Speaker, of course we watch the import of textile products as we do any others.
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Inquiries of the Ministry
I shall find out whether a particular study is being made concerning the effects of imports from Roumania on the firm that the hon. member has referred to.



INQUIRY OF THE MINISTRY

Mr. Bill Knight (Assiniboia):: Mr. Speaker, I have a question for the Prime Minister. In view of the fact that the government has announced it is going to get involved in the business of supplying the railways with hopper cars, would the Prime Minister inform the House whether or not this is the first of a series of steps toward nationalizing the Canadian Pacific Railway?


Mr. Speaker:: Order, please.



CANADA LABOUR CODE


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Minister of Fisheries. Has there been any consultation between officials of the fisheries service and the Department of Labour concerning the effects of Bill C-183 on the fishing industry? If so, are there any plans to clear up the constitutional aspect of this bill before it is enacted into law?


John (Jack) Davis: Mr. Speaker, this bill, as the hon. member knows, is a matter primarily for the Department of Labour. However, there has been consultation between officials of the Department of Fisheries and the Department of Labour with respect to this subject.



ELECTION EXPENSES BILL


Mr. Thomas M. Bell (Saint lohn-Lancaster):: Mr. Speaker, I have a question for the Prime Minister. In view of the bluntly worded criticism by the Canadian managing editors conference in New Brunswick last week concerning the news blackout envisaged by the new legislation on election expenses, would the Prime Minister say what his reaction is to the resolution sent to him and the nature of his reply?


Mr. Speaker:: Order, please. The hon. member knows that a question asked in those terms is not in order. The hon. member is asking the Prime Minister to indicate what his reaction is to a resolution or communication. A question in those terms, to my way of thinking in any event, is not quite in order.


Thomas Miller Bell: Mr. Speaker, this is a very eminent body. Many members of the press gallery were present at that meeting. May I ask the Prime Minister whether a copy of this resolution was received and what was the nature of the reply?


Pierre Elliott Trudeau: Mr. Speaker, I cannot say whether it has been received among the many pieces of mail that I get. I have received something from the Committee for an Independent Canada that the hon. member might want to question me about. I may have received the item the hon. member refers to, and I am sure that if I did it was acknowledged by my office. As to the answer that we would give, the minister will state it on behalf of the government when the debate continues in the House, and I hope at that time the hon. member will state his position on this so-called news blackout.



FINANCE


Mr. William Skoreyko (Edmonton East):: Mr. Speaker, I have a question for the Prime Minister. In view of reports that some government funds made available through the local initiatives and the opportunities for youth programs have not been properly used as designated, can the Prime Minister say whether steps are being taken by the government to tighten bookkeeping controls over these grants?


Pierre Elliott Trudeau: Mr. Speaker, the ministers responsible have indicated at various stages the review process and the ongoing examination that is in hand. They have stated that if members have complaints about particular projects that allegedly are misusing funds they will gladly look into the matter.


William Skoreyko: Is it the intention of the government to recover any moneys that have been mis-spent or not used in accordance with the original intent of the grant?


Pierre Elliott Trudeau: Mr. Speaker, I really cannot answer a hypothetical question. If the hon. member has a concrete case I will certainly attempt to determine the answer.



POLLUTION


Frank Howard: Mr. Speaker, I should like to ask the Minister of the Environment a question. On Friday last, I believe, the minister stated in response to other questions of mine that in my constituency there was a very bad offender in the field of pulp mill pollution. Would the minister be prepared to indicate the names of the pulp mills in Canada that are considered by his department to be very bad offenders?
May 30, 1972


Mr. Speaker:: Order, please. That question ought to be placed on the order paper, unless the hon. member is asking the minister whether he is prepared to do this. Of course the information should not be given at this time.


Frank Howard: Yes, Mr. Speaker, that was my intention.


John (Jack) Davis: Yes, Mr. Speaker, I would be prepared to comply with that request.


Frank Howard: May I ask the minister when he will be able to provide this information?


John (Jack) Davis: Shortly. Most existing pulp mills offend our regulations.


Frank Howard: Could the minister indicate at the same time the stage of negotiations between his department and each of the pulp mills in regard to application of the pulp and paper mill effluent regulations?


John (Jack) Davis: Mr. Speaker, this would complicate the answer. Frequently the negotiation is carried on with the knowledge or aid of the province concerned, and it would take some time to compile all of the information.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, since the Secretary of State for External Affairs is absent on important government business, may I ask his parliamentary secretary whether the hon. gentleman would undertake to have tabled in the House the UNCTAD resolutions which were so consistently opposed by the Canadian delegation at the conference at Santiago, Chile, and would he also undertake to make a statement shortly to the House concerning Canada's role at this conference which has earned so much criticism?


Mr. Gaston Isabelle (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I shall take that question as notice.



PENITENTIARIES


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, my question is for the Solicitor General and it deals with a matter I asked the minister about on May 16 concerning deduction of amounts of damages done by inmates to prison property from the salaries of prisoners in federal institutions. On May 20 the regulation holding prisoners financially responsible for wilful
Inquiries of the Ministry
damage to prison property was suspended. Would the minister tell the House who authorized that directive?


Mr. Speaker:: Order, please. This question ought to be placed on the order paper or discussed at the time of adjournment.


Almonte Douglas Alkenbrack: Ten o'clock.



NATIONAL DEFENCE


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of National Defence. In view of the statement made by the President of the Treasury Board regarding the extension of the principle of regional rates of pay, may I ask the minister whether it is intended to institute regional rates of pay in the Canadian Armed Forces, or will the minister undertake that this will not happen?


Edgar John Benson: Mr. Speaker, I think it is safe to undertake that it will not happen. Members of the armed forces often serve in many areas of Canada within the same year.



LABOUR RELATIONS


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct my question to the Minister of Labour but since he is absent, perhaps in Montreal, I will address it to the acting minister. In view of the move in Montreal today that suspended the jobs of 3,200 longshoremen in Quebec City, Montreal and Trois-Rivieres, men who have been involved in an illegal strike for the last two or three weeks, is it the intention of the government to take action immediately under section 19 of the Canada Labour Code which specifically prohibits work stoppages during the life of collective agreements? May I remind the minister that the present bill we are working on-


Mr. Speaker:: Order, please. The hon. member can ask questions but cannot convey reminders to the minister. The minister has the floor for the purpose of answering the question.


Bryce Stuart Mackasey: Mr. Speaker, I am aware of what has happened in Montreal, namely, the suspension of a large number of longshoremen; the hon. member said 3,200. I can understand the suspension since there is a collective agreement and the men refused to report to work. The collective agreement is a very complex one because of a security clause. I think the employers had little alternative but to take the action they have taken. I believe it would be in the best interests
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May 30, 1972
Foreign Takeovers Review Act
of the men to sit down and negotiate according to the laws of the land.


Lincoln MacCauley Alexander: The minister did not answer my question, perhaps for reasons best known to himself. In view of the fact that Canadian consignees will have to foot the extra charges on goods that are forced to go through the United States, is the government aware of this situation and is it planning to alleviate the financial hardship that will occur if the government does not step in under the Canada Labour Code, which prohibits strikes during the term or life of a collective agreement?


Mr. Forrestall:: Send them to Halifax.


Bryce Stuart Mackasey: Someone mentioned that ships are already on the way to Halifax and Saint John. One man's meat is another man's poison. The main people suffering from this illegal dispute, of course, are the longshoremen, and they should be asking questions of their leaders.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, May 29 consideration of the motion of Hon. Jean-Luc Pepin that Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Speaker:: The hon. member for Egmont. Perhaps the conversations, which I am sure are very interesting, might be pursued outside the Chamber or behind the curtains. The hon. member for Egmont has been recognized. It might be difficult to hear him if these conversations continue.


David Samuel Horne MacDonald: Mr. Speaker, yesterday the Minister of Industry, Trade and Commerce (Mr. Pepin), as well as other government members, joined in a chorus of apologies for the bill which is before us today. Last night the hon. member for Ontario (Mr. Cafik) took us on a global tour of not only the other provinces and their views, but also other countries and other legislation in this field. When one sees what other countries are doing in the field covered by this legislation, one wonders whether it is fair to say there is no place like home. On the problem of development, particularly in areas of regional economic disparity, it is true we face problems of development not only in economically and socially deprived parts of the country but we know that such development in Canada has been spotty, dominated often by one important economic group or foreign group. Surely, the spotty

and somewhat erratic economic development of Canada has occurred because there has never been a coherent set of guidelines for either foreign or domestic investment and development in Canada.
One of the major tragedies, if not the major tragedy, of the legislation we are discussing today is that the bill before us accepts the status quo. It accepts in both complacency and naivete a situation wherein complete sectors of our economy seem destined to remain in the present state. This is something which I do not believe members of this House, or indeed the Canadian people, should be forced to accept. When we deal with something as difficult and complex as corporate behaviour in a modern and complex society, we know that to some extent the corporate structure is parallel to government. It is parallel with the official levels of government. Particularly, it has the force of government. A corporation which employs most of the men of a town or a community within a province indeed controls and influences the lives of those men far more directly than any local, municipal, provincial or even federal government. Indeed, while governments very often deal with what people cannot do, corporations and employers often determine directly or indirectly what people can do.
So, it is not difficult to see why the entire issue of foreign ownership is such a particularly sensitive one. In many ways, those who speak of examining the directorships of corporations for Canadian representation, those who speak of full disclosure, are talking about examining the workings of corporate governments. Yet, despite the ruffled sentiments that this type of proposal causes, I believe we should be committed to these things because they are in the interests of Canadians. It is important for Canadians that the facts about corporate behaviour be known. The composition of directorates should be a matter of public record so that Canadian participation can be determined. I am disturbed by the fact that most recently the government, through the Minister of Industry, Trade and Commerce, has written off so quickly the importance or usefulness of having increased Canadian participation in the board rooms. It has been suggested that just having Canadians as directors would not substantially alter the situation.


Jean-Luc Pepin: Not necessarily.


David Samuel Horne MacDonald: Not necessarily; the minister again indicates that today. However, I believe the minister missed the point, just as this bill has missed the point. What really needs to occur in this country, to use the government's own phrase, is further domesticity in the Canadian economy. We are not speaking of a symbolic increase of directorates to some magic number such as 50 per cent or 75 per cent. We are talking about the whole impact of corporate behaviour today on Canadian participation. In purely legal terms, it may well be true that the increase of Canadian directorships would not substantially alter the character of the industry and economic activity in this country. What we are concerned about is the effect the day-by-day decisions of the board have, on a long-term basis, on the activities of all Canadians. We are concerned about the greater usefulness of Canadian managerial skills. We know from some of the studies which have been made that only recently it has been
May 30, 1972

acknowledged that we had to encourage, through schools of business training and programs of business and commerce, more entrepreneurial skills in this country.
Now, we will know, when we have developed major pools of this talent, that the talent exists and is available for the upper and middle levels of corporate management. I suppose there might be some form of moral suasion if you like for more use by firms in this country, both totally Canadian firms and particularly those which operate as foreign subsidiaries, of Canadian talent in corporation and managerial skills in the economic activity which takes place. While this is accepted in many areas, there is no hint of recognition by the Minister of Industry, Trade and Commerce that this is an important aspect of the problem which requires a solution.
Second, surely there needs to be a facing up to the problems of disclosure. I do not think it can really be argued in detailed terms that corporations, having as they do a tremendous amount of economic and social power, can longer be justified in operating in terms of secret societies. Government cannot for one moment operate as a secret society, although daily we do battle in this House of Commons because of what the government is attempting to do. Surely, if the public believes if it is not in its interest to have a government which operates in secret then it is not in its interest to have large corporations, either wholly domestically owned Canadian corporations or foreign or international corporations, operating in our society in some kind of a secret or medieval manner. There is a sense in which there must be corporate responsibility and accountability. I think, quite frankly, that it is both shocking and an indication of the naivete of the present government that they have in no way attempted to grapple with this important problem.
Third, we must be able to come to grips with those problems that affect our economy and make decisions. I refer to the whole problem of extra-territoriality. In recent years we have known just how important these kinds of decisions can be, whether with regard to wheat sales made by an earlier government or with regard to the present DISC legislation that is being so badly fumbled by the present government. We know that there must be a firm government program to face this whole problem of extra-territoriality.
I could go on in this vein for some time, indicating the weaknesses, the lack of frank recognition of what the real aspects of the problem are, but I do not plan to spend what little time I have remaining dealing only with the negative aspects of the government's performance. I want to make some positive suggestions which I hope will be seriously considered at some stage. I suppose it would be too much to hope for some response from this administration, but I hope the one that will replace it certainly will be able to adopt many of these suggestions and provide us with a national economic and social policy that has some sense of direction, purpose and rationale to it.
It seems to me that the entire area of corporate citizenship, development and foreign acquisition should be dealt with by something more than the negative form of a screening agency. What is necessary, I believe, is a posi-
Foreign Takeovers Review Act
tively oriented national agency that would involve provincial and federal representatives along with industry, the academic community and citizens. The way in which we have arrived at this debate dealing with this bill, shows us just how ludicrous the present position of the government is. First of all, a task force was established under the Minister of National Revenue (Mr. Gray). It operated in some kind of a milieu that was never very clear to anyone. Occasionally there were dispatches that came during the night watches. Finally, we had the report plus this bill. We were told that some consultation with the provinces took place, but one senses that it was nothing more than a perfunctory round-the-table discussion at a meeting last fall of first ministers or first ministers and finance ministers. We have a government whose concepts are of the ivory tower type, a government of "we alone know best". What I am suggesting is that the time has arrived for the establishment of some national, independent review agency on which there can be the broadest kind of representation.
I think that if we are serious about these problems, and it has been shown now by a number of public opinion polls that the whole question of foreign ownership and economic independence is uppermost in the minds of Canadians from coast to coast, I believe we should establish a national institute on economic independence and development. I think this national institute should be established not by one government solely but by the federal government along with the ten provincial governments. Of course, immediately there will be objections that in that kind of situation you will never get the kind of agreement necessary to establish an agency or an institute that can do a really satisfactory job. It is certain that we have never had any worthwhile action yet from this government in this respect. Further to that, since the government has produced its report and tabled this bill a number of provincial premiers have provided more real leadership on a national basis than this government has yet shown.
If we are seriously going to deal with the question in a federal state-and I sometimes wonder whether or not this government is not terribly inconsistent, at one time hiding behind the constitution and at another completely ignoring it-if we believe that we have a viable, workable federal system in this country, then the whole issue of economic independence must be decided within a federal provincial framework. Therefore, I suggest that such an institute on economic independence and development be established by the federal government and the ten provincial governments, and that this institute have statutory responsibilities related to the review of all proposed legislation in the development field in order to see that this legislation meets what might be called the joint criteria of both development and independence.
Let me say here that I think we do have to take seriously the concern that a number of provincial premiers have registered that any restrictions on foreign investment in this country could have a disastrous effect on their own planning and priorities with regard to development. Quite frankly, I think that some of their statements have been naive. I think they really have not looked at what has happened within their own provinces with regard to foreign investment. I do not think they have questioned

May 30, 1972
Foreign Takeovers Review Act whether or not it has been effective for them and for the people to whom they are responsible.
I say that the time has come when we must have a co-ordinated policy that looks to the question of development as well as of economic independence. This institute should and could prepare annual reports on the activities of both provincial and federal governments for public examination. It should and could hold regular meetings, hear witnesses, and generally keep the Canadian public informed as to the true nature of the problem and the various alternatives available. It could, once and for all, force governments and the business community to lay all their cards on the table. In addition to that, a research wing could be established that would provide both short and long-range studies on alternative means of development aside from foreign venture capital. This, tied in with governmentally co-ordinated programs working on a continuous basis, would maintain some real co-ordination between the various activities of the federal government.
We have said nothing here about the way in which government departments and agencies are often working at cross purposes with regard to the whole matter of whether or not the investment and economic activity is in the Canadian public interest. There could be some real independent vehicle which could analyse the over-all policies of the federal government, as well as relate those to the various policies of the increasingly powerful provincial governments. It is a well known fact that a number of provincial governments now have such a large budgetary program of their own, are so heavily involved in assisting the establishment and encouragement of the business community in their own provinces that the only kind of policy must be a co-ordinated one. I think that regardless of whether it is this particular kind of national institute on economic independence and development or a similar agency, there has to be a vehicle which will get us beyond the present situation where we have this kind of ad hoc, instant and somewhat peripheral solution to a very serious and major question facing the Canadian people.
It is strange to note that when we get into discussions of the problem of foreign investment and foreign economic control, we almost inevitably put the cart before the horse. Certainly, that is true with respect to this government. The question is not to have a foreign investment policy and then try to relate it to some kind of development or industrial strategy. Surely, what we need in the first instance is some framework for an industrial policy. What we are really talking about here is a consistent pattern of development to which we would relate a whole series of approaches related to foreign investment and control, and not the other way round. In order to have that we have to have a much greater amount of informed discussion on public goals and on the issues at stake. Without that kind of public discussion, the ability to take action in the Canadian interest will be severely limited on the part of both this government and any provincial governments that seek to deal with this issue.
I have very few minutes remaining, Mr. Speaker, but I want to make four or five additional specific suggestions which must be considered when dealing with this over-all question. The recent changes in the income tax bill, C-259,

should remove some of the disadvantage to Canadian investors with regard to investing in business activity in their own country, but to my knowledge this bill would not provide the necessary incentive so that we might redirect the activity of Canadian investors. Obviously, what we need is a pattern of investing incentives.
Perhaps the suggestion may have already been made, but I put it forward again, that tax credits be given to individuals-not to corporations-who buy Canadian type equity investments, say up to an amount of $5,000 per person per year. In that way there would be a real built-in incentive to put one's money into the kind of development capital that would allow Canadians to participate directly in the development of their own country.
Second, Mr. Speaker, surely we can give greater attention to the use of pools of money that are collected in both pension funds and insurance funds. There are at present real legislative restrictions-this was acknowledged in the report presented by the Minister of National Revenue (Mr. Gray)-that must be dealt with, and surely this is a simple and obvious step that should be taken now.
Third, Mr. Speaker, and of increasing concern to many Canadians, there are the present limitations on and present direction of banking activity in Canada. Our banking institutions have far too often worked to the disadvantage of the development of the Canadian aspect of our economy. What is needed now is a Canadianization of our banking system. Through our banking system more venture capital needs to be released to Canadians for Canadian enterprise. Again, it was suggested in the report tabled by the minister on May 2, that what we need is really a kind of merchant banking in which there can be some real risk taking. Nowhere else would this be more valuable than to those areas suffering great regional economic disparity. Some attempts have been made, but without tangible effect, to extend banking beyond the "Big Eight". Surely, the time has come for this country, and particularly members of this House, to look closely at what kind of advantages the Bank Act and the regulations at present give to our country.
I wish the minister were still here, Mr. Speaker, to hear my fourth suggestion. I am going to speak about a matter that is under his direct responsibility, and that is the Industrial Development and Research Incentives Act. Surely, this can become a more aggressive instrument working to increase our research capacity. We know the tremendous limitations that are placed on increasing the research and development activity that presently goes on in Canada, but since we have legislation that encompasses some aspect of that field I suggest that we work to make it more responsible, more active, more progressive in its support for research activity in business. And related to that there must be parallel legislation that would provide some tax incentive for the implementation of the results of Canadian research in the manufacturing and service sectors. At the present time, there does not seem to be any acknowledgement of the fact that when Canadian research takes place and there is some real pay-out in terms of manufacturing or service activity, there should be some form of tax incentive.
Fifth, Mr. Speaker, we have to acknowledge the fact that we live in an international business community. It is
May 30, 1972

not enough just to talk about what we should do, given our own situation. We are in the very difficult situation where we must direct much of our economic activity beyond our own country. We have frankly to acknowledge the degree to which we are efficient and productive, whether it is technology or management that we are talking about. If we are not able to improve our technology and develop more and better entrepreneurial skills, we will simply not measure up in the international marketplace. Excellence and competence must be increasingly recognized within the legislative framework established both federally and provincially.
Having made these remarks, Mr. Speaker, let me say something else, because I believe it is most critical to any action taken by this or any other government. There must be public participation in and support for what occurs. We have seen instances in recent years when governments sprang suddenly, without warning or understanding, into legislative activity or initiatives. The public are more than willing to get deeply involved in these questions, but so far the government has been reluctant to engage the public in this kind of dialogue. It will be impossible to make the kind of decisions that will be important and effective unless there is a public involvement, a public motivation and public commitment. I hope the minister would not spend over-much on this particular piece of legislation when obviously there are some larger and more central legislative initiatives that must be taken.


Mr. Hubert Badanai (Fort William):: Mr. Speaker, I am very much interested in this particular bill, which is to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, because it deals with a question of great concern to areas where foreign capital is needed to establish a business or an industry, and which have little or no appeal to Canadian investors, to provide jobs and improve local conditions. After several months of study the Minister of National Revenue (Mr. Gray) made a statement of policy designed to regulate foreign investment in takeovers of Canadian based enterprises. I was rather pleased that his statement did not take the hard line of the supernationalists. Instead, he brought forth a sensible document of policy which the majority of Canadians can and will support.
I express the hope that the minister entrusted with the administration of the act will use discretion and common sense. I have great faith in the present minister. I do not believe he will jeopardize the good that many companies, with shares held by foreign investors, are doing for the communities in which they are located. But suppose another minister were to lean heavily on the ideas of the so-called Action for an Independent Canada, it would then become very difficult for companies, however successful, to expand their businesses in that their shareholders, though a minority, could be classified, at least technically, as foreigners. Of course, I would shudder to think what could happen if, by a fluke of circumstances, the NDP were to win power and form the government some time in the future. That is a very remote possibility, but nevertheless it would be a disaster.
I am therefore concerned, and very much concerned at the possibility, however distant, that virtually any acquisi-
Foreign Takeovers Review Act
tion, even by a minority interest, in any Canadian business, by a non-resident or by virtually any company, will be subject to the almost unlimited discretion of the Minister of Industry, Trade and Commerce (Mr. Pepin). This thought was very well expressed in an article on foreign ownership policy which appeared in the May 22 issue of the Financial Times. On the other hand, I am encouraged to think that after due consideration of all the angles of this very important bill, the final draft of the legislation will allow capital to start new enterprises, or expand existing ones that are foreign-owned or to develop Canadian resources, to continue to enter the country. For those of us who appreciate that this type of investment has stimulated Canada's economy in the past and contributed heavily to the nation's present state of prosperity, this is good news. It will not please those who believe that foreign capital is a threat to our independence.
In the future, Mr. Speaker, Canadians who own enterprises in this country and wish to sell them to Americans will be subject to government scrutiny, and will be permitted to do so if it can be shown to be in the national interest. The policy reflects the expressed views of the new Minister of Finance (Mr. Turner), that given a choice between extreme nationalism as expressed by some members of the Independent Canada Committee and prosperity, Canadians will choose prosperity. Of this, I have not the slightest doubt.
The opposition and the news media expressed impatience, which was not really justified, at the delay in introducing this measure. People will realize that the time spent by the government in reaching these conclusions was time well spent. It remains for Canada to continue to attract foreign investment where it can do the most good and to ensure, in every way we can, that the prime benefits accrue to Canadians in terms of prosperity and jobs. Under the new policy, Canada will continue to offer a hospitable climate for foreign investment. The difference between Canada and so many of the other developed countries is that we have, still, so much left to develop and we can use so much help in doing the job.
It should like to quote from the report of the Minister of National Revenue, which sums up the question in these words:
Important benefits have been and can continue to be obtained from foreign direct investment. The data comparing the performance of Canadian-controlled firms to foreign-controlled firms indicates that Canadian control of a business is not, in itself, a guarantee of sound performance; and is not, therefore, a satisfactory means of achieving Canada's broad national objectives.
For instance, general legislation providing for 50 or 51 per cent Canadian ownership, either in the economy as a whole or in particular industries, can be very costly to the economy.
Professor Melville Watkins of the NDP said that the remedy for foreign ownership in Canada was a system of complete state socialism. Mr. Watkins faced the issue in his "Waffle Manifesto", but that document was too hot for his own New Democratic Party to handle. What we have, in these new proposals, is a traditional Canadian solution designed to give us maximum benefits at minimum cost. Consideration has been given to the fact that the provinces attach high priority to rapid economic development

May 30, 1972
Foreign Takeovers Review Act
and are inclined to feel that Canada will continue to require a substantial volume of foreign investment to achieve this objective. I am referring, particularly, to those provinces which possess large mineral, forest, and energy resources and which have been keen for investment funds. For these provinces, foreign investment means an important source of economic development and jobs.
As an example, Mr. Bourassa, the Premier of Quebec, a strong opponent of economic nationalism, thanked the Canadian government for its prudence in limiting itself to "restrained" controls. He said that his government will not accept further controls in the future which could hamper the inflow of job-creating foreign investment. "We don't want to close the door on any foreign investment which will bring more jobs for more Quebeckers" he said; "We can't afford to refuse."
An economist, Ian MacDonald, offers this answer to the argument that Canada is trading away her independence:
As long as non-residents are behaving as good corporate citizens, there is no danger ... If they are not, the government is free to control them. American capital has not come to this country as part of an imperialist plot and Parliament remains sovereign as the appropriate guardian of the public interest should foreign-owned firms behave in a way which threatens Canadian independence or sovereignty.
Briefly, the benefits which have accrued to Canada from foreign investment have given us, first, an inflow of capital without which Canada could not have developed to the present state of economic stability; second, access to the United States managerial skills which have been considerably more developed than those in Canada; third, the benefits of the most advanced United States technological knowledge in fields which Canadians would have required long years of research to develop on their own; and fourth, direct access to the vast United States market for many of our products.
In a special study prepared for the Royal Commission on Canada's Economic Prospects in 1957, Professor Irving Beecher and Professor S. S. Reisman summarized the advantages in this way:
From the search by foreign investors for profit, Canada has received a supply of capital, enterprising skills, technological know-how, and markets which for magnitude, quality, and stimulus to economic growth, has probably never been surpassed anywhere in the world.
Canadian nationalists have been very active in recent years. Walter Gordon, Mel Watkins, Mel Hurtig, the Committee for an Independent Canada and other spokesmen have made "nationalism" the fashionable wisdom. Mr. Crump, the retiring Chairman of the Canadian Pacific Railway, during the course of an interview recently, said that he has no quarrel with foreign ownership and that money has no nationality.


An hon. Member:: Shame; look what the CPR did to this country.


Hubert Badanai: Under the new policy, foreign investment will continue to play that vital role and, notwithstanding Mel Watkins, Walter Gordon, Mel Hurtig and the whole Committee for an Independent Canada, our identity will be as secure as it has ever been. Mr. Alfred Powis, President of Noranda Mines, speaking at the annual meeting of

shareholders of the company held on April 28, 1972, had these significant observations to make:
Canadians are quite rightly concerned about how to provide the additional employment needed to accommodate the fastest growing labour force in the industrialized world. Many proponents of an industrial strategy start from the assumption that primary industry cannot provide the level of employment needed and that we must foster more rapid growth in the manufacturing and service sectors.
In its more extreme form, the argument assumes that Canada has a chronic shortage of capital and surplus of labour. It alleges that past national policies designed to stimulate investment, such as tax incentives, have fostered capital intensive industries such as mining at the expense of other sectors of the economy. It is said that these industries pay very little in taxes, and in addition have not only created too little employment but have also resulted in foreign domination of our economy. Therefore, the conclusion is that we need a national industrial strategy which will divert capital from primary industry to the secondary manufacturing and service sectors where many more jobs will be created per unit of investment. To the extent that this reduces or eliminates the growth of such industries as mining, it is said that nothing will be lost in the long run because our resources are vital to the rest of the industrialized world.
Such arguments have a superficial plausibility, and they are being repeated often enough that there is some danger that they are becoming accepted as conventional wisdom, at least in certain influential circles. They are probably the reason why the mining industry fared so badly in the so-called tax reform exercise. In fact, these arguments are dangerous nonsense and, with respect to the mining industry, they are based on official statistics which are fragmented and highly misleading.
Another point to consider is the extent to which the rest of the world really depends on our natural resources. In some circles, there seems to be an assumption that we have a sort of monopoly on natural resources, and that we can hold the rest of the world to ransom for them and use them as bargaining counters in international trade negotiations. As far as mine products are concerned, this is sheer nonsense. Although we are the world's largest producer of nickel and zinc, 80 per cent of the world's known reserves of these metals are outside Canada, and in all other important metals our share of known reserves is considerably smaller. Moreover, the statement that the rest of the world is running short of mineral reserves so that ours will become increasingly valuable is untrue in the case of mine products. Leaving aside the potential for new discoveries on land, there are almost limitless reserves of most metals on the floors of the oceans which are now close to being within technological reach. Clearly, our mineral resources are only an asset if they are found and developed, and if we fail to do this the rest of the world will simply pass us by.
The last point to consider is the question of foreign ownership of the Canadian mining industry. A great deal is made of the figures produced by Statistics Canada which purport to show, for example, that 80 per cent of our smelting and refining capacity is foreign controlled. However, as indicated previously, these figures are fragmented and highly misleading. The fact is that Canadians control 67 per cent of our copper refining capacity, 70 per cent of zinc capacity and 100 per cent of lead capacity. It is only in aluminum and nickel that so-called foreign control is predominant, and this is because Alcan and International Nickel are considered to be foreign companies because somewhat less than half of their shares have been owned in Canada. However, if the trend of increasing Canadian ownership of these two companies continues, a majority of their shares will soon be held in Canada and the statistics will then show that all major sectors of the smelting and refining industry are overwhelmingly controlled in this country. This is not to argue that there is not an important degree of foreign ownership in Canadian mining. There is. But the real point is that there is also a substantial and healthy Canadian component, and its relative importance is growing.
Thus, the arguments raised against continued emphasis on development of our resources simply do not stand up. The best
May 30, 1972

national industrial strategy is to concentrate on the things we do well, where we have a demonstrated record of international success. This is not to deny the importance of the manufacturing and service industries. We obviously need balanced growth, and this is the direction in which any national strategy should point us. However, unless we stimulate the development of primary industry, we are likely to have no growth at all.
The late Ross Thatcher, former premier of Saskatchewan, argued eloquently for many years against any attempt to halt or reduce the flow of much needed foreign capital for the development of Canadian resources and secondary industry. While members of the NDP, of the waffle group as well as others advocated buying back Canada, and they were making loud noises in the province of Ontario especially, Premier Thatcher was heading to the United States to tell American businessmen that, so far as he was concerned and Saskatchewan was concerned, they were welcome in Canada as good corporate citizens.


Mr. Benjamin:: And the people threw him out.


Hubert Badanai: The ultra nationalists and socialists do not like voices of people like the late Ross Thatcher or of the premier of Quebec.


Leslie Gordon Benjamin: The people do not, either.


Hubert Badanai: However, those people living in areas where large amounts of capital are needed to provide jobs and improve living standards will be happy. The people of northwestern Ontario, where I come from, need more capital. They do not care where it comes from since it is needed to provide jobs for the people of our province.


Douglas Charles Rowland: Mr. Speaker, although I have the utmost respect for the hon. member for Fort William (Mr. Badanai), the kind of speech which he has just made is the kind which is calculated to give me heartburn. His is the kind of counsel this country has followed since the death of the great nation builders, the last of whom was Laurier. Since then we have followed that kind of cautious philosophy. We have lacked confidence in ourselves as Canadians and in our abilities to develop this nation ourselves. We have followed the hon. member's kind of advice, with the result that, today, our sovereignty and independence are jeopardized. That is what the hon. member's philosophy has brought about in this country, and that is the kind of philosophy this party rejects out of hand. His is the kind of philosophy which makes the simple-minded assumption that we need foreign capital to help to develop this country, that foreign capital was absolutely necessary for the development of this country, and it ignores the possibility that, if we had mobilized our resources as Canadians, foreign capital would not have been needed in this country because we could have achieved exactly the same growth on our own.
I think it is important to take a moment or two to consider why we are undertaking a debate of this sort, and why this kind of legislation is before the House. This legislation is before this House because there is a growing concern on the part of Canadians that our sovereignty and independence, which are necessary to develop Canada according to the particular genius of the Canadi-
Foreign Takeovers Review Act
an people, stand in jeopardy. Because they stand in jeopardy, our nationhood stands in jeopardy.
We are discussing the idea of foreign ownership because some of us believe that there is a capacity and capability within Canada to develop a unique and highly valuable society, one which can be a model for the world. In attempting to achieve the goal of development in Canada and in assigning goals for ourselves as Canadians in the past we have been very limited. Our goals have been restricted largely to growth and prosperity. In order to achieve those goals, we have sought the aid of others without first examining whether we had the resources ourselves to undertake that kind of development. In seeking the assistance of others, I believe that what we have done has been to actually reduce our capacity to achieve the greatness which is the potential of Canada.
In line with that statement, I would like to draw to the attention of the House some words of a Canadian historian of considerable worth, Professor Donald Creighton. Writing in MacLeans Magazine of November, 1971, he said:
The truth is that Canadians, in accepting American capital, American management and American technology, have unwittingly received the spirit that animates all three. They have not only become subjects of the American continental empire, but they have also become converts to its characteristic philosophy of life, to what might legitimately be called its religion. The central doctrine of this religion is a belief that progress is the only good in life and that progress means a liberation of man for the progressive conquest of nature by technology.. . .
This new doctrine (the doctrine of continual'economic growth) has captured the minds of Canadians, just as it has those of every other people in the western world. To achieve economic growth, they are prepared to sacrifice their independence, pillage their natural resources, contaminate their environment and endure all the hideous evils of modern industrialization and urbanization. The American empire is taking over the birthright of Canadians; and its'imperial religion has taken over their minds.
That is a pretty strong statement, but I think it is accurate in its particulars. It indicates one major way in which foreign ownership limits our capacity to develop as a nation, a way in which it has not assisted, but limited our capacity to develop as a nation and to realize our potential as Canadians. That point is a bit philosophical and because it is philosophical, it may not carry too much weight with members opposite, such as the member for Fort William who spoke before me. However, there are some extremely practical considerations which indicate that foreign capital, in the amounts we have it in Canada, is also very dangerous for the development of this country.
Let me just mention one of hundreds of examples which come to mind. The concern to which I will devote a moment or two is that of unemployment, a phenomenon often brought to the attention to those of us in this House, through public opinion polls, as being one of the major concerns of Canadians. Our inability to provide jobs for our citizens is related in many ways to the question of foreign ownership. Foreign ownership exists in massive proportions in Canada. Our economy has more foreign ownership and control than that of any developed nation in the world. It is dangerous and undesirable. It contributes directly to our inability to create jobs for our people,

May 30, 1972
Foreign Takeovers Review Act in other words, to the amount of unemployment we are suffering at the moment. It does this in a number of ways.
First, foreign ownership means a branch plant economy. That means that key decisions are being made in board rooms outside this country in relation to considerations totally unrelated to economic realities and social needs in Canada. Thus, the American DISC legislation will quite conceivably result in production cutbacks and plant closures in Canada. Canadian workers will be thrown out of jobs, not because their work is unsatisfactory, not because they have not been sufficiently productive or because there is no market potential for the products they manufacture, but simply because the companies concerned can make a greater profit by expanding production in the United States and taking advantage of the tax cut which the DISC program represents. That is one way in which foreign ownership can adversely affect our ability to provide jobs for Canadians.
Foreign ownership contributes to unemployment by the export of jobs. Multinational corporations come to Canada to purchase and exploit our natural resources to supply the needs of their already existing manufacturing facilities elsewhere in the world. Thus our resources are exported in the rawest state possible and along with them thousands of potential jobs in the manufacturing and service industries.
The hon. member for Duvernay (Mr. Kierans), a member of the party opposite, estimates that $1 billion worth of exports of manufactured goods contains about $230 million in salaries and wages, whereas $1 billion in export resources pays only about $68 million in salaries and wages, and that is jobs. If we continue on our present path, the Science Council of Canada warns, and I quote:
Canada's economy in this decade will increasingly become dependent upon the resource and service industries. Resource industries offer limited opportunities for employment; furthermore much of their profit does not remain in Canada. The tunneling of funds out of the country is likely to stunt the growth of our service industries ...
Our participation in international trade will become less and less significant and we will become, once again, mainly suppliers of raw materials to the North American continent.
The Science Council of Canada has argued that our present course can result in the stunting of growth in our service industries, the most labour intensive of all industries in this country. It can produce a declining participation by Canada in international trade, another area in which jobs are produced. What does that do to our prospects for employment? I am not arguing that this whole problem can be attributed to the fact that our resource industries are largely foreign owned, but foreign ownership is certainly one of the most significant factors in the kind of structural employment we have in Canada.
A third way in which foreign control of the economy contributes to the lack of employment opportunities once again relates to the branch plant nature of economic development in such circumstances. Research and development of significant importance, with its attendant employment potential, both directly and through spin-off is almost never assigned to the branch plant, but remains with the parent company. Moreover, the branch plant introduces inefficiencies into production, increasing per

unit cost and decreasing the export potential of our production.
For example, Canada produces for a domestic market of 22 million people almost as many different brand names and model lines of television as does the United States with a domestic market of over 200 million. That is a direct result of branch plant development in Canada. It makes no economic sense at all. Were our economy not branch plant in nature, we would probably produce fewer models and have longer production runs, thereby reducing per unit costs and making our product more competitive within the domestic market and in world markets.
These are some of the ways in which foreign ownership directly contributes to our inability to meet the Canadian peoples' needs for jobs, the way it contributes to the most critical, in human terms, of all Canada's problems, unemployment. That is one of hundreds of examples of the kind of disadvantages which result from the degree of foreign ownership which exists in the Canadian economy.
At its founding convention in 1961, the New Democratic Party sounded a warning to this country about the dangers which the increasing foreign ownership of our economy posed to our independence and sovereignty. When we were not ignored, we were denounced as being antiAmerican, falsely reviled as wishing to cut off the foreign capital which was erroneously believed to be the life blood of our nation, or laughed at as being hopelessly idealistic.
In 1968, the Watkins Report, commissioned by the government, said substantially the same things as we had been saying, and supplied statistical data to back up those assertions. It also warned us that about 15 years were left in which to set our house in order, to attempt to reverse the trend toward increasing foreign ownership, or it would be too late. The government ignored that report. But in the last two or three years, concern among the general public about our future as a nation should we do nothing about foreign ownership, has grown, and economic nationalism has become respectable, as the hon. member for Fort William has said. I do not consider this to be something undesirable, as he seemed to think, though. The Toronto Star backs economic nationalism. MacLean's Magazine backs it. The Committee for an Independent Canada has been formed. Now that the cause is respectable, the Conservative and Liberal parties have embraced it with open arms-or perhaps I should say with open mouths. For the last two years, the government has been promising immediate and effective action on foreign ownership. We have waited impatiently to see this policy revealed.
On Tuesday, May 8, at 5 p.m. the Minister of National Revenue (Mr. Gray) rose in his place in the House of Commons and unveiled the government's policy on foreign ownership. I listened initially with stunned disbelief and then, increasingly, with anger because the policy on foreign takeovers, together with the proposed legislation, was nothing but a sham and a hoax, a cynical effort to defuse the issue of economic nationalism before an election was called-nothing more, and nothing less. What we heard was not a policy to regulate and reduce foreign
May 30, 1972

ownership of our economy. It was, rather, nothing more than a scheme for screening foreign takeovers of Canadian industries, and an unworkable scheme at that.
Boiled down to its essentials, and it doesn't take much boiling down, the legislation provides that each time a foreign-owned corporation wishes to purchase a Canadian firm possessing more than $250,000 in assets and doing more than $3 million in business, that fact must be reported to the Department of Industry, Trade and Commerce. The department is then, on the basis of criteria as yet undisclosed, to determine whether or not a takeover would be in the Canadian interest. If it is deemed to be in the Canadian interest, the deal can go through. If not, it can be stopped, though an appeal procedure is provided. That is the essence of the legislation. The half a loaf brigade, and there are many on the other side of the House, may say: Granted, it does not do much, but it does do something; it will prevent the takeover of Canadian firms by foreign corporations, and that is a gain. Anyone who takes this view is badly mistaken.
First, one should remember that the legislation is not designed to prevent takeovers as such, but only to prevent those which are not considered beneficial to Canada's interests, whatever that may mean. Second, the agency selected to determine whether or not a takeover is in the interest of Canada is not the independent screening agency advocated by the Standing Committee on External Affairs and National Defence in its report on Canadian-United States relations, or by the Watkins Report. It is, rather, the Department of Industry, Trade and Commerce, the department which for the past decade and a half has been the major architect of placing Canada in the position of finding more of its economy foreign-owned than that of any other developed nation. Third, the minister whose responsibility it is to supervise the screening, the Minister of Industry, Trade and Commerce has stated categorically that the purpose of the legislation is not to restrict foreign investment but, rather, to ensure that Canadians derive greater benefit from it.


Jean-Luc Pepin: I said "mainly"; read my speech again.


Douglas Charles Rowland: The minister said, in effect, in a very charming way-I am paraphrasing: what I think will happen is that if we examine a deal and it does not seem to offer much to Canada we shall call the principals involved in the takeover together and tell them it does not offer very much, that we do not think highly of the deal. This having happened, rather than have the deal set aside, the principals will pull other cards out of their sleeves, and make additional offers.


Jean-Luc Pepin: Read page 2634.


Douglas Charles Rowland: I have done so.


Jean-Luc Pepin: Well, read it again.


Douglas Charles Rowland: When you look at the factors I have mentioned, is it any wonder that a United States businessman, informed about the provisions in this legislation, should have made the comment: Now, we can all roll over and go back to sleep.
Foreign Takeovers Review Act
I have dealt with some of the errors of commission in the legislation. The errors of omission are too numerous for them all to be mentioned individually, but it is important to note a few. First, the legislation contains no provision to deal with takeovers which may be arranged between the time the legislation was announced in the House and the time it becomes law. Moreover, spokesmen for the government have revealed in the House through their responses to questions that there is absolutely no intention of employing other means of restricting takeovers until the bill becomes law. So in the next few weeks, or months, however long it takes for this bill to become law, we can expect takeovers to be successfully negotiated at a highly accelerated rate.
Second, the legislation does not provide for the screening of new direct foreign investment in Canada, that is to say the establishment of new companies as opposed to the taking over of existing Canadian ones. Nor does it provide for the screening of projects to expand existing foreign-owned industry in Canada. These weaknesses and shortcomings were outlined in the Canadian Forum version of the Gray Report. The actual statements concerned were quoted by my leader in reply to the minister's statement on this subject. I shall not read the exchange now, but I refer hon. members to page 1831 of Hansard. That same report, as published in the Canadian Forum, said in one sentence what I am arguing in this regard right now. It said that failure to screen projects for expansion into new industries could lead to easy circumvention of the screening process. This is why, if the screening process is to work, it must not only deal with takeovers of existing Canadian firms but with the expansion of foreign corporations already established. Otherwise, the legislation can be easily circumvented. So the legislation before us is entirely useless, or, to put the best construction upon it, of very little use.
The fact is that the policy announced by the minister in this bill has nothing to do with the expansion of existing firms into new areas and new industries. It has nothing to do with direct foreign investment coming to Canada, and it does nothing to increase Canadian ownership in any of the areas with which we are concerned. In short, the legislation will not work even in the narrowly defined areas in which it is designed to operate.
Another error of omission is the government's failure to amend allied legislation to ensure that it complements the pitiful piece we have before us with the object of ensuring that the screening operation will work more effectively. If time permitted I could give a long list of legislation which requires amendment in order to make this bill work more effectively. One statute which requires amendment is the Corporations and Labour Unions Returns Act, in accordance with which certain information is demanded in connected with the financial operations of corporations and unions. If the screening process is to be at all effective, a great deal more information will be needed about the financial operations of corporations involved in takeover deals. But no move has been made to strengthen the CALURA legislation to this end.
Another area of omission relates to the fact that if the screening agency does occasionally say no to a foreign

May 30, 1972
Foreign Takeovers Review Act takeover bid, it is obvious that some alternative purchaser will have to be found by Canadian industry. An obvious candidate for this role is the Canada Development Corporation. However, while the screening process will take into consideration the fate of companies with a mere $250,000 in assets, the Canada Development Corporation can only look at those with $1 million or more in assets. So, there is another little gap there.
When we on this side of the House asked whether legislation was going to be drafted to close this gap between the amount of assets established under the screening legislation and that under the Canada Development Corporation legislation, we were informed by the government that it had no plan to amend the Canada Development Corporation legislation. These kinds of omissions, and the government's failure to amend the legislation complementary to the bill that is now before the House, lead me to suggest that the screen that the government is holding up is so full of holes as to be totally useless. It is a big zero.
What action is needed to regain control of our economy? I think it would be worth while to spend a moment or two to reiterate some of the points made by my leader on December 9 in this House. He spoke about the problem of foreign ownership and referred to the minimal action that is required to be taken immediately to reduce or eliminate the current danger to our sovereignty and independence. The hon. member for York South (Mr. Lewis) put forward a ten point program before this legislation was introduced. First, he suggested the establishment of a screening or control agency with the power to limit takeovers and the further expansion of foreign ownership and control, including both expansion of existing foreign-owned companies in this country, and new direct foreign investment. The hon. member said that unless the agency has the power to limit further foreign expansion in Canada, it will be a toothless exercise. I suggest that is what we have here, a screening agency with no real power to be effective since it excludes so many of the safeguards that are important to a screening process.
Second, the hon. member for York South recommended the revamping of the Canada Development Corporation to meet the need for an alternate source of investment capital. Investment funds could be drawn, he said, from the reserves of financial and other corporations as well as from voluntary investment by individual Canadian citizens. He said that that was one means of obtaining from within Canada the capital which many people argue we must obtain outside the country.
The third point he made was that the Canada Development Corporation should be given a mandate to invest in new industrial development as well as to buy existing multinational corporations. There is a huge gap in Canadian industrial policy. The government has been unable to respond to the need for capitalization by those Canadians who have discovered new technology. Because the government has not had legislation to enable it to respond to such need for development capital, many of these people have been forced to go south of the border to find that capital, and as a result we have lost the technolo-

gy. The Canada Development Corporation is the logical place to find this sort of capital, and therefore the legislation should be amended to ensure that the CDC is capable of supplying it.
The fourth point made by the hon. member was that the Canada Development Corporation should be authorized to engage in heavy expenditure on research and development.
The fifth point my leader made on December 9 was the need for the Canada Development Corporation to expand the public sector of the Canadian economy. It is the public sector, we can be absolutely sure, that will not fall into foreign hands.
He advocated as a sixth point, a program of rationalization and specialization in Canadian manufacturing, both to meet more of Canada's domestic needs and to change trading patterns away from a single, predominant market.
His seventh point was the immediate establishment of a government export agency with power to ensure that all corporations in Canada promote trade in accordance with Canadian law and policies, and that they do not submit to foreign laws and policies. We have had a number of examples of the need for this kind of trading corporation in the past. I recall an order being placed by the Soviet Union in Canada for the purchase of flour destined for Cuba. Some of the milling companies that tendered to supply this flour under contract eventually backed out because they were United States subsidiary plants and were afraid of the effect that their engaging in this contract would have on their parent company under the provisions of the U.S. trading with the enemy act. Another example was when the People's Republic of China attempted to buy Ford trucks and parts from Canada. It was the fear of the effect of the U.S. trading with the enemy act on the parent company which prevented the Canadian subsidiary from meeting that export order.
The hon. member for York South advocated as an eighth measure, which is required immediately to eliminate or reduce the danger to our sovereignty that is inherent in foreign control of our economy, the establishment, in co-operation with the provinces, of standards of resource planning and development, and requiring the processing of raw materials in Canada.
He advocated as his ninth point increasing public investment in resource industries, through public ownership or through joint participation with private corporations, as the most effective way of regaining control of our energy and mineral resources which are now mainly in the hands of multinational corporations and world cartels.
Finally, the hon. member advocated a policy that requires full disclosure of facts before any shutdown of a plant is authorized, so the government could take over plants threatened with shutdowns when their operations are economically sound and socially useful. We all recall what happened at the steel plant at Sydney, Nova Scotia. A multinational corporation decided it was no longer in its interests to keep this plant open and was quite willing to see hundreds of men in Canada thrown out of work. Such an event was of no concern to it. Then, the govern-
May 30, 1972

ment took over the plant and made a profit in the first year of operation.
These are some of the steps that we on this side of the House contend are necessary to regain some modicum of control over our economy, and to guarantee that our sovereignty and independence will no longer be threatened as they are now. I have put forward what is a minimal program. I have recited ten specific points for action. Only one of these has been acted on by the government in its so-called policy of economic nationalization, and this is the establishment of a screening agency to screen transactions that involve only about 20 per cent at most of foreign investment in this country.
What is needed is for the government to take the kind of action that my leader advocated on December 9. This must be done if we are to keep Canada Canadian. But in response to the expressed concern on the part of Canadians over foreign ownership of our economy, the government has brought forward a bill that is inadequate in every sense, one that does not even do what is stated to be its express purpose. Certainly, it does not touch on the problem of expanding the percentage of Canadian ownership of our economy, and this gap in the legislation demonstrates conclusively that this government is derelict in its duty to protect Canada's sovereignty. The protection of Canada's sovereignty does not involve only the use of military forces. It also involves the use of economic policy. In the use of economic policy, the government is derelict in its duty.


Mr. Ian Wahn (St. Paul's):: Mr. Speaker, the purpose of this takeover bill which we are now debating is to make sure that no takeover of a Canadian business by a foreign investor will be permitted unless it can be established that it is clearly in the national interest. In recent years it has been clearly established that the number of takeovers of Canadian businesses by foreign investors has been so large as to arouse legitimate concern on the part of Canadians. There is no clear evidence that the number of such takeovers is decreasing, despite the fact that in recent years Canadians have been accumulating large quantities of investment capital which could be used for investment in Canada. Much of it is going abroad. Some of the takeovers which have taken place no doubt are desirable from the Canadian point of view, but others have not been desirable. As members of this House know, it has been necessary for the government to intervene without the benefit of enabling legislation to stop important takeovers. I refer specifically to the proposed takeover of Denison Mines and the proposed takeover of Home Oil. This method of control has been embarrassing and unfair to the government and to Canadian owners, as well as to the proposed purchasers of the businesses. It therefore makes good sense to have enabling legislation which will prevent takeovers unless they can be clearly established to be in the national interest. It is also probably desirable to make sure that there should not be an outright prohibition of all takeovers but only those takeovers which in fact do not help Canada.
The bill before us seems to be carefully drafted. No doubt there will be questions with regard to details which can be raised in committee, and no doubt there are a
Foreign Takeovers Review Act
number of amendments which usefully could be made. The principle, however, of having enabling legislation to regulate takeovers of Canadian business by foreign owners is sound. It is not all radical. Most industrial countries have established such procedures. Because of the high degree of foreign ownership of Canadian industry, the need in Canada for such legislation is greater than in most countries. Indeed, legislation of this type is long overdue.
I support this legislation as one phase in the evolution of a truly comprehensive national policy with regard to foreign investment and foreign ownership. The problem I have is not with regard to this particular bill. The problem is that this bill does not constitute a comprehensive policy concerning foreign investment and foreign ownership. It does not constitute the comprehensive policy with regard to foreign ownership and foreign investment which members of this House and members of the public generally have been expecting for so many years.


Mr. Brewin:: Mr. Speaker, I wonder-


Mr. Deputy Speaker:: Order, please. Is the hon. member seeking the floor for the purpose of asking a question?


Francis Andrew Brewin: Yes, Mr. Speaker. I wonder whether the hon. member would permit a question?


Ian Grant Wahn: Yes, indeed.


Francis Andrew Brewin: The hon. member was quoted in the press a few days ago as having said that this legislation was a baby step and would not halt foreign takeovers. He said it would be largely ineffective. Was he correctly quoted? Is that his view of this bill?


Ian Grant Wahn: That is a reasonably correct quotation. As I have said, I support this bill but only as one step, a small step, in the development of a comprehensive policy in respect of the foreign investment and foreign ownership, a baby step if you like.


Francis Andrew Brewin: And ineffective.


Ian Grant Wahn: I will suggest certain amendments which would improve the effectiveness of this legislation if the hon. member for Greenwood will permit me to continue. The Watkins Report on the structure of Canadian industry was published more than four years ago. The report of the House of Commons Standing Committee on External Affairs and National Defence was published in August 1970, and all of us have been expecting an official government statement on foreign investment and foreign ownership since that time. This bill is good as far as it goes, but it does not represent the comprehensive statement of policy which we have been expecting. My remarks will deal primarily with such a policy.
I would like to make a very clear distinction between foreign investment and foreign ownership. I believe Canadians should continue to welcome foreign investment which will be of benefit to Canada and in the national interest; but I believe we should not welcome any further increase in the percentage of foreign ownership in the two vital sectors of manufacturing and resources, which now are more than 60 per cent owned outside the

May 30, 1972
Foreign Takeovers Review Act country. In debating the question of foreign investment, most of the arguments miss this important distinction. I have heard many people, including members in this House declare "In my area we need more capital to create more employment. It does not matter to us whether it is Canadian capital or foreign capital, so long as the foreign investors behave like good Canadian citizens. So far as we are concerned, the only thing wrong with foreign investment is that there is not enough of it." This usually goes along with an assertion that southern Ontario got a head start, that it now has all the foreign capital it needs and is just trying to protect its position by preventing other areas of Canada, such as Quebec, the Atlantic provinces and the western provinces, from getting their share.
These arguments miss the point entirely. No responsible Canadian suggests we should prohibit foreign investment, but we do insist that we have a real problem in Canada because of the excessive degree of foreign ownership and control over our basic manufacturing and resource industries. We do insist that in order to prevent this problem becoming more serious, and in order to direct as far as possible new foreign investment to areas where it is really needed, it is necessary to regulate, but not to prohibit, foreign investment. I ask this question of those who put forward these arguments. If foreign investment has gone into southern Ontario, Montreal, Toronto and the St. Lawrence basin in the first 100 years of our history, what makes them think that things will be any different in the next 100 years, if we do not adopt some sensible rules in respect of foreign investment? Investment will still continue to go to the same places. Cities like Toronto, Montreal and Vancouver will continue to grow out of all proportion to the rest of the country. Toronto may grow to a population of six million people. Who wants that? Certainly, few people from the city of Toronto want that. So, legislation is required which will help direct new foreign capital to regions which need it most and away from the regions which no longer want it. That is really what we are suggesting.
Another related argument, which has been put forward often, is that we cannot possibly develop our manufacturing and resource industries without assistance from abroad; that we do not have the necessary technological ability, know-how or intelligence to do this. What a despairing attitude that is! What a lack of self-confidence it reflects and what a commentary upon Canadians who make such an argument! What a craven fear they must have for our future? Great resource industries have been developed by Canadians with Canadian capital despite the fact that the majority of these industries are now owned by foreign corporations. Businesses of every kind have been built in Canada without the necessity of turning over the ownership of these businesses to foreign investors. What has been done in the past can be done in the future.
Our great banking system has been built up not with foreign capital and not with assistance from abroad. It has been built up by Canadians with Canadian capital. Does anyone suggest that the banks do not have access to capital? They do pretty well, but nevertheless for some reason which I cannot understand every banker I meet tells me that it is almost impossible to develop sound manufacturing and resource industries in Canada without

capital from abroad. I say to them: are the banks not efficient; don't they work well? Do they not have branches abroad doing a good job? They say: yes. I say: what makes you think that Canadian owners of manufacturing and resource industries are less able than you? They cannot answer that argument: no one can answer that argument. Canadians are just as capable of building up their industries as are Americans or any other foreign owners.
What are the actual facts? The Standing Committee on External Affairs and National Defence went into the whole question quite exhaustively in 1969 and 1970 and published its eleventh report in August, 1970. Certain basic facts were clearly established in this report. The Canadian economy can be divided into ten great sectors. These are agriculture, forestry, fishing and trapping, mining, manufacturing, construction, transportation and public utilities, wholesale and retail trade, finance and services. Based upon 1967 figures which were the latest available at that time, all of these sectors were under majority Canadian ownership and control with the exception of two very large and very important sectors. These were the manufacturing sector and the resource sector, including mining and petroleum. In 1967 both these sectors were about 60 per cent owned by foreign investors, mostly from the United States.
Only two of the ten great sectors of the Canadian economy are under foreign control. But the danger is much greater than that statement would indicate. These two sectors are very large, and central to our entire economy. Other sectors which are Canadian owned, such as finance, services, trade, transportation, public utilities and construction, are closely related to and depend upon the two foreign controlled sectors. The remaining three Canadian owned sectors, agriculture, forestry, and fishing and trapping, are smaller relatively in total assets, provide fewer jobs, and have gradually become less important in our economy.
As has been stated in the House time and time again, the fact is that no other developed country in the world has so much of its economy foreign-owned as does Canada. I emphasize also that most of this foreign ownership is concentrated in the United States. I say this not out of any feeling of anti-Americanism but to emphasize that it is particularly important because of the closeness of our other relations with that country. We are close neighbours; we are influenced, sometimes almost overwhelmed, by cultural influences from the United States. American unions are dominant in Canada. We have joint military arrangements, and two thirds of our imports come from the United States and two thirds of our exports go to that country. Our educational institutions are rather similar. The high concentration of American investment and ownership in our economy is only one of a large number of factors which may, if we are not careful, make us unduly dependent upon the United States and may stunt our national development.
Some Canadians say "so what? What is the danger in this?" One answer can be drawn from history. Throughout recorded history, excessive absentee ownership has had evil results, not only for the dependent state but also
May 30, 1972

for the absentee owners. The President of the United States, speaking in this chamber, made this very point. But surely it should not have been necessary that that point be made by the President of the United States in this House. Surely, every member should have accepted it long before he appeared before us. The President of the United States pointed out that in its early years his country also was dependent upon European capital, but that it had adopted policies to develop its own industries and to safeguard its own independence. He pointed out that his countrymen realize that Canada must do the same. The American government does not want a satellite Canada; the American government wants a strong, friendly and independent Canada. This was the very conclusion reached by our committee in its 1970 report.
In addition to this lesson from history, certain specific dangers are clear. If American ownership of our vital manufacturing and resource sectors continues to increase, the result, bearing in mind the closeness of all our other relations with the United States, will inevitably be a high degree of integration of the Canadian economy with the American economy. This is not similar to one country joining other countries of roughly equal size in a common market. This would not be similar to the United Kingdom joining Europe in the Common Market. The American economy is about 12 times as large and powerful as ours. If we have integration of the Canadian and the American economies, this will mean that, in effect, the Canadian economy will become part of the continental American economy. The result of this will be that Canadians will not be able to retain a reasonable degree of control over their economic destiny. This is of prime importance to Canadians. Canadians want to have jobs; they want to be able to earn enough by their own efforts to support themselves, their wives and their families, and all that depends upon the economy. Canadians want to control their own economy, they do not want their economy and their jobs controlled by large multinational corporations or by impersonal forces operating from another country, no matter how benevolent and friendly that other country may be.
If the Canadian economy becomes part of the American economy, it will mean that our economy will inevitably move up and down with the American economy. If the United States suffers deflation, we will suffer deflation. If the United States suffers inflation, we will suffer inflation. If the United States suffers from unemployment, we will suffer from unemployment, and there will be nothing that this Parliament can do about it. If some members say "So what's new? We can't now" I say that it is time for a change.


Some hon. Members:: Hear, hear!


Ian Grant Wahn: We may have already become too dependent upon the American economy, and in that event it is time for a change in our policies. It is time to develop a greater degree of Canadian independence, a greater degree of control over our own economy.


Some hon. Members:: Oh, oh!
Foreign Takeovers Review Act


Ian Grant Wahn: I hope I have explained adequately that I was emphasizing the necessity for a change in the policies governing the operations of our economy.


Mr. Fairweather:: Same thing.


Some hon. Members:: Hear, hear!


Ian Grant Wahn: Our committee made that point in its report when it said:
The danger facing Canada is not one of political absorption by the United States; the danger which Canada must guard against is that it will drift into such a position of dependency in relation to the United States that it will be unable in practice to adopt policies displeasing to the United States because of the fear of American reaction which would involve consequences unacceptable to Canadians-
The committee has concluded that, in addition to maintaining political independence, Canada must also maintain a sufficient degree of military, economic and cultural independence so that it will, in practice, be able to make the independent decisions which constitute the vital characteristic of an independent nation.
If we do not retain a reasonable degree of economic independence, I have no doubt we will continue to maintain the appearance of political independence. The provincial legislatures will continue to meet and debate in the provinces; this House will continue to meet and debate here and no doubt will continue to pass laws. But the vital economic decisions affecting the average Canadian will not be taken in this House or in the provincial legislatures but at meetings and by institutions controlled beyond our own borders. That is the real importance of this debate. There is a real danger here, and that is why it is urgent that we should have a clear statement of government policy on foreign investment and foreign ownership and control.
I believe that most Canadians would support the bill now before us if they could be assured that it is merely one measure in an evolving program to assure Canadians of effective control of their own economic environment, one of a number of measures such as the legislation now in plade relating to banks, insurance companies, trust companies, the National Transportation Commission, the CRTC, the Canada Development Corporation, and many others. But Canadians will feel nothing but dismay if the government puts this measure forward as its final statement of policy in this field.
This particular bill has been presented by the government in response to the demand by members of the House, and by Canadians generally, over an extended period of time for a comprehensive statement of policy on foreign ownership. There is a real possibility, therefore, of misunderstanding. To avoid this danger, it is most important that the government indicate clearly that this particular bill is in fact merely one measure in such a continuing program to regain control of our economy. If this is true, then this fact should be stated clearly in this bill.


Jean-Luc Pepin: That was in the very first paragraph of my speech.


Ian Grant Wahn: The first paragraph is very useful because it does recognize, as the minister has indicated, that there is

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Foreign Takeovers Review Act a problem. That certainly is a real advance, but it is not the end.


Some hon. Members:: Hear, hear!


Ian Grant Wahn: The bill also indicates that there is a problem, but what we are asking for is a statement of policy with regard to solutions. With the greatest deference and respect to the minister, I suggest that this could be very clearly established by adding a preamble to the bill, as was done with the National Transportation Act, which would set out clearly the policy of the government. I suggest that this preamble should, in effect, state that the government recognizes there is a problem associated with excessive ownership of vital sectors of the Canadian economy by foreign owners. This, as the minister has said, is indicated in clause 2, of the bill, so I am not asking for very much.
The preamble should go on to state that action must be taken with care in order to be fair to foreign investors, and to prevent loss of jobs and hardship for Canadians, that one of the most pressing problems, and one of the easiest to deal with immediately is the problem of takeovers, and accordingly this bill has been introduced to deal with this specific problem. However, other measures will be introduced promptly as required to ensure effective Canadian control of the Canadian economy, and to maintain a reasonable degree of economic independence. This is the basic requirement, as I see it. But I suggest two additional changes. To make the takeover legislation effective, new foreign investment should also be subject to regulation by the takeover branch. The necessity for this is clearly explained in the studies entitled "Foreign Direct Investment in Canada" recently published by the government of Canada.
The final requirement, which I would suggest, is to establish a knowledgeable and authoritative group, or agency, or branch, or department, or whatever you wish to call it, to make continuing studies on the subject of Canadian economic independence, and to make policy recommendations to the government with regard to further new measures which would form part of this continuing and evolving program for Canadian economic independence. At the present time we do not have sufficient information on this subject to make wise decisions. We do not really know for sure whether the danger of economic dependence upon the United States is decreasing or increasing. We know we want to be independent. We know we want a reasonable degree of control over our own destiny, but we do not know the best way of achieving this. It is essential that there should be a continuing organization which can do the necessary research, and help to develop policies for consideration by government.
In the past, this House has enacted one piece of legislation here, another piece of legislation there. The problem is too serious and the need too urgent to proceed in this way any longer. We must have continuing study, continuing policy recommendations, and continuing improvements in our program. At the present time some work in this field is done by a branch of Statistics Canada and some by a branch of the Department of Industry, Trade and Commerce. The work should be co-ordinated. The group responsible should be of the highest ability to

match the importance of the problem, and the policies recommended by the group should be given serious consideration by the responsible minister and by the government.
It is entirely clear that Canadians are determined to maintain a reasonable degree of independence in an interdependent world. They are concerned about our increasing dependence upon the United States. Many are not sure whether or not that is a real danger, but after the many years of study by various committees they are looking to this government for more than this specific bill on takeovers. They want to know where we have been and where we are going. They want a sense of purpose. They want a clear policy lead from the government.


Mr. Stan Schumacher (Palliser):: Mr. Speaker, I am wondering whether the preceding speech flows from receipt of a certain telegram that some of us got yesterday, because certainly something seems to have happened over there. First of all, I must say that so far as my particular area is concerned, there does not appear to be any consensus with respect to the matter of foreign investment or foreign ownership of business and industry in Canada. If a person took the preceding speaker's thoughts as gospel he would be left with the feeling that there was no question about that in this country, and that it was a major national concern to everybody who had given the slightest bit of thought to the problem. I suggest that at least in one small part of the country this is not the case.
I have to admit that feeling is divided in my area. Actually, it is evenly divided. Prior to the Easter recess I sent out a questionnaire to the householders in my area. One of the questions asked was, "Do you feel that the government should take action to restrict foreign investment in Canada?" The response was evenly divided, and I give it from a sample of 4,600 questionnaires that were returned. Exactly 45 per cent felt there should be restriction on foreign investment, exactly 45 per cent felt there should be no restriction, and 10 per cent were undecided. Not everybody in the country feels that the matter is of national importance.
I agree that there is a feeling abroad in this land that some of our laws are not being properly enforced to give Canadians their rightful place in the development of the their own country. However, I do not think there is any genuine feeling abroad that would justify the remarks of members of the New Democratic party, who suggest the problem has reached such crisis proportions that the only solution is for the government to step in and take over the entire industry and economy of the nation.
The bill before us provides for proposed takeovers to be submitted to the Minister of Industry, Trade and Commerce (Mr. Pepin) in respect of public corporations, that is, corporations whose shares are publicly traded, when a takeover involves 5 per cent or more of the issued capital, and in respect of private companies when a takeover involves shares consisting of 20 per cent or more of the issued capital. I am somewhat concerned about the position of the government when one considers that at present it is the 100 per cent owner of all the shares in the Canada Development Corporation. I feel there could be a conflict of interest with the government of Canada considering whether to approve a certain takeover of an existing
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Canadian business when it also has the interests of the Canadian Development Corporation at heart.
A great deal of information concerning the shares and the business involved will be the property of the federal government for some 90 days. The government would then be in a position to say that it might be more suitable if the Canada Development Corporation paid the price that had been agreed upon or slightly more. In this way, that organization would be allowed to have an inordinate amount of influence on the business of the country. The government is moving in this direction already. One of the largest companies engaged in the exploration for oil and gas in the Arctic is Panarctic Oils, and the government owns 45 per cent of that company. This government appears to have a continuing interest in getting into the day to day business activities of the country. It is very important to remember, in a country the size of ours, that our industries have connections with others in the world at large because of our limited domestic market. We cannot take an insular view here because we must have those connections in order to get the best results. There is also the question of technology. In many instances, it is imperative that some foreign element be involved in our business undertakings in order that we may reap the benefit of technology that has been developed abroad.
One thing that concerns me about this legislation, Mr. Speaker, is the fact that it might be subject to the same kind of treatment that has been extended to applicants for regional expansion grants. These applicants do not appear to me to have been dealt with in a fair and equitable manner in all parts of the country. It is quite obvious that the bulk of the money has gone to the province of Quebec, and I would say that probably even within that province the bulk has gone to the St. Lawrence Valley. The same attitude towards takeovers would not be conducive to the development of strong, viable businesses in the more remote areas of the country.
This bill enjoys the short title, Mr. Speaker, "Foreign Takeovers Review Act". It is the hallmark of this "Looking Glass" government that what it gives to us is the reverse image of what it promised us. This bill would be more appropriately entitled the "Provincial Powers Takeover Bill". I feel that there is a very strong constitutional weakness in this bill. It deals primarily with shares of incorporated companies because most of the undertakings to which it will be relate will be incorporated. I will have something to say about what I think the proper attitude of the government should be later on, but I am going to deal with some of the weaknesses at this point.
This bill represents another addition to the long list of power grabs-some defeated, some successful-by this government from the provinces and from the private sector. We can add it to the original investment companies bill which would have enabled this government to seize control over the investment of $13 billion annually from private business and to shift investment from one province to another to suit its political whim. Fortunately, that bill was emasculated in the Senate. We can add it to the new Unemployment Insurance Act which went a long way towards seizing provincial power over social welfare. We can add it to the direct payment of federal taxes to
Foreign Takeovers Review Act
individuals and corporations under the Family Income Security Plan, the Local Initiatives Program, the Opportunities for Youth, the Company of Young Canadians, regional incentives grants and a variety of other giveaways.
These constitutional violations of Section 92(7) of the British North America Act which gives the provinces exclusive legislative power over social welfare, are justified under the so-called "spending power" of the federal government. The existence of that constitutional power was denied by the Privy Council, the Supreme Court of Canada, and by that eminent constitutional authority who now heads the government of Canada. The curt dismissals of that power by the Privy Council and the Supreme Court remain unchallenged by any later decisions. The statement by the constitutional authority-now our head of government-is classic in phrasing and farsighted in its analysis of the effect the spending power, if used, would have. In 1961, Pierre Elliott Trudeau said, in a paper titled "The Practice and Theory of Federalism", which he contributed to "Social Purpose for Canada":
Indeed, the federal "spending power" or so-called "power of the purse" is presently being construed as a federal right to decide (at taxpayers' expense) whether provincial governments are properly exercising any and every right they hold under the constitution.
In a note to this statement, Mr. Trudeau comments:
In a brilliant chapter published in A.R.M. Lower, F.R. Scott et al, Evolving Canadian Federalism, Durham, North Carolina, 1958, Professor Corry finds it "extraordinary that no one has challenged the constitutionality of the assumed spending power before the Supreme Court" (p. 119). I share his wonderment; but I find it even more extraordinary that political scientists fail to see the eroding effect that the power of the purse will have on Canadian democracy if the present construction continues to prevail, and in particular what chaos will result if provincial governments borrow federal logic and begin using their own power of the purse to meddle in federal affairs.
Eleven years after this article appeared in print, that constitutional authority has taken the Canadian constitution a long way down the road to erosion. The Prime Minister (Mr. Trudeau) is taking another step with this bill, although not by use of the so-called spending power. This time he is taking a large-sized bite out of the exclusive legislative power of the provinces over property and civil rights.
The second reading stage, Mr. Speaker, is not the time to discuss the clauses of this bill or to point out the violations of provincial powers, one by one. Nor am I interested in hearing denials from the minister who occupies the once proud and prestigious post of Minister of Justice and Attorney General of Canada. Notwithstanding the pride of place that that position once held among Canadian lawyers, its pride and prestige have been eroded, just as surely as provincial powers have been eroded, with the publications by a former occupant, of the position of a so-called constitutional paper entitled, "Federal Provincial Grants and the Spending Power of Parliament".
Be that as it may, Mr. Speaker, I feel that one of the big weaknesses of the present legislation is its failure to attempt a selective approach, since there are big differences in the types of investment to which foreign or other

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Foreign Takeovers Review Act
dollars are directed. Many have commented that the resource industry is largely foreign controlled. I suggest the reason is that Canadians do not want to invest money in that area. Our resources are there and must be developed. We, in Alberta, would like conditions to be different. Like it or not, there is a good and viable petroleum and natural gas industry in the province, and there are large, undeveloped petroleum resources in the tar sands. We might wish our economy were totally devoted to manufacturing. It is not. Those resources are there, and are crying to be developed. The industry remains a high risk industry, and returns on invested capital are not necessarily high.
May I now quote part of a speech given by Mr. A. H. Ross, President of Western Decalta Petroleum Limited, in Ottawa on May 3. After asking if the petroleum industry is profitable, he said:
Recently, the annual reports of various oil companies have been published which indicated new highs for sales, cash flow and net income. What you never read in the newspapers is what happens to the money. Of the 74 companies listed as oil stocks on the Toronto Stock Exchange, 2 (3 per cent) paid dividends on their common shares in 1971, and the yield provided by these dividends was 2.3 per cent. For the 20 companies which are essentially oil and gas producers but which are listed as industrials on the Toronto Stock Exchange and which include the larger producers and refiners, 12 (60 per cent) paid dividends in 1971. These dividends provided an average yield of 2.2 per cent-not what could be called high. The other eight companies paid no dividends. The moneys generated by the industry are going and have gone in the past, to pay back debt and for further investment in the business.
He said that his company has operated for more than 20 years in Canada, has not paid a dividend in that period and that its indebtedness is growing every year. He continued:
Another way to look at the profitability of the industry is to look at the return on invested capital, recognizing it is a risky industry, and compare this return to the industry elsewhere and to other industries. In Canada, for the years 1962 to 1968, the average rate of return for oil and gas producers on total invested capital was 8.1 per cent. Gulf Oil Canada Limited recently reported they earned 7.1 per cent on equity capital in 1971. In the United States, the rate of return on total invested capital for oil and gas producers for this period was 12.4 per cent. Now comparing this return, on the same basis, to manufacturing companies, their return in Canada for the same period was 9.9 per cent. The Canadian industry has not been profitable by either standard. Unquestionably, the glamour of the frontier areas has tended to lure investors to the industry, but as $2 million after $2 million goes into dry holes, and it becomes apparent that even a discovery will be long delayed in going to market and thereby generating any spendable cash, the stars in their eyes will dull and the Canadian industry will have to perform by earning an adequate rate of return. With the size of investment required, the day of reckoning is not too far off.
Clearly, if there is to be enough domestic capital for investment, we must make it easier for foreign capital to enter high rish areas. Also, the matter of jobs has been mentioned frequently in this debate. That question seems to be of prime concern for the hon. member for Duvernay (Mr. Kierans) who, while still retaining membership in the Liberal caucus, appears to find it more profitable to work for the democratic party in Manitoba, in that he seems to agree with that party's thinking in this area as expressed by the party spokesman in this debate. The thrust of that party's ideas is that we should not invest money in resource areas, because those areas of the economy pro-

duce few jobs. The experience of Alberta in this regard is interesting, to say the least. May I quote another part of Mr. Ross's speech which comes under the heading, "The Oil Industry is Highly Capital Intensive-Providing Few Jobs". Having asked the question implicit in that heading, he said:
This economic argument has been put out for quite some time but more vocally lately. Perhaps it is time we took a look at the oil industry as it affects the economy of Canada. Unfortunately, at this time-


Mr. Deputy Speaker:: Order, please. I regret that I must interrupt the hon. member at this time.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty pursuant to Standing Order 40 to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Simcoe North (Mr. Rynard)-Health-Suggested increase in health resources fund to enable training of more general medical practitioners; the hon. member for Vancouver-Kingsway (Mrs. Maclnnis)-Consumer Affairs-Increase in cost of food-Request for investigation of cause; the hon. member for Egmont (Mr. MacDonald)-Transport-Summerside, P.E.I. air services-Result of discussion with local representatives.
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, public bills, private bills and notices of motions.



PRIVATE MEMBERS' PUBLIC BILLS


David Orlikow: that Bill C-19, respecting employment with the government of Canada not covered by the Public Service Employment Act, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, Bill C-19 is a short bill and its purpose is simple, namely, to provide information to the public so that contracts for employment entered into by the office of the Prime Minister (Mr. Trudeau) or other departments of government will be made known in the regular public manner by the publication each month of a list of such contracts in the Canada Gazette. I introduced this measure, not to be critical of the increase in the number of public servants or, indeed, in the number of people and organizations hired on contract by the offices of the Prime Minister, the Privy Council, any government department or government commission, but because I
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believe the public has a right to know who is being employed by the government of Canada for the people of Canada and for what purpose.
A good deal has been written and said about the increase in the number of civil servants, particularly the increase in staff in the offices of the Prime Minister and the Privy Council. In a study done by the research branch of the Library of Parliament, they summarized what is actually happening in both the office of the Prime Minister and the office of the Privy Council. They state:
As of October 1, 1971 there were 238 full-time employees in the Privy Council Office, which includes those on the Federal Provincial Secretariat and the Science Secretariat. Of this number, 157 are administrative and support staff. The total salary cost of the office, in terms of gross salary rates, is $2,452,660.
This is a very substantial increase compared to the size of this staff under other Prime Ministers. With regard to the Prime Minister's office, they state:
There are presently about 90 full-time staff members in this office including 39 stenographers and 21 clerical employees and messengers. The total salary cost of the Prime Minister's Office, in terms of gross annual salary rates, is $915,684.
This is not the time to be critical, and even if it were the time, I would not be critical of the very substantial increases which have taken place in the offices of the Prime Minister and the Privy Council. Government business has increased very substantially in recent years as the government has taken on increasing functions such as universal hospitalization, medical plans, increased pensions, services and the Canada Assistance Act, to name just a few. Obviously it requires more people to administer these programs.
I agree that the Prime Minister's office, which is the central and focal point of cabinet decision making, needs a staff to do the job. I do not object to that. I would support the expenditure of the money for this type of program. However, I am concerned about a very rapid escalation in any type of assistance given to the Prime Minister's office, the Privy Council office and various government departments about which we know a great deal less.
I refer to contracting by the Prime Minister's office, government departments, boards and commissions like the CBC or the CRTC, the St. Lawrence Seaway or any one of the hundreds of government agencies that contract specific projects and services. I am not critical of this practice. I am sure that problems frequently arise that need to be studied and the Prime Minister's office, a government department, a board or commission does not have the expert technical advisers which they need. It may be that they are needed only for a particular task or study. After that is over, that person is not required as a permanent civil servant.
I am aware of the fact that if a problem arises which needs study and if a government department, board, agency or the Prime Minister's office requires quick action, following the normal course of hiring through the civil service, which requires publication of a bulletin, the acceptance and study of applications to find the person that qualifies, can take months. Although I have not had much experience with this, I suppose it could take a year
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or more. I accept the fact that on occasion it is necessary to hire particular people on contract. The point I am trying to make, and which I have spelled out in my bill, is my belief that Members of Parliament, the press, radio, television and the general public are entitled to know who is being hired, for what purpose and their remuneration.
Let me give a couple of illustrations of the kind of information which I think is necessary. On October 8, 1970 I asked a series of questions about the Prime Minister's office and the Privy Council office. My questions were as follows:
1.	Since July 1, 1968, what outside consultants, individuals or companies, have undertaken studies or provided assistance, etc., for (a) the Prime Minister's Office (b) the Privy Council Office?
2.	For both the Prime Minister's Office and the Privy Council Office, what were the terms of reference for each consultant or individual providing assistance?
3.	For both the Prime Minister's Office and the Privy Council Office, what was the remuneration received by each consultant?
Eventually, I got a partial list of the people and organizations involved. I was not satisfied because I knew of several people who were working and had not been listed. I communicated with the Prime Minister's office and was given the information. In one case, I was told that the person involved was listed in the Public Accounts as having been hired as a consultant through the Department of Justice. That does not bother me very much except that it makes it very difficult to get information which we ought to have. We should know precisely who the people are and for what purpose they have been hired.
In the answer which I got from the Prime Minister's office, which I appreciated, I was referred to a question placed on the order paper on the same day, October 8, 1970, by my colleague, the hon. member for Moose Jaw (Mr. Skoberg). Although that question was of a similar nature, it asked for somewhat different information. The question reads as follows:
1.	For the fiscal year 1969-70, what are the estimated expenditures for outside consultant studies for each federal government department, board, Crown corporation or agency?
2.	For the fiscal year 1969-70 (a) what outside consultant studies have been undertaken or are presently in progress sponsored by each federal government department or agency (b) what is the cost for each outside consultant study (c) were contracts for these studies awarded by competitive tendering and, if not, for what reason?
The first answer which my colleague received referred only to the Prime Minister's office and the Privy Council office. It reads:
The total expenditure for professional and special services by the Privy Council Office during the fiscal year 1969-70 was $801,739. This amount includes the hiring of consultants and special staff for the Prime Minister's Office, Privy Council Office and task forces as outlined in Section 18 of the Public Accounts for the fiscal year ending March 31, 1970.
I do not know whether that $800,000 expended through the Prime Minister's Office and the Privy Council Office was near the average for each of the government departments, or whether it was more, or less, than they spent. I do not think that is important. Nor, as I said earlier, am I questioning the expenditure of this money. What I am saying is that we are spending, in the course of each year,

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millions of dollars on studies, and I believe the public is entitled to know who is working for the government, what their tasks are and what is the amount of their remuneration.
I present this bill, I think, in an objective manner. I hope it will not be taken as a criticism, or as an attack on the government. It seems to me that individual Members of Parliament, whether they sit on the opposition side or on the government side, should be as interested as I am in getting this kind of information. It seems to me this is information which every citizen has a right to possess. No person who is employed on a contractual basis as a consultant should be any more reluctant to have people know that he or she is working for the government, or for a particular department, than a person who is a full time civil servant. I do not intend to discuss today in any detail my feeling, as expressed on numerous occasions, that the public has a right to be given the results of studies carried out by people who work for the government, whether as full time civil servants or as individuals hired under contracts. The point I am making, and I shall not belabour it, is simply that the people of Canada have a right to know what the government is doing, who is working for government, under what terms and for what purpose. It seems to me this is a bill which ought to meet with the approval of all members of the House, and I hope it will receive favourable consideration.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I should like to congratulate the hon. member for Winnipeg North (Mr. Orlikow) for raising what is obviously a very important issue. He has done so in an unusual way by proposing an amendment to a public bill. The issue is an extremely relevant one, whether it is raised by way of amendment to a statute or as a philosophical argument about administrative secrecy-I suppose that is really the term one should use. I particularly admired the objective way in which the hon. member presented his argument. He did not use his motion as a basis for criticizing the size of the staff in the Privy Council Office, or attached to the office of the Prime Minister; rather, he contended that with the increases in its proportions the public surely had the right to know not only what these people are doing, but the results of their labour.
About a month ago the Committee on Miscellaneous Estimates was considering the spending estimates of the Privy Council Office. Some of us were interested in the Legislative Secretariat which was doing, I am sure, admirable work. We could identify all the areas of research, but we had not seen the product. I believe that as members of Parliament we are entitled to see the results of studies which have been carried out. One example of particular relevancy is the work which has been done in preparing a code of ethics for parliamentarians. I believe these studies should be published, and not kept on a shelf or shuffled around offices with a secret stamp upon them.
It has been said that because we follow the traditions of the British parliamentary system we have yet to divest ourselves of one of its aspects, namely, the habit of administrative secrecy. There are several enlightened books on this subject. One of them, and I have mentioned it before in debate in this House, is by Brian Chapman.

The title is, "British Government Observed". There is an excellent treatment, here, of what the author terms the sacred cow of administrative secrecy. Another informative book on this theme is entitled "Modern Capitalism". The author is Andrew Schoenfeld who discusses various forms of government in western Europe and the manner in which this question of secrecy is approached. I, myself, hope we can aspire to the example of Sweden where a public reference room has been established in which the public has access to all decisions, all reports made by government or contracted by government. The only exceptions are records which affect the privacy of individual citizens-income tax files, for example-or state bargaining with citizens and corporations in connection with the acquisition of land, and so on, where disclosure of information might affect the price. Lastly, of course, are papers which involve the security of the state itself. These are naturally excluded from public examination. As I say, though, all other records and reports are available to the public.
It is a great pity that we in Canada have so far failed to tackle this issue. None of us, I think, object in a general way to the contracting out of work on these studies which are constantly being called for by government departments. but we object very much to the results being kept secret. The equilibrium to be maintained between publicity and secrecy in government affairs is impossible to define in the abstract with any precision; direct conciliation of the competing claims must be done on the basis of individual cases. Yet no community which is apathetic toward reconciling these different claims can come close to striking a reasonable balance. Such a community may fall into the dominant or stable pattern of this country or of the United Kingdom in which administrative secrecy is widely practiced and, apparently, accepted. It is my thesis that we should take a very careful look at the basis for this acceptance. By way of contrast, American society tends to oscillate between the extremes of secrecy and publicity. We have had a startling example of this lately with the publication by the New York Times of "The Pentagon Papers". We have also had other examples relating to the Gray report and other data, and I hope I am understood to be objective here.
It is my opinion that the reason these leaks are occurring is the tightness of the regulations relating to keeping these documents confidential. No harm would have been done had the data supporting the Gray report been released much earlier than it was. I have a bit of a suspicion that the government did not very much regret that particular leak.
No society can attain an appropriate balance before there has been an intelligent debate on the theoretical, constitutional and practical issues involved. I hope that we are participating in perhaps one edge of this debate. The difficulties posed by combining increased government secrecy, the spread of government information services, the need for more reliable information on which to plan policy and the concern to protect individuals against misuse of such information are formidable indeed. But they will not be solved by repeating ritual slogans, like "open access" or "executive privilege".
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I can add to these another that is a ritual when answers are given to questions or replies made to notices of motions for production of papers. One that we hear over and over again is that this is an intergovernmental matter and it would not be in the public interest to disclose the information. I think I can put words in the mouth of the hon. member who introduced this bill when I say that we who partake of this debate feel that it is very much in the public interest that there be a good deal more publicity, not less. I suggest it is only on the basis of careful study and reasoned discussion that we can understand the meaning of the choices that we have to make.
The complexity of modern policy making is a principal reason for the universal decline of legislatures as the source of policy alternatives. The example I always give when this question is discussed in academic circles is the famous one of the overhaul base for Viscount aircraft at Winnipeg. The government hired the Thompson firm of engineering consultants to recommend to the government whether the overhaul base should be in Winnipeg or in Montreal. Although this did not matter very much to members from constituencies other than in Winnipeg or Montreal we were supposed to stamp "approved" on the government's decision without, in effect, ever having access to the data which led the government to make that decision. By no stretch of the imagination could it be said that the location of the overhaul base at either Winnipeg or Montreal was a matter going to the security of the nation.
The complexity of modern policy making is a principal reason for the universal decline of legislatures, as well as this Parliament, as the source of policy alternatives. Most of the steps taken have enhanced the policy formulation and evaluation capacity of the executive branch. The celebrated knowledge explosion and the rise of the information processing industry have come to the executive branch in full force, but hardly at all to the legislative branch. Yet the problems of modern government have now become so technical and complex that the legislature has found it increasingly necessary to defer to the executive for answers and recommendations. Information has become an even greater source of power in our political system than it was previously.
The proliferation of information can also produce a situation of chronic information overload. This has been discussed in a book by Harold Wilensky called "Organizational Intelligence: Knowledge and Policy in Government and Industry". I do not want to take up very much time discussing this, though I think we will have to come, either in a committee of Parliament or in some other way, to an agreement on how we confront the problem of administrative secrecy, giving Members of Parliament a great deal more access to various reports and studies.
I think the greatest danger inherent in some recent developments is, if I can put it this way, the triumph of technique over human values. I think this is a very serious subject. This would result in what the great English constitutional expert Harold Laski once described as the "trained incompetence of the specialist", that narrowness of vision that often comes with immersion in a program or policy field. Surely, it is our duty as Members of Parliament to see that the trained incompetence of the specialist
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does not occur as a result of the input-to use a cliche- that we give. Someone put it a little differently when he said that it was our role to prevent extraordinary people from doing extraordinary things to us. That might strike hon. members as a valid reason for our seeking election.
Breadth of view must be combined with technical skill in effective policy making. Generally, the training of information technologists does not overcome their limited and political sensitivities. I hope that we, as Members of Parliament, can fill a very important gap in this chain. If we have a limited social and political sensitivity we should be moved away from this place when election time comes along.
Wilensky made the point well when he said:
The danger of technicism is in direct proportion to the shortage of educated men. Too often the new technologists are methodological and exact in their specialized fields, but impressionable, naive, and opinionated on broader issues of policy.
I do not quote this author as being in any sense critical of the public service. I see the public service and the elected member acting in some sort of concert, or orchestration if you like, with the technologist, and those who have experience as representatives of the people can add a different and important dimension to the whole area of policy making.
Technologists lack the critical common sense and trained judgment that mark an educated man. Hopefully, with some luck, we parliamentarians can fulfil an important role here. Executives who surround themselves with specialists must always be conscious of the limitations of the contributions of such individuals. It is now possible to arrive more efficiently at wrong decisions based on poor judgment and buttressed by awesome statistics than ever before. Ignorance cannot be the basis of sound policy making, but we must be sure that our definition of knowledge Is not dangerously narrow.
Perhaps hon. members will feel that they have heard enough from me, but I cannot resist a final quotation which I think sums up my feeling on this issue. Again this is a quote from Harold Wilensky:
To read the history of modern intelligence failures is to get the nagging feeling that men at the top are often out of touch, that good intelligence is difficult to come by and enormously difficult to listen to; that big decisions are very delicate but not necessarily deliberative; that sustained good judgment is rare. Bemoaning the decline of meaningful action, T. S. Eliot once spoke of a world that ends "not with a bang but a whimper." What we have to fear is that the bang will come, preceded by the contemporary equivalent of the whimper-a faint rustle of paper as some self-convinced chief of state-
With an obvious exception.
-reviewing a secret memo full of comfortable rationalizations just repeated at the final conference, fails to muster the necessary intelligence and wit and miscalculates the power and the intent of his adversaries.
I am not applying any person to this quotation. I feel the issue raised by my hon. friend is such that if this bill should be talked out, it will come back again. But face the issue we must as a Parliament. I hope the facing of it can be done in as objective a manner as the amendment proposed by the hon. member. Even given some of the

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perhaps hyperbole I have used, I would suggest that the public interest would be better served with a greater amount of openness.
I believe that in dealing with governments on some issues, because of the sort of cloak of confidentiality with which we surround ourselves the public becomes terribly frustrated. I have found that generally speaking the public will accept a person, warts, mistakes and all if he is honest and open with them. But what people do not accept is one more in a routine series of form letters cranked out by some computer giving a routine answer to a question which affects the individual citizen very much indeed. What sustains the existing practice of limited disclosure, I suggest, are outdated constitutional doctrines and a desire by the government to do its business in private without being put to the trouble of full explanation.
With great respect to the public service I would say there is bureaucratic inertia about facing this issue. I am sure, however, that many people in the public service would like to see the results of their studies receive much more public debate and, not less important-I have to admit this-consideration by an efficient and fair government. With that contribution, I say it is a great pleasure to support the hon. member's bill.


Mr.   Fernand-E. Leblanc@Laurier: Mr. Speaker, the hon. member for Winnipeg North (Mr. Orlikow), sponsor of Bill C-19, entitled "An Act respecting employment with the Government of Canada not covered by the Public Service Employment Act" wanted to remain as objective as possible.
He often mentioned that his purpose was objectivity and not criticism of expenses, and he feels that this list, as now published, does not adequately meet the requirements of the population, of journalists, or of some politicians.
The hon. member spoke for a few minutes particularly of increased expenses in the office of the Prime Minister (Mr. Trudeau). I remember that a few years ago, when I was Chairman of the Standing Committee on Miscellaneous Estimates, the Treasury Board estimates were referred to the committee. On that occasion, we fully discussed the people who, on a contract basis or otherwise, worked for the Prime Minister's office. We supplied, at that time, a complete list of employees, with their remunerations and appropriate comments. If the hon. member had had the opportunity of attending some of the committee meetings during which the expenses of the Prime Minister's office were examined, he could readily have obtained all explanations deemed necessary to make sure that government funds are being properly used.
It can however be wondered why expenses of the Prime Minister's office have been increasing since 1968 and specifically since the election of the present Prime Minister. For him it is a matter of trying to instill "participatory democracy" into the people.


An hon. Member:: Oh, oh!


Mr. Leblanc (Laurier):: A Creditiste laughs at that, but we are in fact engaged in participatory democracy. Surely there must one Creditiste in the House-no, there are two!
The present Prime Minister wanted the people to participate in the administration of the government and because of this he receives more communications, letters, briefs than any of his predecessors ever received. Naturally, there is more work than can be done by one person; that is why, at the present time, the Prime Minister must hire additional personnel to answer his voluminous correspondence and also to attend to the proper operation of his office. The people surely expect the office of the Prime Minister to be managed in an orderly fashion and that experts supply the requested information.
On the other hand, it is also true that some of my constituents do write directly to the Prime Minister's office and send me, later on, a copy of their letters. I personally know that many people in my riding are writing to the Prime Minister.
Concerning the reviewing of expenses I have just mentioned, it was very easy to check those of the Prime Minister's office or of any department, since the explanatory note of Bill C-19 reads as follows:
The purpose of this bill is to provide information to the public what contracts of employment are entered into by the office of the Prime Minister or by government departments.
However, the title of the bill itself refers to "Employment with the Government of Canada" and I wonder whether the words "Employment with the Government of Canada" could not be more widely construed than in the explanatory note.
We could include in the same bill the persons hired by the Speaker of the House of Commons, as the secretaries of the members, the staff of the protection service, pages and messengers who do not come under the public service. The list of such employees and their wages is not disclosed.
We could also apply that bill to the personnel hired by the Speaker of the Senate who also has prerogatives as well as to the staff of government agencies and to the Crown corporations.
Indeed, I wonder if even the manpower centres could not also publish every month a list of the many individuals for whom they find employment and if the interpretation of the explanatory note given by the member for Winnipeg North is right or whether the bill under consideration gives to the term "Government of Canada" a general meaning, because we would then have to include all the positions which I mentioned and probably many others.
I should like to state, by the way, that I am fully confident in the Public Service Commission and that I do not believe that it should have to publish each month the list of vacancies it fills. I want to pay tribute to the Public Service Commission which, for the past four years, has been appearing before the committee which I have the honour to preside. All questions are always answered in a satisfactory manner. Furthermore, the commission itself is well managed by competent commissioners who know
May 30, 1972

how to carry out the studies required to ease the task of public servants; it is remarkable that the quality of th'e public service keeps improving, as does that of all hon. members incidentally.
Speaking of publications, as the sponsor of this bill stated, we must also bear in mind the cost of such publications and try to avoid duplication. The Committee on Public Accounts, a member of which I was for many years, has seriously considered the tabling of public accounts and, particularly, the granting of contracts of employment undertaken by the departments.
So, we studied this problem for many years because we thought that the public accounts were too bulky and that a person who was not too familiar with a government institution would have some difficulty understanding them, especially as some relatively small expenses did not appear in public accounts. This is why there were changes made in the format of public accounts.
So, if my hon. friend who presented this bill very objectively wants to get further information concerning hiring contracts entered into by the various departments, I shall be very happy to refer him to public accounts, volumes I-III, 1970-71. In volume II, sections 28, 29, 30 and 31, he will find exactly what he wants. I refer here to section 28 of 1970-71 public accounts entitled "Professional and Special Services (with individual payments of $2,000 or over)-and this is probably what my hon. friend had in mind, besides the employees of the Prime Minister's office which he also mentioned-where I find the information requested by the hon. member.
If a list of expenses of $2,000 or more only is published now, it is to comply with a recommendation made a few years ago by a standing committee of this House. The list of departments is given here: Agriculture, Communications, Post Office, etc. Here is what one can find about the Department of Agriculture:
Analyst fees
Artificial insemination services Boarding house operations
Cattle backtagging-*
Under the Canadian Lifestock Feed Board, we can read:
Pre-audit services Stenographic and typing services
Economic consultant services
Under the Communications Department, we find:
Clerical and secretarial services
Names are given as well as amounts of expenses of $2,000 or more.
With that, Mr. Speaker, one can hardly complain. Maybe the government should, apart from that, publish every month in the Canada Gazette, a list that would be endless, I believe, and very costly. The more so since apart from the public accounts, where the figures called for in this bill are available.
We also have the orders in council which are tabled regularly and made available at all times to hon. members and which give certain details. Certain credits must be approved by the Treasury Board when they are above a
Public Service Publications
given amount. So there again, expenses are controlled. Moreover, the Auditor General still controls expenses and tells us whenever he believes some expenses are unjustifiable.
With the explanations I just gave, I am sure my hon. friend from Winnipeg North will not mind the fact that I do not agree with him. Besides, it behoves the opposition in the House to discuss and exchange views on certain points. After all, I believe the list of publications I mentioned a while ago is sufficient to respond to the object of the bill before us.


André-Gilles Fortin: Mr. Speaker, I do not want to take too much of the House's time as I hope this bill will be adopted before 6 o'clock tonight.
I wish to congratulate the hon. member for Winnipeg North (Mr. Orlikow) who has introduced it and assure him of my support in respect of this bill.
I thought that this measure was quite reasonable since the principle was to determine where the taxpayers' money goes and how it is spent, the duty of a member being to control the public administration. In fact, I thought this bill would be unanimously endorsed by all members.
However, after hearing the speech of the hon. member for Laurier (Mr. Leblanc), I believe I should review this case in order to place the debate in its true perspective.
What is Bill C-19 aiming at? Is it concerned with artificial insemination or any of the subjects mentioned by the hon. member for Laurier? Not at all. The sole purpose of this bill is to provide information to the public about the contracts of employment entered into by the Prime Minister's office or other departments. That is all. No additional information is needed since it already appears, as he has mentioned, in the Public Accounts. This information can also be found in other documents published by Crown corporations. But the details we know nothing about are those concerning the administration of the various departments and particularly of the office of the Prime Minister (Mr. Trudeau).
These are things we do not know anything about and neither does the hon. member for Laurier.
According to some people in this Parliament, more than 80 persons work for the Prime Minister's office. Other reliable persons whom you and I know well, Mr. Speaker, claim that more than 120 persons work for the Prime Minister in his office here in Ottawa. Other equally reliable sources state that the Prime Minister's office includes still much more persons, over 225 if we take into account the offices scattered in the main cities of the country. And what are these people doing? Someone spoke previously of participatory democracy, which is absolutely ridiculous because the offices do not consult people before a bill is passed. Their sole purpose, according to what we understand

and here again the hon. member for Laurier should prove the contrary if he knows so much-is to tell the Prime Minister what public opinion is after bills have been passed, and that is not political participation.

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Public Service Publications
Anyway, though I might be mistaken, Mr. Speaker, the fact remains that nothing is being said on the matter, that everything is being kept secret, that they will not reveal the nature of these expenses, the number of hirings and so forth.
Mr. Speaker, I would rather be proven wrong and then the hon. member for Laurier will show the need for that bill, thereby avoiding confusion across the country and the doubts one might justifiably entertain since this involves the taxpayer's money. It stands to reason that such information should be supplied.
May I remind him that in today's newspaper La Presse it was stated that the booklet "How your tax dollar is spent" has a pre-election flavour, that it hides and interprets some public expenses such as, for instance, the interest on the public debt. The government members find that funny, but the chapters concerning the moneys we contribute to service the public debt are skipped. The chapter on the role of Parliament is also skipped and the facts are being interpreted in favour of the government. However, the booklet "How your tax money is spent", in which readers find publicity for the government and an apology for its policy, has cost $72,625 to the taxpayers. According to the information provided in La Presse, over 528,000 copies of that publication were distributed through government agencies.
Mr. Speaker, it goes without saying that if on the one hand the government deems it necessary to tell people how their tax money is spent-and on that point, I am in full agreement-I consider on the other hand that hon. members should also have the privilege of being told how some moneys have been spent at the level of departmental management.
Mr. Speaker, before concluding these short remarks, I should like to tell one thing to the hon. member for Laurier, who has not yet learned about the tolerant standards of this Parliament. I would remind him that counting the number of members in the House is absolutely ridiculous. I would tell him that if I wanted-and I will not do it, Mr. Speaker-to point out the lack of quorum his whip and his party would be in a rather bad situation. There are only 12 Liberal members in the House. If we wanted to count the number of members here tonight it would show how low we have reached.
However, one thing is for sure: The creditistes members present in the House are prepared to work. We are supporting Bill C-19 because we want to know what the government is doing with the taxpayers' money.
If the government has nothing to hide about its expenditures to Parliament and the people then why is it against this legislation? If the government is convinced that departmental expenditures are legitimate why is it trying to hide these public expenditures?
Mr. Speaker, I will conclude my remarks with this, hoping that this bill will pass.


Fernand-E. Leblanc: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Laniel):: The hon. member for Laurier on a point of order.


Fernand-E. Leblanc: Mr. Speaker, I have been attacked by the hon. member who just had the floor. Actually, he referred to an article published in La Presse

and dealing with a document entitled "How your tax dollar is spent". He called it an electoral document. Now, if he goes back to page B 9 of La Presse, he will see that there is no question whatsoever of an electoral document-


The Acting Speaker (Mr. Laniel):: Order. I would ask the hon. member for Laurier to resume his seat. I must point out to him that the question he is raising is essentially argumentative and according to the House Rules it does not meet the requirements of a question of privilege or a point of order.


Maurice Brydon Foster: Mr. Speaker, the purpose of Bill C-19, proposed by the hon. member for Winnipeg North (Mr. Orlikow), is to provide information to the public on contracts of employment entered into by the office of the Prime Minister or by government departments. As such, it seems a rather innocuous bill. I am sure there is a great deal of interest in the Prime Minister's staff and surely it would not be a big problem to administer this bill if it were passed. However, the difficulty would be in administering the bill in so far as it extends to something like 230,000 civil servants in government departments. Also, I presume CNR employees and others would be affected by it.
The hon. member wants information about people working under contract in the Prime Minister's office; he wants to know their names, their specific duties and how much they are paid for the services they render to the government. Surely this information would be of interest to many people. However, it seemed to me the hon. member weakened his argument when he talked about placing questions on the order paper. Many of us place all kinds of questions on the order paper relating to public policy and matters on which we feel there should be public information. I do this with respect to my own riding. Sometimes it is quicker to get information in this way rather than contacting a minister directly, particularly if the subject matter is of a continuing nature extending over a number of years.
If the bill covered only staff in the Prime Minister's office it could be of great value, but the hon. member weakened his argument by saying the information was given to him. I believe another hon. member also said he asked for information along the same lines, and got it.


David Orlikow: A year late.


Maurice Brydon Foster: When he thought it was not adequate, he simply phoned the Prime Minister's office and received additional information. Perhaps if the hon. member for Winnipeg North had simply phoned the Prime Minister's office in the first instance he would have received all the information he seeks. The problem with this bill is that it seems to reach out to include all other contracts; for instance, those issued under the Local Initiatives Program and the Opportunities for Youth program.


The Acting Speaker (Mr. Laniel):: Order, please. The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.
May 30, 1972



COMMONS DEBATES AFTER RECESS

[Stage Direction]
The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Hon. Jean-Luc Pepin that Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Stanley Stanford Schumacher: Mr. Speaker, at five o'clock I was quoting from a speech made by Mr. A. H. Ross, president of Western Decalta Petroleum Limited, a Canadian company located in Calgary, in reference to jobs for Canadians in the mining and petroleum industries because it has been said in this debate that this is not a proper type of investment. When we went into private members' hour I had just started to quote Mr. Ross. He said as follows:
Unfortunately at this time little good statistical data is available with regard to the over-all effects of the oil industry. A study of this subject is under way between industry, the Alberta Energy Resources Conservation Board and the National Energy Board but it will probably be over a year before any tangible results are forthcoming. However, various estimates have been made and I will attempt to go through some of them with you. In Alberta Professor E. J. Hanson of the University of Alberta stated in his book "The Dynamic Decade" with updating in 1966, "The economic effects of the petroleum industry upon the province have been large and far reaching transforming a mainly rural and agricultural society into an urban, industrialized one. Alberta was a one-industry economy with limited opportunities for labour and capital-the population would have declined if petroleum had not begun its rapid development-instead of 700,000 people in 1961 there were 1,332,000" and today, 1,639,494-"the petroleum industry has almost doubled the level of employment in Alberta since 1946-the estimated revenue contribution by the oil industry for 1964 was 47 per cent of all personal disposable income" over 50 per cent today. Finally, he concludes that "in the last two decades, the exploration and development activities of the petroleum industry have been prime generators of economic growth-and the skills and abilities of the labour force have been upgraded greatly-with the continued expansion of the petroleum industry being of vital importance to the region."
One has only to consider enterprises like Alberta Gas Trunk Limited, Atco Industries, Kaps Transport, PWA, Transair, Banister Construction, to realize the opportunities outside the actual exploration and development sector which have been created for Canadians. Alberta has become the research and development centre for Canada for such things as off-highway transportation vehicles (which are being sold all over the world including Russia), solid pipelines which could have major implications for mass transportation of Alberta's coal and sulphur, and the application of computer science to mineral exploration which has already made Calgary a major data processing centre.
Another major contribution of the petroleum industry is the large scientific and managerial community which it has established in the west. This industry has attracted scientists and
Foreign Takeovers Review Act
managers from abroad and has been responsible for the repatriation of many highly trained Canadians who had emigrated to other countries. With about 7.6 per cent of the labour force in Canada, Alberta has 42 per cent of the total number of professional geologists (in the order of 1,300) and 30 per cent of the professional mining engineers. As of January 1, 1967, it is estimated that 90 per cent of the petroleum geologists employed in Canada were located in the three western provinces.
Added to the geologists, geophysicists, and engineers are a great number of technicians and other professional employees associated with the petroleum industry. A sizeable reservoir of highly trained people are now available in Canada. This scientific and managerial community has provided the initiative and expertise for the formation of Canadian oil and gas firms, for a drilling industry about 90 per cent Canadian-owned, for Canadian firms to participate in overseas exploration in the United Kingdom, North Sea, Indonesia, Africa, and for opening up the Canadian north. This technological base in Canada will prove to be a significant factor in Canada's development in the future and a significant factor in attracting secondary industry to western Canada.
Then he mentions how much the resource industries have contributed by way of taxes, royalties and other fees to the governments of the west. It is not accurate to say that those industries contribute nothing toward the government of this country. True, they may not be high on *the list of those contributing to federal corporation taxes but they certainly contribute much to the provinces in which they operate.
Earlier when I was speaking the minister asked what it is that I propose and added that my attitude seemed to be totally negative. Before dealing with that matter may I say that we must pay attention to Canadian investors if foreigners are to be prevented from investing in this country. Unless the government's attitude is different from its attitude of the past there will be little sense in preventing takeovers by foreigners. Who will take over a business if nobody wants to take it over? That policy might make sense for monied people in central Canada who may want to go to the fringe areas and snap up businesses at bargain prices.
Actually, one foreign company is trying to Canadianize, so to speak, one of its subsidiaries. In this connection may I quote an article carried in the Toronto Star of May 27. I was somewhat surprised to find this story in that newspaper, in view of the strong editorial bias in favour of the NDP and the Committee for an Independent Canada shown by that publication. This bias results from the strong influence of Mr. Walter Gordon on the editorial policy of that newspaper. The headline reads, "U.S. firm is planning takeover of gas company-by Canadians." The article speaks of the efforts of Pacific Gas Transmission Co. of San Francisco to dispose of its majority interest in its subsidiary, Alberta Natural Gas Company Ltd., and contains this passage:
Charles Smith, president of Pacific Gas Transmission Co. of San Francisco, says his company wants Canadians to own 55 per cent of a Pacific Gas subsidiary, Alberta Natural Gas Co. Ltd. Canadian ownership is now 33 per cent and Pacific Gas owns the rest.
Though market analysts consider Alberta Natural Gas a sound investment, there has not been enough Canadian interest to realize Smith's goal.
Smith said his company is offering the shares because the move "gives recognition to the Canadian government's policy of
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encouraging maximum participation by Canadians in the ownership of companies which transport natural resources within Canada."
Pacific Gas would retain effective control of the company, however, with its 45 per cent shareholding.
Alberta Natural Gas owns and manages the Canadian section of the 1,400-mile Alberta-California natural gas pipeline, a vital link in the North American energy network.
The article then says that the company tried twice to dispose of its 55 per cent interest in its subsidiary and failed, and it plans to make another offering in the fall. That leads me to my next proposal for increasing Canadian ownership of our economy. The hon. member for Edmonton West (Mr. Lambert) touched on this point last night when he said that former estate taxes and present provincial succession duties have prevented Canadians from accumulating the funds necessary for investment in this country.


Leslie Gordon Benjamin: Oh, boy!


Stanley Stanford Schumacher: Pressure from those on my left has brought about this trouble. They decry the lack of Canadian investment in this country yet bring forward proposals under which the government, by taxation, would take all available money from our people. The government, possessing all money, will invest and leave no money in the hands of the people for investment. I for one do not accept that principle and would rather see the Americans owning everything than a Canadian federal government.


Leslie Gordon Benjamin: That figures.


Stanley Stanford Schumacher: That is what my friends to the left would propose. I have mentioned an extreme case, one that I hope will never be realized; nevertheless, that situation would result from following the proposals of those to my left.


Eldon Mattison Woolliams: That is why the Premier of Saskatchewan wants American money.


Some hon. Members:: Oh, oh!


Mr. Nystrom:: He wants equity capital.


Stanley Stanford Schumacher: Instead of bringing forward a master plan and steps for nationalizing industry, as advocated-


Mr. Horner:: By the Benjamins of this world.


Leslie Gordon Benjamin: The people want to own their own Canada.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Stanley Stanford Schumacher: Instead of introducing such a master plan, why does the government not put many small things to work? I think there is room for improvement in cabinet. Furthermore, I am advised that long distance lines between Calgary, San Francisco and other points in the United States are tied up most of the night. They carry computer data material for use in American computers. We ought to act to keep this kind of work at home. That would make sense.
Also, it makes sense to put Canadians on the same footing as foreigners. For instance, Americans are entitled to set losses in exploration against income. That privilege ought to be extended to Canadians. Furthermore, Canadians should be entitled to invest part of their taxable income in the industries of this country and such moneys ought to be deductible from their income. It is also important for our laws in this regard to be developed further.
Although the federal government may be without power in some fields, it ought to encourage the provinces to act. For instance, we ought to make certain that enough Canadian citizens sit on the boards of directors of federally chartered but foreign-controlled companies which operate in Canada. That is my view. I also agree with one point raised by the hon. member for Egmont (Mr. MacDonald). I do not agree with him all the time. I agree with his suggestion that there should be a revision of the Bank Act to ensure that Canadian investments are funded in Canada, not through chartered banks in the United States and then brought back into Canada in the form of foreign control. I do not see any reason for that.

I also believe that the immigration practices of the government should be tightened up considerably to ensure that graduates of Canadian universities and trade schools have the first opportunity to obtain employment in Canadian industry. There should be an application of the doctrine of reciprocity in relation to countries that want to invest in Canada. Countries which put up bars to our investing in their countries should receive the same treatment from Canada: the principle of selectivity should be applied in this regard.
This bill is not too strong at the present time and it is being decried by the party to my left. I feel it is a negative approach to the problem; it restrains and restricts rather than encourages Canadian ownership. I do not think that is the right approach. I cannot say that I have a great deal of confidence in this administration. If the situation were not so bad we would have had a much tougher measure. If something happens we will probably be in for more restrictions. Our only protection is that nothing will happen along this line as long as this government is in power, because we would be plagued with unemployment.
If the worst came to the worst, as the hon. member for Fort William (Mr. Badanai) said, and the NDP took power I would be afraid to have on the books this piece of legislation on which they could expand. They say they will vote against the bill. I do not know why. Surely this is part of their program.


John (Jack) Henry Horner: It is not enough for them.


Stanley Stanford Schumacher: As the hon. member for Crowfoot (Mr. Horner) says, the trouble is that it is not enough. I still do not understand their reasoning in this regard. I have grave doubts about the ability of this bill to solve the problem. However, at this stage there is hope that better criteria will be written into the bill for the guidance or, if necessary, the control of the minister in making decisions. As things now stand, the minister has too much discretion

May 30, 1972

to decide what is good for Canada. These tests are quite subjective. The way the government decided what was good for Canada in its division of money under DREE grants does not leave me much confidence in its ability to assist in the development of regions of Canada which lie outside Ontario and Quebec.


Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, the criticism of this bill is partly because of the high expectations of those who patiently waited for an announcement, and perhaps partly because of the view held that this is the only action of the government in dealing with foreign ownership. However, if one approaches this bill as representing one of a series of initiatives preceded and followed by other initiatives, then the picture that emerges over the years shows a definite trend.
It is clear that we are moving in the direction of more Canadian control of our economy, a process that will accelerate in the next few years for these reasons. In the past few years we have begun to develop in Canada new products and processes for world markets. Here are some examples, Mr. Speaker: PT6 gas turbines, STOL aircraft, machinery for an asbestos milling process, aluminum transmission towers, aluminum hopper cars, hydraulic precision tooling sold to the U.S.A. for use in the construction of space-ships, amphibious water bomber aircraft to put out forest fires, snowmobiles, crash position indicators and flight data recorders used by airlines, snow removal equipment, foam-form-block building materials, electro-vert wave soldering equipment, an organic foam spray to protect perishable crops from frost, the "Voya-geur", a cargo vehicle which rides on a cushion of air. These are just a few.
Another reason is that we have shown ourselves to be capable of generating enough capital in Canada to support our own growth. This is a very recent development. Further, the incentives included in the new Income Tax Act which became effective in January, 1972, will encourage greater formation of Canadian capital in the interests of Canadian industry. These measures have been outlined by hon. members who preceded me. The Canada Development Corporation is now in operation to participate as a shareholder in the creation and expansion of Canadian industry.
Another measure is the ministry of Science and technology which was created last year to advise the government on the investment and application of science and technology in the pursuit of national goals. More money has been granted for research and development of new products and processes. For example, in 1971-72, $31 million was made available for support of some 900 projects for the expansion of scientific research and development under the Industrial Research and Development Incentives Act. This is also true of the program for the advancement of technology. In 1971-72 approximately $28 million was paid under this program in support of 141 Canadian projects, a sum equal to the total amount paid in the previous four years combined.
The Industrial Development Bank has stepped up its operations considerably. In 1971 it made more than 4,000 loans to Canadian businesses for a total of approximately $200 million. As mentioned by others, there is the CRTC
Foreign Takeovers Review Act
and its work to ensure that the national broadcasting system will be owned and controlled by Canadians. There have been positive repercussions in the development of Canadian talent and a Canadian musical industry.
Today we have this bill on takeovers. It is just one more step. If one looks for a moment at the initiatives of this and the preceding government over the years in this area of policy, one can see that they fall into two main categories. There have been initiatives which consist of control legislation such as this bill. I hope this bill will be followed by the establishment of an agency to screen foreign investments other than just takeovers. The other category of initiatives consists of programs and measures to stimulate the growth of new, Canadian-owned industries. These two approaches, as they grow in scope and emphasis will lead to our gaining greater control over our economy and cultural environment within a short period of time.


David Réal Caouette: Mr. Speaker, I listened very carefully to the comments made by the two previous speakers in respect of Bill C-201 that the minister would like to see adopted on second reading and referred to the committee as soon as possible. By the way, the minister came to ask us if other Creditistes members wanted to take the floor in order to find out whether the House could adopt the motion for second reading tonight.
I find that the government or the party in power is acting in a rather strange way. If one day my colleagues are attending a committee session and are not present here in the House, the hon. member for Papineau (Mr. Ouellet) accuses the Creditistes of being absent from the House. When we are here, it is the minister who comes to ask us whether it would be possible for us to stay away from the House in order not to get involved in the discussion on a bill.
Therefore, it would be necessary to know exactly what the government or the party in power wants.
An horn Member: They want us to be slaves.


David Réal Caouette: Mr. Speaker, this is nothing but a point I am trying to make. I do not know whether more of my colleagues will rise tonight but, anyway, we are anxious to see this bill referred to the committee for study so that Parliament may assume its responsibility with regard to foreign investors, foreign control over our economy, especially by the United States.
Mr. Speaker, this situation of economic takeover by a foreign nation is not exclusive to Canada. The same phenomenon is found all over the world. When we visited India some years ago, we realized that British subjects were in control of its economy in spite of India's status as an independent country.
Recently, I visited Cameroun which became independent in 1960 but is still controlled by France. In Iran, for instance, where we attended the interparliamentary conference, we saw that the U.S.S.R. controls the economy. In fact, I went out one day with Senator Maurice Bourget as far as the Caspian Sea where caviar is produced. We were told that the caviar produced in Iran, on the shores of the
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Caspian Sea, is entirely controlled by the U.S.S.R. which lies across the Sea from there. Economic control is thus achieved somewhat this way.
Viet Nam is under French commercial control and American war control. Cuba is under U.S.S.R. control. In Cuba, the economy is not in the hands of Fidel Castro but in those of the U.S.S.R. And if Fidel tries to escape this, the USSR will punish him.
The same thing happens in Czechoslovakia and in all satellite countries of the USSR. Not only their economy but their social policy as well are directly controlled by the USSR. In Czechoslovakia, only 3 years ago, students wanted to rebel against the government or to recover part of their freedom-that of being allowed to put their thoughts on paper. They even called on the Russian army, on Russian tanks, to come and crash the rebellion of those students who had no right to try and recover the freedom which their parents had lost 28 or 30 years ago. The students of 28 or 30 years ago fought the revolution and today their own children are not even allowed to try and recover a small part of their freedom.
Mr. Speaker, this does not mean that we in Canada should follow on exactly the same steps. Investors, no matter from where, will invest as long as they find it profitable.
My friends of the New Democratic Party often say, in reference to Americans: We are not opposed to foreign investment. Only, as soon as a company comes to invest in Canada and makes profits, we will ask that it be nationalized. Why do my hon. friends from the New Democratic Party not take control of their economy in Manitoba and Saskatchewan?
I was in Manitoba not so long ago while the New Democratic Party administration was about to borrow $50 million from the United States, at an interest rate of 9.2 per cent, for the development of a hydroelectric project. The day before, I heard on television the federal leader of the New Democratic Party speaking against the Americans, against the economic control of Americans in Canada, while the next evening, the Minister of Finance of the Manitoba New Democratic government was calling for assistance from the United States, and saying how warmly he had been welcomed in that country!
At this time, the province of Manitoba is about to borrow $300 million from the United States-


Leslie Gordon Benjamin: We own the power!


David Réal Caouette: They own the power, the power to borrow money. These people do not even know where they are going. They are going to borrow some money from the Americans at a rate of 9.2 per cent, and then they come and tell us that they own the power!


An hon. Member:: Just like Rene Levesque.


David Réal Caouette: Yes, like Rene Levesque!
Mr. Speaker, as I just said, Manitoba is getting ready to borrow $300 million in the United States, at current rates. The Americans will lend it to them because it is good
business. In fact, none of them complain about those loans to Canada, loans that are not based on American resources but on the development of Canadian natural resources. We are borrowing figures from the Americans. I say categorically that so long as we do not control credit in Canada, we will never be the masters of our economy.
Last night, I heard over the CBC news the indictment of the Quebec premier (Mr. Bourassa) against federal authorities. He requested from the federal authorities more powers to be able to spend more. But what is meant by powers to spend more? Nothing keeps the Quebec premier from increasing his taxes, under the present system, to spend more. What keeps the premier of Quebec, as well as those of Manitoba, of Saskatchewan, from making representations to the Minister of Industry, Trade and Commerce (Mr. Pepin) who wants to prevent foreign control of our economy? What keeps those provincial premiers from coming to Ottawa and making representations with a view to using the services of the Bank of Canada?
What would be funny about using the Bank of Canada?
When Mr. Bourassa borrows $100 million in the United States, as he has just done, at 8 per cent interest for 25 years, during that period we will pay $200 million in interests alone and we still owe the full capital amount, that is $100 million. We will have to pay back three times as much as the amount borrowed.
Will the Quebec premier return from the United States with a carload of American dollars? No, he will return with a slip of paper which we call a promissory note on which will show that amount, $100 million, and the premier's signature. The note is endorsed by the province of Quebec and the trick is done! On what are those $100 million based? On American resources? They are based on Quebec projects, on the natural resources of the province as well as on the natural resources of Manitoba and those of Canada as a whole. What is the difference between a $100 million figure written by the Americans or by Mr. Louis Raminsky, Governor of the Bank of Canada, a national institution authorized to grant loans?
I have just read in the Bank of Canada Act, sections 13 and 20, that the Bank is authorized by Parliament to issue loans to the federal and provincial governments for periods not exceeding 6 months. What can they do in 6 months, Mr. Speaker? Not much. A province cannot even turn around and undertake any project, that it must repay the loan forthwith.
So, we say: Let us do for the provinces what we are doing for foreign countries. This morning, I received a news release from the Canadian International Development Agency. This was most interesting. I quote:
Canada is providing Nigeria with a $5 million interest-free loan-
-not at a rate of 9, 8 or 6 per cent, no, but interest-free! There it is in print-


Jean-Luc Pepin: Canadians are paying the interest.


David Réal Caouette: The minister states that Canadians are paying the interest. I thought that he was smart, but I have serious doubts now.

May 30, 1972

Mr. Speaker, it is awful to get such an answer from a responsible man, a minister of a so-called sovereign government. I will deal with the subject of sovereignty in a few minutes.
I keep on quoting:
-a $5 million . . . loan to help it ease its foreign exchange problems.
Another release announces a $14 million loan to Tunisia. That makes $19 million and the interest will be paid by the Canadian people, according to the minister.
Mr. Speaker, according to the news release, the loan contract covers the provision by Canada of:
-22 diesel electric locomotives . . . along with spare parts, tools and related equipment.
That loan is for $9.3 million. The locomotives will be assembled in Montreal-
Whenever we ask the same facilities for the Canadian people, through the Bank of Canada, we get the following answer: With such credits, foreign countries buy in Canada!


An hon. Member:: That's it, we shall buy in Canada.


David Réal Caouette: That's it. We know it and we would be silly not do do it. But let us make sure that they buy in this country with the interest-free loans we grant them.
The province that would get interest-free loans would buy in Canada as well as the municipalities and the Canadian government.
The Secretary of State (Mr. Pelletier) said recently: But the Creditistes do not tell you that those countries must buy in Canada. That would be the last straw: grant them credits to enable them to buy in Russia. That would be something.
Mr. Speaker, we do not want foreign aid to be abolished. Far from it! If we can increase it, let us do it. However, let us do the same for the provinces, the municipalities and the federal government which is always flat broke.


An hon. Member:: That's true!


David Réal Caouette: Mr. Speaker, I will now deal with foreign ownership in our economy. I agree that we must prevent all of our economy from belonging to foreigners. However, it should be possible for those people to invest in this country if they hope to make a profit. Canadians who are investing millions of dollars in the United States are not doing it for the pleasure of it but because they are making money. Some corporations are selling their shares to Americans. Why? Because they are getting paid. It is that simple.
So, if we want to keep control of our economy, let us establish an economic system profitable to the individuals. This is the only way of increasing our economic growth.


An hon. Member:: This is socialism.
Foreign Takeovers Review Act


David Réal Caouette: Mr. Speaker, when I hear the NDP members it makes me laugh. As I have already said outside the House, and I will repeat for my hon. friend's information, a socialist is someone prepared to distribute anything that belongs to others but not what belongs to him.
For the last few days we have heard them asking: Why not nationalize the Canadian Pacific? Why? Because the Canadian Pacific is making a profit whereas the Canadian National has a yearly deficit of $270 million which is quite normal since it is a crown corporation. This is socialism as understood by the NDP. The private corporation offers better services yet makes a profit. And this is found funny.
Even Saskatchewan which has been governed by socialists for almost 25 years is the worst administered Canadian province. I went there just three weeks ago.
All government industries created in Saskatchewan by the NDP or CCF have closed because they were not viable. There is no personal initiative in this. As for the cardboard manufacturers and all kinds of gadgets invented in Saskatchewan they are no longer wanted by the people. The people are fleeing to Alberta and British Columbia to escape Saskatchewan socialism.
Mr. Speaker, I will go farther than that. A few years ago even the rats would not live in that province. The province of Alberta had to spend millions of dollars to prevent them from crossing the provincial borders.


Leslie Gordon Benjamin: Tell your supporters that.


David Réal Caouette: I will tell my supporters, but you should tell your supporters too.

At the present time, all socialist countries in the world are experiencing a recession and members of the New Democratic Party would have socialism introduced in ours. When asked to propose something positive, they give no answer.
At a large meeting of waffles and anti-waffles in Winnipeg, the national leader of the New Democratic Party was seen shaking his two fists against the American people. The day after, the Manitoba Finance Minister returned from the United States and stated: They unfolded the red carpet to loan me $50 million. What hypocritical guys they are!
If I was not aware of their theories I would not mention them, but I happened to study the CCF philosophy when I was 20 or 21 years old. Therefore, I know it. Perhaps these people have never met Mr. Woodsworth in their life. For your information, I can say that I met him. In fact, I have read everything he wrote. Better still, their former leader, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) in 1935 campaigned in Saskatchewan in a jalopy. In order to obtain more votes, they had written on one side of the car: Vote CCF. And on the other side, one could read: Vote Social Credit.

May 30, 1972
Foreign Takeovers Review Act
My hon. friends in the New Democratic Party show their faces and as long as they do it I will tell them a few home truths. Let there be no doubt about it.
I should like to quote a few former presidents of the United States. Thomas Jefferson said in 1801, and I quote:
I believe that banking institutions are a greater menace to freedom than armies in action.
They have already mobilized a money aristocracy that defies the government.
The minister of Industry, Trade and Commerce knows that very well. Besides, some years ago, he acknowledged that the money aristocracy obviously was defying the government.
The quotation goes on:
The issue of banknotes should be taken away from the banks and turned over to the people to whom it properly belongs.
That is where it hurts, the cause of all the problems we hear about today.
Mr. Speaker, John Adams, former president of the United States, made the following statement in 1826:
The problems, confusion and anguish of the United States are not so much the result of the weakness of their constitution, of their confederation, or of a lack of honour or virtue as the result of sheer ignorance of the nature of money, credit and money circulation.
As far as industry and economy are concerned, these comments would indeed apply to the situation in Canada today.
The problems, confusion and anguish of Canada in 1972, with all the measures which are being introduced, are not so much the results of weaknesses in our Constitution. At every federal-provincial conference, the talk is on constitutionality but no one knows what changes should be made in the Constitution. It is suggested that it must be amended and repatriated. Nobody knows what to do, the only thing being to set up commissions to study the matter.
If you ask a provincial premier what changes he wants, he will reply: I do not know, we shall appoint a commission. A commission is then appointed which, after a year or two, submits its report and the premier is asked once again: Now, what changes do you want? To which he will reply: I do not know yet. We are going to appoint a second commission to study the report of the first since we do not know exactly what amendments should be brought in.
And yet, every province is only asking for more power, more autonomy in a reorganized Canada. There is no need to amend the Constitution for that because it already guarantees to all provinces that their rights would be safeguarded in the field of education, highways, lands and forests and provincial organization. If these rights are not respected it is because of Ottawa and nobody else.
I envisage a future Canada tailored somehow on the model of a Canadian family, whether it is the Pepin family or-


Mr.   La Salle@: La Salle.


Alexandre Cyr: Cyr.
[Mr. Caouette.J


David Réal Caouette: Be it La Salle or Alexandre, it is nevertheless a comparison we should make.
Let us take for instance the case of a family with ten children. No one child is identical with the other. Indeed, no twosome are identical.


An hon. Member:: -or 16 children!


David Réal Caouette: Well. When I hear people say that Quebec is different from other provinces, it is true, it is not a fabrication. That Quebec is different from other provinces is a fact, but it is also a fact that Ontario, British Columbia and Newfoundland are not the same as others, either. Similarly, Manitoba is not like Saskatchewan. Each of these provinces has its own identity, like the children in a Canadian family. No two children are exactly identical. Parents are well aware of this.
One child must be handled in a certain way. Another requires a different approach. A third calls for a different attitude still, and so on for all the others. And later in life, one may be a lawyer, another a doctor, another a farmer, another a service station operator, and still another a member of Parliament. A daughter may become a nurse, a nun or a secretary and everyone goes his own way in life, even though they all belong to the same family.
Nothing prevents the children to get together for Mothers' Day, Fathers' Day, Christmas, New Year's Day and Easter and they are glad to see each other. And none of them want to be told by their brother or sister what to do or not to do in their lives. Each wants to live his life according to his own aspirations. For myself, I visualize a Canada organized on those bases, a Canada which will allow each province to act according to its own aspirations, in a Canadian family spirit.


An hon. Member:: With respect.


David Réal Caouette: Certainly! With mutual respect.
Mr. Speaker, this would not destroy Canada. The problems, confusion and anxiety which prevail in Canada in 1972 are less the result of deficiencies in our constitution, in our Confederation-whatever Levesque and Co. may say-of a lack of honour or virtue, than of pure ignorance of the nature of currency, of credit, of capital flow. This is what is lacking.
But instead of coming to grips with this problem, we launch an attack on investors. We tell Canadians: Do not go and invest too much in the United States; invest in Canada. All the money of Canadian investors could not possibly be enough to save the Canadian economy, to develop our national resources, to finance the James Bay project, which is the object of so much talk today, and which will cost an estimated $10 billion. In view of the amount of interest we will have to pay on those $10 billion the James Bay development will cost no less than $25 or $30 billion, and we will not even be able to finance it. So where are we going to borrow? Not from the Bank of Canada, but from the Americans, who will put a mortgage on the James Bay!
This is interesting, this is intelligent-and we will pay interest to the Americans. Canadians will be paying for it. The minister also told me earlier that we have to pay
May 30, 1972

interest on the interest-free loans which we grant foreign countries. We are really saddled with interest.


An hon. Member:: Shame!


David Réal Caouette: Another American president, Abraham Lincoln, said-


An hon. Member:: -as was the case in Cameroun.


David Réal Caouette: If we carry on that way, we will soon find ourselves in the situation of the Cameroun.
The government, Mr. Speaker, is about to convert us into Camerounians.
In 1865, Abraham Lincoln said, and I quote:
I have two major enemies: the army of the South which is in front of me and the financial institutions which are behind me. The most dangerous of the two is the one behind.
The Minister of Industry, Trade and Commerce knows it. When he visits all the various countries, such as Japan, the most dangerous enemy is not the army in front of him but the financiers standing behind him. I further quote:
The government should create, issue and put into circulation all the money needed to meet the purchasing power of the government-
That was not said by Caouette, but by Abraham Lincoln. I quote again:
-and the purchasing power of the consumers. The privilege of creating an issuing money is not only the supreme prerogative of the government but it is also the best occasion they have to create something.
Well, the question is not one of demolishing what belongs to others but of creating something. However, we try by any means to destroy what others did because we have not been able to do the same. We take pleasure in destroying what the citizens, personal initiative and private enterprise succeeded in carrying out. I quote further:
Citizens may be and will be provided as stable a currency as their own country.
Money will no longer be the master and it will become the people's servant.
Democracy will dominate the power of money.
At that moment, Mr. Speaker, we could say that we become at last the masters of our economy.
In conclusion, I would like to quote Wilfrid-What am I saying "Wilfrid"-I mean William Lyon Mackenzie King. He could have been called Wilfrid, it would have been the same. William Lyon Mackenzie King stated during the 1935 election campaign-it was probably an election promise-and I quote-


Mr. Corbin:: He won it also.


David Réal Caouette: He won it because of that promise which he never kept, but his successors hardly ever mention it.
As if they forgot all about him.
I do think that the Minister of Industry, Trade and Commerce could take note of this promise by Mr. King, and I quote:
Foreign Takeovers Review Act
Once a nation loses control over its currency and its credit, it does not matter much who in that nation makes laws.
As long as control over currency and credit has not been restored to the government and acknowledged as being it most obvious and most sacred responsibility, any talk of democracy and Parliament supremacy is vain and futile,


Jean-Luc Pepin: What year was that?


David Réal Caouette: In 1935, in August.


Jean-Luc Pepin: Before the establishment of the Bank of Canada.


David Réal Caouette: Perhaps that was even before the minister was born. This is possible.
Mr. Speaker, the minister should read again these documents of his spiritual father, the former Prime Minister of Canada, the right hon. Mackenzie King. Mr. King was right in 1935, and he would still be right today if he talked the same way.
I said earlier that the Bank of Canada is allowed, under the act to grant loans for periods not exceeding six months. All we have to do is introduce an amendment to the Bank of Canada Act, simply change the words "not exceeding six months" and replace then by "60 years" for instance as we do for India, Cameroun, Tunis, Algeria and many other countries. I understand that the right hon. Prime Minister (Mr. Trudeau) will no longer be here by then, but this is still a solution. In fact, the Bank of Canada, is entitled under the act to grant to provinces loans which amount to 25 per cent of what the province may receive in taxes during the year.
Let us take the example of Quebec, with which I am more familiar. This province has an annual budget of $4 billion. This would mean that the province of Quebec should be entitled to borrow directly from the bank of Canada $1 billion each year, for periods of 60 years. And this would apply to all provinces.
Mr. Speaker, it will be very easy to do so once we amend the Bank of Canada Act to allow loans over a 60-year instead of a six-month period. Indeed, extending loans for six months amount to making fun of provinces, of Canada, of the federal government and of municipalities.
In any event, the Social Credit party has a solution. We only have to take control of our Canadian credit, otherwise it is impossible to believe in controlling our Canadian economy. We shall not stop foreign investors from coming into our country. Once again, I say that these people come here to make profits. When the Michelin company first came to Canada, it made a market study, and in order to attract people from other provinces, as well as from United States, it chose to set up its plant in Nova Scotia, instead of Quebec, even if it is a French firm.
Therefore, the problem in Canada is not a problem of language, but one of dollars and cents. Even if we fight in English or in French, it makes no difference, because money does not know any language. It is funny that money does not speak English, French, Ukrainian, Japanese or Chinese, since everyone understands the language of money. I can assure you that there is nobody in Canada who does not know the difference between a $10 and a $20 bill.

May 30, 1972
Foreign Takeovers Review Act
So long as credit is not used for the development of our natural resources, thus creating new truly Canadian industries, any hope of our regaining control of our economy is vain. Let us take concrete steps that will enable us to become masters in our house and also to protect private enterprise and personal initiative. It is not the government which gets a country going, but the initiative of its citizens. If there are enterprising, vigorous, determined people, the government, by helping them organize, will make it easier to regain control of our economy, in the best interests of the people, of the provinces as a whole, in a country which would at last become united for the benefit of all Canadians and provinces. Canada could then be given as an example of understanding, co-operation and good will.
Such is my hope for Canada's future, before the four corners of the country are set ablaze by scatterbrains eager to blow everything up because they have never had the courage to create or build anything.
Mr. Speaker, if Canadians realize the full potential for economic development of their country, we shall again become masters in our house. We shall then be able to ensure economic security and individual freedom for all Canadians.


Mr. Steven Otto (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, I am very glad to be speaking on this bill. I indicated to the parliamentary secretary to the minister that I would like to do so and he reminded me at dinner time that I would be speaking tonight; then just as he was going away he felt it necessary to say to me "in favour of the government".


Eldon Mattison Woolliams: You always vote with them.


Steven Otto: I always speak for the government. The government does not always think so, but I do. The bill deals with the problem of takeovers. I heard speeches yesterday and today in which hon. members merge the three problems of existing foreign corporations, new takeovers and new investment all into one category. But you cannot do that; they are three completely separate problems. May I say, with great respect, to the hon. member for St. Paul's (Mr. Wahn) that if we chose to buy back foreign-owned industry which is already established, the cost would be colossal-somewhere in the vicinity of $27 billion. Indeed, the average lifetime of a business is only about 24 years. Many of these corporations are dying out and new ones are taking over. So to talk about taking over existing foreign-owned corporations just does not make economic sense.
The question arises as to new investments. We all know how important new investment is. There are areas in Canada that require new investments. Economic history has shown that Canadians are not exactly tickled pink to invest in many parts of this country. Our good old Toronto banks invest in Toronto. If you tell them about Calgary, Edmonton and other places they say that they are quite far away, why should they invest there when they can put it right in front of their noses? There is something to be said for that but I would put it this way: new investment takes new capital whereas takeovers take less capital.

This is why it is important to control takeovers because they involve corporations, companies and enterprises which have just started, which have just shown that they can make it. It is that type of corporation that is most susceptible to takeover and also which adds most to the economy of Canada. It is not a future dream; it is an existing enterprise. I think that is a good place to begin to control takeovers.
I will give the minister the good news first and the bad news later. I favour this bill because it gets away from the Walter Gordon concept of restrictions. We have two ways to look at the matter. Either we support our own industry or we take Mr. Gordon's point of view and say, "Down with Americans. Restrict everything"-though the shares of Canadian companies may be lying on the floors of Canadian stock exchanges, not being picked up by anybody even for just two cents. I do not think this makes much economic sense and I am glad to see we are getting away from it.
Mr. Speaker, I could not imagine such a bill put together by so many amateurs and naive people. In fact, I would almost be willing to swear that not one of the people who worked on this bill, Mr. Joel Bell, the Minister of National Revenue (Mr. Gray) or his parliamentary secretary, have ever had any experience even indirectly with takeovers because there are loopholes a mile wide in the bill and it does not answer the problem. There is an assumption among members in the Conservative party and in the New Democratic Party that when a foreign takeover takes place we import foreign capital. Anyone who has had any experience with takeovers in the last five or six years knows that Americans do not put in one nickel of their own capital.


Mr. Peters:: They do it with our money.


Steven Otto: What happens is this: a Canadian growth company needs money to expand and its head goes to our nice little banks and tells them, "We need half a million dollars to buy new equipment. Here are our sales figures and our potentials." But our bankers, being nice, cautious, Scottish gentlemen, very concerned about the reputation of their banks, reply, "You haven't got all the sales. These are not all A-l customers. Do it in stages. Here is $25,000 instead of the $500,000 you are seeking." This is no good at all, Mr. Speaker. The head of the company then tries to find an American buyer. A prospective American buyer will ask, "How much money have you in the bank?" The Canadian will reply, "We have $100,000 in saved earnings." Then the American says, "Here is $100,000 for your company." He pays the $100,000 but takes the company's reserves, so he does not invest a nickel.
The head of the company still retains his position and after this has taken place he can go to our banks and they will talk to him. They will say, "Oh, you've been taken over by an American. How ducky! Have half a million dollars. In fact, have a million dollars." At this stage the Canadian bank doesn't know if the American parent company is broke. Of course, it is better still if it is a Swiss company that is involved. Mr. Speaker, to get a loan from a bank all you need is a telegram from Switzerland. A
May 30, 1972

banker will look at it and assume that you must have money socked away in Switzerland.
What we really import is not money but confidence. In other words, our people and banking institutions do not have confidence in Canadians. I want to assure the minister and all hon. members that Americans are not carpetbaggers. They do not come flocking into this country looking for enterprises to buy. Right now they have strong incentives on their own side of the border for establishing industries in the United States. The DISC program is one such incentive; the U.S. tax structure is another. They do not come up here hoping to swamp us with their money.
We have many enterprising men in Canada who are in business, who run public corporations and private corporations. They know that their businesses cannot grow bit by bit as was the case 50 years ago. They have to take big jumps. If a company is manufacturing shoes and sells to Eaton's, it must be able to produce up to 100,000 pairs of shoes a year. This means buying expensive equipment and getting into a large production schedule. Our banks will not support such companies.
I would like to ask Walter Gordon, the owner of Canadian Management, how many risks he has taken in the last ten years. He will not look at a company unless it has $5 million in sales and a profit growth picture for the preceding five years. Mr. Speaker, if we could prevent all foreign takeovers then Walter Gordon and his kind would have a field day.


An hon. Member:: He has a couple of duds on his hands now.


Steven Otto: It is about time he had a dud or two on his hands. When the banks refuse to co-operate with Canadian business, the Canadian businessman may try the IDB. The hon. gentleman from Davenport (Mr. Caccia) spoke about the wonders of the IDB. Mr. Speaker, its loss ratio is one-seventh that of our banks. The IDB will not lend you any money unless you mortgage your plant, your house, your wife, your mother-in-law, and on top of that it will take your television set and you won't get it back until you repay the loan. It is a most farcical institution. Why will the IDB take no risks? Mr. Speaker, can you imagine a civil servant or a pseudo civil servant taking a risk? If you don't have a statement showing past profits and money in the bank, why should such a person take a risk?
After exhausting all approaches to the banks and the IDB, the businessman then becomes a beggar. He gets a broker and hopes to find an American buyer, but at that stage no American is exactly giving away money. The broker will find an American or a German investor. Incidentally, Mr. Speaker, there was a very good series of articles recently on the International Telephone and Telegraph Company. The Canadian entrepreneur does not want to sell his business, but after finding an American buyer he will sign a tentative agreement to sell. Under the provisions of this bill the government will have 90 days in which to consider the matter. Can you imagine any German or American investor waiting 90 days? It is utter nonsense. Such a deal will never go through.


Jean-Luc Pepin: It takes two years in some countries.
Foreign Takeovers Review Act


Steven Otto: But other countries have financial institutions and governments which support their own industry. Who knows what will happen in 90 days? Our Canadian entrepreneur will go broke because he has exhausted every other source. I suggest that the minister revise this provision in the bill so that the businessman may obtain approval from the cabinet first and then try to make a deal with the American investor. That would not put the whole thing in jeopardy. Business is used to this-you either put up or shut up.
This bill says no, you cannot sell. But the government does not say it will buy the business. The government is really saying, "You have your deal and it has already been approved by the directors". But Mr. Speaker, are American directors going to approve something that still has to be approved by the government? It could happen that in the 90 days everything would die out.
Then there is the Canada Development Corporation which after two years is considering buying Connaught Laboratories, a non-profit organization.


An hon. Member:: Did you vote against it?


Steven Otto: I am all in favour of the Canada Development Corporation but, Mr. Speaker, do you recall that the present chairman of the corporation appeared on national television and said he would not invest a nickel in Canadian industry? Such dedication!


Eldon Mattison Woolliams: You will have to take this fellow to the woodshed.


Steven Otto: This program was taped about a month before he was appointed chairman, so I admire the CBC for showing it. The Canadian Development Corporation has a great deal to do but it cannot continue to be as cautious as it has been; it must get into the commercial banking field and induce ordinary Canadians to buy shares in Canadian companies. It would be a good deal if they could guarantee the price of the shares. Once Canadians are confident that they are not going to lose their shirts- because our history of investment has been a shirt-losing proposition-I think they would be more willing to invest.
Mr. Speaker, it is all very well to say that Americans are buying up our industry, but have we ever asked why Canadians buy hundreds of millions of dollars worth of American stock every year? I suggest it is because the American government and American laws protect the small investor. In most states of the United States the stock exchange is much better, much cleaner than ours; you do not get "conned" every time you go on the stock market. What has been our history of stock markets? An elevator operator says, "Buy Moose Pasture No. 2 at 17 cents". You buy it and hope it goes to 70 cents. It goes to 80 cents, so you keep it. Then it goes to zero and you have lost your money. It is a giant hoopla.


Eldon Mattison Woolliams: Don't talk nonsense.


Steven Otto: Mr. Speaker, I do not think the hon. gentleman opposite is so naive that he does not know that in the resource industry only about 7 cents of every dollar goes
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May 30, 1972
Foreign Takeovers Review Act into the business and the rest goes for promotion, and so on. Atlantic, Prudential-do you want more?-Revenue Properties; in all these corporations there is a history of losers.


Eldon Mattison Woolliams: Those are Ottawa statistics.


Steven Otto: Before we can expect great things of this bill we must lay the groundwork and gain the confidence of the country. I think the Canada Development Corporation could be used to ensure the value of certain shares going on the market as is done by the banks. I think the government could have a great voice in tidying up some of the loose strings in our stock exchanges. There is no reason why it should cost $250,000 for a company to go on the public market here when it costs only $380 in the United States. There should be a review of regulations for all the provinces which have stock exchanges.
It is time that we set a pattern for proxy votes so that the shareholders would get a better break. If all this were done and we set up some sort of economic policy, I would be inclined to say that this bill would be very good for Canada. Yes, Mr. Speaker, I am going to vote for the bill-


Some hon. Members:: Hear, hear!


Steven Otto: -because one thing that it will do when application forms come to the cabinet is to give the cabinet an inkling of how efficient is the Industrial Development Bank and our financial system. The cabinet will not be able to refuse a sale to an American concern when they see the result and the evidence before them that Canadians are doing nothing. In that way the government would finally have a direct link with the business community.
The bill is a good start, Mr. Speaker but it needs a reasonable and rational environment such as has been accepted by countries like Germany, Japan and the United States. I am sure the hon. gentleman opposite from Calgary is well acquainted with the American stock exchange and Moodies, the bible of all investors, knows how a company goes public in the United States and what the rules for minority shareholders are in that country. I am sure he knows, also, what happens here.
This bill will cause the government to give thought to instituting many reforms in our financial structures and institutions and I think that will be the beginning of Canadians investing in Canada.


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, the question of national control of the national economy is one that troubles every country in the world. It is the whole reason behind recent upheavals in former colonial countries in their drive for the elimination of foreigners running the country. This is what is behind the hankering of many people to run their own affairs; it is the dislike of those who occupy the land to see their resources exploited and removed with no real benefit to themselves. It has been the policy of those doing the exploiting for many years to pay off the exploited with a little of their own money while making off with most of it themselves.


Some hon. Members:: Hear, hear!
(Mr. Otto.)


Gordon Harvey Aiken: How does this apply in Canada, and how damaging is it? On the surface we feel that we are running our own country. We have our own Parliament, our own business institutions, banks, investment companies and industry. We find that in some cases when large foreign or international companies establish branch plants here, they send pleasant and accommodating personnel in the higher management and technically skilled categories. They employ a majority of local workmen when possible and train them when they have no trained personnel in this country. They pay good wages in most cases and maintain a high standard of living for their employees.
What is going on under the surface is what we must examine carefully. What is really happening is that hard businessmen are making hard decisions on where most money is to be made in the safest, long range way. It makes no difference whether they are American, Canadian, European or Asian; they operate aggressively to make a profit.
I think that is the point the government has missed in this bill. These people are bound by local rules and must abide by them. They adjust to local requirements. We need in this country firm guidelines, entrenched where possible in legislation, so that the rules may be well known. That is what Canadians want, that is what international business and finance would prefer not to see and that is something they can live with and do live with in many countries of the world. Once they know where they stand, they know how to deal with local situations.
Of course, we Canadians are partly to blame for the situation in which we find ourselves. As a people we have been savers, not investors. People in some other countries are much the same; they are thrifty and inclined to save more than to invest. I can think of several countries like that. The financiers and governments of those countries support a direct policy of investing the local people's money. It is an outgoing investment policy. In other words, the industrial, financial and governmental policy of those countries is directed to using the savings of their people to advance a national policy. I can think of several countries where this sort of policy is prevalent.
The Dutch are one people who are reasonably careful and thrifty, yet their financial institutions and governments are outgoing in carrying out a nationally developed policy of which everyone knows and which is beneficial for the nation as a whole and not just for those who are involved in investing. Canadian financial institutions, banks and governments have the ability to do the same for Canadians. They have not done this, generally speaking, because they were not directed to do it, forced to do it or asked to do it.


Some hon. Members:: Hear, hear!


Gordon Harvey Aiken: Foreign investors are using the savings of Canadians, deposited in Canadian banks, to take over Canadian companies or to establish new industries in this country.


Some hon. Members:: Hear, hear!
May 30, 1972


Gordon Harvey Aiken: That is what I object to most. I have heard much talk about preventing foreign capital from entering this country. I do not object to bringing in foreign capital when it is used to develop our country. As happens so often, the representatives of large financial institutions or international corporations bring no money at all to this country when they establish new plants or take over old ones. When they come, they bring with them nothing but their credit. They establish credit with local banks. They show that they possess sufficient collateral and deposit it often in the form of stock of their parent company.
On the strength of these securities they can borrow enough money from Canadian banks to carry on the business they want to take over. Following that, they use the savings that we Canadians are stupid enough to put into our banks and that national policy is stupid enough not to force into Canadian investment. This is not a case of bringing in foreign funds. In many takeovers not one cent of foreign money comes into this country and is used in the takeover. I do not think we ought to permit this situation. That is the sort of thing this bill might well have been directed against. As I said before, we welcome foreign capital that comes into our country to be used for development. In Ontario, where I come from, and in several other provinces this has been happening over the years.


Jean-Luc Pepin: How could we incorporate the hon. member's suggestion in the bill?


Gordon Harvey Aiken: Money has come in from outside the country. It has entered the province and created a great deal of new industry. The province of Ontario has established guidelines which are reasonably well known to international business. Ontario has passed legislation which requires that resources taken from the province shall be processed in a primary and secondary way in the province before they are exported. Business people know this. When they come to this country and deal in Ontario, that is how they deal.
I think a good deal could be done in a bill like this to spell out to those who would invest in this country that they are welcome to come and use their knowledge and ability to develop Canadian industry, provided that the investing and the business enterprise is carried out in a way that we feel will be beneficial for this country. If we require secondary industries to be established in certain areas, as is the case in Ontario, I think that would be all to the good. I do not think the government is in any way dealing with the main problem in this bill. It is not letting people know that we welcome their money, welcome their know-how, welcome their ability to invest and create industry in this country, but that we welcome it on certain conditions and under certain firm rules which they should know about.
Foreign companies have moved into many other countries, accepted the rules of those countries and got along with them. That is the sort of thing that many of us felt should be included in this bill. The bill does not do that at all and is limited to preventing takeovers of existing businesses. Even there the bill is deficient. It does not make even a policy statement. For instance, if one looks at the tide of the bill, one sees that it is a dead giveaway: it is,
25316-48}
Foreign Takeovers Review Act
"An act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons." Those "certain persons" may be certain undesirable persons or others; the language is vague.


Eldon Mattison Woolliams: Ambiguous is the word.


Gordon Harvey Aiken: Ambiguous is a good word.


Jean-Luc Pepin: Those persons are defined.


Gordon Harvey Aiken: In any event, I think those persons are not the ones we are concerned about. Let us consider clause 2 of the bill in which the purposes of the act are spelled out. The purposes of the act are not carried out in the bill itself. I will not read the clause because we are not supposed to do that during debate on second reading debate. Nevertheless, the clause reads that the general purpose of this act involves, "recognition by Parliament that the extent to which control of Canadian industry, trade and commerce has become acquired by persons other than Canadians to maintain effective control over their economic environment is a matter of national concern", and so on. Certainly that is a matter of national concern and if the bill had dealt with it some of us would be happy. Having made these broad statements of purpose, the bill does little to carry them out.
This bill, in one limited sector, in one limited way, does something to tell the world that we want to control our own economy. For that reason one cannot be against it.


Some hon. Members:: Hear, hear!


Gordon Harvey Aiken: I am somewhat embarrassed by the loud applause from my left for that statement. There must be something wrong. I thought I was developing a good Conservative policy. Maybe there are some Conservative members in the socialist party. I am afraid that I cannot agree with them when they adopt the attitude that they will vote against the bill, because it does something although in only one sector and only in a limited way.
The purpose of the bill is spelled out in clause 2. Perhaps the legislation will be improved in the future. I hope I will not find myself in the same position as the speaker who preceded me. He said that the reason he would vote for the bill was, in effect, that it was so bad that when the government puts it into effect and finds out how bad it is he will have done them a favour by voting for it. I cannot go that far.
The purpose of the bill as spelled out in clause 2 is notice to the world that we want to control our own economy, that Canadians in general want to develop guidelines and tell the world the basis on which we welcome their investment and participation in Canadian development. However, there are so many things it leaves undone and unsaid. I wish something more positive had been done. I do not necessarily mean that it should be more severe; I merely say something more positive should have been done so that foreign investors will know where they stand.
The bill has not been discussed at any great length. There are a few things that worry me, even in the limited

May 30, 1972
Foreign Takeovers Review Act
fashion in which it deals with the question of foreign takeovers. It does it in a typical Liberal way, if I may put it that way; Liberal with a large "L", not a small one in this case. They have made very severe inroads into the Bill of Rights which Canadians hoped would be well recognized. The bill gives the minister powers of investigation. These provisions can be used in contravention of the liberties and freedoms of the citizen. Section 3 of the Canadian Bill of Rights requires the Minister of Justice to examine every bill introduced into the House of Commons to determine whether any of the bill's provisions are inconsistent with the Bill of Rights and to report any inconsistency to the House at the first convenient opportunity.
It should also be noted that a condition precedent to the exercise of certain of these investigative powers is that the minister upon ex parte application to a court may obtain an order authorizing that exercise. The superficiality of this requirement must be obvious. As an aside, but relevant to the conduct of the investigation with regard to the rights of the private citizen, I note that the structure of the investigative process does not set standards of qualification or at least provide for the acquisition of qualifications through experience. In other words, the minister may vary his position from order in council to order in council, from situation to situation. Where authority is delegated, the investigator may be changed at the whim of the government or a succeeding minister. Presumably, any appointed investigator will be a public servant in the employ of the government since there is no provision for remuneration.
I want to talk for a moment about ex parte application to a judge to turn the screws on certain people. An ex parte application is one in which one person goes before a judge without notice to the other party and without giving the other party a chance to deal with the matter before the judge. The judge must weigh the application in light of what he is told by the minister or his representative. The judge can only accept the evidence that is before him. I think the judge would have to assume that if a minister did not have a prima facie case, he would not be making the application. An order must therefore issue almost as a matter of course. The so-called protection of the court in allowing an ex parte application is not there.
The citizen who is called in question before the court has lost his case before he even begins. He has no right of cross-examination and no right of appeal. Even the provision of this bill that appears to operate in favour of the citizen, clause 13 which provides that information gained by the minister in the administration of the act is privileged, only serves to protect the minister behind a wall of secrecy as he conducts his investigation. Neither the courts nor Parliament can force the minister to disclose what he is doing. He is not compelled to keep a true record of his investigation, but he can disclose as much as he wants. He can disclose that which will enable him to obtain a conviction against a witness or any person the witness is forced to implicate.
Interrogation, whether secret or public, can only be justified in the public interest and when the interest of the citizen is safeguarded by due process of law. That principle was adopted by this House when it passed the Bill of

Rights. The bill we are concerned with contravenes that principle in that the right of the citizen is abrogated. I do not want to go into this question at the moment; it is a matter for the committee. I say only that even in the area where the government decides to move, they move in abrogation of many of the civil rights of Canadians and people doing business in Canada.
Canadians have the ability to develop their own country, not to the exclusion of non-residents but in co-operation with them. I hope I have made that point. In conclusion, in my opinion it is not a case of eliminating foreign capital. Where foreign capital comes in for development, it should be welcomed. But where it comes in for exploitation-I use that in the worst sense of the word-it should not be welcomed. This bill has not even attempted to deal with the main issue of foreign control in Canada. I regret very much the shortcomings of the bill.
I only hope that the general intent set out in clause 2 will be followed up in the future by something more specific. I have no intention of voting against the measure on the ground that it does not go far enough, but I express disappointment that after all this time in which to prepare itself to tell foreign investors where they stand, the government should have failed to do so.


Lorne Edmund Nystrom: Mr. Speaker, on rising to take part in this debate I should like to make a few general observations about the recent history and study of foreign ownership of our economy. In the last four years we have received three very good reports concerned with foreign ownership in Canada. First we had the Watkins report. There was also a report by a House of Commons committee which was referred to by the hon. member for St. Paul's (Mr. Wahn) earlier today. Then there was the report prepared by the Minister of National Revenue (Mr. Gray) which has become known as the Gray report. All these reports tell us the same thing about our economy: they tell us that our economy is too great an extent owned by foreign corporations; they warn us very clearly that something must be done about this soon. The Watkins report said, in 1968 I believe, that we had 12 to 15 years to repatriate our economy and if we didn't start doing it at once it might be too late.
Out of the Gray report, which all of us in the House have now had a chance to study, has come the foreign ownership policy which is before us. I echo the words of my leader in this House when he said that the bill before us is a big zero. It is an absolute zero, Mr. Speaker. It is nothing but an economic eunuch delivered to us by the technocratic Minister of Industry, Trade and Commerce (Mr. Pepin) who is so conservative and conscious of the status quo that I am sure he would make Spiro Agnew look like a moderate.
The bill before us today barely touches on the most important aspects of foreign ownership. Even some members of the Conservative party are saying that the bill does not go far enough. Many members of the minister's party are saying the same thing. I suggest that this bill was brought in for one reason only. The Liberal party examined the results of a recent public opinion poll and saw they were not doing very well. They had to do a bit of
May 30, 1972

face-saving, Mr. Speaker, and this bill was brought in as a political move, a form of tokenism to the people of Canada who want action now in the area of foreign ownership.
The government knows that the majority of Canadians want action soon in repatriating their economy and their culture. The government did not intend to do anything about it until they saw that public opinion was catching up with them and they had to save face. So here we have the midwife assisting in the birth of the economic eunuch that will produce hardly anything at all in terms of meaningful action to repatriate the economy. It is a sell-out, I suggest, to the multinational corporations. It is a sell-out to the continentalists in the Conservative party, led of course by the Minister of Industry, Trade and Commerce who himself is a mouthpiece for many of these people.
I am sure that this minister, along with the Prime Minister (Mr. Trudeau) will go down in history as being members of one of the most conservative governments this country has ever know. They are very oriented toward the status quo. Sometimes they put up a good fight, but they do not change the system. They do not change the system when it comes down to the real dollars and cents issues which affect the working people and the farmers of this land. Then we see all the sheep in the backbenches of the Liberal party getting up and bleating in agreement as they vote for this bill. Some of them, out of one side of their mouth, may say that the bill does not go far enough. One of them said this evening he would support the bill because it would then make the minister realize how ridiculous it is and that maybe he would then do something. That is the kind of logic the Liberals pursue.
The minister may know that his own backbenchers are sheep, but I assure him that the Canadian people will not be fooled by this type of legislation. The people of Canada want action now. I am sure all of us received a copy of the telegram from Mr. Edwin Goodman of the Committee for an Independent Canada. I shall read the telegram to the House:
The Committee for an independent Canada urges you in the strongest terms to participate in debate on foreign investment bill. Essential to Canada's future that private members of all parties show inadequacy and weakness of government's bill. Respectfully suggest that pertinent recommendations of parliamentary committee and the Gray report be embodied in the bill and review process widened.
May I remind you, Mr. Speaker, that Mr. Goodman is no flaming revolutionary who is practising doctrinaire Marxist philosophy. I assure you that Mr. Goodman is not that type of Canadian. I assure hon. members, too, that other Canadians such as Mr. Walter Gordon, who the minister might be afraid of, are not that type of Canadian either. The bill falls far short of what it should do. It is doing nothing about direct foreign investment in our economy. It will do nothing at all about the expansion of United States firms or other foreign firms which are already operating in Canada. In fact, in touches very little upon foreign investment in this country.
In my constituency people are concerned about foreign investment. They want us to take action now. The government of Saskatchewan has introduced in the legislature a bill on foreign ownership which will prohibit the purchas-
Proceedings on Adjournment Motion
ing of farmland in that province by foreigners who live outside of Canada. It is a small step, Mr. Speaker. This principle should be applied to other industries if we want to build a Canada for Canadians.
The question of foreign ownership is one which causes many heated arguments. It is one which will polarize opinions as it obviously does in the House of Commons. I think it shows us whose side the people will take-the side of those who are interested in promoting the well-being of the multinational corporation or of those who are concerned about promoting the interests of the farmers and the small businessmen of Canada. I want to see much more done than is offered in the bill before us because our economy, much more than any other in the western world, is owned and controlled by foreign corporations. We lose more out of our country than comes in in terms of wealth. We are losing jobs, we are losing political autonomy, we are losing the right to make many of the decisions we should be making in this country.
Mr. Speaker, may I call it ten o'clock?



BUSINESS OF THE HOUSE

John Angus MacLean: Perhaps the minister can confirm whether we shall be continuing this debate tomorrow.


Jean-Luc Pepin: Yes, Mr. Speaker, I think so.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, during the question period the other day I raised the problem of the acute shortage of general practitioners. This is becoming a very serious and grave situation, so grave that in another 20 years at the present rate we will be approximately 25,000 short. The minister inferred that the provinces were not taking up the health resources funds that were available. It was my understanding from the province of Ontario that they could not get sufficient money to provide the teacher scientists, the space or equipment necessary-in other words, the teaching complex.
I have talked to the deans of various universities about fully qualified students who year after year are refused entrance. Some of these boys worked as male nurses in hospitals, which proves their dedication. They hoped that by doing this they would be accepted. The deans of the universities for which I have high regard told me that without exception they felt very badly about the students whom they could not accept even though they were qualified. One university reported to me that they had 25

May 30, 1972
Proceedings on Adjournment Motion places left for students and that they had had over 1,400 applications for those 25 places.
At the same time, we imported in 1970 1,113 doctors and graduated 1,131. In 1969 we imported 1,347 and graduated 1,017. These figures are the most recent. We are, in effect, denying our own boys and girls who are fully qualified the chance to enter the medical profession. These young people are the sons and daughters of the taxpayers who pay around $50,000 for each medical student who graduates.
Does the minister think that it is fair that these young people should be denied entrance and the chance to enter the profession of their choice? Surely this illustrates beyond any reasonable doubt that if there was any money left in the health resources fund, and with the responsibility for medical manpower requirements that the government accepted when they brought in national medicare, it should be their co-responsibility with the provinces to provide the doctors required and the places to train them.
It is pretty bad when you reject your own boys and girls, the children of taxpayers because it is cheaper to import fully trained physicians than to train them in Canada, many of whose entrance qualifications would not be accepted here. Why should Canada be a parasite on the rest of the world when it comes to producing physicians? We get many physicians from the poorly developed countries whose needs are greater than ours. I hope this answers the minister's doubts-if he really had any-that we are short of doctors, particularly general practitioners, and places to train them.
I should now like to deal with the shortage of general practitioners. The Minister of National Health and Welfare (Mr. Munro) has stated that it is easier to see a specialist in Vancouver-I hope I am quoting him accurately-than it is to see a general practitioner in Hamilton. A shortage of doctors leads to a shortage of interns and many hospitals which 40 years ago would have had interns have none at all today. Consequently, the emergency departments of hospitals are grossly overcrowded. People are seeking help from emergency departments when they are only moderately sick and should be seen at a general practitioner's office, and would if there were enough to go around.
A survey recently conducted and reported by Dr. Glen Sawyer, the secretary-treasurer of the Ontario Medical Association, indicated that people wanted to see the family doctor when they were sick. They were not particularly concerned with how many degrees he had; they just wanted a common sense, medically trained GP and they were willing to pay for his services. Every case where a general practitioner can look after a patient in his home represents a saving of $60 a day for a hospital bed. Taking this as a rough average, ten such cases a day in a city of 30,000 people would mean a saving of $600 per day in respect of health costs. Surely the minister is interested in this. I know every province, particularly the province of Ontario is interested in it. The outpatient departments and emergency rooms of our hospitals are substitutes of a kind for the family physician, but ambulatory care in these cases is largely impersonal and unco-ordinated.
As an example of how general practitioners have become scarce I will take one city, Windsor, which is

supposed to have a fair average. In 1955 the population of the city was 188,614. There were 110 general practitioners and 78 specialists. In 1971 the population of the city was 220,088. There were 104 general practitioners and 144 specialists.
This in my opinion is a fair indication of what is going on in general in Ontario and in Canada. Surely the minister no longer can deny qualified medical students the right to enter their profession and be provided the necessary funds for training in conjunction with the provinces. The provision of more general practitioners to reduce galloping health care costs is a necessity which must be tackled from this angle. Actually Ontario, if it were keeping up with Alberta-if my figures are correct-should be graduating about 700 physicians. I hope the minister will realize that he must provide general practitioners as his first line of defence in lowering health costs. I hope that he will by persuation see that the health resource funds are used up. It is sad to boast or to have to admit that they are not being used completely.


Mr. Andre Ouellet (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I note that the hon. member for Simcoe-North (Mr. Rynard) is most tenacious in his remarks, since this is at least the second time that I am answering his question.
I could refer to the answer that I gave him previously, as well as to those that the Minister of National Health and Welfare (Mr. Munro) has already made in this House.
Perhaps I might also use some notes which I have just received from the department. Unfortunately, they are in English and I would have preferred them to be drafted in French, in order to give a better answer to the hon. member. So, I shall make a few comments on the remarks of the hon. member and say that I personally endorse much of what he has just stated in this House.
I share his regrets when I realize that unfortunately not enough young Canadians can become doctors because they are denied access to our medical schools. These young people often achieve marks of 75, 78 or 80 per cent in their work, yet schools of medicine demand that they get 85 or even 90 per cent to accept them.
The shortage of doctors which worries the hon. member for Simcoe North is a problem which causes great concern to the Canadian government as well. We have told him repeatedly, and I fail to understand why he should insist on holding the federal government responsible for it. To my mind, the hon. member should spend the same energy not in making charges against the government but in suggesting to universities that they operate differently so that more young Canadians might enrol and get a degree in medicine. This would certainly help to alleviate the shortage of doctors in Canada.
In spite of everything, the hon. member for Simcoe North should know that in Canada the ratio of doctors per inhabitants is far superior to that in most developed countries of the world and in particular in Sweden, France, New Zealand, England and Japan.
May 30, 1972



CONSUMER AFFAIRS-INCREASE IN COST OF FOOD-REQUEST FOR INVESTIGATION OF CAUSE

Winona Grace MacInnis: Mr. Speaker, on a number of occasions recently I have questioned the government about the matter of rising food prices and rising chain store profits around the central fact that between April 1, 1971, and April 1, 1972, the cost of food used in the home rose by nearly 7 ] per cent, twice as much as the cost of living generally, while at the same time the profits of supermarket chains also rose in spectacular fashion. For example, Safeway's profits rose by 40 per cent in the first three months of this year, the profits of George Weston rose by nearly 50 per cent and the profits of Dominion stores by 300 per cent.
My first attempt, on May 10, was when I asked the Prime Minister (Mr. Trudeau):
Will the government undertake to make an investigation to see whether this increase in the cost of food is due to inordinate mark-ups by supermarkets or excessive profit-taking by canners and processors of food?
The Prime Minister replied:
Mr. Speaker, I will certainly see that the suggestion of the hon. member is studied. However, I might say that according to our statistics the gain was in line with the March-April changes in the past five years-
This answer certainly was very courteous but it did not satisfy me, nor did it satisfy the many people in Vancouver-Kingsway who have been having a desperately hard time to keep up with the cost of living in their food budget. So on May 17 1 asked the Acting Prime Minister, who on that day happened to be the Secretary of State for External Affairs (Mr. Sharp), whether the government had measures in hand to help low income consumers, to which the Acting Prime Minister replied:
Mr. Speaker, the government has taken many measures of particular interest to low-income families, the aged and the disabled. I think the hon. lady will agree that this should be our first priority.
This, again, was a courteous but unsatisfactory answer. I pointed out that only two groups of people benefited from the budget-the elderly and full-time students. Again I asked whether the government would investigate immediately food prices in this country, and the reply of the Acting Prime Minister was a firm no. So the next day, May 18, I tried again. I asked the Minister of Consumer and Corporate Affairs (Mr. Andras) if his attention had been drawn to a study by a professor at Simon Fraser University and his students which found that supermarket chains are masters of the illusionary pricing technique and often control products from farm to store shelf to the detriment of the consumer, and would he consider making a grant available so that this booklet could be widely distributed across Canada.
The minister promised to examine my remarks and the booklet with great interest. Again, this courteous reply was not helping families with their food budgets, so again I asked if the minister would conduct an investigation into the control by supermarkets of products from farm to grocery store shelf. At this point the Chair ruled that I was out of order. So on May 23 I made my fourth attempt
Proceedings on Adjournment Motion
by trying to secure the unanimous consent of the House under Standing Order 43 to move a motion as follows:
That the matter of food prices and supermarket profits be referred to a special committee of this House for investigation and report.
As Your Honour knows, I did not get unanimous consent; a chorus of "noe's" came from the other side of the House, the government side. So tonight I am asking the government once again to please answer my question favourably: Will they conduct an immediate inquiry into rising food costs and rising supermarket profits?


Mr. Barnett J. Danson (Parliamentary Secretary to Prime Minister):: Mr. Speaker, I am pleased to respond to the hon. member for Vancouver-Kingsway (Mrs. Maclnnis) both courteously and, I hope, satisfactorily on this occasion although I do not expect she would be in character if she were satisfied. I question her misreading of the budget, that it helped only the elderly and students. I think the hon. member would want to include veterans also and all those Canadians who will benefit from a growing, prosperous economy.
First of all, Mr. Speaker, the combines investigation branch of the Department of Consumer and Corporate Affairs is keeping a watching brief on the situation. There has been no evidence of violations under the Combines Investigation Act, but the branch is ready and has the powers to act, indeed is required by law to act, if there are reasonable grounds for suspicion that there is a violation under the combines act. I would urge the hon. member for Vancouver-Kingsway to bring forth any evidence or indication of violations that she has, so that such action can be taken.
I believe, Mr. Speaker, that it would help to put things in perspective if we were to look at the record. As the hon. member is well aware, in late 1970 and early 1971 there was a price war among supermarket chains, particularly in eastern Canada, with a consequent severe effect on the profit of the chains. The hon. member's party might not think that profits are a significant factor, but I do not consider them evil so long as they are in line.
In the first quarter of 1972 there was a substantial increase in profits simply because they had declined so much in the previous year, and we could find no evidence of profiteering. An example might be Dominion stores which the hon. minister said had a profit increase of some 300 per cent. Their year end, I believe, is mid-March and the figures I have would indicate that their percentage of profit on sales dropped from 1.4 per cent in 1970 to .4 per cent in 1971, and then rose to 1.0 per cent in 1972 according to their recent year end statement. In 1967-68 it was 1.7 per cent, so I hardly consider this an extravagant increase in view of the fact that it was lower than before the price war. They have just recovered to the previous level. Other supermarket chains have had a similar experience. Total dollar profits have increased, there is no question about that, but sales have increased substantially-


Thomas Miller Bell: How about babysitting; has that gone up?


Barnett Jerome Danson: I would be delighted to continue because I think the hon. member deserves not only a courteous but a satisfactory answer. We would be more than pleased to

May 30, 1972
Proceedings on Adjournment Motion
initiate an investigation if the hon. member can present evidence of violations. We are waiting for that, Mr. Speaker.



TRANSPORT-SUMMERSIDE P.E.I. AIR SERVICES-RESULT OF DISCUSSION WITH LOCAL REPRESENTATIVES

David Samuel Horne MacDonald: Mr. Speaker, this evening I am going to deal with a question which was raised some time ago following a visit by the Minister of Transport (Mr. Jamieson) to Prince Edward Island. It was a much delayed visit, one which was planned for late last year or early this year and had a number of aspects to it, including the imminent suspension of air service to Sum-merside, P.E.I. That suspension took place in January. Prior to that we had an assurance that the minister would consult with officials in P.E.I., with the premier, with responsible officials in Summerside, with representatives of the Board of Trade and of other important groups. Unfortunately, such consultation did not take place until March.
On March 14 I asked the minister directly whether there had been consultation concerning the adequacy of air service, particularly in view of the suspension of air service to Summerside, P.E.I. I pointed out that one of the most serious aspects following the suspension was the removal of the air terminal. In light of the fact that Eastern Provincial Airlines was granted a suspension for two years, not a termination of air service, this was more than a little disquieting to the citizens who thought that a permanent decision had been taken with regard to winding up the facilities at CFB Summerside. The minister said that it was for the airline to decide about disposing of its building and facilities, but I think the minister may recognize that more is at stake than the decision taken unilaterally by Eastern Provincial Airlines.
Following the suspension of air service a number of difficulties have arisen. Some loss of time has been encountered by the business community and there has been a definite increase in air freight costs to Summerside from other parts of Canada. This I have experienced myself. There is an additional tariff involved in moving goods from Charlottetown to Summerside. In addition, it costs $10 more for a person to land at Summerside than it did prior to the air service suspension in January. This
does not please the people who live in Summerside and west of it.
Proposals have been advanced to the Canadian Transport Commission by Roberts Air Service which has indicated a willingness to provide service between Summerside and Moncton. I understand that this would be simple from the standpoint of the Canadian Transport Commission and the other competitor in the area, Eastern Provincial Airlines who operate out of Charlottetown. At the present time there may be a minor objection from EPA but not sufficient to prevent an air service to and from Summerside.
This is important for two basic reasons, Mr. Speaker. One is the importance of increased regional air service. We have seen some of this with EPA from Charlottetown to Halifax and Fredericton. Even more important is the situation with regard to Summerside because of the new lease of life given to it by the announcement of permanency. The business community and the citizens of Summer-side believe that in light of these new circumstances a more adequate air service should originate there. I hope that the representative of the Minister of Transport can tonight give us an assurance that adequate air service will be restored to Summerside.


Mr. Albert Bechard (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, as the Minister of Transport (Mr. Jamieson) was meeting today with the members of the Atlantic Transport Commission in St. John, he cannot answer tpnight the hon, member for Egmont.
However, I am aware of the discussions which have been held in Charlottetown on the need for air transportation in the Summerside area, in the hon. member's beautiful province where I stop when travelling to that beautiful part of my constituency located in the St. Lawrence and called the Magdalen Islands.

A number of proposals were discussed at that time, and on April 17 an application to the Canadian Transport Commission was filed by Roberts Air Service to provide service between Summerside and Moncton. Mr. Speaker, I am pleased to inform the hon. member that this matter is now before the air transport committee of the Canadian Transport Commission for consideration, and a decision is expected fairly soon.
Motion agreed to and the House adjourned at 10.25 p.m.

Wednesday, May 31. 1972