1973-11-30

ROUTINE PROCEEDINGS

[Stage Direction]
[ English]

Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I wish to table notice of a ways and means motion relating to oil export taxes pursuant to Standing Order 60(1). This notice supersedes the notice tabled on September 21, 1973 on the same matter.


IMMIGRATION
Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, since the coup in Chile, the Canadian government has been following closely developments in that country. From the outset, one of our prime concerns has been the need to assist those people who either have recently left Chile or who now feel obliged to make a new life in another country.
Canada has had a lengthy and admirable record in contributing to the relief of international refugees and related movements. This has been a positive and humane approach designed to permit those persons displaced to make a new life for themselves in our country through immigration. However, each of these movements has had its own particular problems and requirements. In the case of Chile, many of the people caught up in the situation have not been seeking new homes to which to immigrate but rather a temporary safe haven in another country. From the outset, we have tried to assist those persons who want to make their homes in Canada. We are accordingly extending our refugee program to people to whom humanitarian considerations apply.
Within hours of the September 11 coup d'etat, one of our officers was on hand in Santiago to keep us abreast of developments and take such immediate action as was called for. Contact was also made with the United Nations High Commissioner for Refugees who took responsibility for co-ordinating the means by which assistance could be provided to those in Chile who felt themselves in danger, including identifying those who wished to settle in Canada.
Because the situation has been changing rapidly, a total of four special teams have been sent to Chile and third countries where evacuees have located to report on the situation and ensure that facilities were available to assist those who wished to immigrate to Canada.
Most recently a senior officer from the Department of External Affairs and a senior officer from the Department of Manpower and Immigration went to Panama and Honduras where they met with the groups of evacuees from Chile and the local authorities in order to determine the requirements for special procedures and assistance. Simultaneously, senior officers from the same two departments visited refugee camps and also appraised the demand coming from Chileans. Both teams compared views with our ambassadors accredited to those countries, and their findings have been considered by the government together with the data already provided by our representatives on the spot.
A figure of 13,000 refugees in Chile has been mentioned. This is not accurate. The figure of 13,000 refers to the estimated number of non-nationals living in Chile at the time of the coup, most of whom have given no indication of any desire to come to Canada. Two thousand persons have registered with the United Nations High Commission for Refugees and our teams have talked with many of these people in the camps where they are located. In addition, application forms for admission to Canada have been made available to the United Nations High Commission for Refugees for distribution to these refugees and to date the response has been slight. It is well known to them that Canada is receptive to refugee applications. This may stimulate increased interest in Canada and, in anticipation of this, an additional immigration officer and a medical officer have been sent to Santiago. Outside the UN centres there is an increasing interest on the part of Chileans in coming to Canada, and we are in a position to deal with these applicants.
All of these teams, as well as the United Nations personnel on the spot, have confirmed the fact that until recently relatively few people had expressed interest in immigration to Canada. This is true for those in Chile as well as for those located in Panama, Honduras and Argentina, many of whom have been contacted by our special teams.
For those people who wish to settle in Canada as a result of the coup, the provisions of Canada's ongoing refugee program will be applied. These include: relaxed selection criteria, although medical and background checks will still be carried out; accelerated immigration processing; language training and job placement services; assistance to cover transportation costs; financial assistance to provide for accommodation, winter clothing and other such special support necessary to facilitate early

November 30, 1973
Chilean Refugees
establishment. This is comparable with the approach taken to past special movements to Canada.
To date 20 people have arrived in Canada, 50 more have received their visas, and the applications of approximately 125 other people are being dealt with as quickly as possible.
Other countries have also been accepting people anxious to leave Chile, although they have primarily been granting entry to those seeking temporary haven. Our current understanding, according to UNHCR information, is that ten European countries have agreed to accept numbers ranging from 50 to, in one case, 600. In addition, four Latin American countries have evacuated a total of 1,000 people who were seeking asylum.
The situation in Chile is still changing and we will continue to monitor it, for future events will determine the number of people who, in the final analysis, may decide that the best course for them is to settle in our country. However, we expect that in total some hundreds of people will immigrate to Canada as a result of this situation, which will mean that Canada's contribution will compare favourably with that of other concerned countries.
In the past, individuals and groups have always rallied to provide local support and assistance in welcoming displaced people to their new communities and helping them to become established quickly. For these efforts many thousands of Canadians deserve special praise. In the case of Chile, large numbers of Canadians in church groups and other organizations have expressed their genuine concern in the welfare of those affected by the events in that country. We hope that again interested groups and individuals will join with the government in the provision of special assistance for these people by contacting their nearest Canada Immigration Centre or Canada Manpower Centre. Many of the individuals now coming forward are young, well educated and adaptable people who, with a little help, can be expected to add their contribution to the richness and variety of Canada.


Mr. Jake Epp (Provencher):: Mr. Speaker, first of all I should like to welcome the minister's statement with respect to the Chilean refugees. The matter has been in the public eye for some time and clarification was not only needed but was highly necessary. On that basis I welcome the minister's statement today.
Canada has a long standing history of accepting refugees, people who have had to leave their countries for political or economic reasons. This Canadian tradition has been based on two criteria, as mentioned by the minister in his statement. One has been the humanitarian consideration and the other, compassionate grounds. As Canadians we have taken the attitude that individually we have a responsibility to our fellow men and as a country we have a collective responsibility to help those who are less fortunate than we are. It goes without saying, Mr. Speaker, that Canada's international reputation in this respect is well founded and established.
I remind the House that many of us are descendants of refugees who had to leave their homelands at one time or another for various reasons. It was Canada that welcomed our forefathers and gave them the same opportunities that

were afforded to those living in Canada, and so they were able to become part of the traditions we all hold dear.
With respect to the minister's statement in regard to the entrance of Chilean refugees, on behalf of my party I submit that the same principles of humanitarianism and compassion should be applied and must be brought to bear in this case.
As I stated in my opening comments, there are certain questions that must be answered but unfortunately they have not been answered in the minister's statement. One question in the minds of many Canadians today concerns the nationality of the refugees who are applying to come to Canada. Are they primarily Chileans or are there also citizens of Latin American countries other than Chile? We would also like to have assurances from the minister that all precautions have been taken and that checks have been made in every instance where refugees have been allowed into Canada.
I find it rather disturbing that in his statement the minister left open the question of the number of refugees coming to Canada. While it may be rather hard to determine the number at this time, I suggest that the minister must have a projection. Another question remains, to which the minister only alluded, and that is the number of refugees who want to come to Canada on a permanent basis and become part of Canadian society and the number who are looking to Canada only as a temporary haven. These questions should be answered by the minister, Mr. Speaker.
I suggest that every effort should be made by Manpower officials to prepare the refugees for employment in Canada. The services of the minister's department should be made available to them in the same way as they were offered so successfully in the Ugandan experience recently. Canadians welcome genuine refugees. I accept the minister's assurance that the government is satisfied these are people whom Canada can readily accept and who are willing to make a positive contribution to Canadian society.
I remind hon. members that as Canadians we are responding to a plea for help from one of the specialized agencies of the United Nations. I am sure all hon. members join with me in seeking a world in which the international refugee organization will have a constantly diminishing responsibility and role and ultimately will not be needed at all. Surely a refugee problem such as the one facing us today again points out that freedoms cannot be taken for granted but can only survive as long as constant vigilance is maintained and a desire for the preservation of individual freedom is the goal of all mankind.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, for a long time we have been urging the government to treat the matter of refugees from Chile with a greater sense of urgency than has been apparent to date. We naturally welcome this indication that the government is now treating this matter with the proper degree of seriousness warranted by the humanitarian implications and the human tragedies involved. I cannot forbear saying, however, that up until the last few weeks when the minister sent the teams referred to in his statement there was a marked contrast between the complacency with which the
November 30, 1973

government was addressing the subject and the facts reported to us from perfectly reliable sources. I refer, for instance, to the article by Ian Adams in the Globe and Mail just a few days ago.
Many people have come back from Chile stating that there was a continuing reign of terror, that there was an urgent humanitarian need and that Canadian action had been quite inadequate up to that time. I cannot forbear saying that the credit for the change of attitude lies with a large section of the Canadian people. I refer particularly to people in Quebec and people in the churches who communicated with the government-many, I must say, have communicated with me as well-indicating their deep concern about this matter. I regard this belated-I say "belated" advisedly-recognition that something had to be done as a credit to the working of our humanitarian democracy in Canada.
It is suggested in the statement that very few people want to come to Canada. I do not understand that to be the case. I offered to send to the minister a list I had several weeks ago of 60 people in Panama alone who had made application to come to Canada, but it is not until recently that their cases are being dealt with.


An hon. Member:: Where were they from?


Francis Andrew Brewin: They were from various parts of South America, some from Chile, some from Brazil and some no doubt from other countries. I do not personally think, when one is dealing with a humanitarian problem, that the nationality of the people concerned is of very great concern.


Some hon. Members:: Hear, hear!


Francis Andrew Brewin: I want to make one or two points with regard to the details of the statement. I am glad to see that there are to be relaxed selection criteria, although I do not exactly know what that means. I hope it means there will not be an insistence on the production of documents which the people concerned cannot possibly produce, such as passports and other travel documents. I hope this requirement will be waived as it was in the case of the Hungarian and Czechoslovakian refugees. The statement says that background checks will be carried out. Of course they have to be carried out. Our Immigration Act requires that we do not admit people with criminal records. Of course this must be looked into. But I hope these background checks will not result in long delays. I hope that a generous attitude will be taken and that political grounds will not be advanced as a reason for keeping these refugees out of Canada. It is all very well to call a person a Marxist and condemn him for that reason, but we are dealing with people whose lives are in danger and I hope political judgments will not be used to keep people out.
The statement speaks for assistance to cover transportation costs. I hope we will do what I believe the West Germans and Swedes have done, provide an airlift. If you have a sense of urgency, why not provide transportation directly? I hope the government is considering doing that.
Middle East Peacekeeping Force
The fact is also mentioned that one European country, Sweden, I believe, has agreed to accept up to 600 refugees. That is their target. I point out that Sweden is farther from Chile than Canada is. I suggest that we should take a leaf from that country's book and set a target at least as high as that which a smaller country like Sweden has been able to set in this regard.
I wish to finish by saying that, if I have been critical of the government, I now welcome the apparent change of heart. I say again that it is the aroused conscience of the Canadian people which has been responsible for this and I pay particular tribute to them this morning.
[ Translation]


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, in his statement the minister mentioned the humanitarian reasons for accepting Chilean refugees. I think that we all agree with these reasons, except that we should not necessarily call those people refugees, but immigrants whom we should accept for those same humanitarian reasons.
I also believe that we should urge the minister to be careful in accepting those immigrants, to prevent Canada from becoming a refuge for all the riff-raff from all parts of the world.
For several years, Montreal has experienced difficulties with men from a certain country who defy even the government with their organization.
Mr. Speaker, I believe that the people from Chile should be accepted as immigrants rather than as temporary refugees and be taken in only if they meet the requirements of Canada for immigrants. Moreover, these immigrants should accept our political system and democracy as we live it. In short, they must accept to live in Canada as we do ourselves.
When seen under this light, the minister's decision is acceptable and desirable and we will support it. Again, however, care must be exercised, not because of the fact that these people come from Chile and of the experience they had to endure over there. It can be applied to just any situation in any country of the world.
I think then that care must always be exercised in situations like these as for any other.


EXTERNAL AFFAIRS
Mr. Doug Rowland (Selkirk):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask permission of the House to move a motion of urgent and pressing necessity arising out of allegations that Canadian Forces in the Middle East have been supplied with inadequate medical facilities. I move, seconded by the hon. member for Broadview (Mr. Gilbert):
That the matter of medical facilities provided for the Canadian contingent of the U.N. peacekeeping force in the Middle East be referred to the Standing Committee on External Affairs and National Defence for investigation and report.
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November 30, 1973
Conflict of Interest


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


INCREASE IN PRICE OF FUEL OIL-SUGGESTED REFUND TO HOME OWNERS-REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION
Mr. Jean-Marie Boisvert (Drummond):: Mr. Speaker, under Standing Order 43, I ask the unanimous consent of the House to present an urgent and important motion.
In view of the too rapid increase in the price of heating oil which, by the way, is beneficial only to multinational companies and penalizes our distributors, I move, seconded by the hon. member for Charlevoix (Mr. Caouette):
That refund coupons, instead of ration coupons, be distributed to single homes owners to enable them to pay the increase in heating oil prices.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is no unanimous consent. Therefore the motion of the hon. member cannot be put.

[ English]


CONFLICT OF INTEREST
[Stage Direction]
On the order: Government Notices of Motions:
November 28-The President of the Privy Council-That the Green Paper entitled "Members of Parliament and Conflict of Interest", tabled July 17, 1973, be referred to the Standing Committee on Privileges and Elections.
Mr. Speaker:: Pursuant to Section 2 of Standing Order 21, this government notice of motion stands transferred to and ordered for consideration under government orders at the next sitting of the House.



ORAL QUESTIONS


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. In view of public statements made by representatives of three oil companies which serve on the minister's technical advisory committee, will the minister consider asking this committee to meet immediately so that he can at first hand check the figures on the amount of cutback of oil supplies Canada would have to endure if we have to share, as the minister says, in a general world shortfall, and will the minister then report back to the House?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: As the hon. gentleman says, the companies in question are all represented on the committee which is liaising with government, and the figures I cited earlier this week were the result of discussions between the government and company representatives. I will consider the suggestion to see whether it might be useful to call a fresh meeting at this time, but it does not appear to me that any new facts have been brought forward that would cause us to have any doubt about the figures I suggested in the committee, which, as the hon. member knows, reflect the kind of risk that might be anticipated if the worst came to pass this winter.


Francis Alvin George Hamilton: The
minister's answer is the very reason I asked the question. I now have to ask the Prime Minister whether he is aware that, in light of public statements made by companies represented on the committee, which differ from what the minister is telling us, the credibility of the minister is at stake?


Right Hon. P. E. Trudeau (Prime Minister):: According to my information, there is no discrepancy between the statements.


Some hon. Members:: Oh!


Pierre Elliott Trudeau: If there is such a discrepancy I would be more inclined to think it was the credibility of the other parties rather than the minister's credibility which was at stake.


Some hon. Members:: Hear, hear!


SUGGESTED REPLACEMENT OF MINISTER-POSSIBILITY OF APPOINTMENT OF TEMPORARY RECEIVERS OF IMPORTED OIL SUPPLIES
Mr. G. W. Baldwin (Peace River):: Regretful as I am to
differ from the right hon. gentleman-


Some hon. Members:: Oh, oh!
November 30, 1973


Gerald William Baldwin: -I should like to ask him whether, in light of the fact the minister has undoubtedly lost the confidence of the Canadian public and lost his credibility with this House, the public generally and the petroleum industry, he will appoint, if possible, a minister who can restore credibility and confidence so that the public may have some trust in any allocation the government may make of imported energy this coming winter?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Because the preamble to the question was so erroneous and so prejudiced, I lost interest in it after the preamble.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: It is obvious the Prime Minister lost interest in this whole subject a long time ago. I should now like to ask him a very important question. Is the government giving any consideration to the appointment of temporary receivers of imported oil supplies in case of an emergency this winter in order that, if necessary, it may assert government jurisdiction over these energy supplies?


Pierre Elliott Trudeau: I would have to consult with the minister to know whether this is a worth-while suggestion.


JUSTIFICATION FOR INCREASE IN PRICES OF GASOLINE AND FUEL OIL AS OF DECEMBER 1
Mr. David Lewis (York South):: Mr. Speaker, I should like to ask the Minister of Energy, Mines and Resources whether he is satisfied there is evidence to justify the four to five cent increase in the prices of gasoline and fuel oil tomorrow? Has he studied the additional cost of a barrel of crude oil since October 15 and related it to the increase that has been demanded by the oil corporations?


Donald Stovel Macdonald: I am not expert in costing practices in the oil industry but the counsel I have received is that with the dramatic increase in overseas prices resulting from decisions made by supplying states over a month ago the cost of feed stock landed in Canada has, indeed increased and that these increases are within the terms of the exception mentioned by the Prime Minister last September.


David Lewis: Everyone knows that the price of crude oil imported at Montreal and elsewhere has increased. Can the minister tell the House what was the average increase in the price of a barrel of crude oil? I have information that it might justify an increase of a cent or two but that by no means would it justify an increase as high as five cents a gallon.


Donald Stovel Macdonald: If the increase is, in effect, a multiple produced by multiplying 35 times four or five, I would have to confirm in the case of individual companies, but in general terms the conclusion my officials have reached is that the cost increase is reflected in terms of the
Oral Questions
crude price and that it should therefore be passed on in terms of the price of the commodity.


David Lewis: Mr. Speaker, this is so important to people east of the Ottawa Valley that it seems to me the minister ought to give us a clearer answer. Is it a fact that all the minister did was to accept the increases requested by the oil corporations which have already made immense profits?


Donald Stovel Macdonald: No, Sir. That is not true at all. My officials have scrutinized very closely the costs involved, taking the advantage of comparing one refinery with another in order to find the basis for the claim of one or the other. After very close scrutiny and on the strength of this advice from our officials we have concluded that, indeed, these costs have been realized.


David Lewis: Will the minister inform the House whether the price increase to which he did agree was different from the price increase sought by the oil corporations? Did he lower the price increase they asked for or did he study the facts they submitted and decide that what they wanted was O.K.?


Donald Stovel Macdonald: The applications for
increases varied from refiner to refiner. As to whether there was an adjustment in a particular case, I could not be sure offhand, but certainly these applications were very closely scrutinized by my officials who discussed the figures fully with each of the companies involved.

[ Translation]


ADMINISTRATION OF JUSTICE
Mr. Gilles Caouette (Charlevoix):: Mr. Speaker, I should like to put a question to the Solicitor General of Canada.
Could he tell the House whether his department or the RCMP still receive from Interpol reports on political, military, racial or religious groups and whether these reports are distributed on request to other police forces in Canada?


Hon. Warren Allmand (Solicitor General):: The mounted police do receive reports from Interpol on criminal matters, but I doubt whether they receive reports on the matters referred to by the hon. member. I will check and report further to the hon. member.


Gilles Caouette: Mr. Speaker, I have a supplementary question.
If the minister does find out that such reports have been distributed in Canada, can he undertake right now to return these reports to Interpol and to refrain from taking part in such an activity of that body?
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November 30, 1973
Oral Questions


William Warren Allmand: I should like to examine that entire question after I have checked with the authorities.


OIL-SHARING BY CANADA IN POSSIBLE WORLD SHORTFALL OF SUPPLIES-MINISTER'S POSITION
Mr. Jim Balfour (Regina East):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. The minister has stated that Canada has to be a good international citizen in terms of sharing equally the shortfall in world petroleum supplies. What actual net petroleum shortage in Canada would satisfy the minister's definition of good international citizenship under these conditions?


Donald Stovel Macdonald: I think that would have to depend on the circumstances of the case, but I hope the general proposition I have put forward would be accepted even by the Official Opposition. It is that, in certain circumstances, as an international citizen we should assume responsibility within the community to assist countries which experience a greater shortfall than ourselves.


James Balfour: Does it fall within the minister's definition of good international citizenship to be taking options for spot purchases of oil products throughout the world in competition with countries whose fuel shortage situation-


Mr. Speaker:: Order, please. I am sure the hon. member will appreciate that is debate or argument, certainly not a legitimate question.


OIL EXPORT TAX-POSSIBILITY OF INCREASE NEXT JANUARY-APPLICATION TO SYNCRUDE TAR SANDS DEVELOPMENT
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources or the Minister of Finance. Today notice was tabled of a ways and means motion in reference to the oil surtax. It is now rumoured and believed that the surtax of $1.90 per barrel will be increased perhaps in January. I wonder whether the Minister of Finance or the Minister of Energy, Mines and Resources would care to speak to that?


Donald Stovel Macdonald: Mr. Speaker, there has been no decision yet with regard to the month of January in terms of taxation or otherwise. The hon. gentleman may know that there have been discussions with Alberta ministers in regard to this question and those discussions will continue.


Eldon Mattison Woolliams: Mr. Speaker, may I ask a supplementary which follows along the line of the question of the hon.

member for York South regarding the cost to the consumer. I notice that the notice of ways and means motion indicates that mixtures of hydrocarbons will also be subject to the tax, which would include the tar sands. In light of the fact that supply has a lot to do with price, is it the minister's intention that the tax will apply to the Syncrude development, that any such measures-we do not know because we cannot get from the government what it is going to do-will apply to oil produced from the tar sands in the same way as to other oil, which will, of course, curtail our supplies?


Donald Stovel Macdonald: Mr. Speaker, the law is of general application. I might remind the hon. gentleman that the Syncrude project, if I am correct, will come into operation in 1977 and whatever the tax may be at that time I would think it would, on the whole, be subject to the general law with regard to taxation.


Mr. Speaker:: Order, please. I will recognize the hon. member for Calgary North when the minister has completed his reply. I thought the minister had completed his reply and I apologize to him, but I would hope we might try to limit the number of supplementaries for each member.


Donald Stovel Macdonald: To complete it, Mr. Speaker, in December, 1973, the impact of the export tax will not, of course, relate to the Syncrude project because it is many years from realization.


PROPOSED OIL PIPELINE EXTENSION TO MONTREAL- REQUEST FOR INFORMATION RESPECTING APPLICATION TO BUILD
Eldon Mattison Woolliams: In light of the fact that an application has been made, I believe, by Interprovincial Pipe Line Company with reference to the Montreal pipeline, would the minister assure the House that before any decision is made the facts will be bared before the House, including the amount of the anticipated cost, who is going to put up the money, if we have the quantity of steel required, which the Minister of Industry, Trade and Commerce says we have not, so that everything will be laid before parliament and the Canadian people will know that the government is not bluffing on a project it has announced three or four times?


Donald Stovel Macdonald: Mr. Speaker, the hon. member might be aware that for the construction of pipelines in Canada parliament has established a procedure before the National Energy Board which will involve a public hearing. I might add that all aspects of the pipeline will be dealt with. Regarding the question of steel, I am advised that steel will be available for the pipeline to go ahead.


CONSIDERATION OF DEVELOPMENT OF FUTURE ENERGY UNDER PUBLIC OWNERSHIP
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources. Has he given serious consideration, in conjunction with the producing provinces, to develop-
November 30, 1973

ing all future energy in this country as a public utility under public ownership?


Donald Stovel Macdonald: No, Sir.


Lorne Edmund Nystrom: Can the minister say whether or not he has given any consideration to approaching one or more of the producing provinces bilaterally with a view to co-operating in developing their energy resources under public ownership?


Donald Stovel Macdonald: Mr. Speaker, we have had conversations with more than one province, particularly with regard to federal sharing of the proceeds of the export tax. We indicated that on a joint venture basis we would be prepared to co-operate with the province's priorities in energy development. In that sense we have had discussion of this type.


MEASURES TO ENSURE DELIVERY TO EASTERN CANADIAN PORTS OF OIL NORMALLY MOVED THROUGH PORTLAND-MONTREAL PIPELINE
Mr.   Georges-C. Lachance@Lafontaine: Mr. Speaker, I should like to put a supplementary question to the Minister of Transport.
Can he tell me whether further arrangements have been made in our eastern ports to take delivery of the oil that some countries are unwilling to ship via Portland?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, if we can get oil from a source other than the Portland pipeline, there is no doubt that we will be ready to take delivery of it.


Mr. Lachance:: Mr. Speaker, I want to ask the minister whether winter navigation on the St. Lawrence up to Montreal will be included in those further arrangements?


Jean Marchand: No, Mr. Speaker.


INQUIRY AS TO POSSIBLE MEETING WITH NOVA SCOTIA PREMIER CONCERNING INCREASE IN PRICE OF FUEL OIL
Mr. Robert C. Coates (Colchester-Cumberland North):: Mr. Speaker, I have a question for the Prime Minister. Can the Prime Minister tell me whether he has had any communication with the premier of Nova Scotia regarding a meeting in relation to the increase in the price of fuel oil in Nova Scotia that will take effect tomorrow?


Pierre Elliott Trudeau: No, Mr. Speaker.


Robert Carman Coates: May I ask the Minister of Energy, Mines and Resources whether the premier has requested a meeting with him immediately regarding the increase in the price of fuel oil in Nova Scotia that will take effect tomorrow?


Donald Stovel Macdonald: Mr. Speaker, I would have to confirm
Oral Questions
that with my office. I am not aware of it but perhaps such a request has been made.


OIL-STATEMENTS BY MINISTER CONCERNING POSSIBLE WORLD SUPPLY SHORTFALL AND MEETING CANADIAN NEEDS
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my question is for the Prime Minister. The Minister of Energy, Mines and Resources has stated publicly that Canada, as a good international citizen, must share equally in any shortfall of world petroleum supplies. The minister has also stated that Canada's needs will be served first by Canadian crude oil, even if this means cutting off exports to countries that might be in short supply. Can the Prime Minister reconcile these conflicting statements and indicate to the House just what the government's policy is?


Some hon. Members:: Answer!


Mr. Speaker:: Order, please. I am sure the hon. member realizes that to ask a minister to reconcile one statement with another is debate and that a question in those terms is not in order.


FEED GRAIN MARKETING POLICY-POSITION OF SASKATCHEWAN WHEAT POOL
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question has to do with the marketing of feed grains. Has the Minister of Justice been made aware of the fact that, despite his pilgrimage to western Canada to convince the farmers to the contrary, the Saskatchewan Wheat Pool has made it clear that it cannot accept the system now decided upon by the government for 1974 and 1975?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, I have received a document from the Saskatchewan Wheat Pool that indicates some further conclusions by them on the feed grain issue. I was pleased to see that they accepted the basic principle of equitable pricing across Canada and other very important features in the plan. In that spirit of reasonable discussion for which they are well known they have put forward a possible alternative way of accomplishing that objective, and we will be discussing this alternative with them further in the days ahead.


John George Diefenbaker: Mr. Speaker, apparently the minister did not read what the Saskatchewan Wheat Pool said. He has picked out one item. Did not the Wheat Pool say that the Wheat Board must be retained as sole marketing agent, and is that not contrary to what the government wants to do? Second, did not the board of directors of the pool say that they want an equitable system of pricing and, in particular, an adequate level of floor price protection? In view of those facts, instead of quibbling with words is the minister now prepared to back from the position the government took which is not acceptable to the pools of western Canada?

November 30, 1973
Oral Questions


Otto Emil Lang: Mr. Speaker, the Wheat Pool did focus on the very specific aspect of the Wheat Board remaining the selling agent for the rest of the country, and in effect proposed that the kind of system we adopted this year for formula pricing be continued for another year into the future, along with some of the other steps we have proposed. The right hon. gentleman's reference to floor prices is, of course, a direct reference to a part of what is in our policy in terms of minimum price guarantees. They also endorse the storage program which is a part of our policy. That is why I say there is certainly a distinct hope that we can in this further period discuss the advantages of our proposal, which would have left the board very much in control of the export market and most of the domestic-market but would have allowed a market pricing technique to operate, as against the advantages there are with a more artificial technique. I am certainly openminded on the question, as always.


Some hon. Members:: Hear, hear!


John George Diefenbaker: There is no doubt the minister is openminded, but the fact remains that what has been stated by the Wheat Pool supporting the policy of the government is not. Is it not true, that it is unacceptable?


Mr. Speaker:: Order, please. The hon. member for Oshawa-Whitby.


John George Diefenbaker: Mr. Speaker, I must ask for an answer, not an equivocation and alibi. Is it not a fact that the Saskatchewan Wheat Pool says it will not accept the government's plan?


Otto Emil Lang: The fact is that it has indicated its acceptance of the principles which are obviously fundamental to what we are accomplishing. They indicated one variation on the manner of accomplishing what we wanted, but the most important thing is that they have accepted the principle of one country and one grain market throughout that country.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The Chair recognizes the hon. member for Oshawa-Whitby.


INDUSTRY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Finance concerning the survey done last week of 1,000 companies on the consequences of a shortfall in energy supply. Could the minister inform the House in a general way what questions were put to the companies and, second, when the departmental committee expects to finish its analysis of the results of that survey?


Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, perhaps I might be allowed to answer the question. This survey was undertaken by my department. It is part of the contingency planning in respect of the announcement the Minister of Energy, Mines and Resources made last week concerning the energy supplies allocation board. This survey was aimed at determining the possible effects on various industries in various parts of the country of shortages of various fuels-diesel fuel, heating oil, and heavy fuel oils-from the point of view of contingency planning. We are doing our homework, Mr. Speaker.


John Edward Broadbent: Mr. Speaker, would the minister tell the House when he expects the committee will complete its analysis of the results of the survey? I understand the survey is completed. When will the analysis be completed, and will he assure the House he will make the results of that analysis and any subsequent action the government intends to take known to the public?


Alastair William Gillespie: This is a continuing analysis, Mr. Speaker.


An hon. Member:: Continue your homework.


Alastair William Gillespie: If you would like to wait for the answer, I will give it to you. I know some hon. members opposite regard this as a serious question.


Mr. Hees:: Treat it seriously and stop joking about your homework.


Alastair William Gillespie: Perhaps some of them will realize why it is necessary to set up an energy supplies allocation board. Perhaps, then, they will understand that when it is necessary to go that far it is also necessary to get some facts upon which allocations will be made.


John Edward Broadbent: Mr. Speaker, I have a final supplementary for the minister. Can the minister inform the House whether or not the automotive industry was included in this survey and, more specifically, whether his department is finding out what models of cars in terms of size are being produced in Canada since 60 per cent of that production goes to the United States and there could be a fall-off in employment if their sales go down considerably? Was an effort made to determine what kind of models are being produced and what the consequences might be in that industry in light of the energy shortage?


Alastair William Gillespie: We have been in touch with the manufacturing companies and their presidents within the last 24 hours in respect of precisely that kind of question.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for South Shore.
November 30, 1973


STEPS TO ASSURE ADEQUATE TRANSPORT OF BUNKER
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Minister of Energy, Mines and Resources. The shortage of bunker oil supplies at Canadian ports threatens to become even more severe in December and the world shortage may cause Canadian ships, especially our large fishing fleet, to curtail operations due to a lack of fuel. Is the minister taking any steps to ensure that adequate transportation of bunker oil is provided to Canadian ports and that it is adequately distributed to Canadian ship owners?


Donald Stovel Macdonald: Mr. Speaker, the principal effort we will make to have adequate distribution will be dealt with by the legislation which we hope will receive first reading next week to make sure there is equitable allocation of supplies to Canadians. With regard to fuel supplies generally, the hon. member may know we have established with the cooperation of industry a substantial movement of oil from western Canada through the Panama Canal to eastern Canadian ports and we hope we will be able to sustain this volume through the winter. I appreciate the confirmation that this is a serious situation and one requiring parliamentary action.
[ Translation]


SHORTAGE OF PETROLEUM BY-PRODUCTS
Jean-Marie Boisvert: Mr. Speaker, I wish to put a question to the Minister of Energy, Mines and Resources.
Is he aware of the alleged growing artificial shortage of petroleum products and byproducts such as paint, plastic articles and cosmetics? It seems that several citizens fear a shortage of those products in some areas of Canada.


Donald Stovel Macdonald: Mr. Speaker, this is another aspect of the problem created by the shortage of petroleum products. That is why we propose to take the steps, among others, I have just enumerated in answer to another hon. member.


Jean-Marie Boisvert: A supplementary, Mr. Speaker.
Does the minister have the power to prevent those companies from stocking their merchandise with the view to increasing prices after having created a shortage?


Donald Stovel Macdonald: Mr. Speaker, not at the present time, but it is one of those we intend to be given through the bill I alluded to.
Oral Questions


INDUSTRY
Mr. R. E. McKinley (Huron):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce and is in line with the one asked by the hon. member for Oshawa-Whitby concerning the difficulties industries are having. Is the minister aware that 350 employees have been laid off at Hall Lamp Company of Canada at Huron Park because of financial problems caused by a shortage of raw materials related to energy, and has he had his officials contact this company to see if anything can be done which would be helpful so that these 350 jobs will not be lost to the area?


Alastair William Gillespie: Mr. Speaker, I think this reflects the seriousness of the situation to which I referred a moment ago. We were in touch with the firm as recently as this morning and discussed the problem. It is related, I believe, to a temporary shortage of certain materials. Officials of the company tell us they expect to resume production in the near future.


AGRICULTURE
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I have a question for the Minister of Agriculture. I should like to ask him whether, in view of the fact there seems to be genuine concern by the consumers of Canada about foodstuffs, a monitoring system has been set up to indicate the amount of fertilizers that are going to the United States at the expense of Canadians and which would normally help produce a greater supply of food in Canada?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, last spring I met with the fertilizer manufacturers and I did the same thing this fall. Even last spring I seemed to be more concerned than most people about food production in Canada. Knowing full well what they could do to help, I had meetings with these people again and they did what they said they would do last fall. We know how much fertilizer is planned for domestic consumption. I made the statement that I will do everything and recommend everything to the government to make sure that there is sufficient fertilizer for domestic consumption. We are getting the figures and we will be in a position to tell the hon. member just how much fertilizer there will be for farmers in Canada and how much will be available for export.


Stanley James Korchinski: After all that from the minister, may I ask him whether he anticipates an increase in the price of fertilizer to Canadians after the Americans have got it at a lower price?

November 30, 1973
Oral Questions


Eugene Whelan: We already know in some areas of manufacture that there is increased cost because the rock phosphate that is brought from other countries has tripled and in some cases quadrupled in price, so this will be added to the cost of fertilizers and there is only one place from which it can be obtained. Also, in the province of British Columbia the government has seen fit to raise the price of natural gas by 81 per cent and it is going to cost more to produce fertilizer.


Mr. Speaker:: Order, please.


INDUSTRY
Mr. Jack Cullen (Sarnia-Lambton):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the fact the proposed $200 million plus SOAP project requires a fourth partner in addition to Polysan, Dupont and Union Carbide, has the minister received any indication that such a fourth party has in fact been found?


Alastair William Gillespie: Mr. Speaker, I have received unofficial word this morning that a fourth party is being added to the group. I welcome this news because from my point of view the whole project is very worth while and I hope it will go forward shortly.


Jack Sydney George (Bud) Cullen: In view of the importance of this project to the petrochemical industry in Canada, will the minister agree to meet with officials of this project to determine what further assistance might be necessary from the federal government?


Alastair William Gillespie: I would be pleased to meet with them on an early occasion.


SUSPENSION OF JOCELYN LOVELL BY CANADIAN CYCLING ASSOCIATION-REQUEST THAT MINISTER INTERVENE TO SECURE REINSTATEMENT
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is for the Minister of National Health and Welfare and I have sent him notice of it. In view of the fact that Mr. Jocelyn Lovell, an outstanding Canadian cyclist, has been suspended by the Canadian Cycling Association as a disciplinary measure and that this suspension will last until after the Pan-American Games to be held in Australia in February, and in view of the fact the government has invested approximately $30,000 in his achievements to date, would the minister take steps through his office to have this athlete reinstated in time for the Pan-American Games so that the taxpayers' money will not have been spent in vain?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I will make sure to inquire about further developments of this situation, but it is not for my department to give directives to sports organizations; they have their own disciplinary measures and their own rules to comply with.
I English]


SUGGESTED ACTION TO ENSURE TAXPAYERS' MONEY NOT WASTED BY SUSPENSION OF ATHLETES
Otto John Jelinek: I have a supplementary question for the same minister. In view of the fact his department is responsible for grants that go to Sports Canada and to the athletes of this country, can the minister advise the House whether he will take steps to ensure that other disciplinary measures that are taken will not result in such a waste of money to the taxpayers?


Marc Lalonde: Mr. Speaker, I will certainly contact this organization, but I repeat that such organizations do not live exclusively on government subsidies. Besides, I think sport associations to be essential to the well-being of sports in Canada and that on the contrary we must encourage discipline in these organizations.

[ English]



EXTERNAL AFFAIRS


George Harris Hees: Mr. Speaker, I have a question for the Minister of National Defence. Can the minister advise the House why it took the government nearly a month before it sent adequate medical services to back up our peacekeeping force in Egypt and these services are being sent today only because of the resignation of a senior medical officer in disgust at the inadequacies of the services that had been provided?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, I should like to say first of all that some of the unfortunate remarks that have been circulated on this matter are related to a local hospital and not to the Canadian medical services. I would also like to assure the House, and particularly the families of our personnel in the United Nations Emergency Force, that our participation was carefully and soundly planned and particularly well planned in relation to medical services.


Gerald William Baldwin: Like the energy crisis.


James Armstrong Richardson: When our contingent first left on November 10 they had complete medical facilities for a group of 400. In addition, arrangements were made with two civilian hospitals in Cairo, and we also planned, as you have indicated, and have sent a full Canadian 20-bed
November 30, 1973

hospital complete with surgical equipment. We have taken every possible care of Canadian personnel in this force.



REASON FOR DELAY IN TREATMENT OF TWO INJURED SOLDIERS AND RESIGNATION OF SENIOR MEDICAL OFFICER

George Harris Hees: If this planning was so perfect as the minister claims, why was it necessary for these two men who were hurt to wait six hours before receiving treatment in Egypt, and why is it that the senior medical officer resigned in disgust at the inadequacies of these co-called wonderful services that the minister says were planned? Answer that one.


James Armstrong Richardson: The answer is that Corporal Weir and Corporal Berry, who were in an unfortunate automobile accident, were in downtown Cairo and were first treated in a local hospital. That is what I indicated in my first answer. The criticism was not related to the Canadian medical services but to the initial treatment of the two soldiers. They were then moved by a Canadian medical officer to a U.N. approved hospital where they received full and adequate treatment. But the Canadian medical services were not involved in this incident.


George Harris Hees: You still have not answered why that medical officer resigned.


Mr. Speaker:: Order, please.


George Harris Hees: He has no answer, Mr. Speaker.



CONSUMER AFFAIRS


Mrs. Grace Maclnnis (Vancouver Kingsway):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. In view of the finding of the Saskatchewan government that Canadian consumers are paying two to three times as much as they need to for eyeglasses, the cost of which runs as high as $38, and in view of the fact China has quoted a price on eyeglasses with standard plastic frames of less than $10 a pair, will the minister look into ways and means of encouraging Chinese competition as a means of protecting the Canadian consumer?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I will be happy to do so.


Winona Grace MacInnis: Mr. Speaker, owing to the noise in the House I did not hear the response of the minister, but I will ask alternatively, will he look into and consider ways and means of dissuading Canadian eyeglasses frame makers from their present policy of costly built-in obsolescence?


Herbert Eser (Herb) Gray: I will be happy to examine what can be done in that regard.
Oral Questions EXTERNAL AFFAIRS



IMPRISONMENT OF THOMAS SERJEANT IN TANZANIA-DATE OF NOTIFICATION TO MEMBERS OF FAMILY

Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, yesterday the hon. member for St. John's West asked me a question about the time when the brother of Mr. Serjeant was notified. He said at the end of his supplementary question to me that this is a very serious matter and he thought the minister should explain it. In fact, Mr. Serjeant has two brothers. Our High Commissioner in Dar-es-Salaam was specifically asked to contact the brother who lives in England, which we did by telegram on October 19 and in person on October 22. However, since Mr. Serjeant expressly omitted any reference to the other members of his family, we did not call them until some time later. This is our usual practice since in some cases a general alert could lead to unnecessary embarrassment.


Mr. Carter:: Mr. Speaker, I rise on a point of order in connection with the statement made a few moments ago by the Secretary of State for External Affairs concerning the reason the Serjeant family was not advised of the imprisonment of Thomas Serjeant. It is obvious that the record should be put straight because the minister's officials are telling him one thing and they have told the Serjeant family something else. The reason given the mother when she inquired why she was not informed was that they were unable to ascertain the correct spelling of her name.


Mitchell William Sharp: Mr. Speaker, I can assure the hon. member that Mr. Serjeant's brother was contacted by telegram and in person on the dates I mentioned, so that the family was notified as requested by Mr. Serjeant himself.



LABOUR CONDITIONS


Mr. Charles H. Thomas (Moncton):: Mr. Speaker, I had hoped that the Minister of Labour would be in the House today, but in his absence I direct my question to the Minister of Transport. Have the railway arbitration hearings been adjourned sine die to await the report of Dr. John Deutsch who is investigating the matter of pension settlement?


Jean Marchand: Mr. Speaker, I will take this question as notice and ask the Minister of Labour to answer on Monday.


Charles Humbert Thomas: Will the minister also find out when Dr. Deutsch's report is going to be available to the arbitrator so that he can complete his hearings and file his report?
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November 30, 1973
Oral Questions


Jean Marchand: I will try to do so, Mr. Speaker.

[ Translation]



BRITISH COLUMBIA TAX ON FUEL OIL

Mr. Albert Bechard (Bonaventure-Iles de la Madeleine):: Mr. Speaker, I should like to put a question to the Minister of Energy, Mines and Resources, but in his absence I shall address it to the Prime Minister.
According to the information I have, British Columbia is the only Canadian province that taxes heating oil. Would the Prime Minister urge the socialist government of British Columbia to abolish this tax immediately in the interests of consumers?


Mr. Speaker:: Order. This is obviously a representation.

[ English]



INDUSTRY


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. In view of the extreme shortage of supplies of ethylene in Canada, which were drawn to the attention of the department many months ago, and in view of the greater shortages now going to occur in the supply of plastics and resins in Canada, could the minister advise the House what steps his department is taking in order to assure Canadian users of these chemicals that they will have an adequate supply? Will he advise the House what steps he is taking with his colleague, the Minister of Energy, Mines and Resources, and the National Energy Board to get going with the ethylene plants that have been proposed in addition to the one to which he referred this morning?


Alastair William Gillespie: Mr. Speaker, this is a very general question. Perhaps I could say on the generality of the question that, first of all, we have taken a number of steps with the corporations and discussed with them their plans for petrochemical production in Canada. This is why I welcomed the announcement earlier today with respect to the SOAP project. We have also been discussing similar projects with interested parties in and around the Edmonton area. As the hon. member knows, Canada is a net importer of petrochemicals, and this is why we are bending every effort to ensure supplies for plastics users in Canada.



EXTERNAL AFFAIRS


Douglas Charles Rowland: Mr. Speaker, my question is supplementary to those asked by the hon. member for Prince Edward-Hastings of the Minister of National Defence. In the statement explaining the incident to which the hon. member for Prince Edward-Hastings referred the department notes, much to my surprise, that it took approximately six weeks from the time it was first indicated that Canadian troops would be involved in this force until the field hospital arrived in Egypt, despite the fact that we are supposed to have a quickly reactive, highly mobile force. Can the minister explain that?


James Armstrong Richardson: Mr. Speaker, I indicated that the first contingent did have complete medical facilities with them for a unit of that size, 400 men. The hospital was planned at the start of the operation, and it takes a little longer to move a 20-bed hospital with surgical equipment than it does to move troops.


Mr. Speaker:: Order, please. We have reached the end of the question period. The hon. member may ask a supplementary and then I will have to call orders of the day.


Douglas Charles Rowland: Mr. Speaker, I do not find that explanation satisfactory. Troops normally need hospitals. Will the minister discuss with the government House leader the feasibility of having this question of the possible inadequacy of Canadian medical facilities in the Middle East referred to the Standing Committee on External Affairs and National Defence for examination and report, so that the matter may be cleared up?


James Armstrong Richardson: Mr. Speaker, I would be very pleased, so far as the Department of National Defence is concerned, to appear before the committee because I think the medical services that have been supplied are adequate and have been carefully planned. However, I would have to talk to the House leader before such arrangements could be made.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, November 29, consideration of Bill C-176, to amend the Criminal Code, the Crown Liability Act and the Official Secrets Act, as reported (with amendments) from the Standing Committee on Justice and Legal Affairs; and motion No. 22 (Mr. Leggatt).
John George Diefenbaker: between the Minister of Justice (Mr. Lang) and myself yesterday at page 8266 of Hansard. The minister, after referring to me in rather generous words, mentioned something about tilting at windmills. I took the identification of the windmills to be ministers of the Crown in the present government. The minister said about me:
Without pretending to copy his style, may I say, he is well recognized, too, as one of the foremost tilters at windmills-
And I replied:
I have had lots of opportunities, looking at the government.
However, there is an additional sentence in Hansard which reads:
Tilting at windbags, also.
I never said that. I know the hon. member who did, and I just want it to be clear that that portion of the record did not come from me. The windmills referred to by the minister were identified by me as the ministers surrounding him.


Mr. Don Blenkarn (Peel South):: Mr. Speaker, clause 6 of the bill, which the hon. member for New Westminster seeks to amend, was very thoroughly discussed in the committee. It would be hard to say if any other clause received more consideration. If you take a look at the bill as reported from the committee you will see that almost every part of clause 6 was amended. Espionage and sabotage activities by the agents of foreign countries within our nation, or similar activities by those who may not be employed by foreign countries, nevertheless are designed to destroy the democratic system in Canada, and need serious consideration.
When I spoke on second reading of the bill my feelings were very much those of the hon. member who proposed amending motion No. 22. This is an important bill, and essentially is designed to prevent people from snooping into the affairs of others. At that time I commended the minister for introducing the bill, and I commend him again for the work he has done, as well as the committee for the work it did on the bill. It is an essential bill. It is essential that individuals in this country not be allowed to pry by electronic means or otherwise into the affairs of other individuals, into the sanctity of their living rooms, their offices, whether through their telephone conversations or through many of the highly sophisticated devices that are being marketed throughout the country. It is essential that serious penalties be imposed for this offence. Perhaps even the penalties in this bill are not sufficient for those who pry and use electronic methods of surveillance of the private activities of individuals in Canada.
At the same time, we have to look at the rights of law enforcement agencies. I commend to you the position presented to the House by the right hon. member for Prince Albert (Mr. Diefenbaker). That gentleman has had the obligations of the highest office of this nation; he has had the concerns of running a government and he is a member of this House who has had a wide experience in the courts of this country. If there was ever a member of the House who has fought hard for the rights and privileges of individuals it is he. None the less there is some necessity
Protection of Privacy
for those involved in public order to have the right to find out what is going on in the country. It is even more essential that those involved in protecting our nation from people who would destroy it, whether they be from foreign countries or not, be kept in line. Certainly it is essential that the government know what is going on within the country.
Before getting into that subject, Mr. Speaker, I must make one thing clear. Other members have mentioned it, but I wish to make it clear also. This bill does give to the police and those in charge of law enforcement a power that they really never had before, and that is the right to introduce into a court information obtained by electronic means to be used as evidence. This is a new right; the right to introduce something that is not oral evidence which would be subject to cross-examination, but evidence obtained through some recording device. Listening to the playback from a recording device is not necessarily the same as listening to something said orally. I could very easily read a passage which could be recorded but when played back it would not sound the same as if I had said it on a witness stand and you had seen my expressions.
This whole matter of the use of tapes is an extension of the power of law enforcement agencies, and presumably of the government of this country to control espionage, sabotage and the rest, and of the right to introduce the resultant information as evidence. This is not the same as introducing a witness on the witness stand in a courtroom but is introducing a machine on the witness stand in a courtroom to repeat what that machine heard. Unfortunately, what is on a tape can sound differently to different people. A judge in a courtroom has the ability not only to listen but to see the witness, to watch his demeanour and to judge the veracity of the evidence. But when he hears the playback of a tape he does not hear or see the witness nor the witness's expression. In the privacy of my living room, I suppose I could say that it would be a good idea to get rid of the Prime Minister (Mr. Trudeau) and perhaps we could do it by putting strychnine in his coffee. If you heard me say that on the witness stand, you might deduce from my demeanour that I was just joking, but if you heard it as a result of playing back a tape you might take it seriously.
It is with a great deal of difficulty that I arrive at the decision. I cannot consent to this kind of thing, especially when the only protection is authorization by the Solicitor General (Mr. Allmand). I understand why it is necessary, and I think this House must understand and the people must understand, that we live in a sophisticated age with sophisticated crime and so it is necessary, especially in crimes involving damage and danger to the state, that there be something more than the direct evidence of witnesses on the witness stand. It is necessary that the Crown, in a prosecution to convict persons of this type of activity, have the right to introduce evidence that will indicate a conspiracy against the state.
It is with difficulty that I accept this use of taped evidence. I only accept it because there is a prior requirement on us, not just the requirement to protect individual liberty. I respect the opinion of the hon. member for New Westminster in that respect, but the necessity is for us to respect the integrity of our way of life. Without our
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November 30, 1973
Protection of Privacy
system of government, without protection of our cherished freedoms, we will not have a way of life. So, we have a conflict with human freedom on the one hand, freedom of self-expression, freedom of privacy of expression and the absolute necessity to maintain the system so that we can indeed have that freedom of expression.
I suppose one of the things that is bothering hon. members, Mr. Speaker, is the kind of government we have had, especially since this parliament resumed last January. When you look at the Solicitor General you wonder whether he is not an "over the wall" Solicitor General. There have been so many leaks with the prison system that you begin to wonder whether he is the right man to be involved in authorizing warrants to allow someone to do some snooping. Be that as it may, I know he will not be the Solicitor General long and perhaps we will get a better one. I suppose it is necessary to have some minister appointed to give these authorizations. I am sure the minister has fairly competent people in his department. The administration of the department leaves a great deal to be desired.
The clause we are considering draws a fine line. It distinguishes between questions having to do with the protection of individual freedoms and questions having to do with the security of the state. In the past, there has been real as well as apparent danger to Canada. I refer hon. members to the incident which took place immediately after World War II involving Gouzenko. As I recall it, a member of this House was involved in an espionage matter.
Without doubt, some foreign governments do not pay much attention to our ideas of freedom of expression and freedom of thought and are prepared to use all kinds of devices in order to learn what is going on in Canada. They are prepared, perhaps, to break down our economic system and our system of democracy. Although our political system of democracy may not be perfect, it is the best system we have and we do not want to jeopardize it. So, we must be eternally vigilant in monitoring the activities of foreign powers operating within our country. It is necessary for someone in authority in the government to keep a very close eye on the activities of foreign powers, including our neighbour to the south, a great power, and the power of the other side of the Arctic circle. It is imperative that we know what their representatives are doing in Canada. If, therefore, it is necessary for us to undertake electronic snooping or counter-intelligence work, that work must be done.
The bill goes further than that. It provides for monitoring activities to be undertaken in order to prevent a change of government in Canada or elsewhere through the use of violence, force, or other criminal means. We are aware of the activities of the FLQ, which thought it better to bomb mail boxes than speed up the delivery of mail. Any government which is responsible for the security of Canada must keep track of these people and others who might be described as mental cases.
Some nations keep track of certain undesirables by putting them behind barbed wire or in cages. We cannot authorize that. If the rights of all, including those of

minorities, are to be protected in Canada, the government must know what is going on in the country. It must be aware of the activities of those persons whose whole aim is to destroy our society and attain their ends by revolution. We can change our government through the use of a ballot. We put a simple X opposite the name of the candidate of our choice. We must not allow those who would destroy, with guns, bombs and fire, the very basis of our society to carry out their aims. They would create disruption for the sake of disrupting and destroy our system and all our freedoms. Clearly, it is necessary for the activities of such people to be monitored.
The bill, as amended by the committee, is specific with respect to controlling the use of warrants authorized by the Solicitor General. I am referring to the possible infringement of individual rights which might be occasioned by monitoring. Unfortunately, the amendment of the hon. member for New Westminster (Mr. Leggatt) goes a little too far. I understand his attitude. I suggest that the amendment, if passed, would control the activities of the Solicitor General more tightly than necessary. Although I do not have a great deal of confidence in our Solicitor General-as I said earlier, we shall see a new solicitor general shortly-I submit that the amendment is not really necessary and is not really in the interests of this country. As this matter had been fully explored in committee, I am surprised that the hon. member should have brought it before the House at this time. For those reasons I, personally, will not be supporting the amendment.
Sir, in view of what has been happening in the world in terms of hijacking of aircraft, bombings of department stores and shooting of innocent children in other countries of the world, I submit that it is essential for the government to keep itself informed and know what is going on in this country.
If the government had known what was going on in the country prior to 1970, perhaps it might not have been necessary to invoke the War Measures Act. Indeed, it became clear after the War Measures Act had been invoked that that action was not necessary. Nobody was convicted under the act; nobody was even accused under it. Certain people were charged under the regular provisions of the Criminal Code. If the Solicitor General and police forces of this country had kept a proper eye on what was going on, I submit it would have been possible for us to arrest and charge certain persons who were engaged in notorious activities in the province of Quebec, and there would have been no need to invoke the War Measures Act. The government and the police did not know what was going on. The government was frightened to heck and invoked the War Measures Act.


Mr. Speaker:: Order, please. I must interrupt the hon. member, whose time has expired. He may continue, of course, with the unanimous consent of the House.


Mr. Knowles (Winnipeg North Centre):: Two minutes.


Donald Alex Blenkarn: Mr. Speaker, I had just about wound up.


Mr. Speaker:: The hon. member has received conditional approval to continue.
November 30, 1973


Stanley Howard Knowles: The hon. member has been wound up for years.


Donald Alex Blenkarn: Mr. Speaker, I thank hon. members for their courtesy in allowing me more time. I was suggesting that if the authorities had kept track properly of the actions of the revolutionaries in this country prior to 1970, there would have been no need for the War Measures Act to be invoked. Evidence would have been available for charging certain persons with sedition, treason and other offences. There would have been no need to put the whole country under house arrest, so to speak, inasmuch as people could be picked up without being charged and held in jail. That situation could have been avoided if the government had known what was going on and, probably, Mr. Laporte would not have been murdered.
I have suggested what the government should do. It should be aware of the activities of revolutionaries in this country. In other words, our nation must be prepared. I recommend to this House the boy scout motto: Be Prepared. If we are prepared we will not encounter the problems we encountered in the past, problems which other nations have encountered and are encountering today.


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


Some hon. Members:: Question.


Mr. Speaker:: The question is on motion No. 22. Is the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: All those in favour will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


Mr. Speaker:: Obviously, the nays have it.
And more than five members having risen:


Mr. Speaker:: Pursuant to Section 11 of Standing Order 75, the recorded division on the proposed motion will stand deferred. According to the order made on Thursday, November 29, 1973, the ulterior proceedings at the report stage of Bill C-176 stand deferred until Tuesday next.


Marcel Joseph Aimé Lambert: Mr. Speaker, on a point of order; following consultation it was agreed that rather than send Bill C-233 to the Standing Committee on Finance, Trade and Economic Affairs after second reading, the bill would be considered in committee of the whole. We will follow that procedure and hopefully deal with the bill today. I would be quite prepared to move that as an amendment. However, the Chair may feel that being a government motion, this should be done by a minister of the Crown. In any event, everyone has been consulted and this is agreed.
Federal-Provincial Fiscal Arrangements Act


Stanley Howard Knowles: Yes, Mr. Speaker. There have been such consultations and we agree to the change being made in whatever way Your Honour sees fit.


Mr. Speaker:: The simplest way would be to put the motion as suggested, with the unanimous consent of the House.


Some hon. Members:: Agreed.


FEDERAL-PROVINCIAL FISCAL ARRANGEMENTS ACT AMENDMENTS RESPECTING EQUALIZATION FORMULA, ELIGIBILITY FOR PAYMENT, POST-SECONDARY EDUCATION
John Napier Turner: that Bill C-233, to amend the Federal-Provincial Fiscal Arrangements Act, 1972, the Federal-Provincial Fiscal Revision Act, 1964 and the Income Tax Act be read the second time and referred to the committee of the whole.
He said: Mr. Speaker, that is not bad for a Friday morning. The purpose of the bill now before the House is to amend the Federal-Provincial Fiscal Arrangements Act, 1972, and to effect amendments to the Federal-Provincial Revision Act 1964 and the Income Tax Act. It is intended to further improve and update certain fiscal arrangements with the provinces and particularly our system of equalization grants. As hon. members will know, our system now enjoys an international reputation for its effectiveness in dealing with fiscal problems in a federal state. I am hopeful this bill will improve that even further.
I might briefly summarize the content of the bill before commenting in detail on its provisions. If Your Honour will allow me some liberty with the rules, without going into a clause-by-clause analysis, I might make some comments at this stage which might save time in committee of the whole.
Four changes are embodied in the amendments. The first broadens the equalization formula to include, in the revenue to be equalized, local government taxes raised for school purposes. The second extends the existing arrangements for federal financing of post-secondary education for an additional three years. The third reduces from five years to one year the period of ineligibility, for revenue guarantee payments, of any province which failed to adopt the converted tax rates specified in the present legislation when it was enacted last year. The fourth change is simply a technical adjustment. It extends the abatement of three points of federal income tax in Quebec, associated with the Youth Allowance Act, which has been part of the Quebec income tax structure for the past decade. I will deal with each amendment in turn.
[ Translation]
Hon. members are no doubt familiar with our system of equalization grants. This program provides for a payment of unconditional grants to those provinces which are below average in their capacity to raise revenues. Payments compensate a province in full for any shortfall in

November 30, 1973
Federal-Provincial Fiscal Arrangements Act revenues which they experience as a result of being below average in capacity to raise revenues. The program thus insures that each province is in a position to provide its residents with reasonable standards of public services without having to resort to levels of taxation which are above the national average. In the current fiscal year, equalization payments to the seven provinces receiving these payments-that is, all provinces except Ontario, British Columbia and Alberta-will reach about $1.3 billion, f English]
On February 19, 1973, I announced in my budget address that the government intended to broaden the equalization formula to include, in the revenue to be equalized, local government taxes for school purposes. My concern at the time was that the seven lower-income provinces, because of their lower tax capacity, were not in a position to benefit to the same extent as the higher-income provinces from the stimulating effect of the tax cuts introduced at that time. I felt that some additional assistance to these slower-growth and lower-income provinces was justified. The present bill fulfils that undertaking.
Specifically, the amendment I am proposing provides for the inclusion among the revenues to be equalized those that are raised by local government for school purposes. By extending in this manner the kinds of revenues to which equalization applies, I estimate the total value of grants paid to the recipient provinces will increase by about $175 million in the current fiscal year. I might indicate the way in which this amount will be distributed among the recipient provinces: Newfoundland, $24.1 million; Prince Edward Island, $4.6 million; Nova Scotia, $22.4 million; New Brunswick, $20.5 million; Quebec, $72.2 million; Manitoba, $10 million and Saskatchewan, $20.9 million.
The grants are unconditional and the provinces are, therefore, free to use them as they see fit. In my budget address I expressed the hope that this additional income to the provinces would be used to ease the burden on property taxpayers and tenants. I am pleased to see that several provinces have found it possible to provide relief to their taxpayers in various ways, including tax reductions and reductions in budgetary deficits.
This increase in grants will bring the total amount paid in equalization to about $1.5 billion. On a per capita basis the amount to be distributed to each of the seven receiving provinces in 1973-74 will be approximately as follows: Newfoundland, $311 per capita; Prince Edward Island, $299 per capita; New Brunswick, $230 per capita; Nova Scotia, $217 per capita; Saskatchewan, $128 per capita; Quebec, $117 per capita and Manitoba, $96 per capita. The lowest income provinces, Newfoundland and Prince Edward Island, will receive the highest per capita payments. Quebec and Manitoba, which are only slightly below the national average in revenue raising capacity, will receive the lowest per capita payments. I believe all members will agree that this is as it should be.
[Transla tion]
We are now reaching a position in Canada where our assistance to the provinces through the equalization program permits the lower-income provinces to achieve levels of expenditures on public services provided by provincial
(Mr. Turner (Ottawa-Carleton).J
and local governments almost equal to the national average, on a per capita basis.
For fiscal year 1972-73 the national average expenditure per capita on provincial and local government services was about $1,092. In the seven lower-income provinces receiving equalization payments the per capita expenditure was about $1,079. With the higher equalization payments I am now proposing, the average for the seven recipient provinces should approach the national average even more closely. I should point out, Mr. Speaker, that this result is being achieved as well because of the efforts of recipient provinces themselves. If the relative tax burden imposed on individual taxpayers in each of the provinces is compared it can be seen, for the most part, that taxpayers in the lower-income provinces carry a relatively greater tax load. Thus it is both through our program of equalization grants as well as through their own efforts that the lower-income provinces are approaching levels of expenditures on public services equal to the national average. Our expanded equalization program will clearly be a more powerful weapon in combatting the effects of regional disparities in income and represents a further significant move toward the achievement of a regionally balanced fiscal policy.
Hon. members may ask why the federal government does not go all the way and equalize all local government revenues, those for general municipal purposes as well as school purposes. There are several reasons for this. First, as I noted above, the gap in per capita expenditures between the higher and lower income provinces has now been largely closed. Second, local government expenditures for non-school purposes tend to be related to the degree of urbanization. In provinces where the degree of urbanization is greatest costs tend to be higher. I need only mention such costs as those associated with public transportation and environmental protection. To this extent the need to equalize expenditures is not as relevant. Third, where financial problems associated with urban development do arise it seems to me it would be preferable to deal with them through selective and specifically designed programs which would be available to all the urbanized parts of Canada. The equalization program would not lend itself to solving problems associated with urbanization because the three higher income provinces, Ontario, Alberta and British Columbia, where about 60 per cent of our total metropolitan population lives, would not benefit.
I want to turn, now, to a second change embodied in the amendments before the House, the extension of the current arrangements for financing post secondary education. Perhaps I might recall the background to this proposal. Part IV of the Fiscal Arrangements Act provides for federal contributions to the provinces for post secondary education for the fiscal years 1972-3 and 1973-4. Under these arrangements the federal government, for all provinces but Newfoundland, Prince Edward Island and New Brunswick, bears one half of the provinces' post secondary education operative costs. For the three Atlantic provinces the federal contribution, which was originally based on a $15 per capita grant, is escalated by the year over year
November 30, 1973

growth in the post secondary education operating costs of all provinces. For these provinces the per capita grant is more favourable than the 50 per cent sharing.
Total federal contributions for post secondary education, which are subject to a ceiling of a 15 per cent annual increase, take the form of a combination of tax and cash transfers. The tax component takes the form of transferring to the provinces 4.357 personal income tax points plus one corporate income tax point, both equalized to the national average. These tax points are now built into the income tax systems as provincial revenues. The difference between the amount of the provincial entitlement and the value of the tax points is made up in cash. In the current fiscal year, federal contributions to the provinces for post secondary education amount to more than one billion dollars, $608 million in tax points and $459 million in cash.
Last spring the federal government proposed a set of alternative financing arrangements to the provinces designed to meet provincial criticisms of existing arrangements. The provinces claimed that the federal program was intruding upon provincial administration of post secondary education and distorting provincial priorities. Generally, they argued, that they lacked the freedom and flexibility they needed to develop their own programs as they saw fit. In response to these criticisms, the federal government proposed a new system of determining federal contributions which dissociated the federal payments from the costs actually incurred. Payments were to be determined by a formula based on the growth rate of the population between 18 and 24 years of age and an escalation factor, which together would result in an overall growth rate in federal contributions roughly equal to the expected growth in the gross national product.
Under this proposed system, the basis for the alleged federal interference in provincial post secondary education programs would be removed. However, the proposal was not accepted by the provinces and the Prime Minister (Mr. Trudeau) informed them that the federal government would be prepared to extend the existing arrangements for an additional three years. The present amendment extends the term of the existing arrangements to March 31, 1977. These arrangements will, therefore, expire at the same time as other programs under the Fiscal Arrangements Act. Further thought will be given to the appropriate role for the federal government in this area in the period beyond 1977. I might note that with the passage of time, as the dollar value of both the personal and the corporate income tax points rises, the amount of the federal contribution paid in the form of cash will diminish and eventually disappear. The tax points will then finance the entire federal contribution.
Perhaps I might call it one o'clock and deal with the third and fourth changes after the break.


Some hon. Members:: Agreed.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Federal-Provincial Fiscal Arrangements Act
John Napier Turner: Mr. Speaker, before we broke for lunch I was describing the four changes embodied in this bill. The third relates to Part IV of the fiscal arrangements act. This part assures that provinces conforming to our income tax legislation will obtain at least as much revenue from the combined yields of the personal and corporate income taxes, including associated equalization, for the five year period 1972 to 1976 as they would have obtained were the pre-tax reform structure still in effect. The purpose of this revenue guarantee provision was to encourage the provinces to keep their income tax legislation in harmony with the reformed federal income tax law.
In order to discourage provinces from creating possible confusion by raising their income tax rates at January 1, 1972, above the specified "break-even" rates associated with tax reform, the fiscal arrangements act provided that any province doing so would be ineligible for revenue guarantee payments for the full five year duration of the guarantee. The province of Nova Scotia, at the time the fiscal arrangements act was passed in 1972, raised its personal income tax rates above that specified in the legislation. It accepted full responsibility for this step, and has continued to harmonize its income tax legislation with that of the federal government. However, because of the provisions of the act it rendered itself ineligible for the revenue guarantee.
In the light of subsequent developments, a five-year forfeiture of eligibility for revenue guarantee payments now seems unwarranted. The provinces could not have foreseen, at the end of 1971, the federal budgetary measures in effect for 1972 and 1973 which have a significant effect on provincial revenues. I propose, therefore, that the existing five year ineligibility period be reduced to one year.
[ Transla tion]
The fourth and final change embodied in the bill is a technical adjustment to the Income Tax Act and the Federal Provincial Fiscal Revision Act which will permit the continuation of the tax point abatement in Quebec as part of its fiscal system which has been in operation for about 10 years. A special abatement of three points of personal income tax was accorded to Quebec taxpayers in 1964 when the federal Youth Allowances program was introduced.
At that time Quebec already had a similar program in operation for its 16 and 17 year olds. In order to meet this situation, the federal government provided that if a province had a similar program in operation before the commencement of the federal program, that province could continue the provincial program and be "prescribed" under the act as a province qualifying for special contributions towards the cost of its own program through the Income Tax Act. The Income Tax Act was amended to allow taxpayers in a "prescribed" province to deduct 3 per cent from the basic federal tax. Quebec took advantage of this provision and was prescribed. This permitted the Quebec government to raise the provincial tax by an equivalent amount without increasing the net burden on Quebec taxpayers. In addition, the Fiscal Revision Act provided for an adjusting payment or recovery to ensure that the total federal contribution of such a province

November 30, 1973
Federal-Provincial Fiscal Arrangements Act would equal the federal saving arising from not having the federal program operative in the province. The end result of these arrangements left Quebec in exactly the same financial position as all other provinces. The so-called 3 point tax abatement for Quebec taxpayers commenced with the 1965 taxation year and continues to the present day.
As hon. members know we are now moving toward an integrated national system of family allowance which will apply to Quebec residents as to residents of all other provinces. As a result it will be necessary to adjust the present basis on which the abatement and recovery are made in order to avoid a serious disruption in the Quebec income tax system and continue to leave the province of Quebec in the same net financial position as the other provinces.
Mr. Speaker, I am sure that all members of the House will agree with the basic purposes of this bill. To summarize; the amendments proposed will increase the equalization grants paid to the seven lower-income provinces; it will extend the existing arrangements for federal assistance to provincial post-secondary education costs; it will moderate the harshness of the provisions respecting ineligibility for the revenue guarantee; and it will permit the continuation of long-standing financial arrangements with Quebec in the light of the new family allowances legislation program. I trust that the bill will receive the support of the House, and when we go into Committee of the Whole House I will be prepared to answer questions in more detail.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: Mr. Speaker, I have been somewhat amused at the, shall we say, Friday claque the minister seems to have gathered about him to make that much noise. I have no idea of the purpose behind that move in dealing with a bill such as this, but it must be an "in" secret that the Liberals have. Possibly it is just that members on the government side contribute so little to the bill they have to let off some energy somehow, so they pound their desks. They have little else to cheer about.
The bill before us of course carries out changes that were forecast by the minister in the budget of last February 19. To that extent, since it arose out of a consensus coming out of the minister's meeting with provincial financial ministers the month previous, it certainly received the general approval of the House. As I recall it, during the whole of the budget debate there was no particular criticism of this proposal. If one goes back to the debates of March 1972 when Bill C-8 of that era, which is the legislation we are amending today, was debated we can see that, while this legislation has to go through, we can perhaps make some comments.
Certainly I know my colleague the hon. member for Fundy-Royal (Mr. Fairweather) will have a good deal to say about the financing of post-secondary education. Although others may have a few words to say about some of the other things which are being brought in, I do not

think this bill will arouse much controversy. At the time of the debate on Bill C-8, I remember the Leader of the Opposition (Mr. Stanfield), in discussing one feature which concerns us a good deal this afternoon, that is the period of time relating to post-secondary education, said, and I think he was right-although the minister has not said anything about it yet I hope he will do so-that a two-year period as specified in the legislation at that time provided a very unstable base for any provincial government in planning for post-secondary education.
I should like to know this: by reason of this three-year extension, has there been a new arrangement reached or did I interpret the minister correctly when he said that at his last meeting with the financial ministers of the provinces the federal government made a proposal which was turned down by the provinces and that, therefore, the position effectively is still back at square one. I must say I find this a little difficult because, after all, we do know that the criticism aimed at Bill C-8 in March of 1972 was because there had been no consultation. The federal government had disclosed its plan only on the eve of the presentation of the legislation, and therefore it was impossible to get any agreement. A two-year period was put into the bill in order to provide an opportunity for negotiation, but again on the eve, so to speak, of the meeting, which would be the last meeting that could practically be held prior to the expiry of the date in Bill C-8, the government came forward with another formula which the provinces could not see themselves clear to accept. I hope that in further discussing this clause the minister will indicate what progress, if any, has been made and what are his anticipations. Is it to be another drifting along for three years and then at 15 minutes to midnight in 1977 there will be a hurry-hurry proposal and a conference to deal with this very important subject? I would certainly hope that is not so.
I want to emphasize again, and I think this is an area that has particular reference to these relationships with the provinces, that we have just gone through a period of some two months of action by confrontation between the federal government and the provinces, particularly the province of Alberta where there should have been consultation and where there has been no consultation except perhaps in the last few days. I do not know on what day that was done. Although there is the one area in which there has been consultation, even if only by reason of the title of the legislation, the "Federal-Provincial Fiscal Arrangements Act", there should be much more meaningful consultation in the future than there has been in the past. The provinces have always been convened for a conference as close as possible to the expiry date of the agreements. The federal government then makes a proposal to be presented to the provinces. This has happened time and time again on a take it or leave it basis. It seems to me that this procedure is totally wrong. I do not know whether this situation arises because their professional advisors have the idea that what they say is best for everybody, a sort of big brother attitude or an attitude of, why do the provinces not just agree that what the federal government is doing for them is the best in the best of all possible worlds. Of course, we know that there is discrimination. We have seen conferences in the past where premiers have left in a huff and taken unilateral action.
November 30, 1973

This has happened not only in the case of one province but of several provinces. I think that is something to be guarded against.
We see that one of the purposes of the bill is to broaden the base of the revenue sources which are used in the computations for arriving at equalization of revenues. I recall also that in March of 1972, the Leader of the Opposition had spoken at some length about the need to incorporate some element of municipal revenues in the revenue base for arriving at this equalization. I think it is laudable, although if it could have gone further to include municipal revenues, the provinces could have done more to alleviate the already high but also rapidly rising municipal taxes. This will allow the municipalities in the appropriate cases to make rebates to taxpayers paying municipal school taxes.
So, I can say that so far as we are concerned, this is perfectly fine. It must be remembered that in the over-all picture equalization grants paid across the country in 1970-71, which are the last revised figures as of February 1973 put out by the government of Canada, indicated that the provinces across Canada received some $899,227,000 in equalization grants. For the total of both unconditional and conditional grants paid by the government to the provinces, we have the sum of $2,539,904,000, which is a tremendous sum. It is rather remarkable to see what is the distribution and how under the various headings the various provinces share.
In any event, dealing with post secondary education, we see a total of $388,269,000. The lowest sum is, strangely enough, for the province of Nova Scotia. It only received $1,341,000. Perhaps the minister could look at his tables and explain the payments for the benefit of provincial institutions under post secondary education. This is in the table headed, Summary of Federal Contributions to the Provinces and certain Payments to Institutions in the Provinces, and is put together by the government. As I said, Nova Scotia received the sum of $1,341,000, and the highest amount is paid to the province of Ontario which received $143,409,000. Quebec received $114,115,000 and so on down the line.


Mr. Paproski:: What did Alberta get?


Marcel Joseph Aimé Lambert: Alberta has the third largest amount, $54,000,000, and the province of British Columbia received $15,464,000.


Steve Eugene Paproski: We do not mind helping your cause, John.


Marcel Joseph Aimé Lambert: The other cause stated by the minister, beyond broadening the revenue base and also extending the post secondary education financing arrangements to 1977, is consequential upon the approval of Bill C-211 dealing with the increase in Family Allowances. Therefore, because of the fact that the province of Quebec had three points of personal income tax in lieu of the payments to it by the government of Canada under the Youth Allowances Act which was part of their opting out arrangement, the government of Canada will now recover three points of personal income tax.
Federal-Provincial Fiscal Arrangements Act
I looked at the bill most carefully but there was one point which I could not find, that is the guarantee with respect to Nova Scotia. I wonder under which clause it is to be found, because the minister made reference to it, but I have not been able to find it and there are no notes to that extent. My colleague, the hon. member for Fundy-Royal will speak on post secondary education, and I think we can carry on from here into clause by clause debate.


Mr. Saltsman:: Mr. Speaker, before commencing my remarks may I point out, on a question of privilege, that while it may appear to be a much longer period of time, today marks the 31st year since the hon. member for Winnipeg North Centre (Mr. Knowles) was first sent to the House of Commons.


Some hon. Members:: Hear, hear!


Mrs. Morin:: It is time to go to the Senate.


The Acting Speaker (Mr. Laniel):: Order, please.


Mr. Baker:: Mr. Speaker, I rise on a point of order. I am very happy that the hon. member who has just spoken has made reference to this anniversary. I am one of the members in this House who represents a constituency in which many members of the House reside while they are in Ottawa, and in fact in Grenville-Carleton many members of parliament make their home. One of the most distinguished of those members is the hon. member for Winnipeg North Centre. He brings great distinction to the street on which I live-he lives right across the street from me-and I watch him every morning leave the house, so that he can never get ahead of me.
I would like to add my congratulations on this occasion to my hon. friend and neighbour. I do not want anything unusual to be taken out of this, but may I just close by saying that the hon. member for Winnipeg North Centre and I have a mutual interest in a snowblower. It is a different kind of organic union from the one we have heard of in this House. Again through you, Mr. Speaker, I would like to extend the congratulations of our party to the hon. member.


The Acting Speaker (Mr. Laniel):: Order, please. While I appreciate the remarks being made and the event being commemorated, unless we revert to motions or find some other procedure, I do not think we should pursue such comments, although I cannot prevent anybody from speaking.
[ Translation]


Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, if I am not mistaken we are celebrating today a birthday which concerns the hon. member for Winnipeg North Centre (Mr. Knowles), and the hon. member for Grenville-Carleton (Mr. Baker) who has just spoken has referred to the fact that several hon. members are living in his riding. As far as I am concerned, I must say that I am living in this part of Ottawa which is so competently represented in this House by no one else but the Minister of Finance himself (Mr. Turner).

November 30, 1973
Federal-Provincial Fiscal Arrangements Act [English]


John Napier Turner: On the same point of order, Mr. Speaker, since my colleague brought me happily into the situation I want to congratulate the hon. member for Winnipeg North Centre (Mr. Knowles), although he does not have the good fortune to live in my constituency. By the accident of circumstance he finds himself in the constituency of the hon. member for Grenville-Carleton (Mr. Baker), who is also his neighbour. I want to say to the hon. member for Winnipeg North Centre that a neighbourhood may well be an accident of life, and of course everyone has his cross to bear.


Some hon. Members:: Oh, oh!


Walter David Baker: He also had a choice.


John Napier Turner: And it might contribute to the political process if he decided to run in that constituency in the next election. I have known the hon. member for Winnipeg North Centre ever since I came to this House, and I know the younger members have always appreciated the courtesy he has shown them. A few weeks ago I had the unique experience of being best man at a wedding which the hon. member celebrated in his moonlighting capacity, and I got to know him even better then. Might I say that, despite the hon. gentleman's lack of political judgment, he has made a great contribution to the parliamentary process.


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


Mr. Henry Latulippe (Compton):: Mr. Speaker, about the same point of order, I wish to join the other hon. members who expressed their admiration to the hon. member for Winnipeg North Centre (Mr. Knowles). It is with pleasure that we also express our admiration and we are also convinced that the hon. member for Winnipeg North Centre is a great parliamentarian, a great citizen who has rendered distinguished services to the House of Commons as well as to many citizens and, I would like to add, to almost all hon. members.
I would therefore reiterate our admiration and I wish he will remain in this House for a long time because we are glad to have in our midst such a devoted gentleman who truly understands the economic and political situation. We thank him for all he has done and wish him many returns of the day.
[ English]


Stanley Howard Knowles: Mr. Speaker, I agree with you that these proceedings are entirely out of order. I think that it might have been better to wait another nine years, and perhaps when I have been here 40 years such comments as have been made would be very nice to hear. But may I just say in passing that it was 31 years ago today that I was first elected in a by-election in Winnipeg North Centre to succeed the late J. S. Woods-worth. The time has gone awfully fast, but I am very grateful for the kind things that have been said today by my friends in all parties.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Laniel):: I wonder if hon. members would expect me to render a decision on the point of order? The only decision I could render at this time would be to say that the hon. member for Winnipeg North Centre (Mr. Knowles) has been causing disorder for the last few minutes, but I am glad to join with hon. members in offering my personal congratulations to him and perseverance for many years.


Max Saltsman: Mr. Speaker, might I just point out that, although you recognized me for the purpose of speaking on the bill before us, I did rise on a question of privilege, and I did so because in spite of my very great respect and admiration for the hon. member for Winnipeg North Centre (Mr. Knowles) I did not wish to have that time deducted from the time available to me today.


Mr. Barnett:: You mean to say he isn't worth five minutes of your time?


Max Saltsman: He is worth far more than that, but I am not sure that we should be doing this on this particular bill, and so I agree with you, Mr. Speaker.
I wish to raise some questions about shared-cost programs. I agree substantially with the provision that would include school taxes in raising the base, but I think that there are probably some misconceptions about equalization payments. The word equalization itself has the connotation that you are taking from some and giving to others. There is a certain element of that in this equalization program, but equalization does not take away from any province, regardless of its wealth, and redistribute that wealth to another province. Rather, the increase in wealth of a particular province creates a responsibility for the federal government to see that the provinces that have not gone up so quickly in their wealth are compensated for that.
The net effect of including the school taxes in the equalization formula is that the costs to the federal treasury will be increased. I am having some real doubts about federal financing, and how the government intends to find the money to provide for this equalization. The federal government has indexed most of its welfare programs and transfer programs in order to compensate for the increase in the cost of living. My colleagues and I fully agree that that sort of provision should exist in old age security, the Canada Pension Plan and other programs that are the responsibility of the federal government.
But at the same time as it took that very sage move it also took a foolish move. It indexed the income tax. The effect of having those two side by side is that, while the responsibilities of the government will escalate with the increase in the cost of living, which is a pretty permanent feature, its revenues will not escalate at the same rate, and it will have to come to parliament to get increased tax rates to compensate for this. This points out the difficulty which the government has in deciding on the advice it should follow. In the first instance when it indexed social security payments it followed the advice of the NDP, something which was very intelligent. In the second case, indexing the income tax itself, it followed the advice of the Conservative party, which seems to me to be less than
November 30, 1973

wise. There was a very mild reaction from my friends on the right.
I said earlier that equalization is a kind of formidable word, and perhaps in order to really understand the consequences of equalization it is necessary to take an example and try to follow what happens when a province increases its revenue, then sees how this affects the rest of the country. I think the conclusion will be that we really must have a much better formula for equalizing revenues and incomes across the country. In many ways the history of taxation tells the history of civilization, and the degree of caring in a civilization. The broader you make the base for tax and the more inclusive you make the base of tax, the greater is that society's indication that it cares about everybody. In any kind of society or civilization there are obviously going to be disparities, perhaps because of environment or geography or many other reasons. The way a country indicates concern for all its citizens is by broadening the base of taxation and taking all revenues into account when the allocation of transfer payments is decided upon.
Let us relate the equalization formula to what has been happening recently in the energy field and the export tax on oil that the government has imposed. A conflict has obviously arisen between the federal government and the province of Alberta. The province of Alberta feels that the federal government is acting outside its jurisdiction and, at the very least, in a high-handed manner in imposing this tax on what Alberta sees as essentially a provincial resource. The government of Canada has been taking the position that the price of crude oil has been increasing, not because the cost of production has been increasing, or that profits for the oil industry have declined, but rather that the oil industry is taking advantage of an international shortage and political machinations around the world to artificially raise the price of crude oil. The argument is that this is the going price in the United States and, therefore, despite our own cost and supply position we should be paid everything that the market will bear. They not only propose to do it in connection with external markets but they are proposing to do it with all Canadians. The government seems to have taken the position that it makes no difference whether you are American, Canadian or some other nationality, there will be extracted from you whatever the market will bear. Perhaps because I am not an Albertan, it seems to me that this is a rather self-centred position for one province to take vis-a-vis other provinces or for one industry to take vis-a-vis other industries in a country.
Presumably the federal government intends to rebate the export tax to the province under certain conditions. In my view that will be preferable to letting the oil companies take the very large surplus that would accrue from an increase in price. But it also seems to me, Mr. Speaker, that the price should remain frozen in Canada; the export tax, to the extent that oil is sold outside Canada, should be rebated to the province. Of course, that is not going to help the other provinces. There is a sort of mistaken assumption that if the revenues of Alberta increase in contrast to the revenues of the corporations, then the rest of Canada shares.
Federal-Provincial Fiscal Arrangements Act
In some ways, from the point of view of the federal government, it would be better to have the oil company profits increase rather than have to return the revenues to Alberta. While we do not get much revenue from the oil companies, at least if their profits were that high the federal government would get some return from them. But if all the money is rebated directly to the province, then the province keeps it. There is no sharing from that province to another province under the equalization formula but rather there is a charge on the federal government to start raising the level of incomes in the other provinces to match the newfound richness, in this particular case, of the province of Alberta.
If you couple that with what I think has been a rather bad tax arrangement in terms of indexing the income tax system, it is difficult to know how the federal government will raise revenues for this purpose. Presumably they will have to increase the income and corporation taxes of those who are paying them. This means not only that Canadians will have to pay higher prices for their oil, but also they will have to pay increased taxes in order to compensate for the higher price of the oil and the revenues accruing to the province of Alberta. If I were Lewis Carroll I could probably write a book called "Alice in Wonderland" based on this outlandish approach to sharing in a country that calls itself "one nation, one country".
That is why it seems to me that we have to go away beyond anything we have ever contemplated in the equalization program. I feel that the equalization formula we now have does have advantages. Over the years we have included in the tax base new things for the purpose of seeing that one province does not fall very much behind the other provinces. We might in fact take a lesson from the fact that we have been honouring the hon. member for Winnipeg North Centre today and listen to what he says about increasing the old age pensions, not only to keep up with the increase in the cost of living but to keep up with the increase in the standard of living. If we were to follow the equalization formula and apply it on a personal basis to the old age pension, then we would have a formula which provides that to the extent the rich have improved their position, the federal government has an obligation to increase the old age pension to those less well off. However, asking governments to be logical is perhaps too much.
Let me return to what I said earlier about the need to change the equalization formula itself. There are many grievances in different parts of this country, and I want to deal with a particular grievance of the western provinces of Canada. They have had grievances about the tariff that they feel has benefitted Ontario for years, in fact since the national policy of Macdonald. They have felt that they have had to buy in a protected market and sell on a free market. The farmer in particular has been very vociferous about what the market position has been on a given day. I think there is some resentment against protectionist policies in Canada, although they are not any worse than or perhaps not as bad as those of many other countries. Nevertheless, there is a lot of truth in the argument that many goods cost more in Canada in order to assist the development of Ontario industry. The tariff structure was designed to assist industry, and even after the reduction resulting from the Kennedy Round, that situation persists.

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Federal-Provincial Fiscal Arrangements Act
We have a situation where the west resents the east, but it is not so much a question of geography as an occupational resentment. The west is resource oriented, agriculture oriented, and the east is manufacturing oriented, so there is a clash between these interests. Every time we try to make some adjustment in the corporate tax system the question arises, to what extent are we favouring resource industries and manufacturing industries? The most recent change that the Minister of Finance (Mr. Turner) brought in on corporate taxation related directly to the manufacturing industry and excluded the resource industries, although it should not have done this. Historically, our resource industries have been the favoured children of our tax system, even though we have derived very little by way of taxation from those industries. The government's deliberate industrial strategy, if one can call it that, was aimed at this. There have been some changes. We are moving away from an industrial strategy favouring resource industries and moving toward an industrial strategy favouring manufacturing industries.
So long as the bulk of tax income received from manufacturing industries accrues to the provinces in which those industries are located there will be conflicts and clashes between one part of Canada and another. This is true whether you speak of resource industries such as logging, mining or fishing-although the fishing industry has never generated much income-or of other industries in a province. There have always been divisions over how our tax system should be organized. If the present system is to continue, there will always be a need for some kind of jerry-built equalization system, under which we can compensate one part of the country for what is happening in another part.
This is what happens in the whole country. However, the same sort of thing happens in each province. Different municipalities within provinces compete to attract industry. Municipalities want industries to underwrite their tax base, to help in underwriting certain costs associated with residential housing and to help with educational costs. Municipalities in one province fight among themselves. If you want to take an analogy to ridiculous lengths, you could suppose a situation in which each street within the municipality is fighting every other street in an effort to attract industry. That is taking the argument to ridiculous lengths. Yet the present situation is not far removed from the ridiculous situation my analogy would illustrate.
One street does not vie with another street in attempting to attract industry. Different regions in Ontario, however, are competing with one another for industry. Presumably, we will need to transfer the benefits obtained from industry to less fortunate areas by using an equalized tax rate structure across the province. We need to do that sort of thing right across Canada. We need an equalization program which says that no matter where the wealth is created, all Canadians will share in it. That means that the wealth created in Ontario in times of industrial boom will be shared by all Canadians. All Canadians will benefit. That wealth should be taken into consideration in the budget and should be incorporated in the tax base. If another province enjoys an oil boom, the benefits of that boom should be spread across the entire

nation. If we are to build a nation and if we want people to live in all parts of it, we should settle for nothing less. It could be done.
If we could do that, many of the deep felt grievances in this country would disappear. Actually, people would not want industries near them. People living in many small, beautiful communities would want to keep industries out. Who would want them? If you can get the benefit of industry without the pollution and other problems associated with industrial development, why would you opt to have any industry near you? Why would municipalities chase after industry?
We say that industries should go to those areas best suited to them, where services exist and where the possibilities of pollution are minimized. Municipalities, instead of fighting to reduce certain standards in order to attract industry, would raise standards of pollution control and corporate behaviour. It would be to the advantage of municipalities to make sure that industries which locate close to them behave properly and show decent respect for the culture of the area and its environment. We can only do this sort of thing if we consider separately the location of an industry and the tax benefits to be derived from that industry. All the public should benefit from the operation of an industry, no matter where it is located. If we are to obtain all the benefits of an egalitarian society in which people share responsibilities and obligations, we must make sure that industries locate in those places best suited for their purposes.
We have heard about program after program which is designed to twist, distort and alter our industrial system. We have heard about DREE grants. We do not know to what extent they are effective, if at all. We are urging industries to go to small communities, without worrying about what happens to those small communities. Under the present system we do not go to picturesque places in Ontario and say, "Why do you want an industry?" We do not go to small towns in the Maritimes and say, "Why do you want industry? This is such a beautiful place. Why do you want to build a refinery here?"
Under our present system, these smaller communities need the tax base which is derived from industry. Their inhabitants need the jobs. It is not fair to say to those people, "How dare you let a foreign corporation come here and build a plant?". You run into this situation right across Canada. I know we want to do something about foreign ownership. There is lots of industry in my riding, so that I can be excused for being critical of foreign ownership. Such criticism will not hurt. However, you can go to certain areas of Canada where the people are desperate for employment; they do not care about the ownership of the industry; they cannot allow themselves the luxury of not wanting an industry, foreign-owned or otherwise. They cannot afford the luxury of saying, "We do not want a plant in our area." Those people need the revenue generated by an industry, so that they can build the schools they need, the hospitals, and all the other necessary amenities.
I want to conclude, Mr. Speaker. One could elaborate this argument to a much greater extent than I have attempted to do. As we were discussing changes that might be made in our system of equalization payments, I
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wanted to show that we really must go beyond the sort of puny adjustments we have been making in our system. We must go far beyond measures proposed by the provinces in their meetings with the federal government. I know it will not be easy to change the system; I have no illusions about that. People with wealth are not happy to give it up in favour of those who do not have any wealth. However, it should be the objective of our society, and the objective of parliament, to see to it that there is an absolute equalization of wealth across Canada and that wealth created in any province, no matter in what form, should be equally shared by all citizens of this country.
[ Translation]


Henry P. Latulippe: Mr. Speaker, I welcome this opportunity to say a few words on this important bill. I think that we should take all the time required and all appropriate measures to find a way of alleviating the taxpayer's burden instead of taxing him increasingly.
The bill's recommendation reads as follows, and I quote:
His Excellency the Governor General has recommended to the House of Commons the present measure to amend the Federal-Provincial Fiscal Arrangements, 1972 to broaden the equalization formula to include school purpose taxes in the revenue to be equlized and to extend to March 31, 1977 the post-secondary education financing arrangements as contained in Part VI of the Act; and a measure to amend the Federal-Provincial Fiscal Revision Act, 1964 and the Income Tax Act.
Mr. Speaker, finally we realize that this represents a 3 per cent increase in taxes. Canadians are now up against unprecendented increases in every sector. If we pass this bill, we will create new problems for the taxpayer by reducing his purchasing power.
Mr. Speaker, there are serious problems between the provinces and I know that the equalization payments are one of the means used to restore the balance between the various regions of our country. Every possible effort is made in an attempt to restore it, and this is one of the principal means the governments have used in order to enable the poorer provinces to share in the goodies paid for by the rich.
Mr. Speaker, our country has enough resources to give to the poorer provinces without depriving the richer.
Mr. Speaker, all we need do is look at the situation squarely to realize our economy is unbalanced.
We note, Mr. Speaker, that the cost of post-secondary school or university buildings is prohibitive and that the federal government levies a tax on building materials. We also know that the interests on capital for the financing of those buildings are prohibitive.
It is the responsibility of the government and the House to look into that problem in order to determine what steps should be taken to reduce income tax. The Canadian institutions should be financed with credits on the administration costs by our financial institutions and instead of going up by 3 per cent, that tax should be reduced by 3 per cent and maybe more.
Mr. Speaker, the government will have to step in one day, otherwise have provinces will become have-not provinces, as middle income people who are more heavily taxed than others will become poor people. We will no longer
Federal-Provincial Fiscal Arrangements Act have a middle class, nor an upper class, but only a class of poor and poverty will exist throughout this country yet bursting with resources.
Surely, when we have a country bursting with resources, Mr. Speaker, we do not have the right to allow poverty to exist in one of the richest countries where there is an increasing number of poor people.
Unless this bill is amended it will be difficult to support it because it increases the taxpayers' contributions. I know the have-not provinces want more at the expense of the richer provinces and these are on the verge of saying no, Mr. Speaker. The more fortunate provinces do not have more than what they need and I know that, under the equalization formula, it hurts different provinces to give part of their revenues to poorer provinces and not see the day when those other provinces will come out of the red.
So, Mr. Speaker, tax increases through the equalization formula are not welcomed by the richer provinces. For the time being they decided to contribute but I am sure they will get tired of it. Governments will have to find other formulas-I have already referred to this-namely by reducing interest rates, by financing all those institutions, particularly the new ones through new interest-free loans. This way, Mr. Speaker, we would save the taxpayers hundreds of millions of dollars. Indeed we could certainly reduce taxes.
Mr. Speaker, the same applies to family allowances. They have gone up, but at the same time, taxes have been increased. Supplementary estimates of one billion dollars are brought forward to pay those further increases in family allowances, old age security and other pensions. Mr. Speaker, the people always give more than they receive. This situation cannot last forever.
Some day, extensive social, economic and political reforms will have to be implemented so that we may run our country effectively and alleviate the burden of taxpayers instead of increasing it constantly as we are now doing.
[ English]


Mr. Stan Schumacher (Palliser):: Mr. Speaker, I shall not take too much time of the House but I do wish to make a few comments at this stage of the legislative process relating to this bill. What we are witnessing here today came about as a result of meetings held between the Minister of Finance (Mr. Turner) and provincial treasurers and ministers of finance last January. The first thing that comes to my mind when considering the legislation before us is whether the same agreement would be made if the meeting of last January were held at this time, because quite a bit of water has gone under the bridge in the meantime.
The legislation deals with how the proceeds of the "have" provinces will be divided among the have-not provinces. Some consideration should be given to how provinces get into the "have" position and are able to share their wealth under a constitutional system with their partners in confederation who do not have the same apparent good fortune.
As an Albertan, it is obvious to me that Alberta is able to share its wealth with seven of its partners in confederation because it has had very happy experience in manag-

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Federal-Provincial Fiscal Arrangements Act ing its natural resources. Alberta used to be a have-not province. With the development of our mineral resources in the late 1940s, through the 1950s and the 1960s, the situation changed dramatically and the province is now in a happy financial situation. We would like to be in the even happier position of having more funds available to send to our less fortunate brothers and sisters in Canada in the future. In that connection we hope there will be a development of our oil sands. A lot depends, of course, on what decision the Minister of Finance makes regarding the treatment of the profits from that project; whether or not the 50 per cent share of the people of Alberta will be treated as a royalty. Presumably there is some question within the Department of Finance as to whether this should be allowed. When we are considering the effects of the proper harvesting of the natural resources of a province this is a question the minister should bear in mind. I hope he will be reasonable and allow this project in the province of Alberta to proceed.
I wonder whether more thought should be given to the definition of a have-not province. Today many systems are being rethought. I refer specifically to the royalty system in Alberta in relation to oil and gas. The province appears to be moving away from a royalty system and adopting an indexing or reference system so that the return to the people of the province will be based on the real value of the product. I wonder whether the federal government ought to initiate discussions with the provinces to determine whether they are making the best use of natural resources, because if they are not they may be in an artificial have-not position, wasting their resources, so to speak, at the expense of other members of the confederation. Some consideration should be given to this aspect. I notice that the federal government seems to have moved in this direction to a certain extent, though in a way which I do not particularly appreciate.
It has been said that one reason for the imposition of the export tax was a feeling that the producing provinces had not set an adequate royalty on their products; that they were leaving Canada at too low a price. To my mind this is not the correct way in which the federal government should behave. But the principle is there and I suggest that if it is applicable in one area, the federal government should apply it in others.
The bill before us brings school taxation into the revenue base when decisions are made concerning who pays what, to whom, under our fiscal arrangements. This brings me to another point which bears consideration in these changing times. I have always been of the opinion that education and school taxation should be provincial matters, although the federal government has for so long been acting in a contrary way that I wonder whether I am correct in my point of view. I do know that many people contact me about the desirability of establishing a common educational curriculum across the country. I think it is worth noting that the federal government has increasingly intruded into this area.
The cost of education is one of the reasons have-not provinces require the assistance they do under this type of legislation, because education is an expensive process. I believe the minister told us that instead of $1.3 billion in

equalization payments to the various provinces, the amount will now rise to $1.5 billion. I suggest that perhaps the time has come for the government of Canada to involve itself in the educational process more directly than it has done to date. Several hundred million dollars, if not billions of dollars, are spent by the federal government on the educational process by way of grants to universities, the vast educational training program in the armed forces, by assisting in other post-secondary educational activities, and so on.
I think the time has come when we might consider taking the principle which was applied to medicare and applying it to education. There must be some provincial input, but I believe that in this area the concern of the provinces, which has traditionally been expressed most strongly and most eloquently by the province of Quebec, is probably not as great as it was. Historically, education is a strictly provincial responsibility because, especially in Quebec, it was thought necessary to perfect language and the cultural heritage. But today the federal government has taken it upon itself to preserve the language of Quebec through its legislation on bilingualism. Hundreds of millions of dollars are being spent to this end.
I should like to echo the words of the hon. member for Temiscamingue (Mr. Caouette) in this regard when he said the solution to the problem of linguistic protection lies in education. A great deal of money would be required; this is why I believe further attention should be paid to this area by the federal government. We should be doing directly more than we are now doing indirectly. I should like to be told, as this bill progresses through its various stages, how the provinces which are to receive extra money under this legislation propose to deal with these additional funds; whether they will use them in the way the minister hoped. Provision has been made for an additional $200 million or so which is supposed to assist local property owners. I should appreciate being told, possibly during the committee stage, what the various provinces have done in this connection.
[ Translation]


Mr. Pierre De Bane (Matane):: Mr. Speaker, I believe we have every reason to be proud of the bill brought forward by the Minister of Finance (Mr. Turner), the most significant result of which will be to hand over more money to the provinces whose revenue per capita, and consequently public expenditures, are below the national average. I simply want to deal with two matters that are of great concern to me.
The first has to do with the teaching of the second language in schools and universities. In this respect, I find it unthinkable, Mr. Speaker, that we, in the federal government, spend huge sums of money to teach a second language to middle-aged people, while universities and secondary schools, particularly in the English provinces, neglect more and more to teach the second official language in this country, that is French. In my view, it is an aberration, and as the official languages commissioner pointed out in his report, we will never stress enough the responsibility of the education ministers of the English
November 30, 1973

provinces for their failure to teach the second language to our young people.
I would also like to deal with the distribution of doctors throughout Canada. The policy of the federal government is aimed at ensuring that all regions are well served. This is done by means of a bill such as this one on equalization and by means of grants to the industries of the various "have-not" regions. In my opinion, it is time that we should be concerned with the problem of the distribution of doctors.
When we adopted the hospital insurance act and a few years later, the Medicare scheme we said that the right to a good health is a basic right in this country and now realize that most doctors are located in a small number of large centres and that many "have-not" regions do not have any doctors.
This is unacceptable. Doubtless, the question of jurisdiction is important. We must ponder over this. As recorded on page 8691 of Hansard the hon. member for Hull (Mr. Isabelle) who is also a doctor stated on October 14, 1966:
Health as well as education is a basic right, and the government must do everything in its power so that all citizens may be in good health.
We see that after the revolution in the realm of education, primary and secondary schools were built in all areas, even in remote communities, but that nothing much has been accomplished in providing our people with hospitals medical services.
The hon. member for Hull who, I repeat, is a doctor, stated on February 7, 1967, and I quote:
-and of all medical school structures, which are also outdated. These organizations have become encrusted in a dangerous but regular routine and have accumulated more dust than prestige over the years. They have become much like stagnant waters and are even now in need of purification. Their only significant accomplishment boils down to resolution passing committees, whose powers are whittled down from year to year.
In my opinion, these remarks are abusive. However, the problem is a basic one. According to statistics published by Operations Dignite, in my area, that is the Gaspe Peninsula, which accounts for 6 per cent of the population of the province of Quebec, we have a mere 2 per cent of the hospital beds and a mere 2 per cent of the physicians in the province. And I could describe a similar situation in Abitibi and elsewhere.
I think that all the hon. members agree that the life of a Canadian citizen is something precious, whether he lives in a big city or anywhere else. At least in this respect, I think that all hon. members are convinced of the equality of all citizens. I therefore ask my colleagues to ponder over this issue and consider the solutions that we could provide to this problem as soon as possible.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I am in a better mood today, you will be glad to know, because we are on a subject of great interest, one that involves the transfer of a substantial amount of money to the provinces, which as near as may be is an equalization payment to provinces which do not have the advantages of the richer elements of our society that were
Federal-Provincial Fiscal Arrangements Act once found in the central parts of the country but are now slowing spreading westward, it seems.
The minister suggested to me privately that the speech I am going to make has undoubtedly been written by our mutual friend Dr. Colin Mackay, executive director of the Association of Universities and Colleges of Canada, formerly president of the University of New Brunswick. I can assure the minister that my speech was not written by Dr. Mackay, a distinguished Canadian whose name I am glad to mention in this House.


John Napier Turner: A friend of both of us.


Mr. Fairweather:: I said "mutual" friend and I thought that is what the word meant. I am glad to have it underlined by the minister. Interest in this subject was first sparked by Dr. Mackay during his years as president of the University of New Brunswick, and then by other Canadians who have thought about this particular issue. I think of the distinguished former senator, Norman Mackenzie who had a very great interest in Canadian constitutional arrangements. I think of Dr. J. A. Cory, former principal of Queen's University, who understood that the constitution, on matters of post-secondary education, had been much too narrowly interpreted through the years. Other names, of course, could be added but I do not want to bore the House on a Friday afternoon with a long catalogue of those who resisted this narrow interpretation of our constitution.
The truth is that there has been federal involvement in the field of education since confederation when the first military academy was opened with federal funds. We then went through various constitutional minutes, if I can put it that way, bowing to constitutional prohibition on federal involvement. We also had aid to veterinary colleges.
The speech of the hon. member for Matane (Mr. De Bane) was right on the point I want to make. For a long time there has been federal involvement in the medical schools of this country. By a very curious accident of history-I think someone should do a little research on this-it was back in the days of Sir Charles Tupper that we took the very progressive step of holding the Dominion Council examination for doctors in this country. Presumably the fact that he himself was a medical man had something to do with the fact that, from the point of view of the medical fraternity, narrow constitutional interpretations were resisted. That is a very poor and complicated way of trying to say what I am thinking, but I do not have any notes, Mr. Speaker.
The point I am trying to make is that the Dominion Council examinations were a national imperative to the practise of medicine, and this has been a very happy arrangement. I agree with the hon. member for Matane that the massive involvement of the federal government in terms of aid to medical schools across the country gives the national government-if hon. members do not like the word "jurisdiction", perhaps I can say "responsibility" to see to it that there is a fair and adequate distribution of medical men across the country.
Do I see a waving across the way? Am I being greeted? I have only been here 11 years. Does the hon. member wish to ask me a question? No, it was just a friendly greeting,

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Federal-Provincial Fiscal Arrangements Act and that is very nice. I am glad that my speech has elicited this response.
The point I am trying to make, about which I think the hon. member for Matane reminded us very well, is that really it is nonsense to say that the national government has no responsibility in the educational field. One of the most important papers I have seen on this subject was given by Dr. Cory. It was an interpretation of the constitution, supporting the involvement of Canada as a country in the whole field of post-secondary education.
Although I am speaking personally, I might say I intend to support the minister's bill. However, I am disappointed about clause 3 which has to do with continuation of the present formula. Although I do not blame the minister, I think really that governments have copped out. I do not know whether the federal government is responsible. I shall wait for the minister to tell me; I have always found him to be very forthright. But we are really postponing until 1977 some pretty basic decisions. We are really taking the easy way out by extending the present formula, as pointed out in the bill, until the end of March 1977.
Many of us have an interest in this legislation. In the previous parliament this matter was discussed in the Standing Committee on Finance, Trade and Economic Affairs. We heard the AUCC brief, and so on. I would like to see the Secretary of State (Mr. Faulkner) here today. This is very much in his area of responsibility. I, for one, hope that we will have some message from the Secretary of State concerning who is responsible now.
In the administration of Lester Pearson we had in the prime minister's own office, I think, a former deputy minister of finance. If my memory is correct, it was Dr. Young, but I could be wrong because that was some time ago. He had the responsibility, as I recall it, of trying to rationalize the federal position in the whole field of postsecondary education. Then the responsibility was shifted from the prime minister's office to that of the secretary of state. What is happening? Who is in charge? Who has taken the place of David Munro of McGill University who had responsibility in this area? There are questions we will want to have answered. Dr. Carrothers, I think, is to head the federal-what has it been called?


John Napier Turner: The think-tank.


Robert Gordon Lee Fairweather: He is to head the federal think-tank; and I believe it is about time they had one. In any event, in his speech to the Association of Universities and Colleges given on October 31 this year, on "The role of the university in post-secondary education", Dr. A. W. R. Carrothers said:
I think it is now generally recognized that "research is more a national and international commodity than a provincial one", to quote from a policy statement of one provincial minister. Research is a component of university activity that earns for the institution the name of "university"-
My only constraint now is time. I do not want to read all of this into the record, but I have suggested that Dr. Carrothers' speech be sent to senators and members because it is a very important statement on university concerns in this part of the 1970s. Dr. Carrothers also said:

-it is my considered view that we must maintain a shared federal presence in Canadian universities as a major national asset. The parochialization of our universities is a risk which in the 1970s we can ill-afford to take and on which we as a nation need not gamble.
I hope most members of all parties support this view. I think there was a mood a couple of years ago within the councils of the federal government just to transfer tax points and thus end the national responsibility. I am sure this would have been resisted by backbenchers on the government side. I know it certainly was by this party, because it would have been a much more serious thing than a postponement of the decision. It would have been a surrendering or abdication of a constitutional responsibility that this nation has had since the founding of our country.
If I do nothing else in my time here, I want to ensure that in respect of the federal role in post-secondary education we get rid of the constitutional bickering about it and enhance and promote it, because I think parochialization is serious enough in this country in so many other areas of our life. For anyone seriously to put forward a proposal that the federal government should end its responsibility by merely transferring two or three tax points would be, I think, a turning back of a record of which many administrations have reason to be proud.
The minister, I know, is anxious. He is always anxious; that is one of his most attractive qualities. He is anxious about this legislation, so I suppose I should not read the position taken by the Association of Atlantic Universities on the role of the federal government. But of all the universities in this country which would be adversely affected by a mere transfer of tax points, the Atlantic universities would be most seriously affected. This point has been made. They have submitted briefs.
I hope that some time before the passage of this bill we will have a forthright statement by the Secretary of State assuring us that a tax points transfer is not in the wind now or in 1977. It will not be in 1977, because there will be a different administration and certainly my party would resist, with everything it has, any such cop-out. Mr. Speaker, this matter is serious. I think there has been a sort of postponement. I tried this word the other night: I think it is really an avoidance in confession. What we are doing really is having a convenient postponement by changing a couple of figures in a clause. But the issue is far more important than is set out in clause 3.
I want to know what the Secretary of State is doing, I want to know who within that department is doing it, and I want to be reassured that the government really has an action group working on a better formula. We postponed the decision for a couple of years before, and I had hoped that by now we would have had something in legislative form much more positive than a mere extension.


Mr. John Harney (Scarborough West):: Mr. Speaker, as is the case with all members, I stand to speak briefly on this bill. We all have the sense of the passage of time and the pressure there is on us in the House to get the legislation through. The bill has to do with a great amount of money, indeed billions of dollars, and the least I want to
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do by standing up as we see these billions of dollars go away is to wave them goodbye somehow.
I share the concern of the hon. member for Fundy-Royal (Mr. Fairweather) about clause 3 of the bill which refers to section 22 of the act that is being amended. Here again we are dealing with a considerable amount of money, and also with policies tied to that money which have a great effect not only on post-secondary education in our provinces but on education as a whole. In a few moments I would like to address myself to that particular clause. [Translation]
If I may, Mr. Speaker, I should like to give a few words of warning to the hon. member for Matane (Mr. De Bane), who quoted some figures to the House. He said that his constituency, which accounts for 6 per cent of the population of Quebec, had only 2 per cent of all the physicians in the province. He should know that there are some narrowminded people, not here but elsewhere, who could answer that in that part of the country, the air is healthy and people do no need doctors. It is like saying that the kids from the poorer sections of our cities just about never wear glasses and have excellent teeth because they are seldom seen at the dentist's.
But I must admit I have understood the point he wanted to make. The real issue is that of equalization. And that is more than a mere question of money; it has to do with problems Canadians have to face in connection with health, public services and, most of all, with education. [English]
As a general remark, before going on to clause 3,1 would like to point out that we have before us a rather marvellous shell-game. When I call it a shell-game I do not want to suggest it is crooked; I just want to suggest it is complicated. It is complicated for the ordinary citizen of this country to try to understand what we are doing today. If I refer back to the definition section in the act, particularly the definition of "revenue sources," I find many types of revenue sources listed from (a) to (s). By the time the average citizen of this country has discovered, by reading this list, how many times and in how many ways he is being taxed and what happens to the tax when it is transferred from one jurisdiction to another, he will be very confused.
I wish that some day we could work out a taxation system which would be less complicated than this one. Of course, by then we would not need competent ministers of finance; we would all know what was going on. However, I would recommend to all hon. members that they read this list of revenue sources. It is striking in the extreme. One thing about it, of course, is that it is fairly honest and comprehensive. It does admit that such things as hospital and medicare insurance premiums are taxes. Many people argue the other way, but it is evident to people who drafted the act that a premium which everyone has to pay is a tax, no matter which way you cut it.
In regard to the way that taxes are shifted in this country, I would like to raise the fact that we, as one part of the public realm, wind up very often taxing other parts of the public realm. For example, today there is great concern over the conservation of energy. Many people who address themselves to this problem tell us that a large consumer of petroleum resources in this country is the
Federal-Provincial Fiscal Arrangements Act automobile. If you want to reduce the use of the automobile and therefore the consumption of gasoline, you have to stress public transit, encourage public transportation. It is a fact that the federal government will tax publicly-owned transit corporations on the materials and the rol-lingstock they have to buy.
My figures might not be completely accurate, but I see that in the city of Toronto last year the Toronto Transit Corporation had to pay some $700,000 in federal sales taxes. How do they pay this sales tax? From grants they receive from the province, in part. The province in turn will pay for these grants from the taxes they have taken out of the pockets of the citizens of Ontario. Furthermore, they will pay for these taxes to the federal government from grants and subsidies they receive from the municipal government. Where does the municipal government get the money? From taxes that the municipal government gets from the residents of Toronto.
Here we have a rather complicated, duplicated, multiplicative system of taxation which does not stand up to close scrutiny. Would it not be better to say to the city of Toronto and the Toronto Transit Corporation, "Since you are a publicly-owned corporation we, another public entity in this country, will not go to the bother of taxing you, because in order for you to pay those taxes you will have to turn to the taxpayer in yet another way"?
One is certainly allowed to ask, in all these infinite transactions that we perform with our taxes, if a considerable number of them do not stick in the bureaucratic machinery. People have to be hired to handle these taxes and transfers and to negotiate them, and we are suddenly left with an Alice in Wonderland world, as the hon. member for Waterloo-Cambridge (Mr. Saltsman) suggested. We find ourselves running all the faster to keep ourselves in the same place.
As I suggested earlier, the part of this bill which concerns me the most at present is clause 3 which has to do with the extension of the federal-provincial agreement providing for the financing of post-secondary education. Here I would like to support the remarks of the hon. member for Matane (Mr. De Bane) and those of the hon. member for Fundy-Royal to the effect that education is indeed a matter of national responsibility. Just as the hon. member for Fundy-Royal said that education has always been a matter of concern for confederation, I would like to support that point by adducing some historical evidence. For example, at the time of confederation, one of the major reasons Newfoundland chose not to join the other provinces was that the people of Newfoundland, or at least the people in power in Newfoundland at the time, did not want to accept the notion which was just developing in Canada, that education was to be supported through taxes on property.
In the 1830s and 1840s in the United States, the idea that general education should be supported by a general tax on property had been initiated and this idea was in a large way accepted by the then provinces and parts of Canada. There was an element which was essential to confederation and it had to do with education. Newfoundland, for reasons of its own, seeing that this element was contained in confederation, chose not to join. We have had federal-provincial cost-sharing programs in education all through

November 30, 1973
Federal-Provincial Fiscal Arrangements Act
the years, as one hon. member preceding me said, probably for a long time.
I might remind members on the government benches of one of their illustrious antecedents, the Right Hon. William Lyon Mackenzie King, who around 1910-my date may be wrong-initiated an qpprenticeship training program when he was then involved in labour. In the twenties there was a federal-provincial cost-sharing program developed and executed to encourage and assist technical education across Canada. And so we go on through the years. The evidence is very clear in the actions we have taken as a country in the past, that education has been seen to be a national responsibility.
If it is not a national responsibility, why is there section 93.1 in the BNA Act which lays down definitely and clearly the rights of certain classes of Canadians with regard to education? If it is not a matter of national responsibility, why did the Manitoba school question cause such a ruckus at the turn of the century? Certainly it is a matter of national responsibility. It is in the national interest to have national concern exercised over what goes on in our universities and schools, and that concern must be exercised here in this parliament.
Just as we worry about equality of opportunity in other realms, we have to worry about it in the realm of education. Just as we concern ourselves with the notion of national standards when it comes to social services, social welfare and social insurance, so we concern ourselves, quite properly, with the question of national standards in education. That is why we have in the act that is being amended section 22 and subsequent sections providing for payments to the provinces in support of post-secondary education. As the minister stated this morning, these payments involve a considerable sum of money. But relating to the point raised by the hon. member for Matane, I would like to present some figures to the House.
It is a very simple fact that we have exercised a great deal of concern in this House and elsewhere over the notion of bilingualism in this country. We have, quite appropriately and properly, supported and modified acts and resolutions of this House having to do with our official languages in the federal public service and we as members of parliament have voted very large sums of money in the past so that through the Secretary of State we could encourage instruction in the two official languages in the schools of this country. Yet it is a very simple and sad fact that when it comes to the crunch, to the very part in our deliberations where we could do something about it in the federal-provincial agreements that have to do with the support of post-secondary education, we fade out: we don't talk about it. The sad fact is that although we are, I hope, improving the use of the two official languages in the federal public service, in the country at large there is less and less bilingualism.
I would like to cite, for the interest of hon. members, some statistics from a Statistics Canada bulletin catalogued as 81-001. This bulletin points out to us that as the years go by fewer and fewer students in our secondary schools are studying the other official language. In Ontario, for example, in 1970-71, 47.5 per cent of our

students were studying French; in 1971-72 this had gone down to 44.5 per cent, and in 1972-73 it went down to 39.4 per cent. That is not a drop; it is a sudden fall. If it can go down some 6 per cent in two years, you can imagine what the picture will be a few years from now.
Why is this happening? I can give one of the reasons. It is because the universities of Canada have copped out. In the middle of the 1960s one university after another in English Canada dropped the second language entrance requirement. In competition for student enrolments, or whatever the reason was, they said, "we no longer require that students coming to our halls for higher education need to know a second language, let alone need to know the other official language of this nation."
That is why I raise this matter here today: I think it is a matter of national interest. And as the universities dropped their entrance requirements, of course the high schools changed their regulations to the point where now, in my province, a student can go to high school and he can effectively be told, "You don't need to study a second language at all, let alone the other official language of this country."
Perhaps my language is strong, Mr. Speaker, but I have been in this battle a long time. I was once a member of the senate of a university and I remember fighting this battle then. My colleagues at the time could not undertake this sense of national responsibility. They thought only in terms of their disciplines and how they were to prepare their students to succeed in their disciplines. I say that if the responsibility cannot be taken by the universities, then it has to be taken by this House.
What I would like to know from the Secretary of State (Mr. Faulkner)-hope he will be here when we go to clause by clause study of the bill-is whether these concerns are advanced at all in the federal-provincial negotiations that go on? I want to know tbat before I, as a member of this House, vote for a continuation of the same for another three years.


Mr. Deputy Speaker:: Perhaps this is a convenient place to call it four o'clock. If it is, the House will now proceed to the consideration of private members' business as listed on today's order paper.


Mr. Reid:: I rise on a point of order, Mr. Speaker. There has been consultation through the usual channels, as well as with the hon. member who was supposed to move a bill today during private members' hour, the hon. member for St. John's East (Mr. McGrath), and he has graciously consented, if the House wishes to continue with this bill, to allow this on the understanding that he will be able to proceed with his bill next week.


Mr. McGrath:: Mr. Speaker, the condition is this: as long as it is very clear that time will be found next week to proceed with my very important bill.


Stanley Howard Knowles: Mr. Speaker, speaking as one of the elements of the entity euphemistically referred to as the "usual channels", may I say we also agree.
November 30, 1973


Mr. Deputy Speaker:: The House has heard from the "usual channels" the suggestion regarding the business for the last hour of this week. Is that agreed?


Some hon. Members:: Agreed.
[ Translation]


Mr. Cyr:: On a point of order. Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Gaspe on a point of order.


Alexandre Cyr: Mr. Speaker, in view of the fact that it was pointed out in this House that today marks the 31st year of parliamentary life of the hon. member for Winnipeg North Centre (Mr. Knowles), I move, seconded by the hon. member for Scarborough West (Mr. Harney):
That, with your permission, Mr. Speaker, this House give a one-hour break to the hon. member for Winnipeg North Centre (Mr. Knowles) allowing him to leave this House, and grant him permission to leave Parliament Hill.
This break would be well deserved.


Mr. Deputy Speaker:: I suspect there may not be unanimous consent, but I will hear from the hon. member for Winnipeg North Centre (Mr. Knowles).


Stanley Howard Knowles: Mr. Speaker, you anticipated what I was about to say. I believe a motion like that would require unanimous consent. You do not have it.


Mr. Deputy Speaker:: We will continue with Bill C-233. The Chair recognizes the hon. member for Drummond (Mr. Boisvert).


Jean-Marie Boisvert: I thank you, Mr. Speaker, and hope it is for real this time.
I should also like to congratulate my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), as well as the hon. member for Scarborough West (Mr. Harney). As an English-speaking member, he could teach many a lesson to a lot of people from outside Quebec with regard to his understanding, in particular, of bilingualism. What he says is true; we see it happen every day and so much so that often one wonders whether here, in Ottawa, one does not get answers in French just out of charity.
The bill we have considered stems from an agreement between the provinces.
I say that perhaps we would not have to consider such a legislation if the federal government, taking advantage of the war, had not encroached upon the provincial rights at a certain time and if it had not kept them rather egoistically afterwards. Still I am pleased to see that there has been an agreement. For once Quebec will have obtained satisfaction, a rare occurrence indeed.
This bill which particularly deals with the educational field tackles however another matter which, in my opinion, comes under provincial jurisdiction. The previous
Federal-Provincial Fiscal Arrangements Act speakers did not often mention that. I would have preferred if clause 7 had some provisions concerning school tax exemptions, especially for small owners.
With all due respect, we seldom see a bill introduced by the Minister of Finance (Mr. Turner) to give money to taxpayers. We are usually poorer when we leave the House. I have the impression that this will happen this afternoon.
As for the 3 per cent referred to in clause 7, I wonder if this is not a sanction as well as a confirmation.
It seems to me, Mr. Speaker, that it is enough to pay taxes without having to pay taxes on taxes. On the purchase of building materials the 11 per cent are included in the sale price: there is an 8 per cent provincial tax on the 11 per cent federal tax. It might be time, while considering this bill, to reflect a little on that: there is always a class of people who are forever paying. I am talking about the average citizen who are always the most penalized. Through this bill the federal government will interfere in the sphere of provincial jurisdiction and again taxes will go up.
Last week when I spoke on the constitution review, I emphasized the fact that the provinces should submit their needs to the federal government. When they were here the provinces agreed on this point with the federal government. But, in clause 5 there is a provision that says that the amount to be awarded to provinces will be determined by the federal government. I find that rather arbitrary and in case of interpretation of disputes, provinces would not have so much at liberty to assert their claims.
I think that at the committee stage, it will be possible to ask questions and try to elucidate some points.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. McCleave in the chair.
On clause 1-Revenue from school purpose taxes.
[ Translation]
Mr. Comtois:: Mr. Chairman, I want to say that I support Bill C-133. I believe the bill will enable us to reach a higher level of achievement in intergovernmental fiscal relations.
Upon reading the bill we must remind ourselves that the solid foundation on which it lies is none other than the very foundation of Canadian federalism. I refer to the 1972 Federal-Provincial Fiscal Arrangements Act and the previous statutes, in particular those of 1967 and 1957. I do not intend to linger on previous legislation. Allow me to review briefly the bill presented by the Minister of Finance (Mr. Turner). It is essentially an extensive system of federal support through equalization payments to disadvantaged provinces. The bill also provides for yearly stabilization of the total revenues of each province, be it rich or poor. It also allows for close co-operation between federal and provincial systems as regards income tax, even in a period of great change. Furthermore, it provides for unconditional federal participation to the tune of 50 per cent of provincial costs for post-secondary education. Mr. Speaker, this bill contains a remarkable

November 30, 1973
Federal-Provincial Fiscal Arrangements Act series of provisions aimed at improving the cost sharing of provincial programs, thus sustaining provincial revenues.
I refer more particularly to the support made available to lower income provinces by this fiscal arrangements legislation through equalization. In this program all sources of provincial revenue will be subject to equalization. What does equalization mean? It means that the federal government makes up for the losses of any province in a comprehensive way. Those losses arise from a lesser capacity than the national average to increase their revenues through their own efforts and resources. The payments made under this program are substantial. For the first time in 1972-73, they exceeded $1 billion. For 1973-74, the forecasts made for the current year provided for payments of roughly $1,168 billion. It so happens that that estimate turned out to be lower due for a large part to unforeseen tax performances in upper income provinces. As hon. members know, that led to the inclusion in the budget estimates now before parliament of $143,300,000 under the Fiscal Arrangements Act. Of that amount $106,300,000 are for equalization payments, including some $75,600,000 for the province of Quebec.
Mr. Chairman, it is now proposed, as provided in this bill, to improve somewhat the superstructure of our fiscal arrangements. As a matter of fact, this will lead to a broadening of the equalization formula beyond the provincial revenues, to include school purpose taxes levied by local governments. In voting for this bill, hon. members will vote for an equalization increase of about $175 million. It is surely a large amount and those funds will, I am sure, improve the provinces' position.
I should now like to call the attention of the hon. members to the benefits that this bill will bring to my own province. Thus, this bill will increase by $72 million the equalization payments to the province of Quebec for the present taxation year. That amount will bring to $710 million the total amount paid to that province and it represents 19 per cent of the total revenues of the province of Quebec, according to the revenue estimates in the budget for the 1973-74 taxation year.
Mr. Chairman, equalization payments now rank third among Quebec's sources of revenue. They are exceeded only by personal income tax and retail sales taxes. Thus, on the basis of a $710 million payment, Quebec would get more from equalization than the combined revenues from the gasoline tax, the sale of automobile licences, the tobacco tax as well as the profits of the Societe des alcools du Quebec. A last example, Quebec revenues under the equalization formula are about the same as a 7 per cent general sales tax, namely a little less than the present sales tax of 8 per cent.
Hon. members will appreciate the fact that this bill contains other benefits for Quebec. I am referring particularly to the extension of the federal unconditional postsecondary education contributions for the next three years. The federal contributions to Quebec in 1973-74 for post-secondary education amount to $326.8 million of which $150.6 million are under the form of tax points incorporated in the Quebec income tax system.
Mr. Chairman, I could give several other examples of benefits received by my province, by lower income provinces in general, as well as by all the provinces which

benefit from those fiscal arrangements. Besides, I think I have shown that those benefits are indeed substantial and that those arrangements are still getting the full attention of this government. I urge all members to support this very important bill.


Eymard G. Corbin: Mr. Chairman, I have waited until we went into committee of the whole before speaking so as not to delay passage of the bill.
I want to make some very brief comments today on Bill C-233 concerning federal-provincial fiscal arrangements. In particular, I will deal, for the moment, with the integration of school taxes in the equalization formula. I of course welcome this liberal measure and I congratulate the hon. Minister of Finance (Mr. Turner) for it. But I always have some reservations when I read in bills expressions like unconditional grants to provinces. It seems to me that the federal government is giving with both eyes closed. This may be a good thing for federal-provincial relations and it may be some compromise that we must accept in order to keep the country peaceful and preserve Confederation. Still it makes me shudder. I say this because the grant is effective only to the extent where certain objectives are achieved.
If we incorporate school taxes in the present equalization formula, the average citizen in New Brunswick, for instance, will expect his land taxes to be lowered in fact, and the educational institutions improved. In fact, however, the provincial politicians do not always take advantage of the formula to improve them or to give proper credit to the federal government; often, they pour this additional income from the federal government into their general funds so that the average citizen does not know where in fact the money was spent.
That is why the expression "unconditional grant" sometimes scares me. The formula is good to the extent where we have competent and responsible provincial administrations. I know whereof I speak because I am personally well acquainted with the present Minister of Finance of New Brunswick who represents part of my federal riding in Fredericton. For example, for almost two and a half years we have paid some special grants, through the Secretary of State, to teach the language of the official minority of this country. Those grants are directly paid to provincial governments. Up to now the funds have been ploughed into the general revenue fund of the provinces where they disappear.
Fortunately, thanks to several of my interventions supported by my Liberal colleagues in the House, the Secretary of State has succeeded in obtaining a commitment from the New Brunswick premier to the effect that there will be an accounting to the central government of the expenditure of this money so important to the official language minority in New Brunswick.
There should also be, in my opinion, similar commitments from other provinces also receiving a share of the federal grants to teach the official language of the minority, as Ontario, for example, where it has been suggested that the grant has been used for some paving job. This broadening of the equalization formula is of course
November 30, 1973

favourable to the provinces, consequently to New Brunswick, as far as I am concerned, and this is a lower income province, a depreciating term that I am not very proud of.
Though I might contradict the minister, I must tell him that I am not quite willing to admit that this broadening will put the poor provinces, as he said in French, almost on the same footing as higher income provinces. And if I consider the discrepancy between Alberta, which is number one on the list with $1,192, and New Brunswick, which is last with $965, I see that this difference of $227 shows a margin of more than 19.04 per cent, which is, however, quite a substantial one, before equalization.
I admit, Mr. Chairman, that the measure now before us assists in filling the gap, in bringing both sides closer to each other, but further progress will have to be made.
I heartily congratulate the minister for it and I urge him to reduce even more, in the years to come, in co-operation with provincial ministers of finance, the discrepancy between rich and poor provinces in these equalization measures.
I would like, Mr. Chairman, and I will conclude on this point, the provinces to report to us and tell us where this money will be spent because provincial ministers of finance do not always praise or commend these excellent measures. I will not act as a judge as regards the efficiency of provincial policies. The constituents of each of the provinces are able to do so, in as much as they have at their disposal all relevant information relating to the way this federal money is spent by provincial governments.
Mr. Chairman, in order not to delay our business, I reserve the right to rise on the matter of universities a little later.
[ English]


[Stage Direction]
Clause agreed to.
Clause 2 agreed to.
On clause 3-Post-secondary education adjustments payments
John Napier Turner: Mr. Chairman, I think I owe it to the committee to respond to some of the questions that were put to me on second reading relating to post-secondary education. The hon. member for Edmonton South-


Stanley Howard Knowles: Edmonton West.


John Napier Turner: -and the hon. member for Waterloo South.


Stanley Howard Knowles: Waterloo-Cam-bridge.


John Napier Turner: Everybody is doing his own little thing by changing the riding connotations these days. I certainly want to congratulate my colleague for his initiative in changing the name of his constituency from Ottawa East to Ottawa-Vanier. It is a great improvement.


Some hon. Members:: Hear, hear!


John Napier Turner: The hon. member for Scarborough West and the hon. member for Fundy-Royal
Federal-Provincial Fiscal Arrangements Act also have an interest in this subject. The hon. member for Fundy-Royal has had this interest not only since his election to the House of Commons but also while he was attorney general of the sovereign province of New Brunswick.
The hon. member for Fundy-Royal capsulized the questions. I will deal with them. He wanted to know whether the federal government, through the Department of the Secretary of State and the new ministry of research, retained its commitment to participation in an active way in post-secondary education across the country, and whether we were contemplating any withdrawal from that position.
The Secretary of State was here earlier today and was called away on pressing business. He apologizes to the committee and to the hon. member. However, on his behalf I can say quite categorically that we are committed within the limits of our constitutional responsibility and jurisdiction to co-operating with the provinces to the advancement of post-secondary education in Canada. This is for a number of reasons, such as maintaining national standards, as the hon. member for Scarborough West indicated, and promoting research as a leading edge in education. As a matter of fact, we have compounded that with the establishment of a separate cabinet post. My colleagues, the Secretary of State and the Minister of State for Science and Technology, intend to remain involved because of the linkage between research education and employment, the mobility of population, the equality of opportunity in education across the country, and the cultural aspects of national unity.
Several hon. members, particularly the hon. member for Edmonton West and the hon. member for Fundy-Royal, asked why we were only able to achieve an extension of the present agreement which will last until the full scope of the 1972 Fiscal Arrangements Act expires. They asked why we were only able to achieve an extension of the present agreement, rather than a new contract with the provinces that would have received legislative confirmation here in parliament. I might say that over a period of two or three years the Secretary of State and his predecessor advanced several proposals which had as their purpose to rationalize the post-secondary educational system in this country.
The Secretary of State advanced proposals which intended to disassociate federal payments from actual provincial expenditures of post-secondary education, tying them instead to the base year costs with two escalation factors; first, a flat 7 per cent and, second, an escalation feature geared against the growth of educational population which was taken as the population aged between 18 and 24 in the particular province.
The Secretary of State, and indeed the government, felt that this proposition would remove the present discrimination against provinces which for any reason have low per capita expenditures for post-secondary education, and would remove the present bonusing to provinces which for any reason have high per capita expenditures. It would also give the provinces greater incentives to cut costs. It would simplify the administration of the transfer of payments programs and would give the provinces greater certainty of revenues for the purpose of long-term plan-

November 30, 1973
Federal-Provincial Fiscal Arrangements Act ning. From the provincial point of view, it would have gotten us out of their hair and given them flexibility in their programs. For reasons of their own, the provinces could not agree on that formula or on any counter-formula.
At a meeting held jointly with the federal Minister of Finance, provincial Ministers of Finance, the federal Secretary of State, provincial Ministers of Education, the federal Minister of National Health and Welfare, and provincial Ministers of Health, we tried to work out not only the new formula for the financing of post-secondary education, but a new formula for health cost financing. We had to refer the subject of post-secondary education to the first ministers. At the meeting of first ministers, seeing there was no chance of achieving consensus on this new formula proposal, the Prime Minister recommended to the provincial premiers that they accept a three-year extension of the present agreement so we could go at it again. The provincial premiers accepted that proposition.
What is happening now? The hon. member for Fundy-Royal wants to know who is in charge. First, it is the Secretary of State. Under him is the undersecretary of state, Jean Boucher, then Peter Roberts, the assistant undersecretary of state who reports directly on this particular subject, then Robert Lachapelle who is sitting next to me on the floor of the House, the director of educational support, and with him a well knit group of 32 men and women who have as their particular purpose the objective of negotiating a new federal-provincial post-secondary agreement in anticipation of the expiry of the present arrangement, if parliament so deems this afternoon and in the other place.
The Secretary of State and I are consulting on a number of levels. We are consulting with the Association of Canadian Universities at the institutional level. We have had consultations with the Association of Canadian Professors and the Canadian Union of Students, or whatever organization currently has the mandate from the students in this country.
As a matter of fact, a week or so ago I was at a university in my constituency, Carleton University. The students asked me whether they had any right to participate in these negotiations. I repeated to them what I said to the National Students Organization earlier, namely, that the Secretary of State of Canada welcomes their participation in these negotiations, and not only should they approach their own provincial governments wherein those universities reside, but they should also feel free to approach the federal government.
At all of these levels, provincial, institutional, students and professorial these negotiations are being carried on on an urgent basis. I think perhaps I will limit myself to that. There may be further questions from hon. members in the committee.


[Stage Direction]
Clause agreed to.
Clauses 4 to 9 inclusive agreed to.
Title agreed to.
Bill reported.
Mr. Deputy Speaker:: When shall the bill be read the third time?


John Napier Turner: By leave, now.


Some hon. Members:: Agreed.


John Napier Turner: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.


John Napier Turner: Mr. Speaker, I wonder whether hon. members would allow me to return to motions in order to say something about the import surtax on fresh beef and live cattle.


Mr. Deputy Speaker:: The House has heard the suggestion of the Minister of Finance (Mr. Turner). Is this agreed?


Some hon. Members:: Agreed.


Mr. Bell:: I should like to point out to the minister that the stock market has not yet closed in Vancouver. Will this announcement affect the stock market?


John Napier Turner: It does not affect the stock market. It affects the stockyards.


Some hon. Members:: Oh, oh!


John Napier Turner: I wish to thank hon. members for helping me and the House to dispose of an important piece of legislation. I wish to thank especially the hon. member for St. John's East (Mr. McGrath) for his courtesy in yielding.



ROUTINE PROCEEDINGS

[Stage Direction]
[ English]

John Napier Turner: Hon. members will recall that in announcing the imposition of a surtax on imports of fresh beef and live cattle on November 2, the government undertook to review the market situation and the need for the surtax within 30 days.
This review has now been completed and it has been decided that the surtax will remain in place, subject to a continuing review. The surtax has as its purpose the bringing of a greater degree of stability to the Canadian market, permitting movement toward the resumption of more normal marketing of Canadian cattle. We still anticipate that North American trade in beef and cattle will return to traditional levels in the near future, and it is for this reason the government intends to keep the surtax under continuing review.


Mr. Deputy Speaker:: Before I recognize the parliamentary secretary on a point of order, I gather there is no wish
November 30, 1973

by hon. members to comment on the announcement which has just been made.


John Mercer Reid: Mr. Speaker, since we are well into private members' hour, and since the hon. member for St. John's East (Mr. McGrath) has agreed to proceed next week, I wonder if we could call it five o'clock.
Surtax on imports of beef


Some hon. Members:: Happy birthday, Stanley!


Mr. Deputy Speaker:: I hear no dissenting voices. Accordingly, the House stands adjourned until two o'clock on Monday next.
At 4.37 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, December 3, 1973