1972-03-17

ROUTINE PROCEEDINGS


Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, under the provisions of Standing Order 43 I rise to propose a motion with reference to the proposed James Bay power project. There is some urgency that the federal involvement in this project be clarified and discussed in an open manner. Premier Bourassa has recently disclosed that he has had discussions on this matter with the Prime Minister, although that hon. member has been very elusive in response to questions.


Mr. Speaker:: Order, please, the hon. member should present his motion.


Gordon Harvey Aiken: Yes, Mr. Speaker. I therefore move, seconded by the hon. member for Peace River (Mr. Baldwin):
That in the opinion of this House the government should set up an interdepartmental committee to work with the appropriate parliamentary committee to co-ordinate the federal responsibility such as Indian affairs, navigable waters, environment, in the James Bay power project.


Mr. Speaker:: The motion submitted by the hon. member under the terms of Standing Order 43 requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: I am not sure whether there is unanimous consent. I will inquire again.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: The nays are now more hearty. Apparently there is not unanimous consent.



ELECTORAL BOUNDARIES READJUSTMENT ACT


Mr. Rosaire Gendron (Temiscouata) moved: for leave to introduce Bill C-172, an Act respecting the Electoral Boundaries Readjustment Act.


Some hon. Members:: Explain.


Rosaire Gendron: Mr. Speaker, I think that this bill is self explanatory and does not require any special comment, except to say that it tends to add the name "Riviere-du-Loup" to the constituency of Temiscouata, so that we may again use the very well known name of "Riviere-du-Loup-Temiscouata".


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


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, in the absence of the Minister of Finance, who is probably seeing whether it is safe to prepare a budget, I will direct my question to the Prime Minister. Having in mind the statement made by the Auditor General that his annual report for the fiscal year ended March 31, 1971, will not be available to be presented until May of this year, will the Prime Minister assure this anxious House and the country that, if Parliament is not then in session, the report and its contents will be made public right away?


Right Hon. P. E. Trudeau (Prime Minister):: The question is hypothetical, Mr. Speaker.


Mr. Hees:: What about what you said to the blonde the other day?


Gerald William Baldwin: I should like the Prime Minister to review that answer in view of the fact that if an election campaign is then pending and as government waste and extravagance will be one of the main issues in that campaign-


Mr. Speaker:: Order, please.
Inquiries of the Ministry TRADE

March 17, 1972



UNITED STATES DISC PROGRAM-MEASURES TO COUNTER EFFECTS

Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. As it is more than three months since President Nixon signed the DISC act in the United States and in view of the fact that this legislation is expected to increase United States exports by $1 billion annually, mainly at the expense of Canadian producers, has the government yet prepared measures to counter the effects of DISC?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: The hon. member was slightly wrong the other day when he raised this issue as a question of privilege and asserted I had misled the House, or something to that effect. What has appeared in the United States is a handbook, a guide to understanding of the DISC program.


An hon. Member:: Answer the question.


Jean-Luc Pepin: I am coming to it. The main regulations in connection with the DISC program are not out yet; consequently it is very difficult to know how much the program will affect us. As I said the other day to the Leader of the Opposition, if the hon. member has some information to give us we shall be delighted to receive it. All the figures he has quoted this morning are guesstimates and not at all-


Mr. Speaker:: Order. I would like the hon. minister to resume his seat. In my opinion, he is engaging a debate with the hon. member.

The hon. member may ask a supplementary.


John Edward Broadbent: I would be glad to pass to the minister a copy of the New York Times of December 10 in which the details are given. Since the DISC legislation is in flat contradiction of both the spirit and the letter of the Canada-United States automotive agreement, has the Canadian government informed Washington that the pact has been violated?


Jean-Luc Pepin: There is no disagreement between us. We agree that DISC is a very bad piece of legislation. It violates GATT. It violates the auto pact agreement. But I understand the automobile manufacturers in the United States have no intention of using it. So before making threats, before committing ourselves to legislation counteracting DISC, it would be wise to know what effect it will have, and it is too early in the game to know that.


John Edward Broadbent: A further supplementary.-


Mr. Speaker:: Order, please. This exchange is really developing into a debate, but the hon. member may ask a last supplementary.


John Edward Broadbent: Thank you. I understood the minister to say that the auto manufacturers have agreed not to use

the DISC legislation. Can he advise the House whether the parts industry, which affects over 100 communities in Ontario alone, has given assurances to the government that it does not intend to use the DISC legislation?


Jean-Luc Pepin: No assurances have been given, but I repeat that efforts are being made to collect as much information as possible on this subject. The Americans themselves do not know with any precision. I understand that very few companies have used the handbook, the guide; very few have filed applications. I repeat, it is too early to judge. We shall be delighted to receive estimates or forecasts by any knowledgeable people, including the hon. member, but before making moves to counter possible effects we have got to know more.



AGRICULTURE


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, in the absence of the hon. Minister of Agriculture and his parliamentary secretary, may I direct my question to the right hon. Prime Minister?
Can the Prime Minister indicate to whom the Department of Agriculture will pay subsidies for live hogs that were auctioned by farmers and for which the farmers have no classification certificates?


Pierre Elliott Trudeau: I am pleased to take the question as notice, Mr. Speaker.



THE CANADIAN ECONOMY


George Harris Hees: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. As reports coming out of Washington clearly indicate that the United States government is not willing to proceed with discussions on the auto pact until the Canadian government makes known its policy on foreign investment in Canada, can the minister advise the House when this policy will be announced and when the discussions will be able to proceed?


Jean-Luc Pepin: Mr. Speaker, the connection between the discussions on the automobile agreement and the statement of policy on foreign investment is one with which I am not familiar. I do not think that any such connection exists. Certainly the United States negotiations have never raised it in any discussions we have had with them. Personally, I would welcome a statement on foreign investment as early as possible because I think it would be helpful. I do not see why my hon. friend makes a relation between the two; certainly he has no grounds for doing so.
March 17, 1972


George Harris Hees: Mr. Speaker, I suggest that if the minister checks in Washington he will find out that what I say is true.



POSSIBLE RELATIONSHIP BETWEEN DISCUSSIONS WITH UNITED STATES ON CANADIAN EXEMPTION FROM INTEREST EQUALIZATION TAX AND AUTO PACT NEGOTIATIONS

George Harris Hees: Mr. Speaker, I have a supplementary question.
Have there been discussions with the United States government in regard to Canada's present exemption from the interest equalization tax, and are these discussions connected with the discussions on the auto pact?


Jean-Luc Pepin: Mr. Speaker, this question should be
addressed to the Minister of Finance when he is in the House.



FOREIGN INVESTMENT-ANNOUNCEMENT OF POLICY BEFORE VISIT OF PRESIDENT NIXON TO OTTAWA

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my supplementary question is directed to the Prime Minister. Can the right hon. gentleman say whether or not the government's policy on foreign ownership will be made public before the visit of the President of the United States to this country in April?


Pierre Elliott Trudeau: f cannot say for sure, Mr. Speaker.



RELATIONSHIP OF TRADE NEGOTIATIONS WITH UNITED STATES TO DISCUSSIONS ON CLEANING UP GREAT LAKES

Gordon Harvey Aiken: Mr. Speaker, I have a further supplementary question for the Prime Minister which is related to the question of foreign investment and cleaning up of the Great Lakes. Have there been any discussions with regard to cleaning up the Great Lakes as related to the whole question of Canada-United States relations and the trade pact?


Pierre Elliott Trudeau: Mr. Speaker, there have been discussions on the subject of Canada-United States relations, but is the hon. member speaking of the auto pact? What trade pact is he referring to?


Gordon Harvey Aiken: May I ask the Prime Minister whether the auto pact and other trade matters are directly related to the discussions concerning the clean-up of the Great Lakes?


Pierre Elliott Trudeau: Mr. Speaker, I see no possible relation between them.


George Harris Hees: A further supplementary question, Mr. Speaker. May I ask the Prime Minister whether he has finished reading the book that took up so much of his time and interest yesterday afternoon?
Inquiries of the Ministry


Mr. Speaker:: Order, please.


Pierre Elliott Trudeau: It was a very good book.



AGRICULTURE


Mr. Roch La Salle (loliette):: Mr. Speaker, in the absence of the Minister of Agriculture, I wish to direct my question to the right hon. Prime Minister, since he has already met with the leaders of the organizations which I will refer to in my question.
In view of the fact that the Minister of Agriculture has received this week representations from the Federated Co-operatives of Quebec, the Catholic Farmers Union and the Millers Association, who are asking the government to take a position as soon as possible on the unfair treatment suffered by the Quebec producers in terms of their feed grain supplies, I would like to ask the Prime Minister whether he intends to react favourably to those representations.


Pierre Elliott Trudeau: Mr. Speaker, I will gladly relay the question to the Minister of Agriculture.



AIRPORTS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Transport and relates to what is regarded by the people of Pickering Township as the ravishment of their area without an opportunity to them of making effective criticisms and representations against the taking over of the area for the proposed airport. The other day I asked whether the minister would file a list of the 50 or so areas-I do not know the exact number-that were given consideration, without, of course, attaching the reasons why each and every one was not accepted. I wonder whether he is prepared to do that now. Would the minister also state, in view of the almost unanimous feeling of the people in Pickering Township that this airport should not be proceeded with, whether the objections they are making at public meetings and otherwise will receive full consideration by the government?


Hon. Donald C. Jamieson (Minister oi Transport):: Mr. Speaker, I can repeat the assurance I gave to the right hon. member a few days ago that any representations, whether they be made directly to me or through the hearing officers on the expropriation procedure, will certainly be given every consideration. I might remind the House

March 17, 1972
Inquiries of the Ministry
through you, Mr. Speaker, that this is of course a joint endeavour with the government of the province of Ontario. As for the presentation of documentation and that type of thing, I have said that I am prepared to provide whatever is necessary to support the decision that was made. I shall consult with them with a view to seeing what kind of package we can make available which is as informative as possible.


John George Diefenbaker: Mr. Speaker, in so far as the province of Ontario is concerned, that is another matter. What we are dealing with in this Parliament and have a right to deal with is what the government of Canada is going to do in connection with the airport. That is the information I want.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. It seems to me that the right hon. gentleman is reiterating the question that was asked in the first instance.


John George Diefenbaker: Mr. Speaker, I am not reiterating. Apparently it becomes necessary to repeat rather than to reiterate.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


John George Diefenbaker: Will the minister produce all the documents concerned with the decision, however much I disagree with what is being done? I refer to the documents having to do with the airport that the government of Canada contemplates building. Will the minister give those documents? That is what I am asking for.


Pierre Elliott Trudeau: That is a reiteration.


Donald Campbell Jamieson: Yes, that is a reiteration. I assure the right hon. member that I have no difficulty-


Some hon. Members:: Oh, oh!


An hon. Member:: Just an echo.


Mr. Speaker:: Order, please. I would not think it necessary for the minister to reiterate the reply he gave a moment ago. The hon. member for Winnipeg North Centre.


John George Diefenbaker: Mr. Speaker-


Some hon. Members:: Oh, oh!


John George Diefenbaker: I rise on a question of privilege. This does not apply to the minister in question, but questions that are asked are brushed aside with an insouciance-


Mr. Drury:: Order!


Some hon. Members:: Oh, oh!


John George Diefenbaker: -that is not in keeping with
parliament.


Some hon. Members:: Hear, hear!


John George Diefenbaker: I am trying to get information for people who have a right to be heard.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The Chair has recognized the hon. member for Winnipeg North Centre.



VETERANS AFFAIRS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Veterans Affairs. In view of representations made recently to the minister by the War Amputations of Canada calling for an increase in the basic rate of the war disability pension, can the minister say whether consideration is being given to those representations?


Hon. Arthur Laing (Minister of Veterans Affairs):: Mr. Speaker, the answer is yes.


Stanley Howard Knowles: May I ask a
supplementary question. Is consideration also being given to increasing the amount of the war veterans allowance?


Arthur Laing: At the present time, no, Mr. Speaker, but an action tak^n in one place might have consequences in another.



PUBLIC SERVICE


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the President of the Treasury Board. In light of the recent series of troubles at Canada's airports, will the minister give urgent attention to forestalling the proposed alteration in the wage scale for airport firefighters, expecially that part which will result in serious financial loss for many faithful workers?


Charles Mills (Bud) Drury: Mr. Speaker, I am not familiar with the circumstances but I will look into this.



MANPOWER


Mr. Rene Matte (Champlain):: Mr. Speaker, may I direct a question to the Prime Minister?
March 17, 1972

Is it correct that the government has agreed to add an amount of $5 million for local initiatives projects submitted by municipalities of the province of Quebec?


Pierre Elliott Trudeau: I am not
aware of that, Mr. Speaker.


René Matte: Mr. Speaker, I have a supplementary question.
In view of the statement of the Municipal Affairs Minister of Quebec and since the federal minister said at the time that projects submitted as late as February 7 had been accepted, could the right hon. Prime Minister enlighten the House on that matter?


Mr. Speaker:: The hon. member is repeating the same question and I do not think this is in order.


Gilbert F. Rondeau: Mr. Speaker, I would like to put a supplementary question to the right hon. Prime Minister.
Is he for the continuation of the local initiatives program until the next federal election?


Mr. Speaker:: Order.



STATUTORY INSTRUMENTS


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I had hoped the President of the Privy Council would remain with us, but in his absence I will direct my question to the Prime Minister. Two days ago I asked the President of the Privy Council a question concerning the government's intention to bring forward appropriate resolutions to set up the committee under the Statutory Instruments Act and to amend the House regulations in order to implement the bill passed by parliament and he indicated he would look into it. Has this matter been discussed by the government, and what is the intention of the government with regard to this very deliberate action on the part of the government, both in bringing in the legislation and then leaving it inoperative?


Pierre Elliott Trudeau: With great pleasure, Mr. Speaker, I will take note of the question on behalf of the President of the Privy Council.



NATURAL GAS-REFUSAL BY NATIONAL ENERGY BOARD TO GRANT EXPORT APPLICATIONS-REQUEST FOR REVIEW-STEPS TO ASCERTAIN ACTUAL RESERVES

Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to direct a question to the Minister of Energy, Mines and Resources. It arises out of the decision made in December, I believe, by the National Energy Board in
Inquiries of the Ministry
which it refused applications to export natural gas to the United States. I would refer the minister to Volume 35 of the Minutes of Proceedings and Evidence of the Standing Committee on Miscellaneous Estimates where he will find that Dr. Howland, a witness before the committee, said, first, that they took no account of any reserves in the Arctic and, second, that they took no account of any reserves in the future even though proven reserves have tripled in the ten years since the Borden commission was set up. In light of the fact that Imperial Oil say they now have reserves-


Mr. Speaker:: Order, please. The hon. member will appreciate that this is a statement more than a question. He should ask the question as briefly as possible.


Eldon Mattison Woolliams: Yes. I am just coming to it. This is a difficult question. In light of the fact that Imperial Oil say they now have reserves of 20 trillion cubic feet in the north which were not taken into account, would the minister, in light of that new evidence and in light of what Dr. Howland said, be prepared to recommend a review by the National Energy Board, particularly before he makes his speech to the Petroleum Association next Tuesday in Calgary?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, I thank the hon. gentleman for giving me notice of the question. As I recall the decision of the board last fall, the reserves in the north were referred to by the board as being unquantified and inaccessible. It seems to me there has not been a change in that regard. If the hon. gentleman by any chance is referring to the article in the Globe and Mail yesterday he will have noted that the 20 trillion cubic feet was stated as the target of Imperial Oil but the president of that company did not say they had reached the target yet.


Eldon Mattison Woolliams: I have a supplementary, Mr. Speaker. I did give the minister notice of the question because it is a difficult one. In light of the fact that the government has no way of measuring these reserves, is the government now prepared to approach Imperial Oil and other companies that have some knowledge of these reserves, particularly in view of the relation of the government and Imperial Oil at Lake Louise, and obtain this information so that western Canada at least will get a fair shake in reference to the export of this commodity?


Donald Stovel Macdonald: Mr. Speaker, as the hon. member knows, the reason the reserves are unquantified is that the field is still in the process of being drilled. Quite naturally, with more drilling experience we may be able to make a better estimate of it. That, of course, still does not get around the problem of bringing the gas to the market over the approximately 2,000 miles from the source.


Eldon Mattison Woolliams: Is there any body or any group working for the government to ascertain these reserves in the north, and have they any information from these corporations in reference to their reserves, or are you just shooting darts in the dark?

March 17, 1972
Inquiries of the Ministry


Donald Stovel Macdonald: As the hon. member knows, the best way to find out is by shooting drills into the ground, and that is what the companies are doing.



INQUIRY OF THE MINISTRY

Mr. Barry Mather (Surrey-White Rock):: Mr. Speaker, I have a question for the Minister of National Revenue. What consideration is being given toward expediting the government's foreign ownership policy, having in mind the fact fears are being expressed, now that Howard Hughes is located in Vancouver, that Premier Bennett may sell him the rest of British Columbia?


Stanley Howard Knowles: Answer.


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



URBAN AFFAIRS


Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my question is for the Minister of Transport. It concerns the metro centre proposed to be built over the rail yards in downtown Toronto. Does the minister intend to table the letters of intent, agreements and proposed arrangements made between Canadian National Railways, Canadian Pacific Railway, Toronto Terminal Railways Limited, the Canadian Broadcasting Corporation and other parties before the Ontario Municipal Board hearings in April, or will he be making a statement in the House about the whole proposition?


Donald Campbell Jamieson: Mr. Speaker, I question very much whether I can do either in view of the fact this is essentially a private development in the sense of any direct relationship with the federal government per se. Canadian National Railways are one of the participants in the metro centre, and to the extent that they are, I have indicated my support for CNR's participation. Documents relating to that, such as they are and there are not very many-they were just a simple conveyance of information-I will be glad to table. The balance would have to come from other sources.


Sylvester Perry Ryan: With respect to the CBC and the proposed exchange of lands and leasing arrangements, would the minister either take it upon himself or in association with the Secretary of State endeavour to get some information that could be put before the House prior to this hearing?


Donald Campbell Jamieson: I will be glad to convey the request to the Secretary of State.
[Mr. WooIliams.J



PROPOSED TORONTO METRO CENTRE-REQUEST FOR STATEMENT ON FEDERAL INVOLVEMENT

Mr. Andrew Brewin (Greenwood):: Mr. Speaker, in view of the tremendous importance of this vast development, which affects transportation in the future and many other aspects, will the minister consider making a statement on motions as to the federal concern in this whole project?


Donald Campbell Jamieson: I will be glad to consider that. I think the difficulty arises from the fact that as of the moment we are not entirely sure exactly what constitutes the whole project in view of the fact there are a number of outside interests involved.



SUGGESTED RETENTION OF TORONTO UNION STATION

Mr. John Gilbert (Broadview):: Mr. Speaker, in view of the many representations with regard to the proposed demolition of the Union Station which forms part of the complex, is the minister persuaded that it should not be demolished but should be retained?


Donald Campbell Jamieson: I am
not competent to pass judgment on that question, Mr. Speaker.



NATIONAL DEFENCE


Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Minister of National Defence who I understand is away for some time. I have tried to give notice to whoever is the Acting Minister of National Defence. It concerns an important matter having to do with the recent announcement of rent increases and rent changes with regard to personnel married quarters both on and off base. Can the acting minister report whether there have been a number of complaints received, particularly from places like Chatham, New Brunswick and Summer-side, Prince Edward Island, where service personnel are greatly agitated by this recent decision. If so, what action is being contemplated?


Mr.   J.-R. Comtois@Parliamentary Secretary to Minister of National Defence: Mr. Speaker, I would like to reply to the hon. member for Egmont.

The weighted national average system of setting charges for married quarters will be discontinued. On April 1 married quarters charges will be established on the basis of CMHC appraised monthly rental by location plus the appropriate charge for utilities provided. CMHC appraisals are based on the equivalent civilian market rental rates in the local area. Therefore it follows that charges for married quarters will differ at each location. This means effectively that charges for approximately 8,200 married quarters-
March 17, 1972


Mr. Speaker:: Order, please. Perhaps the hon. member might keep the rest of the information for the supplementary questions which apparently are going to be asked.


David Samuel Horne MacDonald: In light of the fact that these very changes that are going into effect on April 1 will in effect mean in some places such as Summerside, P.E.I., that a corporal off base will be paying more rent than an officer commanding on base, I wonder whether or not there can be an investigation into the obvious injustices that will occur under this new system and whether consultations directly with the people involved will be held as there is very great concern about these changes?


Mr. Comtois:: Mr. Speaker, for married quarter occupants of the rank of sergeant and below, the increase will not exceed $15 per month. As for others, they will be increased accordingly.



RENT INCREASES FOR MARRIED QUARTERS-SUGGESTED DELAY UNTIL PARITY WITH PUBLIC SERVICE ACHIEVED

Mr. J. M. Forrestall (Dartmouth-Halifax East):: I will have to ask you to bear with me, Mr. Speaker. I have two supplementary questions. The first one I want to direct to the President of the Treasury Board. Inasmuch as this new policy is tied directly to the determination by the government to bring about parity between the Canadian armed forces and the public service of Canada, and as parity will not be achieved for at least another full 12 months or more, would the government consider a delay in the implementation of this new rental policy until such time as parity is in fact achieved?


Charles Mills (Bud) Drury: Mr. Speaker, it is an interesting suggestion. I think, however, that the hon. member is quite correct that the eradication of inequalities is done in two stages and will not be completed until next year. The hon. gentleman may have noticed that the equivalencies in relation to housing are modified or limited; they are not absolute in their application.


J. Michael Forrestall: I gather from the minister's reply that he will not consider a delay for a year. I wonder whether he would initiate discussions within the cabinet with respect to a system which would permit Canadian forces personnel who are compelled to a major degree to live in rented quarters during their careers to build an equity, a method through which a portion of their rent could be set aside against their retirement?


Charles Mills (Bud) Drury: This is an intereating suggestion. I will certainly be glad to see it explored.


Gerald William Baldwin: We give you lots of them.


Mr. Speaker:: The hon. member for Saskatoon-Biggar.


David Samuel Horne MacDonald: I rise on a point of order, Mr. Speaker.


Mr. Speaker:: I apologize to the hon. member for Saskatoon-Biggar. He will have a chance to ask his question soon.
Inquiries of the Ministry


David Samuel Horne MacDonald: I wonder if the parliamentary secretary could respond to the second question regarding whether there will be consultations with the personnel, instead of reading an answer.


Joseph-Roland Comtois: I would like to repeat what I said before, namely, that charges for approximately 8,200 married quarters will be reduced.


Mr. Speaker:: Order, please. I think the hon. member for Egmont might assume that the question has been noted.


J. Michael Forrestall: Ten o'clock, Mr. Speaker.



TRANSPORT


Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, may I direct a question to the Minister of Transport. In view of the recent statement of the Canadian Pacific Railway that they would require subsidies from the government in order to acquire the necessary rolling stock and motive power to move grain, have they made any such request or representations to the government through the Department of Transport or other avenues?


Donald Campbell Jamieson: Mr. Speaker, the matter is of course under discussion and has been for some months with both railways. My recollection is that within the last two or three days there has been a letter, I believe, from the vice-president of the Canadian Pacific Railway on this matter. I have asked the officials to give me their opinion on it. On the question of the CNR's participation, I have had a lengthy document from them on the best way in which to provide additional cars and discussed the matter in person with the president yesterday with a view to meeting with him again next week.


Alfred Pullen Gleave: Have there been consultations and discussions between the Minister of Transport and the minister responsible for the Canadian Wheat Board on some mutual approach to solve this very serious problem?


Donald Campbell Jamieson: Yes, Mr. Speaker. The consultations to which I referred have in all cases involved either the minister responsible for the Wheat Board or officials and others who report to him.



PROGRESS OF RAILWAYS IN EXPEDITING MOVEMENT OF GRAIN TO VANCOUVER

Mr. Jack Murta (Lisgar):: Mr. Speaker, as a supplementary question I would like to ask the Minister of Transport whether he can report to the House today on what progress the railways have made in the last week in the movement of prairie grain to the port of Vancouver in terms of the specific number of carloads per day being unloaded at Vancouver.

March 17, 1972
Inquiries of the Ministry


Donald Campbell Jamieson: Mr. Speaker, normally I would have that information before a two o'clock question period, but this is Friday morning and I do not normally get it until later in the day. The only thing I can say in a general way is that the report is that the situation is improving but that there are still problems because of weather conditions.



DISCONTINUANCE OF RESPONSIBILITY ON PART OF CPR FOR MAINTENANCE OF SIDING TRACKS AT GRAIN ELEVATORS

Mr. John Burton (Regina East):: Mr. Speaker, as a further supplementary I would like to ask the Minister of Transport whether he has investigated or will undertake to investigate the situation whereby the CPR no longer accepts responsibility for maintaining rail trackage adjacent to elevators, in other words, railway sidings where elevators are located, in view of the change in its operations whereby the CPR no longer maintains section crews at regular intervals?


Donald Campbell Jamieson: Mr. Speaker, all I can say is that I will be glad to look into the question.


Mr. Speaker:: Order, please. We will return to this interesting subject in a few moments but for now the Chair will recognize the hon. member for Compton.



FINANCE


Mr. Henry Latulippe (Compton):: Mr. Speaker, I have a question for the right hon. Prime Minister.
Since the government will probably be transferring certain fiscal benefits to the provinces, such as family allowances in the case of Quebec, could he tell us whether the government intends to withdraw from the fiscal field also to the same extent?


Pierre Elliott Trudeau: Mr. Speaker, that is a very complex question. I could just say that, if the federal government were to withdraw from those areas, the have-not provinces could no longer enjoy the benefits they are now receiving and consequently social security in the well-to-do provinces would be adequate whereas the less well-to-do provinces, such as Quebec, for instance, could not have a social security system equal to that of the other provinces.



POLLUTION


Mr. Robert Simpson (Churchill):: Mr. Speaker, I have a question for the Minister of the Environment. Can the minister say whether negotiations are continuing between his department and the authorities in the provincial government of Manitoba in relation to a pollution problem on the Saskatchewan River as a result of effluent from the Forest Products plant at The Pas, Manitoba, and, if so, what progress is being made?


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, we have been in close contact with the government of Manitoba concerning the necessary plant needed to clean up the effluent from the Churchill Forest Products mill. The government of Manitoba knows what plant is required in order to make this clean-up possible. It is an expensive plant. It will take a while for them to finance its installation.



FISHERIES


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is directed to the Minister of the Environment and Fisheries. It is the same as one taken under consideration by the Secretary of State for External Affairs earlier this week. Are active negotiations under way with the United States government regarding the possible reopening of that country to Canadian catches of swordfish and, if so, is the minister's staff in on these negotiations?


John (Jack) Davis: Mr. Speaker, there have been frequent discussions. Our staff has always been involved. However, the United States food and drug administration is still adamant. The standard is one-half part per million of mercury in fish. They are not allowing any shipments into the United States of fish from any country that exceed that level.


Robert Jardine McCleave: I wish to ask one brief supplementary question. Is the minister's department still going to persist in seeking methods of continuing the dialogue on this very important matter?


John (Jack) Davis: Yes, and I might add that we are still trying to convince health authorities round the world that one-half part per million of mercury in fish is an extremely safe level and could be increased to one part.
March 17, 1972



SUGGESTED ESTABLISHMENT OF ADDITIONAL TERMINAL ELEVATORS AT PRINCE RUPERT TO RELIEVE PRESSURE ON EXISTING EXPORT FACILITIES

Mr. Frank Howard (Skeena):: Mr. Speaker, my question is supplementary to those asked with respect to the movement of grain. In the absence of the minister in charge of the Wheat Board and of the Minister of Finance may I ask the right hon. Prime Minister whether he will raise with those two gentlemen and others in the cabinet the question of providing funds for the establishment of additional terminal elevator facilities at Prince Rupert in order that that port could be used to alleviate the pressure on the export of grain through other ports?


Pierre Elliott Trudeau: Mr. Speaker,
I will take notice of the question on behalf of the ministers.



AIR TRANSPORT


Marcel Joseph Aimé Lambert: Mr. Speaker, I wish to direct a question to the Minister of Transport. Could the minister give a progress report to the House on the status of the discussions with the United States on the extension of the bilateral air agreements, particularly as they affect western Canada?


Donald Campbell Jamieson: Briefly, Mr. Speaker, the last round of negotiations took place a few months ago in Washington. It is normal that the next round would occur in Ottawa. We have indicated to the appropriate authorities in the United States that we are prepared to proceed at any time. The decision as to when the talks will continue is entirely one for the United States as of this moment.


Marcel Joseph Aimé Lambert: Is there any indication of when that might be?



POLLUTION


Mr. Randolph Harding (Kootenay West):: Mr. Speaker, I have a question for the Minister of the Environment. In view of the recent report that the proposed $138 million anti-pollution program for an accelerated clean-up of the Great Lakes has been vetoed by the Nixon administration, I wish to ask the minister what effect this will have on the joint Canada-U.S. program to deal with this problem?


John (Jack) Davis: My
expectation, Mr. Speaker, is that the joint program, which
Inquiries of the Ministry
in principle has been agreed upon between Canada and the United States, will be put into effect.


Randolph Harding: Has the minister made any representations protesting the continuing delay, especially by the United States government, in making a meaningful start on this major international pollution problem, and will the target date of 1975 for meeting certain standards have to be revised?


John (Jack) Davis: I hope not, Mr. Speaker.



INDUSTRY


Jean-Luc Pepin: Mr. Speaker, yesterday the hon. member for Peace River asked if a company called Dominion Aviation had requested assistance through certain development funds from my department. The answer is yes. Back in November they asked for support under the general adjustment assistance program. It was found that they were not eligible, not having any manufacturing capacity in Canada. However, as recently as March the company came back to discuss the possibility of assistance under the PAIT program, and this is still being considered now.


Gerald William Baldwin: As a supplementary question, Mr. Speaker, in light of the fact that the lion's share of assistance for the aviation industry has been largely granted in central Canada, to Canadair and de Havilland, and as this company might very well lose its identity to an American corporation, will the minister look seriously at the application of this company in order that it may be preserved for Canadian industry?


Jean-Luc Pepin: We always do that, Mr. Speaker.



PENDING ENTRY OF BRITAIN INTO EUROPEAN COMMON MARKET-STEPS TO PROTECT CANADA'S INTERESTS

Mr. Mac T. McCutcheon (Lambton-Kent):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the fact much opinion in Canada indicates that Canada's trading position will be damaged by Britain's entry into the Common Market, does the government intend, as a matter of self-interest, to encourage the rejection of entry in the proposed referendum announced by President Pompidou and, if so, what steps are currently being taken to protect Canada's interests?


Jean-Luc Pepin: Mr. Speaker, we have no intention, nor have we got the power, to prevent the enlargement of the European Economic Community. If the hon. member comes to the committee before which my estimates will be present-

March 17, 1972
Inquiries of the Ministry
ed in a few days time, I will answer questions on what we have done and intend to do.


Mr. Speaker:: Order, please. Before calling orders of the day I think the hon. member for Battleford-Kindersley should be recognized.



ATOMIC ENERGY


Mr. Rod Thomson (Battleford-Kindersley):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. What action is the government taking to procure heavy water and avoid a shutdown of Douglas Point nuclear power station or postponement of the further expansion of the Pickering atomic energy power plant? I wonder if the minister would also answer my question of the other day regarding nuclear liability?


Donald Stovel Macdonald: Yes, Mr. Speaker. The chairman of Atomic Energy of Canada Limited has been seeking to purchase additional quantities of heavy water from foreign sources and has had certain success in this regard. However, the demand for the commodity in Canada at the moment exceeds available supply because of the failure of the Glace Bay plant.. Therefore there is a problem. I think I can assure the hon. gentleman that the Pickering program will not be interrupted. That particular system will continue in operation and further successful development.
With regard to the question asked the other day about nuclear liability, at present all nuclear sites in Canada which would be covered by this particular statute are the subject matter of contractual relations between the government of Canada and the individual contractors or provinces in question. The hon. member is quite correct that the Nuclear Liability Act is not in operation, but third party liability is covered by the contracts between the government of Canada and the particular participants.


Mr. Speaker:: Orders of the day. Is the hon. member for Windsor-Walkerville rising to seek the floor on a point of order or question of privilege?



CONSTITUTION OF CANADA


Mr. Mark MacGuigan (Windsor-Walkerville):: Mr. Speaker, I rise on a question of privilege with respect to correcting the record. There -was a small but significant omission in the report presented yesterday by the Special Joint Committee on the Constitution. I merely ask to have the report corrected.
{Mr. Pepin.]


J. Michael Forrestall: Is the hon. member referring to a minority report?


Mark R. MacGuigan: No. I thank the hon. member for Selkirk (Mr. Rowland) for drawing this matter to my attention this morning. I am referring to the chapter on the national capital area. On page 42 of the report, or page 109 of Votes and Proceedings, the first sentence reads:
Hence, we recommend the eventual establishment of a tripartite board appointed jointly by the Ontario, Quebec, and Federal governments.
The sentence should read:
Hence, to determine the nature of this structure, we recommend the eventual establishment of a tripartite board appointed jointly by the Ontario, Quebec, and Federal governments.
The words to be added are, "to determine the nature of this structure".



GOVERNMENT ORDERS


René Matte: That this House regrets that the government has not established consultative bodies with the provinces and municipalities, with a view to decentralizing monetary and fiscal policies in such a way as to permit each level of government to assume its own responsibilities in a manner less burdensome to the taxpayer.
Mr. Speaker, I am pleased to move the motion you have just read, the purpose of which is to set up mechanisms for the decentralization of decision making with regard to monetary and fiscal policies, and for giving co-ordinated access to the provinces, and through them to the municipalities, to the source of national credit to finance public capital.
We are not dealing here with specifically Creditiste proposals but rather with means capable of meeting the wishes, the requests of provincial as well as municipal authorities.
The Quebec Minister of Finance, Mr. Raymond Gar-neau, belled the cat during a working session held at Sainte-Agathe-des-Monts, in November 1971, and convened by the Canadian Institute of Public Affairs.
This is how this statement is reported in the newspaper Le Devoir on November 8, 1971:
While taking part in the study sessions of the Canadian Institute of Public Affairs, Mr. Garneau stated explicitly that the control measures taken by the federal government are such that considerable time elapses before the Quebec government can implement Ottawa's comprehensive policies.
Mr. Garneau puts all the blame for this procedure and the long delays it entails on the federal officials from whom, he said, the provincial government meets with great resistance. "There is
March 17, 1972

sometimes a time lag of six months. This is much too long. We are always caught in the maze of the federal administration."
That is what the Quebec Minister of Finance said, Mr. Speaker.
I continue the quotation:
It was while replying to the audience's question in the presence of federal Industry, Trade and Commerce minister Jean-Luc Pepin that the Quebec minister made this charge against Ottawa.
Cornered from every quarter, the minister had just admitted that his government had proven its inability to work out a practical industrial policy for Quebec or even for the whole of Canada.
In replying, Mr. Garneau pointed out that Quebec was not alone in airing its grievances but that such a feeling was increasingly shared by all provinces which are putting a mounting pressure for the elimination of the unbalance which "the population refuses to accept any longer."
But federal minister Pepin was not through with his troubles. Following the intervention of the Quebec Finance Minister, former federal government minister Maurice Sauve launched another attack.
"The big mistake is that the federal government never did accept that Canada is not a unitary country, but a country with five different regions", he said.
"That is a fundamental problem which has never been solved and as long as they will not adopt selective policies, there will be tensions and contradictions. I submitted those problems to the government, but they never were prepared to admit it", Mr. Sauve added.
Finally, Mr. Garneau indicated that his government was advocating a revision of the means of stabilization at both the level of federal government expenditures and the level of such institutions and organizations as the Industrial Development Bank and the Central Mortgage and Housing Corporation. The government, he said, is considering the introduction in the next tax agreements of a new automatic stabilizer which is the cyclical stabilization fund. That stabilization would enable the Quebec government to have sufficient resources available to undertake investment programs which would have priority and would also be located in some regions.
However, if the provinces are not satisfied with the federal government, the municipalities are not happy either about the treatment they are getting from the provinces. Evidence of this is the criticism addressed by the Quebec Union of Municipalities to that provincial government in May 1968. This is what the reporter Claude Masson stated in La Presse on May 27, 1969:
The municipalities no longer want to be spoon-fed like babies by the Quebec government. On the contrary, they want to be considered like adults and given a reasonable share, a bigger share.
Thus, the Union of municipalities has just made a formal application to Quebec to set aside the "sop" allocated to municipalities in the last provincial budget in favour of permanent provisions to improve the financial situation of urban centres and rural municipalities throughout "la belle province".
The Union of municipalities, whose reaction is supported by a brief submitted to the government a few days ago, on the subject of municipal taxes concerning municipal-provincial relations, not only calls for permanent provisions, but suggests what these could be.
The Quebec Union of municipalities reiterates its key suggestion, creation of a standing provincial-municipal fiscal committee, which the organization believes is the essential instrument of a structure to ensure an equitable distribution of sources of income, and responsibilities between the two levels of government.
The municipal organization headed by the mayor of Montreal North, Mr. Yves Ryan, also claims that "the only
Alleged Decentralization of Policies
remedy for the situation is to accede to our long-standing request for phasing out school boards from the property tax field, which should be left to municipalities." In return, the Union of Quebec Municipalities recalls that it has already offered to preserve for the government the revenue from the sales tax which it could use in its tax and budget reforms. Most if not all the sales tax yield could be used to finance education.
But the municipalities want to go further still and at its convention in Saskatoon in June of last year the Canadian Federation of Mayors and Municipalities requested the right to participate in constitutional conferences and put forward rather convincing arguments.
Federation president Allan O'Brien stated on that occasion, having accepted this office:
In my opinion, we must first of all have the provinces and the federal government recognize our right to be consulted on all issues concerning the territories under our jurisdiction and also of interest to the federal government. I think we should have this right to consultation recognized before we express too definite demands for changes in the Constitution other than this right to consultation.
In short, the Canadian Federation of Mayors and Municipalities requests the right to participate in every aspect of Canadian life and, particularly, in the drawing up of a new Canadian constitution that would take into account the financial and fiscal needs of all levels of government. Here is what the representative of La Presse wrote in this connection on June 16th, 1971:
To date, provincial governments have not yet recognized the municipalities as their equals: they still maintain that they are merely their creatures, "their offsprings". Still, there will be a tri-partite conference, on October 16th next apparently at which the three levels of government will be called upon to exchange ideas.
Municipal representatives want to be recognized in a "new Canadian constitution". When the Canadian Federation of Mayors and Municipalities studied the 52 or so resolutions on the order paper of the convention Tuesday morning, the general assembly adopted a resolution asking the government of Canada and the provincial governments to recognize the role of local administrations in the management of public affairs.
The resolution goes even further and asks those same governments to consider the municipalities as their equal partners in the drawing up of a new constitution.
For municipalities, as well as provincial governments and the Federal government are faced with financial problems that become insoluble as long as we cling to present day solutions.
The following is a letter sent to all hon. members by the secretary general of the "Union des conseils de comte" of the province of Quebec, on June 14, 1969:
Dear Sir,
We have sent to all members of the Assemblee nationale an excerpt of our annual brief presented to hon. Jean-Jacques Bertrand on March 26 last, as well as a study prepared by the firm Cliche and Associes Limitee. Copies of these documents are herewith enclosed.
We humbly submit these documents so that you may appreciate the problem created by the sale of bonds by municipal and school corporations.
This problem is national in scope and all provinces are involved. We submit these suggestions to you and we expect your valuable

March 17, 1972
Alleged Decentralization of Policies cooperation in an effort to convince government authorities of the merits of our requests.
An exchange of ideas on the subjet should take place between the central government and the provinces.
Yours truly,
Andre Nadeau, notary,
Secretary general,
Beaurivage, Lotbiniere, Quebec.
What does l'Union des conseils de comte want exactly? The following is a quotation of the annual brief presented by that body to the Premier of Quebec on March 26,1969:


[Stage Direction]
The government of the province of Quebec is asked to pass legislation exempting from tax interest yields on municipal bonds whenever bonds are issued for utilities purposes.
The Quebec government should also undertake without delay negotiations with the government in Ottawa so that the latter may declare free from tax interest yields on municipal loans already declared free from tax by the Quebec government.
The second resolution, that requesting the government to exempt from taxes some kinds of bonds deserves more attention, for the experience made in the United States seems conclusive. As an example, I recall that the last United States government $4 billion issue (April 1969) bore an interest rate of 6.40 per cent. To this must be added discounts and issuing expenses, which means that the actual borrowing cost was roughly 6.60 per cent. This is the highest rate of interest ever paid by the American government over 105 years, that is since the War of Secession.
Now, at that time, for tax-free municipal or school board issues maturing on the same date, the yield was about 5 per cent, the short-term and long-term yields being 4.40 per cent and 5.75 per cent respectively. If such bonds were not tax-free, the municipalities involved would have to float loans yielding at least 1 per cent more than those of the American government. Therefore, one can readily conclude that the American tax system enables municipalities and school boards in the United States to borrow at a cost nearly 50 per cent lower.
If Quebec municipalities, school boards and hospitals could borrow under the tax-free bonds system, their savings would be substantial. In fact, total borrowings by our municipalities range between $125 and $150 million.
The school boards' borrowings represent similar amounts. Since last year, and for many years to come, CEGEPs must borrow from $50 to $100 million a year. Quebec hospitals will have to borrow at least $1 million per annum within a few years from now. The grand total of such loans may therefore reach a level of $450 to $500 million per annum. Therefore, for a single year, a saving of 2 per cent on interest rates would be the equivalent of about $10 million.
On the total of their outstanding loans, these public bodies could save over $100 million in interest each year; of course, these figures are only approximations. It is difficult to obtain the figures showing that aggregate debt of all our public bodies. With a 2 per cent difference in interest rates, $100 million would mean total debts of about $5 billion, and this is a conservative estimate.

One has only to recall that the debt of the city of Montreal amounts to about $680 million and that of the city of Laval is of the order of $140 million. As the debts of the school boards are nearly as high, the debts of those two cities alone amount of $1.5 billion.
If you add to that all the debts of the cities and towns, school boards, CEGEPs, regionals, hospitals and universities, the total debt of all those bodies can be safely estimated at roughly $4 or $5 billion. So, with annual savings in interest of roughly 2 per cent it can be reasonably said that our public bodies would save approximately $100 million per year if the interest on their bonds was tax free. On the other hand, with present market conditions, the saving in interest might even be greater than 2 per cent.
What are we suggesting, Mr. Speaker, since we always want to be constructive and positive?
All those proposals as well as the policy outlined in the motion now before the House, Mr. Speaker, can be found in a resolution carried by our national council in Ottawa in March 1971, and approved at our national convention held in October 1971, in Hull. That is what is contained in our document entitled "Constitutional Positions".
However, the Social Credit party of Canada believes that we must go beyond the present status quo which satisfies no one and empower the provinces to be themselves, to develop and flourish in accordance with their needs and aspirations.
Therefore, the Social Credit party of Canada proposes that a new constitutional framework be considered and implemented, within which the provinces or groups of provinces would participate through their representatives or their governments in the formulation of policies affecting the country as a whole and in the best interest of all Canadians.
The Social Credit party of Canada therefore proposes that a new constitution made in Canada, by Canadians and for Canadians be drawn up in order to do the following things.
First, to revive the spirit of a true confederation in which the components, that is to say the provinces, will recover and assume the powers which belong to them, so as to protect and preserve their identity.
Secondly, to aim at insuring an effective participation of the provinces in monetary, fiscal and commercial decisions in Canada since decisions made at the federal level have serious effects on provincial economies and policies.
Provincial governments should have their say in the development of a monetary policy. The exclusive control of monies and its corollary, the credit facilities granted by the central government, the action of this government in matters pertaining to exchange rate, fluctuations of currency in circulation and prices and inflation, have a direct bearing on provincial finances and on the opportunities for local economic development.
This is why the provinces should participate in the establishment of such a policy. They should be able, in consultation with the central government, to cash in on
March 17, 1972
[Stage Direction]
their own credit in the same way they are now entitled to borrow on such credit.
Decentralization of the decision-making power in the matter of monetary and fiscal resources, financial decentralization that will allow the various levels of government to finance their needs for public funds according to the wishes of their taxpayers as well as the physical and material possibilities of provinces and municipalities, such is, Mr. Speaker, the policy advocated by the Social Credit Party of Canada, and which, were it followed, would put an end once and for all to this ruinous and gradual running into debt of all governments, and would free a huge amount of capital for financing industry and trade which create employment in Canada.
Mr. Speaker, the present government does not have absolute control over solutions to the problem. We only need to study the failures of the Department of Regional Economic Expansion and the Department of Industry, Trade and Commerce to see that we should implement the policy which we advocate-which is, the joint development of fiscal and monetary programs by the various levels of government.
There is no question, Mr. Speaker, that nobody knows more than the citizens of Quebec City about the problems of the province or of the city of Quebec. Nobody knows more about the problems of Edmonton that the citizens of that city.
This is why the various levels of government should co-operate in order to find adequate answers to the economic problems facing us from day to day.
Marcel Joseph Aimé Lambert: Mr. Speaker, I have listened with great interest to the comments of the hon. member for Champlain (Mr. Matte) who spoke on behalf of the Social Credit Party and I am really at a loss to know where to begin.
Though I shall not venture a personal opinion on the views expressed by the hon. member, it seems to me they contain a host of inconsistencies and I wonder whether the resolution moved by the Social Credit party to which he referred is actually a separatist manifesto for Canada, not for the secession of one single province, but for the balkanization of the whole country since it is suggested that the regions, the provinces or municipalities should be entitled to make their own claims and develop their own monetary policy, I wonder whether this is in the public interest.
But what is Canada?


An hon. Member:: It is not a dictatorship.


Marcel Joseph Aimé Lambert: Canada has a population of 22 million people whether they come from Chicoutimi or any other Quebec area, from St. Albert in Alberta, from Newfoundland or Saskatchewan, it does not matter. They are Canadian people who pay into the coffers of the federal, provincial and municipal governments. They are all the same people!
And if you say: We want rights for the municipalities, however these rights will be exercised at the expense of other municipalities, other provincial governments.
Alleged Decentralization of Policies
Therefore, governments are but instruments of the people. If you insist on rights of some individuals, it will be at the expense of the rights of some other individuals.
The Prime minister of the province of Quebec prided himself recently on the triple victory of the province of Quebec over Ottawa. But a victory against whom? Does it mean that the people from the province of Quebec, as Quebecers, under their provincial government, would act against the interests of other Canadians? They are the same people, and when the hon. member thinks of himself as a Canadian taxpayer, he must consider the total of his contribution to the municipal government-which includes school taxes-the provincial and federal governments. The whole represents his contribution to the administration costs of his country.
There may be differences of opinion as to the share of each sector, but as far as the taxpayer is concerned, is he gaining anything whenever we take from one sector in order to give to another? Would that be more helpful? Perhaps as regards services a new distribution should be made, but when it comes to the contribution by the various levels of government, be it for municipal, provincial or federal programs, whether there is waste or dishonesty at any level, there is no loss for the taxpayer, it seems.
Mr. Speaker, the hon. member refers to the representations by the Union of Municipalities of the province of Quebec. I do not wish to point a finger at or criticize that Union for its views, because we have seen them expressed in several resolutions that were passed by many municipalities throughout the country.
We were told that the interests payable on municipal loans should be exempt from federal income tax, but people seem to forget that there exists in addition a provincial income tax. At the present time, all Canadian provinces have the right to and do levy income tax. But the municipalities claim an exemption because they want to save money!
But from whom do they borrow that money? Mostly from the public market-from Canadians, from caisses populaires, from trust companies, in short, from all the people who invest their money in bonds issued by municipalities, school boards, or federal and provincial governments.


Henry P. Latulippe: Like big corporations!


Marcel Joseph Aimé Lambert: Yes, but I am thinking of the public. Corporations, the Caisses populaires Desjardins, for instance, and insurance companies also invest money. I have no doubt that the hon. member has taken insurance policies on his life and on those of his wife and children. People invest their money in those companies, and they are the ones who-like the hon. member and his family, for instance-indirectly benefit from it.
If we ask that municipalities be exempt from taxation, what will happen to the revenues of provinces and the federal government?
We cannot say that municipalities will not be asking the provinces for so many grants or subsidies, or that the
926

March 17, 1972
Alleged Decentralization of Policies
provinces will not be asking so much from the federal government.
Let us be realistic about it, the "sucking" is not going to lessen. Is public demand for education, health services, hospitals, highways, transportation, expenses, postal services, going to diminish? Not in the slightest!
And yet, we are demanding a reduction of revenues in a certain area because we want to replace them. Such is at present the policy of federal and provincial governments, which indicate today that they need all those revenues.


Henry P. Latulippe: It is a debt policy.


Marcel Joseph Aimé Lambert: It is not a debt policy, but rather a policy of responding to public demand, which is often overheated by partisan and political claims. This is what happens. We urge people to demand services from their governments without telling them that this is going to cost money, and that the public will have to foot the bill. Every single penny spent by government authorities in Canada comes out of the taxpayer's pocket, in one way or another.


An hon. Member:: There is the Bank of Canada!


Marcel Joseph Aimé Lambert: There is no magic in that. It is very simple.


An hon. Member:: And what about the public in all that?


Marcel Joseph Aimé Lambert: We will see whether the hon. member can offer another program to meet the legitimate requests of the Canadian public. The hon. member and his colleagues are always the first to add to that list of requests. Who will bear the cost? That is what is being demanded, and it is very often-


Mr. Prud'homme:: The Bank of Canada.


Henry P. Latulippe: It is the Bank of Canada.


Marcel Joseph Aimé Lambert: I know who will pay for it: it is the Canadian taxpayer, with his efforts, his work, his ingenuity, in other words the whole industry, our economy as a whole. That is the source of income.


George Albert Proud: The Creditists do not know that.


Henry P. Latulippe: There is not a single worker who makes money.


Marcel Joseph Aimé Lambert: That is the source of income for all government activities. Municipalities-


An hon. Member:: There are many of them.


Marcel Joseph Aimé Lambert: Yes, there are many of them. As a matter of fact, the mayor of my own city is among the first to ask for more money. Why? With all due deference, that is just like him. A mayor has lots of more important things to do.
The municipalities are spending money. This is good but who foots the bill? Because in the final analysis there is always somebody who pays for it. Whether it is at the

municipal, provincial or federal level the taxpayer always ends up paying the shot.
We have now reached a point where if we want participatory democracy we must accept the status quo in the field of consultations between the federal government and the provinces although there is much room for improvement.
However, the hon. member will admit that the dialogue between him and his wife or the members of his family is sometimes not quite up to par.


George Albert Proud: Just like within the creditiste party.


Marcel Joseph Aimé Lambert: No, no. One should recognize that it is a question of human relations. The people of this country are in constant communication. But let us leave them alone and start looking at what is happening in our own back yard.
I will now limit myself to the political or monetary question. In fact, do we not all agree that in the tax field there is a need for more consultation. This was brought up as recently as yesterday in a federal-provincial issue. I will not finger anyone or lay the blame on anyone in particular because everyone has to assume his share of responsibilities.
However, as far as the monetary system goes every province or area should have the right to make the decisions likely to meet their needs. But here we are going back to the Middle Ages because when is it going to stop? If the province of Alberta, Saskatchewan or New Brunswick wanted to develop a monetary policy with respect to interest rates, currency value, etc., we would be going back to the Middle Ages, to the era of the city-state. We would mint coins and bite in them or cut them to know their value. And this city-state money was worthless-


Henry P. Latulippe: What is it worth today?


Marcel Joseph Aimé Lambert: It has a value. Today you can buy a shirt or a pair of trousers with a $5 or $10 bill. You put a price on the goods and the shopkeeper is willing to receive a bill in exchange. He does not accept-


Henry P. Latulippe: He pays half of it to the government.


Marcel Joseph Aimé Lambert: He pays half of it to the
government. He pays 37 per cent to the three levels of government. Today, 37 per cent of the gross national product goes to the state one way or another. If the state is required to spend more, then it will ask for more since, as I said earlier, he has to foot the bill at the end.
Any public service, or pension plan or health insurance scheme has to be paid for, and it is hon. members together with their families, their neighbours and other Canadian citizens who have to meet the whole cost.
But can one imagine the people of Alberta or British Columbia insisting on exercising any rights that would be detrimental to Quebecers? What would entitle them to do so since we are all Canadians irrespective of our province of origin?


Henry P. Latulippe: Where do they get their money from?
March 17, 1972


Marcel Joseph Aimé Lambert: The hon. member asks where they get their money from. I am going to tell him, Mr. Speaker. They use their two hands and their brains coupled to the will to work, to succeed and to put their shoulder to the wheel. This is how Canadians succeed.
But we never stop making claims on the government. And I am speaking now as a Progressive Conservative member. I for one have nothing to blame myself for on this point. The development of our economy and the progress of our country depend on our willingness to put our shoulder to the wheel. That is all.


Henry P. Latulippe: Money does not come from the wheel.


George Albert Proud: You know nothing.


Marcel Joseph Aimé Lambert: Mr. Speaker, I would ask the hon. member to let us speak, after which he can make his speech.
Mr. Speaker, I see my time has expired. I thank you for your indulgence in allowing me to speak a few minutes longer.


Stanley Howard Knowles: Mr. Speaker there was silence for half a minute, so that got me to my feet.


George Albert Proud: When you speak we have to do that-a moment of silence before you speak.


Stanley Howard Knowles: Actually, Mr. Speaker, a statement of substance will be made by one of my colleagues this afternoon, but since in most cases the House likes to hear from all parties in the first round of debate, I shall take the floor for a few minutes.
In so far as the precise suggestions contained in the motion now before us are concerned, I have to say they seem to us to be ones which would be most difficult to implement. When one starts to talk about decentralizing monetary policy, and when this is mentioned in the context of a motion that refers to three levels of government, federal, provincial and municipal, it is a little difficult to see where it would all lead. Municipal monetary policy does raise some pretty far-reaching questions. However, it is not my purpose to become involved in an argument over these technical details, but rather to say that in so far as our friends of the Social Credit party are asking us today to think about ways to make taxation less burdensome to the people of Canada, then, of course, we feel that is a welcome subject for debate. As will be suggested later on today by one of my colleagues, we think there are definite ways in which taxation can be made less burdensome. Those ways, of course, involve the revision of our tax structure and placing it really on the basis of ability to pay.
When one refers to a revision of our tax structure, that conjures up immediately the picture of what we went through in 1971 or indeed what we went through during a period of several years, the result of which was supposedly a new income tax act. As a matter of fact-and we made this clear during the debate on that bill-there was
Alleged Decentralization of Policies no real, basic reform in last year's new tax bill, and in this year 1972 the taxpayers are discovering that the new heaven and the new earth that was supposed to result from that bill have not yet materialized. Therefore, we say the answer to the problem of making taxation less burdensome is to attack the whole question of our tax structure and to place taxation on the basis of ability to pay. We have not yet done this-particularly at the federal level, which is our major responsibility. In so far as this motion today is asking the House to think in terms of changes which should be made in our tax structure, we welcome the debate this motion produces.
The other way in which to make the payment of taxes less burdensome, to use the words of the motion, is of course to raise the economic standards of the people of this country. This raises the whole question of what we should do about wage levels, both minimum wages and fair wages, and what we should do about things like old age pensions, family allowances, disability pensions, veterans pensions, industrial pensions and so on. I, therefore, take this minute or two to repeat a theme this House hears from this corner of the House time and time again. The society we have at the present time certainly is not the just society we have heard about, nor is it the final word in the area of economic affairs of a nation like ours.
I feel very strongly that we must move in the direction of guaranteed income levels. When one mentions that, he must make it clear that he does not think in terms of means tests, income tests and that sort of thing but rather of allowances or demogrants and so on, which bring up the income level of our people. To do this sort of thing is costly, but not to do it and to try to continue with a society which is as divided and unequal as ours is much more costly. In a country as advanced as ours, with the capacity we have, I believe we can establish levels of income for workers in city and country alike, and that we can provide allowances, pensions, housing, health care, education, recreation and all these things that will put all of the people at a decent economic level.
Mr. Speaker, that frankly is all I wish to say in this opening round of the debate, namely, that we cannot go along with some of the details in the motion but that we warmly welcome the call for arrangements to make things less burdensome to the taxpayers of this country. There are two ways to do this. One is to place taxation on a more equitable basis, and the other is to raise the living standards of all our people.


Charles Mills (Bud) Drury: Mr. Speaker, in rising to speak to this motion, I am sure that hon. members are aware of the constitutional and jurisdictional problems connected with relations between the federal government and the municipalities. This does not mean that we are oblivious to the problems of the municipalities. We are aware that a city can exceed a province in population and budgetary expenditures. Some of the federal government programs, such as the Local Initiatives Program, are directed specifically at the municipalities. The federal cabinet will meet on Monday, March 27 to receive the annual submission of the Association of Mayors and Municipalities. I do not intend to pursue this particular phase of our concern for and preoccupation with municipalities. As I understand it, another

March 17, 1972
Alleged Decentralization of Policies speaker plans to deal more extensively with this particular topic. I should like rather to concentrate on federal-provincial relations.
No doubt the House is aware that the federal-provincial fiscal arrangements bill which was before the House yesterday was a product of some two years of consultation and meetings of ministers and officials. The Ministers of Finance and Provincial Treasurers held their 12th meeting recently in Jasper. For the last few years it has been a policy for these ministers to meet at least quarterly to discuss matters of mutual interest to both levels of government. I might say that all sections of the draft fiscal arrangements bill were thoroughly discussed at these meetings of federal and provincial ministers and many changes were made in the draft bill as a result of these consultations.
A large part of this bill dealt with equalization, whose purpose is to allow each province to give to its citizens a level of service at least equal to the national average, without having to resort to unduly high levels of taxation. In addition, the federal government will guarantee that provincial revenues will not be less than their revenues of the previous year. This 100 per cent revenue guarantee is another example of a federal contribution to provincial fiscal stability. This is the very essence of the bill, and that is why I am somewhat surprised that the motion does not acknowledge the extent to which the federal government has recognized the growing needs of the other levels of government.
For example, in 1960, before transfers, the federal government share of total government expenditures was 61 per cent compared to a provincial-municipal share of 39 per cent. In 1970, the federal share had decreased to 52 per cent, while the provincial-municipal share had increased to 48 per cent. In 1970, after transfers, provincial and municipal governments accounted for 60 per cent of total government expenditures. The trend to decentralization is clearly shown in these figures, I suggest.
On the matter of decentralization, I should like to draw to your attention another example of the federal effort to recognize the different levels of economic activity existing in the country. For instance, the Special Development Loans Program of 1970, and this year's Federal-Provincial Employment Loans Program, allocated funds for provincial and municipal projects on the basis of the level of unemployment existing in each province. The first program, for instance, recognized the high level of unemployment which existed in British Columbia in the winter of 1970-71 and allocated some $37 million under this program to the province. This represented 23.1 per cent of the total $160 million in the program. Under this winter's program, because the unemployment had dropped considerably in British Columbia, its allocation was less. Ontario, on the other hand, which was allocated just over 10 per cent of the funds in the first program, saw its allocation rise to 16.5 per cent under this winter's program.
At the finance ministers conferences the economic and fiscal situation and outlook is always the first item on the agenda. This is especially important for the January meet-

ing each year because it provides the most current information on the economy to enable the governments to plan their budgetary strategy for the period ahead. There is a very frank interchange of information on a confidential basis at these meetings.
There is also a Federal-Provincial Continuing Committee on fiscal and economic matters which is composed of senior financial officials from both the federal and provincial governments, and which services the ministers. As well as engaging in joint fiscal and economic studies as directed by the ministers, this committee does the preparatory work for the ministerial conferences. It held its fiftieth meeting just prior to the Jasper meeting of ministers. An example of the type of work in which the committee is presently involved is an analysis of the employment program at not only the federal level but also at the federal-provincial, federal-municipal and provincial-municipal level. This mandate for the evaluation was given to the ministers of finance and provincial treasurers last fall by the first ministers. The Continuing Committee is now conducting this evaluation with a view to reporting to the next federal-provincial conference of their ministers.
The terms of reference given to the committee were essentially those which were contained in the communique from the federal-provincial conference last November. These terms of reference proposed a joint examination of the relevant programs to evaluate their effectiveness, assess any problems which had been encountered, and propose criteria and guidelines that might be applied in the design of contingency plans of a similar nature. The ministers also expressed the hope that this committee might be able to submit at least a preliminary report in May, having in mind the relevance of such an evaluation to proposed contingency planning for similar programs in the future.
In addition, I would like to emphasize that since the present government has taken office, not a year has passed without there being a discussion at the summit level of the fiscal and economic situation. Before concluding, I should like to turn briefly to the monetary policy. The Fathers of Confederation in their wisdom clearly gave the responsibility for the management of money in the Canadian economy to the federal government.
Canada's widespread branch banking network, which is part of a well developed capital market, enables funds to move freely throughout the country. In a country with one currency and a single capital market, you simply cannot have a basic monetary policy for one part of the country which is different from the policy applied in other parts. Even if one could somehow contrive to make credit in general cheaper in one part of the country than another, capital would inevitably flow to the places where it could get the highest return; nothing of value would be accomplished for the less prosperous regions which would find it even more difficult to raise their capital requirements. This does not mean that the monetary policy is insensitive to regional conditions. In formulating national policies, the government and the Bank of Canada do take into account the circumstances in all parts of the country. As well, the Minister of Finance (Mr. Turner) and the Governor of the Bank of Canada have, from time to time, asked
March 17, 1972

the banks to be especially sympathetic to applications for credit from parts of the country whose economic position is particularly unsatisfactory.
The government of Canada also takes into account in the formulation of its debt management policy the borrowing requirements of the provinces and the impact of all governmental borrowing requirements on the Canadian economy. Again, there are regular discussions of these matters with the provinces. For example, at a federal-provincial meeting in Winnipeg in the spring of 1970, as a result of concern about the effect of a very strong Canadian dollar on our economic growth and the level of employment, the Minister of Finance asked the provinces to consider very carefully whether they had explored fully the availability of funds in the Canadian capital market before floating issues outside Canada. This request was then extended to all Canadian borrowers. We have received a notable degree of co-operation in this regard, and the use of foreign capital markets by Canadians has declined significantly. To help enable other levels of government to find their funds in Canada, the federal government has kept its public borrowings to the short and medium term markets, leaving the long end to other governments and private sector borrowers.
I think that within the limits imposed by the constitution, and by its responsibility for the economic health of the whole of Canada, this government has demonstrated its willingness to do the very things that are regretted in the motion now before the House.


Mr. Romuald Rodrigue (Beauce):: May I call it one o'clock Mr. Speaker?


The Acting Speaker (Mr. Laniel):: It being one o'clock, I do now leave the Chair until 2 p.m. this afternoon.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Romuald Rodrigue: Mr. Speaker, I would like to use the few moments at my disposal to discuss the way the Minister of Finance prepares his budget year after year. I would like to see included in that famous budget some information which in my opinion is quite important and which would show the real economic conditions existing in the country.
What surprises me in the budget presented each year by the Minister of Finance are the huge amounts appearing under the national debt item as well as the amounts required each year to pay the interest on the national debt.
The Canadian national debt which amounted to $75 million in 1867 at the time of Confederation had quintupled before the First World War to reach some $314 million. After the First World War the debt went up to $1,200 million, representing an increase of 500 per cent in six years.
Alleged Decentralization of Policies
Afterwards we experienced the 1929 depression and the Second World War. The national debt of Canada amounted to over $11 billion in 1945. From 1945 to 1960, we had a new increase, somewhat less pronounced than during the war years, an increase representing another $1 billion and bringing the debt to $12,089,195,000.
From 1960 to 1968, that is over a period of 8 years, the net debt has once again increased to $16 billion, and we can expect that with the budget announced by the former Minister of Finance (Mr. Benson), last October, this debt will increase by another billion before the end of this fiscal year.
Even more striking are the ever-increasing amounts that taxpayers have come to pay each year for the interest of the national debt.
In 1969-70, the actual expenditures incurred to pay the interest on this debt amounted to $1,709,938,172. In 197071, according to figures in section 15 of chapter 8 of the estimates, expenditures for public debt amounted to $1,822,843,840. In 1971-72, still according to the same source, the estimates for public debt amount to $1,994,000,000, and will increase to $2,160,385,000 during 1972-73.
Mr. Speaker, the interest that 22 million Canadians will have to pay amounts to approximately $2 billion per year. This represents, for each Canadian, $100 a year.
But, it should be recalled that in 1945, after the second world war, the interest paid on the public debt was $26.42 per capita. This increased later on to $42.17 in 1960, and 12 years later, in 1972, each Canadian will have to pay about $100 for the interest on the public debt. I am not referring here to the interest charged to provinces, municipalities, school boards, which amount to close to $3 billion per year now.
Such are the fruits of the financial system of which this government and its predecessors have been and are still the faithful servants.
But there are some, Mr. Speaker, who will say that this is good, such as Mr. Alexander Hamilton, the spokesman for international finance and, above all, the spokesman for the conservative party of federalists in the United States, who stated that a public debt is a national blessing because it offers businessmen and financiers a safe investment.
A Canadian Minister of Finance stated around 1945 that the national debt was the barometer of civilization and, to prove his point, that same Finance Minister stated: Well, the natives in Africa do not have any national debt and they are not civilized.
Others, Mr. Speaker, state repeatedly that a national debt is not harmful for the country because Canadians owe this money to one another and that the money paid to maintain this debt goes from one pocket to another.
It is true for some, Mr. Speaker, but only a very small percentage of average Canadians have invested their savings in the public debt of Canada, the provinces, the municipalities or the school boards. These people should know that those pockets do not ordinarily belong to the same taxpayers.

March 17, 1972
Alleged Decentralization of Policies
We have already asked the Minister of Finance to tell us about the holders of government bonds, to give us the names and addresses of the State's creditors. The government was either unable to give us the answer or did not want to do so. If it had, we would have found that the people who receive interest payments on the public debt get some $2 billion per year-that Canadians will pay in 1972-and that such people are not in the low-income group.
On the contrary, those who receive such interest payments are in the high-income bracket, and a large part of such interests will merely add to the dividends of financial institutions.
Therefore, we can draw the conclusion that public debts are regressive and vindictive, because they penalize mostly low-income people. About 15 per cent of their taxes are used towards the interest on such debts.
It is therefore time, Mr. Speaker, to come back to sounder financial concepts and to bring in realistic budgets which really reflect the existing financial situation in Canada.
The Minister of Finance has the responsibility to prepare the federal budget. He calculates expenditures to be made and taxes to be levied in order to meet them. If the public seems to be overtaxed, the Minister of Finance starts thinking about ways and means of either cutting expenditures here and there, or floating new loans that will result in more increases of the public debt and more interest to pay each year.
At present, public finances are nothing more than simple bookkeeping with expenses and revenues which end up each year with either a balanced budget or a deficit budget. Thus, as years go by, as I said a while ago, the debt increases continually and in turn increases the interests that the Minister of Finance must collect through taxes.
The present Minister of Finance (Mr. Turner) is behaving exactly like all previous ministers of finance. I would even say that most political parties are not thinking differently and would not do otherwise if they were called to form a government in a month or two.
We, of the Social Credit party, agree on one point. The Minister of Finance must bring in a budget taking into account revenues and expenses for the year. But there is more than a mere alignment of figures. We believe that the Minister of Finance should also show the assets and liabilities of the country. Assets should indicate the enrichment of the country, and liabilities, the depreciation and impoverishment that Canada suffered through immediate consumption or consumption spread out over several years.
For this purpose, a Creditiste government would establish a Is ational Credit Office who would enter in the assets column any increase in the wealth of Canada. For instance, the building of a bridge in Canada is an enrichment that should be taken into account in the assets column. New highways, a seaway, new hospitals or schools all constitute an increase in the assets.

At the present time, I challenge the government to indicate where that fits into the estimates that it proposes and to tell where these increases in the assets of Canada are reflected.
On the same general subject, Mr. Speaker, the new plants built in Canada as well as the increase in the Canadian population should be taken into consideration. It is said that human resources are our greatest asset. Where is this written in the books of the government? Where is this indicated in the assets of Canada? Nowhere.
This year, more than 300,000 new graduates will join our work force. This is certainly a gain because these new workers, being better educated than their elders will devote their energies and their knowledge to the aim of producing more and making better products. I suggest that this is an asset for our country.
So, every year the asset should increase, but this does not show in the estimates tabled by the Minister of Finance. For instance, what body sees to it that this increase in real credit is reflected in financial credit? Who provides for an increase in financial credit in view of present circumstances? The increase in financial credit is done haphazardly, according to the whims of the only credit makers in Canada.
If production increases, who sees to it that the purchasing power is also increased? No one.
What governmental body sees to it that more money is put into circulation so that the new production, the production that is possible thanks to new plants, new workers and new brains gets to the consumers. Nobody worries about that.
No government has ever proposed that the assets and the enrichment of Canada be made to work for the Canadian people. All that is left to the discretion of those who are in power. Governments and Finance ministers never worried about regulating the whole volume of money in circulation according to the assets and the liabilities, according to annual enrichment and depreciation. The governments leave it up to the industrialists and to their ministers of Finance to get along with the bankers when they run short of money. Private interests decide about increasing or decreasing the volume of money as far as production is concerned. Those same interests will also decide that all that money must be taken away from consumers or taxpayers through taxes or price increases.
In my opinion, this amounts to slowing down, penalizing and taxing every enrichment. Farmers, industrialists and the government are all subjected to the discretion of private interests and to the conditions they set.
But what would a Social Credit government do? That is what some people will ask. Thanks to the monetary techniques of Social Credit we would, at first, fill that gap by introducing an accounting system that would correspond to reality. If the production capacity increases, it must be reflected in the national credit account, in the assets. In the same way, when there is depreciation, attrition or just a loss or destruction of production, that must be reflected in the liabilities, and the difference between the assets and the liabilities must normally bring about a net enrichment
March 17, 1972

and that enrichment must be accompanied by an equivalent increase of the money in circulation so that the country may take advantage of that enrichment.
It may not seem much but if in 1929 we had applied such an accounting method to reconcile money supply with the facts, people would not have starved when there were masses of products and when unemployed wanted nothing more than to work at making products and services available to their families and their fellow citizens.
If in 1971 we had had the same accounting method, there would not now be 700,000 unemployed, a fact that reveals production paralysis because there is no money but an abundance of products.
What does the Minister of Finance ask himself when preparing his budget? The following questions: What does the country want? What is it able to pay? More often than not, he first asks himself the second question if he wants a balanced budget.
Under a Creditiste government, the Minister of Finance would try to answer the two following questions: First, what does the country want? Second, what can it produce? Not in money or taxes, but in available manpower, in unused resources, in technology?
What labour and equipment can the country do without, for instance, in the production of food, clothing, housing, highways? We can ask what choice can be made, if we can choose one or the other or both. If the government decides to build the Mackenzie pipeline, surely the workers and businesses engaged in that undertaking will not produce food or clothing. It will be up to other workers to produce these foodstuffs in their place, both for themselves and for those engaged in building the pipe line.
The problem is therefore whether the country is physically able to build the pipe line without hindering the production of other consumer goods. I don't see that money would have anything to do with it if the Minister of Finance (Mr. Turner) were really against all that.
Under a Social Credit government, there would still be problems of physical possibilities, but no financial problems, since money must necessarily reflect reality and come with it.
The Social Credit budget would be based on the hierarchy of public services called for and achievable. The underlying concept of that budget, Mr. Speaker, would be that of whatever public and private goods the country can produce, i.e. consumer goods, without considering financing problems, since the funds should be produced automatically as and when required, and according to the physical possibilities of implementation.


Mr. David Weatherhead (Parliamentary Secretary to the Minister of State for Urban Affairs):: Mr. Speaker, I am pleased to take part in the debate this afternoon. I have to say I am in favour of keeping control of monetary and fiscal policies essentially in the hands of the federal government in Ottawa so that they can be used to influence the economy as a whole and place from time to time different emphasis on different regions in the country depending on economic conditions in each region.
Alleged Decentralization of Policies
I agree with the comments made by the President of the Treasury Board (Mr. Drury) just before lunchtime with respect to the increased emphasis the federal government has placed upon the equalization payments program. This subject has been debated in the House in recent days. There is no question that these payments, which are made in varying degrees to the less advantaged provinces, have been very beneficial to those areas and it is for this reason also I think it is necessary to keep control of monetary and fiscal policies in Ottawa.
The President of the Treasury Board also referred to the great success the Local Initiative Program has enjoyed in the last few months, particularly with respect to programs initiated by the municipalities. I know that in my own area, the borough of Scarborough has obtained a great many grants to aid local projects under this program. I am sure this is the case throughout the country. Preference is given to places where unemployment rates are higher.
I think there is no question that collection of income tax by the federal government rather than by individual provinces leads to great savings to taxpayers as a whole. To reverse this process would not, I feel, result in a less onerous burden for taxpayers as the motion suggests. In my opinion, it would be the other way around.
This afternoon I should like to comment on a slightly different aspect of the motion, the need for consultative mechanism between the provinces and the municipalities. My own minister, who is in charge of urban affairs, has been in favour of developing a consultative mechanism with the provinces and the municipalities on matters which are of extreme importance to most of the people in this nation. As you know, Mr. Speaker, and as was pointed out in the debate in this chamber on Monday, about 70 per cent of the people in our provinces at the present time live in urban areas. This proportion will increase to about 80 per cent in 1980. Therefore, the problems of the municipalities are to a large extent the problems of our growing urban areas-transportation, welfare, the environment, housing and so on. All these are essentially urban problems, integrated one with another. This gives rise to a need for improved methods of consultation between the federal government, the provinces and the municipalities which, by and large, face the consequences of the population increase.
There needs to be better co-ordination between the 112 federal programs which affect urban Canada, and this led to the creation of the Minister of Urban Affairs last July. As the Minister of State for Urban Affairs (Mr. Basford) said in this House last Monday:
Our mandate is to co-ordinate the activities of the government of Canada in establishing co-operative relationships with the provinces and their municipalities for the enhancement of the human environment. Co-operation and coordination between the provinces and municipalities is precisely the purpose and the mandate of this ministry.
The present Minister of Consumer and Corporate Affairs (Mr. Andras), when he was minister responsible for housing, in a speech before the Canadian Federation of Mayors and Municipalities in Halifax on June 10, 1970 called initially for federal, provincial and municipal consultation on urban matters-some structure, perhaps an urban council, within which political representatives sup-

March 17, 1972
Alleged Decentralization of Policies ported by officials of all levels of government would meet to discuss urban policies regularly. Since that time there have been meetings in Winnipeg, in April, 1971, and in Victoria, in August, 1971, between the Minister of State for Urban Affairs, the provincial ministers of municipal affairs and representatives of Canadian municipalities to explore means by which tri-level consultation can be launched.
At the Victoria meeting, a tri-level interim planning committee was formed consisting of the then minister of state for urban affairs, Mr. Dalton Bales, the then minister of municipal affairs for Ontario and Mayor D'Amour of Hull, representing the Canadian Federation of Mayors and Municipalities. At the first ministers conference in November, 1971, the first ministers consisting of the Prime Minister (Mr. Trudeau) and the premiers or prime ministers of all the provinces, agreed that on-going discussions to finalize the exact elements of the consultative mechanism should go forward with expedition. A meeting of this interim committee to pursue this matter was scheduled for late January, 1972 but had to be postponed at the last minute when changes were made in both in the federal and the Ontario cabinets, resulting in a new Minister of State for Urban Affairs (Mr. Basford) and a new provincial minister responsible for municipal affairs. However, as the Minister of State for Urban Affairs announced last Monday, a meeting of this interim committee is now scheduled for April 10, 1972 at Mayor D'A-mour's chambers in Hull. It will be chaired by Hon. D'Arcy McKeogh, Ontario minister for municipal affairs, and will comprise himself, our minister for urban affairs and Mayor D'Amour. They and their officials will be discussing the process of tri-level consultation-how to do it, when to do it, who should be included in it, and so on.
It is not envisaged that matters respecting possible fiscal transfers between the federal and provincial governments will be discussed by this interim planning committee, nor in the ensuing urban council of whatever.type is recommended. Any debate regarding fiscal transfers per se will continue to be carried on essentially by the Minister of Finance (Mr. Turner) and by the provincial treasurer of each province. This morning the President of the Treasury Board dealt with the matter in further detail and also commented, I understand, on how closely the provincial and federal financial officials keep in touch with each other on this very important matter.
However, hopefully such an urban council would allow representatives from all levels of government, including the municipalities, to move effectively and with greater continuity in co-ordinating and focusing upon urban issues. These issues, I repeat, are largely issues faced by the provinces and municipalities, but also confront the country as a whole. The issues of housing, transportation, pollution, social services, etc. are all included under the heading of urban issues and, it is hoped, will be focused upon by the meeting in Hull on April 10. This consultation with the provinces, and through them with their municipalities, will enable a concerted drive to be made to alleviate the worst of these problems and I think will be of considerable benefit to all Canadians.
May I say I appreciate the opportunity of speaking on the motion moved today by the representative of the Social Credit party. The question of consultation among the three levels of government is a very important one. While I do not agree with the suggested form of consultation with regard to monetary and fiscal policies, I hope I have pointed out that other forms of consultation regarding the broad national and urban issues are proceeding very satisfactorily, and I believe will be a great success.


Hon. Theogene Ricard (Saint-Hyacinthe):: Mr. Speaker, I should like to make a few remarks on the motion introduced by the hon. member for Champlain (Mr. Matte).
I find it somewhat difficult to accept unreservedly the motion introduced by my friend and it will be impossible for me to support it as moved.
However Mr. Speaker, some parts of this motion give me the opportunity of making a few remarks, and I will try to make them as obectively as possible.
But first, I should like to go back to what happened through the years since 1949, for instance, which were fraught with far-reaching consequences.
Mr. Speaker, it will be recalled that federal-provincial relations and the sharing of the tax basis have always given rise to great difficulties and constant wrangles, at least between the provincial and federal governments.
Mr. Speaker, hon. members will recall that it was under the guise of national emergency that the first incursions into the provincial field were made in 1939 by the centralist government of the time, a liberal government.
They will also recall that the then premier of the province of Quebec was sharply criticized-and he still is, as a matter of fact-for opposing the centralist views of the government in office. And in so doing, Mr. Speaker, he was only following the example set by his predecessor the Hon. Alexandre Taschereau.
Also, from 1939 to 1945, the central government found its way into the manpower field, especially into unemployment insurance. Premier Duplessis said at the time that the field of activity was definitely the responsibility of the provinces. However, anxious not to interfere with the war effort that this country was making toward a victory in the conflict that opposed us to Germany, the Quebec Premier simply gave up objecting.
They will also recall the letter that was written by another former premier of the province of Quebec, Mr. Godbout, relinquishing to the central government a large share of the powers which, according to the constitution, belonged to the provinces. Here again, this was done as a contribution to the national effort to ensure victory.
Mr. Speaker, I am mentioning those historic events simply to show that the Liberal party has always produced centralist governments, which ignored needs and aspirations not only in the province of Quebec, but also in all the other Canadian provinces, in order to preside over the fortunes of the country, in their own way. The Liberal party has always considered itself called upon by divine

March 17, 1972

right to govern the country and it has always discharged its functions in that spirit.


Mr. Bechard:: What are you driving at?


J.-H.-Théogène Ricard: If I may, Mr. Speaker, I would like to tell the hon. member for Bonaventure-lles de la Madeleine (Mr. Bechard) that if he has any remarks to make he can make them after I am finished. However, if he does not want to be polite enough to listen to me he could at least in all due respect for this House listen to what is being said. I am certain he will learn a great deal not only from the one who has the floor at this time but also from those who will follow me.
One vital condition to the progress of the business of this House is to know how to listen and learn when the opportunity arises. So, I suggest strongly to my hon. friend the parliamentary secretary to the Minister of Justice to keep his ears wide open. It would be to his advantage and also to that of the House which could benefit from the same courtesy I have shown for those who have spoken before me.


Albert Béchard: I hesitate to listen to the hon. member.


J.-H.-Théogène Ricard: You see, Mr. Speaker, he will never understand. If you wish to call him to order, you are welcome, Mr. Speaker.


The Acting Speaker (Mr. Boulanger):: Order. In keeping with the usual practice, whenever a member has been recognized, other members should let him exercise his right to speak and listen to him with as much attention as possible and without interrupting him.


Albert Béchard: Mr. Speaker, I do not wish to interrupt the hon. member. I will simply make some comments after his speech, which is more or less excellent.


J.-H.-Théogène Ricard: Mr. Speaker, I notice the hon. member said "more or less excellent". He is probably short of vocabulary.
Mr. Speaker, in his motion the hon. member fcr Champlain deplores the lack of communication between provinces and the central government and the fact that it has been worsening during the last four years. I will quote from a few newspaper clippings to prove what I am saying, and I shall not rely only on evidence from opponents of the present government. Mr. Speaker, I have here a clipping from the March 5, 1968, issue of Le Devoir, bearing the headline "Provinces unanimously denounce central government fiscal policy" and where one can read:
All of them denounce what they consider as the law of the fiscal jungle which was proposed to them by the federal government in 1966.
All of them denounce the inflexibility introduced in fiscal relations as an aftermath of the federal government's determination to impose joint programs and its firm intention of withdrawing from them now.
I will also quote the words of former Quebec Prime Minister Jean-Jacques Bertrand, as reproduced in the November 5, 1968 edition of Le Devoir.
Alleged Decentralization of Policies What strange thing are we witnessing at the present time, more particularly since the last four months? We are witnessing-and I regret to have to deplore it-an arrogant and imperialist attitude on the part of the federal government.
Now let us read what the Ontario Minister of Finance, Mr. Charles MacNaughton, had to say as reported in Le Devoir of November 14, 1968:
Last week, those taking part in the federal-provincial conference have been assured that the federal government would reconsider the question of tax sharing. But since then, we heard the central government make another statement to the effect that the provinces must collect themselves their additional taxes if they need supplementary revenues.
This is certainly evidence of a lack of communication, a lack of exchange of views between the central government and the provincial governments.
What does the present premier of Quebec, Mr. Robert Bourassa, now say? In Le Devoir of November 16, 1971, one can read this:
Quebec premier, Mr. Robert Bourassa, blamed yesterday the federal government for failing to consult the provinces when formulating its policy against unemployment, and he called the conference of the premiers of the country, which he attends until tomorrow, an a posteriori consultation.
The Minister of Regional Economic Expansion (Mr. Marchand) would surely be offended, and he would probably accuse the Quebec premier of racism, if he heard the words the premier is reported to have said. I quote:
In fact, the premier stated that the activity of the Department of Regional Economic Expansion, headed by Mr. Jean Marchand, had not changed things very much. More specifically, Mr. Bourassa said, the report had not affected the overall situation in Quebec and on the whole, the results were not very satisfactory.
Mr. Speaker, were the Minister to hear this, there would be no end to his laments, to the effect that we merely want to destroy him. We have no intention of destroying anyone, but as members of the official opposition, it is our duty to ensure that the government produces the best possible administration for the Canadian people.
The quotation goes on:
Basically, the premier wants the federal government to adopt more selective economic remedial measures.
That is what we have been asking the present government all along.
As I said at the beginning this government interfered in fields of exclusively provincial jurisdiction, and later on warned the most interested parties, that is the provinces.
For instance, the federal government meddled in health insurance. Originally, the legislation was to have come into force on July 1st, 1967, but because of the objections of several provinces, its application throughout Canada was delayed by at least one year. We know that the Quebec government, through its premier, the hon. Daniel Johnson, had opposed the measure. He wanted Quebec to receive the tax levied in his province, the so-called social improvement tax. Not only was he the only one to demand that those payments be remitted to the province of Quebec, but after him, the provincial Liberal government has always done likewise while the federal and centralizing Liberal government has refused to accede to the
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Alleged Decentralization of Policies demands of the Quebec government whose duty it was to look after the best interests of that province.
We know what was the comment of the Prime Minister (Mr. Trudeau) about the recommendations made by the then provincial secretary Mr. Mario Beaulieu. I will not repeat his first comment: it was the second time that he was using the term, but I will say however that he dismissed as stupid the claim of the Quebec provincial secretary.
Such refusals and arrogant attitudes give rise in Quebec to an antifederal feeling which is used as a springboard by those who wish to create dissension and promote separatism in Quebec. It is high time, Mr. Speaker, for the members opposite to throw off their own arrogance, to accept finally to hear the province of Quebec through its elected representatives, and to accede to their claims not only for its good, but also for the sake of good understanding and national unity.
Until our current leaders carry out that policy, Mr. Speaker, we will go from bad to worse and have one trouble after another.
The sooner this government becomes more flexible, the sooner it listens to reason, the better it will be for everyone.
And I hope, Mr. Speaker, that those who are from the province of Quebec, the friends of the Liberal party, will convince of that those who hold the reins of power, those who occupy the government benches.


Mr. Ouellet:: You have forgotten to talk about family allowances.


Albert Béchard: Mr. Speaker, first of all, I must tell my colleague the hon. member for Saint-Hyacinthe (Mr. Ricard) that, although I listened with both ears, I did not learn anything new from his diatribe this afternoon, except-


J.-H.-Théogène Ricard: Mr. Speaker, there are some who never understand anything.


Albert Béchard: I would ask the hon. member to please listen.


J.-H.-Théogène Ricard: Some never understand anything, and you are one of them.


The Acting Speaker (Mr. Boulanger):: Order, please. I believe that it is now the turn of the hon. member for Bonaventure-Iles-de-la-Madeleine to have the floor, and I would ask hon. members to show him some courtesy.


J.-H.-Théogène Ricard: That is exactly what I am doing, Mr. Speaker.


Albert Béchard: Mr. Speaker, I have not deemed it advisable to ask you to call to order the hon. member for Saint-Hyacinthe, because, as he is very courteous, he would not dare challenge what I have just said.
I was greatly surprised to hear the allegedly accurate remarks of the hon. member for Saint-Hyacinthe. In fact, he stated that the Liberal party is the most centralizing

since Confederation, and that the legally and democratically elected government of the province of Quebec had been refused the refund of this famous tax, that is an amount of $200,000. What is right-and I shall say it for the information of the hon. member for Saint-Hyacinthe, who is a former neighbour of the late Daniel Johnson-is that Mr. Johnson himself refused to put into force, in our province, the medicare plan which had been accepted by his predecessor, the hon. Jean Lesage.
Would a truly centralizing government make such proposals as, for instance, that he has just made to the provinces respecting family allowances? Is this a centralizing government?
It shall also completely withdraw, and this is retroactive to January, from the estate tax field. Is this the action of a centralizing government? This government also will negotiate tax agreements such as it is negotiating under Bill C-8, now before this House on third reading. Some will say, as the Progressive Conservatives are always doing, that the Liberal party is the most centralizing party.
Strangely enough, Mr. Speaker, the province of Quebec has always put its trust in the Liberal party, as it will again at the next elections.
Now, Mr. Speaker, I would not like to get into electoral matters, but I want to say that there is no reason to be surprised or overly concerned because of the regret expressed today in the motion brought in by the Rallie-ment, sorry, the Social Credit party-it is always changing its name-and which reads as follows:
That this House regrets that the government has not established consultative bodies with the provinces and municipalities, with a view to decentralizing monetary and fiscal policies in such a way as to permit each level of government to assume its own responsibilities in a manner less burdensome to the taxpayer.
No need to be surprised, Mr. Speaker, at the regret expressed in the motion of the Social Credit Party of Canada if we recall the events since Canada was introduced to the policy of Major Douglas-that was his name, I think. Then there were the John Blackmores, the Solon Lowes-deliberately forgetting of course the Mannings and the Bennetts who are simply Conservatives in disguise, not even Progressive Conservatives, the Thompsons, another one who became a Conservative-he was one and he stayed one-the Caouettes, the Samsons and the Bois who don't even know whether they should cheer for Creditistes, Pequistes, Independantistes or the Rallie-ment national (nobody knows any more), they morbidly took it upon themselves to settle all economic problems through the Bank of Canada.
You will agree, Mr. Speaker, that it does not take a great deal of imagination to propose such a childish and, on the surface, such an easy solution to settle the economic problems of a country.
Strangely enough, however, until now, no other country faced with economic, monetary or other difficulties has ever thought to use the cure-all advocated by the Social Credit.
You will not learn anything from me, Mr. Speaker, since you are quite familiar with this Social Credit theory, if I


Mr. Gauthier:: Wait a while!


Albert Béchard: Mr. Speaker, I hear some Social Credit members laughing. They should not laugh, they should be weeping because of the lies they have been bandying right and left for so many years and which they unfortunately succeeded in having too many of our people swallow. They know full well that they are unable to solve any problem from the corner where they sit, since they will never-and fortunately so-be in charge of the country's fortunes.


Charles-Arthur Gauthier: Wait a while.


Albert Béchard: I hear the hon. member for Roberval saying: "Wait a while, wait a while" We have been waiting a long while, and there will, I hope, be a while more to wait so that the people of Canada may not be afflicted with such malaise and misfortune.
Mr. Speaker, even if there is no reason to be surprised by the kind of regrets expressed by the Social Credit, there is still reason to be seriously and deeply concerned with the attitude reflected by this proposition of the Social credit party from the constitutional viewpoint.
In fact all members of the House-at least those of the majority party, those of the official opposition and, I hope, those of the New Democratic Party-know that municipalities are brought into being by provinces and are therefore under provincial jurisdiction. Social Credit members are perhaps not yet aware of that.
As stated by the mover of the motion, who by the way disappeared this morning, so faint is his interest in this debate-although the municipalities do not want to be treated like little children, but be fed their revenue with the soup-spoon and not with the tea-spoon as was said this morning, and I do gladly agree with that, nevertheless the Canadian Government can in no way, within the present constitution and without incurring blame, extent its
Alleged Decentralization of Policies authority to the municipal field which is under the exclusive control of the provinces. And we would be criticized legitimately if we interfered with the rights specifically attributed to the provinces by the British North America Act in 1867.
I agree with the mover of this motion to the effect that there should be some co-ordination of the jurisdictions in the vital tax field to prevent our municipal, provincial and other officials engaged in public administration being plagued with headaches.
But to say, however, that the Canadian government, as is suggested by the motion of the hon. member for Champlain (Mr. Matte), and I quote in part:
-the government has not established consultative bodies with the provinces and municipalities-
-this, in my opinion, is bad faith.
When you are a representative of the Canadian people, when you were duly elected to inform and protect the rights of these people, I say that you are dishonest or partisan or else you show complete ignorance of the development of Canadian politics in the field of federal-provincial relations if you make such gratuitous statements.
I shall go one step further, Mr. Speaker, and say that a member who shows such ignorance-I dare not say, "crass ignorance"-is not worthy of the confidence that the people bestowed upon him in 1968 because he shamelessly misleads them by introducing such a motion and elaborating on the remarks that he made this morning during the debate.
Because of such remarks, because of such an attitude, those members have a duty not to ask their constituents again for this confidence which they abused and these people have a duty to show them to whom they should direct their confidence for the management of public affairs.
It is a sad thing to see that when the Social Credit party of Canada deplores the fact that the government has not taken steps to establish a consultation process in order to decentralize monetary and fiscal policies in a way which would allow each level of government to assume its responsibilities with less expense to the taxpayers, it deliberately forgets the positive efforts made by the government in this direction. It forgets one of the main formula for redistribution of taxes levied-the equalization formula, under which the richer provinces contribute to the greater well-being of the less favoured ones.
Incidentally, the share of Quebec-if this is the province to which the hon. member for Champlain and the Social Credit party are alluding in this motion-had been increasing continually since this measure was initiated in the forties. Renewal of those fiscal arrangements between the federal government and the provinces is provided for in Bill C-8 which is now under study, and which we discussed on third reading only yesterday.
Such arrangements were the result of continuous and intensive consultation with the provinces. In the past few years-as was very eloquently pointed out this morning by the President of the Treasury Board (Mr. Drury)-

March 17, 1972
Alleged Decentralization of Policies there have been regular meetings of ministers. The new Minister of Finance (Mr. Turner) participated in the 12th meetings which took place in Jasper in January.
Moreover, fiscal and economic policies are discussed at almost all federal-provincial conferences-and God knows how many of them we have had since 1968, when the present Prime Minister (Mr. Trudeau) came to power.
We have besides a federal-provincial committee of officials, which to this day has held some fifty meetings.
If you do not call that serious consultation, I will not hesitate to say it is as good as what takes place within the Social Credit party.
Regulations have also been made. Nothing is more natural or human than the desire to reduce the tax burden of the people by distributing it on the greatest possible number of taxpayers. This is what this government and all former Liberal governments have been doing all along in Canada.
However, one should be careful, as the hon. member for Edmonton West (Mr. Lambert) so rightly pointed out this afternoon, not to keep on asking the government to do things, without thinking of the cost that will have to be met at one time or another. After all, money does not grow on threes whatever Social Credit members may think to the contrary.
I have mentioned fiscal arrangements and the hon. member for Compton (Mr. Latulippe) knows that money does not grow on trees.


Henry P. Latulippe: We have never suggested that.


Albert Béchard: He is a shrewd businessman and has not picked up his money on trees!


Henry P. Latulippe: It was within the present system.


Albert Béchard: And it is within the present system that he has succeeded in business and I commend him for that.
I referred to fiscal arrangements as being one of the existing formulas that contribute to the funding of provinces to enable them to carry out their commitments towards the taxpayers and consequently, towards the municipalities which they have created.
Have the members of the Social Credit party, and the hon. member for Champlain in particular, forgotten the initiatives taken by this government in favour of young people, groups and municipalities through the Opportunities for Youth program and the more recent Local Initiatives program? Have they forgotten the large amounts made available to the provinces by the federal government-


Charles-Arthur Gauthier: You should say made available to Liberal organizations.


The Acting Speaker (Mr. Boulanger):: Order, please. I would like to point out that these last few moments, there have been interjections coming from the other side of the House. I would invite hon. members to allow the hon. member who now has the floor to proceed.


Albert Béchard: Mr. Speaker, I thank you for your call to order, but I must say that those interruptions do not bother me at all.


Charles-Arthur Gauthier: You are used to them.


Albert Béchard: Large amounts have been made available to provinces and municipalities, groups and citizens.
For instance, in 1970-71, $140 million were paid in loans to the provinces; $25 million were spent on the Opportunities for Youth Program; $40 million on other summer programs to help the students earn money for their studies; $150 million on the Local Initiatives Program and, during the same year, $160 million in loans to the municipalities, etc.
That redistribution of public funds, Mr. Speaker, helped considerably, directly or indirectly, to lighten the fiscal burden of the ratepayers for, in several cases, the projects carried out by groups within the Local Initiatives Program enabled those municipalities to get jobs done which they had been unable to tackle before for lack of funds.
That is the role of the Canadian government; it assumes it responsibly when it distributes throughout Canada the money collected from every class of society, from every province, rich or poor alike, and redistributes it amongst the most needy of them, and redistributes it equitably.
Has the Social Credit also forgotten the development programs of the Department of Regional Economic Expansion which are considerably helping not only our industry but also our municipalities to build for example, under the special designated areas program, some aqueduct and sewage systems, bridges, sidewalks, municipal facilities and roads?
Nobody would suggest, for example, in the lower St. Lawrence area and in the Gaspe Peninsula which were in a dire need of roads in the 70's and where the federal contribution was up to 50 per cent under the area development program for the construction of roads alone, that there is no communication between the two governments. There is a communication for the welfare of the people in that area of Quebec.


The Acting Speaker (Mr. Boulanger):: Order. I regret to interrupt the hon. member, but his time is expired. I even let him speak one extra minute. Therefore, to allow him to carry on with his remarks, the unanimous consent of the House is required. Does the House agree?


Some hon. Members:: Agreed.


Albert Béchard: Mr. Speaker, I shall be brief. I wish to thank my hon. colleagues for their courtesy. I shall quickly list some of the aspects the Creditistes may have omitted.
I have referred to the programs of the Department of Regional Economic Expansion. There are several of them, but I refer in particular to those that greatly assist our municipalities. Here is the proof: a considerable number of requests for funds are being received by the Department of Regional Economic Expansion and the Quebec Development Board. Why? To help those municipalities without the necessary funds. So, with this co-operation between Ottawa and Quebec, we can benefit, like other
March 17, 1972

provinces, under similar arrangements. Prince Edward Island, New Brunswick and all provinces benefit from this legislation of the Regional Economic Expansion Department.
But, Mr. Speaker, have the Creditistes forgotten the whole program of social security that was introduced in Canada by the Liberal party, clamorously called a centralizing party by the hon. member for Saint-Hyacinthe (Mr. Ricard) whom we may not have the pleasure of seeing in this House after the next election?


J.-H.-Théogène Ricard: The Liberals have repeated this six times, and I have beaten them each time.


Albert Béchard: In your riding it was said six times, but in mine it has not yet been said. Some are starting to say it about you.
For instance, are old-age pension plans, unemployment insurance plans, Medicare, hospital insurance, family allowances, Veterans allowances etc. not meaningful? If Canadians did not have these programs now, where would they get money from? They would have to get it from other sources.
Those are therefore measures that ease the burden of the Canadian taxpayer.
And Mr. Speaker, I have no compunction, as a representative from the province of Quebec, in Ottawa, in asserting that the party to which I have the honour of belonging has made available to all citizens indiscriminately the social security measures which it behooves the government to provide for the people of Canada because wealth should be equitably distributed in order that the less well-to-do, who worked at the building of the country may, upon retirement or at a given time of life, receive a part of what they gave the nation.


Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, I listened very carefully to the remarks of the previous speaker. I especially noticed that, at the beginning, he said that he would not embark on electoral matters. However, I must say that his speech had something of an electoral savour.
I do not usually insist on such things. This afternoon I intend first to try and explain to the House that the Creditistes are not the only ones who realize the defects of the present system. And I am very pleased to support the motion of my colleague, the hon. member for Champlain (Mr. Matte), particularly as far as the federal-provincial relations in tax matters are concerned. I will try to make a suggestion as to how we could put some order in the present system.
Even though some people take pleasure in praising the party in power, we really cannot but notice that we are up to our necks in debts and that there are thousands of unemployed.


Albert Béchard: Please, no electoral speeches!


Charles-Eugène Dionne: There are the results of a regime praised by people who are geared for an election campaign.
Alleged Decentralization of Policies
Enough about that. I shall now deal with the means to which the government could resort to clean up the present
mess.
The way to increase the standard of living of all Canadians, without taking anything from anyone, without paralysing economic activity and without generating either inflation or delfation, would be the financing of public investment by means of interest-free loans granted by the Bank of Canada.


An hon. Member:: That was mentioned earlier!


Charles-Eugène Dionne: It was mentioned but only to indicate that we always conclude our speeches with references to the Bank of Canada. I mentioned it at the very beginning of my comments and I explained how we could benefit from the services of the Bank.
Such a measure, as can readily be seen, would result in lower taxes levied by the government to pay interests on the public debt-which is unpaid and unpayable under the present system-or lower borrowings from the government and would increase accordingly the money available to the consumer to get goods to meet his needs.
Creditistes are not alone in favouring the creation of new credit on an interest-free basis for the financing of public capital.
In his book Demain, c'est Van 2,000, Mr. Gaston Bardet, professor of applied economics at the University of Brussels, after the publication of a thorough study of the banking system and studies performed in Britain by the MacMillan commission and in Canada in 1939 by the House Committee on Banking, Trade and Commerce, draws the following conclusions:
Hence, there are two possible approaches to financing which are totally opposed in character: one coming from savings, or surplus money, the other being projected in anticipation. In the first case, he said, as far as private production is concerned, self-regulation should come from the existing supply of capital-incidentally, we disagree with Mr. Bardet in this regard; in the second case, from demand as it concerns the surest primary needs.
Thus bank financing is highly advisable for building up the country's real estate equipment that is beneficial to the country at a whole. Wherever overproduction is not to be feared, demand determines the issuing. Needs in housing, highways, bridges, hospitals, schools then become the regulators of anticipated scrip money.
As those are consumption and not production loans, Mr. Bardet says there cannot be any interest. The country and the community cannot be usurers.
Another economist has taken an interest in this problem of financing government activities, and he came to the same conclusion that the Creditiste party has discovered a long time ago-the financing of public capital by new credit issued without interest.
The statement of this approach is found in Robert Theobald's book entitled "The Challenge of Abundance" which is available at the Library of Parliament.
This is what Mr. Theobald has to say on the subject, and I quote:
A government can use three different methods to obtain the funds it requires to meet its obligations. First, it can tax its citizens and institutions, thus gaining possession of their money. Second, it can borrow money from people and institutions and pay interest

March 17, 1972
Alleged Decentralization of Policies on the amount it borrows. Third, it can simply create money and use the resulting funds to make its purchases.
The one point on which everybody agreed before 1936, continues Mr. Theobald, was that the government should never simply create funds. The prohibition against creating funds was based on the assumption that the demand for goods would always be equal to supply as long as government did not interfere with the economy. Keynes destroyed the validity of this assumption when he showed that there was no certainty that the demand for goods would always be equal to the available supply in rich countries.
There are other methods, said he, that could be used to close any gap between supply and demand. It would be possible to decrease the level of supply without greatly affecting demand by cutting hours of work and leaving wages unchanged. It would be possible to raise the desire for goods by making people feel that more products were necessary for the good life and a decent standard of living.
The government could simply take up the slack between actual and potential production by building new schools, by demolishing slum housing and building new accommodation, and by controlling pollution. Because there would be unused resources in the economy, the government would not need to raise this money by taxation or by borrowing, the money could simply be created. The additional funds would not cause inflation, for there is-by definition-no shortage of goods.
Mr. Theobald thinks it is possible to democratize money and to use interest-free credits for the country's economic and social development.
I should like to state the opinion of an eminent British engineer, whose ideas create considerable interest in Great Britain.
Volume 183, Part I, no. 5 of the 1968-69 minutes and proceedings of the Great Britain Mechanical Engineers Association contains the full text of the lecture delivered to that Association by Mr. Anthony Vickers, under the following title: "The Engineer Society".
In this study, Mr. Vickers, who was warmly applauded and whose comments were later discussed by members of the Institute, deals first with technological development and the expectations it provides in terms of economic development. Then, in the second part of his report, he dwells on the means of financing social development and concludes by saying, and I quote:
This education requires, first of all, that each and everyone should grasp simple facts as well as the various functions of money whether it be metal, paper or bank credit. This does not entail endless studies of economic and monetary policies. It means that everyone should be able to understand that:
(1)	Money is a means of exchange or a method of payment that is intrinsically worthless and costs nothing.
(2)	The control and regulation of the amount of money required must be greatly improved to meet the demands of technological development and the changes resulting from a capital intensive economy.
This is not the view of a Creditiste, but, as I said earlier, that of an engineer who knows the problem.
In the last part of his report, the author explains how it would be feasible, within a full employment economy, to provide Great Britain with the social assets presently unavailable due to money and credit scarcity.
According to him, the United Kingdom has been reviewing for a number of years seven dam building projects intended to increase water resources, enlarge the national heritage, improve shipping and harbour facilities and in

some cases, enable the construction of electrical facilities and the improvement of the road system.
All these projects would turn out to be important assets for the people besides creating considerable opportunities for employment. Hundreds of millions of pounds would be needed, but the cost of creating the necessary credits would be negligible. Is this not the right opportunity of implementing Keynes' insistent suggestion to the effect that what is physically achievable should be made financially possible?
First, a national investment or finance company should be created. Commissions of all kinds are already in existence: Unemployment Insurance, Workmen's Compensation, and so on; therefore, why not institute a special commission to look after monetary reform? The purpose of this national finance company would be to supply the necessary credits for the creation of assets for the benefit of society. This would mean providing work as long as the resources allowed.
In a free society, in peacetime, overabundant manpower cannot be assigned to alternative jobs; however, through education, rehabilitation, good salaries and decent housing, it can certainly be attracted to other occupations, keeping in mind that the gross national product can be boosted annually by at least 600 million pound sterling.
Never before was our production, transportation or communication capacity altogether as large as today. However, the government invites us to tighten our belts, and this unavoidably causes restrictions being imposed in various ways by producers. Of course, time will tell that taxation was too much costly and complicated, but, even though the purpose of this demonstration is not to discuss taxation problems and basic objectives, it remains, nonetheless, that technological progress requires economic expansion for full employment.
This is why we are suggesting, concerning what we call non-profit capital goods, the institution of a national finance company meeting such needs. Its task would have to be stated clearly in order to avoid conflict with the various financial organizations serving the private sector of the economy, which is based on profit.
This national finance company, which would be one of the most important factors in government policy, would provide a large part of the money or credit now levied through taxation.
In spite of the present high rates the tax system cannot use the inactive resources to build, for example, a modern road system and it also adds a great deal to the costs society pays in the form of interests.
Last Friday, Mr. Speaker, the Minister of Indian Affairs and Northern Development (Mr. Chretien) stated in this House that he would like to be in a position to finance the building of a Canadian pipeline in the Mackenzie Valley but that he was not a creditiste and did not know how to print money. If the minister does not know how money and credit are born all he has to do is consult his banker who, if he is the least competent and honest-and bankers are generally very intelligent people-will tell him how the banking system creates credit out of nothing and if his banker does not know I will send him a copy of the very informative brochure published by the Royal Bank of
March 17, 1972

Canada. This way he would learn that all that is physically desirable must be made financially possible and that with a financial system attuned to reality financial problems would no longer exist when there is no production problem.
As Marquis Serra wrote in his book entitled "Le Chaos economique et la Revolution qui vient", and I quote.
Counting in terms of units called dollars the development of materials, natural resources and technology is an art in infancy. And so it is also when we create purely monetary means-credit, that is-to facilitate the exchange of various services which will carry out the plans.
I think that in this day and age it would be proper for all concerned to seriously look for a way out of this ludicrous social structure which allows a close mixture of poverty and wealth. Money does not grow on trees, as someone said earlier, and the creditistes have known that for a long time. It does not come out of thin air. It is created by man, made scarce by man and, unfortunately, the government which claims sovereignty lets itself be led and controlled by those who manipulate the money and the country and who hold the economic life in their hands to the extent that without their consent no one can breathe.
I think the creditistes are right in offering the solution they advocate and the population who is beginning to understand what is going on is prepared to change this system that breeds too much misery.


Henry P. Latulippe: Mr. Speaker, it is a pleasure for me to comment on the motion proposed by the hon. member for Champlain (Mr. Matte).
There is obviously some depth to this motion, and this does not please all hon. members. Those who are working in this House in order to get re-elected certainly do not like it. This motion does not suit them at all.
Mr. Speaker, in view of the hard times we are going through nowadays, I would say that there is too little understanding, too much disagreement, too little dialogue, too much parading, too little comprehension. At a time when we should be understanding one another in this House, at a time when we should be sharing an educative system in order to rebalance our economy, we just turn our backs and make fun of those people who really have in-depth reforms to suggest in order to rebalance our economy, which is completely unbalanced.
This does not mean that government supporters or administrators are all to blame. I have said this before and I am saying it again: Several of them are in good faith, and working for the common good. However, when you have to work with faulty, outdated tools, even if you do your best, you cannot obtain adequate results.
History should make us friends, economics should make us partners and necessity should make us allies. Nobody should divide two peoples that nature has thus united. Our relations with English-speaking Canadians are becoming more and more essential; they are in the best interests of Canadians. If the situation is somewhat muddled, if there is some confusion in our relations with other ethnic groups, somebody must say so, but in a sensible,
Alleged Decentralization of Policies
normal and scientific manner. We therefore have serious responsibilities.
As to the maintenance of our economic structures, our relations show an unusual decline. Mr. Speaker, we want to see Canadians control their economy, their political life, but we also wish to live in harmony with the other Canadians, regardless of their race, creed, colour or political allegiance.
We are told that our problem is economic, that it must be solved here in Canada through adequate policies; yet, they refuse to discuss those policies. And so, since the end of the last war, the tremendous progress achieved by the nation, by companies, has not prevented under-nourishment, poverty, insecurity and hardships among the vast majority of our people. Economic balance cannot spring from economic imbalance. It is an economic and mathematical point of view that demands economic and mathematical solutions.
Mr. Speaker, all those problems are easy to solve; they are not so colossal. It is a matter of finding the necessary means to solve the economic imbalance we now know. We did not produce that imbalance, we did not create unemployment in Canada, we did not organize the unions or give rise to dissatisfaction.
That dissatisfaction and all those new organizations which spring up overnight are the result of the inability of our governments to give the people what they are entitled to, to develop and take all possible scientific and economic means for the benefit of the people and not to subjugate them.
Financial organizations are subjugating the people who have a power of life or death over the government; it is not the government which must control people, but people who must direct the government and say what means should be taken, if it can not find them, to restore economic balance in order to provide to all a share of our natural wealth.
Mr. Speaker, our economic climate is polluted by our rotten social environment which breeds distrust, hate, dissension and discord among us. The stink of a decaying economy makes us experience the fears of inflation and deflation, financial crises, economic recessions, tightenings of the belt, debts of all kinds, useless direct and indirect taxes and especially continuous interests on swollen figures created with a stroke of the pen.
All this leads to social insecurity. As a reward for the work of past generations, the people, in general, only reap the bitter fruits of unemployment, debts, and sky-high taxes of all sorts.
Even though salaries are going up, they will never satisfy the greedy unions. There must be some order and authority; otherwise, everything will crumble, and we are going to experience here what millions of human beings who have lost their freedom are going through.
We, of the Social Credit, have been saying for 35 years, in every possible way, that the monetary system is strangling us, squeezing us dry. In fact, did Henry Ford not say once: "If the American people realized in what a crooked financial system they are living, they would not tolerate that system another day".

March 17, 1972
Alleged Decentralization of Policies
We are suffering from monetary anemia. The value of our dollar has decreased by 70 per cent in the last 20 years, and this reduces our purchasing power gradually, when, in fact, it should be increasing with the rise in national production.
The time of the lean kine and the fat kine is no more. We have only the lean kine now, and such a situation is no longer advisable.
Our capitalistic society was born, has grown and has developed. The modern world is going back to paganism, towards inhuman capitalization, where man lives in affluence, but is more and more isolated, being deprived by financial forces.
The Social Credit party wishes to make capitalism more humane, by making a servant of it instead of an exploiter. All tools of capitalism should be available to everyone. Such tools should enable everyone to obtain a vital minimum.
In short, such is the justification for the Social Credit, what makes it different from the old, worn out and dangerous political parties which, for dictatorial reasons, are depriving the citizen with financial weapons over which they do not have ultimate control.
Previous speakers have pointed out the untoward effects of our current situation, the result of banks financing social projects of various governments which in turn leads to the indebtedness of the public, the taxpayers and all governments and to tax increases which mercilessly eat up the low income of plant workers, farmers, blue collar workers, civil servants, in short all the classes of society now in a state of stagnation.
The hon. member for Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) said that if I have been successful in our society, I owe it to the present system. Indeed, I have been successful in this society, but I have worked perhaps fifty times more than he did. If someone succeeds in this system, it can only be at someone's expense. I am human enough to allow myself to live, but I also let other people live. That is why I work.


Albert Béchard: Everybody does.


Henry P. Latulippe: Mr. Speaker, other spokesmen for the Social Credit party have proposed a new finance formula, a sound and logical formula that could only benefit all Canadians. I cannot see why hon. members opposite would not consider our economic arguments to settle the problem and balance our economy in a normal fashion.
Nobody is satisfied with the present economy, because it is out of kilter from A to Z. The governments will be collecting taxes from the people. The hon. member for Bonaventures-Iles-de la Madeleine (Mr. Bechard) had this to say a moment ago: "We paid out social welfare benefits, family allowances; we financed the Opportunities for Youth Program and made, all kinds of payments to the population." But how could they do it? By increasing income tax, and all kinds of other taxes, direct and indirect, and after having accumulated huge deficits. These will be increased to $3 million at the end of 1973 in order to cover social legislation designed to allow people to live 
decently. But what is still far from being decent, is the piling up of deficits, and these must eventually be paid, and that is what the hon. member does not understand.
Other members of the Social Credit party have brought forward a new financing system a sound formula.
Mr. Speaker, during the few minutes available to me, I want to point out some of the advantages which would result for all of the population from the implementation of the policies set forth in the motion submitted by the hon. member for Champlain.
First and foremost, social needs of CAnadians could be met to the extent allowed by the physical resources of this country. In other words, if there are brains and brawn available, if our resources are plentiful, nothing could prevent from coping with the needs of Canadians in the fields of social projects, education, health, urban renewal, public equipment, at all levels.
I would like to repeat here that we believe education to be a provincial matter. Therefore, we believe that the provinces should be responsible, through school boards, colleges and universities placed under their jurisdiction, and in consultation with bodies representing that sector- i.e., parents, teachers, church and state-for the development of programs which will however, take into account the objectives pursued by society, and the needs of that society.
However, all those educational needs-be they school facilities, vocational training, or comfort of the students- cost a lot of money, and we believe that a formula like the one we are advocating, although it would not solve everything, would at least eliminate the most serious obstacle which at present paralyzes all good will and practically crushes the best initiatives.
The same thing is true of health services. Before you can cure people and prevent illness, you need first of all to have enough institutions to accommodate the sick. You also need doctors and specialists.
There are now medicare and health insurance programs in all provinces of Canada.
Without trying to determine whether those programs are justified or in what manner they should be implemented, the fact remains that all present health insurance programs are faced with financial difficulties.
The difficulties are such that the federal government has almost called upon the provinces to reduce the costs of those programs which get increasingly higher.
We must not forget that the provinces have to face the costs of building hospitals, that they are responsible for the training of competent staff, that they must negotiate with employees who have the right to strike with respect to their salaries and their working conditions. The provinces bear the brunt of those medicare and hospital insurance programs. They face the cost of those programs and they struggle in order to find the money needed to improve health facilities. They must meet exorbitant costs considering the high interest rates they have to pay for the money they borrow on the free market.	[DOT]
This is something the hon. member for Edmonton West (Mr. Lambert) never did and never will understand, I am afraid, because he says one must work to get money. But
March 17, 1972

where does money come from to pay for labour? To pay for labour, you need investments. Investment money must be borrowed at interest, you must repay the borrowed capital and the interest, which is money that has never been in circulation. This is the reason for the public debt that we now have and that is approaching $46 billion. The cost to each Canadian is approximately $115 to $120 of tax money to pay the interest on the debt. Old parties view this as normal, as good management. They have long had the population believe this but today the people are beginning to realize that there are other means of financing, other means of curbing the increase in those public debts and in taxes which are at the top of the whole economy.
We can no longer levy taxes. Whatever taxes would be levied would not be paid by the citizens because they can no longer afford it. Hon. members, those great economic experts who can solve any problem, are faithful to the system that led us to such stagnation and unbalance. They think they are smart because they follow the beaten path instead of opening new trails and searching for new horizons. Instead of progressing towards real solutions, we are sinking deeper into chaos.
I would like to deal with the social security measures we could improve with a financial system that would be attuned to reality which would not neutralize good will and initiative, but would be reconditioned to give all Canadians at least the strict minimum to which the wealth of their country entitles them.
We think the question to ask is the following: Is Canada wealthy enough, are Canadians able to produce enough to meet the basic requirements of the whole population? If so, why are those needs not met? Simply because the present financial system paralyzes everything, grabs for itself all the wealth, emasculates all efforts.
A financing method which would allow everything physically possible and desirable to materialize would have the effect, Mr. Speaker, to bring hardship and distress to an end for millions of Canadians living below the poverty line.
Mr. Speaker, I would also like to say a few words on the consequences of initiating such a financial system on savings, investments, employment and finally on consumers at large-


Mr. Speaker:: It is with much regret that I have to tell the hon. member that his time has expired.


John Edward Broadbent: Mr. Speaker, in joining in this debate I notice that on this Friday afternoon the Prime Minister (Mr. Trudeau) is not with us.


An hon. Member:: Where is your leader?


John Edward Broadbent: I have not yet finished my comment. I realize that many members are away on legitimate business on Friday afternoons and I was about to say that I hope the Prime Minister is not away today making the kind of speech that he made a week ago today when he visited Victoriaville, Quebec. In his quaint, casual, profound way he was informing the people of Victoriaville that we in Canada are embarking upon a new age of leisure; that contrary to what a lot of troublesome, mis-
Alleged Decentralization of Policies
leading, misguided and misinformed opposition politicians are saying, there really is not an unemployment problem in Canada.
To the people of Victoriaville the Prime Minister said, "Do you realize that in the city of Montreal alone there are 10,000 jobs available for those who want to seek them?" Later in that speech, if reports are accurate, he said, "Things really are not bad in Canada. You know, conditions aren't as bad as they were in the thirties". That is the Prime Minister's standard of comparison: things are not as bad as they were in the thirties. It is interesting that he seized upon the 1930s, because we are not far removed from that period if we consider the absolute number of unemployed.
The speech made by the Prime Minister cannot be taken lightly, or simply dismissed as a somewhat mistaken view or interpretation of what is going on. It must be seen for what it is-a kind of hoodwinking attempt to say that things are not so bad. As someone once said, "That just ain't the case"-because in saying what he said to the people living in that town of Quebec, he left unsaid that for the 10,000 jobs available in Montreal there were in the province of Quebec alone 230,000 unemployed looking for jobs. If the Prime Minister had wanted to be honest and to fully inform the people of this country, in his speech he would have said that there are 16 or 17 people pursuing each job that is available across the country.
This situation compares with the western European average, to be on the generous side, of roughly two people looking for each job that is available. In fact, in Austria, Norway, West Germany and Sweden-countries governed by parties with a social philosophy identical to that of my own-you will find virtually full employment, the highest level of employment in the history of western Europe. That is the kind of point that the Prime Minister finds it convenient to ignore. He is much more interested in talking about the level of inflation of these countries and uttering blithering economic nonsense about how much better off we are because our inflation is not running at the same rate. The Prime minister totally neglects to inform the people of Canada that inflation in itself is not necessarily bad if you do what those countries do to protect pensioners by having fully effective escalator clauses in pension contracts or by getting workers to join trade unions. Something like 85 per cent of the workers in the labour force of those countries are unionized and can therefore deal with an inflating economy. We have something like 35 per cent; therefore it is difficult for us to deal with inflation. But that is the progressive solution: leave this inflation to create full employment; get people into the trade union movement; protect our pensioners. This would be a vital approach to our economy, a sensible one and one which would show a sense of compassion. Perhaps that is why it is not pursued by the Prime Minister.
I share some of the philosophy of my friends in the Social Credit party on the social objective of this debate; that is to say, we must have something to produce real economic benefits for those in our society who are suffering at this time. That is a pretty general objective and to that extent I will be speaking directly on the motion

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Alleged Decentralization of Policies
before us. I should like to suggest four or five practical steps that could be taken right now to bring that about.
The first of these is a change in tax policy which would benefit the vast majority. It is the kind of change that is in complete contradiction of the bill that we will probably be discussing in this House on Monday or Tuesday next which proposes an across the board tax cut of 3 per cent to individuals and 7 per cent to corporations. That kind of tax cut is wrong on the grounds of equity and employment which are the two objectives of a sensible tax policy. The 3 per cent across the board tax cut for individuals means, of course, that millionaires or people with substantial incomes save much more than those with average or low incomes and that is why it is unjust.
An across the board tax cut, of course, is beneficial to a party seeking re-election, especially a party that relies for a good part of its support upon upper-income groups. What we need, instead, is the kind of proposal that I and some other members will be making in the debate next week for a 40 per cent tax cut and to put a ceiling on the amount. In a debate on a similar subject last Christmastime I made a proposal for the introduction of a tax cut of 40 per cent with a ceiling of $40 for the individual. Under the present tax approach of this government, a man earning $30,000 upward will save from $1,000 to $5,000 a year in tax.
Under the government's proposal, a single individual earning $2,000 would save $2.25, a single individual earning $4,000 would save $16.41, and so on. These are paltry sums for low-income people under the so-called tax reform of this government. Having a minimum tax saving of, say $40 for tax payments in Canada would mean something to the low-income people and there would be a ceiling on it so that no one would save more than $40. With the present legislation, upper-income people will save thousands of dollars.
The second practical and just role would be to start hitting the people on the stock market and the land speculators with a full capital gains tax. The government, with all their wisdom and bravado said they were bringing a capital gains tax to Canada but they did not say that we are the only country in the western world, with perhaps the exception of Spain, that has not had a capital gains tax for many years. Instead of bringing it in at the full rate, they brought it in at the 50 per cent rate. Instead of people in the stock market paying tax on a $10,000 gain, these people have an exemption on half their gains. This is completely unjust and inequitable. This kind of thing is responsible for the cynical attitude of low-income people in Canada when they see the fat cats getting fatter by not paying their share of the tax burden. That minimal kind of equity would be desirable both in psychological terms and from the point of view of tax equity.
Another kind of injustice is brought to mind by the $150 exemption to be allowed as work-related expenses. I have heard Liberal politicians say that this is wonderful, that ordinary workmen will be able to claim the expense of driving to work or of purchasing tools without even having to turn in receipts. I do not find this a remarkable or significant innovation. If they had said to the corporate set that a $150 limit per year would be set on their expenses, that would have been fine. But they did not say
IMr. Broadbent.]
that. In any big hotel in Toronto or Montreal, and no doubt in Bayshore in Vancouver where Mr. Hughes is currently residing in his attempt to purchase another part of British Columbia, there can be the situation where jet-set executives entertain their clients and write the whole thing off as a business expense.
If a business proposition is involved, the fact that $150 is spent in one night on wine, good food, and so on, is incidental. But that, Mr. Speaker, reveals the hypocrisy which is built into our tax structure. We say to the working people of the country that they will be allowed to claim $150 a year without even producing receipts, and we say to the upper-income people that they can spend $150 a night and claim it as a business related expense. I say this is completely unjust and should be abolished. What is fair for the poor or average man should be fair for the rich man as well, and this just is not the case with the present tax laws.
I should like to go back to the question of the general reduction of taxes with which we will be presented early next week. I made reference to the across the board 3 per cent tax reduction for individuals. I should also like to say something about the 7 per cent reduction in the corporate sector. If it would not bore my colleagues, I could quote economists on this point. The 7 per cent across the board is for many companies simply a windfall profit by which we will allow them to have a little more money this year. If you reduce taxes in the corporate sector, the least that should be done, instead of giving an across the board reduction, is to analyse this reduction to make sure that what you achieve in the corporate sector is what you intend.
What should be done is to have a 7 per cent across the board reduction in every sector of the economy only if at the end of the fiscal year they can show they have increased their labour force and have expanded their enterprise by a certain percentage. That is the motivation that was argued by the minister of finance last fall when he announced the tax reduction. The motivation was to improve the job situation in Canada. If that is the motivation, there should be a rider attached to the tax reduction and no company should receive the tax benefit at the end of this fiscal year unless it has improved the job situation and has expanded employment. With the present legislation there is no such criteria. So, to repeat the point, it amounts to a windfall profit for a good number of companies and achieves no social benefit for the people of Canada.
Secondly, if we are to have significant corporate tax reform it seems to me what we need is a shift in the tax burden from the manufacturing sector to the resource sector. That is the kind of shift that would result in an increased number of jobs. In Canada the resource sector of the economy pays taxes at rates which are roughly, in their final effect, 50 per cent lower than in the manufacturing sector. Again, if the government wanted to create jobs, what it should do is remove this disparity because everyone knows it is the manufacturing sector-the textile mill in Montreal, the auto plant in Oshawa and the few firms which still exist in Mr. Speaker's riding-which employs significant numbers of people. You can have
March 17, 1972

another oil well in Alberta or in the north, or anywhere else in the country, and it just sits there gurgling away and producing almost no employment.
However, it is the manufacturing sector of the economy, as the former finance minister said when he was in opposition-and that might be significant-which is adversely affected by our tax system. We pour money directly into the resource sector by not taxing it at the same level as we do the manufacturing sector. The result is we have a disproportionate amount of capital investment going into the resource sector and not enough into the manufacturing sector, where it should be. What we need right now, to get back to the motion, is to create a greater sense of fairness. That means greater employment. What we need is a tax increase in the resource sector of the economy which will have, as an effect, the rechannelling of investment into the manufacturing sector.
This government has been quite consistent in its tax policy. It takes great pride in consistency and consistent stupidity. I suppose it would prefer to be consistent rather than make an intelligent and just change. Let me conclude with a practical recommendation. We have now in our foreign reserves almost $6 billion. If we intend to keep our dollar floating, and particularly if we intend to maintain a clean float, as the economists say, there is no need for that little depository of money to simply sit around. A couple of years ago I argued that we should use a good part of the reserves-I believe the amount then was around $3 billion-to buy a controlling interest in the petroleum industry of Canada. I argued that this would make very good economic sense. This is a growth industry, and with control we could carry out our own research and development in Canada by employing Canadian scientists. This would lead to the development of new projects.
Has my time expired, Mr. Speaker?


Mr. Speaker:: The hon. member cannot ask a question of the Chair, but I will tell him that his time has expired.


Gilbert F. Rondeau: Mr. Speaker, in speeches delivered both inside and outside this House the Creditistes have often quoted as an example the building of the Jacques Cartier bridge which everybody knows and which was built according to official figures at a cost of $18,571,308.71. At the present, the taxpayers of this country have paid in interest only for that bridge the amount of $20,198,266.33 and there is still $14,065,605.39 to be paid on the principal.
As we have already said on several occasions, Mr. Speaker, this is dreadful nonsense. A nonsense that the Creditistes undertake to do away with as soon as they have taken over. This should happen soon because the people of Canada have their fill with paying two or three times the actual cost of a product or service they require when it would be possible to build bridges or schools, to carry out various public works without the taxpayers being called upon to pay the cost of two or three bridges when they only get the use of one.
Under the Creditist system, Mr. Speaker, finance is nothing else but facts expressed in terms of accounting. If a production takes place, we write down in the credit
Alleged Decentralization of Policies
column the value of what has been produced. If that production is consumed or destroyed we write down in the debit column the value of what has been consumed or destroyed. Under a creditist regime we would not be asking ourselves questions such as: Do we have the money? Can we pay? Can we borrow? How are we going to pay back?
Has a bridge become necessary? Is a new school being called for? The only question those in charge will have to ask themselves is this, can we build the bridge? Can we build the school that is being called for and needed?
Whether we can build a school or a bridge or not, Mr. Speaker, does not boil down to, do we have the money? It is a matter of, do we have materials, wood, brick, tools, engineers, technicians, workers, to build it?
We, of the Social Credit party, know that the real credit of a country, of a province or of a municipality lies in the productive capacity of that country, that province or that municipality. That is the real credit.
Financial credit should, on the other hand, reflect the real credit. Financial credit should then derive from society itself or rather from a monetary institution which could well be the central bank, which operates on behalf of society and on its instructions. This monetary institution which is only a book-keeping instrument, could well be the Bank of Canada at the national level, or a Quebec institution at that province's level, in case the Quebec government and that of other provinces should take the initiative if Ottawa refused to do so.
But let us assume that the Social Credit party is in power in Ottawa and that the incumbent Postmaster General wants to build a post office somewhere or that the Minister of Transport and Communications wants to put up a bridge between Montreal and the south shore. The ministers concerned would submit their projects to parliament and the members would decide whether they can be physically carried out and whether they meet actual needs. In no way do the members have to ask themselves whether they have the money or not. They only have to consider whether these projects meet actual needs and are physically possible. This means that the members will have to agree if the productive capacity of the country allows it to carry out these projects while still providing the goods required by the private sector. The decision of parliament to allow the construction of a post office or a bridge has nothing to do with any financial concern. In order to reflect realities, finance will have to play its part. The credit board or central bank would have nothing to decide, nothing to dictate with regard to the carrying out of the project. It would merely finance the construction of the bridge and make the required entries in a national ledger.
Let us suppose a $10 million bridge is to be built across the St. Lawrence. In his tender, the contractor would have provided for the expenditures; the purchase of materials, labour, transportation and the cost of money. But where would he get the money to pay his bills from day to day if he is short of cash? From financial institutions, banks, for instance.
Under a creditiste government, the banks would continue to exist, to make loans and give credit. They could lend

March 17, 1972
Alleged Decentralization of Policies money from the savings of citizens, or still obtain interest free credit made available by the central bank, with the only requirement of paying back the whole of the loan over a given period.
But banks being agencies serving the public will have charges, salaries to pay, and they will have to make profits if they are to carry on their operations. Therefore they will ask their make borrowers to pay charges that could be described as interest or service charges. But under a Creditiste government, the essential difference would be that the banks would not grant credit that they could not generate themselves, nor would they appropriate it as though it belonged to them, but they would get it from the Central Bank, depository of the national credit.
Upon completion of the bridge, the government would inspect the works, and if it found it in accordance with the plans and specifications, it would pay to the contractor the sum of 10 million dollars. That amount would include all the contractor's expenses plus his profit, as well as the financial costs he had probably provided for in his bid. But some people may say: The government now owes $10 million to the central bank, since it is the bank that advanced the credits to pay for the building of the bridge. But no, there is no indebtedness. The bridge is wealth newly created by the people, through the work not only of those who helped to build it, but of all those who enabled the contractor and employees to build the bridge by providing food, clothing, tools, etc.
As we do not ask a farmer to pay for the milk he produces on his farm, so we should not have a country run into debt for its own production. If that bridge had been built in the United States, it could be looked upon as a debt to the Americans. But in a realistic system, a public debt, a national debt has no sense and cannot exist except with regard to foreigners, if we received from them in actual goods, material, manpower and services more than we sent them.
Some people may say: "But those $10 million were put in circulation. Are you going to recover that amount through taxes in order to pay for that bridge? Certainly.
I have just said that the people do not have to pay for the construction of the bridge, since they built it themselves, but they have to pay for the use of it, for depreciation, as it deteriorates and depreciates.
As Creditistes say, new production must be financed by new capital, and the retirement of such capital must be done at the rate of consumption, that is at the rate of the disappearance of the wealth that was created and financed.
Let us go back to the comparison with the milk of the farmer. Production should not be paid by him, but rather by the consumer.
In the case of the bridge, it is the public who must pay, not as a producer, but as a consumer.
Let us suppose that the bridge has a life expectancy of 50 years. This means therefore a yearly depreciation of $200,000. So there are those $200,000 which the public will have to pay back to the Treasury office as a tax or as a toll for a period of 50 years. After, whether the bridge is

completely out of use or not, payments will end because it is impossible to consume something two or three times. Nobody should be asked to pay for the consumed thing two or three times, not any more than the milk consumer has to pay twice for the milk he buys from the farmer. Only a financial system as preposterous and as dishonest as ours would exact payment two, three times from the population for its acqueducts, its schools, its bridges, its roads, etc.
What would be the results of such a policy? Governments would stop getting the citizens into debt. There would be ne more debts incurred by the country, the provinces, the municipalities and the school boards while the real needs would be met without the government and the citizens having to wonder whether they can affort them, which taxes are to be imposed, whether they should agree to such sacrifices.
They would no longer have to ask themselves such questions, save this one: Is such production called for? Does it meet some needs? With our material means, can we afford to achieve it?
But with what resources would the government's public services be paid for?
Some public services, such as the post office, can very well be paid for by the users, as well as the railways and the expressways.
Others could be paid for by the public at large. I am referring to ordinary roads, national security and administrative services. All citizens benefit from such services as they ensure order and good public management.
However, some services benefit only a certain group of citizens, such as water and sewer systems, sidewalks. In such cases, the cities and municipalities that avail themselves of such services should have the use and depreciation of same paid for by their own citizens.
In brief, it can be said that it is the responsibility of those who benefit from such services to carry the charges not twice or three times, but once.
Mr. Speaker, I should also like to continue my explanation on the financing of public investments by means of interest-free credit made available by the Bank of Canada and to quote statements by Sir Arthur Bryant reproduced in an article entitled An Alternative to Socialism, that appeared in The Illustrated London News on May 31, 1969.
This text is self-explanatory. And I quote:

What, I believe, is wanted is a total and categorical differentiation between the private and public sectors of the economy. To the former should be restored what it enjoyed before the first application of Socialism at the turn of the century-its ancient monopoly of earning the national income free from government interference in industry and business. Though this would enable the laws of supply and demand to operate once more, with the beneficial result of enabling the efficient to undercut and out produce the inefficient to the all round advantage of the consumer who would benefit by better service and reduced prices, it would not mean the abdication of the state's authority in those matters where state action and monopoly is requisite and beneficial to the community as a whole. Far from advocating a return to the anarchy of nineteenth century untrammeled laissez-faire I would give the state, in its own allocated sphere, far greater power to serve the public good than it at present possesses. In other words, I would
March 17, 1972

render unto Caesar the things that are Caesar's, while rendering unto the individual economic man the things that are the individual's.
To certain statutory public services I would apply the same principle that governs the administration of the fighting services. The goal set them by Parliament would not be to make them pay in terms of money and take the lead, as at present, in the inflationary spiral by forcing up costs and wages, but to provide essential public services to the community at the lowest possible cost or even free. Instead of such essential public services as postal communications, rail transport, electricity, gas, and water being sold to the public and the private sector of industry and commerce at ever rising prices, they should be provided either free or at a steadily diminishing cost with the deliberate intention of making it easier for private industry and business to operate cheaply and efficiently and of reversing the inflationary spiral both for commerce and the private consumer.
Such public services are at present financed by extracting the cost from the public in the shape of ever-rising taxation-a method of public finance which we are beginning to see is a hundred per cent inflationary in its effect, for every increase of taxation is followed by a comparable or even greater rise in wages and prices, with all the additional attendant costs of revenue-collection, administration, and strikes. Instead, I suggest the wage and other costs of public service would be met by the creation of debt-free money by the Bank of England, the finance available for such increase being based, broadly, on the annual rate of growth or wealth increase earned by the nation's private sector. Heretical and even outrageous as this suggestion must seem to any orthodox financial mind, it would, in fact, be no more inflationary than the present system and probably, because of the immense increase in productive activity stimulated by the release of industry and commerce from the restraining and penalizing hand of the civil servant and tax-collector, far less so in relation to the nation's real wealth and earned income.
The corollary to this would be that those who serve the state to provide essential services to the public would do so, though on a free contractual basis, under the same kind of conditions as soldiers or sailors. They would enjoy special status and privileges, ample pay and pensions, but they would not be permitted, as at present, to hold the public to ransom. Nor would the owners of land, whose ultimate freehold would be vested, as before the seventeenth century, in the Crown. For though those who occupied land, both agricultural and urban, would have security of tenure and be free to develop and improve it, they would not be free to make a financial profit by committing waste or trespassing on its permanent value, beauty, and general use to the nation whose continuing and inalienable property it was. The whole basis of such a revolutionary economy would be the creation and preservation of real wealth, both national and private, as opposed to sterile speculation in money values which, though enriching certain individuals, may impoverish the nation.
Given the immense inertia of accepted habits of thought and the even greater power of vested interests, such a revolutionary but, as I believe, basically conservative policy-for it would conserve the national character and values-is obviously the merest pipe dream. Yet, put into effect, it could give new life and hope, not only to the British people, but to the world.

Mr. Speaker, the remarks I have just quoted entirely apply to the Canadian economy. Indeed, not only the Creditistes in this House, but progressive people wherever in the world the current economic system is not serving its purpose, advocate reforms like the ones we have had in this House in the past few years, as well as financial solutions to the present economic system in order to cope with our problems, which cannot be solved in the financial melting-pot which we have experienced in the past and are still experiencing.


Charles-Arthur Gauthier: Mr. Speaker, I want to use the 12 minutes or so which are left to say a few words
Alleged Decentralization of Policies
about the motion proposed by the hon. member for Champlain (Mr. Matte).
According to figures already quoted by other Creditistes speakers, the public debt reaches frightening heights in Canada, and the amount keeps increasing as the federal government, provinces and municipalities of Canada run into more and more debt.
In a paper tabled in the House of Commons by the Minister of Industry, Trade and Commerce (Mr. Pepin) on May 4, 1970, statistics show that for the year 1966, the net debt of provinces was $3,260 million; for 1967, the net debt of municipalities amounted to $8,862 million; the debt of Crown corporations was $12,064 million, while that of Canada amounted, in 1968, to $17,336 million.
All in all-the statistics for 1968 and 1969 are not included in those*figures-the public debt of Canada amounts to $11,552 billion, which represents a debt of more than $2,000 per capita.
And that is a debt which accrues as fast as the country expands, becomes richer with new products, new plants, new housing, new utilities.
In 1867, the debt of Canada was $75,728,642.
In 1913, before the World War I it was $314,301,625. After the war, it had jumped to $1,514,331,033; 25 years later, namely in 1945, the debt had gone up tenfold to reach $11,298,362,018. In 1960, it was $12,089,194,003, and in 1968, it finally hit $16,759,725,147.
Let us also note that the provinces, the municipalities and school boards are also getting into debt deeper and deeper.
How can that be, when there is more wealth, a greater abundance of goods, a larger number of plants, an increase in population, and when industrialization allows greater and cheaper production?
The answer is simple: it lies in the financial system itself.
The industry that mass produces furniture does not also manufacture the money to buy it; the banks manufacture the money.
The farmer who breeds stock to sell them to the slaughterhouses does not produce the money to buy the meat in food-markets; the farmer who grows potatoes does not also grow money in his field. Money is produced by another "plant", another body. It does not grow in fields or on trees, as one member said a while ago: it springs from the pen of the banker.
However, money is only created provided it yields to the banker who creates it as a loan, a higher amount that the one he lent. This is known as interest. But the banker never advances with his loan the interests accruing therefrom, the refund of which is the condition of the loan.
Consequently, the higher the production, the greater is the volume of manufactured products, the more abundant are the crops, the more fertile is the soil, the more productive are the workers, the more the automatic and electronic equipment is operating quickly to create more goods, the more the government builds roads, bridges, public buildings, schools, the greater are the financial needs to buy that production, the more the bankers are lending

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money for the disposal of that production, the higher are the interests to be paid and the total debt.
Is it not possible to completely repay those debts? It might be possible in some isolated cases, but on the whole, it is impossible; it is merely a pure mathematical reasoning.
It is impossible to pay off public debts completely under the present financial system, even with all money now available, for the simple reason that the debtor must always pay back more than he borrowed, and this, because of the interest charged on the loan.
It may happen that the total debts decrease over a certain period if, for instance, bankruptcies cancel debts. But then, factories close down, farms are abandoned, debtors are disowned, there is unemployment and poverty. Debts are only written off at that cost. [DOT]
But what does happen in the case of governments? Some of them manage sometimes to decrease the public debt. They do this first by taking in taxes more money than they distribute in services or benefits. They may do so still by alienating their resources, by selling them to foreigners, or to industries in this country.
In the first case, it is a question of reimbursing the public debt, by ensuring a favourable trade balance through a larger volume of exports than what we now have. There again, that is a local solution that cannot be applied globally, because all countries cannot at one and the same time have a favourable balance of trade.
As for the sale of natural resources to local industries, so that they may be disposed of on the local or domestic markets, it may enable to pay off a national debt, but the purchase of national resources, or the payment of royalties by industrialists, would compel the latter to include such payments in the price of the finished products sold to the consumers. The latter are the ones who must pay the higher prices. Their taxes are not as high, but they have to pay higher prices.
But then, will it be alleged, how would a Creditiste government curb the increase of the national debt and even reimburse the existing one?
Let us suppose that the government wants to build a bridge across the St. Lawrence between Sorel and Berth-ierville. The engineers estimate the construction costs at $10 million. The contractor does or does not have the money to build that bridge. So, he borrows the money from the bank and pays interests. He feels that the $10 million contract will bring in enough profits to pay that interest easily.
Once construction is completed, the government takes over the bridge built by the contractor and gives the latter
a cheque. But where will the government get the money to pay for the bridge? He will get it from the country's actual credit, which was increased through a $10 million asset. Therefore, if the country has grown richer physically through the acquisition of a $10 million bridge, there is an increase of $10 million in the country's actual credit. And, on the other hand, financial credit should reflect actual credit. Therefore there is no debt in the sense we usually understand the word.
Finance should be a reflection of reality. Physical reality was increased by a bridge worth $10 million; the financial credit should increase by $10 million to reflect such an asset. Therefore there is no debt as far as the people are concerned.
One of the members who spoke earlier explained how the repayment of the credit advance would be made in accordance with the depreciation of the bridge, without the interest being repaid. The bridge wears away every year and is being depreciated. If the depreciation is based on a 20-year period, the citizens will have to repay under one form or another the amount of $500,000 a year because we are talking about consumption. If the bridge depreciates 5 per cent a year, actual credit is reduced by 5 per cent. Since finance should reflect the physical reality, financial credit should be reduced by 5 per cent each year. This is the financial balance advocated by the Social Credit party.
But how would we go about paying back the present public debt? First of all, the Creditistes do not want to repudiate debts honestly contracted by earlier governments. However, they make a distinction between the debt the government owes those who saved and lent their money to the government through bonds, and the debt the government has vis-a-vis the banks who have simply created money by a stroke of the pen in order to pay for their bonds.
So, a Creditiste government would ask the bearers of bonds to assert their rights. If a holder has in fact paid for his bond he would continue to receive interest right up to its due date; if a holder has acquired a bond by a stroke of the pen, another stroke of the pen would immediately cancel that debt. Since the banks hold at least 20 per cent of public debts these would be immediately reduced in that proportion, as would the interest to be paid.
As to bonds held by true savers they would be redeemed upon maturity. A person holding a bond of $1,000-


Mr. Deputy Speaker:: Order. It being five o'clock, it is my duty to inform the House that, pursuant to Standing Order 58(11), debate on the motion is over.
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.