1972-03-02

Hon. Donald C. Jamieson (Minister of Transport):: Mr. Speaker, the same statement as the one I am about to read to hon. members is being made at this hour by the Honourable the Treasurer of the province of Ontario in the legislature at Queen's Park.
The government of Canada and the government of Ontario have agreed that a new major airport will be located in Pickering Township just to the northeast of Toronto. The site is roughly between a line just north of Highway No. 7 in the south, north to the Uxbridge-Picker-ing Township boundary and between the Little Rouge Creek on the west and East Duffin Creek on the east. As a co-operative venture, lands will be acquired by the federal government for the airport site and by the provincial government for the immediate surroundings.
The choice of a site northeast of Toronto has come after an exhaustive federal-provincial evaluation since 1968 of 59 potential airport sites in the area within a 50-mile radius of Metropolitan Toronto.
It has now been decided that for a number of compelling reasons, the Pickering Township site is more suitable than any of the other sites studied. In the first place, it is an excellent site, consistent with safety and other aeronautical considerations.
Second, it is also the closest site to Toronto of all the proposed sites and, therefore, provides the easiest accessibility.
Third, because it is reasonably close to Lake Ontario and to a number of major transportation arteries leading out of Toronto, investment in water, sewage and transportation access facilities will be less than at other sites.
Fourth, even though it is close to Toronto, population in the immediate vicinity of the new airport is small. No major communities will be seriously affected by expropriation or very high noise levels and the environmental impact is minimized.
Finally, and in many respects most important, the location of the airport east of Toronto is the result of joint federal-provincial effort to provide a major stimulus to development east of Metropolitan Toronto, as called for in the Toronto-centered region plan.
The southern part of the airport site lies along the route of a series of proposed urban communities to the east of Toronto, which will be separated from existing lakeshore urban centres by a series of multi-purpose transportation, service and recreation corridors. The government of Ontario has been redesigning the shape and location of some of these proposed communities in order to take account of the airport location and to ensure that areas which could be affected by uncomfortable noise levels are not slated for residential development. Transportation and service access facilities are also being designed so that the airport will be on a rapid-transit line linking the new communities east of Toronto to Metropolitan Toronto and Malton. The proposed parkway belt and service corridors are also being designed to serve as a separator between the airport and the airport-related community and the existing urban centres along the lakeshore.
The airport site itself is in the neighbourhood of 18,000 acres. The initial role of the airport will be to provide a variety of services, including international, scheduled and charter operations, thus complementing on a rational basis services at Malton and relieving congestion at Malton.
In addition to providing a new national major airport site, it will also be an integral part of an air system for the Toronto region, and will ensure the provision of efficient and adequate air services, minimizing the problems of noise and air pollution. The land acquisition will begin immediately and the opening date for the first airport activities is planned for 1978-79. Flexibility in the scale and time of expansion is a designed feature of the new airport system.
The governments have agreed that serious consideration will be given to the utilization of the existing Toronto Island airport for short take-off and landing-STOL- aircraft as this technology develops.
The federal government is today filing notice of intention to acquire, in accordance with its new Expropriation Act, all the land required for the airport site itself.
The provincial government is introducing legislation today related to the acquisition of land in the vicinity of the airport which will be crucial to the orderly provision of service and transportation access to the airport and the development of the planned community associated with the airport.
The provincial government will ensure by a number of actions that land use in the airport vicinity is compatible with airport operations and with the regional planning concept. Land exposed to aircraft noise and areas being substantially influenced by urban growth pressures generated by the airport will be controlled by the Minister of Municipal Affairs.

March 2, 1972
Second Toronto Airport
Agreement has been reached in principle between the two governments on the sharing of many of the expenditures associated with the airport development. A portion of the land acquisition by the province will be carried out through funding arrangements under a variety of joint endeavours.
Generally speaking, it has been agreed that the federal government will be responsible for on-site costs of airport projects, as well as relocation costs resulting from the displacement of services. The provincial government will assume responsibility for the provision of basic services such as water and sewage to the boundaries of the airport. Federal assistance may be provided to a certain extent through existing programs. The two governments have agreed to study the implications of mass transit and other transportation facilities related to airport development, with a view to working out joint financing arrangements. This is, in fact, a continuation of work now going on in the Toronto area.
To study this and other related co-operative aspects of implementation, the federal government and the government of Ontario have agreed to establish a federal-provincial committee to make recommendations to their respective governments.
The implementation of the airport project will require close collaboration among all three levels of government. Obviously, the federal government will have basic responsibility for the development on the airport site itself. The province has the prime responsibility, in co-operation with the area municipalities, for the implementation of development off the airport site. The municipalities will be informed immediately of the implications for them and discussions will begin on the establishment of machinery to ensure that they are effectively involved in the implementation process.
That, Mr. Speaker, is the end of the joint statement by the federal government and the government of Ontario. I should like now to add, on behalf of the federal government, Mr. Speaker, that on various occasions I have stated publicly that for large developing areas such as Toronto and southwestern Ontario the construction of one new airport is not in my view the sole solution for the provision of adequate aviation systems for the public at large. For areas such as these, I have stated that rather than the development of one airport we have to be more concerned with the development of an aviation system. In this context, the government plans to take immediate steps to upgrade existing facilities in southwestern Ontario and to continue studies to determine the long-term requirements of the area as a whole.
The initial step in developing an aviation system for Toronto and southwestern Ontario will be the extensive improvement of facilities at Hamilton, London and Windsor airports. Amongst other considerations, the purpose will be to provide better domestic services directly from these centres and the capacity to originate and receive long-haul charter and international flights. It is planned that these airports will be an integral part of the over all system which includes the present Toronto international airport at Malton and the new international airport which is to be built, as I just said, 30 miles to the northeast of downtown Toronto.
The underlying purpose in terms of the travelling public is that these three centres form the hub for a series of growth centres which the federal government feels are entitled to improved domestic services as well as longer haul charter and scheduled international services. This will tend to relieve existing pressures at Malton.
There will, of course, be a continuing need to provide better feeder service from a variety of centres in Ontario to the two major airports in the Toronto region, and I have asked Air Canada to consult with the government of Ontario and other interested parties with a view to initiating services to this end. We will also, in conjunction with Air Canada, take into account the latest technologies including STOL which has important significance for the Canadian aerospace industry.
Finally, Mr. Speaker, I will ask Air Canada to look into the initiation of improved services to and from Toronto to northern Ontario centres including Sudbury and Timmins. That is the end of the statement. I now wish to table an exchange of correspondence with the Hon. Mr. McKeogh which confirms the statement I have just read and contains an annex with more details concerning the extent and degree of federal-provincial co-operation.


Mr. A. D. Hales (Wellington):: Mr. Speaker, I first want to thank the minister for providing copies of the announcement he has just made concerning the location of the new auxiliary airport in the Pickering township area.
We have waited for this announcement for some time. As a matter of fact, many Canadians have been held in limbo as to decisions they should make one way or another arising out of the location of this new airport. The minister promised a decision on this site as far back as November, 1969. In April, 1970 he said the decision would be made by the fall. At that time he did not say which fall. In any event, he is making the announcement in the spring of 1972. We appreciate receiving it at last. Maybe we appreciate it a little more because we waited so long for it.
Up until yesterday morning this was one of the best kept secrets in many a day. Maybe the minister could instruct some of his colleagues in the cabinet on how to keep secrets.


Some hon. Members:: Hear, hear!


Alfred Dryden Hales: We would not have quite so many leaks. Until the article appeared yesterday in the Globe and Mail the new site had been a well kept secret. I congratulate the minister and his staff on doing just that.
We do not propose to agree or disagree with the location. No matter where an airport site is chosen, there will be those in favour and those against. I agree that it is a difficult decision. However, the official opposition feels that the government has not had a long-term aviation plan for Canada. The government recently agreed to spend approximately $400 million on the Ste. Scholastique airport outside of Montreal and now it is going to spend $400 million on another airport site near Toronto. If the government had taken a long-term view of the whole aviation program, it might have considered it would be much better to establish one airport in the Kingston area where good subsoil exists and develop a railway service along

March 2, 1972

the lines of what Japan has with its torpedo train that operates at 135 miles an hour, from Kingston to Montreal and Toronto. People could then land at one central airport and be in either Montreal or Toronto in one hour or less. This type of long-term planning could have saved the Canadian taxpayers a great deal of money and also have provided the type of service they expect.
The area that will apparently be expropriated is approximately 18,000 acres. I do not think this is nearly enough. If these are the facts, this is most important because future requirements and the protection of land owners and taking care of speculators have been overlooked. We will wait and study this matter further. I hope that arrangements have been made to protect a greater area than 18,000 acres.
There are many other things I should like to say at this time but we will reserve further observations until we have had a better chance to study what the minister has said. I am prepared to forgo some of my time in favour of the hon. member for Trinity, who is an independent member, if it will not offend precedent. He lives in Toronto and I am sure he is very interested in this matter and might wish to make some observations.


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I should like to join the Conservative member who has just preceded me in welcoming the minister's statement. We have been looking forward to this statement for some time. I think the five reasons given in the communique which was issued jointly by the minister and his counterpart in the Ontario government are very cogent.
I should like to stress in particular the importance and relevance of two points which were made in justifying the location of the new airport north of Pickering. The first is that it will be an important shot in the arm economically for the whole region east of Metropolitan Toronto. It is a region which from the point of view of both federal and provincial policies has been somewhat overlooked in terms of development. It is my hope and belief, and presumably it is the government's also, that location of the airport there will assist in bringing about the kind of economic development that is necessary.
Second, there is the fact that relatively few people live in this region northeast of Metro Toronto. Airports, as we are increasingly coming to realize in the developing industrial world, are by no means an unmixed blessing. I was very pleased, from a human point of view, to learn that the airport is not to be located in an area in which population is densely concentrated.
Having said this, I should like to raise three questions in connection with the minister's statement. The first is based on the fact that the airport is to be designated as an international airport. This has important consequences for future air travel in Canada as it affects both passenger and cargo service. Does this mean, as I hope it does, that in future international airlines will have landing rights not only at Montreal, for example, but in the Toronto region? The need for this has been overlooked in the past. A change is overdue. I do not mean just the Toronto region but, hopefully, the Winnipeg area as it develops. In terms of providing international service, service should be the
Second Toronto Airport
important factor and international carriers should have the right to land not only at Montreal but at points west. It would seem to me from the minister's announcement that this is what is intended. I hope this intention is carried out.
The same point could be made in relation to air cargo traffic. Some tough-minded economic decisions obviously have to be made here, too, in terms of giving priority to one area as opposed to another. Once again I think, frankly, the policy should be one of giving the customer the right to decide to which airport his cargo should go. In this area, government regulation on the basis of the information we have now is a bad thing; it is better that a laissez-faire policy, if you like, in terms of air cargo should prevail.
The next point I should like to make was alluded to by the previous speaker. I refer to the important question of land speculation. I noted that in last year's estimates the minister's department, for example, had an intended expenditure of $24 million for the purchase of land. The estimates for 1972-73 include an estimate of $62 million, which is a rather substantial increase in the amount allocated to the purchase of land.
Although I do not wish to imply there is anything untoward about this-the minister knows, of course, that no one makes political speeches in the House-I should like to ask whether the change in the allocated amount is to meet the cost of the same land. The minister announced today that the intention was to purchase 18,000 acres, and I am interested in whether the change in the estimate from $24 million to $62 million covers the same land. If it does, then there has been rather an inflated increase in the price of that land. I think this is a serious issue and we should learn soon exactly what acreage was involved for which the two estimates were made.
Related to this, Mr. Speaker, hon. members read with interest, I am sure, the cabinet leak that appeared in yesterday's Globe and Mail concerning the location of the airport. This leak turned out to be what one might say was a reasonably accurate estimate of where the new airport would be constructed. This dovetails with the land speculation question. I hope it is the case that this information was not known to people who might have had a vested economic interest in this land many days preceding the minister's announcement today. A cabinet leak of this sort is of very real importance to the taxpayers of this country. For example, if the location was known a number of weeks ago it might well be the case that some people have been put in the position to make a rather substantial profit on the land that is going to be sold to the government.
May I make one last observation. It seems in this instance that we have had a good example of federal-provincial co-operation in reaching a common objective. I should like to hope that this is the beginning, from the point of view of the minister, of the development of a national transportation policy in which the federal government, together with all of the provinces, can sketch the outline of an integrated transportation policy which would include rail, air and road travel, so that in future we can have a healthy meshing of these different kinds of services.
454

March 2, 1972
Regional Economic Expansion
I conclude, Mr. Speaker, by congratulating the minister on his decision; I think it was a wise one.


Mr. Rene Matte (Champlain):: Mr. Speaker, the minister's statement announcing a tripartite agreement will promote, we hope, the development and progress of that area of the country. We hope that activities at that airport will not give rise to any conflict nor lessen the importance of the Sainte-Scholastique international airport.



REGIONAL ECONOMIC EXPANSION


Mr. John Burton (Regina East):: Mr. Speaker, I wish to ask for unanimous consent to move a motion under Standing Order 43. My motion arises from the fact that four out of five non-civil servant members of the Industrial Incentives Advisory Board are prominent members of the business community, and two of them are executive officers of a corporation that has received five grants totalling $6.9 million. This obviously poses a very serious potential conflict of interest. Therefore I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the matter of potential conflict of interest for members of the Industrial Incentives Advisory Board be referred to the Standing Committee on Regional Development for study and report thereon.


Mr. Speaker:: The hon. member has proposed a motion under the terms of Standing Order 43 which would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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



PENITENTIARIES


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, I would like to table in both official languages a copy of the task group force report on plans for federal maximum security institutions.



CRIMINAL CODE


Mr. Marcel Prud'homme (Saint-Denis) moved: for leave to introduce a bill to amend the Criminal Code (false alarm of fire-penalty).


Some hon. Members:: Explain.


Marcel Prud'homme: Mr. Speaker, this is a bill which I tabled on September 17, 1971 and which, through the kind co-operation of the former Minister of Justice (Mr. Turner) has now been incorporated in Bill C-2 tabled on February 21, 1972.
I would therefore ask for leave of the House to withdraw the bill, since the proposed amendment will be discussed during consideration of Bill C-2.


Mr. Speaker:: Does the House agree?


Some hon. Members:: Agreed.
Bill withdrawn.



CANADIAN CITIZENSHIP ACT


Marcel Prud'homme: for leave to introduce Bill C-165 to amend the Canadian Citizenship Act (minimum residence requirement).


Some hon. Members:: Explain.


Marcel Prud'homme: Mr. Speaker, this is a bill that I tabled in the House on June 25, 1970 and that I should like to introduce again.
This bill is designed to reduce from five to three years the minimum requirement for residence in Canada as regards applicants for citizenship certificates.


Mr. Speaker:: Does the House allow the hon. member to introduce the said bill?


Some hon. Members:: Agreed.


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


Marcel Prud'homme: for leave to introduce a bill to amend the Criminal Code (attempted suicide).


Some hon. Members:: Explain.


Marcel Prud'homme: Mr. Speaker, this is a bill that I tabled on December 15, 1969 in order to remove attempted suicide from the Criminal Code.
Again, Mr. Speaker, I should like to thank the former Minister of Justice (Mr. Turner) who has kindly included
March 2, 1972

this amendment in Bill C-2 which contains amendments to the Criminal Code and is presently on the order paper. I therefore beg leave of the House to withdraw the said bill.


Mr. Speaker:: Does the House agree?


Some hon. Members:: Agreed.
Bill withdrawn.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the right hon. Prime Minister. In view of the information from Information Canada that it is in total disarray and is without direction from the minister responsible, can the Prime Minister tell the House what specific action the government proposes to take?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, if the Leader of the Opposition is referring to an item in this morning's paper-


An hon. Member:: Leaked?


Pierre Elliott Trudeau: Yes, leaked. If the Leader of the Opposition is referring to an item in this morning's paper, I understand it is an internal memorandum prepared by officials for officials. It was not known by the minister or by the government. I can only say that if officials are engaged in this kind of self-criticism it is perhaps a good thing, better than having them circulate laudatory memoranda on the good work they are doing.


Mr. Baldwin:: There is not much room for that, no opportunity.


Mr. Fairweather:: The government does that.


Robert Lorne Stanfield: In view of the information in the memorandum to which the Prime Minister has referred and the escalating costs of Information Canada as shown in the estimates tabled the other day, would the Prime Minister not stop this waste of millions of dollars of the taxpayers' money anc^ disband Information Canada as it is now constituted?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I believe that at the outset the opposition parties received Information Canada as a great menace to liberty of information. They saw in it a potential propaganda machine for the government. I do not think they should be distressed now if the machine is not grinding out much propaganda.


Mr. Orlikow:: But it is costing $10 million.
Inquiries of the Ministry


Pierre Elliott Trudeau: The process is not working as efficiently as we would like, and the memorandum bears this out. I do not think this government should refuse the challenge to set up efficient and well-operating information services. Practically every modern government in the world has them. I thirtk that perhaps the people in this outfit were somewhat frightened by the fears raised by the opposition that Information Canada would grind out too much propaganda, and they perhaps have not been audacious enough in their approach to these matters.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: First of all, I should like to apologize if I have in any way terrorized the government.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: I should like to ask the Prime Minister whether, in view of the wide publicity that this leak has received, he can assure us that Information Canada will be in charge of all future governmental leaks?



ALLEGED INEFFICIENT OPERATION-REQUEST FOR COMMITTEE INQUIRY OR STATEMENT

Mr. Barry Mather (Surrey-White Rock):: I have a supplementary question for the Minister of Labour who reports to the House for Information Canada. Having in mind the sorry state of affairs in Information Canada as revealed in the reported memorandum by its deputy director from which it would seem that futility and extravagance are about equal, will the minister either welcome an inquiry into the matter through an appropriate committee of the House or make an early statement on motions so that the country will know whether it is the government's intention either to straighten up or wind up Information Canada?


Hon. Martin P. O'Connell (Minister of Labour):: There will be an opportunity in the appropriate standing committee to examine the programs and expenditures of Information Canada. I should also like to comment upon and answer the first part of the question which suggested extravagance. The report in the Globe and Mail is an inaccurate report. It skips one year in its comparison. It skips from actual spending in the first year of the new agency to budgeted spending for the coming year. Actually, the increase is $1.2 million next year over this year, and that is more than accounted for by the increase in postage which Information Canada-


Some hon. Members:: Oh, oh!


Mr. O'Connell:: For the first time and because of a change in accounting rules the agency will be paying postage amounting to $1 i million. We are making savings in the total picture. Another $lj million is for four new information centres at Halifax, Toronto, Vancouver and-


Mr. Speaker:: Order, please. For the moment the Chair will recognize the hon. member for Surrey-White Rock on a further supplementary question and then go to the hon. member for Prince Edward-Hastings.


Barry Mather: I have a supplementary question for the minister. In view of the fact that government information
25020-30a

March 2, 1972
Inquiries of the Ministry
expenditures, including Information Canada, are now running at the rate of $1 million a week in this election year, will the minister undertake to review this situation with a view to saving public money, if not government credibility?


Martin Patrick O'Connell: Mr. Speaker, we are starting at home. We are making savings in Information Canada, and we will be encouraging all departments to do that. But I want to point out that each department is autonomous in its own right in its information programming. I would invite the hon. member to look at what proportion government information expenditures represent of government expenditures and I think he will find that it is perhaps a quarter of one per cent of the total. We have a responsibility, which I am sure he would support, to inform Canadians about government programs and of their own rights to access to such programs.


Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, does the minister consider that the Canadian people will get their money's worth from the $10 j million budgeted for next year when this agency requires three weeks longer to make information available than was the case formerly when information was supplied by the individual departments.


Martin Patrick O'Connell: Canadians still receive information from individual departments.


George Harris Hees: Three weeks late.


Martin Patrick O'Connell: We have been taking a very close look at this and re-evaluating the time lag in supplying books and so forth. It is now down to about seven days. We are going to improve that. There is a cataloguing going on in the book storage centre over in Hull, and I think the information given out will certainly match the information given by the hon. gentleman.


George Harris Hees: As a further supplementary question-


Mr. Speaker:: Order please. We will have to move to another subject. I am wondering, first, whether the hon. member for Bellechasse has a supplementary. [Translation]
Is the hon. member for Bellechasse rising on a supplementary?


Mr. Adrien Lambert (Bellechasse):: No, Mr. Speaker.


Mr. Speaker:: I shall give the floor to the hon. member in a moment.

For the moment the Chair will recognize the hon. member for Fundy-Royal on a supplementary.



ALLEGED INEFFICIENT OPERATION-REQUEST FOR TABLING OF DEPUTY DIRECTOR'S MEMORANDUM

Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, if the memorandum is out of date and inaccurate, will the minister table it so that we can share his

propaganda about the propaganda of Information Canada?


Arthur Jacob (Jake) Epp: Mr. Speaker, the memorandum was an internal working document designed to stimulate discussion in the management group of Information Canada. I think the hon. gentleman would agree that it would be improper to table such an internal working document.



ALLEGED INEFFICIENT OPERATION-KNOWLEGE BY GOVERNMENT OF DEPUTY DIRECTOR'S MEMORANDUM PRIOR TO BUDGET APPROVAL

Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I too wish to direct a supplementary question to the Minister of Labour responsible for Information Canada. Was the minister aware of the memo by the Deputy Director General of Information Canada, dated January 24, prior to the government's final approval of the almost 50 per cent increase in the budget of Information Canada?


Arthur Jacob (Jake) Epp: The
answer to the first question is that I was aware of the memo this morning. With respect to the second part of the question, the increase is 11 per cent and not 60 per cent as reported in the Globe and Mail. It may vary depending on what lapsing funds we have this year; and we are doing a very thorough re-evaluation seeking economies within Information Canada.


George Harris Hees: As a further supplementary-


Mr. Speaker:: Order, please. There are a number of hon. members seeking to ask supplementaries but we have not completed the first round of the questioning. The Chair will return to them later. The hon. member for Nanaimo-Cowichan-The Islands.



THE CANADIAN ECONOMY


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the right hon. Prime Minister arising out of a speech made by the Minister of Industry, Trade and Commerce before the Mid-America World Trade Conference in Chicago. According to the release from the minister's office the minister is quoted as saying;
Canada will remain one of the most open and secure locations for investment by non-residents.
I want to ask the Prime Minister whether the statement that Canada will remain one of the most open locations for investment by non-residents is government policy, and whether this is the policy which has been adopted by the government with respect to foreign ownership?


Pierre Elliott Trudeau: Well, Mr. Speaker, we never gave any indication that our policy would result in a prohibition of foreign investment in Canada in general or in any of the provinces in particular.
March 2, 1972

So there is no contradiction with what the minister says is the kind of policy we are looking at.


Thomas Clement (Tommy) Douglas: In view of the screening mechanism recommended by the Minister of National Revenue, and the fact that U.S. Secretary of the Treasury, Mr. Connally, yesterday was again upbraiding Canada for its position on trade matters, may I ask the Prime Minister if this modification of the government's program with respect to foreign ownership is related to the dispute which is now going on with the United States respecting trade matters?


Pierre Elliott Trudeau: Mr. Speaker, it is difficult to see how the hon. member can talk about the modification of a program of which he knows nothing.


Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a supplementary question for the Prime Minister. Has he any intention to amend his statement carried on national television news last night in view of the remarks of Secretary Connally immediately before him?


Pierre Elliott Trudeau: The one about the opposition shaking in their boots every time America talks, Mr. Speaker?


Some hon. Members:: Oh, oh!


Donald MacInnis: Mr. Speaker-


Some hon. Members:: Order!


Mr. Speaker:: Is the hon. member rising on a point of order?


Donald MacInnis: Yes, Mr. Speaker.


Mr. Speaker:: I will recognize him on a point of order, but again I bring to the attention of hon. members that we have not yet completed the first round of questioning and the hon. member for Bellechasse is still waiting to ask the first question on behalf of his group. The hon. member is seeking the floor on a point or order?


Donald MacInnis: Yes, Mr. Speaker.


Some hon. Members:: Oh, oh!


Donald MacInnis: I was under the impression that I had the floor, Mr. Speaker. My point of order arises from a ruling you have made on several earlier occasions which does not allow the Prime Minister to ask questions of opposition backbenchers.


Some hon. Members:: Oh, oh!



MANPOWER


Joseph Adrien Henri Lambert: Mr. Speaker, I have a question for the hon. Parliamentary Secretary to the Minister of Manpower and Immigration.
Further to his reply of February 28 to the question put by my colleague the hon. member for Portneuf (Mr. Inquiries of the Ministry
Godin) to the effect that there were still $4 million for distribution, but that this does not mean that applications exceed funds available, I should like to ask him whether projects submitted before January 31, 1972 will be accepted promptly and whether prompters will be informed in the near future.


Mr. Ray Perrault (Parliamentary Secretary to Minister of Manpower and Immigration):: I understand the Minister of Labour is prepared to answer this question, Mr. Speaker.


Arthur Jacob (Jake) Epp: Mr. Speaker, all of the projects that are going to be approved have now been identified. The department is in the final stages of notifying the applicants and writing contracts with them. This will take a little while, but the identification process has been completed.



LOCAL INITIATIVES PROGRAM-CRITERIA RESPECTING DATE OF PRESENTATION OF PROJECTS

Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary.
In view of the confusion prevailing as to certain points concerning the date for submission of projects, may I ask whether the regulations stipulate that the project must reach the regional office of a province by January 31 or whether the approval date, in the case of Quebec for instance, can be January 31 even though the project reaches the regional office on February 1 or 2?


Arthur Jacob (Jake) Epp: Mr. Speaker, I think the rule is quite clear that the project should have arrived on the desks of the Department of Manpower by January 31 in order to be fair to all applicants across Canada. If the hon. gentleman has any specific case that merits any special consideration I would listen to him, but I would not want to give him too much encouragement at this time.



LOCAL INITIATIVES PROGRAM-SUGGESTED EXTENSION OF DEADLINE FOR COMPLETION OF PROJECTS

Mr. Don Mazankowski (Vegreville):: Mr. Speaker, in view of the fact there have been a number of undue delays in the processing and final approval of projects, and I might say desirable projects, under the LIP program, which in turn has caused delays in the commencement and the final completion of projects, making it difficult to meet the May 31 deadline, is the government giving any consideration to extending the deadline in such extenuating circumstances in order that communities may take advantage of the program?


Arthur Jacob (Jake) Epp: Mr. Speaker, no particular consideration is being given to that question. However, I want to assure the hon. member that the program is under constant review and if any special circumstances are discovered with respect to special

March 2, 1972
Inquiries of the Ministry
situations they will be looked at, but we have no intention of changing the basic regulations as they have been established for everyone.


Gerald William Baldwin: A supplementary-


Mr. Speaker:: Order, please. There are four or five members seeking supplementaries but we will have to move on to the next subject in a moment. The Chair will recognize the hon. member for Peace River on a supplementary and then go to the next subject.



LOCAL INITIATIVES PROGRAM-REQUEST FOR SPECIFIC INQUIRY INTO CERTAIN PROJECTS

Gerald William Baldwin: In view of the fact that the supplementary estimates for this program were pushed through last session and as there is some question about the validity of some of these programs, including the one in Toronto which apparently is for an answering service for an alleged homosexual society, will the minister co-operate in having a specific inquiry made into some of these projects rather than their just being considered in the normal way on estimates?


Some hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: Mr. Speaker, if the hon. gentleman has any specific reference to any project, we want to hear about it.


Some hon. Members:: Oh, oh!


Gerald William Baldwin: I will give you the telephone number-or ask Information Canada.


Some hon. Members:: Hear, hear!


Mr. Turner (Ottawa-Carleton):: What are you worried about, Jed?


Some hon. Members:: Explain!


Martin Patrick O'Connell: Mr. Speaker, I wish to encourage the hon. member to describe the projects more accurately than he has. In answer to the other question, every project will be monitored at least once. There will be a financial audit and progress reports are required from the sponsors of every project. The whole approvals administration is now being converted in phase two into a monitoring operation, so we do intend to be in close contact with these projects to see that they stay on track in accordance with the contracts.



THE MINISTRY


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Regional Economic Expansion and concerns a billet-doux that he, as bagman for the Liberal party, sent out in which it is stated: "funds must be available so that work of the party,
in the next few months, may be adequately financed". I ask this question in view of the admonition of the Prime Minister last night that we should "cultivate with a sure hand and a delicately tuned sense of understanding".


Pierre Elliott Trudeau: Hear, hear!


John George Diefenbaker: In that spirit may I ask the minister whether he, being a minister of the Crown with hundreds of millions of dollars to dispose of, sending out such letters and being unable to bifurcate himself into a minister and bagman at the same time, would table the list of recipients of this letter so that we may decide what the purpose of it was and whether it is contrary to the principles of government that have always been recognized?


Hon. Jean Marchand (Minister of Regional Economic Expansion):: Mr. Speaker, I state solemnly in this House, that I have never collected a cent for the Liberal party; as leader for Quebec, and responsible for Quebec, I merely sent a letter of invitation to a fund-raising cocktail. I believe the right hon. member or some members of his party may even have received an invitation because they are sent systematically by the Federation. All I did was send a letter and no one-this I state solemnly-knows the names of the companies that ask for subsidies from the department; never are those companies approached for funds, unless it is later on, and then I know not by whom.


John George Diefenbaker: Mr. Speaker, the question is, did the minister send such a letter because I saw the letter signed by his own hand.


Some hon. Members:: He said so.


John George Diefenbaker: What business has this minister, heading a responsible department, to bring about at this time a system of benevolence that passed out during the days of the Stuarts? I ask the minister if he will table the list of those to whom the letter was sent so we can determine what he had in mind?


Jean Marchand: Mr. Speaker, the question should be directed to the Quebec wing of the Liberal Federation of Canada; it is that body which sent the letter and I am the one who signed it. It is merely a letter of invitation-


An hon. Member:: Attention, be careful.


Some hon. Members:: Be cautious with your answer.


Jean Marchand: -that is to say-


Mr. Speaker:: Order, please.


An hon. Member:: Resign, resign.


Jean Marchand: -that is to say that there is in the Liberal party a democratic spirit which does not exist in the Progressive Conservative party.


George Harris Hees: You signed it. It is your letter.


Mr. Speaker:: Order, please. May we have order, please.

March 2, 1972


Jean Marchand: I usually sign the letters. Ask the federation.


John George Diefenbaker: Whom did you send them to?


Jean Marchand: You received an invitation and you declined.


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



INDIAN AFFAIRS


Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Is the minister aware of the tragic circumstances surrounding the death from malnutrition last December of a Cree woman at the Sandy Lake Reserve and, specifically, has he received the report on the recommendations made last Friday by the coroner's jury?


Hon. Tohn C. Munro (Minister of National Health and Welfare):: Yes, Mr. Speaker.


Derek Nigel Ernest Blackburn: In view of the fact that some 1,500 treaty Indians at the Sandy Lake Reserve are provided with utterly inadequate health services, for instance, the nearest medical doctor is 300 miles away, would the minister contemplate making a statement at his earliest opportunity on the state of health services provided for Indians in northern Ontario, or would he agree to initiate a public inquiry into this deplorable situation?


John Carr Munro: Mr. Speaker, I would advise the hon. member for Brant that in this general area in the course of the next month we are opening three new nursing stations at a cost of approximately $200,000 each. In the intervening period we are taking steps to improve Indian health services even further. I would indicate also that over the course of the last three years the resources, financial and personnel, that have gone into Indian health services-


Mr. Speaker:: Order, please. The hon. member for St. John's East.



REGIONAL ECONOMIC EXPANSION

[Stage Direction]
ALLEGED GRANT TO A. BELANGER LTEe.-REQUEST THAT MINISTER CORRECT ANSWER
Mr. lames A. McGrath (St. John's East):: Mr. Speaker, I should like to direct a question to the Minister of Regional Economic Expansion, especially since he seems to be in the mood for making solemn declarations. In his departmental capacity will the minister now correct the record or the totally false and misleading answer he gave to the hon. member for Lanark-Renfrew-Carleton on Monday last regarding a grant paid to the firm of A. Belanger
Inquiries of the Ministry
Ltee., which will result in the closing of a branch plant operation in Carleton Place, Ontario?


Jean Marchand: Mr. Speaker, I was asked on Monday whether the company Belanger-Tappan Ltee had received a grant from my department, or whether we had an application for a grant from that company pending. I gave a firm negative reply in both cases and, in truth, there has been no such thing. That company has not been given a grant, and there is no application pending in my department. What happened was that about a year ago that company made an application for a grant, which we accepted. The company accepted our offer but we then withdrew it by a letter dated February 11, 1972. We wrote to the company to tell them that their file had been closed and that they would not receive a grant.
The document referred to by the hon. member for St. John's East is not the one that was tabled in the House, but a kind of summary of government activities, and the hon. member will see in the document which will be tabled next month that such grant was never made. Therefore, no explanation is called for. I hope that the hon. member for St. John's East will have the honesty to correct the erroneous and foolish things which he has been repeating outside the House.


Mr. Speaker:: May we have order, please. The hon. member for St. John's East.


James Aloysius McGrath: Mr. Speaker, on a supplementary may I ask the minister whether he is prepared-


Some hon. Members:: Withdraw!


James Aloysius McGrath: I have nothing to withdraw, Mr. Speaker.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: I have nothing to withdraw. I have the record of the department which indicates that a grant was made-


Jean Marchand: No.


James Aloysius McGrath: -and no further declaration was made by the department to correct that statement-


Mr. Speaker:: Order, please.


James Aloysius McGrath: -and which he knows does exist-


Mr. Speaker:: Order, please. Would the hon. member please resume his seat. I suggest that at this point we are entering into debate between the minister and the hon. member, and we should not have a debate. If the hon. member has a supplementary question, I will recognize him. I am rather anxious to get on and live up to the commitment I made yesterday to recognize hon. members who have been anxious to ask questions for a few days, including the hon. member for Churchill. If the hon. member for St. John's East has a supplementary question to ask, he will be recognized provided it is short and the

March 2, 1972
Inquiries of the Ministry
minister can reply briefly. The Chair will then recognize the hon. member for Churchill.


James Aloysius McGrath: Mr. Speaker, the minister's answer was quite lengthy, and I feel that I ought to be able to ask a supplementary question based on the minister's answer. I was trying to do that. I want to ask the minister whether he is now prepared to lay on the table of the House all correspondence between himself and the firm of A. Belanger Ltee regarding the grant that was announced on June 30, 1971. I also ask the minister why he was so anxious to take the credit for this grant in the eyes of the public when he never made a correction?


Mr. Speaker:: Order, please. This is debate. The hon. member for Churchill.


James Aloysius McGrath: Mr. Speaker, I have a further
supplementary.


Jean Marchand: It is useless to bring documents to the hon. member's attention. He does not know how to read them.


Mr. Speaker:: Order, please. I recognized the hon. member on a supplementary and drew to his attention that other hon. members are interested in asking questions. The first part of the supplementary was legitimate. The hon. member invited the minister to indicate whether he was willing to table certain documents. If the hon. member will allow the minister to reply to that question, I will then go to the next questioner.


James Aloysius McGrath: Mr. Speaker, I rise on a point of order. The record will show that the minister gave a misleading answer to the hon. member for Lanark-Renfrew-Carleton. I raised this as a question of privilege yesterday.


Jean Marchand: The hon. member does not know how to read.


James Aloysius McGrath: Mr. Speaker, I merely asked the minister a question, and I have nothing to withdraw. He stands condemned by his own answer which he gave on February 28, as recorded at page 305 of Hansard.


Mr. Speaker:: Order, please. This is debate, and I really do not see why the hon. member should want to raise the matter as a point of order. It seems to me that the position is quite clear. A question was asked by the hon. member and a reply given by the minister. Certain facts may be in dispute, but we should not, I suggest, either by way of question of privilege or point of order, dispute or continue to debate the facts as alleged either by the minister or by the hon. member. I really think we should go to the next subject. I recognize the hon. member for Churchill and thank him for his patience.



CANADA PENSION PLAN


Mr. Robert Simpson (Churchill):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In
view of what appears to be an unfair obligation placed upon every contributor to the Canada Pension Plan to verify that his contributions are properly recorded and credited, has the minister given consideration to requesting Canada Pension Plan officials to supply each contributor with an annual statement of contributions, as is required by the government of private business and employers?


John Carr Munro: Mr. Speaker, I will be pleased to look into this matter.



MANPOWER


René Matte: Mr. Speaker, I have a question for the Minister of Labour.
Could he tell us exactly on what day in January there were no longer any funds available for local initiative projects submitted by municipalities?


James Aloysius McGrath: You were caught short. You do not even read your own departmental research. You do not even read your own statistics.


Jean Marchand: That is what you say. You do not know what we do.


James Aloysius McGrath: You were caught with your pants down.


Jean Marchand: You don't know what we do.


Mr. Speaker:: Order, please. The hon. member for Champlain is trying to ask a question and these exchanges back and forth make it impossible for the Chair to hear the hon. member for Champlain. I think, even though he is at the other end of the chamber, he should be given a chance to ask his question.

Would the hon. member for Champlain please repeat his question? The interventions that have just taken place have prevented me from hearing him.


René Matte: Thank you, Mr. Speaker. I have a question for the Minister of Labour.
I would like to know the exact date in January when there were no longer any funds available for local initiative projects submitted by municipalities.


Arthur Jacob (Jake) Epp: Mr. Speaker, if I understand the question correctly, the date is not in January at all. The cut-off date for applications was January 31. I have tried to indicate that the assessment process is continuing. All projects that will be approved have now been identified, but we are already in March, and we are still notifying and writing final contracts. If I understood correctly, the date cannot be identified as a date in January.

March 2, 1972


René Matte: Mr. Speaker, I have a supplementary question.
Could the minister explain how come high officials of his department say that there are no funds available since January 5?


Mr. Speaker:: That question has already been asked many times-

If the minister can reply briefly, he will be allowed to do so.


Martin Patrick O'Connell: Mr. Speaker, I will inquire into the question again in a more precise way and let the hon. member know the answer.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, my question is to the Secretary of State for External Affairs and is in reference to a petition recently presented to the minister by the Ukrainian-Canadian Committee alleging widespread arrests of intellectuals in the Ukraine. Can the minister advise whether the government has made or intends making representations to the government of the Soviet Union, or is it considering seeking an investigation by any international body concerned about human rights and fundamental freedoms?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, not only have I received this petition but I received the representatives of the association myself. We had a very long conversation as to what would be the most effective way of attaining the objectives that are in the minds of the association. They have left this matter in my hands for me to consider how we can be most effective on behalf of those who are being oppressed.


Heath Nelson Macquarrie: Am I to take it, then, that the government has not yet found an effective way of dealing with this difficulty?


Mitchell William Sharp: Mr. Speaker, that is not so. The Canadian government has been more effective in reuniting families on behalf of Jewish people who have been oppressed throughout the world than any other government in the world, and I think the methods we follow are the most effective.


Donald Frank Mazankowski: Mr. Speaker, may I direct a supplementary question to the Secretary of State for External Affairs. Inasmuch as the representatives of the Ukrainian-Canadian Committee urged the government to make representations to the United Nations, has
Inquiries of the Ministry
the government undertaken such action? If not, does it intend to make representations to that international body?


Mitchell William Sharp: Mr. Speaker, that matter is under consideration. As I say, I think what is important is helping people, not giving ourselves the satisfaction of having made protests in particular ways but selecting the means that are likely to be the most effective. As I say, we are now beginning to see some of the results of the very persistent and quiet diplomatic means we have used, and I think we should continue them.


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In view of the estimate yesterday of the president of the Family Planning Federation of Canada that one child in every five or six results from an unwanted pregnancy and because of the strong opinion expressed at the Family Planning Conference that the major roadblocks in family planning are now at provincial and local levels, will the minister seek an early meeting with provincial ministers to launch a co-ordinated program of family planning at all levels?


John Carr Munro: Mr. Speaker, as the hon. member may be aware, there is a cost-sharing arrangement under the Canada Assistance Plan for family planning services and counselling. We have ongoing discussions with the provinces almost daily with respect to programs under CAP. Certainly, these include family planning.


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, may I direct a question to the Minister of Industry, Trade and Commerce. Inasmuch as the representations of the Canadian chemical industry further emphasize the danger to our domestic industries resulting from the enactment of the United States DISC program, can the minister now announce whether the government has a policy based on studies of the results of the DISC program or is it willing to implement some of the recommendations made by the Canadian chemical industry?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Mr. Speaker, that study, which was very thorough and took some time, has come to a number of conclusions, one of them being that it would be essential, if plants established in Canada are to be viable, for them to have greater access to international markets and to the United States market in particular. This is not a reality at

March 2, 1972
Inquiries of the Ministry
the moment. We are making efforts to try to bring this about. The results of the inquiry have been communicated to the industry.


Mr. J. M. Forrestall (Dartmouth-Halifax East):: My question is for the Minister of Industry, Trade and Commerce. Can the minister advise the House whether the interdepartmental committee that, to the best of my information, went to the United States this week to renegotiate the terms under which Canada might be able to sell or lease the Pisces to the Soviet Union met with any success or whether the further application by his department was turned down by the Americans?


Jean-Luc Pepin: Mr. Speaker, I have not yet received a report of the meeting which I understand took place yesterday. The purpose of the meeting was to determine whether some of the instruments in the said submersible that are produced in the United States would obtain an export permit. It is quite normal to consult with the Americans in order to determine if a permit will be allowed in order to decide how the Pisces IV will be used for research purposes.


Mr. Speaker:: I apologize to the hon. member for Dartmouth-Halifax East. He had a supplementary which he might be allowed to ask now.


J. Michael Forrestall: I have a short supplementary to the Minister of Industry, Trade and Commerce. I ask the minister whether I can draw the inference from what he has said that there is no longer a question of security or of keeping secure certain information or other aspects of this deep-water submersible? Is that now no longer a consideration?


Jean-Luc Pepin: Mr. Speaker, the answer might be along the following lines. We are very interested in co-operating in research in oceanography with other countries of the world. In order to do so, and use that particular ship, we have to develop a procedure by which this ship can be used jointly by Canadian and foreign authorities. In order to do that, we have to make sure there is no impediment to the use of the instruments on the said submersible and, in order to do that, we must have approval from the United States to import them into Canada.


Mr. Speaker:: Order, please.



CANADIAN BROADCASTING CORPORATION


Mr. Mark Rose (Fraser Valley West):: My question is directed to the Secretary of State. It concerns the strike or lockout of NABET and the problems between NABET and the CBC. Yesterday in Montreal there was a lockout

that involved 700 people in television and radio. Does the minister intend to use his good offices to persuade the CBC to participate in more meaningful negotiations with the union?


Hon. Gerard Pelletier (Secretary of State):: Mr. Speaker, I follow the events very closely and I ask for reports from the CBC. But my way of thinking differs from that of the hon. member. I think the CBC management are not solely responsible if no significant negotiations have as yet been undertaken.



DISPUTE WITH NABET-INQUIRY AS TO COST TO CANADIANS

Mark Willson Rose: A supplementary question. As a result of his investigations, is the minister yet in a position to say how much this labour difficulty between the CBC and NABET has cost the people of Canada to date?


Gérard Pelletier: I am not
aware of the exact figures, Mr. Speaker, but I might be able to get them.



AGRICULTURE


Mr. Cliff Downey (Battle River):: My question is to the Minister of Agriculture. It concerns cattle coming into Canada under authorization of the health of animals branch of the Department of Agriculture. I ask the minister whether at the time of entry into the quarantine stations in the gulf islands all animals have been held under permit by some Canadian individual or corporation?


Hon. H. A. Olson (Minister of Agriculture):: I am sorry, Mr. Speaker. I did not hear the first part of the question.


Cliff Downey: I apologize for disturbing the minister. With reference to animals coming into the quarantine stations in the gulf islands under the authorization of the health of animals branch, at the time of entry into the quarantine stations have all animals been held under permit by some Canadian individual or corporation?


Horace Andrew (Bud) Olson: Yes, Mr. Speaker, except for the very few brought in by the Canadian Department of Agriculture.


Cliff Downey: A supplementary question.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Battle River on a supplementary question and then the hon. member for Marquette. We will then have reached or gone beyond the time reserved for the question period.


Cliff Downey: I am sure the minister has answered my question accurately within the scope of the knowledge of
March 2, 1972

his department. However, will the minister look into reports that there are individuals within the health of animals branch who have made telephone calls to individuals in western Canada asking them to take permits or pay for animals presently in quarantine on the gulf islands? I ask the minister to report on this.


Horace Andrew (Bud) Olson: I can look into this, Mr. Speaker, but I do not know of any such telephone calls. If these animals have already arrived at the quarantine stations, particularly on the gulf islands, I would be very surprised if there is anything in what the hon. member says because the animals have already been assigned.


Mr. Speaker:: Order, please. As I indicated a moment ago, the Chair recognized the hon. member for Battle River and the hon. member for Marquette for the last question.



TAKEOVER OF FEDERAL GRAIN COMPANY ELEVATORS BY POOLS-EFFECT ON FARMERS' FREEDOM OF CHOICE IN DELIVERY

Mr. Craig Stewart (Marquette):: My question is to the Minister of Consumer and Corporate Affairs. It arises out of the proposed takeover by the pools elevators of the Federal Grain Company. As this means one organization will control 65 per cent of all elevators in western Canada, it could infringe on the farmers' freedom of choice in delivering their grain. Is the government investigating this takeover and have any complaints been lodged with his department?


Hon. Robert K. Andras (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I appreciate the hon. member bringing this to my attention. I will certainly take the question as notice and give him an answer as quickly as possible.


Mr. Speaker:: Orders of the day.



BUSINESS OF THE HOUSE


Gerald William Baldwin: Mr. Speaker, I rise on the usual Thursday point of order. I wish to ask the government House leader about the business for the rest of this week and next.


Mr. MacEachen:: Mr. Speaker, we will continue with the listing I believe I gave last Wednesday. In addition to that information, I would like to mention to the House that I hope to call two opposition days next week, namely Tuesday and Friday. I believe there are seven opposition days before the twenty-sixth of March. Therefore we will have to get two in next week. This is what I have in mind, Mr. Speaker. If there is a desire to have further consultation on that, I will be glad to have it.


Gerald William Baldwin: A supplementary question with regard to the business of the House. The government House leader
Business of the House
will recall that I asked him if he knew anything about the date of the budget. Now that the Prime Minister (Mr. Trudeau) has returned from Toronto, is the government House leader in a position to advise whether affairs have now been set in motion so that we will have a budget before Easter?


Allan Joseph MacEachen: Mr. Speaker, I asked the same question myself. I was given the same answer, that it would be taken as notice.


James Aloysius McGrath: I rise on the same point of order. I am prompted to do so because of Your Honour's ruling yesterday on my question of privilege, and also because of our inability to obtain accurate information in the House from the Minister of Regional Economic Expansion.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: May I ask the government House leader when he will arrange for an organizational meeting of the Standing Committee on Regional Development so that we can get the minister's estimates before the committee and subject him to the kind of cross-examination that will bring out accurate information?


Allan Joseph MacEachen: We can have the organizational meeting for that committee at once, Mr. Speaker.


Mr. Alexander:: Mr. Speaker, my point of order arises from the position in which I and other members of the House find themselves as a result of the Minister of Transport (Mr. Jamieson) coming into the House and making a two-phase statement of some five to seven minutes in length, and then immediately vacating the premises.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: In view of the type of statement made this afternoon and the magnitude of the project, surely it should be the practice for this and other ministers, after making such a statement, to remain in the House in order that pointed and important questions can be directed to them. Only in this way can we be satisfied as to-


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: I want to bring this point home because what the minister did this afternoon was obviously an affront to the dignity of opposition members, and perhaps members opposite who have been repeatedly asking questions. I hope the government will appreciate the seriousness of what has occurred here this afternoon.


Mr. Speaker:: Orders of the day.

March 2, 1972
Federal-Provincial Fiscal Arrangements



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, March 1, consideration of the motion of Mr. Turner (Ottawa-Carleton), that Bill C-8, to authorize the making of certain fiscal payments to provinces, to authorize the entry into tax collection agreements with provinces, and to amend the Established Programs (Interim Arrangements) Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Speaker:: Order, please. The hon. member for Roberval.


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, I was waiting for some order to be restored in the House. Indeed, many members were speaking louder than me.
I am pleased to comment on this bill before its reference to the Standing Committee on Finance, Trade and Economic Affairs.
I listened very attentively to the introduction of Bill C-8 by the new Minister of Finance (Mr. Turner) whom I congratulate for his courage in accepting to be the new scapegoat for that much criticized department. I always greatly admired the minister and I do not blame him at all for he is not responsible for the drafting of this bill since he did not hold that office when this bill was hatched by the technocrats.
I was nevertheless a bit surprised at his self-confidence when? he spoke of co-operating with the provinces when we know that most of them are complaining about lack of consultation with the central government. Indeed, in all its relations with the provinces, especially with Quebec, this government reminds me of a steam-roller madly crushing everything that stand in its way without giving it a single thought.
Freedom of choice, acquired rights, autonomy, all that is futile to the government when they plan their federalist action. Their slogan consists in providing for ever greater centralization, even at the cost of making the provinces second rate governments.
I am sure that the minister who knows me as a sincere autonomist wishing to live in a confederation did not expect me to applaud his "supercentralization" of powers no more than I would agree to the views of the NDP about state control.
Therefore, I will speak today as a Quebec federal member. I still believe in the reviving of the true federation we had before 1942. I would like the hon. minister to believe that 90 per cent of Quebecers are still hoping that the federal government will come to its senses and will some day be honest enough to return what it borrowed during the last war, namely the tax fields belonging to Quebec and recognized in the British North America Act because, in my region, we have a principle which we

respect above all-give back undamaged to its owner whatever we have borrowed.
Yesterday, I heard a good one when the minister stated that the federal government and the provinces had equal rights of taxation and I think it is by virtue of such rights that the federal government so easily takes the provinces' place and tells them later: Now we have what we want; if you do not like it, there is always double taxation.
I understood then that the word equality for this government means: Move aside I will take your place. This is what I remember from the statement,of the Minister of Finance.
As far as the Secretary of State (Mr. Pelletier) goes, he came and told us that he crept into the field of education via post-secondary education and that he is there to stay. To gild the pill, he told us that it is only for two years but we know quite well that it will be for two years and then another two years and finally permanently as was done in all other fields.
I think it is high time this government examined its conscience-if it still has one-before things get worse in the province of Quebec because the population is not the only one crying for help. As a matter of fact, Quebec ministers one after the other have protested against federal interference in the affairs of their departments. Because they were Quebec liberals they thought they could stop this massive intrusion but there is no way.
Under the cover of a good Samaritan, Bill C-8 calls for the concession of exclusive rights to the federal government for a period of five years.
It is always the same stratagem of soft talk we have had from this government to hide its true intentions of centralization. Let us suppose that under Bill C-8 the government is asking this House for permission to make certain donations to the provinces. This reminds me of a sated ogre throwing crumbs to the beggars. How this all seems to reflect generosity, kindness, co-operation. How the minister must have congratulated his officials for coming up with such a sentimental style.
As to that permission, the present totalitarian government need not even ask. It has it forever. But read the terms of this little donation so humbly presented and you will see that the title of the bill which is as follows speaks for itself:
An Act to authorize the making of certain fiscal payments to provinces, to authorize the entry into tax collection agreements with provinces, and to amend the Established Programs (Interim Arrangements) Act.
This bill, then, features three main aspects. First, a permission is humbly requested; then the levying of a tax is proposed and lastly, we are informed that this tax will be increased. Mr. Speaker, the cat is out of the bag and we know what the government is after: taxes, taxes, always more taxes.
All this on the other hand is a consequence of a far more subtle and older fraud which was designed to take from the provinces the three main fields of taxation, which were the only guarantee of their autonomy, their basic taxes, as we say in Quebec.
To this end, what pretext did the central government use to have the provinces swallow the pill once more? War. Not war in Canada, not even in North America, but
March 2, 1972

war in Germany, in Italy and Japan. To be honest, I thought perhaps I should quote passages from this agreement that was passed on May 13, 1942. I would like to quote this, above all to inform the people because I know that most hon. members will not even read that speech. I quote:
An Act respecting an agreement between the Dominion and the
Province for the suspension of certain taxes in war time
[Asserted to, the 13th of May, 1942]
WHEREAS the British North America Act authorizes the Parliament of Canada to impose any kind of taxation and the Provincial Legislatures to impose direct taxation;
Whereas in order to enable Canada to put forth, in the prosecution of this war, a maximum effort, it is necessary that the Parliament of Canada should alone exercise the power of direct taxation upon incomes and upon corporations;
Whereas the Government of Canada is willing to allow the Province an adequate compensation if, for the duration of the war, the latter undertakes not to levy such taxes;
Whereas the Dominion Government acknowledges that the Province, in making this undertaking, neither abandons nor cedes any portion of its authority, nor any of its constitutional rights, powers and privileges;
This text is very important, since Ottawa recognizes that the provinces have the right to levy direct taxes. For the duration of the war, Ottawa requested the sole right to levy direct taxes which had been exercised exclusively by the provinces. I did say, for the duration of the war, and if the provinces do not levy direct taxes during the war, Ottawa undertakes to pay them an adequate compensation.
At last, it recognizes, as in the preamble of the last paragraph but one, that the province which signs this agreement, "neither abandons nor cedes . . . any of its constitutional rights, powers and privileges".
In theory, the province of Quebec has only temporarily loaned its privileges, but in practice, the federal government still has the upper hand on taxation.
The war ended 30 years ago; however, the provinces are still fighting the federal government to regain their rights. Why is the federal government so jealously and so stubbornly keeping what the province loaned in good faith? This is what 90 percent of the Quebec people are asking themselves without ever finding a sound answer.
Does the federal government hold that it is the sole authority able to equitably distribute the proceeds of taxation? To efficiently overcome regional inequalities? What is it doing in the fields of health, social welfare, education, roads, agriculture, post-secondary education, and in all the other sectors under the exclusive jurisdiction of the provinces where it sneaked in through shared-cost programs?
I might be told that it had to look after other problems such as old age pensions and family allowances because the provinces were not tackling them. But were there reasons preventing the provinces from being active in social fields? In fact, Ottawa was still collecting all the
Federal-Provincial Fiscal Arrangements taxes without ever reimbursing the provinces, except with crumbs.
This is why the province of Quebec had to levy a second tax, considering Ottawa's constant refusal. And we of the province of Quebec know what such obstinacy on the part of the federal government entails, that is two collecting agencies and duplication of all departments to boot. As a result we now have twice as many bureaucrats and technocrats. We are paying three times as much, yet we get only mediocre service.
The Prime Minister (Mr. Trudeau) himself said so: When Ottawa returns $2 to the provinces, that means it has pulled $5 out of the taxpayers' pockets.
We now have in Ottawa the most chaotic administration ever to exist since confederation, to the extent that nobody knows the limits of its rights or duties. The situation is worse than the Tower of Babel confusion.
The administrators, whether provincial or federal, do not speak the same language, for they are only technocrats transmitting orders received from financiers. And all that while the elected representatives, allegedly responsible to the people, are no longer responsible for anything. We have evidence of that every day during the oral question period when a minister confesses his inability, with respect to such or such section of his department, to alter the course steered by the civil servants.
We are today living on the wrong side of confederation. And as long as we do not revert to sources, we shall continue to flounder pitifully in the worst disorder.
We are living under a federative dictatorship, if I may use that word to describe a central power which imposes its own will to the provinces without ever consulting them. Proliferation of such laws is our most vicious attack on the provinces' sovereignty. And a province will be autonomous to the extent that it can look after itself and assume its responsibilities.
Now, all these bills result in making the provinces increasingly dependent on the central power. And that is what the province of Quebec-and British Columbia, for that matter-rejects ever more strongly while each day Ottawa tightens its grasp.
Perhaps the minister will retort that under Bill C-8 he is offering the provinces some means to free themselves. But the provinces no longer will agree to being offered only that allegedly magic means: they simply want to take it into their own hands, with all the responsibilities and rights that it implies.
That is why I say to the government that it is time to reverse steam before it is too late. Let us show no hesitation to resume our dialogue with the provinces, for Canada will become united only when it comes back to the true meaning of confederation.
Mr. Speaker, it will perhaps be said that I impute all the wrongs to the federal government, but that is not the case, for I think that the provinces, and particularly the province of Quebec, bear a heavy load. Indeed, when I read again the 1942 agreement, I realize once more that all the Quebec governments which have been in office from 1942 to 1972 have been despicable, hypocritical or traitors to their province.

March 2, 1972
Federal-Provincial Fiscal Arrangements
I will quote certain documents and let Quebecers draw their own conclusions, for let us not forget that the agreement is followed by an annex applicable to Quebec. Again, I am eager to read that annex, which is not too lenghty, so that all can be aware of it. Chapter 27 of Bill C-16, assented to on May 13, 1942, reads in part as follows:
Draft of the proposed agreement between the Governments of the Dominion and of the Province of Quebec
Memorandum of agreement made this day of
1942.
Between:
The Government of the Dominion of Canada (hereinafter called "The Dominion"), represented herein by the Honourable James Lorimer Ilsley, Minister of Finance, of the First Part
and:
The Government of the Province of Quebec (hereinafter called "The Province"), represented herein by the Honourable James Arthur Mathewson, Provincial Treasurer, of the Second Part.
Whereas the Dominion and the Province and certain municipalities in Quebec have been levying taxes upon incomes and upon corporations, and
Whereais it is expedient during the continuation of the present war and for a certain re-adjustment period thereafter that the Dominion only should levy such taxes, and
Whereas the Province has agreed to suspend temporarily the levying and collection of such taxes, subject to the provisions hereinafter contained, and
Whereas the Province shall not, by agreeing, as hereinafter provided, to desist from imposing certain taxes during the term of this agreement, be deemed to have surrendered, abandoned or given over to the Dominion any of the powers, rights, privileges or authority vested in the Province under the provisions of The British North America Act, 1867, or any subsequent Act of the Parliament of the United Kingdom, or to have otherwise impaired any of such powers, rights, privileges or authority, and
Whereas the Parliament of Canada has provided funds for the payments which will be due to the Province-
10. The Dominion will pay to the Province in respect of each fiscal year of the Province during the term of the agreement, the sum of $20,586,074.56 computed as set out in Appendix D-
Mr. Speaker, on reading section 23 which deals with the termination of this agreement, one has the surprise of one's life. I quote:
23. (1) This agreement shall continue in force until and terminate on the last day of the fiscal year of the Province ending nearest to the thirty-first day of December in the first calendar year which begins after the date of the cessation of hostilities, complete or substantial, between the Dominion of Canada and Germany, Italy and Japan, unless sooner terminated pursuant to the provisions hereof.
(2)	The Dominion shall, exercising its best judgment on all the available facts, fairly determine the date of such cessation of hostilities, complete or substantial, and shall thereupon give notice to the Province, specifying such date so determined, which shall thereafter, for the purposes of this agreement, be deemed to be the date of the cessation of hostilities, complete or substantial, between the Dominion of Canada and Germany, Italy and Japan.
(3)	If at any time, no such notice having been given, the Province is of the opinion that the aforesaid hostilities have ceased, completely or substantially, the Province may request the Dominion to call a conference of the Provinces and the Dominion for the purpose of consulting together as to whether the aforesaid hostilities have in fact ceased, completely or substantially and, if so, on what date. Upon receipt of such request, the Dominion will forthwith call such conference and will thereafter give the notice hereinbefore provided for at such time and specifying such date as the Dominion deems proper having regard to the views expressed at the said conference and to the obligation of the Dominion to exercise its best judgment on all the available facts and fairly to determine the date of the cessation of hostilities, complete or substantial.
(5) The Province may terminate this agreement on the thirty-first day of March of any year, if notice of intention to do so is given in writing to the Minister thirty days before such date.
I am also wondering, Mr. Speaker, what kind of jokers we are dealing with. For 30 years, Quebec ministers and premiers have been clamouring right and left: Ottawa should restore our taxation rights and we would be in a position to administer.
Has anyone ever read that section (5)?
According to what I have just quoted, there were three procedures to bring the 1942 agreement to an end. First, the federal government could have declared that the hostilities were over and annulled the agreement, returning to the provinces the three basic taxation fields which it had borrowed. Second, the province of Quebec, through its government, could have asked the federal government to call a conference, in order to cancel the agreement. Third, Quebec alone could have directly annulled the agreement on March 31 of any year by notifying the minister in writing that it intended to take back its taxation rights.
Those are the facts. They can keep on blaming Ottawa for not having stated that the hostilities were over and for having continued to use it in Quebec as a bone of contention, but sincerely, has the provincial government ever asked the federal government to call a conference to bring the agreement to an end? Never. And what is worse still, has Quebec, through its premier or any other of its ministers, ever given Ottawa an official notice that it was putting an end to the agreement, as was its right? What sort of game have all our premiers of all parties, who have succeeded each other for 30 years, played in front of the people of Quebec?
What was done by the technocrats who were then advising governments? I could name some who today are preaching revolution, when they knew very well that there was no need for it, that it was a simple question of sending a letter to Ottawa in order to terminate the 1942 agreement.
What did some former Quebec ministers do when they were in power? Did they lack the courage to tell the people how easy it was to opt out of agreements without resorting to separatism? It was all so easy. Yet no one wanted to stick his neck out. They preferred to clamour against Ottawa, whilst pocketing the millions which went and still go to the provincial treasury. It was so much simpler so. Always the rule of the least effort.
But do Quebecers and their government realize what a quandary they have created for representatives of Quebec in the federal Parliament? Are we to refuse outright the equalization payments and all the money coming to our province under the terms of past agreements? A majority in Parliament would be required, and we do not have it.
The federal government has reneged on its promise, that is a fact. But Quebec has done nothing concrete to protect its autonomy and Quebecers must be made aware of that. Not only has Quebec done nothing, but every five

March 2, 1972

years the premier of the province comes to Ottawa for in camera meetings with all other provincial premiers of Canada in order to renounce Quebec taxation rights for another five years.
[DOT]	(1550)
After this treacherous deed, a Quebec premier threw up his arms on television and begged Ottawa to give him back his taxation rights or to stop interfering in Quebec's affairs. Could there ever be a more cynical farce?
Did you know that at these secret meetings that are held every five years, all decisions require unanimous agreement by all premiers?
I should have many other things to tell you, but my time is getting short.
We of the Social Credit party are always in favour of decentralizing taxation powers. But as we must live under this curious system, as the majority in Parliament always decides, we support the statement made in Victoria by Mr. Bennett and published in Le Devoir on February 16, 1972. He suggested that it would be more efficient to help citizens individually instead of giving all the money to provincial governments.
We hope that the conclusions of the report by the Senate Committee on Poverty in Canada, which was tabled in late 1971, will be accepted by the government and that they will materialize in 1972, so that we can ensure a guaranteed minimum income to the people of Canada from coast to coast.
[DOT]	(1550)


Mr. Lloyd Francis (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, I can remember, as I am sure many hon. members of this House do, reading the story of Confederation and the remarks that were made by those who were so far-sighted as to play a leading role in bringing it about. I can remember that one of the Fathers of Confederation from the province of Nova Scotia had this to say to his son, "My son, you have no country, because Mr. Macdonald has sold us to the Canadians for 20 cents a head." Few of us would look on that kind of remark today with any commendation, but the remark in many ways symbolizes the difficulties over the years in working out an equitable and acceptable relationship between the federal authority and the provinces.
The problem lies first in the parochial attitudes in some parts of the country. But it is not fair just to describe these as parochial. They have developed into a theory of the role and the function of provincial authorities within Confederation, and have been compounded by the duality of languages and the plurality of cultures in our society. But in addition, Mr. Speaker, the problem has been compounded by the inability, over the years, to work out a generally acceptable formula which would be recognized by federal and provincial spokesmen in all parts of the country as representing a philosophy on which there would be agreement.
As the Minister of Finance (Mr. Turner), speaking in his place in this House yesterday said, perhaps the greatest and most impressive effort at building a theoretically
Federal-Provincial Fiscal Arrangements
perfect structure of federal-provincial financial relations was the Rowell-Sirois Commission. In its report, just before the Second World War in 1940, it put forward three basic propositions, as the minister said. The first was that the federal government had an overriding financial role in the pursuit of national growth and stability. The second was that fair standards of public services and taxation in all regions of the country were vital to national unity. And the third was that co-ordination in tax policy between the central government and the provinces was essential in a modern industrial state.
Try as we may, Mr. Speaker, it is difficult to reconcile all of these. In the short period of time in which I have been a member of this House, a period which has been interrupted by decisions of the voters, Mr. Speaker, I have seen a remarkable change in the philosophies of Ministers of Finance. And without any question there will be changes in the future.
The Leader of the Opposition (Mr. Stanfield) said that the bill before us was something of a stand-pat arrangement, and in many ways I would have to admit that this is true. But what is abundantly clear is that there are no concrete alternatives being put before the House in terms either of direction or policy, and that in effect spokesmen for the opposition parties have endorsed the measure simply by their lack of offering alternatives.
The basic fact of our modern society is the desire for a wide range of services, educational, health, welfare and social security, which are costly and which have to be provided as an essential instrument of national unity. The chief spokesman for the NDP, the hon. member for Waterloo (Mr. Saltsman), had at least a bit of consistency in the way he was able to approach the argument. I might say that this consistency was probably due to a matter of detachment because it is not likely that he and his party will ever have the responsibility of implementing the policy he advocated.
In his detached and more logical approach to the matter, he indicated that the thrust of the central government was highly desirable. He supported the federal-provincial shared-cost programs in medicare and hospital insurance. He indicated that these programs represented a means of achieving national standards which we all recognize are desirable. He pointed out that the development of alternative measures of fiscal policy under previous governments, by which percentage points were given to provinces in return for their accepting the contributions which had been worked out in the original legislation, was something which he regretted. He went on to say that the problem of the development of uniform standards had to be faced. If necessary, he said, he would support measures by the federal government to operate directly such programs in the provinces where there was a threat, because of lack of fiscal resources in such areas, that the programs operated by them would fall below desirable standards.
This is a counsel of perfection, that the federal government should do all these things. But the fact of the matter is that there are strongly held constitutional views in many of the provinces of Canada, and not just restricted to the province of Quebec. The fact is that in many of these areas there is a firm conviction in the minds of those responsible for provincial administration that they can do

March 2, 1972
Federal-Provincial Fiscal Arrangements
the job better than the federal authority, that they understand the local conditions better than the central authority in Ottawa, and they are prepared to make the most vigorous fight for their own autonomy in these matters.
The hon. member for Waterloo, for whom I have the greatest respect and affection, says that if necessary we can find a way around the constitution. There are many people who have tried to find a way even to amend the constitution itself which may have seemed a relatively simple thing, but so far the difficulties have not been overcome.
There is no simple way in which we can grapple with this problem of uniform standards across Canada by the federal authority moving into certain areas and operating its own programs. This difficulty was faced in a much more oblique way by the Leader of the Opposition when he spoke in this chamber yesterday. He has been a premier of a have-not province. He recognizes that the need for equalization payments in the fiscal arrangements is absolutely essential to Nova Scotia, among others. Indeed over a third of the provincial revenues of that province come from equalization payments, which are the heart of the bill before us.
If we cannot provide the means for the broad range of services, the infrastructures, the social facilities that are provided through shared cost arrangements, if we cannot provide them through federally operated programs, then the only means by which this can be done is through the device of equalization. Equalization, at a cost of something like $1 billion is, as I said, an essential and key part of the measure before us. Indeed, it is expected that the equalization amount in future years will rise to $11 billion, so if we are to deal with this through the means of equalization then we cannot make further concessions in the tax points without destroying the tax system itself.
The Conservative party has considerable strength in the province of Ontario and its Premier is a vigorous opponent of this. Oh yes, he pays certain lip service to equalization but his provincial treasurer makes the most vigorous case for increased tax room, for increased assignment of federal taxing authority, for turning over the results of tax levied at the federal level. The leader of the Opposition said it was too bad we did not take account of that great study which was undertaken about 1967 and which indicated that provincial and municipal expenditures would rise and the federal government would have a surplus in the years ahead. He did not say what should be done about it because the simple fact is that there is no further elbow room that can be given by the federal authority, in its income tax, to the provinces.
In a previous House I had the opportunity of listening to the predecessor of the present Minister of Finance announce that 75 per cent of succession duties would be given to the provinces. At that time I made a mental note that before succession duties were changed there would have to be a federal-provincial conference. Three out of four dollars collected were not going to federal coffers but to provincial coffers. I wondered how long a federal government would stay in the succession duty field under that system. I was very pleased to see that under the tax reform legislation adopted by this House, arrangements

were made which bring a different approach to this problem. We have taxed capital gains on the basis set out by the act and the federal government is withdrawing from the succession duty field.
Meanwhile, as part of the transitional arrangements, there is a certain stability of revenues which will go to the provinces due to the fact that the federal government will continue, at the request of the provinces, to collect succession duties until such time as the yield under the capital gains reaches a level of revenue yield which will be satisfactory to them. At least we have come back to a more rational system. The yield on capital gains is part and parcel of the role of income tax. We no longer have the recession on the tax front which threatened to destroy not only the power of the federal government to act in its own fiscal capacity in handling the responsibilities it has, but threatened to erode the heart of equalization itself and the tax structure.
I am pleased and proud to support the measure before us today. It does not break great new ground, but it gives certain assurances to the provinces that their revenues will be maintained. The Leader of the Opposition said that all of these should have been co-ordinated, the tax reform measure and fiscal agreements with the provinces, and that we have given the provinces an excuse to delay for another ten years. Goodness knows, however, we had enough difficulty trying to put through the measures which have been enacted. The Leader of the Official Opposition does not offer any alternative. He is caught by the dilemma of his own party with the chief and most vigorous spokesman on the provincial level demanding more and more concessions in tax yield. As a man who knows the problem of the have-not provinces, he knows equalization is the heart of their stability, their borrowing capacity and their ability to maintain social services. He knows there is no alternative but to do what the measure before the House suggests. He, therefore, condemns the government for not having undertaken new studies and not having made certain predictions, knowing full well that there are no alternatives before this House but to adopt the measures proposed in the name of the Minister of Finance.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, in speaking on this bill, C-8, I should like to point out that it really does not change anything, that it has merely patched up what has been in effect for the past five years. It will not make much, if any, improvement in fiscal relations between the provincial and federal governments, something which I think will have to be looked at before too long. Even five years ago there was general agreement that these relations should be over-hauled.
It is too bad that at the constitutional conference in Victoria greater results were not achieved in the field of fiscal matters. I think it was at this conference that the Prime Minister (Mr. Trudeau) hoped to bring a new constitution to Canada but he seems not to understand that the main stumbling block to constitution change lies in the fiscal field. The growth of health, welfare and education expenditures by the provinces has tipped the British North America Act out of balance and a fresh approach to the fiscal problems is required.
March 2, 1972

It is interesting to note what the Prime Minister had to say in answer to a question I put to him on June 4, 1971, as recorded in Hansard, at page 6366.1 asked what the Prime Minister intended to do:
-In consideration of the statement made yesterday by Prime Minister Davis of Ontario that he intends to bring forcefully to the attention of the federal government at the Victoria constitutional conference his province's concern over federal policies which create economic hardship,-


Pierre Elliott Trudeau: No, Mr. Speaker, I must confess I am not aware of what Mr. Davis had in mind. The House will recall that he requested some time ago that an additional day be added to the constitutional conference to discuss economic matters. However, since the federal budget and tax reform will be brought down after the conference, it is my understanding that he has now suggested that this additional day be not added to the conference and that economic matters, particularly those relating to the budget, be discussed some time later,-
As was noted by the hon. member who just resumed his seat, I think this was an Ontario point of view. In a supplementary question I said:
Mr. Castonguay has suggested that Ottawa's policies are the cause of Quebec's poverty, has that province indicated to the Prime Minister the areas of economic policy which it wishes to be discussed at Victoria?


Pierre Elliott Trudeau: No, Mr. Speaker. That seems like a very general statement, such as the opposition often makes.
I think the right hon. Prime Minister missed the point at the conference, that fiscal arrangements between the provinces are one of the most important features of Canadian economic life.
The Speech from the Throne in the Ontario legislature contained the suggestion that Ontario would be pressing for greater federal-provincial accord and there was an offer to host a meeting of leaders of the federal, provincial and municipal jurisdictions. There was a suggestion in the Speech that Ontario was eager to achieve progress in such mixed jurisdictional fields as tax-sharing, constitutional reform and shared-cost reform. The province of Ontario has indicated its interest in these matters and finds them of great importance, as has the province of Quebec, a have-not province which pays less into the federal treasury than it receives and it feels that certain arrangements should be changed.
The province of British Columbia has objected strenuously to some features of federal-provincial relations referred to yesterday by the Minister of Finance (Mr. Turner). Their argument against equalization payments is that the eastern provinces, particularly rich Ontario, has never taxed the resource industries as heavily as would be dictated by their stake in them, although the western provinces have done so. It was suggested that it was unfair to expect them to provide all these services to provinces which have neglected to take steps in that direction themselves. I think the views of the British Columbia and Alberta governments, as aired, should be explored and discussed.
Then, Mr. Speaker, we come to the statement of the Attorney General of British Columbia, Mr. Leslie Peterson, who presented another view on equalization payments. He suggested that the payment of $5500 million since 1957 by the provinces may, in large part, have been channelled into the expenses of government rather than
Federal-Provincial Fiscal Arrangements
being directed to those who would be directly affected. In any case, I think it can be shown that there is, on the part of all provinces, a valid reason for doubting the effectiveness of the present arrangement. They want to come to grips with the problem and see if something further could not be done.
It is obvious, Mr. Speaker, that the fiscal needs of provincial and municipal levels of government are rising rapidly due to the concentration of their responsibilities in the health, education and welfare fields. There is not in the new bill and there was not in the old, any attempt to measure the levels of expenditure required to attain acceptable levels of public services across Canada. I hope a little later to discuss in more detail problems associated with determining acceptable levels of expenditure in the fields of hospital and medicare services. Mr. Speaker, differences in the costs of providing adequate services and the level of service attained cannot satisfactorily be measured by differences in revenue alone, as Bill C-8 attempts. That is what the minister's predecessor also attempted.
There has been a dramatic rise in expenditures on education, welfare, transport and health. When the present Secretary of State for External Affairs (Mr. Sharp) was minister of finance, he made a statement at one time to the federal-provincial tax structure committee. Later, he made the same statement in the House of Commons. In it he suggested six main principles that arrangements of the sort I have talked about should heed. First, the fiscal arrangements should give both the federal and provincial governments access to fiscal resources sufficient to discharge their responsibilities under the constitution. Second, they should provide that each government should be accountable to its own electors for its taxing and spending decisions and should make these decisions with due regard for their effect on other governments. Third, the fiscal arrangements should, through a system of equalization grants, enable each province to provide an adequate level of public services without resort to rates of taxation substantially higher than the national average. Fourth, they should give to the federal government sufficient fiscal power to discharge its economic and monetary responsibilities, as well as to pay its bills. The idea there is that the federal government should use its fiscal powers for the benefit of the entire economy. The fifth point was that they should lead to uniform intergovernment arrangements and the uniform application of federal laws in all provinces.
The squeeze on municipal and provincial expenditures is apparent, Mr. Speaker, and it is evident that substantial amounts of net transfers will have to be made to provincial and municipal governments if they are to meet public requirements.
The position of the provinces was summed up by the Premier of Alberta, Hon. Peter Lougheed, who said at the Finance Ministers' Conference in November:
We came to this conference and the preceding Finance Ministers' Conference. . .. We were confronted, without adequate advance discussion, with new fiscal arrangements of a five year duration initiated unilaterally by the Federal Government-supported by some provinces and clearly not by others. Yet we are forced to the wall without any adequate forum for discussion, dialogue and exchange of opinion other than the limited time available at this

March 2, 1972
Federal-Provincial Fiscal Arrangements
Conference and, previously, during the Finance Ministers' Meeting.
He went on to say that he thought the timetable for the introduction of these measures was totally inadequate. Actually, the Premier of Alberta asked for consideration to be given to only a one-year extension of the existing fiscal arrangement while the federal government involves itself with the implementation of its tax measures so as to provide reasonable time to debate these issues and evaluate the impact of federal tax measures. This did not occur, Mr. Speaker.
Hon. Darcy McKeough of Ontario suggested, in a brief to that same meeting, that the current state of financial and economic relations between the federal and provincial governments makes it clear that it is time to reconstruct these relations. A very complex system has evolved which is patchy in design, capricious in detail, uncertain in ultimate benefits and unrealistic for the seventies. This system is characterized by a sharing of tax fields which bears no relation to spending responsibilities; supplementary equalization payments with uneven benefits; costsharing in major provincial functions involving a great variety of formulae and regulations; a heterogeneous tax structure; large federal programs with strongly regionalized impact and dubious long-run economic benefits; and cumbersome federal loan and grant programs to reduce unemployment.
He went on to say that the federal government had failed to enter into discussions on the tax structure when that tax structure was being developed. Once the tax reform decisions were made, and Bill C-259 of the previous sessions which embodied those decisions had been passed, the federal government ought to have opened up discussion on this problem in an attempt to reach a better agreement so that all parties could have co-operated in reaching a solution.
It has been well recorded, Mr. Speaker, that the heaviest burden regarding major public problems and expenditure priorities lies at the provincial and municipal level, while the federal government has the largest share of available revenues. With increasing urbanization and pollution, the problem of the municipal and provincial governments will be strongly accentuated. One must remember that taxing powers are more heavily weighted in favour of the federal government. We ask, what will this fundamental imbalance do to our federal system? I suggest that it is likely that it will be extremely difficult to contain total tax levels within desirable limits. It is obvious, if one studies taxsharing principles in this country and the new income tax system, that our system will encourage independent tax action and interprovincial tax differences. Also, it will reduce the provincial share of income and wealth taxation, leave the onus on the provinces to fill an equity gap in wealth taxation and assume primary responsibility to determine the ultimate tax level of resource industries, leave the onus on the fiscally weaker level of government to contain tax levels, and force provinces to increase the income tax after three years to compensate for discontinued revenue guarantees.
I should like to mention something the Minister of Finance referred to, namely, the problem involving health and welfare and the problem of exerting some control in this field with a view to bringing equal levels of benefits to

all citizens across Canada. In the health insurance field, the contribution to the provinces under the Hospital Services and Diagnostic Services Act has risen from $734 million, the contribution of 1970-71, to an estimated $950 million for 1972-73. Medicare contributions have risen from $400 million in 1970-71 to $660 million, the current level. The increase has been substantial over two years.
May I now talk about the serious problem involving cost-sharing arrangements between the federal and provincial governments. The system of cost-sharing is most elaborate. Obviously, the provincial governments have the most pressing and costly responsibilities, while the federal government has a greater revenue generating capacity. It is true that many of the cost-sharing programs were initiated with a view to obtaining national standards of service and portability of benefits. In many cases the provinces were forced into these costly programs at the insistence of the federal government because the federal government chose to use its surplus revenue capacity to invent large programs in areas under provincial jurisdiction.
An analysis of shared-cost programs certainly indicates they are very difficult to control and administer. They are outside the normal process of control at both the federal and provincial levels. There are a great variety of formulae and regulations. The formula for hospitalization insurance, the largest, is the population eligible for hospitalization times 25 per cent of the average national cost per capita, plus 25 per cent of the average provincial cost per capita. That formula alone has a very different impact on the various provinces.
In many cases the federal government is now attempting to get out of these shared-cost programs which are forced on the provinces or at least limit its commitments by reducing the established shared-cost formula. According to this communique from the federal-provincial conference in Ottawa on November 15 to 17, the federal government advanced proposals which provided for increases in future federal contributions to provincial health programs, tied to the growth of the gross national product supplemented by a special fund of $640 million to be paid to the provinces over a five year period to assist them in improving their system of health care. It was the aim of the federal government that the new proposal would be designed to give more flexibility to the provincial governments in restraining costs and improving the overall effectiveness of the program.
It is noted that the percentage of the gross national product devoted to health care in Canada is the highest in the world. Unless steps are taken to improve the delivery system, the relative share of national care will have to grow even further to the detriment of the capacity of individuals to meet their needs. While I agree we must have some means of controlling health costs within our country, this is not the time for the federal government to throw in the sponge and opt out of the cost-sharing field until suitable alternatives have been found.
What is the problem? The essential problem in hospitalization and medicare is a lack of standards. Probably it is very difficult to arrive at these standards because health care is very desirable. No matter how much money is
March 2, 1972

spent or how many programs are expanded, there are always programs left over that are considered desirable and will improve health care for the people.
The Minister of National Health and Welfare (Mr. Munro) is now involved in programs, along with the provinces, for community health clinics which it is felt will control doctor inspired excessive health expenditures. To a limited extent, these may solve the problem, as long as it is realized that a specific amount allocated to a particular clinic will be the governing factor as to how much care the particular facility will give to the population. Whether it will be enough or not may not be obvious to the individual receiving the care. In any event, it will be a limiting factor. In effect, it is limitation through the allocation of money.
There is a problem being experienced in the United Kingdom. The bed population varies in different parts of the country from one per 1,000 to five. However, there is no discernible difference between the death or morbidity rate or those needs by which we are to measure health services. We now have to decide how much the governments in Canada wish to spend on health, hospital and medicare programs and proceed from there. I think the Department of National Health and Welfare is now exploring areas which are likely relatively non-productive. There is a need to reorganize some of their thrust. Although we all agree that all citizens in Canada should receive the sdme level of care, no real standards are laid down as to what is required to attain a reasonable standard of care.
Yesterday the hon. member for Waterloo (Mr. Saltsman) stated that he felt the government should explore certain areas in health care, I presume, as well as taking over completely the shared-cost programs. I do not think this would be good. Health care is personal. It varies in different parts of the country. Health care and welfare should remain under the control of the provincial government. This is a matter to be worked out between the federal and provincial governments. If the wealthy provinces wish to opt out for tax points, surely this can be arranged. However, we must remember that the poorer provinces need to have standards in order to procure for their people some reasonable level of services. There is some disparity in the shared-cost efforts in this field, but it must be realized that there will always be some disparities no matter how much effort is made to preserve equality all across this country.
In the Rowell-Sirois report, it was recommended that there should be an independent commission to look at the problem of the fiscal means of the provinces versus the federal government and periodic reviews and suggestions. It is unfortunate that this committee has never been established.
With Bill C-8, we are destined to have a very serious problem for another five years in relation to the control of health, welfare and education costs. These seem destined to increase because of the formula under which they have been set up. They will grow at an alarming rate and will have to be adequately looked after in the future. After having spent so much time on the tax bill, it is unfortunate that the government did not include some review of the very important problem of fiscal relations between the provinces and the federal government.
Federal-Provincial Fiscal Arrangements


Mr. C. Terrence Murphy (Sault Ste. Marie):: Mr. Speaker,
I enter this debate, not to contribute anything in the line of technicalities, to discuss balancing of budgets or payment of money from one province to another or from the federal government to provincial governments, but to comment on the underlying principles of this legislation, at least principles which I hope underlie it. My intervention probably would not have been necessary if there had not been a certain amount of publicity during the past few weeks which seemed to indicate that at least some people in this country feel they are practising the virtue of charity by participating in the equalization payments. Some who claim to be plugged into God feel they are following the teachings of St. Paul when he said:
And now abideth faith, hope, charity, these three; but the greatest of these is charity.
To be a virtue, charity must be practised properly, otherwise the virtue becomes a vice, the vice of pride. The same good book that gives us the words of St. Paul about these three virtues also has reference to the story or parable of the Pharisee and the Publican who went up to the temple to pray. The Pharisee patted himself on the back saying, thank God I am not like those others; I don't do this and I don't do that and I tithe three times my salary and so on. And the final story was that the Lord said: He that exalteth himself shall be abased and he that humbleth himself shall be exalted. This is the pride that is a vice.
But there is another kind of pride, a justifiable pride, the pride of a man in his work, the pride he has in his ability to work, the pride a man has in the mere fact that he is a human being. Pride in this sense is justifiable and it engenders in man a capacity to retain his own dignity and to respect that of his fellow men. We must respect this justifiable pride, respect this dignity, respect all these qualities in those we hope to assist, otherwise the virtue we hope we are practising may well turn into a vice. Otherwise, we may well turn in Pharisees, patting ourselves on the back with great self-justification, feeling we are great guys. It is my belief that charity, in the sense I have used the word, does not mean giving; rather, it means loving, or giving because of love. It means a state of mind where one recognizes the need of a fellow man and feels a genuine desire to help that fellow man without self gratification and without desire for reward. It is true this is an idealistic point of view, but in the context in which we are considering this question, the context of equalization payments, there is also a degree of realism.
Under the scheme which is proposed, the "have" provinces are called upon to give, but they will also receive. I can recall a speech made by the former premier of Newfoundland, Mr. Smallwood, at a federal-provincial conference held in the west block in the latter part of 1968 or early in 1969. In the course of his speech he described the situation of a Newfoundlander who, when he rose in the morning, got out of a bed which had been made in Ontario, stepped on to a floor which had been manufactured in British Columbia, walked into the kitchen and sat down at a table manufactured in Quebec, reached for a bowl which had been made in southern Ontario, filled it with cereal from Saskatchewan, covered it with milk from

March 2, 1972
Federal-Provincial Fiscal Arrangements the Maritimes and began his breakfast in a house heated by oil from Alberta and insured, in case of fire, under a policy originating in Manitoba. So the Newfoundlander, though receiving grants from other provinces under this scheme, is nevertheless the buyer of products from the "have" provinces. This is the whole idea of the scheme.
But, while recognizing the realistic benefits of legislation of this type, I prefer to believe that the whole meaning of the legislation is based on the true meaning of charity, and that is love-love for our fellow man, love for our country. I can think of no sounder ground upon which to build a united Canada.


David Orlikow: Mr. Speaker, in opening the debate when he introduced this bill, the Minister of Finance (Mr. Turner) indicated yesterday that the purpose of the measure was to continue the arrangements which had been in existence for many years between the federal government and the provinces, arrangements under which the federal government pays to the provinces, dependent on various formulas of need, substantial sums of money to help poorer provinces particularly to meet the basic requirements of their people.
No one in this House would question, nor to my knowledge has any political party questioned, the primary objective of this proposal and of similar proposals made in years gone by, particularly since the Rowell-Sirois study completed almost 30 years ago. While we support the basic principle as enunciated in this bill and as explained by the minister, we wish to make it clear that we do not accept the suggestion that we have achieved the kind of equity which is required; neither do we agree that the proposals which have been made in the past year or which are contained in this arrangement are adequate to meet the needs of the Canadian people.
Without putting on record today the actual figures, let me say that I do not believe any hon. member would disagree with the statement that the differences in per capita income between people in provinces such as Newfoundland and provinces such as Ontario or British Columbia are still very large. We therefore support this proposal and other programs which have been evolved by federal governments to aid citizens in the poorer provinces and to bring standards in the fields of health, education and welfare in those provinces to substantially higher levels, to try to bring them somewhere near the standards which have been achieved in provinces such as British Columbia, Alberta and Ontario.
This having been said, we must still face the fact that today the disparities in income between people in provinces such as Newfoundland and Prince Edward Island, as compared with those of people in Ontario and British Columbia, are just as great in relative terms as they were 30 years ago. Of course, the incomes of people living in Newfoundland, Prince Edward Island and New Brunswick have gone up in the last 30 years. Relatively, though, they are still in the same position as they were 30 years ago, and this despite the tax-sharing agreement, despite the valiant if somewhat misguided efforts of the Minister of Regional Economic Expansion (Mr. Marchand), despite the shared-cost programs initiated up to date. For these reasons, I believe we ought to express a good deal less satisfaction with what we have achieved than I detected in 
speeches made yesterday by the Minister of Finance and by the Secretary of State (Mr. Pelletier), who dealt with the proposals of the federal government in connection with post-secondary education.
I want to deal specifically with what I consider to be two or three basic, fundamental faults in the proposals that have been made by the federal government to the provinces. For one thing, the federal government made it clear to the provinces that as soon as it can in the very near future, it intends to restrict the amount of annual increase it is prepared to pay toward any shared-cost program with the provinces, particularly in the fields of health and post-secondary education. No citizen of Canada, certainly no member of parliament and, I suggest, member of any provincial legislature in Canada can fail to be disturbed by the very sharp increases, in costs that have been taking place annually in the fields of health, welfare and education. Therefore, it is not surprising that the federal government and provinces are beginning to reassess and re-evaluate programs in the fields of health, welfare and education, particularly post-secondary education.
Most of these programs that are now a fact of life in Canada are in fields in which we have made very spectacular improvements during the last 20 years, programs where the initiative came, quite properly, from the federal government. After all, Mr. Speaker, if any province in Canada has a government-operated universal hospital insurance plan, it was the federal government that first proposed to the province that the plan be initiated and that Ottawa would finance 50 per cent of the cost. Every province of Canada has a medical insurance plan under which virtually every citizen of the country can be assured that the cost of medical care will be met by the government through the raising of taxes of various kinds, such as sales tax or income tax, or some combination of tax and premium, while Ottawa is paying 50 per cent of the total cost. Hardly any province would have gone into such a plan had Ottawa not made it clear that it wanted such a plan and was prepared to meet 50 per cent of the cost. I am sure there is no provincial government in Canada that is not exhibiting marked concern at the sharply escalating cost of medical and hospital care. And so they should, Mr. Speaker. After all, the money to pay for these health care plans comes from the people of Canada in one form or another, be it through taxes or premiums.
Now that Ottawa has persuaded the province to enter into such arrangements with the federal government, the federal government is seriously considering terminating the agreement. It is considering withdrawing from shared-cost programs so that it will no longer have to pay 50 per cent of the cost. For Ottawa to say, as it is making very clear to the provinces, that it is giving serious consideration to limiting the annual increases in costs that it will pay in any one year is, I suggest, a unilateral decision that flies in the face of the principle that was jointly agreed upon by the federal and provincial governments. I agree with the studies that are being conducted by the federal government and the provinces into methods of slowing down the very sharply increasing cost of health and hospital care. The people of this country cannot afford to
March 2, 1972

continue to pay each year the increase of more than 10 per cent a year in hospital and medical costs. I support the studies that are being made, but, further, I believe that the federal and provincial governments need to look at some possible alternatives.
In my own province a number of alternatives are being explored. The government is looking at methods by which the number of acute care hospital beds can be, if not reduced, at least gradually diminished by offering alternative facilities by way of convalescent hospital beds, and so on. Certainly, I think such facilities are necessary. The provincial government is looking at the possibility of having doctors work in teams at community health clinics and being paid a salary rather than a fee for service. Tests now done either in private clinics or hospitals would be done much more cheaply at community health clinics. In the provinces of Manitoba and British Columbia, the premiers have made it very clear that the virtually unilateral increases in medical fees that doctors have been able to charge must be arrested. In the province of Quebec, the provincial government has put forward proposals in an attempt to try to control the increasing cost of health care. All such attempts should be pursued vigorously.
As I have said, I cannot accept the unilateral decision of the federal government to limit, as far as the federal government is concerned, the cost of health programs to a certain percentage each year. I am not saying that methods to limit these increases should not be found; of course they must be found. But I do reject the idea that, having helped persuade the provinces to enter into these kinds of plans for the benefit of their citizens, Ottawa should now decide either to withdraw completely or to reduce unilaterally the percentage of the cost it has paid up to now.
I do not say this in criticism, but I would remind the members on the government side that provinces like New Brunswick, for example, were somewhat loth to embark upon a universal health insurance plan, not because the province did not want it or because their citizens did not need it, but simply because they were worried about how to finance such a plan. New Brunswick has now-I am speaking from memory but I think I am not far wrong-a 7 per cent sales tax. I suggest to the Minister of Finance that if the federal government is to unilaterally restrict the percentage of the medical insurance contributions which it makes to the province of New Brunswick, that province may in the very near future have to increase its sales tax even more. There is no more regressive type of tax than a sales tax. There is no tax which hits poor people, people with low incomes, harder than a sales tax. Yet, if the federal government goes ahead with its proposal to limit its contribution to health programs, that is probably what a province such as New Brunswick will have to do. As I say, the government of Canada has been trying to get the provinces to agree to its proposal which would severely limit future federal participation in hospital insurance and medicare programs which, as I have already said, were originally established by Ottawa. Not only would the federal government's proposals undercut and erode existing national health standards, but they would also effectively thwart attempts by provincial governments to revise their health service delivery systems so as to introduce more efficient, less costly alternative care methods
FederaL-Provincial Fiscal Arrangements
I have indicated some of the attempts which have been made in Manitoba and other provinces to improve health services and at the same time control the cost. The provincial governments have consistently opposed the attempts by the federal government to apply the kind of arbitrary arithmetical ceilings on expenditures in the field of health care, and in other shared-cost programs, on the grounds that the controls which the federal government is proposing fail to provide allowances for provinces with relatively weak fiscal capacities to upgrade their service standards, to narrow the gap between their services and the services provided by wealthier provinces, and to maintain their services at these levels once they have been attained.
The province of Manitoba has objected to the federal government's proposal that it use the growth rate of per capita gross national product with some variations to calculate the amount of increase which Ottawa is prepared to agree to in the field of shared-cost programs. The province of Manitoba has emphasized that the gross national product figures bear no relationship to the health program costs or quality and, more important, no relation to health care needs, and that therefore this kind of calculation simply cannot serve as the basis for determining programming decisions in the years ahead.
The province of Manitoba has outlined the elements which it believes should form the basis of any new financing arrangements. They suggested that the plan should be flexible enough to allow the provinces to move toward more effective alternative delivery systems while maintaining and, where possible, improving the service standards. Second, it is suggested that federal support must be adequate, not only to meet the demands placed on existing services-demands which will continue to be high, especially in any transition period while new programs are being initiated-but also to cover the necessary large costs of effecting a program redirection of the magnitude required to ensure longrun cost de-escalation. Arbitrary limits put on the cost of financing health care programs by the federal government will not put a cap on the increasing cost. What they will do is shift the burden increasingly from the federal government which has the money to the provinces which simply do not have the money required to meet the increasing costs. The province of Manitoba has made it clear, and in this it has been joined by the province of Saskatchewan and other provinces, that it rejects the proposal of the federal government that it set an arbitrary limit on the percentage increase which Ottawa is prepared to pay to meet the cost of health care services.
Lastly, the Manitoba government has insisted that federal support must be allocated in such a way as to recognize the special needs of various regions in Canada as well as the fiscal capacities of the different provincial governments to meet these needs.
Let me just give one illustration of what I mean. The province of Newfoundland is certainly one of the poorest provinces in this country, if not the poorest. Some years ago it established a medical school. For the first time, some of the doctors whom they need in order to try to treat the people who are ill in Newfoundland are being trained in that province. The province is paying a substan-

March 2, 1972
Private Bills
tial percentage of the cost of building that medical college and of maintaining it. But we live in an open society. A very large percentage of the graduates of that medical college in the province of Newfoundland will leave that province in a short period of time. I am not suggesting that Newfoundland ought to do very much to force those doctors to stay in the province, but I am suggesting that there is something very unfair in the people of Canada expecting the people of Newfoundland, who are amongst the poorest people in the country, to pay for the building of a medical college and for the maintenance of that college, the bulk of the graduates of which will leave that province to practise in the wealthier parts of this country. I say that the federal government should be prepared to take that kind of situation into consideration and to evolve a system flexible enough so that the people and the government of Newfoundland do not suffer because they established a medical college in that province.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, it is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The hon. member for Lachine (Mr. Rock)-Transport-Omission of Lachine Canal in takeover by Department of Indian Affairs and Northern Development; The hon. member for St. John's East (Mr. McGrath)-Regional Economic Expansion-Request for organizational meeting of Standing Committee; The hon. member for York-ton-Melville (Mr. Nystrom)-Veterans Affairs-Alleged discrimination by Health club against veteran with wooden leg.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions (papers), private bills, public bills. As there are no notices of motions, the House will proceed directly to private bills.



PRIVATE BILLS


Mr. Stanley Haidasz (Parkdale) moved: that Bill C-164, to incorporate United Bank of Canada, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, this bill is a proposal to create a new bank in Canada. It comes before the House in the standard form of a bill attached as an appendix to the Bank Act. It is sponsored by prominent Canadian citizens who have conceived and taken the initiative in forming a new bank with new ideas to meet the needs of the Canadian people.

Among the provisional directors of the bank is Mr. Benjamin V. Levinter, Q.C., a Toronto lawyer who is well known in the city of Toronto and who, after listening to a speech delivered by the Hon. Walter Gordon about a year ago, decided that Canada does need another bank. He has gathered together a group of prominent Canadians who include such people as Dr. Gerald Lasalle, of Sherbrooke, Quebec, who is a well known and respected figure in that province. He has been Registrar and a Governor of the College of Physicians and Surgeons of Quebec, and is Dean of the Faculty of Medicine at the University of Sherbrooke.
Another provisional director is Mr. A. J. Pianosi of Sudbury, Ontario, a successful businessman. Then there is Mr. Zenon Gutkowski, a chartered accountant, of Toronto, who has lectured in the accounting courses at Queen's University and at the University of Toronto, and for the past 12 years has been director and treasurer of one of the largest credit unions in Canada, the St. Stanislaus Parish Credit Union. Another provisional director is Mr. Isadore Levinter, a lawyer from Toronto, and a Life Bencher of the Law Society of Upper Canada.
The objectives of the provisional directors are to establish a bank in which Canadians of all ethnic origins will be involved in every facet of its affairs, and a bank which will be particularly aware of and concerned with the needs of people in different groups and different regions of Canada, and also with certain other concepts to which I shall refer later. Apart from these special considerations they also believe that another bank, and particularly one with some different concepts and emphasis, will be of real benefit to the Canadian economy in that it will make available additional money to finance business, provide employment, and increase competition in the banking system of Canada.
I believe that hon. members are already aware of some aspects of the ideas of the provisional directors of the proposed bank. This bill was debated in the Senate in June, 1971, studied by the Senate Standing Committee on Banking, Trade and Commerce in September and October, 1971, and passed and given third reading in the Senate last fall.
Information which hon. members may be seeking can be found in the record of the proceedings of the Senate. I believe those proceedings give a good idea of what this bank is all about. They contain an outline, and in fact a good deal of detail concerning the proposed bank, and I do not wish to take up the time of the House at present by going into all the detail. However, there are a number of things about the proposal to establish this new bank which should commend it to all Canadians and to the members of this House.
This new bank will seek the involvement of Canadians of many ethnic origins, including French Canadians and Anglo Saxons, in every facet of its affairs; its board of directors, its management and employees at all levels, and with the special concerns which many of our people have by reason of language or other distinctions. It will also allow a degree of regional control to those responsible for the operation of its branches in the five regions of Canada, which will result in many, if not all of the advantages of a regional bank in a particular region.
March 2, 1972

There is no financial group promoting this bank with the intention of having financial control of it through their stock holdings. The provisional directors are in fact the actual promoters, and the plan to be followed in raising the bank's capital will ensure that there will be no in group with such financial control. Further, the provisional directors have engaged the services of a firm of financial consultants in Montreal, Chartec Limited, for the purposes of making a survey of the market and giving an opinion and report as to the feasibility of obtaining the required money through a public issue in Canada, with the stock being sold by many brokers all over Canada and being distributed as widely as possible. As appears from Chartec's report and the evidence which they gave before the Senate Committee last autumn, an assurance has been given that a sum which is adequate, namely, $20 million, can be raised in this way.
The chartering of a new bank at this time will make available additional money and financial assistance to assist business and increase employment. The chartering of a new bank at this time will also provide fresh, vigorous competition in a most vital area of our economic life in which, because of mergers and other reasons, the general trend in recent years has been very much in the other direction.
Each of the provisional directors comes from outside the normal banking establishment. The new bank will unite Canadians of qll backgrounds in a concept which will be Canadian all the way. In conclusion, Mr. Speaker, I would like to say that I believe there are many things about its concepts and plans which should commend this proposed bank to all Canadians and to the members of this House.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I have listened with a great deal of interest to the remarks of the hon. member for Parkdale (Mr. Haidasz) concerning the necessity and desirability of having an additional bank, particularly one based on regional criteria. For many years I have been of the opinion that we should nationalize the banking institutions. When you have a good proposition and go to a bank manager he is apt to allow you to borrow money. If you have a proposition that is not so good, it is not likely that you will be able to borrow money from any bank. If you have a really poor proposition even a bank manager will tell you that you had better go to a finance company. If you do that, and the finance company agrees to make a loan, it in turn will borrow the money from a bank because finance companies in general are able to get their pound of flesh even if things go wrong.
It seems to me, and I may be wrong, Mr. Speaker, that there is absolutely no competition in the banking field. Recently three banks applied to Parliament for charters and in each case the reason given was that a regional area was not properly served. Two banks were given charters but one was not able to raise the money, for reasons that I shall not go into now. The other is operating, I presume successfully, in British Columbia. I suppose whether Mr. Bennett keeps his money in that bank is a political question, and whether a province should have some say in the operation of the banking institution is also open to argument.
Private Bills
Every time I pick up a newspaper and learn that the bank rate of, say, the Bank of Montreal has increased by a quarter of one per cent, I can be sure that by the next day the other banks will have raised their rates. This happens all the way up to 10 per cent. Banking institutions in Canada would find it difficult to say that they are meeting the needs of the public. They are no more justified in charging 10 or 11 per cent than they would be justified in lending at 2 per cent or 3 per cent if there were no takers, as is sometimes the case today. Some banks are making telephone calls to customers asking them to borrow money because they have more than they are lending.
As was indicated by the hon. member for Parkdale (Mr. Haidasz), the Senate probably operates in a more businesslike manner than we do in this field and there is a good reason for that. Very few Senators have not been given a directorship in some company and many are on the boards of two or three banks. I believe the chairman of the Standing Senate Committee on Banking, Trade and Commerce is a director of a very influential company in the Canadian banking field. The committee hired Chartec Limited of Montreal to find out whether ownership of this bank was to be in the hands of as many Canadians as possible. The bank was to have an initial capitalization of $20 million and the provisional directors were in no way to control the bank financially. The firm of Chartec Limited and its members were to have no financial interest in the actual sale of the shares.
This company interviewed 71 people in Toronto representing 28 investment firms and 18 institutions. Their comments were summarized in the proceedings of that committee, No. 37, at pages 7 and 8 as follows:
One, investor interest in Canadian chartered bank shares in general is high, in view of the high return on capital investment. Investor interest in the United Bank, solely on the grounds of the provisional board's responsible and deliberate actions to date, has given the impression that the investor believes that the basic policies of the bank will ensure a profitable operation.
Two, one crucial factor in investor interest has been the desire expressed by the provisional board that no one group, or small combinations, will control this particular bank-
Three, institutional investors, brokers and dealers are particularly conscious of the role that they can play in realizing what so many Canadians want at this point in our history, that is, a broader genesis and control of emerging Canadian industry. With their leadership, a public issue will be successful.
Four, the deliberate attempt by the founders to involve a group of Canadians from all walks of life, to ensure the bank's particular responsiveness to the changing Canada of the seventies was fully endorsed.
Finally, the regional concept of the bank found great acceptance.
Mr. Speaker, I have an inkling, and it is just that and not backed by any solid information, that this bank will probably end up as a depository for moneys being made in Canada by the Mafia, not only from legitimate business but in investments from other areas as well. It is well known that the building trades are very interested in becoming involved in this bank. We are aware that building contractors make arrangements not only with their employees and allied trades but with banking institutions. Because there is so much construction going on in the city of Toronto, this appears to me to be a lucrative way of not only obtaining capital for the contracts, but also of being a very good place to put legitimate money and money

March 2, 1972
Private Bills
which might not be so legitimate. I have no way of knowing that this is so, except from comments that 1 have heard. I have no means of investigating this institution to find out whether it is so, but I am of the opinion that the CIA would be interested. I am sure that the members of this House would also be interested and that this bank would get a short shrift indeed if this were the case.
Mr. Speaker, it seems to me that a bank is a place where a person who wants to do something constructive can go and borrow large sums of money. About a week ago I commented to an entrepreneur in my area that if all this money being provided to the Lift program, the winter works program and the Opportunities for Youth program were given to the area as a cash donation, we could start a fairly good sized industry which would employ people for long periods of time. The winter works program in Timis-kaming is worth approximately half a million dollars, and he told me that if this amount were invested in an industry it would produce at least $20 million worth of business. Mr. Speaker, with $20 million worth of business in Timis-kaming we could employ a large number of the 25 per cent of our people who are unemployed at the present time.
I just wonder what this bank would do in that regard. It is all very well to say that the money coming from western Canada is being invested somewhere else. As long as a bank has the sole purpose of making a profit, it will take the money where the highest rate of interest and the lowest risk is available and this bank would be no different. It is very easy for the investors to say to the investigating company hired by the Senate Committee that most of the money will be spent in Ontario. This may be true, but I suggest that anybody who has difficulty obtaining money from one of the chartered banks in Canada will have difficulty with them all. If a borrower is turned down by one bank he will be turned down by two. When these people are turned down by two banks, they try to raise money from the Industrial Development Bank, which really is a government agency. Therefore, the banking institutions of Canada take no undue risks.
I suggest that United Bank of Canada, if incorporated, will not do anything in this regard that is different from what the six other chartered banks would do. We must remember that when we are asked to pass this bill. I think it is unrealistic to suggest that because this bank is to be situated in Toronto, it will lend money on a regional basis to meet regional needs. Certainly, its money will be obtained on a regional basis, simply because in Toronto a great deal of money is being spent. It will continue to be spent there until we decide to change the structure of this country and develop some of the resources of the mid-Canada corridor. The chartered banks are not lending much money for development in that corridor. I suggest that the proposed bank will be no better and probably no worse than the chartered banks in this regard. Therefore, what is the point of establishing it?
All that banks do, when they go into business in any community, is take over or build a building and employ another set of employees. The operations of banks are practically identical. If you are a poor risk, they will not lend you money, and if you are a good risk they will. It is

true that in different towns slightly different policies may be followed, largely because certain bank managers adopt different philosophies. For instance, one manager may be a lender; that is, he may like to lend. His bank will lend money. The bank may move him to another town and instal in his place a collector, or a manager who insists on collecting all debts. Of course, after banks have lent money they like to collect what is owing. The point is that, in the end, all the banks work the same way.
In December of last year I spoke on this bill, then Bill S-22. It had originated in the other place. In passing may I say that I am glad this bill has been initiated in this House. Whether hon. members who may not be here this afternoon, or who are present, for that matter, care to admit it or not, it is the elected representatives of the people sitting in this House and not the members of the Senate who may consider personal, regional or corporate interests, who should take a look at bills such as this. Although hon. members have available limited resources for research, nevertheless it is they who ought to make the decision on the setting up of such a bank. Surely one of our major purposes must be to consider such matters.
When I spoke, Mr. Speaker, I said that banks borrow money at a certain rate and lend it at another and, in the process, make a reasonable mark-up. It has been drawn to my attention by a gentleman in western Canada that commercial banks do not borrow the money they lend from the Bank of Canada. He says that this is a purely unrealistic concept when we realize that it takes 75 per cent of the bank's income from interest to pay operating costs. He adds that if they charged 8 per cent on loans they would have to get their money from the Bank of Canada at 2 per cent just to break even. Privately owned banks operate for profit for themselves, and their profits are substantial being at 25 per cent of gross revenue. I will not argue with that contention because, very likely, the gentleman in western Canada is correct. However, if that is correct, it means that we are examining an operation in which banks are obtaining money from depositors, lending it at interest, and, after deducting operating costs, making mark-ups in the region of 25 per cent.
I said in my speech made previously that I wanted to see more competition in the banking field, although I did not expect to see more competition. The gentleman from western Canada disagreed with my statement regarding competition and said:
Banking is a service. It makes no direct contribution to the volume of the G.N.P. nor does it make any contribution to the economies effected in its production. Too often in the provision of services the sharing of a particular service adds to the cost of that service by the necessity of providing duplicate facilities. The virtues of competition are mostly mythical.
The correspondent at Shell Lake, Saskatchewan, is probably right. He made other comments in his letter which I appreciate. I am happy to acknowledge that his knowledge of the banking system far exceeds mine. Nevertheless, whether banks are only providing a service, the field of banking is one that the government itself has become involved in to a great extent. As I said a moment ago, the Industrial Development Bank provides funds for certain industrial purposes.
Also, the government of Ontario has become involved in the tourist industry and has given large loans in this area.
March 2, 1972

These loans have enabled certain borrowers to start an enterprise, and have also been of benefit to an industry that has been badly underserviced in Canada and which could not expand if moneys had not been forthcoming. These moneys were needed to provide facilities in certain areas where facilities had hitherto not been available.
One must also remember that when the government grants moneys under the DREE program, it grants moneys to industries that may be marginal. There, again, the government has entered the banking field, in a manner of speaking. Actually, I am not surprised to see some of these projects going into bankruptcy; neither am I particularly worried. It is desirable to establish industries in certain areas. Some industries need help desperately and, after the banks have refused to help, they have come to the government. Therefore, I say that the government has become involved in the field of banking. For that reason, Members of Parliament should look carefully at the bill before them.
We must look at the entire banking system itself and see how it affects industrial development in Canada. I am not particularly interested in setting up a bank which will merely operate in the old pattern already set by the chartered banks, for their operation has been totally deficient in many fields in this country. I suggest that it is hogwash to talk about an ethnic bank, hogwash to say that it is necessary in any region and hogwash to suggest that it is necessary in Toronto. If a so-called ethnic borrower could meet the legitimate conditions that would be laid down by this bank, I am sure that he would be acceptable to any other bank.


Mr. Henry Latulippe (Compton):: Mr. Speaker, I am happy to have the opportunity of saying a few words about the establishment of a new bank, to be called United Bank of Canada, to which Bill C-164 refers.
Mr. Speaker, we are not precisely opposed to the creation of a new bank, but we want to give our opinion because we claim that banks do not properly fulfill their function in the economy.
They are necessary to our structure. They should ensure smooth running of our economy and not hinder it. When the economy is in trouble, the banks are involved to some extent. When the economy progresses, under our present banking system progress and development are achieved through the contracting of debts.
Canadians need healthy and efficient finances and that is why we are discussing banks. We do not seek to destroy our financial system, nor do we claim that it is wholly bad, but it must be improved.
Why do we criticize the present financial system? Because it is at the root of the evil, not fulfilling its proper functions which are to finance the production of goods corresponding to requirements and the distribution of these goods.
That is one of the proper functions of banks and we shall demonstrate that the financial system does not meet all requirements according to facts, needs and realities of our economy.
Private Bills
If the financial system did all this, it would be fulfilling its functions, but we can definitely state that it does not. And it is easy to say that it does not because we can see that the people ask for public and private goods that are definitely possible on a physical basis but that do not materialize because the financial system does not finance their production.
Also, some goods are offered to the people who need them but families cannot get them because the financial system does not finance consumption as a whole. These are undeniable facts.
Financial credit derives its value, Mr. Speaker, from real credit, that is, from the production capacity of the country. The dollar under any form has any value only because the country's production can supply products to support it. This production capacity is rightly called "real credit", because it is a real factor of confidence. It is the real credit of a country, its production capacity which gives people confidence that they can live in that country.
There are two kinds of credit: real credit and financial credit. To whom does financial credit belong, Mr. Speaker? At its source, financial credit belongs to the community, on the same basis as real credit, which gives it its value. This is a collective commodity which must benefit in one way or another to all members of the community.
Like real credit, financial credit by its very nature is social credit. The use of these collective goods must not be subjected to conditions that hamper production capacity or that divert production from its own specific end, namely the meeting of human needs. These needs are of a private or public nature, in the order of their urgency. The essential needs of all must be met before the luxury demands of a few can be bealt with.
Therefore, chartered banks, on account of their nature and privileges, of their sovereign right to issue credit in large quantity, meet the requirements of public order, because to lend by creating debts is to curb all development, as the terms of these loans are such as to disposess the citizen of all their goods, public and private.
We obviously need a financial system which yields to reality rather than forces it, a financial system which reflects the facts rather than contradicts them. We need a financial system which distributes rather than rations.
Mr. Speaker, the present financial system-and this happens in many fields-is rationing both the economy and the development process. We need a financial system which helps rather than degrades. Our present banking system runs us into debts, rations and prevents possible developments and paralyzes the economy. It is inconceivable that such a financial system can be perpetuated.
Another bank, Mr. Speaker, will not alter the situation very much either way. Another bank more, or less, will not provide more credit in the interest of the people. Such credit would be provided in the form of debts, of credit issues, to the extent that they will be public or private debts.
Banks, companies, even governments, in short, all institutions or corporations are mere productive or administrative tools serving the people. That is what our banks should be. The people are sacrificed in the interest of banks, of companies, of governments and of large institutions. Is this not clear enough?
478

March 2, 1972
Private Bills
I will go even farther. These are facts, observations. This is where the matter stands. This is the present position of our government, the first institution in Canada which is mainly responsible for our economic, monetary and political system.
We form a government of 264 members elected by 22 million Canadians who all have the right to live according to our production capacity. We are thus responsible in Parliament for taking the corrective measures needed in our economy.
Stating facts does not mean accusing, reproaching, blaming or even judging the government. But facts speak for themselves and help us to understand the causes of a parliamentary crisis that might be nothing more than a superficial abcess yet, but nevertheless shows the seriousness of the evil of our administration in Canada.
Here is our balance-sheet for 1967. At a time when in many cases people lack the necessities of life or normal well-being, our banks increased their assets by $3.2 billion. Our companies pocketed or constituted new capital totalling more than $15 billion, and we want to keep on reducing the purchasing power of individuals in order to increase the profits, the capital of banks and big corporations.
Mr. Speaker, in 1967, bank assets increased by $3.2 billion. In 1971, such assets increased by $7,121,396,000, to reach $54,428,406,000, namely a 14 per cent increase in 12 months.
As a matter of fact, here is a table showing bank assets:
October 31, 1970: $46,256,652,000.
October 31, 1971: $52,317,395,000. (For an average of $500 million per month for 1970-71.)
November 30, 1971: $53,147,362,000.
December 31, 1971: $54,428,406,000. (For an average of $1 billion per month for the last two months of 1971.)
Bank assets are therefore increasing from year to year as never before, but the income of most Canadians is smaller. When bank assets show a monthly increase of $1 million as they did during the last two months, the assets of small businesses are reduced, and Canadians are lacking the bare necessities. But the government, despite its prerogatives, does not in the least think of controlling money and credit for the benefit ot the nation.
Mr. Speaker, is such a weak monetary system likely to survive by raising new loans to pay up old ones? In the end, this leads to periodic massive cancellations of debts both private and public, cancellations which in turn pave the way to bankruptcy, repudiation or devaluation.
Over the last few years, we have witnessed devaluations in a number of countries. These were merely the repudiation of debts gordering on bankruptcy. Our economy went through all that. Bankruptcy is a daily occurrence in Canada. In fact, we have had 2,287 bankruptcies since 1969. It is terrible to see that a country such as ours will soon be forced to devaluate its currency to survive along with its system.
As for individual and collective indebtedness, it is undisputable proof that we must improve our banking system and modify the obsolete concept of credit based on

shortage of goods. And it is precisely on that point that social crediters maintain that the inadequacy of the purchasing power may be explained by the inability of the current financial system to supply enough currency to buy the goods produced.
Mr. Speaker, if we want to improve our economy we must straighten out our current financial system by converting our national debt into a national asset. And the Minister of Finance (Mr. Turner) is far from advocating or achieving at.
Let me state briefly how to convert the national debt into a national asset. All our consumption should be financed not by chartered banks but by a central bank or credit commission, a strictly non-profit institution and not profit-oriented as our chartered banks are. All the country's consumption should be financed with interest-free money and all private or public production should be financed by debt-free money. Thus, there would no longer be any national debt since it would be converted into national capital or assets which would then yield national interests distributed as national or social dividends.
That is how we could proceed.
Mr. Speaker, we should immediately convert the national debt into national assets and the interests on the national debt in national dividends to be distributed to all Canadian citizens.
That part of taxes now earmarked for paying bank interests is outright robbery and such a procedure should be abolished along with the use of taxes to reimburse loans. We all know that the amounts involved are considerable if we consider the municipal, school, provincial and federal administrations involved.
The national debt, Mr. Speaker, is the worst swindle and the interests on the debt are extorted from taxpayers as the result of a fraud.
We have a lot of things to say about the banking system, but since we have reached a climax tonight with the request made to the government about the creation of an institution which would be allowed to handle Canada's capital, we will not oppose it too much because we know that one bank more or less will do very little to improve pur economic situation.
We know that this will not solve the problem but we have decided to let the bill go through. We believe that it should be referred to the Committee on Finance, Trade and Economic Affairs to be more thoroughly studied and so that during the committee meetings we might raise objections to it and add to our comments.
We are prepared to let the bill through tonight.


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I rise merely to sound a note of caution in connection with this bill to establish a new bank in Canada. Over the years, Canadian banks have gained a very high reputation in international circles. It is many years since there have been any failures involving Canadian banks or since any difficulties have arisen in relation to their financial situation. It is important and necessary that before hon. members approve the establishment of a new bank they should make certain that it will meet the very high standards which have been set.
March 2, 1972

What causes me concern is that in recent years a number of new banks have been established by Parliament and, generally speaking, they have met with only limited success. On one occasion several banks were chartered within a very short period of time and their affairs did not work out well. I need not go into the details of each case, but they are moving ahead very slowly in most instances and in one case they are not moving at all.
We must assume our responsibility in this House to see that the great international reputation of Canadian banks is not jeopardized by anything we may do. If the institution which we are considering called itself something other than a bank, I would have no hesitation. I assume that the people who are applying for a charter, the people behind the application, are reputable Canadians, people who believe they can establish and operate a bank in the finest traditions of Canadian institutions. I have no hesitation about making this assumption, otherwise I do not believe the bill would have got this far; I do not believe it would be sponsored by a member of the House if he had not formed the opinion that it was well backed and well financed. But this institution is, if approved, to be a bank. It will be a Canadian bank, and when it is operating the reputation of all Canadian banks will depend upon the latest, the newest and the weakest in the banking system. The matter should, therefore, not be dealt with lightly.
I hope the Committee on Finance, Trade and Economic Affairs will closely scrutinize the details of the bank, the ability of the people behind the application, the opinions of the government officials who have been dealing with it and the views of the parliamentary sponsors who have brought the bill this far. The conditions set out in the Bank Act must be strictly enforced and supervision should continue beyond the initial stage.
That, in effect, is the concern I wanted to express. These bills are brought before the House on an occasion such as this, and those who have not been involved closely with the establishment of the bank and do not know the background are very poorly equipped to come to the real decision that we have to make this afternoon as to whether we have a properly sponsored and well financed bank. I do not think we have this background or adequate information. Neither do I think we can expect to be given it in the few minutes that the sponsor had to present his case. Rather, I believe the situation demands very close attention in the standing committee.
I do not intend to oppose the bill. Obviously, certain conditions at the start must have been met; we can only make that assumption with nothing further to go on. But I would sound a note of caution. I am sure that the members of the standing committee, as well as the officials who have to set up the bank and secure financing, who have to verify that all conditions have been met, will be very careful on behalf of the Canadian Parliament and the Canadian people to see that the bank operates as a good Canadian banking institution. If they do that, then I think their purpose as well as ours will have been met.


The Acting Speaker (Mr. Laniel):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
25020-31).
Federal-Provincial Fiscal Arrangements


William Arnold Peters: On division.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Knowles (Winnipeg North Centre):: Six o'clock.


The Acting Speaker (Mr. Laniel):: Does the House agree to call it six o'clock?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Laniel):: The hour appointed for the consideration of private members' business having expired, I do now leave the chair till eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-8, to authorize the making of certain fiscal payments to provinces, to authorize the entry into tax collection agreements with provinces, and to amend the Established Programs (Interim Arrangements) Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
David Orlikow: Mr. Speaker, in my remarks earlier this afternoon I tried to point out the problems that would be created for the provinces by the unilateral decision of the federal government to limit the increases in the contributions that the federal government would make to shared-cost programs such as health services, post-secondary education and other programs. I dealt in some detail with the problems that will confront the provinces as a result of the decision of the federal government in respect of health services.
I want to deal very briefly with the decision made by the federal government and referred to yesterday in the speech of the Secretary of State (Mr. Pelletier) with regard to the financing of post-secondary education. Since 1966 we have had an agreement under which the federal government has paid approximately 50 per cent of the cost of education at the post-secondary level and particularly in respect of universities. Now the federal government has decided unilaterally, I think, although the minister tries to give the impression that this proposal had the agreement of the provincial ministers, that the federal government's increased contribution to post-secondary

March 2, 1972
Federal-Provincial Fiscal Arrangements education amount to no more than an increase of 15 per cent in one year.
All Canadian citizens should be concerned about the tremendous increase in the cost of post-secondary education. Dr. Miles Wisenthal, director of Statistics Canada, education division, in a speech at a conference in Banff in 1970, demonstrated how rapidly the cost of post-secondary education has risen in the last ten years and what is likely to happen in the next ten years. He pointed out that education is Canada's biggest industry and that 20 cents of every tax dollar raised from all sources goes to education. He said that per capita education costs have tripled since 1961. He pointed out that 8.5 per cent of the gross national product in Canada goes to education, more than the United States pays, and that in 1969 Canadian taxpayers spent $6.9 billion on education.
He pointed out that one person in three is either a student, a teacher or a service worker in an educational institution and that this does not include part-time teachers or part-time students. Elementary and secondary school enrolments have risen 30 per cent since 1961, and post-secondary enrolments have risen 251 per cent since 1961. What does he foresee for the future?
Dr. Wisenthal made some projections based on the experience of the past ten years. True, there has been a sudden and pretty significant drop in the past year, but nothing which indicates that his estimates are very far wrong. He points out that education costs could rise to 15 per cent of the gross national product, that while in 1969 the yearly costs per university student were merely $3,600, by 1980 these costs could rise to $9,000 per student. By that year, also, the cost to taxpayers for post-secondary education could be $8.3 billion, more than the total cost of education in 1969.
The government of Canada and the provincial governments not only have a right but a duty and responsibility to consider what is happening in education, both in terms of the number of students attending educational institutions at all levels and in terms of the present and projected costs. We have a right to ask ourselves whether we need so many of our young people and young adults attending schools, universities and community colleges. We have a duty to ask whether an educational system in which a youngster starts school at age five and continues until age 25 provides the best way of educating people, or whether we ought to have a system whereby people go to school, later to work and then return to school for a period of years.
We have a right to ask whether the tremendous amounts of money that we are spending on the upgrading of adults through manpower training courses in our educational institutions is the right method by which to proceed, rather than adopting the system used in other countries where manpower training is carried out almost exclusively on the job.
I do not question the right of the federal government to say that there is a limit to what we can do, but having encouraged the provinces to undertake vast expansion of their post-secondary educational facilities, the federal government should not now say in the middle of the ball game that it is going to stop financing post-secondary

education or sharing its educational costs and that from now on the limit will be a 15 per cent increase in any one year. I agree that we have to think about restricting increases, but this ought to be done through close co-operation and discussion between the federal government and the provincial governments. That has not been done. The decision, as confirmed yesterday by the Secretary of State, upholds my contention that the federal government has made a unilateral decision which is completely unfair and unwarranted.
I wish to deal with one more subject before I complete my remarks, Mr. Speaker. The federal government has adopted a very rigid attitude toward the provinces with respect to the collection of income taxes. Up until now it is apparent that the federal government is not prepared to discuss with the provinces a system of tax credits within the income tax structure. Manitoba was the first province to make a formal submission to the federal government on this matter. It outlined several possible alternative tax credit system and dealt with some of the administrative processes which would be required. Yet to date it has received no detailed response or reaction from the federal Department of Finance.
The government of Manitoba feels that the basic questions at issue in connection with the tax credit problem, from the point of view of the federal government, should be primarily administrative while consideration in respect of specific credit amounts or related questions should fall within the area of responsibility of the provincial governments. There has been no response from the federal government on this matter.
The Manitoba authorities asked for joint discussions so that they could begin to develop a workable tax credit plan. They hope that next year they can begin such a plan and apply it retroactively to 1972. It is difficult to understand why they have had no response from the federal government, because the federal government agreed with the Ontario government's proposal whereby the Ontario government went ahead with a flat rate, retroactive income tax reduction for Ontario residents. Speaking from memory, and I think I am correct, that was a simple reduction across-the-board of 3 per cent.
The government of Manitoba, ever since it was first elected, has said it wants to establish its taxation system on a much more equitable basis so that people will pay taxes in a way in which they can best afford to pay them. Instead of a simple across-the-board tax cut, Manitoba wants to institute a system of selective tax reductions for people in the lower income brackets.
We have heard many government spokesmen talk about equity. Again and again the Prime Minister (Mr. Trudeau) has said that we are moving toward a more equitable society, one in which the people in the lower income brackets will be brought closer to an adequate standard of living. When we have the 1971 census figures analysed, I do not believe the evidence will show that in fact we are moving toward a more equitable society. I believe that, when analysed, they will show the complete reverse, that the differences between people in the lower fifth of the income levels and those in the upper fifth are widening rather than narrowing.
March 2, 1972

The government of Manitoba wants to do what it can to reduce the burden of taxes on people in the lower income brackets. I find it incomprehensible that the federal government having accommodated the government of Ontario with respect to its proposal of a 3 per cent tax cut across the board and having accommodated that province in the collection of its taxes, has so far refused to co-operate with Manitoba in the institution of a tax credit system which would permit Manitobans in the lower income brackets to pay lower taxes than they are now paying.
Therefore, I say to the Minister of Finance (Mr. Turner) and to the government that while we support this bill, and I submit that no Member of Parliament from any province can object to a bill which spells out a form of transferring tax revenues from the richer provinces to the poorer provinces in order that their services be brought closer to the national level, in many ways this bill falls far short of what is required to establish a fair and equitable tax system.


Hon. Hugh John Flemming (Carleton-Charlotte):: Mr. Speaker, in rising to make some observations on this bill concerning federal-provincial fiscal arrangements, which includes authority to- make certain fiscal payments to provinces and to authorize the entry into tax collection agreements with the provinces, I do not wish to offer any great criticism because I feel the bill has a great deal to commend it.
As one who has had some experience in dealing with these questions from all points of view, because I had the honour of speaking on behalf of a province at federal-provincial conferences and later I had some federal responsibility, I believe people from both sides of the House can take a degree of satisfaction from the legislation. I feel, however, that some things have been overlooked, particularly in reference to the maritime provinces, although these may be remedied subsequently.
Before proceeding with my remarks on this bill, Mr. Speaker, I should like to take this opportunity to congratulate the Minister of Finance (Mr. Turner). This is the first chance I have had to do so publicly since he has been entrusted with his new duties. Of my own knowledge I can say he has undertaken no small task in view of conditions as they are nationally and internationally. In this vein may I also congratulate the hon. member for Calgary South (Mr. Mahoney) who has been elevated to the ministry. I feel this is a recognition well deserved. When he was piloting the tax bill through the House he was always prepared to give any information he could, of which he had a considerable amount. I am glad that his ability and hard work have been recognized.


Some hon. Members:: Hear, hear!


Hugh John Flemming: I agree with the minister about the importance of this bill, because there are certain things in connection with public affairs and business which are important. One is to have the assurance that within a certain period of time things will either be maintained at their present level or improved. With this assurance, provincial governments know where they are going and have
Federal-Provincial Fiscal Arrangements
something upon which to base their views. The stability to which the minister referred is most important.
It seems to me that a bill which suggests that within five years payments to the provinces will increase from $li billion to $li billion is most important and anticipates a great improvement in the economic welfare of the country. It is a great thing to be an optimist. Generally speaking, people who accomplish things are optimists and go ahead on the assumption that conditions are going to improve. Some members of my party have been accused of being prophets of doom, but in this connection I find it reassuring that the government-I do not necessarily mean the government, but rather those entrusted with the administrative functions of government-consider that it is perfectly in order for them to suggest that payments may increase from $1 billion to $11 billion in five years.
The question of stability is most important for the provinces. To a degree my remarks are made from that point of view; it is difficult to get out of the habit. Without question, the matter of revenue raising in the provinces is of great importance, and it is a tremendous thing for the provinces to be assured that should their revenues fall below the national average because of lack of revenue capacity, the federal government will make up the difference. As far as the province in which I reside and which I represent is concerned, $165 per capita will be made up by the federal treasury, according to the minister. Multiplied by the population, that is no small sum. If I were running a provincial government I would feel reassured to see this bill presented with the expectation that it would pass this House in its entirety.
The minister quoted from the report of the Rowell-Sirois commission which said that the federal government has an overriding financial role in the pursuit of national growth and stability. Another point the report made was that fair standards of public services and taxation in all regions of the country are vital to our national unity. Of course they are and we all know that, but to have it quoted by the minister is a very fine thing.
The report also made the point that co-ordination in tax policy between the central government and the provinces is essential in a modern industrial state. Of course it is. I am sure that each province realizes that only by co-ordination of the efforts of all will the well-being of the country be enhanced and we will make progress as a nation. I realize that every province cannot have the same amount of growth and taxing capacity, but I am sure that the 100 per cent stability guarantee gives them confidence in regard to their general operations and financing.
Equalization is also tremendously important. Then we must consider the question of fair standards of public service and fair taxation in all regions. This is important. I think many of the matters mentioned in the minister's speech and contained in the bill will be good for the country because uncertainties will be disposed of.
The bill also envisages the federal government undertaking to agree, on behalf of the provinces, to collect personal income taxes and corporation taxes as well as succession duties and gift taxes levied by the provinces. There has been lack of communication between the federal government and the provinces on the matter of succes-

March 2, 1972
Federal-Provincial Fiscal Arrangements
sion duties and gift taxes. We were told, when the capital gains tax was introduced, that the government was vacating certain tax fields; it would not levy succession duties and gift taxes. In the case of New Brunswick, for instance, the provincial government has moved into that tax field, or it wishes to do that. It seems to me that the federal government can be criticized for not having made arrangements under which provinces could enter the tax field vacated by the federal government.
Since capital gains tax is to be levied, it seems to me that arrangements should have been made with the provinces to avoid double taxation. Therefore, I suggest that the federal government may be open to criticism on that score. I say that it is most unfortunate to contemplate the incidence of double taxation in New Brunswick. If small or even large family businesses are saddled with succession duties, those businesses may have to be sold at sacrifice prices. That situation will do no one any good, and those wheels which have been contributing to our economy in that area may be stopped, perhaps for a long time to come. I feel the government has overlooked that. Whether the situation can be corrected at this late date I do not know. I know the matter is serious in my province.
I am pleased to see that under the bill there is a five-year guarantee which provides that each province shall receive as much revenue from the reformed personal income tax system as it would have received under the old system. That certainly will reassure the provinces.
The next item, as I read it, extends for two years the existing system of federal payments for post-secondary education and certain technical changes in the established program are to be made with regard to Quebec. We are all concerned about such matters. After all, although we sit here as federal representatives we all come from a province and are interested in back home.
I remember a few years ago coming into the New Brunswick legislature with some details about a federal-provincial tax agreement. My recollection is not perfect in regard to every detail; however, I remember that after the Second World War the premier of New Brunswick used to report to the legislature when he returned from provincial conferences. He would report that an arrangement had been made with the federal authorities for the rental of the income tax field. That is how we referred to it in those days. We rented the tax field, thereby giving the federal government authority to collect taxes. He would give the details of the arrangement and then say that it was the best arrangement that could be secured in view of conditions prevailing.
The amount of money that this involved for New Brunswick under the tax rental agreement of those days has little relation to the amount that New Brunswick now receives under the equalization formula. Actually, at present there seems to be no connection between the amount rented out, so to speak, and the amount received under this act. I put that difference down to inflation, Mr. Speaker. If I may digress for a moment, let me ask where this extra money is coming from. The extra cash the province receives in return for vacating this field can be put down to the workings of inflation. It seems to me that we are suffering a good deal of inflation and if present rates of inflation continue for 10 or 15 years the consequences will be serious. This is a problem to which we

should attend. Should we not address ourselves a little more diligently to the question of inflation?
From time to time, especially during the last two or three years, there have been strikes involving Air Canada. We have been bothered by the strikes, not knowing whether we could travel to our destinations by air. They caused great inconvenience. The strikes have now been settled. But the other day I talked to a man who had been involved in a strike and he said yes, they had accepted a settlement but he felt the cost of living had risen so much in the interval that the amount he would get after the strike would not buy much more than it could have bought before the strike. The point is that we must recognize the fact of inflation. The President of the Treasury Board (Mr. Drury) the other day brought down a record spending budget. The question is, where will all the money which the government will spend come from? I am afraid that much of it is the result of inflation. If I am right, the implications for us are serious. That is something that we in this chamber should address ourselves to in an attempt to find a solution as quickly as possible.
If I may refer to 1955, let me say that in the Dominion-Provincial Conference of that year we made certain proposals to the government which, although not entirely implemented at that time, have pretty well been implemented since. We said it was important to discuss the principle of federal-provincial assistance to the provinces for the broad purpose of resource development, this proposal being designed to meet a situation with which most provinces had grown familiar. I would say, generally, that the suggestions we made in 1955 have now been recognized by the federal authorities as valid.
During the ten-year period following, and even subsequently, there was broad development of our national economy. At the same time, social welfare measures, either entirely as introduced by the provinces or in part supported by federal revenue, accomplished much to bring about a certain levelling of incomes. These accomplishments, both economic and social, have been substantial and those whose foresight and administrative ability had contributed to the success of those programs were people active on both the national and provincial scene. They certainly had a hand in the improvements that came about. I think all those people deserve full credit for what has happened.
At the same meeting, the second matter we wanted to discuss was the difference in taxable capacities of the provinces. That is what I have been talking about; it is what is embodied in this bill. This principle, which has now been accepted, has been expounded by the minister. It makes me feel pretty good that we were on such solid and safe ground when we made that request back in 1955.
I have always felt that general economic conditions in every part of Canada are the basis upon which the future unity and progress of our country depends. I would like to repeat those words because I think they bear repeating: I have always felt that general economic conditions in every part of Canada are the basis on which the future unity and progress of our country depends. I still believe that. I believe in a national policy specifically designed to recognize income disparity and to do something about it,
March 2, 1972

to improve regional incomes by appropriate fiscal measures, to increase productive capacity so that every ablebodied and healthy adult is able to make a full contribution to production.
It is a shame that we have so much unemployment today. It is not only a question of the person who is unemployed but it is the lack of productivity caused by the fact that the individual is not producing. That is most serious. These are some of the most necessary elements in the process of growth and progress which will cement our country into one strong and viable unit which is the objective of us all. That is what it will do, but surely we are capable of a great deal more. I hope we may succeed in that endeavour.
I return for a moment to the question of the 1955 conference because there are some further points I wish to make. The third subject that we wished placed on the agenda at that time was the special awards that were made to the maritime provinces as a result of the Duncan and White commission reports in 1927 and 1935 respectively. I realize a good many members sitting in this chamber may not have heard of these awards; however, I will not define them in detail. The reports to which I have referred recognized that the maritime provinces had a valid claim on the federal government for special consideration by virtue of the fact that they as provinces had not received any additional public lands as was the case with practically all the provinces from Quebec west. I mention this point so that the minister will be familiar with the basis of our claims of that day which, incidentally, I submit are still valid.
Two maritime provinces had come into confederation when it was set up in 1867 and became the Dominion of Canada consisting of the provinces of Ontario, Quebec, Nova Scotia and New Brunswick, with Prince Edward Island coming in a few years later. The rest of Canada remained a very large and important productive area for future development. However, when the western sections of the country came in and were set up as provinces, which was just a few years later, their boundaries were enlarged, mostly northward, by adding to their areas a great many square miles of northern land. This was the case with Quebec, Ontario, Manitoba, Saskatchewan, Alberta and British Columbia. But the maritime provinces had no northern lands that could be added to their areas, due to their geography; and no special, tangible recognition has ever been made of this special situation.
Many unforeseen changes have taken place since the provinces to which I have referred had their areas greatly increased. Today, the hinterlands referred to have become tremendously valuable to the provinces claiming them. As we all know, the exploitation of natural resources is continuing from month to month. On the other hand, as I have mentioned, the maritime provinces are prevented from adding to their wealth in this way, owing to their geographic location.
At the time these areas were added to the provinces they may have been considered of questionable value. This may have continued for a good many years. However, they have now become fields of large capital investment and are seen as areas speculative resource development with the resulting large increase in tax revenues accruing to the fortunate provinces concerned. Almost
Federal-Provincial Fiscal Arrangements
every week we read of discoveries of oil and gas in what has generally been regarded as the north, and from this we all take the greatest satisfaction. This enhances the strength of the claim of the maritime provinces for special recognition. The royal commission to which I have referred recognized this principle in their reports in 1927 and 1935, and it is surely very evident that with the passing of time and ensuing development the claim of the maritime provinces becomes more and more valid.
I said that no attention has been paid to our special situation, but that is not exactly the case. With the coming into office of the Diefenbaker government in 1957, an act setting up the special adjustment grants was passed, under which $125 million was made available to the Atlantic provinces over the subsequent five-year period. At the end of that period this sum was increased to $175 million over the next five years.
I have always been at a loss to understand the reason for doing away with the special adjustment grants in 1967, because I believe it was over and above the ordinary equalization concept and should never have been considered part of it. I submit it was largely due to our vested interests in the northern lands in respect of which disposition was made subsequent to the coming into confederation of the western provinces. As I said, a large area of land was made available to the provinces from Quebec west. I ask the minister to keep this claim in mind when application is made by any of the Atlantic provinces for special consideration, and to recognize that we should have a very large credit balance on the books of the central government due to our interest in northern lands which has never been properly dealt with.
I return to the history of 1955 because I believe it is of interest and is certainly applicable to the present situation. At that time we asked that consideration be given to speeding up completion of the Trans-Canada highway project and that assistance be given to the Atlantic provinces to this end. This has been done under governments of different political complexion. It has had the effect of linking Canada from coast to coast so that traffic is not only possible but is becoming greater and greater with the passing of the years. The Fathers of Confederation had the correct view when they said traffic and trade should move east and west to the greatest possible extent. This is now coming into being.
When I see large trailer-trucks coming through New Brunswick with Vancouver, British Columbia, Calgary, Alberta, Regina, Saskatchewan, Winnipeg, Manitoba and Toronto, Ontario, licence plates, I am impressed by the link that we know as the Trans-Canada Highway which joins Canada together from east to west, or west to east as the case may be, and brings with it the ability to move traffic and expand trade to an even greater extent.
The next item with which I shall deal is one with which this Parliament is very familiar. It perhaps exists to a greater extent today than when we made the report in 1965. I do not blame anyone in particular for it, but it is in existence. I shall quote the exact words which we used when asking that this matter be considered by the conference in 1955. I shall quote it exactly because I do not think I can improve on the language:
The fifth item which the government of New Brunswick feels should be placed on the agenda is the laying down of a compre-

March 2, 1972
Federal-Provincial Fiscal Arrangements hensive national policy to deal with the problem of unemployment. A policy of this kind can only be carried out under the vigorous leadership of the federal government. Unemployment must be dealt with in two ways:
(1)	The implementation of proper fiscal and monetary policies by the national authorities. This should include a program of capital grants to the provinces and to the municipalities so that public investment may be expanded as unemployment reaches
critical proportions.
(2)	Responsibility for the relief of the unemployed be taken over by the federal government. Neither the provinces nor the municipalities have the resources to deal with this problem during a business recession. It will, of course, be remembered that this was one of the principal recommendations of the Rowell-Sirois Commission.
That last recommendation has now been implemented. So the items discussed at the conference in 1955 can be summarized as follows: some of the proposals have been implemented and some have not:
1.	Federal assistance to the provinces for the purpose of resource development.
This has been done by successive governments. I am not taking any partisan position on it at the present time.
2.	Future tax revenue agreements should include a factor which will take into consideration the difference in taxable capacity among the various provinces.
This has been recognized and done.
3.	Reconsideration and review of the Duncan and White Commission's awards.
This is one request which has not been recognized. If the minister will take the trouble-as I know he would if he had the time-to see what I have said about the Duncan and White Commission's awards, I should be greatly obliged because perhaps he does not have up to date information on this subject. I have referred to it only in general terms though, I believe, in appropriate terms.
4.	Extension and revision of the Trans-Canada Highway program.
This has been done. The country has been joined from east to west.
5.	A national policy to deal with unemployment.
I question whether this has been done by any government. If the minister were to ask me what I would do about unemployment, I do not think I should be able to tell him without a great deal of thought, and perhaps not even then. Everyone acknowledges that this is a very difficult problem. We were talking about it in 1955 at the Dominion-Provincial Conference and we are still talking about it today; it is still with us, unfortunately.
We in the maritime provinces are very conscious that some of these requests made during the 1955 conference have been complied with by this government and by previous governments of all political complexions. There still remains, however, recommendation No. 3.1 do not ask the minister to do anything about it at the moment because I cannot speak on behalf of any provincial government, though of course I have their interests in mind. We must differentiate between our federal responsibility and responsibility to our province and its claims. But I think the minister should acknowledge that we have a credit balance on his books; and I am referring again to recom-

mendation No 3. So when representatives come from the provinces looking for special consideration, I trust he will receive them with his usual courtesy.


Mr. Len Marchand (Kamloops-Cariboo):: Mr. Speaker, before I begin my remarks this evening I should like to congratulate my hon. friend from Ottawa-Carleton (Mr. Turner) on his appointment as Minister of Finance after doing an excellent job as minister of justice. I know he will do the same kind of job in his new portfolio. I should also like to congratulate my hon. friend from Calgary South (Mr. Mahoney). We all know the tremendous job he did in piloting the tax reform bill through the House. He deserves elevation to a cabinet post. I welcome his appointment, as a westerner, but I welcome him first and foremost as a Canadian. I know he will do a tremendous job for Canada.
I am pleased to participate in the debate on Bill C-8. I listened to the Minister of Finance yesterday with a great deal of interest, and I stand solidly behind him and the remarks he made regarding the philosophy of equalization. This has been a very hot subject in the province of British Columbia during the last few months. I am distressed about the connotation this debate has taken on in British Columbia. The Premier of British Columbia has, in my view, taken a wrong stand and the remarks he has made can do a great deal of harm in sowing seeds of distrust and misunderstanding which would lead people to think in terms that would be totally against the best interests of confederation. I do not know what Premier Bennett is trying to do. He says he is not trying to divide the country. I believe him. Yet his remarks certainly cannot be considered constructive or in the best interests of Canadian unity. Perhaps, if he is not trying to be divisive, he should think through the possible consequences before making public statements.
If the government of British Columbia is challenging the concept of equalization on a constitutional and fundamental basis, then maybe they should tell the whole story of where the payments are going, rather than just relating the grievances to statement that too much money is going to Quebec alone. These are not the facts, Mr. Speaker, and the good Premier knows it.
When I hear remarks of this kind, about there being perhaps too many Frenchmen in Ottawa, and remarks such as some hon. members made during the debate on the Speech from the Throne, I have to chuckle. I almost feel like saying, "If you don't like this country you should give it back to the Indians." On the other hand, I suppose the Indians might be blamed for part of this problem. If the Indians had established a different immigration policy these difficulties would not have occurred.
Some of the facts concerning the disposition of grants under the equalization program have already been placed on record by the Minister of Finance. However, I do not believe it would be amiss to re-emphasize them and perhaps to draw attention to a few which were not mentioned by the minister. I should like to put on record figures as to the moneys received by the so-called have-not provinces from equalization payments expressed as a percentage of gross revenue from provincial sources: Newfoundland, 65 per cent; Prince Edward Island, 55 per cent; Nova Scotia,
March 2, 1972

34 per cent; New Brunswick, 38 per cent; Quebec, 16 per cent; Manitoba, 12 per cent; Saskatchewan, 13 per cent.
I think it would be interesting, too, to put on record the reaction of some of the premiers and ministers of the have-not provinces in response to the declaration by the government of British Columbia that it intended to take the federal government to court over the question of equalization payments. In St. John's, Newfoundland, finance minister John Crosbie said his province would have to close up shop if the payments were ended. In New Brunswick, Premier Richard Hatfield said he was surprised and disappointed to hear of the challenge. He added that Premier Bennett, who was born in New Brunswick, knew of the need for equalization payments and the benefits they provided directly to the people of his native province.
In Toronto, Premier Davis said Ontario was not contemplating a similar suit. In his words: "We agree with the principle of equalization; we have never disputed it." Premier Ed Schreyer of Manitoba said the position taken by British Columbia ran counter to the federal system. Senator Forsey, an acknowledged expert on constitutional law, was also quoted as saying that' the threat from British Columbia on equalization is pure moonshine. He also said: "I cannot imagine any lawyer who values his reputation taking the case. He would need the skin of a rhinoceros and the head of an ostrich."
The whole question of federal-provincial relations has been a favourite whipping-boy in Canadian politics for many years and I imagine it will be that way for some time to come. The game of politics dictates this, yet somehow we always manage to arrive at agreements which are acceptable to the diverse views that the regions of this nation reflect. I am confident we will be able to continue in that noble pattern. It seems to me that part of this thing known as being Canadian implies a commitment to national standards and the basics of life. The means with which to achieve this may be faulty in some ways. The differences that may be expressed from time to time among provinces and between the federal government and the provinces must be solved on the basis of negotiation and sound understanding, not always on the basis that "you're the bad guys and we're the good guys".
The essence of Canadian federalism means that some form of tax equalization policies have to be followed to give the less fortunate citizens in distressed regions of this nation the same standards of medical care, hospital and education facilities, income security programs and the like, as other Canadians. Canadians as a whole have long recognized the need for and the importance of reasonably comparable levels of basic public services across the whole country without resorting to unduly burdensome levels of taxation. This is the principle on which fiscal arrangements are based. Our system is pfobably unequalled in any other federal country.
I am proud and happy to have been born and raised in one of the wealthier provinces of this country and to be able to contribute to confederation through the system of equalization grants. I am also happy that I live in a country where I know that if something should go wrong in my own province and we are no longer wealthy, we can look
Federal-Provincial Fiscal Arrangements
to our more fortunate neighbours in other areas for a helping hand.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I think the previous speaker not only demonstrated to the House that one can say everything one has to say in ten minutes, but he said it in a most impressive way. Perhaps that should be a discipline for myself, but I always envy those who can put a case with brevity.
I am going to confine my comments to clause 6 of the bill, the clause that extends the post-secondary education payment program for the next two fiscal years, or till March 31, 1974. I am simply going to raise one or two questions and then discuss some of the comments that have been made about the whole problem of post-secondary education and the undoubted national interest and concern in this field by Dr. J. A. Corry, former president at Queen's University.
In his speech the minister spoke, to use his own words, of "a detailed and motivated statement on the attitude contemplated at the time"-that is, at the end of March, 1974. If the minister's statement is to be useful-I certainly hope it will be-it means that between the time this bill receives royal assent and the end of 1974 the universities and the Council of Ministers of Education of the various provinces must be heard by the Secretary of State (Mr. Pelletier).
I should like to stress the need to hear not only the university presidents but the entire university community, including the faculties and student representatives. There is some urgency to this matter because as my leader has said, and I think validly, what we are debating here is a stand pat proposal, particularly as far as post-secondary education is concerned. What we have here is really a postponement of a decision, one that has to be taken, concerning the federal thrust in this field within the next 24 months. Although 24 months may seem like a long time when one contemplates the period in the House of Commons this evening when a very agonizing series of questions have to be considered, I am sure the time is all too short.
I hope this comment is fair, but prior to 1967 the then prime minister, Right Hon. Lester Pearson, had attached to his office certain people on staff one of whom was Dr. Kenneth Taylor who, if I remember correctly, had specific responsibility for post-secondary education. Then, under the succeeding administration this responsibility was shifted to the Department of the Secretary of State. I have no quarrel with that except to say that although this very important matter is being considered at this moment, the special advisers to the Secretary of State, so I am told, have left that department. If I am incorrect, I should like to know who within the office of the Secretary of State is in charge of enunciating a national policy, a policy of the government of Canada, regarding post-secondary education. Certainly we want to hear these officials when this bill goes, as it must, to the Standing Committee on Finance, Trade and Economic Affairs. Some very fundamental questions will have to be taken up in that committee before the end of this month.
I am very conscious of escalating costs in the field of education, and coming from a have-not, or so-called poor province I am grateful for the fact that a good deal of
486

March 2, 1972
Federal-Provincial Fiscal Arrangements extra money has come to my province in the form of equalization grants and under the formula for federal assistance to post-secondary education. But this is a matter that is really far more fundamental than being simply transfer payments of cash. What I am suggesting is that there is a serious vacuum in this field that cannot be overcome merely by adding a two-year extension to a federal statute. This bill postpones decisions that have to be made. That is why we shall be anxious to hear from officials in the Secretary of State's department, if there are any left responsible for this field, when the bill comes to the committee.
I am alarmed at the growing evidence of an inwardlooking policy, if I may put it that way, in the field of post-secondary education. I would not presume, in a debate like this, to comment on the Wright study that is now going on in the province of Ontario, but I have an uneasy feeling-I say this with great respect for my colleagues who represent areas in the province of Ontario- that the Wright commission has had the attitude that here we are in the Garden of Eden-Ontario. We are born here, educated here and we die here, and may the rest of Canada take the hindmost.
I do not say that this is the case in the equalization formula. How could I, since Ontario has been accepted as one of the key provinces in the Canadian federal system? But I am alarmed at some of the things that seem to be said now, at least in the interim stage of the Wright commission investigation of post-secondary education in Ontario. After all, not all Canada can be born, educated and die in Ontario. There is a national aspect, both a constitutional one and also one lying within the whole focus of the government of Canada in university education.
As I say, we have been given two years of grace for a system which is obviously unloved because of the 15 per cent placed on the escalation of funds, unloved by the government of Canada because it is open-ended and unloved by the provinces because of the uncertainties that arise due to the very short duration of the scope of this act.
Dr. Corry has been underlining the national aspect of university education for many years. It is very interesting to go back to the days of 1966 when this whole matter was being discussed and when finally the ad hoc solution was arrived at within days or even hours of the 1967 agreement, if I understand it rightly. Dr. Corry says:
There obviously must be some national goals of education in Canada; even though at one time or another, nearly all of them may be met by initiatives taken within the provinces . . . There are national goals, and the laying of one-half of the operating costs of post-secondary education as a charge on the federal revenues certifies that proposition.
We discussed in many other debates, when we considered the whole matter of constitutional reform, the aspect of section 93 of the BNA Act, but may I remind the House of a key phrase in section 93 which provides:
In and for each province the legislature may exclusively make laws in relation to education.
I am not for one minute coming to this Parliament 104 or 105 years after confederation and suggesting that the

government of Canada should be butting into the provincial aspects of education, curricula and everything else at the school level. But when the BNA Act became law there were very few universities of international or even national scope in this country.
I am perfectly sure that the skilled drafters of the constitution did not for one moment contemplate that in the university area there would not be massive federal responsibility and concern. As Dr. Corry said, if we need any other evidence of it, we are considering in this bill a massive amount of transfers of money from the government of Canada. If we need any more evidence of the national concern, we have it in the educational provisions that are made for our Indian and Eskimo peoples and for the dependants of people serving in the armed forces, and so on. So it is not at all true to say that the provinces have exclusive jurisdiction in the educational field. That is not contemplated by section 93. Of course, the provinces do have exclusive jurisdiction in and for the provinces themselves.
I do not think it would help this debate or national unity if we began picking at various universities and some of the pressures that are on them, but surely of all aspects of our country's life the university is not one that can be constrained by any narrowness or any provincial boundaries. Many of the famous universities of this country are famous because their authority transcends not only provincial boundaries but the boundaries of the country itself.
It is interesting to recall also that in the whole field of funding, post-seconary education raises the matter of the government role in the field of education. Dr. Corry made a couple of speeches about this in Saskatchewan in 1969. The speeches are entitled, "Universities and Governments". They were given as part of the Quance lectures at the University of Saskatchewan a couple of years ago. In these lectures Dr. Corry raised for us the very fundamental issue. He said that when governments begin to have a major responsibility for the funding of institutions then, as night follows day, governments get themselves into the position of making decisions regarding curricula, and so on, which should properly be left to the universities themselves.
As I began my comments I complimented the hon. member for Kamloops-Cariboo (Mr. Marchand) on the brevity of his speech, so I can hardly carry on much longer. But I do want to say in a general way that the two-year breathing space that has been given to us for the consideration of what is in part VI of Bill C-8 will, I hope, be taken up by the universities themselves, because there is a tremendous amount of information that they should be giving the government of Canada. Also there should be close and intimate contact with the Council of Education Ministers.
Lastly, I hope that when the bill goes to the committee next week or so the officials of the Department of the Secretary of State will be there so that we can raise with them some of the very interesting and what I might call core considerations which arise when governments are heavily involved in the funding of national institutions which are our universities.
March 2, 1972


Mr. Allen B. Sulatycky (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I wish to make only a few brief and perhaps disjointed remarks in this important debate. It is important and appropriate that this debate take place at this particular time because in the last few days the very basis of confederation has been challenged. I refer to three particular elements: the idea of equalization payments, the concept of an accommodation between the two major language groups in the country, and some question has been raised about the value of the government's new multicultural policy. It strikes me that if we challenge these factors in our national existence we are really challenging the idea of confederation itself. Therefore, I say it is appropriate for this House to be debating questions relating to equalization payments and federal-provincial fiscal arrangements.
In 1924 Vincent Massey, who later become Governor General of Canada, said:
This country is much more than a chain of wheat fields, and gold mines, and pulp-wood forests; it is more even than the union of nine separate provinces: it is the expression of certain ideas.
I have never seen a better definition of Canada. Many people have tried to describe Canada and to define Canadian identity. No one has really succeeded as well as Vincent Massey did in these few words almost 50 years ago. The idea that is embodied in Canada could, I suppose, be described as a great experiment in the evolution of a truly co-operative and tolerant society, a society in which we can co-exist with other people who share many things with us but who may have a different language, a different religion, and in which we throw open our doors to the world and allow newcomers to retain that from their past which they value, and even allow them to retain their former language, to a greater extent than is possible anywhere else in the world.
I think that if you look at Canada in any other way you would have to conclude that it is certainly not a feasible state. For example, there is no nation other than the USSR which is spread over such a large area, east and west, north and south, or encompasses as many diverse geographic areas with as inhospitable a climate as we have and with the population strung out in a narrow belt. If we were to look at this sensibly we would conclude that the best thing we could do is join the great nation to our south. That would make the greatest economic sense to many people. If we had done that some time ago we would probably all be better off today in an economic sense. However, that is not what happened.
The people who embarked on this venture called confederation did so because they wished to resist absorption by the United States. They wished to attempt a different kind of society on the northern half of this continent, a society in which two peoples attempt to live together in unity and harmony and who invite the rest of the world to come in and join them in this great experiment. In order for this experiment to survive, Mr. Speaker, it strikes me that we must have an inordinate amount of co-operation among the various regions in the nation, and indeed among the inhabitants of the nation. That is what equalization payments are all about. It is really people helping
Federal-Provincial Fiscal Arrangements
people, the people who are more fortunate helping those who are less fortunate.
I happen to come from an area which has been blessed with great natural resources and which at the moment has perhaps a stronger economy than most other areas of the country. I speak of the province of Alberta. I am sure I speak for most Albertans when I say that we are happy to be able to help Canadians who are less fortunate in other parts of Canada and we will be happy to do so for many years to come.
I believe that the hon. member for Kamloops-Cariboo (Mr. Marchand) was speaking for the majority of British Columbians when he expressed his sentiments earlier this evening. He expressed confidence that if at some time in the future the province of British Columbia became less fortunate, other parts of Canada would take up the slack and help the people in that part of the country to maintain a reasonable standard of public service and a reasonable standard of existence.
At the moment, most of the federal payments made to provinces are going to the five most easterly provinces. I am confident that that will not continue for very long because one cannot help being impressed by the tremendous potential which exists in those provinces. The mere fact that they are all bordered by the ocean in itself makes them an important part of the country, because in the future the oceans will play as great or a greater role than do the land masses of the world. The fact that Canada has the longest coastline in the world and that five of our eastern provinces are on salt water augurs well for this country. I believe that Albertans, citizens of British Columbia and citizens of Ontario when they, in effect, invest in those areas are making a good investment.
But as I indicated earlier, there are those who suggest that there is something insidious about equalization payments and say that we should not make them.


Lincoln MacCauley Alexander: Where did you ever hear that?


Allen B. Sulatycky: I have also heard from many people that we should devote a greater amount of our gross national product to foreign aid. It strikes me as being totally inconsistent to talk of providing 1 per cent or 2 per cent of our gross national product to underdeveloped countries and then quibble about using 1 per cent of the gross national product for distribution to the have-not provinces within our borders.
It seems that equalization is accepted in football circles but it is not accepted universally when it comes to supporting our country. For many years the Canadian Football League has had a system where the teams that draw the largest crowds help support others like Regina, Winnipeg, Edmonton or Calgary, and no one quibbles about that. As a matter of fact, without a system of gate equalization it is highly unlikely that the Canadian Football League would exist.


Mr. Skoberg:: That is Saskatchewan-in Regina?


Allen B. Sulatycky: As an expatriate of Saskatchewan, I stand corrected. I simply use this to illustrate that because of the nature of our country we have to help those areas which are not, at the time in question, able to help them-
488

March 2, 1972
Federal-Provincial Fiscal Arrangements
selves. I hope the people of western Canada do not get hung up on this question of equalization. The people there are characterized by initiative and drive and by their foresight. They continually look forward, not back. If this becomes an issue of any magnitude in western Canada, it will simply divert their attention from the tremendous progress made in the last 20 or 30 years.
There is only one comment that I wish to make regarding the federal-provincial fiscal arrangements, and this is in respect of the shared-cost programs under the Canada Assistance Plan. Upon examining the social welfare systems in the provinces of Ontario, British Columbia and Alberta, one can only conclude they are using the plan as a back door by which to regain some of the funds they feel they are losing under the equalization payments.
In Alberta, many people are concerned about the rising cost of welfare and the numbers of people on welfare. They do not deny that there are unfortunate people who have suffered personal catastrophe and who require assistance from the state, but they also know that there are many others apparently well able to contribute to the state and the economy but who are not doing so and who rely on the social welfare system. This situation exists as well in British Columbia and Ontario and I hear from my friends in Ontario that welfare is easy to get there.
In the last three years I have become convinced that these three "have" provinces are using the system of the Canada Assistance Plan to get back from the federal government what they feel they are paying out under equalization. The result is that in those parts of the country where there is * less need for welfare, it is easy to obtain. In Ontario, British Columbia and Alberta the provincial government can afford to pay 50 cents in order to bring in another 50 cents in federal government funds, but the poorer provinces must scrape to get that first 50 cents in order to pay their own 50 per cent contribution to welfare services.
The result is a distortion in our scheme of providing assistance to the less fortunate individuals in the country. I hope that at some future federal-provincial conference this matter will be discussed seriously so that public funds used to assist our less fortunate fellows are used properly. It should be possible to ensure that provincial governments do not regard them just as a means of obtaining federal funds and it should also be possible to ensure that they are not used in a way which creates dissatisfaction with an otherwise sound social security system.
Mr. Speaker, in the few minutes that I have taken I hope I have indicated my support for the bill sponsored by the Minister of Finance (Mr. Turner) and for the system of equalization grants. I am sure that I speak for the majority of the citizens of Alberta, and I am confident that I do when I read editorials such as the one which appeared in a weekly published in my riding called Western Review, of Drayton Valley. On May 6, 1970, when speaking of Quebec the editor said:
-we should certainly be attempting to solve the economic ills plaguing the province. At the same time, the maritime provinces have more than their share of problems that should also get federal attention.
I am also pleased to be supporting this government which in the last four years has done more than any other

federal government to support those particular regions of Canada.


John Stratford Burton: Mr. Speaker, the bill before us is the product of a long process of negotiation which no doubt involved a great many problems and anxious moments for the ministers and the federal and provincial officials concerned. We must keep in mind that the agreement reached between the federal government and the provinces which is now embodied in this legislation is an integral feature of the fabric of confederation as we have it today. In fact, it has become a very important and essential part of the entire functioning of our nation as a whole. In many respects we can say it strengthens the nation because it takes into account some of the difficulties encountered from time to time and some of the changes which have occurred in the Canadian economy.
On the other hand, I think that we have to recognize that the important role these arrangements play in the functioning of government at the federal and provincial level across the country adds to the frailty of the entire structure of our nation. We go from five-year period to five-year period, and at the end of that time there is again this process of negotiation. This places the bonds of our nation under a great deal of strain, and I think this is inevitable with the type of negotiations involved in reaching the arrangements we are considering.
I think we must also keep in mind that to some extent the arrangements that are reached periodically are substitutes for the inadequacies and deficiencies of our constitutional structure. These at times can be assets which may strengthen our case; at other times they may produce problems and point more clearly to some of the difficulties with which we will have to grapple over a period of time.
I think one point that must be kept in mind in dealing with this legislation is that it underlines the inequalities and disparities present in our nation, inequalities which are demonstrated by differences in the financial position and fiscal capacity of various provincial governments across Canada. One province, Newfoundland, as was pointed out earlier, depends upon federal sources for 55 per cent of its total revenue. This fact, I think, carries consequences affecting the functioning of provinces as we know them within our federal system of government. The province of Prince Edward Island, as was pointed out, depends on federal sources for some 55 per cent of its revenue. This fact has produced problems as well. Certainly, these two provinces would not wish to see those revenues removed in present circumstances; nevertheless, to refer to them as provincial entities and as sovereign governments in the way that the minister referred to the government of Newfoundland in his speech is to put the present situation in terms that are less than accurate.
It has been made clear already in this debate that we in this party accept the principle of equalization and recognize that a great many features of the application of that principle are contained in this bill. I also want to make it clear that so far as the province of Saskatchewan is concerned, we feel the principle of equalization is important. It is important for the nation and is important to many
March 2, 1972

provinces. In future, provinces which do not now receive equalization payments may consider the principle of such payments important.
My own province, of course, has received a good deal of revenue from equalization payments over a period of time. Our dependence on this source of revenue decreased over the years and by about the mid-sixties it looked as though we might be one of the "have" provinces as defined under the federal-provincial fiscal arrangements. Certainly, a great deal of political hay was made of this fact by certain politicians of Saskatchewan who attempted to take the credit for a great deal of work which had been done for many years by the government led by my colleague, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas).
Of course, the situation has changed drastically in recent years as a result of the drop in farm income and the decline in revenue from many mineral resources. Once again an increasing percentage of the provincial revenues of Saskatchewan is derived from equalization payments.
If I may carry this beyond the Saskatchewan scene, Mr. Speaker, I think it is necessary to underline the concern expressed in some provinces which might be regarded as "have" provinces. As I said before, the picture could be different in future years. At some time in the future some of the provinces now regarded as "have" provinces may well, for a variety of reasons, find themselves in a different position and become beneficiaries under equalization payment programs.
It is quite possible that some provinces which are presently enjoying the benefits of equalization payments may in future, by reason of changing circumstances, suggest that they are no longer benefiting from this type of arrangement. It is therefore important to keep in mind that the process of equalization is important for Canada's future if we are to ensure the existence of one united Canada. In this connection I think it is important to point out that we should all be concerned about the imbalances in Canada as between various regions and provinces.
At present, three provinces under these arrangements might be regarded as "have" provinces-Ontario, Alberta and British Columbia. Two of those provinces, Ontario and British Columbia, have been at the top of the scale for a number of years, if one is to judge from a variety of economic indicators. Certainly, to judge from these indicators they are the best off in many respects. How their economic wealth is distributed among the people of the province is another matter about which a good deal could be said.
Alberta, of course, has been in a favourable position for a number of years although there is no guarantee that that will be the case for a long time or on any sort of permanent basis. It may not occupy that position permanently. We must bear in mind that in terms of economic growth and population trends Ontario and British Columbia are the two provinces which are experiencing a high level of growth. None of the other provinces, including Alberta, is enjoying anything like the same level of growth, if one is to judge the situation according to the indicators I have mentioned or other indicators. Ontario, in particular, is growing. Of course, we are happy to see
Federal-Provincial Fiscal Arrangements
development in Ontario. Since Ontario is increasingly becoming the all-important province, I suggest that in the long run this will create difficulties for Canadian confederation.
That is why many of us welcome programs that will lessen the disparities between the other regions of Canada, not because that will be to the detriment of any province, be it Ontario or British Columbia, but because we want to ensure that the other regions of Canada are able to enjoy a degree of growth and well-being similar to that experienced in those two provinces. I am sure the minister is very concerned about some of these factors. The facts I have outlined carry implications which are of concern for Canadian confederation in the long run.
There are a number of features of this bill, Mr. Speaker, with which I think we can all concur; for instance, the change in the revenue guarantee provisions. The bill has changed the 95 per cent figure relating to the federal guarantee to 100 per cent. This is a useful change with which, as I say, we can all agree. It is an important change because it has been shown that the 95 per cent figure which was included in the 1967 agreement had little meaning for the provinces. When one considers the way in which price levels have been increasing in recent years, and the implications that these increasing price levels might have for fiscal policy and governments, I think it will be conceded that it was necessary to raise the figure to the 100 per cent level.
I note, as well, that progress has been made in recent years in developing a more equitable revenue base in calculating equalization payments. Mr. Speaker, I could go into details which are of concern to many, but I will not do so tonight. There are a couple of points to which reference should be made. The first and most important is that in any calculations of revenue base or source for provinces it is absolutely necessary in today's situation to include municipal revenues in the calculations. This is particularly important at the present time because in a number of provinces shifts are taking place with regard to responsibilities for various functions of government vis-avis the provinces and municipalities. Indeed, proposals have been made by various provincial governments to shift the burden of financing certain functions from one level of government to the other.
In my own province of Saskatchewan, the provincial government presently in power, a New Democratic Party government, put forward as one of its major election planks that it would take steps to ensure that some of the burden of financing education would be lifted from property taxation and transferred to provincial sources of revenue. I think the point is very well made, as it has been made on a number of occasions in debating this issue, that unless you include municipal revenues the provinces will be penalized under the present formula if they take steps which result in the type of shift they wish to carry out.
There are a number of other problems with regard to revenue sources that should be noted. One of the items in the definition of revenue sources refers to succession duties. This is a rather difficult and ticklish problem. The federal government has stepped out of the estate tax field and has left this area open to the provinces. Three prov-

March 2, 1972
Federal-Provincial Fiscal Arrangements inces already have a succession duty plan in effect- British Columbia, Ontario and Quebec. Six other provinces now intend to enter the field-Saskatchewan, Manitoba and the four Atlantic provinces. This leaves only the province of Alberta without any sort of succession duty plan.
The question I want to put to the Minister of Finance (Mr. Turner) is this: In the situation that Alberta is not going to be imposing any sort of succession duty, will that province benefit in any way from the calculations made under this act? I hope the minister will deal with this matter when he closes the debate.
A number of other concerns have also been expressed in past years in defining provincial revenues with respect to resources. I would appreciate hearing from the minister what progress has been made in this field and whether the provinces are satisfied with the new formulas for calculating revenue resources. This is particularly important because some provinces, as a matter of policy, have decided to collect more of their revenue from resource royalties and other forms of levies. This is equalized in the calculations that are worked out. Of course, there is no problem. For a long time there was a problem which was particularly serious for the province of Saskatchewan, for example. I am not sure from the wording of the bill that this is the present situation.
There is one other area I wish to deal with tonight. It is related to our concern about this act, although in some respects it may go beyond the immediate terms of the bill. It has to do with the future of federal-provincial health programs. I understand that at the present time negotiations are under way between the federal government and the provincial governments to change the formula for making payments to the provinces under hospitalization and medicare programs. I note in the bill before us that provision is made for continuing the federal hospitalization act for another five years. Under the terms of the bill, I am not clear whether it will be possible to change the formula for making payments. Nevertheless, I think there is an area of concern here.
It is not quite clear from the proposals that I understand the federal government has placed before the provinces whether in the long run it wants to opt out of these programs; whether it wants to get out of the federal medicare and hospitalization programs. No doubt the government is concerned about the very high rate of growth and cost of these programs.


Thomas Clement (Tommy) Douglas: Who isn't?


John Stratford Burton: As the hon. member for Nanaimo-Cowi-chan-The Islands says, "Who isn't?" I have before me a speech delivered recently by the minister of public health of the province of Saskatchewan in which he expressed a great deal of concern about the increase in health costs. With regard to the hospital service plan in Saskatchewan, the medical care insurance plan, he points out that in 1968-69 the total cost for these two programs was $96 million. For 1971-72 the figure is $132 million, a growth of 37.5 per cent in something like three years. Certainly this is a cause of concern to all governments involved.
In dealing with this problem we have to make sure that the federal government is not taking an approach of just

opting out or trying to decrease the contribution it makes to these programs without ensuring that the provinces have adequate fiscal capacity to carry whatever burdens they will have to carry. We need a combined effort on the part of federal and provincial jurisdictions to ensure that some controls are placed on the cost of these programs. At the same time we must ensure there is no decrease in the quality of health care provided and, in fact, that there is an improvement in their quality. This can be done because it has been shown in a number of our health programs that new approaches are possible. There is less emphasis on curative procedures and more on preventive programs. There is not as much need for straight hospital care. It is possible to introduce a variety of approaches that can very well bring about improvements and the quality of care.
I suggest this could be best carried out if the federal government made it quite clear that it was willing to go along with the provinces all the way in introducing improvements in their health programs, helping them adequately to combat a problem we all face in trying to deal with the situation of the growing cost of programs in this area.
There are other remarks I would like to make on this bill; I therefore ask if we can call it ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Raymond Rock (Lachine):: Mr. Speaker, during the question period on Wednesday, February 23, I asked the Minister of Indian Affairs and Northern Development (Mr. Chretien) the following question:
Why was the Lachine canal not included in the takeover of historic canals and given national park status?
The minister was unable to answer because of Mr. Speaker's ruling. Therefore, I raise the subject matter of the Lachine canal at ten o'clock this evening. On February 22, the Minister of Indian Affairs and Northern Development announced that eight canals with important historic links had been transferred to the conservation program. In other words, eight canals were given national park status and a higher recreational and tourist potential. These were the Rideau canal built in 1832, the Trent canal built in 1833, the Murray canal built in 1889, the Ste. Anne canal built in 1843, the Carillon canal built in 1833, the Richelieu canal built in 1849, the Chambly canal built in 1843 and the St. Peter's canal built in 1869.
I welcomed this announcement. It is wonderful. It makes me very happy that the government made the decision to preserve these historic canals and create a national park system because I asked for this many years ago when Mr. Pickersgill was minister of transport. How-
March 2, 1972

ever, what concerns me is that the government neglected to include the first canal built, the Lachine canal.
The entrance to the Lachine canal fronts the city of Lachine and the area in which the massacre of Lachine took place. It is from here that LaSalle left to carry out three of his explorations. All voyageurs going west passed through Lachine. The first attempts to build the Lachine canal took place as far back as 1670 and continued until 1733 when the first canal was completed. Almost a century later, between 1821 and 1824, a new Lachine canal was built-ten years before the Rideau, Trent and Carillon canals and 20 years before the Richelieu, Chambly and Ste. Anne canals.
Is the government aware that the city of Lachine has itself been maintaining a 3,000-foot section of the second Lachine canal, the oldest in Canada, and that on its shore the former Hudson's Bay trading post still stands? The building has not been designated as an historic site; it should be converted into a museum by the federal government.
The government hired the firm of Claude LaHaye and Associates to study the future role of the Lachine canal. After a complete and thorough study this firm recommended that the canal should be used for pleasure craft and that the east end be reopened. The government made an error when it sold the Soulanges canal for one dollar to the province of Quebec. Let us not make a similar, tragic mistake.
I believe that the Lachine canal, the Soulanges canal and the Cornwall canal should be included in the national parks system and operated by students during the vacation season. This would provide more jobs for students during the summer months while at the same time allowing pleasure craft under 20 feet in length to enter the heart of the city of Montreal. Such craft are at present restricted by the Seaway regulations. It would give an opportunity to the people of Montreal, particularly to those living in St. Henri, Point St. Charles, Ville Emard, LaSalle, Ville St. Pierre and Montreal West to own pleasure craft and to build marinas. They would even be able to enjoy skating in the winter time as we do here on the Rideau canal.
I ask that the LaHaye report be referred to the Standing Committee on Indian Affairs and Northern Development for immediate study and that the following recommendations made by LaHaye be immediately adopted:
It is strongly recommended that the St. Lawrence Seaway Authority make representations to the Department of Regional Economic Expansion to conduct an over-all study of recreation in the Montreal region. The development of the canal and its immediate surroundings should form an integral part of this study.
Mr. Speaker, the government recently announced a program for the relocation of the E. B. Eddy Company's operation in Ottawa at a cost of $29 million. Yet the historic Lachine canal, which could become a viable pleasure craft route into the centre of Montreal, with an important tourist potential, is not included in the national parks scheme. It is an insult to the population of Montreal to see so much done along the Rideau Canal parkway while the Lachine canal remains a dump due to the policy of the St. Lawrence Seaway Authority. For further infor-
Proceedings on Adjournment Motion
mation I would refer hon. members to the speeches I delivered on January 9, 1967, on October 19, 1970, and February 21, 1972, as recorded in Hansard.
The Lachine canal is historic. I have prepared a short history on the Lachine canal to prove this point and copies are available to any person requesting one. The Lachine canal should be given national park status and be transferred immediately.


Allen B. Sulatycky: Mr. Speaker, the representations of the hon. member for Lachine (Mr. Rock) regarding preservation of the Lachine canal are well known. He spoke in this House in 1967 and in 1970, and he mentioned the canal most recently last week on the first day of the debate on the Throne Speech. I know that in the last few days he has been pressing his case in every quarter he can find. He has distributed copies of his very well-prepared brief to all members of the Standing Committee on Indian Affairs and Northern Development and I wish to compliment him on a fine piece of work.
The historic past of this canal has been linked with the history of the Lachine area for nearly 250 years. It was indeed this great history which first led to the study of this canal for possible transfer to the Department of Indian Affairs and Northern Development, for preservation. However, detailed study of the canal revealed that it had been extensively altered on at least four occasions including a complete reconstruction at the turn of this century. These changes have been so great as to preclude any possibility of restoration to the earlier historical configuration. The cost of such work, if it were attempted, would be prohibitive.
As well, it was noted that the canal is still used for some commercial activity, although it is not completely operational as were the other canals which were transferred. As a result, it does not offer the same scope for public use as a recreational area. For these reasons,dt was decided that the Lachine canal could not be included in the transfer which has just been completed.



REGIONAL ECONOMIC EXPANSION-REQUEST FOR ORGANIZATIONAL MEETING OF STANDING COMMITTEE

James Aloysius McGrath: Mr. Speaker, the statement made in the House today by the Minister of Regional Economic Expansion (Mr. Marchand) that the offer to Belanger Limited, made, accepted and announced in March, 1971, has now been cancelled confirms my repeated claims that the figures of expected job creation quoted by the minister are grossly misleading. In this regard I am certainly grateful to the minister for this admission.
In this particular case a year would have passed between the initial publication of jobs to be created and the announced cancellation. This case is not at all unusual, however. The figure of an estimated 51,281 jobs to be created from DREE grant offers which the minister is quoting currently includes thousands of jobs which will never be created. The offers which were to have created them will be cancelled in future months or the firms will go bankrupt.

March 2, 1972
Proceedings on Adjournment Motion
I might say there is considerable concrete evidence to support this charge. First of all, if the offers announced by the end of 1970 had resulted in the number of jobs predicted for them, 18,537 jobs would have been created; 4,454 of these jobs have vanished because of withdrawn or declined offers or bankruptcies. Applying this proportion to the total number of expected jobs announced since the beginning of this incentives program, it can be predicted that at least 13,500 of the jobs announced to date will have been lost by the end of this year.
The so-called net expected job total used by the department represents the subtraction from the total announcements of only the 5,095 jobs lost through withdrawn or declined offers revealed thus far. This procedure results in an overestimation of approximately 8,400 "expected jobs".
In this particular case we were able to expose the minister, but how many mote offers have been announced which later have been withdrawn or cancelled secretly? How many hundreds of workers .have been laid off by firms subsidized by DREE or by other firms unable to compete with those subsidized by DREE?
Second, in DREE's 1970-71 annual report released two weeks ago the number of jobs estimated from grants under the former Area Development Incentives Act is 22 per cent lower than the number claimed in the report issued last year: 12,264 expected jobs have been lost. This, again, demonstrates the misleading use made of these "expected job" figures by the department.
I call on the minister to stop misleading the public and this House with his talk of estimated jobs. I call on him to reveal the number of jobs actually in existence as a result of the $244 million which this government has paid out in incentives grants to firms since 1968. The minister refuses to talk of the actual total of jobs created; he talks only of imaginary expected jobs.
But there is a further issue: I contend that the minister, in his answer to the member for Lanark-Renfrew-Carle-ton (Mr. McBride), misled the House since the minister himself admitted outside the House that he had received notice of the question. In other words, it was a planted question designed to get the hon. member for Lanark-Renfrew-Carleton off the hook politically.
What happened between that day early in 1971 when the acceptance of the offer was announced with great fanfare and February 11, 1972-a year later-when the offer was secretly withdrawn? Why did this firm decline what amounted to an outright gift from the federal government? Was it because of the political consequences to the Liberal party in Lanark-Renfrew-Carleton which would flow from the closing down of the Findlay plant, with a loss of 200 jobs in Carleton Place? This would appear to be the case.
Only the minister can get the record straight, and I call on him now to do so. I realize he cannot be expected to do so in the three minutes that he has at his disposal during this adjournment debate, but he can do so, as we have repeatedly asked him to do so, by making a statement on motions which would have to stand up to the scrutiny of the opposition parties in the House.


Jean Marchand: Mr. Speaker, I feel that the debates in this House can only bear fruit if all the members of the opposition as well as government members at least accept the facts, especially those that are known, that are public knowledge.
The hon. member for St. John's East (Mr. McGrath) asked that a debate be held this evening on the matter of the Belanger-Tappan Ltd. Plant, and more specifically on the closing down of the Findlays Ltd. Plant. He has spoken of anything but that; in other words, he attempted to give statistical interpretations. I have absolutely no intention of discussing the matter in the few minutes I am allowed.
I say simply and maintain, Mr. Speaker, that if the type of question that was brought up tonight could be regularly accepted in this House, then the institution would no longer have any meaning.
Mr. Speaker, this is the fourth time since Monday that I have stated in the House that never has a grant been made to Belanger-Tappan Limited. Never, at any time! The hon. member has reiterated the same assertion, that I could sum up this way:

The hon. member for Lanark-Renfrew-Carleton (Mr. McBride) on Monday last referred to a grant paid to the firm of A. Belanger Ltee. The hon. member for St. John's East (Mr. McGrath) knows very well that no grant was ever paid. He said that because he knows very \)vell that some newspaperman would put it in print. That was his only reason. I do not see why he insists. He might interpret these statistics as much as he wants; I do not mind.

That is his business. Let him make his interpretations and I shall make mine. That is the normal play of democracy. But that he should systematically make a statement contrary to facts and continue to assert it, I consider then he is destroying in the process something more serious than the little cause he wants to defend, and that is what I cannot admit.
If the hon. member for St. John's East says there will not be as many jobs created as the minister claims, well, I can't swear to it on the Bible. I can only interpret, as he himself does. On that point, Mr. Speaker, I accept the debate, but on the other point I reject it. It is not proper either for those involved, for the government or for the opposition. Why waste the time of the House this evening saying such things? The hon. member is upset because the hon. member for Lanark-Renfrew-Carleton (Mr. McBride) gave me notice of the question. But, Mr. Speaker, it is common knowledge that even opposition members give us notice of some questions they intend to put. In fact, it even happened to the hon. member for St. John's East. What is dishonest about that?
What matters is whether the reply is right. There is only one simple reply: no grant has been given; the hon.
March 2, 1972

member just refuses to face the clear fact that no grant has been awarded and that consequently he cannot make political hay of that issue.


The Acting Speaker (Mr. Laniel):: Order, please. The motion to adjourn the House is deemed to have been adopted.
Proceedings on Adjournment Motion

This House stands adjourned until tomorrow morning at eleven o'clock.
Motion agreed to and the House adjourned at 10.19 p.m.

Friday, March 3, 1972