1973-10-23

ROUTINE PROCEEDINGS


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have the honour to present to the House a petition under the provisions of Standing Order 67. Very briefly, the petition prays that the House will cause the Canadian Radio-Television Commission to implement the recommendations of the Standing Committee on Broadcasting, Films and Assistance to the Arts which were concurred in by the House on July 24. If the petition is found to be in order, it is my hope that by agreement the subject matter of the petition or the petition itself can be referred to an appropriate committee.


WAYS AND MEANS
Hon. John N. Turner (Minister of Finance):: Mr. Speaker, under the terms of Standing Order 60 I wish to table notice of a ways and means motion proposing the removal of customs duties for an initial period of two years for certain petroleum products including gasoline, light heating oils, diesel and aviation fuels and feedstocks for the petrochemical industry.


Mr. Speaker:: I assume that the minister has the consent of the House to return to motions for that purpose. Agreed?


Some hon. Members:: Agreed.


BUSINESS OF THE HOUSE
Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, I wonder if I could have permission to revert to motions for a brief statement about the business of the House. I should like, first of all, to draw to the attention of hon. members who may not have been in the House yesterday when agreement was reached that the deferred division on the amendments to the Criminal Code will take place tomorrow, Wednesday, at 2.30 p.m.
The normal business will be interrupted at that time for the purpose of taking the vote Thursday of this week will be an opposition day to be taken by the New Democratic Party. Tomorrow, regardless of the progress that is made on the business already announced, we will deal with the report stage of the Canada Pension Plan bill.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, my question is addressed to the Minister of Finance who has now had a week to examine the latest unemployment statistics which at that time he said were "startling, disconcerting and very difficult to reconcile" with what he termed to be the very strong expansion of the economy. Now that the minister has had a week to look into this question, has he been able to reconcile what appears to him to be a contradiction? In a word or two, has he an explanation he can give the House?


John Napier Turner: Mr. Speaker, I think I gave an explanation in reply to the hon. gentleman's question a week ago.


Robert Lorne Stanfield: With due respect, I do not think the minister expressed anything but surprise and amazement. Specifically, with regard to the widespread labour shortages which he said were being reported to him from across the country, has he found any evidence of disincentives to work in his examination of these labour shortages?


John Napier Turner: Mr. Speaker, there may be a number of factors in play. One of them certainly is reflected in the help wanted index released yesterday which shows that the number of opportunities for jobs, as published in the daily newspapers across the country, rose by 21 per cent during the third quarter of 1973.


Robert Lorne Stanfield: Mr. Speaker, I would like to ask the minister, who a week ago seemed to be puzzled by the existence of these labour shortages in association with the sharp increase in the seasonally adjusted figure for unemployment, whether he has found any evidence that these unfilled jobs are the result of any disincentives to work?

Oral Questions


John Napier Turner: Mr. Speaker, I said to the hon. gentleman last week when he first put these questions to me that we are awaiting with great interest the study of the Economic Council of Canada analysing the state of the labour market as reflected in the statistics.


UNEMPLOYMENT RATE INCREASE IN LIGHT OF INCREASE IN JOB OPPORTUNITIES-REQUEST FOR EXPLANATION
Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, on the point mentioned by the Minister of Finance that there has been a 21 per cent increase in the Canadian help wanted index I wish to direct a question to the Minister of Manpower and Immigration who is now back in the House after four days' absence.


Some hon. Members:: Oh, oh!


John Howard Lundrigan: Would he like to indicate what explanation his department has for the fact that there is an increase of 21 per cent in the index of people seeking jobs, based on advertisements in newspapers, and there is still not only a high unemployment rate but there has been a very substantial increase in the unemployment rate in the last two or three months?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, we are always eager to improve the information base on which we provide matching of jobs seekers to existing vacancies. I cannot give any single, simplistic answer as to why that increase has taken place in the unemployment rate, but we are doing our best to improve our manpower office services to match jobs seekers to vacancies.


John Howard Lundrigan: Mr. Speaker, assuming the minister is investigating the productivity of his Canada Manpower offices may I ask him this question. In view of his statement that employment is high where it counts and unemployment is high only where it apparently does not count, in certain regions and among young people, would he indicate what he meant by that statement and, more important, would he modify it and offer some constructive programs to the country to help the regionally depressed areas and particularly young people among whom unemployment is around 12 per cent?


Robert Knight Andras: Mr. Speaker, the premise on which the hon. member bases his question is quite incorrect. That was not the statement I made. What I said was that while unemployment is unhappily high it does not represent one big monolithic unemployment problem, that we do have intolerably high unemployment among young people and serious regional unemployment, which I think is almost the opposite of the interpretation the hon. member put on my speech.
While I was away from the House during the four days to which the hon. member referred I was consulting with the western provincial governments and other people there, and we explored many of these aspects. As I did then I indicate now that we are looking very carefully at improving manpower services, with particular reference to job information centres and job banks.


John Howard Lundrigan: Mr. Speaker-


Mr. Speaker:: Is the hon. member rising on a point of order?


John Howard Lundrigan: I want to ask the minister another question.


Mr. Speaker:: Order, please. The hon. member and others, including the hon. member for Don Valley, apparently wish to ask supplementaries. My suggestion is that the Chair be allowed to attempt to complete the first round of questioning and then return to the hon. member and to others who may have supplementaries on this important matter.


OIL-POSSIBILITY OF DIRECT SALE BY VENEZUELA TO CANADIAN GOVERNMENT
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources but in his absence will direct it to the Prime Minister. During the energy minister's recent discussions with the Venezuelan government regarding oil supplies to Canada, did the Venezuelan government indicate that it was prepared to sell oil directly to the Canadian government?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, the Minister of Energy, Mines and Resources will be in the House tomorrow and will be able to answer the hon. member.


INQUIRY OF THE MINISTRY
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I wish to address a question to the hon. Minister of Finance.
Can he say whether a serious study on the profitability of Canadian federalism has been made by the federal and the Quebec governments?


John Napier Turner: Mr. Speaker, for the Department of Finance, Confederation is always profitable.


Léonel Beaudoin: Can the hon. minister say whether the federal government is aware of the fact that official figures provided by his department have been used during the Quebec election campaign?


Mr. Speaker:: Order. In my opinion, the question as formulated is not in order.

The hon. member for Don Valley on a supplementary to the first question. In any event, I recognize the hon. member at this time. The hon. member for Don Valley.
October 23, 1973


THE CANADIAN ECONOMY
Mr. James Gillies (Don Valley):: Mr. Speaker, I have a question for the Minister of Finance. Does the minister and the Department of Finance attribute and in what proportion do they attribute the slowdown in the growth of the economy to the high interest rate policy that the government is now following?


John Napier Turner: Mr. Speaker, there is no evidence that the high interest rate is either contributing to a slowdown or is geared to slow down the economy. It moderates the expansion of the economy in two ways, first of all, by responding to the extremely strong demands for credit to accommodate that expansion and, second, by reflecting the international interest rate structure.


James McPhail Gillies: If the high interest rate policy is not slowing down the rate of growth in the economy and therefore moderating inflation in the way that the government is trying to solve the inflation problem, is the minister contemplating some policy that will reduce interest rates so that housebuilding and other activities in the economy may be expanded?


John Napier Turner: Mr. Speaker, I think the premise of the hon. gentleman's question is a little in error since new starts in housing are again at a record figure.


James McPhail Gillies: Mr. Speaker, may I put the question a different way. The evidence is quite clear that in the second quarter and probably the third quarter the economy is not expanding, unemployment is rising, there is a high level of inflation, and high interest rates are contributing to this. Is the government going to do anything about it?


Some hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, the economy is still growing at the rate predicted by the government and rejected by the hon. gentleman in February. The real rate of growth of 7 per cent across the country shows that the economy is at or near capacity.


James McPhail Gillies: Mr. Speaker, I want to pose this question so that I will not be out of order. Surely the Minister of Finance must realize as does everybody else in this country-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Perhaps the hon. member might ask the question, but if he wants to put it so that it will be correct proceduraljy I think he has started off on the wrong foot. He might try again.


James McPhail Gillies: Given the fact that the growth in the economy experienced this year all took place in the first quarter and given the fact that in making economic policy one does not look backward but forward, is the minister going
Oral Questions
to do something about the interest rate policy in the country at the present time?


John Napier Turner: Mr. Speaker, we are looking forward to a strong rate of growth both in 1973 and 1974.


DISPARITY IN COST OF LIVING FIGURES FOR VARIOUS
James Aloysius McGrath: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. In view of the fact the cost of living index for regional cities of Canada released last Friday showed wide disparities, for example, an increase of 1.4 per cent in Thunder Bay as opposed to .4 per cent in Ottawa, is the minister looking into the cause of these price disparities, and what corrective measures does the government propose to take?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, the government has announced a number of measures over the past several months aimed at restricting increases in the cost of living and has made a commitment to introduce other measures as required. This is a matter in which I am certainly taking an interest and the Food Prices Review Board is as well.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I seek the co-operation of hon. members in attempting to make progress. We are still on the first question, as hon. members will appreciate. I will recognize the hon. member for St. John's East and then the hon. member for Gander-Twillingate, after which I will recognize the hon. member for Winnipeg North.


James Aloysius McGrath: Mr. Speaker, may I direct a further supplementary to the Minister of Transport. As the same consumer price index showed a 3.2 per cent increase in the cost of food at St. John's, Newfoundland, the highest by far for any city in Canada, is the minister, in light of this fact, now prepared to take very serious measures to alleviate transportation difficulties, more particularly the freight backlog at Sydney, Nova Scotia, which has accrued as a consequence of the failure of the government to take necessary action.


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, I think that this is not in accordance with the facts. I regret that the hon. member does not recognize all the efforts that have been made in order to decrease the backlog. There are about 400 fewer cars there than there were three weeks ago. So we are making this effort. I might say that St. John's, Newfoundland, in common with all of the Maritimes, profits from special freight rates that do not apply in other parts of Canada.

October 23, 1973
Oral Questions


INQUIRY AS TO INTRODUCTION OF SPECIAL PROGRAM TO REDUCE UNEMPLOYMENT AMONG YOUNG PEOPLE
John Howard Lundrigan: Mr. Speaker, my question is for the Minister of Manpower and Immigration. As unemployement among young people under 25 is approximately four times the level among people over 25, and as the minister has indicated that employment opportunities are where they count, I wonder if the minister is seriously considering any special program for young people, aside from the anticipated Opportunities for Youth program for next spring, to make sure that our young people do not continue to be disillusioned and become disaffected from our economic system?


Robert Knight Andras: Mr. Speaker, I am a little puzzled by the hon. member's reference to "employment opportunities where they count." That interpretation of my speech is a bit baffling. Nevertheless, I do recognize the fact that employment opportunities for young people and for certain regions of Canada require a much more precise rifle shooting approach to them than is required to respond to the general, global unemployment rate. That was the theme of my speech the other day.


John Howard Lundrigan: Then why does the minister not do that?


MANPOWER
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, may I direct a question to the Minister of Manpower and Immigration. As the seasonally adjusted rate of unemployment has increased to 6 per cent and as unemployment among persons between 14 and 24 years of age has risen to almost 11 per cent of the possible work force, can the minister explain why funds made available for local initiatives projects, which involve mainly young people, have been reduced this year to $83 million from last year's start-up figure of $165 million and a further supplementary amount last year of $70 million?


Robert Knight Andras: Mr. Speaker, the start-up figure last year at this time, if I remember correctly, was between $80 million and $85 million. This is under constant review.


David Orlikow: In view of the very high unemployment among young people, why have the criteria for qualifying for projects been made so much more difficult this year, with the result that there will be far fewer people working on these projects?


Robert Knight Andras: Mr. Speaker, I rather doubt that is the case. I think the revisions in the criteria were designed to ensure that the funds under this program would go to the pockets of highest unemployment rather than being diverted to other services no matter how worthy or justified they might be for other reasons.


VETERANS AFFAIRS
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of Veterans Affairs. In view of the abrupt desire to retire of Dr. Ritchie, Assistant Deputy Minister of Hospitals, can we now infer that there will be a slowdown or, even better, a freeze on the transfer of veterans' hospitals to other jurisdictions?


Mr. MacDonald (Cardigan):: Mr. Speaker, I am sorry but I did not have my receiver on and did not hear the question.


Allan Bruce McKinnon: Mr. Speaker, in view of the abrupt desire to retire of Dr. Ritchie, Assistant Deputy Minister of Hospitals, can we now infer that there may be a slowdown or, even better, a freeze on the transfer of veterans' hospitals to other jurisdictions?


Daniel Joseph MacDonald: Mr. Speaker, to answer the first part of the question may I say there has not been any sudden intention at all, as is known by many of us. As far as hospital transfers are concerned, the policy of the government has not been changed.

[ Translation]


AIRPORTS
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I should like to ask a question of the hon. Minister of Public Works.
Fifteen days ago I submitted to him a petition from the 582 expropriated owners at Ste-Scholastique. Can the minister tell us when he will meet with them?


Hon. Jean-Eudes Dube (Minister of Public Works):: Mr. Speaker, I have already had the pleasure of meeting in my office a committee representing the Ste-Scholastique expropriated owners. My colleague the Minister of Transport and myself have decided to go to Ste-Scholastique, probably in the next 15 or 20 days. The date has not yet been set definitely, but we are now checking what methods can be used to ensure that all cases are settled fairly.


FOOD PRICES
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. According to Canada
October 23, 1973

Department of Agriculture figures, the wholesale price of beef in Toronto declined by 17 per cent in the past ten weeks while weighted average retail costs on a survey of five Toronto supermarkets only declined by 6.8 per cent. Does the government continue to support the assurances of the Food Prices Review Board that food prices are not rocketing out of control and that excessive profits are not being taken by processors?


Herbert Eser (Herb) Gray: Mr. Speaker, the facts speak for themselves.


Otto John Jelinek: Can the minister advise the House if it is the government's policy to encourage a slower decline of retail prices than wholesale prices?


Mr. Speaker:: Order, please.


FINANCE
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is for the Minister of Finance. On October 9 the Governor of the Bank of Canada indicated that monetary policy is now based on the assumption that economic growth is largely responsible for inflation and we must live with a high level of unemployment. Is the minister now basing his fiscal policy and economic programs on the same assumption?


John Napier Turner: Mr. Speaker, I do not believe the premise of the hon. member's question properly reflects a correct reading of the governor's speech.


William Heward Grafftey: Mr. Speaker, I rise on a point of order.


Mr. Sharp:: Quote the speech.


William Heward Grafftey: I am quoting verbatim the speech made in Quebec. I was perhaps out of order last week, but not this week.


Mr. Speaker:: Order, please. The hon. member for York East.
[La ter:]


William Heward Grafftey: I simply wish to ask the Minister of Finance if his fiscal policies and economic programs are based on the assumption that economic expansion is largely responsible for inflation?


John Napier Turner: No, Mr. Speaker.


William Heward Grafftey: Will the minister then inform the House-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for Brome-Missisquoi has a further supplementary which he might be allowed to ask.
Oral Questions


William Heward Grafftey: In view of the minister's answer, will he inform the House how he proposes to reconcile his views with the expressed point of view of the governor of the Bank of Canada?


Mr. Speaker:: Order, please. The hon. member is inviting the minister to make a statement which should properly be made on motions.


UNEMPLOYMENT INSURANCE
Mr. Ian Arrol (York East):: Mr. Speaker, yesterday in the House the President of the Privy Council was asked when Bill C-125, designed to tighten up the regulations relating to unemployment insurance, might be brought forward for debate. He replied:
Consideration will be given to bringing it forward at an appropriate time.
In view of the present desperate difficulty being experienced by many industries, particularly in Toronto, in getting permanent help, will the President of the Privy Council take appropriate action and bring the bill before the House this week or next week, certainly this session?


Allan Joseph MacEachen: Mr. Speaker, I will consider the hon. member's representation in drawing up the legislative program for the next couple of weeks.


O (1430) EXTERNAL AFFAIRS ARAB-ISRAELI WAR-CEASE-FIRE VIOLATIONS-REQUEST FOR INFORMATION-CANADIAN PARTICIPATION IN POSSIBLE PEACEKEEPING FORCE
Mr. Ron Atkey (St. Paul's):: Mr. Speaker, my question concerns reported violations last night and today of the United Nations cease-fire in the Middle East by Egypt and Syria. Has the Secretary of State for External Affairs any further information to report to the House and the country with respect of these violations and the attitude of the Canadian government with respect to participation in a United Nations peacekeeping force in the apparent absence of any acceptance of the cease-fire by a number of states taking part in the conflict?


Mitchell William Sharp: We are still hopeful that the initiative taken by the two superpowers and the action of the Security Council calling for a cease-fire will be effective. Yesterday I indicated clearly that if we could be helpful in getting a cease-fire established we would be ready to serve, or if we could be useful at a later stage in connection with the negotiations we would be very ready to serve there, too.

October 23, 1973
Oral Questions IMMIGRATION


INTENTION RESPECTING EXTENSION OF ADJUSTMENT ASSISTANCE PROGRAM
Mr. John Gilbert (Broadview):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. In view of representations made by the Canadian Council of Churches and other organizations that the immigration adjustment assistance program be extended beyond its expiry date, October 15, may I ask whether the minister does, in fact, intend to extend that program?


Robert Knight Andras: I have weighed this matter very carefully on the basis of all the representations I have received, for and against, and other evidence I have sought. After assessing the question I have decided not to seek the authority of parliament to extend the opportunity for adjustment of status in Canada. I appreciate the opinions and sentiments expressed by all hon. members who have written to me.


John Gilbert: In view of the department's practice of accepting early applications for registration under the act, will the minister consider accepting late registrations under the same act?


Robert Knight Andras: Since October 15, the expiry date, we have received only 33 such inquiries in all our immigration offices across the country. We have examined these and in cases where there are compassionate grounds for landing as provided in the existing act, which gives me some discretionary authority, we have taken such action and we shall continue to do so. But this does not in any way mean a restoration of the mass adjustment of status program that existed up to October 15.


INTENTION RESPECTING PERSONS WHO FAILED TO REGISTER UNDER ADJUSTMENT ASSISTANCE PROGRAM
Mr. Duncan M. Beattie (Hamilton Mountain):: In view of the statement made by the minister on CTV on Sunday, October 14, that his deparment had no immediate plans to deport illegal immigrants after the deadline date, and his subsequent statement-


Mr. Speaker:: Order, please. This might be a proper moment to remind hon. members that as far as possible questions asked in the House should not be based on statements made outside the House. We have often found ourselves in difficulty in the past as a result of trying to avoid this long established rule. I feel that in practically all circumstances the question can be asked directly without basing it on a statement made outside the House.


Duncan M. Beattie: Thank you, Mr. Speaker. Can the minister inform the House just what he proposes to do with illegal immigrants or aliens who have refused to register and are apprehended?


Robert Knight Andras: Mr. Speaker, since the hon. member did refer to a statement of mine, I should like to point out that I made whatever comments he said I made were in response to a question asking whether there was going to

be a witch hunt. I said there was not going to be one. The new law is well known to all hon. members. The law will be enforced. Where there are reasons on compassionate grounds for considering a particular case, we shall do so. Otherwise, should a straight case arise, for example, involving a criminal who has been apprehended and who is in contravention of the Immigration Act, I think there is no doubt that deportation would take place. The hon. member is aware that the right of appeal has been restricted. The law will apply, and that is what hon. members recommended during the debate.


AIR CANADA
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct my question to the Minister of Transport. In view of the fact we have witnessed the departure this year of three top executives of Air Canada, including the president, John Baldwin, can the minister advise the House whether a reorganization of the top management level of Air Canada is taking place and, specifically, when we may expect an announcement as to a replacement for Mr. John Baldwin?


Jean Marchand: I do not
know of any reorganization in Air Canada. The president left a few weeks ago and I hope he will be replaced very rapidly. But his departure is not related to any restructuring of Air Canada.


FEED GRAIN-ANNOUNCEMENT OF SELLING PRICES FOR WHEAT, BARLEY AND OATS
Mr. J. H. Horner (Crowfoot):: Mr. Speaker, my question is to the Minister of Justice, in charge of the Canadian Wheat Board. Is the hon. gentleman prepared to announce this week the price of off-Wheat Board grain so that uncertainty may be removed from the operations of the feeding industry?


Hon. Otto E. Lang (Minister of Justice):: The Canadian Wheat Board announced its selling prices under the new feed grain policy for feed wheat, feed barley and feed oats yesterday at about one o'clock, Winnipeg time.


INQUIRY OF THE MINISTRY
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Water-loo):: Mr. Speaker, my question is for the Minister of Finance who admitted last week in a news release that he was basing his calculations for next year on a staggering increase in inflation amounting to 6.6. per cent. How does the minister intend to get inflation down to that figure?
October 23, 1973


AIRPORTS
Mr. Francis Fox (Argenteuil-Deux-Montagnes):: Mr. Speaker, I wish to direct a question to the hon. Minister of Transport.
In view of the fact that the Ste-Scholastique expropriated land owners have serious grievances to air concerning the treatment they have received in comparison with those of Pickering, can the minister advise the House whether he intends to look into these and bring about the necessary corrections?


Jean Marchand: Mr. Speaker, the hon. Minister of Public Works advised the House a moment ago that we intended to go very shortly to Ste-Scholastique to learn first hand of these grievances and make sure that the expropriated owners are fairly treated.
* *
*


TAR SANDS OIL-NEGOTIATIONS WITH SYNCRUDE RESPECTING POSSIBLE WRITE OFF OF ALBERTA'S SHARE OF EARNINGS IN COMPUTING TAXABLE INCOME
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to direct this question either to the Minister of Finance or to the Minister of National Revenue. Jurisdiction appears to be shared between them.
Has either of the ministers taken part in any negotiations with Syncrude, in order that the development may proceed and a secure supply of crude petroleum can be obtained, with respect to a write-off from the taxable income of the Syncrude group of the 50 per cent which the province of Alberta will get out of the project when developed? Has there been any discussion along those lines so that the project may proceed and secure supplies of crude petroleum can be assured?


John Napier Turner: My colleague, the Minister of National Revenue, says that he replies "no" to that question. I did have conversations, not with Syncrude but with the Minister of Finance of the province of Alberta, and I expect to be meeting him next week together with two of his colleagues.


Eldon Mattison Woolliams: Can the minister tell the House at this stage whether a decision has been reached by the federal government with respect to a write-off concerning this project which will go ahead if the federal government creates the proper atmosphere?


John Napier Turner: I think the hon. gentleman would expect me to listen to the representations of the government of Alberta and, indeed, in due course, to the representations of the company in order that I might have all the facts available before making a decision.
Oral Questions FISHERIES


SUGGESTED SUBSIDY FOR REPLACEMENT OF OBSOLETE VESSELS AND SHIPS LOST AT SEA
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I have a suggestion for the Minister of Fisheries which may help lower the unemployment rate. When announcing a three-month freeze in August on construction subsidies for all new fishing vessels the minister stated that this action was taken to achieve a controlled development of the fleet. In view of recently released figures which show a decline in Canada's groundfish landings, would the minister reconsider his action and at least make subsidies available immediately for the replacement of obsolete vessels presently used for fishing, as well as assistance for the replacement of ships lost at sea due to fire or storms?


Hon. Jack Davis (Minister of Fisheries):: The problem, Mr. Speaker, is that the hon. member's pessimism about the prospects of the fishery is not shared by those who are building fishing vessels. There has been a tremendous increase in the number of fishing vessels being built, to such an extent that our subsidy moneys have all been used up and we are having to make more funds available. Obviously the industry thinks that prospects are bright. We have simply tried to shave off the peak off what is an exceptional building boom and spread it out over a longer period.


Lloyd Roseville Crouse: Mr. Speaker, I asked a specific question of the minister in view of the fact he has placed a deliberate moratorium on the construction of all fishing vessels and he has not answered it. I will repeat it because obviously he did not hear it. I ask the minister whether he will reconsider his action and make assistance available to replace ships now fishing that are obsolete or ships that are lost at sea due to fire or storm? I submit such action would not increase the fishing effort-


Mr. Speaker:: Order, please.


Lloyd Roseville Crouse: -but would retain the status quo.


John (Jack) Davis: That is a new question, Mr. Speaker. The hon. member probably knows that we are considering another type of subsidy for the conversion, upgrading and otherwise of existing vessels.


HOUSING
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Finance. In view of the fact that 96 per cent of all NHA loans being made in the metro Toronto region go to people with incomes exceeding $10,000 a year, or family incomes above that figure, which means that the poor and people with average incomes are getting nothing, can the minister announce whether the government intends to do anything about bringing mortgage rates down soon?

Oral Questions


John Napier Turner: Mr. Speaker, my colleague, the Minister of State for Urban Affairs, is in western Canada attending a tri-level conference dealing with this type of problem, and he has already stated the percentage of loans available under preferred NHA rates. In terms of the detail of that question, I will convey it to my colleague.


TRANSPORT
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my question is directed to the Minister of Transport. In view of the fact the Canadian government is unable to cope with the freight backlog at Sydney bound for Newfoundland, would the minister give consideration to having the Argentia-North Sydney ferry continue on a year-round basis as recommended by groups of people in that area and other bodies in Newfoundland?


Jean Marchand: Mr. Speaker, I think the premise is wrong, but probably this is the normal way of putting a question to a minister. We have been looking at all possibilities in order to get rid of this backlog, which existed last year and on which I did not even receive one letter from the opposition. Notwithstanding that, we are going to look into all possibilities, including the one mentioned by the hon. member.


UNEMPLOYMENT INSURANCE
Mr. Gilles Caouette (Charlevoix):: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
In view of the many problems that occurred last year at the Unemployment Insurance Commission, the minister informed us this summer that regional offices favouring decentralization would be set up this very fall in areas such as the north shore and the riding of Charlevoix, among others.


Mr.   La Salle@: In Joliette too.


Gilles Caouette: Also in Joliette, for
instance. In view of the fact that since September the Unemployment Insurance Commission has been at grips with delays such as have been experienced last year, can the minister say when the offices whose construction was announced last summer will be set up and when the operation will begin?


Robert Knight Andras: Mr. Speaker, I should like to separate that into the general and the specific. If the hon. member can

give me some specifics I will look into those, but in general I think progress toward completing the reorganization of, or the so-called new approach to, unemployment insurance has been done with dispatch. It was started in April, accelerated in August and will be generally completed around the first of December. I commend the commission for their vigour.
[ Translation]


Gilles Caouette: Mr. Speaker, I should like to put a supplementary question.
Without generalizing, could the minister explain why people in the Quebec City area have been waiting since the beginning of September for their unemployment insurance benefits?


Robert Knight Andras: Mr. Speaker, I do not think I could be that general, but I would be happy to deal with specifics. If the hon. member will give me some case histories we will move very quickly on them.


PROJECTED BENEFIT AND ADMINISTRATIVE COSTS FOR
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister of Manpower and Immigration as a supplementary. Given the optimism of the Minister of Finance respecting growth for the balance of the year and knowing that the government must have some projections in terms of employment and unemployment, can the minister advise whether he has any projected figures for the cost both of benefits and administration for the year 1973? Or can he assure us, because of this optimism, that the total cost will be less this year than it was last year?


Robert Knight Andras: Mr. Speaker, I think I answered a somewhat similar question two or three weeks ago in which I indicated there are offsets. There is the rise granted by statute in the eligible income due to the increase in the average wage rate, which has an effect on the average cost per week of benefits. There is the factor of the length of time on benefits, there is the maturity of the plan in terms of maternity benefits and sickness benefits, and so on. The question cannot be answered either yes or no; anyone who thinks there is a simplistic approach like that is mistaken.


Mr. Speaker:: Order, please. At this point I bring to the attention of hon. members that there are only three or four minutes until the end of the question period.


Lincoln MacCauley Alexander: Mr. Speaker, I have one short supplementary question. Apparently there are no figures and I think the cost is going to be much higher, but let me ask the minister this. Is it the intention of the government to introduce by way of regulation an increase in employer-employee contributions? I have read it will be something like 50 per cent. Is that a fact?


Robert Knight Andras: Mr. Speaker, if such policy is determined it will be announced in the regular manner.
October 23, 1973


RELATIONSHIP BETWEEN JOB VACANCY INCREASE AND INCREASE IN BENEFITS PAID
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a supplementary question for the minister. In view of the publication today of statistics expecting the rate of rise in job vacancies in this country, is the minister's department undertaking a study to determine whether or not that rise in the rate of job vacancies is related to the rise in unemployment insurance benefits that are being paid out?


Robert Knight Andras: Mr. Speaker, we have a monitoring process which was described in fairly gory detail in the House in the spring and which in several ways is constantly monitoring the activities of claimants to make sure they recognize their clear obligation to conduct an active job search. As vacancies occur in any given area and are identified, then that obligation becomes more intense, and our approach to claimants reflects this.


NATIONAL DEFENCE
Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, my question is for the Minister of National Defence. In view of the excellent facilities at Canadian Forces Base Gage-town which are not being fully utilized, will the minister give consideration to new programs which will take advantage of the substantial public investment there?


Hon. James Richardson (Minister of National Defence):: Yes, Mr. Speaker, I am very glad to assure the hon. member that the Department of National Defence recognizes the value of the training facilities at Gagetown. We intend to make full use of them and in fact expand them over the years.


TRANSPORT
Mr. Paul E. McRae (Fort William):: Mr. Speaker, I have a question for the Minister of Transport. In view of the failure of the railroads to move grain through the port of Thunder Bay at an adequate rate, and in view of the possibility that in the event of an impending oil shortage in the east considerable quantities of oil may be moved by tanker, is the minister considering ways and means by which the seaway might be kept open beyond the normal closing date?


Jean Marchand: Mr. Speaker, if this is useful and it can be done we shall examine it, but we have no control over the weather and ice. This suggestion will be kept on the desk and if it is feasible the hon. member can be sure that we will take it into consideration.
Oral Questions PUBLIC SERVICE


POSSIBILITY OF REVIEW OF NURSES' WAGES AND FRINGE BENEFITS IN LIGHT OF DISCONTENT
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the Prime Minister. In view of continuing nationwide discontent expressed by nurses under Treasury Board jurisdiction in regard to wage disparities and fringe benefits compared with those prevailing in the private sector and provincially, does the right hon. gentleman intend to instruct the President of the Treasury Board to review the situation with particular reference to section 76 of the Public Service Staff Relations Act?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I have absolute confidence in the President of the Treasury Board's handling of this matter.


Elmer MacIntosh MacKay: Mr. Speaker, in view of reports received from the nurses that they intend to seek a meeting with the Prime Minister to explore their grievance when he is in Halifax in the near future, will the Prime Minister agree to meet with them at that time?


Pierre Elliott Trudeau: Mr. Speaker, I have not received such a suggestion until now. I will look into the matter.


VETERANS AFFAIRS
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is directed to the Minister of Veterans Affairs. In view of the fact hundreds of nurses involved in the dispute are working at veterans hospitals, will the minister advise, further to what he told me yesterday, what steps he is taking to ensure that those veterans under chronic and domiciliary care will receive proper treatment continuously?


Daniel Joseph MacDonald: The information I have from across the country is that the patients are receiving good care and that the morale is good and the nurses are doing a terrific job.


Mr. Speaker:: The hon. member for Victoria-Haliburton will be recognized for the purpose of a supplementary. The Chair will then see the Leader of the Opposition and call orders of the day.


MEASURES TO INCREASE BED CAPACITY IN HOSPITALS
Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, my supplementary is directed to the Minister of Veterans Affairs and concerns the backlog of veterans seeking admission to veterans hospitals, especially at Sunnybrook Hospital in Toronto. What measures has the minister taken to increase the bed capacity of veterans hospitals?

October 23, 1973
Oral Questions


Daniel Joseph MacDonald: Mr. Speaker, to answer that question, it is not very long since I visited Toronto. I spoke to approximately 100 patients at Sunnybrook Hospital. They were very satisfied with the treatment they were receiving. So ar as I know there are ample beds at this time. If there are not, we can certainly look into it.


Mr. Speaker:: Order, please. The Leader of the Opposition.


Robert Lorne Stanfield: Mr. Speaker, my question is directed to the Secretary of State for External Affairs.
[ Translation]


Mr. Speaker:: I apologize to the Leader of the Opposition. The hon. member for Temiscamingue wishes to put a supplementary question, after which I will recognize the Leader of the Opposition.


David Réal Caouette: I rise on a point of order, Mr. Speaker. Last evening, on the CBC French network, Mr. Rene Levesque stated that the Prime Minister would be resigning on November 15 next. Since when does the Prime Minister notify Rene Levesque of his intentions before parliament?


Mr. Speaker:: The hon. member will admit, I am sure, that it is not a point of order.


Pierre Elliott Trudeau: Mr. Speaker, the members opposite, as Mr. Rene Levesque, take their wishes for granted. Some people think that the representation of French-speaking persons in Ottawa is too strong, but such is not my opinion, Mr. Speaker. As for myself, I intend to continue to carry on my duties-


Some hon. Members:: Hear, hear!


EXTERNAL AFFAIRS
Robert Lorne Stanfield: Mr. Speaker, before I ask my question perhaps I could assure the Prime Minister, 'through you, that many in parliament will find that a comforting reassurance.
I should like to ask the Secretary of State for External Affairs a question arising from his assurance a number of months ago in connection with the delivery of oil to refineries in the Puget Sound area that he had only begun to fight. Can he tell us briefly how that fight is coming on or whether he has really left the ring?


Mitchell William Sharp: Mr. Speaker, like the Prime Minister I intend to stay very much in the fight.


Mr. Speaker:: Order, please. Is the hon. member rising on a point of order?


Mr. Bell:: On a question of privilege.


Mr. Speaker:: The hon. member rises on a question of privilege. Before I recognize the hon. member I would remind hon. members that we have reached the end of the question period. However, I recognize the hon. member on his question of privilege.


Thomas Miller Bell: Mr. Speaker, as recorded on page 7085 of Hansard for yesterday, column one, I made an interjection that I meant to reflect on the government, but I may have brought in a respected civil servant with a distinguished war record. I have been assured that the Assistant Deputy Minister of Hospitals resigned voluntarily for health reasons and that there was no implication of policy. Therefore I would withdraw that without reservation. Needless to say, I am still opposed to the government's policy of closing down veterans hospitals.


Jack Marshall: On a point of order-


Mr. Speaker:: The hon. member rises on a point of order.


Jack Marshall: Mr. Speaker, in his answer the Minister of Veterans Affairs suggested that morale was high and that the service was as good as it should be-


Some hon. Members:: Oh, oh!


An hon. Member:: Just listen.


Jack Marshall: I think there should be a change because certainly many representations are coming to members of parliament and, indeed, to the minister indicating dissatisfaction in respect of the handing over of hospitals and indicating dissatisfaction with the services in the hospitals.


Mr. Speaker:: Order, please. The hon. member will appreciate that this is a point of debate and not a point of order. I suggest again to hon. members that it is irregular after the question period to seek supplementaries on alleged points of order. I appreciate that the hon. member may feel he has a grievance in relation to the answer given to his question, but that cannot be raised by way of a point of order or question or privilege.


Mr. Nystrom:: Mr. Speaker, I hesitate to rise on a point of order but I believe the issue is of national importance. I just received information a few moments ago that the Texaco and Imperial Oil Companies are diverting tankers from the Middle East to the United States. In light of that I wonder whether I might have the permission of the House to ask the Prime Minister whether or not he is aware of this?


Mr. Speaker:: Order, please. I am sure we could have a situation every day in which hon. members receive information during the question period and seek unanimous consent of the House to prolong the question period. I suggest to hon. members that is irregular. I am sure the hon. member can go to- the minister, speak to him and obtain the information he is seeking.


Mr. Knowles (Winnipeg North. Centre):: Mr. Speaker, I rise on a point of order or perhaps I rise to give notice of a point of order having to do with the attaching of the Governor General's recommendation to a bill, first reading
October 23, 1973

of which was given yesterday. I refer to Bill C-224 which proposes to amend the Canada Pension Plan in ways with which I completely agree. I wonder, however, if Your Honour would study the question concerning whether there should be a Governor General's recommendation with regard to a bill which involves no expenditure of public funds. I was indeed aware of the recommendation because it appeared on the order paper when the bill was presented for first reading yesterday, but I did not have the bill until this morning. I have carefully studied the bill. So far as I can ascertain every cent of expenditure referred to in that bill is to be paid out of the Canada Pension Plan fund. It is not a charge in any way on the federal treasury.
I would point out, Sir, that when the Canada Pension Plan was first introduced the defence in respect of there being a Governor General's recommendation, and also a resolution back in those days, was that there were certain administrative charges until the plan was functioning. But of course we are away past that stage. I also remind Your Honour that there have been two or three private members' bills which have been allowed, despite the fact that no Governor General's recommendations were attached, because the Canada Pension Plan even to the point of administrative expense is completely self-sustaining.


Mr. Speaker:: Order, please. I appreciate the hon. member giving notice of his point of order, but it seems to me that he is arguing the point of order which he says he will raise later. I appreciate the point which the hon. member is making. It will be notice, not only to the Chair but to hon. members to the left and to the right of the Chair, to give the matter some thought in the meantime so they will be ready whenever the order is before the House, which it is not at present.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, October 22, consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-164, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system and Air Canada for the period from the 1st day of January, 1973 to the 30th day of June, 1974, and to authorize the guarantee by Her Majesty of certain securities to be issued by the Canadian National Railway Company and certain debentures to be issued by Air Canada, be read the second time and referred to the Standing Committee on Transport and Communications.
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, perhaps the first thing I should do now that I am rising
Canadian National Railways and Air Canada again is to put the hon. member for St. Boniface (Mr. Guay) at ease. I am sure the information which was not given in answer to my question is available somewhere, but I am citing this incident as an example of the difficulty a member of this House experiences in participating fully and intelligently in any debate on transportation. There is no available means by which members may find out where the dollars and cents are going in the transportation system of our nation. Whether it be Air Canada, the public telecommunications system or the Canadian National Railways, these figures are absolutely unavailable, hidden or refused. I think it is significant that today the Minister of Transport (Mr. Marchand) probably evaded the answers to all the questions except two. In answering those two, he had a chance to take a small crack at the Maritimes and to help Mr. Bourassa by going into the Ste-Scholastique problem. Those are the only two definitive answers that he could give in the House, and certainly all questions were within the scope of the minister.
There is no doubt that the initial planning of the transportation system of this country was conducted in a capable and wise way. The results proved the worth of the plan, or at least they did until such time as we found that we had no national transportation policy. We now find ouselves failing as government to keep pace with the needs of the times. This absence of policy, the absence of concrete action, the fractionalization of the whole problem as we take it point by point and region by region have all negated much of the good that should have come from the wisdom of our forefathers as they planned our system.
For instance, we have seen the passenger service virtually disappear from the scene. I submit to you that this was by design or through lack of action by the government at the crucial moment when the passenger system over the rails became so totally and utterly inconvenient that the travelling public refused to patronize it. When you find yourself at McAdam Junction, or in the wilderness somewhere in this country, waiting two, three or four hours to catch a plane you realize that with a little bit of co-operation between railroads and some good planning by the management of the travelling public could have been con-venienced to the point where we could still have had not only an active but a prosperous railway passenger service, one which I think this country needs in the worst possible way.
I can remember as a young man sitting at Windsor Junction in Nova Scotia for four hours waiting for the CPR and CNR trains to connect so that I might move from one train to the other to my destination. I can assure you that any wait of four hours from 2 a.m. to 6 a.m. in the wilderness around Windsor Junction certainly discourages one from travelling by rail. It is a dandy little point, but a miserable station at which to wait. I submit that this was intentional. I submit that the government of Canada either does not know or did not care. These incidents involving misservice to the public took place one after the other.
With regard to the shipment of freight, it is obvious for those who are using the rail system, as it was to those who were using the passenger system and resorted to automobiles or aeroplanes as an alternative means of transporta-
7138

October 23, 1973
Canadian National Railways and Air Canada tion, that there has been a serious breakdown of the dispatch system in the organization of the railroads. There has been an abandonment of the recognition that a perishable product has to be shipped promptly and that it cannot be allowed to rest on the siding. There has been an abandonment of the policy which kept cars rolling and thus utilized. I am wondering to what extent this abandonment of efficient dispatch has contributed to the car shortage which exists. I am not convinced that it is absolutely necessary that 500 of the rail cars of this country be tied up in Sydney almost as a habit, according to the Minister of Transport yesterday.
I am convinced that good planning, good dispatching and good organization by the CNR could move these cars, and that someplace, where there is now a shortage some of those 500 cars could be made available to the people who require transportation for various items of commerce within this nation. This puts the onus fairly and squarely on the government in general, and the Minister of Transport in particular. We can cite instances in agriculture where the turn around time for cars on a 450 mile haul is approximately 17 days. There is no excuse for any such delay. These cars are often loaded within a day. They can reach that 450 mile distance in 24 to 36 hours with proper dispatching. They can be unloaded, if placed properly, within a day, and they could conceivably be back for reloading quite comfortably within a week. If we consider the demurrage that an individual would be charged if he held that car for 10 to 11 days on his own siding, what must it cost the railroads to absorb the cost of idle equipment in this country by virtue of poor dispatching?
These are items to which I think in times of car shortages from the Okanagan to the Annapolis and from Newfoundland to Victoria, the minister should give his full attention. He should not be making excuses for them, he should not say that they are the result of habit. He should say that they are items to which he will give his immediate attention, and will try to resolve them forthwith. This is a serious matter. I was amazed at the fact that the hon. member for Madawaska-Victoria (Mr. Corbin) could speak on this subject last night and not mention the problems connected with the transportation of agricultural products which exists in his constituency. In my opinion it was a gross oversight on his part. The transportation problem, both in respect of the time of delivery and the cost, of as well as the other ancillary charges which the railroads add to the transportation bill, has deprived that area of his constituency and a comparable area of mine of hundreds of thousands of dollars on an annual basis.
When one tries to discuss these items with the railway authorities, one receives no logical answer. Why does the hon. member for Madawaska-Victoria not join me in putting pressure on the government to resolve these problems? This is the co-operation that is required in the interest of Canada, of his constituency and mine. This is a dire need for a portion of his constituency and mine, but it was not mentioned at all in his remarks last night.
I stated that it would seem as if the abandonment of the passenger service was almost intentional in view of poor connections and poor service. I am wondering if the dispatching complications which have arisen, and which require more turnaround time than would have been

required 10, 15 or 20 years ago, are also intentional? Is there no solution to this? It certainly contributes to the car shortage problem for all commodities in Canada. Mr. Speaker, there is some proper criticism due to me in as much as I am being somewhat repetitive. If you look back you will see that I made somewhat comparable remarks, as reported in Hansard, at an earlier date during this session. But I think the remarks made by the various members of parliament, whether they come from P.E.I., Newfoundland, or from Crowfoot, should impress upon the government that the problem is of major consequence, and of particular consequence to my constituency, an agricultural one, which will only get competitive transportation if, as and when the railroads adopt an efficient and competitive pose toward that industry and its requirements.
Now, Mr. Speaker, I would like to mention one other thing, which I am sure I mentioned previously, and on which I hoped I would have had an answer. It is a matter I certainly intend to press. As the CNR took over various facets of bankrupt railway companies, what became of the land grants made to those companies? Were they returned to the Crown? Are they assets of the CNR? To the best of my knowledge they are not. The CNR took over defunct railway lines with all their equipment and all their indebtedness.
Contrast that with the CPR. The CPR retained its lands, and presumably continued to manage them at a profit. But to the best of my knowledge-again I had hoped to have had an answer to this in reply to an earlier question-the total real estate holdings which the CPR received as an incentive to build its railway line are now retained in an independent holding outside the transportation field, and the benefit from these lands does not accrue to the transportation benefit of the people of Canada. That was not the intention when those lands were granted to the CPR. The lands were given to provide assets and revenues that, in the long run, would make the railway a viable operation. They have now been transferred to another account. Again I ask if this is correct? In my opinion something should be done about it.
We have a system in Canada of combination rates, Mr. Speaker. If you want to ship a carload of apples from a point in British Columbia by CNR to a non-competitive point in some other part of Canada, or a carload of apples by the CPR to a non-competitive point some distance from the Annapolis Valley, or a carload of potatoes from New Brunswick or P.E.I. to a non-competitive point, the railways will give you a specific rate. In effect they say, "Because this is a non-competitive point we will really collect from you." As a result, you may well pay 15 cents or 20 cents per hundredweight more to send goods to a non-competitive destination than you would pay to send them to a much more distant destination which is competitive. The Transport Commission is exercising no authority with respect to rates. The results of any investigation do not seem to be made available to the public, and this is to the detriment of the country.
If members opposite want to do something about the cost of living, then it is incumbent upon the government to take a look at some of the methods used by transportation systems, particularly the railways of this country, in
October 23, 1973

imposing themselves on the people of Canada at any expense. The various subsidies which have been granted by the government are not negotiated as part of a national plan. The Minister of Transport made that quite clear today as he backhanded the Atlantic area. They are negotiated in isolation.
There are abandoned track grants for the prairie area. There is the Maritime Freight Rates Act for the Maritime area. There are other vehicles by which money is put into the hands of the railroads. But none of them are part of a national plan. All of them are used as a method to assuage a region at a particular moment when the pot is beginning to boil. This is not the way things should be done. Being primarily in agriculture, I am concerned about the fact that over the last few years the government has allowed the railroads to stop their priority for perishable products. These include livestock, fruit, vegetables and fish, not to mention frozen foods.
There used to be a clause in all tariffs respecting perishable products which demanded that the railroads move them to their destination by the shortest possible route and with the quickest dispatch. But now the railroads can put a car of frozen food or of fresh food on any siding and leave it there as long as they like. They no longer have any responsibility for its delivery in good condition. In such a circumstance, if you lodge a claim against the railroad it will remain on its books and on yours ad infinitum, while the railroad finds all kinds of reasons to blame the shipper or receiver for neglect, which neglect was the fault of the carrier. It is in these circumstances, Mr. Speaker, that the government of Canada is asking members who represent agriculture, and members who represent the fisheries, to support a finance bill for the Canadian National railroad. I find this goes down as sour grapes.
There cannot be adequate rail facilities in this country as long as there is no control, no investigation, no interest shown by government in the service that is rendered by this form of transportation. I want to cite one particular instance close to home, and if the railways could be used to transport this particular product those railways would probably pass through my constituency and that of the hon. member for Madawaska-Victoria. But in this particular instance, because it would be a combination rate for the CNR and CPR between origin and destination, the rate is so high to carry the product from the northeast of New Brunswick to the southwest of New Brunswick that the manufacturer in the northeast has lost the business to an Ontario firm, which can ship the product more cheaply from a centre 500 or 600 rail miles further away from the point of consumption. This shows a lack of co-operation that hurts the country. It is something which should be investigated by the government and the Transport Commission.
I am sure it is not a unique situation. If you were to ship a car of potatoes to Newfoundland by CPR then the CNR says, "I am sorry, but you have cut our rail haul. We will have to add 20 cents a hundredweight to the rate." Then, people in Newfoundland would wonder why potatoes were so expensive coming off the CPR lines. That is part of the reason. It does not matter how many junction points the CNR has to take the car through, the result would probably be the same. This penalizes both the producer and the
Canadian National Railways and Air Canada receiver of the product. These are things we must examine. Let us also take another look at areas where pooled rail lines could be operated to ease the economics of transportation. The railroad companies do not want to undertake this on their own, but they should be compelled by government to look at any means which would achieve reduced mileage of haul, and thus reduced rates. As I say, the railways do not want to do this themselves because of the freedom which has been given to the rail transportation industry in the Dominion of Canada by the legislation introduced and imposed by the government.
The problems exist from coast to coast. They are not unique to any particular area. As I have asked questions and received answers, evasive answers, incomplete answers, and no answers, I have wondered how I got into this maze of Alice in Wonderland. What is delaying the government? Is it looking for Merlin the magician to come from the court of King Arthur to solve the problems? Members of the government should put their heads together and give Canada the transportation policy which it so badly needs. Certainly, those people with the capability to ensure service by rail are not holding portfolios in this government. I plead with the government to come up with a rational solution for the rail transportation requirements of the country.
Other hon. members have spoken about air service. It certainly leaves much to be desired. I will not be repetitive in that regard except to associate myself with those who feel there is much to be desired in the service that is supplied by the nationally-owned air carrier. If the service provided by Canadian National Railways and Air Canada is an example of what nationalization of business can do, may God in His wisdom protect Canada from further nationalization.


Some hon. Members:: Hear, hear!


Mr. Jim Fleming (York West):: Mr. Speaker, my comments on this particular piece of legislation will be brief. I rise only because I was prompted by what I thought was an outstanding speech made yesterday by the hon. member for Bruce (Mr. Whicher). He outlined the problem in his part of Ontario. This problem has existed for several years, and I think it is something that demands attention not only from the people in that area but, if we believe that we represent our ridings as members of the parliament of Canada then we, too, should rise to defend the principles he put forth.
In this connection I should like to refer to one particular town in one geographical area of Canada where I spent my summers. My family roots are in that area; it is the town of Wiarton which was built for the logging industry many, many years ago. Situated at the base of the Bruce peninsula, it is the entrance to what will become the playland of the urbanites of Ontario. The provincial government of Ontario has already spent a great deal of money to expropriate land and build a huge parkland to which people can escape from the cities to enjoy the beauties of the Canadian countryside.
The people in the hamlets and towns in the peninsula, however, are isolated from the rest of Canada. If someone
26635-21J

October 23, 1973
Canadian National Railways and Air Canada wants to go to Toronto on business, if a youngster wants to go to school there, it cannot be done unless there is someone with a vehicle to take them or unless they can afford the $10 or $12 for a cab to Owen Sound where they can take the bus to the population core of Ontario. It was the rural people who built this nation and now they are neglected.
As we argue for subways, for expressways, for better transportation in our cities, for the viability of communications between cities, we forget that the nation was built on communications across the country and the opportunity for people to move freely to other areas. In this town that I speak of there is no chance for anyone who is old or poor to move around. Surely, we could provide at least a token service; even service once a week would serve the small communities across the nation, whether this be done by again inaugurating some rail services or a transportation plan that is co-ordinated with the provinces.
We may argue that great things should be done for the cities but this country, which has been until now influenced by an east-west delineation rather than north-south, must not forget its obligation to people in the rural areas who have a right to communicate with and travel to those other parts of Canada where all modes of transportation are now concentrated.


Mr. Frank Howard (Skeena):: Mr. Speaker, I welcome the opportunity to comment on some matters of local or regional concern because there is hardly a constituency in Canada that does not have a railway in it somewhere. I am told that is one of the difficulties.
I come from an area that was the original site of the western terminus of Grand Trunk Pacific, one of the railroads that went broke and had to be rescued by Canadian National. While I have not read any definitive history of the Canadian National to see what occurred, I have been told often enough that its purpose was to bring together a number of bankrupt or near bankrupt railroads that were started around the turn of the century or even before. Apparently, a lot of these railroads started because it seemed to be an easy way to make a quick buck. Grants of land were available in those days through the federal and provincial governments for the building of railroads and were obtained in many cases by people from other countries. Often the main purpose was not to build a railroad to connect one region or community with another, but was only to cash in on the generous grants that were available. It seems that the promoters in those early days did not particularly care whether the railroad functioned as a viable enterprise or not; they were not using their own money and the lands had bee.n given to them by the government of the day so they had nothing to lose. These were the types of companies the CNR brought together.
We have been told so many times that the Canadian National Railways, having been formed for that purpose, guaranteed to the bond holders of those early defunct bankrupt railroads that they would not lose their money. This was one of the difficulties facing the CNR from the start.
Some members have given the House a good deal of information in the last couple of days. Some have made a statistical analysis of the position of the Canadian Nation-

al, listing its debt charges, its income and a variety of other bookkeeping details to show that it really does not have a fantastic debt. They maintain that the CPR is in a worse position by comparison and that the problem exists as a result of the incompetence and mismanagement of the CNR officials. I will accept the charge of mismanagement on the part of CNR officials because we know that exists and have seen it in action. However, for every instance of mismanagement in the CNR you can find a parallel in the CPR.


An hon. Member:: Twice as many.


Frank Howard: My friend opposite says you can find twice as many. I am trying to get at the point that the difficulties have arisen not because one is private enterprise and therefore sacred, while the other is under public ownership and therefore suspect; the difficulties have arisen because of the very structure of Canada, the manner in which the country became operative, the development of the railroad system, the quick buck artists at the turn of the century and the support of governments over the years, Liberal and Conservative, for the railway systems. Thus, we suffer from the absolute barrenness of vision of both this government and the one that preceded it. The present hon. member for Prince Edward-Hastings (Mr. Hees) was minister of transport for a time in that Conservative government. That is why there are difficulties today. There is a lack of transport policy, and that lack is not associated particularly with any one political party or government. The fault lies with all of us in this chamber.
We look at a transportation policy from the point of view of the narrow interests of our own areas. We tend to want others in the country to be at a disadvantage. We may talk about a national transportation policy, but say, "Do not touch my home ground." We say, "By all means bring about reorganization, but do not touch the Newfoundland ferry service." Or, in another part of the country we may say, "By all means reorganize and restructure the rail transport system across Canada, but do not touch the Crowsnest Pass rates." We could go on ad infinitum talking about our approaches to transportation.
The direct connection between northern B.C. and the rest of the country is provided by the CNR. The north line of the CNR runs from the Jasper area in a general sense for about 1,000 miles westward, to Prince Rupert. I have talked to quite a few railroaders who work on that north line. Many have worked for the CN in other parts of Canada. What they have told me relates not simply to what might happen in the western region of the CNR, or to what the head office in Edmonton might say about the operation of the mountain region, or the western region. What they say applies all over the country. These railroaders, and I am also sure that this applies to the CPR because I have talked to men working for that company, do not feel the pride in their job that they once felt. There is no longer the long service conductor who began working for the railroad and wanted to work for 25, 30 or 35 years, until retirement.
Actually, you seldom see employees with 25 or 30 years of service on the railroad. You do not find that sense of
October 23, 1973

dedication to the railroad which you found some years ago. Part of the explanation lies in the availability of other jobs, the mobility of workers, and the opportunity for families to move to other parts of the country and follow different vocations. However, part of the explanation lies in the fact that within the CNR and within the CPR there are too many chiefs and not enough Indians. There are too many people in managerial positions and too many bosses, one not talking to the other. Too many orders come down from on high, whether from the head office at Montreal or some regional office, to the men running the railroad, the engineers, conductors and station agents, as well as all the others who run the railroads at the community level and in the regions. The concept of relating in a human way to people working on the railroad has gone.
The workers do not feel the compulsion to do a good job. Let me give an example, to show why this is so. Who in the railroad hierarchy made the decision, the effect of which I will illustrate in a moment, I do not know. At any rate, here is the situation: There used to be a train that left Jasper, Alberta, in the evening. There were sleeper-coaches on that train. Mind you, the scheduling of trains changes about every six months. At any rate, that service was provided at one time. That train travelled westward; its terminus was Prince Rupert, about 900 or 1,000 miles away from the point of departure. Between 6 and 6.30 a.m. that train pulling a certain number of sleeping coaches was at about the half way point, at Prince George. At about that time, at 6.30 a.m., the people with kiddies, the families who had bought sleeper accommodation at Jasper and who wanted to go to Prince Rupert, 1,000 miles away, were aroused from sleep. They had to get up, clothe their kids and themselves, pack their luggage, move out of the sleeper car and go ahead two cars on exactly the same train. They had to sit in the day coach for the rest of the journey. This happened at 6.30 in the morning.
When the train left Prince George to go to Prince Rupert, the sleeper coaches were still on the tail end of the train. They were hauled empty all the way to Prince Rupert, 500 miles away, and all the way back again, empty. You could not occupy a sleeper coach on that train between Prince Rupert and Prince George, or vice versa. I do not know who thought of running the railway that way. It was not very satisfactory from the point of view of the passengers. The people who were most upset, because they had to go through this procedure every single day, were the railroaders themselves, the conductors and men on the train. Crews were changed at Prince George, and they saw the stupidity of what was happening. No matter how many complaints we lodged with Canadian National management, nothing happened. We might as well have complained to the Minister of Consumer and Corporate Affairs (Mr. Gray), for all the response we got. Management did not even take the trouble to explain what was happening. It did not acknowledge letters.
The Canadian National has an obligation to the area which I represent, which is just as great as its obligation to every other area it serves. It has a special obligation to the northern part of British Columbia, as it is the railway that ties northern B.C. into the national railroad system. Sure, there is a B.C. railway operating in that area as well in a north-south direction. Its terminus is in north Vancouver. We are connected to the national system at Prince
Canadian National Railways and Air Canada George; therefore, I say that the primary responsibilitiy for maintaining that connection is with the CNR.
The Canadian National system traditionally has moved goods in and out of northern B.C. that go by rail. I am speaking in particular of lumber, which is sent to the markets of North America. The railway at the moment is shirking responsibility for providing adequate service to that industry. As has been indicated in the question period a number of times, there is a serious shortage of railroad cars to serve the north central and northern part of British Columbia. There is a shortage of box cars for moving lumber. Sawn lumber, some of it dried and some of it rough sawn, is piling up at mill sites and at shipping points. According to conservative estimates, about 400 million board feet of lumber which have gone through the mill are waiting to be moved by Canadian National. Between 500 and 600 people have already been laid off in the saw mill industry because there is no other place to pile the lumber that is run through sawmills. Some mills are operating at 50 per cent capacity, in a day when you can sell every stick of lumber you can run through a headrig. Further shutdowns in the sawmill industry in northern British Columbia are imminent. They may be taking place today in one area or another.
Where are the boxcars? In recent months the Canadian National Railways claimed there was a shortage of cars because they were not being returned from the United States with sufficient dispatch. There was an inability on our part to force a quick return of the cars. However, that does not appear to be a valid reason at this time. Surely, a group of people who have had the experience of running a railroad for as many years as the people running the CNR should be able to plan ahead and predict what use is going to be made of the cars. Surely, they should know from past experience that 40 or 50 days is an inordinately long time for a railway car to be sitting on a siding in the United States. It is being used as a warehouse, at per diem rate of approximately $7. This is done on a formal basis, but it comes to approximately $7 a day. CNR is renting boxcars for warehouse space at $7 a day. That is not very sensible planning. It does not take into account the need in this country.
The logging and lumber industry in the north is desperately trying to get out of the doldrums it has been in for the past few years. The provincial government in B.C. has recognized the detriment this situation is to our area by giving the forest resources to one or two large companies. It is now seeking to get into that monopoly position in order to get the small lumber operators back into business. A municipality in my area is seeking to get into the lumber business in order to take advantage of the opportunity to saw and ship lumber out of the region. Communities such as Smithers, Burns Lake and communities both north and south of Prince George are now struggling for some viability. They are being denied that opportunity by this government and Canadian National.
In the estimates for the current fiscal year, we passed an expenditure of $46 million to buy 2,000 hopper cars to ship grain. That is what it cost the taxpayers in Canada. I do not know the arrangements for leasing or renting these cars to CNR, CPR or any other railroad that moves grain,

October 23, 1973
Canadian National Railways and Air Canada but the fact is the government of Canada responded to a shortage of railway cars for grain shipments. All we in northern British Columbia are asking for is similar consideration. We are disadvantaged because of a shortage of boxcars.
The provincial government in British Columbia foresaw this problem last spring. It took steps to deal with the matter at that time. By looking ahead, it knew there would be a shortage and there would likely be an additional shortage in the future. They moved to protect the interests of the communities in that area while CNR did its besx to obscure and work against that concept. The British Columbia government recently began leasing 500 railway cars from a United States company. It is ridiculous that a national government, national parliament and national railway are unable or unwilling to cope with the question of a shortage of boxcars and are forcing a provincially owned railway to go to a foreign country to lease boxcars when they are built here in Canada. That is a ridiculous situation. It prompts me to ask whether anyone damn well cares what happens in this country. It certainly does not appear to be the case with respect to this government in view of its response to this problem.
The Minister of Transport (Mr. Marchand) was asked about this the other day. His answer is recorded in Hansard. He replied that the railways have problems, everyone has problems and he does not know what to do about them. We tried to tell him what to do. Representations were made to the federal government. When this situation occurred before, the government appointed a boxcar coordinator. He had authority to give directions to the national railways of this nation to provide boxcars to areas short of them. We are again asking the Minister of Transport to appoint someone to the position of co-ordinator. I do not care what name is given to the position. He should have authority to look into the matter of boxcar shortages and give some direction to the railroads to ensure that the boxcars that belong to the people of this country are available to them, rather than having them on a siding somewhere for 40 or 50 days being used as warehouses.
Possibly someone from the Canadian Transport Commission could be appointed. I do not suggest the president, Mr. Benson, because he proved how incompetent he is when Minister of Finance. He is doing worse now. I suggest it should be someone with some expertise from the Canadian Transport Commission, a group that was set up to deal with transportation matters. This man should be sent to British Columbia, but not on a one-way ticket. We want him to come back. He should look at the situation and determine what is involved by talking to the mill owners, the Council of Forest Industries and the provincial government.


Mr. Rose:: Send the standing committee.


Frank Howard: 1 would not agree to that. The members of the standing committee are political people. They know the problem. It is the CTC and the Minister of Transport who do not know the problem. Possibly it would do some good to send the minister to western Canada. However, I do not want to get into an argument about who should go.

I suggested someone from the CTC because that group was set up to function in this area.
Rather than wait until this bill gets to committee, we should demand right now that the CNR discontinue its pro rata system of distribution of boxcars. CNR should be asked why the sawmill companies on the northern line must truck their lumber to Prince George to be shipped in what few boxcars are available. They should be asked why the distribution of boxcars to mill points was discontinued. Why are mill owners being forced to pay between $5 and $15 a thousand to have their lumber hauled into Prince George when the railway runs right by their mills? Why did the railways scrap that system?
The minister is aware of all this if he reads his mail. In fact, the Prime Minister (Mr. Trudeau) gave him a directive to look into this situation. The Prime Minister referred the subject matter to the Minister of Transport a week or so ago. On the fifth day of October, a letter was sent to the Prime Minister. The Prime Minister had no need, really, to refer that letter to the Minister of Transport, because the Minister of Transport already had a copy of it. But the Prime Minister formally said: That is Jean Marchand's baby and he will look after it.
In that letter sent to the Prime Minister by Alf. Nun-weiler, who is the MLA for Fort George, all the facts are set out. Mr. Nunweiler knows the situation as intimately from the point of view of a railroader as can anybody, because he worked for the Canadian National for a number of years both in Smithers and in Prince George. This is his work every day, and he knows at first hand what the situation is. He says, in this letter:
This is forcing industries from distant centres which already have a railway (BCR) on their millsites, to truck millions of feet of lumber to Prince George where the CNR then provides them with cars. At the moment, the CNR yards in Prince George are literally plugged with piles of lumber trucked in from places like Williams Lake, 100 Mile House, Quesnel, Hixon, Bear Lake, Mackenzie and others at exorbitant costs-about $5 to $15 per BFM, meaning higher cost of production.
In past years, the CNR distributed cars for industry at these points on a pro-rata ratio based on regional loading needs to protect the regional economy and the public. Government railways are there to provide transportation services to the public, not to harass the public, especially in resource regions like this one where established railways are the lifeblood of the regional economy.
Such a well-respected and honoured group as the British Columbia Council of Forest Industries-I say it is well-respected, certainly, in government and Liberal party circles-says in a telex sent both to the Canadian Pacific and to the CNR that, whereas the CN used to distribute boxcars for the lumber industry on the basis of 40 per cent to mills on the CN line and 60 per cent to mill sites on the B.C. Rail line through the connection at Prince George, the distribution of cars on that basis has been discontinued. As I say, this is forcing people to bring lumber into Prince George. Mr. Speaker, there are 400 million feet of lumber sitting on the ground. Right away there is a need for 4,000 boxcars to move it out to shipping points.
Let us talk in terms of the loss of money to the area. Lumber mill operators have lost millions of potential dollars because they cannot get the lumber out to shipping
October 23, 1973

points and sales centres. They cannot get it into the United States or eastern Canada. Lumber prices have been slipping lately. And all these losses arise because Canadian National has been sitting on that portion of its anatomy which does the least good-I used a much shorter word on an earlier occasion; everybody knows what it is, so there is no point in repeating it.
The only response the Minister of Transport has given the House so far has been to throw up his hands and say: Everybody has problems, Mr. Speaker. Oh, the actual words he used are in Hansard; he did not use those words, but that is what they amounted to. Even the B.C. Railway has difficulties, he told us. This is why I was prompted to say that the B.C. Railway had the foresight last spring to look ahead and prepare to deal with the problem, but not the government whose ministers sit over there and not the Canadian National. It is a sad state of affairs.
All we are asking for is the same sort of consideration as the federal government extends when it comes to the movement of grain. Maybe not even that. I do not mean we should dig into the public treasury right now and put out $46 million to build 2,000 cars-as a matter of fact, if we were to build flatcars we could build many more than that for $46 million. This does not appear to be the answer. What I am asking for is the appointment of someone as overseer who can say to the Canadian National, in this instance, or to the Canadian Pacific to the extent they are involved: In the national interest and in the regional interest you will provide boxcars in this area where they are needed. That is all. I am asking for the same consideration as has been given to grain farmers on a number of occasions. Why should northern British Columbia continue to suffer and be disadvantaged because of, first, the incompetence of the senior management when it comes to looking beyond the end of their noses and, second, the aloofness of the federal government which so far, has done nothing but say: Everybody has problems.
May we not expect a little response to be forthcoming this afternoon, through you, Mr. Speaker? I know the Minister of Transport came to the House in the hope of entering this debate and telling us why this difficulty continues to exist. I, for one, will listen with the most rapt attention I could possibly give. I trust he will assure us that the problem is on the way to being solved in British Columbia-that we do not need to worry about this any more. Will the minister say that?


Jean Marchand: Yes, I can say that in a few words, if you will allow me to do so, Mr. Speaker.


Mr. Deputy Speaker:: Is the minister proposing to make a speech? I do not want to become too technical, but possibly the minister should make his observations by way of a question to the hon. member.


Jean Marchand: Yes, Mr. Speaker. Unfortunately for the hon. member for Skeena (Mr. Howard) I never used the words he attributed to me. Indeed, I never said anything comparable to them. I just explained the reason for the shortage of rail cars in British Columbia. I gave two or three reasons, the first being the growth in the activity of the industry. A year or two ago this was forecast at 6 per cent. It turned out to be around 14 per
Canadian National Railways and Air Canada
cent. This was the first mistake. Everybody made this mistake. There is great activity, great prosperity, a real boom. The CNR did not forecast it. The BCR did not forecast it. Neither did the CPR. Even the British Columbia government did not forecast such a rate of growth.
The second reason is that all the railways order cars which will be used exclusively for the carriage cf lumber. The CN ordered 2,000 cars of which more than 1,000 would have been used only for lumber transportation. I believe the BCR ordered 1,500 rail cars for lumber, and the CPR ordered around 1,000. But because of the strike in the steel industry, delivery of these cars could not be obtained. I believe the railway strike, too, was responsible for a good deal of the backlog. These are the reasons I put forward- not because "Everybody has problems"; I never said that. The answer I gave was the one I have just re-stated. The hon. member for Skeena says 4,000 cars are needed immediately. I would like him to indicate to me how I can, in a short time, get 4,000 cars for that part of British Columbia. If he can suggest any means of achieving that objective, I am ready to adopt it tomorrow.


Frank Howard: That is a most interesting question. Let me deal with two aspects of it. In the first place, I said that there is sufficient lumber on the ground now that it would take 4,000 boxcars to move it. I did not say "Put 4,000 boxcars in tomorrow"; do not be ridiculous. But there is that volume of lumber sitting there, and according to estimates it would take up to 4,000 cars to move that lumber.
Secondly, it seems to me that the minister and the government cannot have it both ways. He told us a moment ago that nobody could foresee what was going to take place. The Minister of Finance (Mr. Turner) could see; that is what his budget last spring was all about. This is the Minister of Finance's persistent answer in the House these days about economic questions. He hearkens back to the spring of this year and says "We predicted this and it is going to get better in 1974". The Minister of Transport cannot turn around and say "We didn't foresee that; we didn't know". Of course he knew, and the government of British Columbia knew. The premier of B.C. is president of the B.C. railroad. That railroad took action in the spring of this year-


Jean Marchand: The same for CN.


Frank Howard: -and had cars built. The premier set up the machinery for building them. The CN did nothing of the sort. CN may have put in an order to somebody to build the cars, but the minister cannot rely on some kind of steel strike for the fact the cars were not built. Canadian National took no such parallel action.
A little while ago the British Columbia railroad leased 500 cars from the United States. It was forced to do so because this government is apparently unable or unwilling to do anything to get the cars needed. Instead of the minister standing up and repeating like a parrot what Canadian Nation tells him, if that is what he is doing, I ask him to appoint somebody to go out to British

October 23, 1973
Canadian National Railways and Air Canada Columbia to look at the situation on the ground, to talk with the people there and see what is involved.


Mr. Paproski:: Send Chretien.


Frank Howard: If he sends the Minister of Indian Affairs and Northern Development (Mr. Chretien) we would get a lot more action than we would out of the Minister of Transport. He may not be doing anything in the field of Indian affairs, but he could deal with this problem; he has lots of time on his hands.
I see the Minister of Transport leaving now. Is he going out to B.C.?


Jean Marchand: Yes, I am going to B.C.


Frank Howard: Good. Seriously, Mr. Speaker, all we are asking the minister to do is to take some deliberate action, ministerial action if he likes, or Governor in Council action if that is what is involved, to appoint someone, whether from the Canadian Transport Commission or some other body, who is not connected with CN, the B.C. railroad or the provincial government, to look at the situation, see what is involved. This person should have the authority of a co-ordinator of boxcar movements to ensure that sufficient boxcars are available to move this lumber. Surely, there cannot have been such a lack of planning on the part of CN that the reason for the shortage of boxcars, as the CN has said on more than one occasions, is firstly demand, and secondly, the increase in the time needed to ship lumber to the U.S. and receive the empty cars back.
This was the point I was making initially. All the CN has to do under the inter-railway agreement on how much each railway charges the other for use of the cars on a per diem basis is to work out an accelerated per diem rate so that it is more costly to keep those cars in the United States to warehouse the lumber than it is to empty the cars and ship them back to Canada so we can use them. Let not inaction on the part of the minister, this government and CN permit what is a viable, developing industry in this part of B.C. to slacken off and stagnate. This does not take histrionics on the part of the minister as he tells us what he said or did not say; we want a response to this uncomplicated kind of request.
Perhaps the minister went out of the chamber to take this action, and if that is the case I am sure we would move quickly toward finding a solution to the problem. The minister does not need to ask me a rhetorical question such as whether I can tell him how he can get 4,000 cars there tomorrow, because I cannot. I do not want 4,000 cars there tomorrow, and even if I did it would be impossible to get them there. Not only that, it would be stupid in the extreme because there would be no place to put them. Boxcars have to flow in and out of the area commensurate with ability to load them. All we are requesting is a continual flow of boxcars so the lumber can be loaded and shipped out to the markets of North America, instead of letting the economic activity of the area to slacken off.


Mr. Roland Godin (Portneuf):: Mr. Speaker, as all other hon. members, I have looked at Bill C-164 which reminds

us that our railway companies operations, particularly those of the Canadian National, are not self-financing.
Before coming to the House in 1965 and during the first years of my mandate, I thought incompetence was causing this unpleasant situation. That is indeed what one is led to believe upon analyzing only the official figures the Canadian National releases in its annual report. However a comparison of those reports made me realize that Canadian National administrators are highly competent people and remarkable figure jugglers. According to statements by the right hon. Prime Minister (Mr. Trudeau) and many of his Liberal colleagues, the CNR would now have the best administration of all times and our country would never have been so wealthy.
Then, Mr. Speaker, how come a railway company operating in such good conditions does not succeed in making both ends meet? To ask this question is to answer it. It is obvious that the Canadian people are simply cheated by such statements. If CNR administrators were badly paid, one might say: it is our fault. But it is not so, for even the President gets a suitable salary.
Mr. Speaker, it is often said that years follow each other but are very different. This is normal. But it is not normal, in my opinion, that the CN balance sheets are the same every year.
In 1962, the CNR had brought forward a balance sheet that shows a deficit of about $6 million, while working expenses had been reasonable and the gross national production amounted to $40 billion.
In 1971, while the gross national product had increased to $93 billion in an inflationnary time, after moving twice as many goods as during the period 1962-63 at rates that had also doubled, the Canadian National again succeeded in providing us with a table indicating $24 million deficit.
Mr. Speaker, this year, a particularly prosperous year under a Liberal administration, their financial statement indicated a $17 million deficit. For instance, if we refer to the statement of 1968 when the CNR stole $371 million from the fund of its retired employees, we find also a table showing again that the deficit was about the same as this year's.
If misappropriating $371 million is not reflected in the assets or liabilities of a balance sheet, I feel we should ask ourselves some questions. And I think that an investigation conducted by the RCMP will give an answer to our questions. If the Americans treated themselves to a Watergate, we, Canadians, should treat ourselves to the same. If we consider the financial statement of the CNR for the fiscal year 1970-71, we will see about the same deficit, that is $29 million. However, we all know that it was not a lucky year but instead a derailment year. I would like to quote from an Appendix to the Debates of the Senate, on Tuesday May 15, 1973. They give a list of derailments involving expenditures of $50,000 or more in 1970-71.
After adding the expenses incurred as a result of recent derailments throughout Canada, either in the Atlantic, St. Lawrence, Great Lakes, Prairies, Rockies areas, the total amount of $13,692,000 is reached and this only in accidents amounting to $50,000 and over. It is rather strange that we find almost the same causes for derailments in all provinces. We note that in the St. Lawrence area as in that of
October 23, 1973

the Great Lakes, the Rockies or the Atlantic, they were caused by broken or burnt axles.
Now it is evident that from Vancouver to Halifax, axles require the same care; they must be lubricated. No private railway would allow its cars to run with non-lubricated axles. If it is not done today it is because the mechanics responsible for the maintenance of trains have been transferred; they are fewer. If you have the opportunity to talk with one of them, he will tell you: I did all I could but the train left before I had time to check half the axles. That is why the axles burn, the trains derail, which involved losses amounting to $13 million in 1970-71.
Here is another serious cause of derailment which is often referred to in the report I already mentioned: rail breakage. Rail breakages occur in the Atlantic area, in the Rockies and in the St. Lawrence area. Finally, the cause is always the same: the reduction in the number of linesmen and railwaymen. The number is almost always the same by shifts, but the distance that each shift must look after has tripled; therefore, they are unable to do their job adequately. These men work at the end of their rail section when they know there might be someting urgent they should do at the other end. They are often unable to get there because some urgent matters have to be attended to at a given place. When there are 40 to 50 miles of track to maintain, obviously, if they take two days looking after 15 miles, there will remain 30 which will not be maintained and then accidents may happen.
Some regional superintendents have obtained their position through influence and unfortunately, these fellows are two often unaware of the work required for the maintenance of railway tracks. For several of those who have reached the top without any effort, rails, railways, all that just happened. So, to them, something that just happens to be does not require any maintenance.
For reasons of economy, I repeat, they have laid off railwaymen, brigades have been reduced as the French would put it, which has led to the difficulties that we are experiencing now, namely too many accidents, and passengers who still have the courage to use this mode of transportation are risking their lives.
Besides, a great many more inspectors were appointed. Even station masters are supervised. An inspector used to look into the cash box which was under the station master's care. As its contents range from $100 to $300 this was not so serious and it was checked once a year. Even if these station masters have sometimes paid $10,000 to $15,000 in to the retirement fund, we have reached the point where these men are mistrusted and an inspector visits the stations about once a month so as to check their contents. Mr. Speaker, I repeat that the number of inspectors has increased so much that we are now under the impression that the Canadian National Railways have now become a second Canadian Senate, with the difference that many of these inspectors do not know each other. Then, you will say: They may not know each other because the country is so big. But it is not because of the size of the country; their number is now so great that if they knew one another, they would be ashamed to go out and do the work that is requested of them. Even in the city of Montreal, they are now spying on each other, apparently without knowing anybody.
Canadian National Railways and Air Canada
Mr. Speaker, last spring, I gave to all the members of this House a letter sent to me by a group of railroad workers. This group did not want to sign the letter. I learned the author's name three weeks later because Canadian National employees are scared, it seems. I would like to quote from this letter which I finally gave to all other members after having it translated for the benefit of English-speaking members. This letter said, and I quote:
Our Members of Parliament have taken an oath to serve the interests of Canada, therefore of the people in general.
The Canadian National, a Crown corporation, seems more than sick in its administration having become the property of a small group of about 2,500 officers who eat up and suck the receipts- company cars, paid expenses-so in order to try and cope with that plague of small bosses an attempt was made to cut down on indispensable people at lower echelons, namely linesmen, car inspectors, station masters, with the result that we know: accidents over accidents. And who pays the bill? Naturally, the bill comes back before Parliament. Even Canadian National officers can boast that our Members of Parliament are in Ottawa only for a while and that they are there to stay.
Furthermore, that group points out that their unions show signs of advanced decay. Why are they trying to protect companies to the detriment of employees? Then they come up with this answer: We have seen the acceptance of new pension plans that presently benefit only those who have 45 to 50 years of service and others to come in 25 or 30 years. What about those who have retired and are being prematurely pushed into the grave through all sorts of devious means? Furthermore, a train accident brings around seven or eight white hats and three or four workers who have their fill with that disgusting administration.
Union leaders are at the mercy of railway companies to ensure survival because those companies suck the pay cheques of the employees to pay the big union leaders. That is why they became weak before the railways and an important group of experienced workers suffer so much.
Why did the vice-president of the Canadian National want so much to discuss pension funds alone and behind closed doors with the unions?
A royal commission should be set up to investigate the relations between those gentlemen. Why is it necessary to die before you have a retirement to live?
Why did a station master retire a few years ago with an annual pension of $1,200 after 47 years of service, while the former president, Mr. Donald Gordon, retired with a pension of $20,000 a year after 15 years of service. Why?
Only the passing of an act could do justice to the needy railroad employees whose services are no longer required, unless they are forced to start all over again. What happened to our oath?
They call on hon. members and try to gain their support.
Moreover, Mr. Speaker, many CNR employees sent us their comments about their superannuation fund. Compared with the possible retirement of Quebec Provincial Police employees, for instance, where a person is eligible for superannuation after 25 years of service, CNR employees are seeking voluntary retirement after 30 years of service. Canadian Armed Forces personnel are eligible for pension after 20 years of service.
7146

October 23, 1973
Canadian National Railways and Air Canada
I repeat, 20 years of service in the Armed Forces and 25 years in the Quebec Provincial Police. It is evident that the same privilege could be given to the railway employees who, in short, were also in the employ of the public service, night and day, during all their working life.
The old system under which the total pension could be paid only at the age of 65 is outmoded, in fact the majority of railway workers die before they reach that age.
A few days ago, the booklet entitled In memoriam, published this month by the railway companies, showed us that the people who are still working are right, as it gives a list of the deceased. The first nine on the list, who died in recent months, were aged 55, 52, 54, 49, 58, 53, 55, 45 and 51. The last six on the list were aged 45, 51, 55, 54, 57 and 51.
The CN financial statement is also proof that the employees die rather young. Indeed the 1971 statement reveals that only $75 million were paid to retired employees while during the same period, the Canadian National collected $261 million for a pension fund of $1,454 billion.
Mr. Speaker, I think those employees toiled hard throughout their life; we are happy to support them in their claims and I believe they are right. Considering that the Montreal stevedores who were laid off last year got their full pension because the company could do without their services, I suggest similar measures could be applied in some cases of dismissals or transfers within the Canadian National.
It is obvious that the CN needs money and this bill proves it. However, we should support this bill on condition that we really agree that the Canadian National should get the credits they are asking for, provided they promise to look after all employee applications.
[ English]


Walter C. Carter: Mr. Speaker, I should warn you that because I represent a part of Canada where we have some very serious transportation problems, especially in connection with the CNR, I shall forgo the luxury of speaking extensively about what is happening in the rest of Canada. Other hon. members who have spoken before me have done a good job in pointing out to the House some of the transportation problems which they are facing in their areas. It is rather strange that the previous speaker, the hon. member for Skeena (Mr. Howard) who represents one of the most westerly parts of this country, and I, who represent the most easterly part of Canada, both have problems in our areas that are pretty well the same. It seems strange also that the culprit in our area in the east is the CNR and that in their case it is CN and the CPR.
The other day the Leader of the NDP (Mr. Lewis) replied in his usual eloquent way to the statement made by the Prime Minister (Mr. Trudeau) on his return from China and said that Canada has a history without any colonial connections. He said that Canada had no connection with colonizing people or exploiting them to blacken the pages of its history. I am sure that is correct in the context in which the statement was made, but I am afraid that in certain parts of this country this government is guilty of the worst kind of colonialism which is exempli-

fied by its attitude toward the Atlantic area and the other underdeveloped parts of Canada.
I cannot think of any other factor that has played a more regressive role in the development of eastern Canada, particularly in the development of my province of Newfoundland, than the policy of the CNR, or, maybe I should say, the lack of a policy on-the-part of this government in matters of transportation. We all heard the Minister of Transport (Mr. Marchand) give the Newfoundland members advice some weeks ago when, in answer to questions regarding the ferry service connecting Port aux Basques with Newfoundland, he asked: "Why don't you learn to swim"? Of course, the minister must realize that that kind of advice does not go down too well in Newfoundland, nor would it go down well in any part of Canada, I suppose.
In Newfoundland we have a very serious situation at present because of the freight backlog that has now piled up in North Sydney, despite the fact that the minister elects to ignore this and tried to give the impression that all is well. This backlog does exist, and it exists at the expense of people living in Newfoundland who are now paying more for their food and other necessities of life than are any other people in Canada. The transportation system is such that it contributes to a large extent to our having to pay more than any other province for our foodstuffs, our building materials and other necessities. I have always held the view that the 90 miles of water that separates our province from the rest of Canada should be treated as any other part of the Trans-Canada highway, because to us it is the same as any other 90 mile stretch of that highway. Therefore, it is my feeling that it should not cost us any more to travel that 90 miles, or transport goods over that 90 miles, than it would cost people living in other parts of Canada to transport goods and themselves over a comparable distance of the Trans-Canada highway.
This afternoon during the question period I asked the Minister of Transport about the Argentia-North Sydney ferry. The minister complains that Canadian National does not have sufficient ships to move the goods bound for Newfoundland that are now stockpiling in North Sydney. He complains that there are inadequate storage areas and not sufficient facilities. At the same time, Mr. Speaker, there is a ferry service operating out of Argentia, which is part of my riding, to North Sydney and back, but it operates only four months of the year. There, we have a multimillion dollar facility that is lying dormant eight months of every year.
I contend that Canadian National, and of course the Department of Transport, should give immediate consideration to the possibility of having that ferry service operate on a year round basis. Not only would that have the effect of providing additional, badly needed service to the province, but it would also have the effect of eliminating some of the heavy traffic that is now using the Trans-Canada highway in Newfoundland, turning it into a very dangerous highway. I contend that freight bound for the eastern half of the province should be rerouted through St. John's, and Argentia.
October 23, 1973

Another important factor in our province is the coastal fleet. I wish to take a few moments to explain what it represents to us. We have 7,000 miles of coastline around the province of Newfoundland and Labrador. Along that coast we have approximately 1,000 settlements, some small and some large. Under the Terms of Union in 1949, the Canadian government undertook to provide good passenger and freight service to and from our province and around our province. Although both Canadian National and the Minister of Transport will deny this, we now find that there appears to be a move afoot to phase out the coastal service which looks after the transportation needs of people living in a large number of these 1,000 communities that dot the coastline.
Since 1956, eleven ships have been discarded and taken out of service completely, with only three replacements being provided. This would suggest that Canadian National is now about to do the same thing with our coastal fleet service as it did with our railway passenger service in 1969 and 1970. Canadian National is now subcontracting some of this work to private ship owners. Of course, in this way control over the quality of service is lost by Canadian National.
Under the Terms of Union the federal government has a definite obligation to ensure that this service is maintained. Canada obligated itself to provide an adequate passenger and freight service to and from our province. At that time we were not dealing with Canadian National. Now, the Minister of Transport tries to shed the government's responsibility, pointing to the inability of Canadian National to provide adequate ships. I repeat that the people of Newfoundland did not negotiate with Canadian National; they negotiated with the Canadian Government.
We negotiated with the government of Canada which at that time gave an undertaking-not subject to the whims of Canadian National, not subject to there being no strikes by Canadian National, and not subject to the dictates of Canadian National,-but that the government would provide a first rate service to our province to move passengers and freight. I contend it has fallen down on that obligation because the service we are now getting is anything but adequate. Indeed, it is very inadequate.
It is becoming more obvious to those of us who live in the so-called have-not areas, the disadvantaged, underdeveloped parts of this country, that we are supposed to continue to be the tools of Upper Canada, that we are not supposed to become developed to the point where we might provide competition to other parts of Canada which traditionally have used the Atlantic area as a dumping ground for their goods. This is a sad commentary on Confederation, that certain parts of Canada appear to be kept underdeveloped, appear not to be encouraged to become developed simply because of the whims of the vested interests and the power brokers in central Canada, particularly those in the federal cabinet.
Before closing I have a few other points I wish to mention. I wish to refer specifically to the Canadian National dock operation in St. John's. I understand that this is the only operation of its kind under the jurisdiction of Canadian National. The reason for that is that Canadian National inherited the dockyard at the time of Confederation. St. John's, the riding which I have the honour to
Canadian National Railways and Air Canada represent, could very well become the service station of the Atlantic so far as shipping and ship repairs are concerned. Our position on the Atlantic lends itself completely to our becoming that, but despite the great potential of the area and of the dockyard, very few improvements have been made at the dockyard since Confederation. Machinery has become obsolete. There has been no worthwhile expansion, or extensions, no great effort by Canadian National to get business for the dockyard, or to advertise its services and its strategic position. Consequently, I fear that it will eventually be phased out.
We find that the morale of the people working there is very low. They are unhappy because, as the hon. member for Skeena said earlier, there appear to be more chiefs than Indians. If you walk through this operation you see a lot more white hats than yellow hats on the job. The workers are becoming unhappy and disenchanted. This is unfortunate because the dockyard represents an important part of the economy of St. John's, of my riding, and of Newfoundland in general. If the government and Canadian National do not inject new life into this operation, advertise its potential and capability, I am afraid it will disappear. This will be unfortunate because of the serious effect it will have on the economy of the province, and particularly on the city of St. John's.
In the terms of union between Newfoundland and Canada, the province undertook to do certain things. We have not reneged on our commitments, Mr. Speaker. The Canadian government undertook to provide certain services, and I contend now that it has reneged, particularly in respect of its transportation policy, to the detriment of the province. Like the other maritime provinces, Newfoundland cannot achieve its true potential without an efficient, modern transportation service. It can never hope to attain the status of a "have" province unless and until the federal government recognizes its responsibility as far as transportation is concerned. The situation is unfortunate and I suppose it prevails in other parts of the country as well.
I am not suggesting that ours is the only province with transportation problems or the only province that has a fight with Canadian National. I have listened to other members so I know that the same situation prevails pretty well right across Canada. But, Mr. Speaker, our province depends very much on a transportation service. It is an island, so we cannot jump in our cars in St. John's and drive to Toronto; we have to contend with the 90 miles of water that separates Newfoundland from the mainland of Canada. That is why I think this government has a very special obligation to our province to provide a fast, efficient, modern transportation service. The gulf which separates our province from the mainland must be taken into consideration.
I do not think it is enough for the Minister of Transport to shrug his shoulders and pretend that all is well or just tell Newfoundlanders that they should learn to swim and stop complaining. The suggestion made by the hon. member for Skeena that members of the Canadian Transport Commission should leave their ivory towers in Ottawa and get around the country to see what is happening so that they can deal with some of the problems is a good one. I would welcome the opportunity to greet the
26635-22}

October 23, 1973
Canadian National Railways and Air Canada Canadian Transport Commission in Newfoundland and let them have a firsthand look at the problems there. They could see the problems created by the removal of our rail passenger service. They might even be so brave as to ride on the CN bus service. I do not think they would last the journey, but I should like to see them try it.
Again, Mr. Speaker, I should like to invite the Canadian Transport Commission to Newfoundland and Labrador to see for themselves the problems with which we have to contend. If they would do, that I am sure they would be able to recommend to the minister and the government some major improvements in this country's transportation policy as it applies to Newfoundland.


Mr. Keith Taylor (Churchill):: Mr. Speaker, this is the first opportunity this House has had to discuss Bill C-164 and more particularly the Canadian National Railways and Air Canada since 1970. As a new member I am not familiar with the ways of this government but I find their leadership in this House and the leadership they have provided to the Canadian National Railways and Air Canada is nothing short of appalling and deplorable. The government's lack of concern is evidenced by this particular bill. If this is a sample of the leadership they are providing to the executive of the CNR and Air Canada, whoever that may happen to be at the moment, I am sure those executives must be as frustrated and confused as is this House concerning the future of this country's transportation system.
Like most people in western Canada, my hopes were heightened by the press releases from the government early this year in which we were promised certain conferences from which great benefits were supposed to flow. For several days, we watched the ministers on television giving press conferences and issuing statement after statement about what they were going to do to rectify the problems in the west, particularly those relating to transportation. I am sure that any member of parliament from western Canada who had the opportunity to attend any meetings with that group got around to discussing the transportation system and its related problems.
At the conference, the Minister of Transport (Mr. Mar-chand) made various announcements, including what everyone took to be an announcement that there would be a freight rate freeze for at least 18 months. It was not very long before we found that the freeze was not a freeze after all, but merely an attempt at a public relations exercise. The freeze is not there in fact, and, of course, again the announcement has worked to the detriment of all Canadians, and western Canadians in particular.
This bill, Mr. Speaker, authorizes the expenditure by Canadian National Railways and its related systems of some $468 million in the period ending July 1, 1974. That amount will be added to the current $1.8 billion in capital debt. The bill further simply gives a blank cheque to the government to pay all the operating deficiencies of the CNR during that time.
I do not know what happens as far as these expenditures are concerned and will be interested to find out the details in committee. We are looking at a bill which authorizes the expenditure of some $225 million in the year 1973, and yet there are only two months of that year left and the bill

still has not gone through this House. I am sure it is evident to everyone that it is not because members on this side did not demand that this matter be referred to the committee to be dealt with as speedily as possible. Here we are, with the government bringing to us an authorization to spend $225 million after the time for spending it has expired. We do not know whether the money has in fact been spent without the authorization of parliament or whether it is awaiting the approval of this House. It is a serious matter and shows the total lack of leadership of this government.
The same applies to the other expenditures. None of the provisions in the bill indicate in any way what is to happen to these capital expenditures in so far as any attempt at repayment or reorganization is concerned. There is simply an authorization to spend money. Terms of repayment are not indicated. Presumably this money will be added to the already overbearing debt which the organization must carry. That debt will be carried from year to year, and will cost the system millions of dollars in interest, which it must pay merely to carry on from day to day as at present.
As I said, this transport system is vitally important for the economic development of western Canada and for ensuring the day-to-day living of those in western Canada. Western Canadians, every bit as much as others in this country, must rely on an adequate transport system if they are to obtain the necessities of life. Nothing showed the truth of this more clearly than the recent railway strike. The people of many areas were literally at the point of starvation, because they could not obtain the necessities of life. This applies particularly to my area of northern Manitoba. We rely heavily on the Canadian National system. Many localities are served only by that system. True, there is a limited amount of air transport, but its capabilities cannot match those of the railway. These communities rely almost totally on the CN, the only railway operating in the area.
We quickly found that without the railway operating, without our being able to receive vital supplies, it was almost impossible for the residents of certain areas to carry on normal day-to-day living. Someone suggested that they could use air transport; however, as the fuel for the aircraft had to be delivered by rail, it was impossible to use aircraft to any great extent.
I want to refer to some specific complaints about the rail system. Let me say, first, that it is clear that local officials of CN are aware of the problems of the system and are doing their best to make changes which will remove some difficulties. However, the co-operation they have obtained from various agencies, particularly government agencies, is such that they have not been able to do very much for us, even though they are aware of the problem and sympathize with the residents of our area who experience difficulties.
Because the population of my area is limited, the railway has had to make small shipments to small communities. Because of high labour and maintenance costs associated with rail facilities, a number of shipping points have been closed and points to which and from which one
October 23, 1973

may ship are ever farther apart. Moreover, the railway is refusing to accept responsibility for goods shipped to certain areas. It has withdrawn its agents and in some cases, has not provided an adequate replacement service to serve those areas affected. The result is that many shipments are delayed. Sometimes goods must be shipped two or three times before they are received by the intended recipient. This has created hardship, especially as in many cases one can ship only by rail, there being no alternate method.
The situation in the Port of Churchill, in my constituency, is critical. The railway is the only facility for transporting heavy goods. In our case, rail rates are specifically designed to discourage small shipments. In the southern areas where small shipments can be sent by truck or alternate means, Canadian National rates are different. In my area they are such as to discourage small shipments by rail. Because the railway provides the only practical means of transport for the residents of northern Manitoba, they must pay prohibitive rates, the result being almost intolerable freight rate increases which have been imposed in the last few years. However, we have no choice. When you live in the north, you pay and grumble, and that is as far as it goes. You cannot do more.
It is true that the railway serves isolated areas; that is evident if one examines the rate structure that the railway insists on using. Of course, the railway justifies the rate it charges by saying, even though there is no alternative means of transport, that the rate is competitive. I ask- competitive with what? At one time only the railway served Thompson, Manitoba. Subsequently a highway was built and goods were shipped in by road. Let us compare that community with Lynn Lake, Manitoba, which is about as far from major shipping centres as Thompson is. The result of competition in the case of Thompson was this: freight rates applicable to Thompson, Manitoba, were approximately one half of those applicable to Lynn Lake, where there was no competition. That shows what is happening to our remote areas. They have had to put up with the present state of affairs. Despite the efforts of various groups in the affected communities to rectify the situation, we have not been able to do very much. I think I speak for every member of the House when I say it is high time something was done to rectify the situation. May I call it five o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Hillsborough (Mr. Macquarrie)- Agriculture-Milk subsidy-Reason for delay in application to Prince Edward Island; the hon. member for Assiniboia (Mr. Knight)- Grain-Wheat-Suggested
News Sources Protection Act
change in crop year to equalize payments to farmers who made early deliveries; the hon. member for Peel South (Mr. Blenkarn)-Labour Conditions-Suggested increase in minimum wage.
If being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills. I understand that there is agreement about the order to be considered. Perhaps it could be stated and approved, and we could proceed to it.


Stanley Howard Knowles: Mr. Speaker, as nobody else has risen to speak, may I say that I believe the agreement is that we proceed to Order No. 7, the bill in the name of the hon. member for Timiskaming (Mr. Peters).


Mr. Deputy Speaker:: Is this agreed?


Some hon. Members:: Agreed.



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Arnold Peters (Timiskaming) moved: that Bill C-41, to provide for the protection of news sources (press privilege), be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, never in history have the democracies depended so much on the dissemination of news in order to protect democracy. The United States for many years followed the English tradition of permitting freedom of the press and freedom of speech. The United States has protected that freedom by embodying it in the first amendment of its constitution. The subject was considered of such importance that it was embodied in the first amendment. Until recently, the United States courts always honoured the concept of confidentiality of news sources.
In Canada, this subject has not been as important as it has become south of the border, perhaps partly because of our colder climate and partly because or our less vigorous nature. I hope it also has something to do with the honesty of the Canadian people, something which may not be shown by our southern neighbours. However, Canadians should be no less vigilant in protecting their sources of news than the American congress was with its first amendment. This protection has been challenged in recent years. There are now 55 bills in congress, the purpose of which is to protect news sources in the United States. This situation results from a recent split decision in the Supreme Court which upheld the contention that newsmen must disclose the source of their information.

October 23, 1973
News Sources Protection Act
Only this month there were news leaks in the United States indicating that an investigation was being made into the financial dealings of the vice-president of that country. Those news leaks which were presented to the American public by a number of newspaper reporters resulted in the hastening of the case against the vicepresident which subsequently culminated in his resignation from the second highest office in the United States. Possibly we should look very carefully at what is happening in Canada.
If we had the type of newspaper reporters in Canada that there are in the United States, I am sure they would be asking some very interesting questions about the CNR method of financing. One reason this matter has not been before the committee for a considerable period is that the Minister of Finance (Mr. Turner) fired the auditors for the CNR. These auditors were appointed by the previous Minister of Finance. Without much explanation in the press or in this House, those auditors were disposed of and no new auditors have been appointed. Although there has been a lot of discussion, it is interesting to note that the CNR has not been granted any money by this parliament for the past two and a half years. This has never happened before.
In the United States, some newspapermen would have looked into the reasons for the firing of the old auditors and possibly the reason for the appointment of the new auditors of CNR. Obviously, someone made the appointment and obviously someone disagreed with it, but no one is looking into the reasons. Possibly this raises the question of whether we have a really responsible press in Canada. I do not know whether this is the fault of the newspapers or the reporters.
It has been a long time since I have heard of the Toronto Star hiring a train or plane to go somewhere to get a story. Although there has been a fairly active war going on for some time, with the exception of reporters in Tel Aviv, there have been no reporters in the Arab countries. Possibly the newspapers are not interested in sending reporters. It is interesting to note that neither the newspapers nor the CBC have seen fit to give actual reports from the battlefield. Maybe we have a different kind of press and what is happening in the United States cannot be duplicated in Canada. Possibly it should be. I think all members will agree with members of the United States senate and congress that one of the fundamental rights that must be maintained is to allow the press to make investigations. Obviously, they must have some source of information and that information should be protected.
Not too long ago in Canada we had a tempest in a teapot. It involved newsmen who over-reacted to police guidelines. As a result of a meeting, the Canadian police association decided to approach the heads of major newspapers. Most of them, certainly the Canadian Association of Broadcasters, agreed the police should have some say in what news is made public and that the police should be in a position to restrict the publication of any news. This caused quite a fuss. It is interesting to note that initially the Globe and Mail thought this was a good idea. There were a number of faults with the way the FLQ situation in Quebec was handled. As a result of that, it was agreed

there should be some co-operation between the police and the news media so there would be no interference with the police in the discharge of their duties. It was not very long until the newsmen had second thoughts.
Mr. Pierre Juneau, the chairman of the CRTC, had some thoughts on the matter. He decided to investigate the Canadian Association of Broadcasters submissiveness to the directive suggested by the chiefs of police. It is interesting to note that in the discussions that took place, no one pointed out that the public have a right to know what is happening. There was agreement that the police had the right to decide what news should be published in the public's interest. I suggest this has not been to the advantage of the public in other countries.
In the case of former vice-president Spiro Agnew, he advised his lawyers to serve subpoenas on the attorney general, officials of the justice department and a large number of newspapers and reporters. I wish to quote what one newspaper reporter had to say:
Executives of news organizations whose reporters were subpoenaed yesterday unanimously condemned the action, charging the subpoenas violated the Constitution's First Amendment guarantee of freedom of the press and that the disclosure of confidential sources would cripple reporters' ability to gather news.
Other comments were made at that time. However, it is interesting to note that the police, the justice department and others all co-operated in dropping many of the charges against Spiro Agnew in return for his resignation as vice president and the fact that he repay some of the money he owed the tax department. In the United States the situation will probably result in either the assassination or the resignation or the impeachment of the President of the United States-or hara-kiri. Public knowledge of Watergate and the surrounding circumstances only came about because sources were available to the press, which, in turn, published statements containing information which was already available to many of the senior people in the government. The consequence was a hue and cry and the development of a public opinion which totally rejected the type of action which was being taken as exemplified by Watergate.
I could refer to a number of other situations which have developed in the United States, including the Pentagon papers which were exposed originally by the press, much against the wishes of the Justice Department. People have gone to jail because of their refusal to disclose sources of information in this connection. The same is true with respect to a number of other important documents.
In the course of his job, a reporter for any of the news media, whether radio, television, newspapers or periodicals, would, if his work was being done properly, be charged by his editor with getting a story and developing news. He would not merely be asked to report superficial events, as happens most of the time in Canada today. He would be instructed to develop this story himself. In so doing, he would find it necessary to search out a number of news sources, and these sources, I suggest, would become very scarce indeed if they thought that the reporter to whom they gave information would say, under pressure in court: Well, I do not want to go to jail, so I will name my sources as being so-and-so.
October 23, 1973

It is obvious, therefore, that if society is to benefit from in-depth reporting, reporters must enjoy the right to withhold information concerning their sources. Editors of some of the largest newspapers in the United States are saying that one of the fastest ways of removing the problem which has arisen in that country is to allow a large number of their reporters to go to jail. They believe the reaction from the public would be strong enough to change the present state of affairs. I could list a number of cases in the United States of reporters being sent to jail for refusing to reveal the sources of their information, cases involving such things as fraud in connection with the development of parks, cases where commissioners and other elected officials had been guilty of taking bribes.
There is, of course, the recent case of Spiro Agnew, who had taken bribes, and the indication the public has received in the last day or two that President Nixon may have received a political pay-off for allowing the price of milk to rise in the United States, not to mention the pay-off he may have received for allowing Hughes to develop gambling casinos. Hon. members may recall investigations by newspapers into numbers rackets, into the Mafia, into the wholesale importation of drugs from Mexico. In this last instance the police were able to secure a jail sentence for the reporter concerned because he refused to disclose the source of his information.
It seems to me we are seeing the press in the United States acting in a much more responsible manner than one would have thought possible. It was not Congress, it was not the judiciary, It was not the CIA or the FBI which broke all the major stories involving corruption and other acts which were placing democracy itself in jeopardy. It is the press which made these disclosures, resulting, in many cases, in the arrest, or, what is more important, in the elimination from office of persons whose operations, if continued, might eventually prevent democracy from functioning.
In Canada, too, there is a crying need for reporters who set the highest standards for their work. Maybe we should examine the performance of the press in Canada. I certainly give the CTV full credit for initiative in a recent venture. I think what they were doing was trying to force members of my party, who are probably more willing to undertake crusades than others, to do something about a situation which those responsible for the program believe is getting out of hand in Canada, a subject which parliament has not really considered very closely or intelligently.


Stanley Howard Knowles: They bungled it.


William Arnold Peters: They bungled it, but I give them full credit for having tried. With the Conservatives, I imagine they did better. But that is just a guess.
There must be some investigative body working to see that democracy functions in the best possible manner. I do not believe the press in Canada has played such a role for a number of years, but I am as hopeful as are, I am sure, all members of the press and all members of this House that reporters and the news media in general will continue to develop in the field of investigative journalism so as to bring about a strengthening of the democracy upon which
News Sources Protection Act
we depend. In a democracy, an informed public is a necessity, and if we fail to ensure the provision to the Canadian public of the information and knowledge necessary to enable each citizen to form his views in an intelligent way, democracy will quickly find itself in difficulty. No doubt there are some forms of government which cannot tolerate an informed press. But we in Canada, attached as we are to democracy, need a free and informed press and, therefore, to some extent, a protected one.


James Sydney Clark Fleming: Mr. Speaker, I rise to speak to this bill having spent the first 11 years working within our news system as a journalist in the newspaper, television and radio media. I covered local politics and had my share of so-called "leaks" or inside information. I worked the past five and a half years, until becoming directly involved in active political life, as a news commentator and had the experience of receiving information with regard to which certain pressure was placed on me to reveal my sources. There was, however, no dramatic showdown when I did not wish to do so because I felt it would jeopardize the people who had given me that information which I felt should be made public.
Having said all that, however, I must oppose Bill C-41 because I believe it is not necessary in our system as it functions today. I believe that, rather than helping the media it would be dangerous to the quality of the products of our news media. I believe that if this bill were passed it would serve the reverse of its well-intentioned purpose. As the hon. member for Timiskaming (Mr. Peters) mentioned a moment ago, the news media must have the wherewithal to garner its news and to make it public. I suggest that if this bill passed and became law, and protection of source were given directly in the law, it would not in fact give them that wherewithal. It would put the wherewithal under great question, thus making the honesty and veracity of the press and the media questionable.
I think the issue can be divided into two parts, namely the public interest in the due administration of justice, and secondly, the public interest in the free and unrestricted flow of information and in the accurate reporting of this information. With regard to the former, that is the public interest in the due administration of justice, the free and unrestricted flow of information has prevailed until the present. The common law recognizes today that there is no privilege for newsmen. The common law principle is that there should be no general privilege of confidential communications, with very few basic exceptions. These exceptions are solicitor and client relationships, the Crown, and spouse privileges. These are the carefully reasoned exceptions to this rule. The four main common law jurisdictions continue in consensus on this point, subject to legislative amendments, such as the one we have before us today.
May I start by comparing some other jurisdictions with which Canada has a great deal in common. I begin by presenting the experience in statute law and in common law in England. The United Kingdom Law Reform Committee in its 16th report on Privilege in Civil Proceedings of 1967 stated the desirability of keeping the number of recognized privileges at a minimum, and added that the better solution is to grant a wide discretion to courts to

October 23, 1973
News Sources Protection Act
permit non-disclosure "where disclosure would be a breach of some ethical or social value and non-disclosure would be unlikely to result in serious injustice in the particular case in which it is claimed". The common law in Britain has always upheld such a discretion in the judge to aid the reluctant journalist.
The case law in England is founded in three cases arising out of the Vassal spy scandal of 1963. In all three cases, the courts held that the journalists could claim no privilege, although in particular cases public policy might allow a court in its discretion to grant a journalist immunity. Therefore, the power lies with the court to consider particular circumstances. But always the weight lies not with the special privilege to be used generally by journalists; the weight lies with the law and the protection of society.
In Australia the leading case in McGuiness v. Attorney General of Victoria of 1940. The High Court of Australia unanimously refused to recognize any claim to privilege by a journalist. Dixon J. spoke of, "the necessity for discovering the truth in the interests of justice", and said the rule was inflexible that no mere obligation of honour could hinder the public policy inherent in requiring answers in the witness box. So there is the same treatment for everyone. I should like to argue as I go on that the best free press is the one that falls under the same guidelines and rules as any other individual in our society.
In the United States, 15 states recognize a privilege of non-disclosure in favour of journalists. These are the only exceptions for journalists in the entire common law world, and before using them as precedents one must ask, firstly, whether there is a difference from other jurisdictions in government structure. A wholly distinct executive may require more informal checks on its functioning than does the executive in a parliamentary system.
I do not want to go into the complications of this particular situation. We are all aware of the Watergate affair and of the problems in the executive branch. I am sure we have all had discussions as members of parliament with our own constituents and among ourselves in regard to the great feeling of satisfaction we have that we follow the British parliamentary system rather than the split executive-legislative-judicial system of the United States. Certainly, I can see in the United States some difficulty, which the first amendment was an attempt to cope with, because of the power that is held by the executive branch alone.
That is not a problem that we have here. If there is any supicion here that the person at the helm is not releasing information or is withholding facts, the pressures within the parliamentary sytem are such that this person can be forced into resignation because of rebellion within his own ranks, or he could be forced to give the facts. That same pressure cannot be applied in the same way in the United States.
The second situation in the United States is that where statutes conferring a privilege do not exist-that is to say, in the 35 remaining states in the United States and in the federal courts-the courts in the United States invoke the public interest in the due administration of justice in disallowing claims to journalistic privilege. The courts hold that this interest prevails even over the constitution-

ally protected freedom of the press, although such disclosure may impair freedom of the press.
Let me now come to the situation in Canada. There are two very important points to bear in mind. The basis of these points is that this question has been given very deep thought. It has been gone over in recent years and the conclusions are that this kind of act would not be in the best interests of the country, the press or our laws.
The report of the Ontario commission on civil rights, 1968, recommends that no changes be made in the common law position on the ground that "injury would be done to the administration of justice". The report notes favourably the operation of judicial discretion in this area.
The Senate committee on the mass media of 1970 has recommended that no change made in the common law.
In case law in Canada, the aforementioned English and Australian cases are mentioned. The two leading cases in Canada are Reid vs. Telegram Publishing Co. Ltd. and McConachy vs. Times Publishers Ltd. These cases illustrate that, although a court may relieve a journalist from his obligations to disclose at a preliminary inquiry or examination for discovery, the courts are obdurate in their refusal to grant an immunity at trial. Newsmen, like everybody else, are answerable to the law of the country.
It has not been reliably demonstrated that the absence of a journalistic privilege hinders freedom of information, but if this can be shown in an individual case, then it should be recalled that there is a discretion in a trial judge to grant immunity. Surely that is the answer right there to this whole issue today.
There has been some question in these days of bureaucracy of the press not having a full opportunity, as dedicated or investigative journalists, to get to their sources. If I may say so on an emotional note, over the years, especially during the last two centuries, particularly in countries under tyrannical rule, it has been the members of the press who, at risk to life and wellbeing, have come through with stories which have put pressure upon these nations. It is the tradition of a good journalist to do his very best, with whatever sources are available to him, at risk to his own wellbeing, to make his case commensurate with his principles. Surely, that is one of the great challenges of being a journalist today, one that should remain.
I would greatly fear that, if this kind of special privilege were granted, that challenge would be in jeopardy. No longer would you be sure of the material presented; if the source did not have to be disclosed there would be a danger of not knowing how reliable it was. This would not only depreciate what was found to be credible in the press; it would also depreciate the drive of the newsman at risk to find out the facts.
I should also like to touch briefly on the fact that there is a special lawyer-client relationship. I find no argument with this. Obviously, in order to work in courts and to protect the proper functioning of the judicial system there must be this special privilege. But I cannot see its application beyond an accused having the right to confidentiality with the person who is defending him before the law.
October 23, 1973


Mr. Denis Ethier (Glengarry-Prescott-Russell):: Mr. Speaker, in debating this bill, which I assume is of great importance to everyone in this House and to every Canadian, we are invited to take this opportunity to express our opinions and the opinions of those who elected us. Since this bill suggests that we change or amend the existing law-and I am sure it was introduced after numerous and lengthy interventions by previous members of this House-I wonder if one hour is sufficient time in which to deal with such a bill. Nevertheless, in such a short period I should like to air my views in opposition to the bill.
In a society such as ours the press plays a very important role, even in our parliamentary system. Members of parliament on the government side represent the majority. That is the reason they were called upon to form the government. Members of parliament in opposition represent and defend the views of the minorities. Thirdly, the minorities who have no representatives in this House depend upon the press to defend their views in addition to their duty of informing Canadian citizen of local, national and international events.
At this point I wish to compliment the members of the press for their very precise and rapid system of informing the Canadian people. We certainly appreciate the efforts made by reporters and their informants when we consider the on-the-spot reporting. One might mention the recent Middle East crisis, the Viet Nam war and the Chilean army coup. There is no doubt that press reporters covering

October 23, 1973
News Sources Protection Act
such events risk their lives. This is done for one very important reason-so that the citizens of the country are provided with exact and rapid information. Surely this bill would destroy the reputation for honest and exact reporting held by reporters who take these risks and make these efforts.
[ Translation]
Mr. Speaker, our press corps enjoys at the present time a reputation which is surely the envy of press people in many countries of the world. That is one reason why I cannot support Bill C-41. By giving our support to such an undertaking, I am convinced, Mr. Speaker, that the reputation which our press corps now enjoys will suffer greatly, since, because of existing legislation, the Canadian people are sure of the veracity of any particular report or piece of news.
If we should be irresponsible enough to accept the principles of Bill C-41, it would cast a doubt in the mind of the reader on the truth of reported facts. The reader would perhaps feel free, although without reason, to question this alleged veracity. I say "alleged veracity", for if information sources are not to be disclosed anymore, would it be not possible, even in this country, to see the creation of artificial information sources or of sources entertaining revolutionary ideas, which, under the cover of anonymity, would do irremediable harm to our country or would destroy the reputation of honesty enjoyed by members of the press in Canada.

Another role the press is called upon to perform in our democratic system is to criticize governments in office when the opposition is too weak to offer positive and constructive criticism. May I add that the press performs this function very well in the present situation. Mr. Speaker, you may think I am drifting from the subject, but I wish to establish the important role the press is called upon to perform in our parliamentary system. The existing law is to reassure Canadians that they are honestly informed and that the minority is honestly represented. There is no doubt in my mind that, with the existing law, the information furnished by reporters is of the highest credibility.
Support of this bill amending the existing law would cast serious doubt on the future of the very important role which the press performs in our parliamentary system. Can you imagine a politically interested reporter who would resort to so-called artificial information or, may I say, non-existent sources of information to attack or accuse certain people or parties of wrongdoing just because the law had been amended and the door opened for such practices? For these reasons, Mr. Speaker, I wish to register my opposition to this bill.


Mr. Romeo LeBlanc (Westmorland-Kent):: Mr. Speaker, I can understand the feelings which prompted the hon. member for Timiskaming (Mr. Peters) to introduce this bill but it seems to me that if he wants to protect journalists against some possible abuses, he also opens the door to dangers we cannot ignore.

As a former journalist, I take part in this debate for a few moments because I think that we deceive ourselves enormously if we think the quality of information can depend on some sensational leaks which can occur, by exception, and which would not be the outcome of continued, lasting work.
I think that in many cases information is available. It is sufficient that journalists work on it, that newspaper owners pay journalists well and give them enough leisure time to pursue the information work they want to do. I think that in many cases the judgments we give on some journalists should rather apply to the owners of newspapers who make them work too rapidly and in a way journalists could not accept if we want them to do careful and serious work.
Mr. Speaker, it seems to me that giving to a particular group the privilege claimed by the hon. member for Timiskaming (Mr. Peters) is creating a new category of citizens, and I do not know many professional journalists-and I emphasize the word "professional", because I feel that in that trade one must be professional-I do not know many professional journalists who do not prefer a system under which they have to defend what they write, rather than to take refuge behind some kind of shield known as legal privilege.
Mr. Speaker, that is why I cannot support this bill and I think that on reflection my hon. colleagues will do the same.
[ English]


Mr. Rod Blaker (Lakeshore-Lachine):: Mr. Speaker, I rise somewhat in the same mood of examination of this bill as the hon. member for York West (Mr. Fleming) who spent a considerable number of years in the business of journalism. It has been said that inside every fat man there is a thin man screaming to be let out. Perhaps inside every lawyer there is a journalist screaming to be let out. I might add, therefore, that I spent the greater part of my professional life in law before becoming a journalist, so that I find the bill presented by the hon. member for Timiskaming (Mr. Peters) particularly interesting to me and, I think, to many people including my confreres both in law and in journalism.
If I were to begin an examination of the bill, I believe it would be first in terms of what we expect from our system of justice. It has been mentioned in earlier speeches on this subject that there is a possible, although I believe not a necessary, contradiction between the interests of our system of justice, which requires the full disclosure of truth not only for the benefit of a defendant in a criminal trial but also for the benefit of the public, and the interests of the public which require access to the greatest possible degree of information.
Of course, the bill of the hon. member for Timiskaming bill is intended, and I think would in some measure be successful in that regard, to encourage individuals who might not otherwise be prepared to speak to journalists to do so in the knowledge that they would be guaranteed anonymity and that the journalists in turn could not be compelled in a court of law to reveal their sources of information and the documentation or, as in the most
October 23, 1973

famous case these days, the tapes which go with that information.
We are faced-if I might begin my comments on the bill more along the lines of law than of journalism-with the age-old need to try to combine both truth and justice. While we can easily admit that sometimes justice is seen to be done and yet truth has not been achieved, and sometimes vice versa, none the less I cannot imagine how our legal and judicial system would work well unless we knew we were making every possible effort to bring forth not only justice but all the truth that we can obtain.
We have had many centuries of experience with law, and over the years some very fine minds have developed reasonably good systems which are intended to provide reasonable security and protection of the rights of individuals who are brought before the courts. I am thinking of a particular rule which is hardly ever challenged and is often held up as an example of how the law should work and how justice should be obtained; that is, the rule on hearsay. As a general rule we do not accept the idea that one individual may report on or give evidence as to what somebody else has said, except under very rare circumstances. Yet this bill in some measure is analogous to the concept of creating a class of individuals in Canada who would be entitled and privileged to use hearsay.
This would be in direct contradiction of the laws we have had for centuries. It would also create, as has been mentioned earlier, a special class of citizens of some 2,000 to 3,000 journalists in Canada. These people whom the bill refers to as journalists-I might add, in passing, that I am somewhat concerned about the definition-would be given the absolute privilege of refusing to disclose their sources of information and the documentation related thereto.
The bill, in clause 2, defines a journalist as an employee or self-employed person working in a newsroom in the news service or on the editorial staff. I mention only in passing that there seems to me to be some difficulty with that definition of a journalist. While I realize that a later clause of the bill includes the electronics media, there are a number of people in newsrooms, particularly in the printed press and television newsrooms, who would not qualify under that definition as journalists. If such legislation as this were passed by parliament, we would want to ensure that the definition of "journalist" be much more sharply defined than the one contained in the bill.
I would like to deal for a moment with the absolute privilege which the hon. member for Timiskaming wishes to assign to journalists. Speaking again as a lawyer, let me point out that the privilege which exists between my client and me, as a lawyer, is not for my benefit but for my client's, and it is entirely a matter of his choice whether he wishes to avail himself of that benefit. That privilege exists basically so that he will not be concerned, if he discloses information to me so that I can act on his behalf, that I in turn can be compelled by a judge to give up that information and therefore perhaps prejudice his defence.
That situation is quite similar to what is proposed in this bill with respect to the privilege granted to journalists. This privilege would provide a combination of nondisclosure of sources with an absolute guarantee to any-
News Sources Protection Act
body who can qualify as a journalist that he need not be compelled in any way to disclose even the facts surrounding his undertaking to give that promise of non-disclosure.
I am concerned that the bill as currently drafted might cause a great deal more injustice than the benefits it would purportedly bring to the public by reason of there being additional access to information. There are many examples of this, but they involve essentially a situation where a journalist-admitting that such an individual can be adequately-defined is party to information relevant to either an ongoing or a recently committed crime. For reasons of his own, and without interest whatsoever in terms of the public welfare, such a journalist could prevent this information reaching the police, the court or the judge in time, for example, to stop the commission of a crime.
Again I say that should this legislation proceed, or should this concept proceed into eventual legislation in Canada, as it has begun to in the United States, then I would be most concerned that we define the word "journalist" more accurately and more extensively and, additionally, that we move very carefully to limit this privilege so that it will not interfere with the normal course of justice and with the protection of the public. There is very clearly a signal and a very real danger, as the bill is currently drafted, that a journalist could become party to a crime and, as such, could not be compelled to give testimony, nor would he have to stand trial as a party or associate to that crime.
The theory of the bill creates some contradictions which I feel might not very easily be accepted by most journalists. The hon. member for York West (Mr. Fleming) has already commented that while on some occasions in his functions as a journalist he had given his word of non-disclosure, if necessary he had been prepared to show the courage of his conviction and accept a jail sentence. That may or may not be a particularly attractive way to resolve the problem, but it does raise the contradiction involved, that is, that the question which underlies this proposed bill is, as I said earlier, that of being able to give the public access to more detailed information while at the same time depriving the community and the courts of the same right. In effect, it would deprive the courts of the right to obtain information it may need in the interests of justice.
Again I would say that if a bill of this nature is brought forward for expected passage in this House, it must be clearly understood that its terms should provide the judge with the final capacity in law to determine which is in the public interest and which is in the interest of the journalist and the people from whom he has obtained his information. Right now this bill permits contradiction. There are cases where one can very easily foresee the possibility that the public benefit would be lost, that the injury caused would be greater than the benefit of having this right or privilege of journalists.
I am also concerned with what the bill would do to journalists. This point has been raised before but I think it can well and safely be raised again: I think it is an extremely important one. I have never yet met a man known in journalism as a competent and able reporter and found him to be in support of a bill of this nature. It has been my experience that those who most strongly look for

October 23, 1973
Canadian National Railways and Air Canada the absolute privilege of non-disclosure of sources either have not thought through the dangers of creating a special class of Canadian citizens or perhaps see the possibility of an exceptionally easy way, an exceptionally simple route out of admission of error, out of their own admission of sloppy reporting, out of the admission of conjecture, by simply saying they have an undisclosed source, they shall not disclose that source and they cannot be compelled to do so. I think we would lose, again, the benefits we might achieve by giving up the right of the journalist to give testimony in court, and we would exchange for that the expectation that there would be at least some journalists who would completely abuse the privilege.
I would refer to the practice of recent years known as investigatory journalism, where in effect we see a journalist acting as a public prosecutor. The defendant seems to be an individual who is on the grill or who is being interviewed, and the judge is apparently the mass of the public. That constitutes something very close to a kangaroo court. Whether that trend toward investigatory journalism will continue or whether the extremely heavy expense, of newspapers in particular, pursuing it will prove worth while in terms of the publisher's interests, I do not know; but, hopefully, in the years to come journalists and publishers will come to recognize that the highly refined system of our law and courts, with prosecution, defence and judge, cannot be replaced by a one-man fringe show.


William Arnold Peters: That has not been true in the United States.


Roderick Blaker: With respect to the hon. member's comment about the United States-


Mr. Speaker:: Order, please. I regret very much having to interrupt the hon. member who has the floor, but the hour appointed for the consideration of private members' business has now expired.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-164, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system and Air Canada for the period from the 1st day of January, 1973, to the 30th day of June, 1974, and to authorize the guarantee

by Her Majesty of certain securities to be issued by the Canadian National Railway company and certain debentures to be issued by Air Canada, be read the second time and referred to the Standing Committee on Transport and Communications.
Charles Keith Taylor: Mr. Speaker, I should like to make a few comments concerning the rates charged by Canadian National Railways on their line into Churchill. This afternoon my comments concerned some of the rates, but another factor that militates against the use of the facilities at Churchill is the recent practice of the CNR in going to a cubic rate as opposed to a straight poundage rate. The effect of this method of calculating freight rates has been to double, or triple in many cases, the rate that would otherwise be charged by the CNR. Anyone who knows anything about freight rates realizes that when you are dealing with rates on a cubic basis it is almost impossible economically to ship bulky items. Things like boats that are vitally necessary in the tourist industry such as we are hoping to develop in the north are bulky and the freight rates become almost prohibitive.
We have had many discussions with the CNR on this matter and, of course, the answer always is that the act which governs them makes it absolutely essential that this form of charge be levied and collected. None of the local officials will give any hope of the rates being changed. It is certainly in the vital interest of anyone involved in the tourist industry in northern Manitoba that something be done about this rate which, as I have said, is almost prohibitive.
As I mentioned earlier, Mr. Speaker, the Canadian National Railways is the only means of transportation to the port of Churchill. If we are to develop Churchill, and I certainly hope that will be the case, it is absolutely necessary that the CNR adopt rates, attitude and policies which will encourage such development. All the freight to and from western Canada which goes through the port must use Canadian National Railways. The experience to date is that these rates, and these rates alone, in many cases make it almost impossible to use the port of Churchill as a means of shipping goods to and from the rest of Canada, particularly western Canada.
I should like to refer to some of the rates mentioned in the report of the committee on freight rates, published by Norman Regional Development Inc., in December, 1972. This is a Manitoba organization set up to study freight rates particularly in northern Manitoba and with reference, of course, to the port of Churchill. The commodity rate for shipping to Regina from Churchill is $126 per 2,000 pounds for 844 miles. From Montreal to Regina the freight rate is $82.20 per 2,000 pounds for 1,711 miles. So the CNR charges $43.80 more for 867 less miles. As far as machinery is concerned, between Churchill and Regina the rate is $56.80 per 2,000 pounds for 844 miles, and from Montreal to Regina the rate is $96.80 for 2,000 pounds for 1,711 miles. In this case the Churchill rate is $40 lower. At the Montreal rate per mile, the rate to Churchill would be $47.75, which would amount to a further saving of $9.05. Let me quote the rate for automobiles sent to Winnipeg from Churchill. The rate is $144 per 2,000 pounds for 978 miles. From Montreal the rate is $76.80 per 2,000 pounds for 1,354 miles.
October 23, 1973

Thus, the CNR quotes for Churchill $76.20 more for 376 fewer miles.
X0)
It is this type of policy which is at the root of complaints of those who are actively involved in the promotion and development of the port of Churchill. If the rates were fair and equitable they would make Churchill the most competitive port for shippers using western Canadian destinations. Yet because of the existing freight rate structure, the main reason for our difficulties, this is not the case. With present rates we find that shippers are reluctant to use Churchill.
Many developments are taking place in western Canada which affect the port of Churchill. I think the CNR owes a duty to all western Canada to review its freight rate structure and give relief to present users of the port in order to encourage its greater use. I have listened to various ministers of the government making excuses as to why the port is not being used to greater advantage. If they were to take a good look at Churchill and actively promote its development, they would not find any difficulty in convincing customers to use the port. Despite the policies of the government, many people are interested in using the port of Churchill.
The minister responsible for the Wheat Board, who is present in the chamber, made a great to-do in announcing that the Soviet Union had shipped wheat from Churchill for the first time. Anyone who has been associated with the port knows that was not the first time this had happened. It was merely another attempt on the part of Soviet authorities to use their know-how in making further use of that port with which they are familiar. They are more familiar with the conditions around the port than we are, and are better able to cope with those conditions than we are. The technology is there; it is the willingness to use the port that is not there. If it were, the port could be developed to handle a much greater capacity.
As I said, despite the lack of promotion there still is considerable interest in the use of the port by coal producers, sulphur producers and many others who ship bulk products which can be conveniently stored during the winter months and shipped out during the regular shipping season. However, we have yet to convince the Minister of Transport (Mr. Marchand) and the National Harbours Board that this is the route we should be taking. The minister should speak to Canadian National Railways and encourage the company to develop a rate structure that will promote increased use of the railway lines running to and from Churchill. That would be in the best interests of all residents of Manitoba. If we made greater use of that port, it would be of benefit to all western Canadians. Quoting government-supplied figures relating to this important port, I have shown that even with present CN rate structures it would be of advantage to us all if there were greater utilization of Churchill.
May I bring one further important point to the attention of the government and of the minister responsible. In view of the current energy crisis we are looking more and more to the north, particularly to the Arctic Islands, for our future petroleum needs. The resources are there in known quantities and merit immediately development. Yet we
Canadian National Railways and Air Canada are still waiting for policies to be adopted by the ministers involved which will show us how these resources are to be developed.


An hon. Member:: Don't hold your breath.


Charles Keith Taylor: Canadian National Railways has a vital role to play in the development of any sector of this country, particularly the north. I suggest to the minister that Canadian National Railways should examine the possibilities of a pipeline, and the role that the railway might play in the construction of such a pipeline, which would run from the Arctic Islands to Manitoba. It could be used to tap the vast petroleum resources in the north.
I suggest, further, that Canadian National should now be making proposals to the parties who would be involved in the construction of such a pipeline in order to encourage the use of railway facilities. We could reach and develop the Arctic Islands and deliver the resources to be found there by using the facilities of the CNR as well as by using the pipeline which would begin in that area.
Time does not permit me to deal with the position that Air Canada holds in my area. Air Canada routes run mainly east and west. A regional carrier, TransAir, looks after the needs of my constituency; but that is another subject. Canadian National Railways and Air Canada are under an obligation to western Canada. If the government's so-called regional development policy is to be enhanced, those companies must again look at the possibility of airport facilities being improved in western Canada. There must be the development of adequate air routes to and from Winnipeg.
Members on my side of the House have spoken in other debates about the merits of using the facilities available in Winnipeg. The advantages to be accrued from the use of those facilities have been nullified by the general policies of Air Canada. If those facilities were used to their fullest potential, Winnipeg would once again become an international air centre, which it ought to be but which it has not been since this government introduced its air transportation policy. I suggest that both Air Canada and CN have much homework to do. If they are looking for leadership, they are not likely to get it from this government. The companies ought to realize that and develop policies which will bring about not only what this government wishes but what the western Canadian provinces have been demanding for years. They are entitled to this, and it could be done without difficulty.


Jack Marshall: Mr. Speaker, I am pleased to say a few words on Bill C-164, the CNR financing bill now before us. Many colleagues said, when we were debating the Criminal Code amendment, that it was time we finished discussing that bill. I can say the same about this bill, as many of my colleagues have brought to the government's attention the many weaknesses and inequities in our present Canadian transportation policy.
One point I should like to mention has to do with the continued deterioration of rail service in many parts of the country, particularly in the Atlantic provinces and specifically in that isolated part, the province of Newfoundland. Much attention has been directed over the past few

October 23, 1973
Canadian National Railways and Air Canada months to our energy crisis and to the difficulty in finding a select and safe means of transportation. In this regard I think reference should be made to some comments of one of the higher officials of Canadian National Railways, Mr. David Blair, vice-president of the Atlantic region. He compared the transportation of energy resources by train with their transportation by truck, that is, by road. I can tell you that Mr. David Blair views most sympathetically the matter of transportation policy affecting the Atlantic region, and his words should be heeded.
Mr. Blair explained that transportation policies and services were based on the assumption that oil and gasoline would be plentiful and cheap for many years to come-of course, that is not the case any more-that these attitudes must change and would change as soon as transportation planners looked at which form of land transport provides the most effective use of the world's limited fuel resources.
A study conducted in the United States in 1970 showed that of the total amount of transportation fuel used in that country, trains accounted for only 3.5 per cent, as against 21.7 per cent for trucks; yet in the same period the railways handled almost twice as many ton-miles of traffic as the highway system. The study showed trains had a gross efficiency of 550 ton-miles per gallon of fuel, compared with 37.6 ton-miles per gallon for highway vehicles. I am sure the figures would be similar for Canada. I hope we can be supplied with similar figures as they apply to our railways, which always seem to be losing money with the taxpayer making up the losses.
If this is true for commodities being shipped by freight, the carrying of passengers must also be considered with regard to conserving fuel and energy. This makes me wonder why Canadian National is on a crash course to eliminate passenger service in Canada, if we can believe the words of the vice-president, Mr. Blair, and there is certainly no reason to doubt them. Another point of interest made by Mr. Blair refers to the electrification of railways in Canada, a process that is being extended in many parts of North America and, indeed, throughout the world. It is a step that offers even more efficiency, as well as a pollution-free transportation system, something for which everyone seems to be striving.
Something else that is difficult to understand is the apparent justification of governments, both federal and provincial, to go in two directions in providing transportation for Canadians. On one hand everyone is complaining about the fact that the cost of land is becoming exorbitant. It is one of the main problems in trying to find land for housing. The government is buying up the same land to provide road accommodation for vehicles, at the expense of the taxpayers. The costs are running away with our planners in government. On the other hand the government, the Department of Transport or the CNR, are eliminating passenger service because of losses. The taxpayer also has to pay for these. What we are really doing is doubling the effect of poor planning on the citizens of Canada when we should be upgrading railway service for Canadians, something which would overcome the runaway costs of transportation.

Canada, with its vastness, was opened to opportunity by the provision and indeed the vision of a railway system to open up the west, the east, the north and the south. However, governments of the day-this is becoming increasingly evident-did not improve the sytem of transportation along these lines but, instead, changed direction because of political timing. The end result has been a jungle of government bureaucracy with the various responsible departments going off in different directions. This has brought us to a point in time where no one knows in which direction he is going. If we continue in this direction we will reach a stage in our development where, because of lack of common sense planning, we will destroy our objective for political ambitions.
It is obvious that with our vast expanse of land in Canada transportation is becoming a very important factor because of its great cost to our citizens. Our planners have become blind to the fact that we must direct every available dollar to controlling pollution and acquiring land for more vehicle transportation. Why, then, have we not realized, as have other countries, that a railway system, particularly because of our vastness, is vital to reasoned development of our nation with its vast resources? However, our planners are going in exactly the opposite direction at the expense of our capability to provide continued progress for the benefit of Canadians.
If it is the intention of the government to push all 22 million Canadians to urban centres such as Montreal, Toronto and Vancouver in the next decade, we might as well quit and eliminate those provinces which are being ignored in the thrust toward providing a quality of life for all Canadians wherever they may live. The province of Newfoundland is a perfect example of what has happened with regard to the devious means of cutting costs without any projected planning by our supposed experts. For some reason or other rail passenger service was eliminated in favour of road transportation because it was decided, at the expense of the public, that road transportation is what is required for the development of our province.
Newfoundland is at a stage now, some 25 years after confederation, where it has the lowest category of trans-Canada roads, rail and transportation service of any province in Canada. There is no province in Canada where factors dictate more that a reasonable and planned transportation policy with rail service for both commodities and passengers would be beneficial to Canadians residing in that province. The problem of transportation in that island province should be directed toward its isolation and the need for uninterrupted service for its future development. It is time meaningful discussions took place to resolve the many simple problems that exist.
There is much talk about the exorbitant cost of living in the province of Newfoundland. The simple reason is the cost of transportation not only to the urban centres of transportation dispersal but to the isolated areas of our province which are suffering most. There is not much point quoting figures and the differences in the cost of food, housing, fuel and all the necessities of family living, but there are certainly enough examples to point out the low priority in which improvements in transportation services are considered in the province of Newfoundland.
October 23, 1973

1 wish to give an example of freight costs. A businessman in my district showed me a freight bill for furniture. The weight of the shipment was 1,040 pounds. The value of the shipment was just over $500. The freight cost was over $170. That amounts to some 34 per cent. Is it any wonder that costs are higher in Newfoundland than anywhere else in Canada?
Another example of the problems in Newfoundland was brought to our attention during the recent railway strike in that province. This was referred to by members from Newfoundland who spoke earlier. The problem has been temporarily resolved, but the situation brought about an inconvenience to citizens which one would not believe possible with our supposed modern methods of transportation. What is the government doing about it? There is another re-organization, another study, another build-up of bureaucracy with new objectives, and another ad hoc approach without long-term planning other than seminars, meetings and more studies which we will probably never see.
We must give some recognition to the government for the fact they are trying to overcome the backlog of problems that exist between Nova Scotia and Newfoundland. However, my main complaint is the lack of projected planning. The port of Corner Brook, which is the hub of transportation activity on the west coast of the province, is an example of the lack of projected planning for future needs. New facilities were provided in 1968, but through lack of foresight the facilities were cut because of, the government said, financial restrictions. It was only a matter of $3 million, and the increase in the needs would be a couple of hundred thousand dollars more. By the time the project was completed a few years later, the storage space provided was too small.
This emphasizes the fact that no one in the government listened to the interested groups about the steady build-up of traffic over the years and the fact that this build-up would continue. Here we are, just a few years later, and the situation has become desperate. There is no space for storing merchandise and this has resulted in cost increases due to breakage, with corresponding losses incurred both by businessman and by the consumer. An extension to port facilities amounting to only 22,000 square feet is required, but it is like pulling teeth to get answers as to the status of the project because in our bureaucratic system it seems no one knows what the other person is doing.
The government is blind to the fact that the economic development of Newfoundland will never be achieved unless transportation is treated in a manner which recognizes the geographic isolation of the island. This focuses attention on the need for improvement in port facilities, the lack of which presently deters the industrial expansion which could take place because of the richness of the province's natural resources.
Another example of the lack of foresight by our planners is provided by the circumstances in which a modern linerboard mill was established in western Newfoundland at the cost of $175 million. Not until the mill was almost completed was it realized that adequate port facilities
Canadian National Railways and Air Canada were necessary to bring the timber resources from Labrador and to provide for the export of linerboard as well as for the pressure of incoming traffic. Already, after only a few months of operation, the presence of some 300,000 tons of commodities has taxed the 950 feet of berthing space available, and the volume of goods piling up will double before the end of the year. It is true that dredging work is presently proceeding under the auspices of the Minister of Transport (Mr. Marchand), but the need to extend harbour facilities has reached emergency proportions.
The western part of the province possesses unlimited natural harbour potential. I suggest every effort should be made to co-ordinate the efforts of the various departments involved, including Regional Economic Expansion, Environment and Fisheries, Public Works, and Transport to develop the potential of this region so as to benefit the province and the nation. Requests have been made to the government to develop the area known as Curling. According to a study completed by provincial government agencies, there is justification for improving harbour facilities there so as to enhance economic development. I suggest to the Minister of Transport that representatives of the four departments I have mentioned should visit the area with me and look into the possibilities in this part of Canada.
As I have mentioned on several occasions there is certainly a need to pay greater attention to the isolated part of Canada which lies to the north. There is particular need for the government to fulfil its promise to provide communication facilities to this part of Newfoundland. I refer to the agency know as Canadian National Telecommunications which comes within the responsibility of the Canadian National system. The report of the CNR for 1972 proclaims improvements in the service to northern Newfoundland, but though I have been in Ottawa for five years I have not seen much improvement in the service: I still cannot get through to these people on the telephone.
The report states that in Newfoundland, the Northwest Territories and British Columbia, the number of customers using CNT long-distance telephone increased by 20 per cent. All I can say, Mr. Speaker, is this: I suspect that whatever part of that 20 per cent increase applies to that area of northern Newfoundland which lies within my constituency consists of telephone callers trying to reach me, or me trying to reach them, and either I can't hear them or the lines are busy or they can't hear me. I can only say, further, that the Telesats and the Aniks have not done much for northern Newfoundland. The situation can only be described as shameful when in this day and age there is little or no communication possible with the part of Canada I have mentioned.
I turn, now, to the subject of air transportation, another form of transport which is low on the priority scale of the Minister of Transport, at least as it applies to that part of Newfoundland where we have the convenience of air travel. Here, again, there is a conflict of interest, if I can use that term. On one hand, when one wants to move from Newfoundland to the mainland one finds the most dedicated employees of Air Canada ready to help, but when one wants to move from the mainland to Newfoundland the reverse is true.

October 23, 1973
Canadian National Railways and Air Canada
I venture to say that service on an Air Canada flight to my province can only be compared to the third-class service one used to get on the Newfoundland railway prior to the expressed intention of downgrading passenger service so that it could be eliminated altogether. If I had the time, Mr. Speaker, I could relate the greatest stories that could ever be told in connection with air travel to Newfoundland.
I have made some 132 trips to my district in the last five years, most of them by Air Canada, and the inconveniences I have experienced, and which must have been shared by most of the west Newfoundland passengers, are hard to exaggerate. The attitude of the stewardesses on these flights indicates they feel it is a punishment trip inflicted upon them for something they did wrong. I can say without fear of contradiction that many of them do not even know where they are going. Certainly they do not know the stops after they leave Sydney, because I have heard their announcements. Certainly, too, Air Canada officials do not know what it means to provide a little comfort for passengers; after trips back to my district I often end up with a charleyhorse.
In their efforts to save a few dollars, officials tend to eliminate or curtail service to citizens who are just as much Canadian as those in the larger urban centres. Here, again, no consideration has been given to the continued build-up of traffic, both passengers and freight, to and from the west coast of Newfoundland. I can only suggest that officials of Air Canada, particularly the vice-presidents of every department, should follow the example of the service provided in the smaller centres by their Air Canada staff and learn what service really means, even though they do enjoy a monopoly of passenger service.
To summarize, Mr. Speaker, I would refer to the obligation undertaken by Canada toward the province of Newfoundland in accordance with the Terms of Union, specifically section 32 which states:
Canada will maintain, in accordance with traffic offering, a freight and passenger steamship service between North Sydney and Port aux Basques which, on completion of a motor highway between Corner Brook an Port aux Basques, will include suitable provision for the carriage of motor vehicles.
For the purpose of railway rate regulation the Island of Newfoundland will be included in the maritime region of Canada, and through traffic moving between North Sydney and Port aux Basques will be treated as all rail traffic.
All legislation of the Parliament of Canada providing the special rates on traffic moving within, into, or out of, the maritime region will, as far as appropriate, be made applicable to the island of Newfoundland.
Mr. Speaker, these terms are very vague and do not meet the changing conditions which have come about over the years since 1949. It is incumbent, then, upon the Government of Canada to review the Terms of Union to give Newfoundland the consideration it deserves as part of our great Canadian nation. It is obvious that the Minister of Transport is cognizant of the transportation needs of all Canada-he has shown his sympathy-and I can only request that even though the population of the province of Newfoundland makes up only a small proportion of our nation, he will recognize, as pledged by his Prime Minister (Mr. Trudeau) and many of his colleagues, that every Canadian, regardless of where he lives, should be able to enjoy the benefits of Canada's wealth and quality of life.


Mr. Doug Rowland (Selkirk):: Mr. Speaker, I should like to use the same point of departure as the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), and that is to say that it is about time this country, and specifically its government, took a good, long, hard look at its transportation policy. Indeed, that look is long overdue. The government should begin immediately preparation of a paper on transportation policy that will take into consideration road, rail, air and sea transportation and which would be transportation's equivalent of the orange paper on social security that was presented to this House earlier this session. In other words, we require a draft national transportation policy. We urgently require a document that could serve as the focal point for discussion of transportation in Canada by the relevant parliamentary committees, public servants both federal and provincial, the transportation industry, unions and management and by other interested parties.
To my mind, the point of departure for any such paper should be that transportation is part of the infrastructure of this country and an instrument of national policy, one of the several means that a nation can employ to realize national ends, such as the elimination of regional economic disparities and the arresting of the trend toward rural depopulation and the overgrowth of our cities. In a phrase, the point of departure of any such study should be service to the public rather than consideration of profitability. Such a study should set out national objectives and the design of a transportation policy to serve those objectives. Profitability should be a very much secondary consideration. This is not the case today with respect to the transportation policy of Canada, such as it is.
To me, it is the epitome of madness to see the Canadian Transportation Commission making decisions with respect to rail line abandonments that take into account the profit and loss picture for that particular piece of line but not the costs that would be incurred by provincial governments which, in order to replace that abandoned line, would have to build more highways capable of carrying much heavier bus and truck traffic, at the costs of farmers and merchants affected who would have to abandon trucks suitable for short-haul situations and purchase new and vastly more expensive long-haul equipment.
It is absolutely ridiculous to hear the Minister of State responsible for housing and urban affairs assert the necessity of arresting the trend toward increasing concentration of the Canadian population in a few urban centres and virtually simultaneously have the Air Transport Board approve an application by Transair Midwest to abandon its Brandon-Dauphin-Yorkton run. Obviously, if urban growth is not to continue at a horrifyingly unacceptable rate, smaller centres will have to be made more attractive to the existing population, especially the young people who live there, to industry, and to industry's skilled employees most of whom are now located in major urban centres. One obvious means of accomplishing that objective is to provide smaller centres with rapid transportation facilities, rail and air as well as road, as closely equivalent as possible to those available in major urban centres. Certainly permitting abandonment of services
October 23, 1973

like Brandon-Dauphin-Yorkton is not the way to accomplish that goal.
The propensity of the transportation commission to approve applications for abandonment of air feeder lines, rail passenger service and rail lines, runs directly contrary to the objective of making smaller communities in Canada attractive places to live, and thus counter the trend to urbanization. Even more ridiculous is the lack of co-ordination between the government's programs to promote greater economic equality on a regional basis through the Department of Regional Economic Expansion particularly and its failure to develop a transportation policy that would further that objective. Indeed, the government's decisions with respect to transportation most often have exactly the opposite effect to that of removing regional economic disparities. Freight rate structures, for example, as was forcefully demonstrated by the four western governments at the Western Economic Opportunities conference, run directly contrary to the objective of fostering economic growth outside of central Canada's economic heartland.
In this regard, I think hon. members should pay particular attention to the kind of arguments presented this evening by the hon. member for Churchill (Mr. Taylor) in discussing the difficulties encountered in his own area as a result of inequalities in the freight rate structure, a structure that bears no relationship to the economic objectives of this country. Despite promises to correct the situation which the federal government made at the Western Economic Opportunities conference on the subject of freight rates, we have seen little evidence of government action in this regard.
An even more topical example of the government's right hand undoing the work of its left hand, more topical since talks on the bilateral air agreements reopen tomorrow, are the tentative agreements reached respecting air charter service. If I may refer to Suntours, this is a Canadian development conceived and executed by Canadian air carriers. Essentially, Suntours involves the provision to Canadians of the opportunity to take relatively brief and inexpensive tours to the world's sun spots during our colder months. The program is a major component of Canada's air charter business. In turn, charter business provides our regional air carriers with one-third of their revenue. Further, regional air carriers are major corporate citizens in some of our less advantaged regions. For example, Transair Midwest Aviation employs somewhere in the neighbourhood of 700 people in Manitoba and northwestern Ontario. It is a big outfit in that region.
With all these facts before it, what does our brilliant federal government do when it comes to negotiating an air charter agreement? During negotiations for a new bilateral air agreement it opened the discussions on an air charter agreement by offering American carriers about 30 per cent of the Suntours business. That was its opening offer. The government said, "We will give you 30 per cent of Suntours' business". And what does the government demand in return? Nothing. The whole thing is strictly Alice in Wonderland.
It is my understanding that the regional carriers and major air charter lines in Canada have prepared a submission for the Minister of Transport (Mr. Marchand) in
Canadian National Railways and Air Canada which they urge the government to modify substantially its position respecting the air charter agreement. I would urge the minister in the strongest terms to pay the closest possible attention to those submissions, because a healthy air charter business is extremely important to the economic well-being of a number of the less advantaged regions of this country.
The bilateral air agreement as it affects scheduled commercial flights provides yet another example of the lack of any co-ordination between the government's policies of regional economic development and transportation. For years the government of Manitoba has been calling for a direct service by Canadian carriers from Winnipeg to Minneapolis, Winnipeg to Denver, Winnipeg to Chicago, Winnipeg to New York and Winnipeg to Los Angeles. At the Western Economic Opportunities conference the western premiers were assured that the representations of Manitoba and similar representations by other western governments would receive every consideration. The result was that the bilateral agreement does not guarantee Canadian carrier operations on any of the suggested routes until 1978. Moreover, it is not until halfway through 1976 that there is any possibility of a Canadian carrier providing service on any of those routes, and this involvement could only be advanced in the event of the total failure of the American carriers to provide the desired service by that time.
What happens in the interim, Mr. Speaker? Western Canadians wishing to travel to major eastern American centres will continue to be funnelled through the already overloaded facilities at Toronto and Montreal. In the case of the Winnipeg-Minneapolis run, Northwest Airlines, an American carrier, will continue to have the monopoly and, holding the monopoly, will continue to provide rotten service. I say "rotten service" advisedly. Moreover, in the event of another strike against that airline, Winnipeg will once again be without any air service to Minneapolis for the duration, which is bound to be lengthy because of the revenue-sharing agreements that American carriers have to cover strike situations.
Among other things, this means more damage to the Manitoba tourist industry of the magnitude that we in that province experienced during the last strike when, to mention just one business, $30,000 had to be rebated to persons from the Minneapolis area who had booked on the cruise boat Lord Selkirk II. And this was just one very, very small part of the tourist industry of Manitoba. I hope that when the talks on the agreement resume tomorrow, our negotiators will be doing all in their power to serve Canada's legitimate regional interests and aspirations.
I now turn to another area of federal concern, that of pollution abatement. It is a demonstrable fact that trains contribute only one-fifth the pollution of the atmosphere that highway traffic necessary to move an equivalent number of people contributes. Nevertheless, the CTC has blindly granted permission to the railways to reduce the transcontinental and intercity passenger service to almost zero and has made no protest about the downgrading of service on the remaining runs, which downgrading of service is calculated to make rail passenger travel even

October 23, 1973
Canadian National Railways and Air Canada
less attractive than the inconvenient schedules now make it. Where is the sense in that?
Then we look at Air Canada and CN, the two major Crown corporations in the transportation industry, and we see an even greater conflict between the expressed policies of our government and the actions of its agencies. Air Canada has consistently operated in a manner directly opposed to current expressions of government concern about our concentration of population in major urban centres and the desirability of removing regional economic disparities. In so doing Air Canada, and TCA before it, consistently misrepresented, dissembled and outright lied without having ever experienced even the mildest reprimand from the federal government which is supposedly its master.
In 1948, Winnipeg was the headquarters of TCA. Today only about 1,400 of Air Canada's employees find jobs in Winnipeg. Moreover, significant numbers of those carried on the books as Winnipeg employees, I am reliably informed, now find themselves on perpetual three to six months' temporary assignments to Montreal and Toronto. Further, better than a third of Air Canada's employees located in Winnipeg are engaged in accounting functions in the financial section. We have learned that Air Canada has ordered a new computer which will be capable of carrying out many of the functions now discharged by employees of the Winnipeg financial section. Where is the new computer centre to be located? In Montreal, of course-a city with a population of 21/2 million. Specifications for the equipment, for which a tender has now been let, specify only remote terminals for Winnipeg. Why? Well, Air Canada says that it is more efficient to have the computer located as close as possible to its prime users. That statement is arrant nonsense in a world of instantaneous communication by telephone, teletype, electronic data transmission, and so forth.
Because of modern communications methods, computer centres for electronic data processing can be located almost anywhere, even thousands of miles from the user of the services or the head office of the organization, with little or no functional difference in the operation's output of the centre. The computer's raw material is information; its finished product is information, and information can be transmitted electronically by cable, satellite or microwave. Information is thus almost completely freight-insensitive. Nevertheless, in direct contravention of at least two key government objectives, decentralization and elimination of regional economic disparities, Air Canada is locating its computer in Montreal.
If hon. members require factual data rather than theoretical argument to convince them that the computer could just as well have been located in Winnipeg, let me draw these facts to their attention. United Airlines, in the United States, has its head office in Chicago. Its main reservations computer is in Denver. Its overhaul base and computer for overhaul are located in San Francisco. Eastern Airlines has its head office in New York city, yet its computer centres are located in North Carolina and Florida. Clearly, Air Canada could have assisted in the regional development of computer processing skills, but it chose not to do so and the government has said nothing. Air Canada has promised no reduction in employment in Win-

nipeg as a result of its decision. Leaving aside any consideration of the calibre of the jobs to be left in Winnipeg, permit me to say I view Air Canada's promises with a highly jaundiced eye.
Let me review the record. In 1948, the Right Hon. C. D. Howe, then minister of transport, stated that 95 per cent of TCA's activities would remain in Winnipeg. In 1948-49, TCA moved its headquarters' personnel to Montreal. In 1949, appearing before a federal transport committee, the president of TCA said:
TCA's long association with Winnipeg has been a very happy one and will continue as long as I can see.
In 1950, the staff of the TCA publications department, the company stationery department and a number of technical functions, were moved from Winnipeg. In 1950, J. C. Bain, maintenance manager of TCA, stated that it would cost $1 million per year over ten years to move personnel, clearly implying that such was unthinkable. In 1951, a major portion of the engineering department and the radio technicians were removed from Winnipeg. In 1952, it was the communications laboratory. In 1956, it was the radio shop. In 1957, following assurances by the president that overhaul operations would not be transferred, a further 100 employees were removed to Montreal. In 1960, the instrument shop and processing laboratory were moved. In 1960, engine overhaul and stores were moved. In November, 1963, then Prime Minister Pearson said in this House:
I am therefore now able to announce the change from the previous expectations announced a year ago that the overhaul and maintenance base in Winnipeg will begin to be phased out early in 1966. For at least as far ahead as planning now extends, that is at least ten years, the Winnipeg facilities will continue to be used.
On October 5, 1967, Air Canada announced that it intended to close the base, and that has been done. So forgive me if I do not believe a word Air Canada says. Winnipeg wants that computer centre and by any standards you care to apply, moral, economic or political, Winnipeg has a right to the computer centre. If the federal government really means what it has been saying about western economic development since October 30, 1972, let it begin to offer concrete proof of its commitment by instructing Air Canada to locate the computer centre in Winnipeg. If management does not like it, find a new management, because there is certainly no point in having a Crown corporation if that corporation does not act to assist in accomplishing the stated goals of government, and even less point if it acts directly contrary to government objectives.
I will go further. There are rumours that Air Canada wishes to purchase a number of Boeing 727s and 737s. If this course is pursued, then I would suggest Air Canada should be instructed to establish a Boeing service centre in Winnipeg capable of maintaining not only its own Boeing aircraft but also those of the Canadian armed forces and regional carriers which lack appropriate major overhaul facilities.
Alternatively, Air Canada could contract out its Boeing maintenance to the CAE in Winnipeg, thus enabling that company to provide a Boeing maintenance facility. In any event, let us get some of the highly skilled jobs now increasingly concentrated in central Canada out west or into the Atlantic provinces. In this case, because of its long
October 23, 1973

association with Air Canada and its central location, Winnipeg would seem to be the logical spot. Just once I would like to see a minister tell Air Canada to do something. I would bet the sky wouldn't fall!
I have spent some considerable time attempting to illustrate the need for the government to develop a transportation policy which would enable transportation to be effectively employed as an instrument of national policy. To me, the first step in any such program beyond that of producing a well-researched and documented discussion paper and, ideally, draft legislation, would be to amend the legislation establishing the Canadian Transport Commission so as to replace references to "profitability" with "service to the public". Were that done there would no longer be any danger of carrier economics being equated with public convenience and necessity as in the recent decision, already alluded to, to permit Transair Midwest to abandon its Brandon-Dauphin-Yorkton run. Surely in this case it must be obvious that Transair was granted the lucrative Winnipeg-Toronto run not so as to provide additional competition for Air Canada but, rather, as a crosssubsidy which would enable it to maintain other less profitable routes.
The same in the case with CN and other railroads. The legislation must make it plain to the CTC that its role is not that of sympathetically nodding its head as the railroad trots out arguments to demonstrate that this branch line or that, this passenger service or that, is losing money and therefore should be abandoned. Rather, the CTC's role should clearly be that of pointing out to the rail companies that the large grants of land and mineral rights given to them by the Canadian public were designed to permit the rail companies to provide a service to the public and that the losses, if any, of the railroad operations should be balanced against the investment profits which have resulted from those grants of land and mineral rights.
For too long we have had governments which have judged the efficiency of our Crown corporations engaged in transportation exclusively on the evidence of the balance sheet. It is about time we began to judge their efficiency in relation to the service which they provide to the public and the degree to which they further the accomplishment of national objectives.
There are so many areas relating to the operations of Air Canada and the CN requiring comment that the difficulty lies not in discovering what to say but what may legitimately be left out. What is the government doing, for example, about the inadequate maintenance carried out on rights-of-way by CN? Why is CN not devoting more of its resources to the research and development of rapid intercity rail transportation? Why, for that matter, is the government, which is providing an $80 million subsidy for the development of short take-off and landing aircraft, not spending equivalent amounts to improve rapid intercity rail transport? The potential benefits in terms of spin-off are just as great, given the interest in rail transportation in the rest of the world.
I could go on, but I will take the time only to draw one further problem to the attention of members of this House and the minister in particular, namely, the plight of the
Canadian National Railways and Air Canada railroad pensioner. For some time now the railways employees pension association has been drawing to our attention, the attention of the public and the attention of the railroads and the railway unions, the need for improved pensions. I hope that the Minister of Labour (Mr. Munro) will see fit to appoint a commission of inquiry or to expand the terms of reference of the Deutsch commission now attempting to determine the actual cash value of the railways pension plan, expand those terms of reference or create another commission which will allow an inquiry into the entire range of problems associated with railway pensions. This proposal has been put to the Minister of Labour before in the House and he has indicated that he intends to give it sympathetic consideration. I see him nodding his head, and I hope that that sympathetic consideration will result in some concrete action in the near future.
The demands made by the pension association, after all, are relatively modest and quite in keeping with the pension legislation recently passed in the House modifying old age security legislation, the guaranteed income supplement legislation, public service pensions legislation and other measures. We have all received cards listing the desires of the railway pension association. I think it is worth while to put those demands on record. Their first demand is a 2 per cent pension retroactive to entering the service. The second is an escalator clause in line with the cost of living index, including a minimum increase of 2 per cent a year. The third is early retirement without penalty on a voluntary basis. The fourth is improved survivor benefits. The fifth is a request to upgrade railway pension plans in line with the provisions contained in the Public Service Superannuation Act, 1970, and its amendments.
Those are relatively modest demands which, I submit, the CN could meet and which the CP could certainly go a long way toward meeting. CP could afford to meet them, but there is less chance of government action affecting the decisions of CP, unfortunately. In other years the Minister of Transport has given assurances during debates such as this that he would do all in his power to influence the railway companies to improve benefits for pensioners. The exercising of that influence, with the backing of the House, has in the past produced benefits for the pensioners, in some cases rather substantial benefits. I would like very much to hear a similar undertaking from the Minister of Transport before we allow the debate on this bill to end.


Mr. Eudore Allard (Rimouski):: Mr. Speaker, our country is experiencing a most remarkable development. This is encouraging for us all and from every point of view. It is more and more normal that transportation and communications between citizens and the various locations in the country progress also at the same tempo as the population and the production of necessary goods and services for all Canadians.
If Canada's development is achieved by the work of its citizens, thanks to its nearly boundless natural resources, it is essential that the government finance the development or the creation of transport bodies requiring too

October 23, 1973
Canadian National Railways and Air Canada much capital to be left solely in the hands of individuals who cannot dispose of sufficient funds.
This is why, in view of these circumstances, we must vote supplies so as to ensure the development of the Canadian National Railways and Air Canada. In principle, Mr. Speaker, I can only approve the provisions of these funds by this government or the guarantee by this government on securities or bonds and debentures to be issued to finance these developments of the CN and Air Canada.
Without dealing with all the details, I note that the CN is authorized, in 1973, to make capital expenditures including investment in securities of affiliated companies not exceeding in the aggregate $225,500,000, to enable the National Railway System to make capital expenditures of $75 million during the first six months of the calendar year 1974 for discharging obligations incurred prior to January 1, 1974, and to enter into contracts not exceeding $167,500,000 before July 1, 1974, for equipment, additions and conversions requiring payments after the calendar year 1973.
I spare hon. members some details in order to save time. But one can also see, in this list that we must recommend the provision of loans or the guarantee of securities to Air Canada not exceeding $140,000,000 for discharging obligations of the airline that become due and payable in the period January 1, 1973 to June 30, 1974.
I leave a few more details aside and come to the clause that ends up the whole thing, and which is designed to authorize Her Majesty to make loans to the Canadian National Railways Company and Air Canada to meet deficiencies in operating revenues to June 30, 1974, any such loans to be repaid from revenues of the Railway Company and Air Canada or, if revenues prove insufficient by subsequent deficit appropriation by Parliament.
Mr. Speaker, in clause 15, one can read that section 3 of the Canadian National Railways Refunding Act, 1955, is repealed and the following substituted therefor:
"Subject to the provisions of this Act, the National Company may issue notes, obligations, bonds, or other securities (in this Act called "substituted securities") in respect of any refunding pursuant to this Act, to an aggregate principal amount not exceeding one thousand million dollars, and the Governor in Council may authorize the guarantee by Her Majesty in right of Canada, of the principal and interest of the substituted securities."
Mr. Speaker, we are being asked to give Canadian National and Air Canada officials some sort of a blank cheque for the amount of $1 billion that they can borrow under the terms they want and at the interest rate they will determine both for things already mentioned and things to be determined.
Here again, Mr. Speaker, as a new member I am surprised at such a way of giving carte blanche to employees, and I cannot help noting it before our ministers and hon. members who wonder why Crown corporations always incur deficits while the Canadian Pacific makes profits.
It is often said that small private businesses must not be administered as the government or government businesses are because they will soon be bankrupt. The aforementioned examples show it well.
So far as the CNR is concerned, the most important fact that makes that large business nearly impossible to administer with profit is the build-up of huge capital that

contributed to the creation of that company, the construction of railway tracks, that ribbon of steel and wood that crosses Canada from east to west and from the Pacific to the Atlantic.
I would not want my remarks to be interpreted as a general blame because it must be recognized that those railways were necessary and that in the main they contributed to the development of Canada. This country would not be the same today had those railways not been built.
When we look today at the annual statement provided by the company itself for 1972, for instance, we notice that the administration by itself is making a profit but that this administrative profit is consumed and surpassed by the interests alone on the debt accumulated since the beginnings of the company. This eternal debt will never be paid and involves increasingly higher interest rates each time there is a renewal of bonds which have expired and can only be reimbursed by the current revenue and expenditures administration.
If we look at the main figures of the 1972 statement, we see that the Canadian National has made net profits of nearly $24 million on the administration of the railroad, but that the interests on the debt eat up this profit and have even caused an increase in the deficit of nearly $18 million. This must be paid by floating a new issue which contributes to boost the total and eternal debt of the Canadian National. New interests will have to be paid on this debt at increasingly higher rates, as long as the decision is not taken to make reforms in this area, particularly as concerns interests on the capital.
In the present circumstances, the important thing is to understand what is going on, without intending to bring any changes. If we can do this, we shall see what needs to be changed because there is no limit to human intelligence, except that which it creates itself by leaving things as they are. This is much easier than changing our methods and it is also much more profitable for some people.
There is only one question to ask if we want to see things as they are and bring the required changes as easily as possible and that is: Whom does it profit? Who benefits from interest on capital? Who supplies this capital? How do they manage to generate it? And finally, if some people can provide us indefinitely with this capital, why could we not find it ourselves here in Canada?
I may be going a little far in my remarks on capital and interests that we are considering concerning the CN, but what is true here is also true in all other cases of capital issues at the rate of millions and billions of dollars. We might perhaps understand these financial problems a little better if we wanted to take a little more time to examine this phenomenon of everlasting debts which burden our annual operations. In 1973, we must still authorize the CN and Air Canada to borrow, to capitalize with the guarantee of the state or Her Majesty for an amount not greater than $1 billion.
Since we are talking about the CN, I would like to comment on the fact that the recent strike could have been prevented if the authorities had striven for good management and if the managers had been aware of and felt
October 23, 1973

responsible for their own interests as well as those of the population.
In recent times, three railwaymen and one foreman were responsible for the maintenance of seven miles of track. There are now only two workers for the maintenance of 20 miles of track. Naturally, it follows that tracks are less safe, derailments more frequent, thus causing thousands of dollars in losses and damages to all kinds of materials.
One can say that these are cheese-paring economies. However, as I was saying, shrewd administrators would have prevented the recent railway strike. When amounts lost in transportation revenues, salaries and taxes are considered, as well as the wages paid to employees that were moved by bus throughout the country, at a daily cost of $28 per employee, which employees were often brought back to their starting point without getting any job or doing any work, economies would have been realized. This was going on during the work-to-rule strike that lasted about three weeks.
If we add all these unnecessary expenses made during the strike, we would be surprised to find that they would have been sufficient to pay the increase asked for during the strike. Again one can be sure that the government's billion dollar corporations cannot be administered like small private enterprises. It remains however that the administrative processes are almost always the same whether they have to do with big, average or small concerns. There must always be revenues, expenses and profits; but one must not make excessive expenses on purpose. For instance, I know that in my constituency of Rimouski, a man came all the way from Campbellton, New Brunswick-100 miles-to replace a window pane in the railway station. Ridiculous, is it not?
I was told that a car and an unlimited credit card were made available to Canadian National employees on a year-round basis, for a fixed and round sum of $50 a month. At that rate, Mr. Speaker, nobody would buy a car in his own name. Corporations would provide cars for all their employees with expenses paid by the corporation, and everything would be added to the yearly administration costs, which would increase the cost of products as well as the annual deficit of those corporations. If that can be done for corporations financed by the Canadian government, it is impossible in private industries, be they small, average or big.
Another comment one often hears is that along the railroad tracks between Vancouver and Halifax there is material going to waste-enough to pay for the employees' salaries for many years to come.
We hear a good number of similar comments, on numerous subjects, especially on the shameless waste that goes on in the Canadian National administration. That could be the object of a royal inquiry on the general administration of that national corporation where senior employees are nevertheless pretty well paid, so that private companies could take a leaf out of the administration's book. But what happens is the opposite.
The more capital is borrowed to subsidize the company, the higher the interest and even the interest rates. The more the company expands, the deeper it gets into debt
Canadian National Railways and Air Canada and standing expenses. It reminds us of a bogged down car. Every turn of the wheels sinks it deeper in the mud.
Mr. Speaker, what is the use of talking about it since the custom is established. The government makes up the losses whether the administration is good or not. That is what must be in the minds of the administrators of the big publicly financed companies where profits are not incentives to further a good and healthy administration.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I have sat in the House during this debate and listened with great interest to my colleagues on all sides speak of the advantages and disadvantages of the service of Canadian National Railways, of railroad problems generally, of airline problems and of the advantages that various areas of Canada enjoy or the disadvantages that they suffer. Some who spoke were concerned about the island economies of Canada which suffer a certain kind of geographic remoteness. They have indicated that this geographic remoteness is complicated by further remoteness caused by inefficient and ineffective transportation facilities which affect the growth and lifestyle of those island areas.
Members from other parts of Canada, notably the west, have spoken of the abandonment of rail lines and the feelings of isolation which are generated as a result. There is isolation from the point of view of a way of life and from the point of view of the operation of businesses and farms. If we accept what members from the west have said, and I think it ought to be accepted, there are some great difficulties with railroads.
I think it is important, Mr. Speaker, that we remember that railroads did not come about by accident. They were instruments of Canadian national unity and the togetherness of the disparate areas of Canada which were separated by great distances where between points of emptiness there were pockets of people. The railroads brought those people together. It is not by accident that the largest committee room in this building is called the railway committee room. I think that is an indication of the significance of the railroads in our early life.
There is another kind of isolation that I should like to deal with, namely, the kind of isolation that we in eastern Ontario feel. This is one of the last areas of Ontario to develop industrially. I speak now from the point of view of secondary manufacturing industries which are so important to this area if we are to provide the number and the variety of jobs for the young people who grow up here. This is necessary so that fewer will leave and that we may retain their talents and skills. I believe that railroads in this part of Canada can lessen this isolation in the sense that I use the term.
I speak now of that area of eastern Ontario which I represent, and perhaps cities to the east and west and up the Ottawa Valley. As time has passed there has been a deterioration in the service that the railroads have offered with respect to freight and passengers. In this part of Ontario we have had to rely to an increasing extent upon the highways for the delivery of goods and people. As a result, the highways have become cluttered with trucks, buses and automobiles and the quality of life has been

Canadian National Railways and Air Canada affected. So in a sense we have been isolated from the service that should be provided by an efficient, well accepted railroad system which should grow and change to meet the new needs and new desires of the community.
The experience in the area has not been that of an expansion of service but, rather, a diminution. It is not exemplified so much by the removal of tracks as perhaps by the closing of stations, of telegraph services, freight services and the other things that formerly served these communities. In the time that I have lived in this area, the very valuable rail service that linked Ottawa, the national capital, and the St. Lawrence region has disappeared. The bus service has been augmented to replace it, but that is not desirable in relation to the quality of life. The freight office which formerly served what we hope is a growing industrial part of Ontario along the St. Lawrence has been closed and people now have to go to the larger centres for this service. This is regrettable and I believe the railroads, particularly the Canadian National Railways, have not been too concerned about serving the area. They have been concerned with the difficulties of the balance sheet, I believe, and have not sought to improve and augment the service for a growing area.
In eastern Ontario, Air Canada does not provide the type of service which ought to be available to the national capital. It is difficult to obtain a reservation between Ottawa and Toronto or Ottawa and Montreal. I believe this is because the airline does not offer the right kind of service for the short haul and tremendous passenger load involved. This matter was raised in the House yesterday by the hon. member for Wellington (Mr. Hales) who put a question to the Minister of Transport (Mr. Marchand). The hon. member inquired about the possibility of an airbus service between Ottawa and Toronto to begin with, and perhaps later between Ottawa and Montreal similar to the service operated so successfully between Calgary and Edmonton. The answer of the minister was that this matter was on the agenda of the transport commission and he hoped a solution would be found.
If adequate service is to be provided within the foreseeable future, this item ought to have been off that agenda a long time ago, because the problem has been developing rapidly for many years: the government ought not still to be in the process of considering it. The problem is with us. Planning ought to have been undertaken many years ago. That sort of planning has been brought to fruition in other areas of Canada and certainly, in the United States.
If there is to be a proper service for those who want to visit the national capital or leave it for business reasons or personal reasons, I think it is essential that there be provided continuing service with economical equipment. It is hard to conceive that in 1973 the minister should stand in this House and say that the matter of air transport between the national capital and the rest of Canada is on the agenda of the transport commission. That sounds as if the matter has not yet been attacked, let alone solved. I think that we of this area in particular will suffer as a result of this lack of action. All parties in the House, indeed all the residents of this area as well as many other areas of Canada, would support the implementation of this sort of program even on a pilot basis.

I also wish to deal briefly with the importance of railroads in urban development. This government has brought forward the semblance of a plan-I do not know if it will be implemented-which provides for the development of new towns and urban areas around existing towns. The plan applies to my particular area of Canada and to many others. It is an important plan because anyone who now lives in a large, urban area feels the effect of the packing into fewer and fewer acres of more and more people. We see what is happening almost wherever we go. We see high-rise buildings sprouting like dandelions in our urban areas.
There is good reason for such development in the national capital area. The reason is this: for all the time that I have been in this area, and for many years before that, there has been inconclusive discussion between the national government, the government of Ontario and the government of Quebec with respect to the provision of rapid transit service in the area. If we are to make the system of new towns viable, or for that matter succeed in developing population centres around existing towns, we will need to tackle the problem of interurban transit. The railroads of this country, particularly the national railroad, will have a big part to play in that development. It will need to do what it already does to a great extent in and around metropolitan Toronto.
That is why we must view with some reservations announcements by the minister responsible for urban affairs with respect to the tearing up of rail lines leading to the centres of towns. We may need to relay some of those rail lines, if we are to move the population which we hope will go out to the new towns and centres of our metropolitan areas. One of the major difficulties that the present government and the government which will succeed it will need to tackle concerns the development of interurban transit, that is to say, inexpensive interurban transit which will persuade those who wish to live in the core areas of cities to move out, and persuade others who wish to move into cities to stay outside. Such a system, if it is to be viable, ought to be rapid and convenient. That is the service we must provide from outlying areas to the central core.
Further, it ought to dissuade those who would use automobiles from using their vehicles and encourage them to use the public transportation system. It ought to be a system that works, that could move masses of people over fairly large distances in a short time and meet the requirements of their working day. It is important for us to consider that aspect, and the part that railroads would play in the life of a community which is changing. Our community is changing: as it changes we will need new equipment and new methods of moving people.
I think the government ought to encourage the railways to undertake research to an extent that we have not hitherto seen in this country. In my area of the country there is a debate going on as to whether a multilane, limited access highway should be built. It would run from Ottawa, south through the large populated area of Nepean township, and eventually connect with Highway 16. It would also connect with Highway 401 which links Toronto and Montreal, the nearest large centres. The necessity for the highway is being debated because of North American
October 23, 1973

dependence on the automobile. This dependence on the automobile has changed our way of life and has made us look away from other modes of transportation.
If this country a long time ago had begun thinking of the importance of railways, there would not have been abandonment of rail services but, rather, their augmentation. They would have served the area in which we live. Furthermore, we would not be considering today the kind of highway which will run through, and perhaps ruin, some good residential areas merely because we want to move cars and trucks. We might be looking at a system which augments an existing rail system running north and south which, incidentally, does not exist today.
We ought not to look on railways as a means of connecting sparsely populated areas separated by great distances in Canada. Rather, we ought to consider railways as means of transporting great numbers of people over short distances. Thus, the railways would fulfil a new purpose. I think that shows the dilemma we face in Canada. We have tended to look on transportation on a piecemeal basis, tending to consider in isolation trains, trucks and other modes. Perhaps the time has come to do what has not yet been done in this country by any government, that is, develop a national transportation policy in which the railroads would play an ever increasing role as time goes on. That ought to be the conscious aim of such policy.
In my area we hope to develop the tourist industry and secondary industry. These industries will depend upon the railways. If we are to depend only upon existing rail services, these industries will not develop and my part of Ontario, as well as other parts of Canada, will be the worse for it. That would be the result, generally, if there were a failure to adopt a national transportation policy.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, it is not my intention to prolong this discussion. Indeed, the members of the official opposition would like to see this matter referred to committee so we can deal with the many unresolved problems that have been brought to the attention of the minister and the government during the course of this debate. However, there is one urgent problem I have been wrestling with during the past two weeks and I would like to place it on the record this evening.
I have been in correspondence with the Minister of Transport (Mr. Marchand). I have also had conversations with the Minister of National Defence (Mr. Richardson), who is the minister from the province of Manitoba. I believe the Parliamentary Secretary to the Minister of Transport (Mr. Guay) is in the House this evening.


Mr. Guay (St. Boniface):: I am listening to you.


Walter Gilbert Dinsdale: That is good. I hope that hon. member will become part of the Manitoba group which on a nonpartisan basis is trying to bring forcibly to the attention of the government an area of very sad neglect in the field of air transportation. Briefly, the story of air transportation as it affects the keystone province has been one of gradual deterioration over the past ten years. It was always expected that the city of Winnipeg would be one of our major international air centres. It is designated as an international air centre. Unfortunately, because of govern-
Canadian National Railways and Air Canada ment policy its role in that regard has been gradually downgraded.
When minister of transport, that able political gentleman the Hon. Jack Pickersgill used to talk about the role of Winnipeg in the international air scheme of things. When he was later transplanted and became the first chairman of the Canadian Transport Commission he used to make speeches across the country. I have in my hand a newspaper report of a speech he made in the city of Winnipeg on September 9, 1969. The headline reads "Air gateway status hinted for Winnipeg". The hon. gentleman was still hinting as late as 1969. I quote from the article:
The possibility of Winnipeg becoming an international air gateway was hinted Wednesday by Jack W. Pickersgill, president of the Canadian Transport Commission.
Speaking to the Winnipeg Chamber of Commerce, the former minister of transport said talks between the federal government and Canada's two main air carriers had already taken place and that a proposal might be placed before the International Air Transport Association in the near future.
It is all "hinting, "maybe" and might". I think the time is long past when we should say that it "might" or "could" be possible, and the government should move to do something concrete in this regard. I am sure the hon. member for St. Boniface is heartily in agreement with what I am saying. Winnipeg's position on the polar route places it in the most strategic position possible. That route is 400 miles shorter to Europe. I cannot understand why this government persists in spending a billion dollars to establish a satellite airport for the city of Toronto at Pickering, which is opposed by the residents of Pickering, when they have the logical location at the Manitoba international airport which has been waiting to be utilized to the maximum since 1969.


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: In 1969, the then president of the Canadian Transport Commission hinted that the great breakthrough was about to be achieved. Let us all work together for that end so that the growing problems of air transportation which have been outlined will be resolved. At present you cannot get reservations out of the city of Winnipeg because of the growing number of people using the airlines. The facility has to be expanded.
There is another aspect of this problem to which I shall refer briefly. That is the role of regional air carriers. The same gentleman, the Hon. Jack Pickersgill, when minister of transport announced a regional air policy. When it was announced, it was hailed by the then president of TransAir, the regional carrier for the central part of Canada, in these words:
The new policy is the greatest announcement made in Canadian aviation history since the time Trans-Canada Airlines was formed by act of parliament in 1937-*
That was recorded in the Manitoba Business Journal of October-November, 1966. Unfortunately, the dawn of a new age has not yet appeared. The record since that time with regard to regional air policy has been one of gradual deterioration. When Air Canada was responsible for supplying air service to western Manitoba and eastern Saskatchewan we had a regional air service that extended right through to Calgary. During the intervening period the responsibility was transferred from Air Canada to

October 23, 1973
Canadian National Railways and Air Canada TransAir. TransAir received the subsidy because the route must be subsidized. We recognize that air transportation is basic. We also recognize that at this stage of economic development, transportation cannot be provided at an adequate level without an air subsidy. However, that was removed. That was also done under the then minister of transport, the Hon. Jack Pickersgill.
Today we are faced with the possibility that air service on the western lateral by the regional air carrier, TransAir, will be discontinued absolutely effective January 1. This precipitates a crisis. This is the reason I wish to briefly bring the problem to the attention of the government and hon. members. It was obviously the intention of the government to upgrade that service, because over $1 million was expended in the early 1960s to expand and upgrade the quality of the main runway.
A few years ago an excellent new terminal facility was opened at the Brandon airport. While it is designated as the Brandon airport, it is actually beyond the boundaries of the city of Brandon. It was designed to serve the whole western Manitoba region. Just at the precise moment the new air terminal facility was opened, the air transport committee was giving authorization to TransAir to downgrade its class A service to a class B commuter service. The latest decision of ATC, which seems to be flying in the face of the declared policy of the government to upgrade this facility and the regional air service, is to accede to the request of TransAir to discontinue completely its responsibility of supplying air service to western Manitoba and eastern Saskatchewan. This involves a population of some 200,000.
I recommend to the Minister of Transport and to the government, as I have already done by letter, that it suspend the decision brought down by the air transport committee early in October which permits TransAir to abandon its responsibilities completely, and while this whole matter is in a state of suspension the government should authorize the air transport committee to conduct a thorough review of its regional air policy on the western lateral of TransAir. I see the parliamentary secretary to the Minister of Transport nodding his head in approval. On this basis, the basis of a thoroughgoing review, the government should then go forward to formulate a policy which would deal adequately with the circumstances I have outlined.
I do not wish to pursue this matter further at present, other than to remind the Minister of Transport that when he was the minister responsible for the Department of Regional Economic Expansion it was under his leadership that western Manitoba was designated as a major growth area under the DREE program. I am sure he would not have allowed or arranged such a designation unless he was in sympathy with the view that an adequate air service should be provided. I trust, therefore, that this question will be considered further in committee when the bill advances to that stage, and that the government will be making an announcement in this connection. Many of the new industries which DREE helped to establish are concerned about losing direct air transportation into their market area. I trust we shall see some positive, vigorous

action on the part of the government at the earliest moment.


Stanley Howard Knowles: Mr. Speaker, I would find it difficult to say what I have to say in five minutes. I notice that all the "late show" performers are in the chamber, and I wonder whether the House would agree to call it ten o'clock.


Mr. Deputy Speaker:: The House has heard the suggestion that we call it ten o'clock and proceed to the adjournment debate. Is this agreed?


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, listening to the suggestion made by the hon. member for Winnipeg North Centre (Mr. Knowles) I found myself thinking of the quotation "O, most excellent man!"
On October 18 I addressed a question to the Minister of Agriculture (Mr. Whelan) concerning the delay in making the federal milk subsidy operative in Prince Edward Island. The minister said he was confused by the complimentary remarks with which I prefaced my question and for that reason he could not give me an answer. Tonight I shall delete any compliments lest I trouble the parliamentary secretary. The issue is naturally one of great concern to the people of Prince Edward Island. In the Guardian of October 16, Premier Campbell is quoted as being "extremely disappointed". He said that as minister of agriculture he had made representations to the federal Department of Agriculture the day after milk prices were advanced. He went on to say:
I cannot understand why a federal subsidy is not now immediately committed to Prince Edward Island and I intend to keep after them for the payment, which should be automatic.
I say "amen" to those words, and I hope Premier Campbell is doing just what he said he would do. I feel exactly as he does on this issue. On September 4 I was in this chamber when the Prime Minister (Mr. Trudeau) announced measures relating to the high cost of living. He said:
The federal government wishes also to alleviate the burden of the price of milk for Canadian families and insists that any measure taken shall benefit consumers. The government is therefore willing to guarantee payment of a 5-cent subsidy per quart of milk to provinces where marketing boards will agree to maintain or reduce the cost of milk for at least one year. At the same time, the government will set up a program aimed at reducing by an equivalent amount the price of a package of powdered skimmed
October 23, 1973

milk. In this respect, it will hold meetings with provincial representatives without delay.
The date of the Prime Minister's announcement was September 4. That is quite a while ago. The expression "without delay" seems to be somewhat overstated, to say the least.
The cost of living in Prince Edward Island is extremely high. I have here the consumer price index recently received from Statistics Canada covering the cost of food at home in September of this year. Taking 1969 as 100, the figure for September, 1973, is 134.6 for Halifax, 139.9 for Saint John, and 145.2 for Charlottetown. Needless to say, these figures are all far above the figures for many Canadian centres. The recent 6 cents a quart increase in the price of milk on Prince Edward Island is naturally bearing down heavily and painfully on consumers in Charlottetown and elsewhere.
I do not fault the producers, nor have I ever done so. They are facing vastly increased costs and the dairy industry is vitally important to our provincial economy, as it is to the whole country. It is a source of pride to me that though my constituency is largely urban, there are in the rural areas of Hillsborough some of the finest cattle in the country and all sorts of breed prize-winners. It is not the producers I blame.
It is apparent from Premier Campbell's statement that the problem is here. There are surely no valid reasons why the measure of relief offered to consumers cannot be applied to our people. If there are reasons for delay, let the minister or the parliamentary secretary tell me about them. More important, let the wrinkles be ironed out and the subsidy applied. There is no excuse for further delay. The Premier of Prince Edward Island, the leader of the opposition there, and the press have all expressed views similar to mine. I join with them in expressing concern. The leader of the opposition said the problem lies in the provincial area. The premier has very definitely declared that it lies with the Minister of Agriculture. I bring the matter to his attention most forcibly because of the great importance which is attached to it.
[ Translation]


Mr. Leopold Corriveau (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, yesterday the hon. member opposite asked a question concerning the subsidy to milk consumers of Prince Edward Island.
Mr. Speaker, I should perhaps take this opportunity to tell the House about the negotiations held with each province. Up to now, agreements have been concluded with seven of them and eight companies of instant skimmed powdered milk. Once the subsidy became effective, the price of milk to consumers was reduced by 4 cents in Quebec on September 17, by 3 cents in Saskatchewan on September 24, by 3 cents in Manitoba also on October 1 and by 2 cents in Nova Scotia; it was reduced by 5 cents in Alberta on October 15 and by 4 cents in British Columbia on October 22. Three provinces, namely Newfoundland, New Brunswick and Prince Edward Island, have not yet concluded an agreement but negotiations are under way. We hope to reach an early and satisfactory agreement with those provinces so that their consumers may take advantage of the subsidy.
Adjournment Debate


GRAIN-WHEAT-SUGGESTED CHANGE IN CROP YEAR TO EQUALIZE PAYMENTS TO FARMERS WHO MADE EARLY DELIVERIES
Mr. Bill Knight (Assiniboia):: Mr. Speaker, on October 16 I asked the minister in charge of the Canadian Wheat Board (Mr. Lang) the following question:
Mr. Speaker, I have a question for the Minister of Justice who is in charge of the Canadian Wheat Board. In view of the fact that many smaller producers delivered their grain during the old crop year in June and July in order to meet financial obligations and debts and therefore lost out on the announcement regarding new prices on July 31 or August 1 for the new crop year, would the minister inform the House whether the government is considering making an equalization payment from the new pool account so as to assist those farmers who took a beating as a result of the new prices?
This is an extremely important question and obviously for the minister and the government, as well as for the Wheat Board, a very difficult one. What am I addressing myself to? I am addressing myself to the fact that in the months of June and July western Canadian farmers delivered in the neighbourhood of 134.2 million bushels of wheat to the Canadian Wheat Board. During that period the Canadian Wheat Board, as the minister rightly pointed out, threw the quotas wide open so the farmers could deliver as much as they wanted.
What happened was that unfortunately, either because the elevator agents at given points did not clearly describe the situation to the farmers or the situation was indeed never clearly spelled out, many farmers delivered wheat, for example to the elevators, took their initial payment in the old crop year and never held their grain over into the new crop year in storage. They were told the world market needed those deliveries.
If some 50 million bushels out of the 134 million bushels delivered were not held over into the new crop year, then as a result of the initial price jump on August 1, the new crop year, of somewhere around $2 at the elevator, with a final projected price in the area of well over $5 on the international market, this would mean a loss to those farmers of around $150 million.
Why did some farmers not hold over their wheat, Mr. Speaker? They did not do so at that given point in the year because they had to meet their financial obligations in terms of bank loans, petroleum costs, fencing, if they had cattle-you name it. In my constituency, just during my office hours many farmers brought to me examples of what happened. Say a three-quarter section farmer delivered 5,000 bushels of wheat. He took his initial price or payment at the elevator, and in doing so lost somewhere between $15,000 to $20,000 when the new price came in. In other words, he bore the brunt of carrying our wheat sales commitments at prices lower than the climbing international price. On the other hand, a producer who was farming a considerable amount of land and could deliver a lot of bushels which he would hold over into the new crop year would earn, if he delivered, say, 20,000 bushels, an extra $60,000.
This situation has created considerable inequity in terms of pool accounts, equal pricing, international market
7170

October 23, 1973
Adjournment Debate
prices and the farmers' share of the price, whether high or low. The board's principle of pooling prices is put into jeopardy, and I know immense difficulties are created for the minister in trying to solve the problem of correcting the injustice suffered by particular farmers. I know a producer in the Willow Bunch country who on July 31 delivered 900 bushels. He talked to the elevator operator, who told him that it would be advantageous to hold it over to the new crop year. He thought about it, but decided to let the 900 bushels go, and then he woke up one morning to find he had lost between $3,000 and $3,500.
Another producer who was on the point of retiring had a farmer take charge of his land and work it in the summer. When the quotas came off, his hired hand delivered every bushel that he had grown to the elevator at the old crop year price. That man lost thousands of dollars in the very year he was trying to retire. Other producers were caught in a situation of delivering 2,000, 3,000 or 5,000 bushels of grain and because of not holding it over, lost because of the new price.
If the open market system were in operation, I would say that is the problem and one should take what one gets: in other words, one should take the rap. However, when you have a Wheat Board which is supposed to work on the principle of orderly marketing and pooling incomes, but tinkers in this situation, you create immense problems. The minister pointed out that backdating the new crop year to July 1 instead of July 31 would be too cumbersome. I agree. That is a cumbersome suggestion and I accept his point of view.
I have a suggestion, however, and perhaps he will consider the possibility of making a payment above the final payment on the crop year, per bushel, out of the funds or revenue to be taken in the new crop year, say in the neighbourhood of 50 cents which would equalize the two. Maybe that is much more radical, but obviously he knows and I know the cause of concern on the Prairies is the idea of taking the two pool accounts and putting them together. I would appreciate the minister's comments on this matter.


Otto Emil Lang: Mr. Speaker, I appreciate the fair way in which the hon. member for Assiniboia (Mr. Knight) has set forth the problem, and the serious difficulty some farmers feel they are in in comparing their own position with that of others who thought that better prices would be available in the new pool and therefore held their crop. I have one reservation in remaining completely aloof and non-partisan in this particular discussion: that is my need to observe that I believe the reason some people sold their grain in the old pool without thinking there might a better price was that at least some honourable and right honourable members in this House were suggesting that a good deal of grain had been sold two or three years ahead at such low prices that it really did make any difference. They were being rather mislead by this kind of Tory advice.
The real difficulty I see in what the hon. member is suggesting in his own solution, and indeed in any solution that takes money out of one pool and puts it in another, is that this is a law which has stood for a long time in relation to pools. There was a storage opportunity available, but of course not equally available to everybody in

the real sense of the word, having regard to small farmers not being quite so able to hold. But I can hardly see taking money which belongs to some farmers under the law, the farmers who are in the new pool, and sharing it with a different group, some who were in and some who were not in one or the other.
I would be glad to consider whether for the future we should look at some such provision which, with adequate notice, would then be fair to apply. It is, of course, the nature of pools that at some point you have to draw a line, and we have chosen the pool instead of the day to day price which exists in the open market. But when it was chosen many years ago it was chosen for a year at a time.
As I say, Mr. Speaker, I am quite prepared to look at the question for the future as to whether or not we can adopt some formula to protect against this situation that would allow averaging of some sort, but I can hardly see doing it at this point in time, retroactively, when it would be the money of one group of farmers which would have to be applied to a different group in order to make such s formula work.


LABOUR CONDITIONS-SUGGESTED INCREASE IN MINIMUM WAGE
Mr. Don Blenkarn (Peel South):: Mr. Speaker, on September 11 last I asked the Minister of Labour (Mr. Munro) whether, in view of the Prime Minister's statement of September 4, consideration was being given by statute or otherwise to increasing the minimum wage. The minister said it was under consideration then.
In reviewing the matter, I find that the hon. member for St. John's East (Mr. McGrath) asked approximately the same question of the same minister back in April of this year. The minister then said that the matter was being given consideration. He said then that the matter was "now" under consideration. The word "now" is pretty important. It was being considered for six months or six weeks, depending on how you look at this. Presumably "now" to this government means never.
We have in this country an inflation rate of 8 Vz per cent. What was a year ago $1.90 is $1.74 today. We have many people working for wages that are pretty small because of the inflation factor, and we have had brought into this House provisions amending the Income Tax Act to provide for people who pay income tax the beneficial results of a reduction in taxes in accordance with the depreciation of the dollar. Recently measures were brought in dealing with increases in the old age pension and the veterans allowance, and on the order paper there is a bill to increase pensions under the Canada Pension Plan and to index those pensions.
However, what I ask the minister tonight is a question about the working poor. What about the man who is trying to support a family on the kind of minimum wage that is set in this country? What happens to him? If he works for 40 hours a week-and that is the work week-he receives $76. That is $304 a month for a four-week month. He receives less than a man and his wife on the old age
October 23, 1973

pension, because in October they will be getting $341 a month.
So we have the ridiculous situation that those receiving social assistance will receive more money than those who work. Indeed, in make-work projects sponsored by this government, such as LIP, the wages are $100 a week. This is considered a wage. But the working poor, the people who do some of the jobs in this country that are not all very pleasant, are treated, collectively, darned poorly.
It is a ridiculous situation when welfare payments made by provinces or welfare payments through various statutes and assistance programs sponsored by this government pay those on social assistance more than those who work. It may be said that the minimum wage does not apply to that many people in this country under federal jurisdiction, but it is up to the federal government to show leadership, and it is indeed a sad reflection on the leadership of this country when the province of British Columbia has a minimum wage of $2.50 an hour, the province of Saskatchewan went up to $2.50 an hour and the province of Ontario has the matter under active consideration while the province of Quebec is providing for a higher minimum wage. I even see that the Board of Trade in the province of New Brunswick is recommending considerably more than the minimum wage offered in this country. It is high time that we had leadership from the federal government, leadership which the nation requires. We cannot develop a work ethic and give people a sense of belonging to a society when we expect them to bend their efforts and their energies for less than we are prepared to pay people who are not required to work.
What we need in this country is a basic minimum pay for those who are working, and it must be in excess of that received by persons on social assistance. It may be that the basic minimum represents more than the productivity of some people in industry. But what is productivity? Who values productivity? In our society it is valued on a competition basis. If we raise the minimum wage across the
Adjournment Debate
board, then that is the minimum of competition because they cannot go below it and we destroy the competitive problem. As a result, those who hire labour must pay more than the minimum or at least the minimum.
The whole argument that you are going to go out of business, that you are going to go broke, that somebody will steal your customers, that you cannot make the restaurant go because you have to pay a minimum wage on which a man can live and raise a family, is utter drivel. What we need is leadership. We must have some action from the government. We must have the action that was promised by the minister in April, and promised in September. That action is a statement that something will be done "now".


Mr. Charles Turner (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, a periodic revision of the minimum wage is provided for under section 35(1.1) of the Canada Labour Code, part III (Labour Standards) which provides as follows:
... the governor in council may from time to time, by order, increase the minimum hourly wage established by subsection (1), but no order made under the subsection is of any force or effect until a date is specified in the order that is at least three months after the date of publication thereof in the Canada Gazette.
Thus, the governor in council is empowered under the act to review and increase the minimum wage of workers in industries under federal jurisdiction. The Minister of Labour (Mr. Munro) has already indicated, in replying to a question from the hon. member for Peel South (Mr. Blenkarn), that a revision of the federal minimum wage, which is now $1.90 per hour, is under consideration. A revision of the minimum wage must take account of various social and economic factors including, for example, changes in productivity and changes in the consumer price index. All these factors are now under review in the Department of Labour in consideration of possible revision of the existing federal minimum wage of $1.90.
Motion agreed to and the House adjourned at 10:20 p.m.
26635-2.3?

Wednesday, October 24, 1973