1973-06-14

ELECTORAL BOUNDARIES READJUSTMENT ACT


Mr. Speaker:: It is my duty to inform the House that an objection signed by the hon. members for Dauphin, Winnipeg South Centre, Provencher, Churchill, Brandon-Sou-ris, Lisgar, Marquette, Portage, Crowfoot and Moose Jaw has been filed with me pursuant to section 20 of the Electoral Boundaries Readjustment Act, chapter E-2, R.S.C., 1970 to the report of the Electoral Boundaries Commission for the province of Manitoba.
If the House agrees, I would suggest that the text of the objection be printed as an appendix to the Votes and Proceedings of this day.


Some hon. Members:: Agreed.


OBJECTION TO REPORT OF COMMISSION FOR PROVINCE OF ALBERTA
Mr. Speaker:: It is my duty to inform the House that an objection signed by the hon. members for Crowfoot, Vegreville, Athabasca, Edmonton West, Calgary North, Red Deer, Rocky Mountain, Battle River, Wetaskiwin, Medicine Hat, Lethbridge, Pembina and Edmonton East has been filed with me pursuant to section 20 of the Electoral Boundaries Readjustment Act, chapter E-2, R.S.C., 1970, to the report of the Electoral Boundaries Commission for the province of Alberta.
If the House agrees, I would suggest that the text of the objection be printed as an appendix to the Votes and Proceedings of this day.


Some hon. Members:: Agreed.
[Editor's Note: For text of above objections, see today's Votes and Proceedings.]


PRIVILEGE
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, my question of privilege relates to the invitation that was not extended to some hon. members of the House
from British Columbia to attend the torch-lighting ceremony and to a statement made by the Minister of National Health and Welfare (Mr. Lalonde) in the House yesterday. As recorded on pages 4722 and 4723 of Hansard for June 13 the minister is reported to have said:
Mr. Speaker, if the hon. member had taken the trouble to come down the hill he would have seen, first of all, that there was no platform, so there was no way one could be seated on a platform.
Mr. Speaker, I as well as my colleagues from British Columbia did go to the ceremony and did see the invited guests seated behind a platform. I would ask that the minister apologize for misinforming the House about the platform-


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


John Douglas Reynolds: -and I would also ask the minister to apologize to the citizens of British Columbia for snubbing its members and making the opening of the Canada Games a Liberal publicity stunt.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: I am not sure that the hon. member would want the Chair to make a ruling in connection with this question of privilege. I would suggest to him and the House that perhaps the hon. member's parliamentary feelings might be hurt but not necessarily his parliamentary privileges.


Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise on a matter of privilege similar to the one raised by my friend from Burnaby-Richmond-Delta.


Mr. Speaker:: Order, please. If the hon. member is rising on a matter similar to that raised by the hon. member for Burnaby-Richmond-Delta he might have liked to follow a similar procedure which is in conformity with the Standing Orders and give due notice. The hon. member knows that according to the Standing Orders he has to provide a written notice as was done by the hon. member for Burnaby-Richmond-Delta.


Stuart Malcolm Leggatt: Thank you, Mr. Speaker. I will keep that in mind and try to get some space on tomorrow's agenda.


Mr. Coates:: Mr. Speaker, I wish to move a motion, seconded by the hon. member for Cape Breton-The Sydneys (Mr. Muir), for unanimous consent of the House under Standing Order 43-


Mr. Speaker:: Order, please. The item, Motions, has not yet been called. We are still on the item, "privilege". It seems there is a rash of such questions. If we have gone

June 14, 1973
Fundy Tidal Power
beyond that item I will call the item, Presenting Reports from Standing and Special Committees. Motions.



ROUTINE PROCEEDINGS


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, I would like to make a statement on motions related to a decision of the cabinet this morning. I wish to inform the House that effective midnight Friday, June 15, temporary controls will be exposed on the export of motor gasoline and home heating types of oil.


FUNDY TIDES-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION
Robert Carman Coates: Mr. Speaker, seconded by the hon. member for Cape Bre-ton-The Sydneys (Mr. Muir), I wish to move-


An hon. Member:: The microphone is not working.
Mb. Coates: Apparently my mike was not working. I will start over again. I wish to move, seconded by the hon. member for Cape Breton-The Sydneys, with the unanimous consent of the House, a motion under Standing Order 43 concerning the review of the Fundy tidal power report of 1969, the investigation having been carried out both initially and in this review as a joint federal-provincial undertaking by the federal government and the governments of the provinces of Nova Scotia and New Brunswick. The federal government announced the initiation of the review on March 31, 1971, and the present Minister of Energy, Mines and Resources informed me in the House last Friday that as yet he was not in a position to know when the review report would be available to him, his officials, and the people of Canada. I therefore seek the co-operation of the government in providing an assurance that at the very minimum-


Mr. Speaker:: Order, please. I hesitate to interrupt the hon. member but I am not sure whether that is his motion or whether he is at this point giving an explanation in support of the motion.


Robert Carman Coates: Mr. Speaker, I therefore seek the co-operation of the government in providing an assurance that at the very minimum an interim report will be made available from this review committee before the House rises for the summer recess.


Mr. Speaker:: The House has heard the motion proposed by the hon. member under the terms of Standing Order 43. Is there unanimous consent of the House?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: Mr. Speaker, I should correct the record right away. I am told that I used the word "exposed" rather than "imposed".
This move will ensure that unusual export demand for these products does not impair supplies to Canadian consumers.
During the debate in the House on May 28 on the subject of possible controls I stated that the government had this matter under review. I added that it was hoped that consultations with refiners would result in agreements suitable to the needs of the Canadian market. The National Energy Board has been in contact with the refiners but was unable to get universal acceptance of a willingness to limit exports of the supplies in question. Further, a significant portion of the export trade is in the hands of independent jobbers whose interest, understandably, is in the development of profitable trading opportunities and who, therefore, are less responsive to persuasion by the National Energy Board.
Because of the very substantial differences which exist between American and Canadian prices, there was no assurance that exports of these products could be voluntarily limited at this time. The government, on the advice of the National Energy Board, has therefore decided to impose export controls for a temporary period. The regulations covering this will be tabled later. At this time I also wish to announce that there will be a repeal of the import restrictions on motor gasoline. The duration of the temporary period will be related to improvement in international supplies of refined oil products and also to the expansion of refinery capacity in eastern Canada.
In concluding, I would remind the House that eastern Canada is necessarily dependent on the international petroleum economy. Imports of refined products continue to be required. Particularly in the case of heating oils, they will not be easy to obtain this year, but the government expects that Canadian oil companies will make every effort to ensure that we enter the heating season with adequate inventories.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I think the minister used the right word when he said "exposed" because never have we had more explicit proof of the fact that the government is reacting all the time to the pressures put upon it. The motion debated in the House on May 28 asked for the imposition of controls and the minister said he would consider the matter. Quite frankly, I am glad he has made this move to

stop the monkeyshines that have been going on in the pricing of gasoline and heating fuels across Canada in the last few weeks. In passing, I wish I could persuade the Minister of Industry, Trade and Commerce (Mr. Gillespie) to be just as helpful to house builders by putting export controls on lumber.
There are two points I would like to make. One is that our national policy in Canada has been to try to increase the processing in Canada of products made out of our basic resources, and of course oil is one. We have been running at a deficit of nine to one with the Americans on trade in processed products coming from the refineries in our two countries. Our national policy has been to try to bring that into better balance. The policy announced today puts a check on decreasing that deficit in the interests of the security of the moment. However, I hope the minister will keep in mind one paragraph in his statement, that he is watching the refinery capacity in eastern Canada very closely, because a good deal of economic impetus can be given to the well-being of the Maritimes and Quebec by the export of finished products from the big refineries on stream and coming on stream and this is very important to eastern Canada. I would hope that in the national interest this will be considered by the minister and that he will move on it a little more expeditiously than he did in deciding to make the statement he made today.
Finally, in regard to what I think is an even more important part of the minister's statement today I point out that he indicated a slight concern for the precarious situation facing the people of Montreal and eastern Canada, including Ottawa, with respect to heating fuel each winter as time goes on. We rely at the moment on offshore resources. I suggest that, instead of leaving it up to private enterprise to secure adequacy of supply for this very important part of Canada in the years to come, the minister should come off his high horse, his big deals with OECD, where he works on an academic formula in case there is a shortage and make a Canada-Venezuela deal which will guarantee our supply in case of any crisis in the Middle East. The main purpose of my response to the minister's statement is to indicate that security of supply for Montreal and the other parts of eastern Canada has not been provided.
The energy situation in the world today is a great danger to the world but, because of our possession of great resources in this field, it provides a great opportunity for Canada. I would appeal to the minister and to the people on his side of the House to make some sort of move and establish clearcut energy guidelines so that we can take advantage of this great opportunity not only for the present emergency but for many decades to come.


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I thoroughly dislike people who get up and say, "I told you so"-


Some hon. Members:: Oh, oh!


Donald Stovel Macdonald: In this case so do I.


Thomas Clement (Tommy) Douglas: -but on this occasion I am tempted to be one of them. What I do deplore is the fact that the government is developing an energy policy by the ad hoc process of responding to a series of crises.
Gasoline and Home Heating Oil Export Controls


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: Last January the minister was quite insistent that there was no shortage of crude oil supplies in Canada, but by February 15 he was compelled by the realities of the situation to impose export controls on crude oil. On May 28, when I moved my motion calling for three items, one of them being export controls on gasoline and other refined products, the minister felt that there was no need for any action. Now, of course, he has announced that controls will begin tomorrow night at midnight.
I do not know whether the minister is being badly advised or whether the National Energy Board is not fully aware of the situation, but almost any person in the oil industry could have told the minister any time in the last three months that we were heading into trouble. What is unfortunate is that when the government does impose export controls it sets them at the inflated figure to which exports have risen. For instance, exports of crude oil used to be around half a million barrels a day and climbed to about three-quarters of a million barrels, but when the minister refused to act last January and waited until February 15 our crude oil exports had gone up to one and a quarter million barrels, and that is roughly where the minister imposed export controls.
What I want to know, and I hope the minister will tell us in the regulations or in a statement to the House, is what the export quotas for gasoline are going to be. In the month of April our exports of gasoline had climbed to 17,850,000 gallons which was more than we had exported in all of the year 1972. If he sets the export controls at that figure, then the export controls are, of course, absolutely meaningless.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: There is no doubt, Mr. Speaker, that when the oil companies were prevented from exporting crude oil they decided to export gasoline which was another way of exporting oil. While the minister kept claiming that this did not involve Canadian oil, and that most of it was from offshore oil refined in eastern Canada, the hon. Mr. Grossman, Minister of Revenue in the province of Ontario, scuttled that argument by pointing out that in the month of March, Ontario, where only western Canadian crude is refined, had exported 4.1 million gallons.
I also hope that the minister will take some steps to assure supplies in those areas that are not supplied by western Canadian crude, such as in eastern Canada. In British Columbia, where they use western crude, much of it is exported to the United States and is refined and shipped back. With the present price structure in the United States that supply is being cut off, not only gasoline but also heating fuel and bunker "C" which is very important for ferries, diesel trains and diesel engines. I hope the minister is going to apply himself to that problem before winter is upon us.
In the motion I moved on May 28 I raised the question of a two-price system and I want to return to that. I hope the minister is now giving consideration to providing some

June 14, 1973
Gasoline and Home Heating Oil Export Controls protection to oil and gasoline consumers in Canada against the pressure of rising external prices. There is no reason why the oil companies who are allowed to sell oil to the United States should not get the American price, but there is absolutely no reason why they should charge that price to Canadian consumers.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: Yesterday the President of the United States gave the minister and the Prime Minister (Mr. Trudeau) a lead by fixing the price of gasoline at the gasoline pumps. We may not have these wide sweeping powers in Canada but since the federal government controls the pipelines there are ways by which we can protect the Canadian consumer from the oil companies who are taking advantage of the higher prices in the United States and raising prices unnecessarily in Canada so that they can enhance their already inflated profits. The time has come for the government to move on this situation and not wait until another crisis is upon us.
[ Translation]


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) said just now that he had warned the government about what is now happening. Only yesterday, my colleague from Compton (Mr. Latulippe) moved a motion for the House to adjourn, under Standing Order 26, so as to study this matter of oil, gasoline and crude oil. At the time the Chair stated, and I quote:
.. . the minister appeared before the committee to discuss the production and distribution of oil products. I allude to previous discussions, not that I claim that the matter has been discussed exhaustively and that it need not be the subject of other debates, but because at this point it must be determined whether the problem entails the element of pressing and urgent necessity, due to recent events, which is normally required to justify a debate under Standing Order 26.
Mr. Speaker, 24 hours later the minister makes a statement to the effect that the matter is urgent. He now says that we must take immediate steps to control exports in our oil, gasoline and heating fuel production sectors.
The minister also said, and I quote:
In concluding, I would remind the House that eastern Canada is necessarily dependent on the international petroleum economy.
Not the Canadian industry, no, but the international economy.
Imports of refined products continue to be required. .. they will not be easy to obtain this year ...
That means that eastern Canada is in danger; we have no assurances that the countries which now supply eastern Canada with oil will be able to continue to do so.
Mr. Speaker, if I understand correctly, eastern Canada extends from Kingston to the Atlantic Ocean, and western Canada from Kingston to the Pacific Ocean; this means that part of Ontario, the entire province of Quebec and the Maritime provinces make up eastern Canada. The citizens of eastern Canada have no assurances that the exporting countries will be able to sell us the refined products we need.
The minister added and I quote:
Particularly in the case of heating fuels, they will not be easy to obtain this year, but the government expects that Canadian oil companies will make every effort. . .
He is still not sure.
... to ensure that we enter the heating season with adequate inventories.
Mr. Speaker, we are in June. Why wait two or three months to take efficient measures which would enable Western Producers-from Alberta and elsewhere in Canada-to assure supplies in Eastern Canada of gasoline and heating fuel necessary for next winter. The government always wait until it is too late to introduce measures after having repeated for months that conditions are not urgent. Now we are told right and left that the price of gasoline and heating fuel will be increased. On the other hand, Alberta producers complain because they could increase their production to supply the large Canadian market, but they are not allowed to export. Very well, however, let us take the necessary steps to import oil from Alberta and other oil-producing provinces, in order that their production be supplied to Eastern Canada so that the people in that area will benefit from the natural resources of the whole Canada, while the people in the West would benefit from some other natural resources.

[ English]


NATIONAL FLAG
Mr. Reg Stackhouse (Scarborough East):: Mr. Speaker, pursuant to Standing Order 43, I ask leave of the House to move:
That, as a way of strengthening national pride and unity, an annual date be designated as National Flag Day, and to deal with the various aspects of implementing this, including the fixing of a date, a House committee, representative of all parties, be appointed, such committee to report, with recommendations, during this session.
The motion is seconded by the hon. member for York East (Mr. Arrol).


Mr. Speaker:: The hon. member has proposed this motion under the terms of Standing Order 43. The motion can be put only with the unanimous consent of the House. Is there unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for St. Boniface is rising on a question of privilege.


Mr. Guay (St. Boniface):: Mr. Speaker, I take strong objection to the comment made by a member on the

June 14, 1973

Conservative side indicating that I objected. This is one time I did not say a word.


Some hon. Members:: Hear, hear!

[ Translation]


REFERENCE OF PETITION OF NATIONAL DENTAL EXAMINING BOARD OF CANADA TO STANDING COMMITTEE ON MISCELLANEOUS PRIVATE BILLS AND STANDING ORDERS
Mr. Gaston Clermont (Gatineau):: Mr. Speaker, I move, seconded by the hon. member for Sherbrooke (Mr. Pelletier):
That the petition of the National Dental Examining Board of Canada, tabled after the time limit prescribed by Standing Order 90, be referred to the Standing Committee on Miscellaneous Private Bills and Standing Orders, together with the fourth report of the Petition Clerk presented to the House on Thursday May 31, 1973, so that the Committee will be in a position to make whatever recommendations it deems appropriate.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of utmost urgency. To demonstrate the urgency of my motion, it is seconded by the non-partisan member for Hamilton West, Mr. Alexander, and has the support of many government members. It concerns the future endeavours of the Press Gallery and is prompted by the 19 to 9 victory last evening of members of the House over the Press Gallery in the annual challenge ball game. I move, seconded by Mr. Alexander-


Some hon. Members:: Order!


Mr. Speaker:: Order, please. As has been suggested, the hon. member for Yorkton-Melville just struck out. Even if the hon. member does not propose that the motion be put to the House, I urge him to follow the proprieties and refer to the constituency of the hon. member seconding the motion.


Lorne Edmund Nystrom: I move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That this House urge the government to make available immediately the necessary funds so that the press can immediately hire a coach and trainer to prepare them for next year's game.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I assume the hon. member does not wish the motion to be put but rather that the matter be taken
Agreed Charge Freight Rates Increase
into consideration by the government and by members of the Press Gallery.


FINANCE
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, under the terms of Standing Order 43, I ask the unanimous consent of the House to discuss a matter of urgent and pressing necessity.
Since the chartered banks grant themselves privileges which are at variance with Section 93 of the Bank Act (c. B-l, Revised Statutes of Canada 1970), and with reference to section 87 of the Auditor General's latest report, I move, seconded by the hon. member for Champlain (Mr. Matte):
That the Minister of Finance require the chartered banks to stop using interest free government reserves, and consider this problem with a view to better regulating this area of activity.


Mr. Speaker:: The House has heard the motion. Under the terms of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: As there is not unanimous consent, the hon. member's motion cannot be put.


TRANSPORT
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I rise on a motion under the terms of Standing Order 43 on a matter of urgent and pressing necessity arising from the increase of 6 per cent in agreed charge freight rates effective September 1, 1973. In view of the inevitable impact this upcoming increase will have on the cost of living in northern Ontario, I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That this House instruct the government to immediately inform Canadian National Railways to exclude, in the same way that export grain and flour are exempt, shipments into northern Ontario from such an increase.


Mr. Speaker:: The motion proposed by the hon. member requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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

Oral Questions



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I wish to direct a question to the Minister of Finance. Now that the President of the United States is again reverting to a general price freeze, does the minister consider this an appropriate time to take the advice we have been tendering for a number of months and take some direct action with regard to prices in this country?


Some hon. Members:: Hear, hear!


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I find the question posed in strange terms for a party that wants to liberate its economic policy from that of the United States.


Some hon. Members:: Hear, hear!


John Napier Turner: This is not the first time the United States has tried a system of price and income controls and, indeed, a freeze, nor the further effort to go back to what the President called selective mandatory controls which in effect is the present phase three. I might say to the hon. gentleman, as I will say later in the debate, that despite those efforts prices have been rising far more rapidly in the United States since the beginning of the year than they have in Canada.


Some hon. Members:: Hear, hear!


Some hon. Members:: No!


Mr. Diefenbaker:: Read what Mr. Shultz said last evening.


Robert Lorne Stanfield: I knew the hon. member for St. Boniface could not keep quiet indefinitely. I thought the minister could have done better in answering the first question. Perhaps he will do better with the second.


John Napier Turner: Give me a better question.


ACTION TO PROTECT HOME BUYERS OR BUILDERS FROM HIGH INTEREST RATES
Robert Lorne Stanfield: With the Minister of Finance obviously relying generally upon increasing interest rates as an anti-inflationary measure, does he now propose to take any effective action to protect Canadians who will be borrowing money to build or buy homes, from the high mortgage rates that will otherwise face them?


John Napier Turner: Mr. Speaker, interest rates have been rising in order that the expansion of the economy can continue without unduly increasing the money supply. With regard to the second part of the question, my colleague has a residential mort-

gage bill which, among other purposes, will channel more funds into the mortgage and housing market.


INFLATION-INQUIRY AS TO CONTINGENCY PLAN FOR WAGE AND PRICE CONTROLS-LEGAL BASIS
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I wish to direct a supplementary question to either the Minister of Finance or the Prime Minister. Does the government have a contingency plan for wage controls and, if so, will the minister or the Prime Minister confirm the opinion of the Secretary of State for External Affairs that there is a proper legal basis for the government to introduce wage and price controls?


John Napier Turner: Mr. Speaker-


Some hon. Members:: Hear, hear!


John Napier Turner: -I have found I have never had to confirm anything my colleague the Secretary of State for External Affairs has said.


Marcel Joseph Aimé Lambert: Would the minister say whether the government has a contingency program ready to deal with the problem of inflation? Does it have a program of wage and price controls based upon a legal opinion that the federal government has this power?


John Napier Turner: The existence of such a plan has been disclosed to the House on a number of occasions by the Prime Minister and other members of the government.


John George Diefenbaker: Non-existent!


EXPORT CONTROLS AND TARIFF CUT ON MEAT ANNOUNCED BY PRESIDENT NIXON-SUGGESTED REGULATION OF EXPORT OF MEAT AND OTHER PRODUCTS FROM CANADA
Mr. David Lewis (York South):: I wish to ask the Minister of Finance a question, one which does not arise from the phony, diversionary tactic of President Nixon in imposing a freeze.


Some hon. Members:: Oh, oh!


Mr. Bell:: Move an amendment tonight!


David Lewis: I want to ask a question arising out of specific steps announced by the President of the United States to control exports from that country, which in some areas will affect the supply of products in Canada such as feed grains, and, more particularly, the announcement of a tariff cut on meat imported into the United States, which could obviously affect the supply of meat in Canada and exert pressure on the price of meat here.


John Napier Turner: That was one part of the President's statement which caused me particular concern. I have been in communication with the
June 14, 1973

Minister of Agriculture to determine just what the effect on Canada would be.


David Lewis: In view of the fact that these delays on the part of the government, whether in the case of the export of gasoline or crude oil, or in doing anything about exports of meat, plywood and so on, will have a very bad effect if action is delayed too long, may I ask the minister whether he is ready to consider taking immediate steps to regulate the export of meat, plywood and so on from Canada, commodities which affect the cost of living very directly.


John Napier Turner: Yes, Mr. Speaker. We will watch the moves that are made and respond immediately if necessary. However, the power the President of the United States is seeking to impose export controls over food in particular requires, as I understood last night, the authority of Congress.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for York South for a further supplementary-

-and I shall then recognize the hon. member for Temis-camingue who also wishes to put supplementary questions.


INCREASE IN CAR PRICES BY GENERAL MOTORS-STEPS TO ROLL BACK
David Lewis: There are some specific things that can be done. Instead of discussing generalities, may I ask the Minister of Industry, Trade and Commerce whether he is planning to take any steps to roll back the unjustified increase in car prices which General Motors has already announced?


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: I think the hon. member is referring to the practice of the automobile companies of making equipment standard which in the past year has been optional. I have been assured by the corporation that the optional items now made standard have been ordered in over 95 per cent of the models affected. Second, that the new basic price, which includes the previously ordered optional equipment, is less than the old standard price plus the options.


FINANCE
David Réal Caouette: Mr. Speaker, I should like to put a supplementary to the Minister of Finance.
In view of the fact that the increase in the Bank of Canada discount rate and the increase in the chartered banks' current interest rate will not keep anyone from borrowing further is the minister considering the implementation of some measure of control, or even a
Oral Questions
freeze on those rates at 3 or 4 per cent, instead of the 10, 11 or 12 per cent current rates?


John Napier Turner: Mr. Speaker, that is really a subject for debate with which I intend to deal later.


Mr. Speaker:: Order, please. The Chair will recognize a number of members who are seeking to ask supplementar-ies on this subject, but I think it is my duty to remind the House that we will be having a debate for the rest of the day on the subject being raised at the present time by hon. members. The hon. member for Shefford will be recognized and then the hon. member for Calgary North, the hon. member for St. John's East and others.

[ Translation]


THE CANADIAN ECONOMY
Gilbert F. Rondeau: Mr. Speaker, I should like to put a question to the Minister of Finance.
Did the Governor of the Bank of Canada consult the Minister of Finance before announcing, in Quebec City, on June 11, that the time had come to slow down bank credit in Canada?


An hon. Member:: Not slow down but extend!


John Napier Turner: The Governor of the Bank of Canada used the term "slown down or restrain expansion" but in fact he was alluding to the fact that our monetary policy is still expansionary enough to serve adequately the Canadian economy.


TARIFF CUTS ON MEAT AND OTHER PRODUCTS ANNOUNCED BY PRESIDENT NIXON-STEPS TO PROTECT CONSUMER-SUGGESTED MEETING
Mr. James A. McGrath (St. John's East):: Mr. Speaker, a supplementary question for the Prime Minister. In view of the fact the Nixon initiatives will have the effect of further increasing food prices in Canada, especially prices of beef and other meat, poultry and dairy products, may I ask the right hon. gentleman whether he is prepared to meet with respresentatives of the provinces and the food industry to take steps to protect Canadian consumers from this external pressure?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the premise of the question is not obvious; I know it is not true as a general proposition. There are some areas where food is not in short supply here and where prices will not be changed.


James Aloysius McGrath: Perhaps I could help the Prime Minister by telling him that the basis of my question-

June 14, 1973
Oral Questions


Mr. Speaker:: Order, please. Perhaps the hon. member would, instead, put his supplementary in the form of a question.


James Aloysius McGrath: Perhaps I could phrase the question this way. In view of the evidence presented to the Special Committee on Trends in Food Prices this morning by a spokesman for the largest retail general food store in Canada that the Nixon initiatives would undoubtedly increase food prices in Canada, especially of meat products, I ask the Prime Minister whether, bearing in mind this expert evidence, he is prepared to meet with representatives of the provinces and the food industry to take steps to protect Canadian consumers from this external pressure?


Pierre Elliott Trudeau: I can only repeat that the premise of the question is not one with which we agree.


COST OF HOUSING-REQUEST FOR REPEAL OF SALES TAX ON BUILDING MATERIALS AND CONTROL OF LUMBER EXPORTS
Mr. Eldon M. Woolliams (Calgary North):: I should like to ask the Minister of Finance a question. Since the government seems to be paralysed when it comes to doing anything about the high cost of housing, and in the light of the fact that interest rates are so high, would the minister now be prepared to repeal the 11 per cent sales tax on building materials and to take a serious look at exports of lumber and other housing materials which are in short supply here? I ask this because the housing situation today is now more serious than anything we have yet experienced.


John Napier Turner: I agree with the assessment made by the president of the Ontario Builders' Association that the sales tax is not the prime reason for present housing costs. The cost of land assembly is the predominant factor, and my hon. friend, the Minister of State for Urban Affairs, is doing his best to correct the situation with the support of the House in adopting the amendments to the National Housing Act.


Eldon Mattison Woolliams: Mr. Speaker, we have experienced the verbal ability of the minister before, and we know it does not mean anything. I should like to direct this question to him once again. Has he taken a look at the large exports of lumber and other housing materials from this country, which are now leaving lumberyards in various provinces, including British Columbia, practically empty and are driving up the cost of housing even further? I ask this in all seriousness in order to help the average Canadian, and I hope the Minister of Finance also wants to do so.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


FREEZING OF FARM INPUT COSTS BY PRESIDENT NIXON- GOVERNMENT ACTION
Mr. Jack Murta (Lisgar):: Mr. Speaker, I direct my supplementary question to the Minister of Consumer and Corporate Affairs. In response to the initiative by President Nixon that will freeze such important farm input costs as machinery and fertilizer, is the government going to take any action now in respect of Canadian farm input costs and, if so, will a statement be made shortly outlining what it is going to do in this regard?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Any statement on government policy will be made in the House, Mr. Speaker.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.
[ Translation]


PROPOSED CONTROL ON EXPORT OF CERTAIN FOREST PRODUCTS-POSSIBILITY OF REPERCUSSIONS IN EASTERN CANADA
Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, I have a supplementary for the Minister of Industry, Trade and Commerce or for the Minister of Energy, Mines and Resources.
In the light of the suggestion made today in this House that the government should control the export of timber and some other wood products, could the hon. minister insure the House that the government will think about it twice before taking such a decision which might have negative repercussions on the economy and on the hiring of manpower in eastern Canada?
[ English]


Alastair William Gillespie: Mr. Speaker, on previous occasions when hon. members have inquired about the possibility of imposing export controls on lumber I have said no. I repeat on this occasion that the government is not considering that step. I would like to assure the House that we have this matter under continuing observation and-


Some hon. Members:: Oh, oh!


Alastair William Gillespie: -I can assure hon. members that I have received assurance during my discussion with members of the industry that they will ensure continuing and adequate supplies of lumber for Canadian housing.


Some hon. Members:: Oh, oh!


An hon. Member:: At higher prices.


Mr. Speaker:: Order, please. There are a number of hon. members wanting to ask supplementary questions. The Chair will recognize the hon. member for Oshawa-Whitby and then return to this subject and recognize the hon. member for Gander-Twillingate.
June 14, 1973


INDUSTRY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the fact that almost all Canadian families have an automobile, can the minister explain to the House why he allowed General Motors to get away with a price increase of up to $383 per car, and get around the agreement by stating that once optional equipment is now going to become standard equipment? Can he explain his decision to allow that shift to take place from optional equipment to standard equipment, thus allowing them to effect that price change?


Mr. Speaker:: Order, please. The Chair will, of course, allow the minister to reply to the hon. member's question, but the hon. member for Oshawa-Whitby and other hon. members will appreciate that a question asked in those terms is rather in the form of an argument. When a member asks a minister to explain a decision or a statement he is really becoming involved in an argument. Having said that, perhaps the minister should be allowed to reply to the hon. member's question to the extent that it is a question.


Alastair William Gillespie: Mr. Speaker, I think I have already given the answer in response to an earlier question. Let me again for the benefit of the hon. member emphasize that there will be a reduction as a result of this move in at least 95 per cent of the cases, because the optional equipment his been swept in and made standard. This is a practice which the automobile industry has adopted for many years at the end of the model year. Another thing I should like to emphasize is that this particular move applies to higher price vehicles. In addition, it does not in any way affect the differential in prices between the United States and Canada. If anything, it reduces the differential.


John Edward Broadbent: Mr. Speaker, in view of the fact, as I understand it, that the price increase covering options is greater in Canada than in the United States, thus widening the differential, I should like to ask the minister what he intends to do about that? Secondly-I will accept the minister's earlier answer as a statement on that part of the question-in view of the fact that companies base their percentage increase for the next year on current prices, is the minister going to permit price increases in three months for 1974 models to be based on present-


Mr. Speaker:: Order, please. I must object to a question asked in those terms. The hon. member is really making a speech. He has actually asked two questions. Again I will recognize the minister for the purpose of replying to the hon. member's two supplementary questions, after which I will recognize the hon. member for Gander-Twillingate and then the hon. member for Kingston and the Islands.


Alastair William Gillespie: Mr. Speaker, perhaps the simplest way to make the point is to say that if the hon. member were to compare identical pieces of automobile hardware here in Canada and in the United States before standardization of
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options in both countries, and again, since these items were included in the new base price he would find that the differential in price levels in both countries was not widened.



THE CANADIAN ECONOMY


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, my supplementary question is directed to the right hon. Prime Minister. Can he indicate whether in his recent meetings, approximately two weeks ago, with his provincial counterparts the issue of price and wage controls or contingency plans to deal with the problem in Canada today was discussed? Was the constitutional aspect discussed, and was there a clear indication by the provincial governments in respect of the issue in question?


Pierre Elliott Trudeau: Yes, Mr. Speaker. The general question was dealt with earlier by answers in the House both by myself and the Minister of Finance. The question was discussed at the meeting, and I think it fair to say that a majority of the provinces were firmly opposed to price and wage controls as being useless and counterproductive, including Conservative provinces.


John Napier Turner: Particularly.


Pierre Elliott Trudeau: Particularly the provincial governments which are Conservative.


Mr. Hees:: You know what happened during the last election.


Mr. Baldwin:: You might tell us what the constitutional authority is to do that.


George Harris Hees: Watch out!


Pierre Elliott Trudeau: I have been told to watch out, Mr. Speaker.


John Howard Lundrigan: Mr. Speaker, in view of the Prime Minister's willingness to share with us the discussions that took place, and I appreciate his enlightening the House on this issue, can he now indicate to the House the nature of the agreement or the compromise that might have resulted from the discussions in relation to what the provinces and the federal government are prepared to do on this very urgent issue?


Pierre Elliott Trudeau: Mr. Speaker, I cannot speak for the provinces on their individual behalf. Some of them have stated publicly what I just now told the House and which was indicated to the House a couple of weeks ago. There was no general consensus on the over-all problem. There was an expression of view which I just related to the House. The constitutional aspect, which interests the hon. member, was not discussed, except to the extent that some provinces took the position that if there were a constitutional difficulty, and if prices and wage controls were

June 14, 1973
Oral Questions
imposed, they would not oppose them on a constitutional basis.



ADMINISTRATION OF JUSTICE


Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is directed to the Minister of Justice. Has he instructed counsel to apply to the Federal Court for a writ of prohibition which would prevent Mr. Justice Morrow of the Supreme Court of the Northwest Territories from hearing any further evidence in the matter of the claim of the Indian Brotherhood of the Northwest Territories in respect of land rights in the Mackenzie Valley?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, we have taken two sets of action in regard to two judgments of Mr. Justice Morrow. One is in relation to a judgment he made sitting as a court, which is by way of appeal in the regular fashion. The other is in regard to a judgment he made sitting as persona designata, and that we have taken to the Federal Court.


Flora Isabel MacDonald: Mr. Speaker, have the minister and the government considered the tragic impact of that action, which Mr. Justice Morrow states he considers an affront to himself and his court? Has he considered the regressive effect this action will have in respect of the desirability of replacing the colonial system of government now in force in the Northwest Territories with a government by the people of the north?


Some hon. Members:: Hear, hear!


Otto Emil Lang: Mr. Speaker, I would like to say emphatically that anyone who would see this in any way as an affront to the court would be making a serious mistake. In relation to the judgment of Mr. Justice Morrow sitting as a court, as I have indicated the regular appeal procedure is being followed. It is not at all unusual to challenge a decision of a judge, acting persona designata, rather than as a court, in another court.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, my question is supplementary to the questions asked of the Minister of Justice. It is directed to the Prime Minister. Without hiding behind the defence of a judge acting as persona designata, can the Prime Minister explain the astonishing behaviour of the executive arm of government in subverting the judicial process by using the Federal Court of Canada to intrude to the extent it has in the territorial judicial process rather than following the usual appeal process if it disagrees with the judge's decision whether made as a court or acting as persona designata?


Pierre Elliott Trudeau: I take it that this is the type of argument which has been made before the court, Mr. Speaker.


Some hon. Members:: Oh, oh!


Erik Nielsen: Mr. Speaker, I have a supplementary for the Prime Minister. Does he intend to do anything about the unwarranted attack by one court against another set up by the executive arm of government, and has he or his government considered the ultimate result of the destruction of the credibility of both courts?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I will do something about it. I will discuss it with the Minister of Justice.



FINANCE


Mr. Henry Latulippe (Compton):: Mr. Speaker, my question is directed to the hon. Minister of Finance.
Would the hon. minister tell us whether the government is firmly decided to allow the Canadian dollar to float as in the past? In the affirmative, what are the advantages for this country?


John Napier Turner: Yes, Mr. Speaker, the Canadian government is maintaining its policy of allowing the Canadian dollar to float. There are always advantages and drawbacks but this is rather a question for a debate or a private conversation.


Henry P. Latulippe: Mr. Speaker, I have a supplementary.
In view of the monetary incertitude and of the complexity of an international monetary reform, partly due to the floating dollar and other international currencies, would the hon. minister tell us whether Canada should withdraw from the exchange market?


John Napier Turner: Mr. Speaker, this might be difficult but I could give the hon. member a copy of my most recent statement on international monetary situation, which I will do.



NATIONAL DEFENCE


George Harris Hees: Mr. Speaker, I have a question for the Minister of National Defence. In view of the report that recruiting for the armed forces is 20 per cent below requirements, following a similar trend which started last year, can the minister advise the House briefly what the government is doing or intends to do to correct this very serious situation?
June 14, 1973


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, we have achieved our recruiting targets so far as officers are concerned.


Some hon. Members:: Oh, oh!


An hon. Member:: I bet!


Thomas Miller Bell: Have you enough admirals?


James Armstrong Richardson: I might also say, Mr. Speaker, that our standards are high. We have four applicants for every one we accept.


George Harris Hees: It has always been considered important to have other ranks as well as officers in the armed forces-


Mr. Speaker:: Order, please. Is the hon. member asking a supplementary?


George Harris Hees: Does the government consider that it would be helpful in this regard if the Prime Minister started taking an interest in the armed forces instead of continually downgrading them by steadily decreasing their numbers?


Mr. Speaker:: Order, please. The hon. member for Winnipeg North.


George Harris Hees: Let us have an answer to that one.



POLLUTION


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. Can he explain to the House how it happened that steps were not taken by officials of his department to patent both in Canada and in other countries equipment developed by scientists of his department to clean up the ill effects of oil spills so that the equipment could be produced both for use in Canada and sale to other countries rather than being pirated as it is by countries such as Japan?


James Armstrong Richardson: Mr. Speaker, I will make inquiries and report to the hon. member.


Mr. Speaker:: The Chair will recognize the hon. member for Winnipeg North on a supplementary and then go to the hon. member for Dauphin.


David Orlikow: Mr. Speaker, while the minister is making his inquiry, would he also inquire concerning why the patent taken out in Canada is so weak that in all likelihood the Japanese who pirated the process can sell the device in Canada in competition with Canadian companies?


Mr. Speaker:: Order, please. The hon. member for Dauphin.
Oral Questions FINANCE



POSSIBILITY OF USING METHODS OTHER THAN MONETARY POLICY TO CONTROL CREDIT-GOVERNMENT POSITION

Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Minister of Finance. Does the rise in the bank rate indicate that monetary policy is hamstrung by the lack of other effective government controls on the flow of credit, and does the government intend to introduce any other method to control credit?


John Napier Turner: Mr. Speaker, since I cannot accept the preamble to the question I cannot reply to it.



NATIONAL HOLIDAYS


John George Diefenbaker: Mr. Speaker, my question is directed to the Secretary of State. In sending out invitations for the concert on Parliament Hill on July 1, why was July 1 described as Canada's national day rather than Dominion Day?


Some hon. Members:: Oh, oh!


Hon. James Hugh Faulkner (Secretary of State):: Mr. Speaker, it is Canada's national day. I will have to check into that.


John George Diefenbaker: Mr. Speaker, possibly I will have to draw the attention of the minister to the fact that an act respecting holidays, Chapter H-7, provides that throughout Canada this date shall be kept and observed under the name of "Dominion Day". I ask the minister, since when did this government get the right to change a statute by administrative action in this way?


James Hugh Faulkner: Mr. Speaker, if the right hon. gentleman is referring to the invitation, I will check into it. My understanding is that it is Canada's national day.


Some hon. Members:: Hear, hear!


John George Diefenbaker: Mr. Speaker, does the minister not know if he sent this notice out under direction of the government?


James Hugh Faulkner: Of course, Mr. Speaker, but unlike the right hon. gentleman I do not myself look at every invitation that goes out.


John George Diefenbaker: But you should know what is in it.

June 14, 1973
Oral Questions COMBINES



APPARENT USE OF TOBACCO PRODUCTS AS LOSS LEADER BY TWO WHOLESALE GROCERS TO DRIVE SMALL FIRMS OUT OF BUSINESS

Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, may I direct a question to the Minister of Consumer and Corporate Affairs. In view of the apparent attempt by two large grocery wholesalers to illegally drive small Ontario tobacco wholesalers out of business through lossleading tobacco products and then subsidizing through higher prices charged for food items, would the minister tell the House what action he is prepared to take under the Combines Investigation Act? I believe the minister has been made aware of this.


Herbert Eser (Herb) Gray: Mr. Speaker, I have already met with a delegation of the National Association of Wholesale Tobacco Distributors and officials of the Combines Investigation Branch are examining the situation very carefully to see whether the information presented to us by the distributors gives rise to grounds for action under the Combines Investigation Act.



FINANCE


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Prime Minister. With interest levels in Canada now back to the 1970 levels, and with money getting tighter and tighter-


John Napier Turner: Not so.


Sinclair McKnight Stevens: -would the Prime Minister confirm or otherwise the report that his government this month committed, or at least facilitated, a $100 million line of credit with interest in the 7 per cent range for Algeria to assist that country's Industrial Development Bank?


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Mr. Speaker, I do not agree with the premise of the question. As to the factual part, I will inquire.


Sinclair McKnight Stevens: With Canadian banks and our own Industrial Development Bank now charging small businessmen interest in the 10 per cent range, is the government contemplating any subsidization of Canadian banks to allow them to charge lower interest rates to Canadian businesses as the government has agreed to do with respect to Canadian banks which agreed to participate in the Algerian line of credit for the Algerian Industrial Development Bank?


Pierre Elliott Trudeau: I will inquire, Mr. Speaker.



NATIONAL DEFENCE


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. Yesterday, in reply to a question from the hon. member for Hamilton-Wentworth, the minister stated, as recorded at page 4719 of Hansard:
The allegation is not correct. There have been no instructions given to shave off beards.
In view of the fact that message 271900Z from the Commander, Maritime Command Pacific, stated in part:
With respect to personnel currently wearing beards, my policy is that they shall be shaved off for the reasons given in MCTM 373.
In view of the fact that, when I called him yesterday, the Commander, Maritime Command Pacific, stated that over 100 men had indeed been ordered to shave off existing beards-


Some hon. Members:: Shame!


Allan Bruce McKinnon: -and had in fact done so, would the minister now wish to amend the answer he gave yesterday, and will he rescind the order, or issue a new one, so that those men who were mistakenly required to shave off their beards-


Mr. Speaker:: Order, please.


James Armstrong Richardson: Mr. Speaker, when I was replying to a similar question yesterday I gave the general policy of the department.


An hon. Member:: What about admirals?


James Armstrong Richardson: That policy is as 1 stated it, that any of our personnel who are wearing beards and who have permission to do so are not, as a general rule-


Some hon. Members:: Oh, oh!


John George Diefenbaker: What about the private rule?


James Armstrong Richardson: -required to shave them off. As with all policies, there are exceptions and these are usually for safety reasons.


Some hon. Members:: Oh, oh!


An hon. Member:: How about civil servants?


James Armstrong Richardson: That is the explanation.


Mr. Speaker:: Order, please. We will be running out of time in about four or five minutes. Is the minister rising on a question of privilege?


Mr. Basford:: Yes, Mr. Speaker. I rise on a question of privilege to assure the hon. member for Victoria that there is nothing wrong at all with shaving.


Some hon. Members:: Oh, oh!
June 14, 1973


Allan Bruce McKinnon: If the minister discovers that some people have been forced to shave off their beards inadvertently or through this miscarriage of justice, will he issue an order to ensure that they can regrow their beards?


Mr. Speaker:: The hon. member's question is
hypothetical.



HOUSING


Hon. Paul Hellyer (Trinity):: Mr. Speaker, I should like to direct a question to the Prime Minister. Now that the government has adopted the policy of making money available wholesale for the financing of the Olympic Games, will the government make similar provisions for the hard-pressed municipalities to pay for the installation of sewer and water facilities in order to reduce the cost of housing?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I must correct the hon. member. This is not what the government has done. The government has put before the House a bill which will permit parliament to express opinions on this, and if other hon. members share the views of the hon. member, obviously there will be no Olympics in the way that they are planned now.


An hon. Member:: Blackmail!


Some hon. Members:: Oh, oh!


Paul Theodore Hellyer: Does the Prime Minister not agree that a unique and ingenious invention like money wholesale, which is infinitely superior to debt free money, should be used for other high priority purposes such as housing which is too expensive for most Canadians?


Mr. Speaker:: Order, please. The hon. member's supplementary is, of course, argument.



ELECTION EXPENSES


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, may I direct a question to the Prime Minister about another kind of freeze and ask him if it is the policy of the government to support the limitation of election expenses of political parties as well as candidates during election campaigns?


Pierre Elliott Trudeau: Mr. Speaker, I told the House yesterday that we would be presenting a bill to the House within a very few days
Oral Questions
which will deal with all these matters, and I hope it will have the support of all parties.


Leslie Gordon Benjamin: In order to contribute to the whole process of limitation and control of election expenses, would the Prime Minister give consideration to the possibility of travelling and taking with him the Leader of the Opposition to speak on behalf of the joint Liberal-Conservative candidates in Manitoba?


An hon. Member:: We do not want to break up your marriage.



HARBOURS


Mr. Eudore Allard (Rimouski):: Mr. Speaker, I wish to ask a question of the hon. Minister of Transport.
Could the minister inform this House about the government's position as regards the development of harbours designed to accommodate large tankers in Canada, in particular along the St. Lawrence River, in view of the decision taken yesterday by the government of the province of Quebec?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, the whole matter of deep water harbours is now being considered by the cabinet and no decision has been reached yet.



NATIONAL DEFENCE


Mr. Jack Marshall (Humbert-St. George's-St. Barbe):: Mr. Speaker, my question is for the Minister of National Defence and it is supplementary to the one asked by the hon. member for Prince Edward-Hastings. In view of the concern expressed by the Canadian Infantry Association in their annual report about the continual reduction of their strength and the reduction in the strength of the cadet services of Canada, and since these two bodies are a source of recruits for the regular force, would the minister advise the House what plans he has for strengthening the capability of the reserves, the militia and the cadets?


James Armstrong Richardson: Mr. Speaker, I think I have already done that on earlier occasions. We are increasing the strength of the reserves. We have issued new uniforms and they will have new equipment. More funds are going into their programs this year.


Mr. Speaker:: We have about reached the end of the question period. The hon. member can ask a supplementa-

June 14, 1973
Oral Questions
ry question and there will be time for one or two further questions before I call orders of the day.



NATIONAL PARKS


Mr. William Skoreyho (Edmonton East):: Mr. Speaker, I have a question for the Prime Minister in the absence of the Minister of Indian Affairs and Northern Development. Is it now government policy that any concessionaire operating within the national parks in Canada, other than national parks in the province of Quebec, must employ bilingual employees, display bilingual signs and print all advertising material in both official languages under the threat of a 90-day notice of cancellation of lease?


Pierre Elliott Trudeau: Mr. Speaker, I will inquire.



CANADIAN PACIFIC


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my question is for the Minister of Labour. In view of indications that CP Air might also be struck by the machinists union, could the minister indicate what steps he and his department are taking now in advance of the possible strike so as to prevent it?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, employees of my department have been involved in the mediation of this particular dispute in an effort to assist the parties in coming to a settlement. I might point out too that obviously this dispute is very much related to the dispute with Air Canada, and I hope that when one is settled the other will be also.



NATIONAL DEFENCE


Mr. Duncan M. Beattie (Hamilton-Mountain):: Mr. Speaker, my question is supplementary to the previous question directed to the Minister of National Defence. In light of widespread discontent reported among our armed forces personnel in Europe, and in view of the fact that the American dollar has been twice devalued, with subsequent revaluation of the (Herman mark, is the government giving any consideration to a further increase in the mere pittance being offered to our armed forces personnel in Europe?


James Armstrong Richardson: Mr. Speaker, having been in Europe and visited our troops last week I can deny categorically that there is widespread discontent.


Some hon. Members:: Hear, hear!


James Armstrong Richardson: Their morale is very high, and one of the reasons is that we have granted a 5 per cent increase in allowances to make up for the devaluation of the Canadian dollar relative to the German Deutchmark.



TRANSPORT


Mr. A. D. Hales (Wellington):: Mr. Speaker, my question is directed to the Minister of Transport. In view of the fact the minister and the Canadian Transport Commission have refused to accept the recommendation of a standing committee of this House that the people of southwestern Ontario should have adequate rail service, would he give serious consideration to accepting and approving an application for air transportation in that part of Ontario so that the people there will have at least some form of transportation?


Jean Marchand: Mr. Speaker, I pressume the hon. gentleman knows that I do not accept an application for this purpose. It is the CTC which accepts such applications. Further, I must remind the hon. gentleman that I met with the Minister of Transport of Ontario and discussed this whole problem with him and we hope to find some solutions. So far as the particular suggestion which the hon. member is making is concerned, I think those making the application will have to appear before the CTC.

[ Translation]



EXTERNAL AFFAIRS


Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I would like to ask a question to the Prime Minister.
In view of recent discussions between Mr. Kissinger and Mr. Le Due Tho, could the Prime Minister tell us if the government was requested to delay or is considering the possibility of delaying or changing its decision as regards the withdrawal of its troops from Viet Nam?


Pierre Elliott Trudeau: No, Mr. Speaker, the decision that was taken and the deadline announced a few weeks ago by the Secretary of State for External Affairs remain unchanged.

[ English]



CANADIAN BROADCASTING CORPORATION


Mr. Elias Nesdoly (Meadow Lake):: Mr. Speaker, I should like to address my question to the minister responsible for the Canadian Broadcasting Corporation. In light of the fact that Rankin Inlet now has television service and that many larger communities in northern Saskatchewan and in other areas of Canada still do not have television services, has the CBC board of directors submitted the accelerated coverage plan to the Secretary of State for his consideration and approval, and subsequently to the cabinet for their approval?


James Hugh Faulkner: Yes, Mr. Speaker. My department and the corporation are now having discussions on the accelerated coverage plan.


Mr. Speaker:: The Chair will recognize the hon. member for Grenville-Carleton and then the hon. member for Peace River, after which we will have to call orders of the day.



AGRICULTURE


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture. In view of the mounting difficulties of farmers in eastern Ontario and other parts of Canada because of the wet conditions which may prohibit the planting of crops, has the minister convened any meetings between himself, his provincial counterpart and farm organizations to develop contingency plans to assist these farmers in a more generous way than was apparent last year?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I discussed conditions in Ontario last Friday with the Minister of Agriculture of Ontario, the Hon. William A. Stewart. His officials and my officials have had discussions since that time. We are discussing just what should be done, and how it can be done.



THE CANADIAN ECONOMY


Gerald William Baldwin: Mr. Speaker, I would like to ask the Prime Minister a question arising out of the previous series of questions. Did the Prime Minister disclose to the leaders of the provincial governments when they were together recently the details of the contingency plan for dealing with inflation, and the legal justification and authority for that plan, and were the provincial pre-
Oral Questions
miers satisfied with the legal authority which the federal government claimed in respect of this contingency plan?


Pierre Elliott Trudeau: Mr. Speaker, the answer is no to the first part of the question. Indeed, they were not asked. As I said in reply to a previous question, the matter was discussed generally, but there was no request made to the federal government to discuss this contingency plan for price and wage controls, to which they objected in the first place.


Mr. Speaker:: Orders of the day.



BUSINESS OF THE HOUSE


Gerald William Baldwin: Mr. Speaker, I wonder if I might ask the government house leader if he has had adequate transcendental meditation with the Prime Minister and other colleagues to be able to tell us what the business of the House will be next week?


Mr. MacEachen:: Mr. Speaker, the business before the House today is a form of transcendental meditation. It will obviously have the same result at the end of the day.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: In other words, today is an opposition day. Tomorrow we will continue with the debate on the income tax Bill No. 2, to be followed by other measures in the name of the Minister of Finance including income tax bill No. 3, the excise tax bill and the customs tariff bill. On Monday, the measures in the name of the Minister of Finance will be continued. On Tuesday, we will have an allotted day, or opposition day.
On Wednesday and Thursday of next week I would like to call second reading of the bill amending the Immigration Appeal Board Act, which I hope will be given first reading on Monday, followed by the Summer Olympic Games bill, the Canada Pension Plan bill and the Parole Act amendment. Friday will be an allotted day. June 26 will be the final allotted day, which would be on a Tuesday.
While I am dealing with the business of the House may I refer to Standing Order 2(3) which reads:
The House shall not meet on New Year's Day, Good Friday, the day fixed for the celebration of the birthday of the Sovereign, St. John the Baptist Day, Dominion Day, Labour Day, Thanksgiving Day, Remembrance Day and Christmas Day.
July 1, as we know, falls on a Sunday, but because of the operation of the statute and the Standing Order, my understanding is that the House would not sit on Monday, July 2, under the terms of the Standing Order and the statute. St. John the Baptist Day is also indicated in the Standing Order, and it too falls on a Sunday, but there is no federal statute that provides that the same operation, or the same result, will take place with respect to St. John the Baptist Day. However, because the day is observed on the Monday, I thought hon. members might want to have

June 14, 1973
Cost of Living
an order of the House that would provide that the House would not sit on Monday, June 25.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: That would be in accordance at least with the spirit of the Standing Order.


Gerald William Baldwin: Mr. Speaker, that is fine. The government House leader will recall that I told him a number of prominent front benchers in our party had requested that we observe that Monday as St. John the Baptist Day.


Mr. Knowles (Winnipeg North Centre):: We are happy to agree to this special order respecting Monday, June 25.
[ Translation]


Mr. Godin:: We agree as well, Mr. Speaker. Besides, I think that it had been decided that we, in the Social Credit party, would not go on leave on Confederation Day if we were not on holiday for St. John the Baptist Day.


Mr. Speaker:: Is it agreed and so ordered?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Mr. James Gillies (Don Valley) moved:: That this House no longer has confidence in the government which, by its weak and stubborn adherence to outmoded policies, increasingly burdens the people of Canada with grievous cost of living increases.
He said: Mr. Speaker, I rise to speak on this motion which refers to the most important issue facing Canadians in all walks of life-the general management of the economy and the way in which the cost of living has been increasing. Between April and May on this year we experienced the largest increase in the cost of living in this country in any similar period in 25 years and we have seen, in the statistics, that the inflation rate has increased to about 6 per cent. No one, however, needs to look at statistics to know that the cost of living has increased by an amount which is almost unheralded in this country. Everyone who walks into a store and buys goods and services knows this fact.
The cost to Canadians of the inability of our government to deal with the problems of inflation are almost incalculable. The ravages it exerts on people on fixed incomes who see their pension wiped out because of inflation, the destruction of savings that takes place because of inflation, the erosion of confidence by people who are trying to save, the eradication of hope which takes place when young people think they never have a chance to buy

a house because of inflation-all these things make it imperative that something be done about this tremendous problem in the economy at the present time.
Certainly, the question of inflation and the kind of inflation we have today is not unrelated to the total problem of unemployment which we have had in the nation over the last couple of years. There is no question that a large increase in the cost of living and a large increase in inflation effects our position in international markets and, certainly as time goes by, if inflation continues our trade must suffer.
I want to point out very carefully to the hon. member for York South (Mr. Lewis) that we are not obsessed by inflation in this particular party as he might have suggested a few days ago when we were speaking on this matter. We are not obsessed by inflation; in fact we have always said that we are quite prepared to accept a small amount of inflation in order to have full employment in our economy if this is the price that we have to pay. I want to point out to the hon. member that it is a great deal different, however, to accept 2 per cent inflation than to have an inflationary rate of 6 per cent or 6 V2 per cent.
I want to point out also to the hon. member that while our inflation rate during the previous years has been less than that of some other countries in the world, the fact of the matter is that there are countries, such as the United States and Great Britain, where the inflation rate is being brought down while our inflation rate is going up and our comparative advantage toward those countries is declining every day. It seems to me that we cannot ignore the fact that if we do not do something about the inflation problem we may some day be faced with the problem of doing something about employment.
Most important, while we are not obsessed in this party about the problem of inflation, although we certainly could not possibly accept a 6 per cent inflation rate in the nation, we are obsessed about the fact that the economy must be fully employed, that people who need jobs can find jobs and that we use our resources effectively and efficiently. I am frightened as I witness what is happening in this country now, and the type of policy that we see enacted by the government, that the government may be in desperation going back to the policies that were followed two or three years ago when it slowed down the economy, and had high levels of unemployment to try to stop inflation.
No Canadian, no member of parliament, can in good conscience sit in this House and watch this happen. It seems to me that it is of utmost importance that we keep in mind that when we want to do something about the inflationary situation in the nation today, we are not doing that only to protect the people who are badly hurt by inflation, but we want to avoid the possibility of going back to a policy that did not work before, and I do not think would work again.
I hope this afternoon that in the course of the next few hours we will have a very serious debate about the reasons for the inflation in the economy and the reasons for the unemployment we had a couple of years ago and the policies that the government is following. Nobody in this House or in any particular party has a vested interest in trying to cure these problems. Everyone is concerned. No
June 14, 1973

one is satisfied with the inflationary rate. But we must accept that this is the federal parliament. If there is one responsibility that is put in the hands of the federal government, it is the responsibility for monetary and fiscal matters on a national basis. This is a responsibility that we cannot ignore. We cannot possibly go back to our ridings and say that we did not do anything about the inflation problem in this nation. All of us have a full responsibility for trying to cure this desperate situation. It seems to me that what we are really debating is not that something has to be done, but what should be done and how it should be done.
What is the government's answer to the inflation problem that we have in the nation today? As I understand it, the government is taking a position on four or five points. First, that basically inflation is a worldwide problem and we cannot really do very much about it on a domestic basis-that it is caused by rising world incomes that are pushing up demand in various countries around the world. Second, the government seems to be taking the position that cost-push inflation in this economy is no longer very important; that it is not as important as demand-pull inflation in Canada. Third, it is saying, it seems to me, that if anything can be done about inflation in Canada we have to do it through the operation of broad general monetary and fiscal policies; that selective controls or general controls of any sort are not necessary and certainly would not work. Fourth, that if they are going to do anything about inflation they are going to do it by operating through the supply side by trying to increase the supply of goods and services, rather than by operating on the demand side.
Let us examine these contentions and see how correct they may be. I would not argue, and no one in this party would argue, that there are no demand pressures developing around the world, that there is not inflation in other countries at the present time, but I do not think we should overrate this fact. The fact of the matter is, if you look at the statistics between 1971 and 1972 when there was worldwide inflation, it was possible for certain countries to reduce their rate of inflation. The rate of inflation between those years went down in Great Britain and in the United States as well as other European countries, but at the same time our rate of inflation went up.
There has never been a direct correlation between changes in the rate of inflation in other countries and the change in the rate of inflation in our country. It is ignoring some of the realities of our economy to suggest that there is nothing we can do about inflation in this country because it is a worldwide phenomenon. Obviously, the world situation has some effect but it is an abdication of responsibility to think that we do not have to do anything about it ourselves. The force which created inflation in Canada three years ago, two years ago, which was cost-push inflation has never been dealt with. They are still present in the economy and are still contributing to the inflation that we have now.
This party rejects totally the notion that we are not sovereign in the making of economic policies in this country, that we cannot find some method in Canada to deal with the problems of inflation and the problems of unemployment. Moreover, Canada has the responsibility of
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doing more than we are doing. After all, Canada was one of the nations that signed the agreement on the International Monetary Fund, trying to stop worldwide inflation. I, for one, find it a little tedious to hear the government constantly excusing its performance by trying to find some country where things are not working as well as in Canada and saying "ha, ha, we cannot to any better than X-country someplace else." It is time for Canada to face its own responsibility-not only to the people of Canada but the people of the world and to come to grips with inflationary problems. We are not helpless before the world as far as the inflationary situation is concerned.
Another point the government is making is that it is dealing with inflation by increasing the supply of goods and services. Certainly, in the long run that is the way in which the problem must be dealt with. However, as Lord Keynes used to say, "in the long run we are all dead". We must have solutions in the short run. We must be convinced whether or not the government is following consistent policies on the supply side. I will not dwell on the programs adopted two or three years ago for not growing as much wheat as we could, because wheat was in over supply, or the flock reduction program. Instead, let us look at the situation as it exists now.
One of the most inflationary factors in the economy today is the cost of housing. The rapid increase in the price of housing is exerting enormous inflationary pressure on the economy of the country. Certainly, if a person comes home and finds that his rent has been increased, he is going to demand higher wages, and properly so, if he wants to maintain his standard of living. We have an enormous housing shortage in this country and the fact that house prices are going up so fast is, in itself, evidence that there is a shortage.
What is the government doing now to try to take action against that shortage? What is happening? Regardless of what anyone on the government side may suggest, mortgage interest rates are going up, while at the same time housing starts in Canada have decreased. We know in this country, as has been evident throughout the postwar period, that when mortgage rates hit 9 l/i per cent, residential building slows down. In fact, one of the characteristic features of the Canadian economy in the postwar years has been this countercyclical activity in housing. When interest rates go up, I am speaking of mortgage interest rates, house building drops off. That is what we are seeing right now. By following a policy that is allowing mortgage interest rates to rise, not only is the government making it impossible for hundreds of thousands of Canadians ever to own a home, but the government is hindering the increase in the supply of housing. And yet increasing supply is supposed to be the heart and soul of the government's policy.
Equally important, in other areas the government is not following supply policies at all. Certainly, nothing has been said until today, and I am referring to the announcement of the Minister of Energy, Mines and Resources (Mr. Macdonald), about relating our domestic production to domestic needs. Everyone knows that lumber prices have soared in this country because of the tremendous demand for lumber from foreign sources. People know that the
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output of mills in the various parts of this country is completely sold out to foreigners, and this is forcing up the price in the domestic market. And yet we have heard nothing about a coherent program on the part of the government to look after the domestic supply needs of Canadian consumers.
As far as monetary policy is concerned, interest rates have been rising and continue to rise. What happens in the monetary system when this occurs? First, the large customers by and large are accommodated. The higher interest rates do not affect them, because they are able to pass them on in the form of higher prices. Actually, if one were to draw any correlation between interest rates and rates of investment in the recent past, one would see that high interest rates have not slowed down the investment of large corporations.
But what about the small borrower-the farmer, the small businessman, the fisherman or the homeowner? They are the first people to be affected. They are the people who cannot get loans. They are the people whose activity is stopped. Yet, they are the ones who ought to be involved in increasing output in our economy. The government now says that it is attempting to monitor whether or not these people are getting loans. It need not monitor very much. Every day I am sure members of this House are getting calls from constituents who find that they are unable to get loans and funds at a rate which they formerly paid. In its supply policies, one would have thought that the government would have removed the sales tax on building materials, but it did not do so. One would have thought that in the budget it would have tried to stimulate output from small businesses, but this was not done. So, if the government is saying, "We are going to cope with inflation in Canada by increasing supply", I say that there is absolutely no evidence of any consistent program for attacking supply in a coherent fashion.
Where the government can most be faulted is in the area of general monetary and fiscal policy, in its broad-gauge use of monetary and fiscal policy to govern the operation of the economy for a number of years. The government has taken the position that it is possible to essentially fine tune the economy and bring about price stability, full employment and growth by using monetary and fiscal measures alone. This is just not so. It may have been true 25 years ago, or 30 years ago, but it certainly is not true today.
The reasons for this, it seems to me, are fourfold. In the first place, monetary and fiscal policies as we know them are designed to work in perfectly competitive economies. The Canadian economy is not perfectly competitive. That was made very clear in the early 1970's, when the government followed a policy of restricting output. Prices did not fall. We had the strange situation of having an unemployment level of 7.1 per cent, and the only thing that happened was that there was a decline in output. There was no decline in prices. Actually, prices continued to rise. If monetary and fiscal policies were to operate as they should in theory, obviously, during that period of time prices would have fallen. But they did not. All that happened was that economic activity was restricted, and prices continued to rise. It is clear that we were operating

then in a period of cost-push inflation and that monetary policies simply were not effective.
Second, the government seems to think that it can use monetary and fiscal policies alone to achieve price stability and full employment, because it thinks it can estimate what will be the impact of the changes that monetary and fiscal policies will bring to the economy over a period of time. However, we do not know what those effects will be. The one piece of evidence which seems to be clear is that, we do not have sufficient information to know when the effects of changes in these policies are really going to take place. I remind the minister that as recently as last year he thought, from the evidence available to him, that the government was operating with a budgetary deficit. It turned out, however, that there was a surplus. Indeed, the whole policy thrust was different from what was contemplated because of the lack of information from which he suffered at that particular time. Because of this lack of information and predictability of when monetary and fiscal policies are going to work, broad and blunt instruments alone are not adequate to deal with the economy.
The third reason that monetary and fiscal policies will not work as effectively as hoped in the economy is that the Canadian economy is structurally different from that of almost any other country in the world. We are different because of the large degree of foreign ownership in our economy. Manufacturing is probably 57 per cent foreign owned; the mining industries are probably 55 per cent foreign owned; oil, gas and coal mines are about 82 per cent foreign owned; petroleum refining is about 99 per cent foreign owned, and so on. I am not speaking about this from the standpoint of whether it is good or bad, but from the standpoint of what effect this has on the operation of our economy. Usually, under normal fiscal policies, if there is a cut in taxes, especially in corporate taxes, you would expect an increase in investment. However, if in the economy, decisions about increases in investment are made somewhere else, then, whether or not that effect will take place is a question that is not certain. There may not be that response at all.
The same may be said with respect to monetary policy. In a situation where your capital markets and banking system are intertwined with those of another country then, although you may change your monetary policy, the effects may not be those that you expected. There is a suggestion that when the bank rate was first increased in Canada, it was increased in response to heavy borrowings on the part of foreign corporations, basically corporations domiciled in the United States. As the short-term rate in Canada was lower than the short-term rate in the United States, they came here to borrow. Because of the great intermixing of our two capital markets, the only response that the government could think of was to increase the discount rate. That sent all our interest rates up, causing all of us to pay more. The government did that because of its adherence to the proposition that you must not interfere with the broad operation of monetary and fiscal methods.
Clearly, it makes absolutely no sense to see all interest rates in Canada go up, particularly at the long end of the market, to see mortgage rates and consumer loan rates rise, simply because foreign corporations are borrowing
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heavily from the Canadian banking system because our short-term rates are lower than those in other countries. One would have thought that in this situation we would have heard some serious debate about the possibilities of a domestic interest equalization tax or something of that nature. The fact is that broad-gauge monetary and fiscal policies, as used in Canada over the past 15 to 25 years simply cannot be counted on to give price stability, reasonable growth and reasonably full employment.


Some hon. Members:: Hear, hear!


James McPhail Gillies: The regional impact of these policies is also well known to all members. In the past 20 years in Canada, the Atlantic provinces have not had an unemployment rate of less than 5 per cent. In 14 of the past 20 years, the province of Quebec has not had an unemployment rate of less than 6 per cent. We must recognize that the central application of broad monetary and fiscal policies, without supplementary programs, puts an incredible burden on people in the less advantaged areas of this nation. Are we going to follow policies whereby, if there is a bottleneck in Ontario, unemployment will increase in Newfoundland? If we stick to broad-gauge monetary and fiscal policies, this is exactly what will happen. The evidence is quite clear. We must be willing and able to use other economic measures at hand to do something about inflation.
I know that hindsight is easy, but it is clear that the economic policies followed two or three years ago were dead wrong. What should have been done at that time was to implement an incomes policy, a freeze on prices and wages, when there was excess capacity in the economy. The economy should have been expanded to supply more goods and services and while, because of the government's inaction it is more difficult now, the situation still calls for the implementation of an incomes policy.
This party has stated that we favour, would introduce and think there should be introduced right now, a 90 day freeze across the board on incomes, prices, rents, dividends-


An hon. Member:: Profits?


James McPhail Gillies: -profits. It should be across the board, in order to break the inflationary expectation in the economy at the present time.


Some hon. Members:: Hear, hear!


James McPhail Gillies: We will use the time of the freeze for the development of an incomes policy in this country. If we build an incomes policy during the period when there is a freeze, we can do it with openness and consultation. Everybody would be satisfied.
What would be the essential elements? Clearly, we must have a prices and incomes board to relate increases in prices to productivity. There is no way we can continue to have increases in prices far beyond increases in productivity without run-away inflation. We need a prices review board to relate price increases to increases in costs. There will have to be an appeal board to ensure that no one is placed in an inequitable position because of our
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program. Without such a program we will continue with strong inflation.
It is not true that we would need an enormous bureaucracy to handle a situation such as this. A program was developed and operated in the United States with less than 1,000 people. The British are now operating a program. It is not true that you cannot have a program if the economy is dependent to a large extent on imports and exports. The British economy has a large amount of imports and exports. I reject categorically the notion that the Canadian people are not willing, eager and able to accept such a policy at the present time.


Some hon. Members:: Hear, hear!


James McPhail Gillies: There does not seem to be evidence anywhere in the Canadian economy that people do not want some action on prices and the cost of living. They want it and they want it now. The issues are very clearly joined in this parliament as to the nature and the direction in which the economy of Canada ought to be operated.
We in this party are not prepared to accept the proposition that we will float along with some sort of broad gauge monetary and fiscal policy and not be willing to enact specific programs at specific times to deal with the problems of inflation. We say categorically that we need an incomes policy. We are prepared to put a program into effect immediately.
The last time we discussed this issue, the members of the New Democratic Party said that such a program would not work. They said the way to look after those who are badly hurt by inflation is to change pension programs and so on. However, that takes too long. These people are suffering now from the ravages of inflation. Something has to be done at this particular moment. Any government dealing with the complicated situation we now have in our economy in a world as inter-related as it is has to be willing to reject the notion that we may not have to use interest equalization taxes, export controls, or programs of limiting the consumer demand. The question we have to face is how long we are going to permit Canadians to suffer from the sort of cost of living increases we are experiencing.


Some hon. Members:: Hear, hear!


James McPhail Gillies: I wish I were Demosthenes so I could communicate how strongly I feel about this particular issue. The people of Canada elected this parliament to deal with Canada's economic problems. Almost nine months after the election and almost six months after this parliament met, our economic problems are worse.


Some hon. Members:: Hear, hear!


James McPhail Gillies: I do not see how any member of this parliament can return to his constituency with any degree of satisfaction that this parliament is working if we do not cope with the problem of the cost of living in this country. That is the central problem with which we must deal. The fact is there is a fundamental difference between the Liberals and the Conservatives in the approach to today's economic problems, and most importantly we are willing to tackle these problems and solve them now.
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Some hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, the issue before the House, the motion raised by the hon. member for Don Valley (Mr. Gillies) is, of course, one of concern to the Canadian people and of deep concern to the government. The inflationary pressures which confront us at the moment concern us because of their effect in eroding the incomes of Canadian families, reducing the value of savings and undermining Canada's competitive position in world markets. I do not want to underestimate the hurt caused to Canadian families by this economic phenomenon.
I want to say, though-and I think the House is entitled to review the facts-that despite the adverse impact of inflation there continues to be an increase in the real income of Canadians. In the first quarter of this year the real disposable income of Canadians per capita, that is after payment of direct taxation and after making allowance for the higher cost of living, was up 4.9 per cent as compared with the level a year ago.
I think the House is entitled to look at the comparison of incomes and prices and to review the facts which are published quarterly by Statistics Canada. Incomes in this country are still, fortunately, outstripping prices. As a government, we have long wrestled with this problem of inflationary pressures. I want to suggest to the hon. member for Don Valley that it does not lend itself to easy or slick solutions. We have been and remain prepared in the government to adopt any policies which would effectively moderate the upward movement of prices and which would, on balance, over a reasonable time, benefit the Canadian people and the economy. The policies we are using at the moment are, first, to increase the supply of those commodities whose production has fallen short of growing demand, thus contributing to rising cost. We are encouraging food production. In the area of housing we are trying to inject more funds into the market-trying to stabilize the price of land by promoting less costly land assembly. So, we are increasing supply on one hand and increasing the disposable income of Canadians on the other.
As to the latter proposition, I should like to review the budgetary policy of the government for a few moments. I refer to the measure to reduce income tax progressively, in favour of lower income groups, by 12 to 13 per cent under a $100 float and a $500 ceiling, the elimination of federal sales tax on all items of food and drink, excepting alcohol; the elimination of federal sales tax on all items of children's clothing and shoes; reduction of the tariffs on agricultural and manufactured products having a consumer appeal, to the extent of $1,400,000,000; raising the old age pension to $100 a month; raising the guaranteed income supplement, and raising the supplement for both married and single persons; proposing, as we did, through my colleague, the Minister of National Health and Welfare (Mr. Lalonde), an increase in the family allowance to $20 per month per child-


Eldon Mattison Woolliams: We have heard this already. We have heard it three times this year.
(Mr. Gillies.]


John Napier Turner: I think it is clear that some of these things ought to be said often, because they are getting through to members on the other side of the House.
The hon. member for Don Valley suggested the government was trying to solve the problem of inflation by higher interest rates. He knows this is not the case. Interest rates are rising in response-


James McPhail Gillies: On a point of order, Mr. Speaker. I think I said "We all know interest rates are rising".


John Napier Turner: And they are rising in response to a remarkably heavy demand for credit as a result of the strong expansion in the economy and in response to the international interest rate structure. The fact remains that if the interest rate structure had not responded as it did, the expansion of the money supply would be higher than 30 per cent, as it is now, and would achieve exactly the opposite result to the one the hon. member is advocating.
The hon. member harked back to the years 1969 and 1970 and suggested we are seeing a repetition of a policy which he did not admire. But there are distinct differences between the policies of the government at the moment and the policies of the government in 1969-70. To begin with, the bank rate, at 614 per cent, is at least one and a half or two points below what it was in those years. The money supply is still expanding at about 20 per cent and bank loans were expanding in the first five months of 1973 at an annual rate of 30 per cent. In those years, between 1969 and 1970, the increase in bank loans was held at 2 per cent. So, there is no foundation for the argument that the policy of the government today parallels the policy pursued in 1969-70. Indeed, the underlying circumstances are different.
In 1968-69 there had been a period of prolonged expansion in this country. At the moment, there is still a gap between the actual and the potential of the economy and unemployment is still too high. In 1969-70, there was a pronounced wage escalation. Wage rates rose at a rate of about 7.5 per cent in the first quarter of 1973, which is below the rate of 7.8 per cent in 1972. There has not been any break-out in wages. In 1969-70, the international position was far different from what it is now. Europe was in a period of recession whereas at the present time every industrial economy of the world is expanding strongly. This expansion is producing contageous results; it is promoting some of the increased world demand for commodities, particularly food, the prime cause of inflation here.
Then again, in 1969-70 we had a fixed exchange rate. Now, we have a floating exchange rate. So, the argument attempting to equate the policy of the government today with the policy which might have been in effect in 1969-70 does not happen to be well founded. The government long ago drew up comprehensive contingency plans for the establishment of price and income controls and we remain ready to implement those plans if, as and when we become convinced they can play a sufficiently effective role in moderating inflationary pressures, so to justify such drastic intervention by the state in the economic affairs of every Canadian citizen.
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As I have emphasized many times in the House, however, we have not adopted such controls and are not prepared to adopt them under circumstances prevailing today because we do not believe they would make any significant contribution to alleviating the particular problem which is confronting us. Indeed, if we tried to make such control effective, we could very well cause considerably more harm than good to the Canadian people by reducing the supply of goods and as a result only aggravate inflationary pressures. Undoubtedly some of the inflationary forces in this country originate domestically. That is undoubtedly so. The underlying cost push pressures which have plagued all industrial nations in recent years have been aggravated, however, by a tremendous demand for goods and services resulting from strong growth in the Canadian economy. By far the greater inflationary pressures confronting us in Canada today are worldwide in their origin. The major upward thrust here and abroad has come from a sharp rise in food prices.
Increases in food prices are due basically to the fact that global supplies of food commodities were sharply reduced by adverse weather conditions around the world at a time when the demand for food, particularly the demand for meat, was rising sharply in response to the substantially increasing economies of every industrial nation. This is particularly and markedly true in the case of Japan which has turned into a consumer-oriented country, now entering the worldwide consumer markets for meat, sugar, clothing and even for French wine. Japan is using some of its huge reserves to get into consumer markets, and this affects world commodity prices everywhere.
The increase in food prices is compounded by soaring costs of a wide variety of international trading commodities including soyabeans and fertilizer which incidentally, are some of the ingredients that go into the cost of farming. As of March, prices of such global commodities, that is world trading commodities, were up 53 per cent over the level of a year ago. Some commodities rose considerably more than that. At the beginning of the year cattle hides were up 126 per cent over the 12 month level a year ago and wool 83 per cent. There are many others, and these are the commodities that are being boosted in price because of an imbalance between supply and demand. There is nothing any domestically oriented controlled system will be able to do about that type of situation.


Some hon. Members:: Hear, hear!


John Napier Turner: I listen to the hon. member for Don Valley with interest everytime he speaks. I have listened to him suggest how we are going to make this country less vulnerable to world economic trends, yet here we are, a major international trading nation, with about 25 per cent of our gross national product depending on foreign trade.
For many years we in Canada have benefited substantially from a massive flow of goods and capital regularly across our borders. While there are circumstances in which Canada can take practical steps to moderate the adverse impact of developments abroad, it is unrealistic to expect that we can totally insulate ourselves from these
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forces and still expect to gain the considerable advantages that accrue to us as a major trading nation. We just cannot do it.
The hon. gentleman has asked whether we might do something in respect of a domestic equalization tax. Even if we did that, what might the consequences be? Would the United States eliminate its exemptions which accrue to us from the United States equalization tax? If that happened, would it not in fact have an adverse effect on our interest rates by depriving Canadians access to United States capital markets? I suggest to the hon. member that if he thinks this through he might realize it could well have a contrary effect to the one he has suggested. I will refer to that matter perhaps at the end of my speech.


An hon. Member:: Wouldn't it have the effect of full investment here?


John Napier Turner: Yes, but it would not benignly effect the interest rates, as the hon. gentleman suggests, and that was the context of the argument of the hon. member for Don Valley when he made that point.
In summary what I am trying to say, worldwide inflationary trends affect Canada as they do every country in the world. This is essentially a demand situation involving an imbalance in supply and demand of agricultural products and of world products. It is not primarily at this stage a cost-push situation. As I have said before, wages have not broken out, profits are recovering from the depressed position during 1970-71 and the price of durables has remained remarkably constant in historic terms.
Let me turn my attention more directly to the terms of the motion before the House, which condemns the government for its alleged responsibility for the increase in cost of living of Canadians because of its, and I use the words of the motion, "weak and stubborn adherence to outmoded policies". I think parenthetically I am entitled to point out that the motion itself is a contradiction of terms, since it is not evident how the government could adhere weakly and stubbornly at the same time to any given policy, good, bad or indifferent. Either we are weak or we are strong and stubborn, but we cannot be both at the same time.


An hon. Member:: You people over there can be both.


John Napier Turner: I would say this motion is only symptomatic of the infinite number of contradictions in the positions taken by the Conservative party on any number of economic issues. The motion does not surprise any of us who have studied the collected works of the hon. member for Don Valley. At a Toronto Stock Exchange conference nearly three years ago he cautioned his audience that economists "in spite of all their pretensions to the contrary", are "probably as much influenced by events of the day, by the popular mood, as are other people".
I want to echo that because I believe the hon. member for Don Valley is like the weather vane which points in one direction on Tuesday and swings in the very opposite direction on Friday.


Some hon. Members:: Hear, hear!

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John Napier Turner: Mr. Speaker, I am being challenged to back up some of these statements, and I will accept the challenge and recite to the House some of the evidence I have compiled.
I invite you and the Canadian people to judge the merits of the charge by the party that condemns us against its own ever-changing diagnosis of the economic problems that face us, and the ever-changing nature of the remedies they prescribe. Where the Conservative party stands on any given issue at any given time is almost impossible to determine because its leading spokesmen regularly contradict not only each other, but they also contradict themselves.


Some hon. Members:: Hear, hear!


John Napier Turner: Let us examine now the analyses of the front benches of the nature of the inflationary problem. Since the primary issue under debate by the House is the issue of inflation and how to deal with it, consider for a moment the way in which the nature of the problem has been variously diagnosed by one of the Conservative financial critics-


Some hon. Members:: Which one?


John Napier Turner: Will the real financial critic of the Conservative party please stand up? I will turn first to the hon. member for Don Valley. During the budget debate he told the House, and this is found in Hansard for February 22 at page 1560:
-anyone who thinks that inflation in the nation today is coming from excess demand in the economy certainly is misinterpreting the inflationary situation in totality.
To that he added "is inexcusable". How many times have we heard that learned member, a professional economist, patiently explain to us that inflation in Canada was caused solely by cost-push factors originating solely in Canada? Presumably, it was this diagnosis that led him to advocate the adoption of wage and price controls, after rejecting them as unnecessary because of the absence of a national emergency only a few weeks before.


Some hon. Members:: Hear, hear!


John Napier Turner: Only a few months later, however, the member radically changed his diagnosis of the problem. Speaking in the debate which he also originated on May 10, like this one, he declared, and this is to be found at page 3616 of Hansard:
I accept the explanation given by the Minister of Finance that there have been great difficulties throughout the world in terms of food supplies, rising incomes and the rising expectations of people who are using more food. I accept those statements and would not debate them here today.
Those are his words, and small wonder he chose not to debate them. He says the situation is the result of a cost-push factor, and then he takes the other position. I ask who was inexcusably misinterpreting the inflationary situation in totality? That contradiction is no isolated case.


James McPhail Gillies: May I pose a question to the minister? Could there not be a matter of cost-push in demand and inflation at the same time? Moreover, does the minister

not suggest that the situation in respect of the Canadian economy has been evolving and changing over the period of the last six months?


John Napier Turner: Mr. Speaker, as I have always understood the hon. member he has been suggesting that wage and price controls are a Galbraithian formula to counteract the cost-push. Now, he is finally admitting-and I have tried to cite examples from three speeches-that there is basically a demand-pull situation which in world commodities and agricultural commodities is not subject to that Gabraithian formula.
Now, let us move on to another area of economic policy. We have a full debate in terms of the motion before us, Mr. Speaker. Let us look at the exchange rate. In the budget debate the hon. member for Don Valley (Mr. Gillies), as recorded at page 1559 of Hansard, questioned the value of the floating Canadian exchange rate and asserted that Canada has never enjoyed really high levels of prosperity since the Canadian dollar appreciated in relation to United States currency. But in the House of Commons on June 5, 1973, another hon. member of the Conservative financial troika, the hon. member for Edmonton West (Mr. Lambert), derided the government for an alleged decision "to ride along with the U.S. dollar". While no such decision was ever made by the government, the clear implication of his question was that the government in some way should take action to increase the value of the Canadian dollar in relation to overseas currencies and in relation to the United States dollar. I wonder what the member for Don Valley thinks that would do for Canadian prosperity? I suggest when they have a free moment they try to work that one out.
I should now like to turn to the question of the monetary policy elucidated by the front bench of the opposition. In recent weeks, the hon. member for Don Valley has attempted to represent the move by the Bank of Canada to moderate the exceptionally rapid increase of credit in Canada as a return to tight money policies aimed at drastically restricting economic growth. I suggest that these statements approach the hypocritical. I want to point out that as long ago as January 26 of this year, as recorded at page 679 of Hansard, the same hon. member asked whether in view of the recent increase in wholesale prices I had discussed changing the money supply with the Governor of the Bank of Canada. I can only presume that by changing the money supply he was urging me to press for its reduction in light of his previous warning in his newspaper column-and I refer again to the hon. member's column on the subject of monetary policy in the Toronto Telegram of September 27, 1971-that excessive increases in the money supply were the primary cause of the inflation.
Here are the words which appeared in the Toronto Telegram of September 27, 1971:
The proper method of lowering unemployment and slowing inflation in Canada is to bring the money supply under control and increase consumer demand substantially by cutting personal taxes .. .
June 14, 1973

That is what the hon. member told us when he wrote in his capacity as a professional economist before he entered the field of the changing winds of political participation.
Let me go on to the question of fiscal policy and economic growth because these conflicts and contradictions are as nothing when compared with the Conservative stand on the basic issue of government economic policy. I think the hon. member for Don Valley posed the issue himself, which was supported by the Leader of the Opposition (Mr. Stanfield) and by the hon. member for Edmonton West, when he told the House during the budget debate last February 22, as recorded at page 1559 of Hansard, this:
The really fundamental question one has to ask in considering this budget and its effect on employment in the economy is: is the deficit large enough to really move this country ahead, to produce the sort of employment that Canadians have every reason to expect and to hope for within the economy?
You will recall, Your Honour, that the member's answer to that rhetorical question was a resounding no. He said a Conservative government would have run a deficit two and a half times that projected in the budget. Another member, the hon. member for Edmonton West said the party would have run up a cash requirement of $4 billion, as he attempted to lift up the estimates and throw them across the aisle of the House. There was, the hon. member for Don Valley said, no reason to believe the economy would grow strongly; the prospects for increases in exports, capital investment and inventory build-ups were all weak, while little or no stimulus would be provided for increased consumer spending.
I want to draw your attention, Your Honour, to the declaration by the same member that if a Conservative government had had an opportunity to introduce the substantially more expansionary budget which he proposed, "within one year and a half our unemployment rate would be down towards 5 per cent". That is found at page 1560 of Hansard. Let us consider the position taken by the Conservative Party against the state of the economy as it exists today. Let us consider the position of the Conservative Party, taken against that budget two or three months ago, of underestimating the expansion of the economy and calling for two and a half times the deficit we now have, and yet they come into this House saying that inflation is the problem. I wonder how much the problem might have been magnified if the deficit suggested by the hon. gentleman and his party had been accepted?


Some hon. Members:: Hear, hear!


John Napier Turner: Consider that suggestion against the state of the economy as it exists today: National output has been increasing at one of the fastest paces in Canadian history, with real gross national product expanding at a seasonally-adjusted rate of 11.6 per cent in the six-month period from the fourth quarter of last year to the first quarter of this year. Exports in the first four months of 1973 were up 26.6 per cent over the same period a year ago. Business capital investment spending during the first quarter rose by 7 per cent, a larger gain than any previous period since the fourth quarter of 1965. The build-up of business inventories was $1 billion greater in the first three months of this year than in the last three months of 1972. The increase in
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consumer spending of 4.3 per cent in the first quarter was the largest recorded in 21 years.
What about unemployment? The hon. member for Don Valley indicated to this House that under Conservative policies it would be down toward 5 per cent by around August, 1974. I am sure all members, particularly the hon. member for Don Valley, welcomed the report by Statistics Canada only a few days ago that unemployment on a seasonally-adjusted basis was down toward 5 per cent by May of this year, 5.2 per cent to be exact.


Some hon. Members:: Hear, hear!


John Napier Turner: That is still too high, but I believe the House will recognize that there is room for some satisfaction that the trend has been sharply downward now for several months.
What are the consequences of Conservative policy as outlined to the House of Commons and thereby through the House to the people of Canada? In a question to me in the House a few days ago, on June 12, as recorded at page 4662 of Hansard, the hon. member for Don Valley referred to the length of the lag-talking about the time lag between implementation of economic policy and the effect or thrust of that policy on the economy. The fact of the matter is that the Conservative Party grossly misjudged the strong upsurge already underway in the economy and, as a consequence of having done so, urged upon the Canadian people and the government the adoption of policies that were more than just out-moded to the time and circumstances. What he urged were policies that were a prescription for disaster at that time, in view of the expansion. That deficit of $4 billion or $5 billion recommended by the hon. member for Don Valley is not even politically oriented economics but is cosmetic economics.
A few months ago the hon. member for Don Valley was telling us that to be concerned about the danger of excess demand developing was "misinterpreting the inflationary situation in totality". In May he indicated that he may have been wrong, that there were demand forces that were already causing inflationary pressures. During the budget debate he proposed on behalf of his party to compound those demand forces by massively increasing government fiscal stimulus and spending. Contrast that position, Mr. Speaker, with that taken by the hon. member for Don Valley on June 6, when he asked whether the government was considering introducing selective credit controls to eliminate some of this excessive purchasing power in the economy. If it is excessive now, how much more excessive would it have been if by any unfortunate chance the country had given the hon. member an opportunity to put his prescriptions into practice.


Some hon. Members:: Hear, hear!


John Napier Turner: Let us examine the position of the Conservative front bench on controls. Like most of the other policy prescriptions advocated by the Conservative Party, their proposal for wage and price controls is based on a totally erroneous diagnosis of the problem the controls are meant to solve. At the time he first advocated them in the name of this party, the hon. member for Don Valley was telling us that inflation was solely a cost-push problem. He has since come to acknowl-

June 14, 1973
Cost of Living
edge that the particularly acute problem facing us today is far more complex than that, that an important element behind these inflationary forces is the worldwide upsurge in demand, matched by a comparable upsurge here in Canada and a worldwide shortage of a number of foodstuffs and other basic commodities. He has, I submit to the House, basically misread the situation. The fact of the matter is that wage and price controls would do very little effectively to reduce the main sources of inflationary pressures-the rising prices of food and other international commodities.
By far the greatest proportion of the increase in food prices over the past several months has taken place at the farm gate. I am not objecting to a fair return to farmers- that return is overdue and it is about time the farmers got their fair share of the returns-but those prices happen to be a result of the farmer getting more of his fair share of the economy. I believe, as the Special Committee on Food Prices of this House is ascertaining, that it is not the result of some sudden, massive rip-off being undertaken by processors, distributors or retailers in the food chains.


Gerald William Baldwin: Nine years of Liberal government.


John Napier Turner: Between January, 1972 and March, 1973, for example, the market price of pigs rose by nearly 72 per cent, while the retail price of pork as shown by the consumer price index rose by less than half as much, or 32 per cent. Cattle prices rose by nearly 21 per cent, but retail beef prices went up by only 11.5 per cent.
What would the Conservative party do to moderate this upward pressure? The hon. member for Northumberland-Durham (Mr. Lawrence) announced that it would freeze all food prices-


Mr. Deputy Speaker:: I hesitate to interrupt the minister but the time allotted to him has expired. He may continue with unanimous consent.


Thomas Miller Bell: Mr. Speaker, there are a number of speakers waiting to speak today. I am sure we would give the minister a few more minutes, but I ask that consideration be given to allowing extra speakers in the debate later.


Mr. Deputy Speaker:: There have never been conditions attached to the continuation of speeches beyond the regular time. Is it agreed that the minister should continue?


Some hon. Members:: Agreed.


George Harris Hees: Wrap it up, John.


John Napier Turner: I want to thank my friends opposite for their rapt attention.
The hon. member for Northumberland-Durham announced that their party would freeze all food prices except those at the farm gate for a period of 90 days. Yet, in the debate on May 10, the hon. member for Don Valley admitted that the freeze on all other food prices along the distribution chain would amount to an effective freeze of prices at the farm gate as well. What then are we to make of all the many reasons advanced by the member for

Northumberland-Durham for exempting farm prices from any freeze, including the fact that we are operating in a "continental or even international market" for such things as "beef on the hoof," and that fresh foods are "subject to many uncontrollable factors such as weather conditions, seasonal fluctuations and world demand." I agree with that, but he should turn to his colleague, the hon. member for Don Valley, and try to work it out with him.
The controls advocated by the Conservatives clearly would do nothing to deal with the second major source of inflationary pressures stemming from the worldwide commodity price increases. If they are not prepared to pay the market price, Canadians will not obtain these essential supplies which they must import, and if they do not obtain those supplies, prices would escalate domestically even more. By the same token, it is obvious that we cannot control the prices of a vast range of other goods imported into Canada, including a substantial proportion of the food we consume.
It is not surprising that the Conservative party should seek to bolster their own sagging position by pointing to the new, tighter phase 4 control program in the United States announced by President Nixon last night as some sort of justification for their own scheme. That was certainly the substance of the first question of the Leader of the Opposition (Mr. Stanfield) in the question period today, and it was certainly implicit in a lot of what the hon. gentleman was saying. Of course, I will want to study all aspects of the program which the president announced, but I am not persuaded that a price and income control program, regardless of the details of its administration, can be effective over any extended period of time in significantly moderating inflationary pressures under the circumstances prevailing today, namely the worldwide demand in agricultural and non-agricultural commodities.
Over the whole of the 20 month period from the time the administration first imposed a total wage and price freeze in August, 1971 to April, 1973 when a number of controls had been shifted to a new phase 3 program, consumer prices rose at a seasonally adjusted annual rate of 4.2 per cent in the U.S., compared to an increase of 5.6 per cent in Canada. If you consider Canada's very much greater exposure to world inflationary forces because of the relatively much greater volume of trade undertaken by Canada in relation to the size of its economy, I do not consider that comparison to be unfavourable. But I want to point out to the Leader of the Opposition that since the U.S. moved to its phase 3 program, consumer prices in the three months from February to April rose at a seasonally adjusted annual rate of 9 per cent in the United States, compared to 6.2 per cent in Canada. Food prices in the U.S. rose at a 25.4 per cent annual rate, despite the fact that they remained under the more rigorous phase 2 controls, compared to 15.9 per cent in Canada.
While the Conservatives may choose to find some moral support for their policies in the program announced by President Nixon last night, let me draw the attention of the House to some essential differences. Unlike the Conservatives, the president does not intend to freeze wages, nor does he intend to freeze interest or dividends or rents. Unlike the Conservatives, the president said that he did not intend to freeze the price of unprocessed agricultural
June 14, 1973

products at the farm level-the main source of inflationary pressures-because this would reduce supplies instead of increasing them and would eventually result in even higher prices for the foods Americans buy at the store. Unlike the hon. member for Don Valley, who has urged that controls become a permanent part of our fiscal mechanism-and he certainly indicated that today-the president warned that permanent controls would put the economy in a straitjacket.
There are a number of important questions raised by the program announced by the president. What, for example, will be the effect of an attempt to freeze the prices of internationally traded commodities such as lumber, copper, coffee, oil sugar and so on? Will it result in a decline in the supplies of such commodities available for import? I would be particularly interested to know whether the Conservative party believes that we in Canada should be guided by the president's proposal to impose controls on the export of food products as a means of holding down prices here at home. I wonder how such a policy would be received by the farmers of this country and what effect it would have on our balance of payments with other countries? As a matter of fact, we are studying the effect of the seeking of authorization by the president for export controls and what the reaction may be in terms of the potential of retaliation around the globe.
You will gather from all that I have said that I am not particularly concerned about being accused, nor is the government, by the hon. member for Don Valley and his party of adhering to outmoded policies because it should be clear by now that the Conservative party is bankrupt of any policies, whether moded or outmoded.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


John Napier Turner: What it offers in place of policies that would provide real and lasting benefits for the Canadian people is a never ending, constantly changing, stream of nostrums and panaceas dictated by nothing more-to recall the words of the hon. member for Don Valley-than the day to day changes in events and popular moods that affect economists as anyone else. Over a period of many months we have been pursuing concerted, cohesive and consistent policies aimed at promoting strong, stable and continuing growth of production, of employment, and of the real incomes of Canadians. Of course, we continue to face a variety of problems, as we always have in the past, and the problem of cost of living currently is one of our foremost concerns and one that is troublesome and hurtful to every Canadian.
While the opposition is free to continue to offer nostrums and panaceas that hold out the promise of magical solutions to every problem, they are in the game of practising cosmetic economics. We, on the other hand, have the responsibility to do everything within our power to pursue practical, workable and effective policies that will be to the long term benefit, not the detriment, of the Canadian people. We intend to continue fulfilling that responsibility as best we can.


Some hon. Members:: Hear, hear!
Cost of Living


Mr. Terry Grier (Toronto-Lakeshore):: Mr. Speaker, it has been an entertaining half hour listening to the minister throw a Phillips Curve past the hon. member for Don Valley and his colleagues. But one assumes the minister was acting on the old principle that the best defence is offence. I think it is worth pointing out that there are many areas where the government is deeply vulnerable to criticism for its management of the economy, and particularly its approach to the problem of rising living costs, areas in which the government can act, and ought to act right now.
For example, I suggest that instead of attacking the all too vulnerable policies of the Conservatives, the minister and his colleagues might better be advised to introduce legislation which would enable the government to implement recommendations of the Food Prices Review Board, which it has set up, within a specified period of time, and permitting the government such measures as selective roll backs of prices, or prohibition of proposed increases on a selective basis. On more than one occasion the government has taken credit for the establishment of this board. Spea.ting to the Canadian Consumers Association yesterday, the Minister of Consumer and Corporate Affairs (Mr. Gray) made much of the potential of the board. But the minister knows, and we know, that unless the government is prepared to follow up the recommendations of that board with some concrete action, it will not prove to have made a very substantial contribution to the problem, with which it has been set up to deal.
I was pleased to note the announcement today by the Minister of Energy, Mines and Resources (Mr. Macdonald) that export controls have been established over gasoline and home heating oil. This is one method by which some influence may be exerted over the domestic cost of these products. It is a measure which I believe to have been overdue, but at least it indicates that the government is prepared to accept some of the suggestions made from this side of the House.
If it is interested in breaking the psychological factor of inflation, the government might accomplish far more by stepping in and forcing a roll back of the price increases on the 1973 GM models which have just been announced, thus indicating to corporate enterprises in this country that they must live up to undertakings given to the government, and presumably accepted in good faith by the government. I suggest that that kind of measure can have far more influence on the psychological aspect of inflation than the rather more cumbersome device alluded to, but not in great detail, by the hon. member for Don Valley (Mr. Gillies).
One of the most constructive steps the government could take to deal with the cost of living would be to assign a maximum interest rate to residential mortgages, to interest rates for loans to small businesses, and to consumer loans. We in this party suggested, and indeed endeavoured to have the recent bill passed through this House amended to this end, that there should be a limit on residential mortgage interest rates, and very shortly we will be dealing with a very feeble proposal of the government to provide more residential mortgage funds. But the problem is not the availability of mortgage funds; it is the
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availability of mortgage funds at an interest rate which puts housing within the reach of ordinary people.


Some hon. Members:: Hear, hear!


Terrence Wyly Grier: The government might well consider limiting in absolute terms, or licensing, foreign borrowing in this country. The government might wel'l consider taking some general steps to lower the freight rate structure which is so central to the economy of western Canada, northern Ontario and other regions of the country, and which makes such a substantial contribution to the over-all cost of living. The government can, and I trust it will, decide that no further increase in the rates of Bell Canada is necessary. Not that that in itself will adequately deal with the cost of living, but it will telegraph to corporate enterprise in Canada, and to the people of Canada, that the government is serious about keeping a check on rising living costs.
It is not enough for the government to content itself with attacking the policies of other parties. The problem confronting this parliament, as the hon. member for Don Valley has said, is a difficult one, not susceptible to easy or simplistic solutions. But that is no excuse for the federal government merely to drift, or to react in response to crises which might well have been anticipated and acted upon earlier.
In dealing with the resolution before the House, one must look at the alternatives that have been placed forward. I listened with considerable interest to the speech of the hon. member for Don Valley because I was anxious to see to what extent today we would receive more details about this Conservative proposal for wages and prices control. First of all, he talked about a 90 day freeze. Of course, that in itself is not a new aspect of their policies, nor is it in itself a policy. It is merely a temporary delay which would be followed up by some kind of constructive action. Otherwise, Mr. Speaker, a freeze in itself simply temporarily holds the situation where it is when the freeze is imposed, and when it is lifted the withholding and the holding back are ended. A surge forward takes place, and I suspect the record will show that the price levels that exist shortly after a freeze has ended are probably higher than if the freeze itself had not been imposed. A freeze is no policy at all. Therefore, one cannot accept it unless one knows what will follow the freeze. That is why I listened with such interest to the hon. member's speech today.
The hon. member for Don Valley referred to a prices and incomes board, the purpose of which would be to maintain price increases and wages increases in relation to indices of productivity and cost. I take it that this is a slight fleshing out of the wage stabilization policies which, in an earlier speech, he indicated would follow the 90 day freeze, and which he suggested would be worked out in consultation with the provinces. I take it for granted, Mr. Speaker, that the hon. member for Don Valley is bringing into his proposal some consultation with the provinces. As I listened to him, I wondered had he any indication in advance that there would be substantial provincial co-operation with his proposal. I wondered had he fully taken into account the very substantial constitutional obstacles which stand in the way of such a proposal.

As I understand the constitution, the federal government, unless in a state of declared emergency, does not have the power to establish the kind of prices and wage controls that the hon. member is talking about. I really wonder if he is prepared, under present circumstances, to give any federal government, including one that might be composed of members of his party, the extraordinary powers to interfere in the operations of the Canadian economy that are envisaged under the peace, order and good government section of the BNA Act. Moreover, Mr. Speaker, as I listened to the hon. member for Don Valley I wondered what confidence he had that controls would really work. I think this is a central problem in assessing this whole inflation situation. What guarantees, what undertakings have we that controls will work?
I decided to do a little research on this problem. I turned to a document entitled "Report of the Standing Senate Committee on National Finance on Growth, Employment, and Price Stability." It struck me as being an authoritative source to which to turn for information. I refer to a chapter entitled "Guidelines, Controls and Other Policies." I read the following recommendation, which in fact was the first one made, presumably because it was the most important one:
-We are in general deeply sceptical about most varieties of controls, guidelines and incomes policies. Their historical record of effectiveness against inflation is poor, and they pose important threats to personal freedom and economic dynamism. They also tend to divert attention from more effective anti-inflationary policies. Problems of public acceptability alone would militate against selective wage/price controls. The control system would likely be either general in its application or a largely meaningless gesture. Controls are one of the least desirable of all economic stabiliziation tools. If they are used at all in peacetime it should be on a short term emergency basis.


Some hon. Members:: Author!


Terrence Wyly Grier: Mr. Speaker, the House calls for the author and I am happy to oblige because I was interested to read in the introduction to this document that the study director for this very important and authoritative reference was none other than the hon. member for Don Valley (Mr. Gillies).


Some hon. Members:: Hear, hear!


Terrence Wyly Grier: I am not one, Mr. Speaker, to attribute motives to the man who wrote those words and who today in the House has very substantially altered his position. I was curious, however, when he chided the minister and the government for not having adopted in 1971 the policy he has now put forward, because this document, authored in part by the hon. member for Don Valley, appeared in late 1971.
Whether the upward pressures on prices in Canada are caused by cost-push or demand-pull, or profit-push for that matter, seems to me to be something which we could argue all night. I suspect that one's bias depends on whether one is in or out of government. It seems to me clear that there are both cost-push and demand-pull factors operating together. One can describe certain facets of the economy where cost-push appears more prominent and one can describe other sectors where demand-pull is more
June 14, 1973

prominent; for example, energy, lumber or food. I say, therefore, that a set of economic formulae designed on the assumption that one or other alone of those causes was the root cause, would not be very intelligent.
Moreover, Mr. Speaker, the allusion to the operation of wage and price controls in the United States did not fill me with any particular confidence. The President of the United States announced last night that a 60-day freeze would be imposed because of what he termed run-away inflation in the United States. I remind you, Mr. Speaker, that the wage and price control policies of the American government have been in operation some two or three years now, and it strikes me as strange and unsubstantial proof of their success that at this point the United States government is imposing sudden freezes in order to cope with run-away inflation. I would suggest to the House that the announcement by the President of the United States last night means that controls phases I, II and III in America are not working rather than that they are working.
Too often in Canada and elsewhere, low inflation has been purchased at the cost of rising unemployment. I do not need to remind anyone in this House that that particular policy was the policy of the Liberal government in the early years of the present administration. I do not say they followed it out of bad faith, but it proved to me that ill-considered and hasty ventures into anti-inflationary policy end up hurting people who are least able to defend themselves in the marketplace and do not solve the problem. Right now in our economy the phenomenon is that we have unacceptably high levels of unemployment and unacceptably high levels of prices. I do not feel confident, on behalf of my party, that a system of controls over wages, profits, prices and incomes, so scantily detailed as the one suggested by the hon. member for Don Valley, could arrive at any solution to this difficulty.
I do not really see how he can expect the Canadian people to accept the kind of proposals he is putting forward in the absence of any details whatever as to how this board would operate, how the wage stabilization policies would operate, for how long and so on. It may well be that the simplistic and dramatic notion of freezing something appeals to people who are yearning for solutions to the difficulty, but I suggest it is dangerously misleading to suggest that the kind of proposition which is inherent in wage and price controls is going to deal with the situation at the present time. People want action, that is true, but they want action that will work and not hurt them. I think we should never lose sight of that factor.
Mr. Speaker, there is some real work facing this House of Commons. Parliament has still much important work to do. Next week legislation to raise veterans pensions will be brought into the House. We have had a solemn undertaking that the family allowances bill will be introduced and dealt with in full before the House recesses for the summer. The Prime Minister (Mr. Trudeau) yesterday indicated that an election expenses bill will be introduced in a few days. A bill dealing with takeovers and foreign investment in Canada is currently before committee. The development of a policy for western Canada built around meetings of first ministers and concentrating on economic development and including some rational approach to the
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reduction of freight rates ought to be a high priority for this parliament. The reorganization and decentralization of DREE is under way. We will shortly be faced with legislation affecting immigration and the immigration appeal board. There is still a lot of work in front of us in parliament, and it seems to me that when one confronts the motion we are debating this afternoon the ultimate question is quite simple: whether, taking everything into consideration, it would be in the interests of the Canadian people for parliament to dissolve at ten o'clock tonight. I make no apologies for saying that from our party the answer is no, it would not.
We shall not, therefore, support the motion presented by the hon. member for Don Valley for that reason and for the ones I have already indicated which deal with its intrinsic lacks of merit. As for rising living costs, Mr. Speaker, I doubt very much that they would be helped by an election campaign. After six months of delay, we might very well find ourselves back here with a parliamentary situation largely unchanged from what it is today. Would we not look foolish then, having spent six or seven months running around the country arguing about cost-push and demand-pull to an increasingly confused and irritated electorate, only to arrive back in mid-winter to start the whole dreary process again? I suggest there is plenty of room on the agenda for immediate action by this government, both to deal with the problem of rising living costs and to complete the agenda of the first session of this parliament. I suggest that both we and the Canadian people would be better off to get on with the job.


Roland Godin: Mr. Speaker, we are debating the following motion:
That this House no longer has confidence in the government which, by its weak and stubborn adherence to outmoded policies, increasingly burdens the people of Canada with grievous cost of living increases.
Mr. Speaker, because I feel that this motion brought in by the Progressive Conservatives is a nonentity which includes nothing positive, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That the motion be modified by replacing the final period with a comma and adding immediately after the following words:
"and because it has not given consideration to financial reforms which would have made it possible to fight against price increases and inflation by enforcing the following economic principles:
The compensated discount and the issue of new credits by the Bank of Canada to finance all new projects".
The Speaker, we have today an opportunity to highlight certain figures related to this government's administration. When we are talking about "grievous cost of living increases" we should not forget that taxes of all kinds are "public enemy No. 1."
History tells us that when a nation levies taxes in excess of 25 per cent of the income of its people, it is involved in a self-destructing process and heading for economic decadence. Currently our sales taxes eat up over one third of each earned dollar; this money is taken away painlessly from our pay cheque before we can use it. But the major
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portion of all thoses taxes, the most beneficial for the government, is under the surface, that is to say hidden.
For instance, the 11 per cent sales tax on building materials added to the 8 per cent Quebec sales tax is a 20 per cent income for both governments while the wholesale dealer only applies a 3 to 4 per cent commission and that, on certain items, the retail dealer will content himself with a 5 to 6 per cent profit.
For the dealers who have had to truck and finance the products, we find the addition of two profits, namely 10 per cent, while the government, which did not make any effort, gets 20 per cent.
In addition to taxes not included in the sales taxes, the dealer must participate in the contributions paid by his employees to social security and unemployment insurance. He has a power bill to pay for each month; he must also pay for his truck on the roads and also 20 cents in tax on each gallon of gas used by his truck.
That merchant also pays municipal and school taxes, and all merchants and industrialists are caught in those toils.
In the automobile sector, Mr. Speaker, it is the same thing; one finds the same problem concerning the manufacturer and even the buyer. Everyone knows that when you buy an automobile, the excise tax and the sales tax combined accounts for almost $900, while the 8 per cent provincial tax is added to the sale price.
To sum up, the two governments once again recover $1,200 in all kinds of taxes, while the dealer who often has to fight competition must be satisfied with a small profit of $200.
Mr. Speaker, one thing that strikes Canadians more particularly: the ever increasing amounts of money they have to pay to service the national debt. If we want to compare, that is very easy when we know that the national debt of our country was only $75 million in 1867. This debt which had increased five-fold before World War I went up to more than $314 million to reach $1,500 million in the 20's. Then, we went through the depression and World War II; the debt of Canada which stood at more than $11 billion in 1945 reached $12 billion in 1960.
At page 22 of the 1973-74 issue of its booklet entitled: "How your tax dollar is spent", the Treasury Board gives the following explanation:
In March, 1972, at the close of the fiscal year, Canada's gross public debt, owed mainly to Canadians, stood at $48 billion.
And one can read a little further:
Paying the interest and other charges on this debt is going to cost $2,581 million in 1973-74.
Mr. Speaker, the estimates of government expenditures for the year 1964-65 showed that $1 billion were paid in interests on the public debt. In 1970-71, the then Minister of Finance gave a figure of $1,880 million for the public debt; and today, in the booklet I have referred to, we can find the amount of $2,500 million, that is $7 million a day only in interests on the national debt.
If one considers that there are about 22 million people in Canada and that interests must be paid on an amount of $2,500 million, this means approximately $110 a year per capita.

Therefore, it is good to recall that in 1945 the annual interest on the national debt was only $26 per capita. Within less than 30 years, this amount has increased fourfold. In my opinion, those are the results of the financial system to which this government and others before have faithfully adhered.
Mr. Speaker, we can read in the motion, and I quote:
That this House no longer has confidence in the government which, bu its weak and stubborn adherence to outmoded policies . . .
"By its weak adherence", Mr. Speaker, I am really opposed to that. And at present, this government is not working by weakness but it acts in collusion with the bankers and the Progressive Conservative Party. I shall take the liberty of telling how far such complicity could go. Let us remember March 1967, when the following motion was brought before the House:


BANK ACT
[Stage Direction]
Decennial revision and extension of charters
The house in committee on Bill No. C-222, respecting banks and banking-Mr. Sharp-Mr. Batten in the chair.
Mr. Speaker, the law in effect dated back to 1954. Such a law should have been revised in 1964, but as this lapse of time was not long enough for everybody to put his finger in the pie, I imagine, and because there were quite many elections that were really costly to the old parties, new legislation on banks was brought in to us in 1967, that is three years late. The old act provided a maximum interest of 6 per cent on loans given by banks and Bill C-222 meant to have such a maximum removed.
Mr. Speaker, it was a fantastic success. After a week of discussions, we got to the vote and page 14314 of Hansard indicates that 80 members were in favour of the bill and 40 were against it. That is where the scandal lay.
Mr. Speaker, at that time, there was really a great team: 97 Progressive Conservatives, while 40 per cent only voted against the elimination of the ceiling on interest on loans made by banks. If we except Creditists and Neo-Democrats, we realize that only 24 Progressive Conservatives members had the courage to vote, 73 having abstained.
Claude Wagner: Take the Creditists out-


An hon. Member:: You would have a better game-


Roland Godin: It is really surprising. Even the right hon. Prime Minister of the time (Mr. Pearson) was not there. The hon. member for Langelier (Mr. Marchand) and the hon. member for Quebec-East (Mr. Duquet) as well as those for Charlevoix, Drummond, Saint-Hyacinthe were not there; there were serious hon. members like those for Edmonton West (Mr. Lambert), Peace River (Mr. Baldwin) and Calgary North (Mr. Woolliams) who were not in the House. All these hon. members were among the gang of 73 who thought they had better hide behind the curtains.
Mr. Speaker, today the leader of the official opposition (Mr. Stanfield) is asking the government what it is going to do to prevent the rise in the interest rate. But there is

nothing to do because the bill has been passed. We have to wait until 1977, provided everything goes smoothly. So I find it ridiculous to wonder what we are going to do. All we had to do, was to vote against the bill and let the ceiling at 6 per cent. It is as simple as that.
At one point, realizing that the act had been enacted without anyone being the wiser for it, I sent out a circular in my riding, asking the following questions, and I quote:
Through what regional newspaper did you learn that the Bank of Canada Act was amended to allow the chartered banks to loan $100 with as little as a $7 reserve? (Bill C-190 passed by the House of Commons on March 15, 1967.)
Did those same newspapers, radio and TV stations controlled by the regular news services advise you that the ceiling on bank interest rates has been lifted for a period of 10 years? (Bill C-222, March 21, 1967.)
Over the next ten years, how much more will you have to pay for federal, provincial, municipal and school interests, as well as for your own personal affairs?
When we speak of inflation today, that is where we are at. We have the result of the votes expressed by the House of Commons.
Now, to resume my quotation:
DID YOU KNOW THAT ACCORDING TO THE CANADIAN CONSTITUTION, the Canadian government is the one which is supposed to set interest rates?
It should have been easy enough to oppose that particular bill that time. And I asked them the following question:
Do you know any other reason besides the electoral fund on which were based the many absences among the Conservatives?
Do you know some Liberal members who sought the advice of their electors before supporting that bill?
Our electors are asked to give their views on the death penalty but there is no way they will be asked to allow banks to deprive them of their money. I continue the quotation:
Considering that between 1944 and 1967 the assets of 8 chartered banks grew five-fold and that during the same period, the dividends paid by these banks went up from 6 to 30 per cent.
Do you think that it is urgent to let those institutions increase their profits and do you feel that the old parties have protected the thieves long enough?
Mr. Speaker, a bill to amend the Bank Act will be reintroduced automatically in 1977. But in the meantime, there is no ceiling and the banks can do as they please, with the results we already know, that is, an uncontrollable public debt.
Now, since the bankers have their spokesmen in Parliament, there are those among them who say that a public debt is a national blessing since it provides businessmen and financiers with a safe form of investment. Yet others, such as the hon. member for Langelier, who has already said as much in this House, state that a national debt does no harm to the country, since it is between fellow Canadians and that the money being spent to maintain this debt is changing pockets.
Mr. Speaker, I think that the Minister of Transport should know that the pockets do not usually all belong to the same pair of trousers, nor to the same taxpayer.
The people in Canada who are drawing interest on the public debt of almost $2.5 billion that Canadians will have to pay in 1973, are not those in the lower income bracket.
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On the contrary, the people drawing this interest are in the upper income bracket and a large proportion of the interest will simply go to fatten the bankers' dividends.
And I think that the word "system" is a rather weak one in view of the "jobbery" that is going on with the national finances. In short, the government, the so-called defender of the people, has become the largest collection agency, to the advantage of the money-lenders. In order to pay the interest on bank loans, the government is imposing more and more taxes of all kinds.
The financial statement of the Bank of Canada gives another proof that the Canadian citizen cannot obtain a strong percentage of the money used to say the national debt. For example, for the years 1957 to 1960, that financial statement showed that the credit created by banks represented 91.8 per cent whereas coins and paper money which can only be disposed of by citizens represented 8.2 per cent.
A Canadian authority on finance Mr. W. Trimble of the Ryerson Institute of Toronto wrote in his book:
We know already that the largest form of money is credit; and the greatest amount of credit is the credit created out of nothing by banks.
Banks lend people money that comes out of nowhere and goes back nowhere when the loan is paid off.
The greatest part of the revenue of banks comes from interests collected on money that does not exist.
So, Mr. Speaker, in order to pay its friends the bankers interest on money that did not exist, this government has a very well broken in tax machine: taxes on building materials, sales taxes on everything it sees and everything it foresees, special taxes, regular taxes of every imaginable kind, temporary taxes, special income taxes and excise taxes.
We also know that a research group is always working on new tricks and trying to find ways to have them swallowed.
I am sure, Mr. Speaker, that at all levels our governments have become all powerful collection agencies. But I am equally sure that the people of Canada agree that the government of Canada has become the top collector.
It is evident that for honestly administered cities and municipalities that collection job is most unpleasant. If municipal authorities admit it, it is with regret that they do it because they are forced to do it under the system.
For the federal government and the provincial governments, it is quite another thing. Collection which is done as satistically as possible has become the interesting point of their administration, the reward for which is this annual picnic commonly called the federal-provincial conference.
For the benefit of high finance, this picnic is repeated every year. In this summit meeting, they take pleasure in discussing sharing powers and tax fields. But never do they talk about finding cheap capitals or asking bankers to lower their rates of interest. People will be told to tighten their belt, the provinces will be urged to delay the implementation of important, essential projects but bankers will never be requested to bring down their rates of

June 14, 1973
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interest. No question about that, for how can those people be asked to do such things when we well know how generous they were during the election campaign?
At this kind of meeting, the participants invariably wonder which of the two governments, federal or provincial, will be the first to take the most from taxpayers' pockets. And every year we have the same situation. It is never resolved because there must be a good reason to levy new taxes.
Before saying that interest rates are too high, that finance has become too expensive, the federal government tells us: If we impose new taxes it is because we give provinces too much money.
Mr. Speaker, the interest presently charged by money and credit manufacturers is too high. They have even come up with bait policies in order to gain public acceptance. To force workers and farmers to borrow money, premiums are granted to them but those premiums are taken back the following day through taxes increases.
In order to prompt the industrialist to borrow for new equipment or for improving his business, a premium is offered to him in the form of a grant paid by several departments, as, for instance, the Department of Regional Economic Expansion, but that kind of premium is rapidly written off by taxes collected on profits, if any, and by prohibitive interest rates that the businessman must pay on his current account and his mortgages.
Mr. Speaker, unduly high interest rates are the cause of many bankruptcies. Excessively high interest rates are one of the reasons why several Canadian industries have been forced to close down. Capital, which has been created to be used, has become a source of problems for the country; provinces, public corporations, everyone as a matter of fact, are in a bad position.
In studying the situation of our Canadian cities, we realize that the public debt has become the number one problem. Interests present 25 to 50 per cent and even 60 per cent of their budget.
The situation is the same in construction. Capital is granted to certain corporations, for instance to build homes for elderly people, but once such a home is built, we realize there is three homes to pay for: the one that was really built and two others to the financing institution.
And so it goes for housing. The worker is financed to build a house for terms as long as 25 to 30 years, and the worker realizes that he too will have to pay his house three times over. He had a single house built, but credit costs will be twice the price of his house.
So we wonder and seek the root of that evil. The reason is inflation, some say. Mr. Speaker, in my opinion, we have sufficient evidence: income tax at the source, various taxes hidden behind all goods we buy, municipal and school taxes; in fact, citizens have become slaves tied at both ends, a little like sausages.
Now, we pay twice or thrice what we received once. The situation is quite simple, and everybody understand that. The answer was also found long ago. But, in my opinion, our administrators act as if they were still looking for an answer, just to create jobs. There has been calculations,

there has been adjustments, and at the government's request, an ingenious device has been discovered.


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member but his time has expired. He may only continue by unanimous consent. Is there unanimous consent?


Some hon. Members:: No.


Thomas Miller Bell: If the hon. member could finish his speech in one minute, or something like that, we would consent, but I really would not wish indefinite time to be allowed him.


Mr. Deputy Speaker:: It has been the practice of the Chair never to present a suggestion to the House that an hon. member be limited in the time he might be allowed beyond the normal time, and I do not propose to alter that practice now. Is it agreed that the hon. member should be given extra time?


Some hon. Members:: No.


Mr. Deputy Speaker:: The hon. member has proposed an amendment to the motion put forward by the hon. member for Don Valley (Mr. Gillies). I have taken the liberty of making an English translation. The French version has already been read into the record. It is possible that a point of order may be raised in connection with the amendment proposed by the hon. member for Portneuf (Mr. Godin). If so, the Chair will be prepared to hear the argument now.


Gerald William Baldwin: Mr. Speaker, I should like to say something about it, but because of the schedule of speakers which has been arranged, because of the limited time available due to the fact that the Minister of Finance was given extra time, I hope Your Honour will reserve a decision on the matter. The amendment sounds as new in English as it does in French-somewhat foreign to the original motion. I should like to advance an argument, but I would prefer to do so at eight o'clock if that would suit the convenience of the House and of the Chair.


Mr. Deputy Speaker:: Is it the wish of hon. members that the argument on the proposed amendment take place at eight o'clock this evening?


Some hon. Members:: Agreed.


Robert Lorne Stanfield: Mr. Speaker, the motion placed before the House today by the hon. member for Don Valley (Mr. Gillies) does two things: it makes a point on a crucial matter and it implies a choice of an alternative. I shall touch on both those aspects. My hon. friend has covered a good deal of ground in making his presentation. I listened with interest to the Minister of Finance (Mr. Turner). In his reply he called attention to the approach being followed by the government-one attacking increases in prices by increasing supply.
But what has happened? The price of houses is up by 13 per cent this April as compared with a year ago. The government is pursuing a policy of increasing interest rates, a policy which is bound to have a dampening effect on the housing situation. Here the government is obvious-
<
June 14, 1973

ly involved in a contradiction. Any effort to fight inflation by increasing the supply of housing is already bogged down as a result of a patent contradiction in government policy.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister spoke about the introduction of lower taxes-a measure which six months ago he said would have bankrupted the country. He spoke about increasing old age pensions-which six months ago, he said, would bankrupt the nation. He said the same thing with regard to family allowances. Talk about changing positions, Mr. Speaker. Talk about weather vanes! I know of no one in this chamber, either in the front rows or in the back rows who could compare with the Minister of Finance when it comes to changing position.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Nobody need worry very much that the hon. gentleman rejects the policies we have advanced today, because, in view of the record of the minister in the last six months, he is very likely to adopt them tomorrow.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: The minister says we on this side have grossly misjudged the economic situation. I have been making comments on the government's economic policy and on the economic situation, particularly since 19691970. I remember how the then minister of finance made fun of our prediction that unemployment would not fall below 6 per cent. I think that was in 1970 or 1971. Talk about misjudging the situation. But that does not bother the present Minister of Finance because he implicitly disavowed the policy followed by his predecessors in 1969, 1970 and 1971. I said we have been consistent since 1969 in advocating economic policies, and we have been right. To date, at least, the present Minister of Finance and his predecessors have been consistently wrong.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: This is one thing that can be said without fear of successful contradiction. At the time the budget was brought down in February we advocated a two-fold thrust aimed at coping with unemployment, and we did, as part of that proposal, propose getting rid of the sales tax on building materials. We also recommended the removal of the sales tax not merely from children's clothing but from all clothing, both as a stimulant to the economy and as a measure designed to reduce costs. It was a two-fold proposal involving stimulation of the economy and a method of coping with inflation, in the belief that the people would wholeheartedly support such a proposal. The tragedy of the present situation is that the government has no adequate approach to dealing with inflation. The tragedy is that long before unemployment has fallen to acceptable levels, particularly in some areas of the country, and particularly among young Canadians, interest rates will have skyrocketed still higher and we shall once again go through what we went through before.
As to the government's methods, in February of this year the Minister of Finance stated that his budget would
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moderate inflation. In February the price level stood at 5.8 per cent above the level 12 months previously, and by May of this year it was 7.3 per cent higher than it was last May. In May of this year food for the family table cost over 15 per cent more than it did a year ago. But in spite of the evidence that the rate of inflation is accelerating in this country, the minister continues to rely on his obviously ineffective policies.
He speaks about the decreases he has made in excise taxes. At the time of the budget this reduction was to do great things to bring inflation under control. It has done so little to be effective that not only have the cost of living indices continued to rise but the Minister of Consumer and Corporate Affairs (Mr. Gray) has not had the courage to produce the report he said he would produce in respect of supervision and surveillance on the passing on of these tax cuts.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: There is the true test of the effectiveness of the budget of the Minister of Finance (Mr. Turner). What did the government do? It set up a commission in respect of food prices-a commission that had no teeth. Anyway, you cannot tackle food prices by themselves. Last year the cost of farm production went up over 10 per cent in this country. In the first quarter of this year it again went up very substantially. You can only attack food prices across the board. I suppose that is why in its presentation on the budget the Canadian Federation of Agriculture said:
Our recent annual meeting of delegates declared in favour of the institution of wage and price controls supplementing broad fiscal and monetary policies. In the farmers' view, they have been and are among the losers, not the gainers-
Farmers recognize that the government will not adequately tackle food prices by appointing a toothless commission. If you are adequately to tackle food prices you must have a coherent policy and attack inflation right across the board. All we are getting from the present government's policies are higher prices and higher interest rates which will have disastrous effects for many Canadians.
In more recent days the government has shown the same wanton disregard for cost of living increases that it showed in previous days for unemployment increases. There is just no effective action being taken to restore order to the economy. One has to ask why, in light of the urgency of the problem, and at a time when we have an opportunity to pursue some parallel course with Great Britain-which is having more success in respect of its freeze than the minister likes to admit.


An hon. Member:: Where are the figures?


Robert Lorne Stanfield: The figures are there, and they are considerably better than the hon. member likes to think. We have an opportunity now to tackle this problem. We urged that determined action be taken in February. We must keep asking ourselves why the Canadian government is so complacent. We believe that something can be done. We put our proposals forward in February. We said we should

June 14, 1973
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have a 90-day freeze on prices and incomes in order to break the chain of cost-price increases and in order to bring together the provinces, the producers, the unions and businessmen for consultation in respect of more selective controls, to be followed by what I would envisage to be a period of 18 months or two years wherein changes would be related to principles of productivity and cost.
We said we would have done this in conjunction with the tax cuts I mentioned-taking the sales tax off building material and taking all taxes off clothing. I am certainly not going to apologize for that. I want to emphasize that we are not talking about permanent controls. I have always believed, and still believe, that permanent price controls would destroy our market economy and simply result in vast power being centralized in the hands of a few officials and perhaps a few ministers here in Ottawa.
I have said, too, that I would not hesitate to resort to a temporary system of controls in order to prevent the inflationary psychology from accelerating rapidly throughout the economy. That is what I said last fall, and that is what I still believe. That is what we said in February when we were in the situation where a temporary freeze and a temporary set of controls were justified and necessary to head off an accelerating rate of inflation, a rate of inflation that has continued since we made that proposal. That proposal offered some possibility, not only of preventing the inflationary psychology from rapidly accelerating but it held some prospect of squeezing some of the inflationary expectations out of our economy.
Look at how much worse things are today. In the meantime, the government has been playing the old trade-off game. Interest rates have gone up, and the Minister of Finance's assurance about preferential treatment for Canadian borrowers is absurd. Other ministers are talking about food prices, housing prices and clothing prices in equally ridiculous terms. It is one thing to whistle in the dark when it is dark, but here we have a group that is in broad daylight putting on blindfolds and whistling in chorus.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Not everybody in the backbenches is whistling behind the fellows in the front benches, because on the government side frustration over the cabinet's complacency is growing. I think it was on May 10, about a month ago, that the hon. member for Bruce (Mr. Whicher) rose in this House and spoke out in favour of a system of short-term controls. He knows something about agriculture and the effect of this proposal on agriculture. That was during a previous debate on the cost of living which my party had initiated. It may well be that in due course more government members will follow. As I said, before very long no doubt the Minister of Finance will be urging this himself as if he had invented the idea of having a freeze and controls.


An hon. Member:: He has not had an original thought for ten years.


Robert Lorne Stanfield: After all, in the past couple of days we have seen other refreshing signs of outspokenness by some Liberal backbenchers, those who recognize perhaps that their party is more in need of medication than meditation.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I am sure some of them look at the front benches and wonder how much more upside down you can get. Whether we have any influence or effect on the government today, we can hope that the government will reverse itself on this matter as it has on so many others. I wonder just how bad things will have to become in the meantime; and even if the government does get around to adopting our position, I wonder how effective it will be when it really does not believe in the idea at all?
Some members to the left, particularly the hon. member for York South (Mr. Lewis)-


An hon. Member:: They are not here.


Robert Lorne Stanfield: They have a representative here, Mr. Speaker.


An hon. Member:: It's a good job you don't have him to draft your motions.


Robert Lorne Stanfield: I am a little puzzled by their comments on this matter because they seem to vacillate between sabre-rattling and support. This has been their pattern in respect of a food prices review board. I do not know today whether they are happy with it or not, and if they are not I do not know what they intend to do about it except to sit here and wait for somebody else to do something. In relation to housing costs and mortgage rates, evidently they think there should be selective controls. The member who spoke for them today suggested there should be certain selective controls. His leader was quoted today as saying that he wanted to do some further thinking about a freeze on food prices. That would seem to be going around, not only precisely in circles but in a good deal of confusion in trying desperately to find a policy which will in some way sound convincing.
There has been a lot of talk today about politics and about people adopting views which seem to be politically desirable. The hon. member for York South is fond of accusing me of being in bed with the business interests in this country. I wonder if he thinks the people in the corporate community are clamouring for a freeze or for short-term controls. I have not seen this mentioned in any brief from the chambers of commerce or from the Canadian Manufacturers' Association.


An hon. Member:: Or the CLC.


Robert Lorne Stanfield: Or the CLC. Certainly, when it comes to the general public's interest regarding the terrible problems which exist in respect of the cost of living, it should be pretty evident that my party is not the rigid instrument which my friends to the left would like to make it out to be, and it should be evident that that party is more rigid than it is prepared to admit, although it seems to be breaking loose and moving around a bit in some confusion.
It is a fundamental purpose of allotted opposition days to air the urgent problems facing the country. Debate on these problems carries to the country the positions taken by the parties in parliament, including the government.
June 14, 1973

The government keeps explaining why things cannot be done. With the policies which this government has, I cannot see any hope of slowing down what is evidently an increasing rate of inflation in this country. Such debate reveals programs where they are present, inconsistencies where they exist, and complacency where it resides. We think all three are amply evident today: we have a program, there is the inconsistency of the NDP, and there is the government's complacency.
I should like to say a few words about the nature of the motion before us, the position of my party in putting forward this motin and the possible consequences of such a motion being adopted. The motion before us is a nonconfidence motion, with a vote tonight. Two such non-confidence motions in each supply period are provided by the rules of the House. It is the duty of the official opposition in this House to reflect the major concerns of the day in these non-confident motions so that the House may express an opinion on the government's performance. The obligation of the official opposition in a minority House is not only to use these occasions to express displeasure with the government but to indicate an alternative course. If the government is defeated on such a non-confidence vote, then the official opposition stands ready to form a government and put its alternative into legislation and into practice.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I would remind the House and my hon. friends to the left that it is the Prime Minister (Mr. Trudeau) who has taken the line that a defeat on legislation which went to the root of government principles would necessitate an election. It is the Prime Minister who took that position, and it is the Prime Minister's interpretation that the government itself decides, after the fact, whether or not any matter has gone to the root of its so-called principles.
Since this parliament commenced it is the Prime Minister, not me, who has indicated that no one could prevent dissolution, in any event, if he wished it. The Prime Minister says in essence: If you don't want an election, then it is up to the opposition parties to somehow give the government what the voters refused to give it last October 30 the comfort of a majority in the House of Commons.
The leader of the New Democratic Party, the hon. member for York South, has taken the position that he and his group would support the government so long as what the government did was satisfactory in their eyes. I took from what I heard today that the government's performance in respect of inflation is not satisfactory in the eyes of the New Democratic Party members. Their position has not presumed the necessity of an election to change the government: quite the contrary, it is the Prime Minister who took that position.
On the subject matter before us today we have fulfilled our responsibility in terms of putting forward an alternative. We have indeed put forward an entire package of alternative economic policies. We stand ready, if called upon, to form a government and take action. We have always been prepared to face this parliament on the basis of policies we have put before the people, and the policies we continue to put before the people, rather than, like this
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government, face this House on policies virtually the opposite to those on which it ran the election.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: We were ready when we outlined our alternatives in the budget debate. In the four months since then the need for our alternative has become more and more evident, and the government's complacency and lack of success in dealing with inflation has become more and more intolerable. So, Sir, I seek support for our motion on the basis that inflation is rapidly escalating and that the predictions and promises of the Minister of Finance show the ineffectiveness of these band-aid programs to deal with inflation. These programs have consistently been proven wrong and the rate of inflation has consistently moved upward. I say that action must be taken, and I seek support for our motion on the basis that we on this side of the House are prepared to act in response to the urgent problem of inflation. We have placed a program before the people, and we are prepared to act now.


Some hon. Members:: Hear, hear!


Mr. H. T. Herbert (Vaudreuil):: Mr. Speaker, I do not profess to have the oratorical prowess of the Leader of the Official Opposition (Mr. Stanfield). Nevertheless, I think we can come to grips with the problem in a little better manner, get away from some of the rhetoric and get down to some of the basic problems facing the House. First of all, in respect of the statement which has been made about frustration among the backbenchers of the government party, let it be very clear that not only was I not handed a prepared speech but I was given no indication of how I should frame my remarks.


Walter David Baker: Try defecting.


Harold Thomas Herbert: Then there was the statement that some of us may be dissatisfied with inflation. I think all of us are. But the suggestion that we are dissatisfied with the action this government has taken on inflation is a different matter entirely. None of us likes what is happening at the present time, but we must keep things in some sort of perspective in a country where purchasing power is rising at a rate probably faster than at any time since the war. In this situation we find ourselves being led voluntarily into a position where we are buying more and more of various commodities, where we are getting a higher quality product and are prepared to pay more as a consequence.
On a typical day we start the morning with breakfast, for which we have canned, reconstituted orange juice and quick oats: we do not boil oatmeal over a slow fire any more. The kids have cold cereal done up in fancy, small packages. We have eggs. We know what has happened to the price of eggs because we have run into a shortage of feedstuffs. As for mushrooms, we are growing more mushrooms than ever in the history of this country. The price of mushrooms is skyrocketing because of the demand; we love to eat them. Then we have instant coffee, or tea using flowthrough teabags.
I will dwell for a moment on the staple food which we have with our breakfast, namely, bread. The other day we

June 14, 1973
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were discussing the fact that this year we negotiated the sale of some 200 million bushels of wheat at a price which is generally agreed to be in the order of $2.60 a bushel. The price last year was $1.70 a bushel. The question naturally arises: What is the effect on the price of a loaf of bread? The answer to that is, zero. Why is that so? It is not that the farmer will receive more for his wheat, but the taxpayer is paying a subsidy to ensure that the price of a loaf of bread is not increased because export prices are rising. I suggest this indicates something we could do which has not been suggested by the opposition, namely, have the taxpayers subsidize the cost of food.
There are other alternatives. One weekend Japan decided to stop importing our pork and during that weekend the price of pork dropped from $1.05 a pound to 80 cents a pound. It follows, therefore, that we could reduce the price of pork by stopping our exports. I suggest that this would have exactly the reverse effect in the long run, since the farmer, making less profit, would tend to turn to other products thus creating, eventually, a shortage of the product, which would drive the price up to where it was originally.
We are demanding more and more foods in prepared form, such as frozen French fries and frozen vegetables of all kinds. While we are on the subject of vegetables, I notice that the price of onions has risen by some 50 per cent. However, I will not concern myself with that matter, because now my best friend will not need to warn me; the price situation will take care of the problem! We buy quick desserts, such as canned rice-pudding. We buy high-priced, high-quality frozen pies and cakes, and more and more as we demand high-quality, prepared foods in a form for which we have never previously asked, we naturally remove from the market the cheaper foods required by the lower income groups.
Our concern in foodstuffs must be not for the middle-income and high-income groups, but for those with low incomes who are not able to cope with increases in food prices. This government has already taken firm steps to put a little more money into the pockets of those with low incomes by increasing old age pensions and by reductions in taxes to compensate them for the higher cost of living.
I want to deal for a moment with the cost of housing, and particularly the cost of lumber. At the moment we are exporting lumber. The opposition has suggested that it is the exporting of lumber which is creating shortages, resulting in higher prices. I should point out that in the 1960s-and after all, which country has greater access to lumber than Canada-despite the large quantities of lumber available in this country we found that lumber companies were going broke. Those that survived were making negligible profits. Only very recently has the price of lumber risen to the point where lumber companies are starting to make reasonable profits.
Quite obviously we can, once again, by not exporting reduce the price of lumber, which would reduce the cost of housing. However, since we are now building houses at a rate faster than ever before in our history-some 273,000 units per annum; some 70,000 odd units per annum more than is considered essential by the Economic Council of Canada-I am not sure that the price of lumber, even

though it is going up, is in any way acting as a deterrent in the construction of housing.
When we consider the price of housing we always look at the high cost in areas where, because of shortage of land and high labour rates, the cost of land has escalated more than it has generally across the country. In Toronto at present, where the average citizen prefers to live in a single family residence, the spread of the city has created a shortage of land to the point where the land that is available has increased substantially in price. Little mention is made of the fact that in and around the city of Montreal, which is equal in size to Toronto but where living habits are different-in contrast to Toronto where two-thirds of the population live in single family residences, two-thirds of the residents of Montreal live in apartments-there is land available.


The Acting Speaker (Mr. Laniel):: Order, please. I regret to interrupt the hon. member. It being six o'clock, I do now leave the chair until eight tonight.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Acting Speaker (Mr. Laniel):: Order. Before recognizing the hon. member for Vaudreuil (Mr. Herbert) who had the floor at six o'clock, I wish to return to the amendment proposed by the hon. member for Portneuf (Mr. Godin). Before inviting hon. members to make a contribution on the procedural aspects, may I say that I am just about ready to let the amendment be put to the House, for reasons that I will explain.

Hon. members know that the Chair indicated, when the hon. member for Portneuf (Mr. Godin) moved his motion before the House adjourned at six o'clock, that it would be willing, at eight o'clock to hear the arguments on whether or not it is in order.
I must say, at this point, that I am very reticent, from the procedural point of view about accepting the amendment in its present form. First of all, the first part of the amemdment does not, to my mind, alter the main motion, and referring hon. members to Beauchesne's citation 202(15), the Chair should, normally, reject an amendment which, all in all, would only confirm what is already stated in the main motion.
The greatest difficulty arises about the second part of amendment. Indeed, the proposal of the hon. member for Portneuf is an entirely new motion whose object is not anticipated in the main motion.
The Chair is reluctant to accept such an amendment, because we are holding today a debate on a non-confidence motion in the government. Still the mover has the privilege of choosing the subject matter of his motion and if one is allowed to introduce amendments deviating from the subject, even if it deals with a related field, those amendments are entirely different proposals and I think
June 14, 1973

that it is an abuse of the privileges granted to the mover of the main motion.
This being said, I think that hon. members can find all the arguments concerning such a decision which could be reached in the citations from Beauchesne, citation 203, paragraphs (1), (3) and (5).
According to me, the second part of the amendment presented by the hon. member for Portneuf should normally require previous notice which should have appeared on the order paper, but anyway, in the circumstances, that point will not influence my decision. I only want to warn hon. members against the danger of allowing that kind of procedural laxity, particularly in the case of a non-confidence motion, a laxity from which the first to suffer would be hon. members who, occasionally, wish to propose such non-confidence motions.
However, we are today holding a debate of utmost importance because the matter discussed is after all basic in terms of the existence or survival of a government and instead of using a period of 30 to 60 minutes for procedural discussion, inviting hon. members to enlighten the Chair and reach a final decision, I deemed in all justice and equity for those who have presented the main motion, I ought to accept the amendment while restating however my doubts concerning its form, and particularly concerning the terms of the second part of the said amendment.
Considering those reserves, and at the same time while warning hon. members, I, therefore, intend to accept the amendment and submit it to the House.
Mr. Godin, seconded by the hon. member for Roberval (Mr. Gauthier), moved to amend the main motion by adding, immediately after "living increases", the following:
"and because it has not given consideration to financial reforms which would have made it possible to fight against price increases and inflation by enforcing the following economic principles:
The compensated discount and the issue of new credits by the Bank of Canada to finance all new projects."
The hon. member for Vaudreuil (Mr. Herbert).


Harold Thomas Herbert: Thank you, Mr. Speaker.
[ Translation]


The Acting Speaker (Mr. Laniel):: Order, please. Before making my ruling, I should have apologized for interrupting the hon. member who was supposed to have the floor at eight o'clock. The Chair will surely take this into account in the time allotted to the hon. member and will listen to him most closely.


Harold Thomas Herbert: Mr. Speaker, I am wondering if I should change my mind now, on account of the amendment, but- [English]
Mr. Speaker, when the House recessed at six o'clock we had been discussing rising prices and I was speaking specifically about housing. I wondered why references to housing costs all seemed to centre around costs in Toronto, when other big cities such as Montreal have not suffered the same problems as Toronto because land is available
Cost of Living
and housing can be built at a lower cost. Good treed land is available at the moment at 25 cents per square foot in the whole of the area around Montreal, and one can build a house in the $14,000 to $16,000 bracket. As many houses are being built there as in Toronto, which indicates to me that houses can be purchased at prices within the means of Canadians if people do not insist on building in downtown locations where the cost of land is, admittedly, very high.
We must also realize, when talking about housing costs, that these days people are demanding a much higher standard in house construction than used to be the case. They are demanding parquet flooring, ceramic tiled bathrooms, electrical outlets, for example, to service various electrical appliances which are two or three times the size of those installed some 20 years ago. They expect all kinds of landscaping, sidewalks, carports, finished basements, and so on. So we are not comparing apples with apples. Even so, today, more than 25 years after the war, we can still see houses being built for less than double the price that obtained in the late forties and early fifties. This, to me, is not an unreasonable price increase, especially when one takes into account the difference in the quality of the product being purchased.
When the Leader of the Opposition was suggesting once again that the sales tax should be taken off building materials, having spent 25 years after the war in the construction industry I asked myself what real effect this would have on house construction. One thing is quite obvious: the benefit would be twice as much for the person building a $40,000 house than for the person building a $20,000 house. I wonder if that is what we are trying to achieve? We must remember that for most people it is the amount of the down payment that is important. For lower cost houses in the $14,000 to $20,000 bracket the down payment in many cases is still less than $1,000. I think this is very important, because finding the initial payment is the real cruncher. So long as house building continues at its present rate, and so long as people in the middle thirties age bracket are able to buy houses-as they are, in large numbers, across this country at the present time- then I do not think the situation is quite as grim as it is sometimes painted.
Another matter which is of concern to us at the present time is transportation. We know that commuter services are being used less and less. But compare prices, again. We know that a commuter today is paying about three times as much as 25 years ago on public transportation, but he is not using it; he is driving in and out of the city by private car, and he is generally driving alone. His costs are about three times what they would be if he used public transportation. In other words, despite higher costs, he uses what for him is a more convenient form of transportation and he chooses to pay more.
The Leader of the Opposition again referred to his suggested 90-day freeze on prices and incomes. Again, we are not talking about freezing prices at the farm gate, and there is no suggestion as to what will happen between the price at the farm gate level and the pegged price at the retail level. The freeze is suggested in order to bring everybody together for consultation. I wonder what we have been doing over the last few months, Mr. Speaker. We have consulted here in committee, we have had consul-

June 14, 1973
Cost of Living
tations across the country, and the media has discussed what we should do. I suggest that we have had enough consultation. We do not need a 90-day freeze in order to give us the opportunity to consult.
I find suggestions in that respect quite barren. We have had discussions; we do not need a freeze for purposes of consultation. Therefore, we must examine the real motivation behind the suggestion. It is a nice, pat answer to give when talking about freezing prices; it sounds good. We have seen what has happened in the United States. They are faced with the situation today where the President has once again been obliged to impose some controls. We ask ourselves: If it applies in the United States, why should it not apply here? I think we forget that as a major exporting and importing nation we are far more subject to the influence of price on our imports than is the United States. For that reason, Mr. Speaker, I suggest we are not in a position to compare ourselves with the United States in this respect.
I also believe, as was said earlier, that to some extent the President was forced into the decision he took yesterday, He did this as a sort of diversionary tactic, because obviously the situation in the United States calls for action by the government to take the heat off the economy. That does not apply in this country. We do not need these diversionary tactics. If we are to apply any price control, we should do it for a specific reason knowing full well what the effect will be on the consumer. Unless we realize that the imposition of price and wage controls today will lead to greater price increases when the controls are eventually taken off, as they must be, we are only kidding ourselves in the interim.
I listened with great interest to members on the other side of the House, because even though they sometimes refer to us as a bunch of penguins-I think that is the term they use-


An hon. Member:: Trained seals.


Harold Thomas Herbert: Trained seals, that's it. Even though that is how they refer to us, we do try to find good ideas. We would use them if we could find them. To date we are finding few ideas coming from the other side that would tend to make us change our minds.


Mr. McKinley:: How many of our ideas have you used until now?


Harold Thomas Herbert: I am strongly opposed to controls. At the moment, labour in this country is making reasonable demands. If we try to impose controls we will only make labour dissatisfied, and without controls on labour any kind of controls at the retail price level would be completely ineffective. Also, one cannot impose controls at the retail level without considering controls at the farm level, for they would be equally ineffective. I think the whole idea just does not make sense. That is why I intend to vote against the motion.
[ Translation]


Claude Wagner: Mr. Speaker, we are engaged in a debate on an extremely important

motion which leaves nobody indifferent and boils down to condemning this government because it persists stubbornly in applying outmoded measures which oppress the people of Canada with ever more painful increases in the cost of living.
Something both tragic and disconcerting must be pointed out in this debate.
On the one hand, the official opposition does its duty and under the rules of this House tells the government what the people of the country think about the policy followed up to now by this government.
On the other hand, the Minister of Finance (Mr. Turner), instead of putting forward the future policy of the government which should at least bring some relief to the people of this country oppressed by the cost of living, devotes a lot of his time to ridiculing the opposition, criticizing in a negative way, using sarcasms and, in short, keeping from telling members of this House about the future policy of this government.
However, a third party, the New Democratic Party, through its spokesman, openly admitted that it will vote against that motion, that it will refuse to condemn this government because according to them the time has not come for an election campaign.
Nevertheless, Mr. Speaker, one could read today in an editorial in La Presse, a suggestion by a very well informed editorialist Mr. Jean Pellerin who in the past has always had high praise for the merits of this government, and I quote:
As though from evil thoughts, Ottawa shies away from the very idea of freezing prices and wages, even for a limited time, in order to take the time to find the cause of the trouble and restrain voracious appetites. The taxpayer feels helpless. If governments, not satisfied with doing nothing to check price increases, go so far as to shamelessly contribute to it, who will ever be able to restore some order in this area?
Mr. Speaker, this is what we find disconcerting. We are all worried and we wonder why the government does not show leadership in an area so essential to our country. And yet, statistics are there and I think they speak for themselves. Last month, consumers were greatly shocked by the cost of living figures. If we figured the annual rate, we would notice that the consumer price increase was 12.1 per cent and that in the food index-what a tragedy for underfed people!-it was 31.2 per cent.
The substantial increases in the cost of living in May, published on June 12 by Statistics Canada, confirmed too tragically the size of the problem. One has to go back to 1948 to see, in May, such sadly spectacular jumps in the cost of living.
Mr. Speaker, in view of those facts and of such prospects, it is morally forbidden for us in this House to be satisfied with mere studies or often useless comparisons with other industrialized countries or, worse still, with statements from worn-out members playing politics or from clowns, as is often the case with the member for Temiscamingue (Mr. Caouette). Recently, during his spectacle, he was trying demagogically to find fault with the distinguished leader of the official opposition (Mr. Stanfield), but unfortunately he could not distinguish between
June 14, 1973

our objective "galloping inflation brake" and our objective "better distribution among the people of the federal government spending power".
Mr. Speaker, while the federal Creditistes, to the amazement of Quebecers, keep on, as we noticed this afternoon, talking nonsense or refusing to give their opinion on matters of such importance as bilingualism, flirting dangerously with those they blame outside the House or spreading their rubbish on hot lines or elsewhere, while the government pretends to be studying, there are families in Saint-Hyacinthe, in the province of Quebec or elsewhere which can no longer feed themselves properly or have to spend a large part of their income to buy food.
Let us open our eyes on the figures of the cost of living. They make you think and think bluntly. So, for the period of April 1972 to April 1973 you will realize-and it comes out of a study made by the Pitfield, Mackay, Ross and Company brokerage firm-what a good investment the meat industry is. Poultry prices rose 26 per cent; beef prices increased by more than 16 per cent; pork prices went up by more than 30 per cent and egg prices jumped by 43 per cent. On the other hand, in Quebec City alone- it has been established by a scientific study-food prices rose 19 per cent within a two-year period.
And now experts tell us that enormous increases in soyabean prices this month on the Chicago market are going to cause meat and egg prices to rise sharply in the coming weeks. And in the area of soya production alone, the government is not even ready to develop a serious production policy which, in the medium and the long run, would make us independent or at least less slaves to the American market.
It appears clearly, Mr. Speaker, that this government, which is wanting in audacity, is incapable of resolving the alarming problem posed by the unrestrained increase in the cost of living.
And yet, Mr. Speaker, it is time for the government to step in efficiently and firmly. Is it always necessary to wait before acting that the less favoured in our society, particularly the poor and often numerous families grow sick and tired of being under-fed, under-housed and come to protest at our doors? Is that what we are waiting for?
As far as we are concerned, we honestly believe that the solutions we propose are striking at the heart of the problem and we are all the more confident because the party currently and temporarily in office has borrowed several of them since January 4, although criticizing them at the beginning, but there are a few examples of measures accepted by the current government. I am thinking about the adjustments in the tax deductions, the increase in the old age pensions and family allowances, the cost of living escalation in tax assessment and the elimination of the Benson injustice in the field of inheritance of family farms.
In fact this is understandable. It is because we are ready to govern this country whereas for the government people it is only a matter of time; they are getting ready to occupy the opposition benches even though in order to be noticed there they will again need the NDP veterans.
Let our position be clearly understood in Quebec as elsewhere in this country.
Cost of Living
First, we have been advocating for quite sometime a more expansionist budgetary and economical policy than that contained in the budget of February last. Our position in this connection is already well known particularly as regards the increased assistance to small businesses. It is our own way of fighting what has been called the "stagflation".
Secondly, we want the immediate freezing, but for 90 days only, of all prices and all kinds of income with the realistic exception of the raw food commodities at the farm gate.
This period would allow the government, after it has regained proper leadership, to consult thoroughly and negotiate seriously with the provincial governments, management and unions. Such an exchange of views in the interest of consumers would be aimed at developing, by means of a sudden check of the rampant inflation, a coordinated and exhaustive price and cost stabilization program. Such exchanges would already be made easier at the outset by the most relevant suggestions especially from the Alberta government, the UPA or the Canadian Consumers Association.
The advocated temporary freeze would surely create a beneficial psychological effect on inflation which also has psychological causes. However, such a freeze would not really cause panic because panic already exists among consumers who come to grips daily with excessive prices.
In the light of this clear-cut policy, the position of government members is for us a great cause for concern. The Minister of Finance would wait for the effect of his budget measures or of his so-called new programs. He is running the risk of waiting in vain, the effectiveness of such measures being concurrently drowned in the inflationary spiral.
According to a Gallup poll-and here I am not referring to the poll showing a loss of popularity for the Social Credit or the New Democratic parties or a slight increase in popularity for the Liberals neither even the increase, not assumed but real, of four points in favour of the Progressive Conservative party, but of a Gallup poll the results of which, were published on June 6 last and showed that 85 per cent of Canadians anticipate that prices will rise faster than the family income. That explains why previously, at least 61 per cent of the population had stated that they were in favour of controls on prices and incomes.
The Minister of Agriculture (Mr. Whelan), in his statements to the farmers, seems to wish-and I concur-to give a new impetus to agriculture, but at the price-and this I find unacceptable-of inflation.
This reminds us, Mr. Speaker, of the not so distant time when this same government was attempting to stifle inflation at the price of a higher unemployment rate. The Postmaster General (Mr. Ouellet), doubtless in between putting coats of paint on his letter boxes, launches into smooth statements, and I am not referring to his statements on feed grain made in Drummondville last night, when he apparently substituted for the Minister of National Health and Welfare (Mr. Lalonde), who in turn was to have substituted for the Minister of Transport (Mr. COMMONS DEBATES
June 14, 1973
Cost of Living
Marchand) who was to have substituted for the Minister of Agriculture, who was probably to have substituted for the Parliamentary Secretary to the Minister of Agriculture (Mr. Corriveau).
The Postmaster General said on January 22, and I quote:
The government. . .


An hon. Member:: That is playing politics.


Claude Wagner: Speaking of playing politics, Mr. Speaker, I have also been informed that the Postmaster General travelled to Drummondville on a government aircraft, accompanied by nine Liberal members, without inviting any opposition members to accompany him.


An hon. Member:: Does that surprise you?


Claude Wagner: That surprises us; we will come back to that later, when the public accounts are being examined.
On January 22, our suave Postmaster General said:
The Canadian government pays special attention to the steps taken by other countries, like the United States, for instance.
Then, I ask him today if he will pay the necessary attention to the price freeze in the United States announced last night by President Nixon.
The same minister-responsible for stamps-said on April 16, and I quote:
The government will announce shortly a detailed plan of action- and so on.
And I ask him today if he believes that the mere fact of setting up a toothless commission is this detailed plan he had promised to the people. Finally, this suave Postmaster General, surely at a loss for inspiration, asserted on May 21, and I quote:
In the face of danger, the government remains calm.
No wonder it is calm, Mr. Speaker, it is so calm as to be disconcerting, and surely the first political boss of the Postmaster General, whom I knew quite well by the way, would flush with anger today if he heard these confusing statements of the hon. member for Papineau.
I would like, Mr. Speaker, to warn the government members. Their attitude-


An hon. Member:: Exclamation mark.


Claude Wagner: And points of suspension.
Their present attitude in the face of the ever increasing cost of living, especially food, while they are satisfied with putting forward in a disorderly manner income support or replacement measures, not only unduly delays a healthy coordination of social security measures as well as the implementation of the guaranteed minimum income program, but also destroys initiative and encourages laziness and dependency, "demotivates" the ever forgotten ones of our country, namely the so-called middle class people and, finally, maintains a psychology of inflation.
Mr. Speaker, it is high time this government acted with firmness, coherence and swiftness to deal with the scandalous increase in the cost of living. The government should act or resign. Should it resign, it would only be confirming legally what it has been doing in effect,

namely resigning in the face of the alarming problems which oppress the people of Canada.
And all the time lost by this government postponing its decision places it in an increasingly incoherent situation and exposes it to an increasingly obvious loss of credibility and, of course, puts it on the road to defeat that some humorists, and perhaps some toady editorialists, will say in their headlines: "Because of the meat."


An hon. Member:: That is hypothetical!


Claude Wagner: If the Liberals, Mr. Speaker, once said about their colleagues of the New Democratic Party that they were basically Liberals in a hurry, which is less and less evident today, I say of the Liberals, which is more and more evident, that they have become Progressive Conservatives not in a hurry, not the least bit in a hurry.
Mr. Speaker, let us finally have a concerted plan to curb inflation! Let us have many, realistic, simultaneous and cohesive measures to deal in the general interest with the increase in the cost of living. If the government does not change radically, it will be repudiated by the people who in turn will say what we are saying today about that motion:
-this House no longer has confidence in the government which, by its weak and stubborn-


Gilbert F. Rondeau: Amen!


Claude Wagner: -adherence to outmoded policies, increasingly burdens the people of Canada with grievous cost of living increases. '
-and the hon. member for Shefford (Mr. Rondeau) says: Amen!


Mr. Roch La Salle (Joliette):: Mr. Speaker, I am very interested in commenting on the motion and, at the same time, on the matter we are debating today in the House.
Undoubtedly, the matter we are discussing is of very special interest to all Canadians. We have been talking about the cost of living for a very long time and, of course, people are expecting that quite efficient measures will be taken to put an end to such a rise. There is no doubt whatever on that, and I think that all hon. members wish that some legislation will finally restrain these increases which are making life difficult for the Canadians.
The motion under study reads as follows:
That this House no longer has confidence in the government which, by its weak and stubborn adherence to outmoded policies-
-well, these views are slightly political-
-increasingly burdens the people of Canada with grievous cost of living increases.
I think that those last lines must hold the attention of the hon. members. There is no doubt that the cost of living increase is burdening the Canadian people. With objectivity, I am making these comments and inviting all members to consider the problem facing the Canadian people.
Surely, some members have spoken and have puffed their goods; I have heard up to now the views of some representatives of the four political parties. I think that
June 14, 1973

we cannot deny the cost of living increase is a basic problem and while acknowledging that the government has made many efforts during the past five or six years and that it is trying to solvp that problem, I honestly believe and I must admit that we did not succeed in checking the rise in the cost of living.
Now, we will try to justify ourselves by saying every so often: Well, the United States are not any better off than we are, or still, it is worse over there. Europe also has problems. The whole wide world has problems. Should we be content to look down on the difficulties experienced by other nations and say: Well, at home, the situation is not any worse off than elsewhere. On the contrary, I think we have reasons to believe and to hope that our government will find a solution to the extent that they will be ready and willing to accept some of the opinions voiced by members of the other parties in this House; but then, these opinions and suggestions must be effective.
Therefore, to that extent, I think the motion before us is rather a just one, although it may have political undertones-personally, I do not care-but we must admit that the cost of living has been rising constantly these last few years, that the government has found no adequate solution. In my opinion, Mr. Speaker, this is nothing but the plain truth.
While I was listening to a member of the New Democratic Party, Mr. Speaker, I felt really disappointed by his party's attitude. Of course, they must make their position clear in case this government is overthrown. To begin with, I should like to tell the House that a government which would be defeated on such a motion would have no reason to resign. No, I suggest that, whenever the government does the right thing, it is our duty, as members of this House, to congratulate and support them. I, for one, have tried to find causes to do so for the past six years and have often succeeded. However, when they deserve to be blamed, it is our duty to do so and to remind them that the Canadian people is anxious anxiously waiting for a solution to their problem which bothers me considerably.
The government, which is eager to justify its actions, which is eager, by all sorts of means, to impress upon us that it has failed to find any solution, did not suggest that it could not find any or that it does not have it at present. I doubt that any other political party has it. Nobody will say that, but my position allows me to say that. I-


An hon. Member:: Speak for yourself!


Roch La Salle: Yes, Sir, I speak for myself, and I think that the Social Credit Party of Canada does certainly not have it either.
So, Mr. Speaker-


Mr. Gauthier:: That is what you say!


Roch La Salle: The hon. member for Roberval reminds me that that is what I say, and that is what I think!


An hon. Member:: One cannot keep you from thinking that!


Roch La Salle: No, you certainly cannot stop me from thinking along these lines. Therefore, Mr. Speaker, we
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acknowledge an accomplished fact: the solution which could be brought forth has not been submitted to us.
Mr. Speaker, I do not have that solution myself, in contrast with my friends to the right who think they have it, and, as a Frenchman said to a Creditiste member a year after his visiting Paris: Tell me, Dumont, your contraption, is it still working?


An hon. Member:: Bernard Dumont.


Roch La Salle: Yes, precisely.
I said a while ago that I was disappointed at the New Democratic Party's attitude, concerning the risk and peril of overthrowing the government. I do not think that a motion merely acknowledging a truth, if it were agreed to, would require the government to resign. Not at all. I do not believe that the government would lack the proper support. As for the mandatory legislation which of course is useful and clearly needed, I believe the government will have to decide whether or not he should go to the people. But it is not because the government is defeated on a motion of non-confidence that it should resign. I think that this Parliamentary tradition has already cost us enough. A government has every reason to continue to govern a country, even though it may be accused at one time of some weakness and of a lack of solutions, a thing we can also be said of all parties.
The attitude of the NDP, which refuses to support this motion, is really scandalous. Afraid to set off an election! One should not be so naive. I wonder what the supporters of the New Democratic Party, who saw these men fight the government as no one else did six months ago, must think of their elected representatives' attitude to so self-evident a truth, namely that the cost of living increase has not been slowed down. And it will be said: because they didn't want to support the Progressive Conservative Party, or, above all, because they didn't want to defeat the government. The New Democrats know just as well as I do that this in no way forces the government to go to the people. In my opinion, they realize that this lack of a solution will cause the government to work harder, to devote itself to finding a solution and perhaps to consider some of the suggestions that have been made.
As far as the construction sector is concerned, for example, a lot has been said about costs; there has been talk of abolishing the 11 per cent sales tax on building materials. I spoke about that two years ago. The subject is still a current one and I believe the three opposition parties are calling for that removal.
We know very well that the complete removal of the 11 per cent sales tax would probably not bring about the expected benefits. The mere removal of the 11 per cent tax would represent a loss of revenue for the government. However, we know full well that the manufacturer of materials and the contractor would be tempted to profit by such a removal. Therefore the owner would not benefit by it.
Two years ago, I asked the government, to invite to the bargaining table unions, manufacturers of building materials and provincial governments in order to find a solution, to discuss together a policy that could be effective and would result in a price freeze for building materi-

June 14, 1973
Cost of Living
als. The government could say they are prepared to increase their credits so that the housing units could increase more rapidly than they do at the present time, in so far as the unions are willing to cooperate, insofar as they are willing to suspend the right to strike so as not to interfere with the building industry.
I believe that we should come as soon as possible to a comprehensive policy to that effect, but at one condition only, namely that the government invite at the same table all the people concerned in the building industry. The very removal of the 11 per cent sales tax on building materials would not bring about the desired effects, but a comprehensive policy that would be well thought-out, well structured, and well negotiated with the responsible people in the building field would enable the government I think, to cope with conditions that have become very awkward for new owners.
As regards the price and wage freeze, one must still consider it before rejecting it off-hand. It is clear that reference is made to a 90-day price freeze. In my opinion, that period of time would be sufficient to find a solution. However, to freeze prices at their present level would do a disservice to the people in the long run.
It is obvious, and I said it three weeks ago, that to freeze the price of beef at 90 cents a lb. would suit Canada Packers Limited, but I think that it is also quite important to consider the matter and find a solution during those 90 days in order to reduce prices and it is not easy.
To what extent is the taxpayer responsible for that situation, Mr. Speaker? It is easy to blame the government or the legislators in that connection.
To what extent did the consumer himself contribute to the prices skyrocketting, prompted by the legitimate desire to acquire almost everything? To what extent does the government share that responsibility? The minister of Consumer and Corporate Affairs might encourage more restraint on the part of the consumer. And I know that amongst opposition members publicity is made to encourage consumers to acquire the things that their neighbours have or that are common in other countries.
Then, the individual and not only the government must be educated in that respect. But in view of the problem, I think it is a real nonsense and a pity that certain members or political parties make out of this a partisan or political question. Canadian people are concerned; they want to see this problem dealt with as soon as possible and for this they rely upon the government.
As a matter of fact, members have the responsibility to discuss this question in a very objective manner and try to find a solution.
I think that the proposals which have been made deserve the attention of every member and that the motion under study which recognizes the fact that we did not succeed in reducing the rising cost of living is perfectly justified. Then, under the circumstances if I were to vote against that motion I would say in short that the government has succeeded in controlling inflation but it would be wrong. I do not say it is the fault of the government, alone because, as I have said before, the government has made enormous but inadequate efforts and I think this is the cause of the problem.

The Social Credit moved an amendment. I do not quite agree with the monetary theory of the Social Credit; therefore it is obvious that I will not vote for this amendment. There are people who believe in it. I do respect their opinion, as I respect all religions in this country; therefore I also respect the Social Credit. Personally, I do not believe in it. Of course, they will argue and do their best to prove that we have tried many things with the present system and they will say: why not try the monetary theory of the Social Credit? More people will have to believe in it before I am convinced. It is certainly not the hon. member for Shefford (Mr. Rondeau) who will convince me. I know too much about his ideas and arguments to be convinced. I must say there are some serious members in that party and I do respect them very much.
I think it is a question of principle. We have a motion before us and it deserves the attention of the House. We must not believe that the government would be defeated because it is a non confidence motion supported by the majority; rather I think we must remind the government that there is a serious problem in Canada and that it should try to do better than it is doing now.
Lastly, Mr. Speaker, I would also like to quote, as the hon. member for Saint-Hyacinthe (Mr. Wagner) did a little while ago, what Mr. Pellerin of La Presse wrote about the New Democratic Party: It reads as follows:
The leader of the NDP, Mr. David Lewis, holds the Minister of Finance responsible for the price increase. He says that Mr. Turner maintains the price index at an artificially high rate because he intends to maintain the equivalence between the Canadian dollar and the American dollar. The explanation may seem far fetched but it might have some element of truth. However, in the eyes of ordinary people, it is thought there is a plot. Producers, packers, deliverers, merchants, proprietors, entertainment enterprises and even governments do nothing to stop price increases.
He ends by saying:
If prices carry on increasing at the present rate, the defence of common wealth will have to come before the respect of private enterprise. Inflation is threatening us all. The authorities must do something instead of washing their hands or taking advantage of the situation.
I believe that this final remark of this journalist deserves to be pondered over. I also think of the concern which the Canadian people has for this problem and I hope that today's debate will help us become even more alive to this problem and that we shall be united rather than divided in our search for its solution.
I believe this is the kind of objectivity which the people is looking for in the members of this House. For my part, such is the purpose I am serving here in this House and I believe it to be my duty and my responsibility to urge those members to work harder at finding the most beneficial solution for society and not a solution which is liable to bring about some political advantage at the polls.
Those who worry only about electoral advantages run the risk of being severely judged by their fellow-citizens who see them in action. Therefore, not only must the government do something but they must also act in the best interest of society. I hope that all these speeches will be followed by an effective and efficient application of the required measures so that we may at last stop the escala-
June 14, 1973

tion of the cost of living and give Canadians more hope than now in the future.


Paul Theodore Hellyer: Mr. Speaker, I am very pleased to have the opportunity to participate in this debate in support of the Progressive Conservative motion. It relates to a most urgent subject, namely, the absolute failure of the government to cope with the real problems which face the Canadian people at this time. It relates in particular to the stubborn adherence of the government to outmoded methods and outmoded policies. The government has tried by traditional means to meet the dual problems of unemployment and inflation and has failed miserably. There is no question whatsoever that monetary and fiscal policies alone will not do the job. Not in a dozen years will that approach adequately meet the needs of the Canadian people. If the government proceeds as it has, we will just move back and forth from too much unemployment to too much inflation, and too much of both, as has been the case these last few years.
It is perfectly obvious that something new must be added, and that is an incomes policy, particularly in the rigid sector of our economy, if we are to be able to cope with the real needs of the ordinary people of this country. In the face of this obviously serious situation, what is the government's response? It is virtually zero. It sets up a food prices commission. The head of that commission just the other day, almost immediately after she was appointed, was apologizing publicly for the government. She said that the people of Canada did not want controls. At least that was her opinion, Mr. Speaker.


An hon. Member:: How does she know?


Paul Theodore Hellyer: My hon. friend asks, how does she know? That is the question which came to my mind at once. I wondered to whom she had been talking. Perhaps she had been talking to the Canadian Chamber of Commerce; perhaps she had been talking to the Canadian Manufacturers' Association; perhaps she had been talking to the Canadian Labour Congress; or perhaps she had been talking to the cabinet. One thing is sure, Mr. Speaker; she was not talking to the Canadian people, to the average citizen of this country.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: As far as I know, in every poll sent out by any member of this House of Commons in the last year or year and a half in which members' constituents have been polled on their attitude toward wage and price controls, the answer has been in the affirmative. Even in the case of one hon. member opposite who sent a questionnaire to his constituents on the Island of Montreal, where the question was framed in this way, "Would you favour wage and price controls even if it meant a big increase in bureaucracy and red tape?" The answer came back overwhelmingly in the affirmative. That is a pretty shocking revelation to the Minister of Finance (Mr. Turner) and other government apologists who say that the Canadian people are not prepared for some drastic action. I wonder where they get their information.
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I suppose it really should be expected that the head of this commission would be obliged or would feel it necessary to talk in this vein. It must be a very frustrating experience to be named head of an expensive but toothless monster. All the brave words about the effect of the glare of publicity on prices is just nonsense, and the government knows it. It was interesting to read the speech of the Minister of Consumer and Corporate Affairs (Mr. Gray). It is a paraphrasing of, or as a matter of fact it is almost exactly like one which Mackenzie King made in the 1920s. It is really contemporary! Let me assure you, Mr. Speaker, it is right up to date-it is not more than 40 years old, about the same age as the minister.
Today, all the Minister of Finance could do in response to a very intelligent speech in this House by the hon. member for Don Valley (Mr. Gillies) was to launch a personal attack on the hon. member.


Some hon. Members:: Shame.


Paul Theodore Hellyer: The hon. member admits quite candidly that over a period of time he has changed his mind on the basis of new information and changed circumstances. This is a mark of intelligence. But who is the Minister of Finance to cast stones at anyone for changing his mind? No one takes a back seat to the Minister of Finance for mind changing.


An hon. Member:: Turn-around-Turner.


Paul Theodore Hellyer: He has done it a number of times already, several times in this parliament, and no doubt he will do it again. He should certainly change his mind in respect of the incomes policy.


Thomas Miller Bell: He changed his constituency, too.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: Being the apologist for the Prime Minister (Mr. Trudeau) in this case will not save him. If the Liberal Party should ever achieve another majority under its present leadership-heaven [DOT] forbid-the Minister of Finance will not last 18 months, and he knows it. He will be the sacrificial lamb. The Prime Minister will be moved to tears as he is deeply affected at the sight of a man giving his political life for a friend.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: The government has allowed a desperate situation to develop. The value of the Canadian dollar is declining rapidly. The government blames inflation on external forces. It is a worldwide phenomenon, we are told; the world price of copper is rising; the world price of coffee is rising.


An hon. Member:: The weather is bad, too.


Paul Theodore Hellyer: The North American price of beef is rising; the North American price of lumber is rising; the world price of French wine is rising.


An hon. Member:: What about the price of fish?

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Paul Theodore Hellyer: All of this is quite true. There is an increasing demand and the solution in these cases, of course, is increased production. But all of the coffee, all of the beef, all of the copper and nickel, and indeed the imported wine, is still only a small part of our total inflation in Canada. The major factors are still, first of all, the high cost of government and, second, the cost-push inflation caused by the wage-price spiral.


An hon. Member:: Tell us about the Bonaventure.


Paul Theodore Hellyer: Even the cost of commodities has been influenced greatly by the higher cost of machinery, the higher cost of power, the higher cost of transportation. All of these are factors in the increased cost of commodities. Commodity prices are influenced by higher taxes, as are other prices. As a matter of fact, big government and rising taxes are a major factor in the inflationary cycle.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: Governments are taking a bigger proportion of the gross national product every year. For the last ten years, each year governments collectively have taken 1 per cent more of the gross national product of Canada than they did the year before. This in itself sets up pressures. It sets up demands for increased wages and it is a directly contributing factor not only to demands for higher wages but also to the increase in prices which in itself results in a demand for higher wages.
In addition to this, the bureaucracy is growing. Just today it was announced that last year the federal bureaucracy in this country grew by 7.3 per cent, and tonight, just a few hours later, the head of the Public Service Commission went on television to apologize for the government. Increasingly, public servants and heads of commissions appointed by this government become little more than apologists for the failures of the government.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: They do not need to apologize for the government, surely, with all the very talkative members on the opposite side who can defend their own inadequacies without help from public servants. Bureaucracy does not need to grow. The growth is due to new programs that in many cases are of questionable value. It is due to programs which in many cases do not give the taxpayers a fair and adequate return for the tax dollar collected. It is due in many cases to programs which are band-aid treatments, and it is due in large part to the fact that these band-aid programs are a symptom of inadequate and incompetent government in this country. It is a question of treating the symptoms, not the disease.
Then there is the wage-price spiral. Just this week a strike was called because workers refused a 20.5 per cent increase in wages over a two-year contract.


An hon. Member:: Where?


Paul Theodore Hellyer: In the province of Ontario.


Some hon. Members:: Oh, oh!


Paul Theodore Hellyer: This was highly inflationary. When a settlement is reached, higher prices will result. It is the old chicken-and-egg situation. Cost-push inflation is still a major component. Higher taxes result in demands for higher wages, which result in higher prices, which result in a squirrel cage situation.


An hon. Member:: Here is the minister.


Paul Theodore Hellyer: I was just going to say that it was a desparate situation. I think it is even more desperate now that the Minister of Finance has joined us.


An hon. Member:: I hear he is secretly starting to smoke a pipe.


Paul Theodore Hellyer: I would not be surprised; I am told it is just as good as transcendental meditation. Prices are rising, and the grocery money is shrinking. Just last Saturday I was talking to a constituent who after she had paid her rent did not have enough money to buy groceries. This is real poverty in its ugliest form. Here is the case of a woman who admits to malnutrition because there is not enough money in her pocket to allow her to buy the groceries necessary for the weekend-and this in a rich country like Canada.
What about housing prices? They are getting out of control to a greater extent every week, every month. The average Canadian citizen cannot afford a decent house for his family. What is the greatest increment of cost in housing? It is the cost of money; it is high interest rates. What do high interest rates do? They bring inflation. And what can be done about it? Nothing, until the Minister of Finance gets off his backside and acts.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: Just this afternoon in the committee on finance we were told that it costs 10 per cent a year just to hold land until it can be developed. That 10 per cent a year does not include any profit for the owner of the land, merely the cost; and that total cost is due to two increments only, municipal taxes and the cost of money. In response to the direct question we were told that the greatest single cost of maintaining land and holding it to develop, when governments allowed it to be developed, was the cost of money. And the cost of money, we know, is exorbitant due to the lack of action on the part of the government.
We will never solve the housing problem in Canada until inflation is controlled. In the meantime, the government's solution is merely to build more public housing, much of it very necessary but in some cases becoming instant slums. We will never have adequate housing for the people who really need it until inflation is brought under control.
The government wants to increase Canadian participation in the industrial development of the country. It wants to have Canadians play a greater part in our industrial development and resource development. Mr. Speaker, if the government does want Canadians to play a greater part, it will have to make it attractive for Canadians to
June 14, 1973

invest. It will have to restore confidence. It will have to control inflation.
At the present time, people who put their money in the bank have less left in real purchasing power at the end of the year than at the beginning of the year. People who buy savings certificates will be worse off at the end of the year than they were at the beginning of the year. People who buy Canada Savings Bonds will be worse off at the end of the year than they were at the beginning of the year. People who buy Government of Canada Bonds will be worse off at the end of the year than they were at the beginning of the year. People who buy Bell Telephone stock will be worse off at the end of the year than they were at the beginning of the year. As a matter of fact, it is difficult to find an investment in Canada at the present time where you can wind up the year with as much as you had when you started on January 1. So, to attack all the major problems facing Canada today it is necessary to implement radical solutions. New methods must be tried.
The United States is more innovative than Canada. The President of the United States is more radical than the Prime Minister of Canada (Mr. Trudeau).


Mr. Stanbury:: In more ways than one, that's for sure.


Paul Theodore Hellyer: We have to break inflationary expectations. We have to control monopoly power effectively. We have to establish a relationship between wages, prices and productivity in those sectors where price competition does not exist. The objections, and I do not have time to deal with them, are all fallacies. You do not need a big bureaucracy. You do not need to set individual wages and prices. The plans that were tried in Europe are not the kind of policies being put forward over here. All that is necessary is mandatory guidelines, which are like speed limits. If these are put into effect we can bring inflation under control, increase employment and have stable prices. The United States should not have abandoned its stage II. I am sure there is great regret there that they did, and they will have to move back in that direction.
So far as PC policy is concerned, it is contemporary and forward-looking. The Leader of the Opposition (Mr. Stanfield) has shown the way. The Leader of the Opposition has grasped the nettle. The Leader of the Opposition, in doing so, has become the only contemporary leader of a party in this House of Commons.


Some hon. Members:: Hear, hear!


Paul Theodore Hellyer: He is tired of talk. He is tired of excuses. The Leader of the Opposition demands action. Tonight all those members of the House of Commons who really put people's needs-


The Acting Speaker (Mr. Laniel):: Order, please. I regret that I must interrupt the hon. member at this time, but I am sure that all other members will be quite happy to listen to him complete his remarks. However, this will have to be done with unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
Cost of Living


Paul Theodore Hellyer: I am right at the end of my speech, Mr. Speaker, and-


The Acting Speaker (Mr. Laniel):: Order, please. I am not sure that there is unanimous consent. Is there unanimous consent?


Some hon. Members:: No.


The Acting Speaker (Mr. Laniel):: Order. Another hon. member is seeking the floor at this time, and perhaps I should intervene. This debate will be completed in about 20 minutes' time. The Chair tries to be as lenient as possible and, at the same time, as fair as possible. To meet those objectives I think that between now and 9.45 the Chair should recognize a member of the NDP and a member of the government party. I would hope there could be some agreement whereby the balance of the time could be split between one member of the government party and a member of the NDP.


Some hon. Members:: Agreed.


Thomas Miller Bell: What's the difference; it's all the government?


Stanley Howard Knowles: On a point of order, Mr. Speaker, there were arrangements made for today's debate. I do not think they should be altered now. Extra time was given to the Minister of Finance (Mr. Turner), and on one occasion when it was a Liberal's turn to speak there was no Liberal here to speak. I suggest that the next speaker should be the hon. member for Winnipeg North (Mr. Orlikow).


The Acting Speaker (Mr. Laniel):: The point raised by the hon. member for Winnipeg North Centre (Mr. Knowles) is well taken. The Chair is only seeking some kind of agreement whereby as many members as possible can speak, but I will at this time recognize the hon. member for Winnipeg North (Mr. Orlikow).


David Orlikow: Mr. Speaker, President Nixon's proposals for a price freeze yesterday were his fourth attempt to deal with the problem of inflation in the United States. Of phases I, II and III, only phase II was at all successful, and it was successful only temporarily. As soon as the tough controls of phase II were removed and the United States moved to the voluntary controls of phase III, the rate of price increases in the United States jumped to a rate which is even higher than the rate of inflation in Canada at the present time.
Today we have been told by Conservative speakers that they are calling for the imposition in Canada of the kind of program which President Nixon has introduced in the United States. Mr. Speaker, the President's first three phases have been a failure, and the fourth phase announced yesterday has nothing to do with an incomes policy, nothing to do with wage and price controls. His proposals yesterday, aside from the effect of Watergate on President Nixon, were simply a call for price controls. As a matter of fact, President Nixon made it crystal clear yesterday-


An hon. Member:: Talk about Canada.

June 14, 1973
Cost of Living


David Orlikow: I will get to Canada and the Conservative party in a moment. President Nixon made it crystal clear that he was not imposing wage controls because the wage increases achieved by working people in the United States were not inflationary.
The hon. member for Don Valley (Mr. Gillies) who moved this motion today and who, as already has been pointed out, changed his position diametrically from what it was less than two years ago, has called for a temporary freeze on all incomes, to be followed by the working out of an incomes policy. In the few minutes at my disposal I want to look at the proposals which he made on behalf of the Conservative Party.
It is relatively easy to control or freeze wages. It is easy to know precisely what the steelworker in Hamilton, the autoworker in Windsor or Oshawa, and the railway worker in Montreal make per hour and to say that they will not be allowed to make more than 2 per cent, 3 per cent or 5 per cent above that amount in the next year. But I challenge the Conservative Party to say in detail-they have not done it today or any other day-how they would regulate and control the rest of the economy.
Let us look at the things you would have to control if you really are talking about an incomes policy and an equitable distribution of restraint on all sectors of the economy. The hon. member for Trinity (Mr. Hellyer) talked about the wage-price spiral. I am not going to say that wages do not have an effect on prices, and the hon. member for Trinity was extremely careful not to say a word about increased profits. So, Mr. Speaker, because hon. members know that I am somewhat biased, let us just turn to the record as it appears in recent issues of the Globe and Mail in the financial pages.
On June 9, 1973, the Globe and Mail carried a story which reported that for the first quarter of 1973, corporation profits were up 53 per cent over the same three months in 1972. That is the biggest quarterly advance in 12 years. On May 1, 1973, the Globe and Mail reported that Canada Packers' profits were up from $10 million the year before to $14 million for the same period this year. On April 19, the Globe and Mail reported that for the first quarter of 1973, International Nickel's profit had risen to $36 million from $1814 million in the same period in 1972, an increase of almost 100 per cent. On May 1, the Globe and Mail reported that Ford Motor Company had a record first quarter profit of $37.6 million, compared to $23.2 million in the first quarter of 1972. On April 27-I pass this along to the hon. member for Hamilton West (Mr. Alexander)-the Globe and Mail reported that Dofasco profits had increased to $11,800,000 for the first quarter of 1973, from $8,200,000 for the first quarter of 1972.


Mr. Alexander:: And non-union at that.


David Orlikow: Dofasco has always claimed that they pay as good or better wages than the organized plants. If that is not true, then I leave it to the hon. member for Hamilton West to explain. If the Conservative Party are serious about an incomes policy, and if they are serious about saying that the wages of workers and salaried people have to be controlled, then what they ought to tell the business

community is that their income tax policy-if and when they form the government-will be to amend the Income Tax Act to provide for a 100 per cent excess profits tax on all profits higher than the base period which they will establish. Of course, they would not dare do that.


Stanley Howard Knowles: They don't say "Hear, hear" to that.


Lincoln MacCauley Alexander: We include profits in the plan, though.


David Orlikow: The hon. member for Saint-Hyaeinthe (Mr. Wagner) said that prices should be frozen except for unprocessed food at the farm gate. I find that a very interesting proposal. I wonder which member of parliament is prepared to tell the farmers of this country that if Canada Packers, Kraft, Dominion Stores or Safeway cannot raise their price to the consumer, they are going to pay one penny more than they are paying to the farmers for the unprocessed foodstuff they produce. It is nonsense to say that if you control prices at the retail level you will not have to control prices to the farmers. I think the farmers know this, and the members of the Conservative Party ought to keep that in mind.
What about the professional person? How would a Conservative government put controls on the incomes of selfemployed people? There has been a Conservative government in the province of Ontario for 30 years, and they still have not found a way to put any kind of limit on the incomes of doctors in Ontario which are increasing by leaps and bounds every year. I suggest that the federal Conservative Party would be no more successful than the Conservative Party in Ontario.
In the newspaper which has the largest circulation in Canada there appeared today an interesting article by Anthony Westell in which he called for an incomes control policy and said, in effect, "Do as I say, not as I do". Mr. Westell used to be chief correspondent for the Toronto Star in Ottawa, but he left that job and is now a professor at Carleton University. I assume that is where most of his income comes from, but in his spare time he moonlights and writes the odd article for the Toronto Star.


Stanley Howard Knowles: "Odd" is right.


David Orlikow: If Mr. Westell wants to write three articles a week in the Toronto Star instead of just one or two, his income will go up; but of course it is easy for him to recommend that the ordinary worker in Canada Packers, Dofasco or some other plant should have his income controlled. Mr. Westell knows that as he is self-employed he does not have to worry about that.
I want to return to the question of food prices, Mr. Speaker. My wife is just as concerned about the cost of food as is any wife in Canada. I wonder how freezing the price of foodstuffs will affect the tremendous percentage of that cost which goes for fruits and vegetables which are imported for six months of the year or more from other parts of the world. We import oranges from the United States, Mexico, Israel and Spain; we import lettuce from the United States and Mexico; we import pineapples and grapefruit-in fact we import all foodstuffs except meats. Prices are going up every week. Does the Conservative Party expect that we can freeze those prices? They do not
June 14, 1973

have the answer, Mr. Speaker; and they have not tried to answer, because there is no answer. They propose that we fix prices. Well, a large percentage of Canada's major products are exported, such as, paper, copper, zinc, nickel, wheat-


Lincoln MacCauley Alexander: Lumber.


David Orlikow: We export lumber-


Lincoln MacCauley Alexander: And the cost of houses is going up.


David Orlikow: I have not heard one member of the Conservative Party suggest a two-price system for the products which we export. Without a two-price system, what we would be doing if we fixed the price at the present rate, and the world price for those commodities went up, would be subsidizing consumers in the United States, Japan and other countries which buy our products.
I think I have indicated very clearly, Mr. Speaker, that even if an incomes policy makes sense, even if it is possible-and I question that very much-it is certainly not possible on the basis of the proposals or suggestions detailed by the Conservative Party today or any other day, in parliament or outside. Having said that, I want to make it clear that I do not accept the present government's policy of doing nothing about the increased cost of living.
What can be done? Where are the major increases in the cost of living taking place? First of all, they are taking place in the cost of housing. I suggest that a great deal could be done about this. The Government of Canada could tell the chartered banks and insurance companies of Canada that they must allocate a substantial percentage of the money they have available for lending to the field of residential housing in order to meet the needs of many for residential accommodation, and that they should lend the money at prime rates of interest.
If the people could obtain money for houses at 7 per cent or T1/ per cent instead of, as at present, 914 per cent or 10 per cent, which will be the rate in the not too distant future, the people of Canada would save substantial amounts of money. I have calculated roughly that on a $20,000 mortgage, if instead of paying 10 per cent, which will be the going rate at the end of the year, a person could pay 7 per cent he would save $600 per year or $50 a month. That amount would really be significant in meeting the increase in the cost of living.
As well, I suggest that the federal government co-operate with the provinces in establishing a land bank assembly program. Let us get rid of the developers who are fattening themselves and speculating with land at the expense of the housing consumer.


An hon. Member:: What will you do with them, shoot them?


David Orlikow: What about food prices?


The Acting Speaker (Mr. Laniel):: Order, please. I regret to interrupt the hon. member, but his time has expired.
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Mr. Herb Breau (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, I do not have much time left. I only want to say that the solution of the Progressive Conservative Party to check the increase in the cost of living and price increases is to freeze incomes.
In other words, the income of those who are defenseless, namely the majority of producers, farmers, fishermen, will be frozen across the board. The man who, in my riding, works in a fish factory for $1.60 or $1.75 an hour, will have its salary frozen. That is the solution proposed by the Progesssive Conservative Party in the current situation.
Mr. Speaker, faced with this situation, the government has proposed fair solutions. Indeed, it tries to improve the net income of Canadians by increasing the old age pension, by establishing programs to help the have nots, those who are defenseless. In other words, instead of acting negatively and freezing incomes, high or low, we are saying that we are going to increase the net income of Canadians.
Some members of the Progressive Conservative Party are trying to talk of the components of misery. Yet, I must remind them that under the Canada Assistance Plan, the federal government shares 50 per cent of the cost of this plan.


The Acting Speaker (Mr. Laniel):: Order. It being 9.45 o'clock p.m., it is my duty, pursuant to section 9 of Standing Order 58, to interrupt these proceedings and forthwith put every question necessary to dispose of the motion now before the House.
Therefore, the question is on the amendment (Mr. Godin).
All those in favour will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Laniel):: Those against will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Laniel):: In my opinion, the nays have it.


[Stage Direction]
Call in the members.
[Stage Direction]

It being 9.45 o'clock p.m. it is my duty, pursuant to section 9 of Standing Order 58, to interrupt these proceedings and put forthwith every question necessary to dispose of the motion now before the House. Call in the members.
Mr. Speaker:: I declare the amendment lost. The question is now on the main motion.


Mr. Speaker:: I declare the motion lost. The House stands adjourned until eleven o'clock tomorrow morning.
At 10.24 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, June 15, 1973