1972-05-23

ROUTINE PROCEEDINGS


Mr. Ian Wahn (St. Paul's) moved: that the first report of the Standing Committee on External Affairs and National Defence, presented to the House on Tuesday, May 16, 1972, be concurred in.


[Stage Direction]
Motion agreed to.


Hon. Ron Basford (Minister of State for Urban Affairs):: Mr. Speaker, I would like to table in both official languages copies of the final report of the Tri-Level Interim Planning Committee made up of myself, the Hon. D'Arcy McKeough and His Worship, Mayor Marcel D'Amour of Hull.



CONSUMER AFFAIRS


Mrs. Grace Maclnnis (Vancouver-Kingsway):: Mr. Speaker, I rise under the provisions of Standing Order 43 to seek unanimous consent to move a motion. My motion arises from the increase in the cost of food in the home of nearly 7 j per cent from April, 1971, to April, 1972, together with a simultaneous increase in the profits of the large supermarket chains during the first quarter of this year- Safeway, 40 per cent, George Weston, nearly 50 per cent and Dominion Stores, 300 per cent. Therefore I ask unanimous consent to move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), the following motion of which I have already given notice to the Minister of Consumer and Corporate Affairs (Mr. Basford) and to which I am sure he will be favourably inclined:
That the matter of food prices and supermarket profits be referred to a special committee of this House for investigation and report.


Mr. Speaker:: Order, please. I should remind the hon. member that it is not the minister's consent that is required but the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent. The motion cannot be put.



FINANCE


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I wish to propose a motion under Standing Order 43 on a matter of urgent and pressing necessity. In view of recent reports under the Small Business Loans Act, the Fisheries Improvement Loans Act and Farm Improvement Loans Act for the period January to March, 1972, which indicate that not one loan was made in the province of Newfoundland, demonstrating failure by the chartered banks of Canada to fulfil their responsibility in directing these loans on behalf of the government, I move, seconded by the hon. member for Gander-Twillingate (Mr. Lundrigan):
That the matter be referred to the Standing Committee on Finance, Trade and Economic Affairs and that witnesses from the Bank of Canada be called for questioning.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: The motion cannot be put.

May 23, 1972
Inquiries of the Ministry



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce with respect to the difficulties that have arisen with regard to the production of the Ford Motor Company because of the anti-pollution controls imposed by the United States. Has the minister or his department been in touch with the company with a view to determining what the position is and what measures the Canadian company is proposing to take?


Hon. Jean-Luc Pepin (Minister of Industry, Trade and Commerce):: Yes, Mr. Speaker, my department has been in touch with Ford. The difficulties that they have in the United States with the pollution control standards have been confirmed. However, the rumour which has apparently been circulating that the company had announced lay-offs is not true.


Robert Lorne Stanfield: Has the minister developed any plan to put into effect to minimize what I might call the ripple effects of any such difficulties of Ford? I am thinking particularly of the effect of these difficulties in bringing about a shutdown or at least a slowdown of the operations of suppliers to Ford of Canada. Has the minister any plans to deal with such an effect?


Jean-Luc Pepin: As far as I know, Mr. Speaker, at the moment that question is hypothetical. I shall inquire further and see whether action is needed.



CHECKING OF EMISSION STANDARDS FOR CANADIAN PRODUCED CARS

Robert Lorne Stanfield: Mr. Speaker, may I put a further supplementary to the Minister of Transport. Has the minister any plans in regard to the establishment of ongoing checks on the emission standards of Canadian-produced cars in addition to the year-end production of evidence by the companies themselves?


Hon. Donald C. Jamieson (Minister of Transport):: Yes, Mr. Speaker. We have to some extent separate testing facilities. I believe the hon. gentleman knows that our controls apply only to new automobiles as they leave the factory; we can only ensure that new cars meet these standards. After that, the question becomes one for each provincial jurisdiction. But we have managed, very successfully, to work out a set of arrangements with the provinces which will, in a sense, give us a national basis on which to work and national standards.



APPLICATION OF UNITED STATES SAFETY STANDARDS TO CANADIAN PRODUCED AUTOMOBILES

Mr. Max Saltsman (Waterloo):: My supplementary is directed to the Minister of Industry, Trade and Commerce. I should like to ask the minister whether his department was aware of the safety standards being set by the United States government and whether, in view of the importance of car exports to the United States, the automobile companies have been asked to make provision for incorporating these safety features?


Jean-Luc Pepin: I am afraid I am not aware, Mr. Speaker. The news came to me this morning. I have a report indicating what I said in answer to the Leader of the Opposition.


Max Saltsman: In view of the difficulty which will now arise as a result of failure to anticipate the safety requirements in connection with the export market, can the minister assure us that his department will keep in touch with the automobile manufacturers to make certain that they comply with these safety regulations in the future?


Jean-Luc Pepin: I will do whatever is needed, but perhaps the Minister of Transport might have more to say on the subject.


Donald Campbell Jamieson: The
situation with regard to our present law having to do with auto safety is that it applies not only to automobiles manufactured in Canada but to all cars imported into Canada; cars imported into Canada from any other country would be subject to such rules as we lay down.


Mr. Speaker:: Order, please. The Chair feels we should complete the first round of questioning. I shall call upon the hon. member for York South and the hon. member for Shefford and then return to the hon. member for Waterloo and the hon. member for Oshawa-Whitby for further supplementaries on this subject.


Max Saltsman: Mr. Speaker, I direct my supplementary question to the Minister of Industry, Trade and Commerce. I should point out as a preamble that the reason I directed the initial question to him and inquired about the checking of safety regulations in the export market had to do with manufacturing and the possibility of plant shutdowns if these standards are not met rather than the safety features themselves. In view of the fact so many automobiles produced in Canada are being exported to the United States, I hope the minister will give us his assurance that he will start checking the provisions that exist in other countries and ensure that those who are manufacturing in Canada meet these provisions in order that exports are not curtailed or held up in any way.



FORD MOTOR COMPANY-POSSIBILITY OF SHUTDOWN BECAUSE OF U.S. POLLUTION CONTROLS- MAINTENANCE OF PRODUCTION FOR CANADIAN MARKET

Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a supplementary question for the Minister of Industry, Trade and Commerce. Since an immediate but

May 23, 1972

avoidable danger to workers in Canada of the Ford Motor Company concerns lay-offs that may occur in terms of production aims for the Canadian market, and in view of the fact the company has indicated there may be a total shutdown of production in Canada as most of their models are exported to the United States, will the minister obtain an assurance from the company that, if this difficult decision has to be taken in some form, it will keep at least the number of employees at work required to produce cars for the Canadian market?


Jean-Luc Pepin: Mr. Speaker, I am told that this would not be very practical in view of the integrated operations between Canada and the U.S.A.



COMMUNICATIONS


Mr. David Lewis (York South):: Mr. Speaker, I have a question for the Prime Minister arising out of the decision by the Canadian Transport Commission to grant the Bell Telephone Company substantial rate increases totalling more than $47 million a year. I should like to ask whether the government is studying this decision for the purpose of taking any action with respect to it?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, this matter has not come to cabinet as yet, but I believe questions having to do with the Canadian Transport Commission would be more properly dealt with by the Minister of Transport. I do not know whether he has advice of anything in this regard.


David Lewis: I think it would concern the Minister of Communications rather than the Minister of Transport in this case. In view of the seriousness of this matter and bearing in mind the net income of Bell Canada in 1971 was over $147 million compared with $133 million in the preceding year, I should like to ask the Prime Minister whether he will assure the House that he will look into the question of whether these increases are justified from the point of view of the consumer and whether, as the Governor in Council has authority to do under section 335(4) of the Railway Act, the government will ask the commission to furnish all the information in its possession relative to the application and the decision for study by the government?


Pierre Elliott Trudeau: I will be very glad to raise this question with the minister.


David Lewis: If the Prime Minister does that, will he also draw the minister's attention to the fact that section 64(1) of the National Transportation Act gives the Governor in Council authority to rescind or vary any decision or order of the Canadian Transport Commission? May I also ask the Prime Minister whether the government will use that section to rescind this order for a rate increase which, I suggest to him, is further gouging by Bell Canada of the Canadian consumer?
Inquiries of the Ministry


Mr. Speaker:: Order, please. I suggest to the hon. member that the last part of the question is not entirely procedurally correct.



LABOUR RELATIONS


Mr. Gilbert Rondeau (Shefiord):: Mr. Speaker, I should like to put a question to the Minister of Labour.
Can he report on the progress of negotiations with regard to the longshoremen strike now paralyzing the ports of Quebec and Montreal, and tell us whether we can hope for an early settlement of that conflict?


Hon. Bryce Mackasey (Acting Minister of Labour):: Mr. Speaker, as Acting Minister of Labour I might point out that in the ports of Montreal, Trois-Rivieres and Quebec a collective agreement was arrived at several weeks ago with beneficial effects to both the employers and longshoremen. The collective agreement contains grievance and arbitration procedures. If the leaders of the unions refuse to utilize their legal rights, that is, the grievance and arbitration procedures, then I can only conclude that they certainly are not acting in the best interests of their members, nor within the mandate they have at their disposal.


Mr. Speaker:: Order, please.


Mr. Warren Allmand (Notre-Dame-de-Grace):: Mr. Speaker, I have a supplementary question for the Acting Minister of Labour. Will he say whether officials of the Department of Labour are taking steps to bring the two parties together in order to settle this dispute?


Bryce Stuart Mackasey: Mr. Speaker, I would presume that the solution is so obvious, namely, that these experienced union leaders should take advantage of the arbitration procedure included in the collective agreement, that the officials of the Department of Labour have not proceeded to take an active part without invitation.



RAPESEED-LAYING OF CHARGES BY WHEAT BOARD AGAINST CERTAIN FARMERS FOR OVERDELIVERY- REQUEST FOR GOVERNMENT INTERVENTION

Mr. R. N. Thompson (Red Deer):: Mr. Speaker, I had intended to ask my question of the minister responsible for the Wheat Board, but in his absence I should like to direct it to the Minister of Agriculture. Is the minister aware that the Wheat Board has caused charges to be laid under the Criminal Code against a number of western farmers for so-called overdelivery of rapeseed for which the farmers have direct production contracts with seed

May 23, 1972
Inquiries of the Ministry
processors? If he is aware of such action, will the minister indicate what steps the government is taking to stop this illogical and intolerable situation?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, I am aware that some farmers and in fact one seed processor have been charged. I cannot agree with the assumption that it is an illogical process. I am sure it will be examined in the courts.


Robert Norman Thompson: Do I understand then that the determination of the Wheat Board to convict farmers under the Criminal Code is justified?


Mr. Speaker:: Order, please. That kind of question is, of course, out of order on many counts.


Robert Norman Thompson: Ten o'clock, Mr. Speaker.



POSITION OF CONTRACTS BETWEEN PRODUCERS AND PROCESSORS IN LIGHT OF PROSECUTIONS FOR OVERDELIVERY

Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, in view of the fact that certain growers of rapeseed and certain oil processing firms were encouraged to enter into contracts at the beginning of this crop year, and in view of the fact that under those contracts the firms are committed to take the total rapeseed production of individual farmers, is the Minister of Agriculture in a position to give the assurance that these contracts can be honoured and followed through?


Horace Andrew (Bud) Olson: Mr. Speaker, a fundamental principle of the whole quota system is to make sure that the market, however large or small it may be, is shared equitably among all producers in the area. Of course, that is the main consideration upon which the Canadian Wheat Board acts when it sees alleged violations of this principle.


Alfred Pullen Gleave: Mr. Speaker, in view of the fact the government has actively encouraged and indeed taken an active part in the transfer of rapeseed production from high to lower erucic acid, will the minister make an early statement on motions clarifying the point which has been raised here for both the processor and the producer?


Horace Andrew (Bud) Olson: Mr. Speaker, the government has never taken the position that any kind of arrangements, contractual or otherwise, shall take precedence to the point of excluding all other producers who should have some access to the market under the quota system as well.



MARIJUANA-STATEMENT BY HEALTH MINISTER OPPOSING LEGALIZING OF POSSESSION AND USE-GOVERNMENT POLICY

Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to ask the Prime Minister a question arising out of a speech the Minister of National Health and Wei-
[Mr. Thompson.J
fare made to students over the weekend in Hamilton, I believe, in which he opposed the legalization of possession and use of marijuana. Was he setting out government policy at that time?


Pierre Elliott Trudeau: Mr. Speaker, I would have to take notice of what was actually in the speech before expressing an opinion on it.



VOTE AT UNITED NATIONS ON LEGALIZING POSSESSION AND USE OF MARIJUANA-REASON FOR ALLEGED CANADIAN ABSTENTION

Eldon Mattison Woolliams: Mr. Speaker, may I ask one further question. Three days ago I asked the Secretary of State for External Affairs a question concerning whether Canada abstained in a special committee of the United Nations when there was a vote on the very question I have raised with the Prime Minister as to the right of possession and use of marijuana. Is the Prime Minister now able to answer that question in light of the fact that the Secretary of State for External Affairs has been away for two days?


Pierre Elliott Trudeau: I understood the minister, as did the hon. member, to say he would take notice of the question and look into it. The minister has been away for two days and I am sure the hon. member has also. It has been a long weekend.



IMMIGRATION


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Minister of Manpower and Immigration of which I have given notice. Would the minister look into and hopefully intervene in the case of James Donald and Alex Donald, two Scottish immigrants living in Toronto who voluntarily came forward, disclosed their situation to the department and refused to take advantage of the right to appeal, which procedure could keep them in this country for years? As their wives and four children are involved and as they are hard-working people, would the minister personally look into the matter?


Bryce Stuart Mackasey: The hon. member was courteous enough to give me advance notice. I can think of nothing that would give me more pleasure than nine more Scots in Canada as landed immigrants and future citizens, so I will personally intervene.
May 23, 1972



FINANCE


Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the Acting Minister of Finance in the absence of the minister. In recognition of the current high demand for gold in Europe and elsewhere, and in view of the current high free market price for this commodity, what steps is the government of Canada taking to maintain adequate domestic reserves?


Hon. P. M. Mahoney (Minister of State):: Mr. Speaker, I will take notice of that question.


Erik Nielsen: I have a supplementary question for the Minister of State. Since many Canadian gold producers are presently selling their production on the international rather than on the domestic market, what action is the Canadian government taking to maintain an adequate inflow of gold from domestic sources? If the minister is going to take notice of this question also, when he answers will he also explain to the House what Canada is doing about the principal gold producer in South Africa having ceased production and what measures Canada is taking in order to ensure the continuation of adequate reserves from international markets?


Mr. Speaker:: Order, please. I would think that the answer to that question should be given on motions. If the minister's answer were to be as long as the question it would have to be given on motions.



INDICATION OF POSSIBLE RETURN TO GOLD STANDARD BY UNITED STATES-CANADIAN PLANS TO MEET EVENTUALITY

Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, perhaps I could bring another matter to the attention of the Minister of Finance or to the Minister of State who is responding for him today. It arises from the recent statement of Arthur Burns, chairman of the United States Federal Reserve Board, at the International Monetary Conference in Montreal in which he indicated that the United States government is contemplating a return to the gold standard. When the minister replies would he indicate what plans Canada is making to meet this eventuality?


Mr. Speaker:: Again I suggest that would have to be included in the minister's statement on motions.


Erik Nielsen: On a question of privilege, Mr. Speaker, may I point out, with respect, that perhaps because of the intervention of the Chair in connection with the three questions asked by myself and the one asked by the hon. member for Brandon-Souris the Minister of State, who is usually quite informative in his replies, might have understood that they need not be answered. Your Honour has suggested that the matter be dealt with by the minister on motions. I wonder if we might have an undertaking from
Inquiries of the Ministry
the Minister of State that he will come to the House tomorrow with a statement on motions.


Mr. Speaker:: Order, please. This is hardly a question of privilege. It is a supplementary question to which the minister might be allowed to reply.


Patrick Morgan Mahoney: Mr. Speaker, I will look at the questions and see what response is appropriate.



PRICES AND INCOMES COMMISSION


Winona Grace MacInnis: Mr. Speaker, I have a question for the Minister of State for Urban Affairs under whose jurisdiction I believe the Prices and Incomes Commission comes. Can the minister tell us whether the final report of the Prices and Incomes Commission is now ready and, if so, when will it be tabled?


Stanley Ronald Basford: Mr. Speaker, it has not yet been presented to the government; it is in the course of preparation, but I understand it will be presented soon.


Winona Grace MacInnis: Mr. Speaker, I understand that it contains some pretty forcible criticism of government policy. May we have the assurance that when the report is tabled it will be published in full?


Mr. Speaker:: Order, please.



MANPOWER


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
Further to the statement he made in the House on May 5 with regard to extending the Local Initiatives Program, can he tell us whether requests for extension will soon be answered, and whether a deadline has been set with regard to their acceptance or refusal?


Bryce Stuart Mackasey: Mr. Speaker, as a general rule all projects under the Local Initiatives Program which are sponsored by municipalities can be extended to June 15 on the understanding, of course, that no supplementary sums of money from the federal purse are involved. If the hon. member would like a specific answer on a specific program, I would be glad to discuss it with him.

May 23, 1972
Inquiries of the Ministry



LOCAL INITIATIVES PROGRAM-FINAL DATE FOR REPRESENTATIONS CONCERNING PRIVATE PROJECTS

Joseph Adrien Henri Lambert: Mr. Speaker, I should like to direct a supplementary question to the minister.
I would like to know whether a deadline has been set concerning the submission of private projects under the Local Initiatives Program or if applications for extension can be approved at any time and get special consideration.


Bryce Stuart Mackasey: Those local initiative programs that are privately sponsored come to an end at the end of May, with the exception of about 1,200 projects which on their merits and according to criteria that have been circulated, will be extended until the sum of $30 million has been expended.



LOCAL INITIATIVES PROGRAM-ALLOTMENT OF PART OF ADDITIONAL FUNDS TO MUNICIPAL PROJECTS

Mr. Bene Matte (Champlain):: Mr. Speaker, I would like to ask the Minister of Manpower and Immigration whether part of the $35 million allotted to LIP projects is available for projects submitted by municipalities?


Bryce Stuart Mackasey: No, Mr. Speaker.



RAPESEED-TYPE OF CHARGES LAID BY WHEAT BOARD AGAINST CERTAIN FARMERS FOR OVERDELIVERY

Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, with reference to questions asked earlier of the Minister of Agriculture in connection with the prosecution of farmers believed to have delivered rapeseed beyond their quotas, in view of the fact that anyone convicted will of course be found guilty of a criminal offence and be branded as a criminal, may I ask him why the Wheat Board has proceeded as though this was a criminal offence rather than under the provisions of the Wheat Board Act where an actual conviction would be for a pseudo-civil offence?


Horace Andrew (Bud) Olson: Mr. Speaker, I will look into that. Perhaps the Minister of Justice will reply to the question, although I think the charges are based on a violation of the Wheat Board Act and the regulations thereof.


John George Diefenbaker: Is the minister saying that the questions asked, which indicated that criminal prosecutions had been undertaken, were without any foundation?


Horace Andrew (Bud) Olson: No, Mr. Speaker, I said I would look into it.



PUBLIC SERVICE


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the President of the Treasury Board. It is based on a public statement by the President of the Canadian Transport Commission to the effect that public employees owe loyal service to the government and cannot be neutral when dealing with the opposition. Can the minister advise the House whether this doctrine is also held by himself and the government?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, I would like to study a little more closely what was actually said before I accept this version of the doctrine.



HOUSING


Jack Marshall: Mr. Speaker, my question is directed to the minister in charge of housing. Has he had replies from the provinces with regard to consultation on housing needs where they concern the provinces, and would he indicate what progress has been made with regard to the introduction of the legislation he promised some time ago?


Stanley Ronald Basford: Mr. Speaker, the process of consultation with the provinces is still continuing, but we have met with all the provinces and had reactions from them. I hope to introduce legislation along the lines forecast in the Speech from the Throne at an early date.


Mr. James A. McGrath (St. John's East):: Mr. Speaker, have similar consultations taken place with Canadian mayors and municipalities regarding the proposed legislation?


Stanley Ronald Basford: The municipalities were represented at most, if not all, of the consultations with the provinces.



INQUIRY OF THE MINISTRY

Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Prime Minister. Would he take the first opportunity on motions to outline to the House the line of reasoning which caused him late Thursday night to decide not to call a general election and let the people decide-


Mr. Speaker:: Order, please. I suggest that such a statement would have to be made on motions, and I wonder whether that is what the hon. member is suggesting. He will appreciate that he cannot expect the Prime Minister to reply to that question at this time.
May 23, 1972


George Harris Hees: On a point of order, Mr. Speaker, I did preface my question by saying, "would he take the first opportunity on motions". Could he answer yes or no to that?


Mr. Speaker:: The hon. member of course, has the option of putting the question down for debate at ten o'clock.



STATUS OF WOMEN


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I wish to direct a question to the President of the Treasury Board. In view of the refusal of the Rideau Club to permit two women representing government departments to attend a working luncheon held in that place last week, is the government giving consideration to adopting a policy of not permitting any government functions to be held at the Rideau Club as long as that organization discriminates against certain government employees?


Charles Mills (Bud) Drury: Mr. Speaker, I had a meeting with some representatives of the gentler sex-


Some hon. Members:: Oh, oh!


George Harris Hees: Don't get coy now. Just tell it like it was, Bud.


Charles Mills (Bud) Drury: Obviously, Mr. Speaker, we are in the presence of what I would call the rougher sex here. I pointed out to them that in cases where government activities involving both sexes were concerned it would not be practical and indeed, we should not interrupt the proceedings by lunching or endeavouring to continue the work in places that did not allow the presence of women.


David Lewis: Mr. Speaker, I wish to direct a question to the President of the Treasury Board supplementary to the one asked by the hon. member for Winnipeg North. It seems to me that the President of the Treasury Board did not get the full import of the question. It was whether the government will not consider refusing to hold any functions, whether of one sex or of both sexes, in the Rideau Club as long as the Rideau Club pursues a policy which is contrary to the declared policy of the government with respect to equality of the sexes in all such matters?


Charles Mills (Bud) Drury: Mr. Speaker, I am not fully aware of all the facts behind this incident. I have undertaken to make some inquiries, but it is my understanding that the Rideau Club at present not only allows both sexes on its premises during the dinner period but also has on occasion allowed both sexes during the luncheon period.


Mr. Knowles (Winnipeg North Centre):: What about breakfast?
Inquiries of the Ministry


Charles Mills (Bud) Drury: Breakfast I am not sure of; I am not sure if there is much demand for breakfast. I will be glad to look into the matter.



FEDERAL-PROVINCIAL RELATIONS

[Stage Direction]
VICTORIA	CONFERENCE-STATEMENT OF QUEBEC


Mr. Roch La Salle (Joliette):: Mr. Speaker, I wish to put a question to the Prime Minister.
A few days ago, during a press conference, the Quebec Minister of Social Affairs stated that, during the last federal-provincial conference in Victoria, a document emanating from a federal government department was circulated among some provincial delegations, cautioning them against certain Quebec proposals.
Is the Prime Minister in a position to say whether he was aware of this and whether he was in favour of such a procedure?


Pierre Elliott Trudeau: Mr. Speaker, I do not know what document is being referred to. If the hon. member can be more specific, I shall find out.


Roch La Salle: Since the Quebec Minister of Social Affairs made that statement, may I now ask the right hon. Prime Minister whether he can find out which federal department circulated that document and report to the House?


Pierre Elliott Trudeau: Mr. Speaker, I have not followed in detail all the statements of the Quebec minister involved, but if the hon. member is interested he might supply me with details and I shall inquire.



PUBLIC SERVICE


Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I intended to direct a question to the President of the Treasury Board, but since it involves the entire public service, both fair and unfair, perhaps it should be directed to the Prime Minister. Has the high level study of guidelines dealing with conflict of interest in the public service been completed and, if so, will it be made public?


Pierre Elliott Trudeau: Mr. Speaker, I believe that any studies of this subject were done under the direction of the President of the Privy Council, and I will refer the question to him.
Inquiries of the Ministry URBAN AFFAIRS

May 23, 1972



DEVELOPMENT OF PROCESS TO PRODUCE DRINKING WATER FROM RECYCLED SEWAGE-REQUEST FOR STATEMENT ON POSSIBLE APPLICATION

Mr. S. Perry Ryan (Spadina):: Mr. Speaker, my question is directed to the minister responsible for Central Mortgage and Housing Corporation. Now that the minister has survived a $400,000 sip of tasteless water made from recycled sewage, does the government intend to promote the use of this newly developed recycling system in Canada and, if so, will the minister make a statement to the House as to the areas in which this system should prove useful?


Stanley Ronald Basford: Mr. Speaker, I will be happy to send the hon. member a complimentary bottle of recycled water.


Some hon. Members:: Oh, oh!


Stanley Ronald Basford: The pilot project that has been financed by CMHC and the Ontario Research Foundation is producing absolutely pure water. It is still being refined from the points of view of economics and engineering, but the experts are very enthusiastic that it will prove out-


Mr. Speaker:: Order, please. I regret interrupting the minister but I do feel that this kind of question normally ought to be placed on the order paper. I fail to see the urgency of the question.


Sylvester Perry Ryan: Mr. Speaker, may I ask a supplementary question. Now that the minister's appetite has been whetted, and mine as well, would he not tell us whether CMHC has plans to introduce this system immediately in any of its current projects?


Stanley Ronald Basford: No, Mr. Speaker. It will be 1973 before that is ready.


Mr. Colin D. Gibson (Hamilton-Wentworth):: As a supplementary question-


Mr. Speaker:: Order, please. I think the Chair might very easily have suggested at the start that the original question be placed on the order paper, but since it was asked and answered the hon. member will be recognized for a supplementary.


Colin David Gibson: Mr. Speaker, I hope the House will forgive me for asking a supplementary, but there is a potentially tremendous tax saving if the municipalities of Canada can be informed. I would ask leave to ask the minister-


Mr. Speaker:: Order, please. Would the hon. member ask his question?


Colin David Gibson: -if he will so inform the municipalities?


Stanley Ronald Basford: Yes, Mr. Speaker.



POSSIBILITY OF RETALIATION BY CANADA IF COUNTERVAILING DUTY IMPOSED BY UNITED STATES AGAINST CERTAIN MICHELIN TIRES

Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. It has to do with his suggestion that Canada might find a way of redress against the United States if the Americans go ahead with countervailing measures against Michelin tires. He has indicated that this could possibly be in the area of defence purchasing. Would the minister indicate what possibly could be gained from that inasmuch as government is the only purchaser of defence equipment?


Jean-Luc Pepin: Mr. Speaker, I deeply regret that a very good newspaper drew the conclusion that I was talking about retaliation. I was simply analysing in a very professorial way-I sometimes go back to previous incarnations-the vagueness and broadness of the concept of countervailing, mentioning that countervailing could be used against different types of subsidies.


Mr. Speaker:: Order, please.


J. Michael Forrestall: As a supplementary-


Mr. Speaker:: We are running short of time and there are still a number of members in the back rows waiting to ask questions. I hope there will not be too many supplementaries.


J. Michael Forrestall: I will attempt to respect your wishes, Mr. Speaker. Did I understand the Minister correctly that defence is probably not the most likely area for countervailing duties?


Jean-Luc Pepin: Unlikely, Mr. Speaker.



REGIONAL ECONOMIC EXPANSION


James Aloysius McGrath: Mr. Speaker, may I ask the Minister of Industry, Trade and Commerce if an assessment has been made of the number of branch plant operations of United States companies that have received grants under the Regional Development Incentives Act in Canada, and if this information has been made known to the United States government?


Jean-Luc Pepin: Not to my knowledge, Mr. Speaker, but the point I was making the other day is that there is no concerted United States action against regional development in Canada. The case we are talking about now, Michelin, is an exceptional one, and because there has been a complaint.
May 23, 1972



TRANSPORT


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I wish to direct a question to the Minister of Transport. Last Wednesday he undertook to inquire from the Canadian Transport Commission whether or not an appeal had been lodged against the proposed freight rate increases on potash. Can he report today whether or not there has been and, if not, will he ask the CTC to review the proposed increases?


Donald Campbell Jamieson: In
reply to the first part of the question, Mr. Speaker, I did check and up to this morning there had been no appeals lodged in this connection. I am not at all certain that I have authority to ask them to initiate such an appeal, but there are several avenues open to anyone who may wish to do so.



POST OFFICE


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, my question was for the Postmaster General, but in his absence perhaps I might direct it to his parliamentary secretary. Can he advise the House whether the Postmaster General has initiated an investigation into the circumstances surrounding the position taken by the provincial government of Alberta in establishing private mail carrier service between the cities of Calgary and Edmonton for government mail?


Mr. Gerald Richard Cobbe (Parliamentary Secretary to Postmaster General):: Mr. Speaker, the minister is studying the matter and I am sure that when the study is complete the information will be available to the hon. member.


Donald Frank Mazankowski: Will the parliamentary secretary undertake either to have the information tabled in the House or to have a statement made on motions?


Gerald Richard Cobbe: Mr. Speaker, I will discuss this matter with the minister.



SUPPLY AND SERVICES


Gerald William Baldwin: Mr. Speaker, may I direct my question to the Minister of Supply and Services. In light of allegations that the cost of the four ships in the destroyer escort program has now risen to an astronomi-
Inquiries of the Ministry
cal figure of well over $300 million, more than half as much again as the original estimate, and since it will take one year before the program is completed, would the minister look into this and make a statement in the House as to where the situation now stands?


Hon. James Richardson (Minister of Supply and Services):: Mr. Speaker, the Minister of National Defence has already made clear statements on this matter. The DDH program is proceeding within the budgets approved by Treasury Board.


Gerald William Baldwin: That is not the way I hear it.


URBAN AFFAIRS
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, may I direct a question to the Minister of State for Urban Affairs. Is it a fact that the agenda of topics to be discussed at the tri-level conference has been determined? If so, would he give the House some indication as to when he intends to table it?


Stanley Ronald Basford: Mr. Speaker, the agenda has been agreed upon and is outlined in the report I tabled at the beginning of this afternoon's session. I would be happy to send the hon. member a copy.


Lincoln MacCauley Alexander: Will the minister say whether or not the representatives of the three levels will be attending the conference as equals?


Stanley Ronald Basford: Mr. Speaker, they will be attending in accordance with the arrangements agreed upon that are being recommended and are set out in the report I tabled today.



NATIONAL CAPITAL COMMISSION


Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of State for Urban Affairs. Is the minister now in a position to answer my question of May 4 and of May 16 as to whether the National Capital Commission has entered into a contract with the Pinkerton agency, a subsidiary of an American firm, for the provision of services in the national capital area previously provided by the Canadian Corps of Commissionaires?


Stanley Ronald Basford: Mr. Speaker, apparently the policing of certain National Capital Commisssion properties is undertaken by arrangement with the Royal Canadian Mounted Police, who have in the past hired to assist them members of the Canadian Corps of Commissionaires. However, this year

May 23, 1972
The Budget-Mr. Mazankowski the Corps informed the RCMP that they were no longer able to supply personnel for this purpose and the RCMP have made other temporary arrangements with Pinkerton.


Stanley Howard Knowles: Mr. Speaker, may I direct a supplementary question on this matter to the Solicitor General. I wonder if the Solicitor General can report to the House on whether the RCMP made an investigation into the background of the Pinkerton agency, particularly its labour relations, before engaging this agency to do this work?


Hon. Jean-Pierre Goyer (Solicitor General):: Mr. Speaker, I have been informed by the commissioner that after four calls for tenders the main angle for the RCMP was to consider human resources as well as security measures supplied to the RCMP for this control. Finally that company was selected as offering the best guarantees in this field.


Mr. Speaker:: Orders of the day.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, May 15, consideration of the motion of Hon. John N. Turner (Minister of Finance), that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Lambert (Edmonton West), (page 2178).
Donald Frank Mazankowski: Mr. Speaker, in rising to participate in this debate may I congratulate, first of all, the Minister of Finance (Mr. Turner) for the showmanship he displayed during the presentation of the budget and for the flurry of enthusiasm that went along with it. His display of enthusiasm covered many of the shortcomings of the budget. That, I suppose, is quite a tribute to the minister, since he appears to be a good salesman in his own right. His actions reminded me of the cliche one hears in sales circles. Salesmen say, "Do not sell the steak; sell the sizzle." Unfortunately, in this budget there is not much sizzle. On close examination we find that there is not much steak in it, either, for the average Canadian.
His statement that providing a job for every Canadian is his first and most urgent priority was indeed commendable. It was a bold statement and was one which I am sure every member of this House would support. That was supposed to be the characteristic by which the present Minister of Finance was to be distinguished from his predecessor. However, rather than take a positive approach and deal with the future, he spent a great deal of his time in his budget presentation in rambling, in defending the record of the government and in defending
[Mr. Basford.J
the record of the minister who previously occupied his portfolio. He blamed the state of the economy on unemployment, on rampant inflation, on everything and anything, from the so-called phenomenon of an above average participation rate in the labour force by too many young people, to too many women being in the labour force. Then, he went on to blame the economies of the United States, of the European Common Market and of Japan for many of the economic problems of Canada; yet nowhere in the budget speech was the minister bold enough to admit that our state of affairs has been caused in large part by the government itself, particularly by the previous minister of finance.
It is fairly well accepted that this government has failed to manage the economic affairs of this country in an efficient and effective way. Really, Mr. Speaker, when the government at the helm cannot operate even an effective postal service, there is little hope of its being able to run the economy of this nation.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: The service of the Post Office Department has deteriorated to such an extent that the provincial government of Alberta has been forced to set up its own mail delivery service. At least, it has entered into a contract with a private mail delivery service for the delivery of inter-government mail between Edmonton and Calgary. It has done that because of the inefficiency and ineffectiveness of the Post Office Department in carrying out its obligations.


Some hon. Members:: Hear, hear!


Some hon. Members:: Shame.


Donald Frank Mazankowski: Today, I received a letter from a gentleman known as Fred Lonsdale Jr., who has offices at Lloydminster, Saskatchewan and Marshall, Saskatchewan. That letter reads, in part:
Our business interests involve mainly communications and we view with alarm our high postage bill, up 60 per cent in the past few years, seems only to have resulted in rapidly deterioration in service.
One part of our business, the Credit Bureau of Lloydminster, is making increasing use of TELEX as an alternative to the mails.
It might not be long before that business will be on DEX 1 eqpt., which similar to PHOTO FAX transmits a photo copy of documents over a telephone line in 1-6 minutes.
Time service by the post office department is bad enough but worse still is the unreliability.
We are also in the insurance business and as we cannot depend on the mails with last minute closing of construction bonds some of our clients simply have to drive bids and bonds to Edmonton or Saskatoon.
The 1903 Ox cart was more reliable.
The letter is dated May 18, 1972.


Mr. Paproski:: And today is the twenty-third; shame.


Donald Frank Mazankowski: I will be glad to send the Postmaster General (Mr. Cote) a copy of that letter and will be glad to hear the outcome of his investigation into circumstances surrounding the provincial government's decision-


Mr. Cote (Longueuil):: Why is the hon. member waiting?
May 23, 1972


Donald Frank Mazankowski: -to set up its own mail service through a private mail carrier. I think this is a national disgrace, Mr. Speaker.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: Back to the pony express.


George Harris Hees: Back to the ox cart days.


Donald Frank Mazankowski: While suggesting that things were going to get better, and we certainly heard that before, the minister went on to say that we have to take a new look at our situation and decide what policy will best serve our long term interest. In this connection, I feel that the minister failed miserably to come up with an imaginative scheme to meet the challenge he boasts about, providing a job for every able bodied Canadian who seeks employment, particularly on a long term basis. When you analyse this budget carefully, you see that it is nothing more than an ad hoc measure, tarnished with pre-election political taint which the government hopes will get it over the hump.
If the Minister of Industry, Trade and Commerce (Mr. Pepin) wants to make another speech, which I hope will be better than the one he made on the last budget, I would certainly like to hear it, particularly if there is anything constructive and stimulating in it. It is certain that that minister has been unable to cope with the economic problems that face industry in this country. This budget may well backfire. When we strip away the verbiage, all the frills and flowery phrases, there is no evidence of the new fundamental approach about which the minister talked. People no longer trust this government. They are suspicious of their underlying motives.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: People are suspicious of the fine print and some of the deliberate omissions. For example, the public was very quick to recognize the fact that effective the first of the year there will be an automatic increase in personal income tax. As the hon. member for Edmonton Centre (Mr. Paproski) says, perhaps the Prime Minister (Mr. Trudeau) cancelled the election because, now that the budget has been analysed, it can be seen that it will not provide the necessary impetus to get this country going. Can we really be sure that the corporate tax measures which have been introduced will be in effect for more than one year? There have been four budgets within the past 12 or 13 months. By simply bringing in another budget, any tax concession or tax increase can be brought into effect.
Also, can we assume that jobs will automatically be generated as a result of these measures? Manufacturing and processing industries need the stimulation provided by tax changes. I do not believe the impact of these proposals will have the immediate effect that we need. The minister alluded to the fact that the impact of the budget will only be felt within the next three or four years.
I ask this question, Mr. Speaker, also; can business generally look forward to less government interference and manipulation, thus allowing the free play of the
The Budget-Mr. Mazankowski
market, coupled with the wisdom and initiative of management, to respond and foster growth in a reasonable and confident way providing long term growth and stability? We do not have that assurance in this budget. Big government continues to dominate in a very paternalistic way. Are we going to have more legislation introduced which will generate animosity and uncertainty in the business world, as the tax reform amendments, the Competition Act, the Labour code amendments and the foreign ownership question have? Are we going to have this form of government regimentation which will leave business in a state of suspended animation?
It is well known that the business community, particularly small businesses, are overwhelmed by the technical details of the recent changes in the tax law, the proposed legislation related to competitive practices and the law of industrial relations and labour standards. A very high percentage of management time is being absorbed trying to calculate the impact of these proposals to the point where essential business planning is being severely hampered. All these things collectively, which have been created in large part by the government's technocrats and academics, make up the bulk of the difficulties which have crippled the economic vitality of this country. These have affected all businesses, large and small, manufacturing and service industries as well as investment and resource industries. I suggest that if the Minister of Finance wants to create jobs, he would be wise to tackle this area and remove the gross amount of government interference which we have in the business world today.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: I sincerely believe this would restore confidence and provide a new sense of determination which would result in renewed planning based on sound objectives. The Minister of Finance could then have introduced a full employment budget with emphasis on more direct employment and investment stimulus, more effective assistance for the labour intensive and export sectors which are placed in an unfair position by recent national and international events. There could be more effective measures to remove the corporate tax discrepancy between Canadian companies and international corporations operating in this country. That would be a worthwhile move. There should be greater across-the-board equity in incentives and tax breaks affecting other sectors such as the service industries, the construction industry, farming, fishing and logging.
I am pleased that the Minister of Finance recognized that growth in jobs comes more effectively from the private sector than the government. I commend him for taking this first step in putting government back into its proper role. While we acknowledge the fact that the corporate tax reduction in the processing and manufacturing sector, plus the added feature of accelerated depreciation on machinery, may provide some stimulus and offset the effects of DISC and the appreciation of the Canadian dollar, it should be recognized that a large part of the machinery in question will be purchased outside this country. This may have a more favourable affect on economies other than Canada's. I believe that more than 50 per cent of the $3 billion spent on machinery and equipment is spent on items imported from other coun-

May 23, 1972
The Budget-Mr. Mazankowski
tries. This proposal may displace more people through greater automation. I believe the minister alluded to this as well. It is now commonly accepted that these proposals will not provide an immediate upsurge in the economy. I believe the minister suggested it may be three or four years before the full impact of them is felt.
I believe, and I say this very sincerely, that positive steps should be taken to bolster the role of Canadian firms which export a large percentage of their products. What are we now doing? Many Canadian companies have to compete against multinational corporations operating on an international scale. They are finding it very difficult to compete as a result of tax policies. The Versatile Manufacturing Company, like many other companies, is being forced out of the country because of the taxation policies of the federal government and the provincial government of the province in which it is located. The president of Versatile suggested to me that his corporation is paying a 54 per cent corporate tax and that Massey-Ferguson, which operates on an international scale, has been paying in the order of 31.6 per cent for the past three years. John Deere, which operates on a world-wide scale, paid an effective tax rate of 10 per cent. The president of Versatile told me that if he were to get an equal tax arrangement with his world wide competitors, he would not only be able to provide more jobs for Canadians, but would be able to reduce the price of his farm machinery considerably. He suggested a figure of 10 per cent. He calculated that he was paying $900 more tax on the largest tractor his firm builds than the Massey-Ferguson company is paying on its largest tractor. His tractor retails in the area of $26,000.
We now have a situation in which this company is being forced to move to the United States to establish a subsidiary there. Once a subsidiary is established, there, we can look forward to its further development in the United States. We allow our truly Canadian industries to suffer, thus failing to provide the potential employment which could be derived therefrom. When grants are being considered under the incentives legislation by the Department of Regional Economic Expansion, more consideration should be given to Canadian corporations as distinct from multinational and international corporations.
I believe, too, that positive steps should be taken to encourage new industry, particularly in areas where for economic reasons greater diversification is required. I refer particularly in this context to western Canada. The provisions in the budget for accelerated depreciation and the reduction of corporate taxes may not be sufficient to stimulate the development of new industry in the west; I have in mind, particulary, the processing of agricultural products. A certain amount of expansion has taken place in this area in western Canada, but great difficulty is still experienced in acquiring sufficient risk capital to start some ventures. The Industrial Development Bank has not always looked kindly on small operations in their early stages and many such development are stultified for lack of risk capital.
I might mention, here, the town of Smokey Lake in my constituency where an alfalfa pellitizing plant has been developed, largely as a result of co-operation between the

citizens of that community. A great demand exists for this product; indeed, at the present time the commodity is being imported into Canada. It became evident that the banking institutions, including the Industrial Development Bank, were not willing to provide sufficient funds to get the operation into being. Eventually, the directors of the company made application to the First National Bank of Oregon. Approval was given in principle to a request for financing, but certain conditions were imposed. The company found itself in a situation in which it could not obtain a grant under the area development incentive legislation because of the time lag. Today, however, through the tenacity and conviction of the directors and shareholders the plant is in operation-but only after many difficulties, a great deal of cost and much inconvenience. I feel it is plants of this kind which are in need of greater consideration from the federal government.
Turning to the area of personal income tax, my own feeling is that reductions in personal income tax levels, particularly in the middle income range, would have been a desirable proposition not only from the standpoint of stimulating the expansion of the economy but also on grounds of fairness. We should bear in mind that the government is constantly reaping greater revenues from taxation as a result of increases in the cost of living. I believe a good case can be made for tying personal tax rates to a formula based upon the cost of living index. There is ample precedence for doing so. I refer to the legislation in connection with the pensions and allowances of senior citizens and war veterans. I welcomed those proposals; the manner in which they were dealt with by parliament indicates how expeditiously the House can dispose of good legislation. Had the government put forward more legislation of this kind, it would have encountered very little difficulty in proceeding with its legislative program.
I turn, now, to agriculture. There are a number of disappointments in the budget but none keener than in the field of agriculture. I do not believe the farmer can find much to be pleased with among these proposals. When industry, manufacturing industry in particular, encounters a setback, relief is provided almost immediately. But those who rely on the export of agricultural products have been obliged to put up with foreign subsidies and unfair competition for many years without redress. The situation has been getting worse, instead of better, yet the government still shows considerable reluctance to provide any relief in this area. The point I have particularly in mind, is this: the minister spoke in glowing terms about the way in which net income in the agriculture industry had increased over the past year. He mentioned a figure of 25 per cent. Some clarification is needed, here, since it is not really net income we ought to be dealing with, but realized net income. This is the figure which puts dollars in the farmers' pockets. And here the figure is in the order of something like 10.8 per cent. I simply say this for the sake of clarification.
Next, I wish to put on record some figures which were quoted before the agriculture committee. As cited by Mr. Williams, the deputy minister, the net income figure for 1966 was $1,549 million. In 1970, the figure was $927 million. Thus, there has been a reduction in that period amounting to some 40 per cent in net farm income. So, we
May 23, 1972

are considering an increase of 10 per cent in that figure, one which is a far cry from the figure recorded in 1966.
Further clarification is also required in connection with the application of the tax proposals as they relate to corporations. I notice with interest that the Farm and Country magazine of Tuesday, May 23, calls for clarification with respect to the application of these changes to companies processing agricultural products. There is uncertainty not only with respect to corporate tax reductions but also in respect to claims for rapid depreciation. An article appears in Farm and Country by John Phillips, who says:
There will be a lot of dismayed Ontario farmers when they discover that Finance Minister John Turner's budget excludes them from goodies offered other businessmen.
Last week, Department of Finance officials gave a tentative ruling to the effect that farmers could not share in the fast writeoff given urban manufacturers.
Within hours of the budget announcement Farm and Country was getting a flow of inquiries about the write-off for farm processing equipment such as automatic feed mixers and grain dryers.
Finance Department whiz-kids have concluded, however, that the few farmers operating a fruit packaging plant or using equipment to wash carrots could qualify for the almost instant depreciation.
Their ruling is not final. The regulations have yet to be written. This may take two months or so. Doubtless Finance Minister Turner will get many representations over the coming weeks.
The only farm beneficiaries under the new budget are old people living on nothing but the basic old age pension and guaranteed income supplement.
I am glad to see the Minister of Agriculture (Mr. Olson) in the House. I am aware of his continued and vital interest in agriculture, and I know he is concerned about the application of the corporate tax rate and depreciation provided for in the budget. I hope he will use his good offices to twist the arms of revenue officials so that these provisions will be taken into consideration and accurately interpreted in the best intents of Agriculture. After all, no other industry is more affected by the appreciation in the value of the dollar and the DISC proposals than is agriculture. Therefore, I urge that these matters be dealt with now rather than after the revenue department has made its final interpretation.
The minister also referred to the many adjustment programs, and many of these spell extinction for a good number of farmers. He also recognized the inequities of the tax reform proposals that have been made in several areas and instituted corrective action, though he failed to do so in the area of capital gains arising from inter-family transactions or in reinstating the basic herd provisions. However, I am aware of the fact that an interdepartmental committee is working on this subject, and once again I urge the Minister of Agriculture to use his good offices in this area.
The minister went to great lengths to deal with the suggestion that most people want to live in the large urban centres. This, to me, simply casts a reflection on the naivety of the minister and the government, as well as their long-standing disregard for rural Canada. The fact of the matter is that this assumption is not correct. On the contrary, there are more and more people becoming desir-
The Budget-Mr. Wahn
ous of living in rural areas and bringing up their families there, provided they have the opportunity of earning a minimum standard of living that is comparable to that of their urban counterparts. Many policies and programs of the government, such as the DREE program, manpower programs and agricultural programs, are literally forcing people to quit rural areas and move to cities. I have warned the Minister of Agriculture and the government on many occasions of the fact that there is a very great need for the maintenance of an equitable rural-urban balance. I believe that a positive approach must be taken to restoring the viability and vitality of the rural communities of this country. This is long overdue. The problem might be attacked by the establishment, for example, of a new department that would co-ordinate all of the economic and social aspects, producing solutions that are based not only on economic realities but on the realities of human and social needs.
I am disappointed that the finance minister did not see fit to take steps to reduce or to remove completely the 11 per cent sales tax on building materials. This is a tax that affects every Canadian and such removal would have had a long lasting effect. Similarly, I am disappointed that the minister did not take the opportunity to reduce or remove the sales tax on the soft drinks industry. This industry has been bombarded by a number of problems, particularly smaller operations, since the advent of the various antipollution programs which have added an extra burden. I see my time is up, Mr. Speaker.


Mr. Speaker:: Order, please. The hon. member's time has expired.


Ian Grant Wahn: Mr. Speaker, I should first like to say that, like most hon. members on this side of the House, I welcome the budget that has been presented, the first budget of the present Minister of Finance (Mr. Turner). I particularly welcome the changes providing for full escalation of old age security payments and payments to veterans. It is quite clear that most hon. members in this House are of the same mind in view of the speed with which this legislation has been passed. May I congratulate the Minister of Finance on his first budget and assure him that it has been well received by most members in this House, certainly by most members of the Canadian public.
As I have said, I am particularly happy about the escalation provisions regarding old age security pensions and veterans pensions. As the minister pointed out in his remarks, the government is committed to proposing ways of rendering justice to those people in our community who have been hurt by the rise in the cost of living and have no way of fighting back. The minister went on to say that he was speaking of those Canadians who have retired, whose working days are over, and of our veterans and their dependants. The same principle, however, applies to payments under the Canada Pension Plan which, as hon. members know, provides for an escalation feature which has been, and is, limited to 2 per cent a year. It would be very pleasant to believe that we could limit the rate of inflation to 2 per cent a year, but experience in recent years makes this look very unlikely indeed.

May 23, 1972
The Budget-Mr. Wahn
I realize that no increase can be made in the escalation rate under the Canada Pension Plan unless at the same time a corresponding increase is made in the escalation rate-the same 2 per cent-under the Quebec pension plan. The two plans are tied together, and parallel changes must be made in co-operation between the two governments. Admittedly, the problems are complex, but just as it was essential that full escalation be provided for our veterans and those in receipt of old age security payments, so it is essential, and only consistent with justice, that full escalation be provided under the Canada Pension Plan and the Quebec Pension Plan. The present 2 per cent escalation is just not sufficient. People who have been working all their lives and expect to get a reasonable pension on retirement are finding that by the time they retire, or a few years after they have retired, the $400 or $500 a month they were expecting to receive under their pension plan is worth much less, perhaps only $300 to $400 a month, in terms of purchasing power. Therefore, it seems to me quite clear that, until such time as we can establish a non-inflationary economy, it is essential that those who have retired on fixed incomes and cannot protect themselves against rises in the cost of living should have full escalation of their pensions. I hope the minister will assure the House that this problem is being considered very carefully, and that in due course provisions will be agreed upon to provide for full escalation under both the Canada Pension Plan and the Quebec Pension Plan.
There is another point perhaps of equal importance in connection with the escalation of pensions. A very large number of people are covered by private pension plans provided by the corporation or employer for whom they work. Probably these private pension plans are at least as important as those under the Canada Pension Plan and the Quebec Pension Plan. To be eligible for income tax deductions, these private pension plans must be registered with the Department of National Revenue. In that way, therefore, our federal government does have control over the provisions contained in the eligible pension plans established by private employers and corporations.
A few months ago I was amazed to learn, after writing to the Department of National Revenue, that under the present procedures of the department a private pension plan will not be accepted for income tax deductibility if it provides an escalation rate of more than 2 per cent. In other words, if an enlightened employer or corporation wants to establish a pension plan which will provide for full escalation so as to protect the income of the employees when they retire against an increase in the cost of living, the income tax department, under existing regulations and procedures, will refuse to accept it. If the income tax department refuses to register a plan, that means that the contributions made by the employee into that pension plan are not deductible from the employee's income for tax purposes. It also means the contributions made by the employer to the pension plan will not be deductible for income tax purposes. Obviously, the result will be that an employer will not adopt that type of pension plan.
It seems incredible that the federal government would adopt deliberately regulations to prevent enlightened

employers from providing pension plans which fully protect the purchasing power of pensions built up by employees over a period of years, yet apparently this is what is being done at the present time. I think possibly one reason may be that the department wishes to protect its revenues. Obviously, if there is to be full protection against escalation a pension plan will cost more than if there is only partial protection. Therefore, in limiting the amount of the escalation to 2 per cent, as we have done in the case of the Canada and Quebec Pension Plans, the Department of National Revenue ensures that deductions from income tax will be lower and that federal government revenues will be higher.
This does not seem to me to be a good reason for this procedure. I hope that the Minister of Finance in co-operation with the Minister of National Revenue (Mr. Gray), will review this situation, and before too long will be able to announce to this House that this particular provision will be changed, and that instead of preventing employers from providing full escalation in private pension plans, the federal government will do its best to encourage employers to set up plans which have full escalation provisions. I hope that ultimately the federal government will go further and will insist, as a condition of registering for tax deductibility, that every private pension plan must include provisions to guarantee full protection against increases in the cost of living.
From my recollection of the budget speech of the Minister of Finance, I believe he indicated a hope that the increase in the cost of living would be kept to a minimum, and we would be able to curb inflation. Of course, this would be an ideal situation. However, assuming we do not have a breakdown in the monetary system which would lead to deflationary conditions throughout the world, and no one wants that to happen, I see no reason to believe- and I think there are many economists who hold this view-that we will have anything but a continuing and very substantial percentage increase in the cost of living each year. Therefore, until such time as we do devise the economic methods which will permit us to maintain stability of prices with high employment, it is essential that throughout the entire spectrum of Canadian life regulations should be adopted and legislation should be introduced to protect the purchasing power of people who are retired, people on fixed incomes and with savings, who are in no position to protect themselves by insisting upon increased wages or salaries.
One provision which does help to protect Canadians at the present time, and one I certainly wish to commend most highly, is that provision pursuant to which the basic exemption for those over 65 will be raised from $650 to $1,000. This provision does help to protect the purchasing power of people who are retired.


Mr. Peters:: Its adoption is fairly belated.


Ian Grant Wahn: It may be belated, but welcome nevertheless, and I am delighted to see it in this particular budget.
I turn now to another important provision in the budget, that which relates to the reduction of tax of manufacturing and processing businesses, including small businesses, and the related provisions for depreciation and fast writeoffs for machinery and equipment required by manufac-
May 23, 1972

turing and processing industries. I think most Canadians will welcome these as well. There has been some suggestion in some quarters of Canada, possibly not from the minister, that these provisions will help to counter the effect of United States legislation providing for the DISC program.
I gather that the DISC program is designed to prevent the multiplication of United States owned branch plants in Canada, and to provide encouragement to manufacture in the United States rather than in Canada. To the extent that the DISC program would prevent a further extension of branch plant operations in Canada, I am inclined to think it should be welcomed by Canadians rather than resisted. To the extent it would result in the withdrawal of branch plant manufacturing facilities which now exist, it would create short term problems because our manufacturing economy has been built up on a branch plant basis. Changes should be made gradually. Any sudden retirement from Canada of manufacturing operations which form the basis of the economy of particular municipalities or localities would cause a great deal of hardship. From a short term point of view, some legislation such as this to prevent hardship in Canada to established manufacturing operations is certainly to be welcomed.
In addition, of course, the general principle of reducing taxes on manufacturing and processing businesses is likely to be well received in Canada. Probably corporate income tax must now be regarded as a cost of doing business rather than as a sharing of profits with the State. In other words, any manufacturing company now has to try to make a reasonable percentage profit on its capital which will justify its continued expansion and continued capital investment. From this point of view, corporate income tax is now regarded as a cost of doing business, just as municipal and sales taxes or any other provincial or municipal taxes. A reduction in the corporate income tax should therefore have the effect of reducing the cost of doing business of these corporations. In time, this should make them more competitive in world markets. It should also in time and as a result of competition lead to a reduction in selling prices in Canada. This, of course, would also help reduce the danger of inflation. There are many good reasons this particular provision, reduction of the tax rate of manufacturing and processing businesses, is a good thing. I would hope, however, the minister would give some consideration to whether it might be desirable to introduce, perhaps over a period of time, a lower rate of tax for companies which are Canadian-owned as compared with other companies. The purpose would be to increase the number and competitiveness of Canadian-owned companies in relation to other companies. The present tax reduction, of course, applies to all companies. I think perhaps it must at the present time, in order to avoid the problems relating to DISC which I mentioned.
Personally, I should like to see long-term consideration given to the possibility of using the tax system to encourage wholly-owned subsidiaries of foreign companies to make their shares available to the Canadian public, to encourage Canadian companies and give them a competitive advantage over companies which are not prepared to operate in Canada upon the basis of a partnership with
The Budget-Mr. La Salle
Canadian investors. This would be a long-term project which perhaps could not be introduced in this budget. However, I believe it is important that we should decide one way or another whether our program to ensure greater Canadian investment can be stimulated by the tax system or whether direct controls are required to do it. Certainly, it is well worth investigating the possibility of achieving what we want to achieve through the tax system.
In conclusion, may I say I welcome the budget provisions, particularly those relating to the escalation of pension payments and the tax provisions. While I welcome them, they are to some extent pragmatic and ad hoc provisions. I hope that before too long the minister will outline in greater detail the basic philosophy of the government in relation to the control of inflation and also in relation to the development of more efficient Canadian industrial organization.	.


Roch La Salle: Mr. Speaker, it is with a keen interest that I take part in the budget debate. The budget speech is always preceded by long comments and followed by comments now worthwhile now interesting now negative and now positive.	[DOT]
I should like, Mr. Speaker, to avail myself of this opportunity to discuss certain budget proposals and remind the government that certain suggestions have already been made and that it should give more attention to some solutions that could promote in our economy and social climate the stability we are looking for.
I am not suggesting that no efforts were made these last years; on the contrary. I also admit that results in some cases were worthwhile and in other cases insufficient. We need only look at our unemployment rate in 1968 and at the one we have today.
The Department of Regional Economic Expansion used great amounts of money to create new employment. The Department of Agriculture put forward some interesting measures in favour of farmers. The Department of Industry, Trade and Commerce succeeded in concluding excellent agreements with other countries. I am also thinking of certain capital injections made at different times of the year during the last four years.
However, all those efforts and accomplishments were inadequate. At any rate, we were not able to check the evil that we call unemployment. I acknowledge that suggestions were made by members from all parties. Some of them were accepted since the budget complies with them. The budget speech also includes worthwhile proposals from the government.
I had an opportunity to invite the government to organize more general meetings with businessmen, provincial authorities, union leaders and employers. In my opinion, the government has not managed, over four years, to find miracle solutions. I still believe that nobody in this House is in possession of such solutions. I am still convinced that the government will always benefit from more regular meetings with businessmen, provincial government representatives, union leaders and employers, focussing on a serious study of our ailing and troubled economy. Considering the expertise of such businessmen and representa-

May 23, 1972
The Budget-Mr. La Salle
tives, the government could obtain wise advice likely to help it establish an efficient and valuable policy for the future of our country.
Of course, I should like to declare myself very pleased with the improved social measures announced in the budget speech. As concerns the increased old age security basic pension, I have been hearing about that for a long time. I shall not say that the government has imagined or devised something new when it increased the old age security pensions.
Anyway, we should honestly rejoice at the government's positive answer to past representations.
However, for a few minutes, I should like to discuss briefly the problem thereby created for the province of Quebec. As a representative of the province of Quebec, I believe that it is only normal that I should stress, among other things, the reaction of the Quebec Social Affairs minister or of the Quebec cabinet. It has been suggested that Quebec might find this legislation unsatisfactory. One would have to be quite na've to believe that the Quebec Minister of Social Affairs was dissatisfied to find that the government was increasing the old age security pensions.
The Quebec government deplored that it was not warned of this measure. I submit that we should consider the Quebec context and the objective of the Minister of Social Affairs who wrote a book on Quebec social policy. This book was written ten years ago and the minister is most anxious to implement this Quebec program of social policy.
It should also be recognized that Quebec is in a rather peculiar situation. In fact, I wonder whether all hon. members are as convinced of that as I am. I think that under those circumstances, the Minister of Social Affairs is quite justified in insisting on a typically Quebec social policy for Quebecers and with Quebecers without being necessarily isolated from the rest of Canada.
In my opinion, Mr. Castonguay was quite right in deploring that the government failed to inform him about the passing of this legislation because he was thus obliged to consider the Quebec social policy in relation to different classes of people and that, simultaneously, the Quebec provincial budget was affected in the area of social policy.
I think that this explanation was necessary. I also believe that Quebec members are perfectly aware of the Quebec situation. They recognize the arguments put forward by the Quebec Minister of Social Affairs. Perhaps they simply need a little more courage to agree with me.
Now, Mr. Speaker, I would add that everyone in Quebec is happy that the old age pension has been increased.
Starting July 1, 1972, the government will increase from $650 to $1,000 the special exemption for persons aged 65 and over.
Mention should also be made of the special exemption of $50 per month for trainees and full time students attending courses prescribed by educational or training institutions.
Moreover, medical expenses are enlarged, for tax purposes, as from January 1, 1972.
No doubt that these special measures provided in the budget are beneficial and welcome. Thus, the changes relating to tax reform are, to a certain extent, very interesting and the economic outlook for next year, to which the Minister of Finance (Mr. Turner) has referred, is very bright. Shall we have to wait until the end of the year to see that the economic outlook has been thoroughly considered and that it reflects what is in store for us?
I do not hesitate to say that the budget brought down by the Minister of Finance is most acceptable. But is it enough to rectify the situation? Are the credits provided sufficient to lead us to believe that within the next ten months or the next year, the rate of unemployment will be reduced to a normal level? Will it be possible to generate enough jobs to meet the needs of the manpower entering the labor market every year, in June, and to create the social climate we are hoping for? I doubt it very much and this is why I took the liberty of making some suggestions.
We have heard about the increase of the old age security pension payable at 65. Some of my colleagues who have spoken about it, and myself, have been wishing for a long time now that the qualifying age be reduced to 60 I must repeat, even though I have already said it and it has been suggested to me, that this suggestion was very interesting. Yet, in the budget, my proposal of bringing down to 60 the age of eligibility to the old age security pension, since, according to statistics, there would be in Canada from 350,000 to 400,000 persons aged from 60 to 65, went unanswered.
In view also of the fact that there are about 600,000 unemployed, it would be very interesting, in a year from now, to be able to put on pension persons aged from 60 to 65, in order to give work to 400,000 unemployed.
I think that this pension of $285 for a couple is inadequate in several cases. We should, once again, consider seriously the possibility of increasing this pension to at least $350 a month for a couple, because I do not think, considering the increase of the cost of living, that we can give these aged people a well deserved rest, an adequate income enabling them to feel happy and say that their country has done something for them, which would create by the same token about 400,000 new jobs.
In my opinion, we would promote a better social atmosphere, by granting our older people a well-deserved rest- since they have been on the labour market for about 40 years-and by providing about 350,000 to 400,000 young people with a job, a responsibility as well as a suitable salary.
Thus, we would have put things back in the right place, we would have given work to young people between 20 and 30 years of age, and well-deserved holidays to people of 60. Therefore, we would develop a most human policy, since we all know that in industry, for instance, machinery is increasingly important, while the person is less and less important.
Mr. Speaker, I really hope that through perseverance, we might get some results. I say so because the hundreds of letters received from people in my riding always emphasize their support for this kind of policy. We would,

May 23, 1972

during the first six months, provide for a voluntary pension, that is to say enable people between 60 and 65 to get a reasonable pension and a deserved rest and, during the next six months, make this pension compulsory, if we really are to put an end to this unemployment which has existed for too long a time.
I understand that the government has been hesitating about developing such a policy, because it has believed, for four years, that it was going to correct this situation through money injections made by the departments I referred to a while ago. I repeat that the government has made every effort in terms of time and money, but we all admit that this was not sufficient. This policy, which would reduce by 70 per cent the number of unemployed, would be such as to involve the passing of legislation which, from a social point of view, would be quite extraordinary and, at the same time, we should stop to spoil the generation of people between 20 and 30, trying to give them ever increasing social allowances, just to request that they remain idle.
We should give serious consideration to setting the age for eligibility to old age security at 60. The amount should be adequate. In view of all the consequences I have just mentioned I believe we would truly make progress towards achievement of a much better social climate than is now prevailing.
I should also, Mr. Speaker, point out to those in the government, particularly to the Minister of Finance, that funds should be made available to build anti-pollution plants in municipalities. It is all very well to discuss pollution but so long as sufficient funds are not made available to municipalities for the building of such plants, all attempts to clean up the St. Lawrence river are pointless, since we know that all its affluent rivers are polluted.
It is very important, I suggest, that intelligent officials see to it that we clean up the Great Lakes and the main rivers first and then smaller streams.
Our municipalities are all anxious-which I learned from their responsible representatives-to get purification plants but the required funds are not available. I think that the Minister of Finance should in the near future consider paying the cost of building purification plants, which would promote the sale of materials and create jobs. Such a policy would be extremely beneficial. And what about the importance the House should attach to recreation? Of course we know that in the province of Quebec certain jurisdictions must be respected. For my part, the suggestion I would make would respect those jurisdictions. I am thinking of a policy on recreation that would provide credits. In fact, the problem is always one of credits when municipalities are considering the construction of arenas and baseball fields.
I know what extraordinary amounts of money provincial governments have spent to organize recreation. Above all else, the municipalities must be given the basic tools, I know from experience because I have dealt personally in recreation. In fact, I had the opportunity and the pleasure of doing recreational work for years, and I know very well how to go about it. It is often low brow work. It does not necessarily entail the submission of
The Budget-Mr. La Salle
extensive briefs to the department, which in any case often gather dust on the shelf.
I know some municipalities which are now equipped with a floodlit arena or baseball park. I feel they are basic equipment which enable them not only to play hockey or baseball but to go in for other forms of athletics.
How could we reach those goals? I thought that the government would be in a position to take part in the construction of arenas. In the average municipality, an arena can cost some $100,000. I do not refer to large arenas with artificial ice which can cost $500,000 or $600,000. In my opinion, those who advocate such projects are mistaken. A good number of average municipalities would like to be have an ordinary arena which would enable thousands of young people to practice some sports, whatever the weather. Such arenas can be built at a cost of $100,000. And I believe that the federal government could invite the provinces to participate, and the provinces could in turn invite municipalities to do so. The municipality would show its good faith by guaranteeing a minimum fund of 25 per cent. The province could be invited to provide 25 per cent of the cost, and the federal government, 50 per cent. We shall then be able to establish a serious, efficient and long-term recreation policy. For instance, my riding has benefited this winter from local initiative programs worth $1,300,000. I was very happy, but I am sure that if the municipalities had been provided with a million dollars, they would have succeeded in building a dozen arenas where, for 20, 25, 30 or 40 years, thousands of young people would have enjoyed themselves.
Such a comparison is valid and I make it because I believe more than ever that it is important to supply the municipalities and the young with basic institutions which will last. As for the necessary basic structure, it shall be easy to provide once we have the basic tools with which to work.
It is unthinkable to organize a hockey game when there is a storm; it is unthinkable to organize a baseball or softball game when it rains. It is unthinkable, of course, to have games during the summer after 8 p.m., as we have no lights.
As for funds put at the disposal of municipalities they should first be discussed with the provinces and municipalities. I am convinced that they would be quite pleased to pay a quarter of these expenditures. The federal government would do something profitable and durable. It would seriously contemplate a policy on leisure.
This does not mean that the federal government should cease promoting sports in Canada, as it is now doing, but in order to properly compete with other countries, serious consideration should nevertheless be given to building arenas and training athletes who will do credit to our country.
Mr. Speaker, I cannot ignore the Opportunities for Youth program which in itself is still an excellent initiative but its application is quite questionable.
The government should seriously consider instituting programs of such a nature that they will serve society in general and at which the young people could work and earn a substantial income during the summer.

May 23, 1972
The Budget-Mr. La Salle
At present, the government makes thousands of young people believe that they will be able to develop a project. Unfortunately, these young people will be greatly disappointed. In spite of funds amounting to about $35 million earmarked for this year's program-which is a commendable effort on the part of the government-it will find that thousands of youths will be very disappointed with this policy because out of six projects only one will be accepted. In view of these circumstances, I should like to remind the government that it would be better to change not only the selection of the projects, but also the manner in which the program is outlined.
Mr. Speaker, I cannot help but wish for the disappearance of this evil which is unemployment. Also, I should like to tell the government that in my constituency north of the St. Lawrence River between Montreal and Berthier, springtime erosion has for many years caused problems to the municipalities of - Saint-Sulpice, Lanoraie and Lav-altrie, which are situated along the shore of the river. Would it be possible to ask the minister that funds be earmarked for the construction of a retaining wall? The St. Lawrence River is a waterway very important to navigation. The technical innovations in the area of shipping are progressing as rapidly as in other areas.
East of those municipalities, a dam was built a few years ago so the riparian owners send me every spring requests for subsidies from the Department of Public Works to check the devastating erosion. The hon. member for Terrebonne (Mr. Comtois) could say the same since the city of Repentigny is in the area I am referring to, between Montreal and Berthier. The hon. member for Berthier (Mr. Yanakis) is also certainly aware of that problem.
Now instead of spending such amounts of money every year, as it has been done for a hundred years only to carry few stones for makeshift repairs, I believe we should build a permanent retaining wall. An important project of that kind would provide employment for a good number of unemployed and riparian owners would be secure. Indeed, they are worrying very much this year about erosion that threatens not only waterfront lots but buildings also. Therefore I should like the hon. minister to consider the possibility of appropriating credits for carrying out such a project. Municipalities made several representations to the Department of Public Works but on account of the standards established a few years ago, nobody wants to assume responsibility for that erosion. Now, we know very well that the water level was raised for shipping purposes, which is a serious cause of concern for waterfront owners. A project of such magnitude would give jobs to anxious workers for a certain time.
Also I would like to mention that the riding I have the honour to represent is still awaiting a review of the designated areas which was promised and which hopefully should be announced by the Minister of Regional Economic Expansion (Mr. Marchand). Saturday last, the city of Joliette officially requested from the Minister of Regional Economic Expansion that it be given a more advantageous designation than that granted to the riding I represent.

The economic situation of my riding is neither better nor worse than in other regions. But I believe that my riding is as much in need of these benefits as some neighbouring ridings-of which I am not jealous-which have been granted a more advantageous designation.
I am again inviting the hon. minister to consider once more our request most carefully as he always does. In fact, two years ago, it was my pleasure to be informed by the minister himself that my riding would be granted 10 per cent on all investments and $2,000 on all new jobs. But since some ridings may be granted up to 20 per cent and $5,000 for each new job, the situation is becoming quite difficult for my riding and mainly its municipalities, not counting the city of Joliette which is making tremendous efforts with a well-organized industrial commission. But we have lost the odd economic injections because of unfair competition.
As we are living in a just society, the minister will no doubt study this question very seriously and be in a position, before June 30, to give some good news not only to the voters of Joliette but also to the whole area which owing to that development will experience an extensive economic growth.
Mr. Speaker, I am under the impression that my time limit has expired. I regret being unable to carry on with my remarks as I had more to say, but I shall end by further calling the attention of the Minister of Finance to the urgent needs facing the voters of the constituency of Joliette that I have the honour to represent.


Mr. C. Terrence Murphy (Sault Ste. Marie):: Mr. Speaker, may I extend my congratulations to the Minister of Finance (Mr. Turner) upon his first budget. I add my congratulations to those of others who preceded me in this debate. I was most pleased to find that the government had finally decided to leave behind the concept of the 2 per cent cost of living escalator and adjust payments so that the actual increase, in percentage terms, in the cost of living will be added to the incomes of those in Canada who are 65 and over. I have been questioned by many on this point, particularly by people in the middle income groups. They suggested that the government was abandoning the principle of selectivity and returning to the universal type of program. May I say, for the benefit of those who feel that way, that the new approach does not conflict with the principle of selectivity. Inflation hits everyone, not only those who are lucky enough to have saved a fair amount of money and have an income for retirement. I am happy that the present Minister of Finance was the one who introduced this cost of living escalator which will apply to those I have mentioned. No one in this country needs help more than those who have served their time, so to speak, in the work force of Canada, who are now retired, and who have little or no defence against the onslaughts of inflation.
I was pleased to recognize, as everyone here recognized I believe, that this budget is a growth budget. It indicates great faith by the government in the private sector of the economy. Over the past few years, the country has faced the problem of unemployment. Without doubt, the problem is serious and the government has taken a number of public measures in an attempt to correct this problem. It
May 23, 1972

is now realized, I think, that the government has more or less come to the end of its tether in this field. It is recognized that we must turn to the private sector of the economy and give that sector the impetus that is required if we are to provide jobs and get Canadians back to work. Without doubt, private industry, which includes both big and small businesses, will be tempted to take advantage of the provisions in the new budget which are helpful. Without doubt, business will want to increase profits, to increase its take so to speak; it will be tempted to do that instead of increasing the number of jobs in the country. The minister has indicated that he will be watching the situation closely to see that this does not happen. I certainly urge him to do so. The thrust of the budget urges Canadian companies to invest in Canada and to create jobs for those in this country who are still unable to find jobs.
While I am talking about this matter, I should like to say something about spending, particularly public spending and public grants in the economically slow growth areas of the country. In my opinion, the Department of Regional Economic Expansion has been doing a great job. Yet I think more is needed, and I do not think that more grants from that department are necessarily the answer. If, over the years, a certain area of our country has become depressed, if that is the right expression to use, it has become depressed for a reason. For instance, perhaps there are not the raw materials available nearby to warrant the establishment of a manufacturing industry. Perhaps the area is far from markets. There could be a number of reasons. The weather might be a factor. For all those reasons as well as for others, private industry may not have seen fit to invest in an area.
The government, through the Department of Regional Economic Expansion, holds out inducements for companies to invest in these slow growth areas. In so doing, it necessarily creates side effects. There is always another side to the coin. In other words, you might set up a pulp mill in New Brunswick, only to find that that pulp mill competes with another mill in Quebec. The pulp mill in Quebec might find it hard to meet this competition. Additional competition is created as a result of a grant given to an industry in a certain area. Numerous examples could be cited. I am suggesting that the government might consider undertaking capital expenditures in areas of slow economic growth. In this modern age when communication from continent to continent is practically instantaneous, there is no reason in the world why all government buildings, departments, and major government investments need to be in one particular area in Canada. Large capital government expenditures could be made very usefully in the slow growth areas. They certainly would not produce jobs in the way a steel plant or a paper mill would, but government jobs are jobs. With government people working in these areas, service industries would grow. I think that this concept, combined with the concept of DREE, might go a long way toward eliminating some of the disparities which presently exist in our country because of regional problems.
During the course of this debate, many members have stated that this budget is, in effect, a countermeasure to
The Budget-Mr. Murphy
the United States DISC program. I do not feel that is necessarily the case. There is more than one market in the world. I agree that the United States is the closest and most accessible market, but we should not overlook the huge market that is developing in Europe as a result of the enlargement of the European Economic Community. Canadians must look to that market and must tap it. There are 250 million to 350 million people in that market, and it is ready to be tapped. However, we want to tap it from Canada rather than from within the structure of the common market, as some American multinational companies have done. This budget will, I hope, encourage Canadian processing and manufacturing industries to process and manufacture in Canada at economic rates that will enable them to compete well in that huge market across the Atlantic.
We feel that the American DISC program is aimed at us, but that is not the case. Our friends to the south have a real problem. The few American multinational corporations with headquarters in the United States that invested in Europe last year managed to sell $14 billion worth of merchandise in the European common market from plants which they established inside the boundaries of that market. The total number of companies in the United States were only able to sell $4 billion worth of goods to that market. The Americans are quite justifiably concerned. They see these plants being established with American capital, while the jobs are held by Europeans. Therefore, there is some reason for DISC. This budget is a step in the right direction, but I do not believe it was aimed at combatting DISC. Rather, the proposals were made with a long range view to enable Canadian industry to compete in all markets of the world, not just the American market, and compete efficiently.
During the course of this debate, many members referred to the unhealthy state of the Canadian economy. Practically every other word from the opposition benches was about the terrible mess in which the Canadian economy is today and has been recently. I say to them, as one bull said to another when asked how his heifer was, compared to what is it lousy? Compared to what country is the Canadian economy in a mess? It has been said by someone much more learned than I, in a context I cannot recall, that no man is an island. Neither is a country nor a family. You can only compare a family man with his next door neighbour, his neighbour in the next city or the next province. The same holds true for a country. You can only tell if it is doing well or poorly by comparing the efforts made within it with those in other countries.
Should we compare ourselves with the United Kingdom, where at the moment the unemployment rate is about 6 per cent, the inflationary rate is about 10 per cent and the growth rate over the past 15 years has only been 4 per cent compared to our huge growth rate? Should we compare ourselves with that country? If this country is in bad shape, what should one say about the economy of the United Kingdom which is being so efficiently run by a Conservative government? Should we compare our economy with one of the socialist countries in Europe where inflation is running amuck, where the cost of social services is so high that governments are concerned about whether there will be some sort of revolution because of the tax burden being carried by the average individual in

May 23, 1972
The Budget-Mr. Macquarrie each of those countries? Should we compare Canada with Sweden? There is probably more unrest in Sweden today than in any other country in Europe. The tax burden is so high the people are rebelling. That country has a socialist government. Should we be compared with the United States where inflation is running between 6 per cent and 7 per cent, even with price and wage controls? Unemployment in that country is running at 6 per cent.
I think I can say with confidence that we can compare our country with any industrialized country in the western world and we can hold our heads up high. We can be proud of our performance, but we cannot be satisfied because there are people out of work and we must take care of them. Many people say that the rate of unemployment in Europe is not nearly as high as in Canada. That is quite true. However, their unemployment statistics are compiled in a different manner. They do not consider a 14 year old to be a potential worker. His ability to work or have a job is not taken into consideration when their statistics are compiled. I do not say that the European unemployment figures are fraudulent, but there is a lot that is covered up.
When checking, out of a hotel in Europe, you may have to wait 45 minutes because, no matter how modern the hotel, there is not a billing machine in it. There are 15 men in the back office working with pens calculating your bill. In this country we have computers to do the work of those 15 men. As the Prime Minister (Mr. Trudeau) has pointed out on many occasions, we could have a high rate of employment if we scrapped a lot of our machines. However, we do not want to do that. We want to urge business to take this budget and go to work. We want them to put those dollars and tax savings to work, invest in Canada and create jobs for Canadians.


Heath Nelson Macquarrie: Mr. Speaker, I am happy to have the opportunity of taking part in this budget debate which, in a sense, is a discussion of the economic state of the nation. It is obviously a surprise to some hon. members that we are still here to take part in the budget debate. Had I believed all the things I saw last week I would probably not have been making a speech here, but somewhere else. So, we find ourselves here today assessing the economic state of the nation, just as a few days ago, obviously, someone assessed the state of the Liberal party and made certain decisions as a result. Noting the fevered expectations and forecasts of the past number of weeks I am reminded, not of the finest poetry in the world, but of a most memorable passage by Macau-ley which reads:
Was none who would be foremost
To lead such dire attack;
But those behind cried "Forward!"
And those before cried "Back!"
And backward now and forward
Wavers the deep array;
And on the tossing sea of steel,
To and fro the standards reel;
And the victorious trumpet-peal
Dies fitfully away.
So, we are not to have an election after all. If it is obvious by its self-diagnosis that the state of the Liberal

party is not too vigorous, it is equally obvious from reliable external and internal indicators that the health of the nation is much less vigorous than it should be. It may well be that hon. members, such as the hon. member for Sault Ste. Marie (Mr. Murphy), believe we have never had it so good, and, believing this, are impelled to communicate this sentiment to the Canadian people time and time again. I cannot muster up the statistics to make such a statement, and I suggest they will not be regarded as being very credible by those to whom they were offered. As we look at this budget, we have to make an evaluation not only of the document itself but of the kind of economic policies which preceded it and the kind of economic conditions which permitted it. So, we are in fact looking at the whole of the record of the government which took office with immense expectations and with much acclaim some four years ago. The present minister's budget, like the economy over which he presides, derives from the decisions or non-decisions, the judgments or non-judgments of his predecessor, so our appraisal has to be somewhat in depth.
Members who support the government have of course waxed enthusiastic about this particular budget and have thrown bouquets in large numbers at the new minister. All I can say is that this is a better budget than the several which preceded it, nurtured and nourished no doubt by the present Minister of National Defence (Mr. Benson). It is interesting, however, that the present budget is evidence of a significant turnabout in the economic policies of the government. It is interesting, also, that the man most responsible for that turnabout should be the Leader of the Opposition (Mr. Stanfield)-


Some hon. Members:: Oh, oh!


Heath Nelson Macquarrie: -who has revealed in his quiet and thoughtful way a grasp of the economics of this country which has far exceeded that of people opposite. If any savant in the party supporting the government wants to know why public opinion polls are showing greater and greater support for this party, it is because month after month people are appreciating the economic wisdom of the Leader of the Opposition. I will give the government that diagnosis for free. If they are thoughtful, they will note his suggestions for our economy which preceded the turnabout of the former finance minister. They will note, too, how perceptively he has analyzed the economic situation. Many of the better moves of the present minister, and in his latter days of his predecessor, were made when they picked up some of the suggestions of the Leader of the Opposition. In his very fine speech during the budget debate, he presented two further important suggestions which I think will find favour among Canadians and have an important effect upon the national economy.
To take satisfaction out of the state of Canada's economic affairs today is surely an exercise in myopic nonobservation. How can we strut about and say how well off we are, how beautifully things are going, when unemployment stalks the land year after year? In the old days of classic economic teachings, we were told that these two things came in sequence; inflation might follow unemployment. But the present government has mastered the art of bringing them on simultaneously and continuously, seemingly with no prospect of making either one of them
May 23, 1972

disappear. There is far too much poverty in the just society, too much inequality among Canadian people and among the regions of Canada.
I happen to come from a region which knows the pangs and inequity of regional disparity. The province of Prince Edward Island, so richly blessed in many ways, is today in the unenviable position of having the highest unemployment rate of all the provinces. We have even surpassed Newfoundland. The figure for March was 16.2 per cent, and combined with this, figures on the cost of living which I have just received today, show that the index in the City of Charlottetown, taking January, 1969 as a base of 100, stands, in April of 1972, at 114.5. Compare that with the figure for another area, St. John the home of my whip, known for its high cost of living-109.8-and 106.7 for the other Atlantic centre, the city of Halifax. So we have the effects of both inflation and unemployment, uniquely painful to the people who must endure them simultaneously. In these circumstances I find it very difficult to tell the people of Prince Edward Island or the people of the Atlantic region they have never had it so good. Ask the young people of Canada how things are going today? Ask the graduates who are coming out of our fine universities by thousands and thousands. Ask them if the economy is going well. I talked to a young student the other day. I said: "Have you applied to the Canada Manpower office for a job?" He said: "Are you kidding? I have been there 45 times."
Much was made by some speakers this afternoon of various programs, including Opportunities for Youth, and the LIP program. They offer something, of course, and with our statistics so high in the realm of unemployment, of course we welcome them. But what happens when the six or seven weeks are over? What happens when the $38,000 or $58,000 or $78,000 is spent and the 12, 13 or 15 jobs peter out at the end of the project? These are mere palliatives. They are not nearly enough for the hundreds of thousands of Canadian people, especially the young who are crying out for opportunities. We all know very well that the projects which are accepted are far outnumbered by other projects, probably of real value and virtue, which are rejected.
We have had discussions in this House during this debate on the general question of regional disparity. A hard and dispassionate look at the statistics-though it is difficult for me to be dispassionate-indicates that the gap is not narrowing. By many important economic indices it is broadening; getting worse. Yet we have a situation where practically the whole country is a designated area. I suppose this is part of the reason that when practically the whole of the generality becomes the special, there is nothing very special left, because almost everything becomes a designated area.
I was much interested in the intervention of my hon. and learned friend the Secretary of State for External Affairs (Mr. Sharp) who was euphoric almost to the point of excitement over this budget. He thought it was one of the greatest that had ever come along. On May 15, as reported at page 2259 of Hansard, he said:
The Budget-Mr. Macquarrie
According to those who are in a position to judge, Canada has a record second to none throughout the world in recent years in terms of the expansion of the economy and the control of inflation.
So, mention was made of controlling inflation. Another modest outburst came a few paragraphs later when he said:
In the last three or four years, we have achieved a record that is second to none in the history of this country.
He then designated the Minister of Industry, Trade and Commerce (Mr. Pepin) as having worked well abroad on behalf of Canadian industry, though earlier he had said that if Oscars were given out for economic performance Canada would have been one of the recipients. He might not have been so timid and suggested that we should have had them all. In other words, whatever proposals were made by the minister would not be designated, as were Swift's, as modest proposals.
I thought it interesting that the Secretary of State for External Affairs should intervene so strongly on behalf of his colleague the Minister of Finance. Then, I reflected upon it a bit and came to the conclusion that it was not so strange really because it is in fact in the external world that some of our great problems have arisen. Things are happening there that are injuring our domestic economy. One of the areas where I have quarreled consistently and differed continuously with the present government is with regard to their white paper projection of a foreign policy for Canadians. Hon. members will recall the following paragraph on "Foreign policy in essence":
In undertaking this review the Government has been constantly reminded of its need and responsibility to choose carefully aims, objectives and priorities in sufficiently long and broad terms to ensure that essential Canadian interests and values are safeguarded in the world situation where rapid and even radical changes can be anticipated as normal rather than exceptional conditions. Canada, like other states, must act accordingly to how it perceives its aims and interest. External activities should be directly related to national policies pursued within Canada, and serve the same objectives. Diplomatic relations are maintained and strengthened for a wide variety of reasons-among others, trade expansion, collective security, cultural contact, co-operation in development assistance, exchanges in science and technology.
Such relationships have to be kept under review to ensure that they continue to serve Canada's objectives effectively. Those may change as both Canada and the world change. In essence, foreign policy is the product of the Government's progressive definition and pursuit of national aims and interests in the international environment. It is the extension abroad of national policies.
I think it is not. I think foreign policy is much more than that. As a decent, responsible and well-endowed member of the international community, we should think of foreign policy as much more than an extension of our domestic situation.
Also raised in this debate is the opposite issue, the effect of external movements and non-movements on the domestic situation. External developments and decisions have affected, and affected unhelpfully, our domestic economy. I believe that this is one of the serious weaknesses affecting our economy today. When we do have a foreign policy debate I should like to discuss the "neo-Mackenzie Kin-gism" which pervades our foreign policy, but I am more concerned today at the statement made by the deputy minister of trade in Czechoslavakia that Canada could be
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May 23, 1972
The Budget-Mr. Macquarrie selling more goods there except for the fact that Canada itself is dragging its feet.
On May 3 a very interesting compilation of statistics by Statistics Canada was issued on March trade. According to a report in the Ottawa Citizen of that date:
Exports during March this year totalled $1,501 billion, barely above the $1,498 billion figure for March, 1971, Statistics Canada reports.
The slight increase was the result of increased exports to the U.S. and declines in exports to almost all other countries.
Exports to the U.S. rose to $1,119 billion from $1,041 billion-
The statistics indicated a trend to increased Canadian dependence on the U.S. market is continuing, despite federal government efforts to open up other foreign markets. Exports to Britain were $8.6 million for March, down from $90.9 million a year earlier.
Other declines: Japan, down to $55.4 million from $75.8 million; West Germany, down to $17.6 million from $26.9 million; Norway, down to $18.3 million from $24.3 million; Italy, down to $14.9 million from $20.8 million; Australia, down to $12.7 million from $22.5 million; Venezuela, down to $8.7 million from $20.1 million; Belgium-Luxemburg, down to $5.9 million from $12.4 million; and India, down to $5.1 million from $9.7 million.
This is a dreary threnody of trade declines to the very kind of country to which our export trade should be booming. Exports of newsprint fell, as did exports of aluminum, copper and automobiles. Is this the kind of record, Mr. Speaker, that is second to none, with an increasing dependence upon the United States market and a continual slipping in other very important markets? Instead of patting ourselves on the back for how well we are doing, I think we should and must make vigorous efforts to stimulate trade all across the world today, and to diversify our trade.
I was amused-though I am sure this was not meant unkindly-by the denigration that the Secretary of State for External Affairs made of the former minister of trade and commerce in the government that I supported. This hon. gentleman was known as a great and aggressive promoter of Canadian trade, and he has been constantly needling and nagging the present government to expand our trade in the markets of the world. Why do we not have more trade offices if this is what is needed? Can we not negotiate with those on each side of the Iron Curtain for more trade offices? If we have to do a better job of selling our goods, then what is holding us back? This is part of this withdrawal syndrome. There are ten countries in the world that have full-fledged ambassadors and embassies in Ottawa to which we have yet to appoint any ambassador. We have not reciprocated the representation.
We have not even yet got around to appointing a High Commissioner to Barbados, a country of 200,000 people which for several years has had a three-member high commission in this city. We have not appointed an ambassador solely accredited to the European Common Market, and if there is any economy or political aggregation more important on today's horizon than that vast united Europe which is developing with the admission of the United Kingdom and other countries, I do not know what it would be. Is this government aware of what is taking place? As I say, Sir, we have not got around to doing what many other countries have done, appointing an ambassador in Brussels solely accredited to that vast and growing aggregation.

Let me read from a very modern and able economist, Dian Cohen, writing in the Toronto Star in respect of the admission of the United Kingdom to the European Common Market. She says:
What is possibly more significant in the long run is that Canada is increasingly being left out in the cold by a world which is aligning itself into massive trading blocs. We are rapidly reaching the point where our only role in the world economy will be to react to external events.
Then, what will we tell the producers of Canada? Will we say then that they have never had it so good? We are in danger of being left out and losing our trade capacity with many of the countries forming the EEC, as well as others out of it. Should we not be concerned and troubled?
Many of my colleagues have dealt with our relations with the United States. Many have described how the government has blown an uncertain trumpet, lo these many months. Do the people of Canada know what is going to happen with the TAPS route? Do they really know what is going to happen about the Mackenzie route? Do they really know how much our government has studied either one of them, and do they really know how forthrightly, clearly and consistently our government has conveyed its views to the United States on either one of them? Is it too fearsome a prophecy to suggest that the people of Canada, if they do not watch out, will end up with both routes and have the invidious dangers to the environment from both of them, not just one? Are they given clear information on this?
Have the people of Canada been told where we stand and where we do not stand on the growing European community? Do they know what we are doing about the possibilities of trade with that area? Do they know what has been done about the market we once had with the United Kingdom? Has the government been alert to the dangers of a rapidly changing world economy?


An hon. Member:: Yes.


Heath Nelson Macquarrie: I am glad there is someone who is satisfied. Speaking of uncertain trumpets, I just heard one.
I would look at another area of great concern, and I see my colleague, the hon. member for South Shore (Mr. Crouse) is here. He is an expert in this field. What are we doing to protect the industry which today is probably in more deadly peril than any other, and that is the historic fishing industry? This is a prime industry of this country, and the situation is hurtful to the whole industry and hurtful to the whole of Canada. We have made great proclamations and talked about a 12-mile limit. No one gets in there; no Australian ships are allowed in there, and no Swiss ships are allowed in there. Of course, they do not come anyway, but those that do come have historic rights which they still hold. We have seemingly made no effort, diplomatically or otherwise, to oust those who are bringing depradation to the great resources of the sea off the east coast and off the west coast as well. In the face of the problem with the Danish government in reference to salmon, the Minister of the Environment (Mr. Davis) screwed up his courage and suggested a personal boycott,
May 23, 1972

but it was clearly ordained the day after that it was a mere personal boycott.
Have we successfully asserted our claims to fisheries management over the continental shelf? There are so many issues that cause thoughtful people great anxiety I am convinced that it is the mismanagement of things abroad which has been one of the large contributors to the ills of our economy at home. We are missing the boat in trade; we are withdrawing from those areas of world activity where we should be functioning at a high pitch with intensive involvement; we are failing to be vigorous in markets of the world and, as I documented a few minutes ago, we are losing markets which are precious and valuable to us. These are the kinds of things which must be considered not only in this debate, but which must be and will be considered by the Canadian people. It is that consideration and that kind of forecast of what conditions should be that is no doubt the reason we are still here and not out on the hustings testing the wind of public opinion on the economic mismanagement of this government.


Mr. Leonard Hopkins (Renfrew North-Nipissing East):: Mr. Speaker, I deem it a privilege to participate in this debate at this particular point, following the speech we have just heard by the hon. member for Hillsborough (Mr. Macquarrie). To start off my speech this afternoon, I should like to give him an example of the great economic savings and advantages which are the record of his present leader, the Leader of the Opposition (Mr. Stanfield) in this House of Commons. Let me quote from a report of a meeting of the Standing Committee of this House of Commons on National Resources and Public Works when the Atomic Energy of Canada officials appeared before it a couple of weeks ago. At that time the chairman asked the following question of Mr. Gray, President of Atomic Energy of Canada, Limited:
As you know, we are purchasing heavy water from as many areas in the world as we can. Can you give us the names of those countries and the costs that we are paying per pound for that heavy water at the present time? By comparison, what would heavy water cost us if we were in a position to produce enough to service ourselves as a nation?
To this question Mr. Gray replied:
We have bought a lot from the United States at varying prices starting at $24 a pound, going to $28 a pound, going to $30 a pound, and they have just announced that the price is now $39 a pound. We bought some from Sweden at $31; we bought some from Russia at two prices, $30 and I think the last was around $32 a pound; and we bought some from Britain at $30 a pound. We have leased some from Argentina at a 7 per cent charge, which we have to send back.
Had Glace Bay-
This is the plant which was originated by the hon. Leader of the Opposition in this House when he was Premier of Nova Scotia. Quoting again:
Had Glace Bay produced heavy water, as it was supposed to do, we would be in a surplus position and would not have had to buy any of this expensive heavy water. This runs into quite a few millions because their contract price started at $20.50 a pound and dropped down to $16 a pound, for an average of $18.15. That is the same number for the Canadian General Electric existing contract. At the moment we have been buying their production at $20.50 a pound. So you can see that there is a big mark-up between $20 and the new price of $39. I suppose we have averaged $30 a pound over all this production, which is something like 1,600 tons. We have
25316-33J
The Budget-Mr. Hopkins
paid at least $10 more a pound, which comes to around $30 million extra.
Is this the type of economy or the kind of economic measures the opposition in this House of Commons would offer to the Canadian people at a time when this government has the best record in many fields of any nation in the western world today?
Let us start looking at some of the positive things in life. We live in a nation which has the greatest potential. I believe the hon. member for Sault Ste. Marie (Mr. Murphy) was correct when he asked whether, because with all the faults at our own doorstep, we ever compared our economy and problems with those of other nations in the world. I have asked this question in this House before, and I ask it again. Who would exchange his way of life in Canada today for that of a person in any other nation in the world? Let us stand up, be counted, and go ahead with a positive attitude for the development of this country. I say on behalf of all members of this House of Commons if some of the backbenchers in this House of Commons were listened to once in a while, those who have firsthand knowledge of their constituencies, and if their recommendations were taken to heart and proper measures followed, we would not have some of the problems which exist today at all levels of government.
I shall give a positive example of this. I do not pretend to be a prophet, but on October 22, 1970 in a speech in this House of Commons as recorded at page 475 of Hansard I stated the following:
I want to say a few words about transportation. It is my view that equitable freight rates and good roads are important in developing the Canadian economy, as are our very worth-while policies of regional economic expansion.
I wish to say at this stage that I am not a critic of the Department of Regional Economic Expansion. I remember the days in 1962 when there were nearly 3,000 people in the unemployment rolls in the city of Pembroke at a time when members of the official opposition were in power. Not one single effort was made to alleviate the unemployment situation in that area at that time. I give the Minister of Regional Economic Expansion (Mr. Mar-chand) full marks for at least having the gumption and intestinal fortitude to stand up, be counted, and produce a program whether or not he may be criticized for the administration of it. It is only the doers in this world who are criticized and not the armchair critics.
In that same speech of October 22, 1970,1 also stated:
We in the Ottawa valley have always been plagued with unsatisfactory road conditions. If there is one thing we badly need, it is a good highway artery.
Let me give the House a good example of what I mean. The bridge in the centre of the town of Petawawa that spans the Petawawa River was built before the first troops moved into Base Petawawa in 1907. Today, it is called upon to handle all the traffic moving into Base Petawawa from various parts of the country, as well as traffic destined for Chalk River. Invariably there is a big traffic jam right in the middle of the town of Petawawa during the rush hour, and it is nothing for cars to be lined up for three miles. One morning about two weeks ago the nuclear laboratories at Chalk River lost $2,000 in wages which the Crown Corporation had to absorb because employees were late through no fault of their own. Renfrew County Council has brought this problem to the attention of the Minister of Highways of Ontario. It sent a

May 23, 1972
The Budget-Mr. Hopkins
resolution to the Minister of Highways of Ontario requesting the early completion of the proposed highway 417. The hon. member for Lanark-Renfew-Carleton (Mr. McBride) and myself were asked to support this brief, and we did so.
In reply to my letter to the Minister of Highways, the Hon. George E. Gomme, I was informed that roads were not the only problems in eastern Ontario, and that if we had really wanted to admit it, another problem was lack of economic development policies. He suggested that if the hon. member for Lanark-Ren-frew-Carleton and myself had succeeded in getting the area designated, this would have gone a long way toward solving our problems. In other words, the minister was trying to pass the buck to us. Let me tell the Hon. George Gomme that the hon. members for Lanark-Renfrew-Carleton and Renfrew North have now done their homework and we are looking for him to do his.
I delivered that speech shortly after the hon. member for Lanark-Renfrew-Carleton and I had succeeded, through speeches in this House, and through talking to party officials, in convincing our ministers in this House of Commons that the Ottawa River valley is very important, very much like parts of the Maritimes. It is also very closely related to the Maritimes. A number of us who have relatives in these areas travel back and forth. We were able to convince the ministers concerned that this area required economic policies. The Minister of Regional Economic Expansion saw fit to declare our area a special area under regional economic expansion. We have reaped some benefits from that program.
Let me tell you, however, what has happened since then with regard to Mr. Gomme's statement to me that another problem must be met which was related to economic development. I stated we had done our homework on this subject. Mr. Gomme, as Minister of Highways and his successor, the new Minister of Transportation and Communications, as late as January 28, 1972 advised the then Minister of National Defence that no second bridge was required across the Petawawa River because a start was to be made on highway 417. Shortly after that, an announcement was made that construction would start in 1973. Originally, the starting date was 1975. I can only say that in 1869 the Canadian government bought the Hudson's Bay Company land in western Canada in order to build a railway across this nation. Without the technological knowledge we have in this modern age, the Canadian engineers of that day built the Canadian Pacific Railway across this nation and had it completed by 1885. We have such a progressive Department of Highways, Transportation and Communications in Ontario today that it takes several years to build a very important bridge across the Petawawa River.
At midnight of May 6, the present bridge collapsed, the very bridge about which I spoke in this House two years ago. At that time, I wrote a letter of complaint to the highways minister of the province of Ontario and received an arrogant answer from him. When the bridge collapsed, several families were stranded on the north side, the site of the Canadian forces base, Petawawa. In order to get the military personnel to assist the civilian authorities, the request must come from the province concerned. I made six or seven telephone calls to Queens Park, Toronto, to try to locate a provincial minister, but I could not even get an answer from the switchboard at Queens Park, Toronto. I even made a phone call to

Ottawa to try to locate a provincial minister. Is this the kind of progressive government that this great new Colgate premier of the province of Ontario is giving us today?
On Sunday, May 7 I sent a telex to the premier of Ontario requesting that a state of crisis be declared and that emergency measures be taken to assist in dealing with this problem because about 4,000 employees cross the bridge daily to and from work. My telex was backed by one from the warden of Renfrew County who is head of some 40 reeves across the county. It was also backed by a telex from the mayor of the city of Pembroke, one from the mayor of the town of Deep River and one from the reeves of Petawawa township and the village of Petawawa in which the military base is located. As of today, May 23, the premier of the province has not even had the courtesy to acknowledge a single one of those telexes from the elected officials in the area. I do not care what the premier of the province thinks of me as a person, but I respect his office and I expect him to respect what I represent, even if he cannot respect me personally. I also expect him to respect the office of the warden of Renfrew County, of the mayor of the city of Pembroke and the mayor of the town of Deep River. That is the least we can expect.
The old ball game has started once again. People have started asking, for what are we paying the Canadian armed forces? The bridge collapsed 450 feet away from the gateway to the second largest military base in Canada. First of all, let me point out that this bridge is part of a provincial highway and it is not the responsibility of the Department of National Defence in any way. They cannot take action until they are requested to do so by the province of Ontario which must take full legal responsibility for any action taken after the collapse of the bridge. The armed forces did not receive a request from the province of Ontario until the Friday following the collapse. Finally, the engineers checked the site toward the end of the week. The approaches to the river banks were built by the province, the abutments were put in by the province and the province took full legal responsibility for that action. I want to pay a compliment to the Canadian armed forces because General Quinn, commanding officer at base Petawawa, his staff and his military personnel have cooperated fully, and had it not been for them I do not know what we would have done. They followed the correct procedures.
Yesterday, 150 engineers from the Royal Canadian armed forces were on duty all day constructing a Bailey bridge. They started at eight this morning and at four p.m. they had 70 feet of the 260 foot span built. This shows the expertise of our ^rmed forces, and it shows what they can do when they are asked to do it.


Some hon. Members:: Hear, hear!


Leonard Donald Hopkins: I do not want to hear it said that our armed forces today are not a professional group.
In the time that I have left, I should like to make a few remarks about an interprovincial national park that will make a great contribution towards achieving greater unity in this nation. We in the northern part of my constituency, in the area to the north of the Mattawa River and
May 23, 1972

on the Quebec side of the Ottawa River in the county of Temiscamingue, are working closely together to create the first interprovincial national park in Canada which would include areas on both sides of the Ottawa River. We are doing this not only as an example of unity between the two major provinces in central Canada, but because we know that people from all the urban areas of southern Canada, from Ontario, Quebec and the other provinces, will go into the national park when it is finished, will be travelling and talking together and thus will get to know one another.
The right hon. member for Prince Albert (Mr. Diefen-baker) is a great admirer of Sir John A. Macdonald. I, too, have read a great deal about him. He was a great asset to this country because of his flexibility in the early days of Canadian history. You will all remember that in 1864 he made his famous speech in Charlottetown in which he said-and I will not quote his exact words-that if you fellows and we fellows could get together once in a while and talk things over, we would learn what a wonderful person each one of us is. We want people from all areas of Quebec, as well as ethnic groups, to come to that interprovincial national park because they will share common interests. We want them to socialize in the restaurants and recreation complexes that will surround the national park and to get to know each other.
This will do far more for the unity of the nation than the political confrontations and the uprisings and disturbances that have taken place lately. We have to take positive steps toward this goal. It was with that thought in mind that I introduced two private members bills for first reading in the House a few days ago. It was rather interesting to hear the comments that have been made following the introduction of the bills. First of all, I am sick and tired of seeing the symbols of various countries abused, specifically the flags representing those nations. I recommend in these bills, and I will recommend on any platform, that the tearing down, the burning and the desecrating of the Canadian or of provincial flags be made a criminal offence, and I recommend the same thing with regard to the flag of any foreign nation lawfully represented in Canada.
I would like to recount an anecdote which appeared in the Canadian Press. I refer to an article in the Globe and Mail of May 2 which reads as follows:
Under two private bills introduced in the Commons yesterday it would be illegal to deface the official flags of Canada and even the U.S. Stars and Stripes or China's Red Flag.
The bills, introduced by Leonard Hopkins (L, Renfrew North) would make it an offence to harm the flags of Canada or the provinces and of those countries whose governments "are legally represented in Canada."
Anybody who "destroys, disfigures, mutilates, defaces, defiles, desecrates or casts contempt upon the Canadian or provincial (or the prescribed foreign) flags is guilty of an offence punishable on summary conviction," the act says.
I hope, Mr. Speaker, that it does become an act. There is an interesting anecdote to this. You know that we have some famous open line programs on our radio stations. It is amazing to hear the intelligent remarks made on some of these programs. I understand that one interesting commentator on a Kingston radio station picked up my bills
The Budget-Mr. Hopkins
and started a great discussion about who is this guy running around protecting communist flags? What is he doing all this for? Apparently I was the subject of heated debate in the whole Kingston area. Mr. Speaker, I appreciate this kind of publicity. There are some politicians who say that publicity is good for you, whether it is bad or good. I do not entirely agree with the former, but in any case this gives me a chance to speak on the Kingston radio station in an area where I am partially known, being a graduate of Queen's University, one of the fine old institutions in this country. I will be very interested to meet this intelligent commentator. Having taught school for 12 J years and having handled every grade from one to 13, I am not sure in which category this commentator falls. However, it will be interesting for me to make a clarifying statement when I am there, and I shall quote from my bills with great delight.
In all sincerity, Mr. Speaker, I would like to have from this House, and particularly from the front benches of my own party, the strongest possible support for the interprovincial national park that we are trying to create between Timiskaming and that great district of Nipissing. This is part of the area that was represented by the hon. member for Nipissing (Mr. Legault) before he gave it over to me, and what a lovely gift it was! While I am on this subject, Mr. Speaker, on a personal level may I say that it has been a great pleasure indeed to have such a fine gentleman and co-operative colleague to the north of me. He will be retiring from parliament at the end of this session, and I wish him every success in all his endeavours thereafter.


Some hon. Members:: Hear, hear!


Leonard Donald Hopkins: The Ottawa River, Mr. Speaker, will run right through the middle of our proposed national park. I am sure the hon. member for Pontiac (Mr. Lefebvre), in view of the experience he has had in this regard during the last few days, will agree with me when I say that according to statistics 3 per cent of the logs that have been floated down the Ottawa River and its tributaries over the last 125 years are still lying in the Ottawa River. Statistics also indicate that an average of 5 per cent of the logs floated down these rivers by lumbering companies during the past ten years are still at the bottom of the Ottawa River. I received representations from groups who were interested in cleaning up the Ottawa river. A pilot project was launched last summer and one group formed a company. They took out a couple of thousand of these logs. Some were 50 years old, and they piled them up on the shores.
Shortly thereafter they were moved to a sawmill and the lumber products and by-products produced were of a high calibre and quite merchantable. This group has been offered, free of charge, all the logs lying in the Ottawa River owned by the companies that floated them down the Ottawa and its tributaries over the years. This group is now the Upper Ottawa Improvement Company, and it is made up of all the companies that have ever driven logs on the Ottawa River. To give credit to the Ontario government, Mr. Speaker, it has cancelled the timber dues that would normally be payable on delivery of these logs. Here we have the Upper Ottawa Improvement Company, made up of all these other companies, willing to donate all these logs lying between Ottawa and Lake Timiskaming. The

May 23, 1972
The Budget-Mr. Hopkins
company has the expertise to do the job. It could employ 200 men. It could feed sawmills on both the Quebec and Ontario sides of the river and create employment. We have many people who are capable of undertaking this type of employment because logging has been a long time tradition in the Ottawa Valley. However, it costs more than $4 per log to put each log out on the river shore.
We have gone to several government agencies but cannot find support for this program. Mr. Speaker, I chaired the committee which passed the Canada Water Act three years ago, and the Ottawa is one of the river basins that will come under the regulations issued pursuant to that act. The Canada Water Act says that the polluter must pay, but how are you going to make the polluter pay if he went out of business 30, 40 or 50 years ago? This is a new field of operations today. I am using the Ottawa River as an example. I am sure there are many other rivers across the country from which logs could be salvaged and which could form part of a good solid program of conservation. I strongly recommend to the government that this be undertaken, either as a manpower training program or that funds be provided through the Department of the Environment to assist companies like this to clean up waterways and help promote tourism. Many of the outlying areas of Canada are not likely to get steel mills, tire plants or other sophisticated industries.
We have two major industries to offer. One is forest products, which we want to protect, and the other is tourism. We want to make our area as inviting as possible to all the citizens of Canada, the United States, and everywhere else throughout the world. If we are given the money to do the job, we will do it. I strongly plead with the cabinet to provide funds to start this program off either through Manpower, Finance, or the Department of the Environment.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Boulanger):: Pursuant to Standing Order 40, I have to inform the House that the questions to be raised tonight at the time of adjournment are as follows:

The hon. member for Selkirk (Mr. Rowland)-Unemployment Insurance; the hon. member for Hillsborough (Mr. Macquarrie)-Human Sciences; the hon. member for Assiniboia (Mr. Knight)-Grain.
{Mr. Hopkins.]



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Hon. John N. Turner (Minister of Finance), that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Lambert (Edmonton West), (page 2178).
Hon. Paul Hellyer (Trinity):: First of all, Mr. Speaker, I would like to congratulate the Minister of Finance (Mr. Turner) on his new portfolio and his first budget. I think he deserves credit for the workmanlike way in which he has approached his task. The good news that unemployment declined a bit this month, encouraging though it is, has been off-set by a further increase in prices. And the worst is yet to come. Recent wage settlements have reached new levels and signal even greater price increases in the months ahead.
It is not surprising, therefore, that a recent nation-wide poll aired on the CTV network program "W5" showed inflation as the problem uppermost in people's minds, with unemployment a close second. The country remains in the depths of economic crisis. Is it any wonder, under these circumstances, that there is so much unrest, alienation and a growing trend toward anarchy?
One thing is becoming increasingly clear-four more years of "London School" economics and Canada will split down the middle; Quebec will separate. The social unrest in that province has a largely economic base. There is a very high level of unemployment. Prices are rising. The level of taxation there, as in other parts of Canada, is excessive. Home ownership is becoming a rich man's dream. And wages in many cases, including segments of the public service, are well below $100 a week. People with family responsibilities cannot exist at that rate. The headline in one Montreal newspaper recently underlined the extent of the unrest when it said that Quebec lags in the national economic and employment upswing. It said that notwithstanding the impetus in employment of the last month, Quebec did not share proportionately in even that tiny improvement which took place.
Is it any wonder that there is so much labour unrest? Of course, the present struggle has an ideological tint. Some of the most powerful labour leaders have openly declared their opposition to our private enterprise system. They want to overturn it completely and replace it with their own ill-defined brand of socialism. But they are still a very small minority. The great majority of the workers they represent do not share their philosophy. But in a climate of unemployment, inflation, high taxes and inadequate wages, passions are easily aroused; mob reactions are easy to excite.
To cool the present unrest, some pretty dramatic economic improvement is called for. The federal budget was a small step in the right direction, but totally inadequate to cope with the size of the problem. Tax cuts for manufacturing industry will spur development and assist in
May 23, 1972

offsetting the United States DISC program. Minute adjustments in old age pensions will help but in no way compensate our senior citizens for their substantial loss of purchasing power caused by years of inflation.
On the other hand, the decision to let personal income taxes rise 3 per cent to their former unreasonable levels at the year end is a step backward. Manufacturers are not going to expand their capacity unless ordinary people have enough money, after taxes, to buy the additional output. Instead of an increase in personal income taxes, a further cut for low and medium income earners is urgently required both as an economic stimulus and in the name of justice. Failure to disclose this decision to allow perso-nel income taxes to rise at the end of the year was an error in judgment on the minister's part. It raises question marks in the mind.
Another omission of serious proportions was the government's failure to "come clean" and estimate the likely shortfall in the unemployment insurance fund which will have to be made up as a budgetary item. One local accountant of repute estimated that the shortfall would be between $400 million and $500 million, or even higher. If provision had been made for this estimated shortfall, the anticipated budgetary deficit would be double that announced by the minister; in other words, his estimate could be as much as 100 per cent in error. If this kind of falsification were inflicted on an unsuspecting public by a private corporation, the Minister of Consumer and Corporate Affairs (Mr. Andras) would cry "Foul" and probably lay charges. Yet the federal government sets the example with impunity.
Most important of all, the budget provided no measures designed to control inflation. The government has gone from one extreme to the other. In 1969-70, inflation was uppermost in their minds and was to be controlled even at the expense of higher unemployment. Now the government says its number one priority is jobs and although lip service paid to the concept of modest price increases, in reality, through its inaction, the government shows that it does not give a hoot about rising prices.
If the government really cared about inflation it would have introduced some form of incomes policy with teeth in it. By one means or another, wages and profits have to be controlled where monopoly power exists. The wage-price spiral must be stopped. Sanity must be restored. The government's abortive voluntary guidelines approach was doomed from the start. A much more realistic approach must be taken if the economy is to be brought under control. Action Canada believes that very simple controls of monopoly power would allow us to pursue the twin goals of full employment and zero inflation. This would be the foundation for an enhanced quality of life.
The classic approach to combines and monopoly power has been anti-combines legislation, but this approach has been almost totally ineffective. The reason, of course, is that oligopolies seldom make formal agreements to set prices. The matter is usually decided around the luncheon table, no records are kept and no evidence exists which would stand up in a court of law. The classic approach has not worked and does not work. And labour unions are not subject to anti-combines legislations at all, so their monopoly power is totally uncontrolled.
The Budget-Mr. Hellyer
There is no alternative to mandatory price and wage guidelines if we are to pursue vigorously and effectively the twin goals of full employment and stable prices at the same time. There are the demands of the consumer. If there is any other solution, I have not heard of it. Monopoly power, no matter what it is called, has to be restrained. Abuse of power by a privileged minority does violence to the principles of a free society.
Someone has referred to the frightening prospects of wage and price controls. A grim picture is painted of a bureaucratic morass similar to that imposed in wartime. Mention was made of ration cards, etc. This comparison of the present situation with that existing in wartime is really quite irresponsible. In wartime there was a physical shortage of goods and services of all kinds. Rationing was essential. In wartime the inflationary pressures were caused by too much money chasing too few goods. It is in these circumstances that black marketeering develops.
Today there is no physical shortage of goods or services of almost any kind, with the possible exception of housing. Today there is an excess of products and not enough money to buy them in the hands of people who need them most. Today rising prices are caused by rising costs. To compare the present situation with the wartime situation is so unbelievably absurd that one wonders why any intelligent person would do so. A red herring of that kind hides the real world and adds nothing to rational debate; it only adds to the depth of confusion.
Wage and price guidelines are not comparable to the bureaucratic controls of wartime. Bureaucrats should not set individual prices. Bureaucrats should not set individual wages. They are not competent to do that; no one knows it better than I do. The kind of price guidelines I suggest would merely limit profits to a certain level of return on capital invested, or in some cases on sales, equal to the long-term experience. Companies would set their own individual prices as they always have in peacetime. Wage increases, where contracts exist, would be limited to the average increase in real output per person in the labour force. Individual wages would be negotiated between management and labour, as they are now, but the total settlement could not exceed the guidelines. In this way union monopoly power would be subject to the public interest and price stability would be possible. Most important of all, this would permit the continuous pursuit of full employment policies.
The pursuit of full employment policies is critically important. The present high level of unemployment is self-destructive and is undermining our society. It has had disastrous consequences for thousands of individual Canadians. I speak with feeling on this matter, Mr. Speaker, because the people of my riding, Trinity, are directly affected. They are people with incomes below the national average. They are people who work with their hands. They work in construction and in factories; they are needle workers and office workers. They are people who are directly and immediately affected by any downturn in our economy. Many of them have lost their jobs and their capital goods as a result. Many of them have cashed in their insurance policies and used the proceeds to meet current requirements. I know of one family which had to give up a house after having made mortgage payments for

May 23, 1972
The Budget-Mr. Hellyer
20 years. It is this kind of distress which cannot be taken lightly. It might be different if it were necessary, but in a country like Canada it is completely unnecessary and for that reason some of us feel impelled to speak out loudly on behalf of these people.
Reducing the present totally unacceptable level of 6 per cent unemployment to, let us say, 3 per cent, which would merely represent those persons changing jobs, would require a fantastic increase in capital investment. At the rate of $25,000 capital investment per person it would require an additional $7.5 billion to provide jobs for 300,000 people. When I use the figure of $25,000 capital investment per person, I am reminded by my economist friends that that figure is much too low; they suggest a more realistic figure would be $50,000 per person. If one is to use the figure of $50,000 per person, the amount required would be $15 billion.
The government has failed to realize the magnitude of the job. Its relief to industry will help provide jobs for new people entering the labour force, but no provision has been made for the investment required to do more than nibble at the backlog. That fact has been underlined by the figures I have quoted. The backlog of capital investment required in order to bring unemployment down from 6 per cent to about half that figure, which might be considered satisfactory in this country, would be somewhere between $7.5 billion and $15 billion over and above that which normally would be required to provide for new entrants to the labour force.
It is perfectly obvious that if the Canadian economy is to survive and prosper, monopoly power must be effectively curbed in the public interest. The size of the political vacuum in Canada today can be measured by the fact that none of the existing parties is willing to undertake this difficult, thankless but essential task. If Action Canada's policy is put into effect, we will then be in a position to solve a whole series of related problems.
At the present time we are underproducing by $3 billion to $5 billion dollars a year in real terms. This is due to the unemployment of men and underemployment of machines. If we went to the full employment solution we would have an extra $3 billion to $5 billion of resources annually, over and above normal growth, to use for the elimination of poverty, the elimination of slums, the construction of urban transportation systems, the provision of adequate housing, the control of pollution and the development of Canadian industries and resources by Canadians. That is a tremendous amount of resources and would finance many homes at $25,000 each, the rehabilitation of many old houses at $5,000 to $6,000, the construction of sewage disposal systems, of garbage recycling systems, the supplementing of incomes at the low end of the scale and for more adequate supplements for old age pensioners, and the provision of meaningful employment for young people.
In summation, the government has failed to level with the Canadian people. The government has failed to take steps adequate to cope with the present level of unemployment. It has done nothing to relieve the tax burden on the lower and middle income groups. It has provided inade-

quate relief for our senior citizens and, finally, the government has stubbornly refused to take the action necessary to curb the abuse of monopoly power by big unions and big business in order to restore price stability and protect the weak and unorganized. For these reasons, Mr. Speaker, the government deserves the censure of this House.


Some hon. Members:: Hear, hear!


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, because the first part of this budget, old age security, the guaranteed supplement legislation and the war veterans pension legislation has already been debated, there is no need to discuss these problems further except to say that the government has moved from its position of making the old age pension static at $85 back to some degree of universality for all Canadians regardless of their economic status. The move of the government a year ago to freeze the old age pension at $80 and gradually phase it out and relate it to the income of the individual has been thwarted, at least for the time being.
I now come to what the budget is doing for business and the economy of the country, that segment which sustains the welfare of Canadians. In this respect the government has been woefully inadequate. Its moves will not help this country to surmount its problems in unemployment and its relations with the outside world, particularly the United States. The stepping down of Mr. Connally, the tough-minded individual who made a start on realigning the policy of the United States both financial and trade, indicates that we are at the end of an era. The regime of Mr. Connally indicates that as a dominant western nation the United States has had to make moves in the interest of that country to strengthen and turn around the balance of payments of the American economy.
The United States has served notice that we cannot expect further favoured nation agreements with the inauguration of the inquiry into Michelin tire exports, the alleged dumping of aluminum into the United States, the controversy over the Canada-United States auto pact and its implication that we are getting the best deal. They have served notice that our manufactured goods are facing increased surveillance protectionism in the United States market.
Similarly, the strong American protectionist sentiment established the union espousal of the Burke-Hartke law in the United States with their proposal that the present American economic structure exports jobs from the United States. We can make no mistake about that. This refers to the export of jobs to Canada in branch plants, and so on, and the American unions have indicated their support for any move to prevent this.
What are the main problems facing Canadians in the immediate future? It is quite obvious that unemployment is of vital and immediate concern. Consequently, what will be our industrial and commercial strategy to provide jobs on a strong growth basis for the years ahead? The unemployment level is far too high, with over 600,000 persons being classified as unemployed. However, much of this unemployment can be ascribed to the high birth rate of the fifties. With a drop from the birth rate of the fifties and indications of a continuing drop, we are now witnessing a drop in the labour force. This will become
May 23, 1972

progressive and in another five years or so there should be no need to create jobs in large amounts.
The jobs needed should be generated by a modest growth of the economy. The government's strategy of tax cuts to manufacturing and processing firms will not be of much value. I object to treating various sectors of the economy in a wildly different fashion. That is what this cut for manufacturing and processing does. There is a strong case for leaving the allocation of resources to the normal competitive processes of the market rather than using crude and non-reliable tax concessions. These introduce a new sense of distortion into the functioning of the marketing system and substitute therefor the judgment of the Minister of Finance as to what types of tax relief make for growth in our competitive system.
This policy will create more disparities in the various regions of the country and will benefit areas which are now considered largely aggressive. It does not do anything for the western grain industry which exports well over 10 per cent of our total export earnings into world markets other than the United States. This tax concession to manufacturers and processors will not in any way help the agricultural industry. I cannot even see where meat processing plants will benefit. There is no obvious reason why the manufacturing sector of our economy should be favoured. It is a myth that only the manufacturing sector creates jobs. Studies have shown that most of our manufacturers have to find a market in the United States and, seemingly, this area will be increasingly closed in the immediate future.
If the government is interested in creating jobs, it is going about it in the wrong way. All economics show overwhelmingly that the service area is the biggest producer of jobs in an immediate way. If it is necessary to counteract the DISC program, it would have been more appropriate to have a similar plan in Canada to encourage exports. The cut in corporation tax for manufacturing and processing firms will benefit companies which receive high profits in the short-run and will do nothing for companies that are getting started or are not in a profitable position. Indeed, it is estimated that substantial savings will end up in the United States treasury due to the fact that many profitable manufacturing firms are American owned.
Erratic variations in tax rates do little, even if they are favourable or result in a lower tax rate. A budget was brought down in June, 1971. This was followed by the 7 per cent temporary tax reduction last October. The tax reform legislation passed last December attempted to set out tax schedules for the ensuing three years. Now we have another haphazard change with the 9 per cent tax cut for manufacturers and processors.
Then there is the added uncertainty of defining what is manufacturing and processing and what is not. It could be months before these will be defined by the tax department. This makes it impossible to plan ahead intelligently. Large industrial organizations need to plan at least three years in advance, so long-term plans must be passed upon something more than the whim of the Minister of Finance. Frequent changes in tax rates are counterproductive. All
The Budget-Mr. Ritchie
people recognize that uncertainty about expectations inhibits investment. Businessmen do not know what to do because they cannot anticipate which parts of the economy will be supported or what will be the duration of the assistance.
Mr. Speaker, the budget implies that investment can better be stimulated by tax reductions to corporations than by across the board tax cuts. Our main deficiency today is still consumer demand; only when consumption catches up with investment in a significant range of industries will more stimulus be needed. The tax reductions for corporations will call forth little additions in investment. There is still plenty of unused plant utilization available for expansion.
At the same time, personal income taxes are going up as a result of the expiration of the temporary tax reduction. Over the past 20 years the Canadian government has become increasingly dependent on personal income tax as a source of revenue. The increase in direct taxes upon individuals over the past 15 years is almost twice as great as the increase in direct taxes upon corporations during the same period. An across the board tax cut in income tax at least for those below the $20,000 bracket would have the effect of increasing consumer demand, which we need immediately, and of contributing to savings, the ultimate source of investment and growth.
There is one area in which the Minister of Finance can quickly and easily increase economic growth and provide immediate jobs. He can clarify the investment provisions as they affect small companies in the sphere of ineligible investment income. An analysis of the affairs of small companies is showing that the relevant provision in the tax bill just passed is having a most damaging effect on the formation of new, small companies created by the investment and savings of other small companies. In its attempt to close the loophole of using the small company as a tax avoidance area, the government has drastically slowed up enterprise in this area. New, small companies quickly create jobs as compared to larger companies which require a longer period of planning. They are particularly important to areas of this country away from the large cities where pools of capital have been concentrated.
The accelerated write-off and the provisions of the budget expanding capital cost allowances for machinery are a simple recognition that taxation policies have been changed to respond to corporate wishes. This type of program will be utilized as a gimmick by many companies to derive maximum tax benefits. These changes will not have much impact on our high unemployment rate because they cannot be implemented by many corporations on short notice. These capital cost allowances permit the deferment of taxes which could result in increasing the cash flow. In subsequent years these same corporations will have written off many of their assets and therefore could be short of funds to pay their taxes. This happened in the late 1960s following the previous period of accelerated depreciation.
Constantly introducing tax changes will have only a temporary effect on our economy. Our economic difficulties have their origin in the Benson, Basford and Bryce proposal which flocked out of Ottawa and have been aggravated by the level of the Canadian dollar which is in
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May 23, 1972
The Budget-Mr. Ritchie
turn the result of improper fiscal and monetary policies. It appears the Liberals have been converted to Social Credit theory in vain efforts to bring down the exchange value of the Canadian dollar. There have been astounding increases in the money supply.
Over the last two years the annual increase has been close to 18 per cent. Increases in money supply of this magnitude have fueled inflation but have had little apparent effect on the Canadian dollar which continues to creep higher. Also, over the past two months the Bank of Canada has used more than $200 million to buy U.S. dollars and thereby restrain the level of the Canadian dollar. Certainly $200 million could be more advantageously spent.
What is needed now is gradual, expanded stimulus; in other words, lower taxes in all categories. Good fiscal policy should be implemented to effect real demand in all sectors of the economy, including exports. The Trudeau cabinet continues to try to substitute its adjustments for those of the marketplace.
Elaborate variations in the treatment of a particular segment of the economy, the manufacturing and processing group, illustrate the administration's bias but little else. Frequent shifts in taxation rates, four changes within one year, create so much uncertainty that investment decisions will not be made. Tax cuts for corporations ignore the common sense view that investment is not going to increase while excess capacity abounds. The shift and emphasis to give more weight to personal income tax was illustrated by the effective increase in personal income taxes which will become payable next year and, as well, corporations which do not fall into the manufacturing category will find their rates go up by 7 J per cent on the first of next year.
The economy is suffering from too much pushing and prodding. Broad tax cuts would bring down the external value of the Canadian dollar and we could be sure that savings eventually would be channelled into spending and investment, perhaps even into plant expansion if necessary. If secondary manufacturing needs help, surely it could be provided in much better ways. Encouragement of export activities is one area in which government could do something. Trade bloc agreements would be of great benefit to the Canadian export industry. We should allow our economy to function and do the things that it does best.
The preferred treatment to manufacturing given by this budget would seem to indicate that the government is embarking upon a so-called industrial policy on the basis that manufacturing is the area which needs help. There is serious doubt in the minds of many people that manufacturing will provide the entry into world markets which Canada's industrial machine is seeking. In a report of the Science Council of Canada published in October, 1971, and entitled "Innovation of a Cold Climate", there are some very interesting statistics. They show that between 1961 and 1967 manufacturing employment increased by 25 per cent. In 1968 this growth faltered and has remained static since. This is not because of lack of technologists because Canada has been graduating these people by the thousand.
The decline in this area has been in part brought about by technology itself being able to supply the same volume of goods with fewer employees. It is significant that in Canada it is precisely those industries from which most was expected in employment, tax revenue and consumer benefits which are now in difficulty.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
William Gordon Ritchie: Mr. Speaker, at six o'clock I was quoting some statements made by the Science Council of Canada on the difficulties that manufacturing is now experiencing in Canada. They said it is significant that in Canada it is precisely those industries from which most was to be expected by way of employment, tax revenue and consumer benefits that are now in difficulty. No new manufacturing industries are in sight, and low technology industries simply cannot shoulder alone the responsibility of meeting our expectations of a better standard of living. The adoption of appropriate over-all monetary and fiscal policies will take the country back toward a satisfactory rate of economic growth. What is needed is to eliminate the elements in the tax system which inhibit growth and promote inefficiency.
The budget takes no cognizance of the increasing change in the approach of youth to the work ethic. Youth is questioning the goals and values of education and the effort involved is seeking a diploma. We have always had this, but it is on the increase in today's society. An increasing number of student dropouts are coming from all sections of the economy and a growing number of young people are opting for non-employment. It is becoming increasingly feasible to live on part-time wages, a situation fostered by a relatively affluent welfare system and an unemployment insurance scheme which in effect is a modification of a guaranteed income.
It seems likely that a growing number of tomorrow's employees will not have the same ideas and aspirations of those of today. Economic, social and political structures will have to be prepared to accommodate these changing attitudes in planning modifications to job content. It is to be kept in mind that employment is becoming increasingly concentrated in the service sector. All this indicates that society is questioning traditional values. The failure of the budget to continue the service aspect of our society must be looked upon as one of the detrimental features of this budget.
I wish to turn for a moment to the foreign investment proposals put forward by the government. In Canada's case, foreign investment is synonymous with United States investment which is the investment we fear. It seems ironic that at this time the aims of the DISC program in the United States, which is causing such consternation in Canada, are the same as those of the proposed foreign takeover committee proposed by the cabinet. Both are designed to keep United States investment at home, and this will provide jobs for Americans.

May 23, 1972

If United States investment can be an instrument of domination, it is also the principal vehicle of technological change. It introduces manufacturing processes as well as new management techniques. It forces our manufacturers to rationalize and modernize, something they would not accept without competition. If we continue to permit outside investments or takeover, we will share in the profits that foreign investors make. Obviously these profits, spread throughout the economy, raise the general standard of living.
We could curtail takeovers by foreign companies, but they would merely establish or enlarge branch plants here with adverse effects on domestic companies. If we turn foreign investment away, these funds will go to other countries. On the other hand, foreign investment does impose limitations on national development in addition to the limitations inherent in the whole process of industrial activity.
For those of us in western Canada, the keeping out of foreign investment would mean replacement by eastern financial interests because of the need in western Canada for investment capital. The possibility of legislating against foreign investment, just as our present efforts to control it, would be negated because eastern capital would be in a position to force Ottawa to impose conditions in its own interests. The best thing to do about foreign investment is concentrate on everything possible to encourage industrial dynamism which will attract the entrepreneur of our society. Experience shows that the entrepreneur of new processes has a greater advantage over his rival and innovation is the major source of profit. We need to attract this talent.
The portion of this budget which deals with the economy of the nation is not conducive to steady and sustained growth. It will not provide jobs immediately, nor will it make provision for future years when our job needs will be less.


Horace Andrew (Bud) Olson: Mr. Speaker, I should like to join members on all sides of the House who have expressed appreciation for the improvement to our economy which has allowed us to take on additional responsibility such as increases to old age security benefits, guaranteed annual income benefits, increases in veterans' pensions, and so on. We on this side of the House particularly, but perhaps members on all sides, can take deep satisfaction from the fact that the Canadian economy has moved forward to the point that even though we did have the most generous pension scheme of any in the world in these categories, we are now in a position to improve that scheme even further.
I do not want to argue that these pensions are high enough or completely satisfactory, but from time to time I think we as Canadians should remind ourselves that the levels of pension benefits were the highest in the world and are being improved even now. I think that is a tribute to the attitude generally of Canadians and their willingness to improve the economy and to share in that improvement in this way.


Erik Nielsen: With inflationary dollars.
The Budget-Mr. Olson


Horace Andrew (Bud) Olson: The hon. member for Yukon (Mr. Nielsen) is now doing something I intend to deal with in greater depth in a few moments, that is, he is deliberately attempting to depreciate and downgrade the performance of Canadians in developing our economy by setting out distortions as to what is actually happening to the point that we do not as Canadians take as much satisfaction as we should.


Some hon. Members:: Hear, hear!


Horace Andrew (Bud) Olson: I have two main reasons for entering the debate this evening, the first of which is to set out in clear, concise and accurate terms the record of the performance of the agricultural sector of the Canadian economy during 1971 as opposed to not only the immediate preceding year but the previous ten-year period. My second reason is to refute this kind of distortion to which the opposition must resort when it does not have any better arguments.
I should also like to refer to misinterpretations and misrepresentations that have been made by some otherwise responsible members of the opposition when dealing with provisions in the budget which they claim to be discriminatory of agricultural production in so far as processing and manufacturing is concerned. Opposition members have had some success in this regard from time to time, in that they have fooled the public for a while with these distorted interpretations to the point that some sincere and well meaning citizens believe them. Therefore, I think it appropriate that we scotch these misrepresentations and misinterpretations early rather than assume that everyone will dismiss them for the kind of allegation they are.
Let us consider some of these misrepresentations. There are one or two other things I should say. Some of my colleagues from western Canada are now travelling about the country suggesting there is nothing in the budget of significance for western Canada. They repeat this to the point that they believe it themselves. It seems to me that the leaders of the governments of the prairie provinces, whether they be Social Credit, Conservative or NDP, have been going around the country attempting to attract manufacturing and processing industries to establish within their provinces. There is no more attractive way to do that than by developing a sustainable basis of the kind the Minister of Finance (Mr. Turner) outlined in the budget in relation to corporation tax cuts.


Erik Nielsen: Oh, be serious.


Horace Andrew (Bud) Olson: As I suggest, every person in the four western provinces has talked himself into believing that the most important economic thrust we can make in this area is in attracting additional secondary manufacturing, including processing, to establish there. We have always agreed that the first stage in development should take place in primary industry such as agriculture, mining and oil and gas development. We have reached the second stage. We ought now to be encouraging secondary manufacturing, including processing, to establish and expand. It is in this general area that we find a higher labour input by Canadians.
It is fair to say that in the oil and gas industry, for example, exploration, development and injecting addi-
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May 23, 1972
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tional and larger volumes into the market stream will provide an impetus to our economy. I am sure this will continue. The petrochemical industry has only just begun operations in western Canada. I am sure it will gain a tremendous advantage from the cuts in corporation taxes which were made for this purpose. The accelerated rate of write-offs, up to 50 per cent, of the cost of new equipment going into this industry will be of tremendous advantage to western Canada.
The petrochemical industry is only one area in which there will be an advantage. Other industries to benefit include mining and the large-diameter pipe manufacturing plants in western Canada. That industry is only at the beginning stage, but there is the possibility or potential that it will develop the greatest pipeline building era in Canadian history. Many of these pipe manufacturers are located in western Canada. They will be in a far more competitively advantageous position as a result of this budget. The plants of the pipe manufacturing industry are located in Calgary, Regina, Camrose and Edmonton and the suppliers of this massive and ambitious industry are located in other parts of western Canada as well.
I have mentioned only a few industries which will benefit. We must remember the tar sands development in Alberta which has really only just started. We can envisage markets looming in the future of tremendous volume and range for the development of this resource. Certainly the provision in respect of depreciation of processing equipment, as well as the new tax structure, will be of tremendous advantage in this area. Hon. members from western Canada should look at the facts and give Canadians the hope and optimism justifiable as a result of this budget, particularly in the secondary manufacturing area which we all agree is the area in which we as a nation should be moving.
I should like to return briefly to the suggestion that there has been some kind of discrimination in this budget against manufacturers and processors who use agricultural raw products. Because it would be improper to do so, I shall not refer to the discussion which took place in committee. However, after this matter out of the committee public statements were made by some members of the opposition who for their own purposes wished to leave a distorted picture. They made a flat statement which was a misinterpretation of the whole matter.


An hon. Member:: Who are they?


Horace Andrew (Bud) Olson: It would be easy to mention their names. They do not spend enough time in this House, so they are not here tonight. But the record is clear. They attempt to make bald, flat statements on the basis of a misinterpretation. They misinterpret what is in the budget. This carries them for a while: I agree that it has in the past. They say that anyone manufacturing or processing agricultural products will be excluded from the provisions in respect of the reduction in corporation tax or the accelerated write-off provision with regard to manufacturing or processing equipment. Very clearly, that allegation is not true; agricultural products which are being manufactured or processed will receive exactly the same treatment.


Mr. Horner:: Will this apply in respect of all products?


Horace Andrew (Bud) Olson: The hon. member is doing exactly what he did in committee; he is asking the Minister of Agriculture to give a legal interpretation of the application of the law which quite properly comes under the Department of National Revenue. Then he will go out in the country and say he asked this question and the Minister of Agriculture did not answer. They know the Minster of Finance said there would be no difference. There are such things as washing, grading, and so on, which are not included but they are not regarded as further manufacturing or processing. If there is no substantial physical or chemical action which takes place in the process, this is considered as grading, washing, and so on. People who understand agriculture-unlike the hon. member for Yukon-know the difference between processing and preparation for market.
Another very important matter I should deal with is the attempt which was made earlier today by the hon. member for Vegreville (Mr. Mazankowski) and half a dozen others to try to explain away, in depreciating and degrading terms, the very significant improvement which occurred in 1971 in respect of farm income.


An hon. Member:: Only because of a low in 1970.


Horace Andrew (Bud) Olson: I know they would have a great deal of difficulty in the farm area because of this garbage they have been peddling for the past two or three years. Farmers now know how productive the government's policies have been for their purposes. When we assumed office in 1968, so far as agriculture was concerned we made clear that the major thrust of the Department of Agriculture, and indeed of the government as a whole, in the agricultural field would be to turn the emphasis toward the marketing aspect of agricultural products because we believed the greatest enchancement of benefits for farmers would be available from emphasis in that area. I suggest that for years the Department of Agriculture has done an excellent job under all governments in those areas in which it has been active.
I suggest there are two main areas involved. One is in the resolution of production problems through such means as the research stations we have across the country, the health of animals branch, and so on. In other words, advance in production technology was one of the main functions. The department did this very well; in fact, it did it so well in many cases that the capacity to produce has far outstripped the advancement in marketing and marketing technology.
The second main area in which the Department of Agriculture has been involved is perhaps one which could be broadly described as the regulatory function. Making inspections and grading agricultural products such as vegetables, poultry, beef and so on in order to make sure that while these products went through the merchandising and distribution system the grades were maintained both on behalf of the producer who was selling and the consumer who was buying the product. As I have said, we made a deliberate announcement that the emphasis would be on the marketing sector for the purpose of improving the position of the primary producer in respect of market-
May 23, 1972

ing functions and structures. We have followed that policy consistently since that time.
We might look at the result of having done this for nearly four years in order to see what the rate of success has been. For example, Canadian farmers on the average in 1971 came through a much improved year. The average gross income per farm-by the way, this is something members of the opposition never talk about-rose to an all-time high of $13,589 in 1971 compared to $10,678 the year before. In other words, it is up almost 25 per cent. That just lays the basis. The average net income also rose in 1971 to $3,946 from $3,160 the year before. This is something I am sure members of the opposition will never repeat outside this House. That is an improvement of 23.6 per cent in just one year. That is pretty important, but it is even more important to point out that taken over a ten-year period the improvement is 70.3 per cent.
Hon. members like to hold up years like 1966, for example, and say that everything has gone down according to that one particular year. The Liberal party was in office in 1966 and does not want to take anything away from that great year. It was a great year for agriculture. No one denies that. We sold the largest amount of wheat, at the highest price, in Canadian history. There is no doubt about that. Hon. members, however, like to make comparisons between 1966 only and 1971. They do not want to make comparisons between 1971 and the ten-year average. All they want to do is make comparisons between that year and the highest peak, the year of the great surge in grain sales under a Liberal government.
I would like also to draw attention to the fact that total grain receipts in 1971 were up by $120 million over the year before. If hon. members would like me to spell out in detail the figures for oilseed, for barley, for oats and for wheat I would be happy to do that, but I can tell them that there were increases in every single grain commodity.


An hon. Member:: There needed to be.


Horace Andrew (Bud) Olson: There are other bright spots that should be taken into account; for example, gross receipts from the sale of cattle and calves, which amounted to $1,034 million, were also the highest in Canadian history and were $60 million over the year before.


Some hon. Members:: Hear, hear!


Horace Andrew (Bud) Olson: Cash receipts to farmers were up to $4,318 million in total, an increase of $151 million over the year before. That just sets out the main framework, the details of which I would like to fill in with respect to some of the commodities that were involved.
We used to hear a great deal of criticism from the opposition regarding the dairy policy. I am sure you have noticed, Mr. Speaker, that they have been strangely silent regarding the dairy policy in the last eight or nine months. The reason is pretty clear. I would like to go into detail on this but I am afraid I might not get extra time. Nevertheless, I should like to point out that people who have asked why we have not raised the price of milk by about 50 cents per hundred should know that the actual increases in milk
The Budget-Mr. Olson
prices-this varies somewhat from province to province because it is the province which sets the amount of payment to the producers-and the change in the holdback by the price changes that we took in 1971 and the improved market conditions, for which we take credit, amount to somewhere between 85 cents and $1 per hundred for the producers.
So when we hear misinformed or underinformed members of the opposition say that the increase was only 20 cents or 25 cents and that the farmers are asking for 50 cents, they should be reminded that the producers received increases on four separate occasions in 1971. The opposition will have to explain why they have been distorting the efforts of this government, because in the final analysis the farmers look more at the results than they do at complaints that everything is wrong.


Walter Gilbert Dinsdale: You can't fool the farmer.


Horace Andrew (Bud) Olson: I hope I have not run out of time because there are many more things I would like to speak about. These days we hear a lot about increasing the capacity of the grain handling system for what appears to be a growing demand in world markets for Canadian grain. Certainly the performance of 1970-71, when we sold 706 million bushels of grain, was an all-time record. This year we will exceed it by a great amount. But what we need to bear in mind and what needs to be recalled from time to time to put this matter in perspective is that the volume we are putting through the grain handling system is increased by 30 per cent or 40 per cent over that which most of the experts believed to be the absolute maximum only four years ago.
However, what is more important is that this was done without massive capital outlays. It was done by improving and making more efficient the use of the facilities we already have in place, such as railways, terminals, cleaning facilities, ship loading facilities, and so on. It has been said over and over again, yet it does not seem to get through clearly, that three or four years ago with the procedures that were used at that time most people involved in the industry thought that 500 carloads per day at the west coast was the absolute limit on a sustainable basis.
Last fall, before we had difficulty with the heavy snows in the mountains, we were in fact putting through up to 700 cars per day on a sustainable basis. This spring, now that we are getting the volume of cars through the mountains-and I am sure there will be some difficulties, some more slides that will tie up rail lines from time to time-on several days recently we have unloaded as many as 950 cars a day with those same facilities, while three or four years ago it was expected that 500 to 550 carloads was the maximum sustainable capacity.
Back in 1968 it used to be thought that the maximum that could be put through Thunder Bay was around 1,000 or 1,200 carloads a day. Now we are approaching 1,900 carloads a day on a sustainable basis. We have no doubt at all that with the kind of co-operation we have had from the grain industry, and with some new procedures that have been brought in, we will be able to put through 30 per cent and perhaps as high as 50 per cent more without any massive capital investment. I think that speaks for

May 23, 1972
The Budget-Mr. Olson
itself. We were going to really come to grips with some of the bottlenecks we had had in the grain industry and make maximum use of the facilities that were already in place, and we have achieved this-


Erik Nielsen: Did the railroads have anything to do with it?


Horace Andrew (Bud) Olson: Yes, the railroads were co-operating. Obviously we could not get 2,700 or 2,800 carloads to export positions unless the railroads co-operated, and we could not get them through the terminals unless the terminal operators co-operated and put them through. So this is a tribute not specifically to the government but to the whole industry for the kind of co-operation they gave us. The hon. member for Yukon has never bothered very much about all this because he did not know, and he still does not know, anything about it; but there are members on the other side who know about the new block system, the exchange of cars at the terminal and some of the improvements in grain handling facilities. They have always said that would not do and that we have to commit oursleves to the expenditure of hundreds of millions of dollars, more storage, and so forth. We have established very clearly that there is much more capacity in the system and what we need is co-operation from everyone. This has been achieved.


Walter Gilbert Dinsdale: The government has pulled its socks up.


Horace Andrew (Bud) Olson: That is not all. We believe that much more can be done in the marketing arena to be helpful to the producers. We believe that the absence of a representative of the producers at the table where the price is determined has been detrimental to the producers' interest in the totality of the marketing system.
If traders are going to make these kinds of determination, and they are working on margins rather than on the absolute amount that is paid for a commodity. For example, obviously they can get along just as well on a two-cent margin between 10 cents and 12 cents on hogs as they can on between 30 cents and 32 cents; in fact, in some cases better. But it is a big difference to the farmer whether hogs are selling for 10 cents or 30 cents. The spread to the traders is the same. Therefore, we are determined to do everything we can to make sure there is a producer representative at the table where theses kinds of prices are determined, a representative whose vital interest is the producer and the return that he gets.
Much has been done and much more will be done in this area and also in the promotion of products in both the domestic and export markets. I remember what happened with respect to honey producers shortly after I assumed this office in 1968. They were in a desperate situation because they themselves had not been directly interested and involved in the marketing of their product.


Mr. McKinley:: They still are.


Horace Andrew (Bud) Olson: I cannot hear what the hon. member for Huron (Mr. McKinley) is saying.


Erik Nielsen: He said they still are.


Horace Andrew (Bud) Olson: When I took this office they were being offered 4 cents a pound for honey and not only had their 1967 crop on hand but almost all of the 1966 crop; and they had the 1968 crop approaching, with almost no barrels in which to store it. They are in a much happier situation today and, by the way, the price is now three or four times as high as the initial offer was then.
We have received many representations from the sheep and lamb industry during the last few years. They had received deficiency payments during the last 12 or 13 years and during the whole of that period there was a decline in returns received from wool. Mr. Speaker, there is a general decline in wool prices all over the world, mainly due to competition from synthetic fibres. One thing which is certain is that making that deficiency payment did nothing to enhance the producers' position in the market place, particularly when there was a viable, growing market for fresh Canadian lamb. Last week I called a meeting of representatives of the industry. To cut a long story short, Mr. Speaker, I hope hon. members read the press communique issued following that meeting. If they do, they will see it is probably an historic event, a turning to the better for the welfare of the sheep producers because they will now in a co-ordinated, co-operative way be involved in the marketing of lamb.
In the first year of the scheme we have offered to finance the development with funds up to $250,000 and we will stay with it for five years with a financial commitment so that the producers can put their own house in order and get a decent return for the high quality of their product.


Eldon Mattison Woolliams: They can't wait five years.


Horace Andrew (Bud) Olson: We are starting right now. This is not one of those on-and-off governments; when we make a commitment we stay with the job until it is done. I hope, Mr. Speaker, I have not yet run out of time. Hon. members opposite seem to think that Bill C-176, which is now the National Farm Products Marketing Act, was the only action the government took to help producers do things in the marketplace for their own benefit. That is only one of a dozen things we did.


The Acting Speaker (Mr. Boulanger):: Order. I regret to interrupt the minister, but his time has expired.


Some hon. Members:: Continue.


Horace Andrew (Bud) Olson: Mr. Speaker, I take it I have unanimous consent to continue.


Mr. Bell:: Mr. Speaker, if the minister continues for only one or two more minutes, that will be all right; but we have a list of scheduled speakers and we could agree only to a minute or so for the minister to conclude. I am sorry to do this because he has been very revealing.


The Acting Speaker (Mr. Boulanger):: This would
require the unanimous consent of the House. Is it agreed?


Some hon. Members:: Agreed.


Horace Andrew (Bud) Olson: Mr. Speaker, I appreciate the point made by the hon. member for Saint John-Lancaster (Mr. Bell). I
May 23, 1972

will take only another 60 seconds. I had hoped to outline the tremendous progress we are making to enhance the position of egg and poultry producers and the position of the potato industry. I am sure hon. members will await with great expectation the successful results of the progress now being made in all these other areas, all of which adds up to the prospect of a much brighter agricultural industry in Canada.


Mr. John Burton (Regina East):: Mr. Speaker, the first comment I want to make is to note that on this day, more than two weeks after the introduction of the budget on May 8, we are on only the third day of the budget debate. This is a very unsatisfactory situation. It is one that should be avoided in the future. By the device of delaying the debate the government can diffuse criticism and discussion of the budget. After all, Mr. Speaker, the budget is the single most important statement made in the House during a session and it requires priority consideration. In this case the budget is so vulnerable that I can understand why the government wanted to diffuse the situation, particularly if a federal election had been called prior to last weekend, as had been planned.
The first question that must be asked is whether the budget is good for Canada and Canadians. The Minister of Finance (Mr. Turner) obviously thinks so, as he asserted in his budget address. His address amounted to an act of faith in corporations, in their capacity and benevolence to act in the best interests of Canadians. His philosophy can be summed up in a phrase: what's good for corporations is good for Canada.
The minister maintains that his budget will produce new jobs. Possibly it will. But will it produce enough? The minister in effect acknowledged that he was on shaky ground when answering questions in the House and questions that I asked him in committee. While he continued to assert his faith in his proposals, he refused to divulge unemployment projections for the balance of the year and would not even give a range of expectations for such factors as the participation rate, an important factor, and only expressed himself very cautiously in extrapolating the trend based on the latest monthly figures.
I cannot help but notice that whenever the government wants to give the economy a boost it always thinks in terms of machines. Thus, we have generous capital cost allowances which permit corporations to buy machinery and equipment this year, write off 50 per cent of it this year and the remaining 50 per cent in 1973. Thus, a firm can buy a piece of equipment on December 31, 1972, and have it completely depreciated for tax purposes by December 31, 1973. Some deal! Who benefits? The branch plant type of industrial structure that we have in Canada means that our own machinery industry is not adequately developed, so Canada will not even benefit much from purchases made as a result of this incentive.
The minister must also take into account the fact that often putting machinery in place displaces jobs. This, of course, involves the age-old problem caused by displacement of labour when machines are introduced. No one in Canada wants to stand in the way of technical progress, but I suggest that the momentum of technology and scientific advance, with proper encouragement, will bring a sufficient rate of progress. But why stack all the cards on
The Budget-Mr. Burton
the side of machines? We are only making more problems for ourselves.
It is maintained that there is a shortage of capital in our economy. But it is also obvious that in the present situation we have a labour surplus situation, a labour surplus only from the point of view of the current functioning of the economy and not from the point of view of real needs. So what does the Liberal government do? It makes the situation worse. It increases the need for capital and in some cases it will aggravate the job situation. If it is possible to build into the tax system incentives based on machinery and equipment purchases, why is it not possible to build in incentives based on net creation of new jobs? Why not introduce incentives for the employment of people?
I do not minimize some of the problems that may be encountered in developing a satisfactory system, but surely it is the only approach that makes sense in this regard. The government cannot take comfort in the contention that the labour force-job situation will balance out in the long run. In the meantime the misery, the hardship and privation that the government has caused millions of Canadians is inexcusable.
The most important feature of the government's generosity to corporations is the cut in the corporate tax rate from 50 per cent to 40 per cent. This carries with it a number of important consequences and implications. First, it makes a shambles of tax reform. Let us for a couple of minutes look at the history of the situation. The Carter report when presented included a plan for a rational tax system. It was to be a neutral tax system within the framework of a basically capitalistic economy. By the time the government produced the white paper, this concept had been modified considerably and it was tinkered with to a good extent.
Following the hearings by the committee of the House and the "blood" paper, the government presented proposals which were watered down even more. Bill C-259 in the previous session was introduced. During the course of debate on that bill more changes were made. Very few of those changes, I suggest, were beneficial to Canadians as a whole. One of the few areas of beneficial change involved co-operatives and credit unions. Much time during the debate was spent on technical points of interest only to corporations. At the same time, I must say that the concept involved in those discussions was based on maintaining a certain balance between taxation received from individuals and that received from corporations. Now that is being altered.
We have not even heard from the minister a statement of the philosophy, principles or approach to be taken by the government. In addition, on January 1, 1973, income tax for individuals in Canada is to be increased by 3 per cent. At the same time there is to be a 20 per cent reduction in tax for corporations. What will that do to the balance between the two tax sources? Are corporations to contribute the amount that they ought to contribute to the total tax system and to public expenditures in Canada.
Of course, the budget papers say that in 1972-73 individual income taxes will account for about 44 per cent

May 23, 1972
The Budget-Mr. Burton
of total government revenues, and corporation income taxes about 15 per cent. The budget figures are based mainly on collections under present rates, before the new rates come into effect. The leader of the New Democratic Party (Mr. Lewis) suggested in this debate that if one calculates the effect of these changes in 1973 when the total changes come into effect, we shall find that about 49.9 per cent of total revenues come from individual income taxes and about 12.2 per cent from corporations.
We must also be concerned about equity. Under the present proposals of the Minister of Finance, the lower rate of corporate tax is to be available only for manufacturing and processing industries. That is also the case with respect to capital cost allowance provisions for machinery and equipment purchases. I ask, what about the other sectors of the economy? The minister really has not any justification in equity for the changes he has introduced in the budget.
The minister has also said on several occasions that these measures are the Canadian response to the situation created by the United States Domestic International Sales Corporation legislation. Obviously, serious problems must be dealt with. Who will be the winners? Who will gain as a result of some of those things which have been done? I suggest that the firms that are to gain the benefits of reduced tax rates and special allowances in Canada are largely the same firms that are establishing DISCs in the United States, and that move will virtually free them of tax obligations on foreign sales. I ought to make clear that I am referring to the DISC legislation in the United States concerning the last point. I ask, again, who will be winners in that sort of situation? It will be the corporations, obviously. And who loses? I suggest we do. I suggest that we Canadians will bear some special losses in this situation.
The government had to respond to the situation. It was caught in the whirlwind of its past policies of depending on foreign capital to such a great extent. The minister's response indicates that he is still going to rely on a passive role on the part of government in the operation of economy, in keeping with the traditional capitalistic approach to such matters.
I have deliberately dealt with the situation in Canada. We are all concerned about the future of Canada. I am concerned about the future of Canada as a nation. We must examine the total picture when we examine documents such as the budget address. Nevertheless, there are also regional considerations to be considered. Since I come from western Canada, Saskatchewan, I want to discuss some regional considerations that affect us in western Canada. The obvious question I must ask is, is the budget any good for western Canada?


Walter Gilbert Dinsdale: No.


John Stratford Burton: I was interested in the comments of the Minister of Agriculture (Mr. Olson) who made an impassioned plea on behalf of the manufacturing industries. His remarks seemed to be rather out of tune with the role he is supposed to play in this government. It seems to me he tried to make the best of a bad situation. He suggested that there will be a few industries in western Canada which will benefit from the special corporate tax rates.

What these tax rates will do to their operations remains to be seen.
The Minister of Agriculture should also bear in mind, when he is talking in western Canadian terms, that one half of manufacturing production in Canada is centred in Ontario. That province, of course, makes a great contribution to Canadian wealth and Canadian well-being and I do not downgrade it in any way. It seems to me that when the Minister of Agriculture attempts to suggest that these special measures which will benefit the manufacturing industry are good for western Canada, he is totally off base.


Walter Gilbert Dinsdale: He is straining credulity.


John Stratford Burton: The Minister of Finance did not even make a nod in the direction of western Canada. He did not have a word to say about problems that concern western Canada. His statement was aimed solely at central Canada and the Liberal party's concern about fixing up its relations with big business in the largest financial and business centres of central Canada. The closest point relating to western problems was a fleeting reference to agriculture in his speech and in the economic review which was tabled earlier.
I should like to review for a moment a couple of comments that the Minister of Finance made in the budget address concerning agriculture. The first statement I refer to is as follows:
In agriculture, a very rapid rise in productivity with a corresponding decline in the need for farm workers, has necessitated a continuing process of adjustment.
What has been the result, Mr. Speaker? Rural Canada is being denuded of population and the minister has not even hinted that he opposes the process under which the rural populations of Canada are being denuded. He did not question this matter at all; he simply seemed to suggest that he wants to see more of it and he hopes the process will continue. He also ignored completely the fact that the real increases in productivity had not been reflected in income figures to an adequate extent. The second statement he made about the farming situation was as follows:
Here a wide range of federal programs have been put in place, including price supports, organized marketing, long and shortterm credit, favourable tax treatment, and production development aid. New measures only recently introduced have improved all of these programs.
I suppose I cannot blame him for bragging a little about some of these things. Although he expressed a great deal of satisfaction, I suggest that in this area there is no cause for it. Tonight in his speech the Minister of Agriculture quoted certain figures. He suggested that the average farm net income in Canada for 1971 was $3,946. Mr. Speaker, I think one should bear in mind that that represents the farmer's return on his invested capital, on his labour and that of his family, on the management he provides-and the return averaged $3,946.
The Minister of Agriculture had the nerve to brag about that figure. He said it was higher than the 1970 figure which, at $3,146 per farm across Canada, was even more disastrous. Here, I suggest, is one of the major causes of poverty in Canada which this government has failed to
May 23, 1972

tackle. Of course, in his speech the Minister of Finance said that last year farm income rose by almost 25 per cent over the level of 1970. I think it was fatuous to compare the 1971 income with the disastrous level of 1970. That is not the sort of comparison one ought to make.
It should also be noted, Mr. Speaker, that the 1971 net farm income of farm operators across Canada totalled $1,730 million. True, it is higher than some years, but at the same time it should be kept in mind that this figure compares with $1,868 million in 1951 and $1,878 million in 1952. In 1971 we were still below the level of 1951 and 1952.
I notice that in his address the Minister of Agriculture made reference to the dairy industry. I do not think the minister should be bragging about this situation. He claimed that opposition members were not saying much about this matter lately, and seemed to be taking some credit for the situation. The minister of Agriculture must have overlooked what the Minister of Finance said about this situation in his budget address. The minister said:
The dairy industry is currently benefiting from a substantial firming in world price levels-
He did not indicate this was as a result of government policies or good government planning. This came about in spite of the type of planning carried out by the government. The government should not have too much to say about this situation because they were doing everything possible to restrict dairy production at a time when world demand was rising and a shortage of dairy products was developing at the international level. The Minister of Finance also said:
-and this year exports of grain and cereals from western Canada will surpass all previous records.
I certainly hope the minister is right. This will be of some benefit to western Canadian farmers, but at the same time it should be kept in mind that it will not be reflected to the same extent in income figures, whether it is gross income figures, as referred to by the Minister of Agriculture a few minutes ago, or net income figures. The fact is that farmers today are receiving $1.70 for wheat. That is the export price. Just five years ago they were receiving $2.13 or $2.14. That is certainly not much of an improvement. We shall have to sell a lot more wheat to simply get back to the same position as 1967.
The next paragraph in the budget address of the Minister of Finance is one I would like to draw to the attention of the House. This statement made me very angry. This is what the Minister of Finance said:
Our manufacturing industries are the largest single source of employment in Canada, providing jobs for more than one-fifth of all working Canadians. But by contrast with other sectors of the economy, this important sector is the one that is most exposed and most vulnerable to the challenge of change and international competition.
I do not deny that the manufacturing industries in Canada are faced with serious problems. However, I suggest that this statement will cause a great deal of resentment and ill will, particularly in western Canada. The minister has demonstrated that he does not know the first thing about agricultural problems and he could care less. Where has the minister been during the past five years,
The Budget-Mr. Burton
particularly since international grain prices began to fall? Has he never heard of the International Wheat Agreement or the International Grains Agreement which collapsed? Is he not aware of the history of long exposure to foreign competition that has faced agriculture, particularly the export sector of the industry?
The situation is even worse. I suggest that the minister's lack of regard for agriculture was a deliberate decision to continue a long-standing policy of restricting support to agriculture. I say this because I watched the minister talk about the budget on the CTV program "Question Period" on Sunday, May 14. At that time he explained that in developing policy for his budget address he examined the three basic sectors of the economy, the primary sector, the manufacturing sector and the service sector. He said he decided that manufacturing was most in need of help and could be helped through budget measures. He pointed out that this arose because of conditions of world competition facing manufacturing industries. It is a strange thing that the minister almost falls over himself to come to the help of manufacturers but he has no time for agriculture. It is tragic for those farmers who have had to bear the impact of world competition for many years, such as grain and cereal producers.
Does the minister not realize what he is doing to agriculture? He is letting it be strangled. Does he not know that in spite of remarkable increases in productivity, this is not reflected in relative net income terms? Does the minister not know what he is doing to rural Canada and the nation as a whole? What kind of a nation does he think we will have if we simply have a few huge cities with a virtual economic and social desert between them? That will not be a nation. Unless we have a definite, meaningful decision by government in the very near future that it will participate in the reconstruction and development of a healthy rural Canada, it will be too late. Rural Canada is now disintegrating. The federal government must work actively with the provinces if we are to avoid a catastrophe.
If the minister is concerned about agriculture and rural Canada, he could at least have said something about the future of the two-price system announced by his colleague, the minister in charge of the Canadian Wheat Board, some time ago. Payments this year were made from a 1971-72 supplementary estimate. What about next year? There is nothing in the estimates for 1972-73. Is the government going to do some more tinkering with the situation? There is a good basis for my suggestion: it is not mere speculation. When the minister in charge of the Canadian Wheat Board announced the method of payment under the two-price system on February 25 he said that a different payment method for future years would be discussed with farm representatives. I quote his words: Unifarm and others have asked that the money be used in future in a stabilization plan.
I suggest that this is what the minister in charge of the Wheat Board plans to do with the future of the two-price system. He is going to tinker with it and use that money in order to sweeten the pot for whatever kind of stabilization plan he brings back into the House.
The budget address is consistent with statements on agriculture made by the Prime Minister (Mr. Trudeau). I

May 23, 1972
The Budget-Mr. Burton
wish to draw his words to the attention of hon. members. This is from a speech made by the Prime Minister in Quebec to the Co-operative Federee du Quebec on February 2. This is what the Prime Minister said about agriculture:
Agriculture will not be able to meet the challenge of the future if it does not become economically independent.
Like any other industrial sector, it has to operate and will have to operate without subsidies, without outside aid, as a mature organism that has developed its full potential.
It is becoming less and less acceptable that consumers bear the cost of farmers' deficiencies.
The Prime Minister blamed the whole situation on the farmers. What did the Minister of Finance have to say about manufacturing industries? He said that manufacturing industries had to be helped because they were exposed and vulnerable to the challenge of change and international competition. I suggest that this is an incompatible stance when one compares what the government is doing for manufacturing with what it is doing for agriculture and rural Canada. I challenge the government to make a firm commitment that it will play a dynamic role, together with the provinces and communities throughout Canada, in rebuilding rural Canada.
Another reason for my concern about agriculture and rural Canada is the possible consequences arising from the budget. I wish to quote as follows from an article in the May 16 issue of the Globe and Mail entitled "Budget has important implications":
F. H. Hatt, president of E. M. Saunders Ltd. of Toronto, takes the view that the reduced corporate taxes for manufacturers will take the pressure off the Canadian authorities to keep the exchange rate down. Since manufacturers and processors are the groups that have been hit hardest by the dollar appreciation in the past two years, the tax cut will offset hardship in this area-and may well provide a margin for some further appreciation of the currency.
A rise in the Canadian dollar to, say, $1.03 in U.S. funds would satisfy Washington as to the appropriate level for the Canadian dollar-
This, again, will hit the export sector of agriculture. It will make it even more difficult for it to survive. However, there is no hint of any help or compensation for the export sector in dealing with the problem it will have to face. Farmers have no protection; they are left out in the cold, with no help from the Minister of Finance.
I suggest that the minister should take careful note of some of these things, with particular reference to a matter that has been referred to from time to time in this House. That is the question of western alienation. There is no question but that our nation is facing serious strains at the present time. There are difficulties in relationships with the province of Quebec from whatever point of view one approaches the matter. However, it must be kept in mind that we have problems in western Canada. This point was dealt with very effectively by the hon. member for Selkirk (Mr. Rowland) when he spoke in this House on February 22. He said:
I consider the phenomenon of western alienation to be of sufficient magnitude to have the potential of profoundly affecting the course of this nation-
He went on to define western alienation in this way:
-the sense of frustration and anger at what is perceived to be lack
of concern and understanding for the west and its problems by central Canada.
He commented, further:
-westerners are still in the process of adapting themselves to the changes inherent in industrialization and are still seeking to define the new relationship with the rest of the country that these changes necessitate.
Later he said:
It is this lack of political clout in Ottawa and a total lack of understanding or even of attention on the part of the federal government which has led to present western alienation.
I suggest that if the Minister of Finance does not show any more concern for the west in the future than he did in his budget address, we are in for serious problems in the future.


Erik Nielsen: Mr. Speaker, as I sat here listening to the Minister of Agriculture (Mr. Olson) I could hardly believe my ears. According to him, everything is rosy with the western farmer and nothing could be better. Yet as I travelled in the west, as I am sure members opposite have done, and listened to the western farmer I came to the conclusion that there was a huge groundswell of discontent in respect of the policies of this government. If everything is so rosy, why is there this tremendous discontent, particularly among western farmers? If everything is so rosy, we can assume that nothing more can be accomplished by the government, particularly the Minister of Agriculture, in regard to western agriculture.
I have heard some of my colleagues from the east coast suggest that perhaps the Minister of Agriculture could use his influence with the Minister of Fisheries (Mr. Davis) to encourage him to at least attempt to solve some of the acutely serious problems which exist in that area of the country. I do not think things are as rosy as the minister would have us believe.
The minister says I know nothing about wheat and he is right. But he should have the same modesty when he speaks about oil, gas and the mining industry and admit that by any criterion his knowledge of these segments of the Canadian economy is slight indeed. I am one of those who was around when the minister was on this side of the House as a member of the Social Credit party.


Mr. Cullen:: He saw the light.


Erik Nielsen: Let me inform the hon. member for Sarnia-Lambton (Mr. Cullen) that it was not much of a light.


An hon. Member:: That's when your light went out.


Erik Nielsen: Let me inform the hon. member for Hamil-ton-Wentworth (Mr. Gibson) that the minister does not know a great deal about agriculture and will not know much if he continues to shift his position as he did in a few short years. We can go back to 1956 when the minister scorned, ridiculed and scoffed at the policies which were being advanced in respect of agricultural policy. These are the same policies, upon which he is heaping ridicule, that he advocated when he was a Social Credit member in this House before opportunism advanced him to where most Liberals wind up in the party opposite.

May 23, 1972


An hon. Member:: Oh, come off it.


Erik Nielsen: The Minister of State (Mr. Mahoney), the hon. member for Calgary South who has at least one supporter behind him, received his kudos and his portfolio as a result of the tremendous task he accomplished in piloting the tax reform legislation through the House of Commons. What does he say when he is asked questions? He was asked a question this morning about a critical situation facing Canada in respect of the price of gold. This knowledgeable and usually informative Minister of State for nothing, said nothing. I think interjections by him, both in his previous position and his positon at this time, are very ill-timed.


Some hon. Members:: Hear, hear!


Patrick Morgan Mahoney: I rise on a point of order, Mr. Speaker. I think the hon. member should mention that the principal reason he did not receive an answer was that the Speaker would not allow me to answer because his questions were out of order.


Erik Nielsen: When ministers over there are embarrassed, as they usually are, by questions from this side of the House they take refuge in assuming the mantle of the Speaker and either call our questions hypothetical or out of order. The truth of the matter is that the minister was not up to date on the current situation and knew nothing about it. If he did, which is very unlikely, he did not have any intention of informing the House about it, which is par for the course for these ministers.
The Minister of Agriculture is right in suggesting I know nothing about wheat. I have sat during debates in this House when the majority of members of the other side were not here.


Jack Sydney George (Bud) Cullen: You haven't been around very often.


Erik Nielsen: The only time the hon. member for Hamil-ton-Wentworth has anything to say is from the seat of his pants on the backbench over there. If he wants to contribute, why does he not urge other backbenchers to encourage the Prime Minister (Mr. Trudeau) to let them express a free opinion, instead of-


Colin David Gibson: I rise on a question of privilege, Mr. Speaker. I can only say to the hon. member that perhaps my speeches have not been the greatest in this House, but I have made about 50 while my hon. friend has been absent from the House, practically the whole session.


The Acting Speaker (Mr. Boulanger):: Order, please. There is no point of order.


Erik Nielsen: Mr. Speaker, I will not grace that interjection with the legality of a point of order. All the hon. member for Hamilton-Wentworth has to do is compare the column inches of Hansard to see whether or not I have made more of a contribution than he has. The argument is often used-


The Acting Speaker (Mr. Boulanger):: Order, please. I have listened to all hon. members, but I would ask the
The Budget-Mr. Nielsen
hon. member who has the floor to continue his remarks on the budget debate.


Colin David Gibson: Just wait till we have the election.


The Acting Speaker (Mr. Boulanger):: Order. I am sure the hon. member knows what I mean by having order in the House.


Erik Nielsen: Mr. Speaker, I have not really noticed any disorder in the House. The interjections that I have heard from the opposite side of the House are no worse than those usually coming from that side, and are no more inane than is usually the case. When I hear comments about voting and arguments of the sort that the hon. member for Hamilton-Wentworth likes to dredge up, from a pretty empty barrel of interjections I might say, all I have to do is look at the attendance record of the former hon. member for, I believe, Ottawa West who is now in the other place. That hon. member has been a very distinguished member of the House for many years and in the last session he had a 100 per cent attendance record, yet he had only four column inches in Hansard compared with two pages of my own. So I do not think I have to put my record on the line with anybody else's, least of all with that of the hon. member for Hamilton-Wentworth, whose estimate of having participated 50 times in debates is an exaggeration to say the least.


Mr. Francis:: Mr. Speaker, the hon. member referred to the hon. member for Ottawa West, which is my seat. I do not quite understand his reference and I am wondering whether that is what he intended.


Erik Nielsen: Mr. Speaker, I do not want to confuse the hon. member for Ottawa West (Mr. Francis) with the hon. member who was promoted to the other place, though the hon. member for Ottawa West might entertain some ambitions about following him, in which case I give him my sincere wishes.
To get back to the comments of the Minister of Agriculture about wheat sales, if ever there was a bigger horn to blow he certainly took second place to no one tonight, because he was really blowing. Even one as ignorant as I am about wheat knows-and not one of the few farmers on the other side will gainsay me this-that the reason for wheat sales is not super salesmanship on the part of anyone in this government, or in the last one for that matter. The reason for our wheat sales is that Alvin Hamilton and the Diefenbaker government passed the Export Credits Insurance Act which permitted credit to be granted to potential purchasers of wheat. Hon. members opposite, at least the knowledgeable ones, know the truth of that statement.
The Minister of Agriculture speaks of distortion. Even to a mind as ignorant as mine on the subject of wheat his remarks today can only be described as downright misleading, because they simply are not true. This being the budget debate, it is only fair ball that we should expose some of the weaving, ducking and avoiding that the treasury benches have been treating this parliament to over the last four years. Anyone who watches from the public galleries the operation of this House during question period, when opposition members are trying to get infor-

May 23, 1972
The Budget-Mr. Nielsen
mation from cabinet ministers, must wonder what this institution is all about. We get half-answers, answers that some people would describe in even broader terms. We get no answers. We get answers that are misleading. We get answers that duck and weave every step of the way. One has only to refer to this afternoon's session to hear questions that have been put to ministers by opposition members throughout the previous four years.
What has happened to parliament? What has happened to the committee system? I am a member of the Standing Committee on Indian Affairs and Northern Development. The chairman of that committee is not here tonight, but the committee usually meets on Tuesday and Thursdays and has a deadline by which to pass the estimates.


Mr. Marchand (Kamloops-Cariboo):: You are never there.


Erik Nielsen: The hon. member for Kamloops-Cariboo (Mr. Marchand) says that I am never there, but he knows that is not true. As far as the hon. member is concerned, that is a matter in connection with which he can require me to put up my seat because it is a direct charge that he knows is not true. He knows very well that I am a regular attender of that committee and that I contribute very substantially to its deliberations. But when does this committee meet? It should be meeting regularly twice a week, but it is not.


Jean-Pierre Goyer: Are you referring to privileges and
elections?


Erik Nielsen: I am speaking of the Standing Committee on Indian Affairs and Northern Development. If the Solicitor General (Mr. Goyer) has any useful and meaningful contribution to make to this debate, I invite him immediately to get to his feet and make that contribution. However, I very much doubt that he will. He has made no useful contribution as yet as a member of the cabinet and I doubt that he will make any useful contribution for the short time he has left at his disposal as a member of the cabinet. The only thing the minister has done so far is to set up his "gumshoe corps", his so-called security planning and research group. What has this so-called group done? Of whom is it composed? How many people are in the group? What is it doing? All these questions we ask of him in the House; we ask questions of him in committee. But we get no answers.


Jean-Pierre Goyer: Related to wheat problems.


Erik Nielsen: I would not doubt that a bit. That is the only reason the government has for setting up such a force-to look after internal security in the growing of wheat. Certainly there is no other reason for setting up such a body and replacing a hitherto legitimate and perfectly efficiently performed function on the part of the RCMP.
So we have a committee system today which in 1968 the Prime Minister assured the country was going to be reformed to enable it to operate more efficiently. And committees do not even meet. When committees bring down reports the government pays no attention to them; the reports are ignored. All these committees, with the

possible exception of the saw-off in the public accounts committee, have a majority of Liberal members and all decisions are of course made by that majority. Even the procedures within the committees are decided by the majority.
Every member in committee is limited to five minutes to speak his piece; he is then cut off by the chairman. Either that or the chairman runs interference when government officials are being questioned. So what earthly use is a committee system that has now degenerated to the point of absolute uselessness? Nothing is done in committee. The estimates have been taken away from the House, where they used to be given fair debate, and salted away in committee where they are never heard of again. All this under the guise of so-called participatory democracy. That arm of parliament has been completely destroyed.
It now appears that it is unparliamentary for the leader of the New Democratic Party-and I can cite other examples on this side of the House-to use the expression, as he did today, "gouging". The hon. member was referring to Bell Telephone gouging the people of Canada, though I do not myself necessarily subscribe to that view. That was called procedurally incorrect.
We have a Prime Minister who can use obscenities and swear words in the House, and this is perfectly all right. But suddenly it is wrong for opposition members to use descriptive adjectives. I can recall the time when this was the very essence of debate. But suddenly it has become wrong under the rule changes which were imposed upon us by a government with an insatiable lust for power. The opportunism of the Minister of Agriculture is a prime example of what I am referring to.
In the Yukon there have been repeated demands for reform of government institutions for a dozen years. For three successive years representatives of the people there have been asking for government reform. Acting unilaterally, and without the approval of the House of Commons, this arbitrary Minister of Indian Affairs and Northern Development (Mr. Chretien) decided to change the structure which had existed for years-not that it was necessarily a good system-and experiment. The north is a greater experiment in state socialism than people in southern Canada could believe. If they could see it, they would not believe it. It is worse than the colonialism which existed in this country 100 years ago.
The Minister of Indian Affairs, with the approval of the Prime Minister, made it even worse by setting up within the bureaucracy what he was pleased to call an executive committee consisting of three civil servants taking instruction from the minister, and two elected members of council-a committee of five predominated by the civil service majority. I criticized the minister at that time. I told him it would not work. I knew it would not work.
At the end of the last session, matters reached a point at which 250 citizens in Whitehorse, where the council meetings were being held, crowded into the corridors leading to the council chamber, booing, catcalling and clamouring for the resignation of the council. Almost 5,000 citizens in the Yukon, almost 60 per cent of those eligible to vote in the last federal election in 1968, sent a petition to the
May 25, 1972

governor in council, with copies to the minister and the Prime Minister asking them to take action with regard to the disquiet which existed there and which some believed bordered on civil disobedience. And what did we get from the minister? We got platitudinous statements that he did not intend to adhere to anything which smacked of government by petition. He adopted the same attitude with respect to the petition of the Old Crow people. That petition has yet to be heard. They renewed their appeal to be heard as recently as two weeks ago.
While all this was going on, members opposite suddenly saw a vision, a vision which in 1957 and 1958 they ridiculed. Now, because there have been discoveries made in the north which were foreseen a dozen years ago by those who did have a vision of northern development, they want to climb on the bandwagon. And so we find the minister of northern development making all kinds of what he is pleased to call new announcements. We find the Prime Minister blatantly exercising political opportunism by announcing a new Mackenzie highway which will extend 1,049 miles to the Arctic coast.
Mr. Speaker, this highway, which he announced approximately two weeks ago was already under construction more than a year go and it was in the plans ten years ago. Yet all of a sudden the Prime Minister announces the new highway, only because of the probability-he thinks, and so does the minister of northern development-that a pipeline will be constructed down the Mackenzie Valley.
A pipe dream is what they are operating on, because while a gas pipeline down the Mackenzie Valley is probably inevitable, it is a good few years away yet, particularly in light of the fact that the United States government has announced approval of the TAPS route from Prudhoe Bay to Valdez with a tanker connection to Seattle.
So the government, again in its zest for gaining political advantage on the eve of what it thought might be an election, announced this tremendous new highway down the Mackenzie Valley, a highway which is to cost $100 million. Anyone who can do a simple calculation can see that this works out at $100,000 a mile through some of the roughest, toughest country in which any road could be constructed. It would not take any contractor even remotely familiar with construction costs in the north more than a moment to tell you that this would not amount to any highway at all, if it were built, but merely a two-car trail through the wilderness.
I do not wish to be taken wrongly. I am not knocking any investment the government makes in the north, because therein lies the future of Canada; we are a northern nation and this vast region holds the key to this country becoming one of the richest in the world. But instead of taking this kind of approach, the sincerity of which in any case I doubt, they should be devoting their attention to discovering means by which the gas reserves which are being rapidly proven not only in the Prudhoe Bay area but in the delta could be funelled through one of the northern centres such as Whitehorse. I think this should be part of the price of a pipeline down the Mackenzie and across the Yukon.
Gas means cheap energy, and in the northern portion of the Yukon and Northwest Territories we possess the larg-
The Budget-Mr. Fortin
est known reserves of iron ore in the free world-some 22 billion tons. Combine this iron ore with cheap energy and you have the basis of a steel industry far superior to that which made the United States the great industrial nation it is today. As it is, I question the sincerity of the minister's statement that we are spending more money in the north than we have in any other year. Speaking about distortion, I question the basis upon which the minister of northern development could tell us that $19 million are being invested in one year in the north. That is somewhat short of the truth. He is talking about contracts which are let for one, two and three years, sometimes more. There has been a good deal of pre-electioneering going on among ministers opposite, including the Prime Minister. It reminds me of the old political game of trying to catch your opponent off guard, trying to catch your opponent with his pants down.
I think I might end my remarks with reference to a story. Men who have been in the business world may appreciate a story about a 43-year old businessman who had just lost a good secretary. He was asked, "How is that fine looking secretary of yours; is she well?" The reply was, "No, I had to fire her". His friend asked, in astonishment, "Why fire such an excellent secretary?" "Well," he said, "it was my forty-third birthday. I came down to breakfast in the morning and not even my children remembered my birthday. I went to the office, my secretary remembered and said, 'Happy Birthday'. She said she would like to take me to lunch. After lunch she said, 'It is such a beautiful day, let's take a drive in the country', which we did. While driving in the country she suggested we go to her apartment for a martini and forget the office for a few hours. We went and had one martini, and as she was walking toward her bedroom she turned and said, 'Make yourself comfortable while I do the same.' In a few minutes she came out with a large birthday cake in her arms, followed by my wife and children singing 'Happy Birthday', and there I sat in just my socks." I suggest that is how the government is likely to find itself sitting as a result of its lack of decision in calling an election.


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, it is becoming traditional in Canada to criticize or laud disproportionately the annual budgets brought down by the central power, especially because the latter adopts its budget policy without consulting the members of the Canadian confederation, namely the provinces.
This inevitably and justifiably leads to back-washes in some provinces-not only in one of them-which interpret this action as trespassing on the setting up of and the respect due their respective priorities. No consideration, anywhere in the world, can be viable without true consultation and policy co-ordination in the implementation of the programs adopted by various levels of government.
This is not new, but the time has come to innovate and prove that federalism can be viable. The central government has enormous responsibility in that respect but, once again, unfortunately, it overlooked it in formulating its budget policy. This, however, is understandable considering the fact that we are now studying what is strictly

May 23, 1972
The Budget-Mr. Fortin
an election budget intended to restore the fortunes of the administration of the Prime Minister (Mr. Trudeau).
After four years of blind administration and buffer politics, in fiscal as well as in monetary matters and in the field of economic expansion, the victims of this lack of real policy cannot be counted.
The unemployed, families thrown out in the street, the number of poor and families in misery-the proof of this is in the Croll report-the number of bankruptcies among private enterprises, the frightening growth of the public debt, all this is everywhere in Canada. Witnesses of this failure, the structures are now threatening to collapse everywhere, so unfair and shocking is the economic and social situation for Canadians.
Before this confessed failure, the Trudeau government defines its budget as follows, and I quote:
The main thrust of this budget-is to buttress the Canadian economy-to provide incentives for Canadian industry to grow and compete and provide jobs.
And in the same breath, the minister adds the following: -to render justice to those people in our community who have been hurt by the rise in the cost of living and who have no way of fighting back.
Those are words, but the budget offers nothing to financially help the people to face the rise in the cost of living.
In spite of the publicity given to the budget speech, we have in the last few hours seen here in this House identical or almost identical reactions to those shown last year and before then on the same occasions. For some, the dyed-in-the-wool Liberals, the budget is automatically called a masterpiece. Let us say in passing that for the past 100 years, one always realizes looking back that this is a mistake, while for others, it is of no value because it does not come from them (I am speaking of the retarded Conservatives, who walk in the shade cast by the Liberals).
It is quite obvious that the truth has few chances of coming to light in such attitudes, either extreme or retarded conservative. For us, Creditistes, this budget is not much different from the previous ones, except that we are on the eve of a federal election.
Let us see what the budget brings forward: depreciation over two years in the case of machinery and equipment purchased from now on for use in manufacturing and processing goods in Canada. That will be good news for the big corporations which can afford expensive machinery and equipment. Within two years, they will buy all the machinery and equipment they can, notwithstanding their price. On account of this privilege from the Liberal government, they will be able to depreciate the full cost of such equipment over two years. Logically, we could argue that the more equipment those corporations will buy, the more workers they will lay off.
Therefore, such a policy runs counter to that of the Minister of Regional Economic Expansion (Mr. Mar-chand) whose purpose and endeavours are to create employment. On the other hand, that department will invest as usual millions of dollars to create more or less permanent employment. On the other hand, the government will unduly promote the interest of the big corporations in encouraging them to buy machinery whose full

cost they will be able to depreciate over two years, which will contribute in increasing beyond measure the unemployment rate in Canada.
The Liberal government still goes further in the case of big corporations so that they will contribute to the election funds: it sets the reduction at 40 per cent, of general corporate tax only in the case of income from manufacturing and processing. There you have another measure to gratify those who are contributing to election funds. A 40 per cent reduction for big corporations, that's really something. That is a bitter pill to swallow.
We know that according to the budget, corporate income tax represents 16 per cent of budget revenue, against 17 per cent in 1970-1971. Not only will corporations pay less income tax than during the previous years, but they will benefit from a reduction to 40 per cent. The Liberal government does not forget those who contribute, since it is the only way to maintain the exploitation of the people by high finance.
On the other hand, on page 13 of the budget paper, one can read the following:
As is shown in table 5, income tax is again the largest source of government budgetary revenue.
In the field of personal income tax, the federal government will collect over $5,540 million, that is over 39 per cent, that is an increase of 2 per cent over last year. We are far from the just society: the allowance is of 40 per cent for the large firms, but nothing constructive is being granted to the individuals, except a tax increase of 3 per cent. However, the minister said that the budget was intended "to render justice to those people in our community who have been hurt by the rise in the cost of living and who have no way of fighting back."
Mr. Speaker, I have read somewhere the following statement which has always impressed and which I found extremely strong until I came to the House of Commons and really understood its significance: "The future of the young people is being jeopardized by sinister capitalists who hang on to their manger; they are shameless and deprived of ideals." Young people don't know what to make of those capitalists-what I call high finance.
What strikes us is not only the concentration of money in a few hands, but the strength of the discretionary economic power held by a small number which is encouraged in this budget.
Those great masters of credit money and debt money which they freely use, those experts who inject credit money into the economic system can seal the fate of the people so that nobody can subsist without them. The financial magnates have been given powers devoid of any moral consideration.
The economic dictatorship controls the life of the nation by the issuance and receipts of credit through banks with the collusion of the Bank of Canada. In all budget papers submitted to us, there is no reference to that problem.
During its four years in power, the government has done nothing to improve the banking system in that regard. As in all fields, everything is dependent of finance, on those who are vested with such extraordinary
May 23, 1972

powers and who have supreme control over society, internal and external trade as well as over politics.
A man who spends less than he earns gradually makes money. Everybody can thus become well-off whether they are employers, dealers, industrialists, farmers or workers. At that rate, it is quite difficult to become a millionaire. But on the one hand the government is encouraging savings, on the other, through its taxes and present budget, it is taxing and retraining them. How many millions are the products of gross, immoral, sometimes even illegal injustice: protection of laws relating to companies, to the Bank Act, the unlimited powers given to some people by the government and this at the expense of the nation.
Banks have no gold and yet they lend millions. Why are we told that money is based on gold when banks have no gold? There again no such mention is made in the budget. As incredible as it may seem, a Canadian deputy minister of finance said recently in a letter, and I quote:
-as banks have been relieved of their responsibilities, there is definitely no gold kept in Canada in support of money in circulation.
Through an improbable law, the federal government has given chartered banks authority to lend fourteen times as much money as they own. There is nothing in the budget on this item. If we grant this authority to banks, why should we not grant it to workers and to everybody? Carpenters, farmers, doctors, are citizens on the same basis as bankers and in Canada are entitled to the same privileges, if any, through the guaranteed minimum income plan.
As under this law, banks only have to keep 5 per cent of deposits and as they lend 14 times more money than they own through the issue of credit, what would happen if all depositors were to claim their deposits at the same time? There is nothing in the budget about this.
This monetary system that is supported by the government is wrong and unfair.
There has been overproduction, according to the budget speech. We are inclined to believe it since workers, in ever increasing numbers, are being thrown out of work and forced on unemployment insurance benefits. However many people lack the bare necessities. What is wrong? Our scholarly economists seek means to fight unemployment, to avert disaster. The solution is so very simple: distribute money to the people so that they can purchase production, and work will start anew.
There has been overproduction, we are told. And meanwhile "Marchand and company" pour out millions to create jobs and increase production, which is absurd.
Instead of basing money on nothing, and allowing banks to issue credits, why not base money on production and balance distribution? There must be better adjustment of goods to human needs.
The Right Hon. Prime Minister himself (Mr. Trudeau), said at the time of his last visit to Victoriaville that man was not made for work and that it was the first duty of a government to ensure an income to its citizens.
In the recent budget, not a word is said about this.
By basing money on production instead of on nothing, it would be easy to keep proper balance between production
The Budget-Mr. Fortin
and money in circulation. If the amount of money in circulation is smaller than the amount of production, let new dollar bills be issued and shared equally.
Let no one come and tell me that his would be equivalent to socialism. Did our so-called adversaries, whether from the Liberal or the Progressive Conservative party, practise socialism when they instituted the unemployment insurance, family allowance or the old age security plans?
In terms of commercial inventory accounting, reserve merchandise is called capital. Well, if this is capital, let us give it its counter-value in purchasing power.
When one establishes the inventory of a country, one talks about human capital, natural ressources, real estate and production. Then this capital-and I think this is the only one which is truly sound-let us show the people, through means of purchasing power and operation, that it exists and let us balance purchasing power with production. If everything is bought because the consumer has money, production will have to be renewed and there will no longer be any unemployment. If it is true that more and more the machine is replacing man and that progress is here to stay, we should find a financial mechanism to make up for the loss of work. That is the substance of Social Credit.
One of the richest men in the world, Mr. Rothschild, probably the most powerful international banker, said a few years ago:
Let me issue and control the currency of a nation and I will take care of those who make the laws.
Mr. Speaker, he has only confirmed what we have been thinking and saying for a long time: That most legislators are at the mercy of bankers. That is what is happening in Canada!
Why allow such an accumulation of capital when a man occupies only a limited space in the world, eats only three meals a day, even though financial tycoons are suffering from stomach ulcers. They wear only one suit, sleep only in one bed and live in only one house at a time. Why then allow them to hold forty companies' directorships, forty salaries, forty dividends, "forty interests"? If they number about one thousand in this country, and this figure is not exagerated, they are occupying the place of 40,000 workers and getting their salaries.
Abusive capitalism has helped production by exploiting consumers and we thus have almost one million unemployed in Canada. Since on the average each unemployed has three dependents, it follows that three million Canadians are suffering from privation.
Mr. Speaker, in Canada, the wealthiest country in the world, we must put capitalism at the service of all Canadians, and not indulge in an exagerated capitalism, or abusive socialism, as advocated by the New Democratic party.
Financing peace, this is what we are longing for, and it seems here to be an impossible task. But financing war pursuits seems to be a very easy task for governments. Let us look at what is happening in Vietnam, for instance: One never hears of money problems, but one can always hear about the everlasting problem, because it serves the big financial interests.

May 23, 1972
Proceedings on Adjournment Motion
Mr. Speaker, we need a monetary reform which would not take away one cent from the "Haves" but would provide for those who do not have enough to live as human beings.
Some will say: Why give more to the have-nots? This is again socialism! Let us be serious. We gave millions of dollars to India, to China, to Africa, even to Communist affiliated countries. Does that make us more socialists in Canada?
Money is not wealth, but it does express wealth and, yet, it is everything. Therefore, we have here a basic economic error. Money must serve the Canadian people and not subjugate it.
Banks are distributors of credit money of which the dollar has only the value of a nickel. Why, they are counterfeiters! The whole build up of the Canadian economic structure managed by a hundred dictators, bank and company managers is based on the ignorance of the people and the unfair and anti-social laws.
We are all subjugated, amazed, dazzled, we are all struck with a sort of fascination for these millionnaire czars who exploit to their benefit our dullness, our ignorance, our fear to know and to understand.
Mr. Speaker, that is why it is so difficult to understand the difference between a grit and a tory, but with time in this House, we end up by learning that there is no difference between them.
Mr. Speaker, may I call it ten o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Doug Rowland (Selkirk):: Mr. Speaker, last winter it came to my attention that some people in a number of large Canadian cities had discovered a way of profiting from the delays encountered in issuing unemployment insurance cheques and from the desperate financial straits in which many people in receipt of unemployment insurance payments found themselves. These "businessmen" would offer people who were due to receive an unemployment insurance cheque, but who had not yet received it and were in need of money, what was in effect a loan.
This practice is called discounting. An offer of cash would be made, in return for which the recipient would pledge to turn over his unemployment insurance cheque upon receipt to the person making the loan. To guarantee receipt of the cheque the lender would have his client arrange to have the cheque mailed to the lender's office.

The loan was never for the full amount of the cheque. Customarily, also, half the amount of the loan was given immediately and the other half when the borrower signed over the cheque to the lender. A typical transaction would be an $80 payment in return for a $100 cheque, $40 of which would be paid immediately and the other $40 when the cheque was signed over. The discount was $20. One can readily see that if the cheque was received a week later, the lender was in effect charging interest at rates in excess of 1,000 per cent per annum. That is usury in anyone's language. The transaction involved absolutely no risk to the lender because he was having the cheque mailed to his address and it was a government cheque.
A further investigation revealed that the people involved in discounting UIC cheques were also engaged in discounting anticipated income tax rebates, pension cheques and other benefits paid by governments. I felt this practice to be odious and accordingly raised the matter in the House on the first occasion which presented itself after we reassembled following the Christmas recess. Accordingly, on Friday, February 25, I asked the following question:
Is the department aware of loansharking operations, the lending of money against unemployment insurance cheques, resulting from the delays in payment and, if so, what action is the commission taking to prevent this occurrence?
The Parliamentary Secretary to the Minister of Manpower and Immigration (Mr. Perrault) replied:
Mr. Speaker, the situation will be investigated. If indeed such a situation exists it is clearly despicable.
On Friday, March 10, I followed up the matter by moving the following motion under Standing Order 43:
That in the opinion of this House the government should immediately bring forward legislation which would ensure that the practice of discounting government payments to individuals, at usurious rates of interest to the recipients of benefits provided by law, is placed under the provisions of the Small Loans Act.
Unanimous consent was denied. On Wednesday, March 15,1 asked the following question:
Has the government yet taken any steps to end the practice of lending money at usurious interest rates against the future receipt of unemployment insurance cheques?
The Parliamentary Secretary to the Minister of Manpower and Immigration replied:
Mr. Speaker, as hon. members are aware, the minister is very concerned about the practice of discounting unemployment insurance benefit warrants. I want to assure the hon. member that consideration is being given to a number of measures designed to halt the practice. I can inform the House that as of now a process is beginning and new regulations are being instituted under the unemployment insurance plan to prevent the use of an address which is not that of a claimant for mailing purposes without the permission of the Unemployment Insurance Commission. I must say-
And so forth. I then asked the parliamentary secretary if the government was considering legislation to end the practice and his answer was a simple yes. My understanding is that the government did indeed take some action. It had the Superintendent of Insurance investigate the practice of discounting in order to discover if violations of federal laws were involved and if prosecutions could be undertaken.
May 23, 1972

In addition, I understand that UIC regulations were altered so as to make it more difficult for a client to have his cheque mailed directly to a loanshark. But no legislation was forthcoming. Accordingly on Wednesday, March 29, I myself introduced a bill the purpose of which was to make it clear that the practice of short-term discounting of payments of governments to individuals such as UIC benefits, pension cheques and income tax rebates were to be considered loan transactions and subject to the provisions of the Small Loans Act.
Maximum interest charges allowable under that act are 24 per cent, or 2 per cent per month. The practice of discounting, if subjected to such regulations, would end because the rate of return on a loan lasting a week or two only would be so little that it would not be worth the trouble of undertaking the transaction. I have yet to receive any comment from the government on the contents of the bill.
Finally, on Monday, May 8, I asked the following question:
A while ago there was some trouble with loansharking associated with unemployment insurance cheques. At that time the minister's parliamentary assistant who was being questioned in the House indicated that legislation might be prepared by the government. Is the government considering the preparation of such legislation and if so, what form will it take? Will it be by amendment of the Small Loans Act?
The minister replied:
Mr. Speaker, preliminary investigation shows that if there is any weakness in the act or law it lies in the provincial jurisdiction. We are suggesting now that perhaps we should be concentrating in that area, with the co-operation of the provinces of course, in order to bring an end to this type of situation.
What the minister's reply means is that the federal government believes that the practice of usury through shortterm discounting is one which must be regulated by legislation at the provincial level. The provinces still say that this is a federal responsibility. So we have another jurisdictional dispute, another constitutional argument, while Canadians continue to be gouged daily by loansharks. My advice to the federal government is: take a chance, introduce legislation to control discounting and if someone wants to challenge the constitutionality of the legislation to let him take it to court. The odds are better than even that the federal government would win such a case.


The Acting Speaker (Mr. Laniel):: Order, please. I regret to interrupt the hon. member, but his allotted time has expired.


Mr. Ray Perrault (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, I am pleased to answer the question the hon. member for Selkirk (Mr. Rowland) asked during the question period on May 8. I listened with interest to his observations this evening. I assure him, again, that the minister and the department are considering actively the problem he spoke about again this evening.
By order in council PC 1972-667 an amendment to the unemployment insurance regulations was made which reads as follows:
Section 145 of the unemployment insurance regulations is amended by adding thereto the following subsection (8);
Proceedings on Adjournment Motion
A claimant making a claim for benefit shall, unless otherwise permitted by the commission, supply the mailing address of his normal place of residence.
This, the hon. member will observe, will prevent claimants from advising the Unemployment Insurance Commission of a change of address which could be that of a lender. Most hon. members know that loansharks oblige people about to receive benefits to have them mailed to their civic address, to ensure that they get back the moneys lent plus the extravagant interest rate for which they are asking.
In addition to this amendment to the unemployment insurance regulations, investigations of which the hon. member is aware have proceeded for some weeks. These investigations may lead to additional measures to protect the interests of the unemployed of this country. Indeed, active consideration is being given to possible actions. I hope it may be possible to make further announcements later.
One of the findings that has emerged from the investigations is that there is not necessarily a relationship between delays in unemployment insurance benefits, for whatever reason-those mistakes might be on the part of the claimant or the commission or anyone else-and the so-called loansharking operation. Indeed, loansharking began long before changes were made in the unemployment insurance regulations of this country. Nevertheless, that practice is deplored by the minister, by the department and certainly by the government. Any useful suggestions received from any part of the House will be welcome and will be given careful and attentive study by the minister, to make sure we can end this practice.



HUMAN SCIENCES-PROGRAMS TO INCREASE PUBLIC EXPENDITURE

Heath Nelson Macquarrie: Mr. Speaker, on April 17 I asked the Secretary of State (Mr. Pelletier) to take note of statistics which had just come to my attention from Statistics Canada indicating that the government of this country spends 15 times more on the natural than on the human sciences. I asked if the government was so totally committed to technological efforts that it was not contemplating further expenditures on the human sciences.
From my university background I have noted over many years that the relationship between the human sciences and the engineering and natural sciences is something like that of Lazarus to Dives, but I was appalled and disturbed that the gap had widened between these two with the assistance of government. The document which stimulated my concern is entitled "Federal government expenditures on the human sciences," catalogue 13-545, published by Statistics Canada. One quotation is startling. It reads as follows:
The expenditures on activities in the human sciences are rather modest when compared to the expenditures for the engineering and natural sciences. For instance, the current expenditures on R & D in the human sciences represent only 7 per cent of the equivalent in the natural sciences in 1969-70. Moreover, this proportion drops to 6 per cent if capital expenditures (important in

May 23, 1972
Proceedings on Adjournment Motion the natural sciences but almost non-existent in the human sciences) are included in the calculation.
Comparison of total expenditures on scientific activities for these two areas shows that for one dollar spent in the human sciences in 1969-70, there was a corresponding expenditure of almost eight dollars in the engineering and natural sciences. However, forecasted expenditures for 1970-71 and 1971-72 indicate a small 'improvement', which expected ratios of $l/$7 for these two years (excluding the census costs).
This matter is one of great concern, especially at a time when there is renewed concern in Canada about such questions as our national identity, cultural heritage, and so on; when we find that there is a seeming drying up of expenditure on the part of the government on those things which one might say expresses the Canadian soul. Not long ago I saw a very moving editorial in the Ottawa Citizen entitled "Canada Council beheaded," written by Christopher Young. He wrote:
The government acted with commendable speed in filling the vacancy at the top of the CBC. Only performance will tell whether vice-president Laurent Picard is the right choice to run the national broadcasting network, but at least there will be no hiatus at the top. Mr. Picard was appointed three months before the resignation of George Davidson was to take effect.
This is a great difference from the situation with regard to the Canada Council. I again quote:
The council's director, Peter Dwyer, suffered a severe stroke while at work a year ago. Mr. Dwyer had worked in the Privy Council under the St. Laurent government and had drafted the act setting up the Canada Council, on the basis of recommendations made by the Massey commission. He had moved to the council's staff when it was founded in 1957 and had directed its highly successful arts program from the beginning.
It was apparent rather quickly that Mr. Dwyer would not be able to return to the heavy administrative job at the head of the council's permanent staff. His formal resignation was announced last November, and he is now a consultant to the National Arts Centre.
But nothing has been done to fill the post, and the council is drifting aimlessly. Decisions are deferred. New ideas are discouraged. Staff morale is wretched. The council itself, made up of distinguished or politically acceptable citizens, has failed to fill the vacuum of leadership.
The public servants who work at the council and the people in the arts who have come to depend on its advice and funds-at least those I have spoken to-are appalled by the effects of the government's failure to act. Whether indifference or indecision is the reason, the results are serious-
Meantime some of the newer government agencies-notably the Local Initiatives Program and Opportunities for Youth-are moving into areas where a more dynamic Canada Council might be expected to be active-
The Canada Council does not loom as large in the national consciousness as the CBC. But its importance to the writers, musicians, painters, actors and dancers, as well as the university professors, of this country can hardly be exaggerated-
Governments need to be checked not only on those things which they ought to have done but also on not doing those things which they ought to have done.
This sounds very episcopalian.
The government-and specifically the prime minister whose prerogative this appointment is-ought to have acted on the Canada Council vacancy long before now.
I think that these two things unite in a most disturbing way the heavy expenditure on the natural sciences and engineering and the very miniscule expenditure on the tremendously important realm of the human sciences. The fact that the Canada Council leadership seems not to

have commanded any priority causes me a great deal of anxiety. I say this as one who believes that while the natural sciences are important, while the structure of Canada, its basic engineering, is important, surely the soul of Canada is still more important even than these and this priority should be reflected by a sensitive and thoughtful government.


Raymond J. Perrault: Mr. Speaker, the hon. member's question follows a report issued by Statistics Canada outlining the discrepancy in government spending between technical sciences and human sciences. Although we must acknowledge the existence of such a discrepancy, let us put it into proper perspective.
It seems that the figures provided did not include the Department of the Secretary of State, the Public Archives, the CRTC, the National Library, the Company of Young Canadians, the National Film Board, the Canadian Film Development Corporation, the National Arts Centre, the CBC or the Opportunities for Youth program, to mention but a few. All these programs are closely related to human sciences, since they deal with people, and the bulk of their expenditures is directed toward aspects of Canadian life that are of a humanistic nature.
I am aware that the hon. member is thinking in terms of moneys distributed to provide assistance to specific research in sociology, political science and anthropology, but I am sure he will agree that a good many of the reports and studies paid for by the federal government, or its agencies, whether it be the youth report or whatever, fit very well into those criteria. Furthermore, the people employed to carry out those taks are mainly social scientists.
I would like to terminate my remarks by saying that the distinction made by confining human research to technological research is somewhat rhetorical. It can be argued that a botanist, a chemist, an environmental specialist deals as much with the well-being of people as does a sociologist. The federal government is attempting to infuse this concept in its apparatus and in this respect is studying very closely the recommendations of the report of the Senate Special Committee on Science Policy. That particular report has stressed this aspect of sciences and has offered most valuable comments.



GRAIN-PILOT PROJECT FOR USE OF INTERIOR ELEVATORS-REQUEST FOR STATEMENT

Mr. Bill Knight (Assiniboia):: Mr. Speaker, in the last several years since the introduction of the task force report on agriculture in 1969-70 there has been considerable discussion concerning the use of inland terminals and unit trains. The minister in charge of the Wheat Board told us last winter that very soon a report on transportation arrangements in the Dominion of Canada will be tabled in the House of Commons. Yet we sit here today, soon to be in the month of June, and no report is forthcoming.
In lieu of an announcement by the Minister of Agriculture (Mr. Olson) in Winnipeg concerning the movement of
May 23, 1972

grain through inland terminals for cleaning and shipment, I asked the Minister of Agriculture the following question:
Since the federal government is going ahead with a pilot project to determine the feasibility of channelling grain through large interior terminal elevators, I wonder if the minister would be prepared to make a statement on motions outlining some of the details of this program, such as the elevator companies involved and so on.
I asked the question because of the many implications of this project for the Prairies generally in terms of the use of inland terminals. I inquired whether the government had established objectives, whether it had estimated the cost of operating the necessary trucks, whether it had decided who should lease the trucks and how the private elevator companies would be involved. How would the grain be cleaned and shipped out? This information should be laid on the table without delay so that interested parties in the prairie region can form an opinion as to the government's objectives and the significance of the program by comparison to the expected end results-results which should also be publicly stated.
I make this suggestion no matter on what side of the debate on the use of inland terminals a group may happen to be. These groups, whether the Palliser Wheat Growers Association, the National Farmers Union, the wheat pools, the Pioneer Elevator Company, or what have you, should have the opportunity to know exactly what is going on in terms of the use of inland terminals and to understand the implications for our transportation system. Ministers speak of moving so much grain to the west coast, but at the same time I suggest we cannot ignore the problems that we faced during last winter. We must look at different methods of grain movement and grain handling in terms of one principle above all others, and that is service to the farmers involved. There is no use completely changing the system if this merely adds up to
Proceedings on Adjournment Motion
additional cost of production for farmers whose prices for grain commodities are already far too low.
All kinds of ideas are being put forward in this country, indeed in the world, regarding grain movement. The United States has been developing the use of water transportation facilities, different types of barges to haul goods, especially farm products. Some of the railroad companies, such as Pullman in the United States, have developed certain ideas that are based on the use of container cars and larger door openings in grain cars to facilitate quicker loading of grain. There are all kinds of methods that the government can examine. But the most significant and important aspect of this kind of project is that there be complete consultation with those directly involved who will be directly affected after the program has been implemented.


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, with regard to the hon. member's request for details on a pilot project to channel grains through interior terminal elevators, I might say simply that this project is for feed barley only. This barley will be trucked from various private country elevators under instruction from the Canadian Wheat Board to the Canadian government elevators at Moose Jaw and Saskatoon. At this point it will be cleaned, segregated by grade and made ready for reshipment pending instructions from the Wheat Board. At the end of this crop year the pilot project will end and an evaluation will be made. I might point out, Mr. Speaker, that the project will be useful not only for purposes of evaluation but it is expected that four million bushels of barley will be put through the system under the project.
The hon. member also raised other points. However, I can only say that this experiment was undertaken on the recommendation of those who were greatly involved in grain transportation in this country.
Motion agreed to and the House adjourned at 10.25 p.m.

Wednesday. May 24, 1972