1973-04-12

[Stage Direction]
First report of Standing Committee on Justice and Legal Affairs.-Mr. Jerome.
al to provide a paper given on the question of internal security in Canada by an assistant commissioner of the Canadian Royal Mounted Police at a private conference held in this city. Given the importance of this matter to the general question of civil liberties and the question of the privileges and rights of all members of this House, I would move:
That the Solicitor General be instructed to table a paper entitled "The Threat from Subversive Elements," by Assistant Commissioner Draper of the RCMP given at a conference in this city on Monday, April 9.
Mr. Speaker:: Is there unanimous consent as required under Standing Order 43?


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR, MANPOWER AND IMMIGRATION
[Stage Direction]
Third report of Standing Committee on Labour, Manpower and Immigration-Mr. Portelance.
[Editor's note: For text of above reports, see today's Votes and Proceedings.]

Hon. John N. Turner (Minister of Finance):: Mr. Speaker, pursuant to Standing Order 41(2) I wish to table three copies, in English and French, of the Economic Review dated April, 1973.


TABLING OF REPORT ON PRIVATE AND PUBLIC INVESTMENT IN CANADA
Hon. Alastair Gillespie (Minister of Industry, Trade and Commerce):: Mr. Speaker, pursuant to Standing Order 41(2) I should like to table in both official languages copies of the report on Private and Public Investment in Canada.


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


AGRICULTURE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under the provisions of Standing Order 43 I wish to move a motion on a matter both urgent and important.
In view of the constant rise in the price of feeds, which contributes to increasing production costs of meat, I move, seconded by the hon. member for Compton (Mr. Latulippe):
That a special debate be held in this House to analyse the real causes that contribute to the astronomical increase in the cost of animal feed.


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


ROYAL CANADIAN MOUNTED POLICE
Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43 concerning the request I made two days ago to the Solicitor Gener-


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

April 12, 1973
Indian Affairs


FOOD PRICES
Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, today it is my pleasure to present this House with a petition of some 10,000 names demanding some action to lower food costs. The government has stated that it has contingency plans for wage and price controls. I think a petition of this type from my part of the country shows they are needed now and that action is needed now.


Mr. Speaker:: Order, please. The hon. member knows that under the terms of the Standing Order he can only lay the petition on the table and not make a speech or present argument in support of the petition.


Mr. Howard:: Mr. Speaker, I rise on a point of order. Your Honour proceeded past motions without making reference to-


CANADIAN CITIZENSHIP ACT
Mrs. Grace Maclnnis (Vancouver-Kingsway) moved: for leave to introduce Bill C-175, to amend the Canadian Citizenship Act (equal residence requirements accorded alien spouses of Canadians).


Some hon. Members:: Explain.


Winona Grace MacInnis: Mr. Speaker, at the present time an alien wife of a Canadian citizen may be granted citizenship when she has resided in Canada for only one year, but an alien husband of a Canadian wife must have resided for five years.
The purpose of this bill, therefore, is to amend the Canadian Citizenship Act to provide that there is no difference between the residence requirements for the acquisition of Canadian citizenship by an alien husband and an alien wife of a Canadian citizen.


Some hon. Members:: Hear, hear!


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: Order, please. We are at that point now.


INDIAN AFFAIRS AND NORTHERN DEVELOPMENT
[Stage Direction]
On the order: Motions:
April 4, 1973-Mr. Howard:
That the Second Report of the Standing Committee on Indian Affairs and Northern Development, presented to the House on April 4, 1973, be concurred in.
Frank Howard: Mr Speaker, I would not want to cut into the time of the House set aside today for the important question of the income tax bill. I wonder, therefore, if I could get unanimous consent to have the motion standing in my name put without debate.


Mr. Speaker:: This would, of course, require the unanimous consent of the House. I believe the hon. member is referring to the first motion standing in his name. The hon. member appreciates that in view of the well established practice of the House the motion cannot be debated in any event. If the hon. member suggests there might be unanimous consent for the motion, I might inquire.


Some hon. Members:: No.


Mr. Speaker:: Obviously there is not unanimous consent. The motion, therefore, cannot be put at this time.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I wish to direct a question to the Minister of Finance. In view of the request to Congress by the President of the United States for authority to tax the incomes of U.S. subsidiaries abroad in certain instances at U.S. corporate rates, one of these instances being where lower taxes in the foreign country are a factor in the decision of the subsidiary to invest, has the minister given consideration to this and the distinct possibility that his proposed tax cuts for manufacturing and processing industries could result simply in swelling the treasury of the United States in the case of certain investments by U.S. subsidiaries?


John Napier Turner: Mr. Speaker, all we have at the moment is the text of the President's message to Congress. We do not have a text of the proposed bill as we do in the case of the trade reform bill which the President put forward in textual form to Congress. We are, of course, studying this matter very closely. We need a little more precision before an answer can be given to the Leader of the Opposition.


Robert Lorne Stanfield: Is it the intention of the Minister of the Finance to contact the appropriate authorities in the
April 12, 1973

United States in order to secure more information as to the precise terms of the bill to be submitted to Congress?


John Napier Turner: Yes, Mr. Speaker.


Robert Lorne Stanfield: Does the government intend to proceed with the proposed tax cuts affecting manufacturing operations in Canada even in those instances where the benefit of those tax cuts, or a substantial part of it, will simply go to a foreign treasury?


John Napier Turner: I would think we would have to obtain the clarification the hon. gentleman was seeking before making a final decision in that regard.


PRESENTATION OF STATEMENT ON REGIONAL DEVELOPMENT PROGRAMS TO UNITED STATES IN LIGHT OF PRESIDENT NIXON'S PROPOSED TRADE AND TAX LEGISLATION
Mr. Elmer M. MacKey (Central Nova):: I have a supplementary question for the Minister of Industry, Trade and Commerce. In the light of the Michelin episode, is the government preparing a formal and complete statement on our regional development programs in relation to President Nixon's proposed legislation concerning unfair trade and tax policies and, if so, when will it be presented to the United States government?


Alastair William Gillespie: I think the hon. member should perhaps address his question with respect to regional expansion plans to my colleague, the Minister of Regional Economic Expansion. But as to the broad generality of the question I think it is fair to say we shall be watching the trading impact of these measures very carefully. I am sure the hon. member will welcome, as I do, the decision of the United States administration to enter into consultation with us at an early date in connection with the Michelin countervailing duty finding.


Elmer MacIntosh MacKay: Can the minister tell us how the United States study of the Michelin Tire case is proceeding? Has he received any indication of the progress being made and, if so, will he inform the House now or on motions as early as possible?


Alastair William Gillespie: We have received a reply to our formal note presented some six weeks or two months ago requesting consultation. The United States government has stated it will be very pleased to enter into consultation with us and we look forward to these talks taking place at an early date.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Hamilton Mountain for a last supplementary and then the hon. member for Brant.
Oral Questions


FORMAL PRESENTATION TO UNITED STATES OF CANADIAN POSITION RESPECTING BURKE-HARTKE BILL
Mr. Duncan M. Beatty (Hamilton Mountain):: Mr. Speaker, I have a supplementary question for the Minister of Industry, Trade and Commerce. In light of the fact that the government has presented no formal position, in writing or otherwise, to the United States government in connection with the Burke-Hartke bill, and bearing in mind the serious implications of this bill, if passed, for our trade, can the minister undertake to prepare a formal and detailed position on the bill and present it to the United States government immediately?


Alastair William Gillespie: As the hon. member no doubt realizes, the Burke-Hartke bill is a bill prepared by a United States Congressman and a United States Senator and presented to their respective Houses. There are various ways in which we can make our views on the contents of this bill known, and I can assure the hon. member we are using the normal channels with efficiency.


MANPOWER
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. Will the minister inform the House whether responsible officials of Manpower in the Ottawa area have investigated the practice of a number of government departments and agencies in Ottawa which hire secretarial assistance from private placement agencies rather than through the Manpower office, paying $4.25 an hour to the agency which, in turn, pays only $2.65 an hour to the employee?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: I shall investigate that situation with all haste.


Derek Nigel Ernest Blackburn: When making inquiries about this practice, would the minister attempt to find out why the Unemployment Insurance Commission, for which he is responsible, paid a private placement agency at a rate of $170 a week for secretarial assistance rather than go to the Manpower office for which the minister is also responsible?


INDUSTRY
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I have a question for the hon. Minister of Industry, Trade and Commerce.

April 12, 1973
Oral Questions
Since it is the task of the Department of Regional Economic Expansion to promote employment in the country's poorer areas and also to assist small business, can the hon. Minister of Industry, Trade and Commerce tell us how he can help the Department of Regional Economic Expansion achieve this goal when 37 of 40 members of the advisory council are owners or presidents of Canada's major businesses, located in this country's major cities in the most prosperous regions?


Mr. Speaker:: Order. The hon. minister might perhaps reply briefly to the hon. member's question. I am sure, however, that the hon. member for Shefford will be the first to recognize that he has expressed an argument rather than a question. However, to be fair to the hon. member for Shefford, I am prepared to give the floor to the hon. minister if he wants to reply briefly.
fEnglish]


Alastair William Gillespie: Mr. Speaker, very briefly, my colleague the Minister of Regional Expansion and myself do not require an advisory council to tell us how we should address ourselves to the problems of small business. I am sure the hon. member will appreciate that we are in constant consultation and so are our departments.


Gilbert F. Rondeau: I would like to ask a supplementary question, Mr. Speaker.
Could the hon. Minister of Industry, Trade and Commerce tell the House whether the activities of his department are in agreement with those of the Department of Regional Economic Expansion as regards assistance to small business and especially employment in the poorer areas?


Alastair William Gillespie: Mr. Speaker, we have a basic responsibility for trying to develop the health, viability and competitiveness of manufacturing industry throughout the country and, as well, the health, viability and service of the tourism industry of Canada. I think that our responsibilities and the special but distinct responsibilities of my colleagues are complementary.


COMPOSITION OF CONSULTATIVE COUNCIL-DISCUSSION WITH MINISTER OF REGIONAL ECONOMIC EXPANSION
Mr. Andre Fortin (Lotbiniere):: I wish to ask a supplementary question, Mr. Speaker.
In view of the statement made by the hon. minister as to existing common interests between both departments, could he tell the House whether there has been consultation with his colleague, the Minister of Regional Economic Expansion, as to the selection of the 37 members of the advisory council who represent large enterprise only?


Mr. Speaker:: The hon. member for Burnaby-Richmond-Delta.


John Douglas Reynolds: Mr. Speaker, my question is for the right hon. Prime Minister.


André-Gilles Fortin: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: Order. The hon. member for Lotbiniere on a point of order.


André-Gilles Fortin: Mr. Speaker, I believe the minister was about to answer but the interpretation did not reach him on time. I would like to ask him again if there was consultation between the two departments.


Mr. Speaker:: Order. The hon. member has already asked this question. I guess that during the last 30 seconds the question must have reached the minister; maybe he can answer right away. I was not under the impression that he intended to answer, but if he wants to, I will recognize him.


Alastair William Gillespie: Mr. Speaker, as I have indicated, there is a very high degree of consultation among ministers on this side of the House. The point that I should also like to make clear to the hon. member is that my advisory council is not just composed of big businessmen; it is also composed of businessmen representing smaller businesses situated in all corners of the country.


CONSUMER AFFAIRS
John Douglas Reynolds: Mr. Speaker, my question is for the right hon. Prime Minister. In view of the petition presented today from British Columbia residents, and in view of the many other similar requests from both consumer and producer groups, is the Prime Minister now prepared to acknowledge officially that there is a growing demand for direct controls, as has been recommended by the Leader of the Opposition and others?


Right Hon. P. E. Trudeau (Prime Minister):: Equally, Mr. Speaker, I met a group yesterday that was against controls as suggested by the Leader of the Opposition.


An hon. Member:: That was the cabinet.


Pierre Elliott Trudeau: I suppose there is a growing demand for all kinds of things in this country.


John Douglas Reynolds: Is the government going to set out the powers and directions for the prices review board and, if so, when will these guidelines be brought before the
House?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member might want to direct his question to the minister who spoke on this subject in the House a couple of days ago.

April 12, 1973


John Douglas Reynolds: Mr. Speaker, I have another question for the right hon. Prime Minister. Will the Special Committee on Trends in Food Prices be discontinued after the prices review board is set up?


FOOD PRICES-GOVERNMENT ACTION ON REPORT OF SPECIAL COMMITTEE
Mr. lames A. McGrath (St. lohn's East):: Mr. Speaker, 1 have a supplementary question for the Minister of Consumer and Corporate Affairs. What action does the government propose to take since receiving the report of the Special Committee on Trends in Food Prices to aid and assist the hardpressed consumers of this country, other than setting up a new and equally ineffective prices and incomes commission under the guise of a prices review board?


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I would refer my hon. friend to my statement in the House on Tuesday.


Mr. Ron Atkey (St. Paul's):: Mr. Speaker, I have a supplementary question for the Minister of Consumer and Corporate Affairs. Would he indicate clearly his position on recommendations 2, 4 and 6 of the report of the Special Committee on Trends in Food Prices, which deal with consumer protection, consumer education and consumer representation, and which clearly apply to all consumer items and not just food which is the only focus of the toothless and misguided recommendation-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I suggest that the minister would have to do that on motions rather than by way of a reply to a question.


VETERANS AFFAIRS
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is directed to the Minister of Veterans Affairs and is a follow-up to a question I asked yesterday. In view of the fact that the joint study report on the basic rate of pension recommended a new formula basing annual increases on the increase in the average wage of the five lowest categories in the Public Service rather than on the cost of living index, would he advise the House whether the government is accepting this formula in considering amending legislation on disability pensions?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, this recommendation is now before the government.


An hon. Member:: Where it was yesterday.


Daniel Joseph MacDonald: I hope to have a report for the House on this subject before very long.
Oral Questions


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, will the minister be able to make a statement on this matter to the House before we rise for the Easter
recess?


Daniel Joseph MacDonald: Mr. Speaker, if a statement is available to me I will make it available to the House.


Some hon. Members:: Oh, oh!


An hon. Member:: Who is running this department?


Jack Marshall: Mr. Speaker, after three months the Minister of Veterans Affairs is learning very quickly from his colleagues how to be evasive. Since this is very important so far as the veterans are concerned, and in view of the fact he accepts the recommendation of the joint study, will he make a statement on motions before we recess for Easter?


Daniel Joseph MacDonald: I would give the same answer that I gave to the other hon. member. If I have a statement to make I will sure make it.


Some hon. Members:: Oh, oh!


An hon. Member:: Stay in there, Jack.


NATIONAL SECURITY
John Edward Broadbent: Mr. Speaker, my question is directed to the Solicitor General. Will he inform the House as to his reasons for deciding not to make available to members of this House the address delivered by a senior official of the RCMP to hundreds of businessmen at a private meeting in Ottawa a few days ago?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, I have already made available to the hon. member one of the papers presented at the meeting which did not deal with matters that were considered to be security.


John Edward Broadbent: That is not the one.


William Warren Allmand: A second paper did deal with matters that were of a security nature. I must say that this paper was not given to a group of businessmen; it was given to a group of industrial security officers-


Some hon. Members:: Oh, oh!


William Warren Allmand: -who work in close conjunction with the government on defence contracts and similar matters. I looked into the matter to see if it could be given to the hon. member, but it would be against the public interest to make this information available.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Mr. Speaker, would the Solicitor General inform the House whether it is government policy to

April 12, 1973
Oral Questions
permit senior RCMP officials to collaborate, and I use that word with care, with private interest groups by divulging to them confidential information about other Canadians?


William Warren Allmand: Mr. Speaker, when it is in the interest of the government and Canadian security we do so.


John Edward Broadbent: Given the profound importance of this question to the existence of civil liberties in Canada, would the minister agree to appear, along with Assistant Commissioner Draper before an early session of the Standing Committee on Justice and Legal Affairs to explain the nature and purpose of the investigation supervised by Assistant Commissioner Draper?


William Warren Allmand: Mr. Speaker, I have been ready to go before the Standing Committee on Justice and Legal Affairs with my estimates for several weeks. I am prepared to go as soon as possible. Whether we can discuss matters of a security nature at the meeting is another question, but I am willing to give the committee as much as possible. In this regard I am taking the same position on this matter as former conservative and other governments.


CANADA DEVELOPMENT CORPORATION
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the announcement earlier this week in Vancouver of the purchase of shares in Ventures West Capital Limited by the Canadian branches of the Mitsubishi and Mitsui companies, which are two of Japan's largest trading companies, could the minister inform the House if the stated policy of the Canada Development Corporation has been changed in respect of foreign ownership of Canadian companies, particularly those in the natural resource field?


Alastair William Gillespie: Mr. Speaker, in listening to the question it seemed to me to be a highly technical one. It is not one I am prepared to answer now, but I would be very happy to seek the information the hon. member desires.


Mr. Speaker:: Order, please. The hon. member may ask a supplementary and I believe the hon. member for Winnipeg North has a supplementary to the previous question. He will be recognized next.


William Hillary (Bill) Clarke: Mr. Speaker, perhaps I could simplify the question for the minister. Is it the policy of the Canada Development Corporation to encourage the retention of Canadian ownership of Canadian businesses?.


Alastair William Gillespie: Mr. Speaker, I do not think that particular question should be directed to me. I am not the minis-
(Mr. Broadbent.1
ter who reports to parliament for the Canada Development Corporation.


NATIONAL SECURITY
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a supplementary question to the Solicitor General. Can he tell the House whether every one of the industrial security officers who listened to the speech by the Assistant Commissioner of the RCMP was cleared by the RCMP or any other agency of government for security so that they were permitted to listen to the speech about security, the details of which cannot be given to Members of Parliament?


William Warren Allmand: Mr. Speaker, I would have to check into that. I do know that a good number of these industrial security officers were former members of the RCMP.


David Orlikow: Mr. Speaker, I wonder if the minister really intended to tell Members of Parliament that there are private citizens who are entitled to get details about security problems in this country that Members of Parliament are not entitled to get?


William Warren Allmand: Mr. Speaker, I have taken the position that I will give as much information as possible to Members of Parliament. It is for that reason I have invited the Justice and Legal Affairs Committee to visit the premises of the Police and Security Planning and Analysis Group for briefing. I am also attempting to make as many other reports as possible available, but where the security of the country is involved I do not think we are able to give reports on security matters to all Members of Parliament or to make them public generally.


Mr. Speaker:: Order, please. There are many supplemen-taries on this subject. Is the hon. member for Edmonton Centre rising on a supplementary?


Mr. Paproski:: No, Mr. Speaker. This is a new question.


Mr. Speaker:: The hon. member for Edmonton Centre.


THE SENATE
Steve Eugene Paproski: Mr. Speaker, my question is directed to the Prime Minister. In light of the nature of the present parliament, would he tell the House whether he is soon going to fill all the vacancies in the other place and, in light of the balance in the House, is he going to consult with the opposition on those appointments?
April 12, 1973


Pierre Elliott Trudeau: Mr. Speaker, on the first part of the question the answer is, not immediately. On the second part of the question the answer is that such consultations have taken place at times.


MANPOWER
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Minister of Manpower and Immigration. A survey of 20,000 students conducted by the minister's own department at 64 universities and colleges revealed that women post-secondary school students seeking summer work not only had a tougher time getting jobs but were paid substantially less. Will the minister undertake to make a special effort to see that this inequity does not continue this summer?


Robert Knight Andras: Mr. Speaker, to the degree it is within my power I certainly would join the hon. member in endorsing equal treatment for women as for men. I know my colleague, the Minister of Labour, who reports to parliament on the government's actions with regard to the status of women, feels exactly the same way. I think we are doing everything in the federal domain that we can to that end.


FINANCE
Mr. Henry Latulippe (Compton):: Mr. Speaker, I have a question for the hon. Minister of Finance.
In view of the increase in interest rates of the Bank of Canada and two chartered banks, could the minister state whether the government intends to take other action to curb the inflation due to the causes we are aware of, and what action will it take to completely do away with inflation?


John Napier Turner: Mr. Speaker, I have already^ revealed some of the means the government is considering in the budget speech of February 19.


SUGGESTED STUDY OF MODIFICATION OF BRANCH BANKING SYSTEM TO EASE BURDEN OF HIGH INTEREST RATES ON SLOW GROWTH AREAS
[Stage Direction]
Mr. ]. Robert Howie (York-Sunbury): Mr. Speaker, my question is for the Minister of Finance. Will the minister consider instituting a study of modifications of the branch banking system designed to ease the burden of universal high interest rates on areas of slow economic growth.
Oral Questions
John Napier Turner: Mr. Speaker, the governor of the bank and I when we were in communication with the banks as a result of the rise in the bank rate made it clear to them that we expected that in their loan policy they would give special attention to small Canadian-owned businesses and to businesses in slower growth areas of the country. I noticed with a good deal of satisfaction that the banks in announcing the increase in the prime rate made those observations and will accord those priorities.


Robert Lorne Stanfield: Mr. Speaker, in view of the minister's request that the banks give special consideration to small businesses and slow growth areas, am I correct in inferring that there is in fact a restrictive policy in effect generally, that bank credit will have to be rationed, and that it is for this reason the Minister of Finance has asked that special consideration be given to small business?


John Napier Turner: No, Sir. The expansion in loans has never been greater. The banks will be able to respond to any legitimate search for credit, but in allocating this they have deemed it advisable in the interests of the country to give special priority to small businesses and particularly in slower growth areas.


Robert Lorne Stanfield: Mr. Speaker, if there is ample money to meet proper loans, why has the minister found it necessary to ask the banks to give special consideration and priority to small business? He cannot have it both ways.



MANPOWER


Mr. Gilles Marceau (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I should like to put a question to the Minister of Manpower and Immigration.
Since the employment of students during the summer is a major problem, I would like the minister to state whether it is true, as reported in the newspaper Le Soleil of April 4, 1973, that the Department of Manpower and Immigration pays all expenses for 250 students from France who wish to work in Ontario for the tobacco crop?


Mr. Speaker:: I will allow the minister to answer this question since it has been put directly. The hon. member knows that he may not ask a minister to either deny or confirm an item published in a newspaper. Be that as it may, we may agree that the question has been put directly and the minister may answer it briefly.


Robert Knight Andras: Mr. Speaker, no such payment of transportation or other costs is being made by the government. Last year there were negotiations to bring in some foreign students which were entered into before the employment visa program was introduced, and it was deemed neces-

April 12, 1973
Oral Questions
sary to honour that contract. But no such expenses are being paid.


Mr. Speaker:: The hon. member for Wellington.


Mr. Hales:: I should like to address a question-


Mr. Speaker:: I apologize to the hon. member. [Translation]
Is the hon. member for Lapointe rising on a supplementary.


Gilles Marceau: Yes, Mr. Speaker.
Can the hon. minister assure the House that his department has taken the steps required to prevent this project from causing prejudice to Canadian student labour available for the same kind of work?


Robert Knight Andras: Mr. Speaker, we did introduce employment visas the other day, and I made a statement before the standing committee indicating that, although foreign students in Canada as of January 1, 1973, would be able to seek jobs without employment visas other than under the existing law, future foreign students coming to the country would be subject to the regulation about Canadian preference for jobs where Canadians are available.


Mr. Speaker:: The Chair will recognize the hon. member for Wellington. I believe the hon. member for Gander-Twillingate has a supplementary question and I will come to him in a moment.



INCOME TAX


Alfred Dryden Hales: Mr. Speaker, my question is directed to the Minister of National Revenue. In view of the fact that there are only 18 days left for filing 1972 income tax returns, and in view of the fact that thousands of Canadians have found it necessary to hire experts and other consultants to fill out these forms and these sources of assistance are taxed to capacity and will not be able to complete the forms in time, would he consider extending the filing date?


Hon. Robert Stanbury (Minister of National Revenue):: Mr. Speaker, the returns are coming in at the usual rate this year, with an unusually low rate of errors in them. I must say that the indication so far is that a much lower percentage of Canadians are using any kind of tax consulting services-


Some hon. Members:: Oh, oh!


Robert Douglas George Stanbury: -than are the Americans.


Mr. Bell:: How about Fred Davis?


An hon. Member:: How about Indonesians and Italians?


An hon. Member:: How about Eskimos?
[Mr. Andras.1


An hon. Member:: How about the weather?


Mr. Speaker:: Order, please. I hope the minister will reply to the question as briefly as possible, and then we will try to proceed.


Robert Douglas George Stanbury: The question of the extension of time has been carefully considered, and after considering all the elements of it-


Robert Lorne Stanfield: And the weather.


Robert Douglas George Stanbury: -it has not so far been shown that there would be any advantage to the public in any extension.


Mr. Fairweather:: Paul Martin is in the other place. You don't have to copy him.


Alfred Dryden Hales: Would the minister not agree that the reason that more forms are coming in correctly filled is the fact that people have hired experts to fill their forms for them?


Mr. Speaker:: Order, please. This is obviously an argument between the minister and the hon. member. The hon. member for Gander-Twillingate has a supplementary question.



FINANCE


Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, my question is for the Minister of Finance. Can he say, in respect of the increase in the interest rate by the Bank of Canada, if there were any formal communications between him and the governor of the Bank of Canada regarding the over-all rate, not specifically regarding the regional development program, any letters, documentation, memoranda or briefs of any sort, and would he be prepared to table such documentation?


John Napier Turner: No, Mr. Speaker; advance consultation was verbal.


John Howard Lundrigan: As this is obviously a major shift in government policy, whether it is done by the back door through the Bank of Canada or with courage if the government had the courage to do it, is the minister saying that this major change in policy, which will have such a restrictive effect as a result of the concomitant interest rate raises, was adopted without any formal communications between him and the governor of the Bank of Canada and that we are going to have this restrictive policy now in regional development without any consultation of a formal nature?


John Napier Turner: I do not accept either the preamble or the substance of the hon. member's statement, so the rest is superfluous.


Mr. Speaker:: Order, please. I suggest to hon. members that we are getting involved in so many supplementary
April 12, 1973

questions that we are not making much progress. Some hon. members in the fourth and fifth rows have questions. I will recognize the hon. member for Qu'Appelle-Moose Mountain on a supplementary question and then the hon. member for Fraser Valley West.



INQUIRY AS TO REQUEST BY WESTERN CANADA GROUP TO ESTABLISH BANK

Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is for the Minister of Finance. Has the minister received any preliminary contact from a group of people in western Canada about the setting up of a western Canadian bank?


John Napier Turner: No, Sir, but the hon. gentleman's question is rather vague. The answer is no, so far as I know, in response to the words of his question.



SHIPPING


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, my question is directed to the Minister of Transport and it recognizes the grave public concern about possible future oil spills on both our coastlines. In view of the fact that up to 500 medium-size oil tankers, most of them of foreign registry, and hundreds of towed barges are using the inside passage between Vancouver Island and the mainland of British Columbia each year, when is the minister going to establish a shore-based traffic direction system in that heavily congested region?


Hon. lean Marchand (Minister of Transport):: Mr. Speaker, I think the west coast communication system is sophisticated enough and I do not believe that it has caused any serious accident or incident. I wish the hon. member would elaborate on his question.


Mark Willson Rose: According to some people who use these passages in this congested area, the bridge to bridge system is definitely not working. I should like to ask the minister if he has instructed or intends to instruct his technical staff to investigate direction systems such as the Decca system used in Europe for adaptability on Canada's west coast?


Jean Marchand: Mr. Speaker, I am ready to look at it and will have the department make a report. We may be able to give a more precise answer some other day.
Oral Questions



NATIONAL CAPITAL


Mr. Rene Matte (Champlain):: Mr. Speaker, I wish to put a question to the Minister of State for Urban Affairs.
On March 9 last, the minister made a statement concerning an exchange of land between the federal government and Quebec.
As it was said in the Quebec National Assembly that this statement was premature, could the minister give us more details about this agreement?


Hon. Ron Basford (Minister of State for Urban Affairs):: Mr. Speaker, a long statement was made at the time as to an exchange, not of ownership of property but an agreement between the province of Quebec and the National Capital Commission for the exchange of administration of land. The province of Quebec and the city of Hull, if one wants to evaluate it, got the administration of about $3 million worth of property, and the NCC got the administration of about $1 million worth of property.



GOVERNMENT ADMINISTRATION


Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, I have a question for the Minister of Public Works. In view of the minister's recent statement that the government is planning a $250 million building program in six cities, and in view of the fact that this appears to be mainly a consolidation of existing services there, will the minister state what new departments or services will be developed in or transferred to western Canada?


Hon. lean-Eudes Dube (Minister of Public Works):: Mr. Speaker, it is not up to the Minister of Public Works to direct the inflow or outflow of public servants. We only provide buildings to receive them.


Douglas Roche: My question is directed to the right hon. Prime Minister. In view of the unsatisfactory answers we have been receiving to questions concerning development in western Canada, will the Prime Minister allow Members of Parliament from western Canada to attend and somehow take part in the western economic conference to be held in Calgary this summer?


Pierre Elliott Trudeau: Mr. Speaker, I am prepared to examine various ways in which we can get more satisfactory questions from western members.

April 12, 1973
Oral Questions



DATE OF ANNOUNCEMENT OF GRANTS UNDER STUDENT ATHLETES PROGRAM

Mr. John Wise (Elgin):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Can the minister inform the House-


Mr. Speaker:: Order, please. The hon. member for Elgin is trying to ask a question.


John Wise: Thank you, Mr. Speaker. Can the minister inform the House when the final selections will be made for the grants in aid under the student athletes program?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I am unable to give a definite date to the hon. member but I would hope that in the first part of May these grants would be announced. I will investigate and give the hon. member a specific date.
We reached certain conclusions and we are supposed to get together and try to finalize some kind of understanding.


Henry Perrin Beatty: May I
ask the minister when he expects to be able to report to the House what steps that will be taken for southwestern Ontario?


Jean Marchand: Mr. Speaker, it is very difficult for me to say to the hon. member at what time we will be ready because we have to have further negotiations with the government of Ontario, and Canadian National will have to appear before the CTC because before installing a new line or abandoning one we have to have the agreement of the CTC. I do not know how many weeks all this will take.



UNEMPLOYMENT INSURANCE


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Has the Manpower consultative service of his department been informed by International Nickel Company of the possibility of 3,000 lay-offs by INCO later this year?


Hon. Robert K. Andros@Minister of Manpower and Immigration: Mr. Speaker, I shall have to take this question as notice and advise the hon. member.


John R. Rodriguez: Will the minister inquire whether this agency has been contacted by INCO with respect to this situation and would he inform the House of the results?



STUDY OF DECENTRALIZATION OF OFFICES-REQUEST FOR REPORT

André-Gilles Fortin: Mr. Speaker, I would like to ask a question of the hon. Minister of Manpower and Immigration.
He said previously in the House that the department officials were considering the possibility of decentralizing the administrative services of the Unemployment Insurance Commission. Would the hon. minister inform the House now or in the near future as to the decision reached on this subject?
[Eng lish]
Hon. Robert K. Andras (Minister of Manpower and
Immigration): Mr. Speaker, the decision is very close and I think I will be making an announcement in the not too distant future.



TRANSPORT


Henry Perrin Beatty: Mr. Speaker, my question is directed to the Minister of Transport and arises from the statement made by the Chairman of the Canadian Transport Commission that it had been asked to prepare a study on the totality of passenger needs in Southwestern Ontario. Can the minister tell the House whether the reinstatement of rail passenger service in southwestern Ontario is contingent upon receiving a report in six months time first?


Jean Marchand: Mr. Speaker, I met last week with the hon. Mr. Carton of the government of Ontario and we discussed this problem of commuter services and trains in southwestern Ontario.
(Mr. Trudeau.]



POLLUTION


Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, may I direct a question to the genial Minister of Transport. In light of the recent statement by the Premier of Prince Edward Island to the effect that he is satisfied with the steps not being taken to raise the Irving Whale or its cargo, can the minister advise if he has now abandoned his laudable search for a method to raise this ship or its cargo from the St. Lawrence?


Jean Marchand: No, Mr. Speaker.
April 12, 1973



CONSUMER AFFAIRS


Mr. Albert Bechard (Bonaventure-fles de la Madeleine):: Mr. Speaker, I have a question for the hon. Minister of Consumer and Corporate Affairs.
In the interests of consumers living within the boundaries of the province of Quebec, does the minister intend to urge the Quebec government to reconsider its decision on the 11 per cent rate increase that Hydro-Quebec has just been granted, or to ask it to postpone putting the new increase into effect until an unspecified later date?


Herbert Eser (Herb) Gray: Mr. Speaker, it seems to me that this is a provincial question, but I shall be glad to discuss it with my Quebec counterpart.



POSSIBLE INCLUSION OF OPTOMETRICAL SERVICES UNDER NATIONAL HEALTH PLAN

Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Has any final decision been reached with regard to the discussions that have gone on for over a period of years with the provinces concerning the inclusion of optometrical services in the national health plan?


Marc Lalonde: Mr. Speaker, we have scheduled a meeting with the health minister for the beginning of May, to talk about the financing of health services. We will certainly have occasion to discuss a number of other health problems. I am sure that this question will come up too, but there is at present no solution to the problem.


Robert Muir: May I ask the hon. gentleman if he is in agreement with the terms in which his predecessor always replied to me, that whenever a conclusion was reached, a consensus was reached, etc. etc., with the provinces, he would be prepared to go ahead with it?


Marc Lalonde: Mr. Speaker, I shall answer in a general way, and say that the government is always very happy to work closely with the provinces, and that we are never happier than when there is agreement between the two levels of government.


Mr. Speaker:: The hon. member for Provencher.


Mr. Epp:: Mr. Speaker, I was going to ask a question of the Postmaster General. He just slipped in for the first time and went out again after half a minute so I will have to wait until he is back in the House.
Oral Questions LEGAL AFFAIRS	,



SUGGESTED TRAINING OF PARA-LEGAL PERSONNEL

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Justice. In view of the statement by the Premier of Saskatchewan several weeks ago that para-legal personnel should be trained in order to bring down legal costs for the average citizen, can the minister tell the House whether his department is giving any thought, in consultation with the provinces, to training para-legal personnel?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, it occurred to me when I saw that statement to ask whether the Premier of Saskatchewan had read my speech to the Canadian Bar Association in Montreal last September. The matter of para-legal service is rather within provincial jurisdiction and, indeed, within the specific jurisdiction of law societies which can, by changing their rules or adapting their rules, make it possible for the development of such services.



POST OFFICE


Arthur Jacob (Jake) Epp: Mr. Speaker, my question is for the Postmaster General. In view of continuing population decreases in western Canada, a trend which has been accentuated by the difficulty of providing government services in remote areas, are the minister or his officials giving any consideration to re-examining the requirements that must now be met in order for rural routes to be established in those areas where small postal stations have been closed?


Hon. Andre Ouellel (Postmaster General):: Yes, Mr. Speaker.


Mr. Speaker:: Order, please. The hon. member for Provencher may ask a supplementary and then the Chair will recognize the hon. member for Scarborough East.

I believe the hon. member for Lotbiniere wishes to ask a supplementary. I will recognize him for that purpose, after which we will have to call orders of the day.


Arthur Jacob (Jake) Epp: Mr. Speaker, in view of the answer given by the Postmaster General, would he undertake to look at specific rural routes, because we have often been asked on this side of the House to be more specific in our questions?
Oral Questions AIR TRANSPORT

April 12, 1973



SUGGESTED PROVISION OF SHUTTLE SERVICE BETWEEN TORONTO-MONTREAL AND TORONTO-OTTAWA

Mr. Reg Stackhouse (Scarborough East):: Mr. Speaker, a few weeks ago I asked the Minister of Transport a question concerning the possibility of shuttle services being provided by Air Canada between Toronto and Montreal and between Toronto and Ottawa. The minister indicated that he would hold consultations with Air Canada. Has this been done and what is the result?


Jean Marchand: Yes, Mr. Speaker, I got in touch with Air Canada. As you know, we have a rapid air service between Montreal and Toronto. It has been improved since last summer. However, it has not reached a point where it is done on a non-reservation basis. They are improving their system and looking to its expansion to other cities in Canada, but they are not to the point of establishing such a service for the cities mentioned by the hon. member.



CONSUMER AFFAIRS


André-Gilles Fortin: Mr. Speaker, I wish to ask the hon. Minister of National Revenue whether the government is intending to send an official protest note to the Quebec government, as it has received one from the latter, in connection with the increase in the cost of living and the fight against inflation and more precisely about the increase of Hydro-Quebec rates.


Robert Douglas George Stanbury: think this question should rather be directed to my colleague the Minister of Consumer and Corporate Affairs.


Mr. Speaker:: I believe the hon. member for Edmonton-Strathcona wishes to rise on a point of order as I call orders of the day.


Douglas Roche: Mr. Speaker, since this parliament began I and other Members of Parliament from western Canada have been asking intelligent questions about the development of western Canada. A few moments ago the Prime Minister put me down by saying I was not asking intelligent questions. I just want to tell you, Mr. Speaker, that that kind of put-down attitude is what cost the Prime Minister dearly in the last election and will cost him just as much in the coming election.


Arthur Jacob (Jake) Epp: Mr. Speaker, I rise on a question of privilege on the very same matter raised by my colleague. It has to do with the answer to the question I asked the Postmaster General. We are trying to get better services in western Canada. The type of answer we are getting from the Prime Minister simply indicates arrogance and the fact that he is not willing to accept his responsibilities.


Mr. Speaker:: Perhaps hon. member will allow the Chair to call orders of the day.



BUSINESS OF THE HOUSE


Mr. MacLean:: Mr. Speaker, before the first order of business is called, may I ask the government House leader if he will indicate the sequence in which he expects to place government business before the House in the period between now and when the House rises for Easter?


Mr. MacEachen:: Yes, Mr. Speaker. I should like to advise my hon. friend that today we will continue with the committee stage of the income tax bill and, hopefully, when we complete that bill we will turn to the Excise Tax bill and the Customs Tariff bill, to be followed by the CNR financing bill and possibly the crop insurance bill. My hope is that I will be able to call for a short time the debate on the food prices committee report, which was dealt with for one day earlier this week.


John Howard Lundrigan: Mr. Speaker, I wonder if the House leader can indicate whether we can expect the new, modified FISP bill to be presented to the House before we rise for Christmas-for Easter, rather.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: Mr. Speaker, the family allowances bill will not be dealt with or brought forward before the Easter recess.


John Howard Lundrigan: What about Christmas?


Allan Joseph MacEachen: I hope it will be brought forward soon after our return from the Easter recess.


Mr. Guay (St. Boniface):: On a question of privilege, Mr. Speaker, I notice that today the hon. member for Crowfoot is wearing something over his right eye. As you are aware, Mr. Speaker, the hon. member is also chairman of the transport committee. I want to assure you and members of this House that I had nothing to do with it.


Mr. Horner (Crowfoot):: Mr. Speaker, I rise on a question of privilege. To my friends, colleagues in the House and political enemies may I say I should like to take credit for the handicap from which I am now suffering, which was caused by a piece of metal. It got in my eye when I was putting on my new Alberta license plates. The wild rose, as you know, is our flower and our license plates are very good, but I was handicapped somewhat by a bolt-


An hon. Member:: You were hit in the eye.


John (Jack) Henry Horner: -which I had difficulty in removing. However, the eye is in perfect condition. The light bothers it somewhat, but not any light shed by the government.


Mr. Speaker:: Orders of the day.
Aaril 12, 1973



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, April 9, consideration in committee of Bill C-170, to amend the statute law relating to income tax-Mr. Turner (Ottawa-Carleton)- Mr. McCleave in the chair.
The Chairman:: Order, please. The House again in committee of the whole on Bill C-170, to amend the statute law relating to income tax. When the committee rose on Monday, April 9, clause 19 of the bill was under discussion. The hon. member for Bellechasse was seeking to be recognized. He is now recognized if he wishes to be.
On Clause 19-Depreciable and other Capital Property of Deceased Taxpayer.


Joseph Adrien Henri Lambert: Mr. Chairman, when we adjourned I was making a few remarks on Bill C-170 and since then, the Minister of Finance (Mr. Turner) tabled an announcement that he will amend certain clauses. Since these amendments generally seem to satisfy the requests which have been made, I will wait until we are studying certain clauses of the bill to make representations.
As for clause 1, I would have preferred more significant advantages to be granted to the individual as regards basic exemptions. I admit that some improvements have been made to the bill but, in my opinion, they are not sufficient and do not match those requested.
Those were the few remarks I wanted to make at this stage; I will again raise certain subjects when the bill is studied clause by clause.


Robert Jardine McCleave: Shall clause 19 carry?


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
On clause 20-Election by Legal Representation and Transferee Re Reserves.
Mr. Lambert (Edmonton West):: Mr. Chairman, there is no difficulty with this clause, although I am wondering about the intrusion of a different principle by this clause. Frankly, I think it should have been included in clause 19. We are considering clause 20, subclause (1), and this ought to have been included as clause 19, subclause whatever. This matter does not affect the Income Tax Act although, so far as clause 20 is concerned, there is no difficulty with it whatsoever.
I should like to ask the minister, when he answers in speaking on clause 20, subclause (1), to deal with something that should have been clarified in clause 19. When we are considering depreciable property and there is the transfer by devolution to the child from the deceased taxpayer, I take it this provision covers all the buildings and improvements to the property of a depreciable nature, save and except the principal residence which is covered by Section 40 of the act. There has been some uncertainty about this. Perhaps the minister could clarify precisely what is going to be covered in this exemption
Income Tax Act
from capital gains, first at the time of death and, second, the inter vivos transfer under the amendments that the minister has introduced. Presumably the same assets are going to be covered.
I will also want a full explanation as to the value of the capital asset which shows up in section 73(3), paragraphs
(e), (i) and (ii). This appears in the left hand column of page 3 in Votes and Proceedings under the notice given by the minister where the valuation is deemed to be the capital cost of the transferor, not that of the transferee. I think we will get into a little bit of difficulty there.


John Napier Turner: Mr. Chairman, I can give the undertaking to the hon. member and the committee that both on the transfer by death and the transfer inter vivos, during the lifetime, pursuant to the amendment I tabled, the free transmission involves all depreciable property, including buildings and equipment, original or improved. As the hon. member has suggested, the principal residence is already taken care of under another provision.
The hon. member's reference to paragraph (e) of section 73(3) is a relieving provision. This simply provides for the continuity of the cost provisions in respect of the depreciable property. I think that I can assure the hon. member that this again is a relieving provision.


Mr. Ritchie:: Mr. Chairman, I wish to ask the minister a question. It involves the transfer of the property of a farm family at death under the projected amendment. Is depreciable farm machinery included in this provision? In what manner will it be replaced or how will this be done? I think this is a very important area because of the high capital cost of farm machinery. I am particularly aware of the high capital cost of farm machinery for western grain growers. I would also like to ask the minister to clarify the distinction between the straight-line depreciation turnover and what I think is called the depreciated balance.


John Napier Turner: Diminishing balance.


William Gordon Ritchie: Diminishing balance. The loss of this straight-line depreciation has been very keenly felt. I have received many more representations on this than on the capital gains tax on the family farm. I would like to see the straight-line depreciation carried on when the asset is passed from the parent to the son or daughter. I urge the minister to reinstate this straight-line depreciation. I believe that more than anything else, it has provided for a very strong economic base in agriculture. I think it is very important that this straight-line depreciation be carried on and expanded at the earliest opportunity.


John Napier Turner: Mr. Chairman, these provisions, of course, apply primarily to the diminishing balance standard of depreciation and include that balance as applied to a depreciable property, as I defined earlier for the hon. member for Edmonton West. With regard to the straight-line depreciation, this is covered in Section 13 of the act. It is unaffected by these provisions; not narrowed, not widened.

April 12, 1873
Income Tax Act


William Gordon Ritchie: Whatever is left can be carried forward by the new owner.


John Napier Turner: I believe that is the case, Mr. Chairman. We will give the hon. member further confirmation of that. If there is anything different to report, I will let the hon. member know.


Marcel Joseph Aimé Lambert: Mr. Chairman, we have covered two cases. There is one point. It was my understanding the minister was also providing for the rollover. However, I now take it that would not now be included. I am referring to the rollover where the farmer, inter vivos, sells farm A in order to acquire farm B. There is no provision for that.


John Napier Turner: Mr. Chairman, there is no provision for that. The rollover provisions only apply to depreciables of a prescribed class under the capital cost allowance system, since the farmer can already sell straight-line depreciables with a straight-line capital gain. We do not see a problem there.


Marcel Joseph Aimé Lambert: Although I know the minister does not want to deal with incorporated family farms, under this legislation he is not providing for the situation where a farmer is going to sell his present farm, which may be too small, or for some other reason, and will immediately acquire a farm down the road. He may be moving from an orchard property to a corn growing property. There would still be the problem of capital gains with respect to this farm land transaction.


John Napier Turner: That is so, Mr. Chairman, because it is not a continuation of the same farm. It is a barter, exchange or sale and purchase of a new farm property.


Mr. Towers:: Mr. Chairman, when we were completing the business the other night, I asked the minister a question. I do not believe he has answered it. I wonder whether he would do so at this time. It was with regard to the evaluation that is being established on farm properties. At the present time, I do not think there is any provision whereby a farmer can confirm with the Department of National Revenue or the taxation department that his property has been evaluated and that the evaluation will be acceptable in future years and to future governments.


John Napier Turner: Mr. Chairman, there is quite a division of responsibilities in the administration and interpretation of the taxation policy. From time to time the Minister of Finance, whoever he or she may be, has the responsibility for tax policy, brings it forward to the House and committee and interprets it in terms of its own intentions. As hon. members know, those words are not binding on a court of law. The court, the Tax Review Board or the Federal Court will look at the statute as they find it. My words today or the words of any minister are not relevant in the interpretation of the statute. The parliamentary intention must be sought by the words of the statute itself, not only with regard to the tax law, but the Criminal Code or any other statute.
There is also a distinction in responsibility between the tax policy, which at the moment is mine, and the adminis-
tration of the act, which is the responsibility of my colleague, the Minister of National Revenue. There is nothing in this bill or the amendment I introduced Thursday evening that bears on the problem raised by the hon. member. There is nothing in this bill, nothing in the amendments I introduced Thursday night, which bears on the question raised by the hon. member. I do not have the authority to respond to his question, except to say once again that I will draw the matter to the attention of my colleague and impress on him the importance the hon. member attaches to it.


Thomas Gordon Towers: Thank you. This is an important question. Valuation has to be established upon some basis, and if it is left in the hands of future generations the government will, no doubt, find itself in a position of unfair advantage. It is an issue which the government will be obliged to clear up, either through the Department of Finance or the taxation branch of the Department of National Revenue.


Lorne Edmund Nystrom: I should like to ask the minister a question in connection with the amendment having to do with capital gains. Will he tell us his definition of a child? Is it the same as the definition here, which reads:
"Child" of a taxpayer includes a child of his child and a child of his child's child.
That is the extended meaning of "child" applicable to this transfer provision. Is the same definition used in the amendment the minister is bringing in? Will it include the grandchild?


John Napier Turner: I do not want to begin discussing the famous law against perpetuities which the hon. member for Edmonton West and I could argue, or the cases in British law involving what we used to call fertile octogenarians. The bill says:
For the purposes of subsection (9), "child" of a taxpayer includes a child of his child and a child of his child's child.
In other words, it includes children or grandchildren.


An hon. Member:: Or great grandchildren.


John Napier Turner: Or great grandchildren. If, by reason of accident or predecease, there was a gap in the generations the benefit could go on to a further generation as long as the farm stayed within the family by direct descent.


Mr. Murta:: Are farm partnerships, at the present time, or under the amendments, treated in the same way as farm corporations? There are a great many farm partnerships in existence throughout Canada, situations in which fathers and sons, or two or three brothers, are operating under partnership agreements. Would the minister clear up this matter?


John Napier Turner: The rules apply only to individually held farms, since it is the family farm we are trying to preserve. They do not apply to partnerships or corporations.


Jack Burnett Murta: That being the case, is the government prepared to consider a further extension of this principle,
April 12, 1973

because there are a great many important implications here for the farming community?


John Napier Turner: We are certainly prepared to look very sympathetically at the partnership question. The farm corporations pose far greater difficulty for us because they also involve non-farming small business as well. But I can go further into that, if the hon. member wishes.


Robert Jardine McCleave: We have before us Bill C-170, clause 20 which is found at the bottom of page 25 and the top of page 26 of the bill. Then, there is additional material which I presume the minister will ask to be formally moved in a few moments. First, I will ask the committee whether clause 20, as found at the bottom of page 25 and the top of page 26, is agreed to.


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
Robert Jardine McCleave: Now, I will ask the minister whether the material in respect of which the marginal notes are as follows-inter vivos transfer of farm property by farmer to his child; extended meaning of "child"; gain or loss deemed that of transferor; extended meaning of "child"- is to be moved by way of amendment by the minister or one of his colleagues.


John Napier Turner: My colleague, the Secretary of State for External Affairs will be glad to do that, Mr. Chairman.


Mr. Sharp:: April 12, 1973
Income Tax Act
20.2 (1) The said Act is further amended by adding thereto, immediately after section 75 thereof, the following section:
"Gain or	75,1 (1) Where
loss	(a) a taxpayer has, after 1971, transferred propdeemed	erty (which property is referred to in this subthatof	section as "transferred property" to a child of
transferor his in circumstances such that subsection 73(3) applied in respect of the transfer,
(b)	the transfer was made at less than the fair market value of the transferred property immediately before the time of the transfer, and
(c)	in a taxation year, the transferee disposed of the transferred property and did not, before the end of that year, attain the age of 18 years,
in computing the transferor's income for any taxation year the amount, if any, by which
(d)	the aggregate of the transferee's taxable capital gains for the year from the disposition of the transferred property,
exceeds
(e)	the aggregate of the transferee's allowable capital losses for the year from the disposition of the transferred property,
shall, during the lifetime of the transferor while the transferor is resident in Canada, be deemed to be a taxable capital gain of the transferor for the year from the disposition of property, and any gain or loss taken into account in computing the aggregate described in paragraph (d) or the aggregate described in paragraph (e) shall, for the purposes of computing the income of the transferee for a taxation year, be deemed not to have been a gain or loss of the transferee.
Extended	(2) For the purposes of this section, "child" of
meaning of a taxpayer includes a child of his child and a child "child"	of his child's child."
(2) This section is applicable to the 1972 and subsequent taxation years.' (English and French).-Sessional Paper No. 291-1/308B.
There are a fair number of amendments, and I thank the committee for permitting me to dispense with reading them all. I have, of course, read the marginal notes applicable to them. They are to be found in the added pages of last night's Votes and Proceedings. This is the material moved by the hon. Secretary of State for External Affairs and seconded by the President of the Privy Council by way of amendment.
Is it the pleasure of the committee to adopt these amendments?


Marcel Joseph Aimé Lambert: The only comment I wish to make is this. I am very sorry the government failed to look into the question of the incorporation of the family farm. It is my information, and I take it as being reliable, that as of today there are about 8,000 family farm corporations in the country. Relative to the number of farmers in Canada the figure may seem small, but I put it to the minister that these 8,000 farms could readily account for between 30 and 40 per cent of agricultural production in this country. They are the heart and core of the bigger producers, particularly in the prairie provinces, though I am sure that if the minister would travel through southwestern Ontario he would find that the tobacco
farmers, the dairy farmers and, certainly, the beef growers, are almost to a man incorporated.
This has been the thin end of the wedge. I am glad to see the principle has been recognized. It vindicates an amendment I put forward at the time the Finance Committee was making its report to the Minister of Finance. The government has at last recognized the principle that the family farm should, at this stage at least, be exempted from capital gains tax. I trust we shall see an extension so that the whole range is dealt with. Certainly, speaking on behalf of my colleagues, I commend this position as being one we would take.


Lorne Edmund Nystrom: A brief comment, Mr. Chairman. We, of course, support the amendment introduced by the minister and congratulate him on introducing it. I should like to say also he was very wise to accept the view of my party in this regard. I believe it was progressive move. We all recall that an amendment to the same effect was moved last year by a former member of this House, Mr. John Burton. It is an important step in keeping alive the family farm not only on the Prairies but throughout the country.


John Napier Turner: I have taken note of the comments made by the two hon. gentlemen who have spoken. I just want to say that the caucus of the party to which I belong was also instrumental in bringing about this decision. I want to give particular credit to the hon. member for Bruce.


Mr. Nowlan:: The minister tells us his caucus was instrumental in getting the government to change its mind. Members of my party and members of the party to my left have tried for more than three years to bring some sanity to this legislation as far as the family farm is concerned. All I can say is that if a new caucus on the government side has been able to help bring about changes in this important field, let us have another election very soon so that we can benefit from either a new government or a new caucus, in order that still further changes may be made. It has been a "tax to form" bill, in view of what the Minister of National Revenue said. If these tax conformities are not clarified so there is a further conversion of Paul on the road to Damascus, as the Minister of Finance mentioned today, then they will be by other governments in the not too distant future, so that the Canadian public has a tax law that is not only equitable but sane and sensible, and can be understood by them.


Robert Jardine McCleave: Shall the amendment proposed by the Secretary of State for External Affairs carry?


Some hon. Members:: Carried.


[Stage Direction]
Amendment agreed to.
Clause 20, as amended, agreed to.
On clause 21.
Marcel Joseph Aimé Lambert: Mr. Chairman, perhaps we should revert to the practice we had the other day where, instead of my rising to ask a question, the minister gives an explanation, though I can say to the minister that I have no comment to make on this clause.

April 12, 1973


John Napier Turner: Mr. Chairman, again this amendment is of a relieving nature and will ensure that the capital cost of depreciable property or the adjusted cost base of other capital property would not be reduced a second time where a debt is extinguished or cancelled.


[Stage Direction]
Clause agreed to.
On clause 22-Expropriation assets acquired as compensation for or as consideration for sale of foreign property taken by or sold to foreign issuer.
John Napier Turner: Mr. Chairman, essentially this section permits a taxpayer to defer the recognition of income for tax purposes until such time as his investment has been recovered. It relates to section 80(1) which is the section providing for rules for determining the income of a taxpayer who has had a business carried on abroad which was expropriated by a foreign government.


Marcel Joseph Aimé Lambert: Mr. Chairman, this, then, in essence, is to prevent from being taken into income at one time, or over two years, the total value of a foreign asset that has been expropriated; the resident Canadian taxpayer is therefore allowed to prorate it. He can also elect to take the income, if there are any securities of the acquiring country or authority, and accumulate that income so it becomes capital to the total value of the capital at the time of the expropriation. Thereafter it is treated as income but subject to income tax; is that so?


John Napier Turner: Basically, that is it.


[Stage Direction]
Clause agreed to.
On clause 23-Navire ou aeronef appartenant a des non-residents.
John Napier Turner: Mr. Chairman, this is an amendment to the French version of paragraph 81(l)(c) and removes the word "ou" from the phrase "d'un navire ou d'un aeronef ou qu'elle exploite dans un trafic international". Clause 23(2) is a relieving amendment which exempts from taxation various forms of income accruing from property awarded to a person under 21 years of age in respect of personal injury. An example of persons who would benefit from this provision are the victims of the drug thalidomide.


Marcel Joseph Aimé Lambert: Mr. Chairman, about 15 months ago we made an amendment reducing legal age to 18 so as to conform with what is now considered to be the age of an adult, and since in most provinces today the legal age of an adult is 18, why are we reverting to the age of 21 rather than going down to the plateau of 18, as I think we should?


John Napier Turner: Mr. Chairman, to look at this from another point of view, we are trying to exempt income building up on a compensation award, leaving it free of tax until the person is 21. So, it is really for the benefit of the child that the income be allowed to accumulate from an award until he is 21, rather than 18. This provision has nothing to do with majority, minority or civil responsibility; it is purely a relieving measure.


Mr. Harney:: Mr. Chairman, last Thursday night I brought some comments to the attention of the Minister of
Income Tax Act
Finance regarding the section of the act that is being amended by this clause of the bill. If I may refresh the memory of the Minister of Finance, it had to do with disability payments paid under supernannuation or retirement plans. Before I go any further, I wonder whether I could ask the Minister of Finance if he remembers the points I made?


John Napier Turner: Mr. Chairman, the hon. gentleman put it in such articulate terms, there is no way I could forget. He raised a question about the taxation of workmen's compensation payments made to injured firemen employed by the borough of Scarborough. I am advised that workmen's compensation payments made to injured firemen employed by the borough are being exempted from tax. Workmen's compensation is a provincial responsibility, but it is my understanding that as a Schedule II employer, 75 per cent of the normal wage paid as workmen's compensation is not being subjected to income tax. The additional 25 per cent amount paid by the employer is being subjected to tax.
In the case of permanent disability, it is my understanding that a similar exemption is being accorded to amounts payable as workman's compensation. Since the administration of the act is involved here, perhaps if the hon. member has any specific case he would refer the situation to my colleague the Minister of National Revenue.


John Paul Harney: May I thank the Minister of Finance for his compliment about my articulateness, but in spite of my reputation I guess my point was still not made; I am sorry about that. I was not referring to firemen working for the borough of Scarborough; it happened to be firemen who had been working in the past for the Toronto fire department. I understand that Scarborough and Toronto are very close neighbours, so I can see where the minister made the mistake.
I was not talking about people who are receiving benefits from the workmen's compensation board, be it in the province of Ontario or any other province. I understand that they are quite clearly covered by the provisions of the present act in section 81(l)(h). I was talking about people who in the past had received disability payments at a time when their working unit was not covered by workmen's compensation by reason of provincial law. The case I employed as a clear example of this was that of the Toronto fire department.
The Toronto fire department had a very ancient and venerable superannuation, retirement and disability plan of its own, and it was not until the late 1950's that the Toronto firefighters were brought under the workmen's compensation board. Before that time, if the firemen were injured they received disability payments, not from the workmen's compensation board but out of their own superannuation and retirement funds. But these payments were clearly disability pensions.
Since the late 1950s-staying with the example of the Toronto firefighters-firemen who are injured and who receive disability payments from the workmen's compensation board do not have their pensions taxed. The unfortunate persons who worked for the fire department before it came under the workmen's compensation board do have their disability pensions taxed.
April 12, 1973

Income Tax Act
The point I was trying to make to the minister was this. Would he consider making an amendment to bring the pensions of these people within the terms of the act having to do with income that is not to be included in any amount that is calculated to be taxable? That is quite a different matter from the one to which the minister just referred.
As I said the other night, Mr. Chairman, there is no reason in simple justice why these people should have their disability pensions taxed. The cases I have in mind are those of people who have appealed to the income tax department and have been told time and time again that nothing can be done because of the law, although their cases are just and will be reported to the Department of National Revenue. They probably were reported in the past, but in effect nothing has been done. I know of 12 cases in Toronto of people who used to work for the Toronto Fire Department. I cannot guess how many other Canadians are affected by the same difficulty in the law, but I would suspect it is many more than the 12 cases of those firefighters in Toronto. There are probably all kinds of people who worked for provincial or municipal governments who fall within that category. I wonder if by my stumbling and awkward manner, and my rather inarticulate remarks, I have managed to convey the point to the minister.


John Napier Turner: I am prepared to look into this further, but in reference to the Toronto Fire Department, it is my understanding that the pension plan in 1954 contained a disability clause and pensions paid under it were subject to tax and contributions by way of premiums are deductible. If that is so, this is fairly normal, but I will look into it again to see whether there is any remedial measure I should take in the way of some further amendment. If that is the situation and contributions are deductible on the way in, they would be taxable on the way out. If this is part of a disability situation it may be different, but I will look into it.


John Paul Harney: I have just one final point. I take it when the minister says he will look into it he means he will do so for the purposes of the discussion we are now having with regard to amendments to the tax act?


John Napier Turner: I would need far more precision than I have now to be able to do that, but if there is a legitimate problem here I will undertake to the hon. member to remedy it at the earliest possible opportunity.


John Paul Harney: Mr. Chairman, would it be possible for us to put aside our decision on Clause 23 while the minister has a further opportunity to look into the matter?


Robert Jardine McCleave: Is it agreed that Clause 23 shall stand?


Stanley Howard Knowles: Stand.
Clause 24 agreed to.
On Clause 25-Transfer of property to corporation by controlling shareholder.


William Gordon Ritchie: Mr. Chairman, I should like to take the opportunity to make a few comments about partnership rules on the basis of a discussion I had with my own accountant and an article written by Donald R. Huggett which appeared in the Canadian Chartered Accountant. He suggested that in attempting to find a reserve for 1971 receivables it is the individual partners of a partnership who will have the real problem, not because of any particular equity or anomaly but because reserve limitations are so difficult to grasp and computations are virtually impossible to make with any degree of accuracy. He said:
As stated, individual partners must bring into income in 1972 their share of 1971 receivables which were not previously taxed, but they are permitted to deduct a reserve therefrom which, in the case of expanding firms, may result in the postponement of tax until retirement or later years. It is the computation of the "reserve" that will give many professionals fits-
He goes on to state that the actual cost is not so difficult to calculate, and then states:
Fair market value of a partner's interest may be a difficult figure to determine and no rules are prescribed (naturally) for its computation. However, it may be significant to note that the proper figure is the fair market value of the partner's interest and not his share of the fair market value of the partnership.
I think this is of some importance in assessing tax equity. Mr. Huggett also states:
Unlike the computations for cost and fair market value, the calculation of tax equity must be made at the partnership level. Once established, it must then be apportioned among the partners. No rules are provided for the division of tax equity among partners and one can only assume that the number of methods will approximate the number of professional partnerships in Canada. Unfortunately, playing the tax game without rules is almost as dangerous as playing Russian . . . roulette-
He then went on to say in the final paragraph:
While the various provisions seem logical, there is no doubt that they are extremely complicated and that it would be extravagant for each and every partner of a professional firm to spend the time required to attempt to comprehend them in full.
I think this is an area in which partnerships have a very shady and dim path to follow.
Clause 25 agreed to.
Clauses 26 and 27 agreed to.
On Clause 28.


Marcel Joseph Aimé Lambert: Mr. Chairman, this deals primarily with the valuation of a licence or a permit held by a corporation. In this connection, I am wondering what the minister has by way of an example. To what extent may a corporation hold a permit and what will be the valuation of it? I am thinking of the rights to distribute certain types of goods under a permit issued by a municipal corporation. Would a milk quota, for example, be involved? Perhaps the minister could give us an explanation.


John Napier Turner: Mr. Chairman, this is consequential on the amendment which provides for taking into the cost period a government licence, which would include milk quotas and all other types of federal, provincial or municipal licences. This particular amendment provides for including in tax equity of the corporation at the end of this 1971 tax year, the cost of the permit issued under governmental authority during the time, and
April 12, 1973

the cost is defined in 21 of the Income Tax Application Rules, 1971. This is consequential on the basic valuation in other clauses.


[Stage Direction]
Clause agreed to.
On Clause 29.
Marcel Joseph Aimé Lambert: May I ask why 5 per cent was chosen instead of 10 per cent, as basically that is the change made in this clause? This question has arisen in respect of holdings to become part of an affiliated corporation.


John Napier Turner: This is a relieving clause which allows more corporations to qualify.


[Stage Direction]
Clause agreed to.
Clause 30 agreed to.
On Clause 31-Deduction in computing income of trust.
Marcel Joseph Aimé Lambert: I have had a running battle with the minister by correspondence, and with others, including the Minister of National Revenue, relative paragraph 104(14) whereby it is provided for an election within a prescribed time and in a prescribed manner by the preferred beneficiaries. I think the minister's adviser knows whereof I speak.


John Napier Turner: I have the letter right here.


Marcel Joseph Aimé Lambert: What the minister is doing is that instead of the word "his" he is putting in the words "any beneficiary". That clarifies the wording of the section, but where is the prescribed time and the prescribed manner; where are the regulations? They have not been issued, and I am told it may be months before they are issued. Considering that this is legislation which was introduced in December, 1971 it seems strange that no regulation has been issued. A number of estates of very important size are being prejudicially affected at the present time by this inability to make the election.


John Napier Turner: The hon. gentleman has a different point here. The basic regulations have been issued. On the discretionary trusts, the regulations have not been issued because we wanted to get some idea how the total system works. I understand we are still two or three months away from that. The hon. gentleman has a legitimate point here.


Marcel Joseph Aimé Lambert: In respect of relief for the taxpayers involved will there be a retroactive effect, because in the interval these trusts have been tabled at i50 per cent and they are paying the high rate of tax. I know it is in the minister's interest to bring in as much money as possible, but in so far as the taxpayers are concerned they are not large in number and this is very important in so far as investments are concerned. I do not care whether it involves only 20 taxpayers, because if they are being done in the eye then something must be wrong.
Income Tax Act


John Napier Turner: Well, I think we have had a fair amount of correspondence from the hon. member on these points and we will try to do something.


[Stage Direction]
Clause agreed to.
Clauses 32 and 33 agreed to.
On clause 34-Over 65 years.
Stanley Howard Knowles: Mr. Chairman, clause 34 is one of the clauses which has made it urgent that this bill be passed.


Marcel Joseph Aimé Lambert: It should have been through in December.


Stanley Howard Knowles: Yes, or two or three years before that. The desirability of getting the clause through, of course, is so that refunds may be made which a number of pensioners have claimed on filing their returns, refunds which we understand have been computed and are ready to be mailed. What this clause does is to raise to $1,000 the extra exemption a taxpayer can claim if he is 65 years or over. For the year 1971, that figure stood at $500. It was raised by a previous piece of legislation to $650 for the year 1972. However, if this clause goes through, that $650 will never have been in effect and instead the figure will be $1,000 as from January 1, 1972.
I suppose there are few pieces of legislation before this parliament that will receive such quick and ready endor-sation, but because it is so popular and so certain to be passed I dare to ask a question about it, even at the risk of appearing to question motherhood. If my memory is correct, and I think it is, the first time when an extra exemption for old age was added to the basic income tax exemption was at a time when the government was being pressed to increase the amount of the old age pension. It did not feel it could do so and thus this concession was made. It was my own thought at that time that this was a temporary arrangement and that when the time came for pensions to be made universal, and of a more substantial amount, that the extra exemption which originally was $500 at age 70 I believe, or was it to start at age 65-I think it started at age 65.


Marcel Joseph Aimé Lambert: It was suspended in 1964.


Stanley Howard Knowles: Then, for a while it was suspended for those receiving old age security between the age 65 and 70. At any rate, Mr. Chairman, I would like to ask the minister whether this time around any consideration was given to the alternative, namely, that instead of a charge on the treasury of this kind, that is allowing this extra exemption, that the amount of money involved might be used to raise the actual amount of the old age pension. My point is that when you allow this $1,000 exemption it is fine for all those who have income taxes to pay, but what about the million-I think that must be the number-persons over age 65 who do not pay any income tax at all? This extra $1,000 does not mean a cent to them. To those who pay a little income tax this $1,000 exemption may mean a bit, or if you go at it in another way those in the upper brackets receive a fairly high percentage reduction and those in the lower brackets receive a lower amount.
3246

April 12, 1973
Income Tax Act
Is the minister familiar-I am sure he must be-with the history of this? Has some consideration been given along the way to using this money to increase the actual amount of the pension? I submit that $15 or $20 added to the actual pension of everyone would be more of benefit to the persons on old age security than this benefit. There are some organizations, notably organizations of women in this country, which have made quite a study of this matter and have recommended this very course. I do not know whether the recommendations have reached the minister, but I hope they have. Even though it may sound a little academic to ask a question about this matter which will be passed very quickly, I should like to ask the minister whether thought has been given to the alternative that instead of the extra exemption, which means nothing at all to one million old age pensioners, the amount involved here could have been added as an additional amount to the old age security pension itself.


John Napier Turner: Well, Mr. Chairman, I would have to review the various philosophical thrusts behind the three types of old age pension. The first is a universal pension paid across the board, regardless of need and means to everyone in this country 65 years of age or over. That is in consideration I believe of the productive efforts and initiative that our older people have put into the country, as a reimbursement to them for that effort and also as a means of supplementing their income after their earning days are over. Added to that on a basis of need is the guaranteed income supplement for those whose resources are insufficient. The raising of the exemption, on the other hand, from $500, then to $650 and now to $1,000 is in recognition of those people of moderate means-more than moderate means sometimes-and people of less than moderate means who during their lifetime have sacrificed in order to provide some kind of capital assets from which they derive income. This is as an encouragement to them to set something aside and as a recognition of the fact that such incentive is worthwhile in our society.
If they were to build up a property of $10,000, $20,000, or $30,000, or now in the case of working men and women, capital far in excess of that, then the income they draw from it might be $3,000, $4,000, $5,000 or $6,000 a year in addition to what they have by way of old age pension. I suppose the philosophy is that the exemption should be raised for those people as an extra incentive. For single persons aged 65 or over there would be a basic exemption of $1,500, the optional standard deduction of $100, and the special deduction for age proposed in the bill of $1,000, making $2,600. No income tax is paid by persons over 65 up to $2,600. For married persons there is the $1,500 exemption plus the additional exemption for married persons of $1,350, again the optional standard deduction of $100, and the proposed special deduction for senior citizens of $1,000. So, for someone over 65 who is married, the total exemption is now $3,900 and no tax is paid on that amount.
The purpose of this amendment is to encourage the setting aside of a nest egg, of savings, to encourage the

curtailment of consumption for future use. Perhaps that is a worthwhile motive in our society.


Marcel Joseph Aimé Lambert: Mr. Chairman, I do not want to add anything to what was already said on second reading and to all the protests I have made about the pressures now being put by the government to get this bill through now because time is operating to the prejudice of senior citizens, but primarily-and some are becoming most excited about this-to the students who are on the other end of the scale. The polity should be made by the government to the taxpayers concerned because these were provisions that were brought in in the budget of May last year and the bill introduced in June of last year. Here we are in mid-April, and these people are still not able to obtain their refunds.
However, the point that I want to make is directed more to the Minister of National Revenue than to the Minister of Finance. As you know, there is form TD1 wherein the taxpayer is the subject who files with his employer, or the person paying him the income he makes, indicating the extent of the exemptions that he is claiming. We have provisions for people of married status and we have a provision for wholly dependant persons, and we also have provisions for persons over 65, but it was drawn to my attention yesterday afternoon over the telephone by a person who is directly affected that there is no provision for the claiming of an exemption by a disabled person who is entitled to the $1,000 exemption. As a matter of fact, the person in question is an employee of the government of Canada, and that person is not able to file a TD 1 form and obtain a $1,000 exemption but must claim it at the end of the year through a refund. In this particular instance the refund to that person has been held up. If that person has a statutory right to an exemption, why should the TD 1 form not provide for it?
I do not think this is the same sort of thing as one can claim a little later on under section 35 for attendants allowance for a totally disabled person. In this particular case I make a strong recommendation that the Minister of National Revenue take a look at form TD 1, and let us reverse the process for these disabled persons.


Stanley Howard Knowles: Mr. Chairman, as I indicated when I was speaking a few minutes ago, I do not wish to delay the passing of this clause or even the passing of this bill, but I would like to say that I appreciate the answer which the Minister of Finance gave in response to my comments. He indicated that there are different groups of people and that the purpose of this provision is to recognize the position and the rights of those who have some savings of their own. That is a point of view that I share, especially when we come to the question of universality. It is precisely for that reason that I do not think there should be any means test on old age pensions at all. But that is an argument we can make on another occasion.
The point I would like to make-and I hope the minister will accept it-is that in spite of all the fanfare there is about this, at least one million old age pensioners get no advantage out of this at all. The number of old age pensioners who qualify for the guaranteed income supplement, according to the latest figures I have, is about 58 per
April 12, 1973

cent of the total, or 58 per cent of 1,800,000, which is about 1,045,000. Of course, people who qualify for the guaranteed income supplement are getting money that itself is not taxable, so with these new limits they are not taxable in any case.
I also wish to draw to the attention of the Minister of Finance that the percentage I gave a moment ago, which comes from the latest figures which I have obtained, is higher than it was the year before. In other words, even with the higher rates of pension and the higher rates of guaranteed income supplement, the number of Canadians over 65 who qualify for at least a portion of the guaranteed income supplement is rising. A couple of years ago, it was 55 per cent. Last year, it was 58 per cent. So there is an increasing number of persons whose other income is limited and who rely very heavily on the old age security pension and on the guaranteed income supplement. If the minister wonders about what I said to him I will say again that the percentage of those receiving old age security who have so little that they can apply for the guaranteed income supplement is increasing, and therefore my point is that if he wants to do something substantial for old age pensioners he has to do more than this. This higher exemption is all right, but it is only a token.


John Angus MacLean: Mr. Chairman, I just want to raise one small point with the minister. It is a suggestion which I should like to make that perhaps ways and means could be found to discontinue sending personalized income tax forms to certain categories of elderly people who are not in the taxable bracket and who no longer contribute to the Canada Pension Plan.
I realize that there is a legal obligation to file income tax returns and indicate that you are not taxable, but to many elderly people it begins to be almost a harassment when they receive complicated income tax forms which they are required to file. I wonder if the minister has any suggestion to make on this matter?


John Napier Turner: Mr. Chairman, I appreciate the point made by the hon. member for Malpeque. One cannot know in advance whether any particular taxpayer is or is not taxable on the basis of his income. I suppose that in case of doubt the Minister of National Revenue sends out a form. What we have done under this bill is to recognize that elderly people in particular whose income is less than a certain amount should not have to file by instalment. The bill provides that if the previous year's tax was $400 or less, then they do not have to pay by instalment. That is a relief from the burden that the hon. member mentioned. The Department of National Revenue has the past records to go on at the $400 or less taxable income level but across the board it is a little hard to know whether the particular taxpayer has taxable income until we send out the forms. I do not know any way around that.


John Angus MacLean: I do not know either, but I was thinking of people who had been employed and had been taxed on that basis and who have little or no other income which would put them in a taxable bracket or who are no longer employed, who are retired and not contributing to the
Income Tax Act
Canada Pension Plan. I feel that perhaps there could be a system where the computer could be made to turn off when it gets to that category of people.


John Napier Turner: There are some officials of the Department of National Revenue in the House and I hope they will take note of that point.


Robert Jardine McCleave: Shall clause 34 carry?


[Stage Direction]
Clause agreed to.
On clause 35.
Marcel Joseph Aimé Lambert: Mr. Chairman, in this clause there are a great number of extensions dealing with students, full-time attendants for the disabled, travelling allowances for medical services and so on. This is an amendment to Section 110(l)(c)(iv.l) which deals with a full time attendant in a self-contained domestic establishment, not a nursing home. This is an extension of the old nursing home full time attendant arrangement. Can the minister explain what is meant by full time attendant? Is that a person who must live in, who works 40 hours a week-if it is a domestic establishment is that a nurse or a male attendant who works eight or nine hours a day five days a week and then the taxpayer is home for the weekend to look after the aged parent or whoever is under the care of the full time attendant?


John Napier Turner: Mr. Chairman, it is a question of fact.


Marcel Joseph Aimé Lambert: It is easy to say it is a
question of fact, but how is it defined? If I were the taxpayer and had an aged parent at my home with a full time attendant is that full time attendance six hours a day or eight hours a day? If the Department of National Revenue insists that it has to be an eight hour day and my arrangement with the attendant is for a six hour day I can get into an awful row.


Stanley Howard Knowles: Worse still, if they call for 24 hours.


Marcel Joseph Aimé Lambert: Is it the same if they live in? Is it a five day week?


John Napier Turner: Mr. Chairman, I think it is in the interest of the taxpayer that this be left vague. A full time attendant is a full time attendant. I agree with the hon. member for Winnipeg North Centre (Mr. Knowles) when he asks if it would be 24 hours a day. That would be unreasonable. I think it is in the interest of the taxpayer to have these terms defined generally as full time attendants and allow it. If we were to get specific then anything outside the specific clause would be included. Knowing the drafting process as I do, I tend to feel that my friends define rather narrowly and I would hate to see cases meriting consideration which might be excluded by a narrow definition. I think the taxpayer is better served by a general definition.


Marcel Joseph Aimé Lambert: Mr. Chairman, with this interpretation, it may be that, since the evidence of payment or of the employment is to be by way of a receipt bearing the social security number of the attendant and is, therefore, available for income tax purposes-if the
26087-59J

April 12, 1973
Income Tax Act
attendant were to work six hours during the daytime hours and to work at night in the supermarket, we could get into all sorts of difficult situations. I want to try to determine the wishes of the minister and also what the House thinks about this. It should be as broad as possible so that we do not get a narrow interpretation by national revenue assessors.


John Napier Turner: I think that any assessor who reads this would interpret it generously.


Frank Howard: Mr. Chairman, on second reading of this bill I presented an idea to the minister regarding the expenses incurred for medical purposes when the individual has to travel from his residence to some other spot where the facilities are available. At that time I was not looking at the bill but at the statement the minister made about it on May 8, 1972. Clause 35(3)(viii.l) at the bottom of page 57 of the bill provides that those expenses can be deducted if a number of things happen, one of which is if payment is made:
to a person engaged in the business of providing transportation services, to the extent that the payment was made for the transportation of
In this instance, the taxpayer has to make the payment to a person engaged in providing transportation services; in other words, he has to hire a transportation vehicle when he is 25 miles or more away from the facility. From my own experience travelling around th^ country, I know that there are a number of places where commercial transportation is not available in any convenient form. In a northern area it is not unusual for people living close to the communities to own their own boats, yet have no medical facilities available in the community. In others, people are disadvantaged by the lack of commercial transportation and have to use automobiles while in the far north it is a question of aircraft. People who own their own aircraft may have to use them to travel for medical attention.
I think the construction of that subparagraph which says that the demand must be made "to a person engaged in the business of providing transportation services" would deny the opportunity for the deduction in cases where there were no commercial transportation facilities to take the patient 25 miles or more for medical attention. I suggest that this subparagraph should be amended. I drafted the amendment and sent a copy to the minister so that he could consult with the people who are in the business of drafting. I do not know whether my suggestion is acceptable, but I think we should remove subparagraph (viii.l) entirely and substitute the following:
to a person engaged in the business of providing transportation services-
Which is how it reads at the moment, and add the words:
or for transportation by a mode of transport owned by the taxpayer at rates not in excess of those provided by regulation for any such mode of transport to the extent that the payment was made for the transportation of
The additional words are, "transportation by a mode of transport owned by the taxpayer at rates not in excess of

those provided by regulation". The difficulty I had in trying to adopt language that might be acceptable, in order that an acceptable and reasonable figure might be arrived at, was compounded by the fact that, as mentioned earlier, it is difficult to know how much a mode of transport may cost. For instance, in coastal areas people normally travel by boat, usually their own boat. I do not know how much it costs per mile to run a boat. Cost varies with the size of the boat, and I do not know what a reasonable cost would be. Similarly, varying figures could be used in connection with the operation of a motor vehicle. We are allowed 16 cents per mile, and in other areas the allowance is 14 cents, and so on. It is difficult to spell out these amounts. Again, in the far north or remote areas of the country people own their own aircraft. I do not know how much it costs to travel by aircraft. What the reasonable figure would be I do not know.
I thought that this matter might best be decided by regulation which might spell out what is a reasonable cost for the various kinds of transportation that a person might use. To stretch the point, in the depths of winter, in the northern most points, the mode of transportation would be dog sled, I presume. I do not know what are the cost factors involved in that mode. As it may be necessary to spell out these costs in great detail, that matter might better be left to regulation. I hope the words of the amendment cover the point I am trying to make. If my suggestion is acceptable, I think it may ease what otherwise would be a discriminatory application of this particular concept.


Reginald Francis Stackhouse: Mr. Chairman, I should like to discuss the clause on page 59 dealing with deductions to be allowed for students and supporting individuals.


Mr. Barnett:: On a point of order, Mr. Chairman, surely the hon. member is out of order. The hon. member for Skeena has proposed an amendment which, I respectfully suggest, might be put.


The Deputy Chairman:: Order, please. The Chair expected the hon. member to raise a point of order, I imagine because the hon. member for Skeena hoped that the minister might comment on his suggested amendment. However, the minister did not rise and the chair did not receive the amendment as yet. I, therefore, recognized the hon. member for Scarborough West.


Frank Howard: Mr. Chairman, I handed a copy of the amendment to a gentleman here, because I wanted it to reach you.


John Napier Turner: I did not get a copy of the amendment either.


Frank Howard: Members are so interested in it that perhaps there were not enough copies to go around.


Gérald Laniel: It was the impression of the Chair that the hon. member wanted first to hear the remarks of the minister, or is he definitely asking the committee to consider the amendment immediately?


Frank Howard: Mr. Chairman, the normal purpose in moving an amendment, as I understand it, is to have that
April 12, 1973

amendment considered. I did that. If you or members of the committee think it would be more appropriate if this were done in another way, I would be glad to do that. However, I formally put forward the amendment. If the matter needs to be couched in different words, to comply with the sort of language that lawyers use in the writing of statute law, I would be glad to listen to other words, if by so doing we could be more precise. Initially, however, I must move the amendment in order to bring it formally before the committee.


John Napier Turner: Mr. Chairman, I want to reserve my right to challenge the matter from the point of view of its being in order, naturally. It may well go beyond the scope of the clause and extend the incidence of the charge on the people defined by the terms of the ways and means resolution as agreed to by the House.
Having said that, let me say that my officials and, particularly, the officials of the Department of National Revenue think there might be difficulty in the administration of this. The argument of the hon. member is well taken. It may be that in various regions of the country where commercial transport is not available by road, air or water, that a private charter arrangement would have to be made for the person to use his own car; he could have someone drive him, or use his own boat, or some other mode of transport. Obviously, the administration problem in this area involves difficulty because of the possibility of abuse. Perhaps we ought to stand the clause and see what we can do by way of drafting to meet the point and provide some protection, so that there would not be an unnecessary incidence of abuse.


Frank Howard: Mr. Chairman, I simply agree to stand the matter, but let me say this about the question of abuse. If a person is in business and uses his car in the conduct of his business, and drives 150 miles to conduct business, he keeps track of that cost, and charges X cents a mile, or whatever may be permitted. How can you protect from abuse in that type of activity? Presumably it would be fairly simple to keep track of expenses.


John Napier Turner: I can see a difficulty. If a person is driven in an ambulance or taxi or bus he has a receipt showing that he has paid out some money, and keeping track of expenses is relatively easy. But the trouble arises when there is no record of disbursements. We will ask the national revenue people to see what they can come up with, to cover the point.


Frank Howard: If a person spends money to earn income and drives his car 150 miles to conduct his business, he does not pay out any money except for gasoline. Can he not charge so many cents per mile for doing that business? Can he not say, "I had to spend that?"


John Napier Turner: But we are not talking about business expenditures.


Frank Howard: I know the minister is not, but I am. I am saying that as, in that situation in which a person makes a business expenditure there is some kind of check to prevent abuse, the same kind of check could be applied in the area I am talking about. That is all I am saying.
Income Tax Act


Marcel Joseph Aimé Lambert: Mr. Chairman, I certainly sympathize with the hon. member for Skeena who has mentioned the problems of people living in isolated areas. However, problems of a legal nature may arise out of his proposal. If a charge is made by a neighbour or an individual who is not in the business of transportation, the insurance policy covering the vehicle may be invalidated; no matter whether it is an aircraft or car, the insurance policy is invalidated if a charge is made. If there is only compensation for gasoline, that may be all right. The difficulty only arises if a charge is made.
Second, I find difficulty in justifying the amendment as worded. How would it apply to a populated area, like Ottawa? The wording of the amendment does not exclude such areas. For example, it would be simple for me to run from one side of Ottawa to the other and back, and drive almost 25 miles. I beg your pardon. The distance is to be in one direction; that makes it somewhat different. I object to that amendment to the act, because if I were to live on one side of Toronto and I were to go to the other side, and there may be valid reasons for my so doing, then I would drive not less than 25 miles in one direction. Let me add that the cost of commercial modes of transportation will be far in excess of the cost of taking an ambulance or taxi in a rural or unpopulated area. I know what the hon. member for Skeena wants to do. I agree we should stand this clause to see whether there is some way of arriving at this isolated area proposition. We can take another look at this tonight.


Thomas Speakman Barnett: Mr. Chairman, this is not the first time I have heard a Minister of Finance stand up in committee and say this is a good idea, but we will have to let National Revenue look at it. I sometimes wonder whether anyone from National Revenue in a responsible decision making capacity ever moves out of this capital. Often an essential and sensible suggestion to try to equalize and make fair the application of laws for people who do not live in large urban areas is by-passed on some excuse that it is administratively difficult.
Perhaps the people who live in the communities the hon. member for Skeena was talking about are not as wily as some urban dwellers. I do not know. Why would a thing like this be difficult? It is a matter of geography; more than 25 miles. If that is not enough to satisfy the hon. member for Edmonton West, let us make it 27 or 28 miles. It is a simple matter of geography. There are maps of Canada that show how far it is from point A to point B. Surely, somewhere within the apparatus of the government of Canada there are facts available with regard to where medical facilities are located. If the Department of National Revenue does not have that information, surely it could be supplied by Statistics Canada or the Department of National Health and Welfare.
With regard to the question of evasion, this could be covered by the submission of some kind of voucher supporting the claimed deduction. If it has to be validated by an appropriate medical authority stating that the person was in fact required to travel from his place of residence to a medical facility in order that the claim could be scrutinized by the Department of National Revenue, that would not be a very difficult requirement. I appreciate the

April 12, 1973
Income Tax Act
minister's remark that he wants to make sure this is administratively feasible. However, I certainly hope what is essentially a sound proposal to achieve fairness will not be sidetracked, as is so often the case. There is a recent example of this in an information bulletin which was issued the other day; it dealt with the question of expenses at remote sites.
We in this chamber must recognize the realities of life in the various parts of Canada. We should try to make the law fair to those people who accept the advice the Prime Minister has been handing out rather freely in recent months to go to the places where the work is and produce the wealth. These kinds of discouragements can be built into laws to prevent people from feeling they are being treated equal if they go into the resource areas and take the sometimes heavy production types of jobs. It is sometimes difficult to understand the exhortations about young Canadians going to the north, going west, or wherever it may be that these jobs are supposed to be available. I urge the minister and his officials in the Department of Finance not to accept a brush-off from the Department of National Revenue because of some imaginary administrative difficulty.


Robert Jardine McCleave: Is the hon. member rising on the same point? If not, perhaps the Chair should put the motion at this time.


Mr. Alexander:: If I understand correctly, Mr. Chairman, the minister would like an opportunity to give this further consideration. In any event, Mr. Chairman, if we are just discussing the whole ambit, I would like to know-


Reginald Francis Stackhouse: Mr. Chairman, I rise on a point of order. If we are not speaking on an amendment, I believe I have the floor.


Lincoln MacCauley Alexander: I am sorry, Mr. Chairman. I do not want to-


Robert Jardine McCleave: Order, please. The hon. member would be right if we were in the House, but in committee any member can seek the floor when another member resumes his seat. No one loses his right. The Chairman has recognized the hon. member for Hamilton West. Following that, I will recognize the hon. member for Scarborough West.


Lincoln MacCauley Alexander: I did not realize my colleague was seeking the floor. I bow to him. If I were sitting on the other side, I would maintain my right but it is my colleague who is seeking the floor.


Reginald Francis Stackhouse: Mr. Chairman, I should like to discuss some of the clauses on page 59 which deal with allowances for students and ask for some reconsideration so that greater help can be given to students, parents and others from many of our middle class families. The incomes of many of these families are too high for them to receive much of the government aid that is available through grants and loans and, at the same time, are so low they find that financing education for their young people is not easy.
I congratulate the minister on the proposals appearing on page 59. They indicate a great deal of progress in this
(Mr. Barnett.]
area, first in recognizing the principle that the cost of university and other education should be deductible and, second, making some very admirable provisions for it. Good as the provision is, I think it ought to go much farther. I hope the minister will give consideration to the comments I will make and to the suggestions I will offer.
I first wish to point out that this proposal only allows for one variable, that is the variable of the student's income. According to this proposal, he may deduct $50 a month times the number of months he is enrolled in the institution. In the case of the sponsoring individual making the income tax return, he may deduct the student's taxable income. A much more important and relevant variable for the student or his family is the way the fees vary. According to the proposals on page 59, considerable advantage is given to a person attending a certain kind of educational institution, such as a community college where the fee may only be in the neighbourhood of $250 a year. A student attending for nine or 10 months of the year can claim a deduction of $450 or more. Compare that with the need of the student who is enrolled in a scientific course that may involve him paying a fee in the neighbourhood of $1,000. He can only claim the same deduction as the person paying a fee in the neighbourhood of $250. Some consideration should be given to providing for this variability in the kind of fees our students and their families are paying.
I suggest it could be covered if the bill were changed so that the student or his sponsor might deduct $50 multiplied by the number of months of the year during which the institution is attended, or the tuition fee, whichever was the greater. This would be of considerable help to students enrolled in expensive courses. These students do not all come from high income families. Many are attending these institutions only through great efforts by themselves or by their families. They do not make up a great number of taxpayers, and I think we would find that the value of the help to them would far exceed the burden it might place on the government.
I should like to comment, now, on another subject. Clause 35 makes provision for students attending universities outside Canada, but as far as I can see not for students attending other post-secondary institutions which do not offer degrees. I find it difficult to understand why non-degree-granting institutions within Canada should be on the list of designated institutions while those outside Canada are not. I think we should take into account the needs of students attending nursing schools, art schools and other educational, institutions, which, if they were in Canada, would be on the list of designated institutions.
It sometimes happens that students need to go outside Canada to attend courses which are not available here, and I do not think they should be penalized for doing so. Further, I would point out that we offer the opportunity to a Canadian taxpayer to deduct where a student is enrolled in a non-degree-granting institution outside Canada if the student commutes to such an institution, but not if he is a full-time resident. Again, it is hard to see why this distinction should be made. A student living within driving distance of the United States border might,
April 12, 1973

for example, be able to attend an engineering school, or a school of technology, or a nursing school, there, and benefit from this concession. On the other hand, if he lived hundreds of miles from the border and was obliged to live near the school of his choice, he could not claim this reduction.
Finally, I would ask that the minister give considerable thought to the possibility of permitting an allowance for parents who send their children to privately-funded schools. According to the most recent figures I have, there are 147,628 boys and girls attending schools of this kind. Many of these children will not go on to universities or colleges. They do not come from high income families. Most of them are in these schools because of profound religious and moral convictions on the part of their parents. The families concerned support the public sector of the educational system through taxation, though they do not necessarily benefit from it. They have to meet, from their own resources, often at great sacrifice, the cost of educating their children at these private schools. I myself am profoundly committed to the concept of the public education system, but I believe we should have equal respect for those who are looking after these private institutions. I suggest that opportunity be given for the parents of such children to deduct all or part of the cost of private education from their taxable income. This would go a long way to assist Canadian parents who because of religious and moral convictions find themselves bearing a very heavy burden.
Finally, Mr. Chairman, I would ask the minister to consider the question of income from educational trusts. I am informed that such income is subject to taxation even though the money derived from the funds will be going to the children. I have received complaints that parents have to regard such income as taxable and I hope the minister will consider exempting income derived from educational trusts from definition as taxable income.
The minister has done something which will receive support from all parts of the House and of the country in recognizing the principle which characterizes his proposals, but I trust he will give serious thought to improving these provisions so as to help a large number of families and individuals who are making an honest effort to advance themselves.


Mr. Skoreyko:: A few comments having to do with allowances in respect of students attending certain types of educational institutions. I have received a number of letters from the Edmonton area where parents of nurses have gone to the Department of National Revenue for a ruling as to whether or not student nurses qualify under the section we are considering. They were given a negative answer. They did not qualify because nurses were not attending a degree-granting university. I should like to point out to the minister that those who decide to become members of the honourable profession of nursing work very hard for five or six days a week without pay for what they do. It is true they may receive some benefit by way of board, but the responsibility for their maintenance is a responsibility of the parents. These students will graduate from nursing schools supported by the departments of education in their respective provinces. These nursing schools are entitled, under provincial laws, to grant
Income Tax Act
degrees. Why, in these circumstances, are nurses not accorded the benefits of this section? I shall have more to say on this subject in a few moments after I have heard the minister's response.


David Orlikow: I wish to make a few comments on the subject dealt with by the hon. member for Scarborough East. He may think every member of every party agrees with him, or with the general principle enunciated in this clause having to do with clause 35(6)(h). Speaking as a Member of Parliament and as a taxpayer-and as a taxpayer who benefits from this section-I am less than enthused about this proposal. I have not worked out a detailed calculation, but I have a daughter who attends university for seven months of the year. Based on a total of $350 for the year, in my particular tax bracket I suppose I would save somewhere in the neighbourhood of $100 to $125 a year. I admit that I do not mind getting that saving, but once again it seems to me that we have a relatively new provision in our income tax law that benefits people in the top income brackets of this country who least need the help.
I do not have the actual figures in front of me, but if I say that 80 per cent or more of the young people who attend universities-not community colleges but universities-in Canada come from the upper or middle income groups, I am certain that I am making a relatively conservative estimate. Yet it is precisely this group of people, the young students or their parents, who will benefit from this provision that was brought in last year, I think it was. This is one more illustration of how over the years we have brought into our income tax law special provisions that have eroded the progressive nature of the income tax law and given advantage to people in the upper and middle income brackets. We all know that, particularly since the end of world war II, the gross national income in Canada has risen each year somewhere between 5 and 9 per cent. We know that most people in Canada are living better than ever before, and we all like to think that in recent years we have been moving toward a more egalitarian and equitable society. But that is not the case.
Some questions that I asked both last year and this year and which were answered by Statistics Canada demonstrate conclusively that those in the upper income brackets in this country are each year getting a larger percentage of the gross national product, whereas the people in the lower income brackets are getting a progressively smaller percentage of the gross national product. The question I asked last year and this year was a simple one. I asked what percentage of the total money income was received by the lowest fifth, the second lowest fifth, and so on, of the people in Canada in terms of family units.
What did I find in the answer I was given both last year and this year? I found that in 1957 the lowest 40 per cent of the Canadian people received 16.1 per cent of the total income earned in Canada. In 1967, this percentage dropped to 15.6 per cent, and in 1971, the last year for which there were figures, it went down even more, dropping to 14.2 per cent. On the other hand, the upper 40 per cent of the income earners of this country experienced a reversal of this trend. In 1957, they received 65.9 per cent

April 12, 1973
Income Tax Act
of the income, in 1967 they received 66.6 per cent, and in 1971 the percentage was 68.2 per cent.
Some people will say: "Oh, but that is before taxes. Our tax system, transfer payments, pension payments and welfare payments work the other way, and people in the lower income brackets receive a higher percentage of the total income and resources of this country". I do not believe that is true. My belief, which I must admit was an intuitive belief, was reinforced by a study released in December 1972 by the Economic Council of Canada entitled "The Pattern of Taxation in Canada". The author of the study was Allan Maslove, and he deals precisely with what taxes the various income groups in this country pay.
For the sake of brevity, Mr. Chairman, I shall paraphrase the question he asks and the answers that are given. His answers are fully documented in great detail, with a whole series of statistical charts that I would commend to the Minister of Finance and the members of this House. One of the questions Mr. Maslove asked was: Who pays for the various governmental activities; and who, in the final analysis, actually pays-bears the burden of-the tax? Mr. Maslove says that virtually all taxes have the potential to affect the relative economic positions of an individual family in two ways: by affecting the income received-the income-sources side; or by altering the relative prices of the goods bought-the income-uses side. The net effect of these two adjustments, according to Mr. Maslove, is to change the real income position of the individual as compared to his pre-tax position and relative to other members of the community.
Mr. Maslove then analyses taxes on the basis of whether they are progressive; in other words, whether they increase in percentage and in amount as incomes rise, or whether people in the lower income brackets pay more of their income in taxes. He says that the extremely regressive nature of the tax system at the low end of the income scale and the lack of progressivity over the remainder is quite apparent. He points out that from 22 to 39 per cent of the people, depending on province, in all family units are in the lower income range, having an income of $6,000 or less per year.
Mr. Maslove then asks who pays for government programs. He says all of us who pay taxes pay, and most of us do. He then asks which group bears proportionately the heavier burden of taxation, and his answer is that it is the lower income families. Who bears the least of the load proportionately? It is those with higher incomes, particularly those with incomes over $12,000 a year. I suggest that the bulk of students attending Canadian universities come from families with incomes over $12,000 a year. I make no secret of the fact-indeed, even if I wanted to I could not- that I am in this category. Yet it is precisely people like me who get the tax break. Someone in the 50 per cent tax brackets who has one child going to university for seven months of the year will save $175 a year, and I suppose that I shall save about $125 a year. Any person making $6,000 a year whose child attends a university-there are some, but fewer than the hon. member for Scarborough East seemed to suggest-will have only a minimal tax reduction.
While I am not going to oppose this, I would tell the minister-


Gérald Laniel: Order. I regret interrupting the hon. member, but it being five o'clock it is my duty to rise, report progress and request leave to sit again later this day.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Laniel):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: The hon. member for Humber-St. George's-St. Barbe (Mr. Marshall)-Fisheries-Storm damage in Newfoundland last November-Inquiry as to report and compensation to fishermen; the hon. member for Scarborough West (Mr. Harney)-Industry-Closing of radio production at Don Mills plant of Philco-Ford-Government action; and the hon. member for Gander-Twillingate (Mr. Lundrigan)-Unemployment insurance-Expiration of fisheries benefits-Possible equating of benefit period with qualifying period-Request for statement.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely notices of motions (papers), private bills and public bills.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
[Stage Direction]
On the Order: Private members' notices of motions (papers).
Mr. Reid:: Mr. Speaker, I rise on a point of order. I think there would be agreement to take notices of motions for the production of papers Nos. 48 to 73 in one group. I believe the minister has a short statement to make, and then we could proceed to Notice of Motion No. 76 standing in the name of Mr. Latulippe.


The Acting Speaker (Mr. Laniel):: Order. Hon. members have heard the suggestion of the parliamentary secretary. [English]
The hon. Minister of the Environment (Mr. Davis) might want to make some comment as to what the House is about to do.


Hon. Jack Davis (Minister of the Environment):: Mr. Speaker, I have read the motions put forward by the hon. member for Skeena (Mr. Howard), Nos. 48 to 73, and have made inquiries concerning the papers he wishes to have tabled in this House. The government has no objection to providing this information. However, it includes an exchange of correspondence and the production of papers
[Mr. Orlikow.J
April 12, 1973

relating to the provincial agencies in British Columbia and various private companies. I am still endeavouring to obtain clearance from the relevant provincial authorities and the companies in this connection. I can say that, subject to obtaining these clearances, and with the usual reservations as to confidentiality, we will produce this documentation for the hon. member and the House.


Frank Howard: Mr. Speaker, had the statement the Minister just made been made when this series of motions was first dealt with on Wednesday, February 21, then perhaps a different course might have been followed. These motions might well have been adopted at that stage and not cluttered up the order paper for this length of time.
I am perfectly agreeable to the suggestion of the minister that he seek clearance of the authorities of the provincial government and the companies in view of the jurisdictions involved. There is no objection in that regard. I do think, however, that for parliament to accept the concept that once it has passed a law, the Fisheries Act, and set out in that act-


The Acting Speaker (Mr. Laniel):: Order, please. I hope the hon. member will enlighten the Chair by limiting his remarks to the question as to what we are to do with these motions. The Chair has not noted that the suggestion made has been adopted and that we are to discharge these motions Nos. 48 to 73, or leave them on the order paper. I would invite the hon. member to speak to this point.


Frank Howard: Mr. Speaker, I had understood that the House was agreeable to putting notices of motions for the production of papers Nos. 48 to 73 inclusive as one motion in order to table the correspondence in respect of them all. That is the motion to which I was speaking. I was also referring to the suggestion of the minister that we do this only after he receives authority from the provincial government and the private companies. In speaking to that motion, I had reached the point of saying I think it is most improper and wrong for this parliament, having passed this law, the Fisheries Act, which declares that it is an offence to place deleterious substances in water frequented by fish-


The Acting Speaker (Mr. Laniel):: Order, please. Again, as far as the Chair is concerned, there is no motion before the House. The Chair is not sure that hon. members have decided to proceed with this group of motions at this time, or whether the hon. member is making his comments in reply to the remarks of the minister. I noticed that the parliamentary secretary was rising in his place a moment ago. Perhaps he could enlighten us as to the procedure the House wishes to follow.


John Mercer Reid: Mr. Speaker, the procedure I suggest is that there be an order of the House to accept motions Nos. 48 to 73 together so that after they are accepted by the House and the minister receives necessary clearance, with the usual reservations, the papers could be tabled in the ordinary way.
There was a change in the position that was taken as a result of the guidelines announced by the President of the Privy Council (Mr. MacEachen) two or three weeks ago as
Pulp and Paper Mill Effluent Regulations
to how the government would approach the problem of making available to members of the House papers requested on motions for production. There had been a decision taken by the government and these motions were then transferred for debate. The government would now like to make these papers available and have the motions discharged in that sense, and passed by the House.


The Acting Speaker (Mr. Laniel):: Subject to the comments of the hon. member for Skeena (Mr. Howard) and the minister, is it agreed that an order of the House be made that motions Nos. 48 to 73 as appearing on the order paper be put at this time?


Some hon. Members:: Agreed.


POLLUTION
Frank Howard: That an Order of the House to issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and MacMillan Bloedel Limited, Port Alberni, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and MacMillan Bloedef Limited, Nanaimo, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Northwood Pulp Limited, Prince George, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Prince George Pulp and Paper Limited, P.O. Box 6000, Prince George, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Rayonier Canada Limited, Woodfibre, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Rayonier Canada Limited, Port Alice, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between
3254

April 12, 1973
Pulp and Paper Mill Effluent Regulations
the Department of the Environment or any agency or branch thereof and Scott Paper Limited, P.O. Box 760, New Westminster, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Tahsis Company Limited, Gold River, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Weyerhaeuser Canada Ltd., P.O. Box 800, Kamloops, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Cariboo Pulp and Paper Company, Quesnel, British Columbia (Start-up: end of 1972), since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and British Columbia Forest Products Ltd., Mackenzie, British Columbia (Under Construction), since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Belkin Paperboard Limited, Burnaby, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.	*
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and British Columbia Forest Products Limited, Croftor, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Canadian Forest Products Limited, New Westminster, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Canadian Forest Products Limited, Port Mellon, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Columbia Cellulose Company, Limited, P.O. Box 1000, Castlegar, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Columbia Cellulose Company, Limited, Prince Rupert, British Columbia (kraft), since January 1, 1972, relating to

the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Columbia Cellulose Company, Limited, Prince Rupert, British Columbia (sulphite), since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Crestbrook Forest Industries Ltd., Skookumchuck, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House to issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Crown Zellerbach Canada Limited, Campbell River, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Crown Zellerbach Canada Limited, Ocean Falls, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Eurocan Pulp and Paper Co. Ltd., Kitimat, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Finlay Forest Industries Ltd., Mackenzie, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and Intercontinental Pulp Company Ltd., P.O. Box 600, Prince George, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency of branch thereof and MacMillan Bloedel Limited, 1010 Derwent Wau, Anna-cis Island, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
That an Order of the House do issue for a copy of all correspondence, telegrams and other documents exchanged between the Department of the Environment or any agency or branch thereof and MacMillan Bloedel Limited, Power River, British Columbia, since January 1, 1972, relating to the pulp and paper mill effluent regulations and the application thereof to the above-mentioned Company.
He said: Mr. Speaker, I hope it is clear what we are talking about at this point. I had reached the stage of my remarks where I suggested it is inappropriate for the Parliament of Canada, having passed a law which says that it is an offence to put deleterious substances in water frequented by fish, to then suggest that as of the date of
April 12, 1973

the so-called pulp and paper mill effluent regulations of 1971, those regulations should apply to the pulp and paper mills in spite of the Fisheries Act.
I think it is inappropriate for the minister to now stand in this House and say "we are agreeable", meaning "him", and then ask this parliament to endorse the concept that we should now adulterate or dilute the authority of this parliament by making the law subject to a decision of private corporations. The law of this land was made to apply to every one of these pulp and paper mills referred to in motions Nos. 48 to 73 inclusive. Parliament adopted the regulations; parliament has made the law of the land and I do not think the minister should be allowed at this time to ask us to agree that what parliament said in respect of the law should be subject to what the private corporations want. I do not think we should be asked to allow the minister to apply the law in that way.
Presumably these companies have been approached by the department as to the application of the pulp and paper mill effluent regulations, and I just cannot agree to the idea that we should now ask those companies whether it is all right for them to produce documents which relate to the very point as to whether they are or are not, and to what extent, complying with the law of this land, namely the Fisheries Act.
The other point I wanted to mention comes about as the result of what the parliamentary secretary said in respect of the guidelines for the production of papers. Apparently the government has taken a different view in respect of these particular motions. These motions were transferred for debate at the insistence of the government on February 21 on the ground that the documents sought were papers which were confidential. The guidelines to which the parliamentary secretary now refers were contained in Cabinet Directive No. 45, which was distributed under the signature of R. J. Robertson, Secretary, on February 16, a full five days before somebody stood up in this House saying these matters were confidential and could not be tabled.
I assume that the motion having been put it will be agreed to upon the conditions set down by the minister. I just think it is a wrong principle to establish that a law of this Parliament is subject to a decision by a private corporation which is required to meet the provisions of that law.


Mr. Speaker:: Subject to the reservations of the minister, is it the pleasure of the House to adopt Motions Nos. 48 to 73 inclusive?


Some hon. Members:: Agreed.


An hon. Member:: On division.


Mr. Speaker:: Carried on division.


[Stage Direction]
Motions agreed to.
Commonwealth Holiday Inns Ltd. [Translation]

Henry P. Latulippe: That an Order of the House do issue for a copy of the agreement and of all documents concerning the offer of a guaranteed loan from the Department of Regional Economic Expansion to Commonwealth Holiday Inns Ltd., of London, Ontario, for the construction of a hotel in Winnipeg, Manitoba.
He said: Mr. Speaker, I am glad that the government has agreed to study this matter. This information will be very useful to us, because a number of hotel owners have heard about this and would like an explanation of what the government has done. This, Mr. Speaker, is why we requested production of these papers.
I should like to protest about one aspect of the loan guarantee program. I am in favour of guaranteeing loans to industry, but I do not think that we should guarantee loans for building hotels. I sincerely believe that the guaranteeing of loans of $675,000 to Commonwealth Holiday Inns Ltd. and $1,460,000 to the Parc Samuel Holland Hotel in Quebec contributes nothing to the Canadian economy, because large concerns can easily obtain capital.
Mr. Speaker, the Department of Regional Economic Expansion could use this capital for other purposes, to help a number of other businesses or industries. The Industrial Development Bank in particular could help with financing these businesses, and I think the department need not have gone so far. However, I am aware that this will create a number of jobs.
I know that this can be a labour intensive area but I think the Department of Regional Economic Expansion has been established for another purpose, namely to help industry.
Mr. Speaker, big hotel chains have other facilities to find the capital they need. Moreover, these industries get loans for a period of 10 or 20 years. After the expiry date, if they havent made all the payments, the government or the responsible agency is committed to pay back up to 90 percent of the capital which has not been reimbursed when due. The department guarantees up to 90 per cent of the payments which have not been made.
Mr. Speaker, these institutions will not hurry to pay back that money. If after 10 years, there is still $500,000 or $1 million outstanding, the government promises to pay up to 90 per cent of these amounts.
I think that this help should be given to industry rather than to hotel owners. Several small hotel owners told us they had been refused the financial help they were seeking from the Department of Regional Economic Expansion. If this help is denied to small hotel owners, it should also be denied to big institutions that need a lot of capital and have facilities to get the capital they need for their development.
On this subject, Mr. Speaker, I wonder if the government intends to stop guaranteeing loans for the construction of big hotels.
26087-60 i

April 12, 1973
Commonwealth Holiday Inns Ltd.
I would also like to know whether it intends to make guaranteed loans available to individuals who would like to take advantage thereof, since in my opinion it would be the best way to restore our capital-starved national economy. Indeed, capital is scarce and everybody deeply regrets it. However, since we have other organizations to assist such establishments, they should act. The guarantees must be satisfactory because it is one of the best trade in the world.
The hostelry trade is thriving therefore guarantees are satisfactory. The Industrial Development Bank should meet those needs and let the Department of Regional Economic Expansion promote those who are unable to get funds to meet their needs and thus encourage the growth of their trade or industry.
If we use the funds of the Department of Regional Economic Expansion to provide more beneficial help for those types of businesses or industries I just mentioned, I think the money could be put to better use and the people would benefit from it.
I know the regulations of the Department of Regional Economic Expansion are broad; I also know that the law favours help to big industries, big businesses. But if the Department of Regional Economic Expansion is to be in charge of that, I ask that it do so not only for big industries or big hotels but also for small people. The Industrial Development Bank could intervene instead of the Department, which should receive instructions as to certain reserves. The money could be distributed in a more satisfactory manner to guarantee certain amounts for small businesses and small industries which are in need of money and cannot get it because large amounts are invested in big institutions. Certain industries should have preference over those institutions.
So I ask for the co-operation of all hon. members of this House and I would like those anomalies to be corrected somehow. I would also like to see businesses in need of help benefit more from it and the funds available to the government used in a more direct fashion for institutions and businesses really in need of money.
Again, I think the Parliamentary Secretary to the President of the Privy Council (Mr. Reid) for telling us that the government was accepting in a block the notices of motions for papers Nos. 43 to 76. I thank him for the papers he will be tabling and for the decision. I am happy to see the government decided to release the information on those types of businesses. This has to be known because people, as I say, ask us for information on them. With the production of those papers and all the information required we will be in a position to satisfy those who ask us for information.
I will not say more; I would still have a lot of things to say but since the production of those papers has been accepted I thank once more those who are responsible for it.


Mr.   J.-J. Blais@Nipissing: Mr. Speaker, at the beginning of my remarks I must point out that the member for Compton (Mr. Labulippe) has misunderstood, because the notice of motion for paper No. 76 has not been accepted. I

was extremely surprised that the member did not discuss the notice of motion he presented in the House.
As for the argument proposed by the hon. member, Mr. Speaker it gives me pleasure to point out that the new program of the Department of Regional Economic Expansion is of course a new initiative from the government, although the department has been in existence since 1969. The member for Compton will be the first to admit that experiments are still underway, and that the results accumulated until now cannot possibly provide the department with sufficient information for the department to become omniscient.
I would like to point out first that my comments may indicate that there is a lack of understanding about the departmental policy regarding guarantees. In view of the fact that I was not prepared to answer the hon. member's statement, I will give him the information as I understand it.
The guarantee is available for loans of $250,000. It is not a loan but a guarantee offered by the department to the applicant. It is not an application to the department to obtain a loan which would be refundable. The applicant must go to his bank and ask for the funds he needs. The minimum amount for the loan is $250,000. Once the applicant has subscribed his contract with the bank-which of course is not a very popular institution with the hon. member of Compton-the Department of Regional Economic Expansion will review the material to see if it is really suitable to protect the interests of the lending institution. I am sure that the department will not commit itself unless it is convinced that the guarantees offered by the applicant are suitable to protect the interests of the bank.
In the system which has been in existence for a few centuries already, he who stands surety for someone is not held responsible first for paying back the loan. Of course, the applicant is expected to do that.
The hon. member made a few remarks on the fact that some hotel owners whose turnover does not justify a loan of $250,000 are disadvantaged by the present policy. Perhaps, in the very near future, the department may lower the ceiling; at any rate, there will be a change as regards the amount available or at least the key amount which will be the main criterion for the department when granting guarantees.
I should now like to deal with the matter before the House. It bears directly on the production of documents. I am convinced that the member for Compton would be the first to recognize, in agreement with the members of his party, that private enterprise still exists in Canada. I want to insist on the confidential nature of the documents.
Mr. Speaker, we do want businessmen to be assured some discretion with regard to their day to day exchanges. Needless to say, the government has seen fit to advance sums of money to individuals when the public good was concerned. But these amounts are always offered regular businesses. I am sure the hon. member would not want us to invite private enterprise to make requests from the government and that it should, in turn, use that information against them.
April 12, 1973

Surely the member for Compton recognizes that when there are exchanges between applicants under the DREE programs, the information they supply must necessarily be protected.
Mr. Speaker, this is why the application forms bear at the top a note that the information supplied by the applicant will remain strictly confidential. This does not mean that the information is not available.
Besides, Mr. Speaker, I am sure that the hon. member for Compton, with the utmost facility, could obtain information as to the way one should file an application, the criteria under which applications are granted, etc. And I am sure, given the generosity of the department, that such information would be provided to him.
In fact, a monthly report issued by the Department of Regional Economic Expansion has been tabled in the House. I am referring to the January 1973 issue which gives all necessary information to properly fill the applications.
Such information is made public. Mr. Speaker, I am referring to the January report since, apparently, the hon. member for Compton has not had an opportunity to go over that document and, evidently, he has not seen that of February nor that of March.
The document was tabled in the House in January 1973 and reads in part as follows;
The purpose of this monthly report is to provide Parliament and the general public with up-to-date information on the operation of the regional development incentives program. The report contains summary statistics on administrative actions taken from the inception of the program until the end of the month in question, together with listings of essential facts pertaining to each offer of incentive assistance accepted during that month.
Industrial incentives are available in broad regions and special areas designated by the federal government following consultation with the provincial governments.
Then, from this report, the monthly grants keep on being paid with "Details of offers accepted; and of offers accepted and subsequently revised, declined or withdrawn."
Then, Part III gives a "LOAN GUARANTEE ACTIVITY DURING THE MONTH" as well as details of offers accepted; and of offers accepted and subsequently revised, declined or withdrawn.
Finally, Part IV gives definitions, etc.
I wish the member for Compton would read this report because it is obviously most exhaustive.
Now, I would like to quote this:
Application of Terms to Loan Guarantees
-which is directly connected to the motion of the hon. member for Compton.
The above definitions apply to both incentive grants and loan guarantees, except that there are no payments to applicants with loan guarantees.
This is what I said earlier
And further on:
When providing loan guarantees the department enters into an agreement with the lender to guarantee repayment of a portion of
Commonwealth Holiday Inns Ltd.
a loan being made to the applicant. Such an agreement can only be executed^when the applicant and the lender complete the loan arrangements.
It is just as I said. There must be agreement as to terms; it is the department's duly to ensure that the agreement protects the interests of the Canadian people.
I continue to quote:
The original offer to the applicant by the department is in the form of a letter of intent, a copy of which is sent to the prospective lender.
It goes without saying that the document must remain confidential, because it deals with very private matters which is necessarily confidential information. This is, for instance, the market that the applicant considers, new techniques that they would not want to make public. The financial status of a company is of no concern to its competitors. It goes without saying that these papers must remain confidential, and I am sure that the hon. member for Compton will agree with this.
I keep on reading the report:
Acceptance of the letter of intent by both parties is considered as an "offer accepted". If the applicant fails to complete his loan arrangements, the offer is withdrawn. If the applicant abandons his project or completes his loan arrangements without the guarantee, the offer is "declined".
So, it is quite possible that in such a case the applicant gets a loan without having to submit guarantees; obviously, the lender would be ready to advance money to the applicant if his guarantees are absolutely secure, and only when the applicant cannot get satisfaction from a bank does he consult the department. So, that is it. The report adds:
Once the Department has completed an agreement with the lender, there is a "guarantee in operation".
A loan guarantee applicant discharges his loan obligations directly with the lender, reducing at the same time the potential liability of the department.
Of course.
Mr. Speaker, if I require that all the documentation be tabled in the House, that will directly encourage a procedure which has been always condemned by parliamentary institutions. Since the implementation of the program, the party, the government, the department has adopted the policy whereby the applicant is informed that all information will be strictly confidential. One would not be wise to cause the government to show ill will by asking it to change its attitude. We would no longer receive applications because I am sure that some applicants would not give to the department information which would necessarily be against their interests if it were disclosed.
Moreover, Mr. Speaker, I would like to indicate to the hon. member for Compton that if the government agreed to produce documents now, that would go directly against the principles stated in the House last March 15 which can be found in Appendix B of Hansard. I refer precisely to three of those conditions:

Exemptions.
The following criteria are to be applied in determining if government papers or documents should be exempt from production:

April 12, 1973
Commonwealth Holiday Inns Ltd.
ITranslation]
Paragraph 5 reads as follows:

Papers containing information, the release of which could allow or result in direct personal financial gain or loss by a person or a group of persons.

Obviously the hon. member for Compton will be the first to agree that some of the information he requests could spell economic disaster for the applicant.
Paragraph 10 reads as follows:

Papers relating to negotiations leading up to a contract until the contract has been executed or the negotiations have been concluded.
Under the existing procedure an offer is made by the department. That offer should lead to a contract and this falls directly under that paragraph. There is no question about it. Paragraph 14 is most important and deals directly with the hon. member's request. It reads as follows: [English]
Papers that are private or confidential and not of a public or official character.

Mr. Speaker, what is more private in a private enterprise system than information relating directly to the efficiency of this enterprise? I can see nothing here that might be considered public. I never asked the member for Compton to show me his bank account or his arrangements with his bank manager or even with his wife. I do not know what kind of relations he has on the strict economic point of view. Nor would I like him to ask me my financial conditions.
I am also confident that the member for Compton would meet a rather violent response from businessmen in his riding if all at once he asked them: "Gentlemen, will you please let me have your balance sheet so that I can better judge the conditions which might affect you in our riding". Of course, this might be very useful to him, but surely this is not justified under the circumstances.
Mr. Speaker, I will not take any more of the time of the House because, in my opinion, this issue is quite clear. I am sure that having heard my remarks, the member for Compton will admit that this is not at all the acquisition of public property under the requested documents.
As regards representations for wider distribution of information to prospective applicants, either in my constituency or in his, I am in perfect agreement. In my opinion, the Minister of Regional Economic Expansion (Mr. Jamieson) would be the first one to supply to the highest number of applicants the information which could encourage them to use the facilities which are available under the new law.
Besides, Mr. Speaker, I hope that, in view of the interest shown by the hon. member for Compton, sooner or later he will, depending on his political success, second the

government when the time comes to develop the department's program and the government in general.
This program is beneficial to my constituency and it would be more advantageous for us if it were more complete. I think the hon. member for Compton will agree, because the regional development program is unique in that it was not established in another country and it must be given as much encouragement as possible. One of the main aspects of this program is respecting the secrecy between the applicant and the government.


Arthur Jacob (Jake) Epp: Mr. Speaker, in speaking to the motion before us there are some preliminary remarks I wish to make relating to the Department of Regional Economic Expansion. When the present government was first elected in 1968, I was not a member of this House. However, it was my impression that the government espoused two priorities: first, linguistic equality of both of Canada's official languages and, second, removing some of the regional economic disparities that exist in Canada.
May I say that I endorse the underlying principles put forward. I also endorse in general terms the objective of the Department of Regional Economic Expansion, which is that industrial incentives be made available in particular regions following their designation by the federal government after consultation with provincial governments. Surely, many aspects of economic development must be considered when one talks about industrial expansion. One could mention transportation and geographic isolation. Our transportation system must span these geographically isolated communities as much as possible.
One must also look at DREE programs from the point of view of the capitalization necessary for small and medium size industries. There is great potential in so-called designated areas, but if this potential is to be utilized and realized there must be outside help with capitalization. As the hon. member who just resumed his seat suggested, it is necessary for there to be co-operation between federal, provincial and municipal governments and with private entrepreneurs if this potential is to be realized.
If I may speak directly to the motion, the hon. member for Compton (Mr. Latulippe) wishes specific documents to be produced. I agree that to some extent certain aspects of DREE activity should be made public and come under scrutiny. The activity mentioned in the motion, however, is not an area that should be made public because a certain amount of confidentiality is necessary in connection with the loan application and those who review it. If private entrepreneurs are to avail themselves of government help, specifically that given by DREE, they must be confident that their financial position and other internal matters pertaining to the company do not become the property of the public.
I shall now speak specifically about the convention centre, or the Commonwealth Holiday Inn mentioned in notice of motion No. 76. As I come from Manitoba, may I point out a few factors of which the hon. member may not be aware. As hon. members know, Winnipeg, by virtue of its location in the mid-continent, is uniquely placed for the development of convention and tourist facilities. It is
April 12, 1973

fairly closely related to large metropolitan areas of the United States such as Minneapolis, Minnesota. It is quite accessible from the mid-western United States.
The province of Manitoba and the city of Winnipeg, specifically Unicity, have been able to get together, the result being that private entrepreneurs are now developing what is known as a convention centre in Winnipeg. That centre will contain recreational facilities and will be suitable for the holding of large and small conventions. The Commonwealth Holiday Inn is part of this complex and of the development of the inner city of Winnipeg. I am speaking as a Manitoban who lives 40 miles outside Winnipeg. This centre will be an asset not only to Winnipeg but to all Manitoba. That is the type of development we are looking for from DREE.
The hon. member suggested that the money spent should have been made available to small businesses. I agree. However, a guaranteed loan of this nature does not rule out any loans that might be made to small or medium sized businesses. So I endorse what has taken place with the assistance of local and provincial officials in Manitoba whose work has enabled us to include this Holiday Inn as part of our convention facilities.
In anticipation of the completion of the convention centre we have already seen in the general area of Winnipeg the development of hotel facilities which are second to none in North America. Mr. Speaker, if you relate the hotel facilities and the number of rooms we will have in Winnipeg to the population of Manitoba, you will see why we anticipate economic development as an ancillary effect of the convention centre through the expanded tourist industry.
Almost all of Winnipeg is regarded as a designated area under the DREE umbrella. I refer to the city itself. I have been speaking more of rural areas and their development. I could say that Winnipeg should not be included as a designated area, but I cannot be so provincial. Vancouver, Toronto and Montreal have gained a reputation, in many circles, and if you are holding a convention it is thought it should be in one of those centres. We in Manitoba, specifically Winnipeg, are trying to prove that this is not the case. Winnipeg has facilities which make it a viable convention area.
As an aside, I might say that Commonwealth Holiday Inns have built a facility in Kenora, Ontario, which is just outside my constituency. This is a very modest facility relative to large urban centres, but it is a very fine facility for a town the size of Kenora. The impact the hotel has had on Kenora by reason of one being able to find hotel accommodation has increased the tourist industry, not only in Kenora but in the eastern part of my constituency which depends almost entirely on tourism. It is an expanding industry. In my constituency, which is just west of the Manitoba-Ontario border, we feel the effects of this hotel in Kenora. Ancillary effects are also being experienced in Kenora and eastern Manitoba.
I agree that possibly more grants should be made available to smaller operators in tourist industries, such as rural hotels, lodges, and so on. I do not believe a guaranteed loan of this type would in any way rule out such
Commonwealth Holiday Inns Ltd.
development. The large, international hotel chains are not necessarily considering moving into the smaller areas. They are not competing in those areas. There is a lot of room for development by the small entrepreneur. A guaranteed loan of this nature would not jeopardize development or expansion in the smaller areas.
I will endorse DREE as long as its objective is the economic development of areas which have been designated, not as areas that need help but requiring special encouragement in capitalization so they can compete. We want to remain on a free enterprise basis and capitalize and utilize our facilities and personal drive. That should be, and I believe it is, the aim of DREE. I endorse what has happened relative to this guaranteed loan and the development of the convention centre in Winnipeg. In conclusion, I invite all hon. members to Manitoba, not only to use the convention centre but to take advantage of the facilities that have been built to house people for the night.


Some hon. Members:: Hear, hear!


Mr. Eudore Allard (Rimouski):: Mr. Speaker, I would like to make only a few remarks on the notice of motion for papers now under debate.
I wonder why the government refuses to table those papers. Would it have something to hide?


Mr. Prud'homme:: That was explained earlier.


Eudore Allard: They said why; they said it is because they are confidential, but I think hon. members should be informed about what is going on in different fields.
That is why I support the request of the hon. member for Compton (Mr. Latulippe). I wonder if the hon. member who answered him, the member for Nipissing (Mr. Blais), supports private enterprise. I wonder if he knows the difference between a private enterprise and cartels.
As to the case before us, it is a chain of hotels. Consequently it is a big corporation which properly deserves to be called a cartel. I want to make it clear to the hon. member that the minimum amount of $250,000 is inaccessible for other firms, small family firms or the sole owner.
This is why I urge the Minister of Regional Economic Expansion (Mr. Jamieson), on behalf of small and medium hotel firms, to lower the ceiling, in future regulations, to $25,000 for loans granted to innkeepers. I have nothing against the $250,000 loan guarantee. If this is good for big companies, we should also favour those of lesser importance in order to enable them to survive.
In the province of Quebec, numerous places are tourist havens, especially in the Gaspe peninsula, on both shores of the St. Lawrence and in the northern area of the Laurentians. If the government really wants to promote the industry, the second most important in Quebec, it should lower the $250,000 ceiling in order that loans may be more readily accessible to small and medium companies.
Such action would tend to promote tourism in our country and, as I said before, I am in favour of assistance to major businesses, provided the smaller ones are also

April 12, 1973
Income Tax Act
looked after. As it is six o'clock, I must interrupt my remarks.


The Acting Speaker (Mr. Boulanger):: Order. The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight o'clock.


George Albert Proud: Mr. Speaker, I am rising on a question of privilege.
I shall ask the hon. member if it was really his intention to kill his colleague's motion.


The Acting Speaker (Mr. Boulanger):: I have already called it six o'clock and that is why I have decided against the question of privilege.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration in committee of Bill C-170, to amend the statute law relating to income tax- Mr. Turner (Ottawa-Carleton)-Mr. Laniel in the chair.
Gérald Laniel: Order. When the committee rose at five o'clock it was considering clause 35.


David Orlikow: Mr. Chairman, when I was discussing this subject earlier today I was making the point that while I have no particular objection to this clause which gives tax benefit to a taxpayer who has a dependant attending university, I feel it is just one more example of benefits being given to people in the middle and upper income brackets. I draw attention to the figures made available by Mr. Maslove in the study he carried out for the Economic Council, which showed conclusively that people in the lower income bracket pay a substantially higher percentage of their income in taxation to the three levels of government than do other taxpayers.
Since I spoke earlier this afternoon I have learned that the government of Ontario has announced it will increase sales tax from 5 per cent to 7 per cent.


Some hon. Members:: Shame.


David Orlikow: I suppose there are very few taxes more regressive than sales tax. The only example I can think of are municipal taxes which are paid on property without any relation to wealth or income. Other than this, there is no tax more regressive than sales tax. All the studies show that people in the lower income bracket pay substantially

more this way as a percentage of their income than do taxpayers in other income groups.
We have made some progress. It is not often I commend the minister, but I commend him now on the very progressive step he took when reducing income tax rates. I commend him for weighting the benefits of these cuts instead of providing a flat rate which would, again, mainly benefit those in the middle and upper income brackets. I have been reading a book entitled "The Rape of the Taxpayer," written by a former senior civil servant in the United States treasury department, Mr. Philip Stern. He gives an illustration of what I have in mind. He points out that if Governor Nelson Rockefeller, for example, were to make a donation of $100,000 to one of his favourite charities, the Museum of Modern Art in New York city, his liability for income tax would be reduced by $70,000. So in effect he would be given $30,000. But if a schoolteacher gave a donation of $10 to the museum, the tax deduction would amount to only two or three dollars.
This is the kind of inequity we have incorporated into our income tax laws over the years by means of special clauses and subsclauses designed to help somebody or other, usually those in the middle and upper income brackets. Consequent upon the income tax reduction which I am sure will be approved by the House-I am thinking specifically of the 5 per cent reduction-every taxpayer will get an immediate reduction of $100. But for many people in the lower income bracket, particularly married men with dependants, the reduction of $100 is, in fact, not 5 per cent but as much as 45 per cent. That is the kind of tax policy thinking that I should like to see the minister not only continue but expand.
May I close by giving the minister an illustration of what I mean by referring to something that was done this year in the province of Manitoba. The Manitoba government put through a program called the education property tax credit plan. They took the view that every person who owns his own house or rents accommodation for himself and his family is paying, in his municipal taxes, for the support of the educational system in his area. The government have taken the view that the burden of local taxes is becoming too onerous; therefore they have devised a tax credit plan under which every person who pays income tax is entitled to a credit of a minimum of $50 and a maximum this year of $147. Next year the maximum will go up to $200.
The difference between that plan and most other tax plans that I know about is that the minimum $50 is given to people in the middle and upper income brackets, whereas the maximum of $147 this year and $200 next year benefits those in the lower income bracket. As one's income increases, so one's tax credit decreases. Not only does it give a tax credit to those who pay income tax; it gives a rebate to people whose income is so low that they are not required to pay income tax. The province is encouraging these people to fill out an income tax form, and has opened offices with staff to help people who are not accustomed to paying income tax to fill out the form and mail it to the provincial finance minister. In return they get a cheque in the form of a rebate under the plan. The Minister of Finance is beginning to think along those
April 12, 1973

lines. I think he has made a good beginning, though he has not gone nearly far enough in his income tax reduction this year.
My last point is this. I trigd to make it clear in my remarks before the dinner hour that I did not object to this particular form of tax aid to people with dependants at university. However, it is time we looked at our whole income tax structure in this country and revised the system, wiping out most, if not all, of the concessions given to special interest groups, whether they be in the oil or mining industry or any other industry. We should do what the Carter commission said, which essentially was that we should regard a buck as a buck and people should pay taxes on that basis.


Mr. Yewchuk:: Mr. Chairman, I want to make some comments with reference to paragraph (g) of this clause. This is the paragraph which provides an exemption for students, particularly those who are taking a course that offers a degree. It would appear that somebody has made a mistake and decided that nurses do not receive degrees and thus do not qualify under this provision. The fact is that nurses do get a degree, called an RN. This is just as valid and accepted as a B.Sc., a B.A., a B.Ed. or any other degree.
I suggest the minister take another look at this provision and make a change to entitle nurses to the same sort of privilege as that granted other students. Their expenses are no less than those of other students. Their work is no easier than the work of the students. Also, they are usually very beautiful and should get a deduction for that in itself. Some of them even know more than the minister responsible for housing.


Stanley Ronald Basford: Some know more than the doctors.


Paul Yewchuk: They certainly make a great contribution to the care of patients, and no doubt patients appreciate the services that are rendered by nurses. Most patients would take much longer to get better if nursing services were not available. I wonder whether the minister would give me an explanation for taking this type of unpopular step at a time when he is trying to be so popular in this country. It would be easy to make a change to the wording of the clause. I just wanted to bring that matter to his attention.


Lorne Edmund Nystrom: Mr. Chairman, I have one question for the minister on clause 35(5)(e.l) which provides a $1,000 deduction for people who are blind or confined to a bed or wheelchair. Has any consideration been given to expanding this provision to include invalids who are not necessarily confined to a bed or wheelchair? Many members get letters from people who are unable to work owing to permanent sickness. Just half an hour ago I came across a case where a fellow had been an invalid for five years and unable to work. As I read this provision, this man's spouse would not be able to deduct $1,000 because he is not necessarily confined to a bed or whqelchair.


John Napier Turner: To deal with the last point first, Mr. Chairman, it is possible that it has been difficult to define just what "disability" consists of; that is
Income Tax Act
our problem there. We are continuing to widen the exemption as we go.
The question of nurses was brought to my attention by the hon. member for Athabasca's colleague from Edmonton East. I passed him a note across the Chamber with the answer that the nurses' associations ought to get themselves certified under the regulations of the Department of Manpower and Immigration so as to qualify under the deductibility clause. This is something they should be able to do through their association.


Paul Yewchuk: Mr. Chairman, would the minister clarify the exact procedure that is required? Would any other legislative changes be necessary as far as the manpower department is concerned, or is it simply a question of registering with them?


John Napier Turner: It is simply a case of registering the profession of nurse with the Department of Manpower and Immigration. I have had dealings with nurses' associations. At one time, may I inform the hon. member, I had five hospitals in my riding in Montreal, and I found that the nurses were better organized than the doctors. I just put that on the record so that the nursing associations will know what to do.
Earlier there were some comments about tuition fees. May I draw to the attention of the hon. member for Scarborough East section 60, subsections (e), (f) and (g) of the existing act where he will see tuition fees generally are deductible. This is an educational deduction generally for the student, for his spouse or his sponsor. I think when they are read together it will be seen that we have broadened this deduction a good deal.
The hon. member then spoke of non-degree institutions, particularly outside of Canada. I suppose this is a policy decision that will have to be reconsidered at some time, but the impetus has been to try to persuade our students to get their education in this country. He then referred to the commuter problem. We will take another look at that, but at the moment we find there is not enough policy thrust for his suggestion.
In respect of secondary institutions the hon. member is getting into the separate school question. The federal government has stayed constitutionally clear of primary and secondary education. We are involved in post-secondary education, educational manpower training for employment, and recycling. I think I would have great difficulty persuading the provinces that this was not an initiative already in their domain, and I am afraid I cannot recommend to this House that we get into it. The hon. gentleman should direct his question to the Ontario government.


William Skoreyko: Mr. Speaker, when the minister referred to nursing associations, did he mean a nursing association, or individual nurses? In the province of Alberta, for example, would they be certified, or could each individual nurse be certified?


John Napier Turner: Any nursing association anywhere in the country, if it could persuade the Department of Manpower and Immigration to recognize the

April 12, 1973
Income Tax Act
profession of nursing, or a particular school of nursing, as a qualified institution within the regulations would be eligible and that would be the end of it. I would suggest that the Alberta nurses ought to see what they can do to get the various training schools in the hospitals qualified within the regulations of the Department of Manpower and Immigration; they would then be qualified within the section and the amendment.


Reginald Francis Stackhouse: Mr. Chairman, I would like to make a few comments on what the minister has said. First of all, under the provisions of the existing legislation, as I understand them, a student is entitled to deduct tuition fees, but I do not recall a sponsoring individual having that right.


John Napier Turner: That is right.


Reginald Francis Stackhouse: My plea was on behalf of the sponsoring individual having an equal right to that of the student. With deference to the minister's remarks, I should think further changes would have to be made to the legislation before us; or perhaps the minister will bring in something new to give the sponsoring person the same right the student apparently now has.
Secondly, in respect of what the minister said about secondary education, I do not think this gets us into the separate school issue per se, because it involves many other institutions. The reason the province of Ontario has not seen fit to pay the costs of students from grade 11 on is that from grade 11 these institutions are regarded as private schools.
Therefore, I was referring to all secondary institutions privately funded, which includes institutions sponsored by many religious groups, Christian, Jewish, Protestant, Evangelical, and other persuasions some of which have no religious reference at all. Parents send their children to these schools because of their own convictions. It seems to me when parents are sponsoring the public educational system through taxation, but because of their own particular convictions have a desire for another form of education for their children, they should have this advantage. In this instance I feel the federal government should agree.
Rather than looking at this matter in the parochial way, I think it is back in the lap of the Minister of Finance. I hope at a subsequent time he will bring forward a measure to give these people as much relief as possible. I think the minister should do this as an example of what might be done in the future. The government has accepted the principle that the cost of education can be deducted not only for students but for sponsoring individuals, and I think we will see steady progress in this area over the years with the government providing more and more assistance year by year. This is very often a technique used by government. It is very much like the salami technique, under which you offer a slice this year, a little more next year, and so on. I think we can look for progress. However, I wish the minister would not be so content to wait, but would give the people, now, what they really need.


Lorne Edmund Nystrom: Mr. Chairman, I want to pursue the point again with the minister about people who are disabled. Would he have his officials look at this clause once again?

It seems to me a bit unfair the way it stands. I am not trying to make a political point here, but a number of people who are genuinely disabled or invalid are not necessarily confined to a wheelchair or to bed.
It seems to me this legislation could contain a clause that would provide for eligibility under a doctor's certificate or statement to the effect a person is unable to work or pursue his occupation. That should be enough to qualify him for the $1,000 exemption on the spouse's income. Would the minister consider standing this clause for the evening and having another look at it to see whether he could possibly include this type of provision to make the legislation more equitable for people who are disabled? Many people in this country have disabilities but do not receive adequate pensions or assistance, either federally or provincially, and a provision such as this would be a small help to them in remedying the situation.


John Napier Turner: We are being quite specific here, Mr. Chairman, in that we are referring to individuals confined to bed or a wheelchair. This is the essential purpose of the relief, and we prefer at this time to leave it at that. We will take the hon. member's problem under advisement, but we are specific in the parameter of relief that we are covering.


William Gordon Ritchie: Mr. Chairman, I should like to ask the minister whether his department has a definition of blindness, because this is very difficult to define. Does he have guidelines he could send to the people who are affected?


John Napier Turner: Mr. Chairman, there is nothing within the statute to define blindness. This, again, involves a question of fact. I suppose it could be by medical certificate.


Paul Yewchuk: Mr. Chairman, I am sorry to be asking more questions on this matter but I am still not clear as to what is required. The minister says nurses know what to do, but it strikes me as rather peculiar that they have not done it. He went on to say they have to persuade the Minister of Manpower and Immigration to allow them registration within the department. Perhaps he could clarify with regard to the apparent stumbling-block in the Department of Manpower and Immigration. It seems to me that a school which is qualified or recognized for training nurses should automatically qualify.


John Napier Turner: Obviously, the need has not arisen. But if the hon. member would look at page 61 of the bill and the amendment to section 110 of the Income Tax Act, specifically the definition of an educational institution on the third line of page 61, he would see that an educational institution in Canada is a university, a college or other educational institution. Then if he looks down to paragraph (B) he will see that it covers being certified by the Minister of Manpower and Immigration as an educational institution by which courses are conducted that provide or improve the qualifications of a person for employment or for the carrying on of a business or profession.
Since nursing is a profession, all that needs to be done is to have the particular institution qualify within these regulations. That is my advice to the hon. gentleman. The particular association of nurses or the hospital he has in
April 12, 1973

mind just need to apply; and if they meet those general criteria, I cannot see any problem.


William Skoreyko: Mr. Chairman, would it not be much more simple if the minister spoke to the Minister of Manpower and Immigration and asked him to automatically certify all nursing schools which offer degrees in nursing-that would simplify the matter-rather than having each individual association appear before the manpower group. Would it not be much more simple to automatically recognize them if they offer degrees?


John Napier Turner: I am not so sure of that. I think it would cause more problems than it would solve. We have general criteria which apply, for the purposes of the Canada Student Loans Act, to education, tuition fees and other aspects of education. There are the same general criteria for all programs. There has been a lot of experience with this program and it seems to have worked pretty well so far.


William Skoreyko: You are giving this benefit carte blanche to every university, so why cannot you give it to nursing schools?


John Napier Turner: Well, for any type of school, perhaps; but they must meet the standards of the act. I think we found in practice in the past that setting general criteria and having the facts established within them is the better way to deal with it. Every time we specifically add one institution, we thereby exclude every other institution. It is better to have a general set of criteria which apply equally to business schools, recycling schools, manpower training, and so on. I do not think the case will meet much difficulty in being met.


Gérald Laniel: Order. Does this complete consideration of clause 35? I wish to bring to the attention of hon. members the fact that the Chair some time this afternoon had before it an amendment suggested by the hon. member for Skeena, who is not in the chamber at this time. It was more or less suspended-it was not put- in the hope that it would be reconsidered and could be moved later. I wonder what the situation is now. Shall clause 35 carry?


John Napier Turner: In the absence of the hon. member for Skeena, I wonder whether the leader of his party or the House leader could deal with the matter on his behalf. I am prepared to meet the point of the hon. member for Skeena by introducing an amendment. I have not really yielded my point of order, but I am prepared to meet his point by moving an amendment which would read:
That clause 35 of Bill C-170 be amended by adding thereto, immediately after subclause (6) thereof, the following subclause:
I will circulate copies of this amendment in a minute.
" (6.1) Section 110 of the said act is further amended by adding thereto, immediately after subsection (1) thereof, the following subsection:
'Deemed	(1.1) Where, in circumstances in which a person
payment	engaged in the business of providing transporta-
Gf	tion services is not readily available, a taxpayer
medical	makes use of a vehicle for a purpose described in
expenses	subparagraph (1) (c) (viii.l), the taxpayer or his
Income Tax Act
legal representatives shall be deemed to have paid to a person engaged in the business of providing transportation services, in respect of the operation of the vehicle, such amount as is reasonable in the circumstances.' "
Translated into English, it means that if there is not commercial transportation available, and he takes his own car, he gets a reasonable mileage charge for it. I think this meets the point of the hon. member for Skeena in respect of air, water and land. I would be prepared to move that amendment. I do not know whether anyone is in a position to speak for the hon. member for Skeena, but I think it meets his point. Does anyone have the courage?


Stanley Howard Knowles: Does my hon. friend the minister know my hon. friend the member for Skeena? I think, Mr. Chairman, this amendment does meet the point. However, I wonder if we should deal with it in this way; that is, that we accept the moving of this as an amendment in substitution of the other one so that we do not have the argument on the point of order, but let the matter stand in case the hon. member for Skeena or the hon. member for Comox-Alberni can get here this evening. I am not asking that it be stood over until tomorrow. I am merely asking that it be stood for a little while.


John Napier Turner: I am agreeable to this. If there is no objection by the hon. member for Skeena or the hon. member for Comox-Alberni to this proposed amendment, then the clause shall be deemed to have been carried; is that fair ball?


Stanley Howard Knowles: Yes.


John Napier Turner: Then it is so moved by the Minister of State for Urban Affairs, seconded by the Minister of Consumer and Corporate Affairs.


Stanley Howard Knowles: I am assuming no one is raising the question of whether there need be an amendment to the ways and means resolution. Let us assume that has been taken care of. I rise really for the purpose of having the understanding clear that the amendment will be considered as having been carried, and if my friends do not wish to speak to it we will not return to it.


John Napier Turner: By ten o'clock tonight.


Stanley Howard Knowles: If they wish to return to it, we will revert to the clause.


John Napier Turner: I will not hang too tough on that.


Gérald Laniel: The first point raised by the hon. member has been considered by the Chair. In looking at the amendment, it would seem to be more or less an amendment in respect of detail, and I do not think the Chair should reopen the debate. On the other point, shall the amendment be deemed to have been carried, subject to the reservation that has been made by the minister and by the hon. member for Winnipeg North Centre?

April 12, 1973
Income Tax Act


Some hon. Members:: Agreed.
Amendment (Mr. Basford) agreed to.


Gérald Laniel: Shall clause 35, as amended, be deemed to have been carried, on the same conditions?


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
On clause 36-Application of subsection 115(2).
Marcel Joseph Aimé Lambert: What is the effect of clause 36?


John Napier Turner: I have been asked by the hon. member for Edmonton West to explain the effect of this clause.


Marcel Joseph Aimé Lambert: Generally.


John Napier Turner: Section 114 of the act
deals with individuals who either become resident or cease to become resident in Canada during the course of the year. The addition of section 114.1, which was put in as a result of this clause, represents a technical change to ensure that a person resident in Canada during a part of a taxation year is not able to avoid tax on certain categories of income earned in Canada during that portion of the year in which he is not resident in Canada. It is a technical amendment.


Gérald Laniel: Shall clause 36 carry?


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
Clause 37 agreed to.
Marcel Joseph Aimé Lambert: Mr. Chairman, if you would call clauses 38 to 48 inclusive, we are ready to agree to them.


John Napier Turner: That is fine.


Gérald Laniel: Is it agreed that clauses 38 to 48, inclusive, carry?


Some hon. Members:: Agreed.
Clauses 38 to 48 inclusive agreed to.
On clause 49-Beneficiary's receipts that are not deductible.


Marcel Joseph Aimé Lambert: I would like to have a little more explanation from the minister on this clause.


John Napier Turner: On clause 49, we return to sub-clause 49(1). This is a technical amendment to section 144, subsection (3), paragraph (e) which exempts taxable dividends from an employee's income. Clauses 49(2) and 49(3) relate to distributions from employee's profitsharing plans. This amendment provides tax relief where a beneficiary of an employee's profit-sharing plan receives proceeds from a plan which includes shares of other property that appreciated in value during the period it was held by the trust for the plan. The amendment also makes clear that any capital loss realized by the trust for
[The Deputy Chairman.]
the plan shall be taken into account in calculating the portion of the proceeds to be included in income.


Marcel Joseph Aimé Lambert: Mr. Chairman, on this point may I ask the minister whether he has received many representations from the major employee groups in the country, for instance from Simpsons-Sears, who at the time of the white paper and Bill C-259 were in the vanguard of it and showed that, frankly, the proposals with regard to deferred profit-sharing plans under the white paper were confiscatory and totally wrong. They were going to completely "zap" any idea of the equity of any employee profit-sharing plan.
What has happened since that time? Have there been further representations, and have the representations been taken into account in these amendments? I must say that there has been a deafening silence from that side, as far as I can see, both in the press and in letters, so we must assume that the proposals contained in this bill meet at least the major portion of their objections.


John Napier Turner: That is so. I issued a press release, which was circulated to hon. members some time ago, saying that I was going to do it; and this clause does it.


[Stage Direction]
Clause agreed to.
Clause 50 agreed to.
On clause 51-Amounts received taxable.
Marcel Joseph Aimé Lambert: This is one of the areas that seemed to give a lot of trouble. I wonder if the minister would explain to the Committee what he has done to meet the objections outstanding with regard to this particular point as it stood in Bill C-259.


John Napier Turner: The amendments in clause 51 relate to section 147 of the Income Tax Act. The amendments provided in this clause will help taxpayers considerably. They will implement an undertaking given by me in a news release on September 21, 1972. This release promised that where a single payment is made from a deferred profit-sharing plan upon retirement from employment or the death of an employee, and that single payment includes shares or other securities, the taxation of any accrued capital gain attributable to the shares or other securities is included in the single payment and may be deferred until the beneficiary disposes of them.


[Stage Direction]
Clause agreed to.
Clauses 52 and 53 agreed to.
On clause 54-Farmers and fishermen.
Marcel Joseph Aimé Lambert: I think this clause requires an explanation. It brings in considerable changes affecting farmers and fishermen and their way of paying tax. Let us get that on the record.


John Napier Turner: I know the hon. member knows a good many fishermen. This is an amendment to the provision in the act which allows farmers and fishermen to calculate their instalments of tax during the year on the basis of either an estimate of the tax for the current
April 12, 1973

year or by reference to experience in the previous year. They can elect. In the past, instalment payments which amounted to two-thirds of the estimated tax due on December 31 had to be calculated on the basis of the current tax liability or the previous year's taxable income.
The amendment permits the instalment to be calculated by reference to the taxpayer's instalment base for the previous year instead of by reference to the taxable income. It is provided that the instalment base shall be determined in the prescribed manner. A news release issued by me on July 19, 1972, indicated that the instalment base fcr an individual would be his tax for the preceding year.


[Stage Direction]
Clause agreed to.
On clause 55-Other individuals.
Marcel Joseph Aimé Lambert: May we have an explanation of this clause?


John Napier Turner: I think I can respond to the hon. member's request. This is on the point we talked about earlier when I was referring to the question put to me by the hon. member for Malpeque. It is the clause which exempts any individual who might otherwise be liable for a quarterly tax payment from making such payments if the tax payable from the previous tax year did not exceed $400. It also applies for the current year if it does not exceed $400. Instead of persons, and especially pensioners, having to make quarterly instalment payments they are allowed to make one payment during the year. I think this is a release from a lot of bureaucratic entanglement.


[Stage Direction]
Clause agreed to.
Clause 56 agreed to.
On clause 57-Corporations.
Marcel Joseph Aimé Lambert: I take it that the attempt here is to give a little more flexibility to corporations. It uses a wider period of 15 months. If one looks at section 157 and the requirements about the payment of tax by instalments, this may give them a little more flexibility. I hope that whenever the minister deals with tax and with corporations, whatever steps may be convenient for the Minister of National Revenue will not require an addition to the working capital that will be involved in the corporation, because all I can say is that if you have to borrow the money there is only one person who pays for that, and that is the consumer.
Goodness only knows that the poor old consumer is right on the business end of the rifle-barrel and he gets the blast every time it goes off. I do not care what government triggers off a levy or requirement that involves a greater cost in doing business, it is the consumer who is right there at the end of the muzzle and who gets the full blast. I hope this clause will introduce greater flexibility and will loosen some of the shackles that were imposed on business through Bill C-259. We will be amending this act as we go along, if only to make it more practical for the taxpayer himself rather than just to make it nice and tidy up here in Ottawa.
Income Tax Act


John Napier Turner: This clause does what the hon. member hopes it does.


[Stage Direction]
Clause agreed to.
Clauses 58 to 69 inclusive agreed to.
Robert Jardine McCleave: This completes part I, with the exception of clause 23 which was stood. I propose that we call it when we have completed all the remaining clauses. The committee will now consider clause 70, in Part II, which commences at page 110. Shall clause 70 carry?


[Stage Direction]
Clause agreed to.
Clause 71 agreed to.
On clause 72- Goodwill and other "nothings".
Marcel Joseph Aimé Lambert: Mr. Chairman, you will almost have a nightmare when you read the marginal note, because you will recall that you had to concern yourself, at the time of the study of Bill C-259, with "goodwill and other nothings". What is the general effect of the rather lengthy changes that have been introduced here both as to government rights and the original rights?


John Napier Turner: Mr. Chairman, clause 72 amends section 21 of the Income Tax Act amendments and rules to ensure that on the disposal of a government right or the renewal of original government rights acquired before 1972, the amount payable to the taxpayer for the purpose of section 14 of the act cannot exceed the amount by which the selling price exceeds the cost. Government right means right or licence acquired from a federal, provincial or municipal authority which enables the taxpayer to carry on that business activity to the extent to which he would otherwise be unable to carry it on.
I think the committee should know that of the amount payable to the taxpayer referred to in the clause, only one half is included as taxable income under section 14 of the act as "eligible amount". Such rights would include transportation rights or licences, taxi licences, truck licences, bus licences, air line licences, boat licences, or marketing regulations for agricultural produce, milk quotas, egg marketing, acreage allotment for tobacco growers and so on, timber cutting rights, radio and TV rights, including cable TV and satellites. The new treatment for government rights was introduced primarily because government protected rights tend to have more loss of value and non-deducted cost before 1972 and this should be recognized in computing the proceeds of sale.
I submit to the Chair that this amendment goes a long way toward satisfying the requirements of the agricultural community on the taxation of quotas and their evaluation.


Robert Jardine McCleave: Shall clause 72, at pages 112, 113 and 114, carry?


[Stage Direction]
Clause agreed to.
Clauses 73 and 74 agreed to.
On clause 75.
[Stage Direction]
April 12, 1973
Income Tax Act
John Napier Turner: Mr. Chairman, I have an amendment deemed to be based on the ways and means motion. It will be found in Votes and Proceedings for Wednesday, April 11, 1973, at page iv. It reads as follows:
'Inter vivos transfer of farm land by a farmer to his child
That Bill C-170 be amended by striking out lines 34 to 37 on page 123 thereof and substituting the following:
(19) Where a taxpayer owned, on December 31, 1971, and thereafter without interruption until a transfer thereof by him to his child, in circumstances to which subsection 73(3) of the amended act applies, land referred to in that subsection, the following rules apply:
(a) paragraph 73(3) (c) of the amended act does not apply for the purpose of determining the cost to the child of the land, and
(b) subsection (5) shall apply in respect of the transfer of the land to the child as if the references therein to "June 18, 1971" were references to "December 31, 1971".
(20) For the purposes of subsections (18) and (19), "child" of a taxpayer includes a child of his child, and a child of his child's child.'
All this does, Mr. Chairman, is provide the transitional rules to accomplish what we accomplished in an earlier motion, namely, that the transition of the family farm from generation to generation can be accomplished not only by death but during the lifetime if the farm remains in use. These are transitional measures to bridge the original tax reform statutes and today.


Marcel Joseph Aimé Lambert: The minister read "paragraph 73(3)(c)". The ways and means motion refers to "(d)".


Robert Jardine McCleave: Perhaps before the hon. member for Edmonton West makes his contribution, the Chair could put the amendment moved by the Minister of Finance.


John Napier Turner: On a point of order, Mr. Chairman, the hon. member for Edmonton West is correct. It should read "(d)" rather than "(c)", according to the ways and means motion.


Robert Jardine McCleave: The Chair is grateful that the Minister of Finance and the hon. member for Edmonton West agree on what the amendment should be, but the Chair has not quite understood where the change is in the amendment that is found on page iv of No. 70 Votes and Proceedings for Wednesday, April 11. Perhaps this could be made clear to the Chair before the amendment is put to the committee.


Marcel Joseph Aimé Lambert: Mr. Chairman, it was just that the verbal presentation made by the minister differed from the textual one in that he used the small letter "c" rather than the small letter "d". I know it is not a big point, but the record of Votes and Proceedings and the amendment that has been given to you should be correct. The minister was just reading the wrong letter.


Mr. Lewis:: He can't read.
[The Chairman.]


Robert Jardine McCleave: Then I rather confidently put to the committee the amendment as found at page iv of Votes and Proceedings for Wednesday, April 11. Is the amendment moved by the Minister of Finance, and subject to the correction pointed out by the hon. member for Edmonton West, carried?


Some hon. Members:: Agreed.


Robert Jardine McCleave: Shall the clause as amended carry?


[Stage Direction]
Clause agreed to.
On clause 76-Exploration and drilling rights; payments deductible.
Marcel Joseph Aimé Lambert: Mr. Chairman, could the minister inform the House the reason for the restrictive phrase "and before 1972" which has been inserted in subsection 29(14) of the rules? It appears in the bottom left-hand corner of page 123.


John Napier Turner: Mr. Chairman, this is a technical and relieving amendment to ensure that payments made after 1971 for rights to drill for or take oil and gas from Canada which rights were acquired before 1972, will be deemed to be Canadian exploration and development expenses. This is a technical amendment to ensure that the reference to subsection 29(14) of ITAR conforms to the amendment to that subsection. Under the change made, the expression "before April 10, 1972" will be inserted to replace the expression "after April 10, 1962".


Robert Jardine McCleave: Shall clause 76 carry?


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
Clauses 77 to 91 inclusive agreed to.
Robert Jardine McCleave: That completes part II. We shall now consider part III. Shall clause 92 carry?


Some hon. Members:: Agreed.
Clause 92 agreed to.


Robert Jardine McCleave: Earlier in the proceedings of the committee clause 23 was stood at the suggestion of the hon. member for Scarborough West. The committee will now consider clause 23.
On clause 23-Navire ou aeronef appartenant a. des non-residents.


John Napier Turner: I can only say to the hon. gentleman opposite that I do not have enough factual details to be able to isolate the problem he referred to. We have had correspondence about it, and I said I could not cure this because under the general principle of disability pensions the pension is taxed because the premiums are deducted as they go into the pension. In other words, the deduction is taken off income as the pension is contributed to, and when the pension comes out or is paid it is taxed. The universal principle is, the money is deducted and paid in and taxed when it is taken out.
April 12, 1973

However, I give the undertaking to the hon. gentleman's colleagues that I will review the matter and there may be a future amendment. At the moment I do not have enough facts before me to warrant a departure from that general principle.


Lorne Edmund Nystrom: In the absence of the hon. member for Scarborough West may I say that I believe, on his behalf, that this is all right. I thank the minister for taking this matter into consideration.


Marcel Joseph Aimé Lambert: Mr. Chairman, in Toronto during the past year two policemen were killed while on duty and their widows were awarded, shall we say, full salary pensions for a period. Will the minister advise us how it is proposed to deal with this matter? These payments are in part workmen's compensation pensions. Is it the intention to tax the balance in excess of that? I do not know that these are pensions. Here, the municipal authority has decided that a workmen's compensation pension, available under the workmen's compensation provisions, shall be made up to the level of the salary of the policemen who were killed on duty. That is a very proper thing to do since there are usually small children involved. How are we to handle this matter from the tax point of view?


John Napier Turner: I suppose we shall have to see how the Minister of National Revenue will handle it, as this in part comes under the administration of the existing act. If, on challenge by a taxpayer, an interpretation is called for and if we find that there is some inequity, a policy decision will have to be made. At the moment I believe the hon. gentleman's question is premature because we are still not sure, until an interpretation is made, what tax characteristic should be given to that particular type of compensation.


Robert Jardine McCleave: Shall clause 23 carry?


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
Title agreed to.
Robert Jardine McCleave: Shall the bill as amended carry?


Some hon. Members:: Agreed.
Bill reported.


Mr. Deputy Speaker:: When shall the said bill be read the third time?


Marcel Joseph Aimé Lambert: By leave, now.


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


Marcel Joseph Aimé Lambert: Mr. Speaker, I do not think the bill should be read the third time immediately. We have made good progress today and I do not think third reading should be expected as a matter of course. Certain things must be commented upon with regard to this bill. Also, certain matters of an income tax nature are outstanding, which must be considered now that the House has passed the bill in detail through the committee stage.
Income Tax Act
We have now dealt with the increased exemptions for people over age 65 and we have dealt with increased allowances for students. I have found it rather interesting in the last few days to note that somehow or other certain categories of taxpayers all of a sudden are in a great rush. Up to a week or ten days ago there was great silence, particularly from students, about the inability to obtain refunds. This matter was raised in the House. I raised it in a speech, as did the Leader of the Opposition (Mr. Stanfield). Then there was a statement by the Minister of National Revenue (Mr. Stanbury) about the number of files or returns that were banked, shall we say, and that authorization from the House was being awaited in order to pay out the refund cheques or process the files. Some, certainly, may be ready for pay-out; in others, the matter of assessment may be involved.
However, I thought it was not quite in keeping with the realities of the situation when the Minister of Finance (Mr. Turner) the other day stood up and solemnly requested from the House early, almost peremptory passage of the whole of this complicated bill. Here he was, expressing considerable sympathy for senior citizens who would need their refunds in order to meet the pressures of increased living costs. Oh, it was a grand scene. I do not know whether the minister watched the Oscar presentations and was trying to emulate them. Perhaps he felt a twinge of regret because he was not able to participate and show how good an actor he can be at times.


John Napier Turner: I would have sent my Indian princess.


Marcel Joseph Aimé Lambert: I hope that with the passage of this bill, I trust tonight, the other place will be able to attend to it with appropriate consideration. Although the minister stated the other day he felt he had substantially complied with the undertakings given to the Senate by the former minister of finance at the time of the indecently hasty passage of Bill C-259 by the other place, I am now told by my connections and those working there that they do not quite feel that way toward the bill. They feel there are some major gaps. It may be these are in the remaining provisions which we will see at some time.
I do not know what the minister intends to do with regard to the corporate tax cuts to manufacturing and processing industries. Incidentally, I want to reiterate something which has escaped the attention of almost all members of this House. All corporations, from the two-man trucking outfit with "Ltd." or "Inc." behind its name to the major corporations in this country engaged in manufacturing and processing, will be faced with a tax increase of up to 7 per cent as of January 1, 1973. This exists on a parallel scale with the potential increase in taxation for individuals because last year the minister said it was impossible to do anything with regard to tax cuts for individuals. He said it would lead the country into bankruptcy. This was totally wrong. Of course, Saul was converted on the road to Damascus.
The government got around the tax cut for the individual, but it has not done anything with regard to the restoration of the 7 per cent tax cut given by Mr. Benson on October 15, 1971, and which was applicable for the last

April 12, 1973
Income Tax Act
half of 1971 and all of 1972. The grocer, farm equipment distributor, automobile garage, paint contractor, plumber and all others who are incorporated will have a tax increase for 1973 of up to 7 per cent. It is true there is a cutback under the statute from 50 per cent to 49 per cent, and from 25 per cent to 24 per cent, but the restoration of the 7 per cent and the combination works out to about 5.8 per cent. It is strange that no one has mentioned this. The press has said very little about it; the financial writers said very little about it until ten days ago.
I want to reiterate that what is left for the House to consider in so far as individuals are concerned are the goodies of the 1973 budget. There are also leftovers of the corporate tax reduction provisions and incentives of 1972, and there may be some administrative changes. We will have to wait and see. If this tax bill is put through tonight, I invite the minister to let us see the ways and means motion for implementation of the balance of the budgetary provisions. This includes not only income tax but the Customs tariff. There have been some unilateral cuts in the Customs tariff. Attention was directed to these at the time of the budget debate. While the Customs tariff bill proposed by the minister will go through fairly expeditiously, he had better reconcile himself to the fact that the next one will get a great deal more scrutiny and will receive a great deal more criticism.
Some industries have had their guts ripped by the minister's proposals. This is something we should be worried about. I do not know what motivated the government to make these proposals on a unilateral basis when we were just starting on the next round of multilateral trade negotiations. I do not know what kind of gesture it was for Canada to just toss away a great number of its negotiating points. The minister shakes his head. Let him talk to the people in the industries affected. He will get a different reaction.
Some of my colleagues want to speak about the changes that have been made with regard to capital gains as they apply to the family farm owned by the individual taxpayer. The minister confirmed this afternoon that the amendment that was brought in in addition to the provisions to exempt farmlands of a deemed realization on death, if passage was to a child or a descendant of a child there could be an inter vivos sale to a member of the family within that limitation. However, there has been no provision for a roll-over by the taxpayer in selling an orchard property and buying a corn growing property or something suited to a change in his farming practice. Whether the farm is owned by an individual or not has not been included in the legislation. This will prove to be quite a disappointment to the whole of the farming community in Canada.
My colleagues will be making more eloquent pleas with regard to the corporate family farm. I will leave the details to them. The minister has made other changes with regard to the smoother working of Bill C-259, or the Income Tax Act of 1971 and the application rules, particularly clause 78 where he has given a further two years' grace in the foreign, affiliated property inclusion, the FAPI rules, because a great many Canadian corporations will face tremendous administrative problems or potential

problems this year. Personally, I hope the minister will scrap the whole idea that gave rise to FAPI.
A Canadian company might have a holding of 2 per cent or 5 per cent in a foreign company, yet the Canadian government was insisting that this so-called foreign affiliate file financial returns in Canada. I wonder at the effrontery of Canadian tax authorities in trying to impose that regulation. If such legislation existed in the United Kingdom or in the United States we would be screaming that a foreign government was trying to make Canadian companies comply with the law in the United States or Britain, even though all we held was an ownership of shares or a joint ownership of interest in a third company.
All I can suggest to the Minister of Finance (Mr. Turner) and to his colleague the Minister of National Revenue (Mr. Stanbury) is that some of these foreign companies will not-so-politely thumb their noses, and there is nothing the Canadian government can do about it. I think it is a can of worms of the worst kind.


Steve Eugene Paproski: How does that grab you, John?


Marcel Joseph Aimé Lambert: I would hope that since the minister has already taken 18 months to come up with the idea that he cannot work out the rules, he will decide to scrap the whole blessed thing, because to me it is totally wrong. I hope I have said enough with regard to this matter and, hopefully, we can get the bill through third reading tonight.


Lorne Edmund Nystrom: We have had a thorough discussion of this bill, Mr. Speaker, so I intend to take only two or three minutes. We are supporting the bill, as I said earlier, because it deals with individuals, giving individual people a tax break and more exemptions in terms of medical expenses, student allowances, and so on. I should like to thank the minister publicly for amending the bill in the two places he did, concerning capital gains for farmers and the amendment by the hon. member for Skeena (Mr. Howard). I think this is proof positive that parliament is starting to work and that we can make parliament work if we all get down to it as MPs and make up our minds to do something that is good and beneficial for individual Canadians.
The elimination of capital gains tax on farms will go a long way to preserving family farms not just in western Canada but right across the country. I think the minister should be complimented on accepting a very good NDP idea which has been promoted for years-


Some hon. Members:: Oh, oh!


Stanley Ronald Basford: Put your rubber boots on.


Lorne Edmund Nystrom: -in this House by, among others, the hon. member for Saskatoon-Biggar (Mr. Gleave). Hon. members will also recall the amendment moved in this House last year by the then hon. member for Regina East, Mr. John Burton.


An hon. Member:: What happened to him?
April 12, 1973


Lorne Edmund Nystrom: What happened to him? After the Gallup poll, I am sure he will be back, with the Conservative party taking a thumping as they did in the last Gallup poll. I should like to assure hon. members on my right that he will be back and that many other New Democrats will be back from the Prairies, British Columbia and Ontario.
With that, I would like to say we support the bill. It deals with individuals. It is interesting to look at the last seven or eight budgets of the government. The first seven gave all kinds of tax exemptions and benefits to corporations. If we add them all up, we find that the first seven budgets reduced taxes to corporations by half a billion dollars and that taxes to individuals went up by $1.5 billion. In the last budget the government ignored corporations and concentrated instead on doing things for the average citizen. This is another example of making parliament work, setting an example that our party likes. I can assure the minister that if he wants to bring in more tax reform measures to block some of the loopholes for the wealthy, tax reforms to tax the resource industries more heavily, he can count on our party to help him make parliament work and pass that legislation as well, because I believe these are things that must be done in order to help the average Canadian citizen, in order to get this country really moving again.
The Conservatives would like hand-outs for the big boys, but this does not really get the economy rolling. If we want to get moving and increase employment, we must help the average citizen, the average worker, farmer and small businessman. That is the way to get this country on its feet and that is the way to create jobs. If the minister is interested in doing that, we will help him make parliament work and change this country in a really profound and significant way.


Stanley Ronald Basford: That is the Liberal way.


Steve Eugene Paproski: Who needs Burton when you've got Nystrom?


William Gordon Ritchie: Mr. Speaker, I could not let this opportunity pass without mentioning a few things. The main change has been in the family farm tax situation and the roll-over during the lifetime of parent and son. But nothing has been settled about the partnership family farm and nothing has been settled about the corporate family farm. Capitalization of these farms is becoming fairly large, at $100,000 even for smaller ones. Their owners are looking at the limited liability clause that covers corporations. These farms account for a significant part of our agricultural basic production.
We are now becoming interested again in food production. At long last the food glut seems to be ending and we are looking for ways and means of increasing the food supply. The rural population has dropped to a point at which it is probably getting impossible to continue to produce food in a great amounts as in the past, and unless the corporate family farm is dealt with, it will suffer the same liability that occurred prior to the repentance of the government in so far as the family farm was concerned. I think this is especially important because these farms tend to be the most productive in agriculture.
There may be one more important item, one which has been brought to my attention by many farmers who have large amounts of capital invested in their farm machines.
Income Tax Act
This is the loss of straight line depreciation, so-called, which was used by the farmers to keep their machinery a1 a high level of efficiency. It probably has contributed to the fact that food prices remain low, because productivity was extremely high.
Mechanization on the farm carries through into the service end and straight through into farm machinery manufacturing. This is extremely important, because whereas the capital gains tax will occur only occasionally, fortunately, in a family where there is a death or where there is a passing on from one generation to the next by selling, this straight line depreciation occurs every year, and it is the means by which much of the agricultural industry is able to keep at a high level of efficiency. The loss of this straight line depreciation has been severely felt by all.
Now I should like to comment on the capital gains tax as applied to small businesses as well as farms. It is too bad the government cannot see fit to make a start in looking at this area. I mention this in particular because it is an extremely onerous burden on taxpayers in a province to face both an estate tax and a capital gains tax. I have come to the conclusion that one can live with a capital gains tax or with an estate tax, but it is pretty difficult to live with both and still have a viable small business. I do not think it bothers large corporations, but it is a very serious thing for small business. We have suddenly discovered in this House, and so has even the NDP, that small business is important. Under the foreign takeover bill we are studying ways and means to permit Canadians to own more of their own country, and in this area we often start with the very large corporations. If Canadians are to own their own country, one place where we can make a significant effort is at the small business and small corporation level.
I suggest it is most important that the federal government and the provinces work together on this and cooperate to make sure that an estate tax and capital gains tax together do not bring about the dissolution of small businesses that have to be sold out piece by piece to pay those taxes.


William Skoreyko: Mr. Speaker, I shall take only a few moments of the time of the House to register some reservations regarding the measure before us. First of all, I should like to talk for a moment about the 1972 tax return. Much money has been spent on advertising this so-called very simple form which Fred Davis says is easier than you think, but strangely enough never in the history of Canada during the last 100 years have so many people been so frustrated over a new tax policy. Never have so many people had to seek professional help in order to figure out the complex, eight-page document that is presently in the hands of every taxpayer in Canada.
I am reminded of the opposition to the medicare bill which was before the House some years ago. The doctors opposed it vehemently, saying that it was one of the things that would ruin this country. Yet in fact that very legislation guaranteed the medical profession of this country a salary beyond anything they had ever experienced before,

April 12, 1973
Income Tax Act
for the rest of their lives. This tax measure has done the same thing for the accounting profession; this can be verified simply by talking to accountants. As a result of this bill and others that we have dealt with, the government have guaranteed the accounting profession of this country a pension payable every April 30 from now on.
I am a little concerned about what one of the previous speakers said. He said he was very happy that the problem of capital gains tax on farms had been resolved. I do not think it has been fully resolved at all. This afternoon in the House the minister got to his feet and clearly indicated that so far as the family farm was concerned, he had made concessions to the one-owner farms. However, he did not deal clearly enough with the position of corporate or partnership farms.
I think the hon. member for Lisgar (Mr. Murta) expressed his concern about the need for clarification in regard to what would happen in a situation where a father and son or three brothers in a partnership owned a farm and one of them died. That situation has not been clarified. Neither do I understand the statement made by an NDP member a moment ago to the effect that that party was delighted at the clarification of the minister. As I say, I do not think the position has been clarified at all, and it needs to be clarified later.
The position of the family farm vis-a-vis capital gains is also not clear to me or to a number of farmers across the country. Neither is it clear in the minds of revenue officials. It is alarming to find so many people telephoning the revenue department in their respective areas and finding officials, who are supposed to be knowledgeable in the law, uptight, close-mouthed, refusing to give information. The only information people can get from the revenue offices is that they must wait a while because there will be a ruling coming from Ottawa.
One other matter that needs clarification was raised in the House previously and has been the subject of much discussion. I refer to the sale of milk quotas in the dairy industry. If a milk quota is sold, is it regarded as goodwill as in the case of a conventional business? I think the minister should be responsible to see that regulations governing the sale of quotas are spelled out clearly.
As a result of the new tax measures, property such as farms, cottages and rental property which is owned by taxpayers is now being arbitrarily assessed for purposes of capital gain at some time in the future. Does the minister not feel that the assessments obtained by the revenue officials should become the property of the taxpayer himself? I understand that when revenue officials assess a piece of property, whether it be a farm, cottage or rental property, attempts are made to secure information for the file of the taxpayer so as to determine the amount of the assessment. It is my understanding that this assessment is then fed into a computer and eventually will be used against the taxpayer. I do not think we need to use this kind of, if you like, gestapo tactic in Canada in order to obtain information on taxpayers which is fed into computers and used ultimately against the taxpayer.
The government today has made inroads into the office of every business in this country. It is a shame the government is not satisfied with the taxes that are paid by business enterprises and leave it at that. I owned a small

business a few years ago and required, on average, about one and a half people in the office just to look after the demands of government, such as figuring out deductions for medicare, unemployment insurance and everything else. It is time the government relieved some of the pressure it is putting on the business community of Canada.
Although I am quite prepared to go along with the concessions the minister has made up to this point, I hope that by the time the next budget rolls around he will have seriously considered the criticism which members of the opposition, particularly those of the Conservative party, have made and that he will come up with some new proposals in 1973.
Motion agreed to and bill read the third time and passed.


EXCISE TAX ACT
John Napier Turner: that Bill C-171, to amend the Excise Tax Act, be read the second time and referred to committee of the whole.
He said: Mr. Speaker, this bill will implement the ways and means motion relating to excise taxes which I tabled on March 29 of this year. It is the same as Bill C-223 which was introduced following the budget speech on May 8, 1972, which received first reading on June 26, 1972, but was not passed before parliament dissolved in September of 1972. This bill does not contain any amendments to implement the proposals in the budget speech of 1973; it relates exclusively to excise tax amendments for 1972 and following. The bill does not contain any general rate changes or new exemptions that could be classed as major in terms of the effect on revenue. Nevertheless, the changes will be important to those who are directly affected.
Most people would probably regard the three most important amendments in the bill to be these: the exemption from sales tax of eyeglasses and contact lenses; the change from a 6 per cent rate of sales tax to a complete exemption from sales tax of goods produced by the labour of individuals who are blind or who are deaf and dumb and the extension of this exemption to goods produced by mentally retarded persons; and the exemption from sales tax of machinery and apparatus acquired by manufacturers or producers for use by them in the development of manufacturing or production processes or the development of new goods to be manufactured by them. Other exemptions from sales tax provided by the bill include crates for transporting poultry, certain items used in the fisheries, and chemicals purchased by municipalities for use in sewage treatment plants.
The bill does not impose any additional tax burdens. The total effect on revenue of the changes provided by the bill for a full year is estimated to be about $5 million.


Marcel Joseph Aimé Lambert: Mr. Speaker, as a result of some discussion I think it is agreed, having completed the income tax bill and since we have now had the opening statement of the minister on this short bill,
April 12, 1973

that I call it ten o'clock lor the purposes of the formal business of the House. We would then proceed, hopefully, to the adjournment debate.


Mr. Deputy Speaker:: The House has heard the suggestion of the hon. member for Edmonton West (Mr. Lambert). Perhaps I should draw to the attention of hon. members that members whose contributions are awaited in the adjournment debate are the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), the hon. member for Scarborough West (Mr. Harney), and the hon. member for Gander-Twillingate (Mr. Lundrigan)- although not necessarily in that order. As we still have a few minutes before ten o'clock, if it is agreed that we call it ten o'clock now we will proceed with the adjournment debate. Is this agreed?


Some hon. Members:: Agreed.


Mr. McKinley:: Mr. Speaker, I rise on a point of order. When these discussions took place a moment ago, I immediately called the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). He is not here as yet, but he is on his way. I see that the hon. member for Scarborough West (Mr. Harney) is here, so perhaps the order of appearance in the adjournment debate could be changed.


Mr. Deputy Speaker:: It not only may be changed; it will be changed.


Mr. Lefebvre:: Mr. Speaker, I rise on a point of order. Some hon. members on the government side who were supposed to answer these questions may still be at committee meetings, in view of the fact committees are still sitting. I should like to have time to contact them in order that they may be in the House.


Mr. Deputy Speaker:: Perhaps we could agree to hear the hon. member for Scarborough West first. Who was to reply to that hon. member at this time?


Thomas Lefebvre: Mr. Speaker, the Minister of the Environment (Mr. Davis) is here and he will be replying to questions No. 1 and No. 3. Perhaps we might start with those two.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Deputy Speaker:: I think we will ask the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) to make his contribution now, if he has caught his breath after running over here, since he and the Minister of the Environment (Mr. Davis) are both present.
Adjournment Debate


Jack Marshall: Mr. Speaker, I did not realize that everybody was so efficient. It is so long since I requested the debate at this time on a question I asked in the House of the Minister of the Environment (Mr. Davis), seeking a more substantial reply, that the answer is now probably obsolete.
The question I asked on November 19 in relation to storm damage in Newfoundland last fall has been answered, not only by the minister before the committee but in the House after follow-up questions and by departmental officials in the committee. I must say those answers were not much help in any event. My question related to the involvement of the federal government in respect of storm damage, which occurred last fall in western Newfoundland, to fishing gear, stores, longliners and other fishing vessels, some of which were completely destroyed. In answer to my question in the House, to my surprise the minister indicated that so far as the federal government was concerned, his responsibility only arose when vessel insurance was concerned and it was left to the provinces to compensate for losses to fishermen, regardless of the extent.
Even though we have to accept the cold fish attitude of the minister, which is becoming his trademark as well as that of other officials, fishermen were led to believe that compensation would be considered, on a co-operative basis, by the two levels of government. I suppose we must accept the decision of the federal government that unless the damage was on the basis of a national emergency, the federal government has no responsibility.
I refer to the matter again tonight as there is still an area of concern in which the minister can help, and that is in relation to fishermen who did not have vessel insurance because they could not afford it. I refer to fishermen whose longliners were damaged by the storm last fall and still remain unrepaired.
As the fishing season approaches, we find there are no funds available to assist these fishermen in putting their boats back into the water. In addition to this, there is a perennial problem which the fishermen face. They are willing to compete with foreign draggers, but cannot find the means to purchase these vessels because of the restrictions under the Canadian Fisherman's Loan Act and under the Newfoundland fisheries loan board because of the down payment required. Under the loan board, a fisherman or a group of fishermen who want to invest in a longliner, the cost of which runs to $50,000 or more, cannot find the required 10 per cent down payment even though they have the initiative and the knowledge to compete with others and are allowed to compete without restriction.
The government should act out of humane consideration for and faith in Newfoundland fishermen and provide for a review of the restrictions imposed on these fishermen. The government should provide incentives and the opportunity for these fishermen to provide not only for themselves but for neighbouring fishermen. I ask the minister to consider this aspect of the industry. I am not one who criticizes unnecessarily, but I submit this idea which I know the minister will consider, in view of his

April 12, 1973
Adjournment Debate
interest, of providing funds necessary to all Newfoundland fishermen to contribute to the Canadian economy, not only to the benefit of Canada but to their own livelihood. I ask that consideration be given to this matter and that the minister provide answers to my submission.


John (Jack) Davis: Mr. Speaker, the hon. member is referring to the loss of fishing gear in Newfoundland. He refers to the fact, also, that the federal government has refused, so far at least, to compensate fishermen for loss of gear. He refers to me personally as being a cold fish minister. The people of Canada, through the government of Canada, have set up and administered the only insurance program which exists to cover losses of fishermen. There is no such program at the provincial level. The program which does exist relates to commercial fishing vessels and all gear fixed to those vessels. It is a form of insurance available at very low rates. It has been extended at exceptionally low rates to insure fishermen especially in the province of Newfoundland.
There was also an attempt two years ago to include as insurable gear miscellaneous gear, but the fishermen did not see fit to pay the very modest premiums charged for this. Indeed, very few of them signed in the initial stages. That program, therefore, was abandoned because there was no, or little income available to it. It could not work as an insurance plan. It is still a challenge. It is an opportunity for the province because it relates to small gear for small people in outlying places. This is the kind of program which a province could well administer.
I do not know what the Department of Fisheries really does at the provincial level. If it cannot handle this kind of thing, I do not understand how it can handle any larger program. We have joined with the province in many surveys, including surveys of gear damage. The province knows what the damage is. It has also known for a long time that this relatively small program is a logical one for the province to carry out, and it has failed to do its job in this connection.


INDUSTRY-CLOSING OF RADIO PRODUCTION AT DON MILLS PLANT OF PHILCO-FORD-GOVERNMENT ACTION
John Paul Harney: Mr. Speaker, I managed to get two words across a while ago. They were simply "I wonder". I was beginning to wonder then whether there would be somebody here from the Department of Industry, Trade and Commerce. I am glad to see that the parliamentary secretary is here.
My question tonight is an extension of the question I asked last Friday morning at a time when the Minister of Industry, Trade and Commerce (Mr. Gillespie) was not in the House. It had to do with the partial shut-down of a plant in Don Mills, Ontario, owned by Philco-Ford of Canada. It appears that the plant intends to shut down one part of its operation concerned with the production of car radios for sale and resale to the Ford Motor Company of Canada. It turns out, from all the evidence, that this is indeed a very efficient part of this plant, so it could not be for reasons of efficiency that they are closing it down or for reasons of labour costs. We know the average wage rate in that section of the plant is some $2.90 an hour and

that, I assure you, Mr. Speaker, in the Toronto region is no fortune.
However, some excuse is made for shutting down this part of the plant and throwing out about 100 employees on the ground that they are simply assembly-line workers, not many of whom are skilled and, as it says in the article, most of whom are women. I do not particularly like that aspect, but there you have it. I suppose women, in the world of industry, are more expendable.
The reasons for shutting down that part of the plant, as given by the managers and owners of the plant, are for the sake of economy. According to the trade union representatives of the workers in that plant, the total labour cost for the car radios produced in the plant, per radio, is $3. The total cost of labour and materials is $13. The radios themselves sell for $90. It is evident that $3 is a very small part of $90. It appears that the plant operates very well and very economically. But Philco-Ford is going to move this operation to a larger operation it is setting up in Brazil. They intend to produce, apparently, all their radios for all their world sales in Brazil.
So there we have it, a multinational corporation, for reasons of its own-its views on rationalization and economy-deciding to wipe out the jobs of about 100 Canadian workers. Surely this decision was not made with the interest of these workers in mind, and certainly not with the interest of the Canadian economy in mind.
My question to the Minister of Industry, Trade and Commerce at the time was simply whether anything could be done under the terms of the auto pact to intervene in this matter and somehow persuade this company not to "rationalize" its operations-I put the word "rationalize" in quotation marks-to the detriment of the workers of Don Mills and to the detriment of Canada. The components for these radios made at Don Mills come from Taiwan. They are not made in Canada. They are brought in duty-free under some aspect of the auto pact.
What we could ask, further, is whether the car radios which will be made in Brazil will be brought in duty-free. We might ask, even further, just how many components for cars to be produced in Canada will be brought in from outside the country duty-free. I have asked these questions in the hope that the minister can say there is something that can be done under the auto pact to prevent this kind of thing. However, I must say I am in despair of getting that kind of answer. I am too sure, unfortunately, that the minister, with regard to this particular pact, is impotent. I do not really think he can do anything.
I wish that in answer to my question he would say it would be possible for him to intervene to preserve these jobs for the Canadian workers. At any rate, I wait with some expectation and perhaps some faint hope that if I cannot get that kind of answer, we can get from this government some day in the future some backbone, some mettle and some spirit to protect the jobs of Canadians.


Mr. Herb Breau (Parliamentary Secretary to Minister oi Industry, Trade and Commerce):: Mr. Speaker, the hon. member was reasonable in his question when he asked whether there was something the minister could do under the auto pact. Unfortunately, as the hon. member knows, under the auto pact the auto companies are required,
April 12, 1973

under contract, to keep a fair level of production in Canada in respect of the production of vehicles in ratio to the markets in Canada and the Canadian contracts with CDA. When the companies have complied with that provision, there is no legal authority under which the government could oblige Philco-Ford or the Ford Company of Canada to do anything in respect of its components. We sympathize, of course, with the social dislocation which some people might feel but, unfortunately, in our type of economy, unless there is a legal requirement there is nothing we can do.
I would like to say also that Philco-Ford of Canada is also engaged in the manufacture of stereo and television sets at the Don Mills plant. The company has enjoyed substantial market success over the last five years and the average level of hourly employees at the plant increased from 330 in 1967 to 580 in 1972.
The transfer of car radio production to Brazil will affect 122 workers. The company will retain 47 of these workers in the production of other products at the Don Mills plant, and it is expected that the balance of 75 workers could be laid off in July, 1973. However, the company is hopeful that the market demand for its stereo and television products will enable it to retain a number of the employees scheduled for lay-off in July. So we hope that the markets in the other products will justify keeping the other employees.
I would like to say that it is very unfortunate that multinational corporations do this, but we must admit that in other circumstances we have benefited from such shifts in production. For example, there has been a lot of criticism in the United States that under the auto pact, production has been shifted by these corporations from the United States to Canada. So while sometimes, in this world of international economics we have to give and take, this is one of the "gives", but sometimes we have the "takes".
I am sorry that this has to happen, but the company cites lower production costs as the reason for the transfer. That is the reason the company gave to the department. Also, they have transferred production from the United States. It seems they want to develop some kind of captive production in what is probably the only plant of its kind in the world; so they shifted that type of production from other countries also. We know they shifted it from the United States to Brazil. We are sorry this has happened and we hope the employees will be able to stay on.


UNEMPLOYMENT INSURANCE-EXPIRATION OF FISHERIES BENEFITS-POSSIBLE EQUATING OF BENEFIT PERIOD WITH QUALIFYING PERIOD-REQUEST FOR STATEMENT
John Howard Lundrigan: Mr. Speaker, is it in order for me to ask my question, since I do not see the Minister of Manpower and Immigration (Mr. Andras) here to answer it? ,


An hon. Member:: The parliamentary secretary is here.
Adjournment Debate


The Acting Speaker (Mr. Boulanger):: I do not think that question should be asked. The hon. member should say what he has to say. Somebody else is responsible for the answer. The hon. member has seven minutes in which to put his question.


John Howard Lundrigan: I am somewhat discouraged that the Minister of Manpower and Immigration is not here to answer the question, which is a very legitimate one. I understand the Minister of the Environment (Mr. Davis)-


Mr. MacGuigan:: I rise on a point of order, Mr. Speaker-


The Acting Speaker (Mr. Boulanger):: There can be no point of order at this time. That is why I pointed out that the hon. member should not start his question in that way, because then the parliamentary secretary would wish to rise on a point of order. We cannot allow points of order at this time. The hon. member for Gander-Twillingate (Mr. Lundrigan) has the floor.


John Howard Lundrigan: Thank you, Mr. Speaker. I am disappointed that the Minister of Manpower and Immigration is not here to answer my question. He is the minister in charge of the department which now has jurisdiction over unemployment insurance for everybody in Canada, I presume. I want to raise a question which is a very difficult one to raise during the regular question period, because it is a somewhat complicated matter and I think most members of the House, and indeed the general public, are not aware of the issue.
If I were to put the issue in the form of a general question, it would be to ask the government and the Minister of the Environment or his representative today, who obviously wants to go to bat for him, what the government has against the fishermen of this country. I will say right now that if I ever become a member of a governing party which will not be able to do more for the fishermen of Canada than the present government, I will not support that government. I make that commitment to the fishermen of this country. I will not support a government that allows discrimination, the worst form of discrimination that I have witnessed in the last number of years, and I will not be satisfied with the minister reading 1,500 words of a prepared text.
I want a legitimate answer and I promise I will pursue this matter as long as I am a Member of Parliament until it is duly rectified by this government or a succeeding government. We have a system of unemployment insurance for fishermen which is at least 100 years old in concept. This year, for example, in our province there will be about $70 million and last year $73 million went into the province in the form of unemployment insurance as a whole. That was the total cost to the federal treasury, minus whatever was paid by the contributors.
In order to rectify the injustice now being perpetrated on the fishermen, it might cost the government another $1 million or $1,200,000 or a little bit more. For two years the minister has indicated before the committee and before the House that they are working on a plan for the fishermen. There are three ways to present a full-blown plan that would improve the lot of the fishermen. At the moment a man working in any capacity in Canada, in the

April 12, 1973
Adjournment Debate
automotive factories or as a carpenter or labourer, who has eight weeks' stamps and is in a very high unemployment area like the Maritimes, can receive approximately one year of benefits. In other words, he can work for two months and get approximately one year's benefits. Some people argue that this is excessive. A fishermen with eight weeks' stamps, the man who catches the fish to keep the fish plants going, gets 61 weeks' benefits; in other words, only five-sixths of the number of stamps. A labourer or carpenter or anyone else gets six times as many benefits as he has stamps. If you add that up, the stamp that any regular worker receives is approximately seven times as good as the stamp the fisherman receives.
The minister will say that the fisherman is an independent worker and does not deserve any benefits at all. Coupled with the foregoing, however, he is not able to draw benefit until the middle of December and it continues, if he has enough stamps-he must have approximately 30 weeks' credit in order to draw for the full off-season- until the middle of May. Unless he is among the top 10 per cent of fishermen in Canada, he is forced to go on welfare from approximately March until the fishing season starts in earnest, which is approximately June.
On top of that, the fisherman has to average the last 20 weeks' benefits in order to come up with the rate of return that he would get from his stamps if he is really industrious and wants to work through October and November. Instead of being credited for the determination to continue, he gets a lower stamp because his average is down. If he quits at the beginning of September having had eight or ten weeks of very good fishing, he is all right; but if he continues into the stormy fall of the year he is penalized.
These are three or four ways in which the government could amend the present program for the fishermen in order to give them some justice. The government has concluded that the fishermen in Canada are not a very potent force. It is not compatible with the government's political aspirations in the larger urban centres to treat these people with any respect, and consequently they are being trampled upon. That is the reason the government is refusing to move. The minister is aware of the injustice, because I have already moved a motion and have talked to him in committee, and also to the Minister of Manpower and Immigration. But they will not budge. I
I am going to carry this cause even across the Canadian nation until the people of Canada see that the fishermen are not being given a square deal. I want the minister to give us some assurance that at least the government will move toward making the fisherman's stamp at least partly equal to the stamp given to the regular Canadian worker. I ask that the fisherman be given as many benefit weeks as the number of stamps he has. For most, that would mean four or five weeks' benefits to tide them over until the fishing season starts. I submit that would cost the treasury almost nothing and would give our fishermen at
least part of a square deal-a square deal that they are not now getting.


John (Jack) Davis: Mr. Speaker, the hon. member for Gander-Twiliingate (Mr. Lundrigan) made several criticisms of our present unemployment insurance scheme as it applies to the fisheries in Canada. One, at least, I think is valid, the requirement that under present law the fisherman can only record his last 20 weeks of fishing in order to determine his benefits. A fisherman, naturally, would want to record for benefit purposes his best weeks and, therefore, under the present system he is tempted to stop fishing when his catch begins to taper off. Under the new amendments proposed and tabled, actually they have received first reading in the House, that problem will be overcome. So I would urge the hon. member to support the legislation in order to overcome the 20-week problem which he mentioned.
The main purport of the hon. member's remarks was that the fisherman is being discriminated against. The fisherman has a difficult time of it, but he is the only category of self-employed person in Canada who is receiving the benefit of unemployment insurance. For example, farmers do not. Farmers, unlike self-employed fishermen, are not eligible for unemployment insurance.
The hon. member concluded that most factory workers can work for eight or ten weeks, or some short period, and enjoy as much as one year of benefits. That, indeed, would be an exceptional case; perhaps 1 or 2 per cent of all factory workers are ever in the position of working as little as eight weeks and then drawing one year of benefits. On the other hand, fishermen every year draw a benefit. Many of the better fishermen draw benefits every year from December 1 to March 15 as a regular practice. As a broad generalization, fishermen pay about $1 into the scheme and get $10 out. They pay, in total in this country, about $2 in each year and get $20 million out. So the fisherman gets a pretty good deal under unemployment insurance.
I am not saying that the unemployment insurance scheme is tailored to his particular circumstances. It is not. It is a scheme which was developed basically for factory workers. We need a better scheme that is tailored to the needs of fishermen. However, the present scheme is much enriched over the one of a couple of years ago. I remind the hon. member that it was the Liberal government that brought in the scheme. The Conservatives were in power for nearly half a dozen years and did nothing about it. It has been enriched several times since. We will, in one year or two when the present unemployment insurance scheme shakes down and when it is working well, develop an alternative scheme that will apply to fishermen. We will develop a scheme that the fishermen will like better. I hope the hon. member will support us in that scheme.


John Howard Lundrigan: The minister is against fishermen.
Motion agreed to and the House adjourned at 10.15 p.m.

Friday, April 13, 1973