1973-07-17

PRESENCE IN SPEAKER'S GALLERY OF DELEGATION FROM KOREAN NATIONAL ASSEMBLY

Mr. Speaker:: Order, please. I should like to bring to the attention of hon. members the presence in the Speaker's gallery of a distinguished parliamentary delegation consisting of five members of the Korean National Assembly, led by Dr. Paik Too Chin.


Some hon. Members:: Hear,, hear!


Mr. Speaker:: As many hon. members will know, Dr. Paik served twice as prime minister of the Republic of Korea, before being elevated to the dignity of the Speakership.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I must say, however, that this last position Dr. Paik relinquished, to become chairman of the Yujong-hoe group in the national assembly of his country.
[Translation\
Hon. members will recognize, I am sure, that this visit will help draw closer the bonds of friendship which now exist and have existed for a long time between the Republic of Korea and Canada.

I am sure that hon. members will hope and trust that this visit of our distinguished parliamentary colleagues will be both fruitful and useful.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, under Standing Order 41(2) I should like to table in both official languages further background documents concerning the Western Economic Opportunities Conference. The final background document will be tabled later this week.


CONFLICT OF INTEREST
Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, I should like to make a statement with respect to conflict of interest concerning members of parliament. It is necessary for us as members of parliament to turn our attention from time to time to standards of conduct as trustees of public confidence, and to devise and re-examine rules and sanctions governing the behaviour of members of parliament so as to assure the people of Canada that private interests will not be allowed to take precedence over the public interest.
It is with this purpose in mind that I am tabling a green paper containing the government's proposals for a policy on conflict of interest as it relates to both Houses of Parliament. Part of the problem related to the controlling of conflict of interest is to define such conflicts, especially for the purposes of legislative expression.
The green paper confines itself to a discussion of the most easily recognizable and potentially most harmful area of conflict of interest, that involving private financial interests. In the paper, a conflict of interest is defined as a situation in which a member of parliament has a personal or a private pecuniary interest sufficient to influence, or appear to influence, the exercise of his public duties and responsibilities. The limitation of the definition to pecuniary interest is a practical limitation resulting from the need to be able to identify the conflict sufficiently to formulate legislation and rules. This green paper includes an analysis of the problem and a set of proposals as a first step in the evolution of formal standards.
The history of legislation in this field in Canada and in other jurisdictions indicates that two main approaches have been taken to the problem of control. One is avoidance, the other, disclosure. The proposals advanced in the green paper are intended to achieve three principal objectives. First, to curtail the abuse of public office; second, to eliminate, where possible, the appearance of a conflict of interest; and third, to suggest a set of guidelines in accordance with which all members will be expected to govern their behaviour.
We have divided conflict of interest into four areas. First, corrupt practices and prohibited fees; second, incompatible offices; third, government contracts; and fourth, financial interests.
The proposals recommend little substantial change in the presently existing law relating to corrupt practices. Bribery should certainly continue to be a criminal offence and should remain as part of the Criminal Code rather
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July 17, 1973
Conflict of Interest
than being incorporated in the independence of parliament act.
The new proposals falling under the heading of prohibited fees would prevent members of the House of Commons or Senate from accepting a fee or reward for intervening on behalf of constituents or members of the public before government boards or tribunals, public servants or fellow members of parliament.
The proposals relating to incompatible offices would make the holding of nearly all federal and provincial offices incompatible with membership in the House of Commons and Senate, even if there is no salary attached to these offices. The only necessary exception would be those offices especially provided for in an act of parliament.
Perhaps the most important area in which proposals are made is the area of government contracts. It is proposed that legislation be passed which would generally prohibit members of the House and Senate from participating or deriving any benefit from government contracts. The prohibition would apply to the holding of a contract personally or participating indirectly as a shareholder in a company or as an officer, director or manager of a corporation with a government contract.
The variety and range of various relationships which can exist between governments and individuals makes it essential, however, that members of parliament receive some relief from this very wide-ranging provision. There are seven general exceptions proposed to this general prohibition. It is in relation to these exemptions that members would be required to comply with a system of annual registered disclosure of specified interests.
These disclosure requirements will fulfill the objective of apprising the public of those private interests which members have which are of relevance or potential relevance in the administration of their public duties, but at the same time will ensure the privacy of the individual member with respect to those interests which are not relevant to conflicts of interest.
It is in the area of financial interests that it is proposed the other commonly used form of disclosure be applied. This is the verbal disclosure which members will be required to make at the relevant time. We are proposing resolutions from both Houses requiring members to ensure that they do not benefit, or appear to benefit, from the use of information which may have been provided to them as members of parliament on a confidential basis.
There is a special group of proposals in the green paper which outline the sanctions to be applied and the administrative machinery necessary to ensure that the proposed scheme is workable.
With regard to any rules contained in the Standing Orders of the House of Commons and Rules of the Senate, the respective bodies would be responsible for their administration.
What I consider to be central to the success of the others is the recommendation that a standing committee of each House be designated and charged with a permanent reference to investigate all questions of conflict of interest, to provide members on request with advisory opinions and to advise the House on a regular basis of any changes which
	-
are needed in the rules governing conflict of interest. There will be a continuing need for observation and reform.
These committees would also be empowered to gram dispensation or relief to any member from the application of certain provisions of the proposed act if it is thought that a particular provision would create undue personal hardship for the individual member or not be in the public interest.
In addition, the independence of parliament act would contain penalties applicable to those who knowingly violated its provisions. Members of the House of Commons who refused to divest themselves of prohibited conflicts would be automatically disqualified within a short period of time and Senators would be subject to a fine severe enough to discourage them from remaining as Senators.
Mr. Speaker, this has been a somewhat cursory abbreviation of the proposals contained in the green paper. It is the intention of the government that this paper be referred to a parliamentary committee for discussion and examination and that out of this discussion a commonly accepted system of dealing with conflicts of interest could evolve. The proposals put forward here are not advanced as unalterable but as a foundation upon which further discussion could take place. I do hope, however, that they will provide at least a framework which would serve as a guide in the consideration of the question of conflict of interest and that the eventual rules will assure the Canadian public that their interests are primary. I also hope the development of such rules will assist hon. members in a very difficult and complicated area.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I welcome the fact that the government, through the President of the Privy Council (Mr. MacEachen) has at long last acceded to the pressure placed upon it by producing these proposals. I am not saying this in any too critical way. It is a very difficult problem. I know the government had before it a proposal by Professor Williams of the University of Alberta made in 1969. Four years have gone by, and the government has finally produced its document.
I thank the minister for having given me as much notice as he could. This is a very lengthy and detailed document and I have not been able to absorb it to the extent I would have liked. I may say I am very glad it is in the form of a green paper and not a white paper. This is one of the wonderful benefits of having an election in store. Certain advantages accrue from the situation. Instead of a white paper being produced with all the celestial certainty the government once had, a green paper is put forward containing tentative proposals for the House to discuss. That is the way in which the government ought to proceed.


Pierre Elliott Trudeau: On energy policy, too?


Gerald William Baldwin: I would suggest that the government proceed along these lines, by way of green papers instead of white papers, in many more fields of activity, in which case it will live more happily during the very brief period which still remains to it.
As the minister said, there are problems connected with the avoidance and disclosure of conflict of interest and, of course, there are certain exemptions provided. It would be presumptuous of me to attempt to deal in detail or at any
July 17, 1973

length with these proposals. They are very wide ranging and they cover many aspects of our parliamentary life, of our association with the business community and with the world of commerce. I intend to be very general in my approach, bearing in mind that there will be an opportunity in the course of the committee studies to go into detail and make recommendations. I am glad the government has recognized the difference between the public approach and the special approach, and the fact that members of parliament are also members of the public and are entitled to the same benefits as are members of the public generally. We, too, pass the age of 65 and become entitled to certain benefits. We borrow money from the Farm Credit Corporation; we sell grain to the Canadian Wheat Board, and sometimes we even have children and become entitled to the family allowance, then becoming clients of the Minister of National Health and Welfare (Mr. Lalonde). I think the government, in making that distinction, has been quite wise.
With regard to the suggested limitation of 5 per cent, I think this will be a matter for consideration and discussion, and I will not deal with it in any greater detail now.
On the question of disclosure and the suggestion that in addition to disclosures which must be made in the sense that there must be registration there is this disclosure required to be made in this House, I think this is good. If a member of this House or the Senate has holdings which fall within the allowable limit, and I think this is probably the intention of the government as enunciated in its green paper, I still think the member should make full and adequate disclosure of his interest. Having made such a full disclosure, the hon. member of this or the other place can then become an advocate in the House with the freedom that disclosure has given. There may be some problems about the details of disclosures during the question period. I think this might present some difficulties for Your Honour. An hon. member, before asking a question, might say he has so many shares in such and such a company, but less than 5 per cent, and in spite of that fact he wants to ask a question. These are only practical difficulties which I am sure this House, with its good sense, will be able to overcome.
The exemptions to be permitted to be given by the House probably represent a wise move, but whether that right should be extended to a committee of the House is something I should like to consider very carefully. Whether a committee of the House should have the same authority as the House in granting exemptions is something else.
Having regard to Crown corporations, from a perfunctory reading of this green paper I am not certain whether they will be included in this prohibition in relation to government contracts and money, but I assume that is the idea and that legislation will follow accordingly. There is also the question of future benefits. To what extent would a member of the House, having participated and having been a strong advocate in a certain position, be entitled at a later stage to accept future benefits, once the specified time had elapsed and after the legislation had been enacted?
Conflict of Interest
We all know the situation in the United States where high-ranking officers in the Pentagon went on, after their service in that institution, to become executive officials to some very large corporations with which that government had been doing business, and we know the problems that were created. This is an issue we will want to look at very closely. After a member ceases to be a member of this House or the other place, to what extent would he or she be entitled to take advantage of the advocacy which took place in this House in respect of certain issues? I do not intend to go beyond that question, but I hope we can give full effect to the bona fide intentions of the government. We must remember that it is not only what we say that is important but also what we do.
I think we must work out methods by which there can be the fullest possible inquiry into any of these issues, and whether this is done by a committee of the House or through another form of inquiry is unimportant. I think I am entitled to say to this government that its conduct in the last few weeks in respect of this legislation in relation to the granting of full inquiries into certain actions that have been brought to the attention of the House and the government warrant us filing a caveat by suggesting that when the legislation or the proposals come up for discussion, any proposal, any legislation or any change in the standing orders which does not provide for or in any way inhibits the fullest inquiry when problems do arise will not be satisfactory to this party.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, the green book tabled today by the President of the Privy Council (Mr. MacEachen) is a very important document, and I thank the minister for having supplied us with it as well as a copy of his statement at least an hour ago. The subject is one that is of basic concern to the proper functioning of a political democracy. I hope the government, having come to this point and having introduced this interesting and valuable paper, will make it possible for parliament to pursue this matter, take the necessary legislative steps and also change the rules as suggested in the document now before us.
It has been said by more than one prominent Canadian that public representatives and elected persons have the right to be regarded as honourable men and women. I am sure all of us in this House agree with that pronouncement. It is also true, however, that the public has the right to be sure, and it is for that reason that legislative steps must be taken and rules and regulations must be laid down. In the brief time I have had to peruse the green paper I think I can say it does cover the subject very well. It poses the problems and makes suggestions that would come to grips with the situation. However, Sir, there are a few comments I should like to make.
My comments relate to points which I think should be included in this matter right from the start. In the first place I find in the green paper far too many uses of the words "exception", "exemption", "relief" and "dispensation". Those four words occur again and again. Rules are laid down covering what members of this House and of the Senate must do, but then so as not to interfere unduly with the work of a member or Senator this exemption might be given or that dispensation might be granted. I
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July 17, 1973
Conflict of Interest
believe the statement goes too far in watering down the very good proposals contained in the document.
Let me cite as an example, although in this case it is not an instance of relying on general words but is a specific proposal. In the case of members being prohibited from having shares in a company which enters into a contract with the government, there is the exemption that if the member's holdings are less than 5 per cent of the total shares of the company then the prohibition does not apply. It strikes me that there could be cases where a holding of 4.9 per cent of the shares of a company could be a very substantial holding. I suggest we should go a lot further in that regard.
Likewise I find references to what are popularly called blind trusts. I think greater use could be made of this practice than is suggested in the document. I also feel that more could be said about the whole question of being directors of companies. I find references to the holding of shares in companies, but I do not find, so far as members of parliament and of the other place are concerned, a prohibition against being directors. We know that in the other place this practice is almost an abuse. When one member of the other place can be a director of more than 20 companies, it is that sort of situation which raises the whole question of conflict of interest to serious proportions.
I contend that the document and any legislation or rules that are laid down in this respect should have something to say about directorships in companies, whether or not they are in companies that have contracts with the government. Of course, you would not expect me to leave this phase of the matter without saying that I think the simplest way to avoid conflict of interest so far as members of the Senate are concerned is to abolish it.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: I am not surprised at the fact that my own colleagues have applauded that statement, but I appreciate the fact that there has been applause from some of the other quarters of the House as well.
I feel that the statement is also deficient, and so is the proposed legislation, in that it makes no reference to conflict of interest so far as senior public servants are concerned. I dealt with this in a bill of mine, Bill C-38, which has been on the order paper since the beginning of this session, and I believe that my proposals in that respect should have been included in the bill proposed in this green book. After all, those senior public servants who are involved in policy making decisions can be just as deeply involved in what might be called a conflict of interest as members of parliament. As a matter of fact, I suggest that they can become more involved than private members of parliament. That, of course, leaves open the question of what should be done with respect to cabinet ministers, but I understand that a statement in that area is coming later.
I am about to conclude my remarks, Mr. Speaker. The final statement that I want to make is that I think all of us have to face up to the fact that when we are talking about

conflict of interest we are talking not just about the dollars that can accrue to an individual because a company with which he is connected has a contract with the government but we are talking in much larger terms about the social directions in which legislation can go. It is for this reason that I firmly believe that the disclosure procedures of any legislation should be very full. The public has the right to know what are the social and economic interests of all the members in this place, as I say, not just so that they will be on guard against their making a few dollars out of a contract but so that they will know the kind of legislation that we can expect out of parliament, whether it be legislation in the interest of the financial and business community or legislation in the interest of people as a whole. In the final analysis, the voters make the decision as to what kind of persons they want here, but I believe it is our responsibility to make it clear that it is known what the interests of all members of this place are. The only reason I did not refer to the other place as well is that I have already indicated what we should do with it.
We welcome the introduction of this subject. A couple of years ago the Prime Minister said they had looked into it but that nothing more needed to be done. I am glad to see that he has come to the realization that something needs to be done, and we hope that action will be taken at the earliest possible date.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, on behalf of my colleagues and my own behalf, I thank the minister for having made his statement to the House today on conflicts of interests in the case of members of parliament and senators.
Mr. Speaker, the minister mentioned a while ago that part of the problem with regard to the control of conflicts of interests lies in the fact that such conflicts are difficult to define, particularly for legislative purposes. The minister divides in four categories the points on which there can be conflicts of interests.
First of all, corrupt practices and prohibited fees. I believe all hon. members will agree on this.
Second, incompatible offices. A member cannot be, I feel, deputy minister on Bronson while representing a riding in the House of Commons. His duties as deputy minister would be incompatible with those of a member of parliament; everyone will also recognize this.
The third group refers to government contracts. Now, if a member of parliament became a contractor to obtain contracts from the Department of Regional Economic Expansion, for example, I think that nobody would accept that, including the senators, I suppose.
Finally, mention is made of financial interests. It is especially on that point, I feel, that the interpretation of the legislation by government officials is wrong and I will merely give you a personal example.
I am the president of a company in Rouyn-Noranda, the Garage Joyal Limitee and at certain times during the year, I could hire additional labour to help fight efficiently against unemployment. However, my competitors can apply to the manpower centre in Rouyn and perhaps create half a dozen jobs, the manpower centre contribut-
July 17, 1973

ing 75 per cent of salaries, while the government official tells me that I cannot create such jobs, precisely because I am a member of parliament. The same thing can happen in other fields where there is no conflict of interest but misinterpretation by a government's officer.
It is in this fourth category, I think, that financial interests affect many members of parliament, and it is there, Mr. Speaker, that, according to me, the President of the Privy Council (Mr. MacEachen) should have told us if he considers establishing an apparatus to supervise those four categories of conflicts and the participation of members of both Houses in corporations that are not of governmental nature, which almost never deal with the government, and which, at a given time, are forbidden to benefit from the same rights as the other corporations of their kind, but where there is no member of parliament involved.
It would be good to establish clearly in the bill the financial interests covered by the minister's statement, and the apparatus the minister intends to use for watching these conflicts whatever they may be.
Mr. Speaker, the introduction of this document is altogether timely. The minister draws the attention of all members of parliament and senators on a matter which, today, is debated not only here but in several countries, especially in the United States for the past seven or eight weeks. We would not like to see the same thing happen in this country. We want to take the required steps so that these things be avoided in Canada, but we must act openly.
There is one thing, in Canada as elsewhere, that should also be watched closer and I know that it is being talked about. It is the issue of election funds. A minister may write to big firms, even American ones, and ask for funds in order to finance an election campaign; then, there is certainly a conflict of interest, perhaps not directly but indirectly personal, because the interest of the minister's party is at stake. Then, it would be good to establish the required machinery in order to check the acts, the behaviour or the interests of members of parliament and also of political parties so as to give the people the certainty, the conviction, that their representatives are not corrupt but individuals at their service.


SOCIAL SECURITY
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, pursuant to Standing Order 43,1 request the unanimous consent of the House to discuss a most urgent question, namely the constant increase in the cost of living.
I move, seconded by the hon. member for Rimouski (Mr. Allard):
That the House proceed immediately to the consideration of Bill C-21I on family allowances so that the increase may become effective for the fall school term in September 1973, and so as to
Finance
increase the income of low and middle income families and help them face the high cost of living.


Mr. Speaker:: The House has heard the hon. member's motion. Under Standing Order 43, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent. The hon. member's motion cannot therefore be put.


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, the bill appearing on the order paper entitled "An act respecting certain immigration laws and procedures" has been the subject of discussion through the usual channels. I understand there is a disposition that unanimous consent might be granted to waive the ordinary notice and go forward with first reading today.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.


IMMIGRATION
Robert Knight Andras: for leave to introduce Bill C-212, respecting certain immigration laws and procedures.


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

Mr. James Gillies (Don Valley):: Mr. Speaker, I ask leave seconded by the hon. member for Edmonton West (Mr. Lambert) to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring immediate consideration; namely, the urgent need for the Canadian government to set out its intentions and proposals with regard to the deteriorating international monetary situation and the threat to Canadian world trade therein.


Some hon. Members:: Hear, hear!

July 17, 1973
Oral Questions


Mr. Speaker:: The hon. member for Don Valley (Mr. Gillies) has filed the notice required by Standing Order 26. He has also been kind enough to leave with me some written material in support of the suggestion that an emergency debate be allowed relative to the matter to which he has just alluded. I want to assure the hon. member that I have studied very seriously his motion as well as his representations in support of it.
To be sure, the current international monetary problem constitutes a serious matter which concerns all members of this House. It is one which I am sure many members of the House would like to have an opportunity to discuss. This is a consideration which the Chair must take into account, along with a number of other factors outlined in section 16 of Standing Order 26 and in numerous relevant precedents.
The Standing Order stresses that the matter proposed for discussion must relate to a genuine emergency calling for immediate and urgent consideration. My interpretation of the Standing Order is that it is intended to provide an opportunity not just for a special debate of important matters which may be of general interest to members but for an emergency debate required by sudden circumstances.
Since the problem proposed for discussion by the hon. member for Don Valley is in the nature of a continuing difficulty, as evidenced by a series of questions asked by the hon. member himself over a period of time, I would hesitate very much to rule that Standing Order 26 is applicable so as to set aside the business of the House today for an emergency debate. In view of the importance of this problem and the concern which it evokes, hon. members would hope, I am sure, that it might be possible to discuss this matter in some other way than under the provisions of Standing Order 26.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask the right hon. Prime Minister if he can now indicate to the House whether he has directed a review of the government's economic policy in light of today's very disturbing unemployment figures and last week's disturbing cost of living figures?


Pierre Elliott Trudeau: Mr. Speaker, I did not issue any special directive on that. There is a planning procedure whereby periodically and frequently the Minister of Finance reports to cabinet and cabinet discusses these matters so important to the Canadian people.


Robert Lorne Stanfield: Mr. Speaker, a supplementary. I should like to ask the right hon. gentleman whether he is not yet

persuaded to examine some means of dealing with inflation other than the means which create high interest rates and have a very dampening effect upon the creating of jobs in the country, particularly slow growth regions of the country, now that interest rates are mounting very rapidly?


Pierre Elliott Trudeau: Yes, Mr. Speaker, very many other measures have been examined. Indeed, several have been brought in through the budget and other measures.


Robert Lorne Stanfield: A supplementary, Mr. Speaker. It is surely apparent that these methods have not been effective. I should like to ask the Prime Minister, with something over half a million Canadians unemployed in the month of June, the summer, what the forecasts are with regard to employment in the fall and winter and very specifically what plans the government has ready with regard to respective fall and winter unemployment and when such plans will be discussed with the provinces?


Pierre Elliott Trudeau: Mr. Speaker, I repeat, such discussions and plans are under continuous consideration by the cabinet. I hardly agree with the premises of the Leader of the Opposition when he says that the government is dampening the growth of the economy. When you have an increase of 528,000 jobs on a year over year basis, this is hardly a dampened economy, Mr. Speaker.


Some hon. Members:: Hear, hear!
[ Translation]


SUGGESTED CONFERENCE ON QUEBEC ECONOMIC OPPORTUNITIES
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I would like to ask a supplementary question of the Prime Minister.
Considering the real and significant increase in unemployment, especially in Quebec, does the Prime Minister intend, in view of a decentralizing policy that appears to have become his own and failing the holding of a conference on priorities for Canada, to call an Ottawa-Quebec conference where economic opportunities for Quebec could be analysed?


Pierre Elliott Trudeau: Mr. Speaker, I do not think it is necessary to hold such a conference. There are continuous exchanges between the premier of Quebec and the Prime Minister of Canada, between his cabinet ministers and federal ministers on various subjects, from finance through trade to regional expansion. Therefore, I do not intend to hold a particular conference, Mr. Speaker, but to continue our good relationships that have served for at least two years to rebuild and strengthen the Quebec economy.


JOB CREATING PROGRAMS-SUGGESTED CONFERENCE ON POSITION OF NEWFOUNDLAND-GOVERNMENT POSITION
Stanley Howard Knowles: Mr. Speaker, may I direct a supplementary question to the
July 17, 1973

Prime Minister. Can the Prime Minister say whether the government has ready or almost ready a direct job creating program for such a period as this and, if so, when will it be announced?


Pierre Elliott Trudeau: Mr. Speaker, the House will remember that one year ago we had a program which was to be spaced over a period of three years, and discussions have gone on with the provinces. There are more funds to be expended under this program. As to other programs not yet announced, I am afraid the hon. member will have to wait and see what action the government will take in the hypothetical situation that he suggests.


Stanley Howard Knowles: Mr. Speaker, may I direct another supplementary question to the Prime Minister. As it is a matter of deep concern to all Canadians that every time these unemployment figures come out Newfoundland is at the top of the list, I wonder whether the Prime Minister will consider holding a Newfoundland economic opportunities conference to see whether we can do something for that province?


Mr. Speaker:: The Chair will recognize the hon. member for Temiscamingue.


Stanley Howard Knowles: On a point of order, Mr. Speaker, I think the Prime Minister was trying to get on his feet to answer my question, and surely he should be allowed to answer if he wishes to do so.
[ Translation]


Mr. Speaker:: I recognize the hon. member for
Temiscamingue.


INCREASE IN UNEMPLOYMENT RATE-REQUEST FOR EXPLANATION
David Réal Caouette: A supplementary question, Mr. Speaker.
Since the Prime Minister is always so well informed of the situation and the ups and downs of the unemployment rate in Canada, what does he feel is responsible for the increased number of unemployed this time of the year?


Mr. Speaker:: I do not think that a question thus enunciated is quite in order. The Prime Minister may wish to answer, but when the hon. member asks the Prime Minister what he feels a situation is attributable to, I doubt that such a question is in order. As I am aware, however, that some hon. members are anxious to ask a series of questions on this important topic, I have no objection to the Prime Minister answering the question put by the hon. member for Temiscamingue, if he so desires.


Pierre Elliott Trudeau: Mr. Speaker, I would just like to point out to the hon. member that the figures do not indicate whether there has been an increase in the unemployment rate. In actual terms, unemployment has continued to decrease in June. It is when we talk about seasonal figures that the hon. member can draw this conclusion, but that does not mean that there are fewer workers at work; on the contrary, there are more.

Oral Questions YOUTH


OPPORTUNITIES FOR YOUTH PROGRAM-JOB CREATING PROGRAMS FOR YOUNG PEOPLE-REQUEST FOR STATEMENT OF GOVERNMENT POLICY
Mr. Joe Clark (Rocky Mountain):: Mr. Speaker, may I direct a supplementary question to the Secretary of State. I would ask the minister if he can confirm that it is now the government's intention not to combine the LIP and OFY programs and that, despite the continuing climb in real unemployment among young people, it is now proposed to orient OFY away from direct job creating activities. If so, what is the government going to do to help young Canadians find jobs.


Hon. James Hugh Faulkner (Secretary of State):: Mr. Speaker, as the hon. member knows, if there is any change in the form of OFY, it will be announced in the normal way. As I have indicated to the House before, there are discussions going on now about the future of OFY, and these will be concluded.


Charles Joseph Clark: Mr. Speaker, will the minister now give a firm undertaking to reconsider the government's decision not to tell the House about those plans before the parliamentary recess and make an early and full statement on motions relative to the future of OFY and any new program to help young Canadians find jobs?


James Hugh Faulkner: Mr. Speaker, I prefer to make the announcement after we have concluded our discussions, and as the House may rise shortly, those may not be concluded by that date.


THE CANADIAN ECONOMY
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, may I direct a supplementary question to the Prime Minister. As retail sales, housing starts, manufacturing shipments and new orders have all been slackening while unemployment has started to rise again, is it the government's intention before the House recesses for the summer-I will wait until the Prime Minister has finished waving to the gallery. Is he through? Is it the intention of the government, before the parliamentary recess for the summer, to introduce an industrial strategy that will get the economy moving at a satisfactory pace?


Pierre Elliott Trudeau: Mr. Speaker, that really depends on the date on which Parliament will adjourn for the summer, and I believe no adjournment date has been put before the House as yet.


George Harris Hees: A supplementary-


Mr. Speaker:: The Chair will recognize the hon. member for a supplementary, then the hon. member for Yorkton-

July 17, 1973
Oral Questions
Melville on a supplementary, and then the hon. member for St. John's East.


George Harris Hees: Mr. Speaker, would the Prime Minister advise the House, if the House does not adjourn for, say, another couple of weeks, when we can expect the government to announce an industrial strategy which will get the economy moving?


Pierre Elliott Trudeau: Mr. Speaker, the question is hypothetical.


FINANCE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, may I direct a supplementary question to the Prime Minister-


George Harris Hees: That's the same old Pierre.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: If the Prime Minister could pay attention for a moment, Mr. Speaker-


George Harris Hees: There must be a girl in the gallery.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: Mr. Speaker, may I direct a supplementary question to the Prime Minister.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: Mr. Speaker, I will try the Minister of Finance. Apparently the Prime Minister does not give a damn. In view of the fact that one of the major United States banks has increased its prime interest rate to a level as high as that of 1969, which was a record, and as Canadian interest rates usually follow those in the United States, can the minister assure this House that there will not be any further increase rates in this country before the end of this year.


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I have followed a policy which the House will generally support of not speculating either in terms of the forward movement of interest rates or of exchange rates and, of course, I could not give that assurance.


Mr. Speaker:: Hon. members will note that there are a number of members seeking the opportunity to ask sup-plementaries. I will try to complete the first round of questioning in a moment, and, as I said, the hon. member for Yorkton-Melville and the hon. member for St. John's East may ask their supplementaries.


Lorne Edmund Nystrom: Mr. Speaker, in view of the widespread speculation in the country that the banks are likely to increase their interest rates soon in this country, can the Minister of Finance not assure the House and the country that he will impose controls or restraints of some type

upon interest rates so that they will not increase for the Canadian consumer this year?


John Napier Turner: Mr. Speaker, I cannot give that guarantee.


SUGGESTED REVIEW OF BANK OF CANADA MONETARY POLICY WITH A VIEW TO INCREASING MONEY SUPPLY IN SLOW GROWTH AREAS
Mr. James McGrath (St. John's East):: Mr. Speaker, may I direct a supplementary question to the Minister of Finance. In view of the unseasonably high rate of unemployment in Quebec and the Atlantic region and the effect that high interest rates are having on those slow-growth regions, may I ask the Minister of Finance if he is prepared to review the present policies of the Bank of Canada of increasing interest rates, with a view to making money more readily available to those slow-growth regions?


George Harris Hees: And don't give us that old stock answer again.


John Napier Turner: Mr. Speaker, the monetary policy of the Bank of Canada is that of expanding the money supply at a rate sufficient to accommodate the expansion of the economy, which is expanding-


George Harris Hees: That is the same old stock answer.


Mr. Speaker:: May we have order please?


John Napier Turner: -at an annual rate, taken over the last six months of 12 per cent compounded. I think the House is entitled, in reviewing the figures that were announced today, to recognize first of all that no one, neither Parliament nor the government, is satisfied with the level of unemployment. But we are entitled to recognize that the economy, if we consider June, 1973, over June, 1972, has produced 529,000 new jobs, a rate of 6.2 per cent of new job creation, which is the largest increase of this type in the history of this country.


James Aloysius McGrath: May I ask the Minister of Finance, by way of a supplementary question, if he feels that an unemployment rate of 12 per cent of Newfoundland, 9.3 per cent in the Atlantic provinces and 7.4 per cent in Quebec for the month of June constitutes a sufficient rate of expansion?


John Napier Turner: Mr. Speaker, I am certainly not satisfied with those unemployment rates, but I think parliament should take note of the fact the trend in unemployment, seasonally adjusted since the turn of the year has decreased from 6.7 per cent to 5.3 per cent.
July 17, 1973


PRIVACY
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Prime Minister. In view of the report that President Nixon's conversations in his two White House offices during the past two years were tape-recorded, will the Prime Minister assure the House that meetings taking place in his office, either with domestic or foreign visitors, are not being tape-recorded?


Pierre Elliott Trudeau: Yes, Mr. Speaker.


DISPOSITION OF TAPE-RECORDINGS OF CONVERSATIONS BETWEEN PRIME MINISTER AND PRESIDENT NIXON
Stuart Malcolm Leggatt: I might say, Mr. Speaker, I am pleased with the reply. In view of the fact some of the conversations in the White House were between the Prime Minister and President Nixon, can the Prime Minister advise the House if he has been supplied with tape-recordings of those conversations?


Pierre Elliott Trudeau: Mr. Speaker, it seems to me the question is making light of a very important subject. This government takes the position that it is very important; that is why we have introduced legislation to that effect in this House.


Stuart Malcolm Leggatt: Mr. Speaker, I rise on a point of order to indicate that the questions was not asked facetiously. There is a bill presently under consideration by this House. This is a matter of some importance to the House.
[La ter;]


KNOWLEDGE OF PRIME MINISTER OF TAPING PROCEDURES OF PRESIDENT NIXON-REQUEST FOR TRANSCRIPTS OF TAPES
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I wish to direct my question to the Prime Minister. Did the Prime Minister have any knowledge that his conversations in the oval room and the hideaway office with President Nixon were being taped when he was there on December 6, 1971?


Pierre Elliott Trudeau: Mr. Speaker, I had no knowledge then, and I have no knowledge now, that they were taped.


Allan Frederick Lawrence: In view of press reports which clearly indicate the tape-recorders were not turned off when the Prime Minister was there, and in view of the fact that it is now within his knowledge, will the Prime Minister take steps to get transcripts of those tapes from the White House administration?


Pierre Elliott Trudeau: Mr. Speaker, when I talk in confidence to a head of another government, I operate under the presumption the conversations are private and privileged. I still maintain that presumption.
Oral Questions


Allan Frederick Lawrence: When it is obvious that these tapes are going to be produced to a legislative body of another jurisdiction, does the Prime Minister not feel we have the right to compare the tapes-


Mr. Speaker:: Order, please.

[ Translation]


EXTERNAL AFFAIRS
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I would like to direct a question to the hon. Secretary of State for External Affairs.
Since there is a lot of confusion in the statements made by the Zambian government following the assassination of the two Canadian girls, does the hon. minister intend to send members from the Standing Committee on External Affairs and National Defence to conduct an inquiry in Zambia in order that we know once and for all the truth about that tragedy?
[ English]


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, the answer is no. I do not think we would welcome a group of parliamentarians from Zambia investigating a matter of that kind in Canada.


INQUIRY OF THE MINISTRY
Mr. J. R. Ellis (Hastings):: Mr. Speaker, I wish to direct a question to the Minister of Transport. It has to do with conflict of interest. In light of allegations made by the Centre for Public Interest Law that an overly cozy relationship exists, with the president of Bell Canada sitting on the five-man salary board of the Canadian Transport Commission, will the minister explain how this can possibly be condoned and whether it will continue?


Mr. Speaker:: Order, please. I again have serious doubts about a question asked in those terms. The hon. member might like to seek his information in a regular way. It is debate to ask how a situation can be condoned or condemned. That is not a proper question.


John Raymond Ellis: May I rephrase my question and ask whether the minister feels there is a conflict of interest involved?


Mr. Speaker:: Order, please.

July 17, 1973
Oral Questions
[ Translation]


REGIONAL ECONOMIC EXPANSION
Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, I wish to direct a question to the Minister of Regional Economic Expansion.
Are the negotiations between the government of Quebec and the government of Canada about the revision of the policy of the Department of Regional Economic Expansion begun last May, completed, and when can we expect an announcement to be made?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, all phases are not as yet completed. I am happy to report that considerable progress is being made. There should be something to report within a matter of two or three weeks.
[ Translation]


ASSISTANCE TO EASTERN TOWNSHIPS-GOVERNMENT POSITION
Irénée Pelletier: Mr. Speaker, I wish to direct a supplementary to the Minister of Regional Economic Expansion.
Could the minister indicate if the government is prepared to make public the position of the government of Canada with respect to the assistance it intends to make available to the Eastern Townships?


Donald Campbell Jamieson: Yes, Mr. Speaker. In so far as the working papers are concerned, all of them have now been released. There may be subsequent papers which I will be equally happy to release. In so far as the eastern townships are concerned, we have identified these as being one of the areas of our greatest concern and where a considerable amount of our activity should take nlof~ in terms of regional development.


CEREAL GRAINS-REQUEST FOR ASSURANCE NO EXPORT CONTROLS WILL BE IMPOSED
Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, my question is for the minister in charge of the Canadian Wheat Board. Because the international and Canadian grain trade fear that government export permits will be required for all grains after harvest this fall, the Canadian Wheat Board had to turn down offers of $5 a bushel for No. 1 amber Durum wheat. Will the minister, in order to rectify this unusual situation, give an assurance that cereal grains will not be subject to export restriction by government permit in the coming crop year?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, I am convinced there can be nothing at all to the suggestion

of the hon. member with regard to the specific sale. I am also convinced the Wheat Board is fully aware of what I will state, that is, that the basis for export of wheat, barley and oats will be exactly the same next year as it has been for many years.


AIR TRANSPORT
[Stage Direction]
Mk. Don Blenkarn (Peel South): Mr. Speaker, I have a question for the Minister of Transport. Will the minister confirm or deny the suggestion that is abroad-
Mr. Speaker:: Order, please. I am sure the hon. member realizes that a question asked in those terms is clearly out of order.


Mr. Blenkarn:: Is the Minister of Transport attempting to force Canadian Pacific airlines to abandon its entry into Amsterdam in order to acquire the rights to Milan?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, this is the first time I have heard about this.


Donald Alex Blenkarn: Has the government calculated the loss of revenue to Canadian carriers by virtue of the fact that landing rights in Milan have not been granted to them?


Mr. Speaker:: Order, please.


GOVERNMENT ADMINISTRATION
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, I wish to direct a question to the Prime Minister. Is it government policy that in all federal programs which invite applications from the Canadian public, after determination of approval or rejection by the department involved the notification of approval is transmitted by letter, over the signature of the cabinet minister concerned, on ministerial stationery, whereas those whose applications are rejected are so informed by public servants in the department involved, on ordinary departmental stationery?


Pierre Elliott Trudeau: Mr. Speaker, this is the first time I have heard this representation. I will consider it.


Paul Wyatt Dick: Mr. Speaker, I wish to direct a supplementary question to the Secretary of State. Will the minister kindly inform the House whether all those whose Opportunities for Youth applications were approved were notified by letter, on ministerial stationery, signed by himself, whereas all those whose OFY applications were rejected

were notified by letter, on departmental stationery, on a plain letterhead signed-


Mr. Speaker:: Order, please. The hon. member's second question sounds very much like the first. Perhaps the minister might be allowed to reply to the question.


James Hugh Faulkner: Mr. Speaker, it was a decision we took to do it that way.


TRANSPORT
Robert Lorne Stanfield: Mr. Speaker, I wish to direct a question to the Minister of Transport who has indicated he is waiting for a response from the premiers of the Atlantic provinces. Is it correct that the minister and the premiers of the Atlantic provinces are waiting for a report and recommendations from a joint federal-provincial committee, chaired by one of the minister's officials, as stated by the Premier of Nova Scotia?


Jean Marchand: I think this is true. There was probably some confusion caused by an answer I gave in the House from which it could be inferred that I was expecting a reply from the premier whereas, in fact, it is an answer from the joint committee of the provinces and the federal government.


Robert Lorne Stanfield: Of which one of the minister's own officials is the chairman?


Jean Marchand: Yes.


ADMINISTRATION OF JUSTICE
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I have a question for the Solicitor General regarding the arrest of John Patrick Daniel Murphy in Dublin in connection with a shipment of arms found aboard the Manchester Vigour and the seizure in Toronto last Friday of a quantity of sub-machine guns. Can the minister tell us, following the investigation by the RCMP, whether the arms seized in Toronto are connected with the same Murphy? Was he the consignor of the arms which were shipped through Dubois International Limited of Montreal? Was he also responsible for a shipment which was made last fall, and have any arrests been made in Canada by the RCMP in connection with these incidents?


Hon. Warren Allmand (Solicitor General):: Arms were seized in Toronto in Mr. Murphy's residence but they did not seem to be associated in any way with the one sent to 26446-70^
Oral Questions
Ireland. They seemed to be personal arms he had in the house.


Some hon. Members:: Oh, oh!


William Warren Allmand: The arms which were seized in Toronto were restricted weapons-sub-machine guns, and so on.


Some hon. Members:: Oh, oh!


William Warren Allmand: I was trying to make it clear that the arms which were found in Toronto were not of the same type as were sent to Ireland. Mr. Murphy has been arrested in Ireland and charged with an offence. He has now been released on bail in Ireland.


Some hon. Members:: Oh, oh!


William Warren Allmand: The RCMP have been investigating this case for several weeks in conjunction with agencies abroad. As far as we know, Mr. Murphy is associated with the shipment of arms to Ireland. We do not know whether there were other consignors as well. This matter is being investigated at the present time.


POSSIBLE INVOLVEMENT OF S AND H AIRWAYS IN ARMS SHIPMENTS TO IRELAND-REQUEST FOR REPORT
Thomas Clement (Tommy) Douglas: May I ask the Solicitor General whether the RCMP have been investigating the flight of a DC-3 owned by S and H Airways of Toronto and flown by Oscar Stefanski?


An hon. Member:: That name is not Irish.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: It should be "O'Stefanski"!


Thomas Clement (Tommy) Douglas: Has the RCMP investigation revealed whether or not this plane, which went down just off Newfoundland, was making a trip from Algeria to Shannon and thence to Iceland en route to Canada, was carrying any arms shipment, and whether or not there were two passengers on board? If so, what were the names of those passengers?


William Warren Allmand: I have no information with respect to the plane referred to by the hon. member, but I will look into this aspect and report to him in due course.


BROADCASTING
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I wish to direct a question to the Minister of Communications. It concerns the application for a new television licence in the Vancouver area. In view of the fact that the chairman of the CRTC has stated that no decision has been made with regard to this application, though the western representative, Mr. Hal Dornan, has indicated that a decision was made two weeks ago, and since the hearings were held in June and concluded several weeks

July 17, 1973
Oral Questions
ago, could the minister tell us whether a decision has in fact been made and when an announcement can be expected?
[ Translation]


Hon. Gerard Pelletier (Minister of Communications):: Mr. Speaker, following a question by an hon. member I asked the chairman of the CRTC whether a decision had been made, and the chairman of the CRTC assures me that a decision has not been made but that it should be forthcoming.


INQUIRY OF THE MINISTRY
Mr. Roland Godin (Portneuf):: Mr. Speaker, I wish to direct a question to the Minister of Transport.
I wish to congratulate the minister for the participation of his department in the exhibition of the International Association of Navigation Congresses which took place-


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


Roland Godin: Mr. Speaker, since the exhibits put up by the government of Canada were limited to pictures and mock-ups of a few coast guard ships would the minister say when he will be able to invite us to a genuine exhibition of Canadian merchant marine ships?


PROPOSED MACKENZIE VALLEY PIPELINE-POSITION OF DISCUSSIONS WITH UNITED STATES
Mr. Trevor Morgan (St. Catharines):: Mr. Speaker, in the absence of the Minister of Energy, Mines and Resources may I address a question to the Prime Minister? In view of the vote in the United States Senate this morning approving the construction of the Alaska Pipeline, setting aside the provision of the Environmental Protection Act and removing any prospect of judicial review, can the right hon. gentleman tell me whether discussions are being continued in connection with the projected Mackenzie pipeline for gas and, if so, when it is expected that the results of such discussions can be made known to the House?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, on behalf of the Minister of Energy, Mines and Resources, I must say that the subject of the decision reached this morning by the Senate in Washington affects in no way the future of the construction of a pipeline in Canada, because the decision of the American Senate deals with oil. With regard to the discussions concerning the construction of a pipeline, the situation remains the same: we are still interested in having a pipeline built along the Mackenzie Valley.

f English]


HOUSING
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, yesterday I directed a question to the Prime Minister; it will be found reported at page 5627 of Hansard. I should now like to ask the Minister of State for Urban Affairs whether he would assure the House that the CMHC mortgage in connection with a large public project known as Trefann Court will not be approved until Mr. John Jordan, former executive director of Co-operative College Residence Incorporated has been investigated? Can he assure us that a mortgage will not be granted in connection with this large project until the secret investigation which is now going on has been completed?


Hon. Ron Basford (Minister of State for Urban Affairs):: As I said in the House the other day, at the request of the Mayor of Toronto and the government of Ontario a general commitment was made regarding Trefann Court housing because, of course, this is an urban renewal scheme which all governments, as well as the citizens involved, are anxious to see go forward. However, no specific application for a loan has been received, no loan application has been approved and none will be approved until I am totally satisfied that the taxpayers' interest in the investment is protected and all the inquiries I have made are answered satisfactorily.


Eldon Mattison Woolliams: In the report made by Mr. Yorke, counsel for the CMHC, it was stated that Mr. Jordan was incompetent as far as being the executive director of the colleges was concerned. If he was so incompetent, will the minister assure the House that in light of the report he has received from counsel, no sucA loan will be made to a man by the name of Jordan who is head of the group?


Stanley Ronald Basford: Mr. Speaker, irrespective of what any report may have said about Mr. Jordan, he is solely a consultant, as I understand it, and no loan would be made to him.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member on a supplementary question, but I must remind hon. members that we are running short of time. The Chair will then recognize the hon. member for Churchill, and the hon. member for Nickel Belt.


STUDENT CO-OPERATIVE PROJECTS-DATE WHEN CENTRAL MORTGAGE AND HOUSING FIRST AWARE OF ALLEGATIONS OF IMPROPRIETY BY VINCENT LAPETINA
Hon. Paul Hellyer (Trinity):: Mr. Speaker, my supplementary is directed to the minister. I gave him notice of this question. Can he advise the House when Central Mortgage and Housing Corporation was first made aware of the allegations by Vincent Lapetina in respect of irregular and illegal practices that existed in relation to certain student co-operative housing projects?
July 17, 1973


Stanley Ronald Basford: Mr. Speaker, I am advised that the corporation received the letter that Mr. Lapetina wrote to the audit services bureau, about which the hon. member has asked- I say this so that we are sure of what we are talking about-on October 25, 1971. Meetings thereafter were held between members of the staff of the audit services bureau and members of the staff of CMHC. I am advised that from those meetings the conclusion was arrived at that no further action should be taken.


Paul Theodore Hellyer: Mr. Speaker, does the minister wish to convey to the House that this letter in the fall of 1971 was the first indication CMHC had of these allegations?


Stanley Ronald Basford: No, Mr. Speaker, but I believe the question of which the hon. member gave me notice related to that letter and that is what I was answering. Whether other information was available or became available to officers of the corporation is still a matter of inquiry. Without trying to convey any implication at all, I was replying to-


Paul Theodore Hellyer: On a question of privilege, Mr. Speaker.


Mr. Speaker:: Order, please. The Chair will recognize the hon. minister in order that he may complete his reply. I note the hon. member is rising on a question of privilege. I should remind hon. members that we have only three minutes left before the end of the question period.


Stanley Ronald Basford: Mr. Speaker, just so we are clear, the hon. member's question related to Mr. Vincent Lapetina's allegation of irregularities. I believe that the first allegations were contained in his letter to the audit services bureau. If there are other allegations, I am not aware of them. That is when I believe Mr. Lapetina's allegations were first made.


Paul Theodore Hellyer: Mr. Speaker, I rise on a question of privilege. I am surprised that the CMHC was unable to advise the minister that it was informed several months in advance of that time that allegations had been made, and that in fact there had been material brought to the corporation in Toronto-


Mr. Speaker:: Order, please. I suggest that the hon. member for Trinity should indicate his question of privilege. This seems to be debate between the hon. member and the minister and hardly a question of privilege.


Paul Theodore Hellyer: Mr. Speaker, the question of privilege is that the minister has inadvertently given the House misleading information affecting the integrity of CMHC. This is of a very serious nature in that CMHC knew of these allegations some time in advance of the date just given us by the minister. In addition it appears that they circumscribed the audit which was held, they did not carry out a proper investigation, they continued to authorize loans to the same principals involved, and that some of the senior officers or former senior officers of CMHC were involved in a cover-up. I think this involves the privileges of all members of this House to such an extent that the Prime Minister must now assure the House that an impartial judicial inquiry will be established, one which can call witnesses, hear testimomy and get to the facts fearlessly and without prejudice. I feel all of these
Oral Questions
circumstances and facts have a relationship to the privileges of this House.


Stanley Ronald Basford: Mr. Speaker, I rise on the question of privilege. I think the hon. member suggested that I have misled the House. I have not endeavoured to do that at all. The hon. member has suggested that this is a serious matter, but I am treated with hilarity. The question of which the hon. member for Trinity gave me notice asked when CMHC was first advised of Mr. Vincent Lapetina's allegations of irregularities in respect of student co-operative projects. My answer to that question is that officials of Central Mortgage and Housing Corporation received the Lapetina letter referred to in this House the other day, on October 25, 1971, according to the advice given me. Whether they received information about the allegations by Mr. Lapetina earlier than the date of that letter, I do not know but I will make inquiries.


Paul Theodore Hellyer: Surely they should have known and should have advised the minister.


Mr. Speaker:: Order, please. I would suggest to the minister and to the hon. member that this is debate and has nothing to do with a question of privilege.


PROPOSED GAS PIPELINE FROM ARCTIC ISLANDS- REQUEST FOR REPORT ON STUDY BY PANARCTIC OILS
Mr. Keith Taylor (Churchill):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. In view of the recent statement by the Premier of Quebec relating to the pipeline route to carry natural gas from the Arctic Islands, will he advise the House whether PanArctic Oils Limited has completed its studies on the pipeline route, and has any report been made to him on such a study?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, studies are now under way and no decision has yet been made in this regard, neither by PanArctic Oils Ltd., nor by the group concerned.


REGIONAL ECONOMIC EXPANSION
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Regional Economic Expansion. In view of the minister's announcement that DREE will be decentralized and four regional offices established, will he inform the House whether northern Ontario is to be the recipient of one of these regional offices?


Donald Campbell Jamieson: Mr. Speaker, it will not only be the

July 17, 1973
Oral Questions
recipient of a regional office; there will be other regional offices established in Ontario and there will be a very special office established in northern Ontario.


Mr. Speaker:: Order, please. The minister replied very quickly before the Chair had an opportunity to intervene. A question such as the one asked by the hon. member should normally be placed on the order paper or considered at the time of adjournment. I suggest every hon. member would want to inquire whether his constituency will be the beneficiary of one of the regional offices to be announced by the minister.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. Has the Post Office Department introduced a new policy of returning mail, undelivered by reason of change of address, to the sender rather than providing directory service as has been the practice in the past?
[ Translation]


Hon. Andre Ouellet (Postmaster General):: Mr. Speaker, I am sorry but I did not get the question of the hon. member-


Mr. Speaker:: I suggest that in any event the question should be placed on the order paper as I fail to see the urgency of the matter.


Walter Gilbert Dinsdale: Mr. Speaker, I rise on a point of order. I have been endeavouring to ask this question now for three days. I suggest it is urgent because delivery of mail by the Post Office Department is one of the most important services government can provide. My information is that the Postmaster General has introduced a policy of returning mail to the sender, undelivered by reason of a change of address, rather than providing directory service as has been the case in the past in the interest of efficient mail delivery.


CANADIAN PACIFIC RAILWAY
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is directed to the Minister of Transport. Due to increased CPR traffic and the continuous increase in the speed of freight trains in and out of metropolitan Toronto, causing great discomfort to a large number of citizens, is the minister prepared to seriously consider a thorough investigation into this matter, or to devise to decrease the unacceptable noise level?


Jean Marchand: Mr. Speaker, this matter is already under investigation by the

CTC and the government of Ontario. We hope to find a solution to all these problems.


PROPOSED MACKENZIE VALLEY PIPELINE-ADVICE TO UNITED STATES OF CANADIAN INTEREST AS ALTERNATIVE TO ALASKA TANKER ROUTE
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is directed to the Prime Minister. In view of allegations today by a United States senator that the U.S. State Department misled the U.S. Senate by stating that Canada has shown "no strong, current interest" in the Mackenzie pipeline alternative to the Alaska tanker route, can the Prime Minister assure the House that the U.S. State Department was recently advised by the government that it has, indeed, a strong, current interest in the Mackenzie route?


Pierre Elliott Trudeau: Yes, Mr. Speaker, that is the position of the government. As to the word "recently", I would have to confer with the minister to see how recent that was.


John Allen Fraser: I have a supplementary, Mr. Speaker. In view of the senator's further charge that the United States ambassador to Canada has had private conversations with the government, indicating Canadian approval of the Mackenzie route as an alternative to the tanker route, can the Prime Minister advise the House if there were such conversations and, if so, with whom and how recently?


Pierre Elliott Trudeau: Mr. Speaker, I will take note of the question and inquire.


Mr. Speaker:: The Chair will recognize the hon. member for Dartmouth-Halifax East and then call orders of the day.


Mr. Forrestall:: Mr. Speaker, at the risk of breaking up the beautiful romance I will let my question go to another day.


CANADIAN NATIONAL RAILWAYS AND AIR CANADA
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct a question to the Minister of Finance. In light of the fact that the annual reports of Air Canada and the CNR have not been audited according to law and because of this, according to the Minister of Finance, cannot be referred to the appropriate standing committee, could I ask the Minister of Finance if he is discussing the matter or consulting with the government House leader concerning ways and means of bringing forward Bill
July 17, 1973

C-164, which provides for the appointment of auditors, so the bill could be dealt with and passed by this House? Also, is the minister seriously considering appointing the Auditor General of Canada to ratify accounts of Air Canada and the CNR for the last fiscal year?


John Napier Turner: I am not seriously considering appointing the Auditor General of Canada. I would hope, if there were general agreement, that the CNR financing bill could be passed by parliament.


Donald Frank Mazankowski: I have a supplementary question for the Minister of Transport, Mr. Speaker. What initiative is the minister taking with his government colleagues to expedite the referral of these very important documents to the appropriate standing committee so that a number of very urgent and pressing issues may be thoroughly aired?


Jean Marchand: I have no progress to report, Mr. Speaker.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, July 16, consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-195, to amend the Customs Tariff (No. 2), be read the second time and referred to committee of the whole.
Mr. Stan Schumacher (Palliser):: Mr. Speaker, I do not wish to encroach at great length upon the time of this House with my intervention on the bill which is now before us. I believe I am compelled, however, to make some representations concerning the Customs tariff as it relates to certain agricultural implements that are required in this country so that certain phases of our industry in this area will be more competitive and more productive in face of the problem of rising costs. I do not think anyone can say that the rate of inflation and the increase in prices is not affecting the efficiency of the producers of food. There is a worldwide shortage of food, and every step which can be taken to alleviate that shortage will have a wide-ranging, beneficial result not only in this country but in the world at large.
The Minister of Finance (Mr. Turner) has recognized the problem to some extent by cutting duties and providing access to our markets of some foods, but that will not prove very effective if the sources of supply of those foods are limited by the producing countries through export controls. I urge the minister to give some leadership to the officials of his department so that the tariff items in respect of machinery may be brought more in line with modern technology. We find that growers of poultry and producers of meat products, particularly of hogs, have been the beneficiaries of a great deal of technological improvement over the past number of years, which improvement has not been reflected in the Customs tariff.
Customs Tariff (No. 2)
We have situations, for example, in the poultry industry where complete systems have been designed to confine the birds, feed and water them and collect the eggs. This is all contained within an integrated unit. In effect, it amounts to a machine. However, officials in the Department of National Revenue are unable to treat it as a machine because of constraints relating to the Customs tariff. They will allow an exemption for anything that is written down in the tariff, but anything that is not written down in it cannot be exempted. While I am sure the people in the department would like to do something in this area, they are unable to do so unless the Department of Finance takes action, in a budgetary way, to allow them to do so.
In the poultry system, which I have mentioned we find there are elements in the unit such as nests, posts and flooring which are not specifically laid down in the tariff item and therefore cannot be exempted. I should point out that when a large cargo of these items crosses the border, a very complicated situation arises for the Customs officer which involves a great deal of time. He must break down the constituent parts of the system, or machine. I believe the whole problem results from the fact that the tariff item has not kept up with technology.
I think it should be borne in mind by the minister and his officials that there is really no competitive product manufactured in this country. The items about which I am speaking are produced primarily in the United States and in the United Kingdom. I think the technology in the United States is much further ahead and is more suitable to the situation in Canada, although of course that is not of primary importance because agricultural products are supposed to enter the country duty-free. We have here a situation where they do not enter duty-free.
The same situation applies in large measure to the hog operating procedure, whereby pens and parts of those systems are also subject to duty, when in fact the intent of the original tariff was that they should come in duty-free. If these items were duty-free it would be easier for people to expand their operations and production and we would generally be better off, because I do not think the shortage we are facing now will be short-term. Steps must be taken to solve this long-term problem. The intent always has been to give agricultural implements tariff preference. These items must be considered to be implements or machines, and not items of building materials. So I urge the minister to study this matter between now and the introduction of the next budget. I know it is too late at this time; but we must start somewhere. I hope consideration will be given to straightening out this problem before we reach the same point in time next year.


Mr. Kenneth J. Higson (Lincoln):: Mr. Speaker, I rise to participate in this debate essentially for two reasons. First, I wish to express my concern with regard to the medium and long-range effect the proposed tariff changes will have for Canada as a major trading nation of the world. Second, I wish to tell you, Mr. Speaker, something about the effect the proposed changes, dealing with the tariff reductions, will have on the Canadian food and vegetable industry and, specifically, the important and unique section of that industry centred in the Niagara peninsula.

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Regardless of whether one looks to figures supplied by Statistics Canada or to those made available by the Department of Industry, Trade and Commerce, it becomes evident that in the last three years our net trade surplus has been declining. This is true in spite of the fact that our total export trade has been increasing. It is a simple fact that our imports, in dollar value, have been increasing at a more accelerated rate than our exports.
Accordingly, if we are to reverse this trend, as reverse it we must to avoid a deficit balance in trade, we must stimulate those industries involved in the export of Canadian goods and, more important, we must establish industries or provide incentives to those industries which we have, to provide in as large a measure as possible the goods which are presently being imported. In other words, we should attempt to stimulate those industries which can supply our market with Canadian products presently being serviced by imports.
For the last quarter of a century Canada has been lowering its tariff protection, particularly with respect to manufactured goods, at a rate far in excess of other trading nations and today we possess fewer non-tariff barriers to trade than any of our major trading partners such as the United States and countries in the European Economic Community. One has to be concerned, as we approach the forthcoming trade negotiations with the United States, with which country we conduct some 75 per cent of our trade, as to exactly what strength we possess at the bargaining table and what tools we have at our command with which to obtain trade concessions from the United States and, indeed, from other trading partners all of whom have lately manifested an increasingly protectionist attitude.
We do have our natural resources, including water and the products of our forests, which are coveted by most of our trading partners, particularly the U.S., but if we are to rely on these as pawns at the bargaining table and as our sole trump cards, I suggest we shall be playing a reckless game of poker with the destiny of this nation at stake.
The Minister of Finance (Mr. Turner) has told us that the unilateral removal and reduction of tariffs as this bill proposes is done in the name of reducing prices to the Canadian consumer. While there may be some evidence of this, I have yet to be convinced so far as the whole list is concerned. There is no doubt that as a result of the tariff reductions, United States exports to this country will increase, and the question has to be asked: At what cost to the Canadian manufacturer or the Canadian producer? I trust that the minister is sincere and, more important, that he is correct in stating that the reason for and the result of the tariff reductions will be lower costs to the Canadian consumer. I trust that the purpose is not an attempt to soften, placate or be nice to the Americans, because nice fellows seldom finish first, particularly when the stakes are so high.
I wish to direct the attention of hon. members to an industry which I am convinced will not be helped by the tariff cuts and in fact is put in a more perilous position by this bill. I have little doubt that hon. members have heard of the southerly half of Ontario's golden horseshoe, but I doubt if many members are aware of the importance of

Niagara's tender fruit, grape and wine industry and the problems which that industry faces today.
A while ago, when this House was sitting in committee, I entered the chamber while a spirited debate was taking place with regard to the plight of the western wheat grower. I listened intently to speeches from both sides of the House. Knowing very little about the problems of producing and selling wheat, I was left unsure as to who was right. But if this government and previous Liberal administrations have treated wheat growers as they have the Canadian fruit industry, I can well understand why the Liberal Party has been nearly decimated and obliterated in western Canada. Judging from the attitude of this government, the fruit and vegetable grower simply does not exist, for it has consistently ignored every measure to assist this industry and appears to believe that the industry can go down the proverbial drain with scarcely a ripple.
The Niagara fruit industry is centred in an area of my riding bounded on the north by the south shore of Lake Ontario, on the west by the great industrial city of Hamilton, on the east by the Niagara River and on the south by the Niagara escarpment. It is a basic element to the economic well-being of the towns of Grimsby, Lincoln and Pelham, the city of St. Catharines, and the most historical town of Niagara-on-the-Lake. This area of some 40,000 acres is well suited for the production of sweet and sour cherries, peaches, pears, plums and grapes as a result of several unique physical features including soil and climate duplicated by few areas in Canada or, indeed, anywhere in North America.
There are approximately 3,000 fruit growers in my riding who pay wages to 5,000 full-time and seasonal workers estimated at $7 million. The tender fruit processing industry creates additional work for another 5,000 seasonal workers with a payroll averaging $6 million annually. Because of an increasingly higher volume of tender fruit sold privately on highway markets, caused to a great extent by a feeling of insecurity in the processing industry as a result of unfair offshore competition of processed fruit, it becomes difficult to state accurately the total value to growers of all fruit produced; however, the value of processed tender fruits averages approximately $7 million, and grapes about $12 million.
Taken in total, the fruit industry together with its attendant or associated industries represents to all those involved an industry of some $50 million. In short, the Niagara fruit area ranks among the prime tender fruit growing areas in the world and produces 80 per cent of all Canada's tender fruit crops plus 90 per cent of Canada's grape and wine production. However, this industry, like others, is not without its problems, the most important of which is to remain economically viable against rising costs of labour, chemicals and containers, skyrocketing land values as a result of the pressures from five or six major cities surrounding the fruit belt, and increased competition from offshore products of like kind.
Most basic in any discussion of Canadian agriculture- here I refer specifically to the Niagara fruit industry-is the firm resolve to maintain and nurture that agricultural industry of which fruit and vegetables are an important part. Any nation that does not possess and protect an
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agricultural industry is a nation where the cost of food is so high that it bears no relation to the cost of other consumer goods. As the Minister of Agriculture (Mr. Whelan) has reminded us, in Canada we have an enviable record of maintaining the lowest food prices in the world. But this record cannot and shall not be maintained by the agricultural community itself.
Most growers and others involved in the production, processing and marketing of Niagara fruits believe in the basic resolve that the industry must be maintained. Accordingly, the regional municipality of Niagara in which the industry is centred has brought forward a draft official plan which puts a heavy emphasis on the retention of Niagara's fruit lands for just that purpose. More recently, and no doubt more importantly, the province of Ontario has passed legislation to provide for planning and development in the Niagara escarpment area which complements the official plan by placing a heavy agricultural purposes. The province has taken this step in recognition of the uniqueness of that fruit industry and the importance of giving it protection against the encroaching onslaught of residential, commercial and industrial development in the Niagara peninsula.
However, Mr. Speaker, designating lands for agriculture is only half of the measure that must be taken. It must be complemented by an attempt on the part of the federal government to make the fruit industry economically viable by the imposition of tariffs and/or flexible import quotas on fresh and processed tender fruits coming into Canada from jurisdictions such as Australia, South Africa and the United States that do not face the cost-price squeeze experienced by the Canadian producer, of which I spoke a moment ago.
The federal government has a responsibility to act. It has been responsible for setting minimum wage rates in certain endeavours which has the effect of setting a precedent in Canada, in so far as minimum wage rates are concerned, which growers with a minimum profit margin find difficult to meet. Growers must pay Canada Pension Plan premiums. The federal government is responsible for tariff and other forms of taxation on items that the grower includes in his cost of production. It has imposed unemployment insurance, the contribution of premiums by growers, and has set benefits at a level that convince many people who might otherwise work in the industry that it is more beneficial to accept the benefits of unemployment insurance, or other forms of social assistance to which the federal government contributes, rather than work in the industry.
In one of his now famous "honey and all is well" speeches to the agricultural community, the hon. Minister of Agriculture stated in Niagara-on-the-Lake on June 15 last, when discussing the proposed zoning and preserving of lands for agricultural purposes:
I do not think they-
Referring to farmers.
-and they alone, should bear the full cost of expropriation or restricted use which is a decision made by society for the good of society as a whole.
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He is quite correct. But, as usual, he never explains how the government will assist the agricultural community to avoid bearing the full cost of such restrictions. I suggest there are a variety of ways the government can assist the fruit and vegetable grower, but the first and foremost must be to provide a domestic market for his produce at reasonable prices without the interference or unfair competition from offshore products that in many cases are shipped into Canada certainly below the wholesale price of the exporting nation and sometimes even below that country's cost of production.
Our present anti-dumping legislation really is a farce and it is useless to the Canadian fruit and vegetable industry. It takes four or more months to establish whether there has been dumping contrary to the rules and, further, to ascertain whether damage has been done prejudicial to our production. Nor are the assurances of the Minister of Finance, that tariffs will be reinstated if substantial damage to our particular industry can be proven, good enough. Even the threats of imports can do damage to our industry, and the process of proving damage simply takes too long. I suggest, Mr. Speaker, that the principle is wrong that Canadians producing a Canadian product for Canadian consumption should have to prove damage by foreign competition.
Mr. Speaker, until now I have attempted to explain the importance of the Niagara fruit industry and the most important problem facing that industry. That brings me to Monday evening, February 19 last, when the hon. Minister of Finance announced in his budget address proposed cuts of certain tariffs on the importation of out of season fruits and vegetables. This news has been received by the Niagara fruit industry with such shock, anger, dismay and utter frustration that it is still reeling and has yet to recover. Perhaps the brunt or the worst of this unilateral reduction of tariffs on fruit and vegetables has been avoided this year only by the fact that the volume of production is down substantially for the current fruit season.
I believe that the hon. Minister of Agriculture is an intelligent man, but he is either so inept in understanding the fruit and vegetable industries in this country that he should not be the Minister of Agriculture or, in the alternative, he was ignored when the budget proposals were being prepared by the hon. Minister of Finance. I strongly suspect it was the latter. Does the government not realize that we must maintain this industry in order to provide competition for the offshore products which are bound to enter Canada? If we have nothing with which to compete, sooner or later our own industry will wither and we shall be entirely dependent upon offshore products, at whatever the cost to the Canadian consumer.
I read with great interest the speech of the Minister of Agriculture to the annual meeting of the Canadian Horticultural Council when that body last met in Ottawa. I congratulate the minister, who is not in his seat, on the first half of his speech, which was well written. There are many things in it with which I agree. However, as I read the second half I began to wonder who was really pulling the strings. Surely the minister does not believe that the tariff reductions will actually be reflected in the consumer price of imported canned peaches, pears and other tender fruits.

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Surely the minister does not believe that the in-season tariff is of sufficient duration and sufficiently high to protect the price of the domestic product. Surely he does not believe that this nation can bounce tariffs on and off like a yo-yo, and can still bargain at the next round of trade and tariff negotiations from a position of strength. Surely the minister does not believe that he can expect co-operation from the leaders of the fruit and vegetable industry when he or representatives of this government do not even have the courtesy to consult them and explain the necessity for such tariff reductions.
This morning, Mr. Speaker, I received a telephone call from a very large fruit producer in my riding. He asked me why the government exposed the fruit industry in this manner and, further, whether the federal government was really interested in preserving the Niagara fruit industry. I could not answer. But, Sir, I can advise the hon. Minister of Agriculture and this government that if these proposals relating to tariff reductions on imported fruits and vegetables are brought into force, it will mean chaos in the fruit industry in the Niagara peninsula and the other fruit and vegetable growing areas of Canada and an undoing of what the Ontario provincial and municipal governments are trying to do to preserve this most essential and important industry.
I do not accept the proposition that imports of fresh fruits, whatever the price, do not have an effect on the price structure of the domestic product. I do not accept the suggestion that the tariff reduction on canned fruits, which amounts to about two cents on a 14 ounce tin-the very profit margin of our domestic processor-will be realized at the consumer level. During the past 16 months, two of the six major canners in my area have ceased to process tender fruits because of a cheaper offshore product. When the remaining four cease production, and the fresh fruit industry has gone and we are totally dependent on imported fresh and canned fruits, then watch the price to Canadian consumers and take note of our position of strength at the trade and tariff bargaining table: the first will have skyrocketed, and the second will have evaporated.
Mr. Speaker, I cannot be happy with these proposals for tariff reduction. I urge this government to reconsider and to co-operate with the provincial and municipal governments of Ontario and British Columbia to maintain and promote a healthy Canadian fruit and vegetable industry. Anything less means trouble ahead for our own industry and higher prices for the Canadian consumer.


Lorne Edmund Nystrom: Mr. Speaker, I will be very brief as I have to catch a plane in a few minutes, but I want to say a few words on the bill before us. I cannot help but start off in rather light vein, recalling the comments of by the hon. member for Winnipeg North Centre (Mr. Knowles) and the government House leader (Mr. MacEachen) on conflict of interest today. I hope that legislation will soon be forthcoming I notice in the tariff bill before us that there is a possible conflict of interest. On page 9 of the bill, in schedule B there is an item that reduces the tariff to zero for the most-favoured-nation and for the British preferential tariffs. I refer to the item dealing with bananas. I wonder whether the Leader of the

Opposition (Mr. Stanfield) had any influence on this item, knowing his love for bananas.
To be serious, the bill before us will introduce selective tariff cuts with respect to a number of food items and a number of non-food items. The purpose of the bill, I take it, is to cut tariffs and costs to the Canadian consumer, to bring down food prices and other prices that consumers pay in an attempt to reduce the cost of living which has been rising during the last few years. My party supports this bill, but in a hesitant way because we do not think these cuts will accomplish very much. I say that in view of the international economic situation, inflation which is increasing at a high rate, the American and Canadian dollar falling as compared with the German mark and the currencies of other countries, and other pertinent factors. For that reason I think the immediate effect of these tariff cuts will be small indeed.
My other point is this. I hope the Minister of Finance (Mr. Turner) will monitor the effects of these tariff cuts and that when we discuss the bill in committee of the whole he will elaborate on the monitoring agency that is being established. I see that he nods his head in the affirmative. Perhaps he will tell the House whether these tariff cuts are being passed on to the consumer and whether they will benefit the producers of farm commodities. I am concerned about their effect on some primary producers of this country-the fruit growers of British Columbia, for example, and of other parts of the country. These cuts may have a negative effect on them. I hope the minister will monitor this process closely with a view to assuring the House that the benefits of the tariff cuts will be passed on to the Canadian consumer.
I wish to make one more comment. In a general way, I think we should be looking at over-all tariff reductions, across the board, particularly as we are moving towards less restraint in international trade in this country and around the world. We in western Canada have been annoyed for years because of some of our grievances. One of our long-standing grievances concerns the very high tariffs which protect industries in the golden horseshoe area around Toronto. The result is higher costs for Canadians, particularly those on the Prairies, the farmers and those who must buy farm machinery, fertilizer, and so on. They must pay artificially high prices partly because of the high tariffs. If tariffs were reduced generally, such action would benefit the Canadian consumer, the producer, the farmer and in fact all Canadians.
I commend sincerely to the Minister of Finance a speech made by the Minister of the Environment (Mr. Davis) in Vancouver. He put forward the case for reducing tariffs and eliminating protectionism in this country. He said if tariffs were reduced, the net income of Canadians would increase as prices generally in this country would be lower. This would bring great benefits to the economy. He mentioned as an example the safeguards under the auto pact and the benefits which have accrued to the people of southern Ontario.
I ask the minister to study that speech and that approach and, after he has studied it and has looked at the effects of these selective tariff cuts, to bring before the
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House a new bill that substantially, in a planned and organized way, will reduce tariffs across the board in this country. That would assist the Canadian people generally and in particular our primary producers.


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, during the progress of this debate the agriculture problem has probably been discussed more thoroughly than at any time this session. It seems that the Government of Canada has chosen to apply principles which might work in regards to commodities other than those of agriculture, to agricultural commodities. It expects those principles to work in agriculture. Let us examine from an eastern point of view at least one commodity and the effect which both the producer and the consumer over the last few years have had on that commodity.
The potato industry has operated under an adverse tariff structure. It has dealt with an export market under terms of adversity as a result of economic competition. It has dealt with our neighbour to the south on inequitable terms. I am speaking about our ability to export. In general, we have suffered because of our geography. The Minister of Veterans Affairs (Mr. MacDonald) is familiar with the adversities we have experienced as a result of various trade problems, which include transportation. In general, the industry has managed to stagger along despite these problems.
Each time representations have been made to the government about obtaining an equitable trading position for the potato industry, the government of the day has said it is impossible for us to trade in this regard because we barter from a position of weakness. If we bartered from a position of weakness with respect to potatoes prior to today, I can only say we shall be bartering from a position of futility from here on because we now have no leverage to apply in international negotiations.
I should like to bring to the government's attention the fact that in agriculture we indeed are in a strong bargaining position in dealing with our trading partners, particularly our partner to the south. Statistics show that in the first 11 months of 1972 we imported $268,153,000 worth of agricultural products. In the corresponding 11 months of 1971 we imported $240,138,000 worth of such products. In that 12-month period we had an increase of $28 million in agricultural imports.
It is equally interesting to note some of the products which we imported during those periods. We imported blueberries, berries, cherries, cranberries, grapes, lemons, potatoes, peaches, pears and strawberries-all items which can be produced in Canada in much larger quantities than at present. As well, we imported asparagus, beans, broccoli, turnips, cauliflower, celery, corn and cucumber- again, items which farmers in the past produced in much greater quantities than they are producing at the moment.
Although the population of Canada is growing, our interest in agriculture is declining. In some instances we are witnessing a static or declining production of agricultural commodities. It is time the government of Canada, particularly the government sitting to your right, Sir, took a hard, serious look at the effects which lack of government policies and consideration have had on both consum-
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er and producer. Let us not underestimate the cost to the consumer of the do-nothing policy of this government.
In 1971, the government of the United States in its wisdom chose to apply a surtax on imports of all products, including food. This was done on August 15. On August 30 a delegation arrived in Ottawa to discuss the consequences of that move for the potato industry of eastern Canada. That attempt was made with the support of the then minister of agriculture of P.E.I. The industry wanted some consideration. We were told that there would be an adjustment if there were any adverse consequences for the industry. In some nebulous, unforseeable, indefinable way the potato industry would come out of its problems. But we did not receive any answers. We appeared before those people at a later date with concrete proposals for exports which would relieve the surplus of potatoes in the Canadian market. When we met with them it was suggested that the then minister of consumer and corporate affairs would not dare to let the price go up. We were met with the suggestion that too much profit might accrue to somebody.
We were met with everything including a variety of statistics that undeniably showed Canada had a surplus of potatoes, and an answer that indicated the then minister of agriculture and the government of the day had no intention of alleviating a very serious economic problem in the potato industry on a national basis. Neither would they prohibit the importation of potatoes from other areas, or dispose of the surplus that existed in Canada. This is a do-nothing policy, a blind, stubborn position which has been nothing but detrimental to Canada as a whole.
Eventually they did come to the conclusion the potato industry had to have some assistance on a national basis. However, this only happened in April when the bins that were still almost full were rotting. As one member said earlier, the smell of rotting food pervaded that area of our province. Salvage was undertaken, but the producer was left holding the bag with a massive capital loss. What was the consequence? Instead of a continual increase in the production of potatoes in Canada as a result of the loss in 1971 there was a substantial reduction in production for 1972. Since the 1972 crop the taxpayer has paid through the nose. The crop was too small to begin with, partly because of weather, acreage and the yield in the over-all picture. However, when it finished at one of the earliest dates in history at the highest average price on record, we then were dependent upon a foreign source of food.
The removal of duties encourages foreign sources of food. When you become dependent on a foreign source for any food, you are at the mercy of the foreign merchants. That is the position the Canadian consumer has been in throughout this season, and not only with regard to potatoes. Canada has come nowhere near its capacity for producing fruits and vegetables in Ontario, Quebec and in the garden areas east and west. There is absolutely no protection in this country from the dumping of surpluses from any part of the world. Agriculture pays the shot except when there is a world shortage, and then it is the consumer. It is time a balance was struck between agriculture and the consumer. It should be government policy. The removal of duty is not the answer. This government does not understand the agricultural problem. It cannot

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correlate the need of the consumer and the need of the producer so that neither suffers the extremes of price which makes the situation difficult for both.
For six consecutive years the potato industry in eastern Canada had successive capital losses with little, if any, recognition of their position. In spite of that, duties are to be withdrawn from agricultural products. Canada has been oblivious to the policies of other countries which are concerned about their food supply. The European Economic Community has chosen to support food production with the certainty their farmers will be at work and the bins in their grocery stores will be filled with their own products. If perchance there is a surplus of a commodity such as potatoes, onions, apple juice concentrates or apples, they will find ways and means to remove it from the markets in which it is surplus and dump it in world markets at whatever price they can get.
It is not uncommon for an Atlantic potato producer to find that potatoes are delivered in central American and South American areas at prices which will not pay for the cost of containers and freight, let alone any return for production costs. This is the competition which has put the potato industry and other industries throughout Canada in a very serious economic position, without any recognition of the problem by the government of Canada which continues its indolence and neglect of agriculture.
We find ourselves in another position today with regard to the management of agriculture and agricultural products, namely, the vegetable protein oil structure. This government has imposed upon Canada restrictions with regard to the export of proteins. It does not understand that by this procedure it has virtually eliminated from Canada the production of vegetable oils. For cooking French fries, or packaged and cooked foods, oil is required. Oil cannot be imported into Canada because we have not placed ourselves in a good enough negotiating position. Oil cannot be produced in Canada. While we have the protein meal in a position where it cannot be exported, at the same time we have filled the warehouses of the protein processors to the point where they have had to shut down and are no longer producing vegetable oil. This problem is going to mushroom as a result of total lack of understanding of an agricultural problem.
I commend the government for its foresight in saying we shall have enough protein to look after the animal feeds, but I condemn them for failing to see the side effects and failing to understand that in the process of controlling protein they have virtually eliminated the production of vegetable oil. The number of foods for which prices will rise cannot be counted upon one's fingers and toes as you go over the list. All oil-cooked foods and all foods containing oil-margarine in particular-will be in extremely tight supply. This is a tragic situation. It is neglect of one problem and ignorance of another. The consumer will again be the one who suffers.
We are part of an international food structure in which the balance of world food is pretty fine. When it gets out of balance by 1 or 2 per cent, the price of a product may tumble on a world basis. We then find ourselves in a position where if for one reason or another any country allows its food production to decrease, it may cause, on the reverse trend, an increase in price which causes the con-

sumer to suffer. Because of its failure to recognize the necessity of Canadian production and fair prices for the consumer, Canada may be the country hardest hit in the world in relation to prices our consumers pay and diminished returns for our farmers. This list contains items which are shipped across the continent. If the producer in the eastern part of Canada received encouragement to produce cabbage, for example, which comes from as far west as California, and if he could recover the cost of packaging and freight, he would have an adequate income. However, there is no encouragement, no protection and no hope he may share in the early market as well as participate in the late one. Some cabbage can be sold early and the balance can be properly stored.
We have an opportunity to increase agricultural production in Canada. We should not allow it to shrivel and shrink. The Canadian Horticultural Council has developed a position with regard to future trading operations. It is contained in a book comparable in size to the one I hold in my hand. I wonder if government members have read it. Do they know the consequences to agriculture if they do not recognize the duty requirements of this industry? Have they stopped to think of the multiplier effect that agriculture generates, because the farmer is one of the freest spenders in our society? The farmer is one of the most free-spending elements in our economy. He will build a new barn, buy a new tractor or expand his operations whenever he has cash to spare. His money is not salted away in bonds or investments but is expended in ways which provide opportunities for employment in production either on the farm or in the factory. Many Canadians are without jobs today because farmers have no confidence in the policies of the present government, whether they are engaged in the production of wheat, fruit or vegetables. They know they will be left at the mercy of world markets to suffer along with the consumer at one time or another.
I suggest again, as I did last night, that Canada should immediately attempt to negotiate with the United States in connection with our protein shortage. We should try to negotiate an agreement under which we would obtain protein from the United States in return for proteins ordinarily marketed by ourselves. There has been a flow of protein across the border from coast to coast. The two embargoes have disrupted the entire protein trade and brought the vegetable oil industry in this country virtually to a standstill. The United States has not chosen to issue permits for export of the edible oils we have traditionally bought. And here we are, in a position where we shall never be able to negotiate with respect to agricultural tariffs because we have removed them all-we have taken them off beef, pork, meat, fruit, and so on. By so doing we have endangered agricultural production and we have certainly endangered the consumer.
I plead with the minister to reconsider his position, to take agriculture seriously and learn to understand that there are people in the Department of Agriculture who know what they are talking about. If the Minister of Finance (Mr. Turner) and the Minister of Agriculture (Mr. Whelan) would listen to the arguments in favour of imposing seasonal duties or year-round duties in response
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to the economics of agriculture and the needs of the consumer, Canada could be a happier nation both agriculturally and as a group of consumers. This should be the objective of the Government of Canada. It is the objective of the people on this side of the House. It could, it should, it must be accomplished.


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I was impressed by the member for Lincoln (Mr. Higson) who spoke earlier and also by the member who has just resumed his seat. It would be redundant of me to try to repeat some of the things they said, but in spite of our ideological differences there seems to be a great deal of agreement between us in terms of what I believe and in terms of the definition of the problems.
It seems to me, and I know the minister always listens attentively to every speech, even when he is signing letters-he is ambidextrous in that way-that the minister would do well to listen to the plaintive voices of rural Canada, because if the minister would take a brief glance at the electoral map he would see that his party enjoys very little confidence from rural Canada. I think one of the reasons for this is that, whether it is a fair image or not, there is a feeling abroad, particularly in rural Canada, that the government under the Liberals does not really care about the problems of rural Canada.
I am not saying I allege this. I certain would not say that. But it must be a viewpoint when one considers that the strength of the governing party in rural Canada is something which they need to improve. We have all kinds of excursions into the four parts of the country, such as British Columbia, where the crop of successful political candidates is probably not of their party. As a matter of fact, so bad at the moment is their score in this regard that one must wonder whether the Liberal Party is indigenous to any part of this country west of Winnipeg.
I would be delighted to blame the Liberal Party for all of the problems facing my riding, Mr. Speaker. But I really cannot do that: not only because the Minister of Finance (Mr. Turner) is a charming and diligent gentleman, but because one of the problems which exists in my riding stems from the fact that we are close to a large city. The reason that the large city of Vancouver extends up into my constituency, with its surburban intrusion, is that the policies of the Liberal government have forced people into the cities and obliged them to abandon agricultural pursuits in large numbers.
Instead of being independent and self-reliant men, successful and affluent in the agricultural industry, for which this country is so capably gifted and suited, they have had to become the new serfs in the high rises. The reason for this is that we have had a very negative attitude toward agriculture, in my opinion and in the opinion of many others, and I think the government would do well to consider very seriously representations put forward with great sincerity by people from rural ridings on this side of the House or, for that matter, from the government side of the House. I am sure the minister does listen. I am not sure what he does after he listens; that is the part that causes me a little uneasiness.
Mr. Speaker, my riding does not depend upon its agricultural industry to the extent it did, because of the
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urban intrusion. But more than that, the urban intrusion has come about for the reasons I suggested earlier and also because of the fact that farm income is not sufficient to overbalance the value of the land. No matter how you do it, such as the government of British Columbia with its zoning or its Bill 42, its land freeze, it is all very well to freeze the land and prevent subdivisions, but if there is no income from that land then you trap the farmer on the land and he can do very little with it and becomes almost an indentured peasant.
So I think the minister and the House would agree that is it important that if a person is to be maintained as a farmer, if we are going to have an agricultural industry, it is implicit that there be some reward for the labours of that man in his chosen field, which happens to be agriculture-no pun is intended. Therefore parliament must ensure, through the kind of legislation which we discuss here, that farm income increases. Farm income increases when farmers sell things. What we have in this bill is a proposal by the government that for certain products-as a matter of fact, for all fruits and vegetables, fresh and canned-we will remove the tariffs for one year.
There seems to be in most people's minds a contradiction between what is good for the consumer and what is good for the producer and, as many people have observed, you cannot have it both ways. How can you have higher income for the producer and lower consumer prices? That is a conundrum, and I am certain that it bothers the minister no end as well.
I think one of the results of the Canadian seasonal disadvantage is that we must pay higher prices for our agricultural products as compared with our neighbours to the south. It seems to me that we either want to preserve the agricultural industry or we do not. The agricultural industry, like any other, does not make rapid adjustments to short-term plans, and we have here what I would call a short-term solution or at least a short-term attempt at providing cheaper consumer prices.
Canada is already a net importer of food-and I am not talking about oranges and bananas; I am talking about food that we produce here. What can we expect of our agricultural industry when people who have made substantial investments for barns, equipment, feed, fertilizer and other things find, as the horticultural council suggested here on February 19, that their viable industry is threatened as a result of their protection being wiped out from under them without warning?
I know the minister has made an adjustment in respect of tomatoes, and I think he reacted well to the problem in respect of the import of cherries; but these types of problems are typical of those faced by the Canadian fruit and vegetable industry all the time. You do not have to take my word for that; spokesmen for farm and horticultural groups have been reiterating this fact for years.
We do have a problem in our country as a result of our short season. Our crops mature later than those in California and Mexico, and when we import tail-end crops from those countries just at the time our crops are maturing, our industry is unable to command the best price. This is not technically dumping when these products are

July 17, 1973
Customs Tariff (No. 2)
brought in or offered to this country, in the sense that one would define dumping as exporting below the domestic price. Nevertheless, the tail-end prices are lower in the United States at the end of their production season just when ours are coming on the market. This causes a great deal of trouble.
A number of industries in the Okanagan, including the tree fruits industry, have for many years requested that machinery be adopted to protect these industries when our prices are threatened because of the offer of crops from across the border. They require this machinery in order that action can be taken immediately rather than four or five months later. These crops do not necessarily have to be imported in order to drive our prices down; there only need be an offer made. An offer at low prices kills the price of our produce from the Okanagan or the Fraser Valley.
As I said earlier, I am not certain that the tariff cuts for one year, substantial as they are, will be reflected in much lower consumer prices. That is a difference of opinion, but we cannot tell what the result will be. This policy was only articulated on February 19, and we are dealing with the bill today. Whether this will prevent rapid increases in prices, I do not know. The minister suggests it will prevent more rapid rises in costs, but we will not know this until we review the situation at the end of the year.
There is a difference of opinion on the effect of this measure but there is no difference of opinion at all on the fact that the five major producers in this country are not Canadian-owned. At one time these foreign-owned companies had to come to Canada to buy their plants. Companies such as Del Monte, Libby's, the Jolly Green Giant and Stokeley-Van Camp used to buy their plants from us but they do not have to do that any longer The tariff has been removed from canned foods, so what is to prevent these companies from moving their production to the United States? I do not see how these reductions will assist our unemployment situation. We have heard about the multiplier factor, but I suggest this will be a divider factor. I think we all agree that this is an attempt on the part of the minister to do something positive about consumer prices, but there is a possibility that he might be throwing out the baby with the bath water. I hope that is not the case.
When I was a young man, and that was quite a while ago-


John Napier Turner: You are still young.


Mark Willson Rose: -I can recall in my province, certainly in the Fraser Valley where I grew up, and the Okanagan where I lived later, there was a large fruit and vegetable cannery in every community. These are no longer in existence. They are gone but not forgotten. One of the reasons for their disappearance can be related to a rationalization or a trend to bigness. You should jump on a 747 some time to find out what has happened to the country. We have larger planes flying across the country but it takes you ten times as long to get your baggage.
Rationalization has taken place, but I think we all regret the fact that we no longer have these community industries. The policies of government in not protecting our processing industries and, for that matter, the agricultural industry generally, has led to this situation. I believe we

will have to commence reversing these policies. Had we had the foreign-ownership bill 20 or 30 years ago we would probably still have these processors in Canada. If we cannot protect our producers it seems to me we will be trading off our agricultural industry. If that happens we will become completely dependent upon foreign countries for our food. That may be all good and well for some people and perhaps it will mean cheaper food in the long run, but I doubt it.
Once our industry has been destroyed, what is to prevent the United States from saying it can no longer supply us with the quantity of food we require unless we are prepared to provide them with fresh water and fuel? I know this is a concern of many people, and we in this party are more than a little concerned about the effects of the tariff cuts articulated in schedule B of this bill. I feel it is important for me as a representative of a semi-rural riding to outline publicly my misgivings about the trend that we may be creating. I would certainly like some kind of assurance from the minister that he will give serious consideration to methods to protect our producers from the threat of importation. I do not understand why we have to go through this whole routine every time the threat exists. Hon. members from the Okanagan area had to go through this procedure in order to protect the cherry producer. This was done three years ago in respect of strawberries, and two years ago in respect of potatoes. We have to go through this routine time and time again.
We in this party are generally in favour of a gradual lessening of tariffs, but we do not want this at the expense of those industries we feel are important, basic domestic industries in this country. That is why we look upon this measure, not necessarily with cynicism or complete misgiving but with a certain amount of criticism. In conclusion, I express the hope that the minister will continue to monitor the effects of this proposal so that we can maintain and enhance our agricultural production in the years to come.


John Raymond Ellis: Mr. Speaker, in speaking during this debate I am repeating in part representations I have made to the minister and others over the past few months. The decision to remove the tariff on citrus juices will effectively destroy the Canadian reconstituting industry, with the relatively large number of jobs involved. This industry was developed to provide Canadian consumers with lower-priced citrus juices. The problem is relatively simple. Before this legislation there was a 5 per cent import duty on ready-to-serve fruit juices. There was also a similar duty on concentrate brought in by Canadian food processors to produce an acceptable juice in Canada. Using the concentrate, the Canadian processor employs a good deal of labour, purchases labels, containers and packing materials in Canada and utilizes Canadian transport. All of this material would normally come from outside of Canada, and in most cases from Florida.
The removal of the 5 per cent tariff on canned juice, whether reconstituted or natural, coming into Canada will effect a reduction of over 30 cents per case in the cost of citrus juices at the wholesale level. The reduction, however, in the tariff on concentrates amounts to a less than a
July 17, 1973

10-cent saving per case. The difference of approximately 25 cents represents more than the profit margin that the reconstituted orange juice processors in Canada have been working on for many years.
Not only will there be a number of jobs lost directly in the processing industry, but those jobs which affect the supply of containers, packing, labels and transportation will also be lost to Canadians. In my riding alone, one small factory would lose about 30 employees in this particular line. The seriousness of the matter is amplified when you realize that this is the type of business that is normally handled by a very small manufacturer, one that does not have the flexibility to increase or decrease its product lines.
We understand from discussions with the minister and members of his staff there has been an agreement by the department to remit to those processors the tariff collected already on unused concentrate and unsold juice made from concentrate. While this is generous of the department, it nonetheless does not solve the problem. The removal of the tariff by the minister comes at a particularly difficult time, following a huge surplus crop in Florida which is being placed on the Canadian market at extremely low prices. If the minister should reconsider the matter and replace the tariff in the early months of next year, it would of course come after another crop year when Canadian warehouses would be full to overflowing.
The point we are making is that the juices bought by Canadian consumers are not disporportionately high in price, that market fluctuations are affecting the resale price and bargains are available to Canadian consumers. If the minister persists in this reduction, however, jobs in not only my riding but in others will be greatly prejudiced. I strongly urge the minister to reconsider this rather hasty move.


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, it is my understanding that certain farm equipment may be imported from the United States duty-free, but it has been brought to my attention that hay barges are subject to 17 Vi per cent duty and 12 per cent sales tax. Manitoba distributors feel these hay barges that are manufactured in the United States should be imported duty and sales tax exempt for farm use. The distributors are willing to record all sales and submit farm and user certificates to substantiate the fact that all sales were to farmers for farm use only. Several items should be considered in establishing this as farm equipment. The first is width. The hay barge is 12 feet wide and does not qualify to travel on highways and other roads. It therefore can only be used on private property.
The second item to be considered is construction. The hay barge is not constructed for high speeds or commercial application. It is being manufactured and sold in the United States strictly for farm use and should be allowed to enter Canada for this purpose. Shortage of farm labour and shortage of food should persuade us to allow Canadian farmers to produce food in the most economical way. I will be only too happy to supply the minister with the correspondence on this subject for his consideration.


Mr. William C. Frank (Middlesex):: Mr. Speaker, I appreciate the opportunity to take part in this debate on
Customs Tariff (No. 2)
Bill C-195 as it relates to changes in the Customs tariff. As we all know, there are dozens of tariff changes but to the ordinary layman they appear insignificant, particularly when they amount to only 1 per cent here, 2 per cent there, and so on. However, I would like to deal specifically with one change that could be quite easily overlooked in scrutinizing the total list. This is the change from 17 Id per cent to 15 per cent as it relates to trailers manufactured in Canada.
No member of this House has more responsibility to speak out against this decrease in tariff on behalf of Canadian mobile home and travel trailer companies than myself, because within my riding I have one of the largest, if not the largest, totally Canadian-owned trailer manufacturer in Canada, namely, Glendale Mobile Homes Limited, with their head office in Strathroy, Ontario. When I speak on behalf of this particular company I know I speak for all trailer manufacturers in Canada, and just for the information of hon. members I would like to take a minute to list how many manufacturers there are across Canada.
There are seven in British Columbia, thirteen in Alberta, three in Saskatchewan, two in Manitoba, sixteen in Ontario, nine in Quebec, two in New Brunswick and one in Nova Scotia. There are 53 trailer manufacturers across this great country of ours. Thousands of employees are involved in these 53 companies. Unfortunately, time did not permit me to research how many but I know that in Glendale alone, in the Strathroy plant, there are approximately 550 employees, and Glendale employs another 800 employees in their three factories located in Alberta, Quebec and New Brunswick, making a total of 1,350 employees of this one company alone.
The trailer manufacturing industry was absolutely dismayed at the government's decision, brought down in the budget at the beginning of the year, to reduce the Customs tariff on mobile home and trailer imports from the United States. They sympathized with the government's objective of dampening the upward extra pressure on prices. However, they did not expect it would be done because it would have an adverse effect on Canadian production and employment. It is difficult to realize why this government and this minister would go ahead and lower the tariff if they were aware that approximately 20 per cent of the mobile homes and 17 percent of travel trailers now purchased in Canada are imported from the United States.
Let me cite some figures on recent imports into Canada. In the first nine months of 1971 in respect of class 584-65 mobile homes, there were 2,400 for a total value of $11,706,000. In the first nine months of 1972, there were almost 3,500 of the same type of trailer for a total value of $15 million. This is a 25 per cent increase in trailers and a 28 per cent increase in dollar value. In the class 584-66 travel trailers, in the first nine months of 1971 there were over 2,800 imported, at an approximate total value of $5 Vi million. In the first nine months of 1972, of this same type of trailer there were almost 3,800 imported, with a total value of $8,700,000. In this particular group it represented a 33 per cent increase in imports of the trailers themselves, with a 57 per cent increase in dollar value.
In the United States, for conventional housing in 1973 expectations are that there will be a slight decrease. However, mobile home shipments are projected to increase, but

July 17, 1973
Customs Tariff (No. 2)
at a much slower rate than in previous years, thus providing added pressure with regard to places in which to dump them. Canada is always a convenient, and in fact the only, market close at hand. The reduction in tariff amounts to $175 to $200 a trailer, enough in many cases to pay for the cost of transportation to the Canadian market or to pay for the dealer's expense of setting up the mobile home on a site. On travel trailers the saving will certainly make a very competitive market much more competitive. The government could not have realized that for years the tendency has been for the large United States mobile home and travel trailer manufacturers to use Canada as a dumping ground for their excess production. This, unfortunately, continues to be the case despite the fact that the Canadian mobile home and travel trailer industry has imposed upon itself severe standards through the comprehensive CSA Z240 factory certification program.
These standards, which involved extra cost which most manufacturers absorbed, are now being adhered to, but at the same time American units, some of doubtful quality, are being imported to areas of Canada where they do not as yet have to conform to our self-imposed standards. Furthermore, the Canadian industry has continued, with substantial success, to hold the line on prices to the consumer through increased investment in new plant and machinery. This has been done at the same time as government subsidies and incentives have been provided to our American competitors to assist them in setting up new facilities in Canada.
The CSA standards that I mentioned and which dealers here in Canada have to abide by, cover electrical, gas, oil and plumbing fixtures, and CSA Z240 factory certification by Canadian Standards Association engineers is now a requirement for membership in CMHTTA. The certification program is also available to non-member manufacturers be they situated in Canada or the United States. The Canadian Mobile Home and Travel Trailer Association is endeavouring to have the provinces approve the CSA standards through legislation. However, this takes time and to date only Alberta, Prince Edward Island and to some extent British Columbia have done so.
The estimates are that of the 4,450 mobile homes imported into Canada in the first eleven months of 1972, no more than 500 were CSA certified. Of the 4,356 travel trailers imported in the same period, fewer than half were so certified. A CSA certified product is a safer and better product but it is more expensive to build a mobile home, an estimated $200 to $300, and probably it would be more expensive by $100 to build a travel trailer, in accordance with CSA standards. One can readily see the advantage already existing for non-certified United States exporters to Canada.
It is now feared that under the economic pressure of lower-priced, lower-standard imports the CSA certification program which has been of great benefit to consumer and manufacturer alike could now break down as a result of this $170 to $200 benefit that the lowering of the tariff by 2lA per cent will give to exporters from the United States. It is now apparent that large numbers of both mobile homes and travel trailers are being imported into areas of Canada where unemployment levels are already

high, particularly into Quebec and New Brunswick. In Quebec, in the 12-month period previous to November 1972, 470 mobile homes were imported, with a gross value of close to $2 million; and for the same period 181 travel trailers were imported, at a gross value of over $360,000.
In New Brunswick, for the same period, 967 mobile homes were imported, twice as many as to Quebec, with a value of over $4.5 million. As for the travel trailers imported into New Brunswick, 87 were imported with a value of approximately $230,000. These figures for November, 1972, are taken from Statistics Canada. Particular note should be made of the fact that many of the units which show Ontario as their destination merely cross the border into Ontario and are transported to Quebec. Statistics Canada reports that 37 per cent of mobile homes sold in New Brunswick in the first nine months of last year were imported from the United States, and it is estimated that the number could go up to 50 per cent in 1973 if this tariff reduction is allowed to take effect.
It is difficult to separate the Quebec and Ontario markets since they are interchangeable. However, taking the two provinces together, it should be noted on the basis of figures from Statistics Canada that for the same period imports of mobile homes equalled 33 per cent of the total market. It is recognized that the Canadian market has been growing and Canadian industry has been endeavouring to rapidly fill the breach by the establishment of strategically located factories, in many cases with government assistance, to provide employment in accordance with regional needs.
So here we have it, Mr. Speaker-on the one hand a government that is handing out grants, particularly in depressed areas, to build trailer factories, and on the other hand what appears to be a hit-and-miss program of reduction in tariffs which is hanging a millstone around the necks of these factories by increasing their competition with imports. To lower the tariff at this time would appear to be a most inopportune move when the Canadian manufacturers of trailers are striving to develop economies of scale in face of the U.S. giant which produced 615,000 mobile homes in 1972 against an estimated 20,000 Canadian mobile homes-a 30 to 1 ratio-and 362,000 travel trailers and truck campers as compared to an estimated 27,000 Canadian, which is a ratio of 13 to 1.
It is difficult to estimate the impact of the lessening of the tariff in terms of employment as there are many factors to consider, but our best judgment leads us to believe that it could have the effect of reducing the importation of up to an additional 1,500 mobile homes and up to an additional 1,500 travel trailers, amounting to an estimated 1,200 jobs on an annual basis. Remember, Mr. Speaker, that the real impact is brought home by the fact that regions of Canada where the unemployment level is among the highest will be the hardest hit.
It would appear that the reduction of the tariff by 'IVi per cent, along with the floating Canadian dollar and the weakening of the American dollar, can only have an adverse effect on our trailer industry. I feel that this situation will entice more Canadian dealers to deal with the U.S. product and also will provide an even greater incentive to U.S. manufacturers to push more and more of their products into our Canadian market. I cannot see how
July 17, 1973

this reduction in the tariff can go through without creating hardship to Canadian trailer manufacturers, both in production and in employment. It is with great urgency that I appeal to the minister to conscientiously reconsider this particular tariff reduction so that our trailer manufacturers, and particularly the truly Canadian-owned companies, one of the largest of which I have the pleasure of representing because it is in my riding, will not be further jeopardized.
I should like to dwell briefly on another totally different subject, but rather than start it now may I call it five o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Brandon-Souris (Mr. Dins-dale)-Post Office-New postbox program to expedite mail-request for policies concentrating on efficiency rather than imagery; the hon. member for Selkirk (Mr. Rowland)-Air Canada-Alleged use of non-union personnel by company during strike-request for leave to prosecute; the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall)-Social Security-Action to increase pensions for the blind.
It being five o'clock, the House will now proceed to the consideration of private members business as listed on today's order paper, namely, public bills.


Mr. Reid:: Mr. Speaker, I rise on a point of order. I think there might be agreement to take up order No. 3, Bill C-25 in the name of the hon. member for Calgary Centre (Mr. Andre).


Mr. Deputy Speaker:: Is this agreed?


Some hon. Members:: Agreed.


PRIVATE MEMBERS' PUBLIC BILLS
[Stage Direction]
[ English]

Mr. Harvie Andre (Calgary Centre) moved: that Bill C-25, to amend the National Energy Board Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
National Energy Board Act
He said: Mr. Speaker, I hope that Bill C-25 will receive second reading today. It may be the simplest bill presented to the House so far this session. It seeks to amend only one word in the National Energy Board Act. Section 6(1) now reads: "The head office of the board shall be at Ottawa". Bill C-25 would amend that to read: "The head office of the board shall be at Calgary". It is a short bill and the change in the wording of the bill is small. But the consequences of the passage of this bill would be profound. The bill would affect, and dramatically improve, the operations of the National Energy Board. Ths bill would affect, and dramatically improve, the efforts being made to develop a national energy policy. This bill would affect, and dramatically improve, the government's operations in this most important area. Finally, Mr. Speaker, this bill would affect, and dramatically improve, the prospects of the Liberal Party in western Canada.
In the course of my remarks I hope to show that the passage of this bill would have all these effects and, indeed, if it should become the forerunner of several such bills it would have a profound effect upon the way in which this country is governed, it would lead to a new sense of unity and purpose and would do away with a great deal of feeling of regional alienation.
At first blush, this bill might be interpreted by some as a bill intended for home consumption. Some might feel it is an attempt to share in the pork barrel, similar to, say, a new wharf for Pebblecove, a national park for Rosedale or a new airport for Kenora. Those who may make that interpretation are clearly misjudging the scope of the bill and my purpose in presenting it today. My fundamental and main purpose in presenting the bill is to seek approval of this House to permit one small step in decentralizing the federal government of Canada.
Mr. Speaker, in my opinion the question of the decentralization of government is one of the most fundamental and important questions facing Canada today. This has been an important issue with me personally, virtually since I have been interested in politics which is since I reached the age of majority. I am happy to see, that is, if I can believe the statements made by the Prime Minister (Mr. Trudeau) at last weekend's western Liberal meeting, that this government now also subscribes to the principle that decentralization of the federal government is good for Canada as a whole.
This change of heart is long overdue, Mr. Speaker, because if Canada is to survive and show progress we can no longer accept as a political model a nation consisting of a central heartland where all authority rests on a subservient hinterland. This sort of old-fashioned, city-state model is simply not satisfactory in today's world. There are many reasons why we can longer live with these old concepts, not the least of which is the fact that the hinterland will no longer tolerate such a model. More importantly, it must be recognized that government has become so large, so intermeshed in the daily lives of Canadians that to continue to allow it to operate in a rather remote enclave, far in distance, means that axiomatically it is far in its attitudes from the people it serves.

July 17, 1973
National Energy Board Act
It is no longer true that all policy comes from elected representatives who bring forward the views and the attitudes of the people they represent, and thereby the regions they represent, and ensure that government policy reflects these views. Increasingly, it is the civil service that develops and presents policy. Indeed, we have a ministry of State for Science and Technology, for urban affairs, and for multiculturalism who are charged with developing policy. We in the House, we elected representatives can criticize, to be sure, and sometimes we are effective in altering policy. But comparing the resources available to members of this House of Commons with those available to the civil service, we are at a distinct disadvantage and therefore it is the policy of the civil service that prevails. I do not mean to imply that our civil service is incompetent and not nobly motivated, because that is not the case. We have a civil service that is second to none and we can be proud of the people who serve this country. There is a great deal of talent, and I have been suitably impressed and in fact deeply satisfied to see the calibre of people who serve us in Ottawa.
However, if they are all located in one region, if they all live in one enclave and get their opinions from the same newspapers, from the television of that enclave, from the cultural influences of that enclave, it is to me self-evident that they are going to reflect some of the attitudes of that enclave and not be in a position to appreciate the attitudes, views and expressions of concern that emanate from other areas of the country. Since my election last fall, and especially since this session started last January, this point has been brought home to me on many different occasions and I believe it is one of the main factors for what is termed western alienation.
Mr. Speaker, there are many other reasons why decentralization of the federal government is desirable, but I will not bother to repeat them here and now, since, as I have already stated, it would appear from the Prime Minister's statement in Vancouver last weekend that he is already convinced. Therefore, that aspect of the bill should receive government support. In fact, it would appear that most parties in this House, if not all, are in favour of government decentralization, so I would assume there would be no criticism of this aspect of the bill.
The second aspect upon which I should like to comment is: why move the National Energy Board, and why to Calgary? Calgary is clearly the headquarters of the Canadian petroleum industry from which point exploration and development activities throughout all of Canada are planned and co-ordinated. The offices of the Energy Resources Conservation Board, the Independent Petroleum Association of Canada and the principal office of the Canadian Petroleum Association are all located in Calgary. It is estimated that some 20,000 persons are employed directly in the petroleum industry in Alberta and approximately 12,000 of these are located in Calgary. In excess of 400 oil and gas firms are located in Calgary.
Calgary is situated at the hub of the major air routes connecting with eastern Canada and the northwest Arctic, with the midwestern and western United States and the far east. It is a thriving, major city in western Canada and ranks third as the head office centre of Canada's largest companies, by assets and sales, according to a survey

conducted by Canadian Business Magazine. Historically, Alberta has made an impressive contribution to the Canadian energy picture as a whole. Alberta is presently recognized as Canada's energy province and by 1975 it is expected that Alberta will account for 52 per cent of Canada's energy production and will contain 55 per cent of its reserves, exclusive of those contained in the Alberta tarsands.
The Alberta tarsands suitable for surface mining alone are estimated to contain recoverable reserves of approximately 86 billion barrels, or twice the total proven reserves of conventional oil in North America. With the sands containing an estimated 250 billion barrels recoverable by other means, this area will undoubtedly play a major role in the energy future of this country and indeed of the world. The importance of coal reserves in western Canada must not be overlooked in considering the total energy picture. Western Canada possesses 96 per cent of total Canadian coal reserves. It is of considerable interest that an increasing number of petroleum companies are becoming engaged in the mining industry and hold extensive coal reserves.
The development of Canada's north is assuming increased importance with significant oil and gas discoveries in the Mackenzie delta and Arctic Islands. Calgary is the headquarters of the research being done regarding the development of Arctic energy and its transportation. Both the Northwest Project Study Group and Gas Arctic Systems, since amalgamated as Gas Arctic-Northwest Project Study Group, are located in Calgary as is Mackenzie Valley Pipeline Research Limited.
Being the centre of the oil and gas industry now, Calgary will be, with its associated professional, technical, service and supply industries and its close proximity to the main air, road and water routes to the Arctic, the natural nucleus from which the impetus and drive of energy development in the Arctic will continue to emanate. Certainly in light of the importance of Arctic energy development in this centre and the impact it will have on the immediate and long-term world energy crisis, Calgary's role in the over-all energy picture is one of rapidly increasing significance.
During the last two years it has been necessary for the Independent Petroleum Association of Canada to sponsor seminars in Toronto, Montreal and Ottawa in order to emphasize, particularly to the investment community, the importance of the industry and the need for investment in order to ensure the continuing discovery of reserves. Under the new tax incentives recently announced, the prospect of the western Canadian oil industry to obtain eastern capital, so often rebuffed in the past, is enhanced and relocation of the National Energy Board in Calgary would do much to further emphasize the importance of western Canada as the focal point of present and future energy requirements.
With Calgary being the hub of Canada's major energy reserves, with important offices of the oil industry situated there, it would seem that by having the offices of the National Energy Board located in this city an over-all improvement in communication and co-operation between
July 17, 1973

the board and the industry should result. At no time in the history of energy development in Canada has the need for closer liaison and co-operation been greater.
The considerable time spent by Calgarians in National Energy Board hearings must not be overlooked. A representative sample of National Energy Board hearings shows that Calgarians make up between 38 and 48 per cent of persons participating in those hearings. If one takes into account western Canadians, the figure is between 80 per cent and 90 per cent. There are currently under way in Ottawa hearings before the National Energy Board. The majority of the participants are from Calgary and western Canada. The convenience and saving in money, and so on, that would result from the hearings being held in Calgary should not be overlooked.
It is appreciated that the National Energy Board has responsibilities ranging beyond the petroleum industry and extending internationally. It is also appreciated that frequent consultation with federal ministers and deputy ministers is required. Actually, part II of the National Energy Board Act requires that such measures within the jurisdiction of the Parliament of Canada as it considers necessary or advisable in the public interest, to do with the control, supervision, conservation, use and development of energy and sources of energy must be reported upon and recommendations must be made to the minister through the National Energy Board.
It is also recognized that there will be costs associated in the moving of senior personnel from Ottawa to Calgary. It is my firm view, however, that in view of the purpose of the National Energy Board "to assure Canadians the best use of energy resources", according to the 1971 annual report, maximum benefit toward that purpose can best be attained in Calgary which plays such a prominent role in the total energy spectrum.
One of the primary considerations in the best use of energy reserves is the development of an adequate supply. This situation is particularly pertinent with regard to depletable energy resources, and relocation of the board is closer geographical proximity to existing supplies and nearer to the frontier of future supplies would seem to be most prudent indeed and in the best long-range interest of all Canadians.
If the Prime Minister (Mr. Trudeau) is to be believed, the decentralization of government activities is a goal toward which we should aim. I hope my remarks show that relocating the National Energy Board in Calgary would be one small step in that direction. I have tried to show why Calgary would be the reasonable location for the National Energy Board.
I want to conclude by urging hon. members to allow this bill to be read the second time and to let it go to committee where it can receive detailed study. I say this in view of what happened last week end at the conference in Vancouver, where members of the Liberal Party from western Canada brought forward a resolution urging that the National Energy Board be moved to western Canada. By permitting this bill to be read the second time now, hon. members opposite would show how responsive they are if three days after the resolution was moved in Vancouver they permit the bill to pass on second reading; and, coincidentally, it seeks to do that which the resolution sought to
National Energy Board Act
do. I think hon. members opposite now have a real opportunity to demonstrate how wise they are. If they are anxious to make some sort of political demonstration, to do something that will encourage western Liberals and give them more spirit, what better way is there than agreeing to this bill on second reading?
I have tried not to play down the difficulties of moving an agency of this size. According to the estimates, on March 31, 1974, they will be 247 people associated with the National Energy Board. They would not all need to be moved; a substantial number only would be moved. I agree that there are problems associated with such movement. The National Energy Board must report to the minister and make recommendations on various issues that come forward. I agree that there might be a communications problem.
I am not trying to underestimate problems associated with the decentralization of federal government activity. I am merely saying that if hon. members opposite are sincere in believing that this decentralization is desirable, that if they want to keep Canada together and reduce western alienation which has not been created by the press but is a reality, that if they want to impart to western Canadians a sense that they are part of Canada, they must look at this question. What an opportunity this simple bill has given them. I suggest that they agree to it on second reading and send it to the Standing Committee on Natural Resources and Public Works where it can be explored and where witnesses can be brought forward to look into the difficulties of decentralization. We need to know what are the difficulties of spreading out across Canada functions of the federal government instead of concentrating them in one region.
I think hon. members opposite would be doing a real service to Canada and to Liberal members of western Canada, and giving them encouragement and hope for the future if they could all say, "Look at how we are considering government decentralization." They would also be giving the Prime Minister the chance to open the western economic opportunities conference next week in Calgary by saying, "Look, we are responsive. Last weekend there was a resolution asking for the National Energy Board to be moved to the west. On Tuesday we allowed a private member's bill to go through on second reading which would have that effect. We did that because we were sincere in what we said in Vancouver last weekend. Because we are sincere and genuine, we took that action."
This is a real opportunity. As a matter of fact, if you want to chisel away some of the large majority I received in the last election, you can do so by being responsive in the way I have suggested. If you are responsive, I will have to go home and do my homework, because I will be in trouble.


Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I listened with great interest to the speech of the hon. member for Calgary Centre (Mr. Andre), mostly because it was highly political in content and revealed his astuteness. He recognized the effect of the Liberal conference in Vancouver and its ramifications for Liberal policy in future. Since the hon. gentleman chose to take that line and speak about the conference, let me say that I was there. His analysis was very accurate. Indeed, all the participants were very

July 17, 1973
National Energy Board Act
involved in it. There were numerous Liberals from other parts of Canada and they were listened to with a great deal of sympathy.
I take issue with the whole thrust of the hon. member's bill. Indeed, it became evident to me in Vancouver that the confrontation is not one of east versus west, but one of hinterland versus urban centre. The hon. gentleman for Calgary Centre has espoused the cause of the rural ridings of Canada. The speakers who took part in that conference were not only from the Northwest Territories, the Yukon and the rural ridings of western Canada: there were some from urban centres, but predominantly they were from rural areas. They indicated their displeasure at the absence of any government policies on those measures which would be helpful to the rural and undeveloped areas of Canada. Indeed, the arguments presented were very similar to those I have presented a number of times with regard to problems that affect my constituency in northern Ontario. The arguments and subjects discussed were the same as those discussed by most members in this House last week during the debate on the suspension of the application of the electoral boundaries legislation. The questions of freight rates, immigration, industrial development-


An hon. Member:: Decentralization.


Mr. Blais:: I agree. All these matters were drawn to the attention of all delegates. It was as though they were at a meeting in North Bay, where the same topics are discussed. It becomes evident there has to be decentralization. The hon. member is right. His arguments are proper; there is no question about that.
However, I suggest that the decentralization should not be from one hogtown to another. I do not have anything against Calgary or Edmonton. They are gems on the Canadian panorama. They pale in comparison to the marvellous Rockies, being only human creations, but they are still more beatiful than most cities throughout the world. However, I would be sorry indeed if we were to find ourselves in a situation where Calgary and Edmonton replaced Toronto and Montreal as far as the centre of economic interest is concerned. I would feel that the future of my children would thereby be frustrated.
I believe decentralization should take place when the Minister of Regional Economic Expansion (Mr. Jamieson) announces the government's position and policy to decentralize these services. He will be dealing with decentralization not from one city to the next but from one city to those areas that are the subject and object of the government's policy. I would be disappointed if the minister selected the city of Toronto as being the provincial region or provincial headquarters for the Department of Regional Economic Expansion. By the same token, I would be very upset if he selected Calgary as one of the centres.
A great deal of argument was presented relating to the fact that Edmonton is the provincial seat. There is another lobby going around. Perhaps my friend is not aware of the lobby whereby Edmonton wants to be the seat of the National Energy Board. I do not know how it will be determined. Evidently everyone from that area belongs to

the same political party. There is going to be a saw-off at some point. Perhaps the chairman will be from one city and the vice-chairman from the other. It is argued that because Edmonton is the seat of provincial power, it should also be the seat of the National Energy Board. We forget the National Energy Board is responsible to the federal government, not to the provincial energy board. There is one in the province of Alberta. I have no objection to where they want the provincial board to sit, but this should not include the National Energy Board.
The policy of this government with reference to energy has been to act as an arbitrator. The government has been accused of not having a national energy policy. It has been argued it has not yet formulated a national energy policy because there are too many facets to be determined. One important problem presently facing the government is the position between two competing provinces-Ontario which is highly industrialized, and Alberta where the major source of presently used energy resources is to be found. These two warring provinces are not at each other's throats but they are at least shaking hands very hard. I suggest the position of the Alberta government, with justification, is to seek to protect the provincial interest. No one will deny Premier Lougheed's right to protect the provincial interests of Alberta in contemplation of the better national good, but surely his prejudices lie with the province of Alberta. If the seat of the National Energy Board were in Alberta it would be subjected to massive influences from these areas. We would be in a sorry state indeed.
I remind the hon. member for Calgary Centre that we are in Ottawa as a result of competition between two major centres to be the seat of the Canadian House of Commons. In her wisdom, Queen Victoria chose Bytown. When disposing of these seats of power we must remember that power is multifaced and is exercised in many ways. The National Energy Board is undoubtedly one facet of federal power. If we were to seat that board in Calgary Centre, undoubtedly its decisions would greatly influence the national energy policy. It would not favour that policy to the advantage of Canada as a whole.
I am very sympathetic toward decentralization. I hope that eventually this House will be able to sit in various areas in Canada. We may come to that position if we develop our northland to the stage it ought to be developed. At the present time, I feel the National Energy Board should not be subjected to this sort of step. I will point out why. Of all the boards, it is the most mobile. Section 6 of the act provides that the board may determine to sit at any place it deems desirable or necessary. It can also delegate to any one of its five members the full powers of the board. As I understand it, the board has sat more often in areas outside Ottawa than in Ottawa. Perhaps I am wrong on that. I have the figures. At any rate, the board has made it a practice to travel from one place to another in order to hear representations. Whenever the interests are regionalized, it travels to that particular region to hear representations.
It may be the hon. member has a point. It may be it would be advantageous to do as he suggests if we were dealing only with oil and gas. But we are dealing with
July 17, 1973

hydro, with thermonuclear energy, with energy derived from gas and oil taken from areas outside Alberta, including Arctic resources. There will be competing applications. There is bound to be a major dispute in the years ahead as to whether a gas line should be built on the east or on the west coast of Hudson Bay. This decision will be the subject of competing interests in Ontario, Manitoba and Quebec. There will be controversy regarding the precise route the Mackenzie pipeline will take and the nature of the industrial development associated with these projects.
The Athabasca oilsands are important, but until oil has actually been extracted from them, there is little the federal government can do. Until the provincial government attempts to export that oil to other provinces the federal government has no jurisdiction. Only in the case of exports from a province does the federal government exercise any authority, and permits are presently being reviewed by the Energy Board.
I wish to repeat that I believe in decentralization. I believe the west has a legitimate argument to make. But in my view decentralization should be directed toward all areas of Canada which are in need of development, not only toward Barry from Toronto, or Saint Scholastique from Montreal, or to North Bay in northern Ontario, or to Pontiac in the province of Quebec, but right up to Kenora-Rainy River. However, at this point I would suggest the hon. member's proposal is slightly premature.


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I must confess I read with dismay the bill in the name of the hon. member for Calgary Centre (Mr. Andre) which proposes to move the National Energy Board to Calgary. In my opinion, moving this Board to Calgary is like moving a virgin into an army barracks. Whatever virtue the board now has would soon disappear completely once it crawled into bed with the oil tycoons in Calgary.
It would be more to the point to abolish the Energy Board as it is presently constituted and come up with a body which would work in the interests of the Canadian consumer. The history of the National Energy Board since its inception in 1959 has been one of short-sighted decision-making and policies which have not worked in favour of the Canadian industry and the Canadian consumer.
If we look back, we can recall that the Board was set up in 1959 shortly after the great pipeline debate, supposedly to preserve Canadian interests. The Borden Royal commission had recommended the setting up of such a board, pointing out that Canada had exported petroleum resources to the detriment of Canadian consumers in the past. I might refer, for example, to the Essex County gas fields in Ontario, and to what was done on the west coast under the Pacific-Northwest agreement.
The royal commission further pointed out that Canadians were exporting gas to the United States at extremely low prices, resulting in a loss of revenue, and recommended the setting up of the National Energy Board in order to preserve Canadian interests. What has been the result? I am afraid, judging by the history of this Board, that it has become the best friend of the petroleum industry.
Perhaps this is because of its membership. Many of its members are former oil executives or people who have been closely involved in the industry and who possess a
National Energy Board Act
particular bias. In addition, the Board is subjected to tremendous pressure from the oil industry which submits briefs and arguments by high-priced lawyers and experts which overload the Board with facts and figures in favour of the case put forward by the industry. This is why the very idea of moving the Board to Calgary dismays me. The hon. member told us there were some 400 oil executives in that city. I can just imagine the pressure under which the Board would be operating.
Canada has exported most of her cheap natural gas to the United States or, at least, has committed herself to doing so. In 1972, in consequence of decisions by the National Energy Board, 40 per cent of Canada's marketable natural gas was exported to the United States at prices much below those which could have been obtained having regard to the energy crisis in that country. My fear is that if we do not place limits on exports, Canadians will have to pay more for the use of their own natural gas resources as future domestic needs increase.
The whole premise of the Board's philosophy in relation to the export of energy is wrong. The Board says that if Canadians can find enough oil or gas for the domestic market we should export the surplus. The folly of this reasoning is that as reserves become depleted the cost of production rises. In other words, because the United States is getting so much cheap natural gas today, Canadians in the future will have to pay much more for this source of energy as we are forced to bring supplies from the far north where extraction and capital costs are so much more expensive.
Why has the Board refused to accept the idea of a two-price system whereby Canadians would pay one price for oil and gas and importers in other countries would pay the much higher world market price? We can benefit as Canadians under such a policy, but try to convince the National Energy Board or the oil companies which have such undue influence on the National Energy Board. In spite of the fact that two of the four major natural gas exporters are U.S. subsidiaries selling gas to parent companies, the National Energy Board has not intervened to impose more fair prices for our resources.


Harvie Andre: Mr. Speaker, I rise on a point of order. I have enjoyed with other hon. members the hon. member's description of NDP energy policy, but I submit this has very little to do with the subject we are discussing. The merits or demerits of the National Energy Board and the facility with which it has handled Canada's energy in the past is not the subject matter of this bill. I would rather the hon. member stuck to the subject matter and not engage in a derogatory criticism of the National Energy Board. Certainly that was not the intent of my bill.


The Acting Speaker (Mr. Boulanger):: It seems to me that the point of order raised by the hon. member is one that could be well taken in respect of the speeches of other hon. members. The hon. member did seem, to the Chair, to be wandering from the bill when he referred to the western conference. I suppose I should have called the hon. members to order, but I will now ask the hon. member to relate his remarks more specifically to the bill.

July 17, 1973
National Energy Board Act


Reginald Cyril Symes: Thank you, Mr. Speaker, and I thank you for pointing out to the hon, member for Calgary Centre (Mr. Andre) that the western conference bears little relationship to this bill, though I think my argument does.
I was trying to point out that the National Energy Board has been unduly influenced by oil companies in this country, and moving it to Calgary would only heighten this problem and work against a beneficial policy for Canada.
If I may pursue this line of reasoning, I feel that to move it to Calgary would only increase the problems and pressures that face the National Energy Board. Already that board has capitulated to the pressures of the oil companies in selling our Canadian resources at prices beneficial to foreign oil companies rather than to the Canadian consumer.
In 1970 the National Energy Board told West Coast Transmission, for example, to serve a United States market at ridiculously low prices in order that the Pacific northwest would not be faced with an energy shortage. Again in 1971 the National Energy Board was forced to admit that too much gas was exported, and that year we had approached a shortage of 1.1 trillion cubic feet. In other words, the National Energy Board gets much of its information from oil executive and the oil industry in Calgary and has constantly over-estimated the supply of energy resources in this country.
In my opinion, the National Energy Board has had too much independent authority. It is not responsible to this House of Commons. It has a history of not acting in the best interests of the Canadian consumer and it has undoubtedly been influenced by the petroleum industry, 83 per cent of which we should remember is foreign-owned, 65 per cent of that being U.S.-owned. I think it would make much more sense to move it to oblivion, restructure the whole board and make it responsible to this House of Commons and the Canadian people.


John Mercer Reid: Mr. Speaker, Bill C-25 proposes two questions to the House of Commons. The first is, what is the appropriate place for the National Energy Board to be located; secondly, in a more general and perhaps more philosophical sense, to what extent and in what way should the federal government move to decentralize not only its departmental functions but also its regulatory functions? I think the hon. member for Sault Ste. Marie (Mr. Symes) made a significant point in a somewhat humorous way when he suggested that to move the energy board to Calgary would be like putting a virgin in an army barracks.


An hon. Member:: Send the Wheat Board to
Newfoundland.


John Mercer Reid: The problem that we face is really twofold. I do not know whether hon. members have had an opportunity to look at the green paper entitled "Members of Parliament and Conflict of Interest" tabled by the President of the Privy Council (Mr. MacEachen), but it does have a rather interesting comment concerning what is conflict of interest, which is, of course, the point the hon. member for Sault Ste. Marie raised in his offhand comment.
[The Acting Speaker (Mr. Boulanger).]
The President of the Privy Council indicates in his paper that he proposes to bring forth a further paper dealing with conflict of interest and senior civil servants. More to the point, there is a comment on the first page I should like to quote for the edification of hon. members. It states:
This definition raises a number of questions. The decision to limit the discussion to pecuniary interests is made on practical grounds considering the difficulties that would be involved in determining other rewards, psychological ones for example, which might motivate an individual's action.
I have always argued that those people in government service who are most open to potential conflict of interest and temptation are not members of parliament or cabinet ministers, but indeed are members in regulatory positions, senior civil servants.
The reason for that is quite obvious. The House of Commons, members of parliament and cabinet ministers have enthusiastically taken away their powers of patronage and powers to engage in this kind of conflict of interest situation. That power has been passed on to senior civil servants and regulatory boards.
What would be the situation if we were to move our regulatory bodies from Ottawa into the very centres of the industries which have a tremendous amount of influence on the way in which they take regulatory decisions? It is my opinion that any regulatory board ought to be located as far away from the physical operation of that industry or corporation as it possibly could be in order to ensure that the minimum of temptation is placed before those people.
I think one of the fundamental problems or dilemmas we have been faced with in respect of our regulatory bodies, not only the National Energy Board but the Canadian Transport Commission and the CRTC, is the fact that by definition they get so deeply involved in the industry they are trying to regulate that they have a tendency to lose sight of what we in this place might call the totality of public interest. This is not something that happens deliberately. This is something I believe is understood by the members of the regulatory bodies, not only by the commissioners themselves but also by their staffs. None the less, this is a danger.
We in this House of Commons provide perhaps the most spectacular example of the way in which we try to deal with the singular, the unique and the particular as it affects our ridings, at the expense of consideration of national policy or what might be termed national unity.
In this House of Commons we do not talk as representatives from particular ridings about national issues. If we are backbenchers on this side or on the opposition side we talk about riding concerns, regional concerns, provincial concerns and then perhaps national concerns. The blinkers on us blind us to the national impact of policies. I think any decision in respect of the decentralization of our regulatory bodies has to be considered very carefully because of this particular danger.
The second point I want to raise is the matter of geography. Let us be quite honest, this is a country which is influenced by its geography, and governments, civil servants, regulatory bodies, corporations or any kind of government services are obviously going to be located, in a place where somebody, somewhere, is going to have to
July 17, 1973

travel great distances in order to contact government boards or agencies. So the dilemma which faces members of parliament and the government in trying to determine what degree of decentralization is adequate is simply this fact of geography, which means, in effect, that there is no set answer.
Let us take a look at the operations of the National Energy Board. The main thrust of the argument of the hon. member for Calgary Centre (Mr. Andre) is that the bulk of the activities carried on by the National Energy Board concern the west and the west only; therefore the board ought to be moved to Alberta because that is the centre of the oil and gas industry. What are the facts? They are, of course, quite different. Oil and gas reserves in Alberta, Saskatchewan, Manitoba and British Columbia are the responsibility not of the federal government but of the provincial governments. The National Energy Board has jurisdiction only when it comes to dealing with the export of these resources, not with their discovery, not with bringing them into production.
Therefore the primary responsibility for energy resources in Canada, such as oil and gas, is not that of the federal government but that of the provinces. Of course, there are exceptions. There is the exception of off-shore oil which be might found off the east coast, perhaps in the area of Hudson Bay, off the coast of British Columbia or in the Northwest Territories. Generally speaking, however, in terms of current energy policy it is not the National Energy Board which has jurisdiction; it is the provincial governments which have that jurisdiction.
If hon. members examine the totality of the energy policy in Canada they will discover it is the provinces in Canada which have primary jurisdiction, and they have shown no desire to turn over their jurisdiction to the federal government. So when we talk about the place of residence of the National Energy Board and about a national energy policy, we are not talking about one resource policy but rather a series of energy policies as promulgated by the various provinces, with the federal government attempting to convince them to co-ordinate those policies for the good of all Canadians. As we all know, that is no easy job. In fact, it is very difficult even in the best of all possible worlds.
When we deal with the functions of the National Energy Board we deal with the powers of the National Energy Board with what its actual jurisdictional powers are. I think under any consideration it must be admitted that the operations of the National Energy Board, while important, are not really as important to the health of the oil and gas industry in Alberta as the hon. member for Calgary Centre has made out. Rather the province of Alberta has a tremendous responsibility in this field because the authority of the National Energy Board is indeed limited.
I wish to address myself further to the question of the geography of Canada. Ideally the federal government should have been located in the geographical centre of Canada. That would mean there would be no discrimination against the west, the east or any place else in respect of where the government of Canada took up residence.
National Energy Board Act
Ideally the geographical centre of Canada should be the location of the government of Canada.
When we contemplate the decentralization of departments or regulatory bodies, ideally we should be looking for a place in the centre of Canada where these bodies could be domiciled. Mr. Speaker, quite humbly I suggest that some place in the Precambrian shield, in northwestern Ontario in the riding of Kenora-Rainy River, would be ideal for the location of the government of Canada and the agencies of the federal government if there were decentralization.


Mr. Knight:: Mr. Speaker, on a point of order, I wonder whether the hon. member would entertain a question.


John Mercer Reid: Of course.


William George Knight: Could the hon. member inform the House, in view of his suggestion in respect of a new location for the national capital, if the humidity in his area is as bad as it is here?


John Mercer Reid: I wish to assure the hon. member that the climate in Kenora in the summer is simply marvellous and since the House of Commons seems to have some unusual desire for summer sittings I believe this should be a matter to be weighed. I am prepared to admit that there are periods in the winter when the temperature is not ideal, but it might be possible to have a winter recess rather than a summer recess in those circumstances.
I should like to return to the matter of location of the National Energy Board. One other aspect is that the National Energy Board is bound by duty to provide advice to the government of Canada on energy matters. It is quite obvious that in this particular case there would be a conflict concerning the easy accessibility of senior officials of the National Energy Board to members of the federal government if in fact the board were decentralized out of Ottawa. When we come to deal with the whole question of decentralization this factor will emerge time and time again, simply because there is no easy way of eliminating the sheer dilemma of the geography of Canada.
Such decentralization would be possible perhaps in the case of corporations such as the CNR, Air Canada, the Northern Power Development Corporation and the Canadian Development Corporation, which are proprietary crown corporations. They could probably be decentralized in a way which would not affect their work or the terms of reference which they have been given under acts of parliament. If the National Energy Board were to be moved physically out of Ottawa to some other location, then there would be a penalty to be paid by the government and by the National Energy Board. This is a dilemma which we will have to face in respect of all aspects of decentralization. The government is engaged in this policy and I hope it continues, but it would be unwise for us to proceed without the knowledge that there are some difficulties ahead.


The Acting Speaker (Mr. Boulanger):: Order. The hour appointed for the consideration of private members' business having expired, I do now leave the chair until 8 p.m.
At six o'clock the House took recess.

July 17, 1973
Customs Tariff (No. 2)


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

[Stage Direction]
[ English]

[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-195, to amend the Customs Tariff (No. 2), be read the second time and referred to Committee of the Whole.
William Charles Frank: Mr. Speaker, when I called it five o'clock this afternoon I had nearly finished what I had planned to say with regard to the drop in the tariff from 17 Vi per cent to 15 per cent on mobile homes and house trailers manufactured in Canada. Recently another matter has come to my attention on which I would like to speak for a few moments. Instead of criticizing the decrease in the tariff I should like to recommend that an increased tariff be imposed on imported hatching eggs so as to protect the broiler hatcheries in Canada.
The effect of the U.S. embargo recently placed on soybean meal and other products has actually set the price of soybean meal in Canada, which is at present around $450 a ton. In the United States, as a result of this U.S. embargo the market for soybean meal as of noon today is $193 a ton. This has put broiler hatcheries in the United States at a great advantage compared with competing broiler hatcheries here in Canada. The broiler breeder, in feeding hens for hatching broiler eggs, has to pay an increased cost on feed per dozen eggs as compared with the commercial egg producer. The broiler breeder flock will need approximately 35 pounds of feed for 100 birds compared to 23 pounds for 100 birds for the laying type breeder.
It can easily be seen that this is quite a large increase in cost. The American counterpart of the broiler breeder flock owner in Canada can buy protein for upwards of $200 a ton less than the breeder in Canada and so is far more competitive. He can ship eggs to Canada to compete with our hatchery broiler breeders. The actual cost would appear to be 18 cents per dozen eggs cheaper for the American breeder.
This is a situation that deserves immediate attention, at least for a temporary period until the 90 day embargo is lifted in the United States. I hope that the minister will give this matter serious consideration, as I am sure it is worthy of such consideration on a temporary basis. If something is not done the broiler breeders and hatchery men in Canada will be forced to retreat, as it were, and in some cases probably go out of business. Once these businesses are closed up, it is very seldom that they reopen.
I hope the liaison between the Minister of Finance (Mr. Turner) and the Minister of Agriculture (Mr. Whelan) is better than it was between the Minister of Consumer and Corporate Affairs (Mr. Gray) and the Minister of Agricul-
[The Acting Speaker (Mr. Boulanger).]
ture. The Minister of Consumer and Corporate Affairs was quite willing to give the Consumers' Association of Canada another $100,000 to supposedly fight marketing boards, and this seems hard to believe. I asked the Minister of Agriculture about this in the House and he said "I am not worried because they will not find anything wrong with marketing boards". In other words, he was saying "What's another $100,000?" So I hope the liaison is better now than it was then. That $100,000 could be used to great advantage to promote better rural-urban relations. We are all consumers, whether urban or rural. That is an area which needs some support, and if the Consumers' Association of Canada is to do anything it should try to help the rural and urban people understand each other.
In closing I should like to re-emphasize that the Minister of Finance seriously consider a temporary support program for the hatchery men in Canada.


Mr. Harry Olaussen (Coast Chilcotin):: Mr. Speaker, Canadian trade policy has traditionally been characterized by high tariffs against foreign goods. This policy, the so-called "national policy", was started by the Conservative party after the election in 1878 and has been continued by successive governments of both parties ever since.
The Liberal party has been called the party of low tariffs. However, history does not back up this claim. The Liberals, just as much as the Conservatives, are a party of high tariffs. The New Democratic Party, on the other hand, does not believe that Canada's problems, international or domestic, can be solved by a high tariff policy.
The needs of the Canadian domestic market must be met in as orderly a fashion as possible. The needs of the manufacturers as well as the needs of the consumers cannot be ignored. Therefore, I welcome Bill C-195, to amend the Canadian Customs Tariff, introduced in the House of Commons by the Minister of Finance (Mr. Turner), not in the sense that it will solve all our economic problems and bring lasting relief to the consumers of this country, but in the sense that it tries to deal with the high cost of goods and the inflationary trend in this country. I hope that the proposed tariff cuts will not be of a temporary nature but that they will be prolonged for as long as it is feasible to do so.
I urge the government to accept the need for reductions in many items that are not included in the present bill. These additional areas should be discussed and implemented through amendments when the bill goes into committee.
One area which I urge the government to consider is the need for reduction not only in manufactured goods but also in raw materials that need to be imported for the manufacture of products in this country. This is essential if the government is interested in creating jobs and lowering prices for consumers. It is central to our party's philosophy that it is essential for us to manufacture and process raw materials in this country. It is essential that the import of raw materials for manufacture must top the list of amendments to the bill if we are to implement a policy that creates more jobs and gives encouragement to many of the country's small manufacturers.
July 17, 1973

In this instance, I should like to speak on behalf of one small manufacturer in my constituency. In Lac LaHache we have a small industry engaged in the manufacture of saddle pads. They cannot afford to bring the raw material into this country for manufacture into saddle pads because of the 21Vi per cent tariff under tariff item 56805-1. To meet the competition of imported saddle pads they have to have the fabric cut into the shape of saddle pads in the United States so that it can be imported at a 20 per cent tariff under tariff item 61200-1. As a result jobs have been lost to the United States at the expense of a small Canadian community that is hard pressed for jobs as it is.
If the tariff on this particular item can be lowered considerably then this manufacturer of saddle pads can anticipate the needs of the domestic market and as a result plan ahead and increase production, thus creating more jobs and contributing to the economy of this country. Therefore, I urge the government to look into this particular situation and agree to amendments that will reflect its interest in this and other areas worthy of consideration.


George Harris Hees: Mr. Speaker, when speaking on this bill on Friday last the Minister of Finance (Mr. Turner) gave as justification for lowering tariffs in his budget on May 19 the opinion that this move would do two things. First of all, it would help lower the steadily rising cost of living; secondly, it would cause farmers to lower the price of their products in order to become more competitive with other countries. It has become painfully obvious that lowering these tariffs has had no effect on the skyrocketing cost of living, which has continued to rise at a steadily accelerating rate. Today, as we know only two well, it is more than 8 per cent higher than it was a year ago and it is going up each month at a steadily increasing rate.
Let us look at the two reasons the minister gave for lowering these tariffs. Firstly, that this move would make our farmers lower their prices and become more competitive against products from foreign countries. Such goods in future will enter Canada more easily because of these lower tariffs. Let me tell the minister that the agricultural industry of Canada is probably one of the most competitive in our economy. Competition within the industry for the consumer's dollar is very fierce indeed. Farmers do not charge more than a fair price, made up of their cost of production plus a reasonable profit.
Some people, like the members of this government, forget that the steadily rising cost of living, which this government steadfastly refuses to check with effective steps, means that farmers and other producers must pay more and more for the materials they use in producing their products. It means also that they must pay more for the labour required to turn out their products. Many farmers cannot obtain labour, even though they pay a very fair wage. In my constituency, Prince Edward-Hastings, last fall many apples were left on the trees; they could not be harvested because labour was unobtainable, even though there were people in my neighbourhood who were out of work. Increases in farm prices have been the result of those things I have mentioned; prices have not
Customs Tariff (No. 2)
increased because farmers, have been charging unjustified prices to the people who consume their products.
If I may mention something else that is important, the government erred in reducing tariffs without obtaining compensating benefits in return for the reduction of those tariffs. When the government goes to the meeting on the General Agreement on Tariffs and Trade next fall, it will find that it will have to make concessions for every tariff benefit it will try to obtain for this country. Our government gave away concessions to other countries and received nothing in return. It will have to start at the GATT tariff negotiations from scratch.
Just how stupid and gullible can a government be in this regard? Obviously the minister and his advisers think they can go to the GATT negotiations next fall and say to those from whom they will try to obtain tariff reductions, "Oh, but we lowered our tariffs last fall, and you must take that into account and give us credit for those tariff reductions." Let me tell the minister that the people with whom his officials will deal are very tough indeed. They will laugh at the Canadian delegates and say, "Buster, we are starting from scratch. We take it from the way it is today." The minister will find that he has given away a great deal in the way of tariff reductions without having received any compensating, return, and we will need to start from scratch. That will cost Canadian producers for whom the government will negotiate at the GATT conference a great deal in the extra concessions they will have to give in return for whatever they receive.
In conclusion, I say that the government was wrong in introducing its tariff reductions six months ago in the budget of February 19. Reducing tariffs, particularly on agricultural products, has failed to make any impression on the steadily rising cost of living; living costs continue to go up steadily month after month. For the reasons given, I am convinced that the tariff reductions announced in the budget of February 19 ought to be cancelled forthwith. The government should admit it has made a mistake and stop this unjustified pressure on our farmers. It should go to the GATT negotiations and see if it can obtain concessions for industry and other people in a more sensible and practical manner. Let it obtain concessions that will benefit the entire Canadian economy.


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I have been very interested in the good speeches made on Bill C-195. In his budget speech the minister said that the budget was an attempt to provide some stimulus to the economy; apparently he wants economic growth. Who doesn't? Also the budget is designed to fight any possible inflation that might result from such stimulus.
This bill, it is said, is designed to lower the price of food. The minister is going to do all this, even though this country is being buffered by a disorganized world monetary system. As the American dollar moves up and down from day to day, Canadians everywhere are involved in monetary peril. It involves all of us, no matter where we trade in this world, as in effect the American dollar is closely tied to ours and affects the value of our currency.
Many of our exports are those of primary industries. I am referring to agriculture and forestry. Conditions within these industries are influenced greatly by condi-

July 17, 1973
Customs Tariff (No. 2)
tions outside our country. Last year Canada became a net importer of agricultural products, for the first time in this country's history. We are selling less on world markets and importing more. It is sad to learn that we cannot supply all our own protein feeds and that we would be starving for proteins if we could not import them from the U.S.A. The situation is particularly severe, as there are ever fewer farmers.
Agriculture accounts for nearly one third of this country's economic product. When exported, agricultural commodities earn much needed foreign exchange, which is necessary for our high standard of living. Yet the number of farmers is declining. In 1961 there were 480,000 farmers; five years later there were 431,000 in this country. There was a decline of 10,000 farmers per year during that period. In 1970 the labour force on farms was around 500,000, or 170,000 less than in 1961. Technology and machinery have compounded this problem by replacing labour. Returns on agriculture run at over $400 million per year. We must understand what is happening. We are becoming net importers of goods, particularly of agricultural products. I make these statements to indicate how important the agricultural industry is and how scientific the farmer has become.
Today, one farmer feeds 40 people; at the turn of the century he fed five. Although we buy and sell on the markets of the world, our dollar is devalued to the same level as the American dollar.
The minister said that he was all for lowering the cost of living. Everybody is for motherhood, but I agree with him. He wants to reduce the price of food for Canadians. Our Canadian producers will have to lower their prices if they are to remain competitive. This is as true now as it has been in the past.
What has happened is history. Food prices have gone ever higher, and the consumer must pay ever more. I recall when I was operating a dairy farm that a good deal of sugar beet pulp was grown in southwestern Ontario. I well remember the people in the sugar beet industry saying to the government over and over again, "We are in trouble." Apparently cane sugar was coming to Toronto and other parts of the province under some sort of quota system. Our growers could not compete with the lower prices made possible by cheaper labour in foreign countries. Sugar cane cost less to produce than our sugar beet products had cost. Our sugar beet growers were promised about $700,000, I believe, to stay in business. Yet all at once this offer was withdrawn and the industry went down the drain. Now I understand that the industry is to be restored, at an approximate cost of $50 million. That shows the folly of tinkering with something you do not understand. Farmers across Ontario, even farmers in the cattle business, are looking elsewhere for the by-products of this industry, and paying more for them.
The government now talks about reopening this industry. It is going to be difficult and time consuming. It will probably take five to 10 years. I could cite many other industries in the agriculture field, but I will only mention one, the peach industry in the Niagara district, something I know a little about.

The tariff on peaches coming into Canada from the United States is 63 cents a case; going from Canada to the United States it is $1.45 a case. I have only mentioned the United States, but we have become a dumping ground for countries all over the world. I can mention Australia, South Africa, Austria any many others. The same is true of other fruit. Carried to its logical conclusion, we should not produce any fruit or vegetables; we would import them all. Then would come the hold-up. It would be like the price of sugar-up it would go. This may be the philosophy of the Liberal party.
When Senator Harry Hayes was minister of Agriculture, he said Canada could not compete on even terms or be competitive with the United States, for example. In his opening address the minister said he would make us more competitive. So what is the Liberal Party's philosophy? I wonder about it because Harry was down to earth and very earthy in his statements. He gave the example of a cow with a baby calf on Parliament Hill on a cold winter day, 20 degrees below. He said the cow and calf had to be put into a very warm stable. He asked how we could produce that cow and calf as cheaply as someone in Arkansas where the sun always shines and a stable is not required. There was lot in his philosophy.
It is difficult for our farmers to be competitive with a short growing season and a late spring. More buildings are required to house livestock. Fruit and vegetables in the south are ready for market earlier than in Canada. They ship their surplus fruit and vegetables here when ours is beginning to come on the market. The farmer cannot compete unless he is subsidized. At the rate farms are being abandoned, I suggest the Minister of Finance (Mr. Turner) give some thought to this. Food would be cheaper if the farmer received a subsidy. He could become competitive in the world market. How can he compete in a northern climate with a late spring? It cannot be done.
I refer back to Senator Harry Hayes; maybe the minister should have a talk with him. The point I am trying to make is that if we are going to preserve a viable agricultural industry, now is the time to do it. There is a world shortage of food. We should think about subsidizing the farmer so he can become competitive in world markets. The minister realizes this. He is broadminded and is given to making changes. At the suggestion of our party he made changes at other times. He realizes the farmer is in a tight corner. The minister has travelled across Canada. He is a good Canadian. He surely realizes he has to give help. If he is going to bring cheaper food to this northern area.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I wish to confine my remarks tonight to the considerations and implications of this customs tariff bill with regard to Canada's beef cattle industry. I had the privilege of doing this last night in the feed grains debate. Tonight I will make only a few remarks about the cattle industry as this tariff bill may affect it.
The first tariff item under Schedule B, item 501-1, is cattle. It is followed by various other livestock and meat items. May I first briefly summarize our present cattle situation as it is affected by the tariffs in Canada today. Canada is a minor net importer of beef, importing roughly 3 to 5 per cent of our per capita consumption. However, now we are definitely a net exporter of feeder cattle. All of
July 17, 1973

our feeders are exported to the United States. Our trade pattern or balance with our major trading partner, the United States, has in recent years been near equilibrium, but generally in our favour.
Until recently Canada imposed nominal tariffs on all imports of beef and live cattle. These nominal duties still exist in law, but have in effect been suspended since February 19 of this year for a period of one year. These tariff rates were 1V4 cents per pound on live cattle and 3 cents per pound on beef and veal. We are still subject to the various import duties, quotas and variable levies imposed by other countries. The United States is by far our most important market for feeder cattle and various beef products.
While opportunities appear to be developing, Canada does not yet export significant quantities beyond North American shores. However, Greece, Italy and France are emerging as important importers, especially of calves which are air-freighted from Canada. I should point out that these comments refer primarily to commercial cattle and beef and not to purebred or breeding cattle.
Imports of feeder cattle into Canada from the United States are restricted by health tests for anaplasmosis and blue tongue. However, no such restraints apply to either the importation of slaughter cattle or to the export of feeder cattle to the United States.
Canada and the United States share a North American cattle and beef market in which Canada is approximately an 8 per cent partner. It is therefore obvious that general price levels in Canada will be virtually dictated by American price levels. This has always been the case. Cattlemen in Canada have been aware of and operating under this situation for many years. We do not want to change this relationship, but it is important that we understand it.
There has been an historical tendency for the Canadian market to operate above the American market more of the time than below. This means that removal of the import duty is potentially more damaging to the cattle feeder. In effect, the tariff removal on April 19 lowered our Canadian price ceiling by the amount of the tariff. Since we still have to pay a tariff on Canadian cattle going to the United States, the net effect, quite apart from the very direct impact of lower prices, was to destroy the delicate balance of the Canadian and United States beef industries which had been built up over the years. This change in balance was to the detriment of Canadian producers. The reason for the removal of these imports tariffs is very obvious: it is to hold down or reduce the retail price of beef in Canada. I suggest, however, that this action has exercised and will exercise almost no effect on retail prices. I suggest, too, that the tariff experts in the minister's department should have been able to predict this. I am sure the Minister of Agriculture (Mr. Whelan) would have given advice to this effect had he been consulted.
Cattle producers are not so naive as to complain too seriously about the price drop due to the tariff removal, bearing in mind our very strong market. But we do complain strenuously about some of the further implications of this tariff action. Here is one concrete example which I drew to the attention of the House during the debate of
Customs Tariff (No. 2)
feed grains last night. From January 1, 1973 to date we have exported from western Canada to the United States 80,000 feeder cattle. In the same period last year, approximately 5,000 were exported. This represents a loss of about 7 per cent of our Canadian beef supplies in the form of fat cattle.
I suggest to you, Mr. Speaker, that we exported far more than 80,000 feeder cattle. We also exported a good many jobs. We exported feed lot investment opportunities. We exported the chance to become a net supplier of fat cattle to the U.S. and other global markets.
Why is it that U.S. feeder cattle buyers can outbid our own feeders for these 80,000 head of beef on a North American beef market? There can be no doubt that the reason lies in the competitive advantages which the American cattle producer enjoys vis-a-vis his Canadian counterpart. First of all, the U.S. fat steer market may rise $4 or more above our own, but it never drops any lower than ours, transportation costs being taken into consideration, due to the one-way tariff situation which presently prevails between our two countries.
Starting in 1972, our own basic herd provision was removed from the Income Tax Act. On the other hand, U.S. cattlemen enjoy liberal provisions enabling them to treat breeding herds as capital assets. Late in 1972 and early in the present year, U.S. feeders were at a distinct advantage due to the inequalities in DES regulations as between the two countries. Then again, U.S. cattlemen enjoy a distinct advantage in the area of machinery and equipment costs. Finally, there is the extreme shortage of high protein feeds and the uncertainty of supply coupled with high cost. These, Mr. Speaker, are the most important reasons why we are a net exporter of feeder cattle today.
The suggestion has been made that reciprocal free trade is the solution. It isn't that easy, of course. By and large cattlemen will support the principle of free trade only as long as equality is maintained with respect to all other inputs. This, of course, is not the case, for the reasons I have just outlined. When our cow-calf sector or the feed lot industry are in positions of relative disadvantage, the removal of import tariff or the introduction of reciprocal free trade can adversely affect the growth and even the viability of the industry. It is most important that the federal government should closely examine the competitive position of the Canadian industry before opting for the removal of tariff and reciprocal free trade.
It might be noted that a study of this type has now been completed in the U.S. in the form of the Flanagan report on agricultural trade policy, carried out under the aegis of the United States Department of Agriculture. It would appear that this report will recommend a liberalization of trade through full market orientation in that country. This, of course, will eventually lead to a truer free trade policy on the part of the country to the south, and since we are so clearly linked with them I think a comparable study should be undertaken as a necessary step here in Canada, in co-operation with the feed grain industry, the cattle industry and the federal government.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Laniel in the chair.
Clause 1 agreed to.
[Stage Direction]
July 17, 1973
Customs Tariff (No. 2)
On clause 2-Schedule A further amended.
James McPhail Gillies: Is it the intention of the minister to call each of the items in the schedules?


John Napier Turner: I must say that it had not been my intention, no.


James McPhail Gillies: I think a number of members of our party wish to make observations on a variety of these items. There has been a considerable number of representations about practically every one of these items in the schedules on behalf of the various interested groups. I wish to call the minister's attention to the items dealing with the removal of tariffs on frozen foods. I am curious to learn why the minister thought it would be advisable, or effective policy, to reduce tariffs on this particular item, since it would have the effect of virtually eliminating the frozen food producers in our country at this time.


John Napier Turner: Mr. Chairman, we have received representations in this regard from several concerns, even a local Ottawa concern. I might say that we are taking the position I have taken in respect of all these items. The Minister of Agriculture and myself have set up a joint committee consisting of deputy ministers and the assistant deputy minister of my department. We are analysing each one of these items to see whether, as I said in the budget speech, it has had an adverse effect on employment or production or an adverse effect on the ability of the Canadian producer to compete. If a case can be made, as it was in respect of greenhouse tomatoes, cherries and so on, we act. I am aware of the particular representations that have been relayed indirectly by the hon. member for Don Valley and we have them under active consideration.
Under clause 3(3) of the bill, if sanctioned by parliament, we have the opportunity to restore the duties to what they were as of February 19, 1973, providing a case is proven, and that is the reason for this ability to restore.


James McPhail Gillies: Mr. Chairman, is it my understanding that the minister has the authority to restore the tariff at any particular time when representations are made, or must this be done at the end of one year?


John Napier Turner: First of all, we have a temporary one-year tariff reduction on a number of items contained in Schedules A and B attached to this bill. This is temporary, and the tariff can be restored even prior to February 19, 1974 if a case can be made to show that the reduction adversely affects employment or the ability of Canadian producers to compete. Under clause 3(3) parliament gives the governor in council an opportunity to restore the tariff to what it was prior to the introduction of this bill, and at any time.


James McPhail Gillies: Has the minister had any cause to restore any of the tariffs to this particular date?


John Napier Turner: Yes, Mr. Speaker, the tariff on greenhouse tomatoes.


Mr. Whittaker:: Mr. Chairman, the horticultural council has been very concerned about many of the reductions in tariffs covered under clause 2. It has made representations to the minister seeking to have certain of these tariffs restored. I should like to bring to the minister's attention a number of these items and ask whether at this stage he is ready to reconsider his position. I refer to the following items:
8702-1 Asparagus
We request that the MFN ad valorem rate of 10 per cent apply in any fiscal year April 1 to July 15 and March 1 to March 31 except when the seasonal specific rate is applied.
They also request that the ad valorem tariff of 10 per cent be reinstated in respect of cabbages for the period June 1 to February 28, except when the seasonal specific rate applies.
The next one is 8712-1 in respect of cucumbers, and it states:
The 22 week 2V\ cent per pound specific duty period is too short to give tariff protection for the full period of greenhouse and field production of cucumbers for the fresh market. Greenhouse production begins about March 1, immediately followed by field production to first frost about October 10 or a period of 32 weeks. Now that the 10 per cent ad valorem is removed the industry only has 22 weeks of protection.
We request the reinstatement of the 10 per cent ad valorem tariff to apply March 1 to November 30 except when the seasonal specific rate applies.
The next one is 8717-1 in respect of onions, and it states:
Although the seasonal specific rate applies for 44 weeks, which covers most of our marketing season, an 8 week "free" period can cause quite disproportionate damage because onions are storable. Onions imported in volume during the free period could seriously disrupt sales of early set onions.
The next one is 9203-1 in respect of sweet cherries, and it states:
The 2 cent per pound seasonal protection for 7 weeks was not applied last year because 10 per cent ad valorem afforded greater protection than the specific, i.e., the f.o.b. price last year was from 40 cents per pound U.S.A. source. This means the ad valorem protection amounted to 40 X 10 per cent = 4 cents per pound, while the specific is only worth 2 cents per pound.
We request that the 10 per cent ad valorem rate be reinstated to apply June 15 to August 15 except when the seasonal specific rate applies.
The next one is 9205-1 in respect of peaches, and it states:
We request that the 10 per cent ad valorem rate be reinstated to apply July 1 to October 31, except when the seasonal specific rate applies.
The next one is 9206-1 in respect of pears, and it states:
The seasonal specific rate does not cover our normal marketing period for pears. Extensive research has been devoted to extending our marketing season for late pears, which has now been brought to the end of February and into March.
We request that the 10 per cent ad valorem rate be reinstated to apply July 15 to February 28, except when the seasonal specific rate applies.
The next one is 9211-1 in respect of strawberries, and it states:
The loss of the 10 per cent ad valorem duty is serious for strawberry producers who are already subjected to extensive inroads of import competition. We request partial reinstatement of the 10 per cent ad valorem duty to apply June 1 to August 31, except when the seasonal specific rate applies.

I could refer to others in respect of processed fruits and vegetables, but perhaps the minister would like to reply in regard to those I have quoted.


John Napier Turner: Mr. Chairman, I have listened not only to the remarks of the hon. gentleman tonight, but also those made earlier today and yesterday regarding some of the proposed tariff reductions on fresh and processed fruits and vegetables. I am also aware of the representations made both to the Minister of Agriculture and myself by the Canadian Horticultural Council. I think it might be worthwhile if I repeated again tonight what I said late Friday afternoon as it did not get much play in the press.


An hon. Member:: Do you think it will get more tonight?


John Napier Turner: I think it is important that it be again drawn to the attention of the producers of fresh fruits and vegetables that I have asked the Tariff Board to conduct a study of the tariff items on these commodities and to make recommendations as to an appropriate structure of rate schedules. In order to explain the terms of reference in more detail than I was able to do at the second reading stage on Friday, I should read certain paragraphs of a letter I sent to the Chairman of the Tariff Board on July 6.
This letter was made public by the Tariff Board last Thursday. Perhaps with the indulgence of the committee I might read a few paragraphs which I think set out the situation clearly. This letter is dated July 6, 1973 and is addressed to Mr. Couillard, President of the Tariff Board, and it reads in part as follows:
Dear Mr. Couillard:
My colleagues and I have concluded that a number of developments in recent years have made many of the present tariff provisions for fresh and processed fruits and vegetables inadequate and out of date.
As a result of rising prices, the specific rates of duty applicable to many of these products have been affording growers and processors a diminishing level of protection against imports. The greenhouse industry has become a more important factor in the Canadian market, particularly for tomatoes and cucumbers. Greenhouse and field crops reach the market at different times of the year and it is claimed that the present tariff structure cannot provide sufficient protection for both crops.
Moreover, in some years, there have been sudden influxes of large quantities of certain fruits and vegetables at very low or distress prices while at other times certain domestic products have been in short supply. The present tariff is not structured to deal adequately with either of these situations.
I believe it would be useful if the Tariff Board were to examine the impact of the present tariff structure on the fruit and vegetable growing and processing industries taking into account the general interests of Canadians as consumers and the importance of these products in the budgets of Canadian families. I would expect the Board to include in its report a detailed assessment of other factors affecting the production, consumption, marketing, and international trade in the products of these industries. It should also consider and report on how, in its view, provision could be made for action to be initiated quickly to either counter the adverse effects of low-priced imports on Canadian growers and processors or to benefit consumers at times when domestic products are in short supply.
I, therefore, direct the Tariff Board to make a study and report under section 4(2) of the Tariff Board Act on the following tariff
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items insofar as they relate to fresh and processed fruits and vegetables:
Then there is a long list of items, many of which were covered in the representation of the Canadian Horticultural Council. I want to add to that that this action by the government concerning the reference to the Tariff Board does not alter in any way the fact that the proposed duty reductions are scheduled to expire on February 19, 1974 and will be carefully reviewed by me and by my colleague the Minister of Agriculture in the light of the economic conditions which prevail at that time. This study will take into account the representations I have received concerning proposals before the committee, and the comments made during the course of debate during second reading and in committee of the House. In other words, the fact that I made the reference to the Tariff Board to review in current circumstances the pressure from imports exerted on Canadian producers and the effect of imports on Canadian consumers brings the matter up to date, and there will be a thorough review by the Tariff Board of that whole subject.


George H. Whittaker: Mr. Chairman, I should like to thank the minister very much for his words but I am afraid the processors and producers in Canada become a little short-tempered about studies. We are talking about what is happening right now, which is the reduction of their tariffs. They are very concerned about this and are making representations to have these tariffs restored or reduced, as the case may be. These items can be studied, but what we are requesting now is immediate action.
The Canadian growers are most concerned about the market and what happens in respect of certain fruits and vegetables. The growers are dependent upon outlets for their products. Without processors, growers will be forced out of business. Canada's processors are making one of the smallest margins of profit of any segment of the Canadian manufacturing industry-2.7 per cent on sales in 1969, compared to 4.1 per cent for all manufacturing, according to Statistics Canada. Many processors cannot afford to reduce prices, and additional competition from imports could force them out of business.
At the present time the Canadian government is carrying out a study to determine whether the Canadian tender fruit industry may be saved. The decrease in tariff protection would indicate the government is not interested in saving this industry. Two firms which pack the majority of Canada's tender fruit are making corporate decisions as to whether they continue to operate or have their brand labels packed in the U.S.A. Here again, if you import cans into Canada there is a duty of 17 Vi per cent; but if you import the cans full, they are duty free. Or if you do pay duty it is not as much as 17 'h per cent. In this way the cans are bought much cheaper and you have a base to work on in respect of the cans. Several retailers and distributors are already doing this, and it may be simpler, easier and possibly even more profitable for them. However, the result will be disastrous to Canadian growers. It is the equivalent of exporting thousands of jobs to the United States.
We require a processing industry which is capable of handling Canadian production. Canada's fresh tender fruit industry is in jeopardy without a complementary

July 17, 1973
Customs Tariff (No. 2)
processing industry. Similarly, the asparagus canners and freezers are having real difficulties in competing against imports from Taiwan. This is a labour intensive industry, and if processors cannot compete, once again thousands of jobs will be affected.
The glace and maraschino cherry industry has already fought and won a case against dumping of products imported from France. The lowering of tariff puts the industry back in the same position. The industry has to decide whether it will continue to process here or have its product packed in another country. This will also affect the cherry brining industry which has difficulty in competing against cherries brined in Italy.
We are not only talking about the loss of a processing industry and jobs; we are also talking about the future of growers who are dependent on processors as an outlet for their produce. We sincerely hope that the tariff protection which the processing industry had will be restored, as the loss of this industry will eliminate competition for foreign imports, and inevitably result in higher prices to the consumer and the loss of jobs to Canadians.
The specific processed product tariff items which we request be restored to the pre-budget rates are the following: item 8901-1, asparagus; item 9001-1, frozen asparagus; item 9002-1, Brussels sprouts; 9004-1, frozen vegetables. This category includes, among others, green peas, corn, green beans and cauliflower, and the budget change is very serious in these highly competitive items. Then there is item 9010-1, dried vegetables.
This new industry is expanding, both in the freeze-dry and other forms of dehydration. We are concerned over the economics of this industry. Next is item 9015-1, pickled or preserved vegetables. The reduction will create problems in the frozen french-fried potato industry.
Another item is 9021-1, tomato juice. Unless reinstated the reduction will result in further inroads of Californian products into western Canada, thus affecting sales of the Ontario product. Item 9030-1 refers to pre-cooked potatoes. This industry is complementary to our fresh potato production and is facing serious import competition. Item 9032-1 relates to pre-cooked potatoes with admixture. Item 9100-1 refers to soups. Then we have 10520-1, cherries in brine, item 10530-1, jellies and jams, and item 10535-1, fruits and peels. We were already subject to dumping of these products from France. The danger of large scale imports still exists and we cannot afford further loss of protection. The next item is 10601-1, apricots. Next are items 10603-1, peaches, 10604, pears and 10607-1, mixtures.


John Napier Turner: Mr. Chairman, I want to assure the hon. gentleman that I have read that brief. As a matter of fact, representatives of the council attended a number of times upon me and the Minister of Agriculture. I assured them, as I now assure the committee, that if a case is made in the circumstances as described, action will be taken and a tariff will be restored.
I want to assure the hon. member who says that industry may be tired of studies, that the Tariff Board will commence hearings on this in January. Those hearings have already been announced. As a result of the extensive discussions we have had with the Canadian Horticultural Council, we have already made a commitment, as I men-

tioned on second reading, in respect of canned peaches. Some of the representations on certain commodities have already been withdrawn by the Canadian Horticultural Council after discussions with the Minister of Agriculture and myself as well as our officials. We have a continuing interchange with the council and I want to assure the hon. member we are taking this matter seriously.


Mr. McKinley:: Mr. Chairman, I wonder if the Minister of Finance could explain Something to us. He said that if it could be proven that producers are being hurt by the lowering of these tariffs. Could he explain to us the procedures that producers would have to adopt in order to prove to the government that they are being hurt? If it is a long, drawn out six months affair, they might all be out of business before the government decides to do something about it.


John Napier Turner: What happens is that when I or the Minister of Agriculture receives a complaint, we send out a list of questions-not a questionnaire-geared to their own particular situation to try to elicit facts. On the basis of that, if we can ascertain damage either to production, employment, or the ability to compete, we take relieving action. If we are not quite clear and representations are made in particular through a member of parliament, who comes in with the people concerned, I and the Minister of Agriculture set up a personal meeting, either with us or with senior officials, to examine the situation.
Particularly with regard to agricultural products, in view of the short seasons involved for some of these products, as we did with tomatoes or cherries we take action to solve the seasonal problem facing those producers. That is the procedure. I want to assure the committee that if any producer or producer association is affected and a member of parliament wishes to bring it to our attention, the matter gets prompt and immediate attention from the Minister of Agriculture.


Robert Elgin McKinley: I have another matter that I wanted to raise. It has to do with the reducing of the tariff on mobile homes. Can the minister tell me whether they are included in this clause or the next one. The item is in schedule B.


John Napier Turner: We have had many representations from manufacturers of mobile homes, not only this evening and during this debate but from members on various sides of the House. Officials in my department have written the association suggesting a meeting, but we did not receive a reply yet. They have not come back to us as yet to set up a meeting, but we want to have a meeting with them and analyze their brief and their situation. If they will just confirm a date with us, our people will meet with them at the earliest opportunity.


Robert Elgin McKinley: My main concern is not only with regard to mobile homes, Mr. Chairman. I do not know whether hon. members will remember the time back in 1969 when the government was busy closing Canadian forces bases across Canada. They happened to close one near Clinton in Huron county. Previous to that, questions had been asked about this in the House. I have here an answer that
July 17, 1973

was given by the Prime Minister which I would like to quote. It was in answer to a question from the hon. member from Malpeque, who asked:
Mr. Speaker, I should like to ask one more supplementary question on this very important matter. I address it to the Prime Minister. Will the right hon. Prime Minister assure the House that before any closure takes place the government will implement measures to compensate as far as humanly possible for any economic hardship that may be caused to the people and communities concerned?
The answer which the Prime Minister gave was:
Mr. Speaker, I would not give that undertaking in respect of any closure, because it is conceivable that in some areas closure would not have the significant consequences about which the hon. member is concerned. But in cases where there would be significant hardship, as the hon. member says, I can give an undertaking that the government would not proceed with the closure without having considered alternative ways of alleviating that hardship.
Since that time a tremendous amount of effort has been expended in providing employment in that area, and on that base in particular. Of course, this is not a designated area. Nothing south of Parry Sound in Ontario is designated. The government thinks it is not an area which needs to be designated, perhaps because of the industrious people there who look after themselves. It is part of the country where my friend, the hon. member for Don Valley, was born and raised. But we did have a commitment from the government that some assistance would be given.
Recently, within the last couple of years, some seven industries have been established there, and among them the Glendale mobile home factory. They will employ about 150 people. We certainly did not get any help from the government in attracting industries, but we did obtain considerable help from the Ontario government in the way of development loans.
Now the federal government is putting another obstacle in front of them. I would appreciate it if the minister would take a serious look at any representations that are made to him by the mobile home manufacturers.


John Napier Turner: I will give that undertaking. If the association of manufacturers will confirm a date when they want to meet us, we are ready. We have already sent out an invitation.


Kenneth James Higson: I have one question for the Minister of Finance. I appreciate his comments with regard to the speed with which he believes the government can work in proving damage and in reinstituting a tariff. My question is this: After representations are made by the Canadian Horticultural Council and other people in the industry, would it not take two or three weeks before the surcharge is placed on sweet cherries? By then, of course, the great bulk of the crop has been harvested and marketed at depressed prices because of competition from offshore products.


James McPhail Gillies: I would like to draw the minister's attention to item 6300-1. I wonder what was the reasoning behind the reduction of the tariff duty on cleaned rice from 50 cents to 25 cents per 100 pounds, given the fact that the tariff reduction is a saving of a quarter of a cent per pound and the consumption of rice in Canada averages only six pounds per head. It seems that this will have a very modest effect on the cost of living in Canada, and yet it will have a great impact on a wholly Canadian industry.
Customs Tariff (No. 2)
What is the reasoning behind the change which the minister suggests on this item?


John Napier Turner: What we have done here, as the hon. gentleman knows, is that the British preferential tariff and the most favoured nation tariff on cleaned rice has been reduced from 50 cents per 100 pounds to 25 cents. We followed the principle which we used in all these items: will this make the price of rice more competitive in Canada for the Canadian consumer without adversely affecting Canadian producers or processors? That was the thought.


William Charles Frank: I would like to pursue the remarks I made this afternoon on the item relating to house trailers and mobile homes. Do I understand the minister correctly to have said that he has set up a meeting with the Canadian association, or that if they request one he will set one up? I was not clear on that.


John Napier Turner: Mr. Chairman, we have written the Canadian Association of Mobile Home Producers asking them to set a date to come and meet us in Ottawa but we have not heard from them yet.


William Charles Frank: How long ago was that?


John Napier Turner: May 9.


Mr. MacLean:: Mr. Chairman, I should like to ask a rather general question with regard to the minister's interpretation of the effect that the tariff changes on sugars of various kinds will have on the sugar refining industry in this country and on sugar marketing in some sugar exporting countries. I take it that the only tariff remaining is on completely refined sugar, and that all the classes of sugar that are shown as entering duty free under the British preferential tariff are categorized as non-refined sugar. I am not sure of the technical terms involved here but I should like to have an explanation in layman's language of the practical effects of the change.


John Napier Turner: Mr. Chairman, I hope I can satisfy the hon. gentleman in layman's language. What we did is accept the Tariff Board report on sugar. We did not go as far as the Tariff Board wanted us to go because we preserved the Australian preference. We are in the course of negotiating a new Canada-Australia trade treaty and we did not want to dislodge that.
We have talked to the Canadian refiners about this particular item and have been assured by them that they can live with it. What we tried to do is introduce more competition into the distribution, processing and refining of sugar in this country without adversely affecting the ability of Canadian refiners and producers to compete in world markets.


Mr. Ritchie:: Mr. Chairman, today I noticed that the electrical manufacturers complained that appliance tariff reductions would affect them. Can the minister give us some detail on how much this tariff was reduced, and particularly the effect of devaluation or appreciation on some of their competitors. What was the point in reducing tariffs in light of their argument that they were not

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Customs Tariff (No. 2)
contributing to inflation and that generally appliances had not risen in price for some time?


John Napier Turner: Mr. Chairman, first of all I want to say that over the past year in this country the price increases on durables have been fairly modest. It certainly has not been contributing to the general rise in the cost of living. I agree with what the hon. gentleman says in with what the appliance manufacturers complained about in the sense that they reasserted that they had not been contributing to the price increase.
What we did want to assure, of course, was that the industry would remain competitive, so I merely reduced the duty on appliances from 20 per cent to a temporary rate, until February 19 next year, of 15 per cent. This is the same rate that has applied for several years on other durable consumer goods-radios, television sets, dish washers, air conditioners. This reduction would not unduly prejudice them and they certainly would be able to sustain their position against foreign competitors, importers. In addition it would be a benign competitive pressure in favour of the Canadian consumer.


William Gordon Ritchie: Would these imports be in large quantities from the United States or from the European Common Market and Japan?


John Napier Turner: Largely the United States, Mr. Chairman.


William Charles Frank: Mr. Chairman, I should like further clarification. In the event that this bill is given third reading without any change to this trailer tariff, what happens then? Do they have to wait until February or March next year, or is it the minister's problem to take it off as a result of pressure? I think this is a very important matter for this industry. I have the largest manufacturer in my riding. They employ 550 people in a small town plus 800 in three other factories, so it is important to them to know where they stand.


John Napier Turner: Mr. Chairman, because the government wants to assure itself that it is not making mistakes, we stand willing to be corrected on the basis of adverse effects on employment or production or competitive ability of Canadian producers. For that reason, we made a temporary reduction. If the hon. gentleman is good enough to look at clause 3, subsection (3), on page 3 of the bill, he will see that at any time between third reading of the bill, whenever that should be, or when Royal Assent is given to the bill, whenever that should be, and February 19, 1974, or prior to the 20th day of February, 1974, if a case is made out, the Governor in Council may restore the tariff to where it was prior to February 19, 1973, last February, when I brought down the budget.
In other words, there is no rigidity at all. If the mobile homeowners association will reply and fix a date, we will listen to their case. If they have a case, we have the flexibility under this clause to do something about it.


Herbert Thomas (Bert) Hargrave: Mr. Chairman, I should like to address a question to the Minister of Finance to follow on my closing remarks during the second reading debate when I referred to the Flanagan report in the United States. This

report studied the relative competitive advantages with the industry down there. In view of the upcoming GATT meetings and the interst in them, if the minister has not already received a request from the Canadian Cattlemen's Association I am sure that he will. Is he prepared to try to find some clearcut answers to the competitive position of the Canadian beef industry vis-a-vis the American beef industry as it affects cost inputs? I am thinking primarily of the feed grains input. Can the minister comment on the possibility of a Canadian study of relative costs similar to the Flanagan report?


John Napier Turner: Mr. Chairman, we are going to be looking at all the relevant factors, including cost factors as between Canadian and American producers or as between Canadian and foreign producers, prior to the GATT negotiations. Some of the statements made tonight, yesterday and Friday were critical of the alleged unilateral action on the part of the Canadian government in presenting these proposals. As I understand the argument, it was that we should have obtained reciprocal concessions from the United States or some of our trading partners prior to bringing these temporary reductions before the House of Commons. The argument is that allegedly our bargaining position has been weakened.
There are a number of answers to this. The first is that these are temporary reductions. They expire on February 19, 1974, well before any GATT negotiations become conclusive. It has become apparent that the forthcoming round of GATT negotiations is not imminent as it was once believed to be. It is our view, on the basis of advice we are getting from our friends in the United States and in the European Economic Community, that the talks on tariffs probably will not begin until late 1974, long after these temporary reductions are history.
The important factor influencing the shape of the negotiations is the amount and form of negotiating authority or discretion to be given to the President of the United States under the trade reform bill which is now before Congress. At one time we anticipated that the House of Representatives would deal with the matter early this year and that the Senate would be dealing with it during the summer, but events down there have thrown any schedule out of kilter. Speaking practically, we do not believe that the President will be given authority in time, under the trade reform bill, to make the preliminary negotiations in Tokyo, and later in Geneva this fall, meaningful.
That being so, speaking practically, we will be negotiating in late 1974 and throughout 1975 for tariff reductions which may come into effect at the earliest in 1977 and possibly much later.
I want to make it clear that before the start of the forthcoming negotiations, or before the forthcoming GATT round, the government intends to consult extensively with the business community, the labour community and the agricultural community. Indeed, the Prime Minister gave that undertaking to the provinces as well at the meeting here in Ottawa of the Prime Minister and the premiers of the provinces. We said that consultations with the various sectors of the Economic Community and with
July 17, 1973

the provinces will be held before a final negotiating position is taken by Canada at these GATT negotiations. So, it is open for the Canadian Cattlemen's Association and other representatives in our economic community to approach the negotiating committee, which was announced by my colleague, the Minister of Industry, Trade and Commerce.
In terms of a time schedule, I would say that there is plenty of time available. My colleague, the Minister of Industry, Trade and Commerce, has already made this clear in a public statement, and I am glad to confirm that again before this committee.


Herbert Thomas (Bert) Hargrave: Mr. Chairman, the minister has talked about what may happen in 1977. Would the minister be prepared, perhaps jointly in co-operation with any other group, to look at the representations of the Canadian Cattlemen's Association and make a detailed study of any competitive advantage or otherwise that may arise from these proposals? I think the cattle industry would be prepared to co-operate on this. Actually, I think we would need the co-operation of the minister's department in the carrying out of such study.


John Napier Turner: Mr. Chairman, I can give that undertaking. We are willing to look at that and we have to know what our negotiating position ought to be. The hon. gentleman has that undertaking.


James McPhail Gillies: Mr. Chairman, if I may move from the sublime to something more detailed, could the minister explain the reasoning behind the reductions under tariff items 42505-1, 42520-1 and 42525-1, which have to do with lawn mowers? Representations about this have been made by the lawn mower industry, which is a very active industry in Canada. The industry serves the Canadian market. Now there is a good deal of competition because of these tariff reductions. What was the reasoning behind these reductions?


John Napier Turner: Mr. Chairman, what I said respecting appliances applies here. A good deal of opposition no doubt came from the manufacturers of lawn mowers. On the other hand, the duty on parts was taken off, so that some lawn mower manufacturers could be even more competitive because of the duty reduction on the parts going into their main products.


Mr. Lambert (Edmonton West):: With all due respect to the minister, may I point out that this is not merely a matter of machinery or one involving parts. I think the officials of the department ought to have consulted with the industry, as I suggested when I spoke on second reading. We know, and the minister obviously knows, that one of Canada's leading manufacturers of this type of commodity planned to double production facilities in the Toronto area. As soon as the budget came down, not only did plans for expansion of production facilities go into a total deep freeze but, as a result of the minister's proposal, the company in question lost one of its major retail outlets. The competition in this area is very, very close.
That Canadian manufacturer who lost one of his major accounts manufactured machines not only under his own name but under other household names for major depart-26446-72
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mental store distribution. What is not often known at the official level is how actual commercial arrangements operate. This company lost a major account to the United States. It did not go to Europe; it went to the United States, to a manufacturer who was able, because of a minor differential created, to produce the product on a limited basis, even though it might only be saleable for one year. Not only has the company in this country abandoned its plans to expand production-and, may I say, part of the thrust behind the minister's budget was to provide a stimulus to the economy-but it will have to cut back production facilities and lay off some staff.
What is the purpose of the exercise? The minister said that the three-fold thrust of the budget was for the expansion of the Canadian ecnonomy. What is the minister hoping to achieve if, as a result of these custom tariff proposals, Canadian firms have to cut back their production? The product was not obsolescent. This was not a case of someone just marking time or spinning his wheels. We are talking about a principal manufacturer in this particular field who has cut production as a result of work carried out in an ivory tower. There was no consultation. Oh, I know the minister's officials very well. Frankly, in some ways, the minister is in an ivory tower. Members on my side of the House may also be in an ivory tower. But I say that the minister's officials are in a tower that is twice as high as ours.
I say this with all due personal respect to the people involved. You know, they should get down among the people and mow lawns. In this case one of Canada's major lawn equipment manufacturers has simply said, "All right, if that is what you do to me, okay; I have scrapped my plan to double capacity and I am cutting back." Mr. Minister-I say this through you, of course, Mr. Chairman-the ball is over in your court.


John Napier Turner: Mr. Chairman, I do not know whether the officials are in an ivory tower; certainly they are here tonight on the floor of the House. It is a little hard to develop a consultative process on items prior to a budget.


Marcel Joseph Aimé Lambert: It has been done before.


John Napier Turner: Perhaps we can develop such a process in the Standing Committee on Finance, Trade and Economic Affairs for all sorts of budgetary items. This is something we can consider. At the moment, the budget is brought down on a day fixed without prior notice. The consultation really has to be on the general understanding that the minister and his officials can get relating to the state of the country at that time.
On the day the budget was brought down, we set up a consultative process to see whether these items would (a) achieve the purposes they were set out to achieve, and (b), do so without adversely affecting production.
I do not know the situation to which the hon. member is referring. If the industry had been placed in jeopardy on February 19, I would have thought they would have come to see us. Certainly if they had asked the hon. member to

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Customs Tariff (No. 2)
seek an interview with me, and the hon. member would have insisted on that, I would have seen them. I and my people are still willing to see them. If an American company sets up an investment based on a one year temporary reduction, it would be a pretty short cash flow on which to base an investment in this country.


Marcel Joseph Aimé Lambert: Mr. Chairman, I just sat back as a fisherman waiting for the trout to rise to the fly. I have before me a copy of the letter outlining the precise argument I have made in much more detail. It is dated February 21, two days after the budget, and is addressed to the minister. The minister said people affected by budgetary proposals would consult with him. What happened to the answer to this letter that was written less than 48 hours after the delivery of the budget? Will the minister tell me privately or publicly what was his answer to the letter from Gilson Brothers of Mississauga, Ontario, in this regard? I have a copy of that letter. It is purely objective.
The hon. member for Don Valley read representations from a number of concerns in which they complained to the minister about certain of these proposals seriatim.
To refute the minister's statement, may I say that this question of consultation would be something new. I am not going to be the one to say they are liars or mistaken. With regard to certain budgetary proposals and customs in the past they have had the courtesy of the department of some consultative process in order to work matters out. The minister admitted there was a departure this time, that changes were made without consulting on a limited basis, and the government were going to get a feedback from the concerns involved. We now have it. From assessing the results, I am not very impressed with the degree of consultation, bearing in mind the minister's statement with regard to the thrust of the budget, which was the stimulation of the Canadian economy.
Does the letter from which the hon. member for Don Valley read, and which I now intervene to support, talk about economy support? Does it talk about the importation of rice into Canada where the net benefit will be something like IV2 cents a year per capita? What do all of these things add up to? It is up to the minister to discharge the burden of his budget.


John Napier Turner: Mr. Chairman, the hon. member for Edmonton West mentioned Gilson Brothers of Mississauga. We received a complaint from another concern in Ontario with regard to the duty reduction on power lawn mowers on the grounds he has recited, namely that they had difficulty competing against American manufacturers. We also received a complaint from the Canadian Outdoor Equipment Company of Toronto and an individual in Peterborough. Both Gilson and the other company expressed themselves in favour of the duty reductions on engines and other parts for lawn mowers; that is to say, items 42420-1 and 42525-1. At this stage I can merely give an undertaking to the hon. member for Edmonton West-


Marcel Joseph Aimé Lambert: On the three items.


John Napier Turner: -to resurrect the correspondence and give him a personal report on the follow-through. I admit the burden of proof is on me.


George H. Whittaker: Mr. Chairman, I wish to ask the minister about one of the duty areas of the tariff structure. Guthion can come into Canada duty free in three pound bags, but in pound bags, under tariff item 93811-2, there is a 7VS per cent duty. This is put up in 2Vi pound bags because this is the quantity that is used. It is the only way it is packaged in the United States, yet it cannot come in duty free.
I recognize that this is not under this item, but I would like to take this opportunity to refer to a letter I received today. The reply from the Department of National Revenue was that the provisions in the Customs Tariff Act are statutory. They were introduced by parliament and consequently they are required to be administered accordingly.


John Napier Turner: Perhaps the hon. member will give me a photostat of that letter.


George H. Whittaker: I will give you the letter.


John Napier Turner: Send me a copy and I will have my officials look into it.


Mr. Barnett:: Mr. Chairman, I wish to come back to the point raised by the hon. member for Edmonton West. I listened to the exchange between the hon. member and the minister on the subject of lawn mower parts and I wish to pose a question to the hon. member for Edmonton West or the minister. This great patriotic distributor which markets across Canada under its house name because of some fractional price differential, if I understood the hon. member correctly, switched its account from a Canadian to an American manufacturer. This is very interesting and very relevant to the item under discussion inasmuch as the result of that action, if I heard the hon. member for Edmonton West correctly, was the loss of a certain number of Canadian jobs. Possibly the minister can enlighten us on this aspect of the topic that was under the discussion between him and the hon. member for Edmonton West.


John Napier Turner: The hon. member is making my case. I could not put it much better than that.


Thomas Speakman Barnett: When we get into a discussion of this kind in the committee stage perhaps it is the occasion to start naming names. There are only a certain number of distributors who manufacture under house names in Canada and presumably they are Canadian firms. When a situation of this kind is brought to the floor in committee, the Canadian people are entitled to know who is responsible for the cancellation of plans for the expansion of that particular Canadian manufacturing enterprise.


John Napier Turner: I believe the hon. member for Edmonton West was good enough to say who made the representation. He has already revealed that information.


Thomas Speakman Barnett: I have in mind the firm which cancelled its order for manufactured goods which were put out under its own brand name, or house name, as the hon. member put it. I do not know whether this information can be made available by the minister, but since the matter was raised by the hon. member for Edmonton West perhaps there is some onus upon him to tell us exactly who he was talking about. He has mentioned the manufacturer but I would be interested to know the name of the firm which took the action to which the hon. member for Edmonton West has referred.


Marcel Joseph Aimé Lambert: The 15-second answer is that there is no name given of the major customer who decided that lawnmowers could be purchased from a source in the United States at a more competitive price than any Canadian manufacturer could offer. But the people who wrote to the minister indicated there were other customers who were considering similar action and making serious inquiries of United States manufacturers.


James McPhail Gillies: I have a question for the Minister of Finance. In a statement made in the House the other day the minister said that the appropriate time for him to discuss the impact of all the tariff reductions and the rate of inflation in Canada would be during the consideration of this bill. I wonder whether the minister would now care to reveal the result of the monitoring and the effect of these tariff reductions on price levels in Canada.


John Napier Turner: We went into the monitoring process at some length during the discussion of Bill C-194 having to do with sales tax, but I want to make a few points in response to the hon. member's question tonight. The Department of Consumer and Corporate Affairs has been assigned the responsibility for monitoring the impact on prices of the budget excise taxes and tariff measures. I hope that eventually we will have some sort of analysis to present to the House.
I want to make a number of points which relate to the analysis which can be made. First, of course, it will be difficult, as I said earlier on another occasion and on an earlier bill, to isolate the effect of a single factor, either a reduction in tariff or the lowering of a sales tax on the price of any particular product, from other factors which may be at work in the economy of Canada and in other countries.
There are other factors involved. I need hardly mention them to the hon. gentleman, but they include changes in the value of currencies, the effect of the devaluation of the U.S. dollar and, pari passu, the Canadian dollar; the worldwide shortages of certain products, and so on. This does not mean that the price impact of the tariff cuts is not real, but merely that it is clouded and that an attempt will have to be made to isolate it.
The second point I should like to make is that when I referred to the tariff reductions in my budget speech of February 19 I did not say they would result in price reductions. I think my words were that they could have a significant effect in dampening the upward pressure on consumer prices. I also said the economic effects must be judged not only by the reduction of charges on imports, 26448- 72J
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but by the effect of such reductions in moderating prices charged by Canadian producers and distributors.
The third point, Mr. Chairman, is that if one were to judge from the objections which have been received since the budget from a number of Canadian firms who consider that their competitive positions have been adversely affected by the temporary tax cuts, then, although I would not accept all their complaints as valid, I think one has to assume from these complaints that there are pressures on prices in a number of sectors affected by the tariff cuts. This having been said, the remarks I made relating to Bill C-194 affecting sales tax reductions would apply in similar fashion to the monitoring process in connection with the bill dealing with tariff cuts.


Fred Alward McCain: Mr. Chairman, I just have one quick question. I think the basic economy for consumer, producer and national interest as a whole is best served by a government policy of duty sensitivity in respect to agriculture. What steps does the Minister of Finance propose to take which would make the council of inquiry or committee of inquiry active, alert and quick-moving in cases of emergency when periodic duties are required to halt the importation of unreasonably priced foreign produce into the Canadian consumer market? I wish I could ask this question of the Minister of Agriculture but in his absence I must direct it to the Minister of Finance. It must be sensitive and able to act immediately in emergency circumstances which unreasonably depress certain farm prices.


John Napier Turner: Well, there are two mechanisms to meet such circumstances. First, there is the mechanism set up under this bill in contemplation of clause 3(3). If there are adverse effects on employment or production, we already possess a mechanism to deal with this.


Fred Alward McCain: Too slow.


John Napier Turner: On general subjects another mechanism is available to us as these issues arise, usually only a couple of times a year. We can make an immediate reference to the Tariff Board. Whether we use the customs tariff or the excise tax, we try to use the most effective method available to protect the Canadian producer.


[Stage Direction]
Clause agreed to.
Clause 3 agreed to.
Schedules A and B agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read the third time?


Some hon. Members:: By leave, now.


John Napier Turner: that the bill be read the third time and do pass.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: On division.

July 17, 1973
Adjournment Debate
Motion agreed to and bill read the third time and passed.


Mr. Deputy Speaker:: In accordance with Standing Order 40 a motion to adjourn the House is now deemed to have been made. Therefore, the question is that this House do now adjourn.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Walter Gilbert Dinsdale: Mr. Speaker, I have a matter for the Postmaster General (Mr. Ouellet) tonight. I am sorry that hon. gentleman is not in the House. In the past few weeks he has been as elusive and as erratic as the Canadian mails. I have been waiting for some considerable time to get specific answers to the questions I will pose tonight.
I understand the Postmaster General is preoccupied with the financing of the Olympics, and that fact has been commented on during other debates and in other places. I think he would be much more usefully employed in attending to the administration of the Post Office Department, that department which continues its downward slide so far as deteriorating efficiency is concerned.
This afternoon during the question period we had another example of the Postmaster General's failure to come to grips with urgent problems in respect of Canadian postal services. I asked whether the hon. gentleman was aware that a directive had gone out to the effect that directory services were no longer available. This directive dated June 25 was issued from the Calgary office and states in part:
All mail-(local or out of town) marked "moved" by the delivering employee or section is not to be given directory service but is to be block stamped and returned to the sender-
Having regard to this matter the Canadian Union of Postal Workers has noted that this is a negative approach to the problem. They state:
Rather than increase the number of man-hours required to eliminate this backlog of mail by adding, temporarily, to the staff of the Directory Section, or by offering overtime to the existing Directory Staff, they have decided, in their wisdom, to deprive the public of a service which they have come to expect, and rightly so, as part of a complete service paid for when they purchase a postage stamp, particularly for first class mail.
I would also refer the hon. gentleman to the classic case of Mr. De Marois who had been trying to get a birthday card delivered for two months. He appealed to the Post Office Department's customer services and was informed that the address should read "Mississauga" and should

include the postal code of the address of the individual to whom he was sending the card, a Reverend O'Reilly. Mr. De Marois conformed with those instructions, with no success.
Mr. De Marois then wrote to his member of parliament, the Hon. Robert Stanbury, who referred it to the Postmaster General. He in turn informed Mr. De Marois that he had referred the matter to postal officials, and around and around it goes.
Then there is the classic example of Harry Bruce, as reported in the Globe and Mail of April 19. He was supposed to be commencing on CBC "Capital Report", on editorials from across the nation, but these editorials did not reach him until long after his appearance on CBC. I suggest that both the CBC and the Post Office Department were deficient in this regard.
My real complaint arises from a question I propounded on June 22. It was responded to by the Minister of National Revenue (Mr. Stanbury) as the Postmaster General was not in the House on that occasion. In the interests of long-term planning and streamlining, the Postmaster General announced that new boxes and had been established. This is another gimmick designed to solve our mounting postal problems. There are no less than four boxes the good citizens of Canada have to sort out in order to be guaranteed assured mail. The Post Office Department widely publicized this with one of their elaborate documents which they send out from time to time. It is interesting to note there is no provision for mail proceeding outside Canada. I suppose we have become completely insular in this respect. A cartoon by Norris published in the Ottawa Citizen for July 10 shows confused Canadians gathered around a box. The comment is:
It's called "assured mail delivery"... unless one of the employees gets into a snit, misunderstanding, argument, bad mood, tantrum, rage . . .
This places the finger on the problem quite precisely. Morale is low among the postal employees and there will be no improvement in the service until the Postmaster General and his officials come to grips with these problems. I have had to outline the situation very hurriedly because of the lack of time in this period tonight, but there is nothing more important than efficient, fast, reliable postal service. It is more important than the ritualistic conferences now being organized by the government across western Canada.
I hope the Postmaster General, although he has not deigned to be with us tonight, will recognize that his primary obligation is not to solve the unsolvable problems of financing the Olympics. It is to ensure the increasingly exasperated Canadian public that the Post Office will fulfil the obligation it has long discharged over the years until recently, which is to provide an efficient mail service, an assured mail service, so that Canadians can keep in touch with one another on a regular basis and be guaranteed that reliable service is forthcoming.
[ Translation]


Mr. Gilles Marceau (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I will not take up the nonsensical accusations of the hon. member for Brandon-Souris

(Mr. Dinsdale) because the government has no time to waste.
I would say that the Postmaster General (Mr. Ouellet) is appearing before the Committee on Miscellaneous Estimates where he is discussing a most important bill and I think that since he was previously engaged he was bound to discharge his duty. He cannot be in two different places at the same time.
I am truly flattered to see that the hon. member for Brandon-Souris has suddenly discovered the new mail boxes which are used at the same time to inform the public at large of the modern structure of one of the best postal services in the world. I am glad he noted this innovation but I regret he did not understand the message largely diffused and which explained the advantages and efficiency of this service.
Those changes are derived from a long-term planning program undertaken by the department over the last few years. In fact, Canada is the first country in the world to offer a service such as guaranteed mail-the distribution of first-class mail as early as the day following its mailing and this throughout the country. When one considers the vastness of this country, one must admit that this is a rather extraordinary achievement.
As explained through advertising and in the individual folders, the coloured stripes on the mail boxes are indicative of the services offered. Each box bears one, two or three coloured stripes and each one indicates a mailing limit. The blue stripe indicates the time limit for national mail, that intended for the most remote centers in the country. Because of the distance which this mail must cover people are requested to mail their letters earlier in the day. If the customer meets this requirement, we undertake to deliver his mail on the next delivery day.
The white stripe indicates a later time limit for regional mail, whereas the mauve stripe pertains to local mail. This latter service is new and is designed to add a new dimension to the mail services given our clients.
Finally, we have endeavoured to give our clients the opportunity to avail themselves of the best possible service by indicating clearly on our mail boxes the type and nature of services offered. Is this not what businesses do to publicize their prices?
I shall convey to the minister the comments of my hon. friend and mention his aggressiveness, though, having known him for a long time, I am sure that down deep he knows that we have the best service in the world; basically, that is why we have considerable admiration for hon. members of the opposition who do not always say what they think, but who quite often mean what they say!


AIR CANADA-ALLEGED USE OF NON UNION PERSONNEL BY COMPANY DURING STRIKE-REQUEST FOR LEAVE TO PROSECUTE
Mr. Doug Rowland (Selkirk):: Mr. Speaker, on Friday, July 13, I asked the following questions of the Minister of Labour (Mr. Munro) in respect of the strike of the Air Canada finance section in Winnipeg which was at that
Adjournment Debate
time in its seventh week, and I received the following answers. I said;
In answer to questions in the House last week, the minister indicated he was reserving judgment on a request from the union involved in the strike referred to asking for leave to prosecute the company for unfair labour practices until such time as mediation had a chance to work. Now that mediation talks have broken off, is the minister prepared to accede to the union's request to prosecute?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, the hon. member states that mediation talks have broken off. I have tried to indicate I hope this is a temporary situation.
Following this, I asked:
Has the minister completed his inquiry into allegations that Air Canada is forcing non-union personnel to act in the capacity of the striking workers? If he has completed those investigations, what are the results?


John Carr Munro: I have not completed the investigation, Mr. Speaker.
Each of the answers given by the minister was unsatisfactory so I put the question down for debate. But before pursuing it, I asked substantially the same questions yesterday and received substantially the same answers. I thought then that it was about time that certain facts about this strike and the failure of the Minister of Labour to act were made clear.
First with respect to the minister's reply last Friday and this Monday that he had not yet received a report of the investigations, which he said his department has undertaken, into allegations that Air Canada was using threats to persuade non-union clerical personnel to act in the capacity of striking workers. That problem was first drawn to his attention in the House by a series of questions which I asked of the minister on June 20, almost a month ago. The union had made those allegations to his department before that. Then on July 5 my colleague, the hon. member for Winnipeg North (Mr. Orlikow), asked the minister the following question and received the following answer:
I should like to ask the minister whether he will have the officials of his department in Winnipeg look into charges that Air Canada employees who are not unionized have been directed to do the work which was done by people on strike and have been threatened with dismissal if they do not take on that work?


John Carr Munro: I expect information on this very point today or tomorrow.
"Today or tomorrow." That was on July 5. On July 13 and again on July 16, when I asked the same question of the minister, he still had not received the report. This, let me remind the House, is a strike situation. It is an emergency. It is not an occasion which permits the luxury of leisurely, gentlemanly, intellectual exercises. When action is required, it is required right now. Even today union personnel from whom the allegations came have seen no evidence of an inquiry being carried out. They have not yet been approached in this regard by anyone from the minister's department.
I have made my own inquiries and I am convinced of the validity of the allegations. I have talked to non-union personnel who have been told, when they showed reluctance to engage in strike-breaking activities by replacing striking workers in the finance section, that they were at liberty to refuse but that the fact of their refusal would be noted on their personnel file. It does not take a genius to

July 17, 1973
Adjournment Debate
understand what such a notation might mean to a man's or woman's career. It would take a person of exceptional strength of character to resist such pressure. I can offer no proof of my conversations because the people concerned, again understandably, were unwilling to sign affidavits. I am convinced that Air Canada is doing all in its power, legal and extralegal, to break this new union. It is about time that the minister took official notice of the facts and told Air Canada that such conduct on the part of any Canadian business, let alone a Crown corporation, was not acceptable.
I wonder in this regard what the travelling public would say if they became aware of the fact that the reason they have difficulty in finding seats on aircraft travelling between Winnipeg and Montreal, especially at the end and the beginning of the week is because as much as half the space on scheduled flights has been blocked off to enable personnel from Montreal, told to work in the Winnipeg finance section, to travel back and forth. I wonder what the travelling public would say if they knew that entire aircraft had been diverted for the purpose of transporting strike breaking personnel, voluntary and press ganged, between Montreal and Winnipeg. I think it is about time the government took official recognition of the facts and told the management of Air Canada to cease and desist from these practices.
With respect to the second question, that of granting leave to the unions to prosecute Air Canada under the terms of unfair labour practices legislation, I should like to note that I have sympathy with the minister's belief that granting such permission would be counterproductive so long as talks or mediation procedures, having some chance of success were under way. But I have seen no evidence of that since last Friday.
Last night union members voted almost 100 per cent to reject the latest company offer. Here it is important to understand that the union had offered to accept the company's wage offer and the company's position with respect to job classification if, in turn, the company accepted the union's position on seniority. Put simply, the union's position is that in the event of lay-offs the last person hired, the person with the least seniority, should be the first person laid off. That is a fairly standard union contract clause and a reasonable demand.
Further, the union requested that if subsequent adjustments meant more senior personnel had to undertake new tasks, they be granted 30 days in which to learn the new job. To me that is, once again, a reasonable approach to job security. But the position was rejected by the airline despite union concessions on two other highly contested and important items, job classification and the wage package.
Well, perhaps it is now time for the minister to grant leave to the unions to prosecute Air Canada for unfair labour practices in an effort to precipitate a settlement. Remember, this is a newly certified bargaining unit engaged in its first negotiations. In the initial phases of those negotiations the company raised the salaries and provided promotions to some 80 of the 450 odd people involved in what was, to me, a clear attempt to break the union. Beyond that, the union alleges that the company

provided inaccurate information on at least one key subject to the conciliation board.
Well, let us have the truth. Let us send the case to court. If the minister is not prepared to do that in an effort to provide a catalyst to bring the parties to terms, let us hear what action he is going to take. Is he ready to intervene himself? This dispute involves about 450 workers. The strike has gone on for eight weeks. It will eventually affect the efficiency of our largest air carrier. I think it is time for the minister to stop agonizing and start to act.


Mr. Charles Turner (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, in a final effort at the request of the mediators on July 11, the company put forward a complete draft of a new agreement, including movement in the primary areas that have been specified by the union. These improvements were in regard to union recognition, retroactive pay, pay scales, seniority, shift scheduling and union participation in the revision of classifications.
The proposed agreement provided for wage increases of 7 per cent, fully retroactive to September 25, 1972, plus 8 per cent increase in all rates compounded and an additional $10 on top of each wage scale, effective at the signing date of the agreement, plus another 8 per cent increase on all rates compounded one year from date of signature. The contract was to run for two years and two weeks from the date of signing, which would be the same length as an agreement signed by the International Association of Machinists and Aerospace Workers recently. On July 12, after studying the company's latest proposal, the union committee advised the company and the mediators that they would not accept the proposed settlement.
In view of the strike of these employees which has now lasted seven weeks, the mediators suggested that the final offer which the mediators had secured from the company should be presented by the union to its members to permit them either to accept or reject the proposed contract themselves. The union indicated that they were considering a number of alternatives which they would submit to their executives before taking action.
In regard to the first question by the hon. member for Selkirk (Mr. Rowland), he is referring to a request to the minister for consent to the making of a complaint pursuant to Section 187(5) of the Canada Labour Code.
The particulars in support of allegations under Section 148 outline their arguments to support their contention that the company failed to bargain in good faith. The second section of the allegations refers to particulars in support of allegations under Section 148(b). They contend that the company reclassified as "permanent, full employees", with a resulting revision in their rates of pay and fringe benefits, a number of people who had formally been classified as "casual" employees. This fundamental change was made without notice to C.A.L.E.A. and without C.A.L.E.A.'s consent. This matter is still being processed. When all of the information that is required by the minister has been obtained, he will be in a position to make his decision on this request to refer this matter to the board for a hearing.

The second question addressed to the minister by the hon. member for Selkirk related to the allegation that Air Canada is forcing non-union personnel to act in the capacity of striking workers. We have been advised that the company is using its supervisory and managerial personnel from the finance branch to carry on the main functions of this branch. To assist in the clerical work relating to these functions, the company has transferred a number of clerks from other departments of their operation. These clerks apparently performed similar types of clerical work in the branches where they normally are employed.


SOCIAL SECURITY-ACTION TO INCREASE PENSIONS FOR THE BLIND
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I hope that the remaining member on the government side will answer me.


Stanley Howard Knowles: If he does not, I will.


Jack Marshall: Mr. Speaker, in spite of several questions to the Minister of National Health and Welfare (Mr. Lalonde) asking him to provide some leadership to the provinces in increasing social benefits to blind persons in Canada, I keep getting the usual answer that the responsibility lies with the provinces. And when I ask the ministers responsible in some provinces, they put the blame on the federal government.
The Blind Persons Act provides for federal sharing, under agreements with the provinces, of 75 per cent of the amount paid in allowances to blind persons 18 years of age and over. I know this and have known it for some time; and I also know, as the minister keeps repeating time and time again, that it is up to the provinces to increase the benefits and that the federal government will pay 75 per cent.
I know a lot of other things, too. I know that since 1963 the maximum monthly allowance has been $75 and it remains the same ten years later. I know, too, that there are some 1,600 children up to the age of 15 who suffer from congenital eye defects, injuries and infections; that there are some 4,000 between 16 and 39 years of age suffering, too, from these defects, plus degenerative myopia; and I know that there are almost 8,000 citizens between the age of 40 and 64 who suffer from the same defects plus many others, such as retinitis, optic atrophy, diabetes, nephritis, tuberculosis, hypertension, blood vessel disease, tumors, and diseases of the central nervous system. And I know too, Mr. Speaker, that there are almost 8,000 citizens between the ages of 65 and 80 years and over 5,000 citizens over 81 years of age suffering from blindness. Yet the only answer I can get is "It is not our responsibility".
The minister had the opportunity at his widely touted conference with the provincial welfare ministers to bring this complete lack of humane consideration to their attention and to demand that the provinces pay some attention to these unfortunate citizens who are suffering from a lack of funds for buying the special needs and attendant supports they require. They lack these funds because of the rapid increase in the cost of living. But the minister is
Adjournment Debate
blind to his responsibility in showing the leadership required for demanding a change in the thinking of the levels of government which are responsible for supporting the inequities in the programs under this department.
Not only is he blind to the facts and indicates the inhumanity of his government, but he in his short term of office is suffering from "pass-the-buckism". I must confess the minister has shown more than average capability since he took over the Department of National Health and Welfare, but I ask him to stop and think of the suffering of the blind citizens of Canada. When he again meets with the welfare ministers, presumably in September, I ask that this inequity in social security legislation be treated with human feeling and priority, and that he introduce a program or amendments to the Blind Persons Act, which dates back to 1948, some 25 years, to help these unfortunate Canadian citizens.


Charles Robert Turner: Mr. Speaker, I would like first to address the comment respecting blind persons allowance. Under the federal Blind Persons Act, an allowance of $75 per month may be granted to blind persons 18 years of age and over. The program is based on a means test, and although the federal government shares in 75 per cent of its cost, it is administered by the province, which determines eligibility and the amount of payment and does not take into account the needs of the individual and his family.
It was because of concern over these and other limitations which are characteristic of this and similar categorical programs that the federal government introduced the Canada Assistance Plan, which came into effect on April 1, 1966. The plan was enacted as a comprehensive and public assistance measure, and the fact of need rather than the cause of need became the important criterion for determining eligibility for assistance.
The Canada Assistance Plan, under agreements with the provinces, enables the federal government to contribute 50 per cent of the cost of assistance and of improving welfare services granted to persons who are in need. The legislation places no ceiling on the rates of assistance to be shared, nor is there any reference in the plan to allowable income. This, in effect, has left the provinces free to set amounts and conditions and to take into account the needs of special groups.
I should also point out that the Canada Assistance Plan legislation includes provisions under which a province may cease to accept applications under the Blind Persons Act and provide assistance to blind persons under its needs-tested social assistance programs. At the present time, five provinces and the Northwest Territories are no longer accepting applications under the act. These provinces are Saskatchewan, Ontario, Alberta, Quebec and British Columbia.
Since many provinces are no longer accepting applications under the act, and because the provinces and territories were given notice that the agreements between them and Canada under the Blind Persons Act are being terminated effective February 1, 1981, there will be no proposals to increase the federal sharing in an amount greater than $75 per month.

July 17, 1973
Adjournment Debate
I should note that there have been some changes since 1955 in the maximum monthly allowance, the age requirement and the maximum yearly income allowable. In 1955 the maximum monthly allowance was $40. The allowance was increased in July 1957 to $46 and in November 1957 to $55. It was further increased in February 1962 to $65, and finally in December 1963 it reached the present maximum of $75.
We were also asked what action we intend to take to help persons on low incomes with mounting food prices. People in low incomes can be divided into two groups, those who are receiving social assistance and the working poor.
The working poor need not wait another five years until the proposals of the working paper become fruitful. We will soon be presenting legislation which will increase federal family allowances from the present average of $7.21 per child per month to an average of $20 per child. I expect that we will start payment of the increased benefits by January, 1974. It is true that, even after the increase in family allowances of the size proposed, there will still be families whose income, working income plus family allowances, will fall below an acceptable minimum or below the social assistance levels for which they would qualify if
they were on welfare. It is for this reason that we have advanced the idea of a general income supplementation plan to supplement the incomes of the working poor.
This proposal cannot be effected as quickly as the increases in family allowances because here we are entering into an area of provincial jurisdiction. It is only through a joint federal-provincial review that it will be possible to develop an over-all approach which will prevent us repeating mistakes of the past which have resulted in the present income security system becoming a patchwork quilt of programs.
Persons in receipt of social assistance will also be receiving the benefits of the increased family allowances. In addition, under the terms of the Canada Assistance Plan we continue to share in basic needs, which would include need for food. The provinces are free to adjust benefit levels to changing situations, and it is through the Plan that at the present time we are in a position to help persons in receipt of assistance, and in some cases persons on low incomes, to meet mounting food prices.


Stanley Howard Knowles: End of
quotation!
Motion agreed to and the House adjourned at 10.33 p.m.

Wednesday, July 18, 1973