1972-06-05

ROUTINE PROCEEDINGS


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, I should like to make two statements today, a very short statement that I have been asked to give on the events at the Tel Aviv airport and also a statement on the meetings of the NATO Council in Bonn. I have discussed this with the opposition parties who are agreeable that I give the two statements together and comments can be made on both at the same time.
I am sure all members of the House shared my feelings of shock and horror when they heard the news of the shooting incident at Tel Aviv airport on May 30. Such acts of senseless violence directed against innocent civilians can only be deplored by reasonable people everywhere. In my absence from Canada, Senator Martin on May 31 conveyed to the Israeli Ambassador in Ottawa the government's feelings and expressions of sympathy to the bereaved families of the victims of this horrible crime. I know the House would wish to join me in expressing sincere condolences to the family of Mrs. Subach of Montreal, who was killed, and to her daughter, Miss Mimi Subach, who was wounded, our wishes for an early recovery.
The ambassadors of Israel and Lebanon have made known to us the views of their governments on this episode. We have taken note of a number of public statements, among them one by the president of Lebanon last Friday condemning the Tel Aviv airport incident. In addition, our ambassador in Beirut has been instructed to convey our views on the incident to the Lebanese government.
This tragic episode is another instance of acts of violence by extremist groups which are unfortunately becoming all too common in various parts of the world. Such acts are particularly dangerous in the Middle East, and I hope that this one will not lead to an escalation of violence there.
Since the incident, new security measures have been put into effect in Canada. My colleague, the Minister of Transport (Mr. Jamieson), would be glad to give information to the House on these measures.
Mr. Speaker, I would now like to give a report on the NATO Foreign Ministers meeting, from which I have just returned, in the capital of the Federal Republic of Germany, situated at the crossroads of Europe. In terms of time, too, the Bonn meeting took place at a crossroads in the evolution of East-West relations.
The NATO meeting coincided with the completion of President Nixon's talks with Soviet leaders. Secretary of State Rogers reported to his colleagues in Bonn on this historic visit and, in particular, on the strategic arms limitation agreements. We all welcomed these agreements as an important turning point in efforts to curb the nuclear arms race and enhance international security through nuclear arms control. Along with other ministers, I welcomed the commitment of the United States and the Soviet Union actively to continue negotiations on further limitations. I also expressed particular appreciation to the United States for having regularly consulted its allies in the North Atlantic council throughout the negotiating process.
On June 3, shortly after the NATO meeting, the Foreign Ministers of the four powers signed a final protocol bringing the Berlin Agreement into force. At the same time, representatives of the Federal Republic of Germany, the Soviet Union and Poland exchanged instruments of ratification concluding their non-aggression treaties. The Canadian government welcomes these agreements as major steps forward in relations between East and West. The Berlin Agreement hopefully marks the end of the recurring tension and instability in and around Berlin that have frequently envenomed East-West relations since the blockade in 1948. The non-aggression treaties should remove another source of tension, allowing the Federal German Republic to put its relations with Eastern Europe on a more normal basis.
Together these developments open the way for the Alliance to take part in multilateral preparatory talks on a conference on security and co-operation in Europe and for the two German states to begin negotiations on a modus vivendi. Such an accommodation is necessary for the success of the Berlin agreement and for the maintenance of stability in Central Europe. If the two German states can agree on a modus vivendi, it will pave the way for their entry into the United Nations and a general recognition of the German Democratic Republic.
When one looks back at the many years of stagnant East-West relations, the conclusion of the Berlin agreement and the non-aggression treaties represents remarkable progress. It vindicates the Alliance's policy of making a Berlin settlement the pre-condition for progress on preparation for a conference and demonstrates that the Alliance, through its solid support for Chancellor Brandt's "ostpolitik", is a positive instrument for detente.
NATO Ministers agreed in Bonn to accept the invitation of the Finnish government to hold multilateral preparato-

June 5, 1972
Tel Aviv Airport Massacre
ry talks in Helsinki to prepare for a conference on security and co-operation. The exact date on which the European countries, the United States and Canada will sit down to talk about a conference will have to be set by mutual agreement among the potential participants. With other NATO members, Canada will now move to engage other interested countries in planning for this phase.
I should emphasize that a decision to convoke a formal conference has not yet been taken. That decision will depend on the outcome of the preparatory talks. The aim of NATO countries at these talks will be to ensure that our proposals are fully considered and to establish that enough common ground exists among participants to warrant reasonable expectations that a conference will produce satisfactory results.
For example, we want to see more normal contacts and exchanges between countries of different political and social systems in Europe. To achieve this end, the conference should deal in a practical way with measures designed to contribute to the freer movement of people, information and ideas. I was not alone in underlining the importance of this consideration at our meeting last week.
On the military side, NATO Ministers were agreed that certain stabilization measures could usefully be discussed at a conference in order to create confidence on both sides.
In addition to a conference on security and co-operation in Europe, NATO Ministers devoted considerable attention to the question of mutual and balanced force reductions. Just as we have always considered that progress in East-West political detente must be measured in terms of practical results, especially on the Berlin problem, so we believe that any real improvement in security in Europe will remain illusory unless it is accompanied by some reduction in the concentration of military power in the area.
This is not to say that force reductions should be negotiated at a conference. It would be impossible in practical terms to carry out negotiations on such a complex matter among the 35 participants in a conference. Preparations for a conference and for mutual and balanced force reduction negotiations should, however, proceed as far as possible in parallel. In order that force reductions complement the political achievements of a security conference, talks on the two subjects should be concurrent but separate.
Unfortunately the explorations on mutual and balanced force reductions have not yet begun because of soviet unwillingness to receive Manlio Brosio, former Secretary General of NATO, as an explorer. More recently, however, the Soviet Union has expressed its willingness to explore procedures for negotiations on mutual and balanced force reductions. At the Bonn meeting NATO Ministers affirmed their support for multilateral explorations. The next step will be to find means of translating this idea into action. I suggested in Bonn that a group should be selected among NATO members to engage the Soviet Union and other interested countries in preliminary talks to seek sufficient agreement to bring about negotiations. Considerable interest was shown in the Canadian idea at the meeting and we hope Alliance mem-

bers can reach accord on some form of group approach in the near future.
The atmosphere in Bonn was very much influenced by the promising progress recently made in the broad negotiating process by which we hope to resolve the underlying causes of tension, including the division of Germany. NATO countries responded by expressing their intention to pursue the opportunities for progress on both preparations for a conference and explorations for mutual and balanced force reductions. We should have no illusions about the difficulties that lie ahead. In many ways the task which now faces us is the most difficult of all. We shall have to combine continued defence preparedness with pursuit of detente, Alliance solidarity with willingness to seek accommodation with the other side, and firmness on basic principles with flexibility on means.
Canada has direct and identifiable interests in both security and co-operation in Europe. That is why we have supported Alliance policies in defence and detente in the past and why we intend to work with our NATO allies in the continued search for improved East-West relations through mutual and balanced force reductions and a conference on security and co-operation in Europe.
I should now like to table the communique issued after the meeting of the North Atlantic Alliance, and suggest, if the House agrees, that it be printed as an appendix to Hansard.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.
[Editor's note: For communique referred to above, see appendix].


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I am sure the minister speaks for all of us when he underlines the horror we felt on learning of the senseless violence at the Tel Aviv airport. We share in his expression of sympathy to the family of Mrs. Subach. Surely it is not too much to ask in 1972 that innocent people be free to travel the world. Surely it is also obvious that violent acts of this sort only make the problems in the Middle East more difficult of solution.
I thank the minister for making available a copy of his statement on the meetings of the NATO council that he attended. He spoke about being at the geographic crossroads of Europe and at a crossroads in the evolution of East-West relations. I am sure we would agree that this is an important juncture. Indeed, President Nixon's visit to Moscow must have been underlined by the NATO council meeting, the SALT talks and so on. I am sure we are interested in the development of plans lor a European security conference, although I suppose it is not too unfair to say that no one can accuse NATO or the Warsaw pact countries of moving with undue haste, since this has been very much an international topic for some years now.
The minister also mentioned the success that President Nixon had in achieving an agreement to curb the nuclear arms race. Here I was struck by the irony of the fact that France will later this year be testing nuclear devices in the Pacific area. Presumably France is now attending and participating in the meetings being held by the United
June 5, 1972

Nations at Stockholm, but I suppose it is also true to say that irony is not an unknown concept in international issues.
I am sure it is important for the European community and for NATO to be at the stage now where they are co-ordinating their international policies. We must remember that NATO is not the same thing as the European community. The communique the minister has tabled concerning the ministerial sessions of NATO contains the words "freedom and security" and refers to the need to preserve freedom and security on the part of all members of NATO. I hope that as we preserve these concepts internationally member nations, such as the military regime of Greece, will live up domestically to the ideals that undoubtedly she espouses if she is a signatory to this communique internationally.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I join, as do all members of my party, in the feelings of shock and horror expressed by the minister at the senseless massacre at the Tel Aviv airport. We also join him in the messages of sympathy to the families of the victims. There are two features of this appalling outrage I want to note. First, it was fully premeditated and fully planned and, second, it was aimed at entirely innocent civilians. It marks a new high in barbarism. One of the most regrettable features is that certain spokesmen for some governments in the Middle East condone this act of terrorism. All the more credit to King Hussein of Jordan who described it as a product of sick minds. There is no doubt of the revulsion of the whole civilized world at such acts of violence. Surely it is up to governments to co-operate more effectively in limiting and preventing the preparation of these deeds of terrorism within their own territories.
The general statement of the minister on the NATO ministerial meeting was most welcome to us and I think to men and women of good will throughout the world. Although much remains to be done to end confrontation in Central Europe, most striking and encouraging progress has been made.
The Moscow communique, setting out the results of the meeting between President Nixon and leaders of the U.S.S.R. indicates that the two superpowers have set their faces toward a more co-operative relationship. The SALT talks resulting in the signing of a treaty on the limitation of ABM systems and the further agreement on the limitation of strategic offensive arms mark a slackening of what has been called the mad momentum of the nuclear arms race.
The Berlin agreement removes a source of tension in Central Europe. Non-aggression treaties between the Federal Republic of Germany, the U.S.S.R. and Poland have opened the way to a reduction of fear and suspicion in that part of the world, and also opened the way to the proposed European security conference. I suggest we should now be ready to welcome both Germanys into the United Nations.
I pay tribute to Chancellor Brandt. In my view his statesmanlike initiatives have had a lot to do with the far better climate of affairs in Europe at the present time.
Tel Aviv Airport Massacre
We acknowledge that preparatory talks are necessary before the European security conference proceeds, but we hope that the NATO countries do not drag their feet on the ground of need for preparation. We think that the momentum of recent events should be followed by action.
The subject of mutual and balanced force reductions is a complex subject, but this is absolutely essential if there is to be reality in the reduction of tension in that part of the world. I have never been quite sure that Mr. Brosio, the former Secretary General of NATO, was the right person to send to deal with mutual and balanced force reductions. However that may be, I am glad to see this communique indicates that multilateral discussions will take place.
I would end by saying that the test of all these useful developments will be the momentum with which the nations use the favourable atmosphere and for positive and definite moves toward a more co-operative world community.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, my colleagues and I share the regrets and concern expressed by the hon. Secretary of State for External Affairs (Mr. Sharp) in regard to the recent massacre at the Tel Aviv airport which was no doubt organized and planned by criminal lunatics. We deplore such acts, whether they occur in Tel Aviv or elsewhere. We regret this escalation of reprovable acts by notorious criminals seeking to create panic wherever they go.
Such acts have been committed in Tel Aviv, and even here in Canada. Some are occurring now in Latin America, in Mexico and other countries.
We therefore join the representative of the government in expressing our most sincere condolences to the bereaved families.
Concerning the other subject dealt with by the hon. Secretary of State for External Affairs, the NATO meeting, I should say that negotiations between the Soviet authorities and the President of the United States have resulted in agreements on arms limitation, on the use and testing of nuclear arms. We suggest that it is not through arms that peace can be achieved in the world, but rather through understanding, charity and co-operation whether between Russia and the United States or any country, including Canada. I repeat, Mr. Speaker, that in my opinion it is through dialogue and understanding that a just and durable peace can be established in the world.
Now, even though people or representatives of government may say efforts are being made to achieve peace, we must recognize that the more peace is discussed the greater disagreement and bickering because between the various countries of the world. And it is certainly not through arms or criminal acts such as we have been witnessing recently that a just and durable peace can be established.
My colleagues and I are happy with the talks the President of the United States has held and we hope they will have favourable consequences, which might renew the hopes of the population as to the establishment of a just and durable peace throughout the world.

June 5, 1972
Transport
[English]	Mr. Speaker: There is not unanimity. The motion cannot
TRANSPORT	be put.


Mr. W. M. Howe (Wellington-Grey-Duiierin-Waterloo):: Mr. Speaker, pursuant to Standing Order 43 I ask the unanimous consent of the House to propose a motion in the following case of urgent and pressing necessity. Last week the Standing Committee on Transport and Communications held hearings in western Ontario to ascertain whether alternate, efficient comfortable bus service had been provided as promised at the Canadian Transport Commission hearings in Owen Sound in March, 1970. In view of the fact that these services are far from being as promised, bringing untold hardship to thousands of citizens both young and old, with consent I intend to move, seconded by the hon. member for Huron (Mr. McKinley):
That the government immediately issue instructions to the Canadian National Railways and Canadian Pacific Railway to re-establish the passenger rail services which were discontinued in November, 1970, in western Ontario.
Federal authorities in conjunction with the province of Ontario and the municipalities involved immediately undertake studies which would involve public hearings with a view to determining a minimum railway passenger train network as defined in relationship to the most economic, efficient and adequate transportation system required.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



FISHERIES


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I too seek unanimous consent under Standing Order 43 on a matter of urgency, namely, the failure at the conference of the International Commission for the Northwest Atlantic Fisheries to agree on the Canadian proposal for an immediate ban on high seas fishing for salmon. Therefore I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House urges the government to immediately restrict all fish imports to Canada from Denmark, as a protest toward the Danish refusal to conserve the Canadian spawned North Atlantic salmon, and furthermore, if bilateral negotiations between Denmark and Canada fail to achieve a ban on salmon fishing off Greenland within the next six months, that the government undertake further economic measures against the Danes.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: The motion cannot be put.


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



ATLANTIC REGION FREIGHT RATES-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION UNDER S.O. 43

Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. It concerns reports which indicate that the railroads are about to seek further increases in freight rates in the maritime region. In view of the fact that this represents the ninth increase in freight rates in 30 months, and in view of the crippling effect that such additional increase would have-


Mr. Speaker:: Order, please. The hon. member is now arguing the case. I suggest to the hon. member that the motion should be put without argument.


Elmer MacIntosh MacKay: Mr. Speaker, I move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the Minister of Transport impose a moratorium on freight rate increases until the government announces its over-all transportation policy for this region.


Mr. Speaker:: The hon. member's motion is proposed under the terms of Standing Order 43 and requires unanimous consent. Is there unanimity?


Some hon. Members:: Agreed.


Some hon. Members:: No.



DEPARTMENT OF THE SOLICITOR GENERAL BILL


[Stage Direction]
On the order: Introduction of Bills.
June 2, 1972-Mr. Howard (Skeena)-Bill intituled: "An Act respecting the Department of the Solicitor General (correctional service program).
Mr. Speaker:: The hon. member for Skeena has given notice of his intention to propose this motion. The Chair has had an opportunity to study the hon. member's proposed bill and I have extremely serious reservations about the bill from a procedural standpoint. Generally speaking, it seems to me that the hon. member is clearly attempting by the bill to circumvent the normal supply procedures. If the hon. member thinks he can convince the Chair that this is the kind of bill which should be allowed to be proposed, I will hear him, but after giving the matter serious thought I am sure he will appreciate that this would be a very novel way of considering supply proposals in the House if this bill were submitted for the consideration of the House.


Mr. Howard (Skeena):: Mr. Speaker, the purpose of the bill is certainly not to circumvent anything. As presented the purpose would be clearly to deal with a limitation upon otherwise wasteful expenditures on the part of the
June 5, 1972

government. In light of the fact you have raised a question about the bill, I wonder whether we might let it stand and consider it on another day?


Mr. Speaker:: Perhaps the hon. member might want to reflect on the suggestion I have made. I will hear him if he wants to submit a procedural argument tomorrow, and I will make my ruling at that time. For the moment, the bill will not put for first reading.



QUESTIONS ON THE ORDER PAPER

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Marshall: 1.	Are all UIC offices in Canada now manned by skilled, trained interviewers and, if so, how many of these interviewers are allocated to various offices?
2.	How is it intended to service remote and isolated areas where unemployed are removed by long distances from UIC offices?
3.	Will the trained interviewers be available to counsel the unemployed employables in order to assist them to fit into society?


Hon. Bryce Mackasey (Minister of Manpower and Immigration):: 1. All UIC District Offices and Service Centres are manned with Claimant Assistance guidance officers. The number in each office varies from 1 to 12, dependent upon the estimated claim load.
2.	It is intended to service remote areas by means of itinerant visits by guidance officers from District Offices and Service Centres. The frequency of these visits will be determined by the number of claimants requesting Claimant Assistance interviews.
3.	The Claimant Assistance Program was established to provide assistance to U.I. claimants, however, guidance is made available to individual on a request basis from either Canada Manpower Centre or social welfare agencies.


UIC-WORK INDUSTRY RECORDS
Mr. Marshall: What records are now to be kept at UIC offices on the work history and educational and training qualifications of the unemployed?


Bryce Stuart Mackasey: Information kept by UIC offices on the work history and educational and training qualifications of the unemployed consist of that listed on the "Application for Benefit", and "Employment Status Questionnaire" completed by each claimant when requesting U.I. benefits.


UIC-CONFIDENTIAL INFORMATION ON CLAIMANTS
Mr. Marshall: Is the confidential information on claimants made available to other branches of the UIC and, if not (a) for what reason (b) in
Questions
what way may a claimant be assisted if jobs meeting his or her qualifications are available in another city?


Bryce Stuart Mackasey: The only confidential information available under the Claimant Assistance Program is that provided to the guidance officers by claimants during CAP interviews. This information is not made available to any other branch of UIC. (a) In order that a realistic appraisal of a claimant's employment and related problems can be made, it is essential that the claimant be put at ease and have the utmost confidence in the guidance officer. To achieve this, he is assured that anything he may say will be held in the strictest confidence within the Claimant Assistance Branch, (b) By referral to a Canada Manpower Centre.


PUBLIC SERVICE SUPERANNUATION ACCOUNT
Mr. Knowles (Winnipeg North Centre): 1.	What was the total amount of money in the Public Service Superannuation Account as at (a) March 31, 1969 (b) March 31, 1970 (c) March 31,1971?
2.	What rate of interest has the government paid for the use of this money during the fiscal years ending on the dates noted above?
3.	What amount of interest was credited to the Public Service Superannuation Account during the fiscal years ending (a) March
31.1969	(b) March 31, 1970 (c) March 31,1971?
4.	What was the total amount paid out of the Public Service Superannuation Account during the fiscal years ending (a) March
31.1969	(b) March 31,1970 (c) March 31,1971?


Hon. C. M. Drury (President of the Treasury Board):: 1.
The amount credited to the Public Service Superannuation Account as of: (a) March 31, 1969, $3,178,376,807; (b) March 31, 1970, $3,695,308,333; (c) March 31, 1971, $4,097,595,197.
2.	Interest was paid on this account at the rate of 1.0000 per cent per quarter up until the quarter ending June 30, 1969. T.B. Minute 692055 dated September 25, 1969 amended section 35 of the Public Service Superannuation Regulations, and the actual interest rates subsequent to this date were as follows: Quarter ending September 30, 1969, 1.2416 per cent; quarter ending December 31, 1969, 1.2575 per cent; quarter ending March 31, 1970, 1.2868 per cent; quarter ending June 30, 1970, 1.3174 per cent; quarter ending September 30, 1970, 1.3262 per cent; quarter ending December 31, 1970, 1.3427 per cent; quarter ending March 31, 1971, 1.3597 per cent.
3.	The total amount of interest credited to the Public Service Superannuation Account during the fiscal year ending: (a) March 31, 19$9, $117,950,358; (b) March 31, 1970, $130,993,152; (c) March 31, 1971, $147,693,942.
4.	The total amount paid out of the Public Service Superannuation Fund during the fiscal year ending: (a) March 31, 1969, $86,964,343; (b) March 31,1970, $95,880,827; (c) March 31, 1971, $107,680,817.
Note: The total annual amounts being credited to the Account which include interest are set to be just sufficient to meet estimated future obligations under the Act.
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June 5, 1972
Questions


MORTGAGE LOAN TO PESTALOZZI COLLEGE
Mr. Ryan: Is Pestalozzi College meeting its mortgage payments and, if not, by how many payments is it in arrears and what is the total amount of the arrears?


Hon. Ron Basford (Minister of State for Urban Affairs):: The date for adjustment of interest on this mortgage was set for May 1, 1972. The first monthly payment will become due and payable on June 1,1972.


UNEMPLOYMENT INSURANCE-ASSIGNMENT OF BENEFITS
Mr. Marshall: Has the government requested provincial welfare departments to contact claimants to have them assign their right to unemployment insurance benefits to welfare authorities to grant relief and recovery of these payments and, if so, by what method?


Bryce Stuart Mackasey: No. Section 48(2) of the Unemployment Insurance Act, 1971, provides that Unemployment Insurance benefits may be assigned to a province or municipal authority in order to reimburse that province or municipal authority for the amount of welfare payments it makes to a person, which welfare payments would not have been made if the Unemployment Insurance benefits to which he is entitled were then in pay.
A number of provinces are completing assignments as authorized by Section 48(2), and the Unemployment Insurance Commission is presently working with the remaining provinces in developing the procedures that will facilitate the extension of the assignment of benefits to all provinces wishing to participate in the program. However, the government has definitely not requested provincial welfare departments to contact claimants to have them assign their Unemployment Insurance benefits.


CANADIAN WHEAT BOARD-SALARIES OF COMMISSIONERS
Mr. Burton: What is the salary of the Chief Commissioner and each of the Commissioners of the Canadian Wheat Board?


Hon. Otto E. Lang (Minister of Justice):: Chief Commissioner, $37,500-$42,000; Assistant Chief Commissioner and Commissioners, $31,500-$37,500.


TORONTO-REHABILITATION OF EXISTING SUBSTANDARD HOUSING
Mr. McCleave: Has the government or any agency thereof entered into an agreement with the city of Toronto to provide loans on a sliding scale for the rehabilitation of existing substandard housing in that city and, if so (a) how much was the ceiling of the total of the loans (b) how many loans have been made and what do they total (c) what interest rate is charged on these loans (d) are these loans available to property owners who rent their properties and what restrictions, if any, are placed on the size of rental increases for such improved properties?


Stanley Ronald Basford: Central Mortgage and Housing Corporation has entered into an agreement with the City of Toronto to provide loans on a sliding interest scale for the rehabilitation of existing housing and, where necessary, upgrading them to meet city standards, (a) The aggregate amount for lending under this agreement is $1.5 million, (b) While no loans have been approved as of May 15th, 1972, there are 40 applications in various stages of processing which will likely result in approvals, (c) The interest rate on these loans will be on a sliding scale geared to income, from 0 per cent for incomes under $3,000 per year up to 7 7/8 per cent for incomes of $7,000 a year and over. The cost of the interest subsidy will be shared between the city and CMHC. (d) These loans are available to property owners who rent their properties, providing the owner agrees to maintain the low rental scale of the dwelling and not to raise rents without first proving to the city that increases in such costs as taxes, maintenance and financing make higher rents necessary.


OPERATION LIFT
Mr. Mazankowski: 1.	How many applications under Operation Lift were received from producers from each of the three prairie provinces?
2.	How many producer applications were approved, and entitled to payment in each of the three prairie provinces?
3.	What was the total amount paid to producers in each of the three provinces?
4.	Are all applications finalized and funds distributed?
5.	How many producer applications received over payment and what were the major reasons for over-payment?
6.	Has legal action been taken to recover these funds and, if so, in how many cases?
7.	As of this date, is any amount outstanding as a result of over-payment and, if so, in how many cases and what is the amount?
8.	What was the total amount of money distributed under Operation Lift, including administrative operations?


Mr. Marcel Lessard (Parliamentary Secretary to Minister of Agriculture):: 1. Number of applications received by provinces: Manitoba, 16,941; Saskatchewan, 64,304; Alberta, 29,457; British Columbia, 755; Total, 111,457.
2.	Number of applications: Manitoba, 15,093; Saskatchewan, 60,013; Alberta, 25,228; British Columbia, 704; Total, 101,038.
3.	Amount paid: Manitoba, $6,115,350.00; Saskatchewan, $42,106,406.00; Alberta, $14,396,440.00; British Columbia, $574,219.00; Total, $63,192,415.00.
4.	No.
5.	(i) 4,053 producers, (ii) Major reasons for overpayments: (a) Corrections in acreages reported by producers which were made necessary following aerial surveys and "on the farm" inspections, (b) Many producers who originally seeded cover crops on summerfallow and nurse crops with perennial forage changed their plans and harvested the cover and nurse crops.
6.	No legal action has been taken to recover these funds.
7.	As at May 5, 1972, 2,497 overpayments totalling $364,572.80 were still outstanding.
June 5, 1972

8.	Lift Payments, $63,192,415.00; Administrative Costs, $2,211,745.38; Total, $65,404,160.38.


GRASSLAND INCENTIVES PROGRAM-THREE PRAIRIE PROVINCES
Mr. Mazankowski: 1.	How many applications have been received from each of the three prairie provinces under the Grassland Incentive Program?
2.	How many applications have been approved entitling producers to receive payment under the program, in each of the three prairie provinces?
3.	(a) How much has been paid out in each of the three prairie provinces (b) how much is scheduled to be paid on applications received last year?


Marcel Lessard: 1. Applications received Manitoba, 4,245; Saskatchewan, 7,683; Alberta, 12,738; British Columbia, 620; Total, 25,286.
2.	Number of applications approved by provinces: Manitoba, 3,525; Saskatchewan, 6,632; Alberta, 10,885; British Columbia, 497; Total, 21,539.
3.	(a) Payments by provinces: Manitoba, $1,273,544.00; Saskatchewan, $2,545,236.00; Alberta, $5,596,661.00; British Columbia, $444,609.00; Total, $9,860,050.00. (b) Estimated $9,860,050, subject to field inspection.


AUSTRALIAN CATTLE IMPORT PERMITS
Mr. Downey: 1.	What are the names of those who were awarded import permits for Australian cattle as indicated in a recent press release by the Minister of Agriculture?
2.	How many permits, for how many animals did each one receive?


Marcel Lessard: 1. The names of individuals receiving import permits for livestock are not made public until after the animals have entered Canada.
2.	A total of 76 permits were issued for a total of 254 animals.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. Knowles (Winnipeg North Centre): 1.	In each year since the Public Service Pension Adjustment Act of 1959 was passed, how many persons have received payments thereunder?
2.	In each of the above years, what was the total amount paid out under the said act?
3.	In each of the above years, what was the average amount paid under the said act (a) to retired public servants (b) to widows (c) to others?
4.	In each of the last five years, either calendar or financial, for which statistics are available, how many pensions under the Public Service Superannuation Act (a) to retired public servants (b) to widows of public servants or widows of retired public servants, have been discontinued because of the death of the superannuate?
Return tabled.
Orders for Returns


CANADA'S MEMBERSHIP IN LATIN AMERICAN ORGANIZATIONS
Mr. Robinson: 1.	Of how many Latin American organizations is Canada a member and what are the organizations?
2.	What is the annual cost of membership in each of the organizations?
3.	What benefits does Canada derive from each of the Latin American organizations to which it belongs?
Return tabled.


LOTBINIERE CONSTITUENCY-LOCAL INITIATIVES PROGRAM
Mr. Fortin: Under the Local Initiatives Program and since its inception, were funds invested by the Department of Manpower and Immigration in the constituency of Lotbiniere and, if so (a) what was the total amount (b) what is the complete list of groups who benefited from the program (c) what are the details of the agreements reached in the constituency?
Return tabled.


STUDENT SUMMER EMPLOYMENT
Mr. MacDonald (Egmont): 1.	Was a survey conducted by the Department of Manpower and Immigration in 1971, of 20,000 students at 58 Canadian universities and community colleges and, if so (a) what percentage of these found work for 16 weeks, 12 weeks, 8 weeks, 4 weeks, 2 weeks and no work (b) when were the students surveyed, under what circumstances and by whom (c) what were the questions asked?
2.	Of the 20,000 students, how many were in their first postsecondary year?
3.	How many of these students did not return to post-secondary training?
4.	How do these figures compare with those obtained by Statistics Canada?
5.	What explanations are there for any major differences in findings for these two surveys?
Return tabled.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development who has stated that he is not pressing for any early settlement of treaty claims by the native people. He has also said that the government is ready to accept at any time applications for the building of pipelines in the north. Is it his view and that of the government that these two questions are entirely distinct and that the question of treaty claims in the north has no connection at all with permission to build pipelines in the north?
25316-56J

June 5, 1972
Inquiries of the Ministry


Hon. lean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I have already outlined the government's position regarding treaties signed with Northwest Territories Indians. We are aware of our obligations under such treaties and we would like to fulfil them as soon as possible but it would not be quite fair to compel Indians to accept a settlement sooner than they want it. Nevertheless, we must go on with our projects regarding northern development and I think that most Indians are wishing for as much progress as possible and this as soon as possible in the Northwest Territories.


Robert Lorne Stanfield: I take it the minister is saying there is no connection between the two. With regard to the question of aboriginal rights as distinct from treaty rights, the minister has said that these rights are before the courts. Is it the minister's position that there is no connection between these rights and any application for the building of a pipeline through the north? Is this the position he takes at this stage when these rights have not been determined by the courts?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have nothing to add to what I have already said in the House.


Robert Lorne Stanfield: Mr. Speaker, I should like to ask the minister, in order to remove any doubts in anybody's mind with regard to this matter, whether it is truly the position of the minister that he is prepared to receive applications for pipelines without any effort on his part to settle any questions with regard to aboriginal rights?


Joseph Jacques Jean Chrétien: Mr. Speaker, it is indeed the government's position. We intend to proceed with the development of the North. Should the Supreme Court give a ruling directly with regard to aboriginal rights, the government would take the situation in hand and decide what ought to be done.



POSSIBLE PROVISION OF SPECIAL MANPOWER CENTRES TO PROVIDE COUNSELLING AND OTHER SERVICES

Mr. David Lewis (York South):: Mr. Speaker, in the absence of the Minister of Manpower and Immigration-I am sure for good reason, although he was scheduled to be here-may I direct a question to the acting minister arising out of a special report concerning young people on welfare issued by the Social Development Council. In view of the evidence in the report that the young people are very much discouraged about the services they receive from the Canada manpower centres, is the minister studying the situation for the purpose of establishing special counselling and other services directed to young people through a network of manpower centres for youth?


Hon. Martin P. O'Connell (Minister of Labour):: Mr. Speaker, I understand that several meetings have been taking place between various departments of the government on questions related to the one asked by the hon. member. I suggest to him that he might wish to direct a question to the Minister of National Health and Welfare.


David Lewis: Mr. Speaker, I will do so with pleasure. The pleasure of addressing a question to the Minister of National Health and Welfare is no greater than that of addressing one to the Minister of Labour. May I ask the Minister of National Health and Welfare whether the question of special centres directed to meeting the needs of young people is being discussed by a committee at the present time and being favourably considered?


Hon. John C. Munro (Minister of National Health and Welfare):: Yes, Mr. Speaker. Officials of my department met last week with officials of some of the provinces to discuss this general area, and we are giving the matter serious consideration. I would also like to indicate that the officials discussed with the provincial officials the work activity aspects of the Canada Assistance Plan. The hon. member may be aware that we made the criteria more generous in terms of cost-sharing for projects initiated under the work activity provisions of the Canada Assistance Plan in the hope that more projects could be submitted, and these of course would involve youth. It was the subject matter of the study to which the hon. member referred.



SUGGESTED TRI-LEVEL GOVERNMENT CONFERENCE TO DEVELOP POLICIES TO MEET NEEDS

David Lewis: May I ask the Minister of National Health and Welfare another question along the same lines arising out of the allegations or evidence in the report-whichever word one may wish to use-that the overwhelming majority of young people on welfare are in need of work, would rather work than be on welfare, and are finding considerable difficulty and considerable humiliation in obtaining welfare. In view of this fact, are the minister or his officials considering initiating a national conference of all three levels of government to develop policies and a more decent attitude toward the young with a view to meeting their needs?


John Carr Munro: Mr. Speaker, I am glad that the hon. member did point out, because it was not given too much note, that the study declares they do want to work. That bears out our own studies within the department. As to the suggestion of a national conference, Mr. Speaker, we are giving that some study right now, and we may be prepared to talk further about it with the provinces. I might indicate that we have had several discussions with the provinces already on this whole field. I might also indicate that we have set aside a fund to give us a more accurate analysis of exactly those in this country who are on social assistance, and for what reasons. We have set this money aside in order to give us the statistical data to which the study also referred.
June 5, 1972


David Lewis: Mr. Speaker, I wish to ask one final supplementary on this subject. In view of the fact the overwhelming majority of these young people are anxious to work, and in view of the proportion of unemployed in the age group of 14 to 20 years, may I ask the minister whether the government and the committee, if he can speak for the committee, are considering some ongoing program, following up the Local Initiatives Program and opportunities for youth, of permanent training and actual jobs for the young people?


John Carr Munro: Mr. Speaker, I have not had a chance to study the report in detail. The local initiatives program and the Opportunities for Youth program have gone a long way in this direction. Whether they are to be complemented by something permanent would involve discussions with the provinces. I think a major area for examination here, in terms of a permanent mechanism, is greater accessability by the provinces to the provisions of the Canada Assistance Plan. I have already mentioned one, work activity. I think this could be of considerable help in terms of involving the young.



OPPORTUNITIES FOR YOUTH PROGRAM-EXTENSION TO PROVIDE ADDITIONAL JOBS FOR THOSE BETWEEN AGES OF 16 AND 24

Jack Marshall: Mr. Speaker, I wish to direct a supplementary question to the Secretary of State. In view of the fact the report referred to by the hon. member for York South indicates that the population increase of Canadians aged 16 to 24 years outstrips our ability to provide jobs, would the minister indicate what action he is going to take to expand the Opportunities for Youth program to take care of all the needs in the future?


Hon. Gerard Pelletier (Secretary of State):: Mr. Speaker, the budget relating to this program has been increased twice between last year and this year. The government will have to see if this program should be pursued next summer, but, as I have already told the House, there are other youth employment programs that are not designed for students only. Those programs are now under consideration within the Department of Manpower and Immigration and that of the Secretary of State and will be discussed in due course.



INQUIRY RESPECTING GRANT TO HOSTELS

David Réal Caouette: Mr. Speaker, may I ask a supplementary?
With respect to young people who prefer to live as parasites instead of looking for a job and who, as I saw in Regina, presently live in youth hostels, does the government grant any money for their maintenance, be it in Regina or elsewhere in Canada?


Gérard Pelletier: Mr. Speaker, the fact is that there exists a certain number of hostels that are set up by private organizations. They are subsidized by the federal government and the Department of
Inquiries of the Ministry
the Secretary of State in its summer activities program when they comply with certain criteria.
However, as to the hon. member's reference to young people staying idle in hostels for long periods, I must say that this would not involve a hostel that would be financed by the federal government, because the maximum period that young people are allowed to spend in these is two days.



ANNOUNCEMENT OF NAMES OF RECIPIENTS OF SPORTS CANADA SCHOLARSHIPS

Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I wish to direct a related question to the Minister of National Health and Welfare. When will the minister be announcing the names of the 500 recipients of Sports Canada Scholarships, in view of the fact that there must be at least 1,000 of the 3,200 applicants still up in the air about what they are going to do this summer?


John Carr Munro: Mr. Speaker, I believe that in the latter part of last week-I stand to be corrected as to the precise day- letters went out to all the successful applicants for scholarships, together with a press release formally announcing them. The press release may not have gone out until today, but certainly letters were mailed to all the applicants.


Mr. Speaker:: The Chair will recognize the hon. member for Greenwood for a last supplementary on this subject, and then the hon. member for Temiscamingue.



IMMIGRATION


Francis Andrew Brewin: Mr. Speaker, my question, I think, should be addressed to the Parliamentary Secretary to the Minister of Manpower and Immigration. It arises out of the report entitled "Riverdale," which I think is the same report referred to by the hon. member for York South; it is published by the Minister of Labour. Has the government seen the allegation in that report that misleading advertising and an unsuitable and dishonest sales campaign are still being used to lure immigrants to Canada? Would the minister look into this part of the report and take whatever action is required to end this sort of activity?


Mr. Ray Perrault (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, we have at the present time no advertising sales campaign abroad as such, nor has there been a campaign of this type for quite some time. A report received by our research branch shows that out of 3,500 immigrants who arrived in 1969 and who were surveyed fairly recently, only 4 per cent of

June 5, 1972
Inquiries of the Ministry
those who received counselling abroad reported subsequently that this counselling was inadequate in any way. Moreover, two out of three persons in this small group indicated-


Mr. Speaker:: Order, please.


Raymond J. Perrault: 1 would hope, Mr. Speaker, that we could provide a full and complete answer to the hon. member.


Mr. Speaker:: Order, please. I suggest to the hon. member for Greenwood and to the parliamentary secretary that that question really was not supplementary. It might have been related to the first question, but we seem to have drifted away little by little from the original question asked 15 minutes ago. For the moment the Chair will recognize the hon. member for Temiscamingue.


Raymond J. Perrault: On a question of personal privilege, Mr. Speaker, may I suggest that the hon. member schedule this for ten o'clock because we would like to provide him with the facts.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


David Lewis: On a point of order, Mr. Speaker, I suggest that the House would be glad to revert to motions so that those facts can be given to us now.


Mr. Speaker:: Is there unanimous consent to revert to motions?


Some hon. Members:: No.


Mr. Speaker:: Apparently there is opposition to the suggestion that we return to motions for the purpose of hearing the parliamentary secretary on this matter. For the moment the Chair recognizes the hon. member for Temiscamingue.



NATIONAL PARKS


David Réal Caouette: Mr. Speaker, I should like to direct a question to the hon. Minister of Indian Affairs and Northern Development, in charge of national parks.
On many occasions when I asked him questions about the Temiscamingue national park, the minister replied that he was to discuss the matter with the premier of Quebec. Is the minister aware that people are now talking about an interprovincial park that would include the Mat-tawa area in Ontario and that of Temiscamingue? If so, could he tell us about the progress of the discussions?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am aware of the new proposal to the effect that citizens from Ontario would like the park to include areas on both sides of the frontier. We also discussed the matter with the Ontario government but have not received any answer yet.


David Réal Caouette: On a supplementary question, Mr. Speaker.
Did the hon. minister receive representations from the council of Temiscamingue county to the effect that it would be preferable to create a national park in Temiscamingue without any areas from another province?


Mr. Speaker:: Order. The question as asked is not in order. The hon. member is asking the minister whether he received representations to that effect.


David Réal Caouette: Mr. Speaker, I will rephrase my question.
As regards that interprovincial park, is there any opposition from the citizens of Temiscamingue? If so, what has the minister told them?


Joseph Jacques Jean Chrétien: Citizens on the Quebec side would like the park on their side alone, people from Ontario would also like to have it on their side alone; as a good federalist, I think it might be wise to set it up on both sides.


Mr. Speaker:: Order, please. The right hon. member for Prince Albert. May we have order, please. The hon. member for Temiscamingue has a supplementary, after which I will recognize the right hon. gentleman.


David Réal Caouette: Has the minister informed the premier of Quebec of his intention to establish an interprovincial park?


Joseph Jacques Jean Chrétien: Yes, Mr. Speaker.



AIR TRANSPORT


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my questions have to do with the statement made at the beginning of today's sitting by the Secretary of State for External Affairs, particularly with the diabolical events that took place in Tel Aviv and the need for action being taken to control hijackings of airplanes which have reached epidemic proportions. Are discussions now going on between the countries which have airways operating in their respective territories to ratify the treaties entered into in 1963 at Tokyo, in 1970 at The Hague and in 1971 at Montreal? This is a matter that particularly affects the foreign relations of our country and the question is therefore directed to the minister responsible. What is being done in this connection?
June 5, 1972


Mitchell William Sharp: Mr. Speaker, the necessary legislation that would give us authority to ratify or, at least authority to carry out the undertakings is now, I understand, before the other place. I hope it will be passed soon. We will then proceed to ratify these agreements.


John George Diefenbaker: Am I to understand that ratification will take place following the conclusion of deliberations in the other place?


Mitchell William Sharp: Yes.


John George Diefenbaker: What has been agreed to in discussions with nations connected with the assurance that there will be effective screening of passengers getting on aircraft?


Mitchell William Sharp: Mr. Speaker, I do not like to encroach on the responsibilities of my colleague, the Minister of Transport, but I have had a detailed discussion of measures under way, and they are very thorough. We are subjecting all passengers going to Tel Aviv, for example, to very special screening and very special inspection. Of course, the problem is greater than one of passengers going in that direction, because at any time some madman may decide to blow up an airport anywhere in the world. We are grappling with this problem, I think, at least as effectively as any other country.


John George Diefenbaker: Mr. Speaker, in view of the apparent results, no country is doing very effective work. May I ask the minister whether Canada is installing screening apparatus to prevent persons getting on board aircraft with substances in their possession that can be used for explosion purposes?


Mitchell William Sharp: Mr. Speaker, as the right hon. gentleman knows, even if very special precautions had been taken before the Japanese who blew up the airport at Tel Aviv boarded the aricraft, those precautions would have been ineffective because the apparatus and the guns were to be found in their baggage and not on their persons. I think that these questions ought to be directed, for more detailed information, to the Minister of Transport who, I think, will be able to satisfy the right hon. gentleman.


John George Diefenbaker: Mr. Speaker, the minister took it upon himself in his opening statement to explain the situation. I thought he knew something about the subject and did not need the assistance of another minister. I ask him particularly whether, in Canada, there is full and effective screening of international flights today?


Mitchell William Sharp: Mr. Speaker, I think those questions ought to be directed to the Minister of Transport. In our cabinet we work co-operatively; perhaps in the right hon. gentleman's cabinet it was not the same.


Some hon. Members:: Oh, oh!


John George Diefenbaker: Mr. Speaker, I just wanted to learn whether the minister knew anything about the situation of which he spoke.


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



BRITISH COLUMBIA-INQUIRY AS TO REQUEST BY PROVINCE FOR ASSISTANCE-IMPROVEMENT OF PERMANENT CONTROL FACILITIES

Mr. Bruce Howard (Okanagan Boundary):: Mr. Speaker, I have a question for the Minister of the Environment, but in his absence I shall direct it to the Prime Minister. Has the federal government received any request from the province of British Columbia to provide any assistance in connection with the serious flood conditions in the Similk-ameen, Okanagan and Kamloops areas of British Columbia?


Right Hon. P. E. Trudeau (Prime Minister):: No, Mr. Speaker. I received a report on the situation from the Minister of Veterans Affairs and from the hon. member for Kamloops-Cariboo. They were in the area over the weekend. After that report I checked and, to my knowledge at this time, we have not yet received any request from the province of British Columbia.


Mr. Baldwin:: The hotline between Victoria and Ottawa is disconnected at present.


Bruce Andrew Thomas Howard: Has the government of Canada any plans to join with the province of British Columbia in upgrading permanent flood control facilities in those areas?


Pierre Elliott Trudeau: Mr. Speaker, if such a request were made by the province we would certainly give it most serious consideration, as we have in other cases.



EXTERNAL AFFAIRS


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Secretary of State for External Affairs. The crew of a Canadian survey ship, the J. E. Jonsson, reports that sophisticated underwater equipment it was hauling was cut after it was crossed over by a Russian fishing vessel off Sable Island, and on the same day the Canadian ship detected a submarine of unknown origin. My question is this: Since a Canadian Armed Forces aircraft was pressed into service to hunt for the $50,000 seismic cable, has the minister registered a complaint with the Russians over this matter? If so, what was the official response?


Mitchell William Sharp: Mr. Speaker, the answer to the question is no. I have not yet registered a complaint and, indeed, I was unaware of the facts until the hon. gentleman drew them to my attention. I have been away for a few days and perhaps have not caught up with the news.


Lloyd Roseville Crouse: As Canadian fishermen have complained many times that the Russians have damaged their fishing gear by cutting through it, would the minister request the

June 5, 1972
Inquiries of the Ministry
Russian fishing fleet to pay greater attention to the rules of the road when fishing on Canada's continental shelf?


Mitchell William Sharp: Mr. Speaker, we have made representations along those lines to several countries. I think the situation is better than it was and I hope it will continue to improve to an even greater extent.


DAMAGE TO FISHING GEAR BY RUSSIAN VESSELS- CONSIDERATION AT ICNAF CONFERENCE
Mr. lames A. McGrath (St. John's East):: I have a supplementary question, Mr. Speaker. Inasmuch as after the last series of incidents off the east coast involving Russian ships it was suggested by the Russians to our fisheries inspection people at the time that this matter should be taken up at the next meeting of the International Commission for the Northwest Atlantic Fisheries may I ask the minister if Canada pursued this matter at the recently concluded ICNAF meeting in Washington and if any agreement was arrived at with the Soviet Union on rules of the road in fishing on the Grand Banks?


Mitchell William Sharp: Mr. Speaker, I will inquire from the members of the delegation and answer that question when I have the information.


PALESTINE LIBERATION FRONT GUERILLA SCHOOL-INQUIRY AS TO TRAINING OF CANADIANS OR CANADIAN RESIDENTS
Hon. Paul Hellyer (Trinity):: Mr. Speaker, can the Secretary of State for External Affairs advise the House whether or not there are any Canadians or Canadian residents who have been trained by the Palestinian Liberation Front at the guerilla school in Lebanon, the school where those persons responsible for the terrible tragedy at Tel Aviv airport were trained?


Mitchell William Sharp: Mr. Speaker, I do not know the answer to that question, and I do not know whether I will be able to get the information because I do not think those people publicize their activities.


Paul Theodore Hellyer: Would the minister inquire of the Royal Canadian Mounted Police and advise the House whether they have any knowledge of Canadians or Canadian residents who were trained in Lebanon in that school?


Mitchell William Sharp: Mr. Speaker, I hesitate to give that undertaking because it may be that the Royal Canadian Mounted Police will consider that it is not in the public interest nor in the interest of the security of Canada to reveal any information that they possess.


LE DAIN REPORT ON MARIJUANA-INQUIRY AS TO ANNOUNCEMENT OF GOVERNMENT POSITION RESPECTING RECOMMENDATIONS
Frank Howard: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. When does he expect to make an announcement with respect to the report of the Le Dain Commission on marijuana?


John Carr Munro: Mr. Speaker, I cannot announce a specific time except to advise the hon. member that we are studying the report and rushing the matter as quickly as possible. I hope to be in a position soon to make recommendations to my colleagues in the government. However, I cannot say precisely when that will be.


Frank Howard: Is the minister aware that every day's delay is instrumental in attracting more and more young people to attempt to use marijuana because of the semi-endorsement that was given by the Le Dain Commission when it suggested that use of marijuana be permitted by law and that there is great need to clear up the situation?


Mr. Speaker:: Order, please. I suggest that the hon. member has made a representation. The hon. member for Brandon-Souris.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General and arises from the setting up of the special mail service between Calgary and Edmonton by the province of Alberta with a resultant annual saving of $100,000 compared with the cost of the service formerly provided by the Post Office Department. When will the minister announce to the House the improvements in service that he referred to in his recent speech at Vancouver?


Hon. Jean-Pierre Cote (Postmaster General):: Mr. Speaker, following the press release put out by the government of Alberta regarding savings of up to $100,000 a year by using a courier service, we made inquiries and found that our postal service between Edmonton and Calgary is excellent. Assured mail delivery works at 98 per cent efficiency. We have four trucks that travel daily between the two cities. The facts are that the different Alberta government departments were hiring different couriers to transport their mail between the two cities. The government has now decided to reorganize and hire the services of only one courier. Therefore we will not lose any business. It is just a matter of reorganization within the Alberta government.
June 5, 1972


Walter Gilbert Dinsdale: Has the Postmaster General approached the province of Alberta offering improved service to the province between Calgary and Edmonton and, in particular, has he offered the restoration of the six days a week mail delivery service?


Joseph Julien Jean-Pierre Côté: No, Mr. Speaker, but I know the service provided by the courier is only a four days a week service. Our officials have met with the Alberta government and it is true, it is a four days a week service they now have. My officials met with the Alberta government officials to determine ways in which the Post Office can help them meet their actual and future requirements. The Alberta officials have shown interest in the service we can offer them.




Mr. Mac T. McCutcheon (Lambton-Kent):: Mr. Speaker, I wish to direct my question to the Secretary of State for External Affairs. What progress is being made as far as extradition arrangements between Canada and Cuba are concerned relative to aircraft hijackers?


Mitchell William Sharp: Mr. Speaker, the negotiations are still under way. It had been our hope that they would be concluded shortly. I will have to find out just what their state is at the moment. I know that an official draft is in the course of negotiation between the two countries.


AGRICULTURE
Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, my question is for the Minister of Agriculture. In view of the fact that approximately 1,400 cattle died in transit on the railways from the western provinces to Ontario last fall, has the minister investigated the matter and has he anything to offer by way of a solution to what the cattle breeders describe as a national disgrace?


Hon. H. A. Olson (Minister of Agriculture):: Mr. Speaker, we looked into this some weeks ago, in fact, some months ago. It is true that last winter was an unusually difficult winter with regard to the incidence of certain diseases and climatic conditions. We hope we can find a basis on which the shippers, the transportation companies and, indeed, the government regulations can be reconciled to improve the situation in the coming year.


Percy Verner Noble: Will the minister take the necessary measures to avoid a repetition of these extensive losses of valuable livestock in the approaching shipping season?
Inquiries of the Ministry


Horace Andrew (Bud) Olson: Mr. Speaker, we are now working on an urgent basis in that regard, but no one can guarantee that we will not have severe weather next winter or that there will not be another outbreak of some of the diseases.

[ Translation]


FEDERAL-PROVINCIAL RELATIONS POWERS OF FEDERAL GOVERNMENT-ALLEGED REPRESENTATIONS FROM QUEBEC MINISTER OF FINANCE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I have a question for the Minister of Finance.
In view of the statements of the Quebec Premier that the Canadian government has too much spending power, can the minister indicate to the House whether he has recently received representations to that effect from the Quebec Minister of Finance?


Hon. John N. Turner (Minister of Finance):: No, Mr. Speaker.


NORTHERN AFFAIRS
Robert Lorne Stanfield: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. Do the minister and the government still favour the concept of pipelines and highways through the north using one corridor and that authorizations relating to pipelines will be determined by the National Energy Board?


Joseph Jacques Jean Chrétien: Naturally, Mr. Speaker.


Robert Lorne Stanfield: In view of the fact the government has decided to proceed post-haste with the construction of a highway through the north, I wish to ask the minister whether the National Energy Board and, in fact, the government, have approved the route as suitable for a pipeline corridor?


Joseph Jacques Jean Chrétien: Mr. Speaker, with regard to the construction of highways, there is no need to ask the advice of the National Energy Board. The construction of highways in the north is the responsibility of my department, just as the choice of the corridor will be.
As for granting the permit for building the pipeline, the choice of the company or the group that will perform the work will be made by the National Energy Board.
With regard to the northern territories, they are the responsibility of my department.

June 5, 1972
Inquiries of the Ministry


Robert Lorne Stanfield: Would it be true to say that all the talk about the corridor is mostly gas?


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


POLLUTION
Mr. Jack Cullen (Sarnia-Lambton):: Mr. Speaker, my question is for the Minister of Transport, but in his absence I will direct it to his parliamentary secretary. What action is being taken by the Department of Transport to assist the United States Coastguard in limiting pollution of the St. Clair River and shoreline as a result of a collision between two ships early this morning?


Mr. Gerard Duquet (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, officials of my department are already on the scene of that unfortunate accident to look into the various aspects of the matter. Having occurred in American waters, the accident as such will require an inquiry; there is also the matter of pollution. Those two aspects are now being studied by the people who are on the spot.


Mr. Speaker:: Order, please. Perhaps the hon. member might be allowed to ask a supplementary and the Chair will then recognize the hon. member for Comox-Alberni.


Jack Sydney George (Bud) Cullen: Have officials of the United States Coastguard and/or the Department of Transport determined the extent of the threat posed by 40,000 plus gallons of bunker fuel carried by one of the ships?


Gérard Duquet: Mr. Speaker, I shall not be in a position to answer that question until we have received the reports of the investigators.


CHERRY POINT OIL SPILL-REPRESENTATIONS TO UNITED STATES RESPECTING POSSIBLE DAMAGE TO CANADIAN PROPERTY
Mr. Thomas S. Barnett (Comox-Alberni):: Mr. Speaker, my question is for the Secretary of State for External Affairs. In light of statements the minister has made in this House and elsewhere that he would hold the government of the United States responsible for the results of any oil spills in the transport of oil on the Pacific coast, has the minister received any report of a spill of oil from a tanker at Cherry Point, Washington, moving toward or into Canadian waters and, if so, has he taken this matter

up with the appropriate authorities of the United States government?


Mitchell William Sharp: No, Mr. Speaker. I have not heard this report. I will look into the matter and see whether we have a case to take up with the United States.



ADMINISTRATION OF JUSTICE


John George Diefenbaker: Mr. Speaker, I wish to direct my question to the Minister of Justice. It has to do with the unCanadian, if not unconstitutional, course of action being taken by the government of Saskatchewan under what is called the foreign ownership of land bill whereby Canadians outside the province of Saskatchewan are denied the right to inherit or own land in Saskatchewan. The government of that province is now receiving representations in this connection. Has the government of Canada communicated with the government of Saskatchewan and pointed out the danger of legislation that denies Canadians equality in the holding of land?


Otto Emil Lang: Mr. Speaker, the government has not formally communicated its view to the government of Saskatchewan at this point in time, but I think the government of Saskatchewan knows this government's views.


John George Diefenbaker: Mr. Speaker, I doubt whether that government is composed of mindreaders. Instead of relying on them having that capacity, will the minister inform that government that this kind of legislation is a denial of Canadianism?


Mr. Speaker:: Order, please. The hon. member for Edmonton Centre.


John George Diefenbaker: Mr. Speaker, I rise on a point of order. I am trying to get an answer to a very simple question, but the minister, who is usually vociferous in his answers, seems to be disregarding a situation which is causing deep unrest in Saskatchewan.


Mr. Speaker:: I have to suggest to both the right hon. member for Prince Albert and the minister that the supplementary was rather in the form of a representation.



IMMIGRATION


Steve Eugene Paproski: Mr. Speaker, I had a question for the Minister of Manpower and Immigration, but since he is not here may I direct it to his vociferous parliamentary secretary. In view of the fact
June 5, 1972

Howard Hughes has been given a further ministerial stay, allowing him to extend his visit to Canada, and in view of the fact that a member of the Department of Immigration has personally looked after this procedure, would the parliamentary secretary advise the House, the country and the world whether "H.H." is alive and well?


Raymond J. Perrault: I am glad to rise and reassure the hon. member. On Friday last Mr. Howard Hughes was granted a one-year extension of his non-immigrant status. He is reported as being indisposed-


Mr. Speaker:: Order, please. That question could very well have been placed on the order paper, or it might be considered at the time of adjournment.



NATIONAL PARKS


Elmer MacIntosh MacKay: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development. Can the minister say whether there will be any further consultation between his department, the Nova Scotia government and interested persons in the area with respect to the boundaries of the proposed national park in the eastern shore area of Nova Scotia?


Joseph Jacques Jean Chrétien: Mr. Speaker, we are discussing that problem with the Nova Scotia authorities. I have myself discussed that project last week with Premier Regan and we think that we have reached an understanding which will be acceptable to all those concerned.



LABOUR RELATIONS


Mr. John L. Skoberg (Moose law):: Mr. Speaker, my question is addressed to the Minister of Labour. Having regard to the alleged wildcat strike of longshoremen in Montreal, Trois-Rivieres and Quebec City and the lockout on May 30 by the Maritime Employers' Association, can the minister tell us whether his department has made any headway in settling this dispute and, if not, what action does he contemplate taking?


Abram Ernest Epp: This morning I sent a telegram to the president of the longshoremen's union and to the president of the Maritime Employers' Association requesting them to reply today as to their willingness to submit the differences between them to arbitration, which is the procedure provided for in the Canada Labour Code as well as in their own collective agreement.
Inquiries of the Ministry MANPOWER



LOCAL INITIATIVES PROGRAM-RESPONSE TO REQUESTS FOR ADDITIONAL FUNDS AND EXTENSION OF TIME FOR COMPLETION OF PROJECTS

Jack Marshall: Mr. Speaker, my question is addressed to the Parliamentary Secretary to the Minister of Manpower and Immigration. Since many local initiative projects are being stultified by lack of funds, can the hon. gentleman say what action the government intends to take in response to the many requests which have been made for the allocation of additional funds and the extension of the time within which projects can be completed?


Some hon. Members:: Ten o'clock.


Raymond J. Perrault: Mr. Speaker, I should like to assure the hon. member from Newfoundland that 11 extensions have been granted in his own province alone with a total value of $217,928. This is encouraging progress. We shall be pleased to provide him with additional information.



EFFECT OF LONGSHOREMEN'S STRIKE ON SHIPMENTS FROM MONTREAL-POSSIBLE ALTERNATIVE SHIPPING FACILITIES

Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the minister in charge of the Wheat Board. Can he inform the House whether grain shipments out of Montreal have been suspended or curtailed because of recent labour difficulties there? Can he also say whether alternative shipping facilities are available should the work stoppage be prolonged?


Otto Emil Lang: Some individual shipments were certainly delayed. There are, of course, alternative loading facilities available throughout the east and these are being used to continue the very rapid movement of grain.



TRANSPORT


Mr. Charles H. Thomas (Moncton):: Mr. Speaker, my question is for the Prime Minister. In view of the widespread concern about reduced rail passenger services, escalating rail and truck freight rates and dissatisfaction with air carrier services, is the government considering a review of the responsibilities and powers of the Canadian Transport Commission to determine whether this body is performing the functions envisaged for it by Parliament when the National Transportation Act was passed?


Some hon. Members:: Hear, hear!

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Pierre Elliott Trudeau: I cannot point to any specific review being carried out at this time with the intent the hon. member has mentioned, but all governmental bodies and agencies are, of course, under constant survey by the government to make sure that they act within the terms of the relevant statutes.


Mr. Speaker:: Order, please. We have gone beyond the time allotted to the question period. If there are supple-mentaries on this matter, so wide in its connotations, they could be put tomorrow. I think no serious harm would be done by the delay. The Chair will recognize the hon. member for Battleford-Kindersley who has been trying to ask a question during the whole of the question period.



NORTHERN AFFAIRS


Mr. Rod Thomson (Battleiord-Kindersley):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. In view of the possible construction of a Mackenzie highway as envisaged by the Prime Minister, and the large number of skilled workmen which would be required on such a project, and similar projects such as the proposed Mackenzie Valley pipeline, may I ask whether the minister has any definite plans to train native people so that they can find employment in connection with these undertakings?


Mr. Speaker:: Order, please. I would think this question is so general in nature that the minister should indicate whether he wishes to make a statement on motions. He should not make the statement at this time.


Joseph Jacques Jean Chrétien: My answer is yes, Mr. Speaker.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, May 31, consideration of the motion of Mr. Pepin that Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be read the second time and referred to the Standing Committee on Finance and Economic Affairs.
Hon. Eric Kierans (Duvernay):: Mr. Speaker, I am glad to have the opportunity to say a few words in this debate on Bill C-201.
I might start off on an informal note by relating an experience I had three weeks ago today at New York University when I was one of a group of 25 economists discussing the rising tide of nationalism throughout the world and the growing opposition to the activities and expansion of multinational corporations. I think we saw some of the results of this opposition in two countries just last week in the shape of expropriations and takeovers in Syria and Iraq. Included in the group were senior representatives of two of the largest multinational corporations, IBM and Standard Oil of New Jersey, neither of whom had found anything in our legislation to disturb them. They said we had adopted in Canada a very moderate and liberal policy which did, indeed, surprise them. But what surprised me most was that many economists there, Japanese, European, Latin American and Indian, did not really want to discuss the Canadian case. The Canadian case, to most of them, was not one which would provide them with indications of what they themselves could do by way of policy to prevent the growth of foreign investment on such a scale in their own countries. To them, the experience in Canada, where United States manufacturing and resource development activities have taken over to such an enormous extent, is, indeed, a horrible example, but what they were really concerned about finding was some hint of a policy which might prevent such a situation ever arising in their own countries. In other words, we are a special case.
I might say I agree with those who have expressed the view that the bill before us does nothing, really, to come to grips with the overwhelming problem which faces Canada. The reason for this, to a large extent, is that it attempts to provide solutions to a general, or national problem, by the taking of ad hoc decisions. In other words, each particular takeover is to be examined on its own merits, and if it is found to be in the general Canadian interest it will be approved, otherwise it will not be approved. But I submit to Your Honour that there is no takeover which could not, in a sense, be proven to be an advantage in particular situations. However, this is not where the problem lies. It matters not in whose riding this takes place. On examining a takeover, one looks at the reasons for the takeover. Let us say one finds on the side of the seller, or the Canadian, that he is a man who has grown old and tired, having developed his business. There is no continuity of management. He is responsible for an operation that employs 50 or 160 people, but his sons are not interested in entering the business. Therefore, he has to look around for management.
If it is not accepted that there should be this kind of takeover or sale of assets, then this whole enterprise is going to place in jeopardy the livelihood, the salaries and wages, of the existing employees of the firm. I do not think there is any member of this House who, if he were to act on behalf of such a buyer, could fail to prove that the buyer of such an enterprise could provide more research and development, as well as more capital, than existing entrepreneurs. By providing more employment and more products, he could prove that that particular takeover would be in the interests of that particular locality or region. As I say, that is not the problem that is facing Canada. Our problem is related to what I suppose could be called, not only in the discipline of economics but in

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other disciplines as well, the fallacy of composition. In other words, you cannot extend from the examination of a particular case a generalization to arrive at a general or national policy.
Let me give the House a simple example. A wheat farmer in the west could decide of his own accord to double the acreage he sows, in which case obviously he would reap tremendous advantages. On the other hand, if all wheat farmers in the west decided at the same time to double their acreage, the disadvantages, the catastrophes and the chaos could be monumental to the industry as a whole. This is what we face in this particular situation. It is not merely a given takeover that is at stake here, but rather the volume and amount of the takeovers that are taking place and indeed are a fact of life in this country that we call Canada.
Let me give the House another example. None of the problems that the United States has had with its balance of payments recently can be attributed to the developing nations. Indeed, the developing nations of this world have helped and saved the United States from having a very much worse balance of payments problem. In each of the last three years the United States drained from its operations in the developing nations in the world more than $4 billion a year. Approximately one-third of this $4 billion was accounted for in an export surplus that the United States had with the developing nations. The other two-thirds was the return on capital, royalty fees, research fees, management fees, and profits pulled out of the developing nations and back into the United States.
Again let me give an example. In the year 1971 United States oil companies invested in Libya $1.8 billion. The profits of those companies amounted approximately to $1.6 billion. What they withdrew was $1.5 billion.
In the over-all structure of relations between the United States and the developing countries, the following summary can be made. Their balance of payments improved initially on merchandise trade and current account by $4 billion. But obviously, the developing countries needed the money to pay for the deficit in their current account so there had to be a capital outflow. What was the composition of that capital outflow from the United States to the developing nations? The United States-and we are just as guilty of this sort of thing-declare that they want to help the developing nations of the world in their current accounts, and they pull out $4 billion. Then, these nations say that somehow this has to be equalized because they have to pay their bills. Therefore the United States replies that it will give them grants in aid totalling approximately half that amount, which is $2 billion. We all know that these grants in aid are tied. What is exported is really equipment and also technology, though technology that is suitable in the United States may not necessarily be suitable in each of the recipient underdeveloped nations. The other $2 billion, to equalize accounts from the point of view of the developing nations of the world, is an increasing outflow of private investment from the United States.
Now, Mr. Speaker, what does this investment do? It can only do one thing: it searches out the ownership of, and title and proprietary rights to, even more resources than the United States already has in each developing country. As a result, the problem accelerates. We can all see that
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there is a political limit to this which will very shortly be reached in most countries and has already been reached in others-long ago in Cuba, and now in Chile, Peru and the Middle East. So I say that the problem for Canada is not that we should be worrying about a particular takeover, but rather the whole problem of the amount of takeovers and the amount of foreign investment that we have permitted in this country, indeed, that we have encouraged and are still encouraging.
The fallacy of composition is, perhaps, a simple error in logic. Sometimes it can be called sophistry and sometimes deception, though certainly there is no implication of deception here or intention to delude people. However, the problem cannot be solved on this basis. What it demands is an over-all attack on the entire problem of just what Canada's economic objectives are, and how we can best attain them. It is also an examination of the results of a continuation down this particular road and whether it is going to lead us, as indeed it already has to a very great extent, to the position where we can only pay our deficit on merchandise trade and capital account by selling off more and more of our own property. As I say, there is a limit, and in the case of Canada I am sure we will be smart enough to reverse this pattern, even though for most other countries it would already have been well past the point of return.
I ask, is there a policy that we can develop, an over-all policy rather than a policy directed to the examination of a particular merger or takeover between two particular firms? I say that there is such a policy, an over-all policy that demands the integration of all our policies. It demands the integration of our fiscal policy, our monetary policy, our commercial trade policy, our exchange rate policy. We should find this policy and seek the solution to reversing this kind of trend, though not without putting some burdens, stresses and strains on the economy.
I do not think anyone can rightfully claim that this bill comes even close to approaching the real problem. It comes close to discouraging new foreign investment, but it does not discourage new investment of its own accord. Any firm not presently in Canada can invest, which is what the United States wanted to be made quite clear. They said it was fine, that they would not have to buy anyone out, but that they could start up all the subsidiaries they wanted. In fact, the United States goes even further and, by giving all sorts of grants, encourages companies to enter Canada and provide further competition to a manufacturing industry that is already far too heavily concentrated.
With regard to existing investment in Canada, we have already taken other measures to permit expansion at a faster rate than hitherto. There is already more than sufficient foreign investment here in Canada for them in their own innerdynamic way to progress far more rapidly than the gross national product does. In other words, by the proportion by which they do expand more rapidly than the economy as a whole expands, they will acquire increasing control. Some of these measures have even been sanctified in the most recent budget in the granting of two-year writeoffs to firms. The firms who are getting the best of such a thing are the large firms.

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In the population of firms in Canada we may say we control 50 per cent of manufacturing, but the 50 per cent we control are the small and medium-size firms. The 50 per cent controlled largely by foreign capital are part of the largest sector, and these are the firms that can invest $10 million or $20 million and can writeoff such expenditures from capital equipment rather than the profits they make on the Canadian consumer market. In other words, we are digging the pit deeper and nothing in this legislation is in any way going to reverse that.
What we have to come to grips with, and this was quite clear at New York University, is the fact that there are a great many people in this world, including those in Japan and the Common Market, and obviously in the United States, who are convinced that the only way in which a nation can obtain growth is by the use and encouragement of multi-national corporations. They recognize there is growing resentment around the world to activities of such giants. Who do they blame? They blame the people who feel insecure and disturbed because of this.
We hear from distinguished economists such as Charles P. Kindleberger of MIT who says:
International firms stimulate the development of international policies. They leave less room for the independent, idiosyncratic, law-unto-itself national state.
That is what this House is all about.
Raymond Vernon, the distinguished Harvard professor, states:
The basic asymmetry between multinational enterprises and national governments may be tolerable up to a point, but beyond that point there is a need to re-establish balance through accountability to a governing body multinational in scope.
This is what this bill talks about, multinational enterprise being a firm which operates in one country and wants to cross over into your country. Here we have a law for corporations that permits such institutions to live in perpetuity. No one of us here is immortal, and even this institution reviews itself, perhaps for the better, every four years. Every institution we can think of is accountable in some way to somebody except that institution called a corporation, and because a corporation has conquered time, the institution of corporation now wants to conquer space. It wants to be able to go anywhere. It is a kind of pantheism. When it tries to go forward it runs up against a resistance of bodies exactly of the kind we have here in this House today.
Let me get a little closer to the problem. George Ball, a name we know well, in an article referring to the importance of being stateless, that is an international corporation being stateless and subject to nobody, not even its own government, says:
An international companies' act, as I see it, has intrinsic merits. It offers the best means I can think of to preserve the great potential of the world corporation for expanding.
What is he trying to say here? I suggest he is referring to an attempt to create a supranational authority, with a charter that would be granted by the United Nations, which would be above the activities of the different national assemblies across the world. This search for a supranational state is a logical development we are pres-

ently going through. This is an attempt to place what we could call a cosmocorp, whether it is a multi-flag, multibranch, multiinternational or multinational authority, beyond the reach of politics, making it above politics, or making it apolitical.
I will admit that corporate planners may be able to do things better. There is no doubt that they have accumulated in their hands greater resources; capital, technology and even management skills, and they can apply this to given operations, but they cannot decide for a people how their nation's resources should be allocated. That is what a House like this is all about. It is politics that defines what the inhabitants of a state think are the problems that should be solved rather than the multinational corporations, no matter what their claims are to a superior technical nature.
I agree with a free flow of international capital. As an economist I agree with this just as I agree with free trade of goods and products. What is also being advocated today with the free flow of international capital is the idea of a free flow of ownership and property rights. This is a completely different thing.
The United States was built on a free flow of international capital, mainly from the United Kingdom, but there were no property rights involved. This capital was in the form of loans, debentures and bonds to enable the United States to get going, but the ownership, control and equity in the future growth of the United States remained in American hands. This is the kind of consideration we have to give to an over-all strategy in order to come to grips with the problems facing this country.
I have my grave doubts, too, about a great deal of the claims made for this sort of institution. The bulk of investment funds does not come from capital markets, it comes from the consumer; the dollar that you and I pay for whatever product we buy. Some 80 per cent of new capital expenditures are financed by profits retained out of that dollar bill. They are financed by depreciation allowances, accelerated investment allowances, double depreciation and depletion in the case of mineral resources. These are the things that enable corporations to accumulate the money they invest tomorrow.
The actual investment of these funds is determined not so much by what the consumer wants or what the consumer needs, it is determined more with an accent on the growth that the corporation direction wants or for which it is searching. These are the funds that count. It is not the salaries and wages corporations pay in a certain locality or riding that are important. They are important in a limited way, and deadly important to the people who are employed, but the people who are so employed could also be employed by a wise and expansionary government policy doing things that are perhaps more satisfactory to the consumer. The money that is paid the employee is not nearly as important as the money that is retained. These are charges against the dollar for distribution, for royalty fees, for management fees and for research and development, all paid for by the consumer. The profits are made and used to reinvest for research and development, technology, plants and equipment for tomorrow. If you cede this for the whole future direction you give up not only ownership rights to your economy today, you give up
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ownership rights and the right to direct your economy tor all time.
There is undeniably a tremendous hostility because of the very magnitude of the problem. It will accelerate during the next three, four or five years because at the present time what is worrying the multinational corporations of the world and the three big trading blocs is that an overwhelming proportion of these are owned and controlled in the United States. The Japanese have the funds and the will to acquire their share. They will go searching out. The Europeans will need their share. In this flow of buying out the resources and markets of the world, there will inevitably be a counter reaction of tremendous hostility and resentment. I only hope that when this resentment comes we will have the grace to say it was our fault, mea culpa, mea culpa, mea maxima culpa, and that when finally it becomes a political realization we will say it is something we ourselves should have and could have foreseen and can hardly blame the dependent nations for engaging in it.
I do not want to go any further into the operations of the multinational corporations. I suspect greatly that the claims that are made about the benefits of their technology to countries such as Canada are exaggerated and that if we had a positive economic policy of our own we could easily equal the so-called advantages and expand well beyond them because it is not technical efficiency which counts. It is the relationship of the efficiency to the supply and factors of production of the economy of a country such as Canada. If we rely on the promises of technology we must remember that our problems are much more. The promises of technology really demand tremendous capital and capital is not in surplus in Canada. Normally when you make an economic decision you make it to use to the utmost the factors that are in surplus, as in our case labour and employment, and to husband your resources in the area of capital. You can have a perfectly rational technology and efficiency which on purely technical grounds seems to be superior. If it employs more of the factor that is absent in the economy and less of the factor that is plentiful in the economy then it is not a rational economic decision.
They sell production techniques, but these techniques which they export to Canada and across the world are the production techniques they developed for their own domestic market. That they could be equally suitable to countries all over the world is somewhat doubtful. There is no reason to believe they are. In fact, the introduction of technologies that are superior to the state of the art in many countries creates great strains and stresses which have a distinct impact on the social, cultural and political fabric of each of these countries. As I have suggested we need an over-all attack on the problem. Because the problem is so serious, and so large a part of the population of this country is aware of it and has as they say a gut feeling that something is wrong, I think we need the co-operation perhaps of all parties in developing it. I must simply say that I do not expect that kind of policy to come from what we euphemistically call an establishment here in Canada. I do not expect it. I do not blame the cabinet for this kind
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of a bill. It is the kind of bill which could be promoted only by the people who are here in the civil service.
You know, Galbraith yesterday talked about the structure in the United States and the symbiosis, as he said, of bureaucrats and the great corporations and the social establishment. Symbiosis I suspect is a good word for shacking up or living together. We have the same situation here. It is understandable. You do not find many deputy ministers talking individually with farmers or small businessmen who have gone bankrupt, had tax problems and perhaps had something to say about the kind of policies which led to this. Or you do not find them talking to small entrepreneurs who are successful. The conjunction here, the meeting of the minds here in Ottawa, is between the bureaucrats in the large corporations and in our very large federal departments. It is understandable. They belong to the same jet set. I do not mean the watering holes of the world but rather the same international conferences in the Genevas, the Tokyos, the Parises or the Washingtons. They meet on the same plane and attend these same conferences and meetings.
As I say, they do not see any representative of the real guts or the vast majority of the people who make this economy go. The president and the vice-president of a corporation and a deputy minister have roughly the same standards of living and the same salaries. They have roughly the same size of organization and the same number of employees. They have a billion dollar budget in each case and perhaps more in some cases, but the relationships and comparisons are reasonably of the same order. They have the same motivation. Their 22,000 employees they would like to see grow to 25,000 tomorrow. That would be a significant indication of their importance. Applied to the private sector they are judged now not by the old classic definition of how well they can handle the assets entrusted to them or the profits made but more on the growth of their assets and the growth of the number of employees. This largely applies to departments. They have the same kind of motivation. They also have the same kind of utter confidence in themselves that they know what is good for people. So you find them not really considering the problems of small business or service industries today but how can they goose the economy with some physical leap forward into technology.
Technology for what? To produce things people do not want. It may be the moon, supersonic aircraft or technology to provide services the people do not want. They have the same priorities for destroyers, CF-5's or hydrofoils. Now, the current one going on is that somehow there is a technology of STOL aircraft which might place Canada in the forefront. The large corporations and bureaucrats get their heads together and talk about sums of $200 million to invest in this project. I do not know why people want to go from Montreal to Ottawa in 48 minutes instead of two hours. I do not see how many people, less than one per cent of the population, would ever take advantage of such a service. However, I can see how the people of Canada would pay out $200 million to provide such things as more clothes, better houses, transportation, food, and the things we need in so many areas of our population.

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But I think the greatest bond of sympathy that I can find between the two groups, a bond of sympathy that does not and cannot exist between the average Canadian entrepreneur or farmer and a civil servant, is that they are not operating with their own money. The ordinary farmer and the middle sized manufacturer is operating with his own money, and right off the bat there is a distinction between him and the civil servant. But there is no distinction between the civil servant at the highest level and the bureaucrat of a large corporation; neither of them is making these decisions for our benefit and neither of them is handling his own money. The vice president of a multinational corporation or his board of directors are not operating with their own funds; they are operating with the funds of the shareholders about whom they could not care less because what they are maximizing is their own expansion, growth, prestige and status, and all that they want to do is to give as little to the people who actually own the company as they possibly can to keep them satisfied. Nor is the civil servant operating with his own money. He is operating with the taxpayers' money. So all of his dreams and visions will not cost him a nickel. There is lots more where that came from.
This kind of bill came out of that kind of environment. It did not come from the cabinet or from the members of the caucus who have a political sensitivity to the problem as it actually is and to the depth, width and breadth of the solutions that are actually needed.
I am sorry to say that I would vote for the bill because it is a small step forward, and something is better than nothing, but I will vote for it on that basis only. But after a long period of gestation, far more than the normal nine months, I would like to say that if this is all that the government can bring forward as a response to the kind of problems and to the depth of the problems that foreign ownership represents for the Canadian people, the government would have been better off not to have brought it forward at all.


Mr. Max Saltsman (Waterloo):: Mr. Speaker, it is always a great pleasure to follow the hon. member for Duvernay (Mr. Kierans). Just before I came into the House the usual conversation took place behind the curtains when some government members, in an attempt to find out how long the debate was likely to last, asked me, "How many speakers do you have?" I said that we had three speakers, four if you count Eric Kierans. I am delighted with the position that the hon. member for Duvernay has taken because in some ways he reflects what has happened to a lot of us. I can remember the time when the hon. member for Duvernay was less concerned about the flow of foreign currency, and in some cases took very strong exception to extreme nationalist tendencies. This has also been the case so far as I am concerned on a number of matters.
We are being pressured at the moment to get this bill through the House. The government obviously wants it as some kind of a showpiece. Why they would think it a showpiece is beyond me, but they seem to feel that it is of some benefit to them to get this measure through. I presume that in their view it is of some benefit to the country to get the bill through. There is some suggestion that the

Finance Committee deal with this bill rapidly and bring it back to the House in time to have it passed by the end of June. I think it would be a terrible mistake to rush this bill through the committee and through the House, since it is of so little value. By getting the bill through we may be doing ourselves a terrible disservice in the sense that we will be undercutting the kind of sentiment which exists in Canada to really do something significant about the matter of foreign ownership.
A number of Liberal party supporters are obviously feeling embarrassed about the position in which they find themselves. I am thinking, for instance, of the hon. member for St. Paul's (Mr. Wahn) and the Liberal members who signed the telegram of the Committee for an Independent Canada. They obviously do not see much value in this bill, yet at the same time they are saying it is better than nothing. Even if it is only a small step forward, they feel the bill should go through. I would like to suggest to you that it is not better than nothing, it is worse than nothing simply because it is an attempt to diffuse this whole issue of foreign ownership in Canada with a bill that will not accomplish anything at all.
If we are going to deal only with the question of takeovers, we must ask ourselves what the urgency is. First of all, there is not a great deal left to take over if we start from that premise, and second, since the takeover aspect represents a relatively small proportion of the increases in foreign ownership year by year, I do not see that the Department of Industry, Trade and Commerce, which is going to have the responsibility for screening the foreign takeovers, will turn anyone down in view of the criteria which have been established. I doubt whether any takeover of any industry in Canada could not be made to fit inside the boundaries of those criteria. In fact, if this bill were legislation today, there would be very little difference in the rate of takeovers that would occur in Canada.
So what is the urgency in passing this bill? If we take a look at the key sectors, we find that most of them, such as newspapers, television, banks, transportation, uranium, power and pipelines are now controlled. There can be no takeovers in these areas without the government's approval. On occasions, when there was an uproar and sufficient concern in the country, the government has stepped in without legislation. They did this in the case of Home Oil, in the case of uranium, in the case of Denison, and in the case of the Mercantile Bank. There was no legislation for the government to use. Where was their authority? Apparently they must have had some authority, unless they were acting illegally, because they moved in and definitely stopped foreign takeovers.
The truth of the matter is that the government now possesses all the power that is required to prevent takeovers in Canada if they chose to exercise that power, but in most cases they simply do not choose to exercise it. What we are being asked to do is take the government off the hook and establish criteria which are so wide that virtually any takeover can be accommodated within the criteria. Then, the government can say that the government has passed legislation and everybody fits the criteria. This reminds me of their good behaviour pamphlet which they sent around to foreign owners of industry, telling them that they should be good boys. I have heard
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minister after minister rise and say that there was nothing to worry about because they had all agreed to the good behaviour guidelines that we laid down. Of course, this good behaviour did the government a lot of good. These companies applied for DISC and did not even bother to tell the government what they were doing. I suspect that this takeover legislation will serve as nothing more than camouflage to get the government off the hook about doing something about foreign ownership. Frankly, I would prefer to have no legislation at all, rather than this timid, insipid legislation that will do no good. I would prefer to keep the government on the hook, to keep them under pressure and to keep them responsive to the Canadian people. A great deal more would be accomplished in this way.
Everyone faces a dilemma with regard to the foreign ownership issue. People in my party face a dilemma. I do not suggest for a moment that there is total agreement within my party as to how we should proceed and how far we should proceed. There are differences. But there is one thing on which my party is united. There are no more facetious comments, as there have been in the past from the other side of the House, about the waffle movement and about what we are doing with regard to this. There is one thing on which we are all united. All of us are determined that this country is going to remain independent. While we may not all agree on the exact techniques to accomplish these things-that is an on-going debate-in this party, unlike the other parties, there is an absolute determination to do something about foreign ownership and Canadian independence. I cannot say that about the Liberal and Conservative parties.
There is a kind of tragic dilemma that faces many Liberals. I am sure that all of us in this House come to know each other, regardless of the parties to which we belong, and we develop a fair amount of respect for each other despite our political differences. Mr. Speaker, it is tragic to see what is happening to the good Liberals, to those who want to be Canadian nationalists. They want to stay inside the Liberal party. They think that by staying in the party they can exert pressure from within, that they can change the party's course on foreign ownership and strike a blow for Canadian nationalists. But the fact is that all those well intentioned Liberals have failed.
I do not want to talk about my friends in the Conservative party. When it comes to the question of foreign ownership the differences in that party are so deep that nothing seems to emerge upon which we can comment.


Walter Gilbert Dinsdale: Worry about your own differences.


Max Saltsman: I have explained our differences, and I have been frank about them. You should be frank about your differences in the Conservative party.
Here I can think of my friends in the Committee for an Independent Canada, who sent a telegram to all of us asking us to support a position on Canadian independence, and to take a strong position on foreign ownership. I think of their desperate attempts to justify their political affiliations, at least those who are not in the New Democratic Party, and to reconcile them with their sense of
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Canadian independence and their concern about the future. I think of candidates like Mel Hurtig and other fine people, trying to walk the line, saying, "We can do it within the Liberal party." The question is: can they? I don't think they can. Here I also think of newspapers like the Toronto Star. No one can say the Toronto Star has not fought as hard as a newspaper can for Canadian independence. But still it supports the Liberal party. When it comes to a question of the fortunes of the Liberal party they forget about Canadian nationalists. Other issues become more important to them. All of their prestige, and all of the words of the best editorial writers they can command then say, "It's again time to vote Liberal."
I can also think of my friend, Eddie Goodman, the former chairman of the Conservative party, trying to do the same thing within the framework of the Committee for an Independent Canada. These are people whose loyalty to their parties is so great-I am not critical of them for that because my loyalty to my party is deep-that it poses a dilemma for them. How do you reconcile your desire for Canadian independence with on-going loyalty to your own party? These people are still waiting for change to be made from within. Apparently all the people I have mentioned have indicated that they are not prepared to change their political affiliations. They have said that they are going to work from within their parties. But can they bring about this change? Can they, in fact, accomplish this? I do not think they can.
The reason is that the Liberals, for one, are immobilized by their own outdated ideology of free enterprise. They will not intervene in the economy. If they will not intervene in the economy, then the cause of Canadian independence is hopeless.
I was quite interested in the references that the hon. member for Duvernay made to the other measures that are necessary-how it is necessary to relate fiscal and monetary policies, and how it is necessary to have some kind of an industrial strategy if we are going to deal with foreign ownership. I concur in those statements because while foreign ownership is a problem it is not the only problem in the management of the economy. Unless the whole problem of foreign ownership is put in the context of what we as a nation desire, what social purposes we have, what kind of society we want to be, what our objectives are, how we are going to relate to all industry and not just to foreign industry, what sort of things we are going to emphasize and concentrate on, and how we will relate our monetary and fiscal policies to these objectives, then we cannot deal with foreign ownership.
We cannot bring in related legislation on takeovers. To what are you going to relate it? Will you bring in legislation limiting the ownership? How does that tie in with your plans? Which industry do you say is not desirable, and which is? How does it tie in with your plans? When you have no plans you have no datum. You cannot make decisions of this type. This is one of the reasons I and many other people continue to support my party. We at least realize that without some degree of planning in our society we cannot do anything about foreign ownership. This is the critical point about the entire debate on the foreign ownership issue. Unless the nationalists are prepared to take this position, then their nationalism will go

June 5, 1972
Foreign Takeovers Review Act
down the drain. They will not succeed. This is the dilemma.
The Liberal does not want to take this position very often. He believes in the market economy. He believes in keeping his hands off things. He wants them to run their normal course without government interference. He does not want to take the hard measures that are necessary. These will be difficult measures to take. Those in charge will have to speak with the provinces. Many differences must be reconciled. Planning is not an easy matter. This is not the kind of planning you impose on people from the top down. That kind of planning is neither acceptable nor workable. You must sit down and discuss these matters with all the people involved.
There are some provinces that do not feel the same way about foreign ownership, that think the more foreign ownership they can attract the better it will be. Can you blame a province with a relatively low level of industrial development for saying, "Look, we are not concerned about the ownership. We know it has certain effects on the national economy, but 20 per cent of our people are unemployed. Anyone who wants to come in here and put up a factory is welcome." This is a serious problem, but it is not an insoluble one if you are prepared to do some planning about your economy, and if you can say, "There are ways we can help."
There is another difficulty, Mr. Speaker. Very often questionnaires are sent out ask people if they are upset about foreign ownership. Almost invariably something like 80 per cent to 90 per cent reply that we have too much foreign ownership and that we must do something about it. But when you ask the critical question, "Are you willing to pay a price to do away with foreign ownership"? the percentage drops enormously. If the question is coupled with some antagonism toward the United States, then the percentage goes way down. That is a characteristic mark of this country. If we are going to take action along these lines, then it is the responsibility of the national government to persuade the people of Canada that we can do something about foreign ownership without being enemies of the United States, and without any substantial reduction in our standard of living, or in providing employment. In fact, quite the contrary, Mr. Speaker, because by taking action in some areas of foreign ownership we can increase the prosperity of Canada. I will come to that argument a little later on.
We have been brainwashed by the myth of the superiority of the international corporation. The American businessman has been told this over and over again by people in the highest places. No less a person than a former prime minister of Canada, bolstered by all the business leaders, high civil servants, and the cabinet ministers who listen to them, has been taken in by this myth. The public have been brainwashed into believing that there is some superior business technology that we would lose if we took action against foreign ownership. I do not think that is really true. Foreign ownership of enterprises in Canada makes us poorer, rather than richer. I was interested to read the remarks of the hon. member for Grenville-Carle-ton (Mr. Blair) as recorded in part at page 2654 of Hansard for May 29. He said:

There is much evidence to show that whether or not enterprises have been owned in Canada is irrelevant to their performance in the interests of Canada.
His authorities were Professor Safarian and Professor Watkins. I know the hon. member and know him to be very careful when quoting. Yet, he was not very careful in his research. I think both Professors Safarian and Watkins dealt with aspects of performance of American as against Canadian companies. I do not think they dealt with the efficiency of corporations. Researches I have asked the Library of Parliament staff to undertake establish clearly, I think, the inefficiency of foreign controlled manufacturing industries which have set up in Canada, as compared with the efficiency of companies, private or public, that have remained Canadian. The preliminary evidence, I do not say it is conclusive, tends to rebut the claim, heard often, that ownership makes no difference to performance or that American-owned companies are superior to Canadian. The most efficient manufacturing companies in Canada, by and large, are those which have remained under Canadian ownership, and the most inefficient are those which come under foreign control and are broken up into branch plant operations. This is not because the Canadian entrepreneur is more talented at organizing than his American counterpart; this has come about because the pattern of foreign ownership in Canada has proven ineffective and inefficient and is not suited to the Canadian market. American companies have tried to create in this country a replica of the United States market, a market almost 11 times our size. If you make a suit that is 11 sizes too big for a man, you can hardly expect him to look good in it or walk well in it. Many sectors of the Canadian economy are poorer, as a result of being foreign owned, than they otherwise might be. I will not deal with the outflow of funds. That question was excellently dealt with by the hon. member for Duvernay (Mr. Kierans).
Having said all these things about foreign ownership, I return to my earlier theme. We need to consider the whole business of ownership in some kind of national, planned context. I am not in favour of the outright prohibition of foreign ownership; nor am I necessarily in favour of licensing arrangements, which are more and more entered into. Sometimes a foreign corporation, instead of establishing a branch plant in Canada, will licence a Canadian manufacturer to produce a commodity in this country. I have seen some licensing agreements; some are worse for this country than the presence of the foreign corporation. For instance, they sometimes insist that the product shall be sold only in the Canadian market, at a price considerably higher than that charged in other countries. In many ways such agreements limit Canadian manufacturers and impose conditions which are little short of slavery. What is worse, since the conditions are invisible, the people of the country are unaware of the difficulties that may be created by such licensing arrangements. Perhaps some licensing is good. Really, I am suggesting that our difficulty is not with foreign ownership alone.
If we pass this legislation and attempt to prohibit takeovers, how can we deal with a company that says, "If you will not let me take over a corporation, I will start a new company." Nothing prevents the setting up of a new cor-
June 5, 1972

poration. What will happen if the new corporation is to do business in an already overcrowded field? What would happen, for instance, if a tire manufacturer were to establish himself in this way? At present, virtually every United States tire manufacturer operates in this country, as well as one from France. The tire manufacturing field is already overcrowded. Permitting industries to be established in an already overcrowded field and thereby permitting an even greater fragmentation of such industries would work a disservice to the Canadian economy. It would not be a benefit.
Also, a company could say, "Fine; although we are not allowed to take over a company, we will set up in competition to it and drive it out of business." That company may have a thousand times the assets of its competitor; it could lower the price of a commodity and drive its competitor out of business. Actually, big, foreign corporations have available so many options that the takeover route is sometimes the kindest of all and may be preferred to driving another company out of business. How will the government decide, when faced with such situations, if foreign corporations are or are not to be allowed to operate in this country? I do not think the government will be able to decide in these matters. I think it will rubberstamp every request for a takeover that comes before it.
In opening the debate for my party, my leader made an interesting suggestion that has been made by others. He suggested that we ought to use the money in our foreign exchange reserve fund to buy back some Canadian companies. This would accomplish a number of things. There is approximately $5 billion in the fund. It is a source of embarrassment to us. If we took that $5 billion and went to the New York Stock Exchange, say, and began buying shares in some American corporations or repatriating foreign obligations, we should obtain a number of benefits. First, we would rid ourselves of that embarrassing fund of money that is not doing us any good. I am, of course, talking about our foreign exchange reserves. If we were to participate in this kind of "buy back", we should lower the value of the Canadian dollar and stimulate manufacturing in this country. Of course, no doubt some hon. members think that this is such an unusual scheme that it has not been tried. Well, let me say Japan is carrying on a somewhat similar policy. Japan is in a position similar to Canada's, in that Japanese currency is appreciating rapidly. This has resulted in unemployment and in pressures being exerted in that society. That country also has some foreign debt. It is taking money that has been built up in its foreign exchange reserves and is repatriating that foreign debt. I think we can do much the same. Let us use imagination and exercise courage.
It is important to plan because, today, ownership is not as important as it once was-at least, it is not all that important. Whether companies are foreign-owned, domestically owned, publicly owned or privately owned, power in a democratic country, as people become more involved in the political process and understand better what is happening in politics, rests more with the people. It is the government of Canada, by and large, that possesses overwhelming power, not General Motors. We have recently witnessed confrontation between the public power and private power. We must not be confused merely because the government has backed down. Sometimes, it chooses
Foreign Takeovers Review Act
to back down. When the government does not choose to back down in a confrontation with the private sector, the government, exercising the power of the people through representatives elected to Parliament, wins. We have seen this often. More important than legislation such as we are now discussing is the willingness of the government to act when the clear necessity arises to act within the context of an over-all plan.
Some foreign ownership, I think, may be advantageous for us. I think of some areas in which foreign ownership is helpful. To the extent that it is helpful for this nation, I say, why should it not be permitted here. On the other hand, much foreign ownership is not of advantage to Canada. You know, the old idea "The more foreign ownership, the better" has caused us lots of trouble. We can no longer make that assumption. What we have to do from here on is ask foreign ownership to make its case because a case has not been made with the philosophy of the more foreign ownership the better. This is creating a lot of difficulties for this country.
We should be prepared to look at foreign ownership, but first it has to make its case, not just on a takeover because that does not relate to anything. It has to make its case in terms of its expansion from the use of internal funds and with regard to whether it is going to open a new factory. We have never before asked that that be done. We have not created a framework whereby we can judge the case it is trying to make or created a mechanism whereby we can tell what benefit to Canada their operations will be.
We all know that no country is completely free. As much as I would like to see it completely free, with no strings attached, just as I as an individual would like to be completely free with no strings attached, there is not this kind of complete freedom for anyone or any country. We want a world where we are interrelated, have some concern for each other and want to help each other. There is going to be some interdependence. The crucial question is not whether we are totally free, but the extent to which in this kind of interlocking world we can preserve the maximum freedom to pursue our own objectives. That is becoming more and more difficult with the high degree of foreign ownership in this country.
This government does not seem to have the foggiest notion about how to proceed with the problem of foreign ownership. On one hand, they bring in this legislation which states that any company with assets in excess of $250,000 under takeover threat is going to be examined. How do you determine that? There are many ways this can be hidden from the government if a company so chooses. The corporations Act does not call for the disclosure at the $250,000 level. It must be in the millions before disclosure is required. The Canada Development Corporation cannot step in and take such action. It cannot purchase anything unless the assets are in excess of $1 million.
We had the Unemployment Assistance Act. When the government of the United States imposed a 10 per cent surtax, instead of taking other action that was open to it, this government, in a panic, said "Don't worry about it. If you lose any benefit, we will give you a benefit. We will up

June 5, 1972
Foreign Takeovers Review Act the ante." With the reduction of the corporate tax to 40 per cent, this has now been put into permanent legislation. That was an attempt to outbribe the Americans under the DISC program. I do not think we can operate in this way. There is no indication whether or not we want all these companies, whether they are worth bribing or of what value they are to us. It has come to the point where the government is making such substantial bribes that we wonder whether the whole thing is worth it. We do the same under DREE. There is increasing evidence that these companies would have located without the bribes.
There is no real science policy. I notice that the Minister of State for Science and Technology (Mr. Gillespie) is in the chamber. I have been looking to him for great things. To date, all I have been getting has been nice speeches crossing my desk, but no science policy. We were hopeful that once a member of the cabinet was designated to be responsible for science, we would hear something. If something is going on, we are not hearing about it. I suspect there is still no policy and that we are still passing out money in the vain hope that perhaps some of it will do some good.
The government is either walking or running around, depending on their energy on any given day, in a grand flap. They do not seem to know where they are going or what they are doing. The air force used to call it "situation snafu". That means it is all "fuddleduddled". I remember what "snafu" means.


Mr. McCleave:: Fouled up is what you mean.


Max Saltsman: They are more careful of their language in the air force than in the House of Commons, which is saying something.


Walter Gilbert Dinsdale: The gentlemen of the air force.


Max Saltsman: It is for many of these reasons that I feel the legislation is unsatisfactory and should not be passed. Therefore, I wish to move the following amendment, seconded by the hon. member for Regina East (Mr. Burton):
That Bill C-201 be not now read a second time, but that it be resolved that in the opinion of this House the government should give consideration to the introduction of a measure providing for an independent review body answerable to Parliament with power to limit and control new foreign investment in Canada and the expansion of foreign-owned corporations already established in this country, as well as the take-over of existing Canadian corporations.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. The Chair would like assistance on the procedural acceptability of the amendment moved by the hon. member for Waterloo (Mr. Saltsman). Hon. members may argue that it is declaratory of a principle in opposition to the principle of the bill but even if that is the case, and I do not admit it to be at this point, it does seem to me that the proposed amendment goes considerably beyond the scope of the bill which we are now considering. It deals with the expansion, for example, of foreign-owned corporations already established in this country. I cite that only as an example that comes to mind from taking a quick look at the proposed

amendment. I would be very pleased to have the assistance of hon. members.


Mr. Jerome:: Mr. Speaker, as might befit the occasion, the amendment is an ingenious attempt at orderliness, but I submit that it is procedurally unacceptable for two or three reasons. First, if the amendment is accepted, it would raise a most obvious difficulty in that it proposes the establishment of an independent review body which is answerable to Parliament. This body would have the power to limit and control, not only the subject matter that is envisaged in the bill, but a wide range of subject matters.
I think it is accepted as a matter of course that if such a body is to have any function and power, it would have to be supported by a staff and secretariat in order to be competent and operate as would be envisaged by the motion. The body would have to be staffed by talented, capable economists and experienced persons who would command a substantial salary and require staff to support them. Obviously, there would be a considerable expense to the public treasury which is not envisaged in the recommendation from his Excellency. It cannot be seriously argued that if such a body were set up it would not create, or require, that sort of expenditure; the hon. member would not suggest that it would act on a voluntary basis and that its support staff would do the same. So, there is a fundamental difficulty.
In addition, I would submit two further considerations. First, the question immediately arises whether the amendment is really opposed to the principle of the bill, as an amendment on second reading must be. I am sure the hon. member and his colleagues do, in fact, accept the principle that control should be exercised over takeovers by foreign investors of undertakings in Canada. So what they are really saying is that they agree with the basic principle of the bill calling for control, but require, or suggest, that control be exercised by a different body in a different way and that it be exercised over a wider range of transactions than presently contemplated. In short, they are saying that the principle of the bill is acceptable but that its provisions do not go far enough.
The precedents are so clear as to scarcely need citation. In this situation, amendments of the kind the hon. member has in mind are not in order, for the obvious reason that if the principle of a bill is accepted, specific proposals can be examined in detail during the clause by clause study in committee at which time amendments can be put forward. In addition, amendments of this sort can be introduced at the report stage to flesh out the skeleton of ideas now before us-amendments to clauses or the addition of further clauses to the bill to accomplish the objective the hon. member wishes to pursue. In other words, an attempt is being made here to propose amendments to the bill by the device, not of moving such amendments now, which would be clearly out of order, but by seeking to amend the motion for second reading and thus having the government consider the introduction of a totally different kind of measure. The device of referring this back to the government is, therefore, a means of getting around difficulties which would arise in making
June 5, 1972

specific amendments to the bill itself; it is an attempt to do indirectly what cannot be done directly.
I submit, therefore, that the proposed amendment is clearly out of order. It is obviously irregular to go into the merits of the provisions of a bill at this stage, yet this is what the amendment would envisage. A third difficulty is that it goes totally beyond the scope of the bill itself. It goes beyond the scope of the recommendation, as I have said. For all these reasons, I submit that the amendment is out of order.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, may I say, first of all, that some of the arguments used by the Parliamentary Secretary to the President of the Privy Council may have merit. There is one he used, however, which can surely be disposed of quickly. In his opening remarks, he suggested that the amendment would involve the expenditure of money and was out of order on that ground. I would draw to his attention, and to yours, Mr. Speaker, that the whole of the amendment is governed by the phrase "in the opinion of this House the government should give consideration to the introduction of a measure-". It is an understanding as old as this Parliament, Mr. Speaker, that when a member asks the government to give consideration to something, it is not an instruction. Therefore, acceptance by the Chair of this amendment, or its passing, would not be an instruction calling for the expenditure of money; it would only be an expression of opinion that consideration be given to the proposal set out in the resolution. I put it to you, therefore, that the argument that the amendment proposed by my hon. friend is one involving the expenditure of money does not carry any weight at all.
The parliamentary secretary had a good deal to say about the fact that because the amendment suggests things which go beyond the present bill it should not be put forward now. He invited us to wait until we get into committee, or to the report stage, or to third reading. I suggest to him, since he is fast becoming No. 1 or No. 2 in the procedural efforts from that side of the House, that if we sought to do these things at the committee stage or the report stage he would be the first to get up and say we could not do them because they went beyond the provisions of the bill.
I have dealt with these matters first because I do not believe them to be serious, as is the basic point which arises with increasing frequency as we try to move reasoned amendments. Although there are a hundred years of precedents in this area, it strikes me we have developed some restrictive jurisprudence in the last few years. For example, it now seems to be established by the Chair that the mover of a reasoned amendment must not only be in direct opposition to the bill, but that he must be opposed to the principle of that bill. If that is his position, the mover of such an amendment is then entitled under the terms of Citation 382 of Beauchesne, Fourth Edition, to move an amendment setting out the reasons he is opposed to the principle of the bill and suggesting other ways of dealing with the matter. My hon. friend, the member for Waterloo (Mr. Saltsman) has made it clear that he is opposed to this bill. He even went so far as to say that it is not a case of its being better than nothing-it is worse than nothing.
Foreign Takeovers Review Act
However, I am prepared to admit to Your Honour that you sometimes say it is not enough for us to express opposition to the bill; we must be opposed to its principle. Well, one of the things which is sometimes a little difficult to sort out is the principle of a bill. What is the principle of the bill before us? One might easily say that it does not have any, but that is hardly a procedural point. The principle of this bill is the provision of an arrangement under which a Minister of the Crown may review takeovers of Canadian companies already established in Canada. That is all it does. We are opposed to that principle. We think that in its place Parliament has the right to ask the government to bring in a bill to provide for foreign investment, foreign takeovers, and the extension of foreign ownership or foreign influence in Canada, to be reviewed by an independent body-not just by a minister-that is answerable to Parliament.
It is because we think that that alternative, while it is in the field of foreign investment and foreign ownership, is so distinctly opposed to the principle of this bill that we contend it is the type of reasoned amendment that Your Honour ought to consider very seriously, even in the light of the dicta that have been laid down by the Chair in recent weeks. There is no question about our stand on the bill. We think it is worthless and we intend to vote against it. We think that, in principle, it is wrong to handle this matter by putting this namby-pamby power in the hands of a minister. We think it is wrong in principle to confine activities under legislation of this kind to one area only.
Having stated our opposition to the principle of the bill and to what it tries to do, we have proposed, as we think is our right under citation 382, an alternative; and our motion asks the House to call upon the government to give consideration to that alternative. Therefore, Mr. Speaker, because this is an alternative and is presented by members who want to see this bill proceed no further; we contend that the amendment meets the terms of a reasoned amendment and should be put to the House.


Mr. Deputy Speaker:: If there are no other members who would like to assist the Chair on the procedural argument, I should like to thank the hon. parliamentary secretary and the hon. member for Winnipeg North Centre for their assistance on the question whether or not this is a reasoned amendment which the Chair should accept as such. When the amendment was proposed by the hon. member for Waterloo (Mr. Saltsman) I indicated that I had some doubt whether it was in fact a reasoned amendment as defined by the authorities which bind the Chair. Despite the very lucid and helpful arguments of the hon. member for Winnipeg North Centre, I must tell the House that he has been unable to convince me that this amendment does meet the tests required to make a reasoned amendment acceptable to the Chair.
I think there is no disagreement on the authorities; the parliamentary secretary dealt fully with them. The hon. member for Winnipeg North Centre stated-and I agree with this-that a reasoned amendment must be declaratory of a proposition that opposes the principle of the bill before the House for second reading. This, of course, is very well established in May, in Beauchesne and in the precedents which the Chair must follow.

June 5, 1972
Foreign Takeovers Review Act
I should like to deal with this matter firstly on the basis of whether or not the proposed amendment is in opposition to the principle of the bill. With respect, I do not find that it is. The title of the bill is "An act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons". I think I would fairly describe the proposed amendment and the argument of the hon. member for Winnipeg North Centre if I were to say that he is proposing another way, an enlarged or different way, in which to achieve the same objective and also to do other things. If this is the case-and I believe it is-I do not think he is opposing the principle of the bill but is suggesting another way in which the objective of the bill might be obtained. On that basis, I would have to say that I cannot accept the proposed amendment.
The parliamentary secretary raised two more points. I agree with his first point that the proposed amendment does seem to go beyond the scope of the bill. It not only suggests an alternate way of dealing with the matter with which the bill attempts to deal; it also suggests that the independent review body would deal with other matters as well. I mentioned before the expansion of foreign owned corporations already existing in this country which is referred to in the proposed amendment. It would seem to me that that provision goes beyond the scope of the bill before the House.
If I may deal with the third point for the record, it was argued by the parliamentary secretary that this proposition would involve the expenditure of funds. I would agree with the hon. member for Winnipeg North Centre on this point. The amendment is merely asking the government to give consideration to such expenditure, and that is all. However, that is not the point on which my decision turns and I refer to it only because both hon. members who argued the case referred to it.
For the two reasons I have mentioned, I very much regret that I cannot accept the proposed amendment as a reasoned amendment that comes within the rules.


William Gordon Ritchie: Mr. Speaker, in speaking in this debate on foreign ownership I should like to put forward some ideas of my own on the problems involved in this issue. It seems to me that one of the most important facets of foreign ownership and control of the Canadian economy is to have some clear idea of what the different types of foreign investment are and their effect on the Canadian economy. Government statistics indicate that Canada's liabilities to foreigners as at the end of 1970 amounted to a little over $49 billion. However, only half of that sum was foreign investment in companies controlled by non-residents, including overseas owners as well as those in the United States. The rest consisted of financial investments by non-residents in stocks of Canadian companies, bond issues of Canadian governments and corporations, and short-term investments. Certainly this part of foreign investment in Canada does not represent ownership and control in any sense.
I should like to look at some aspects of this particular half or portion of foreign investment. The present NDP government of Manitoba has been a large borrower in the United States market since it came to power. Its premier, Mr. Schreyer, had only been in office a couple of weeks
[Mr. Deputy Speaker.)
when he found it necessary to go to New York to arrange a loan. Just this week German financial interests made a loan to the government of Manitoba, which presumably was just a roll-over. This is an indication that the province of Manitoba needs foreign money to carry on its business affairs.
This morning the Montreal Gazette reported that the New York market had raised a loan of $150 million for the government of Quebec. This loan was defended by the premier of that province as being necessary and useful to the province. The James Bay project, with which the province of Quebec would like to continue, demands a $6 billion investment, probably even more, and it is considered there is no way that this money can be financed, given the present state of the Canadian economy, within Canada. Without these borrowings by various provincial governments, the provinces would not have been able to proceed with the building of these schools, hospitals and highways at anything like the volume we currently enjoy. I do not think there is anyone in this House who would be willing to say the provinces should have been curtailed in their borrowing rights if that had meant a reduction in any of the social services our people enjoy. Indeed, it is well recognized that the federal government has been most adamant in forcing on the provinces a high level of social services.
Recently, there has been an inflow of capital into Canada for mortgage loans for residential buildings. Certainly, in this case ownership and control remains in Canada. When it is considered also that Canada has abroad $21 billion worth of investment, this helps in turn to off set the flow of capital into Canada and bring us into balance. If you subtract the $21 billion from $49 billion, you get to the stage where we have a net imbalance of $28 billion. It is perhaps not so bad, when you consider that our gross national product is approaching $100 billion a year, to have a net deficit of $30 billion. That is not so great considering the immature state of development of our economy.
For instance, the recent tax legislation goes further in the way of limiting foreign securites that Canadian pension funds can buy, presumably on the philosophy that savings which are available for investment in stocks should be bottled up in the Canadian market. Canada wants to keep this money at home, but at the same time wishes to obtain free access to the United States capital market. We have indicated this in many ways, particularly in respect of borrowings for Canadian provinces. In some ways it seems to me we are kind of wanting to have it both ways. We want free access to the New York market but we propose to limit the access of Canadian capital to the U.S. market. All this makes for a certain amount of trouble.
It seems to me, whether we like it or not, United States investment is one of the principal vehicles of technological progress we have available to us. The hon. member for Waterloo (Mr. Saltsman), who spoke just before me, mentioned that his study showed Canadian manufacturing was superior to manufacturing by foreign-owned companies. If that is so, it seems unusual that we have one of the highest tariffs in the world to protect our manufacturing industry.
June 5, 1972

In the last two years we have seen the government move in the textile industry so that foreign textiles have been kept out and have largely disappeared from our shelves. United States investment, with its large technological know-how, seems to be needed by us for at least the foreseeable future. If this U.S. technological know-how is unavailable or closed to us, as well as other technological know-how from western Europe and Japan, surely we in the long run will be poorer for this. It is doubtful whether our citizens would put up with a lower standard of living than our neighbours enjoy, particularly to the south of us. Technological know-how from other jurisdictions surely increases rationalization and modernization in our own economy. It forces our manufacturers to more productivity and presumably increases the standard of living of all our citizens.
In the recent tax changes made by the Minister of Finance (Mr. Turner) when he presented his budget greater stress was placed on tax incentives for the manufacturing industry. How will we obtain this high level of technology in manufacturing, particularly when it is recognized that our high priced manufacturers must sell largely in the United States market, unless we are willing to procure technological know-how from other countries?
In respect of Canadian banking institutions, it is pointed out they are doing business with other countries. Apparently, as Canadians, we are happy to have them do this, yet we have designated banking as one of those segments in which we do not wish any foreign investment. So, it seems in this area we have considerable differences of opinion and a collision of ideas.
Official statistics suggest there is a high percentage of foreign ownership and control in certain of our industries such as petroleum, chemical, rubber, machinery and manufacturing. It has been found that when a corporation changes from being foreign-owned to Canadian-owned it does not necessarily change its way of doing business or does a better job so far as the Canadian public is concerned. For instance, the CPR has been majority Canadian-owned just in the last decade, yet have there been any discernible changes in the policies of the CPR? I have yet to see them. It is just as actively engaged in discouraging travel by passengers as it has been in the past. I met one citizen who made the journey from Lethbridge to Winnipeg without ever having to turn in his ticket.
In the case of petroleum and natural gas, the recent decision of the National Energy Board, which was strictly political, to not export natural gas is an indication that this industry can be effectively controlled without foreign ownership. Without foreign investment there would at the present time be no western petroleum industry. This has all been developed with United States capital and a little western Canadian capital. Eastern money was not available or eastern investors were not interested in investing in the western oil industry at least to the present time.
It is often said that foreign investment is capital intensive and, therefore, we should not encourage it because it does not employ a lot of labour. The province of Alberta, with its rapidly growing cities of Edmonton and Calgary, demonstrates that oil and gas create a climate for the employment of a large number of people. It is estimated that over one million people are dependent in western
Regional Economic Expansion
Canada on the oil and gas industry. This represents 20 per cent of the total population of western Canada.


The Acting Speaker (Mr. Boulanger):: It being five o'clock, the House will now proceed to the consideration of Private Members' Business as listed on today's order paper, namely Notices of Motions and Public Bills.



PRIVATE MEMBERS' MOTIONS


Mr. Murray McBride (Lanark-Renfrew-Carleton) moved:: That, in the opinion of this House, the government should consider the advisability of extending the designation of Renfrew County for special incentives under the Regional Economic Expansion legislation beyond June 30,1972.
He said: Mr. Speaker, on December 10, 1969 an almost identical motion was moved in this House by me. My concern then, as it is today, was for Lanark and Renfrew Counties, and I asked that they be named as special designated areas under the then new Regional Development Incentives Act. I was on that occasion ably supported by the hon. member for Renfrew North (Mr. Hopkins). Our representations in the House more than two years ago were but the tip of an iceberg, being that portion in view to the public of much larger representations we were making as vigorously as possible to bring federal assistance to eastern Ontario and to obtain an improved and better life for the people we represent.
In April, 1970, just four months after my motion was debated in this Chamber, the Minister of Regional Economic Expansion (Mr. Marchand) named Renfrew County as a special area. This good news, which some said would never come, was met with startled disbelief, followed by a real sense of joy and enthusiasm by all who live in and love the Ottawa Valley. For too long too many people, especially in the Renfrew County area, have been living in the outer regions, just beyond the fringe of economic growth, so they have become accustomed to a very average and mediocre future as part of their lot. It is therefore a real source of satisfaction for me, as the federal Member of Parliament for a large portion of this county, to be able to play a part in breaking this block to progress. For two years now the county of Renfrew has been designated.
Two years ago the western world was in the midst of a very severe set-back in the aircraft production industry. The whole industry was in bad shape. This hurt Renfrew in particular which was very dependent upon that industry. Similarly the county had a natural dependence and tie-in with the forest industry which needed to be restructured. The forests needed to be better harvested and better utilized. The federal government under the leadership of the Prime Minister (Mr. Trudeau) not only had sympathy for the poorer areas of Canada but took action and set up a whole new Department of Regional Econom-

June 5, 1972
Regional Economic Expansion
ic Expansion, the sole purpose of which was to assure a greater degree of equality and justice for people such as those I represent so that our dream of a continuous and varied industrial growth could become a reality and a steady stream of new job opportunities could be provided for the young and old alike. This progress, along with a solid agricultural base, is giving the people and the area I represent the kind of confidence for the future we all want to have.
Allow me now to be more specific. What has happened since April of 1970 when the designation was made? I refer in my participation this afternoon to only the eight townships I represent, the townships of Westmeath, Ross, Bromley, Admaston, Horton, McNab, Bagot and Blythe-field along with towns such as Cobden, Renfrew, and Arnprior. I am sure other speakers will follow me in this debate in respect of areas of the county which they represent. I hold in my hand at the moment a sheet which lists some 15 different grants which have come into my portion of the county alone. I shall not take the time of the House this afternoon to go through all of these, but they cover a large section from Waba at one end into Arnprior, Renfrew, Cobden and Westmeath. In other words, it is pretty well distributed over the entire area of my constituency. I shall simply refer to the total value of the regional economic grants approved for Renfrew County. The amount under this designation since 1970 has been $3,313,706; in other words, just over $31 million of federal aid to create employment and sizeable job opportunities in this whole area. I will deal with this in more detail later. The momentum has just built up and some announcements of real significance will be made in the very near future.
I believe it might be wise to place on the record this afternoon something which confuses some members of the public concerning regional economic expansion designations. When a grant is approved some persons assume that somehow the new industry has received into its hands the amount of money announced. That is not the case. When the federal government announces the approval of a grant, this means simply that representatives of a certain company have come to the government, have said they propose to establish a facility to produce this many units of a certain product and want to know what proportion of the capital cost the government is prepared to contribute if they locate in a slow growth, designated area.
After analyzing the market for the product concerned, after analyzing the need for it and after analyzing the possibility of producing it with the facility suggested, the government will either approve or not approve a grant. In the case where a grant is approved the important point is this. It is then up to the company to go out, raise the funds, build the facility and purchase machinery, equipment and so on. It is only when the new facility comes into production that the money is indeed and in fact paid out. Even then the whole amount is not paid out. Under most of these plans, 80 per cent of the grant is paid out when the facility first comes into production and the other 20 per cent in 36 months or three years. The reason is very obvious. It is to protect the public purse from some fly-bynight operator who might come in and not have a worthwhile company. He may not be prepared to go forward with the project. There is no way any member of this

House would want to see the government provide money without ascertaining that the company is a worthwhile company and ready to put in some of its own money and actually go forward.
When I speak of $31 million in federal grants being approved I mean just that. They are approved. All the money is not paid out yet, only to those plants now in production. This is the main point of the motion before us today. It takes some time for industrial development to occur. It takes time to bring in these facilities. Among the 15 I have listed here-and again this is only in my portion of the county-a few have not yet gone into production for one reason or another. Always there will be some which may never go into production. Therefore, it is essential and incumbent upon the government, in my opinion, that this designation be not terminated on June 30 as now scheduled but be extended beyond that date. Ideally the designation should be continued for another three years, but at least for an absolute minimum of one and a half years or 18 months. That is the purpose of the motion I have moved today. It is to encourage the government, and to set out in this Chamber the need for having this designation extended.
It takes time to become located. Now, more industrial growth is coming into the county, but it has taken time for the people on the local scene to get organized in order to take advantage of the assistance the federal government has made available to the county. In the Renfrew County area, we have overcome the set-back caused by the closing down of the Renfrew Aircraft and, indeed, the spin-off effect on Haley Industries and some of the set-backs which came to the area because of the pressure on the aircraft industry. However, the long-term advantages of a viable and flourishing forest-based industry have not yet been achieved. The dramatic intervention of the federal government is still needed because the forest industry has not yet reached a point at which this resource can be properly harvested and moved forward. I see in the House the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack) who has within the boundary of his constituency a greater forest area than I have in mine. This is also true in the case of the hon. member for Renfrew North-Nipissing East (Mr. Hopkins). Possibly they will wish to take part in this debate and therefore I shall not refer further to the forest based industries.
I mentioned at the outset of my remarks that in 1969 I asked to have Lanark County included in the designated area. The situation in Lanark, in 1970, was ruled to be less severe than in Renfrew. Only Renfrew County was designated. The motion before us today refers only to Renfrew County. It was placed on the order paper on February 23. Just five days later, on February 28, 1972 we were all shocked to learn that Findlay's Limited in Carleton Place announced it was closing down as of the end of May. That announcement followed all too closely on the heels of another very negative announcement that Digital Equipment intended to withdraw from the town of Carleton Place. The point I am making is that Carleton Place is not in Renfrew county, it is in Lanark county.
As long ago as December, 1969, I stated in this chamber that in my opinion the designation was needed in both
June 5, 1972

Lanark and Renfrew counties. The government and the officials saw fit to provide the designation for Renfrew county but not for Lanark. It did seem that since that date there was some justification for their decision because certainly the circumstances in Renfrew county were severe. But the point I want to make very clearly this afternoon-a point which I made a few days ago in the Committee on Regional Development-is that the circumstances have shifted recently, and now I firmly believe that the needs of Lanark county, and in particular of the Carleton Place region, are equal to if not more severe than the needs of Renfrew county. So I would make an appeal here that the DREE designation of Renfrew be not considered in isolation but that the needs of the wider area be taken into account at the same time.
Following meetings with the Carleton Place officials at the end of February and in March, it was soon revealed that the Ontario Development Corporation was covering the area of Lanark, and so for some weeks in March and indeed in April I was convinced that perhaps it made sense to have the county of Renfrew under the federal plan and the county of Lanark under the provincial plan, and to have a division of responsibilities. However, if press reports are correct, the province of Ontario through its minister, Mr. White, just over one week ago announced, without any prior consultation with the federal government, that no further Ontario Development Corporation forgiveable loans would be forthcoming to foreign owned firms. The fact of the matter is, regardless of how any member of this House may feel about foreign owned industries, that many of the firms who are interested in settling in these more remote, smaller towns such as Renfrew or Carleton Place or Almonte are indeed foreign owned. Therefore, one week ago a sudden change was introduced and Lanark county was thrown into a serious disadvantage.
I raised this question in some detail a few days ago in the Committee on Regional Development at its meeting on May 30. I would certainly like to draw the attention of anyone interested in this question to the record of proceedings of that particular meeting as it appeared in issue No. 14, where a very lengthy and detailed discussion was recorded between myself and the officials of the federal department as to just what would be the future of a community like Carleton Place when it was suddenly placed at a distinct disadvantage, since many of the industries that would be interested in settling there with the assistance of the Ontario Development Corporation would now naturally migrate a few miles further to the county of Renfrew to get the advantage of the federal designation under DREE. This is a problem that is extremely serious. If you are in a high density population area it is not so urgent, but when you are in a more remote area where industrial development is more difficult, then a sudden shift like that upsets the whole balance.
I appealed to the Minister of Regional Economic Expansion (Mr. Marchand) at that meeting on May 30 to consider filling this vacuum that had suddenly been created by the Ontario government's withdrawal. I see my time has almost expired, but I would like to conclude by saying that the county of Renfrew needs more time to develop the forest based industry. It needs more time to take advantage of the new industries which we have been able
Regional Economic Expansion to get, a large number of them spread through the whole area. But I also want to say that in my opinion Lanark county has suddenly had a severe kick in the pants and has been placed at a serious disadvantage. I want to quote one short section from the record of the proceedings of May 30 of the Committee on Regional Development which reads as follows:


Murray Arndell McBride: I will ask a question which is really a representation. In view of this statement by ODC, will the minister assure this committee that he will give every possible favourable consideration to the designation under DREE of areas like the depressed areas of Lanark that are now going to be left at a significant disadvantage?


Mr. Marchand (Langelier):: We are going to discuss this with the government of Ontario, and if this decision of ODC changes the situation to a large extent, of course it might bring us to revise certain things that we have done.
I want to assure the House and to publicly assure the minister that there are many people in the Ottawa valley today who sincerely wish and hope that the federal government would move to take up the slack that has been created by this change in provincial policy. I want to assure the House that I will do my part to encourage the minister to give every possible favourable consideration to including, especially the northern part of Lanark county which includes Almonte and Carleton Place, in some kind of a special area, or else to meet again with the province and get them to reconsider their action.
In conclusion, I want to say that the federal designation of 1970 has meant that more federal funds have come into Renfrew county than ever before in its history, and this is being appreciated by myself, as the local member, and by the people there. It has brought a whole new future to the area. It must be continued so that we can finish what is now well under way.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Boulanger):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Assiniboia (Mr. Knight)-Grain-Request for forgiveness of overpayments to farmers in light of forgiveness of duties and taxes owing by car manufacturer; the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack)- Penitentiaries-Suspension of regulation making inmates financially responsible for wilful damage to property; the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall)-Manpower-Local	Initiatives	Program-
Response to requests for additional sums and extension of time for completion of project.
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[Stage Direction]
June 5, 1972


[Stage Direction]
The House resumed consideration of the motion of Mr. McBride:
That, in the opinion of this House, the government should consider the advisability of extending the designation of Renfrew county for special incentives under the Regional Economic Expansion legislation beyond June 30,1972.
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, in rising to take part in this debate, I wish to compliment my friend, the hon. member for Lanark-Renfrew-Carleton (Mr. McBride) for his opportune motion.
I take it that the hon. member is asking that the present designations and rates be extended beyond June 30, but he does not state for how long. Under the Pearson government, and before redistribution, when we first had legislation providing for treatment of certain designated areas, none of those areas were located in any part of the riding that I then represented. That was the riding of Prince Edward-Lennox. In that riding at that time we were forced, and we still are forced to stand on our own feet, pay federal, provincial and municipal taxes, and do without the benefits of designation. Thus, I was obliged to take the stand that since the undesignated areas received no special benefits, and had to continue to pay taxes to stimulate the designated regions, this did little net good over the whole national scene. That is logic that cannot be refuted. The more assistance we give to certain areas, then the bigger the load that unassisted areas must bear.
Although I support the hon. member's motion because I now find myself representing 12 townships and two incorporated villages in the Barry area to which this designating motion applies, we have found that in spite of quite a long and fairly productive period of designation there is something still wrong. The forest industry, and all the other business such as secondary industry, that we thought would be immensely benefited, are still impaled upon the hazards of taxation and poor markets. I now contend that the government should extend further tax benefits to these firms and help them find markets for their products. I know that the hon. member for Renfrew-Lanark-Garleton is listening to me, Mr. Speaker, because here I am referring to markets for wood pulp and wood chips.
The lumber market in that area is fairly good. The price of maple is at an all time high. The mills are paying $85 to $90 a thousand for spruce logs. That indicates they are getting good prices for sawn lumber. However, the market for pulp and wood chips is in a turmoil and uncertain. There are some companies which got assistance under ARDA, and others that are hoping to receive grants under DREE, that do not know what the next quarter will bring with respect to marketing of the products for which they may receive assistance to manufacture. The government, the House of Commons, and all private members in it are
[The Acting Speaker (Mr. Boulanger).]
finding out that designation is not just everything we thought it would be. There must be some better plan of assistance for primary industry, especially for the small primary industry we have in the Ottawa valley.
If we are to do as my colleague recommends, and extend this arm of benefits beyond June 30, "then I must insist that the northern part of the counties of Lennox and Addington, and the northern part of Frontenac be included in this designated area, plus the five townships of western Lanark which I have the honour to represent, including North and South Sherbrooke, Bathurst, Dalhou-sie and Lavant.


An hon. Member:: You might as well get a share of the pork barrel.


Almonte Douglas Alkenbrack: An hon. member says that we might as well get a share of the pork barrel. I point out that three applicants in the township of Raglan in the western part of Renfrew county have had no satisfaction from the Department of Regional Economic Expansion to date. This would indicate that the pork barrel must be pretty well used up. More than one industry in the Renfrew county portion of Frontenac-Lennox and Addington has applied for assistance, and has not yet received any benefits.
The forest industry in my area can still be classed as a primary industry. Although the government has encouraged the establishment of pulp and paper mills helter-skelter, indiscriminately and unwisely across the country, it has not tried to encourage any secondary manufacturing in the forest industry in the Ottawa valley. There is a pulp mill at Portage du Fort just across the river from Pembroke, and I wonder why we cannot have one on our side. Our people from Ontario have to market their plup wood there sometimes at a disadvantage. Sometimes they do not get full measure for their product, a product which they have to draw many miles. I ask why cannot a study be made into the feasibility of a pulp mill on our side of the river in Renfrew county? Such a mill could manufacture the wood into pulp, and possibly into paper. It would be a secondary form of manufacturing which could employ some of the manpower we have there. It would employ more people than the primary production to which we have been confined for so many years.
Diverging from the wood industry for a moment, Mr. Speaker, I would like to point to a very energetic and economically viable maple syrup industry in Raglan township, which is the result of a brilliant man's mind, the result of much work, and the result of patents held by this individual. By vacuum action he pipes the maple sap from each tree. He has over 50 miles of plastic piping conducting the sap to a very modern sugar house. It contains the most modern equipment, costing thousands of dollars. I understand he has spent over $40,000 on the operation he now has. It produced this year about $20,000 worth of maple syrup of the very best quality. This man was unsuccessful in his application for help from DREE. He applied but was given short shrift. The other day I said to him, "I suppose you have received a grant from the federal government." He said, "No, not one cent". He received very little from the provincial government. He is now operating
June 5, 1972

on his own credit and doing fairly well. I think such an industry deserves assistance. He was given none.
I suggest that we need better tax incentives for industry in the Ottawa Valley. I also suggest to the House that there should be better marketing assistance. When the government considers these two items positively and specifically, tax incentives and marketing assistance, I am sure it will find that less cash will be needed from what hon. members have called the pork barrel.
Can anyone say with credence-I ask hon. members to answer this question in their minds-that any one county is at a disadvantage in the total, over-all picture when one considers industrial progress? Is any one county at a disadvantage under the status quo, say in western Ontario? I think not. Is any one county in eastern Ontario at a marked, lamentable disadvantage? I think not. We are too closely related, socially and economically, for that to be the case.
That is why we might be better off it we looked more at the vital questions of taxation and marketing instead of saying to a man who wants to borrow money to buy another chipper with which to make more chips from his wood lot, "We will give you a certain percentage per man that you hire." Perhaps the project the man has mapped out will not work if he is given a grant under those conditions. This is another area that should be more clearly defined. I know a man in my riding who approached DREE for assistance in a chip and lumber industry. His is a most reliable firm. The application is being processed. I have recommended the firm and hope the minister will approve the necessary financial assistance and permit the company to see its project through to the end. The firm has been in business for a long time. It is reliable and will continue in business whether or not it receives the grant. Other firms in the same area and business have already received grants from DREE. I insist that everyone should be treated in a similar fashion.
In closing, Mr. Speaker, when we talk about the development of parts of Lanark, Renfrew, Carleton or the counties of Frontenac or Lennox-Addington, I ask: what about the development of all eastern Ontario? In adopting this motion, why not adopt a broader outlook? I say there must be a similar assessment of our problems and that the whole area must be treated equitably so that all undertakings in eastern Ontario are given an equal chance. Others here will speak for western Ontario. I support the hon. member's motion in the hope that the program may be extended and that it will bring some of its anticipated benefits to our area.


Mr. John Burton (Regina East):: Mr. Speaker, I listened with a good deal of interest to the remarks of the hon. member for Lanark-Renfrew-Carleton (Mr. McBride). I listened to him sympathetically as he put forward a case for the needs of his constituency. I think we could all speak of particular problems facing our constituencies. Using the vehicle of his notice of motion, the hon. member was able to outline to the House some of the problems facing his constituents. I know a little about his constituency, having had occasion some years ago to work there. I found the people particularly hospitable and got along
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Regional Economic Expansion
well with them. I assure the hon. member that I enjoyed very much the short time I spent there.
In the motion before us I note that the hon. member has made specific reference to an area of his constituency. As I suggested, I cannot blame him for finding an opportunity to deal with the problems of the people he represents. At the same time, I must express my view. I had hoped that the notice of motion might be based on a somewhat wider view of the situation. Problems and policies connected with regional development and programs of the Department of Regional Economic Expansion affect the whole of Canada.
I am sure the hon. member appreciates that policies and decisions concerning a particular area of his constituency can hardly be made unless we consider also the situation in other parts of Canada. Thus, I think we must consider other factors as well, particularly-as has been pointed out-the fact that current designations under the Regional Development Incentives Act and the Department of Regional Economic Expansion Act are due to expire at the end of June. The minister has indicated on a number of occasions that he expects in the near future to make an announcement concerning future designations. Naturally, quite a few members of this House are interested in particular areas and in the basic policy approach that will be adopted by the minister during the next three years for future programs which the department may undertake.
This matter is critical, Mr. Speaker. I am sure all hon. members agree with the objectives of regional development. The removal of regional disparities in Canada is something to which we all subscribe and on which we all agree. If we are to achieve these objectives we must examine some important considerations. The department structured its program in a way that would provide for a review of the situation at this time. I think this is a good time for us to consider what the department has done up to the present and where it will go from here.
As I listened to the hon. member for Lanark-Renfrew-Carleton I noted that there are a couple of policies which need to be questioned. One of his assumptions seems to be inherent in the thinking of some people who deal with economic problems. The very simplistic idea that one hears expressed either clearly or in somewhat vague terms is that all that is necessary to solve the problems of an area is to get industry to move in; all that is necessary is to dangle a carrot in front of them, then no problems will follow and everyone will be happy.
Many of us have learned through observing the scene that this is simply not the case. It does not deal with the problem. New industries have moved into particular areas and benefits have accrued from their establishment. However, this has not removed or solved the basic problems of these areas. We have to find something more. We must find an appropriate way of dealing with the problems of economic development and the whole social and economic picture of the region with which we are concerned. We must achieve better integration of government programs.
One of our concerns at the present time is pollution and environmental problems. This question came to my attention last year when there were problems involving the

June 5, 1972
Regional Economic Expansion establishment of a pulp mill in Saskatchewan. This became a political issue in my province. The government of the day, which is no longer in power, wanted to establish a pulp mill. It twisted the arm of the federal government to get a commitment for a regional development grant. It was quite a large grant, $12 million or more. The federal government said it would insist that the new pulp mill in the Meadow Lake area meet all the pollution standards being established by the Department of the Environment. I had occasion to question the deputy minister and some of the officials of the Department of the Environment. I was assured by various officials of the Department of the Environment. I was assured by various officials, including officials of the Department of Regional Economic Expansion, that this firm and the provincial government were really serious about tackling the pollution problem. They saw no reason why they could not solve the problem.
We all know what happened in Saskatchewan. The government of that day was defeated in 1971. The new government, in honouring a commitment it had made during the election campaign, undertook to wind up the agreement that had been signed for the construction of the pulp mill because it felt the benefits that would accrue from this development were not commensurate with the very large cost involved. It took a great deal of courage to make such a decision.
I do not have the clipping before me at the moment, but last fall I read a news article which appeared in two Saskatchewan papers. The article reported an address given by a top official of the Department of the Environment; as a matter of fact, one of the officials whom I had questioned in May, 1971. He assured me there would be no problem in dealing with pollution. However, after the agreement had been wound up, this official, Mr. K. C. Lucas, said in Saskatoon that the pulp mill never had a hope of meeting the pollution control standards being established by the Department of the Environment. The story that came out was what we had suspected all along. It came out when it would not do any harm to certain people who had a political stake in that mill. This is one of the concerns we must have.
Another example involves the hon. member's constituency. I understand that a charcoal plant was proposed for the community of Wilno in the Madawaska Valley. I think that is in the hon. member's constituency. The hon. member is shaking his head in the negative. In raising this matter I want to make it clear that I am not jumping to conclusions; I am simply raising some points that have been drawn to my attention and which I feel deserve consideration. These involve some of the considerations we must bear in mind when dealing with the whole question of industrial development and attracting new industry to areas.
Some time ago an announcement was made for the construction of a charcoal plant in the community of Wilno. No doubt this was welcomed by some people. In making the announcement, the Minister of Regional Economic Expansion (Mr. Marchand) said it should be clearly understood that the conditions of the agreement on which the grant was based required the company to meet all the anti-pollution standards laid down by law. He stated that

no money would be forthcoming from the department unless the anti-pollution equipment met the standards laid down by law. He did not specify in that announcement whether he was referring to federal law or provincial law. The information I have may be subject to correction, but I understand that the Department of Regional Economic Expansion was simply going on the basis of standards set by Ontario provincial authorities. I am not in a position to judge whether those regulations are adequate or not, but I raise the question.
This should be a matter of interest to the federal Department of the Environment. Even though it may not have legislative authority to deal with a matter of this nature, other departments such as the Department of Regional Economic Expansion should be able to draw on the Department of the Environment for a judgment on the adequacy of standards that are maintained where a grant is proposed by the Department of Regional Economic Expansion.
Another area where there is cause for greater integration and co-ordination of effort is grants to foreign-owned or controlled firms. I have raised this matter on a number of occasions in the House. The question is before us for debate today under the government's bill concerning review of foreign takeovers. We are dealing with a piece of legislation which, however inadequately, proposes to provide a review mechanism in respect of a foreign-owned or controlled firm proposing to take over a Canadian firm or enterprise. At the same time, the Department of Regional Economic Expansion is to continue its current policy of providing grants to firms and applicants no matter whether they are Canadian owned and controlled or owned and controlled from outside Canada.
If the objectives in the foreign takeover review bill, Bill C-201, are to be accomplished it is inconsistent for the federal government to carry on its present policy through the Department of Regional Economic Expansion of continuing to make incentive grants to foreign-owned and controlled firms without any other policy development.
Over the past three years the Department of Regional Economic Expansion has spent $1.2 billion. Another $500 million expenditure is proposed for the current fiscal year. Already $250 million has been committed under the Regional Development Incentives Act in grants for the establishment of new industry. Much of this amount still has to be spent. I suggest that there is no evidence of progress in overcoming regional disparities through this program.
The fact is that the federal government and the Department of Regional Economic Expansion have indicated that this is a priority program undertaken in an attempt to overcome regional disparity. The program simply has not been successful. I am not suggesting there is not a place for some grants being made to industry, whether public, private or co-operative, but the emphasis which is being placed at the present time by the department on giveaway grants must be changed because it is not serving the function it should be serving and the people of Canada are not getting the value they should be getting for their money.
June 5, 1972

I continue to believe that regional disparity must be overcome. It must be the subject of priority attention because inequality in the distribution of our national wealth remains one of the greatest threats to our nation. When we do review this program there are certain provisions which should be incorporated in it.
First, direct state intervention is needed to establish an industrial strategy for each region. The federal government in co-operation with the provinces must be prepared, at least at the outset, to invest directly in enterprises which can be viable in the long term.
Second, the corporate tax structure should be overhauled so that taxes reflect the real social cost, such as overcrowding and congestion, of industries locating near cities such as Toronto, for instance, as opposed to the Maritimes, the Prairies or Renfrew county.
Third, a carefully planned infrastructure program coordinated with industrial development is needed. Co-ordination is presently impossible because the department only responds to propositions made by corporations which present applications, and such proposals are only haphazardly tied to the department's program for giving slow-growth regions the basis they need for development.
Fourth, there must be a greater measure of consultation with the provinces and with local governments and organizations. Regional development cannot work effectively if the support of the people in the region concerned is tepid because their views have been set aside. This program needs overhaul. I know that all of us are committed to the principle of overcoming regional disparities in Canada, but we must find more effective ways of doing so than have been presented up to the present time.


Maclyn (Mac) Thomas McCutcheon: Mr. Speaker, I am honoured to have an opportunity to support the hon. member's motion and to spend just a few minutes before six o'clock commiserating with him on the difficulty he faces because one part of his constituency is designated while the other is not.
Long before he became a member of this House I experienced the same upsetting arrangement in Lambton-Kent. In those days, areas to be designated were decided on the basis of unemployment figures originating in various Unemployment Insurance Commission offices. This arrangement left a terribly grey area affecting the jurisdiction of the Wallaceburg unemployment insurance office and the Chatham office which at that time was not designated. Thus, I have reason for sympathizing with the hon. member and I am pleased to support his motion, particularly since he has called for an enlargement of the designated area. I am sure I speak for him when I say it must be uncomfortable to contemplate a high degree of unemployment in Lanark involving the closing down of plants, while just a little way north in Renfrew everything seems to be booming.
In Lambton-Kent we also carry on a lumber industry, though not to nearly such an extent as the country which the hon. member represents. I was in conversation the other day with a sawmill operator who was forced, as part of the fight against pollution, to make a $50,000 invest-
Foreign Takeovers Review Act
ment in a wood-chipping machine. He is going to make wood chips and sell them to the United States. One of my hon. friends asks whether they will be used to make charcoal. No, these wood chips from southern Ontario go through a manufacturing process in which they are made into inexpensive pressed board.
When the policy of assistance to less developed regions was first announced by the Minister of Regional Economic Expansion (Mr. Marchand) on March 11, 1970, he outlined the area in Renfrew which was to be covered, but in the closing part of the statement he said-I am quoting from his announcement-that the agreements being made with the provinces would be for the same period as the designations; for most of the areas, however, it was expected that these agreements would be followed by further joint development plans extending over a five-year period.


The Acting Speaker (Mr. Boulanger):: Order, please. The time allotted for private members' business having expired, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Pepin that Bill C-201, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
William Gordon Ritchie: Mr. Speaker, before the dinner hour I was pointing out that the oil and gas industry had brought to western Canada an estimated one million in population, or 20 per cent of the population of the west. With our period of high unemployment during the last two decades, I was posing the question where these one million would have found a living, whether in Toronto or Montreal. Certainly, without United States capital the oil industry would not be nearly as far advanced as it is today.
Then, again, I pointed out that recent discussions have been going on in this House and the country at large over the proposed Mackenzie Valley pipeline. Looked at in a dispassionate way, it seems that the best route for bringing oil and gas from the Arctic is down the Mackenzie Valley and into continental North America. Construction of this valley pipeline really depends upon whether Alas-

June 5, 1972
Foreign Takeovers Review Act kan ecologists can convince the United States government that a pipeline through Alaska is not in the best public interest.
In view of the efforts of the Alaska Chamber of Commerce and other people involved, including those who build tankers and people on the west coast and in the United States who need oil, it is likely the Alaska pipeline is the one that will be chosen. What about our own position? It is considered that a $5 billion pipeline is clearly beyond our capacity as a nation to build on our own in the immediate future. This seems to be another example of what will happen without foreign investment because it will be a considerable time before a pipeline is built down the Mackenzie Valley.
The 13 Liberal rebels have expressed dissatisfaction with the government's proposed legislation. They consider it weak and inadequate. These hon. members are all from Ontario, the province which has benefited most from foreign investment as shown by the Ontario government survey. This is also the area which has access to large amounts of Canadian capital.
The proposed takeover committee implies massive government scrutiny of Canadian business. There is great concern professed in respect of what the private sector is doing, yet almost half our gross national income is being spent by the three levels of government. It is time the government reconsidered what it is doing. Surely there is now less leeway for the private sector to have initiative on its own. Presumably, in respect of foreign takeovers each company will be required to manufacture and trade in the interests of the country.
The greatest difficulty is, of course, that the committee will be almost completely political. We will have the same situation as under Bill C-176, the marketing act, where the government will determine where the agricultural industry is to be located. We already have, in the Canadian Dairy Commission, a body that locates industry using politics rather than the market as the determining factor. This new act also will allow the government to decide where industrial activity will take place in Canada. In view of the regional character of Canada, it seems to me past experience has shown that industrial activity will take place in those areas which have the largest representation in Parliament, and this means central Canada.
The necessity of the committee always making decisions with politics foremost in mind is the main weakness of this board concept. Surely the demand on the members of the committee will be so great that it will only make a superficial examination of takeovers. With all the questions involved, such as how many jobs will be created, will Canadian management be employed, will money be spent on research and development, and will export markets be developed-all very nebulous and difficult to answer-I do not think a committee could more than superficially examine any particular problem. Every new company hopes it can accomplish these things but only time will tell whether they are successful.
If the committee functions in any sort of meaningful way in attempting to assess any proposition, it will be years behind in that assessment. It will have many of the

problems which face the Russian state planners. It seems likely that this committee in practice will not function unless it is willing to assume a very large role in the Canadian economy. It certainly is a vehicle by which discrimination against the peripheral parts of the country could be carried on. I hope that when the bill reaches committee many of these aspects in relation to the potentially very powerful committee will be thoroughly investigated. At that time we will have an opportunity to discuss how the committee might best function.


Mr. Bill Knight (Assiniboia):: Mr. Speaker, I rise to participate in this debate because of its significance to the future of this country, about which my generation is very concerned, particularly in terms of the direction in which we move in controlling the operations of our economy and, in that respect, our society.
It is a long time since the original reports on foreign investment and ownership of Canadian industry were published. There was a great deal of expectation in society that this government, or any government, would make a concrete move in dealing with foreign investment and foreign ownership. We have heard a number of members, including members on the government side, express concern about measures proposed to deal with foreign control of our economy.
We have heard a great deal about foreign ownership being sovereignty versus multinational corporations. These corporations have developed under the British system on the basis of democratic control. Governments are concerned with seeing that the needs of people are met and governments must deal in politics. But multinational or domestic corporations are concerned only with one aspect of the lives of people. There is a fundamental difference between the role of the multinational corporation and the role of the government.
When societies such as that of the Unites States were developed with foreign capital, in most cases investment from Great Britain, those societies maintained control and ownership of property. In this way there was mainly a development of domestic firms. These firms are responsible to the government to the extent that government is representative of the people. Domestic firms were easily controlled, regulated and watched. But in our society in the second half of the twentieth century there has been a fundamental change from sovereignty and national government to international corporations, so that governments such as ours and those of the United States and Great Britain, are caught in a complex situation, having to play one interest against the other. Because of the essential interests of multinational corporations, the government of the United States has been put in the position of having to adopt legislation such as DISC in an attempt to involve these corporations in domestic production. Whenever this is done it immediately affects the economy of countries such as Canada because these countries have allowed their economies to fall into the hands of foreign ownership, thus losing sovereignty in a good many respects.
This difficulty becomes greater when political parties are financed by the corporate aspect of the economy, because it is their responsibility to continue their position of economic power. Because of the manner of develop-
June 5, 1972

ment of multinational corporations in the last half of the twentieth century, many difficulties have arisen. A multinational corporation of the United States operating in Canada serves as a means of draining brainpower while concentrating manual labour in one country and skilled workers in another. Quite often they frustrate geographical planning by the use of investment power. If allowed to locate development where they choose, they can redirect their investment power on an international scale, thus injuring the country in which there has been some control over or planning of investment.
Quite often they can regulate their income, their investment and their profits, if you like, so that they can pay taxes in whichever country has the lowest tax rate. This, once again, allows the corporation to play one country against another country for special concessions and breaks. This was pointed out in the budget brought down by the Minister of Finance (Mr. Turner), in terms of tax cuts.
Some people ask what is the future of multinational corporations. George Ball of the United States State Department says that the structure of multinational corporations will be used to develop a supernational world going beyond nationalism, where profit is the personal motive of economic development. He could be correct in some way. He could well be correct in pointing out that the multinational corporation may set up its own system of allowing the development of international government of a kind which I would find extremely threatening.
As many of my colleagues have pointed out, not only is there need for action by the national government of Canada in coming to grips with this problem and question of foreign ownership, which is not tackled by any means in this piece of legislation, but there is need for national governments be they in Great Britain, in Canada or in the United States, to re-examine our role with each other in terms of developing on the world scene a kind of international examination of the role of multinational corporations and the possibility of setting up certain aspects of international standards to deal with these multinational corporations.
So when it is suggested that there must be international co-operation, along with the government of Canada being prepared to tackle the problem, one can see how important it is that the government come to grips with this problem very soon. Governments will have to co-operate to force multinational corporations to disclose full information concerning their operations. To realize this one need only cite the example of secrecy surrounding, according to the Minister of Industry, Trade and Commerce (Mr. Pepin), the DISC program which I think in terms of the world scene has proven to be counterproductive.
Furthermore, governments among themselves should pass co-operative legislation to set up standard charters or documents of incorporation which would establish certain regulations and certain manners in which multinational corporations could deal with the economy. Governments should set up intergovernmental regulations for adjustment among themselves to prevent corporations
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playing one government against another. They should consider government representation on boards of directors as well as partial public ownership as a mechanism of control. Governments should refuse corporations the right to operate without the government having a holding in them and setting up a joint holding body for the purpose.
What I am suggesting is that not only is the legislation introduced in this House completely ineffective in coming to grips with the issue of foreign ownership but, further, the government in co-operation with other governments on an international scale must come to grips with the matter of setting certain standards and regulations for the operation of multinational corporations.
Foreign ownership in Canada is neither a new issue nor an issue which will become old with time. It is perfectly obvious, by the introduction of this legislation, that the government sees very little need for tackling this important question which faces the Canadian economy. Throughout our history we have developed this country on the basis of opposing north-south development in such a sense as to fragment and break up the nation. Sir John A. Macdonald developed a plan to build the Canadian Pacific Railway in the manner in which he did, in the hope of avoiding control of that corporation by United States interests. There was great controversy, as there should well have been, concerning the way in which the CPR should be built. But one of the effectual and important things was that it was done in such a manner that there would be Canadian control as he saw it in the 1870s and 1880s.
We have developed our nation, as well, through disputes over the Alaska boundary and our concern about arrangements in respect of the international boundary with the United States. We established an international boundary commission to check into the matter of water resources. So since the early days of Canadian confederation we have continually, in one manner or another, sought to develop the kind of economy that would maintain our political independence from the United States of America.
By the 1960s we should have reached a decade of decision, but it passed without any decisions being made. We had report after report. I need not go into this. We had a call for action by different groups in our society in respect of an independent Canada. This involved people such as Walter Gordon. In 1961 the founding convention of the New Democratic Party called for the development of nationalism of a positive nature, not narrow nationalism such as was developed in the 1930s in Europe but positive nationalism which would show that we want Canada to remain a free, independent nation.
We expect this to be done only by a government which brings about a true concept of Canadian control of the economy. Control of the economy by a foreign country, no matter which one, brings about, in the political realm, a certain amount of loss of independence on the part of the people whether it be through Russian control of the Polish economy or United States control of ours. The dimension might be different but there is the fundamental question that people who do not control their economy cannot control their government and their democratic system.

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Foreign Takeovers Review Act
It is in this decade, and I believe in the next ten or perhaps 20 years, that essentially we must come to grips with the problem or find ourselves having to talk of reforming the whole of North America in a continental system. If we do not come to grips with the problem now, my generation and generations to come will find themselves more and more involved with the United States of America and its economic system as well as its corporate control.
I had hoped that after the groundwork was laid in terms of reports, this decade would be the one in which there would be action to try to develop a truly independent Canada. But with the government in power and Her Majesty's Loyal Opposition both essentially tied to the corporate interests, I do not think, nor do I believe, that the Liberal party which is holding on to the concept of continentalism will ever come to grips with this issue unless there is a fundamental restructuring of politics in Canada and a strengthening of the position of the NDP.
We have had a decade wherein we should have made a decision, but the end result is this piece of legislation which is before us now. As the hon. member for Waterloo (Mr. Saltsman) and the hon. member for Duvernay (Mr. Kierans) pointed out, it is almost an act of treason in some sense of the word for this kind of legislation to be produced, a piece of legislation which deflates the great anticipation of Canadians and of the younger generation that we will come to grips with foreign ownership in our economy, that we will really delve into the problem, show some imagination and hit it head on.
Why does a foreign company invest? It invests to make higher profits relative to the risk it must take. Some people suggest that because of the small market in Canada, Canadian subsidiaries do not have advantages in production. However, Canadian subsidiaries of international companies usually hold a superior competitive position with similar domestic plants simply on the grounds of their relationship with the parent company. This allows them to expand and grow to the disadvantage of the domestic plant, and thus it allows an eventual takeover.
There is no aspect of this bill that deals with such expansion on the part of such corporations, no attempt to curtail it and redevelop the direction in which we are heading. The smaller size of the Canadian market is not a hindrance to these multinational firms but, in fact, leads to the establishment of small plants and thus increases the advantages of the multiplant corporations which give the small plants access to large-scale markets. This lowers the cost as well, which gives multinational firms a further advantage oyer the domestic plant.
Many sectors of our economy have fallen into foreign ownership, such as Canadian patents 90 per cent of which are foreign owned, 70 per cent by Americans. Foreign ownership of industries is highly concentrated in what I would call an oligarchical position where they fix prices in terms of the Canadian economy. When people talk of the free enterprise system where there is competition, I suggest they talk of something that is far removed from reality.

Foreign ownership is highly concentrated in industries which have control of the market, such as the tobacco industry, the automobile industry, aircraft, oil, rubber, etc. Corporations may generate millions of dollars of profit to their shareholders. However, one must consider where the shareholders reside. The multinational corporation hinders the more equal distribution of income. One need not delve deeply into the tax system in order to note the kind of corporate tax cut which we saw in the budget which further enhanced the position of multinational corporations in the Canadian economy.
Many members of the House have pointed out in the past some of the difficulties which we face in terms of controlling our economy and have given examples such as the one referred to by the hon. member for Duvernay in his speech last fall when he spoke of the income tax bill relating to our exports and the control of our economy. He said:
An additional $1 billion export of energy to the United States, for example, would give us in this country $68 million in wages and salaries. But that balancing inflow on which Mr. Connally and Mr. Nixon are insisting in manufactured goods could mean that we are importing anywhere from $200 million to $350 million in their wages and salaries, depending on the industry. If it is the furniture industry, we would be exchanging $68 million for $330 million. If it is the textile industry, 26 per cent of $260 million on an average of their output is composed of wages and salaries. If it is agriculture, wheat or products like that-and I am at no time speaking of pulp and paper or wheat and fish and hydro electric power, which are renewable resources; I am speaking of nonrenewable resources and agricultural products-the average is 26 per cent. If it is pulp and paper, the average is again 26 per cent. So we are exchanging 6.8 per cent or $68 million out of $1 billion, for $260 million. We cannot have our cake and eat it too. It is some exchange! There may be a balance of trade in dollar terms, but there is no balance of trade in jobs or wages and salaries.
This points out the dilemma which we now face in Canada. We are in fact exporting jobs, salaries and skilled labour. Further to that, as I previously mentioned there is the relationship of the multinational corporation to the whole area of the laws of the country. What develops in the multinational corporation, in an economy controlled by it, is a duality, one loyalty to the laws of the mother nation and the other to the laws of the parent company. Both of these can affect the trading aspects of the nation. The American anti-trust laws and trading with the enemy act both affect the kind of trade and distribution that Canadian industry has allowed when it is controlled by the parent company. American moral, political and economic judgments are fostered in foreign nations through the roots of the multinational corporation.
As I suggested previously, corporations take away Canadian talent which is in the hands of the parent company. Some of these remarks are based on comments made by such people as the vice-president of Dupont Company of Canada who once stated:
Clearly any subsidiary is always the chosen instrument of its parent company. The very reason for its existence is to carry out the function of the parent in its designated sphere of activity and it must recognize this relationship in all its actions.
That is the loyalty to the parent company. Therefore, what develops is a kind of over-all government policy, a policy that affects people in the multinational corporations and people in control of the domestic affairs of the nation, and thus the government loses that kind of power.
June 5, 1972

Direct investment by multinational corporations erodes the decision-making process of citizens, and this is essentially what has been happening in the Canadian economy.
What is the reaction of this government? The government has not set up a screening process. It has set up nothing more than a smokescreen to hide its deficiencies in the realm of policy regarding foreign ownership. I do not think the dismal failure of this government to come to grips with the matter of foreign ownership can be understated. It merely sets up a smokescreen. There have been a number of editorial comments dealing with this subject. The Financial Times of Canada, in an editorial headed "The Missing Policy", wrote:
The government has been talking out of both sides of its mouth. It wants to reassure business that nothing drastic is planned. At the same time it is trying to tell Canadian nationalists that this may be only the first step towards more stringent controls. Some hints are being dropped that real limitations on foreign ownership are merely postponed until the employment outlook is brighter.
The cabinet appears to be split on the issue and several ministers are visibly unhappy about what has been produced, Even after two years of study and debate it appears that the Trudeau government felt obliged-presumably by the approach of the election-to say something about foreign ownership when it hadn't made up its collective mind what to say.
The first part of that paragraph is where the essential truth lies. The government is trying to produce a bill and then go to the people and say it has done something about foreign ownership, but in fact it will have done nothing. As an hon. member has already said in this debate, directors of multinational corporations can roll over and go back to sleep because they have nothing to worry about from the actions of the federal government. The Montreal Gazette, in an article headed "Ownership Policy Puny, Invites Trickery" which appeared on page 10 of its May 3 issue, summed up what the government has done as follows:
The mountain has laboured and brought forth a mouse-
Not only does the government's decision disregard the principle recommendations of its own major task force headed by revenue minister Herb Gray, it also falls far short of the objective outlined by Prime Minister Trudeau himself.
"As a government, our minimum posture is to maintain the status quo," Trudeau told Southam News Services chief Charles Lynch last November.
"American control of our oil and petroleum is 95 per cent, we wouldn't like to go to 99 per cent; the American control of our manufacturing industry is 60 per cent, we wouldn't like it to go to 80 per cent-and so on, and I think if we tell the American people this, they will understand it"-
Takeovers simply aren't the principal problem.
In what the Gray report calls "a more or less normal year," takeovers account for only some 5 per cent of the increase in the assets of Canada's foreign-controlled corporations.
New investment from abroad plays a much more significant role. And the most important fact of all is the expansion of foreign corporations already established in Canada.
I repeat the statement that the most important factor of all is the expansion of foreign corporations already established in Canada. The government has not seen fit to deal with this fundamental question. What the government should do in the future, as has been suggested in this House previously, is create a stronger role for the Canada Development Corporation, to institute a kind of planned
Foreign Takeovers Review Act
economy which develops our country on the basis of the essential needs of Canadians and not on the basis of the essential needs of corporate interests.
While the leader of my party was speaking in this debate he was asked a question about grains and wheat and it was implied that he was talking about the manufacture of wheat in Canada into flour before shipping it abroad. To me it was a preposterous question. Wheat and similar products are non-renewal resources, but the minister in charge of the Wheat Board was comparing them with products that are renewable resources. It is those which we presently ship abroad and buy back as finished goods; the minister should know that.
Essentially, what I have suggested tonight, Mr. Speaker, is that we in Canada must take action on the international scene to persuade other governments, those of Great Britain, of European countries and of the United States to work out the standards which multinational corporations must meet and the roles they must play in the economies of the world. Such steps must be taken, along with much stronger action by the government in terms of developing domestic control of our economy.


John Stratford Burton: Mr. Speaker, this bill is making a mockery of Canadian nationhood. It is the type of measure which leads to confusion, misunderstanding and resentment among Canadians. It is the type of bill that places Canadian nationhood in jeopardy. Canadians have a right to expect more forthright leadership from the government than is demonstrated in this bill. The government of Canada, whatever its political persuasion, has an obligation to provide more effective leadership to the nation than has been demonstrated in this bill.
Many strains face Canadian nationhood at the present time. I suggest that this type of weak, ineffective response to a serious national problem can only intensify these strains. Canadians at the present time are searching for their identity. They are seeking to remove inequities and disparities that exist in our nation. But what does the government do? Having allowed much of our industry, much of our economy, the control of that industry and our economy to be alienated from Canadian hands, the government says, "We are not going to do anything about that. We are going to do something about future takeovers and future mergers of firms." I suggest that this will not help Canada in its search for identity and in finding ways and means of overcoming some of the problems we face at the present time. I suggest that the record of the Liberal government is pretty bleak and dismal in this whole area.
We can go back a number of years to the early 1960s. First of all we had Walter Gordon who came on the scene shortly after the Liberal government assumed power in 1963. He may have had a somewhat misplaced faith in certain institutions in Canada, but nevertheless all of us must be prepared to give him credit for his courage and for a very imaginative proposal that be brought forward, which unfortunately was shot down somewhere along the line.
I am sure there are some members on the other side of the chamber who remember that incident very well, members such as the Minister of Labour (Mr. O'Connell). At that time, Mr. Gordon presented a proposal for a takeover
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tax which could have prevented some of the problems we are now attempting to wrestle with and which we have been discussing. Following that, Mr. Gordon and some of his associates had to determine a course of action. Eventually they appointed a committee which produced what has become known as the Watkins report, which made a number of proposals to assist in attaining more effective control of the Canadian economy. These proposals were rejected by the government of the day.
Then we had proposals for a Canada Development Corporation. They really originated with the policy convention of the NDP in 1961. Subsequently this idea was picked up by a number of people, but with some variations. One of those people was Walter Gordon. He presented some proposals in this regard. They were shot down. A bill was presented to the House of Commons while he was minister of finance but never saw the light of day beyond its introduction.
Finally, in 1971 we had a bill to establish the Canada Development Corporation. I am sure most people were looking forward to a creative and imaginative proposal. I suggest it was nothing of the sort. We established an institution, a new corporation, and it was set out clearly that it was to be profit-oriented, that it would be privately controlled and that the government's stake in the corporation after it was established was to be limited to 10 per cent. This new instrument as established cannot be, as it develops its operations, an effective instrument for developing our national development policy. The measures which have been enacted cannot change the course of foreign investment, foreign ownership and foreign control of the Canadian economy.
As a result of a great deal of pressure which the opposition exerted on government, a study was undertaken. It was decided to study the question of foreign ownership. This was commissioned in the spring of 1970 and, of course, questions on this matter have been raised in the House of Commons frequently during the past two years. As late as last fall, and I have information I could give in detail if anyone doubts my word or memory-


An hon. Member:: No; good heavens!


John Stratford Burton: -we were assured on a number of occasions that the matter was still under study and that the government had not made up its mind. Later, information came to light clearly showing that the government had made its basic decision last July. It came to light on July 29, to be precise, through a document published in the Montreal Gazette or Montreal Star-I forget which-which clearly appeared to be a copy of a cabinet memorandum that had been leaked.
It was clear that despite what the Prime Minister (Mr. Trudeau) and members of government said on a number of occasions in months subsequent, the government had made its basic decision on this matter last summer. More work was to be done and further discussions were to take place. Finally, May 2 was to be the big day. I can only comment by saying what a ghastly performance that was. What a shameful performance. I am surprised the government had nerve enough to present such a policy to the

House as its answer to the problems which have been discussed for so long.
The government had had this matter under study for two years. As well, a voluminous document was presented to the House of Commons representing the studies and reflections connected with this subject. However, when it came to action being taken we found that there was to be a much more limited response by the government. I ask, does the government seriously think this bill will do the job? What does this bill show about the Liberal approach to public affairs? I suggest the Liberal party does as little as it can get away with. It does not want to disturb anything. It does not want to upset the present power structure in Canada. It does not want to offend the 95 corporations on which it depends for its support. The Liberal party is not truly committed to the process of social change and advance. It will move when it is forced to, when it must and when it has no other choice.
Before May 2 last we witnessed a most curious situation involving the Liberal party and the Progressive Conservative party. The Liberal party, on the one hand, had traditionally been known as the continentalist party, the party which advocated the continental approach to our economic affairs. It appeared that changes were taking place, that the party might be prepared to take action and change direction. The Progressive Conservative party, on the other hand, traditionally had been known as the nationalist party, the party that was concerned about nationhood and had taken stands in the past on that question.
We found in recent months the leader of the Progressive Conservative party (Mr. Stanfield) making statements to the effect, "Let us not scare the Americans. Let us not harm our relations with the Americans. Let us not cut off our source of foreign capital." I am sure that, many faithful, sincere and loyal supporters of the Progressive Conservative party winced and shook their heads as they heard their leader make those statements.
I read carefully the speech of the hon. member for Fundy-Royal (Mr. Fairweather) who began speaking for the official opposition in the debate on this bill. I think he added to the confusion surrounding this situation. I think the approach of the hon. member for Fundy-Royal was at variance with the approach his Leader took, as expressed in statements he has made in recent months. The hon. member correctly noted some of his concerns respecting the bill. He noted its ineffectiveness, some of the problems it must deal with and expressed the view, as I interpret it, that the bill will not accomplish much in dealing with the problem it was introduced to deal with. What sort of topsy-turvy situation affects the Liberal and Conservative parties? It seems they are both in a total state of confusion. Neither is willing to take effective action to stem the erosion of the Canadian economy, to develop alternative approaches or to develop alternative instruments of policy.
In addition, it must be said that the Prime Minister's role in this entire debate has been somewhat pale and ineffective. In his statements of recent days he has adopted a most cautious stance which does not do him credit. He suggested that if this bill were held up in the House of Commons the consequence would be serious. He said
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opposition parties would be held responsible if the bill were held up and did not pass before the end of June.
Let us examine that assertion in the context of what has happened. As I noted, the study of this matter was begun officially by the government in the spring of 1970. A great deal of background work had been done before then. We were given the official statement of government policy and the draft bill on May 2. Bill C-201 was introduced immediately thereafter. Not until May 29, almost one month after the bill was introduced, was the debate on second reading of Bill C-201 begun. But now the Prime Minister blames the opposition if the bill is held up. That, I suggest, is irresponsible hypocrisy.
We know, for example, that the Prime Minister stalled answering questions by using all sorts of diversionary tactics. He said the matter was still under study, when it was clear that the government had made its basic decision on this question. The Prime Minister also dragged red herrings across the trail, one of the most serious being the entire issue of regional development and the relationship between foreign ownership policy and regional development considerations.


An hon. Member:: Now you are dragging a couple across the trail yourself.


John Stratford Burton: He suggested that any restriction on foreign ownership would hurt the disadvantaged regions of Canada. May I quote from a statement the Prime Minister made in Regina early in 1972. The statement gave a great deal of concern to his good friend, Walter Gordon.


Mr. Benjamin:: If he never comes back it will be soon enough.


John Stratford Burton: According to a report, the Prime Minister said:
There is this constant trade-off between those parts of Canada which are already fairly developed like the central provinces, and particularly Ontario.
And that's where you find the Melville Watkins and the Walter Gordons who think that enough is enough and they don't want any more foreign capital to develop their province, but they don't always realize that other parts of Canada have not developed that far and therefore they would not mind a little bit of foreign capital if it means there is more technological progress and higher standards of living and so on.
That is what the Prime Minister said in Regina. I suggest the Prime Minister's statement is wrong in fact and that its effect is harmful. Varying studies, some of which have been commissioned by the federal government, relating to economic geography have come to our attention and these show clearly that the pattern of foreign investment is not directly related to the pattern of regional disparity that is evident in Canada. Also, reports which have been produced by the federal government show clearly that foreign investment has been highest in Ontario where the highest level of income in Canada is earned.
The typical pattern of entry of foreign businesses, with some exceptions such as industries that are resource-oriented, has been to Ontario. They go to Toronto or one of
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the larger centres nearby and establish their Canadian operations. I suggest that the manner in which foreign investment has taken place in Canada has contributed to the problems of regional disparity with which we are now wrestling.
There is another matter concerning regional development policy that we must consider. That is the regional industrial incentives program. The federal government, through the Regional Development Incentives Act of the Department of Regional Economic Expansion, has already committed over $250 million in grants under this program. Over half the money that has been committed under this program will go to foreign-controlled firms.
The Minister of Regional Economic Expansion (Mr. Marchand) maintained that he could not cut off grants to foreign-controlled firms because this would hurt regions in need of help. He has said many times that we need a policy of controls over foreign investment but it has to be a general policy, it cannot be part of the regional development program and cannot be an instrument for controlling or curtailing foreign investment. In response to questions I asked in the House and in committee, the minister expressed the hope that there would be an effective policy to deal with this problem in the foreseeable future. Where is that policy? Where is the minister? It seems that in so far as his policy is concerned, it is business as usual; there is no change.
The foreign takeover bill before us states that it will do something about maintaining Canadian control of our economy. On the other hand, however, we continue to feed this growing monster under programs such as the regional development incentives program. The foreign firms which helped create regional disparities by the pattern of their development will not solve the problem now. We need a different sort of Canada Development Corporation than was presented by the government. We need a complete overhaul of the industrial incentives program.
The bill before us is designed to curb takeovers. But why should a foreign firm be interested in a takeover when it can get help like this to expand an existing operation or start up a completely new operation? What we need from this government is a complete change of policy. The government might take note of the change that was recently introduced by the Ontario government whereby they decided to stop forgiveable loans to foreign-controlled corporations. The Ontario government reached the conclusion that this was not contributing to development in the province of Ontario.
We have Bill C-201 before us. We had the usual type of detailed introduction by the Minister of Industry, Trade and Commerce (Mr. Pepin). He is the same minister who told American businessmen in a number of recent speeches that they had nothing to fear and nothing to worry about with regard to legislation the government was going to introduce. He was right. This minister also had a recent experience with some of the American-controlled subsidiaries in Canada. The minister thought he was dealing with them in good faith; he thought he could rely on them and that they had not taken action through their parent corporations to become involved in the United States DISC program which would undercut their Canadian operations. The minister found out through
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newspaper articles and reports from Washington that he was wrong. He thought he was able to operate on a straightforward basis with these corporations. The bill before us reflects the known concerns and attitudes of the minister. We have known for some time that he wanted to take very little action to control the activities of foreign-controlled firms in Canada.
I wish to review briefly some of the loopholes in this legislation which must be examined very closely. I do so within the context of the suggestion that even in this limited area where the government is proposing to take action, that action will not be effective and will not do the job. I find that clause 2 of the bill is quite ironic. It sets out in grandiose terms the purpose of the act in these words:
This act is enacted by the Parliament of Canada in recognition by Parliament that the extent to which control of Canadian industry, trade and commerce has become acquired by persons other than Canadians and the effect thereof on the ability of Canadians to maintain effective control over their economic environment is a matter of national concern, and that it is therefore expedient to establish a means by which measures may be taken under the authority of Parliament to ensure that-
I ask hon. members to note this passage:
-in so far as is practicable after the enactment of this act, control of Canadian business enterprises may be acquired by persons other than Canadians only if it has been assessed that the acquisition of such control by those persons is or is likely to be of significant benefit to Canada, having regard to all the factors to be taken into account under this act for that purpose.
This is a very grandiose statement but we have this one catch, "in so far as is practicable after the enactment of this act". We find, as well, various factors which the minister says will have to be taken into account in assessing mergers or takeovers in the future. This, of course, is very difficult to assess at this stage. It is not so much a question of the words in the bill but, rather, the manner in which the bill is put into practice once it is enacted.
I have another concern. It appears from examination of the bill that there are certain types of business which for tax purposes might be classed as non-profit. For example, there are some foundations which carry on industrial operations, the profits go for charitable purposes and they are exempt from income tax on that account. The fact is they only carry on a subsidiary operation in Canada. I know of one large, international drug company where this is the case. Most of their research and development work is carried on in England. They do some final testing work in Canada but do none of their basic research work here. They operate in Canada through various subsidiaries but they do not carry on the basic part of their operation here. Such business is exempt from the purview of this legislation.
Another matter that concerns me is that this bill is to be applied to any purchase of shares of a corporation where 5 per cent or more of the voting rights attach. That has to do with a corporation whose shares are traded publicly. It is not a public corporation as such but a corporation whose shares are publicly traded. There are many corporations incorporated as public companies or public corporations but their shares never reach the stock market; they are never traded as such. They would not be involved at this 5 per cent level but, rather, at the 20 per cent level which concerns private corporations. When 20 per cent of

the shares of a corporation are exempt from the purview of this legislation, the situation becomes serious.
There are other clauses in this bill which require further examination, but I do not intend to discuss them at the present time. However, when I was reading this bill, on several occasions, since provision is made for certain things to be done and certain things not to be done, I wondered what penalties were set out. What happens if a person or group of persons fails to take the action prescribed or takes action which is prohibited?
At the end of the bill I found that penalties have indeed been provided. Intentional failure to report a takeover is punishable by a fine of $5,000. Now, $5,000 means a good deal to some people but I doubt it would mean very much to a large corporation which felt it might be advantageous to go ahead with takeover arrangements without reporting them, and then to go through the motions if the government ever caught up with what was happening. The corporation might well be ahead by a good deal more than $5,000.
The bill deals with takeovers and mergers. But what about the expansion of firms already existing in Canada and the establishment of new enterprises? Members might be interested to take note of the pattern of foreign investment in Canada over the last several years. I have here a set of figures obtained from "Survey of Current Business", for November, 1970, published by the United States Department of Commerce.
One of the tables sets out the sources of funds of United States subsidiaries in Canada, giving a percentage breakdown. The percentage obtained from United States parent companies and other United States sources in 1968 amounted to only 6 per cent. Funds obtained from retained earnings amounted to 25 per cent, from depreciation and depletion 41 per cent, from borrowings in Canada 24 per cent, from equity sales in Canada 2 per cent, and from other sources 2 per cent. Only 6 per cent came into the country from abroad. Most of the money was generated internally to provide for the expansion of foreign-owned firms here.
I have another table also taken from "Survey of Current Business" for October, 1970. This shows the inflow of new United States capital investment in Canada compared with the outflow of payments to parent firms. In the period between 1960 and 1969 the inflow of new United States investment amounted to $5,497 million. The amount paid out in interest and dividends flowing back to the United States amounted to $6,252 million. The amount paid out in royalties and fees totalled $1,770 million. So the total for these two items flowing to the United States amounted to $8,022 million, which means that the net outflow during the ten-year period was $2,525 million. These figures should be kept in mind. In addition, there are fees paid out in royalties and in respect of franchise arrangements, sales contracts, and so on, which contribute to the picture.
At the present time there is an absence of policy for dealing with this situation. As I said, a grandiose phrase appears in clause 2 of the bill describing the government's intentions but it has not been followed up by any means
June 5, 1972

for effective implementation. What is obviously needed is an effective way of dealing with the situation I have described-a revitalized and reconstituted Canadian Development Corporation, for example, together with a control instrument which would really do the job.
A great deal of confusion exists as to policy. The hon. member for Duvernay (Mr. Kierans) correctly stated this afternoon that whatever the need for foreign capital in Canada, we were attracting it in the wrong way; we were placing no restrictions on the inflow of equity capital while, on the other hand, discouraging provinces and other institutions from borrowing in the United States.
Mr. Speaker, if there is need for an inflow of capital into Canada, the most effective way of satisfying it while retaining some control over our economy is to allow it to take place in the form of capital borrowing. This, in fact, was the pattern of development in the United States in its earlier years when that country depended on an inflow of capital from Britain. The government is caught amid conflicting priorities. It is encouraging capital investment by offering all kinds of incentives though it is known that in some areas there is a shortage of capital in Canada. On the other hand it has done nothing to bring about a more effective use of labour in Canada by ensuring that Canadians can find employment so as to make a living. After all, more than half a million Canadians are unemployed at the present time. Budgetary policy this spring seems to follow the motto: What is good for the corporations is good for Canada. This seems to be the approach of the Minister of Finance (Mr. Turner).
When we discuss measures of the kind before us, in line with our responsibility to our constituents, we ought to realize fully that we are dealing with a matter which affects the future of this nation, that the future of Canada is at stake and that the decisions we are making now will affect the nature and substance of Canada in the future- indeed, whether there will be a Canada in the future at all. Many of us have a stake in ensuring the development of a healthy society which will reflect concern for those in our community who are least fortunate. It is time the government changed direction and abandoned its present catastrophic course of action.


Roderick J. (Rod) Thomson: Mr. Speaker, there is some disposition to conclude the debate, so I shall not prolong my remarks unduly. Contrary to all hopes, the government's policy as reflected in the bill before us is similar to its policy in connection with agriculture. It is a stopgap measure, narrow in its viewpoint, shortsighted and deficient in that it allows for no long-term planning. There is no glimpse here of a comprehensive economic plan for Canadian development and the measure suggests no means of increasing and maintaining control over our resources, industries, etc. In effect, it is only running fast to keep from going backward.
Much has been said about the bill and I do not wish to repeat it. However, I do want to kick around for a few minutes some ideas about what we might do in regard to foreign ownership. It seems to me that the present government lacks new business ideas and is not forward looking enough to meet problems in the future. I can think of no
Foreign Takeovers Review Act
better example than the shipping of grain to the west coast. Everybody knows that trade with the Asian rim countries has been improving and we have now sold more grain and other products to that part of the world than the railways can ship. This is very poor business management. I agree that buying boxcars by the government is better than taking no action at all, but I suggest this is a stopgap, ad hoc measure and is typical of what takes place too often in this country. We see much evidence of this sort of thing.
Therefore, why should we be surprised by a bill of this nature that attempts to deal with foreign ownership? Many people have suggested improvements in the shipping of grain, and as a farmer I have made several myself over a number of years. Yet the government still has not produced a long-term plan. It is high time the government made some forward-looking plans to promote Canadian business interests.
I should like to discuss one idea of my own. I suggest that when we use the taxpayers' money to buy shares in a company, or give a company a DREE grant to conduct research that would be worth something to the company be it foreign-owned or otherwise, the taxpayers should receive something back on their investment, on the use of their money. Otherwise why spend the money in the first place? It seems to me we should have a sort of Panarctic approach. If money is given an oil company to prospect for oil in the Arctic, some of the oil should belong to the people.
I also think more thought should be given to the development of Canadian business. I observe the Minister of State for Science and Technology (Mr. Gillespie) in the chamber and I suggest to him, as I have done before, that it is high time someone on the government side produced an industrial strategy that related to items in Canada that we produce very well. An industrial strategy should help Canadian business, which is what we are primarily interested in. A lot is said about foreign capital and foreign ownership as if this were necessarily bad, but the bill before us simply allows a big fish to eat a little fish, provided the cabinet approves, which is a rather negative approach. I suggest that if the government looked after Canadian business, Canadian business would be in a better position to look after itself.
I have another idea I should like to put forward. Suppose a lead-zinc mine-we have several of them in Canada-needed foreign technological know-how or foreign capital for development purposes. We should say to these investors, "If you join hands in partnership with us, we will pay you in lead and zinc. But once we have paid you back, the remainder of the equity in the mine is ours". Let us just consider this idea for a moment. In effect, I am saying that we are not making a very good deal with countries like Japan, Great Britain, Germany and the United States. These countries with technological expertise and spare capital also need resources. My point is that we might make a better deal. We are not as shrewd traders as we might be.
Another point I should like to make is that if we allow these countries to have access to our resources, we should also make a better deal for markets for our manufactured products which are more competitive. A trade-off has

June 5, 1972
Foreign Takeovers Review Act been suggested. If countries want something from us, let us trade something with them in return. It seems to me the government has made some poor deals of this nature. In effect, we have been backwoods boys dealing with shrewd businessmen.
These are not hard and fast suggestions but I did not want the debate to go by without suggesting that we look at other ways of solving our problems. It is not enough simply to take a negative stand and allow foreign capital to come into Canada only on certain conditions. Let us look at developing Canadian industry in a positive way. If we do this, some of our problems may solve themselves.


Stanley Howard Knowles: Mr. Speaker, may I rise, not to take part in this debate but to speak to a point of order. I think you will find that there is agreement among the parties that if a vote on the second reading of this bill is called for-and I can tell you that one will be called-perhaps it could be made an order of the House that the vote be taken not at this time but at 9.45 p.m. tomorrow night. I point out that tomorrow is an opposition day under the aegis of the Progressive Conservatives, and I believe that the House leader for that party will confirm that he and his colleagues are agreeable to this suggestion.


Gerald William Baldwin: Yes, Mr. Speaker, we agree; and I should like to think that the government would be quite prepared to sacrifice the time of one of its members from a quarter to ten until ten o'clock tomorrow. I think it would be a good idea if the vote were held tomorrow because it would enable hon. members to read their speeches and decide which way to vote.


Otto Emil Lang: That would be agreeable to us, Mr. Speaker. [Translation]


Joseph Adrien Henri Lambert: Mr. Speaker, I support the proposal which the hon. member for Winnipeg North Centre (Mr. Knowles) has just made, and I understand that it would be in the interest of the House that we proceed with the vote tomorrow night, as suggested.
. [English]


Mr. Deputy Speaker:: Hon. members have heard the House leaders of the various parties. Is it agreed?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.


Mr. Deputy Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Pursuant to special order made earlier this day, a recorded division on the motion stands deferred till tomorrow at 9.45 p.m.



CANADIAN WHEAT BOARD ACT


[Stage Direction]
The House proceeded to the consideration of Bill C-204, to amend the Canadian Wheat Board Act, as reported from the Standing Committee on Agriculture.
Mr. Deputy Speaker:: Order, please. Before I put the motions which are before the House at the report stage, I might say it would appear that motion No. 1, standing in the name of the hon. member for Saskatoon-Biggar (Mr. Gleave), is defective in that it not only purports to amend Bill C-204 but it also would rescind section 35(1) of the main act and, in effect, substitute for that section a new and substantive proposal. This is the thought the Chair has at this moment. To indicate the authority for the view the Chair takes, subject to whatever arguments hon. members wish to make on the point of order I should like to refer hon. members to May's Seventeenth Edition, page 549, where it is stated:
An amendment is out of order if it is irrelvant to the subject matter or beyond the scope of the bill, or if it is irrelvant to the subject matter or beyond the scope of the clause under consideration. Amendments which are irrelvant to the clause under consideration should, as a general rule, if they are within the scope of the bill be moved as new clauses.
If hon. members would like to assist the Chair on the procedural point with reference to motion No. 1, I would be pleased to hear them.


Mr. Gleave:: Mr. Speaker, I submit that the amendment is in line with the purpose of the bill. It was proposed as part of the bill when it was first presented to this House for consideration; therefore, the government and those responsible for bringing in the bill must have considered this matter as relevant to the bill.
The bill deals with the matter of quotas. That is an inherent part of the measure before us. One of the main purposes of Bill C-204 is to regularize and make legal, by amendments to the Canadian Wheat Board Act, certain procedures the Canadian Wheat Board has been following in administering quotas and establishing the rights of farmers to deliver their product at a given point of time to a delivery point to which they are limited, plus an alternative. This is one of the main purposes of Bill C-204 dealing with control of flax, rye and rapeseed.
I refer to this matter specifically in the amendment; therefore, I maintain it is within the four corners of the bill. I gather from the minister's attitude that he agrees with me on this point. For that reason I suggest the amendment is in order.


Otto Emil Lang: Mr. Speaker, I should just like to make the very brief point that whatever the situation may be in
June 5, 1972

strict, regular fashion-and I do not really quarrel with Your Honour's approach to the interpretation here-we are in a peculiar situation, having the bill restored to the report stage with the bulk of the original proposal as contained in the original bill. I think the recommendation is broad enough to support this amendment and for that reason I would not argue against its admissibility at this point.


Stanley Howard Knowles: Mr. Speaker, I am grateful to the Minister of Justice (Mr. Lang) for the comments he has just made and I trust Your Honour will take that point of view into consideration. It is the point I wished to make. Surely Your Honour does have to look at the circumstances under which this order is now before the House. There was an agreement among all four parties at this session that we would put this bill back on the order paper at precisely the point it had reached in the last session.
If at this point in the last session we had been faced with this amendment there would have been no question as to its admissibility, because it was part of what had been in the earlier draft of the bill and removed by the committee. In other words, all we would have been doing at the report stage of the last session would be putting back into the bill what had been taken out in the committee.
In view of the fact it was an all-party agreement not to debate the bill on second reading again and send it back to the committee, but to resume the matter exactly at the stage it had reached the last time, I suggest Your Honour should take that into consideration. Whatever was admissible at this stage in the last session should be admissible now. Since there does seem to be agreement on both sides of the House that this is the way we ought to treat it, I hope Your Honour will see fit to allow the amendment.


Mr. Horner:: Mr. Speaker, I should like to comment briefly on the point raised. What the amendment does is reinstate the bill to the position it had reached last session. That portion of the previous speaker's remarks is correct, but the bill would never have passed the committee if this section had not been deleted. It was with the deletion of this part that the committee agreed to pass the bill, hoping it would get passage at the last session.
If one checked the record he would see that another bill, doing essentially what this amendment does, was presented to the House for first reading. I think that was Bill C-255. Technically it might be in order, if we really consider that this bill is now at the report stage of second reading, to accept the amendment. Certainly the understanding reached in committee at the time this bill passed the committee and was returned to the House was that this part should be deleted. This was done almost unanimously, though I see an hon. member shaking his head in a negative fashion. In any event, it was passed by the committee only because there was an agreement in committee to facilitate the passage of this bill without the contentious part in order to continue the operations of the Wheat Board.
I suggest you should rule the amendment out of order at this time and that Bill C-255 should be re-submitted so that the whole question of rye, flax and rapeseed could be dealt with. If this were done I could understand that the
Canadian Wheat Board Act
consideration of Bill C-204 would be facilitated and it would be passed before the end of this month.


Marcel Lessard: Mr. Speaker, I should like to add a few words in the same vein as the hon. member for Crowfoot (Mr. Horner). When the bill was examined in committee, we agreed practically unanimously to delete that clause from the bill and when we reported to the House it had actually been deleted. It was the hon. member for Sas-katoon-Biggar (Mr. Gleave) who deemed it advisable to move an amendment at the report stage in order to include the clause once more in the bill.
For my part, I should much prefer not to have the amendment incorporated into the bill because it extends the powers of the Canadian Wheat Board. Past experience has demonstrated that powers vested in the Canadian Wheat Board have not resulted in making us very happy in eastern Canada and our argument against granting greater powers to the Canadian Wheat Board was the iniquity of the Board's present regulations.
I do not feel this is the right time to extend the Board's powers to other types of grain and I suggest that the amendment be rejected.


John Stratford Burton: Mr. Speaker, arguments about whether hon. members wish to have this matter dealt with one way or the other would seem to be totally irrelevant at this time. What is to be taken into account, I submit, is set out quite clearly in Hansard for May 9, at page 2081, where the government House leader, the President of the Privy Council (Mr. MacEachen), rose in introducing this bill and said:
I rise on a point of order, Mr. Speaker. With respect to this bill of which notice is given on the order paper. There have been discussions among the House leaders and because this is the same bill as was reported out of committee last session it is understood that when and if it is given first reading it will be moved forward to the report stage on the understanding that hon. members will be able to move amendments in the usual way and will not be confined to the amendments that were moved in the last session. If the House is of a mind to do so, I should like to have an order which would put this bill at the report stage, where it stood at the prorogation of the last session, on the understanding that hon. members might move amendments either as in the former session or new report stage amendments.
In the exchange that followed it was clear that there was agreement, and Mr. Speaker concluded by saying:
Pursuant to the order made a few moments ago this bill stands for consideration at the report stage.


Mr. Deputy Speaker:: The difficulty the Chair has, of course, as I indicated initially, is that it would appear the motion in the name of the hon. member for Saskatoon-Biggar is not procedurally in order. I suggested at that time that it does reach back into the act itself. It goes beyond the scope of the bill before the House for consideration.
Hon. members who have directed their remarks to assist the Chair on this matter have not quarrelled with that submission. Some of them have, however, on the

June 5, 1972
Canadian Wheat Board Act
other hand, indicated that there was some degree of consent or agreement among hon. members and that this might be considered notwithstanding the fact that the Chair might find the motion is not in order procedurally. The hon. member for Regina East (Mr. Burton) has quoted Hansard of May 9 and the words of the House leader of the government, but I would think with respect, that those statements were predicated upon amendments being in order before they could be accepted unless there is consent of all hon. members.
I gather from the hon. member for Crowfoot (Mr. Horner) and the parliamentary secretary that there would not be such consent. In the absence of the consent of hon. members I would have to find, as I indicated earlier on the basis of the citation in May's Seventeenth Edition, page 549, that the amendment is not in order.


Stanley Howard Knowles: Mr. Speaker, I am uncertain just how to handle this, but it seems to me as House leader for the New Democratic Party I have a point of privilege I must raise tomorrow with the government House leader. There was no suggestion earlier that consent would have to be obtained at a later stage to the moving of certain amendments. There was a clear understanding among the four House leaders that this bill would be advanced to the report stage on the understanding that members would be able to present at that stage the same amendments they were able to present at the last session, plus any others they might wish to present. This amendment is one that was presented at the last session. It was in order then because it was simply restoring something which had been taken out. I must say, if this is the result, we were taken in by the kind of agreement into which we entered as House leaders which in turn was confirmed by the House.
I feel very strongly that if you do not see fit to accept this amendment tonight, the matter should stand until we have a discussion among House leaders. We get along very well and when the four of us reach agreements those agreements stand. I do not quarrel with the right of the hon. member for Crowfoot (Mr. Horner) and the Parliamentary Secretary to the Minister of Agriculture (Mr. Lessard) to oppose the matter in principle, but there is not any doubt in my mind concerning the agreement reached. If I may say so, one reason the bill concerning the Northern Canada Power Commission is still standing as a notice and has not been proceeded with is that the same type of agreement sought in respect of it was not reached. But in the case of Bill C-204 the agreement was clear and iron-clad. If Your Honour feels that the procedural niceties do not allow the Chair to accept it, I suggest it be allowed to stand until the House leaders clear the matter.


Gerald William Baldwin: Mr. Speaker, I must say I would probably be opposed to the amendment moved and yet I must also say that in my view the hon. member for Winnipeg North Centre (Mr. Knowles) has stated in essence what I thought was the understanding, that is, that hon. members would be able to offer amendments at the report stage in the way in which the hon. member indicated.
I have not had an opportunity to look into this thoroughly, but I notice there is an amendment at the report stage standing in the name of the minister. It would appear to

deal with sections in the act which are not covered by the amending bill. I am referring to amendment No. 2. I may be wrong but it strikes me, on the basis of the reasoning of the Chair, that we must only look at amendments at the report stage which can be related to the amending bill before the House. If that is the case, I wonder whether amendment No. 2 of the minister is in order.


Otto Emil Lang: Mr. Speaker, on the question of privilege I should like to confirm that my understanding certainly agrees with that of the hon. member for Winnipeg North Centre (Mr. Knowles). Perhaps I might on this question of privilege draw Your Honour's attention to the fact that the reference of the extension of the act to rapeseed, flax and rye does not appear in the bill. I take it that it appears in this form because that was the original form of the recommendation to support the amendment.
I say to the hon. member for Crowfoot (Mr. Horner) and to the parliamentary secretary that I would propose in due course to urge my colleagues to vote against the amendment, not because I am against it in principle but because of the nature of the deliberations which took place upon it. That, however, is a different issue. I hope at this stage we might go to the substance of the amendment knowing that the history of the matter is as the hon. member for Winnipeg North Centre says. That was the understanding concerning the bill at the report stage.


John (Jack) Henry Horner: Mr. Speaker, I have one further comment. In respect of your words to the effect that this amendment goes beyond the context of the bill before us, may I say that while it may not have gone beyond the context of the original bill before the committee it now, in your words, goes beyond the context certainly of amendments at the report stage. If this is so, conceivably it is out of order.
While I know good will must prevail between the House leaders of the various parties, I would suggest at this late hour that perhaps the best way in which to proceed would be to call it ten o'clock and let the House leaders meet again to discuss the pertinent points. Then we could proceed tomorrow with a better understanding of how to deal with the suggested amendment.


Marcel Lessard: Mr. Speaker, after listening to what the hon. minister has just said concerning the position which may be taken when the bill is examined, I have no objection to this amendment being debated, except that I reserve the support which, for intance, I may give to the said amendment.


Leslie Gordon Benjamin: Mr. Speaker, with respect may I add one further point. I say this not in criticism of the Chair but perhaps in criticism of all of us here. It seems to me that when the amendment at the report stage appeared on the order paper, as this one did in the previous session, at no point in time did anyone in this chamber draw to the attention of the hon. member for Saskatoon-Biggar (Mr. Gleave) that his motion might be out of order. After all the time that has elapsed, surely the motion should be
June 5, 1972

allowed, if for no other reason than that it was not ruled out of order, and we must at least allow the motion to proceed to a vote.


Mr. Deputy Speaker:: It seems to the Chair that the situation is as I indicated earlier, that from the point of view of strict procedure I have considerable doubt as to the acceptability of the motion. Hon. members have referred the Chair to discussions at another time among hon. members. May I point out, with respect, that the Chair has the responsibility to rule on the procedural acceptability of motions such as this. Normally consideration is given to motions when they come before the House for debate.
I have indicated the ruling I would make but am not anxious to make a ruling now, if hon. members would prefer that I defer it. If it is the wish of the House, as was suggested by the hon. member for Regina-Lake Centre (Mr. Benjamin), the Minister of Justice (Mr. Lang) and the hon. member for Peace River (Mr. Baldwin) who are generally in accord, I will defer my ruling until the next time the matter comes before the House.


Stanley Howard Knowles: Mr. Speaker, I am sure the House would be pleased if you would do that. When you are giving further thought to your ruling, I wonder if you would take into account in a particular way the point just made by the Minister of Justice regarding the royal recommendation. I draw your attention to the fact that he was speaking not only about the royal recommendation in last session's bill but about the royal recommendation that is attached to this session's Bill C-204 in which there is a reference which reads, "to extend application of the act to flaxseed, rye and rapeseed".
As the Minister of Justice has pointed out, in the bill as it is before us, which is in the form in which it was reported from the committee last session, there is no such reference. So as I tried to say before, we are dealing not with a situation that is governed by the normal rules but with a situation that is governed by the fact that we have carried over a matter from one session to another and have done it by a clearcut understanding among the House leaders of all parties. If Your Honour will give the matter consideration overnight, perhaps we can deal with it more acceptably the next time it comes up.


Mr. Deputy Speaker:: With respect to the point raised by the hon. member for Winnipeg North Centre, may I say that I am aware of the terms of the recommendation but that is not the basis on which I feel that the motion is not in order. I indicated that I thought it went beyond the scope of the bill before the committee.
I consider that in so far as the royal recommendation is concerned, there would probably be no objection on that point. I feel that whatever hon. members, through the House leaders, think they should do is a matter for them to consider. In so far as the Chair is concerned, as I have indicated I will defer my ruling if it is necessary to make it. However, I would prefer hon. members, through the House leaders, to give this matter further consideration and when the matter comes before the House, to indicate to the Chair if any agreement has been reached.
Proceedings on Adjournment Motion Mr. Knowles (Winnipeg North Centre): Ten o'clock, Mr. Speaker.


Mr. Deputy Speaker:: Is this agreed?


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

William George Knight: Mr. Speaker, on May 25 I
asked the minister in charge of the Wheat Board the following question:
Mr. Speaker, I have a question for the Minister of Justice who is also in charge of the Canadian Wheat Board. In view of the fact that a major car manufacturer owes the Crown $6 million in duties and sales tax and that this debt is to be forgiven, I wonder whether the minister or the government would give consideration to a similar forgiveness of overpayments to farmers, as described in the Auditor General's report?
The answer I received was extremely insufficient and incorrect. The minister said:
Mr. Speaker, I do not see the connection between the two situations described by the hon. member.
I think this points out a lack of continuity in government policy. There are certain groups in our society which are put into a privileged position, such as the large automotive industry, especially in terms of a company that ships cars from the United States. They receive a write-off of $6 million, but the farmer who is affected, as reported in paragraph 64 of the Auditor General's report, by the wheat inventory reduction payments is not in the same position.
The Auditor General's report sets out a number of weaknesses and inconsistencies in the administration of this program. The department has established that some 4,000 farmers have been overpaid approximately $540,000. Of this, $177,000 has been recovered and attempts are being made to recover the remainder.
When it comes to the complaints of farmers in western Canada we are in a situation where 4,000 of them will have to repay the overpayments. This is the position under the Lift program due to misadministration of the government. Yet the government is writing off $6 million for a large corporation. That is the inconsistency of the government. They are the financial backers of this government; let there be no question about that.
Throughout his report we see all kinds of inconsistencies pointed out by the Auditor General. In paragraph 69, on the cost of unused accommodation in Ottawa, we find that $32,000 was spent for unoccupied space in moving the Canada Council to new accommodation. In paragraph 73, on royalties not reported by a foreign licensee, we find

June 5, 1972
Proceedings on Adjournment Motion
that because the royalty portion of the licensee's selling price has been withheld by a foreign government agency, the licensee has not reported sales on which approximately $118,000 in royalties should have accrued to Canadian Patents and Development Limited.
In paragraph 77, on indirect compensation to chartered banks, we find that government deposits aggregating $100 million remain at the disposal of the chartered banks free of charge without the approval of Parliament. At the same time, there is inconsistency on the part of the government when they drag the court 4,000 farmers in this land because of the misadministration of PFRA by the Department of Agriculture. We as Members of Parliament should be pleased that the Auditor General points out these inconsistencies and we should be happy to have the opportunity to read his report.
On page 4 of the Auditor General's report we find that the government is trying to cut back on the services available to the Auditor General to look at government expenses. He points out that there has been a downgrading of senior staff positions and says:
In my opinion, this action by the Treasury Board secretariat is unfair and discriminates against the Auditor General. It should be corrected forthwith. If it is allowed to stand it will mean that his office is prevented from employing auditors in the highest classification in the public service of Canada. It will also mean that in order to reach the highest classification in their profession, his most experienced auditors must leave the-office of the Auditor General.
This action points up more clearly than anything else that if the Auditor General of Canada is to be truly independent he must be free to recruit the staff he needs and to determine their salary levels within the framework of the public service of Canada.
Not only is the Auditor General the most important employee of Parliament but it is a fact that the government is making moves to undercut his position. It is in this report that Members of Parliament such as myself can find the inconsistencies of this government in how it handles revenue. The report points out time and time again the kind of inconsistencies that have occurred.
This is money set aside, budgeted and not spent, built up to over $200 million, to which the government has access for spending on any kind of program it sees fit, without direct action by Parliament. It is a nice chunk of pie ready to be served to the people of Canada before a general election.


Marcel Lessard: Mr. Speaker, the hon. member in directing his original question to the Minister of Justice (Mr. Lang) sought to draw a parallel between two distinctly different circumstances. The situations mentioned were the Canada-United States automotive agreement on the one hand and the Operation Lift program on the other. The minister in his reply stated that he could see no connection between the two situations and frankly, Mr. Speaker, neither can I.
Although the Canada-United States auto agreement is not administered by the Canadian Department of Agriculture, perhaps I may still reply to that part of the hon. member's question which pertains to this agreement. It is my understanding that this agreement was based on the

principle of free trade. As such it did not envisage collection of duty or sales tax by either party. The amount the hon. member interprets as being a direct liability is, in my understanding, what has been referred to as a contingent liability, not a direct liability nor an outstanding debt owing.
The overpayments to farmers are examples of direct liabilities and as such are quite different both in terms of accounting principles and of actual fact. Under the terms of the Lift program, farmers who elected to participate in the program were paid a specific amount for each acre taken out of wheat production, with an additional payment made when this acreage was diverted to perennial forage production. These payments were made subject to a definite set of governing regulations.
I am certain the hon. member is well aware of the reasons behind the Lift program and I need not go into them in detail. However, I should like to mention the fact that the government, in an attempt to put needed cash into the hands of farmers as soon as possible, made advance interim payments to farmers who submitted claims. Final payments were made when on-farm inspections had been made. Some overpayments did result. Some of these overpayments arose out of arithmetical errors and misunderstanding of the regulations. In other cases there were definite inconsistencies when the actual farm inspections were made.
In conclusion, and to answer the hon. member's question, the government does not intend to forgive or writeoff these overpayments. Rather, we have already collected much of the amount owing and have been, and are, judging each outstanding case on its own merits. Where, according to the regulations, recovery is justifiable we shall attempt to collect the full amount owing.



PENITENTIARIES-SUSPENSION OF REGULATION MAKING INMATES FINANCIALLY RESPONSIBLE FOR WILFUL DAMAGE TO POPERTY

Almonte Douglas Alkenbrack: Mr. Speaker, I bring a question before this House tonight which is of vital importance to Parliament, to our penal system and to all Canadian taxpayers. It arises from a sequence of events at Millhaven penitentiary in my riding. During the first week of May a hunger strike and riot were staged by certain inmates, and in the latter action these persons wilfully destroyed an estimated $4,000 worth of federal property, namely, the plumbing in that institution. As a result of this, on May 16 I asked the Solicitor General (Mr. Goyer) the following question:
Mr. Speaker, I have a question for the Solicitor General on a subject which has aroused public opinion regarding certain happenings in our penal system. Can the minister inform the House and give his assessment of the extent of damage done by certain inmates of Millhaven penitentiary last week when in a reported protest or strike they wilfully destroyed an estimated $4,000 worth of federal property in that new prison?
The minister said he would be happy to look into the matter. I asked him a supplementary question as follows:
In view of the minister's new but ill-advised policy of full wages for inmates, will he not deduct the amount of damages from their wages?
June 5, 1972

You will note, Mr. Speaker, that the Solicitor General said he would be happy to look into the matter. I now draw your attention to another document, a news item which appeared in the Kingston Whig Standard four days later, on May 20. I will quote from it. It shows that the minister must have looked into the matter, but in a manner harmful and detrimental to the interests of the Canadian public and not in keeping with the protection of persons and property. I quote from the Whig Standard the article headlined, "Prisons suspend rule":
The Commissioner of Penitentiaries has suspended a regulation that requires inmates of federal prisons to pay for damage done to prison property.
The regulation states that when an inmate damages government property he may be financially liable for the full cost or a portion of the cost of repairing the damage.
Regional director John Moloney acknowledged Friday that inmates no longer had to pay. This is a "recent innovation" he said. He did not know why the regulation was suspended.
In the past, inmates made good the damage out of pay credits. They could be deprived of pay up to three months if necessary, but at that time their case was automatically reviewed.
The publishing of this latest piece of policy emanating from the office of the Solicitor General compelled me to ask another question in the House on May 30, which has brought us to this confrontation tonight. Public opinion in my constituency is aroused over this latest policy or desertion of policy on the part of the Solicitor General and his department. I asked, as recorded at page 2675 of Hansard for May 30, the following question:
Mr. Speaker, my question is for the Solicitor General and it deals with a matter I asked the minister about on May 16 concerning deduction of amounts of damages done by inmates to prison property from the salaries of prisoners in federal institutions. On May 20 the regulation holding prisoners financially responsible for wilful damage to prison property was suspended. Would the minister tell the House who authorized that directive?
It has always been an axiom of the common law that Canadians shall be held responsible for damage they do to persons and property. The law applies as well to persons in our penitentiaries and we must uphold especially the regulations governing those persons. Neither the Commissioner of Penitentiaries nor the Solicitor General have the power to change this law. How crazy can the government get in implementing its permissive society?
The Prime Minister (Mr. Trudeau) and the Solicitor General are now projecting their version of the permissive society even into the prisons. Now, under their policy, a person convicted of crime and incarcerated in an institution is a privileged person. The suspension of this time-honoured regulation will only invite wilful damage and vandalism, encourage more riots and discourage the recruitment of guards for the penal service. The guards at present face a tough enough time. There is no need to make it tougher for them to maintain order and to perform their duties in our prisons.
The cost of Millhaven prison, the most commodious and modern in Canada, will be over $20 million when completed. According to the evidence I have placed before you, and according to reports of speeches alleged to have been made by the Solicitor General in western Canada, he and the Prime Minister are following dangerous policies
Proceedings on Adjournment Motion
and are now saying to the criminal elements of Canada, "We honour you in our participatory democracy. We are removing most of the deterrents to your chosen vocation of crime. If you go to prison, we will give you a better standard of living than many taxpaying Canadians enjoy. You can destroy all the property you like; we will not hold you morally or financially responsible. The taxpayer will pay for your damages. We will also restore to you your privileges and in your commodious quarters we will make the taxpayer restore whatever you destroy. You can retain the salaries which we will pay you and thumb your noses at the judges of the courts who sent you here, for you may soon have a privilege that they do not possess, that of the franchise."
May I remind the Solicitor General, Mr. Speaker, that the law of Canada stipulates that we shall at all times maintain the protection of persons and property. It is for this very reason that the Solicitor General's office exists. On behalf of the Canadian people I demand that the minister reveal who authorized this relaxation of law as evidenced in the directive in question. Originally, the director said he did not know why the regulation was suspended. This House and the Canadian people are quite sure that the Solicitor General knows why. The Canadian people are sick of and disgusted with the permissive policies of this government and its failure to govern. They are revolted by the abandonment of well-founded principles and deterrents which used to be assured by law, and they deplore the sick society which has resulted.


Mr. Douglas A. Hogarth (Parliamentary Secretary to Solicitor General):: Mr. Speaker, as usual the hon. member of the opposition is only half right. He suggested that the damage in Millhaven amounted to $4,000; actually, it amounted to $2,200.


Almonte Douglas Alkenbrack: I said the amount was estimated.


Douglas Aird Hogarth: Then is $4,000 an estimate of $2,200 worth of damage?


An hon. Member:: You must take inflation into account.


Douglas Aird Hogarth: May I point out, to correct the hon. member further, that there is no intention on the part of the Solicitor General to relieve any individual inmate from responsibility for civil damages or property destroyed or damaged in our penitentiaries. What has been decided is that the collection of such damages will no longer be pursued merely on the basis of an administrative directive from the commissioner. Henceforth, in appropriate cases collection of such damages will be pursued by a regulation appropriately passed under the provisions of the Penetentiaries Act or, in the alternative, by civil process in the courts of ordinary civil jurisdiction.



MANPOWER-LOCAL INITIATIVES PROGRAM-RESPONSE TO REQUESTS FOR ADDITIONAL FUNDS AND EXTENSION OF TIME FOR COMPLETION OF PROJECT

Jack Marshall: Mr. Speaker, today I asked the Parliamentary Secretary to the Minister of Manpower and Immigration (Mr. Perrault) if any consideration would be given by the government to

June 5, 1972
Proceedings on Adjournment Motion providing more funds to municipalities or groups to complete projects which were approved under the Local Initiatives Program and, through underestimating the project, cannot complete same due to lack of funds.
For some reason or other the congenial parliamentary secretary continued to avoid the import of the question and instead, for the benefit of his party, said what glad tidings he had for us about what the government is doing. Tonight I am going to surprise him and say that I think the Local Initiatives Program is good. I give full marks to the government for introducing it, but unfortunately they made a few errors, which anyone can make, and I am going to try to help the parliamentary secretary and the minister overcome these weaknesses.
My question was prompted by several representations made to me because projects which were approved could not be completed due to the fact that costs were underestimated. This is going to leave a good number of projects incomplete and, therefore, the value of such projects and their benefits will be lost. Indeed, the money so far allocated will be wasted. In this regard, I feel it imperative that a good, hard look be given immediately to all projects in order to assess and ensure successful completion.
While I have the opportunity, I think it is worth while to put forth some ideas to the government in line with the Local Initiatives Program. In my opinion, the federal government should broaden the concept of the Local Initiatives Program into a five-year national development plan to strengthen provincial and municipal infrastructures. Every community in Canada requires basic public services such as water and sewage, access roads, fishing facilities, standard housing conditions, medical services, day-care centres and the like. The government should give consideration to providing a program, through the coordination of all departments concerned, to work in cooperation with all levels of government to provide the funds through local initiative to achieve these goals.
If consideration were given to such a proposal, the departments of government concerned could allocate funds from their votes in ensuing years to support local initiative. Not only would public services be provided but it would instil a sense of local participation, pride in one's community and a sense of comradeship and community spirit to make a better Canada.
The Minister of Manpower and Immigration (Mr. Mack-asey) accepted a suggestion that I made in the House a couple of weeks ago that Fisheries and Public Works collaborate with his department to develop a type of project similar to the Local Initiatives Program to allow fishermen to provide new inshore facilities. The minister, whom I admire for his non-partisanship, accepted the idea. I hope something will be forthcoming in this area.
This idea could be broadened to take into account all phases of community infrastructure services with the involvement of local people. This would create a sense of involvement which would contribute toward the objectives of a better Canadian nation. One of the most important problems in our nation today is that of controlling pollution. The government is prepared to spend billions of dollars in this area but it seems to fail to realize that basic

control should be directed at the root of the problems in the area of proper sanitation control in communities.
I have another example. Submissions were advanced by the score in connection with the provision of fishing facilities. They were turned down on the grounds that extended facilities were not justified. Yet similar projects have been approved under the terms of the Local Initiatives Program. This emphasizes the confusion which surrounds the disbursement of government funds and the duplication of effort which occurs. Far better results could be achieved through a combination of effort on the part of all levels of government.
In this connection, I ask the parliamentary secretary to suggest to the minister that when the cabinet next meets it should consider the proposal that the subject of local initiatives programs be placed on the agenda of the federal-provincial-municipal conference to take place this fall. If he needs any help from the opposition, I am ready and willing to assist him in any way possible.


Raymond J. Perrault: Mr. Speaker, on behalf of the minister I wish to thank the hon. member for setting forth certain of his ideas with respect to the Local Initiatives Program. As he knows, the government is very responsive to good ideas from whatever direction. As well, I welcome the enthusiastic support accorded to the Local Initiatives Program by the hon. member speaking for the official opposition. This is especially heartening in view of the earlier criticism voiced by one or two of his colleagues on the basis of incorrect information.
As of June 5 the department has granted an extension of time in respect of 1,396 projects to allow them to be completed to the extent of the funds which have been allocated to them. These extensions have been allowed to June 16 and are in line with the minister's announcement made on May 1. Furthermore, the minister stated on June 2 that an additional $30 million allocated to the Local Initiatives Program would permit some 1,200 projects to be extended to September 30, keeping some 15,000 persons at work until the end of the summer. I know the hon. member will greet this news with real enthusiasm.
The minister has indicated already that the criteria for selecting the extended projects will, in general, favour the quality of life over job creativity. In this regard, I understand there have been 11 extensions involving an amount of almost $300,000 in the great province of Newfoundland alone. The manpower and immigration department has issued a first list of the projects extended during the summer; it contains some 730 names. That was on June 2, and the number will be greater by now. It is expected that all the 1,200 contract extensions will have been signed within a few days.
The original $150 million program created 92,500 jobs during the winter, far in excess of the number predicted by certain members of the opposition. One hundred million dollars was allocated to projects promoted by private organizations and $50 million to projects sponsored by municipal councils. Most of the extended projects are private ones.
Motion agreed to and the House adjourned at 10.20 p.m.
June 5, 1972



APPENDIX

[Stage Direction]
May 31, 1972

[Stage Direction]
The North Atlantic Council met in Ministerial Session in Bonn on 30th and 31st May 1972,
2.	Ministers reaffirmed that the purpose of the Alliance is to preserve the freedom and security of all its members. Defence and the relaxation of tension are inseparably linked. The solidarity of the Alliance is indispensable in this respect. Allied Governments seek an improvement in their relations with the countries of Eastern Europe and aim at a just and durable peace which would overcome the division of Germany and foster security in Europe.
3.	Ministers noted progress in relations between Western and Eastern countries, increasing contacts between the leaders of these countries, and the conclusion of important agreements and arrangements. They welcomed these developments flowing from major initiatives undertaken by their governments, which had full and timely consultations on these subjects. Such consultations will continue.
4.	' Ministers welcomed the signing by the United States and the USSR of the Treaty on the Limitation of Anti-Ballistic Missile Systems and the interim agreement on Certain Measures with respect to the Limitation of Strategic Offensive Arms. They believe these two agreements limiting the strategic arms of the United States and the USSR will contribute to strategic stability, significantly strengthen international confidence and reduce the danger of nuclear war. Ministers also welcomed the commitment by the United States and the USSR actively to continue negotiations on limiting strategic arms. They expressed the hope that these two agreements will be the beginning of a new and promising era of negotiations in the arms control field.
5.	Ministers noted with satisfaction that the Treaty of August 12, 1970, between the Federal Republic of Germany and the USSR and the Treaty of December 7, 1970, between the Federal Republic of Germany and the Polish People's Republic are to enter into force in the near future. They reaffirmed their opinion that these treaties are important, both as contributions towards the relaxation of tension in Europe and as elements of the modus vivendi which the Federal Republic of Germany wishes to establish with its Eastern neighbours. Ministers welcomed the declaration of May 17 in which the Federal Republic of Germany confirmed its policy to this end and reaffirmed its loyalty to the Atlantic Alliance as the basis of its security and freedom. They noted that it remains the policy of the Federal Republic of Germany to work for circumstances of peace in Europe in which the Germany people, in free self-determination, can recover their unity; and that the existing treaties and agreements to which the Federal Republic of Germany is a party and the rights and responsibilities of the four powers relating to Berlin and Germany as a whole remain unaffected.
6.	Ministers also welcomed the progress made since their last meeting in the talks between the Federal Republic of Germany and the GDR. They regard the conclusion of the agreements and arrangements between the competent German authorities, which supplement the Quadripartite Agreement on Berlin on September 3, 1971, as well as the signature of a Treaty on Questions of Traffic between the Federal Republic of Germany and the GDR, as important steps in the effort to improve the situation in Germany. They thus feel encouraged in the hope that, in further negotiations between the Federal Republic of Germany and the GDR, agreement might be reached on more comprehensive arrangements which would take into account the special situation in Germany.
7.	Ministers noted with satisfaction that the Governments of France, the United Kingdom, the United States and the USSR have arranged to sign the Final Protocol to the Quadripartite Agreement. The entry into force of the entire Berlin Agreement being thus assured, the Ministers hope that a new era can begin for Berlin, free of the tension that has marked its history for the past quarter century.
8.	In the light of these favourable developments, Ministers agreed to enter into multilateral conversations concerned with preparations for a Conference on Security and Co-operation in Europe. They accepted with gratitude the proposal of the Finnish Government to act as host for such talks in Helsinki at the level of Heads of Mission under the conditions set out in its aide-memoire of November 24, 1970. Accordingly, they decided to work out with other interested governments the necessary arrangements for beginning the multilateral preparatory talks.
9.	Ministers stated that the aim of allied governments at the multilateral preparatory talks would be to ensure that their proposals were fully considered at a conference and to establish that enough common ground existed among the participants to warrant reasonable expectations that a conference would produce satisfactory results.
10.	Prepared in this way, a Conference on Security and Co-operation in Europe should constitute an important factor in the process of reducing tension. It should help to eliminate obstacles to closer relations and co-operation among the participants while maintaining the security of all. Allied governments look forward to a serious examination of the real problems at issue and to a conference which would yield practical results.
11.	Ministers considered that in the interests of security the examination at a CSCE of appropriate measures including certain military measures aimed at strengthening confidence and increasing stability would contribute to the process of reducing the dangers of military confrontation.
[Stage Direction]
June 5, 1972
12.	Ministers noted the Report of the Council in Permanent Session concerning a Conference on Security and Co-operation in Europe. The Report examined the issues which might be included on the Agenda of a Conference as set forth in paragraph 13 of the Brussels Communique of December 10, 1971, as well as the procedural questions relating to the convening of a Conference. Ministers directed the Council in Parmanent Session to develop further its substantive and procedural studies in preparation for a Conference.
13.	Ministers representing countries which participate in NATO's Integrated Defence Programme recalled the offers to discuss mutual and balanced force reductions which they had made at Reykjavik in 1968, at Rome in 1970 and subsequently reaffirmed.
14.	These Ministers continue to aim at negotiations on mutual and balanced force reductions and related measures. They believe that these negotiations should be conducted on a multilateral basis and be preceded by suitable explorations. They regretted that Soviet Government has failed to respond to the Allied offer of October, 1971 to enter into exploratory talks. They, therefore, now propose that multilateral explorations on mutual and balanced force reductions be undertaken as soon as practicable either before or in parallel with multilateral preparatory talks on a Conference on Security and Co-operation in Europe.
15.	These Ministers noted the studies conducted since their last meeting on political, military and technical aspects of mutual and balanced force reductions. They instructed the Permanent Representatives to continue this work in preparation for eventual negotiations.
16.	These Ministers stated that the present military balance of forces in Europe does not allow a unilateral relaxation of the defence efforts of the allies. Unilateral force reductions would detract from the Alliance's efforts to achieve greater stability and detente and would jeopardize the prospects for mutual and balanced force reductions.
17.	Ministers took note of a report by the Council in Parmanent Session on the situation in the Mediterranean. They expressed their concern regarding the factors of instability in the area which could endanger the security of the members of the Alliance. They instructed the Council in Permanent Session to follow closely the evolution of the situation and to report to them at their next meeting.
18.	The next Ministerial Session of NAC will be held in Brussels in December 1972.
19.	Ministers requested the Foreign Minister of Luxembourg to transmit this communique on their behalf through diplomatic channels to all other interested parties, including neutral and non-aligned governments.
[Stage Direction]
Tuesday. June 6. 1972