1973-04-05

SPRING1

['It is my duty, pursuant to Section 19 of the Electoral Boundaries Readjustment Act, Chapter E-2, Revised Statutes of Canada, 1970, to lay upon the table of the House a certified copy of the report of the Electoral Boundaries Commission for the province of Newfoundland, 1973.']
Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, I suppose it is a bit unusual for a "Rose" to be part of a daffodil promotion; nevertheless I am pleased to be part of the traditional rite of spring in the House that heralds its coming in British Columbia and is announced by making flower children of all hon. members.
The Bradner daffodil growers of my riding, who donated these blooms, regret that spring is a little late this year and hope that next year the presentation can be made in late January or early February when the blossoms are usually at their peak.


Some hon. Members:: Hear, hear!



Mr. Speaker:: It is my duty, pursuant to Section 19 of the Electoral Boundaries Readjustment Act, Chapter E-2, Revised Statutes of Canada, 1970, to lay upon the table of the House a certified copy of the report of the Electoral Boundaries Commission for the province of Newfoundland, 1973.



ROUTINE PROCEEDINGS


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion concerning a matter of urgent and pressing necessity, namely, that benefit control officers of the Unemployment Insurance Commission are using devious methods to disqualify immigrants who are not fluent in one of the official languages from unemployment insurance benefits. Such methods are unacceptable to Canadians and, indeed, as far as this party is concerned are very repugnant. I therefore move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That the question of methods used by benefit control officers of the Unemployment Insurance Commission to exclude immigrants who do not speak an official language from unemployment insurance benefits be referred to the appropriate standing committee for investigation and report to the House.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


VETERANS AFFAIRS
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I wish to move a motion under Standing Order 43 on a matter of urgency. The vast increases in the cost of land and housing are causing serious restrictions for some 125,000 war veterans who hold qualification certificates in meeting the requirements under the Veterans Land Act. This difficulty is emphasized by the acreage requirement, the limits on loans available, and the high down payment required. In order to bring legislation in line with the needs of the veterans, I move, seconded by the hon. member for Halton-Wentworth (Mr. Kempling):
That the government immediately appoint a committee, consisting of members of the department, officials of the veterans land administration and veterans organizations, to study these matters with specific consideration given to removing the October, 1968, and March, 1974, deadline restrictions, and that the report be referred to the Standing Committee on Veterans Affairs within three months.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


REGIONAL ECONOMIC EXPANSION
Mr. Bill Knight (Assiniboia):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. In view of the fact that a motion was passed in the Standing Committee on Regional Development this morning deploring the failure or unwillingness of the minister to appear before the committee, among other things, I ask unanimous consent to

April 5, 1973
Communications Policy
move, seconded by the hon. member for Nickel Belt (Mr. Rodriguez):
That this House call upon the Minister of Regional Economic Expansion to appear before the Standing Committee on Regional Development at its next sitting.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


COMMUNICATIONS
Mr. Terry Grier (Toronto-Lakeshore):: Mr. Speaker, in view of the fact that the recent green paper outlining proposals for a communications policy for Canada explicitly draws attention to the growing inability of the Canadian Transport Commission to reflect the interests of Canadian consumers in regulatory hearings, and because this criticism bears directly on the validity of the rate increases awarded to Bell Canada, under the provisions of Standing Order 43 I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That the paper on "A Proposed Communications Policy for Canada" be referred to the Standing Committee on Transport and Communications.


Mr. Speaker:: This motion also requires unanimous consent. Is there unanimous consent?


Some hon. Members:: No.


Some hon. Members:: Agreed.


Mr. Speaker:: There is not unanimity.


An hon. Member:: Who said "no" over there?



SOCIAL SECURITY


Mr. Rene Matte (Champlain):: Mr. Speaker, pursuant to Standing Order 43, I would like to move a motion on a matter of urgent and pressing necessity.
In view of the minority situation of the party in office and the ever growing importance of social security throughout this country, I move, seconded by the hon. member for Villeneuve (Mr. Tetrault):
That a representative of each of the parties in this House accompany the Minister of National Health and Welfare at the federal-provincial conference of the Ministers of Social Affairs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is no unanimous consent. The hon. member's motion cannot therefore be put.



MARRIED WOMEN'S PASSPORT BILL


Mrs. Grace Maclnnis (Vancouver-Kingsway) moved: for leave to introduce Bill C-173, respecting a passport issued to a woman who is married.


An hon. Member:: Explain.


Winona Grace MacInnis: Mr. Speaker, this bill is about sexual equality. Its purpose is to make it possible for a woman who is married to have the same right as a man by enabling her to have a passport issued to her in the name which is set out on her birth certificate should she so desire.


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


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask the Prime Minister whether the Minister of Energy, Mines and Resources was stating government policy last night when he indicated that the federal government does not have any role with regard to any potential differences that may exist between the province of Alberta and the province of Ontario over certain energy matters.


Hon. Donald S. Macdonald (Minister of Energy. Mines and Resources):: Mr. Speaker, perhaps I could respond to that question. I did not use the terminology and phraseology referred to by the hon. member. Rather, I indicated that we did not want to get into the middle of the acrimony which was developing between-


Mr. Speaker:: Order, please. The minister will appreciate the difficulty the Chair is faced with. When there is allusion in a question to a statement made outside the House it is recognized practice that the inquiry should be limited,
April 5, 1973

Oral Questions COMMUNICATIONS
as was done by the Leader of the Opposition, to asking the Prime Minister whether the alleged statement represents government policy.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I did spend some time with the minister yesterday afternoon discussing this very question. I was sure he would say he did not make the statement which is attributed to him.


Robert Lorne Stanfield: Mr. Speaker, I have a supplementary which I shall direct to the Minister of Energy, Mines and Resources. Is it the position of the minister on behalf of the government that the government of Canada does not have any role with regard to the potential differences that exist over certain matters between the provinces of Alberta and Ontario?


Donald Stovel Macdonald: Mr. Speaker, certainly the government of Canada does not have any role to get in the middle, as I was about to say, of any acrimony publicly between two premiers. However, we believe it would be desirable to have private consultation with the interested parties in this particular matter. I am looking forward to having such consultation to see whether we can bring together the consumer and producer interests involved in this matter and arrive at a mutually satisfactory settlement.


Robert Lorne Stanfield: Mr. Speaker, is it the minister's position that any such differences should be settled before any general national conference or any general national consultation takes place with regard to energy policy?


Donald Stovel Macdonald: That certainly is the insistence of the premier of Alberta. It seems to me that the situation of future planning by the Trans-Canada Pipelines in particular will require that the outstanding issues be resolved at an early date. Therefore I think the timing of the matter does indicate that before we can have a general federal-provincial discussion and a full scale meeting for that purpose we will have to arrive at some agreement on the current and immediate issue.


Robert Lorne Stanfield: Is it the minister's intention or the position of the government that the National Energy Board should have any role to play or have any jurisdiction with regard to the regulation of any such disputes in the future?


Donald Stovel Macdonald: The jurisdiction of the National Energy Board is set out under the statute. What is involved here is really a substantial change in the base price of gas which until now has not been a subject of the board's consideration. I think that the slightly longer term question is the kind of question that should be involved in the over-all energy discussions in due course.


BELL CANADA RATE INCREASES-INQUIRY AS TO GOVERNMENT DECISION ON TRANSPORT COMMISSION ORDER
Mr. David Lewis (York South):: Mr. Speaker, I have a question for the Minister of Communications. In view of the fact that Bell Canada tabled its proposed new tariffs with the Canadian Transport Commission a day or two ago and therefore time is of the essence with regard to any decision by the government, may I ask the minister whether the government has made a decision on the order of the Canadian Transport Commission and, if so, whether the minister intends to make any statement to parliament on the matter?


Hon. Gerard Pelletier (Minister of Communications):: Yes, Mr. Speaker, the government has taken a decision and I shall announce it to the House tomorrow morning in a statement on motions.


NATURAL GAS-DIFFERENCES BETWEEN ALBERTA AND ONTARIO-COMMUNICATION BETWEEN MINISTER AND PREMIERS ON POSSIBLE PRIVATE MEETINGS
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I should like to ask a supplementary to the questions that were put to the Minister of Energy, Mines and Resources by my leader. Have you specifically been in touch with the premiers of Ontario and Alberta with respect to-


Mr. Speaker:: Order, please. The hon. member should address his question to the Chair even if it is a supplementary. The Chair accepts even supplementary questions.


Sinclair McKnight Stevens: Thank you, Mr. Speaker. Perhaps the minister could answer my question whether he has in fact been in touch with either premier concerning his suggested private meetings.


Donald Stovel Macdonald: Yes, Mr. Speaker, with the responsible ministers and in one case with the responsible parliamentary assistant.


NATURAL GAS-DIFFERENCES BETWEEN ALBERTA AND ONTARIO-REQUEST FOR STATEMENT ON GOVERNMENT POSITION
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a supplementary question. Would the minister consider making a statement to the House on motions stating, I hope clearly and concisely, what the federal government's position is, if it has one, with regard to the proposals made and the constitutional position taken by the two provinces?


Donald Stovel Macdonald: Mr. Speaker, I have pursued that in the

April 5, 1973
Oral Questions
standing committee. Perhaps the hon. gentleman would like to peruse the proceedings there.


UNEMPLOYMENT INSURANCE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the minister responsible for unemployment insurance. It arises as a result of statements made regarding questionable actions of benefit control officers. In view of the fact that Park-dale Community Legal Services has charged that "it is clear the benefit control officers have been coached in methods of extracting statements that are damaging to the claimant", would the minister issue instructions in no uncertain terms that such practice is to be discontinued immediately?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, I have already done so. I might say that I welcome the report of Parkdale Community Legal Services, as does the chairman of the advisory committee of the Unemployment Insurance Commission to whom it was directed. The chairman assured me this morning that the committee will contact the people who prepared the report and look into the activities of the unemployment insurance commission which were criticized by them, with protection of any claimants involved, as part of the advisory committee's over-all examination of the benefit control operation.


Lincoln MacCauley Alexander: Pending receipt of and action taken on the report and recommendations, if any, of the advisory committee, will the minister assure the House and advise benefit control officers that no interviews or statements related thereto will be used in considering disqualification unless and until claimants have been informed of their rights, the purpose of the interview and how the information they offer will be used? Can the minister give us that assurance pending receipt of this report?


Robert Knight Andras: Mr. Speaker, that is the intention of my instructions to the Unemployment Insurance Commission in the past.


BENEFIT CONTROL-INQUIRY AS TO TIGHTENING OF INTERPRETATION OF &quot;SUITABLE WORK&quot; AND SECRET ADMINISTRATIVE DECISIONS
Mark Willson Rose: Mr. Speaker, I would like to direct a supplementary question to the Minister of Manpower and Immigration. Has the Unemployment Insurance Commission in the past three months tightened up its interpretation of "suitable work", and have there been any new and secret administrative decisions taken recently about which parliament and the public have no knowledge?
[Mr. Macdonald (Rosedale).J


Robert Knight Andras: Mr. Speaker, I would say the answer to that is no. The benefit control operation was introduced in June or July of last year and has been continuing with certain refinements, about which I have advised the House, since that time. So I do not think the allegation is correct.


Mark Willson Rose: Since the previous minister of manpower and immigration defended the new UIC program on the grounds that more generous benefits took the load off provincial and municipal welfare expenditures, has there been any change in policy deliberately to transfer desperate UIC claimants, and the cost associated with them, to the provincial and municipal welfare rolls?


Robert Knight Andras: Very definitely no.


REQUEST FOR REOPENING OF OFFICES IN RURAL AND SMALL TOWN AREAS
Mr. Heward Grafftey (Brome-Missisquoi):: I have a supplementary question, Mr. Speaker. Will the minister now reopen UIC offices that were shut in rural and small town areas in order to assure the House that the thousands of Canadians now unfairly disqualified in these areas, and who are available for work, will have their claims processed fairly and promptly?


Robert Knight Andras: Mr. Speaker, without accepting the premise of the hon. member's question, I have indicated before and I indicate again that a reorganization of the commission is pending and should be announced shortly.


William Heward Grafftey: As a supplementary-


Mr. Speaker:: Order, please. I see 15 members who are seeking to ask supplementaries. We will not have that many. The Chair will recognize two or three, and if hon. members then want to have a debate on this subject we can use the rest of the question period. For the moment the Chair recognizes the hon. member for Brome-Missis-quoi.


William Heward Grafftey: Will the minister inform the House how the UIC offices for these areas know if a man is available for work when the offices are over 70 miles away from where he lives and there is no liaison with the local placement officers?


Robert Knight Andras: If the hon. member will give me specific examples I will look into them and advise him later.


PROPOSED NUCLEAR REACTOR DEVELOPMENT ON STODDART ISLAND, N.S.-NEGOTIATIONS WITH DEPARTMENT-MEETING OF SAFETY STANDARDS
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I wish to direct a question to the Minister of Energy, Mines and Resources. It has to do with reports
April 5, 1973

that in all likelihood negotiations are going ahead for the development of what has been described as the world's largest nuclear reactor at Stoddart Island off the coast of Nova Scotia. First of all I want to ask whether or not at this point in time there have been any negotiations between the developers of that project and his department and, if so, is the minister satisfied that the reason for their coming to Nova Scotia is legal difficulties in the United States, and are the safety standards involved in the building of a plant of this magnitude being met by the developers?


Donald Stovel Macdonald: Mr. Speaker, I have not participated in any such discussions and I am not aware that there have been any recently. I would remind the hon. gentleman that the Atomic Energy Control Board has jurisdiction from parliament to control any such installation and that the board has expressed its reservations about the safety of the American-type reactor. On that basis, and using the question of the hon. gentleman for the purpose, I might remind interested parties that the board would have to be satisfied about the safety of any reactor.


INCOME TAX
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of National Revenue. In view of the report that Chrysler Canada has illegally avoided paying taxes totalling approximately $34 million for 1967-68 by inappropriately claiming losses which accrued to its dealers, will the minister inform the House whether or not his department has investigated this and, if so, would he inform the House what his decision has been on the matter?


Hon. Robert Stanbury (Minister of National Revenue):: Mr. Speaker, I think the hon. member knows that it would not be proper for me to discuss any individual tax case here.


John Edward Broadbent: In view of the seriousness of the charge respecting this major tax evasion, would the minister table any copies of letters between the Chrysler Corporation and the internal revenue service of the United States on this subject, which I am informed are in his department?


Robert Douglas George Stanbury: Mr. Speaker, I have no knowledge of any such correspondence and I am not certain that tabling it would be proper either, but I will be glad to look into the matter.


John Edward Broadbent: Would the minister inform the House whether any present member of the cabinet has interceded on behalf of Chrysler Corporation on this matter?


Robert Douglas George Stanbury: Not with me, Mr. Speaker.


Mr. Speaker:: Order, please.
Oral Questions


SOCIAL SECURITY
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, in the absence of the hon. Minister of National Health and Welfare, I should like to address my question to the right hon. Prime Minister.
In view of the federal-provincial conference which is to take place in the near future for the purpose of reviewing the whole question of social security in Canada, does the hon. Prime Minister intend to invite representatives of all political parties sitting in the House to participate?


Pierre Elliott Trudeau: Mr. Speaker, I do not believe a decision has been made as yet as to whether the conference will be in camera or public.
If it is public, we shall probably, as usual, reserve seats for observers, and members of the political parties represented in the House will have priority over the general public.


FAMILY ALLOWANCES-PRIORITY ON AGENDA OF FEDERAL-PROVINCIAL CONFERENCE
Mr. Henry Latulippe (Compton):: Mr. Speaker, I wish to direct a supplementary to the right hon. Prime Minister.
Since the federal-provincial conference is to take place on April 25, 26 and 27, and since the Quebec Minister of Social Affairs intends to take part, would the Prime Minister say whether the question of family allowances will have priority in the upcoming discussions?


Pierre Elliott Trudeau: There may have been a mistake, Mr. Speaker, and I am sorry if there has, but I thought the hon. member was referring to the first ministers' conference.
If this is his question, the answer is that the agenda has not yet been drawn up. If the hon. member is referring to the matter of the welfare ministers' conference, I would ask the parliamentary secretary to answer. But first let us find out if I have got the question right.


Henry P. Latulippe: Mr. Speaker, my question is about the coming federal-provincial conference, which is to take place on April 25, 26 and 27. It is a conference of health and welfare ministers.


Mr. Norman A. Cafik (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the whole purpose of the federal-provincial conference of welfare ministers is to discuss an over-all review of all welfare programs, and in the area of social security family allowances form a very important part and they will certainly be discussed at that conference.
Oral Questions FINANCE

April 5, 1973


COLLECTING OF CERTAIN COINS BY AMERICANS FOR MELTING IN UNITED STATES BECAUSE OF SILVER CONTENT-GOVERNMENT ACTION
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, yesterday I brought to the attention of the Minister of Finance what I termed a racket whereby Americans come to Canada, gather up our silver coins, take them to the United States and then melt them and make a very large profit. Will consideration be given to an order in council being brought in, similar to the one in effect in 1970 and set aside in 1971, to prevent this racket continuing?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, at the instance of my colleague, the Minister of Industry, Trade and Commerce, an order in council was passed by the government this morning under the Export and Import Permits Act placing silver coinage bearing pre-1968 date on the export control list.


John George Diefenbaker: Mr. Speaker, I commend the minister for the alacrity with which action was taken. Can he give any general idea of the amount that may be exported without having a permit? Has he that information available at the moment?


John Napier Turner: It would be very difficult to trace, Mr. Speaker, because the purpose of this type of export would be to melt down the silver. I cannot give any more information to the right hon. gentleman who on this issue has been as bright as a silver dollar.


UNEMPLOYMENT INSURANCE
Paul Yewchuk: Mr. Speaker, my question is for the Minister of Manpower and Immigration and is supplementary to that asked by the hon. member for Hamilton West. In view of the statement by Parkdale Community Legal Services that unemployment insurance benefit control officers are using unacceptable methods to exploit immigrants who do not speak English very well as a method of disqualifying them, will the advisory committee be conducting a detailed investigation into this aspect before it reports to him?


Robert Knight Andras: Mr. Speaker, I would find such activity on the part of benefit control officers to be as reprehensible as the hon. member finds it. As I indicated in my previous answer, the allegations of Parkdale Community Legal Services are to be investigated by the advisory committee and contact is being made by the chairman of the advisory committee with the people who prepared the report.
[Mr. Cafik.J


BENEFIT CONTROL-CONSULTATION WITH LABOUR LEADERS
Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, I have a supplementary question for the minister. Will the minister say whether or not his department plans to get together with leaders of the labour movement with a view to working out some agreement in this matter that will be acceptable to all parties?


Robert Knight Andras: Mr. Speaker, of the members of the advisory committee four are representatives of the labour movement. They are working diligently with the four representatives of management under the direction of their capable chairman, Mr. Anatole Lesyk.


PROPOSED FLOODING OF SKAGIT RIVER VALLEY-NATURE OF AGREEMENT WITH UNITED STATES RESPECTING POWER PROJECT-CANADIAN POSITION
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is for the Minister of the Environment. On April 3 the Minister of the Environment said, concerning the Skagit River, as found on page 2943 of Hansard:
We have now had a reply from the United States State Department officials. They agree, in principle, to the convening of a meeting or a series of meetings with the two principal parties with a view to terminating a longstanding contract.
Yesterday Mr. Vickery, superintendent of Seattle City Light, held a press conference and stated that he had been assured by Rufus Smith, United States Undersecretary of State for Canadian Affairs, that no agreement has been reached to end the project.


Mr. Speaker:: Order, please. A question should not be posed in those terms. I think the hon. member might like to come to his question now.


John Allen Fraser: Thank you, Mr. Speaker. Can the minister tell the House whether the United States government has officially assured the government of Canada that the only question to negotiate is the question of compensation?


Hon. lack Davis (Minister of the Environment):: No, Mr. Speaker, I cannot give that assurance to the House. The main purport of the statement I made was that an agreement had been reached between the two countries to hold meetings between the principal parties, British Columbia and Seattle City Light, with the purpose from our point of view, of terminating the agreement.


John Allen Fraser: Today Mr. William Johnson of the United States Embassy advised me that the official American position is that of Seattle City Light. In view of that, can the minister assure the House that Canada has delivered to the United States government notice that Canada will not permit the flooding?


John (Jack) Davis: Yes, Mr. Speaker.
April 5, 1973


Mr. Speaker:: The hon. member for Broadview? The hon. member for Nickel Belt.


UNEMPLOYMENT INSURANCE
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, may I direct a question to the Minister of Manpower and Immigration. In view of the fact that many areas in Canada have large immigrant populations whose language is neither French nor English, can the minister advise the House as to the policy of his department with respect to language capability of benefit control officers in those areas?


Robert Knight Andras: Mr. Speaker, this matter is being given attention, and to the degree practical and possible language services other than French and English are being provided to where claimants have difficulty in understanding.


Mr. Speaker:: Is the hon. member for Hamilton Mountain rising on the same question?


REGISTRATION REQUIREMENTS FOR TRADESMEN IN ORDER TO RECEIVE BENEFITS-ALLEGED EXPULSION THREAT BY UNIONS IF NON-UNION JOB ACCEPTED
Mr. Duncan M. Beattie (Hamilton Mountain):: Mr. Speaker, I am not going to talk about the two official languages. My question is for the Minister of Manpower and Immigration. Is it the policy of the government that an unemployed tradesman simply has to register with the Unemployment Insurance Commission and his local union in order to receive benefits, or does he also have to register with Manpower and seek work himself?


Robert Knight Andras: Mr. Speaker, first of all he has to qualify under all the regulations and rules of the Unemployment Insurance Act, but he has to register with the Manpower centre in his area and he is requested to seek work beyond any reference by Manpower. The general practice, where this exists, is to go through union hiring halls and this is acceptable except where the extension of unemployment is very long and where there are identified jobs for which he is capable. Then there will be other directions given to him.


Duncan M. Beattie: Is the minister aware of the muscle being exerted by international unions, with threats of union expulsion if a tradesman accepts a nonunion job in a related field? If so, in such cases does the Unemployment Insurance Commission allow these persons to continue to receive benefits after they have refused employment because of their fear of being expelled from their union?
Oral Questions


Robert Knight Andras: Mr. Speaker, there is protection in the act for union members and the rules and regulations under which membership is maintained, but where they are on extended benefits and their unemployment has lasted an inordinately long time, they are requested to take jobs beyond those referred to them by the union hiring hall.


Duncan M. Beattie: Can the minister not answer my question?


Mr. Speaker:: Order, please. I will again give the hon. member for Broadview a chance to ask his question. I am not sure whether he wants the floor.


HOUSING
Mr. John Gilbert (Broadview):: Thank you, Mr. Speaker. So many are jumping up that I am sure you have trouble in seeing me. My question is directed to the Minister of State for Urban Affairs. In view of the fact that the intention of the limited dividend provisions of the National Housing Act is to provide low rent for persons with low incomes, and in view of the fact that the limited dividend group of the Dufferin project in the city of Toronto have advised the minister that their rents are as high, if not higher, than those of similar projects in the same area financed by private owners, what steps does the minister intend to take to lower the rents of persons in limited dividend projects?


Hon. Ron Basford (Minister of State for Urban Affairs):: Mr. Speaker, the purpose of the limited dividend program is to limit the return of the owner of the buildings and thereby provide housing at slightly less than market prices. However, the owners are entitled under the terms of the mortgage agreement to charge through rents for actual increases in costs. I have not yet seen the representations the hon. member refers to but I will get them out forthwith and examine that particular case. Of course, I have also instructed CMHC, as the hon. member knows, to examine all applications for expense increases as strictly as possible.


NATIONAL REVENUE
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, may I address a question to the Minister of National Revenue. He is aware of the nature of my question because of the discussions we have had about it. Will the minister say whether he plans to continue or discontinue the customs service for parcels and other commercial consignments that has been enjoyed for so long by the businessmen of Sidney, British Columbia.

April 5, 1973
Oral Questions


Robert Douglas George Stanbury: Mr. Speaker, as I have indicated to the hon. member previously, there will be no change made in the substance of that service without discussing it further with him and with the Chamber of Commerce of Sidney and Saanich, as I believe the area is known. There is no suggestion of removing the service.


Donald W. Munro: Mr. Speaker-


Mr. Speaker:: Order, please. If there are to be further
questions, I suggest to the hon. member that they should be placed on the order paper.


CANADA DEVELOPMENT CORPORATION
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, my question is for the Prime Minister. On November 29, 1971, the right hon. gentleman announced in the House that the Canada Development Corporation would have its headquarters in Vancouver, British Columbia, within two years. Is that still the policy of the government, and when may we expect the corporation to have its headquarters in Vancouver?


Pierre Elliott Trudeau: Mr. Speaker, the government has not changed its policy since I made the announcement in that regard.


John Douglas Reynolds: Can the Prime Minister announce when the Canada Development Corporation will be moving its headquarters to Vancouver since there is such a short time between now and November and because it will mean, as the Prime Minister stated, the creation of hundreds of jobs for British Columbians?


GOVERNMENT ADMINISTRATION
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is for the Prime Minister. Yesterday the Prime Minister said he wanted to continue the policy of decentralizing government services. Is he giving any consideration to moving government services to or developing them in western Canada, specifically Alberta?


Pierre Elliott Trudeau: Mr. Speaker, such decentralization has already been brought about in the case of Alberta and of other provinces too.


CRIMINAL CODE
Winona Grace MacInnis: Mr. Speaker, my question is for the Minister of Justice. In

view of the fact the Criminal Code requires that abortions be performed only in accredited or approved hospitals and with the sanction of a hospital board, and because in many areas the refusal of hospitals to establish such abortion boards creates a situation where other hospitals are overloaded or where women must travel to other provinces or other countries to seek an abortion or fall into the hands of illegal or incompetent practitioners, will the government consider removing abortion from the Criminal Code, thus making possible the establishment of clinics where legal abortions can be performed by competent physicians?


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


Some hon. Members:: Oh, oh!


Mr. Speaker:: The minister might be allowed to reply briefly to the hon. member's address.


Hon. Otto E. Lang (Minister of Justice):: No, Mr. Speaker, we do not intend to take action to remove it from the Criminal Code.


Some hon. Members:: Hear, hear!


Otto Emil Lang: I should add that I do not see anything in the Criminal Code that requires any hospital or individual to participate in abortions.


Winona Grace MacInnis: May I ask whether the minister will at least consider honouring the promise of his predecessor that parliament would be given an opportunity to debate this matter?


Otto Emil Lang: Mr. Speaker, several years have gone by since that time. In that interval a good deal of debate has occurred in the country and I am not sure whether any fruitful purpose would be served by a debate in the House at this time.


VETERANS AFFAIRS
Jack Marshall: Mr. Speaker, I wish to direct my question to the Minister of Veterans Affairs. In view of the fact the present provisions of the Veterans Land Act are not keeping pace with the vast increase in the cost of land and homes, will the minister advise what consideration is being given to relieving the restrictions being faced by veterans who hold qualification certificates?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, this would be a matter of government policy. If any changes are to be made, they will be announced in due course.
April 5, 1973

Oral Questions FLOODS


Jack Marshall: In view of the vast increase in the cost and size of the land required by veterans, will the minister take the necessary action to relieve the acreage payment under the act by reducing the limitation of one half acre less 20 per cent for veterans who qualify?


Daniel Joseph MacDonald: Mr. Speaker, this would also be government policy which would be announced in due course.


EXTERNAL AFFAIRS
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs.
In the light of reports of an intense renewal of hostilities in Viet Nam, could the minister inform the House as to the present position of the Canadian observers, especially with regard to their safety, and could he tell us if he is considering any changes?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, we have received from the government of the Republic of Viet Nam a protest against the activities of the communist forces in that area. This has been addressed to us not as a member of the International Control Commission but as a member of the International Conference on Viet Nam. In other words, this protest has been made to all parties to the conference. The commission itself is continuing to try to carry out its responsibilities under increasing difficulties, but we have not yet had any advice that in their view it is necessary to withdraw from any place in which they are now located.


FISHERIES
Mr. S. I. Korchinski (Mackenzie):: Mr. Speaker, my question is to the Minister of Fisheries. In view of the fact many fish processors suffered losses in last year's operations and there are many unanswered questions with regard to the financial state of the Freshwater Fish Marketing Corporation, has the minister received any request from any processor or province to withdraw from the Freshwater Fish Marketing Corporation?


John (Jack) Davis: Mr. Speaker, other than the corporation itself, it is not true that either the fishermen or the fish buyers lost money. The financial loss is confined mainly to the corporation.


Stanley James Korchinski: Mr. Speaker, I rise on a point of order. My information is that the Co-op Fisheries of Saskatchewan lost $108,000 last year.


LAKE ONTARIO-REQUEST FOR PROVISION OF SANDBAGS TO PROPERTY OWNERS
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, my question is for the Minister of the Environment. Because of many instances of urgent need for sandbags to cope with high water levels of Lake Ontario and the Bay of Quinte, will the minister and his department take action to make sandbags available to property owners whose premises are presently threatened with flooding in this emergency?


John (Jack) Davis: Mr. Speaker, the property owners should look for this help to the levels of government to which they pay property taxes.


Almonte Douglas Alkenbrack: Mr. Speaker, I remind the minister that these waters are under national jurisdiction.


Mr. Speaker:: Order, please.


INDIAN AFFAIRS
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. In view of the recent press statement by the Indian Brotherhood of the Northwest Territories which mentions the sham the government went through in granting a permit to Cominco at Fort Wrigley against the wishes of the band and settlement councils, which resulted in the land caveat being filed, will the minister tell the House if the government is now prepared to grant a moratorium on development in the affected area until the land claims are settled?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, we have repeatedly invited the Indians in the Northwest Territories to choose the lands they are entitled to under treaties Nos. 8 and 11; our position in this regard is still the same. We hope they will make a choice; it is up to them to decide which lands will belong to the Indians in that area.


Walter Gilbert Dinsdale: In view of a press statement by the Indian Brotherhood of the Northwest Territories that a caveat over the major portion of the whole MacKenzie Valley was based on possible claims to aboriginal rights of the Indian people of the Northwest Territories, will the minister tell the House when his statement on aboriginal rights will be presented to the House?


Joseph Jacques Jean Chrétien: Mr. Speaker, we are now working on the matter of the rights of the Indians in the provinces where
2998

April 5, 1973
Oral Questions
no treaties were signed. We hope to be able to discuss this problem or formulate a policy on this subject within the coming months.


ABORIGINAL RIGHTS-REQUEST FOR INFORMATION ON FEDERAL REPRESENTATION ON NEGOTIATING COMMITTEE-INCLUSION OF YUKON RESIDENTS
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I wish to direct a supplementary question to the Minister of Indian Affairs and Northern Development. In reply to a question put to him by the hon. member for Kingston and the Islands last Wednesday, he said he would be announcing this week the composition of the federal half of the negotiating committee that would be negotiating settlement of the claims of the Yukon Native Brotherhood. Can he now say whether the composition of the federal side of that committee has been decided and, if so, what is it?


Joseph Jacques Jean Chrétien: Mr. Speaker, there is one day left before the week is over. I hope to keep my promise before tomorrow evening.


Erik Nielsen: A supplementary question.


Mr. Speaker:: Order, please. There are two or three minutes left before the end of the question period. The hon. member can ask a supplementary question. The Chair will then recognize the Leader of the Opposition and the hon. member for York South and call orders of the day.


Erik Nielsen: Can the minister assure the House that the committee will be composed of five or six members and that at least two will be drawn from nominations of the Commissioner in Council of the Yukon?


Joseph Jacques Jean Chrétien: Mr. Speaker, at least one resident of the Yukon will sit on the negotiations committee; this will be announced in due course.


INCOME TAX
Robert Lorne Stanfield: Mr. Speaker, my question is for the Minister of Finance. Can the minister inform the House whether that part of the notice of the ways and means motion relating to the proposed cut in corporate tax rates with regard to manufacturing and processing profits will be the same as the relative part of the motion arising from his-I am speaking very slowly so the minister will be sure to understand.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Will that part of the motion relating to this tax be in the same words as the ways and means motion the minister tabled following his 1972 budget?


John Napier Turner: Mr. Speaker, I want to analyse that statement very carefully.


Some hon. Members:: Oh. oh!


Robert Lorne Stanfield: Mr. Speaker, I will be very happy to have the answer tomorrow.


REGIONAL ECONOMIC EXPANSION
David Lewis: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion. Two or three times in the last couple of weeks he has indicated that his department and the government were reaching the point of decision with respect to the application of the group known as TEMBEC to continue the operations of the mill in Temiscaming. May I ask the minister whether a decision has been reached, and can he inform the House what it is?


Hon. James C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, I am happy to be able to say, as I indicated earlier this week that I would, that we have reached a decision. It is one that involves government participation in a major effort to get this mill reopened.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: There are several other parties to the agreement, as the hon. member and the Speaker will know, and there will, of course, have to be continuing negotiations to work out suitable arrangements. But if all the other pieces fit into place satisfactorily, the federal government will not impede the project but, indeed, will make a contribution toward it.


David Lewis: I am glad to have the answer that the federal government will participate, but I am a little worried about the further consultations that the minister says will have to take place. In view of the fact that this attempt was put before him last November, or before his department, would the minister take steps to see to it that these consultations are completed quickly and that the mill is reopened with the least possible delay?


Donald Campbell Jamieson: Mr. Speaker, I can certainly give that commitment. May I also add that the reason for additional consultations with the government of Quebec and the company, but particularly with the government of Quebec, is that they have made certain conditional commitments to the project and we want to be sure exactly what their nature is. I hope to meet with the appropriate minister from Quebec on Tuesday or Wednesday of next week.
April 5, 1973


Mr. Speaker:: I am informed there is still one minute left before the end of the question period. The Chair will recognize the hon. member for South Shore.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I should like to direct a question to the Minister of Fisheries. When will a report be made available to members of parliament concerning the decisions reached following the secret two-day federal government-industry conference on fisheries problems, which concludes today in Halifax?


John (Jack) Davis: Within the next few days, Mr. Speaker.


Lloyd Roseville Crouse: Mr. Speaker, I have a brief supplementary. Since herring overfishing was reportedly discussed at the meeting and herring landings in Nova Scotia declined by approximately one-third in January of this year compared with landings a year ago, is the minister contemplating any immediate discussions with members of the International Commission for the North Atlantic Fisheries to review the herring quotas established by the council in Rome in January, since the recommended increase-


Mr. Speaker:: Order, please. The hon. member was given the floor for a brief supplementary. We have now gone beyond the end of the question period but the hon. member will be allowed to finish his question. I was hoping that it would be brief, but the hon. member has the floor.


Lloyd Roseville Crouse: Mr. Speaker, to finish the question-since the recommended increase of 25,000 tons to 90,000 tons from the Nova Scotia banks means that foreign herring fishing in sub-areas 5 and 6 has increased by 50 per cent in the last two years.


John (Jack) Davis: Mr. Speaker, we will certainly be taking up this matter again with the other nations fishing in the North Atlantic. However, we will do so after we have had the recommendations of the fishermen and the companies.


Mr. Speaker:: Orders of the day.


BUSINESS OF THE HOUSE
Gerald William Baldwin: Mr. Speaker, could I ask the government House leader what the business is for this week and next week?


Mr. MacEachen:: Mr. Speaker, today we will begin second reading of the income tax changes, followed by the
Income Tax Act
Excise Tax Act and the Customs Tariff Act. Following that I shall probably call the CNR financing bill and then crop insurance.


Gerald William Baldwin: Mr. Speaker, I wonder whether the minister would remind his colleague, the Minister of Finance, that by the time we come back after the Easter recess it will be almost one year since the day he brought in his last budget, and that the House would be very much obliged if the minister would speed up his cerebral processes so we could examine, before we leave for the Easter recess, the ways and means motion he still has to bring in?


Jack Marshall: Mr. Speaker, could the House leader indicate if legislation to increase the basic rate of the pension will be introduced before the Easter recess?


Allan Joseph MacEachen: No, Mr. Speaker.


Mr. Speaker:: I believe the hon. member for Winnipeg North Centre is rising on a point of order.


Mr. Knowles (Winnipeg North Centre):: No, Mr. Speaker, I should like to ask a supplementary question. Would the President of the Privy Council check with the answer given to that question yesterday by his colleague, the Minister of Veterans Affairs?


Allan Joseph MacEachen: I would be happy to, Mr. Speaker.



GOVERNMENT ORDERS


John Napier Turner: that Bill C-170, to amend the statute law relating to income tax, be read the second time and referred to a committee of the whole.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Laniel in the chair.
The Deputy Chairman:: Order, please. I invite members of the committee who have to leave the House to do so as quickly as possible so we may proceed. House in committee of the whole on Bill C-170, an act to amend the statute law relating to income tax.


Mr. Lambert (Edmonton West):: Mr. Chairman, when Mr. Speaker was putting the question on second reading, I stood up but he continued to put the motion. There is so much hubbub in here I still am not sure whether the motion was carried on second reading, and can judge only from the fact that Mr. Speaker left the chair and the Chairman seemed to take over. Both the minister and I stood up to make statements and to carry on the debate. There is no way it could have been considered we agreed
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April 5, 1973
Income Tax Act
to go into committee. I suggest that a message be sent to Mr. Speaker under the circumstances, because that was certainly not the case.


Gérald Laniel: Order, please. The hon. member will understand that the proceeding he is referring to cannot be judged by the Chairman of the committee. If the hon. member wants the committee to report progress and to bring Mr. Speaker back into the Chair, there is only one way, as Chairman of this committee, that I can make a decision as to that to the satisfaction of the hon. member.


John Napier Turner: Mr. Chairman, I would support the interpretation of what happened that as given by the hon. member for Edmonton West. If there is unanimity, perhaps we should ask the Speaker to resume the Chair.


Marcel Joseph Aimé Lambert: I do not want to be very, very difficult about this, but I should like to indicate to the Chairman, as perhaps he knows as a result of occupying the Chair himself that at the particular point when proceedings in the House change it is absolutely impossible to hear what is being said by the Chair. Therefore, in view of what the Minister of Finance has said perhaps I can move that the committee rise, report progress, and that we then revert to second reading when Mr. Speaker is in the Chair.


Gérald Laniel: I am not sure whether I understand correctly the proposal the hon. member is now making. If he wants to put a motion to the Chair, I think it should be followed up. Otherwise, there could be another solution. The practice has been that hon. members could be permitted to make speeches on the whole subject matter of the bill under Item 1.


Marcel Joseph Aimé Lambert: The motion is not required to be in writing.


John Napier Turner: Mr. Chairman, the committee is master of its own rules and, by unanimous consent, we are asking you to report progress in order that we might return to the second reading stage as though second reading were not given. I think that is the consensus of the committee.


Gerald William Baldwin: In answer to that, Mr. Chairman, it was not the intention of this committee, sitting before as the House, that second reading should be given without an opportunity for adequate debate, and any such interpretation is not in accord with the view of the House.


Gérald Laniel: Is there unanimous consent to the suggestion of the minister that the committee report progress in order that we might call Mr. Speaker back to the Chair?


Some hon. Members:: Agreed.


Gérald Laniel: The procedure suggested to the committee, as I understand it, is to dissolve the committee and revert to the procedure we agreed to and return to second reading stage. Is that agreed?


Some hon. Members:: Agreed.

Progress reported.
[Editor's note: And the House having returned to a consideration of the motion for second reading;]


Marcel Joseph Aimé Lambert: Mr. Speaker, I thank you for coming back. As I explained to the Deputy Chairman, it was impossible to raise this point of order in respect of the action of the Minister of Finance (Mr. Turner) before the committee. This point of order is really raised for clarification, and is something on which Your Honour may have to take advice, or perhaps it will have to be referred to the Committee on Procedure.
This matter arises because of the unusual circumstances the House finds itself in today as a result of the so-called superseding notice of motion and a bill being presented, presumably based on that motion and having reference to notices of motions for ways and means of May, 1972 and February 19, 1973.
Standing Order 60(11) reads as follows:
The adoption of any Ways and Means motion shall be an order to bring in a bill or bills based on the provisions of any such motion.
Quite to the contrary, the House has adopted five ways and means motions, each of which was an order of this House to bring in a bill or bills based on the provisions of such motion. On Tuesday last, the Minister of Finance introduced Bill C-I70, and that is the one that is before us for consideration today. This bill is divided into three parts. The first part relates to the Income Tax Act, the second part commencing at page 110 of the present bill relates to amendments to the income tax application rules, 1971, and the third part commencing at page 136 relates to chapter 63 of the 1970, 1971 and 1972 statutes. Each of these parts of Bill C-170 relates to a different ways and means motion, yet the wording of the rule suggests there can be a bill or bills arising out of one motion, but not one bill arising out of several motions. Accordingly, I suggest to Your Honour that we have to consider whether this bill conforms to Standing Order 60(11).
The minister acted on his own motion, and without obtaining the consent of the House to suspend the application of Standing Order 60(11). As a result there is no way of raising a point of order and there is no debate at that time.
An additional oddity is that two of the motions purport to amend the same act, one part being Part III and the other Part IV. The minister has not explained why such changes were based on separate ways and means motions, and under a strict interpretation of Standing Order 60(11) he should have brought in separate bills, not an omnibus bill. The reason I raise this matter is that this is the first occasion of this kind and it may require clarification.
The second point I should like to make, and this is as a result of a combination of circumstances which originated in the inability of the government to make up its mind as to what it intended to do in proceeding with ways and means motions, relates to the presentation of two budgets. The motions were tabled as required by the rules following the presentation of the budget messages. Then, the government waited, waited and waited and finally made up its mind to bring in what the minister calls a supersed-
April 5, 1973

ing ways and means motion. This was introduced to the House on Thursday and the designated day was Tuesday. Now, we have a 110 page plus bill which was not available to the House until yesterday afternoon.
There is one question which arose in respect of a previous budget. Your Honour will well remember it as it caused grave difficulty. On that occasion, the bill that followed the passage of the motion did not conform with the terms of the motion. I have some very serious doubts about the procedure followed by the minister in this case. The quick survey I made this morning would indicate that in Part I of the bill there are at least 15 amendments to which there is no reference in the ways and means motion. In Part II of the bill there are seven such references, and Part III of the bill conforms with the motion.
In fact, there are two particular provisions, one in Part I and one in Part II, which are entirely new and are marked "new". It may be that the minister has an explanation for this, and we do agree that in some matters there are consequential amendments. It is readily understandable that when Clause 7 provides for something and Clause 8 is consequential upon Clause 7, an amendment to Clause 8 is required but would not be the subject of a detailed determination in the supply motion.
We have not had an opportunity to make that very detailed examination of this 110-page bill in relation to the Income Tax Act. We are being asked to debate it now. We saw it for the first time yesterday and, as I say, I raise these points of difference already. Somehow or other the minister may be able to give a valid explanation, but I raise this is as a point of order in order to afford him an opportunity to have this particular point checked out. However, if we are to continue tomorrow or later today with the clause by clause study, the minister will readily understand that because of the timing he has put on this- certainly he understands the complexity of the Income Tax Act, -and the fact that we might have to take this blessed bill and blend it into the act so that one is not caught up in agreeing to what is nonsense and so that one can readily understand it, some better effort should be made in the future to ensure that this dilatory government does not rely on being able to put the gun to the head of the opposition.
Many of the provisions of this bill should have been in effect a month or six weeks ago. However, they are no proposed and the government says that we must pass these in a hurry of else the taxpayer will suffer. That is totally wrong. I want to come back to the original point I made in respect of Standing Order 60(11). I do not want the bill blocked, but I would like Your Honour to take up the matter to see whether there could be a reference to the committee on procedure to have this particular point straightened out.


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


Mr. Nystrom:: Mr. Speaker, I am rising in respect of the debate on second reading.
Income Tax Act


Mr. Speaker:: Perhaps I might reflect briefly on the point raised by the hon. member for Edmonton West (Mr. Lambert). I appreciate his suggestion that the very interesting comment he made is not one which should be used by the Chair or by the House at this time to set aside this particular bill. He is perhaps, placing a caution on the proceedings of the House by suggesting that the matter be considered in due course by the Chair and also by the Committee on Procedure and Organization. When points of this nature are brought to the attention of the Chair they are normally, or I might say as a matter of fact, referred to the Committee for study. This is what certainly would be done again in this particular instance.
I would like to refer to one point made by the hon. member for Edmonton West to the effect that there is no precedent for this procedure. There is a precedent. It may be that it is not a good precedent and that perhaps we should not have followed this procedure in the first instance. If the hon. member would look at the House of Commons Journals for February 16, 1971 he will find that there were two resolutions proposed for consideration of the House. They were carried. There was a motion in respect of one bill that was passed on the two resolutions. Again, as I say, this perhaps is not a good precedent in the sense that it may be that the procedure at that point was not correct and that the point of order should have been raised at that time. In any event, however, there is a precedent for the procedure which is being followed at this time and the particular incident will be brought to the attention of the committee.
Is the minister rising to make his initial statement?


John Napier Turner: Yes, if I
might.


Mr. Speaker:: I suppose the fear of hon. members is that perhaps the minister is rising to close the debate.


John Napier Turner: Mr. Speaker, I think the way you suggest is the right way to handle the point of order, if I may say so with respect. We are about to commence debate on Bill C-170 to amend the Income Tax laws relating to the year 1972.1 think it might be helpful if I took this opportunity to comment upon some of the more important aspects of the bill.
First, I should like to refer to a number of measures which are designed to assist individuals. One urgent priority confronting us is the threat posed the the financial security of those Canadians who have little or no ability to protect themselves from the burden of rising living costs. I refer principally to the aged, a large proportion of whom are women, and to the blind and disabled. A number of steps have already been taken by this government to assist this hard pressed group, including the indexing of the old age security pension, the increase in the old age security pension and the improvement of the benefits paid under the guaranteed income supplement. In addition, this bill proposes to increase the exemption allowed persons 65 years of age and over for income tax purposes from $650 to $1,000. I do not believe members of this House would want to penalize those men and women who have made sacrifices throughout their lives in order to save for their own retirement. This increased exemption

April 5, 1973
Income Tax Act
will also be extended to taxpayers who are confined to bed or a wheelchair and to the blind.
In my budget of last May, I spoke of the growing financial burden facing students and their families in meeting the rising costs of higher education or vocational training. Traditionally, we have tended to think of education and training as the problems of youth alone. Increasingly, however, education and training are becoming a continuing process. More and more Canadians and an ever larger number of adults, particularly married women, are resuming their studies in order to obtain more interesting and better paying jobs to widen their own horizons in life. The costs of education and training have been climbing, and there are indications that these factors are weighing heavily against decisions to proceed with education or training. Hence, the need to propose measures to encourage the efforts of students and their families to invest in further education or training.
The bill before us provides a new deduction related to the cost of obtaining education, which will be in addition to the existing deduction for tuition fees. This new measure will provide for a deduction of $50 per month per student for each month in the year during which the student was in full-time attendance at certain educational or training institutions. It will be applied to full-time attendance in a qualifying educational program at educational institutions providing courses at the post-secondary level, and also at educational institutions certified by the Minister of Manpower and Immigration in connection with the present tax provision affecting tuition fees. The deduction will be available to the student, but to the extent that she or he cannot make full use of the deduction, it will be available to the student's parent, husband or wife.
A further proposed amendment affecting individuals relates to medical expenses. This is an area which requires continuing surveillance to make sure that the hardship cases are dealt with quickly and adequately. To this end, the bill proposes to include as a medical expense for tax purposes an amount paid as remuneration for a full-time attendant to care for a taxpayer, his spouse, or other dependent, in a domestic establishment in which the cared for person resides. This will be available upon certification by a doctor that the person is incapable of self-care for what is likely to be an indefinite period.
It is also proposed to include as a deductible medical expense amounts paid to commercial transport services for transportation of a taxpayer or his spouse, or dependent, and an attendant if necessary, to and from a hospital, clinic or doctor's office to which the individual has travelled a distance in excess of 25 miles to obtain medical services not otherwise available nearer home. I believe that this will be of untold benefit to those living in smaller communities across Canada where some of the specialized medical services are not close or easily available and where Canadians go to the larger centres for more specialized treatment.
There are also several proposed amendments concerned with deductions at source, a matter of considerable
[Mr. Turner (Ottawa-Carleton).l
importance to many individuals. First, there is an amendment which would permit a taxpayer to elect to have tax deductions made at source on income such as pension benefits. Ordinarily, this type of income is not subjected to source deductions, but a number of taxpayers have asked that they be given the option to pay their tax liability on a periodic basis. This could prevent the need to meet a large year-end tax liability.
Second, the income tax regulations have for many years authorized a reduction of the amount of tax normally deducted from payments at source, where deduction of the full amount would cause hardship. This might be done, for example, where a taxpayer had little other income and was likely to end a year with little or no tax liability. An amendment is proposed to place this authority in the Income Tax Act rather than in the regulations.
Finally, in this regard, individuals who earn income that is not subjected to deductions at source are required to pay instalments during the year as a payment against their tax liability for the year. In order to ease the financial and paper work burden facing many of our low income taxpayers, especially pensioners, an amendment provides that instalments will not be required if the individual's federal tax liability for the preceding year did not exceed $400.
In this bill there are several important proposals concerning taxation of retirement income plans. It is proposed to amend the definition of earned income used in determining the amount an individual may deduct as a contribution under a registered retirement savings plan. The amendment provides that the deductible amount of a retirement savings or pension plan contribution, will not be subtracted in computing earned income. The effect of the prior law was to reduce the maximum contribution permitted to be deducted from an intended 20 per cent of earned income to approximately 16 2/3 per cent of earned income. This amendment will correct that anomaly.
It is also proposed to treat a refund of premiums from a registered retirement savings plan received by a beneficiary through an estate in the same way as if the payment were received directly from the plan. In the result, a spouse will be able to invest the amount as a contribution to another registered retirement savings plan or use it to purchase an income averaging annuity.
In certain circumstances, tax on the post 1971 appreciation in value of shares or other securities received from a deferred profit sharing plan on retirement, death or withdrawal will be deferred until the recipient eventually disposes of the securities. The recipient's cost for tax purposes at the time of receipt will be based upon the amount he would have received upon withdrawing from the plan on January 1, 1972, plus amounts allocated to him after
1971.	In effect, this amendment will provide a form of rollover treatment for securities distributed by a deferred profit sharing plan to its members.
I would now like to mention in general terms a number of amendments contained in Bill C-170 before the House which provide assistance to the farmer. Most important, an amendment is proposed which will permit a farmer to transfer his farm to his children free of capital gains tax at the time of his death. This exemption from the general rule of deemed realization of capital property at death is
April 5, 1973

intended as a response to a most urgent problem facing us, namely, the need to help preserve the family farm as a viable unit. The farm is a unique property-it is an illiquid asset, subject to volatile fluctuations in value. An involuntary deemed sale for tax purposes at a time when there is no actual receipt of cash may leave the family with no choice but to sell out. This amendment should help to prevent that result.
Under the present law, part of the sale proceeds of licences and rights issued by a federal, provincial or municipal authority and acquired before 1972, and later disposed of, are treated as income. No deduction may be made for any amount paid to obtain the licence. An amendment is proposed to ensure that any recovery of original cost will not be taxed. This provision will cover milk and other agricultural marketing quotas, timber, taxi, bus, truck, broadcasting and similar government issued licences.
For farmers and ranchers reporting their income on a cash basis, the early years of establishing a new herd can result in heavy startup expenses and a substantial loss. In many cases, the loss cannot be used within the five year period allowed for the carry forward of losses under the existing act. A proposed amendment will permit a farmer or rancher to carry his livestock in his inventory at any amount up to fair market value. This will overcome the problem of "unusable losses" in the early years and allow those startup expenses to be taken into account in later, profitable years.
There are also a number of proposed amendments in this bill which are of particular interest to the small businessman. As an incentive to small business, the present act provides a rate of 25 per cent on the first $50,000 in each year of business income of Canadian-controlled private corporations until $400,000 of taxable income has been accumulated. The purpose of the incentive was to provide additional funds to help corporations expand their businesses. To the extent that a corporation did not need additional capital to expand, the benefit of this incentive was not made available. This was accomplished by a provision withdrawing the benefit of the low rate to the extent that retained earnings were put into long term investments, unrelated to business activities-the so-called ineligible investment test. This ineligible investment test has proven complex and difficult. An amendment will repeal the test effective January 1, 1972.
The Income Tax Act requires a corporation to make an election when it pays a special dividend out of its surplus which was accumulated before the start of the new system on January 1, 1972. Many small corporations found difficulty in meeting these requirements during the first year of the new system, and to relieve the problem, an amendment will permit corporations to file late elections for special dividends payable during 1972. A corporation's surplus accumulated prior to 1972 consists of undistributed income and capital gains. A corporation may distribute both of these surpluses free of tax to its shareholders, but only after it has paid a special 15 per cent tax on its 1971 undistributed income. If the corporation distributes its pre-1972 capital gains before it has paid the 15 per cent tax on all of its pre-1972 undistributed income, a special tax is levied.
Income Tax Act
A proposed amendment would permit a corporation to elect to pay the 15 per cent tax on its total undistributed income-whatever that figure turns out to be-and once that election is made the corporation could proceed to distribute its pre-1972 capital gains without the risk of paying the special tax. This will relieve the difficulty facing many small corporations in estimating their undistributed income on hand at the end of 1971.
Where a Canadian corporation distributes its property to shareholders in the course of winding up, it may have difficulty in taking advantage of the rules permitting payment of dividends out of its special surplus accounts. Proposed changes will permit the rules for distribution of these special accounts to work more effectively. This has been a particularly troublesome problem to many small businessmen who often find themselves faced with the need to re-organize their business. The proposed amendment should provide welcome simplification of the existing rules.
I wish that time permitted me the opportunity to discuss all of the many amendments proposed in this bill, but I hope during the committee stage to be able to give what explanations I can to the House through the committee and to respond to whatever questions and clarifications may be needed. I have limited myself to a few general comments at this second reading stage upon some of the more important measures affecting individuals and particularly farmers and small businessmen. I hope that, in so far as they went, my remarks have been helpful to hon. members in obtaining a better general understanding of the nature of the bill. I look forward to the constructive comments which I am confident will be forthcoming at the committee stage and during second reading from all hon. members as we debate the bill.


Marcel Joseph Aimé Lambert: Mr. Speaker, I think the Minister of Finance (Mr. Turner) did not speak any truer words than the last ones that he uttered when he said his explanations at this stage are extremely brief on a subject which is extremely difficult. I must say that I find the thinking processes of the government somewhat illogical at this time.
First of all, the minister exhorted us to deal expeditiously with this legislation when he introduced his ways and means motion the other day. He said, as recorded at page 2723 of Hansard for March 29:
I would urge the House to deal expeditiously with these 1972 tax measures .. . After these have been dealt with, parliament will be asked to consider those tax measures arising out of the May and February budgets which affect 1973 and subsequent taxation years.
That sounds very nice, reasonable and plausible, except that it was within the power of the government to have had the House deal with these matters much sooner than now. It is only at the eleventh hour-as a matter of fact some people would say at five minutes to midnight-that the government has made up its mind on how it is going to proceed on some of the budget proposals of May, 1972 in order to maintain a somewhat illicit relationship with the NDP. I can see the pattern now. The government is going to combine some of the May proposals with those made in

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February. Now that he has seen this bill, the hon. member for Winnipeg North Centre (Mr. Knowles) must realize how much of the February budget there is in it, and how much of the administrative changes applicable to Bill C-259 have been smuggled into this bill. There will be left some very stark realities to consider in contra distinction. There will be the personal tax reduction and all the other goodies of the 1973 budget up against one corporate tax cut in an omnibus bill. We are given an omnibus bill here,-


Stanley Howard Knowles: There may be two bills.


Marcel Joseph Aimé Lambert: -Mr. Speaker, and we are being asked to put through some of the most complicated changes to the Income Tax Act in an attempt to clarify those sections of Bill C-259, all 700 or 800 pages of it, which defied the wit of the government at the time, which practitioners have shown to be impractical, and on which the government knows it has not been able to bring in the regulations causing delay in the application of some sections. Indeed, the Minister of National Revenue (Mr. Stanbury) says he does not even know when the regulations are going to be ready. Yet, the taxpayers have their heads on the block. They are supposed to work industriously for the government under conditions that they simply cannot know.
The minister, as I say, has asked us to deal expeditiously with these measures. He has said that there are taxpayers over the age of 65 years who are facing problems with regard to the increasing cost of living. Whose fault is that but the minister's and his administration? That measure could have been passed last year. Was it mandatory with respect to the May 8 budget that we could not see the motions to adopt, nor the bill founded on it, until June 26? The House could not act at that time. Then the House adjourned on July 7, and came back at the end of August. After that the Prime Minister (Mr. Trudeau) and his associates went off on their frustrating fall hunt for votes. What a story of misadventure and misgovernment. Those should have been the days when these measures were dealt with in parliament. If these tax measures were so good for the public, and the government had any real concern for the beneficiaries of this miniscule largesse that it was exhibiting in last year's budget, why was it necessary for it to decide on an election at that time? What kind of priorities did it have? Today, those people are being given top billing in the government's priorities, but ten months ago they were at the bottom of the ladder. They were not even considered.
As a result, today we are being exhorted to get on with it, and if any of us speak for more than ten minutes we will be told that this is far too long.


Stanley Howard Knowles: Take your time.


Marcel Joseph Aimé Lambert: There are many other things in the changes to Bill C-259-


Stanley Howard Knowles: You are the first speaker for your party. You have unlimited time.


Marcel Joseph Aimé Lambert: And I intend to take my unlimited time.


William George Knight: Surprise, surprise!


Marcel Joseph Aimé Lambert: For instance we know how many representations were made with regard to deferred profit sharing plans. The hon. member for Wey-burn is making some sort of intemperate interjections-


William George Knight: Assiniboia.


Marcel Joseph Aimé Lambert: I apologize to the constituency. We know that members from that party at that time had many things to say about changes that should be made, but they were resisted. Now that the changes are being brought in, surely to goodness they must get the same degree of careful attention. First of all, they must get the same degree of explanation. We cannot complain about lack of explanation at the time of Bill C-259. There had been a white paper. There had been innumerable committee hearings on the basis of the white paper. There had been the committee report, and then legislation introduced based on the committee report and on other material which the government had, followed by nearly three months of sittings in the House to handle that tax bill. There was plenty of explanation for a portion thereof until the guillotine started to fall.
What sort of a guillotine is the minister trying to impose upon the House now? It is that represented by some sort of sympathetic consideration for the senior citizens, for the disabled, for the blind, for those people who had heavy ambulance expenses, for students and for small business. You know, Mr. Speaker, I almost drowned in what I thought were the crocodile tears of the minister when he spoke about small business and its non-eligible income. His predecessor had insisted that this was right. It is great to see that his predecessor and his parliamentary secretary, who seemed to plug up their ears against protests throughout the country, are no longer in this House, one by choice and the other by the electors' choice.
We will just see how we get along with this bill rather than merely accept these exhortations of the minister for the wrong reasons. Then, Mr. Speaker, the minister pats himself on the back, almost like my colleague from Crowfoot, little Jack Horner, in his self-satisfaction-not that my colleague has that degree of self-satisfaction-at pulling out a plum. He says:
I am confident that members of this House will agree that this is a sensible and orderly way to deal with the tax measures arising out of the May and February budgets.
Mr. Speaker, on a quick rundown this morning I was able to find 25 instances of changes in the act to which no apparent reference can be found in the Ways and Means motion. There may be an explanation because, strangely enough, many of them arise in the French text. They may be corrections for some reason or other, but there is no indication. The minister failed to explain that. I had hoped he would accept the invitation which I had extended and that at this stage we would get some explanation. We have not been able to make an exhaustive study of the
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bill, nor have we been able to dovetail it into the act. This would require a great deal of time.
In addition, we do not know yet what features out of the 1972 budget and the 1973 budget the minister is going to include in one or more bills to come with regard to income tax. We know Bill C-222 of last year, but we would have to compare it to Bill C-170 of this year to see if anything in Bill C-222 was dropped except the reduction in corporate taxes. There is no provision for the accelerated write-offs which was in the 1972 measure.
The notices of motion of February 19 are still outstanding. What features of those budget proposals are still outstanding with regard to the amendment of the act? Perhaps this is an abject confession by the minister that there is still disagreement on government policy with regard to one or more features of the two budgets. Perhaps the budgetary proposals in themselves at some stage are incapable of definition or, what is worse, that Bill C-259 which was presented to this House as being so well prepared has presented difficulty. It must be remembered that there were many sections of that act in which there were no principles of taxation or extensions of tax, particularly in relation to capital gains. The extension of taxation into trusts was taken on trust by this House- certainly in blind uncomprehending faith by government supporters on the alleged assertion that the regulations would be published shortly and that this would all be clear.
There are reams and reams of regulations yet to be written, Mr. Speaker, and that bill was passed in December, 1971. It seems that in the view of the Department of Finance and the Department of National Revenue the average taxpayer of this country, whether personal or corporate, is some creature to be flogged, to be flayed alive and have all sorts of hardships inflicted upon it. It is of no concern to the department-ultimately the tax will come.
I say that those senior officials of the two departments should have two or three years out in civvy street defending taxpayers, being involved in business and finding out what a monstrous thing they are administering. Hopefully, they would be humanized.
Before the hon. Minister of Finance came into politics, Mr. Speaker, he was attached to what I would call the best tax firm in Canada. He should have instilled in his heart forever-


William George Knight: What heart?


John Napier Turner: All heart.


Marcel Joseph Aimé Lambert: -a concern for the taxpayer but he has yet to show any of that sympathy.


John Napier Turner: Oh, Marcel!


Marcel Joseph Aimé Lambert: I am surprised at the Minister of Finance, Mr. Speaker. I think he figures he has written his ticket to heaven in due course-


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: -by that proposal to reduce personal income tax by 5 per cent and by some
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other things he has done, such as the additional $100 on personal exemption and a few other things in the February budget. If there had been anything less than that I would have said that the minister had in place of his heart all the ice of the Arctic and the Antarctic, because in places Bill C-259 was calculatingly designed to extricate from the Canadian taxpaying public far greater sums than should have been extricated. All they did was artificially set up a financial cushion to give a little leeway.
The minister would not listen to what the former treasurer of the province of Ontario, among others, had to say when he appeared before the Finance Committee as to the potential tax yield under personal income tax. Oh, no, the Department of Finance people will have nothing to say about looking at that. They are in continuing shame they were so far out in their estimates. The minister will agree that the yield in 1972 on the basis of Bill C-259 was far in excess of what any government should ever aspire to. Knowing the level of unemployment in many areas and the decline of industry-if there had been a buoyant economy in 1972-


John Napier Turner: That is the reason we got those receipts, a buoyant economy.


Marcel Joseph Aimé Lambert: With 6 per cent unemployment? With 18 per cent unemployment in a constituency that the Speaker knows a lot about? And the young people-what about the under twenty-fives who are unemployed? What about certain industries that had to close their doors? That was a buoyant economy? The only thing that could give the minister the idea it was buoyant was rampant inflation. It is easy to have inflation to steam up growth but it is all artificial. Those people who have investments can tell how it is. In any event, this is what the minister was doing and this is why he felt so good. You know, Mr. Speaker, it is amazing how this administration has boasted. It boasted during the last election campaign, and it will probably boast in the same way during the next one, whenever that may come, perhaps in the not'too distant future.


John Napier Turner: Is the hon. member nervous?


Marcel Joseph Aimé Lambert: I am not nervous. The government will claim that it is the slick administration, the efficient one. Yet here we are, 11 months after the introduction of certain tax relief measures, and the government is finally moving to implement them. It is only doing so because it knows that if it delays any longer there would be a great wave of dissatisfaction on the part of thousands of taxpayers who are waiting for refunds and voters who have followed government instructions for claiming exemptions and relief that have no foundation in law. Even if these provisions become law before the Easter adjournment, not until June or July will the individuals concerned get their refunds. Is this how the government treats them? Of course, the government can take all the time it wants in making refunds; but, let the taxpayer delay making his return for even three days, and 6 per cent interest is charged. That interest is charged

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even if the return is made two days late. The scales are not evenly balanced, Mr. Speaker.
You know, Mr. Speaker, taxpayers are making claims under these not yet passed measures because they were instructed to do so by the government's income tax forms which blithely ignore the fact that, in so doing, illegal actions were being sanctioned. We are now being pressed to legitimize those particular actions.
Where did this whole mess begin? We could go back to the May 8 budget address by the present Minister of Finance (Mr. Turner). Although he had been in office for less than 40 days, I think he went out a lot faster than Walter Gordon.


John Napier Turner: I was appointed on January 29.


Marcel Joseph Aimé Lambert: Then, let us make it 60 days.


John Napier Turner: Make it 90 days.


Marcel Joseph Aimé Lambert: Those were the so-called days of decision in which the various personal and corporate tax reductions were spelled out. The minister might explain why, in a majority House, the government waited 34 days before introducing bills to implement the tax relief proposed in the May 8 budget. Then before those bills could even be debated, the House was adjourned eight sitting days later, on July 7. You know, it is widely rumoured, but only the Minister of Finance knows for sure, that the real reason for this lack of urgency was the blind faith of the Trudeau administration that the government would be returned by the people in a general election with an increased majority.
What were they suffering from? I do not know. It was not spring, so it could not have been spring fever. It must have been the June moonlight that affected them. Something like that affected the Prime Minister (Mr. Trudeau) and his advisers, because we know how wrong they were. Does that mean that the Minister of Finance, who was a far more practical politician, I would say, than some others, was overruled by his cabinet colleagues and that the Liberal party then went out vote hunting with unfinished business left behind? This is not how the shop ought to be run, under any circumstances. I would think that the Minister of Finance, if he does not wish to repeat that experience this time, would insist that these budget bills be all locked up, so to speak, and enacted into legislation, because the country just cannot stand this, shall we say, slopping handling of business any more.
What was behind the governments's actions? I do not know. It could be, of course, that the administration was beguiled by that slogan, "The land is strong." Perhaps they thought they were strong and that they did not have to worry about those people who had been given tax relief.
On November 28, 1972, the Minister of Finance, speaking to the Canadian Tax Foundation, a body to which I belong, said:
A few days after the election, the Prime Minister stated the government's intention to put Bill C-222 back on the Order Paper

when Parliament returns to work. I renewed that pledge earlier this month.
Then, he said:
I repeat it tonight. We want to get on with the Budget bill...
I do not known how many of the minister's officials told me the same thing when I asked about certain provisions regarding Bill C-222. Why, they said, Bill C-222 was almost on the order paper, they were to act on it so quickly. But Bill C-222 has not even hit the order paper. Oh, yes, some provisions are on it now. Those orders are less than a week old, and we are now in the first week of April. That is performance, Mr. Speaker, real performance.


Stanley Howard Knowles: Hear, hear!


Marcel Joseph Aimé Lambert: Since the administration said that there was such urgency and priority to these budget bills, one can well ask why they waited until January 4, this year, to call parliament into session. It would have been a simple matter to recall parliament at the beginning of December. The legislation was ready. It was not a new program which had to be enacted. The legislation could simply have been brought forward as the minister has now brought it forward, by way of the introduction of a notice of motion on ways and means, and we could have had this legislation completed by Christmas. But did they do that, Mr. Speaker? No. That action would have forced them to disclose the unholy mess in the UIC. The administration has been temporizing and the taxpayers of Canada have had to suffer.
We know that the pressure has been put on the government from within, from within its own caucus and from the people to the left of me, with regard to the corporate tax measures.


Stanley Howard Knowles: Hear, hear!


Marcel Joseph Aimé Lambert: Some want to put the
corporate tax measures through, and the result is that the administration has delayed, fobbing off that measure with other tax measures, trying to blame the opposition, and so on. It has tried to pressure the opposition through some of their friends. The government only acted when we, in the opposition, brought attention to the position of senior citizens, students and others. There was not even the semblance of any reaction on the government side during the budget debate. The Leader of the Opposition (Mr. Stanfield), I and my colleagues have come back to this charge: that the government has failed to act on the real heart and guts of the May budget.
We have heard a lot about corporate tax cuts, yet it is remarkable that in his budget of May 8 last year the minister did not say anything about the 3 per cent increase in personal income tax that was to come into effect on January 1. The parliamentary secretary said nothing about the 7 per cent in corporate taxes that is to be imposed for corporations generally. The relief proposed in the May budget applies only to those engaged in manufacturing and processing. Yet the administration cannot draw up regulations or establish guidelines with regard to what is a manufacturing or processing concern. As a matter of fact, for the ordinary Canadian corporation, there is a tax increase over 1972 of close to 6 per cent.
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For a Canadian corporation earning less than $50,000 this year, there is a tax increase over 1972 of 7 per cent.
Some members who were not here at the time will not remember, but those of us who were here during the debate on Bill C-259 remember that during an emergency debate on Wednesday night, October 14, the then Minister of Finance announced a tax cut from July 1, 1971 of 3 per cent for personal income tax and 7 per cent for corporations across the board. No one has mentioned that. All the attention has been turned to a tax cut of 9 per cent for the manufacturing and processing industries. Actually, it is less than that. It is 4.5 per cent. It goes'back from 50 to 40, although the statute provides for 49, so on a percentage basis, it is a 4.5 per cent tax cut. What about the rest of the corporations? What are they saying to the government? Do they realize they will have this tax increase for 1973? Every little trucking firm, paint contractor, house builder, corner grocery store and any other similar organization in Canada with the initials "Ltd." behind their name, or in the province of Quebec, "Inc.", will have their taxes increased by 7 per cent over 1972.
Now, we see just how much concern the minister has for small business under these circumstances, how much concern we will see in 1973 because a great deal of small business is incorporated. They are not all the ogres the hon. member for York South (Mr. Lewis) seems to mouth. A man and wife running a grocery store may be incorporated. The hon. member for York South says "They are the villains of the peace. They are the corporations. They are the ones." I am surprised about the concern of the Minister of Finance in his 1972 budget, and again in his February budget, to get the economy going when everybody is going to have to pay 7 per cent more corporate tax. That is a great stimulus to business? My eye, it is. It is a great stimulus to inflation. There is no way that any business is not going to pass on tax increases to every Tom, Dick or Harry, the consumers.
A municipality may decide to raise assessments or impose higher taxes for municipal services. This may be to increase salaries for the administration or for education. Some of these are rather astronomical when compared with salaries of members in this House. If they do that, the money will come out of your pocket, Mr. Speaker, and mine. That is the place from which it is extracted.
We wonder about the pressures of inflation in this day and age. It is the older people and those on fixed incomes who have to bear the brunt. They are not able to pass on the hot potato of inflation. They are the ones who must pay. What concern is there in the May budget and the February budget for those people? We traversed this ground in the budget debate, but I remind hon. members there is no help for the elderly and those below the exemption levels.
The minister can boast all he wants about increasing exemption levels, but it does not do one iota of good to the person who is below the exemption level. It is worse than Marie Antoinette's reference to cake to say to them their exemptions are being increased when they are already $500 or $1,000 below the exemption. What good does it do them if the exemption is increased? That is the kind of
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concern we get from this government when it comes to income tax changes.
The minister will get his bill in due course, but I wish to advise him that my colleagues want to talk to him about family farms. According to the minister one has to die to pass on a farm within the family. If the health of the farmer has broken, he cannot retire in decent honesty at age 65 or 70 and pass on his farm to his son. Oh, no. There is a deemed realization at that time. There are also other areas my colleagues will talk about.
As we debate all these nice provisions to tidy up the deficiencies of Bill C-259 and clarify the act, I hope the minister will be here with his officials to give this House and the country the fullest possible explanations. This is a big volume. It has to be as good and as clear as the rest of the act. It is a tough act. I wish some other changes were being brought in to alleviate the lot of the taxpayer from an administrative point of view, but we have not seen them up to the present time. The government has not yet quit patting itself on the back for having introduced these tax reforms. The government has compounded many sins.
I think we will be here for some time, Mr. Speaker.


Lorne Edmund Nystrom: Mr. Speaker, as the hon. member for Waterloo (Mr. Saltsman) used to say, it is a great pleasure to follow the hon. member for Edmonton West (Mr. Lambert). I can assure the minister that I will be taking a slightly different tack regarding taxation and the bill before us today. Bill C-170 contains approximately 130 or 140 pages outlining, as the hon. member for Edmonton West stated, several changes to the tax laws of this country. Primarily and basically, it deals with a number of changes regarding individuals, ordinary people. It increases the exemption for pensioner, for example, from $650 to $1,000 and provides for exemptions to students in post-secondary institutions. It also provides for medical expenses, such as ambulances and so on, and there are some legislative changes regarding farm writeoffs, such as capital gains when a farm is transferred on the death of the farmer either to his son or his daughter. These farm items are important, and other changes could be made. The minister knows our position and the hon. member for Saskatoon-Biggar (Mr. Gleave) will be elaborating on it a little later.
Since the bill deals primarily with individual items, I and my party feel it important to pass the measure as expeditiously as possible through second reading and through the other legislative stages in this House. We feel it is important that individual citizens receive the benefits contained in the bill. However, I do want to make one or two arguments about taxation and about the record of this government in that field in order to emphasize the position of our party. We are placing emphasis on the individual taxpayer, the average guy, and ask that he be given a better tax break. In turn, this would stimulate the economy more effectively than would giving tax breaks to corporations through the proposals of the minister in connection with fast write-offs and a reduction in corporate income tax.
I think that the fallacies in our taxation system have been outlined many, many times in the past. We had the

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Carter commission report in 1961 which said that we had a very unfair tax system which should be reformed or amended. We then had the white paper on taxation which was brought before this House. The Conservative party, and members from Calgary and Edmonton in particular, regarded that as the great "red manifesto". They said that it was much too radical, much too progressive a document. As a result, we had the tax reform bill which retreated considerably from the white paper proposals which were put before this parliament.
At any rate, I feel that we need a taxation system in this country that gives the average person a much greater tax break than he gets and which taxes the wealthier people more, one that plugs some of the loopholes and taxes in a much more fair manner extractive industries. This has just not happened in the last few years under either Liberal or Conservative governments, as an examination of the last few budgets reveals. I want to examine the last seven or eight budgets that have been presented by this government since 1968 and show how they have favoured the corporate sector in an ever-increasing way and have heaped more and more taxes on individuals. I have prepared what might be called a sort of scoreboard so as to compare the benefits reaped by the corporations to the detriment of the average taxpayer.
The first budget was brought down by this government in October, 1968. The then Minister of Finance, Mr. Benson, made some very interesting announcements. For example, he applied a new social development tax, as he called it, against the people which was expected to increase government revenue by $55 million in the 1968-69 fiscal year and by a further $440 million in the 1969-70 fiscal year. The total increase in taxes for people in that budget was some $495 million. The social development tax, as we all know, was continued in 1970 and 1971, so about $1 billion more could be added to the total taxes paid by people in this scorebook that I have prepared.
In the same budget, on the corporate side, Mr. Benson applied new taxes on life insurance companies and changed reserve requirements for certain financial institutions. According to my calculations, it was forecast that these two measures would result in a total of $130 million additional revenue obtained from corporations in that year. The then minister also announced that corporations would have to pay their tax a little sooner, on a month by month basis the same as ordinary people. He estimated that this would mean an additional $275 million in federal revenue received from corporations in 1969 and 1970. However, this was not really a tax increase; it simply meant corporations could no longer defer their tax payments for as long as they had previously.
There were a few other small changes in 1968, but all had minimal effect. If you look at the scoreboard for 1968, you find that taxes for individuals-and this is important-went up by $1,495 million. In other words, there was an increase in taxes to the tune of $1.5 billion in the first Benson-Trudeau budget 1968. On the other hand, taxes paid by corporations went up by only $130 million. That gives a comparison of the priorities set by the government that was supposed to be a reforming government, one that would bring a new look to Canadian society in 1968.

Budget No. 2 was presented by the same government in June 1969, and again the former minister, Mr. Benson, decided that tax increases were to be the order of the day. He extended the 3 per cent personal and corporate surtaxes applied in the previous budget for another year. This meant increased taxes paid by individuals to the federal goverment of about $107 million; for corporations it meant $48 million in added taxes. Some capital cost allowances for new buildings in selected areas were deferred, but the amount involved was relatively small. Taking budgets Nos. 1 and 2 together, we find that the cumulative figures for taxes paid by people went up by $1.6 billion and for corporations by only $178 million.
The third budget brought in by the Liberal government was in March, 1970. In that budget there were not any major tax changes, either on the personal side or on the corporate side.
Budget No. 4 was presented by the government in December of 1970. The minister of finance decided once again to extend the 3 per cent surtax on individuals and corporations until the end of 1971. The estimated revenue increase received from individuals was $170 million and from corporations $75 million. But the corporate side also received an off-setting tax cut of $25 million through more favourable capital cost allowances for manufacturing and processing. So the net increase in corporate tax was reduced to $50 million, whereas individual tax increases amounted to $170 million. A look at the cumulative figures of tax in the first four budgets of the administration which commenced in 1968 reveals that taxes for people increased by $1.7 billion or $1.8 billion and for corporations by $228 million.
I now come to the fifth budget of the Trudeau-Benson era which was presented in June 1971. I might add that that was the month that a democratic socialist government was re-elected in Saskatchewan, my home province. The economy was in an extremely depressed state at that time, as we all remember, and at last the Minister of Finance began to acknowledge that fact, so the federal goverment decided it was time to cut taxes. For people, Mr. Benson reversed his earlier decision to apply the 3 per cent surtax to the whole of 1971 and abolished it effective July 1. This reduced personal income tax revenue by some $90 million. In addition, some new exemptions were permitted, which further reduced revenues from individuals by $45 million. But on the other side of the ledger, we find that corporation income taxes were also cut in that year, saving corporations about $40 million. I may add that corporate income tax cuts in 1971 were supported in this House by members of the Conservative party.
In addition, the so-called tax reform package was introduced in June of that year but did not take effect until the end of 1971. If you take the cumulative figures in respect of the first five budgets brought in you find that taxes have gone up for individuals by $1.6 billion and for corporations by $188 million since 1968. The same pattern was developed right through the first five budgets presented by this government since 1968.
At the time budget No. 6 was presented in October, 1971 the economic situation had not improved, and more tax
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cuts were announced by the government. The people received a 3 per cent tax cut amounting to $125 million in 1971-72 and $225 million effective in 1972-73. Again, the corporations had their taxes reduced, and this was referred to earlier by the hon. member for Edmonton West. There was a 7 per cent across the board tax cut for all corporations in this country amounting to $160 million in 1971-72 and of $175 million in 1972-73.
We find that in this budget there are further tax cuts for individuals and corporations. If you put the cumulative tax cuts in the six budgets together, you find that by October 1971 taxes had gone up for individuals by some $1.3 billion while taxes for corporations were already $147 million lower in 1971 than they were in 1968. You can see the continuing imbalance in taxes as between individuals and corporations.
Let me now come to the seventh budget of last May 8, and some of its proposals are before the House today in the bill we are now debating. It was brought in by the new Minister of Finance (Mr. Turner). For elderly people and students there were special exemptions, and these are being debated today. These special exemptions result in a $50 million tax cut over a full year. Corporations fared much better with fast writeoffs, and a reduced income tax rate for processing and manufacturing businesses from 49 per cent to 40 per cent starting January 1, 1973.
In total, these changes represent $500 million in corporation tax cuts for the first full year and $700 million in the second year of application. If you put all these factors together, to the end of 1972, as announced in the May 8, 1972 budget, we find that as a result of the first seven budgets of the Trudeau government taxes were increased for individuals by $1.5 billion since 1968 and that taxes for corporations went down by $500 million between 1968 and
1972.
That was the situation as we commenced the election campaign last fall. Taxes for individuals have gone up by $1.5 billion since this government was elected, and taxes for corporations have dropped by $500 million since 1968. As a result of the October 30 election, this party was able to influence to some degree some decisions made by the Minister of Finance and the government. We find the budget he brought down in February differing fairly radically from previous budgets of this government.
We find, for example, that he continued the tax cut, increasing it to .5 per cent, although this was not an across the board tax cut, but contained an element of progress-ivity. There is a $100 minimum exemption for taxpayers and a maximum of $500. This is a much more progressive method of taxation, benefiting people on lower incomes more than the wealthy of this country. We also find an increase in the old age pensions. Again, the increase was not as great as we had hoped, but at least pensions went up to $100 basic and $170 for those receiving the supplement. We also have increases in the pensions of veterans of this country and we have tax changes favouring farmers. We have, too, an increase in exemptions for individuals of $1,600 and $3,000 for married couples. All these things are on the individual's side of the taxation scoreboard.
We also had a cut in the sales tax on certain items like children's clothing, footwear, cosmetics, toiletries, and so
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on. We find that the equalization payments for the poor provinces have gone up as the cost of local school taxes were taken under consideration.
There is one clear exception in this budget in comparison to the first seven presented by the government sitting across the way. That exception is that there is not proposed in this budget additional handouts, gifts or tax cuts on the corporate side. I suggest this is the result of the influence our party was able to exert in this parliament. This is a direct result of the election of October 30 when the people of Canada said, in effect, they wanted a more equitable taxation system, that the average citizen was paying far too much in taxes today with the benefit going to extractive industries, with loopholes allowing the wealthy people to get off scot-free.
The parallel I have drawn proves that this government, over the years, with the support of the Conservative party, has been giving much too much to large corporations in this country and much too little to the individuals. This trend has begun to change and this party will be pushing as hard as it possibly can in the direction of giving the average citizen a real tax break. I should like to add, and this does not need repeating because we have said it so often, that our party remains firmly against any proposal introduced by a Liberal government, a Conservative government or anyone else, that will give the corporations a greater tax break or more benefits, and the members of this party will vote accordingly.
In the next four or five minutes available to me, I should like to suggest two or three things to the government in terms of reforming our tax system to make it even more equitable for the average citizen. First of all, I believe a system of tax credits should be used instead of a system of exemptions. I feel this is more progressive in that if we use tax credits the person at the lower end of the income scale would receive more benefit while the person at the upper end would not. I think that is the more progressive and natural way to move.
I also believe we should have a comprehensive income concept with all forms of income being subjected to income tax. I believe we should have a full capital gains tax that would attack all incomes in the same way, with exemptions in respect of family farms, homeowners and small business enterprises in the family which are so vital and necessary to keep the economy moving. If we do not have a more equitable tax system then we will continue to penalize the average citizen instead of helping him by giving him.
Let me give you one example of the way our present taxation system militates against the ordinary citizen. I have taken some statistics from the tax reforms of last year and compared the cases of three individuals. Each of these individuals is receiving an income of $10,000, is single and does not have any dependents. The first makes $10,000 in wages or salary. Perhaps he is a teacher or works in a factory. That $10,000 income will be taxed at the rate of $2,285. The second person is also single with no dependents, but making $10,000 through capital gain by speculating on the stock market or perhaps by selling off some land at the edge of the city, or in some other manner. Capital gains are taxed at half the rate at which

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wages and salaries are taxed. He pays on $10,000, $844 in taxes. Is that fair? I do not think it is.
The third example is that of a single person who has no dependents and also has an income of $10,000. His income is through dividends rather than through wages. He is the poor guy who clips coupons and derives his income through dividends from corporations. Under this new bill he pays in taxes $193 per annum, or even less. This person takes advantage of the tax loopholes that this government has built into the taxation system and which the Conservative party supports. The tax is $193 or less for a person with an income derived through dividends, and is $2,285 for the person who slaves it out in the factory or in a business who receives his income through wages or salaries. I say it is about time that we changed that system. We should treat all taxable income equally, whether it is the income of, a corporation or a person working in a factory or teaching school.
The final point I want to make in respect of taxation is a point which has been made many times. It was made last year by Mr. Kierans. The natural resources and extractive industries in this country should be taxed at a much higher rate and should not have the advantage of the tax loopholes they now have. If this were done, there would probably be much more incentive for capital to go into the manufacturing, processing and service industries, industries which are labour intensive and not capital intensive. Therefore, there would be more jobs and employment would not be exported from this country. We could accomplish that objective by reforming our tax laws and making these people pay their fair share.
Like the former member for Duvernay, Mr. Kierans, I would like to point out a few statistics which reveal how unsatisfactory the taxation system is when it deals with raw materials compared to other sectors of our economy.
I have some statistics from the Department of Finance in Manitoba which I believe were used in this House by Mr. Kierans last year. They show the percentage of profit on which companies paid taxes over the last few years. We find that the retail merchants paid taxes on 90 per cent of their profits. Wholesalers paid taxes on 87 per cent of their profits. The construction industry paid taxes on 77 per cent of its profits and manufacturing paid taxes on 65 per cent of its profits. Then, when we come to the mining industry, which is capital intensive and which is largely foreign owned or dominated, we find that it paid taxes in the last ten years on the average of only 13 per cent of its profits because of the special gifts, concessions, grants and loopholes which are available to it.
Turning to the gas and oil companies, we find that they are even better off than the mining companies in Canada. They paid taxes on an average of only 5.7 per cent of their profits. I say it is time that we reformed the tax system so that we do not provide any more incentives for the mining, gas and oil companies. We would then have more revenue for the people of Canada and more revenue for programs to encourage more capital investment in manufacturing and processing which would mean that our country would indeed be better off. So, I want to urge that the minister give consideration to some of these suggestions. I think these are ways in which we can provide

some real purchasing power for the little people and give them some confidence in their own country and in the economy of this country. I urge the expeditious consideration of the bill before us. It deals with individuals. It deals with the average citizen and will help him a bit in the jungle of taxation laws we have in our country.


Sinclair McKnight Stevens: Mr. Speaker, would the hon. member for Yorkton-Melville entertain a question?


Lorne Edmund Nystrom: Yes.


Sinclair McKnight Stevens: The hon. member has reviewed what he regards as the inequities in the taxation policy. Does he feel it would also be helpful if the government stopped spending so much money?


Stanley Howard Knowles: A good Tory question.


Lorne Edmund Nystrom: The question is so typically Tory that I am almost stuck for an answer. The hon. member asks whether or not cutbacks in government expenditures would make for a more equitable taxation system. I agree that there are a number of areas where there probably could be cutbacks in government spending, but I believe there are also areas where the government should be spending money. There should be more expansionary measures in the budgets of the country; there should be more government leadership, for example, to provide jobs which would in turn provide more productivity in our economy, this would lead to greater benefits for the average citizen. I think we can do this by implementing a tax reform package such as that advocated by our party and by implementing many of the proposals in the Carter Commission Report. This would give a real incentive to the average citizen. The average citizen will not receive much incentive if General Motors or Shell Oil is given a huge tax concession or a huge grant under DREE or under some other governmental program. The average citizen will have more of an incentive if he receives a genuine tax cut so that he is able to buy some better food, purchase some better furniture or perhaps purchase a home in order that he may have better living accommodation for himself and his family.


Henry P. Latulippe: Mr. Speaker, I am pleased to make a few comments about Bill C-170.1 would like to refer in particular to the impact of our economic system on taxpayers. Mr. Speaker, they are not satisfied because they cannot enjoy the goods that nature and industry have put at their disposal.
Mr. Speaker, if I may, I would like to consider briefly the situation which prevails in any of the world nations. Whatever political party or economic philosophy we adhere to, either capitalist, socialist or communist, everywhere in our world which is called the earth we find natural resources, everywhere people till, work, produce, consume, capitalize, finance. Everywhere, healthy adults are responsible for the production for all citizens, including those who are too young, too old, too ill, too poor, too uneducated to earn their living. We must protect them.
April 5, 1973

Mr. Speaker, will all these economic changes proposed in Bill C-170 have a saving effect on our taxpayers? I maintain that taxpayers will not find very much that is better in all these statements of principles and new legislation that are being put through in the field of taxation.
I think that we will still have the same problem, and that all that will only complicate the economic situation that we already know and deplore.
Our economic situation lacks of satisfactory balance. As I said just now, we produce all sorts of goods, we consume and we capitalize. These are the sectors that need putting straight, and they are precisely the sectors that the present bill does not deal with.
The present bill pays little attention to these areas, which we should all examine with a view to making changes that will bring about the results that the people have waited so long for. We all know that, in this budget as in previous budgets, the improvements we make to various forms of taxation and distribution are a mortgage on the future.
We are basing these regulations on a mortgaging of the future. Indeed, our tax laws and regulations are drawn up in such a way as to allow for future debts, future mortgages, and this does not solve the problem, now or in the future.
We are using the future more and more to mortgage Canadians, which will not solve the basic problems of our economy. Amassing still more debts will hurt us later on, because then we will have to pay debts of the past, and incur new ones so as to face the problems that confront us then.
The prime objective of the budget is to stop unemployment, put an end to poverty and reduce inflation. I think that, in the present situation, the contrary occurs because we have an increase in the rate of unemployment and in inflation, and we see with regret that poverty is growing worse.
The more we advance, the poorer we become, the less citizens can provide for their needs and balance their own budget because it is unbalanced in fact by government budgets.
When governments want to give some leeway to enable the individual to make both ends meet and set his budget on an even keel, we can only do that by unbalancing the budget of the state. If we do that to try to straighten out the budget of the individual, the problem is still there and the state is in a bad position, with the deficits we now have.
Mr. Speaker, this bill would bring up the basic personal tax exemption from $1,500 to $1,600 a year for unmarried people and from $1,850 to $3,000 for married couples. I think this is far from being sufficient and I am convinced that the problem will not be solved that way.
Mr. Speaker, to be logical and to tailor the tax exemption to the rise in the cost of living, it would have been necessary to do like Quebec and increase the basic allowance for single persons to $3,000 and for married persons to $5,000 a year.
Mr. Speaker, although it would have been a little more acceptable to taxpayers, it would not have solved the
Income Tax Act
problem because it is now said that almost 2,700,000 taxpayers will no longer pay income tax under the new basic exemption. They did not pay any before, because they were too poor, but the rise in the cost of living coupled with inflation is neutralizing the effect of the incentives which the government thinks it is giving to the people.
Apparently thousands of citizens will no longer pay income tax, yet the government will levy almost $1.5 billion more than before.
They said that they were going to cut taxes but the reverse is happening; they raise taxes as never before. The same holds true of provincial governments. They call an election and tell the citizen that they have lowered taxes while they did just the opposite.
The taxes that we have now are in part indirect, they are hidden and the government or the Minister of Finance (Mr. Turner) is prepared to show his great talent by telling Canadians: We have exempted you from taxes, we have cut taxes, whereas in fact the burden is being shifted to a certain category of taxpayers.
As for the suppression of the 10 per cent tax on soft drinks that they have asked us to accept, we did, I believe, with pleasure, but it does very little for the taxpayers and will not even begin to solve their problems.
Mr. Speaker, I think that if this government had included in the budget a 10 per cent discount on the ever rising milk prices and on other food products in order to really help families, we could say: this is a positive and sensible measure which will directly help people in their great economic recession, which will help them meet both ends and live a little more decently.
As for the old age security pension raised from $82 to $100 a month, we voted for it and we are proud but we know that it will not solve the problem either. We know that the rising cost of living and inflation eats it all up. So there is no practical solution as yet, no solution we can accept with confidence. We cannot yet tell the taxpayers that we have really done something tangible for them. We have done nothing positive. It's all negative, Mr. Speaker.
The right-thinking citizens, those who are clear-sighted are saying to us: your work in parliament is all negative; nothing in all this fiddle-faddle helps us enjoy a decent living, absolutely nothing. All we are getting is higher taxes; the more we borrow money the more we have to pay back and we are becoming poorer and poorer.
The more governments advance, the more poverty increases among the population; the more governments get into debts in all kinds of ways and in all fields of economy, the poorer the people get. These changes are far from being advantageous and practical for the general public.
The New Democrats say that the problem will be solved by taxing the large corporations. I am in favour of only one tax table and I would like to see it appear. But to tax some people in order to give to others, when there are masses of overproduction, and to tax citizens who do not have enough already in order to give to someone else, that does not solve the problem. As a matter of fact, that only increases the cost of living and the cost of products.

April 5, 1973
Income Tax Act
To solve the problem, one must get to the core of it, namely lower the cost of living by every possible means.
Now this government is a good representative of the people's image. Out of 264 elected members, there are thirty ministers who spend most of their time discussing and bickering over minor issues, forgetting and neglecting the only real problems, the first and most important of which is the problem of a guaranteed personnal income for every Canadian citizen, paid out of the national production of goods and services of the current year. There are nearly 23 million Canadian citizens and there is enough production to satisfy all of them. There is even enough for exportation and in spite of that, there will still be surplus. That is where we should do something and through various means, solve that problem.
Instead of solving problems, we multiply them, we forget about them; we pretend to solve some of them among the less urgent ones, to make believe that we are doing something, but in fact we try hard not to change anything in the general pattern of national economy, which inflates the income of rich people and their society and drains more and more those of the poor people and their families.
People, families and corporations, that is all that is being administered throughout Canada, but only persons are endowed with life. Families and corporations are not alive, they are but groups of people. Families are natural groups of living people, while companies are artificial groups of adult citizens legally associated under regulations established by the supreme authority of the government of Canada.
Mr. Speaker, the companies' organization is respected. The company is respected as a body and is considered as a direct body whereas it is a body without a soul, an indirect body. The direct body is the human being and it is each human being and for each human being that we must administer and this not for public bodies without a soul nor public bodies without responsibility. Only the human being has responsibilities.
Everyone knows that there is only one administration formula of which I have already spoken several times. Everyone knows that the companies are making profits and reserves on their administration of the current year to warranty the progress and safety of the years to come and succeed in whatever they undertake.
Then why not plan the family administration which also needs profits and reserves for the years to come in addition to meeting the current year's expenditures? Why oblige all the family heads to administer their family expenditures on the income of only one person or of a single person?
This is how absurd is our national economy. This is the reason for inflation, unemployment and poverty.
The increase in the cost of living is subtly hidden in the huge reserves, the hidden and secret reserves of public or private corporations camouflaged by the accountants in their annual reports and tax exempted by the government to the benefit of the shareholders and directors in collusion with the economists who pretend not to see or know nothing about this common practise which is used to

deprive the people and even governments and families of the greater part of the national wealth.
So much is being given to private and public corporations, whereas nothing is provided for the families; not enough is being given to the adults who contribute to production through their work and their capital, in return for which they receive salaries and interests planned and adjusted to their degree of education and experience. The hidden cause being detected, their wounds become easier to heal.
Mr. Speaker, we know that there exist large corporations which are hoarding large reserves. There are hoarded reserves of billions of dollars on which no taxes are being paid. Some order ought to be put in those reserves, though without confiscating everything. A small portion of this should be levied for payment of a guaranteed income to all our citizens and, moreover, part of the excess production should be turned into funds to be distributed among those Canadian people not lucky enough to draw salaries because they cannot work, or are too old, or are sick, in short, those unable to earn what they need. Some help must be provided for them through other technical means, because the world in which we are living is a modern world, where technology has been promoted and replaces labour. Those citizens who are not working must live. This is one of the reasons why we shall soon have to pay a guaranteed income to each citizen, though without robbing those who already have not enough money. The necessary money for distribution should be drawn on the excess funds and excess production.
Mr. Speaker, this is the means we are putting forward to alleviate the disquieting economic situation now prevailing.
A large measure of general confusion still surrounds the guaranteed income plan in 1973. The idea is to bring order into all that.
Mr. Speaker, those matters have been under study and subjected to various experiments for over 50 years already, as the minister himself explained it in detail in this House on January 11 of this year and as reported at page 197 of Hansard.
Mr. Speaker, the big royal commissions of the federal government since 1960 on the revision of our banking and fiscal systems, on the status of women and on poverty in Canada have already explained all there is to be known to curb inflation, unemployment and poverty, to restore national economic balance between individuals, families and companies, incomes, expenditures and profits, taxes and reserves, needs, costs and prices, capital, work and the right to a living, employers, employees and dependents.
Mr. Speaker, everything has been said by those big royal commissions which required time, energy and money. For over 10 years their reports remained available to all people concerned, governments and the governed. The famous reports of those royal commissions-


The Acting Speaker (Mr. Laniel):: Order. I am sorry to interrupt the hon. member.
April 5, 1973

Great Slave Lake Railway


PRIVATE MEMBERS' MOTIONS FOR PAPERS
The Acting Speaker (Mr. Laniel):: I have the honour to inform the House that a communication has been received which is as follows:
Government House, Ottawa April 5,1973
Sir:
I have the honour to inform you that the Right Honourable Gerald Fautaux, P.C., Chief Justice of Canada, in his capacity as Deputy Governor General, will proceed to the Senate chamber today, the 5th day of April, at 5.45 p.m., for the purpose of giving Royal Assent to certain bills.
I have the honour to be, Sir,
Your obedient servant, Roger de C. Nantel for
Esmond Butler, Secretary
to the Governor General



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: Pursuant to Standing Order 40, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Winnipeg South Centre (Mr. McKenzie)-Post Office-New postal code; the hon. member for Selkirk (Mr. Rowland)-National Defence-Renewal of Norad Agreement; the hon. member for South Western Nova (Mr. Haliburton)-Fisheries- Lobster fishery.

It being five o'clock p.m., the House will now proceed to the consideration of private members' business, as listed on today's Order Paper, namely private bills, notices of motions (papers), public bills.

There being no item under the heading "Bills" on the order paper, the House will now proceed to Notices of Motions (Papers).


TRANSPORT
Mr. Les Benjamin (Regina-Lake Centre) moved:: That an Order of the House do issue for a copy of the report of Mr. Justice Tritschler on the inquiry into the construction of the Great Slave Lake Railway.
He said: Mr. Speaker, this motion for the production of the report of Mr. Justice Tritschler into the construction of the Great Slave Lake Railway is on the order paper because it is my opinion, the opinion of members from all parties in the House, the opinion of some eminent legal counsel, and the opinion of the contractors themselves that they still have cause for some significant redress as a result of losses incurred in the construction of this railway on behalf of the Canadian National Railways. After seven years or more of efforts of all kinds to obtain redress, these contractors have not yet given up. The standing committee of this House on Transport and Communications, after a great deal of effort by members of all parties, were finally able a couple of years ago to get the government to agree to refer this subject to the committee. We had hearings, heard the contractors, heard the railway representatives and submitted a report to this House which the House subsequently adopted. I quote from that report as follows:
During the hearings your committee was confronted with conflicting evidence relating to the problems caused by unexpected weather, difficult terrain, and the use of clauses 16 and 18 in the Canadian National Railways' construction contract. Considering this conflicting evidence and the technical problems relating to it your committee recommends the following:
I will read the one pertinent recommendation, which is:
That the Minister of Transport establish a one-man inquiry to consider the merits of the claims submitted to this committee by the Great Slave Lake Railway contractors. The person nominated to conduct the inquiry should be acceptable to both the contractors and the Canadian National Railways and should report to the minister in confidence so as not to prejudice any future court hearing.
After many more months of delay, the minister finally appointed Mr. Justice Tritschler who submitted his report to the minister. As a result of that report the minister advised the contractors concerned, without telling them what was in the report, that their demand for redress would not be recognized. Mr. Speaker, the minister and the government say that because the report was submitted to the minister in confidence they cannot make it available to the House and, more particularly, to the contractors concerned. I submit, Mr. Speaker, that the reason for confidentiality no longer exists for the following overriding reasons. I repeat the statement in the report:
The person nominated to conduct the inquiry should be acceptable to both the contractors and the Canadian National Railways-
At no time, Mr. Speaker, did the minister or any of his officials communicate in any way with the Lucas Construction Company or Mr. John Lucas of Regina to ascertain whether the appointment of Mr. Justice Tritschler was acceptable. My information is that the minister or no

April 5, 1973
Great Slave Lake Railway
one in his department contacted any of the other four contractors in this regard. The minister and his officials, chose to ignore that part of the recommendation but conveniently chose to abide by the part of the recommendation concerning confidentiality of the report. Since the recommendation that the person making the inquiry should be agreeable to both sides was ignored by the government, I submit that completely destroys their claim for confidentiality of the report. It is my opinion, and the opinion of many others of all parties, that these contractors are still entitled to redress.
I want to give a bit of background on the Lucas Construction Company. John Lucas, who has been in the construction contracting business since 1934, did contract work for the South Saskatchewan River Dam, for the Saskatchewan Department of Highways, helped build the railway to the Kelsey Dam in Manitoba and helped build the Flin Flon highway in Manitoba. Those are a few of the projects in which he was involved. He was an experienced and competent operator in the north, knew the conditions, the weather and the terrain. He was not, I repeat not, what one could call a fly-by-night operator. Yet this contractor, Mr. Speaker, lost over $1 million on the contract with the CNR. In fact, if one were to take into account all his losses, he lost over $1 million on machinery, nearly half a million dollars in land, lost his bonding and refinancing to the value of $1,200,000, lost a further $200,000 in earnings in subsequent years-in total, the loss was in excess of $3 million.
Two or three or all four of the other contractors suffered similar losses, Mr. Speaker. Why? I submit there were two reasons. One was the weather-abnormally bad weather for that part of Northern Canada, particularly in the matter of rainfall. The Peace River Record Gazette of August 2, 1962 reported that rainfall between April 28 and July 28, 1962 in that area totalled 25.3 inches. There was upwards of 50 inches of rainfall in the area in which the Great Slave Lake Railway was being constructed during that time.
The other reason for the difficulties these contractors experienced was the severe, and in my opinion unreasonable, enforcement by CNR officials of the provisions of the contract as well as the outright interference by the CNR engineering staff with the contractors in attempting to carry out the contract. There is not any question that Lucas Construction, for example, did its utmost to comply with CNR demands, despite the terrible weather in 1962, the adverse decisions of the engineering staff and the frightful working conditions in the spring of 1963.
For example, Mr. Lucas was arbitrarily required by the engineering staff of the CNR to sublet part of his contract to New West Construction Company. Whereas the CNR was paying Mr. Lucas 27 cents per cubic yard, Mr. Lucas was forced to pay 30 cents per cubic yard, in the rough construction, to the subcontractor as a result of an arbitrary and, I submit, unreasonable decision of the CNR engineering staff.
It is clear from the foregoing and from the many documents that many Members of Parliament have been accumulating for the last ten years that Lucas Construe-

tion and the other contractors made every effort at considerable additional expense to complete the project as soon as possible. It is clear, too, that the CNR acted in a way, on a number of occasions, that was clearly unreasonable, especially in view of the unparalleled bad weather. This contract was unbelievably harsh, so harsh that it did not contain a "force majeure" clause, nor an arbitration clause. That contract appropriated complete control in all particulars to the CNR. My learned legal counsel, the hon. member for Winnipeg North Centre (Mr. Knowles) tells me that "force majeur" means an excuse for not fulfilling a contract.


Gerald William Baldwin: That is the Prime Minister (Mr. Trudeau) in full motion.


Leslie Gordon Benjamin: It is invoked because of irresistible conditions or acts of God. This kind of unreasonable, unjustifiable contract under which the CNR calls for tenders I believe constitutes an immoral business practice. It raises the question as to whether a Crown corporation or, for that matter, any corporation can call for tenders on a public project, can sign an almost impossible contract and, in the carrying out of that contract, act in the way the CNR acted. Is there no obligation on that public concern to remedy the damage that it did to the public, of which even dirt contractors are a part? Since the government, the minister and the department failed to carry out the full recommendations of the committee that were debated in this House, the House, and particularly the contractor concerned, I submit are thereby entitled to access to the report of Mr. Justice Tritschler. I hope that all hon. members will agree, for the sake of fairness and for the sake of redressing the wrong that was done over ten years ago, to adopt this motion. The government I submit should give redress to both of the contractors to whom reference was made. Even an ex-gratia payment of $200,000 or $300,000 to Mr. Lucas would enable him to start again. He has lost his bonding. He cannot get going again. He has lost everything. The only reason he did not lose his house was that it was in his wife's name. In all fairness and justice, we must continue this fight. I know members of all parties agree with this, and I hope the House will adopt the motion before it.


Gerald William Baldwin: Mr. Speaker, I want to add my support to what has been said by the hon. member in whose name this motion stands, for two reasons. I will try to be brief, although I do not know why I should be, because I do not suppose the government intends to accept the motion. In any event, I will be brief.
My first reason for supporting the motion is that I am aware of the particular circumstances involved in this case. I know of the difficulties faced by the people involved in the construction of this railway. They worked during two or three years of the most difficult construction weather in a most difficult area building a railway. Mr. Lucas and some of the subcontractors, some of whom are still in the Peace River country and were and are involved in this matter, have sustained financial losses because of the various predicaments in which Lucas and others found themselves. They went struggling ahead in order to make sure that the railroad would be constructed on time and at very, very reasonable cost.
April 5, 1973

I know the legal aspects of this matter. There is no question but that the CNR did all it had to do legally. But as the government, on the one hand, can airily throw $1 billion into the unemployment insurance program, $1 billion more than it originally intended to spend and, on the other hand, become involved in proposals for spending hundreds of millions of dollars in the giving of discounts under corporate tax write-offs for unlimited periods to a great many corporations, most of which will go to the United States, it seems to me that it could look at the situation before us and, as my hon. friend suggested, make a compassionate payment. After all, Mr. Lucas worked well and deserves the thanks of the people of this country. He and his fellow contractors deserve our thanks for what they did, and I think a compassionate allowance would be well within the range of possibilities that might be considered by the government and the CNR.
As the commissioner appointed pursuant to the order of the committee of this House failed to make public the reasons for his recommendation or failed to make his report in such a way that it could be made public, I submit that we, in this House, should be diligent in finding ways by which the report could be made public, so that this House and the people of this country might know why the commissioner acted as he did. To me, brought up in the traditions of the law in which trials are held in the full glare of publicity, in which witnesses testify in public, in which decisions are made public and in which appeals are allowed, it is intolerable that a judge of the Supreme Court should make a report of this kind which the government keeps from the people involved and from the members of this House. I think it is a vicious and intolerable system which allows this. For that reason I hope that some way may be found of making the report public. No harm would be done by it. On the basis of the report, once its contents are known to the members of the House, we might be free to recommend a compassionate payment. That is the particular reason for my support of this motion.
There is a more general reason for my support, namely, that there is too much secrecy surrounding the actions of this government, just as there is too much secrecy surrounding the actions of all governments. This government is particularly addicted to secrecy. We see that in the way ministers fail to answer questions, or answer irrelevantly, or do not provide answers that are responsive to the question. You cannot have a democratic institution operating in the shadows. Facts must be made public, must be made known. Why, in heaven's name, that is not the case I do not know. Why should not governments make public the facts, documents and information on which they act? I know that we often hear the same story. We are told, "Well, it is not possible. If decisions are to be made, the circumstances under which they are made must not be made known to the public. Such decisions would not be possible if civil servants were not allowed to operate furtively and secretly and if the public had knowledge of the reci mmendations which they make."
I disagree with such assertions violently. I should like to have the full right to make known the circumstances of such recommendations, and give others equally the right to appear before committees. Let them have the right to justify the recommendations and justify the facts which
Great Slave Lake Railway
they make public, on the basis of which the government makes decisions.
There is an interesting article carried in a special "Playboy Forum" report entitled, "Mr. Nixon and the media". It reads in part:
Why should freedom of speech and freedom of the press be allowed? Why should a government which is doing what it believes to be right allow itself to be criticized? It would not allow opposition by lethal weapons. Ideas are much more fatal things than guns. Why should any man be allowed to buy a printing press and disseminate pernicious opinions calculated to embarrass the government?
That is what Lenin, Russia's first communist dictator, said. Those are the questions he asked. They are statements which are being put in a little different way by governments in both this country and the United States. There is an attempt being made by the President and the present government of the United States to seriously impair the freedom of the press to make full disclosure of the facts coming to their attention. There is the Pentagon papers trial and reporters are imprisoned from time to time for refusing to make known their sources of information. By declaratory judgment in 1945, the United States supreme court declared, and I quote:
-"the assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the [public] and that a free press is a condition of a free society."
I do not believe people listen to these things very carefully. All too often, governments do not listen. Slowly and insidiously, we see taken away from what has been a free society and the institutions of that free society, the right to demand the fullest possible dissemination of facts, information and documents. What the hon. member is asking here is an illustration of that statement which I have made.
I know that the President of the Privy Council (Mr. MacEachen) has tabled a set of rules which he proposes on behalf of the government as the basis on which documents asked for by notices to produce should be produced. Let me say at once that is totally unsatisfactory to me. It is inadequate. It simply sets out in a formal documentary fashion the present exceedingly limited opportunities that are available today. Why should any minister or any government have the right to say that, in his opinion, it is in the public interest that this document be not disclosed? What special virtues surround any minister to permit him to make that statement? There is no question that in many instances it is because the disclosure of the documents would result in embarrassment. It is about time more ministers and more governments were embarrassed. It is time that we opened the windows then let in the fresh air and sunlight with the freest possible dissemination of information. Does the hon. member want to ask a question?


Mr. Gucry (St. Boniface):: Yes, Mr. Speaker. Why did the Conservatives not do so in 1962?


Gerald William Baldwin: Mr. Speaker, I said the same thing then. I do not care what government is in power. There was a great deal more freedom then. I sat behind the govern-

April 5, 1973
Great Slave Lake Railway
ment in 1961 and 1962 and watched ministers of the Crown respond to questions. I watched the dissemination of information in response to notices to produce. Disclosure was a lot fuller and freer than today.
I admit there are abuses in the practice of seeking information and the production of documents. There are abuses on both sides of the House. However, that does not alter the fact that the primary responsibility rests upon the government to disclose, to the fullest extent, facts and information in its possession. These are limits. I have said that. I supported a bill proposed by the hon. member for Souris-White Rock (Mr. Mather) attempting to secure approval of this House on second reading of a bill for freedom of information. I said then, and I repeat now, there are certain areas of national security. There are also criminal offences which may be under investigation and cases involving confidential information gathered by the government with regard to such matters as income tax. However, the government shows no reticence.
A businessman sitting in his office or store day after day receives a voluminous amount of questionnaires from the government which demand, not ask that he fill in the information requested with the penalty of prosecution if he fails. Governments are never hesitant when it comes to demanding information, but it is a horse of a different colour when they are requested to make known facts in their possession. You will never have a free, open and good society when you have a government that is secretive, hides facts that should be made public and refuses to allow the dissemination of that information to the press, Members of Parliament and the citizens of this country. That is the major reason that I want to support the hon. member in his quest for the very reasonable production he has asked for in this case.


Mr. John M. Reid (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, I was rather surprised to hear the speeches of the hon. member for Peace River (Mr. Baldwin) and the hon. member for Regina-Lake Centre (Mr. Benjamin). I feel they have done the House a disservice. Neither of these members bothered to read to the House the report of the Standing Committee on Transport and Communications which recommended the establishment of this inquiry. What exactly does that say, Mr. Speaker? Let me read the first recommendation from that report. I quote:
That the Minister of Transport establish a one man enquiry to consider the merits of the claims submitted to this Committee by the Great Slave Railway contractors. The person nominated to conduct the enquiry should be acceptable to both the contractors and the Canadian National Railqays-
I want to emphasize the next part of the sentence.
-and should report to the minister in confidence so as not to prejudice any future court hearing.


Leslie Gordon Benjamin: Mr. Speaker, I rise on a point of order. I do not know whether the hon. member for Kenora-Rainy River (Mr. Reid) was here and asleep or out of the chamber, but that is exactly the part I read in my speech a few minutes ago.


John Mercer Reid: Mr. Speaker, I was in the House listening to the hon. member. If he did read it, I am surprised that he did not understand it. If he did understand it, he would

never have made the ridiculous argument that the government was trying to prevent information coming to the House of Commons. What the government is doing is accepting a recommendation of a standing committee of this House and keeping the report confidential. There is no question of withholding information from members of this House. It is obeying a recommendation of the committee to the House of Commons. If the government had taken the attitude that this information should be permitted to come forward, the government would have been in default and should have been condemned.


Gerald William Baldwin: Mr. Speaker, I rise on a point of order. I listened to the hon. member in whose name the motion stands. I heard him make that statement. I did not repeat it. I heard him say that, because one condition was breached, the condition that both parties would be consulted with regard to the appointment of the commissioner, there was not the same degree of validity in the other condition. That is the statement made by the hon. member. I accepted that statement.


John Mercer Reid: Mr. Speaker, I was closely involved in the negotiations that led to this particular matter being referred to the Standing Committee on Transport and Communications. I was not involved in the selection of a commissioner. From my conversation with the contractors, I know there was a great deal of difficulty and, in the end, there was no particular agreement on who should be commissioner. In point of fact, when the two parties were unable to agree, they went to the minister and said if he would appoint someone who was reputable, they would accept him. Because the two parties were not able to agree on a person, they agreed on a different procedure being used. The point about the confidentiality of the document has nothing to do with the former point. The point was that a report was to be made by a reputable investigator. The report was to be made confidential in order to protect the rights both of the contractors and the CNR.
The only point I want to make is that the government is obeying resolutions and motions which were accepted by the committee, whose report was later adopted by the House of Commons. Were the government to do otherwise, it would be derelict in its duty. Had the government done what the hon. member wants it to do, it certainly would not have followed the recommendations made by a committee of this House and adopted by the House.
Mr. joseph-Philippe Guay (Parliamentary Secretary to Minister of Transport): Mr. Speaker, I wish to participate in the debate of motion No. 47.1 believe it might be a good thing to place on the record some of the events that have taken place in this regard, since I believe it important to do so.
The construction of the Great Slave Lake Railway gave rise to a number of disputes between the contractors responsible for the clearing and preparation of certain segments of the land, and the CNR. The disputes led to litigation which was eventually settled with each claimant and a release obtained from each party by the CNR.
April 5, 1973

However, notwithstanding this disposition of the matter, the contractors continued to press for further payments.
The following is a summary of the statements which led to an order of the House to hear representations from the contractors. The problems related to Great Slave Lake Railway contractors were first raised in the transport committee in June, 1967, when Mr. Schreyer asked Mr. MacMillan for comments related to the difficulties faced by seven contractors. The chairman of the committee referred to an earlier reply by Mr. MacMillan to the effect that if there was not litigation regarding these contracts, there soon would be and he would just as soon not comment. Mr. Schreyer stated: "Yes, but that leads me to this: You would expect that there would be litigation, but if these firms have gone into receivership or bankruptcy, how in the world could they initiate a civil suit?" When told that there could be a civil suit in such a case, Mr. Schreyer noted that he would like to see what lawyer they would get to act for them on that basis.
On March 5, 1968, and again on March 18, 1968, Mr. Schreyer questioned the then minister of transport about what action he had taken to date on an investigation into the construction of Great Slave Lake Railway and the bankruptcy of some construction firms engaged on the line. On March 25, 1968, Mr. Schreyer referred to allegations by contractors that Canadian National Railways enforced terms of the contract unfairly and onerously, and he summarized the circumstances of the contractors as follows:
The majority of the 13 or 14 construction firms involved in the project lost heavily, half of them being forced into bankruptcy. If that had happened to only one or two, one might say, well, it was a case of poor management or poor bidding. But when half the firms-seven of those involved-go into bankruptcy, it is safe to assume that there is something rotten in Denmark and that the contract conditions must have been onerously enforced. Or perhaps the Canadian National Railways' specifications were sloppy in the extreme and grossly inaccurate. Many elements could enter into the matter.
Then Mr. Schreyer referred to a prior inquiry made into the pipeline contracts as precedent for the need for an inquiry, and noted the results of the pipeline inquiry. The inquiry found that Mannix Company Limited had submitted claims amounting to $16,000 which were settled for $6,600. Mattagami Construction had submitted claims amounting to $27,900 which were settled for $17,900. Mannix Construction Co., had submitted claims amounting to $972,000 which were settled for $420,000. Canadian Comstock had submitted claims for $96,696 which were settled for $65,243. Dutton Williams Brothers had submitted claims amounting to $2,776,731 which were settled for $692,490.
In October, 1968, Mr. Schreyer noted that the minister had continually been requested to look into the matter of improper tendering with respect to Great Slave Lake Railway. He noted that allegations had been made that serious errors in the enforcement of the terms of the contract were made by Canadian National Railways, as a result of which some contracting firms engaged in building the Great Slave Lake Railway went into bankruptcy. Mr. Schreyer stated:
Several months have elapsed since then-
Great Slave Lake Railway
The minister had received some briefs from contractors.
-and in the meantime some firms have been forced into receivership and bankruptcy. Some were forced into bankruptcy before the matter was brought to the minister's attention by members of this House. Since that time I understand one or two other firms engaged in the construction have also been forced into receivership.
Mr. Schreyer noted that the contractors had exhausted all legal avenues. He further stated:
-unless we obtain from the Minister of Transport some indication of action, the contractors to whom I have referred will all be forced into personal and corporate bankruptcy.
I am sure the hon. member is pleased to hear this; and may I tell him I am well aware of what I am quoting. The hon. member for Timiskaming (Mr. Peters), referring to another branch line, stated that local employees had been used in the construction of the line and noted that it would obviate some of the problems that plagued contractors in the Great Slave Lake area in regard to local employment problems. Then, according to the information I have, Mr. Schreyer later said:
Some construction firms, Hatch Construction, Pete Rohl Construction, Ginter Construction, Krywa Brothers Construction, Lucas Construction and others, have been put into bankruptcy because of clause 16 of the form of contract. The acting minister will want to look at this material-
That is, briefs sent to the minister.
-in detail to see what course of action can now be followed in order to redress the grievances of these people. There is no use talking about their right of access to the courts. In some cases justice, unfortunately, still is not obtainable without money with which to hire legal counsel, etc.
On February 5, 1969, Mr. Schreyer's question No. 206 was answered. The question asked:
1.	Has the Minister of Transport made a decision relative to the claims submitted to him by those contractors that were engaged in the construction of the Great Slave Lake Railway for the CNR and, if so, what is the decision?
2.	If such claims have been accepted as valid, is Treasury Board approval being sought for payment, either in whole or in part, of these claims?
The question was answered by the then minister of transport, the hon. member for Trinity (Mr. Hellyer), as follows:
1. A review has been made of the circumstances relating to the claims of various contractors against the CNR in respect to the construction of the Great Slave Lake Railway.
Notwithstanding that one may have considerable sympathy for the circumstances in which the contractors find themselves as a result of these contracts, it appears that the claims, to the extent that they remain outstanding, are matters which must be settled between the companies directly involved and the management of the CNR.
The CNR has informed the Minister of Transport that some of the claims have been dealt with and additional payments have been made in some cases.
Part 2 of that question the then minister of transport answered by saying, "Not applicable." During the hearings in May, 1969, on the Canadian National Railways' annual report, numerous statements were made, some of which I would like to quote as follows:

April 5, 1973
Great Slave Lake Railway


Mr. Skoberg:: I move that the committee call as witnesses those contractors available that were engaged in the construction of Great Slave Lake Railway and were subject to the invoking of clause 16 of their contracts by Canadian National Railways.
Considerable discussion ensued related to the wording of the motion, the need to appear, etc. In this regard Mr. Allmand noted:
We should not entertain these grievances under this particular motion because these contractors, whoever they may be, whether individuals or corporations, might have made a claim through the courts, which is the usual way when one is not satisfied under a contract. The usual procedure is to make a claim in court. I do not know at this particular time whether any claims have been made in court; whether there are judgments on these particular claims or whether there have been settlements made out of court. Maybe they did not make claims before the court; maybe for some reasons they were prevented.
Mr. Horner spoke to Mr. Allmand's recommendation to turn down the recommendation, as follows:
Secondly, I would like to suggest that the whole difficulty arises out of something that was not the contractors' fault. It was not the railway's fault either. It was practically an act of God: the weather conditions were the biggest trouble. Surely, contractors or the Canadian National Railways should not be held responsible. We should hear the problems that the weather conditions brought about, without forcing these people who, as I understand their case, are nearly bankrupt anyway. I sincerely want each member of this committee to look at this problem. If they tendered low and lost their shirt, then you and I can justifiably say, well, the next time they will tender wisely. But in this case it was not a case of tendering low; it was an act of God-building a railroad in severe conditions through what we might call a hinterland, an area which is not settled, an area which nobody really knew the conditions, and then, on top of all that, adverse weather conditions during the construction of the railway.
He went on to state:
Mr. Chairman, it is only fair and just that we at least hear their case. If we decide that it was not because of weather, but through faulty construction or faulty management of their contracts, then I do not think we should be held responsible for bailing them out, nor should the government, no matter which government. If we find that it was because of adverse management direction under clause 16 of the contract, or because of adverse weather conditions, perhaps we could give them a sympathetic hearing at least, and maybe a sympathetic answer. With regard to Mr. Allmand's third point, Mr. Chairman, that this whole question may go before the courts, I urge this committee to give serious consideration to that problem. If these contractors are in as severe a position as they say, they are facing bankruptcy. They cannot afford to go to court.
Some hon. members of the committee went on to speak about this, and Mr. Nesbitt said:
-it is quite evident that the House leader, Mr. MacDonald, has been apprised of the matter and has made certain commitments in the House. There seems little doubt that this matter would be heard and witnesses called to hear both sides of the story. It is my understanding that the minister might have some reservations in setting an unfortunate precedent where every person who had a 25-cent claim against the railway or the government might want a hearing, or that it would open the flood-gate in the future, but I do not think that could happen and I think this committee could, perhaps, make that quite clear. This would not set a precedent as there are very unusual circumstances in this case. There are many millions of dollars involved. It has been apparent that the cause of the thing was not necessarily the fault of the railway at all, but was caused by unforeseen acts of God, as I believe the term is, although I do not know why the Almighty should be blamed for some of these unfortunate things. However, that is in fact what they are, and there certainly have been commitments made that the committee would hear the whole matter.
To sum up briefly-


An hon. Member:: That would be nice.


Joseph-Phillippe Guay: I could continue, because I think some hon. members would want to hear all these facts. I thought they were of interest. I should like to reiterate the authority given to the commission by the House of Commons on December 11, 1969, as follows:
That the Minister of Transport establish a one-man enquiry to consider the merits of the claims submitted to this committee by the Great Slave Lake Railway contractors. The person nominated to conduct the enquiry should be acceptable to both the contractors and the Canadian National Railways and should report to the minister in confidence so as not to prejudice any future court hearing.
I should like to conclude by quoting from a letter from the CNR, signed by Clare J. Irwin, to the Hon. G. E. Tritschler, Chief Justice, Court of Queen's Bench for Manitoba, Law Courts Building, Broadway Avenue and Kennedy Street, Winnipeg 1, Manitoba, dated October 22, 1971. It reads in part:
The evidence of both Ben Ginter Construction Co. Ltd. and CN supports CN's contention that the powers of the CN engineer under clauses 16 and 18 of the section 6 and 7 grading contracts were exercised reasonably and with discretion under difficult circumstances.
By Benjamin Ginter's own tesimony, the weather was not a problem with respect to this grading work and there is no evidence that the condition of the terrain gave rise to unusual difficulties in this regard.
In any event, the evidence is that a formal claim was made to CN on behalf of Ben Ginter Construction Co. Ltd. following completion of these contracts. This claim was settled after protracted negotiations between counsel for the contractor and for CN in the amount of $342,000, a sum greatly in excess of the $207,000 recommended by Dr. R. M. Hardy following his consideration of the claim. That amount must be considered as having fully compensated this contractor for claims of any nature which it brought against CN following completion of the work.
The evidence adduced at the hearing was that the CN engineer in exercising his powers under clause 16 of this contract acted reasonably. Despite this fact, when a formal claim was made by this contractor and Dr. R. M. Hardy was asked to advise with respect to that claim, a settlement was effected to the mutual satisfaction of both parties by CN paying to the contractor the sum of $64,000. This amount was equal to the full amount paid to hourly-rated contractors for work done under clause 16 on clearing sections 6 to 9 and initially charged to Krywa Bros. Const. Ltd.
It is important to note Dr. Hardy's evidence that, in addition, this contract was earlier paid approximately $40,000 for work done by the hourly-rated contractor at no cost to Krywa Bros. Const. Ltd. Even if it could be concluded that CN's engineer exercised his powers under clause 16 unreasonably, it is submitted that this total additional payment of approximately $100,000 adequately compensated Krywa Bros. Const. Ltd. for any costs resulting from such action.
The weather gave rise to no unusual difficulties in the clearing work done by this contractor and the condition of the terrain cannot be the proper basis for a claim by a contractor engaged soley in clearing land.
The letter goes on to explain, in respect of all other contractors, that they were all dealt with in the same manner. I could continue reading this letter; it might be of interest to some hon. members of the House. Possibly I could quote one more paragraph which indicates that Lucas Construction Ltd. had been treated in the same way. The letter reads:
April 5, 1973

Following completion of the hearing with respect to Lucas Construction Ltd. it became apparent that portions of the testimony of Dr. R. M. Hardy may have been unclear. Accordingly, I asked Dr. Hardy to advise me with respect to these points. I enclose for your further consideration Dr. Hardy's letter to me 21 October, 1971.
It is CN's submission that the evidence clearly indicates that the powers of CN's engineer under contract clauses 16 and 18 were exercised reasonably under the circumstances existing throughout the duration of this work.
The effect of weather upon a contractor engaged in this type of heavy construction must be foreseen by the contractor at the time he makes his bid.
The evidence of Dr. Hardy as clarified in the enclosed letter together with the evidence given by witnesses for both Lucas Construction Ltd. and CN at the hearing would indicate that an unusual soil condition was encountered on grading section 4. There can be no doubt, both from the evidence of Dr. Hardy as found in the Minutes of Proceedings of the Standing Committee on Transport and Communications of 19 June, 1969, at pages 2599 and 2600 and from Dr. Hardy's evidence at the recent hearing as clarified by his letter, that any additional costs incurred by Lucas Construction Ltd. attributable to this soil condition were considered-


The Acting Speaker (Mr. Boulanger):: Order, please. I am sorry to interrupt the hon. member, but the time allotted to him is up.


Mr. Jean-Marie Boisvert (Drummond):: Mr. Speaker, since there are only seven minutes left, I shall try to leave enough time for the question to be put.
Mr. Justice Tritschler's report on the inquiry into the construction of the Great Slave Lake Railway is more evidence of the government's policy of silence when it suits them. The manner in which they have kept this report secret is further proof of the government's dictatorship in Canada. Under cover of a well-disguised democracy, the word "freedom" comes to mean-



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate chamber.
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill C-147, an act to amend the Old Age Security Act-Chapter No. 8.
Bill C-148, an act to amend the War Veterans Allowance Act-Chapter No. 9.
[Stage Direction]
It being six o'clock, I do now leave the chair.
At six o'clock the House took recess.
Income Tax 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-170, to amend the statute law relating to income tax, be read the second time and referred to the committee of the whole.
Henry P. Latulippe: Mr. Speaker, before recess, I was speaking about the state of mind of all Canadians concerned, the governments or the people.
I was suggesting that we produce too many of these official reports, royal inquiries and white papers submitted in large numbers to all Canadian members of Parliament. Why should we spend two more years on new studies, reviews, federal-provincial consultations, suggestions, further research, when all that is already included in the work carried out since 1960?
Mr. Speaker, the general impression we get from January llth's impressive speech by the Minister of National Health and Welfare (Mr. Lalonde), the member for Out-remont, especially coming from one who was once in the first rank of advisors to the right hon. Prime Minister of Canada (Mr. Trudeau) for almost five years, and who must know better than anyone what goes on, after so many royal inquiries on these matters, is an impression of dullness which suggests incompetence, impatience, incoherence and a waste of time, which suggests perplexity as to which way to turn in the maze of organizations that are immediately involved with the guaranteed personal income which guarantees the individual's right to a living.
We must, Mr. Speaker, work towards setting up a national organization that will guarantee all Canadians a share in the national revenue.
The regulations of exchange and commerce, the general levying of taxes by everyone under our present system, the exchange rate and minting, banks, the issuing of paper money and rates of interests, all these are the aims of our present economic system.
Inflation, unemployment and poverty are merely failures in the circulation of money. Let us stop complaining and sulking. The solution to our lack of money lies in the hands of the government of Canada, and particularly in those of the seven most important ministers and Members of Parliament elected by the Canadian people.
The seven members of the cabinet who can supply an immediate solution to the problems of circulation of money, in the interests of the nation and of the 23 million Canadians, are the right hon. Prime Minister, the Leader of the Official Opposition (Mr. Stanfield), the leader of the New Democratic Party (Mr. Lewis), the leader of Social Credit (Mr. Caouette), the President of the Treasury Board (Mr. Drury), the Minister of Finance (Mr. Turner) and the Minister of National Health and Welfare.
These Canadians are those mainly responsible for our economic organization. Only they can make the big decisions, and only from them can we expect decisions and major reforms that everybody hopes this parliament will introduce to correct the present economic situation.

April 5, 1973
Income Tax
Now, if national production amounts to $114 billion in 1973, which means $5,000 per capita or $25,000 per family of five members, on average there are nine million Canadian producers who get revenues from their wages and investments. We call upon this government to consider major economic factors and establish a national economic balance between people, families and companies, between earnings, spendings and profits, between taxes, duties, exemptions and personal income, and to provide for a guaranteed personal income.
Mr. Speaker, although the Canadian economy is still one of the most prosperous in the world and while generally, the capitalist economy of free enterprise is still superior to the socialist and communist systems, 1 assert with supporting evidence that our Canadian capitalist economy of free enterprise has some basic deficiencies, namely inflation, the rise in the cost of living and interest rates generally; unemployment and the numerous strikes are only some apparent and localized symptoms at certain times and places.
The basic deficiency, the basic weakness of our economy, the sole and basic source of all the troubles which we are endeavouring to control, including currently rising interest rates, that sole cause of our many economic difficulties is the essential aspect of our Canadian capitalist economy of free enterprise which is so difficult to correct. It is merely the unbalance among the various foregoing constituent factors.
Mr. Speaker, we are going to support this bill but in a rather negative way because we feel that it does not contain the solution we are seeking. We would have preferred to see the tax exemption for married couples raised to $5,000 and $3,000 for single people. In spite of that we accept the government proposals. We will not oppose the passing of the bill but we would like to make it known to this House that we are not very satisfied because we would have liked in this month of April 1973, in the twentieth century, in view of our fantastic production which increases from year to year and the decrease in the number of individuals contributing to production-nearly 30 per cent of our labour force is unemployed-to increase our gross national output to at least $125 billion or perhaps $150 billion in the coming years. We cannot do it because our workers are out of work and because we have not found the means to make the investments needed to get our economic production system going to produce more. When the young are not working, they are not producing. We would have liked to see people work and produce more because in that way we could have reduced prices and would have done so through the help of competent citizens putting their energies at the service of their fellow countrymen and working for the good of the community. We could have increased our assets and by doing so we could have reduced our costs and if our costs were reduced with methods such as those we advocate we could give compensated discounts to reduce the cost of living, to prevent it from increasing steadily.
Mr. Speaker, we could reach a peaceful settlement of the major problems affecting us and to which we cannot find a solution.


Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, may I preface my remarks with a brief quotation as follows:
The federal government is aware of the importance of the family farm. We realize the importance of keeping our family farms healthy and growing ... Despite all our talk about corporate farming and about agriculture being big business-and it is-the family farm is still a basic unit in our agricultural community.
The author, Mr. Speaker, was the Minister of Agriculture (Mr. Whelan) and these remarks were contained in an open letter to farmers of Perth county, published in the Perth-Stratford Beacon Herald on February 10 this year, on the occasion of that county's annual agricultural week celebrations. The date of publication, February 10, is significant because it was nine days before the budget speech of the Minister of Finance (Mr. Turner) on February 19. What did this minister have to say about the family farm? I quote from page 14 of his speech as follows:
I would now like to draw your attention to another matter which is of great importance, namely the preservation of the family farm. Under the present rules, when a farmer dies and leaves his farm to his children he is treated as if he has sold his farm at its fair market value. In the result, there may be a capital gains tax liability. For many of our farmers this poses a serious problem. First, the value of a farmer's land is often subject to fluctuations which have little bearing on the real value of that land as a farm. Second, most small farmers have little available cash and have already exhausted their credit. Therefore, a tax liability at a time when there has been no real sale may leave the family of the deceased farmer with no alternative but to sell out.
To remedy this problem, I propose that, effective January 1, 1972, when a farmer dies and leaves his farm to his children there will be no deemed sale of his farm land.
In the "Budget Highlights" at page 5, however, that passage was reduced to the following brief sentence:
Family farms permitted to pass from generation to generation free of capital gains tax.
This is what was picked up across the country and for several days or weeks there was joy in the rural areas, based on the general misunderstanding that capital gains tax had been eliminated for the transfer of a farm to a wife, son or daughter. At this point, the farmers of Canada were rejoicing because of four basic misunderstandings of this supposed tax relief as it applied to the family farm. Indeed, all Canadians felt that at long last this government had recognized and were prepared to cure the ills that the government's tax legislation had brought to them. These four items of misunderstanding were as follows: first, the farm could be sold or transferred to the children during the parents' lifetime without tax liability; second, capital gains tax had been eliminated with respect to such sale or transfer; third, the residence of the child or children at the time of the parent's death was of no consequence; fourth, the whole farm could be sold or transferred.
With respect to the first item of misunderstanding, it took a week or more before it was realized that the farmer had to die before any relief was possible. Regarding the second misunderstanding, it gradually became clear that capital gains tax was not eliminated at all; it was merely deferred. Therefore, if the farm had a value of $50,000 on valuation day, and a few years later had a value of $75,000 on the date of the father's death, or even a few years later

April 5, 1973

had a value of $95,000 when the son sold it, perhaps to a neighbour, we find that the capital gain to the son is $45,000. In other words, farmers are finding out that even though they leave their farms to their sons in their wills, their sons will still be stuck with retroactive valuation day value.
The third misunderstanding is the residence rule which must be met by the farmer's son or daughter. I wonder if the Canadian farmer realizes even today that if he leaves the family farm to his son in his will, and by sheer coincidence that son, at the time of the father's death, happens not to be at that precise moment a resident of Canada, no relief from capital gains tax can be enjoyed even though the son returns home post haste in order to continue the operation of the farm.
The fourth misunderstanding, Mr. Speaker, is crucial. It involves the question of what is a family farm. I suggest that most of us know it as a combination of land and buildings, probably a dwelling house, livestock, equipment, feed, fertilizer and other things. It is the totality of all of these in combination. When we speak of the family farm in relation to its purchase or sale, or in relation to capital gains tax, however, the interpretation is perhaps more narrow. It is considered by most to mean the land and buildings, the real estate: the non-movables, or immovables, if you prefer.
When a farm real estate agent lists a farm for sale he intends to sell, and the prospective purchaser intends to buy, not such things as stock, equipment and other things; he intends to buy the land and buildings. Therefore, Canadian farmers did not pay special heed to the reference in the budget speech to "farm lands," because "farm lands" mean land and buildings. It bothered a few of us though, Mr. Speaker, because it is no secret that the Minister of Finance would not know a cow from a cabbage and could not care less.
It bothered the hon. member for Grey-Simcoe (Mr. Mitges) who in this House, on February 28 last, asked the Minister of Agriculture if this capital gains tax exemption-I should point out that some of us at that time did not appreciate that it was simply a deferral-also included the buildings on the farm, or was it just the land? I remember the question very well, for two reasons. First, I was trying to be recognized by Your Honour on the same day to ask a similar question and, second, before the Minister of Agriculture answered he leaned over and consulted his colleague the Minister of Finance. Even this brief consultation, Mr. Speaker, was so unique and historic that it became branded in our memories. In any event, after this consultation the Minister of Agriculture replied, "It includes the complete farm".
Mr. Speaker, why would any farmer have difficulty understanding this answer? A few might believe that a complete farm includes such things as livestock, equipment and feed. In any event, we were all pretty well satisfied that the tax on land and buildings could at least be deferred except for this. A few of us began receiving strange reports that farm groups such as the Canadian Federation of Agriculture, the National Farmers' Union and the Ontario Federation of Agriculture were not getting firm answers to the questions they had been putting to the minister and officials of his department. Therefore,
Income Tax Act
the hon. member for Grey-Simcoe wrote to the minister and asked for a specific answer to this question: Does the deferral of capital gains tax apply to both land and buildings? The answer, dated March 9, 1973, included a lot of the usual gobbledygook about parts XI and parts XVII of the act, "deemed disposal," "recipient descendants," and so on. However, one part of the minister's letter is very clear. It reads as follows:
The deferment of capital gains tax does not apply to farm buildings or machinery There will be no change in the basis for valuing the buildings and machinery.
What are we to believe, Mr. Speaker? What are the farmers of Canada to believe? Are we to believe the minister's answer in this House on February 28 when he said, after consulting the Minister of Finance, that the deferral included the complete farm, or are we to believe what he said a few days later in his letter of March 9, that the deferment of capital gains tax does not apply to farm buildings?
If we believe the minister's letter which indicated that only raw land is considered, then this simply has to be a gigantic hoax perpetrated by the government on the farmers of this nation. Is this government serious in believing that farmers across this country shall secure valuation on land alone? Will the government ask these Canadians to consider a family farm as land alone? The whole proposition is so preposterous that it would be laughable if it were not for its tremendous tax implications.
I listed four points of misunderstanding and concern and I have spent most of my time on the fourth point in the hope that a minister will tell this House just what farm assets are subject to capital gains tax and what farm assets are not.


Leslie Gordon Benjamin: You can only exclude the wife and the hired man.


William Herbert Jarvis: Let me return to the first area of misunderstanding, that the parent must die before the tax can be deferred on the passing of the farm to the child. Mr. Speaker, I submit to the House that this is not only unsatisfactory; it is deplorable. Many whose opinion I value share this position. For example, Farm and Country magazine published on March 27 a story headed, "Leaving a farm to a son in a will has never been a satisfactory means of transferring the farm from one generation to the other." Let me quote from that story by Lyall MacLach-lan. It reads in part:
There have been too many cases where sons have reached their fifties and had nothing for their years of hard work on the farm except a promise of the farm when father was gone. As the years pass by, family relationships often change, as a daughter-in-law and then grandchildren appear on the scene. We all know wills can be changed at any time .. .
Those of us who counsel and help farm families with their transfer programs have been striving to get away from the idea of leaving everything in the will. We urge farmers, depending on their individual circumstances, to start a tranfer program as early as possible in their lives and not to depend on their wili for transferring the main farm business.
The proposed change in the Income Tax Act will encourage farmers to do the very thing we have been working to change. However, perhaps when the details of the proposal are known, it

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will include deferment on any capital gains tax when a father transfers his farm to his children while living.
What a vain hope that was, Mr. Speaker. In the same publication there is a story concerning Gordon Hill, president of the Ontario Federation of Agriculture. The story is headed, "Budget moves undermined Whelan, Hill warns federal cabinet session", and reads in part:
Federal budget proposals hurting Canada's farm population 'have undermined the confidence we have in (agriculture minister) Gene Whelan,' the federal cabinet was told recently.
'Also, it's undermined the confidence we had in the government,' Gordon Hill, president, Ontario Federation of Agriculture, added. In an open confrontation, he said the move on capital gains and elimination of the tariff on imported fruit and vegetables plus beef had 'shocked farmers.'
'It's bloody well not good enough,' snapped Hill. Exempting farms from a capital gains tax only on the death of the father 'keeps young men hanging around waiting for the old man to die.,-
Hill said the appointment of Whelan as Minister of Agriculture met with farmer approval. 'He's doing a good job. He's talking the farmers' language. He was convincing farmers that the federal government was trying to solve their problems. Then came the Turner budget. Now we've got a lot of doubts.'
Finally, let me read an editorial in the same publication, written by Don Coxe. It is headed, "Tax deferral misleads farmers". According to the story:
Turner's budget move was hailed in government press releases as 'solving the problems of family farm inheritances.' In reality, what Turner has done is to give a tax deferral to those heirs who are Canadian residents at the time of the death of a parent owning a farm which they inherit; those who stand to benefit most are those whose families have done no estate planning.
He concluded this thought by saying:
'Better dead than in the red' could become the watchword of farm estate planning.
In order to be absolutely fair to the Minister of Agriculture, let us consider for a moment what he has been telling farmers and farm organizations across this country. I believe I have read every speech he has made since the budget speech, and there have been many. Let me begin by quoting what he said to the Canadian Horticultural Council, at the Chateau Laurier on February 27, 1973:
Farmers specifically got an exemption from the capital gains tax for family farms passed from parents to children.
Later in this speech he said:
-the budget has brought important gains for farmers, and in particular the exemption from capital gains for transfers of family farms from parents to children.
Next let me read from the speech he delivered to the Waterloo County Federation of Agriculture. He said:
The capital gains tax was changed for farmers who pass their farms on to their children.
From there he moved to Port Elgin, Ontario, and addressed the farmers during the Saugeen and district farmers rural-urban night. He said:
In closing, I would like to review some of the gains farmers made as a result of the new budget announced last month. First of all, farmers got a cut in income taxes-by as much as 47 per cent for those with an income of $5,000. Second, there was the exemption from capital gains tax for farms passed on from parents to children.
Finally, let me quote from the speech he made to the Farm Forum at Weyburn, Saskatchewan. He said:
In the budget speech last month, we announced a change that will exempt family farms from the capital gains tax if they are passed down from parent to child.
Those are fine words, Mr. Speaker, but one must be particularly impressed by what the minister did not say to the farmers of this country. First, he has not said a farmer must die first; he has not said that in any speech. Second, he has not said that the tax is only deferred. He spoke repeatedly of tax exemptions. Third, he has not told farmers of the residency rule. Fourth, he has not told the farmers that the provisions apply to land only, if indeed that is his understanding and that of the Minister of Finance. The minister, even though he will not deign to inform the farmer, has given him some advice. I refer to his remarks as recorded at page 1580 of House of Commons Debates for February 22, 1973. He said:
I am happy to see that the budget aims at preserving the family farm. The tax concession does not apply to the corporate giants but to farm families who pass on their farm from one generation to the next.
I think the change is important enough that farmers should consult a lawyer-and even for a farmer this is a concession-or an accountant if they are planning a transfer of their farm to their son, son-in-law, daughter or whoever it may be. There are several methods of transferring a farm from father to son or daughter including gifts spread over a number of years. A good accountant can tell them how this can best be done. The change announced in the budget changes the rules of the ball game, to the benefit of the family farm, and I want every farmer to get the most he can out of these concessions that are rightfully his.
From the day this session commenced to the present day, the Canadian farmer has been misled, misinformed and mistreated; and not one incident can be found of this government's willingness to inform farmers of the exact nature and import of the capital gains tax legislation in a frank, open and honourable manner. In closing, sir, may I quote again from the remarks of the minister to this House as recorded at page 1582 of House of Commons Debates for February 22. He said:
We have talked about the family farm. It is easy for many people to talk about a family farm, people who really have no feeling in this regard. I think one has to be raised on a family farm to really understand what it means and to have the feeling of having produced crops. One must be in this position to know what it is to create things. I have been criticized before for saying I feel that farmers are the salt of the earth and closer to God because they create things.
In light of what has been produced by this government with regard to the family farm, I can only say, Mr. Speaker, that it is a good thing our farmers are close to God, because about all the Canadian farmer can hope for now is divine intervention. Finally, I wish to quote what my leader said in Regina on September 15, 1972:
We will act to ensure that capital gains tax does not apply to transfers of average sized farms within the family unit.


Some hon. Members:: Hear, hear!


Mr. A. P. Gleave (Saskafoon-Biggar):: Mr. Speaker, I wish to say a few words on this bill. First I wish to quote from a letter sent to one of the British Columbia members by a farm organization in that province. It lists three items

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the farmers in that area would like to see in the tax proposals which are passed into legislation. They are as follows:
(a)	the need for farm transfers within a family without capital gains taxation.
(b)	the need to remove taxes from the sale of marketing quotas.
(c)	the need for maintenance of the basic herb concept.
They are not asking for a great deal. It will not cost the government a significant amount of money and will not bankrupt the Canadian economy. It could be done without causing a great deal of distress to the Minister of Finance (Mr. Turner). It may even help the Minister of Agriculture (Mr. Whelan) to look like a better guy. However, it is aparently just too much to hope for.
The basic problem of the government and those who plan our taxation system is that they do not understand what it means to let agriculture survive in this country. Never mind helping them to survive, but just to let them survive. That is our problem. The government is hopelessly behind the times in its thinking. They are attempting to have a taxation system that was relevant to agriculture 15 years ago. That is another problem: the practices in farming are changing very quickly.
The second item with respect to the need to remove taxes from the sale of marketing quotas would not have been raised in this House or this country 10 years ago, and certainly not 15 years ago: I think I am absolutely safe in saying 10 years ago. However, it has now become a very important factor in the operations of a significant number of farmers in Canada today. The dairy industry, to name only one sector, has gone the furthest in making a saleable quota part of the total marketing operation. Perhaps it should not have been done that way. I think better methods could have been devised, but that is beside the point. The point is that in many areas the industry "low operates in that way.
If a cream shipper-I do not refer to the big shot dairy farmer, but the ordinary person milking 10 cows and shipping cream, or the person milking 10 to 15 cows and shipping industrial milk in Saskatchewan or many other provinces-has to purchase a quota, he has to borrow money. He is making an investment. If he borrows money, he has to pay interest. If he sells his operation, he must either try to recover that money, sustain a loss or those who take over the operation from him must sustain a loss. The present taxation provisions make it difficult for them to finance the operation.
I do not know whether this government and the minister responsible seriously want the kind of farm we have in Canada today to survive. They had better make up their minds pretty soon. The kind of taxation imposed decides, to a very considerable extent, the type of farm that will continue. The manner in which transfers take place, how money is invested and how the farm is passed from one generation to the other is decided by the taxation system. If the taxation system makes it impossible for family farms to finance their operations, they will cease to exist.
I now wish to deal with item (a), the need for farm transfers within a family without capital gains taxation. In their wisdom, those who planned our taxation system said, a farmer can transfer without capital gains taxation, but he must die before he can do so. There are not many
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tax provisions where a person must die before he is entitled to an exemption, but that is the case here. What about transfers that are made while the farm owner is still living? Most farmers I know do not want to hang on to the farm until they go to the cemetery; they want to be able to turn it over to their son, son-in-law or whoever it may be. Many prefer to quit so they can relax and take it easy. They may wish to help the son or the family along for a few years. But no, this cannot be done. They have to cash in their chips to get any benefit from this provision. I do not understand why.
Perhaps the minister has some good reason why it is so. Maybe it will cost the government less money if farmers have to die before passing on their land, rather than passing it on while they are still alive. If that is the case, I think the minister should tell us. I think only a few of them will be able to pass it on if they wait till they cash in their chips, because the children will get tired of waiting and will leave. Perhaps the minister will get some more money in that way, but he should at least tell the House why this particular method was chosen.
While the minister is at it, he should also tell us why he did not give consideration to the position of family farm corporations. We now have a significant number of farms run by a father and son or by a family corporation. These farms are also transferred, yet no reference is made to them in the bill. This bears out by my belief that the drafters of this legislation did not understand what they were dealing with and did not choose to consult anyone who did. I get a bit irked when I think of people in my constituency in Saskatchewan who are trying so hard to run their own farms and produce grain, cattle and hogs, yet their ordinary needs are not considered.
Mr. Speaker, there are enough economists in the Department of Agriculture, and I do not know what the Minister of Agriculture is going to do with them. He said that he did not like economists; I have heard him make some harsh remarks about them. But let me tell the minister that they have been the fastest growing force in his department during the last three or four years. The minister has spent more money gathering in economists than gathering in anybody else.


Mr. Whelan:: Not me.


Alfred Pullen Gleave: Not you; but you have them, buster. Having acquired all these economists, they cannot even tell the Department of Finance how to arrange a taxation system that will enable the farmers to continue operating. It is either that or the Department of Finance will not listen to them.
We tried to talk the government into leaving the basic herd alone so that farmers would be able to build up and maintain a stable herd of cattle. But even that was too much. No minister of the government has stood in this House and explained why the government could not afford to leave the basic herd as it was. If there is a reason, why does not a minister tell the House what it is? That is the logical and reasonable thing to do.
All of us have to pay our share of taxes and, goodness knows, they are high enough. Although we are prepared

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to do this, one of the basic precepts of income tax is that it should not kill the goose that lays the golden egg; in other words, it should not destroy entrepreneurial activity, if for no other reason than that this activity produces revenue. I should like to know how much tax the government is collecting from dairy producers in foreign countries who are going to sell Canada over 25 million pounds of butter. Are the economists that the Minister of Agriculture has in his stable going to advise the government how to tax butter producers in New Zealand or other countries? The government ran out of time to pay subsidies so as to get the cheese factories out of business in Ontario. This year they gave them an extension of time so they could collect the grant to quit producing Cheddar cheese. The government could have saved taxes by not paying the cheese factories not to produce cheese.
I say it is about time the government started to think about the ordinary guy in the farming business in Canada. The government has programs to get them out of farming. The agricultural adjustment program was another scheme the government dreamed up in some back room to kill off the taxpaying farmer of Canada. They wanted them shuffled out. I do not know whether these farms will get any better, but they are certainly going to make them bigger. There is a good scheme going now to get them big enough that Kraft will buy all the milk. Then you will have a one-man show.
The government will then have the problem of trying to get Kraft to pay income tax. Kraft will probably move its head office and the government will be pretty badly strapped. Before the government finishes its grand master plan to close down the cheese factories and let Kraft take over, it had better develop some method of getting tax moneys from Kraft. Otherwise, the government may experience some small difficulty.
The government has set up some pretty good outfits. For example, there is the Canada Grains Council. I asked the minister about this today. The government gives this council some of the taxpayers' money, then the council publishes a little pamphlet which is just like the one put out by the Department of Agriculture. So there is more duplication there, but I do not know whether they think it is important. The minister in charge of the Wheat Board is also responsible for this council. He sends out questionnaires to find out how farmers want their two-price wheat system implemented. Then these retired farmers write us letters asking how they can get paid their share. These are the retired people for whom the two-price wheat system fails to provide, the people who have retired and whose sons have taken over their farms. They write to us saying they are dependent on their farms for some of their income and that they want their share.
The government and the minister are not really thinking about the ordinary operator and how he can solve his problems. Today the Canadian Co-operative Wool Growers met in Ottawa and invited the minister to speak to them at the Chateau Laurier. An hon. member who represents a number of these people was in attendance. I am not sure whether he heard this statement, but he should have because it is indicative of the situation on farms
throughout western Canada. The statement made by the minister to the wool growers' association was as follows:
I think one of the most important challenges you face right now is to make the industry grow, and to get more farmers into the business. I say that because I believe you don't have enough volume to build up a consumer market. You don't have enough volume to make it attractive for businessmen to invest in a top-notch marketing system, including packing plants.
It does not matter whether it is the wool growers or anybody else, if they are to obtain an increase in the price of their products and invest more money in the industry, they must have confidence that they will be able to obtain a reasonable return. They must be confident in the belief that if they invest, their money will be secure and they will be able to make a decent living. If farmers do not have that confidence, they will not stay on the farm.
The minister has said that dairy farmers in Ontario are not able to employ enough workmen to operate their farms. I suggest this is because we have persuaded too many young people to leave the farm. Anyone who has observed population trends knows that it is easy to convince young people to move from rural areas to the city, but extremely difficult, once they have become urbanized, to persuade them to move back to the country and work in a rural environment. That is what has happened in this country. The minister agrees that it has happened because we have not provided encouragement or security to young people living and working on the land. Instead, we have developed policies which result in the very opposite, namely, encouraging people to leave the land.
I recall attending a meeting during the election campaign in a little place called Hafford in the northern end of my constituency. This meeting was arranged by people involved in the dairy processing industry and officials of the provincial government: they got these people together to persuade them to go back to milking cows and producing industrial milk. Some five years earlier these people in the town of Hafford were milking cows and shipping cream. The dairy commission changed the method of quota payments, and many of the producers dropped out of the industry. Some of their sons and daughters had left the farm and had no intention of returning. I assure the Minister of Agriculture that we in Saskatchewan will have an uphill job getting these young people back to the farm. This is mainly because of politics adopted by this government.
The same situation exists in the hog industry. There was a real upsurge in hog production in 1969 and 1970. Then we hit a downturn in price and this government did not make any move to protect the producers until it was too late. We will now have a difficult task increasing hog production.
I see that the Minister of Finance and the Minister of Agriculture have got together. I do not know at this point whether they are discussing a charge in these taxation proposals, but I hope they are.


An hon. Member:: One or the other should resign.


Alfred Pullen Gleave: An hon. member suggests that one of them should resign. I think that is an excellent suggestion. At least they have sat at the same desk and are talking to each other. Perhaps they could confer long enough to
[Mr. Gleave.J
April 5, 1973

come up with a realistic approach to agricultural policy in order that we will have a taxation policy that will enable our farmers to survive.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I was bom and raised on the farm; consequently, I have a feeling for the way of life on Canadian farms and for the many problems and dilemmas which farmers, young and old, face today. I know, for instance, what difficulties young farmers face when they take over their father's farm of agricultural business, as we like to refer to it today, after the father has retired or has died. For this reason I shall confine my comments to the parts of the bill which relate to agriculture.
The bill before us today is inadequate. It forgives the capital gains tax only in the case of a farmer dying and passing his farm on to his son, daughter or another member of the family. It is ridiculous for such a concession to be made only when a farmer dies. Let us consider the perfectly logical case of a farmer in his forties who has a son in his early twenties, a son who is willing and anxious to get into farming-which is perhaps rare today. Perhaps the farmer is prepared to give all or part of the farm to his son in order to get him started, but the son finds out that the capital gains tax would be prohibitive and he could not own the land on which he would toil until his father's death.
I am a young person who recently married. I am not sure it is my political life that is the cause, but we are just beginning to plan a family. I will have the same feelings as my father, and his father before him, who worked very hard to make sure their children would benefit from their work and have a better life than theirs. Our pioneer forefathers spent long hours hewing out a living on the land in anticipation of a bright future for themselves and their children. I resent very much an attitude on the part of any member of this House which would indicate that one generation has no right to pass on wealth in the form of capital farm assets such as land and machinery to another person of the same family.
I think this is a step backward and one which takes away the incentives which have been inbred in our people through the free enterprise system. This is what the government is doing to our bona fide rural farmers by imposing capital gains taxes on farmland and farm machinery, and by taking away the basic herd concept. The farmer has limitations that other businesses do not incur. If a farmer has an increase in the cost of his input, such as fertilizer, machinery, sprays and everyday expenses, he is unable to add these to the price of the barley he grows or the steer he sells. He must pay the increased costs of inflation, labour and other inputs which, should a machine company be faced with them, would simply be added to the price of the product sold to the farmer.
We might consider another set of circumstances in which a young farmer could afford to purchase some of his father's land, or take a loan to do so, only to discover that the capital gains tax was prohibitive because land values had risen tremendously in a speculative area. This is a common situation in my constituency and in many constituencies close to metropolitan areas. Areas within
Income Tax Act
30 or 50 miles of a metropolitan area find that land prices have risen because many people have moved into the small towns. I suppose this population flow from the cities is all right in this instance because it takes away from the urban sprawl. But because of this situation land prices in the area skyrocket.
My point is that long before there is any actual development there is excellent arable land available for farming for a period of 10, 20 or even 100 years. It is not fair that young people who happen to live in rural areas should be subjected to a high capital gains tax. We have seen in the past few years recommendations by accountants and agricultural experts to the effect that farm people should incorporate in order that they could pass on partial or total ownership through shares from father to son in the form of a gift, to the allowable limit. My reservation is that this means of transfer should occur free of capital gains tax.
One of the most undesirable aspects of this bill and of other recent tax legislation is the terrific burden in respect of bookkeeping and computation which is placed upon the farmer. Many of our farmers, as many hon. members are aware, are not yet caught up in an agribusiness concept of operation. They keep records in their head, in an old shoe-box in the barn, or elsewhere. Undoubtedly, this is not the most efficient, modern way to proceed. However, it is a fact of life. Most older farmers are set in their ways and will have difficulty adjusting. I hope the government will provide assistance for farmers to complete their returns properly, and will see that farmers are not penalized or prosecuted due to genuine and inevitable confusion and misunderstanding in this transitory period.
In addition, as I have pointed out previously to this House, capitalization costs for farms are rising at a tremendous rate. The average capital outlay for a new farm in 1971 was $37,000. Today the figure has reached $80,000. At the same time, the number of census farms in Alberta, and in Canada generally, has dropped off rapidly, and the average age of farmers is increasing to the point where it is now 50 or more. This is not an unusual situation, I might add, in view of the attitudes implicit in the bill before us. It is unfair to impose a capital gains tax on a young farmer who takes over from his father who may have been running the farm on the 1950 basis, because the new farmer may find it necessary to update the equipment and perhaps purchase another quarter section of land in order to make it an efficient farm unit. The young farmer would have difficulty obtaining a loan, not only for the purchase of the land but for bringing the farm up to date, without having the imposition of a capital gains tax upon the takeover.
I am one who believes in rural values and rural ways. Amidst the hurly-burly of city life, its glamour and excitement, all hon. members and indeed all Canadians from rural areas know the special feeling and characteristics of country life, such as the opportunity for reflection and quiet, the stern reliance on self-initiative and self-discipline and the avoidance of government paternalism wherever possible. I believe that such basic values, including the work ethic, were instrumental in building Canada and

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are not irrelevant today. Indeed, I believe they have as much to contribute to the future as they did to the past.
We should look at the hippy attitude and learn something from it. They led the movement away from urban smog back to the soil, back to nature and back to the natural life. As the pace of our lives continues to mount, we need even more the balance and perspective that the rural values of Canadian life have to offer. The preservation of rural communities, which the present bill does not aid as effectively as it should, means that the basis of our society, the family, should be able to stay together.
Communities are preserved only because succeeding generations continue to work and remain there for the good of the community. Young people are kept on the farm, join 4-H clubs and obtain the reverence and respect for this life which will impel them, wherever it is financially possible, to stay on the farm and see that people do not join in the mass exodus to the cities because it is possible for them to remain on the family farm. I find that some towns which develop close to cities and lose their farm atmosphere suffer severe social problems as a result. I have seen examples of this in my riding. The smaller rural towns 15 miles or so away from the cities find they are growing rapidly because of improved commuter transportation, and so on. Homes are being broken as fathers work away from home for longer periods of time. The children are left to play on the streets since their former clubs and meeting places have closed down. Drugs become a large problem in these towns.
I reiterate how ridiculous it is for this capital gains tax to stand in the way of retaining the farm atmosphere. Most farmers put all their profits and savings back into the farm during their lifetime. The farm is essentially their retirement fund. If it is prohibitive for them to sell their farms to their sons, then it is small wonder that so many farms are closing down. The hard work of a farmer often necessitates his comparatively early retirement. It is unfair for a farmer who must get some capital for his retirement from his farm, to have to pay or have his son pay capital gains tax. If this government is in fact committed to preserving the family farm and is not merely paying lip service to a remote ideal, then it should eliminate the capital gains provisions completely on any farm transfers within a family unit.
The people of the west are not deceived, as the Prime Minister (Mr. Trudeau) found out last October, by rhetoric and hyperbole. While they know that this bill is a step in the right direction, they also know it stems not from any real appreciation of our needs and desire to maintain the family farm in Canada. I conclude by repeating that this legislation is a baby step in the right direction, but further steps must be taken to remove the capital gains tax from the family farm unit.


Mr. Harry Olaussen (Coast-Chilcotin):: Mr. Speaker, to say that our tax system is unfair to those in the lower income bracket is to repeat the same old story over and over again. However, I will repeat it once more and say that our tax system has never afforded fair treatment to Canadians. We may increase a few benefits here and a few benefits there, but the over-all result remains the

same. As long as the voters of this country are willing to accept these inequities in our tax system, the basic problems that exist in this system will not change.
Low-income groups continue to bear a disproportionate share of the tax load. They are also the unfortunate target of federal and provincial sales taxes which result in their paying a greater percentage of their income in the purchase of goods than those whose incomes are substantially higher. For them, tax relief is available when amendments to the Income Tax Act are brought in, such as the one we are debating tonight.
For the old age pensioners, the proposed increase in exemptions from $650 to $1,000 to all persons 65 years of age and over will undoubtedly give them some relief, temporary relief, that is supposed to enable them to cope with increases in food prices and other essentials. For students, the proposed deduction of $50 a month in computing the taxable income will be a welcome relief during a period when there is a loss of income which might otherwise have been earned. It will also no doubt be a welcome relief for those parents who have to bear the extra costs of education and other related expenses.
However, as we look at the over-all picture we must not lose sight of the fact that these token gestures do not reflect drastic changes which are necessary if we are to achieve any measure of a just society. It is high time we began to use our budget as a long-term planning device rather than a mere short-term response to particular crises. We must make a choice as to what our goals should be. Are we to have economic growth? Are we to have price stability? Or are we to have income redistribution and the alleviation of poverty?
We will never really exercise such crucial choices so long as we continue to be obsessed with mere means and methods rather than long-run objectives. Every time there is talk of tax reform we hear loud voices of protest from those who fear they may be deprived of their familiar loopholes-their expenses, entertainment allowances, dividends, depletion allowances, capital gains and other artful tax shelters. These protests usually come from those who are well organized, highly visible and vocal and easily make their demands known through well financed lobbies and pressure groups. Such is not the case with those who are unorganized, undereducated and relatively powerless. They are used to expecting little and getting less.
In conclusion I can only say that I welcome the deductions in this bill. I welcome them because they are essential under the present system. I welcome them because there are those whose needs are such that these deductions will enable them to live just a little better.


Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, it is my intention to confine my remarks on Bill C-170 to the amendment dealing with the transfer of farm property by a farmer to his child. This really reinforces the comments made earlier by the hon. member for Coast-Chilcotin (Mr. Olaussen) and the hon. member for Perth-Wilmot (Mr. Jarvis).
In the riding of Lambton-Kent we have a very impressive historical record of Century Farms, yet despite this living testimony of family farm units there has been a
April 5, 1973

steady migration, in particular of our young people, from the rural communities to the urban centres because of the economic uncertainties of a future in agriculture. This fact, of course, has been well substantiated by Statistics Canada. The figures for 1971 reveal a drop of 24 per cent, in five years, of Canadians living on farms. Less than 7 per cent of Canadians now live on farms, compared with 10 per cent in 1966 and 12 per cent in 1961.
The declining number of farm residents coincides with a similar drop in the number of the nation's farms. In 1966 there were 430,522, and in the last year for which I was able to obtain statistics there were 366,128. In addition, there has been a decrease in the number of farmers who are living on their farms. In many instances they find it necessary to live and work in towns and cities to supplement their income so they can retain their farms.
I can assure the House that the agricultural community of Lambton-Kent is deep in tradition and proud of its farming heritage. When the initial legislation proposing the capital gains tax on the transfer of farmland was introduced, they were quick to realize that the gradual erosion of the family farm unit, which had been evident in the entire agricultural community, would not be greatly reduced. The farmers of Lambton-Kent are knowledgeable, capable of interpreting government action or, in the instance of that piece of legislation, government inaction in responding to their pleas. They realize this government has a paucity of ideas for an effective agricultural policy. Add to this the crippling capital gains tax on the transfer of family farms, and it is not difficult to realize why our farm community has lost confidence in the government. Indeed, farmers are entitled to ask if this government has an interest in Canada's primary industry, namely, agriculture.
I know this issue is of major concern to the entire farming community of Lambton-Kent and I know I speak for that entire community when I earnestly urge that amendments be made to the bill which is presently before the House. We welcome in principle the introduction of the provision which is in keeping with the position this party has clearly outlined in the past. Unfortunately, the provision, although a move in the right direction, is far too restrictive for sound farm planning and I am certain it is not too difficult for hon. members to visualize the innumerable awkward situations that can arise from such a restrictive provision.
I wish to remind hon. members that when the original legislation was introduced to the House, the Senate committee recognized that farmers occupy a special position in the society's economic structure. They realized that over the years this part of the economy has been subjected to pressures leading to changes in the nature and use of farmland. They realized that there was a continuing trend of dissolution of the family farm and they urged that measures should be taken to reverse it. They strongly recommended that land, together with any other capital property used by the individual in a farming activity, should be allowed to be transferred during the lifetime or on death to descendants without being subject to capital gains tax. I support that view and strongly recommend the proposal.
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Another problem that frequently mitigates against sound farm planning, and on occasion has a deleterious effect on the family unit, is the inability of a farmer to sell his farm property to buy another farm which may be more socially or economically feasible in terms of the entire scope of his operation. I cannot see the logic of penalizing a farmer in this instance with a capital gains tax and would strongly urge the correction of this inequitable situation.
Another matter which I would like to bring to the attention of the government relates to the evaluation of land, or to land valuation. Mr. Speaker, I found it very disconcerting, on April 4, as recorded in Hansard at page 2968, when the following question was asked of the Minister of National Revenue (Mr. Stanbury) by the hon. member for Pembina (Mr. Hollands):
Mr. Speaker, I should like to direct a question to the Minister of National Revenue concerning the land evaluation taking place in Canada for tax purposes. Would he inform the House whether the property owners whose properties have been appraised for tax purposes have been notified, and, if so, is there an appeal procedure to handle these evaluations?
The Minister of National Revenue replied as follows:
Mr. Speaker, the evaluations that are taking place are for the purpose of future reference. They do not necessarily have any status in law at this point. Valuations from any source can be considered. This information is being gathered to assist parties in the future determination of values.
I believe the significant part of that statement is that they do not necessarily have any status in law at this point. Surely there should be some direction as to whether or not valuations will actually be accepted at this time. Surely, sir, the government must have the ability to arrive at some formula. I am sure many formulas could be devised for land valuations.
The last point I would like to deal with, which I feel requires attention and correction by the government, is an allied problem which discriminates against many of our farmers with the existing Income Tax Act. I can best illustrate this by citing a specific example recently brought to my attention by a constituent. A farmer and his son had hoped to convey their farm properties to their own corporation. The Income Tax Act in its present form states that any gain on a deemed disposition or sale of a principal residence of a taxpayer, including the one acre, is not subject to tax under the act. In the event that the dwellings were included in the farm sale to their company, they would not receive this benefit.
However, if the father and son were able to sever the one-acre parcels from the farmland and retain them as their own private dwelling, they would not have been taxable under the act. But the municipal act authorizes townships to pass bylaws controlling the severance of property, and in this particular township, as well as in many townships in the province of Ontario, a bylaw exists to the effect that no area of less than ten acres can be severed from the farm property. In such cases, the township committee of adjustment refuses the one-acre applications since they contravene their township bylaw. In other areas where it is not necessary for the township to have such a bylaw, one acre of land properties can be severed and the remainder conveyed to farm corpora-

April 5, 1973
Income Tax Act
tions. Of course, this means that farm owners residing in those areas have a decided tax advantage over farm owners residing in areas which have a ten-acre by law.
This places the farmer in a most unfortunate situation. Under capital gains tax legislation there is no consideration for his dwelling, while on the other hand under the township bylaw he cannot have the house severed from the farm. To summarize, Sir, as the legislation presently exists there has been no consideration by the government to recognize the necessity of different severance bylaws in the townships, which are fundamental on their part to effective planning, and there is obvious discrimination to the farm community when adequate consideration has not been given to the formation of limited companies.
In conclusion, Mr. Speaker, I welcome the amendment but I re-emphasize that it is far too restrictive for sound farm planning and I would urge that serious consideration be given to the proposals I have outlined. If the government is interested in preserving the family farm, surely it will be prepared to take action on these reasonable requests which come from the farming community.


Mr. John Harney (Scarborough West):: Mr. Speaker, I think I will follow the example of the two previous speakers and be as brief as possible, although I must give you due warning about an occupational habit of mine, that as a former university lecturer I tend to go for 50 minutes until the bell rings. But I will try to see if I can finish in five minutes.
Although there is very much to be said about this bill, there is one very small item which I want to talk to tonight. It is small but it does affect some people in this country, not a large number of people, rather intensely. I refer to section 81(l)(h) of the act, which since 1970 has received revision. In the old form of the act it was section 10(lXh). Now it has moved to section 81(l)(h). I take some comfort in realizing it is possible for tax acts to be amended. Under the old form of the act, section 10(l)(h) used to read:
compensation received under an employees or workmen's compensation act of Canada or a province in respect of an injury, disability or death,
This kind of compensation was to be included in amounts not included in computing income. It has been proven possible to change the act, because the present consolidated version in section 81(lXh) reads this way:
compensation received under an employees or workmen's compensation law of Canada or a province in respect of an injury, disability or death, except any such compensation received by a person as the employer or former employer of the person in respect of whose injury, disability or death the compensation was paid-
I want to speak in favour of looking at this part of the act a little further to see if it could be amended, because the kind of case I want to raise now, as I suggested a while ago, may not be numerous but it is rather harsh in its nature. I have received representations, as I am sure other hon. members have, from people who have been paid disability pensions in compensation for injuries received while they were working for units or entities which were not covered, strictly speaking, under the workmen's compensation acts of their respective provinces.

I can bring before the attention of the House one particular case, that of a Toronto firefighter who was injured in 1955, in fact injured seriously enough to be granted a rather significant disability pension. It turns out that this man has his pension taxed because, according to the law, his pension is paid under the Toronto fire department's superannuation and benefit fund. The pension was clearly granted for his disability; it is a disability pension. However, at the time he was working for the Toronto fire department the employees of that department were not included, by reason of provincial legislation-not by any choice of their own-under the workmen's compensation act. Still he has his disability pension. He and a number of others are paid out of the superannuation and benefit fund, but in this case it is clearly a disability pension.
Over the years this man has tried to have this pension included in that kind of income which is not considered for taxation purposes, just as workmen's compensation disability pensions are not included in income to be considered for taxation purposes. But, of course, his appeals and his attempts have proven unsuccessful, although he has met with an enormous amount of sympathy. He has gone to appeal boards of the income tax division and he has been told that they would recommend that the law be changed to allow him an exemption.
He has spoken to what he calls government lawyers who agree with him and say, "You are absolutely right; your disability pension should not be taxed." But the fact is that the law is quite clear; on the one hand it says a disability pension granted under a provincial law providing for workmen's compensation shall not be taxable, and on the other hand in other sections the law says that benefits paid under superannuation or retirement funds are taxable. The simple point of the matter is that although this man's disability pension is paid out of the retirement or superannuation fund, it is still, I repeat- and if I have to repeat it again, I will-a disability pension and should not be taxed.
I know it is very difficult to have the machinery of parliament grind fine enough to take care of the few cases of injustice of this kind. I cannot tell you, Mr. Speaker, how many cases there are across the country. I know of this man's case, and I know with regard to the Toronto firefighters that there are about a dozen such cases. We can guess that across the country a significant number of people are suffering under this injustice. But even if there were only one case it would be reason enough for parliament to take action now to correct this kind of injustice.
For a very brief time we will be considering amendments to the act. Since 1950 we have been able to add a grammatical clause to section 81(l)(h). The purpose of the clause-when we get to committee of the whole we can discuss it-is to define this kind of disability pension, even though it comes under a superannuation fund, as a disability pension and therefore remove it from taxation. Surely, Mr. Speaker, it will not take a lot of effort for us to do that. I could understand, if this bill were not before us now, that it would take a lot of effort to do so, and perhaps we could justify our inaction on the basis that we cannot steam up the vast machinery of parliament to take care of this single, simple case.
April 5, 1973

However, the bill is before us and I am sure there would be no difficulty at all in the minister proposing this kind of amendment. He has proposed all kinds of amendments to the act, and I am glad to see that a lot of work has been put into it. In the bill before us, clause 23 proposes quite a number of changes to section 80 of the act.
I appeal to the House and to the minister to take a few moments of our time to consider this question. I am sure most of us would agree that this man's case is extremely valid and his cause is just. We would like to bring about the kind of change which would finally bring justice to this kind of situation.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I am very pleased to take part in this debate. My remarks will be from the viewpoint of a farmer-rancher from western Canada. My main association with agriculture over the years has been in the production of beef cattle on the short-grass ranges of southeastern Alberta.
The provisions of the present tax structure with regard to family farm transfers were a most important issue in the last election. I do not think there was any topic that came up more often-perhaps not during meetings but at the back of the room over a cup of coffee-than this subject which most members from the rural areas are talking about tonight. It is most important to me.
The new proposals, in this regard, in Bill C-170 are of the utmost importance to agriculture. I refer, of course, to the tax deferral provision that will permit farmland to pass tax-free from one generation to the next within the family. At first glance, I suggest it would appear to be the complete answer to the criticisms of the existing tax set-up. However, it is really much too limiting in that the proposal only applies when the farm property is transferred by inheritance on the death of the father or mother. For sound estate planning, a farmer should not have to die in order to have his children take over legally and officially.
Let me give the House a typical example of a family farm transfer. This is a very real problem that is presently being discussed in a family in the Medicine Hat riding. It was brought to my attention a week ago when I was home for a visit. A 65-year old farmer and his two sons, aged 34 and 29, came to see me about turning the father's farmlands over to the two sons. Nine years ago the father had helped the eldest son get started on his own by backing the son's Farm Credit Corporation loan with some of the father's land as security. Five years ago the younger son got started on his own in the same way, with another FCC loan again backed by the father's land as security.
Now, at the age of 65, the father would like to retire and sell his land to his two sons. Because the Farm Credit Corporation's contracts with the two sons are not open-ended, they will not release the titles to the father's land and the proposed sale to the sons cannot be completed. In addition, the father had assumed he could turn over his farm at his cost to his sons without a tax and, of course, be able to enjoy his retirement-alive! In addition to the tax deferral provision, this situation also points out very clearly some of the inadequacies of the Farm Credit Corporation of the federal government.
Income Tax Act
We have all heard many times, and I am sure under many circumstances, of the so-called family farm problem. I am convinced, Mr. Speaker, that it is not so much a family farm problem as a "young farmer" problem. To me it is the most underestimated Canada-wide problem in agriculture today. It is no wonder our food costs are so high and are going higher. It is a case of fewer and fewer farmers on larger and larger farms that become more difficult to finance every time they change ownership.
The 1971 census shows that the average age of farmers in Canada was 49.1 years. This is an increase of 0.2 years in the five years since 1966. Less than 7 per cent of Canada's population are now farm residents. The number of farms in Canada declined 10.4 per cent between 1961 and 1966, and 17.2 per cent between 1966 and 1971. Young farmers, even with the best intentions, are having increasing problems in financing their own new farm, even from their parents. There is no stampede of investment capital into straight farmlands today. This is all the more reason why the Farm Credit Corporation and this capital gain deferral provision must be restructured to provide the incentives for young farmers to become established and allow their parents to retire at a reasonable age.
The new budget provision allowing livestock to be brought into inventory up to fair market value is a welcome provision. Once again, however, it does not go far enough in providing for a capital herd or the recognition in the tax law of the validity of treating breeding animals as a capital asset. In addition to these two suggested changes, three other tax items are suggested for inclusion in the approach to this new tax act. The capital gains roll-over provisions should also apply to what I term the family corporate farm as well as the provision for principal residence exemption. Five-year averaging for incorporated family farms should also be permitted.
The income tax definition of the term "farm" is much too broad. Surely it is time for a new definition that will more properly serve the more active and meaningful members in this industry. I have used the terminology "family corporate farm" in this debate. This type of farm administration has become necessary in order that a good many family farms can continue to operate as viable institutions.
I should like to bring these comments to a close by reminding the House what the Minister of Agriculture (Mr. Whelan) said in the throne speech debate, as recorded at page 343 of Hansard. He called for suggestions from all hon. members as to "what they think the Farm Credit Corporation can and should be doing to help young farmers and farmers in general." I say to the minister that he might begin by giving the Minister of Finance (Mr. Turner) the benefit of his experience and wisdom in matters relating to farm taxation and financing.
Taxation and Farm Credit Corporation policies must be redirected to give younger farmers a chance, so that they do not have to compete so openly against the more affluent farmer who is very often one or two generations older. We should all recognize that what the young farmer lacks in concrete collateral for loan purposes, he more than makes up for in youth, energy, ambition and much better
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April 5, 1973
Income Tax Act
education, and that these non-material, intangible items are his strength and, indeed, Canada's agricultural strength.


William George Knight: Mr. Speaker, it is with great reluctance that I take part in this debate, in view of some of the changes which have been proposed to this legislation. I am sure my colleagues realize that the whip does not spend all his time attending debates in this House, and therefore they will not mind my having a few words to say. I promise to be brief, which will be a change.
I am always amused to see that when we deal with income tax and the Income Tax Act is debated, we take up parliament's time with amendments, subamendments and amendments to those subamendments. Not long ago we saw the Carter commission report on taxation. After that we saw Mr. Benson, who has been sent to the Canadian Transport Commission to retire, introduce a bill that was 1,500 pages long, and almost too heavy for any Member of Parliament to carry, on the subject of income tax. He had to make some 200 amendments to that piece of legislation which he introduced.
Next we have the Minister of Finance (Mr. Turner) bringing in more legislation to change the amendments that were made previously to change the Income Tax Act as proposed by the previous minister. That legislation was forced through, by closure, in 1971.1 suppose we shall see more amendments to that legislation. This reminds me of a story. It seems that the Income Tax Act and the amendments thereto go through as many stages as a cocoon goes through in changing into a butterfly. This evening we are dealing with more changes.
Having mentioned that the Minister of Finance is introducing changes, let me say that there are parts of the legislation relating to western agriculture that bear mentioning. The government, in talking about the great changes to be brought in has, as usual, taken that great position espoused by liberalism and has not gone the whole way but only half way. When proceeding with income tax changes in 1971, the government was told, in the form of amendments proposed by members of the NDP, that transfer of the family farm from one member of the family to another should be exempt from capital gains tax; those exemptions should apply across the board if the farm went from the father to the son, daughter, or another member of the family. The idea was that the farm should stay within the family and remain a family farm. That amendment was moved by the former member representing Regina East, Mr. John Burton.


An hon. Member:: Who is he?


William George Knight: He will be back. The second amendment proposed was for retaining the concept of the basic herd. Again the government said no, it could not be done. I expect the mandarins of the Department of Finance who sat just in front of the Minister of Finance and conferred with him said, "No, we cannot make this kind of change." Then we saw a general election that brought an interesting result on October 30. Suddenly, this minority government decided that it could be more open-handed in a number of ways and, following the concepts of classical

liberalism, it went half the way. We did not see the reestablishment of the concept of the basic herd-I see my hon. friend for Medicine Hat (Mr. Hargrave) is interested-we got half a loaf. Perhaps in one or two years further amendments will be introduced, because half a loaf creates complications.
Next we come to the capital gains tax. I listened with great enthusiasm to the Minister of Finance when he said that we had done away with the capital gains tax as it relates to the family farm. Members of the other side cheered, and some of us on my side even smiled. The Minister of Agriculture (Mr. Whelan) jumped up from his desk, ran over to the Minister of Finance and shook his hand as if salvation had come. They are still behaving that way over there, Mr. Speaker. That minister suggested the government's action would bring salvation for western producers and they would think he was a really great Minister of Agriculture.
Then we read the details of the proposals of the Minister of Agriculture and the Minister of Finance and found that there is to be a very limited change in the provisions relating to capital gains. They will affect the family farm and are related to the time of death.


John Napier Turner: I said that on budget night.


William George Knight: That was a very limited change, in view of the proposal put forward by the former member for Regina East, one of my party. We will continue to press for further revisions in this respect. I suppose that we are seeing the old story re-enacted. The hon. member for Northumberland-Durham (Mr. Lawrence), who wants a freeze on farm prices, will vote the same way as other members of the Tory party, who I suspect will vote the same way as the NDP will vote on the measures before us, namely, with the government. After all, half a loaf is better than no loaf. If he is here for a few more years or for as long as the member for Assiniboia, he will learn.


John Napier Turner: He is already in the deep freeze.


William George Knight: I am pleased to see further exemptions respecting old age pensioners. Some exemptions are to be increased to $1,000. I believe these will provide relief to those who are supporting young persons going to university, high school and institutions of higher learning. These further tax exemptions are welcome. I believe that $50 a month for expenses is to be allowed. I support and welcome that proposal.
Before going on with any more complimentary remarks, let me say that the hon. member for Perth-Wilmot (Mr. Jarvis) made an excellent speech. I am not always that generous, let me add. In any event, he quoted from some of the speeches made by the Minister of Agriculture. I want to end on this note. So far as I recall, at no time did he bring out in those speeches what the minister's position was with respect to capital gains tax. He quoted from only a few of those speeches. If he had produced all the speeches the minister has made, he would have needed about five wheelbarrows.
April 5, 1973

II we in this House of Commons had as many changes to benefit the western producers and farm producers of this country, or if we had as many bills from this minister as we have had speeches, we would not be doing anything but dealing with farm legislation. Our farm legislation would be the best in this country. All we get from this minister is talk, talk, talk. We have had one lousy piece of legislation on crop insurance, and that was it. There have also been two changes with regard to the basic herd. The minister is very excited. He made two speeches in my constituency. No one will believe he is credible unless we see more than we have seen up to the present time.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I wish to make a few brief points. I agree with those who referred to small farms. The passage of an amendment to pass on a small farm at death is really an example of tokenism. Very few farms are in the hands of the original owners at death, unless they are unfortunate enough to die in their forties or fifties before their families mature. Farmers now wish to sell their farms at the age of retirement, 65 or soon thereafter. They expect to use the money to live at a higher standard than in the past. For a farmer 70 or 75 years of age to have a son willing to take over the farm is most unusual. I think this aspect of the tax bill can only be considered as a token gesture. As a previous speaker mentioned, it is only possible to postpone the payment of capital gains. With the increase in the rate of inflation, it is logical that most farmers would want to pay the capital gains when the farm is passed on so that in the future they will not have an enormous bill to pay.
I would now like to deal with some aspects of small business. In my province there is an estate tax. All businesses are valued by either the federal government, from the point of view from assessing capital gains, or by the provincial government for estate taxes either on the basis of seven times the profits or the net assets value, whichever is higher. This creates a great problem. There is a long series of negotiations while the tax accountants and tax lawyers attempt to reduce the assessment by the government.
The problem is that both governments assess the business as though it were a pile of cash in the bank, or on the desk, from which they can take their share. However, it is not a pile of money; it is a going concern. With the death of the chief of the business, it is under poor management for some time. The small business is not able to protect itself against the death of the owner. If the owner is getting on in years, the premiums are very high. Often he is uninsurable. Although the insurance may be used to pay the income tax or estate tax, it is not deductible as a business expense.
Take the example of what will happen in the future for a small business in a province such as Manitoba that has both an estate tax and a federal capital gains tax. A small business with a gross value of $500,000, not a large business by modern standards, would only employ about 10 to 12 persons. In then years' time, with inflation and some accrual, the business could be worth $1 million. If the owner suddenly died, the business would be faced with a very severe problem-how to pay the capital gains tax.
Income Tax Act
Assuming the rate is 50 per cent, it would be $125,000. There would also be an estate tax of approximately $187,-
000.	A company worth $1 million would be faced with a tax bill of over $300,000. The business management would be insecure and poorly oriented. Also, the management would be poorly trained. Even with six years to pay, there would be only one way to pay the $300,000 bill. That would be to sell it as fast as possible, take their money and find another job.
This did happen to a company in Manitoba, a successful, family-owned oil company. They could do nothing but sell out. It was sold to a company that would be considered foreign-owned. There was no other option available. This has reference to the foreign ownership bill which is now before the committee. This is a very tangible problem. It will become even worse as the capital gains tax matures. Unless the provinces with estate taxes, and the federal government, come to some agreement this problem will increase in the future.
I wish to say a few words about partnerships. I have been told that with the taxation system for partnerships, it is almost impossible to sell out. They are not particularly onerous or unfair but they are so complicated that this method of doing business will not be as successful as it was in the past. A partnership is one of the best ways of carrying on a business. With those few words, Mr. Speaker, I conclude my remarks.


The Acting Speaker (Mr. Boulanger):: Is the House ready for the question?


Mr. Roland Godin (Portneuf):: Mr. Speaker, some members of our party would like to make a few remarks about the bill before the House, and I would like to call it ten o'clock.


The Acting Speaker (Mr. Boulanger):: The Chair is aware that it is ten o'clock.


Mr. Comtois:: On a point of order, Mr. Speaker.


The Acting Speaker (Mr. Boulanger):: The hon. Parliamentary Secretary to the Minister of Finance on a point of order.


Joseph-Roland Comtois: Mr. Speaker, I thought all parties had agreed to approve second reading before ten o'clock this evening. If some members of the Social Credit Party of Canada wish to speak, I am sure they will have a chance to do so tomorrow in the committee of the whole.


Roland Godin: Mr. Speaker, I called it ten o'clock; a number of my constituents are having tax problems, and I intend to speak on their behalf tomorrow.
26087-46J

April 5, 1973
Adjournment Debate



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Doug Rowland (Selkirk):: Mr. Speaker, on February 6 I asked the Prime Minister (Mr. Trudeau) whether it was the intention of the government to permit a debate in this House, prior to May 12, of the entire question of the North American air defence agreement. I asked that question because on May 12 the present agreement is due for renewal, or termination. Before a decision of this magnitude is taken, I think the government should have the advantage of the advice of the House.
The Prime Minister's answer was to the effect that if the opposition parties really wanted to discuss the matter, they had opposition days available to them and should utilize one of those days for this discussion. I consider that to be a highly unsatisfactory answer. This is a matter of government policy and it is the responsibility of the government to bring its policies before the House for approval or denial.
My purpose in raising the question this evening is to secure an assurance from the Minister of National Defence (Mr. Richardson) or his representative here tonight that prior to May 12, the day on which the NORAD agreement must be renewed in some form, or terminated, this House will have the occasion to debate the subject in order that the government may have the advantage of the advice of this chamber before making a decision of considerable importance to our nation.
The North American air defence command was established in the mid-1950s to counteract the threat of a manned bomber attack on the continental United States of America. I think it is time indeed to re-examine the whole premise upon which that alliance was based. In the opinion of most experts, the threat of a manned bomber attacked on continental North America is no longer extant. The Union of Soviet Socialist Republics, the major threat to North America in the event of war, now has other methods of conducting an attack on this continent. It has intercontinental ballistic missiles in hardened sites resistant to a first attack. It has nuclear submarines equipped with intermediate range ballistic missiles. The Soviet Union and the United States of America combined have the nuclear capacity to destroy this world twice over.
Given that kind of situation, it is extremely doubtful that the Union of Soviet Socialist Republics would employ its long-range bomber force to attack North America in a first strike. It has 195 aircraft capable of attacking North America and returning to the Soviet Union, and those aircraft travel at under 600 miles an hour. That provides simply too much warning for them to risk a first strike situation. When these bombers start to move, the whole United States retaliatory system would be activated. It does not make any sense at all that they would employ their long-range bomber force in that manner.
[Mr. Godin.l
The second strike employment of long-range aircraft is doubtful because a United States first strike probably would render the Soviet bomber bases ineffective. In addition to that, when you consider the efficacy of NORAD in that kind of scenario, should the Soviet undertake the first strike NORAD bases would be among their first targets. So the whole notion of an agreement designed to counter a manned bomber attack as being effective or useful becomes very questionable.
In order to maintain NORAD we are now involved in discussions and possible vast expenditures on an airborne warning and control system known as AWACS, in addition to discussions in respect of the purchase of an improved manned interceptor known as IMI and discussions about the purchase of over-the-horizon backscatter radar, all of which technical schemes involve expenditures beyond belief. All of them are designed to counter a non-existent threat.
Given the fact that a manned bomber attack on North America is unlikely in the extreme, I wonder why this country should continue to associate itself with an alliance designed solely for the purpose of countering that non-existent threat. I am quite prepared to admit that in order to assert its sovereignty, this country must maintain the capability of surveillance and interception within its airspace, but that kind of capability does not necessarily involve a formal alliance with the United States.


The Acting Speaker (Mr. Boulanger):: Order please. The hon. member's time has expired.


Mr. Leonard Hopkins (Parliamentary Secretary to Minister of Defence):: Mr. Speaker, I have listened with interest to the representation of the hon. member for Selkirk (Mr. Rowland) for a debate on NORAD. I think he will appreciate that any expenditure made by any country in the western world is worth the price of freedom.
I should like to remind the hon. member at this point that the deputy commander-in-chief of NORAD, Lieutenant General R. J. Lane, appeared before the Standing Committee on External Affairs and National Defence on March 2, 1973, and addressed the committee on the history of NORAD, its missions and its forces and facilities. At the same time, Mr. Kirkwood, the assistant deputy minister of policy, spoke briefly to the committee on the nature of Canada's contribution to NORAD.
Tomorrow morning at 9.30 the minister was scheduled to address the Committee on External Affairs and National Defence exclusively on the subject of NORAD. In fact, I believe the hon. member has already received an advance copy of the statement that was to be made by the minister. It is regrettable that the committee meeting had to be postponed late this afternoon. I have been given to understand that several members of the committee are participating in the Canada-U.S. interparliamentary group at a meeting in the United States later this week.
The House of Commons Standing Committee on External Affairs and National Defence will be holding meetings shortly and the hon. member will be given an opportunity to express his views at that time, when the Minister of National Defence (Mr. Richardson) will be present to answer any of his questions.
April 5, 1973


POST OFFICE-NEW POSTAL CODE-PROVISION OF PRINTED STICKERS TO PUBLIC
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, first I should like to congratulate the minister on the new arrival in his household.
I wish to speak on the matter of the postal code that soon will be used across this nation. There are some serious defects in this system and there is a question concerning exactly how successful the code will be. The introduction of a Canadian postal code and the proposed investment of $100 million for a mechanization program in the Canada Post Office are causing considerable waves in public opinion and the postal unions in particular. A much simpler coding system could have been adopted. The possible error factor is too high and will create confusion. Machine sorting will be done only for coded mail, and therefore hand sorting could not be eliminated. The desired rate of 50 per cent to 60 per cent coded mail will definitely not achieve a cost reduction, for the obvious reasons.
I do not agree with the objections of the postal unions that the proposed mechanization will reduce the labour force. The opposte is more likely. It is the investment of $100 million which should be the main concern. Once the equipment is installed, it has to be maintained. Repairs, occasional breakdowns and improvement of the sophisticated equipment will be an additional cost factor and also more reason to keep the old hand-sorting method alive. It will be no surprise if the present postal deficit of $77 million to $105 million per year doubles in the near future. As a result, the total deficit for the next decade could reach $1,500 million to $2,000 million. We will have to make unpopular decisions to cover the enormous money demand of the civil service, which in turn is influenced by so-called experts. The Canadian taxpayer will have to pay again for experiments, as he has so often in the past 20 years.
Since the Canada Post Office is on the road of no return with the introduction of the postal code, it would appear that a complimentary label system will be required. I have further information on the label system which I have presented to the Postmaster General (Mr. Ouellet).
It seems to be a fact that the rising prosperity of nations is leading to inflated costs of their services. One of the most affected is the postal service. While the West German postal deficit in 1970-71 was over $120 million, the Canadian postal service was operated in the past decade with close to a $600 million deficit, with $77 million for 1971-72. The mail sorting operations represent a key problem, also, for the slowly decreasing efficiency. Therefore, the Canadian postal service is in the process of introducing an area coding system with an investment of $70 million for mail sorting equipment.
The record shows that in Great Britain, where the coding system was introduced three years ago, only very few people use it. There is no doubt that the coding system, with its sophisticated equipment, depends solely on the participation of the public. In order to utilize the sorting equipment, the code system must be extensively used, otherwise it will create considerable confusion and
Adjournment Debate
will make the equipment obsolete. The label system is designed to solve this problem by creating many personal advantages for the participant so that he will be more inclined to use the code.
I have further comments in respect of the postal code. Postal codes as complicated as those pressed by the Post Office upon Canadian postal users were introduced in Britain more than two years ago. With the exception of a few firms, practically nobody uses them. They do not appear on the letterheads of reputable newspapers. A large number of private citizens are not even aware they exist. I asked friends in London for their postal code, hoping to speed up my mail. "What postal code?" was their astonished reply. This is in stark contrast to the use of zip codes in the United States or postal codes in most of continental Europe. Further, Britain and Canada seem to be the only countries in which the Post Office has been persevering in respect of fully automatic sorting.
All other industrialized countries, including the United States, have come to the conclusion that this is impractical since it would presuppose every letter writer knowing the complicated codes of all his or her correspondents. Most countries use a simple code of figures or letters denoting districts. This means that detailed sorting has to be done by hand. But British experience has shown that after five years a vast majority of people never use the complicated code, and sorting then has to be done by hand. The very expensive machinery thus lies idle. And there are not enough skilled sorters available and mail is subjected to endless delays.
Automation is not the answer to every problem; there are many occasions when human skill is both superior and faster. If the Post Office had invested all the money that has been poured into the sophisticated machinery in human relations, we might have had a faster service and perhaps even contented personnel.
As you can see, Mr. Speaker, there are serious doubts as to the success of the postal code. Over half a million dollars has been spent to advertise the code system but the question is: Will it do the job? I am sure the country will be most interested in the Postmaster General's comments.


Hon. Andre Ouellet (Postmaster General):: Mr. Speaker, first I want to thank the hon. member and to assure him that both the mother and the son are doing well. Judging by the way my boy arrived on earth, crying, I would be surprised if very soon he were not in politics and in the House of Commons.
I would like to say first, in reply to the hon. member, that three minutes is very little time in which to answer all the questions that he has put tonight. The response to the code, based on the experience in the province where the code has been launched, has so far been excellent and it is continuing to be good. We hope to complete coding in Canada by the end of this year and then we will be able to cope with the problems in sorting the mail.
The reason this code uses letters and figures is that we want to have a code which would allow us to fulfil our requirements not only at present but for the 20 years ahead. The other reason we have such a code is that it is

April 5, 1973
Adjournment Debate
more precise. There is no doubt that this is a much better code than the one used in the United States or in Britain.
I was interested in the remarks of the hon. member when he referred to the label system. This is something that we could look at to see what could be done, although I would like to remind the hon. member that we will be writing every Canadian to give him his code and give him some labels that he could use to put on his telephone or to send to his friends. The response so far has shown that we are on the right track. We hope the public will understand that by using this code we will be able to provide them with a better service. We do not think this system will be unsuccessful. Quite the contrary, we feel that in the long term we will save money and we will give Canadians what they want, namely, a better postal service!


FISHERIES-LOBSTER FISHERY-REQUEST FOR STATEMENT ON REVIEW OF EFFECT OF OFFSHORE ON INSHORE FISHING
Mr. Charles E. Haliburton (South Western Nova):: Mr. Speaker, this evening I wish to raise in this brief period a subject which is of great interest and concern to lobster fishermen in the area of South Western Nova. That area has 2,500 or 3,000 men engaged in the lobster fishery. They have their organization, the Southwest Nova Scotia Lob-stermen's Association, which had an undertaking from the Prime Minister (Mr. Trudeau) in the summer of 1971 that a study would be undertaken by the Department of Fisheries in order to determine what detrimental effect the fishing of lobsters in offshore areas might have on the inshore lobster fishery. I raised that question with the Prime Minister in the House a few weeks ago but had no answer from him; so I raise it again this evening.
The impact of an extensive fishery in the offshore area, being undertaken not only by our Canadian fishermen but by fishermen of foreign fleets, is of grave concern. It is understood that the Russians are taking lobsters in their drags, unhampered, and that the Japanese fleet is fishing precisely for lobsters, because they have developed some very sophisticated equipment to take lobster off George's Bank and the Grand Banks. They freeze them, carry them to St. Pierre and Miquelon, where they make use of warehouse facilities, and then the lobsters are transshipped to Japan. One question I would like to ask the minister is whether his department of the government of Canada is concerned with that trade, whether they have any way of determining what volume it is and thereby determining what value and what is the result to our fishing resources.
It is also a matter of concern that control over lobster fishing has not been brought under the ICNAF arrangements; accordingly there is no international way in which the fishing of lobsters offshore can be controlled. This is vitally important to a segment of the population in southwestern Nova Scotia and it is a question that it behoves the Department of Fisheries to investigate, just as the Prime Minister undertook that it would be investigated.
It seems to me that the Department of the Environment should determine the volume of lobsters being taken by foreign fleets in these areas and should investigate the fishing techniques being employed by these fleets. It also seems to me that the department must determine the volume and efficiency of the domestic offshore fishery and that a definite appraisal must be made of the relationship between offshore lobsters and inshore lobsters.
This is an industry that means some $20 million to the fishermen in my area. The fishermen's view is that the inshore stocks cannot possibly account for the replenishment that takes place from year to year, and that the volume of sprat to be found in our inshore areas could not be accounted for by mother lobsters in that area. They also say that lobsters are known to move many miles in a 12-month period; that inshore stocks can be exhausted in a 12-month period and are replaced by lobsters from some extraneous source.
I suggest it is incumbent on the minister and the department to make a definite determination of where the seed lobsters for the inshore areas come from. If it is not possible to determine absolutely that there is no connection with offshore lobsters, then it seems to me the only proper thing should be a presumption to be made by the department that there is in fact a connection and that inshore lobster stock should be protected by very careful control over the offshore fishery, whether it be international control or Canadian control.
I might add that to my knowledge fishery scientists so far indicate that they are doubtful of any connection between the two species of lobsters, the inshore and the offshore. But that is not a good enough answer for that industry. It is not a good enough answer for people who are interested in the future of a Canadian industry, who are interested in what has been a Canadian industry. It is not good enough for people who are interested in Canada exercising and taking the available resources which are within an area which has always been thought of as Canadian from a nationalistic point of view.


André Ouellet: Mr. Speaker, unfortunately, the hon. member arrived quite late and the representative of the government who was to answer his question had to leave the House.
In any event, I am very happy to tell him, on behalf of the government, that to my mind the problem is very important. I listened closely to the remarks of the hon. member and I can assure him that the Department of the Environment, which is also responsible for Canadian fisheries, is watching the situation very closely.
Personally, I am sure that all Canadians are very proud of the quality of the Canadian lobster; we want to preserve that extremely important industry. Not only is the lobster catch important to the fishermen themselves; it is also important to all Canadians and in particular to the government and the responsible department.
Motion agreed to and the House adjourned at 10.28 p.m.

Friday, April 6, 1973