1973-10-26

ROUTINE PROCEEDINGS


[Stage Direction]
Sixth report of Standing Committee on Indian Affairs and Northern Development-Mr. Buchanan.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Hon. Otto E. Lang_ (Minister of Justice):: Mr. Speaker, it has already been indicated in the House on several occasions that it is the intention of the government to conduct a poll of rapeseed growers in western Canada before the end of the year to determine the system they prefer for the marketing of their product. On June 1, I announced the appointment of a supervisor for the poll, Mr. George S. Turner, to take charge of the task of consulting with rapeseed growers and overseeing the conduct of the poll itself. On the basis of Mr. Turner's consultations with growers and their organizations the following criteria for the conduct of the poll were recommended and accepted by government:
1.	A producer eligible to vote in the poll will be defined as a Canadian Wheat Board regular permit holder whose permit indicates acreage seeded to rapeseed in any two out of the three crop years, 1971-72, 1972-73 and 1973-74. Also eligible to vote will be new permit holders who grew grain for the first time in 1972 or 1973 and whose permit books indicate acreage seeded to rapeseed in at least one year.
2.	The ballot will be worded so that the rapeseed grower may indicate his preference for one of two options for the marketing of his rapeseed, that is, the present system or the Canadian Wheat Board, plus the opportunity to register an undecided vote.
3.	A majority of at least 60 per cent of the ballots returned must be in favour of the Canadian Wheat Board alternative before such a change could be made.
4.	Ballots will be mailed to producers in early December, 1973.
Information concerning alternative marketing systems for rapeseed will be distributed to growers prior to the poll to assist them in deciding on the system they prefer for
the marketing of their product. Manitoba Pool Elevators, Saskatchewan Wheat Pool and Alberta Wheat Pool, at our request, have jointly prepared an information brochure stating the case for including the marketing of rapeseed under the Canadian Wheat Board. The Rapeseed Association of Canada, again at our invitation, has prepared a brochure stating the case for the open market method of rapeseed marketing. The pools and the rapeseed association have borne the cost of preparing the material for their respective brochures while the government is bearing the cost of printing and distributing the material. The brochures will be jointly mailed on November 16 to those rapeseed growers who are eligible to vote in the poll. The ballots will be mailed on December 3 and voters will have until December 14 to return their ballots to the supervisor of the poll, Mr. George S. Turner. The results of the poll will be made known to the House immediately following the conclusion of the poll.


Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to begin by thanking the minister responsible for the Wheat Board for sending us a copy of his statement a few minutes before he rose to make the statement in the House. It is a good idea for the government and various organizations to keep farmers well informed, and it was a good idea for the minister to make the kind of statement he made today well in advance of the intended rapeseed plebiscite.
The vote that will take place in the first part of December will be most important. A great many people see it as possibly a turning point for agriculture in Canada in relation to the Wheat Board form of marketing, which is basically negotiation and the pooling of prices, as against the concept of futures marketing in which prices are determined by supply and demand in the marketplace at any given time. There have been requests by organizations to postpone the plebiscite because of the complexity of the task of explaining the differences between open or futures marketing method and the Wheat Board selling method. The minister did not allude to this, but I understand they have been turned down and the vote will be taking place in the first part of December.
I am glad to see that in the plebiscite there will be an opportunity to register undecided votes. I take it from the minister's remarks that undecided votes will be counted as votes for retention of the present futures marketing system for rapeseed and flax.
When one looks at the whole situation concerning rape-seed and the tremendous growth of this crop over the past few years under the futures or open marketing system it is obvious that the growth has been phenomenal. I believe that for a good many producers across western Canada it has been a very satisfactory way of selling their product.

October 26, 1973
Rapeseed Plebiscite
While it might be improper for us as politicians to get involved at this time on one side or the other inasmuch as this is a good opportunity to let the issue be decided by the growers associations and the people directly involved in the plebiscite, I hasten to say that when one looks at the whole situation at the present time it seems that the present method of marketing rapeseed is quite satisfactory.


Mr. Bill Knight (Assiniboia):: Mr. Speaker, when one looks at the statement made by the minister on the question of the rapeseed marketing poll one wonders how far the government is going in the direction of government by plebiscite. It seems strange that when there is an issue whether this commodity should be sold on the open market or marketed by the Canadian Wheat Board we suddenly have a plebiscite. Where is the plebiscite on the action taken with regard to feed grains? There is none.
If 51 per cent of the producers who return the forms say they want the Canadian Wheat Board to market their rapeseed, it will not be done. If 59 per cent say that is what they want, it will not be done. The plebiscite requires 60 per cent. That must be what is called Liberal democracy. The question should be decided on the basis of a simple majority one way or the other. If a 60 per cent majority were required to form a government in this country, we would not have a government at this time.


An hon. Member:: Maybe we don't have one now.


William George Knight: Maybe we don't.


Some hon. Members:: Oh, oh!


William George Knight: The Conservative critic stated, as the Tories have done with regard to every major policy that has come before the House, that they want a hands off policy. They do not want to take a stand. Not taking a stand in the debate that will take place on rapeseed simply means one thing, a stand for an open market. All members of the House should take a stand. In fact, the minister should take a stand. Where do the politicians stand in regard to marketing rapeseed? This party stands for putting flax, rye and rapeseed under the jursidiction of the Canadian Wheat Board.


Some hon. Members:: Hear, hear!


William George Knight: Under the open market system farmers sign contracts for $3 a bushel and the brokers and shysters resell the rapeseed at $6 to $7 a bushel. I say it is time we moved into a position of orderly marketing through the Canadian Wheat Board.
The leaders of the farm organizations and the members of the government should state where they stand. It is nonsensical to hold a poll now when last year the government brought in amendments to the Canadian Wheat Board Act which raised the question of the marketing of these commodities outside that board. The New Democratic Party moved an amendment in committee to the Wheat Board Act to provide for the marketing of flax, rye and rapeseed under the jurisdiction of the board. The government party and the Official Opposition defeated that amendment. Now there is to be a plebiscite and the law does not even allow the Wheat Board to market these

grains even if the farmers vote in favour of the proposition.
Does the minister in charge of the Wheat Board give western farmers the assurance that if they vote for Wheat Board marketing his colleagues will allow him to bring such an amendment before the House? Will the Conservative party allow the government to give the Wheat Board jurisdiction over rapeseed? I think the manner in which the plebiscite has been set up, and the manner in which the government is carrying it out, amounts to an attempt to weigh the procedure in favour of the open market system.


Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I think that the minister's statement that a consultation of producers would be held in late November or early December is an undertaking to enable an important area of our economy to express itself and choose a process for the marketing of its production.
As stated in paragraph (2) of the minister's statement, the ballot will be worded so that the rapeseed grower may indicate his preference for one of two options for the marketing of his rapeseed, that is, the present system or the Canadian Wheat Board, plus the opportunity to register an undecided vote.
Mr. Speaker, this process seems to me altogether democratic and enables producers to choose their own marketing system for their products. I understand that in other fields of production, they do not operate this way and I would suggest that the Department apply that consultation policy not merely to rapeseed growers but also to all other Canadian farmers.


NATIONAL DEFENCE
Mr. Frank Howard (Skeena):: Mr. Speaker, I rise pursuant to Standing Order 43 to seek permission of the House to move a motion on a matter of urgent and pressing necessity, namely, the deteriorating situation of the search and rescue activities or operations of the Department of National Defence on the west coast and the inability of that group properly to fulfil its functions. I move, seconded by the hon. member for Comox-Alberni (Mr. Barnett):
That the Standing Committee on External Affairs and National Defence be authorized to conduct an immediate inquiry into the search and rescue operations of the Department of National Defence on the west coast with instructions to report its findings and recommendations back to the House not later than November 30 of this year in order that whatever corrective measures are deemed necessary may be put into effect as quickly as possible.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.
October 26, 1973


EXTERNAL AFFAIRS
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise to seek the unanimous consent of the House to move a motion under the provisions of Standing Order 43 arising from the fact that there is justifiable reason to believe that acceptance and passage of this motion would result in the release of Ronald Patrick Lippert imprisoned in Cuba. I ask unanimous consent to move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That on the occasion of the tenth anniversary this week of the imprisonment in Cuba of Ronald Patrick Lippert, this House requests the government of Cuba to give consideration to permitting him to return to his family in Canada on humanitarian grounds.


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


Some hon. Members:: Agreed.


Mr. Speaker:: I have the impression that there is consent but I will inquire again. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: There is agreement. Therefore the motion will be put.


[Stage Direction]
Motion agreed to.

William George Knight: Mr. Speaker, I rise pursuant to the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that Mr. G. N. Vogel, Chief Commissioner of the Canadian Wheat Board, points out that wheat available for export to a hungry world will be 100 million bushels short of last year's export sales, and western farmers will not enjoy this greater percentage of the new world prices as has been initially stated by the minister in charge of the Canadian Wheat Board, I move, seconded by the hon. member for Meadow Lake (Mr. Nesdoly):
That the House instruct the government to refer the latest report of the Canadian Wheat Board to the Standing Committee on Agriculture in order to call before that committee the minister in charge of the Canadian Wheat Board to examine the present marketing and pricing activities of the Canadian Wheat Board.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.
Oral Questions NATIONAL DEFENCE


ALLEGED USE OF AIRCRAFT BY PERSONNEL FOR HUNTING, FISHING AND RECREATIONAL PURPOSES- REQUEST FOR UNANIMOUS CONSENT TO MOVE MOTION
Frank Howard: Mr. Speaker, I rise on another matter of urgent and pressing necessity. Perhaps if we can curtail waste in one direction we may be able to expand the search and rescue operations of the Department of National Defence. Therefore, I move, seconded by the hon. member for Timiskaming (Mr. Peters):
That the Standing Committee on External Affairs and National Defence be authorized to conduct an inquiry into the use of armed forces aircraft to transport hunting, fishing and recreational purpose parties comprised of armed forces personnel (officers in particular).


Mr. Speaker:: The hon. member will appreciate that the Chair has reservations about this kind of motion, but I will inquire whether there is unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Secretary of State for External Affairs arising out of the admission by the Minister of Energy, Mines and Resources in the course of yesterday afternoon's debate that his department had received a report that Aramco, the producing company in Saudi Arabia, had been instructed by the government of Saudi Arabia not to ship any more oil to Canada and the minister's further statement that there had been other reports in conflict with that report. Has the government of Canada now clarified whether the government of Saudi Arabia has instructed the producing company there, Aramco, to ban shipments of oil to Canada?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: No, Mr. Speaker, we have had no confirmation of that report. As my colleague said, we have had contradictory reports. We are trying to establish the facts but have not yet been able to do so.


Robert Lorne Stanfield: Mr. Speaker, what steps has the minister taken to clarify this important question? Yesterday he said the government was making representations to all Arab countries in respect of oil shipments. Has the government of Canada been in direct contact with Saudi Arabia on this question? Has this question relating to these instructions to Aramco been put to the government of

October 26, 1973
Oral Questions
Saudi Arabia and, even more important, has the Canada case been put to the government of Saudi Arabia?


Mitchell William Sharp: As I said yesterday in the House, Mr. Speaker, and I think the day before, as referred to by the Leader of the Opposition, I called in the ambassadors who are the representatives here in Canada of Arab countries and put the Canadian case to them. The same case was put in cables which have been sent to all our ambassadors abroad, including the ambassador who is accredited to Saudi Arabia, instructing them to make these views known to the governments of the countries to which they are accredited. The latest information I have is that our ambassador has not yet been able to make an appointment with the governments of these countries, but an effort is being made at the present time.


Robert Lorne Stanfield: I have one further supplementary question, Mr. Speaker. In view of the difficulty the Department of External Affairs has in presenting the Canadian case, will the Secretary of State for External Affairs ask the Prime Minister whether he will consider sending Mr. Ivan Head to Saudi Arabia?


Mitchell William Sharp: Mr. Speaker, Mr. Ivan Head is a very good officer in the Prime Minister's office. We also have excellent ambassadors abroad.


OIL SUPPLIES FROM MIDDLE EAST-SUGGESTED REPRESENTATIONS TO MULTINATIONAL CORPORATIONS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In view of the statement he made to the House a couple of days ago that he might consider direct contact with the head offices of the multinational corporations since basically they are responsible for the shipment of oil, and in view of the incident regarding Abu Dhabi and possibly Saudi Arabia, would he now consider direct contacts with the multinational corporation heads and their marketing agencies?


Mitchell William Sharp: No, Mr. Speaker. On a question of principle, I think it will be agreed that it is better international practice for governments to deal with their own companies and not deal with companies that are located in other countries. This can be done informally from time to time, but I believe we in this country resent it when foreign countries come in and deal directly with Canadian companies.


SUGGESTED ESTABLISHMENT OF NATIONAL PETROLEUM
Lorne Edmund Nystrom: Mr. Speaker, in view of the fact there are no Canadian oil companies but just subsidiaries of American companies, will the Minister of Energy, Mines and Resources now consider the immediate establishment of a petroleum energy corporation in this country so that we can deal directly with the Middle East countries or Venezuela?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, I must say that the debate yesterday was not totally decisive in that regard. I would just point out to the hon. member again that, with regard to at least the companies he has referred to, the ordering and shipping of oil are the responsibility of the Canadian company, not the responsibility of the parent.


PUBLIC SERVICE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the President of the Treasury Board. In view of the fact that percentage increases in low wages and salaries really mean nothing, will the government undertake a review of the basic rate of wages to its clerks in the employee of the federal public service, and can he say whether a review has been undertaken of the arbitral award in the case of the nurses?


Hon. C. M. Drury (President of the Treasury Board):: Mr. Speaker, the hon. gentleman suggests that we make a basic review of all pay rates in the public service. I do not think any such general review is contemplated. In respect of the recent arbitral award to nurses, representatives of the association have been seeing a number of ministers as well as members of parliament in Ottawa. I have not yet met with them, although I would be glad to do so to hear their problems.


Stanley Howard Knowles: Mr. Speaker, with regard to the first part of the question may I ask it again and remind the minister that it related not to a review of all basic rates in the public service but a review of the lower rates just as the government has had an outside report on the rates in the upper echelon, namely, those of deputy ministers.


Charles Mills (Bud) Drury: Mr. Speaker, I think the relationship between the low rates and the high rates in respect of those employees who come under the Public Service Staff Relations Act is determined through the collective bargaining process. I do not think the hon. gentleman would suggest it would be appropriate for the government unilaterally to bypass the collective bargaining process.

[ Translation]


CANADIAN BROADCASTING CORPORATION
[Stage Direction]
ALLEGED DICTATION TO MEMBER FOR TfiMISCAMINGUE CONCERNING REMARKS TO BE MADE BY HIM ON CERTAIN PROGRAMS
David Réal Caouette: Mr. Speaker, I would like to ask a question of the minister responsible for CBC telecommunications and I am making it a question of privilege also.
Everybody is aware of the program called "Les Affaires de l'Etat" in French and "Nation's Business" in English,

which is broadcast every week or so. Now, I am scheduled to make videotape recordings this afternoon as part of "Les Affaires de l'Etat" in French for tomorrow night, and for "Nation's Business" tonight at 11.15, a program which is usually aired on Sundays but which will be seen earlier this time on account of the Quebec general elections. Mr. Speaker, I received a phone call from the CBC a while ago. Here is the question I want to ask the Secretary of State: people call me up to tell me what to say and what not to say. And I am quite sure that all the political parties which send members to this telecast do not let the officials of this public corporation dictate what they must do.
Mr. Speaker, I told them that I could decide by myself what to say on the CBC network. But I should like to ask the minister if the CBC has a right to dictate what I must say on a program, or if it should respect my freedom.


Some hon. Members:: Hear, hear!


Hon. Gerard Pelletier (Minister of Communications):: Since the Secretary of State is not here, I should like to ensure the hon. member that I shall bring this matter to the attention of the Canadian Radio-Television Commission. As for giving an opinion as he asks me to do, I believe that this would be out of order.


CAPACITY OF PRESENT PIPELINE AT SARNIA TO DELIVER ADDITIONAL OIL FOR TRANSFER TO MONTREAL MARKET
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Can the minister now confirm whether the interprovincial pipeline at Sarnia, without any additional construction west of Sarnia and without having to cut back the supply to Ontario or current exports to the United States, has a sufficient capacity and capability to deliver additional oil for transfer to the Montreal market should normal supplies to that region be cut off or diverted?


Donald Stovel Macdonald: Mr. Speaker, I could confirm that but I would have to double check on the figures the hon. gentleman used. I will do so and will be glad to report to him.


Sinclair McKnight Stevens: Mr. Speaker, I would point out to the minister that I did not use any figures in my question.


INQUIRY AS TO DECISION ON PRICE INCREASES FOR GASOLINE AND HOME HEATING OIL IN EASTERN CANADA
Sinclair McKnight Stevens: On October 22, as recorded on page 7082 of Hansard, the minister indicated that a decision on price increases for gasoline and home heating oil in eastern Canada might be taken in this current week. Can the minister now indicate if such a decision has been taken and what the decision is or, if the government is still indecisive on this subject, can he tell the House why the government has found it so difficult to determine this important issue?
Oral Questions


Donald Stovel Macdonald: Mr. Speaker, I anticipate a decision of that kind might be taken next week.


OIL-SECURITY OF SUPPLY FOR SOAP PROJECT IN SARNIA
Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I should like to direct my supplementary to the minister and ask him whether he has received any communication from the sponsors of the SOAP project in Sarnia regarding security and assurance of supply? If he has received such a request from them, would he inform the House what his answer was?


Donald Stovel Macdonald: I met with the principals of the SOAP project who expressed concern on a number of points, one of them being security of supply. I pointed out to them that under the provisions of our law supplies to Canadian firms, whether refineries or petrochemical firms, were a priority for Canadian feedstock and that on that basis they could rely on the fact that they would have feedstock for their proposal. There are some further aspects of the proposal which would involve the export of certain refined products. At the moment, export is under the jurisdiction of the National Energy Board. I indicated to them they would have to consult with the board and possibly consider an application in order to get board approval for exports which might be integral to the project.


Max Saltsman: Mr. Speaker, in view of the conversations the minister has had with the people involved in the SOAP project and since the supply of petrochemicals to Canadian manufacturers is becoming very critical, did the minister receive assurances from the sponsors of the SOAP project that they intend to go ahead with the building of their petrochemical complex?


Donald Stovel Macdonald: Mr. Speaker, it was clear to me it would be critical to the economics of the process that they should have export access for some at least of the products, and I pointed out to them that this, of course, was covered by the jurisdiction of the board. So far as we are concerned, certainly we support very much the concept of additional petrochemical facilities at both Sarnia and Edmonton.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the Secretary of State for External Affairs. Has Canada in fact been requested by the Secretary General of the United Nations to contribute to the peacekeeping force being sent to the Middle East war zone as a consequence of yesterday's Security Council resolution and, if so, what is the response of the government?

October 26, 1973
Oral Questions


Mitchell William Sharp: The answer to the question is no. The Secretary General has not as yet asked Canada to contribute any forces. It is my understanding he is calling upon the traditional neutral countries, Sweden, Finland and Austria, which have troops ready and available in Cyprus, to make the initial contribution.


Heath Nelson Macquarrie: Mr. Speaker, may I ask the minister if the transfer of Austrian, Finnish and Swedish troops to the Middle East zone has caused a consequent request to Canada for alteration or augmentation of our force in that peacekeeping group?


Mitchell William Sharp: Mr. Speaker, we have not yet received such a request. If it were made we would, I think, look at it sympathetically if this were a way to help establish a peacekeeping force in the Middle East. We would want to be sure, however, that the peacekeeping force in Cyprus would remain a truly international force. It would not be our wish to change the character of that peacekeeping force in any way.


Heath Nelson Macquarrie: I have one final supplementary, Mr. Speaker, with reference to a statement by the minister yesterday, I believe. Have we been asked to supplement or augment our UNTSO contribution?


Mitchell William Sharp: Not yet. We can expect that we may be, although it is not clear yet until we know the terms of reference of the new peacekeeping force that will be established pursuant to the Security Council resolution. It is my understanding that the Secretary General will be announcing the terms of reference of that peacekeeping force at three o'clock this afternoon, at which time the situation may be a little clearer.


REPORTED OBJECTION BY EGYPT TO CANADIAN PARTICIPATION IN MIDDLE EAST PEACEKEEPING FORCE
Mr. Doug Rowland (Selkirk):: Mr. Speaker, I have a supplementary for the Secretary of State for External Affairs. Has the minister any information which would either confirm or deny reports that Egypt has registered specific objections to the idea of Canada participating in a truce supervisory force in the Middle East?


Mitchell William Sharp: No, Mr. Speaker. We have had no information of that kind. I can, if I may, add that I can understand the desire of the Secretary General in the first instance to rely particularly upon the traditionally neutral countries, and I think that if I had been in his position I would have taken the same view.


Mr. Speaker:: The Chair will recognize the hon. member for Selkirk on a second supplementary and then the hon. member for Vegreville.


POSSIBILITY OF SOVIET UNION INTERVENING UNILATERALLY IN MIDDLE EAST CONFLICT
Douglas Charles Rowland: With respect to the Middle East situation, has the Secretary of State for External Affairs received any information which would either confirm or deny reports that the Soviet Union was or is prepared to act unilaterally in the Middle East with respect to the landing of troops and, if the reports confirm such an intention on the part of the Soviet Union, have we made representations expressing our disapproval of any such action?


Mitchell William Sharp: I think that question was settled by the support that the Soviet Union gave to the resolution of the Security Council in which the idea was quite clearly established that in this peacekeeping force none of the forces of the permanent members of the Security Council should participate. I believe that originally Egypt had suggested that the forces of the Soviet Union and the United States might engage in some peace enforcing role, but this seems now to have been changed. Therefore the answer must be that whether or not they had the intention of supplying troops unilaterally that no longer is the case.


TRANSPORT
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, my question is directed to the Minister of Transport. On Monday he indicated that he would be meeting with the railway companies yesterday. Did this meeting take place, and can he indicate to the House what measures will be taken by the government or by the railway companies to relieve the immediate shortage of boxcars which has detrimentally affected the grain and lumber industries. Also, can he advise the House what steps will be taken of a longer term nature to alleviate the chronic shortage of boxcars which has been experienced over the past years and which has detrimentally affected these two major industries?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, as I indicated in the House, yesterday afternoon I met representatives of both railways CNR and CPR. We discussed the situation in Newfoundland, the situation of the Digby-Saint John ferry, the situation at Thunder Bay, and the situation in British Columbia. I received commitments regarding a few of those subjects, and on others I am likely to receive reports early next week. For example, CN told me that they would meet their commitment so far as grain movement is concerned, and CP agreed to postpone any changes in the ferry service between Digby and Saint John. So far as Vancouver is concerned, they will report to me next week, and I hope I can complete then what I am saying today.


Donald Frank Mazankowski: Since a very large part of the problem stems from the undue delays in boxcars coming back
October 26, 1973

from the United States, in other words, boxcars are being held there for unduly lengthy periods of time-I am informed that in the case of shipments of lumber it is approximately 45 days-has the minister discussed this subject, and what action does he propose to take to correct the situation?


Jean Marchand: I do not think that the United States is responsible for the delays in this case. It is the lumber shippers who are responsible because they use the boxcars as warehouses in the United States. This is something, I think, that we will have to try to correct because it is a distinct abuse.


INQUIRY AS TO COMMITMENT BY CANADIAN NATIONAL RAILWAYS TO REDUCE BACKLOG OF FREIGHT AT NORTH SYDNEY DESTINED TO NEWFOUNDLAND
Mr. James A. McGrath (St. John's East):: Mr. Speaker, the minister indicated that he discussed the Newfoundland situation with CNR. Did CNR make any commitment to alleviate the backlog still remaining at North Sydney? I understand there are still 500 freight cars backed up at North Sydney and this is still causing some shortages and a great deal of difficulty in Newfoundland.


Jean Marchand: Mr. Speaker, it is true there is still a backlog of 500 boxcars in North Sydney. Right now, however, neither the CNR nor Mr. O'Brien representing the Newfoundland government have complained about anything. I think all the needs are met. I believe they have done a tremendous job because in the last month the decrease in the number of backlogged cars is almost 500 on top of what they regularly do. So I think this is a good job and nobody is short right now. All I hear is that by the end of November we might have to use Hercules aircraft in Labrador because there might be a shortage there.


Mr. Speaker:: The Chair will recognize the hon. member for St. John's East on a supplementary, but we have to try to get on. The Chair will then recognize the hon. member for Skeena, the hon. member for Portneuf, and then we will return to the hon. member for Vegreville.


James Aloysius McGrath: It is evident that the minister is only hearing what he wants to hear because that is not the way I hear it at all. May I ask the minister if the CNR gave any undertaking it would have this backlog cleared up and the situation back to normal before the end of the year, because at the rate we are going the backlog will be there for some considerable time?


Jean Marchand: It all depends on the increase in the movement of goods to Newfoundland. On boxcars alone in relation to last year there has been an increase of 35 per cent. I think that the DREE programs are working very well.


Some hon. Members:: Hear, hear!


Jean Marchand: With regard to taking care of the backlog due to the strike, this has been done. Now what we are fighting against is the backlog created by the increase in freight movement to Newfoundland brought
Oral Questions
about by a prosperity that has never been known there in the past.


Some hon. Members:: Hear, hear!


Mr. Speaker:: We will suspend the debate for a moment on this matter and I will recognize the hon. member for Skeena, as I said a moment ago, followed by the hon. member for Portneuf. If hon. members want to continue the debate on this point, we will return to it.


NATIONAL DEFENCE
Frank Howard: Mr. Speaker, I should like to direct my question to the Minister of National Defence. In view of the fact the three Buffalo and three Labrador helicopters that are assigned to search and rescue operations on the west coast are inoperable 40 per cent of the time-and this limits their activities-


Some hon. Members:: Oh, oh!


Frank Howard: -would the minister be agreeable to authorize, by presenting a motion to the House, the Standing Committee on External Affairs and National Defence to conduct specifically an inquiry into search and rescue operations on the west coast so that we can see just what is taking place?


Hon. James Richardson (Minister of National Defence):: No, Mr. Speaker.


Frank Howard: Since the minister intends to let the situation continue to deteriorate, I wonder if he is aware that with respect to the operations of the Department of National Defence at the Comox airport base on October 1, 5, 8, 12, 14, 18, 19 and 22, and the month is not over yet-


Mr. Speaker:: Order, please. Perhaps the hon. member might like to ask a question. He knows that the purpose of questions is not to convey information but rather to seek information.


Frank Howard: The minister certainly needs information, Mr. Speaker. On those dates in question the recreational parties comprised mostly of top military brass were flown to Sandspit. Will the minister put a stop to this waste and extravagance in the hope that perhaps the saving in money can be used to develop the search and rescue squadron?


James Armstrong Richardson: I have seen reports in the press of the flights that are referred to. They were pilot training flights.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for Portneuf.

October 26, 1973
Oral Questions


UNEMPLOYMENT INSURANCE
Mr. Roland Godin (Portneuf):: Mr. Speaker, I would like to put a question to the Minister of Manpower and Immigration.
Since some unemployed must wait between three and four months before getting their unemployment payments and those delays are apparently caused by the malfunctioning of a computer in the Montreal regional office, does the minister intend to have the equipment repaired or the rental contract cancelled so that the computer may be replaced by one that works?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, having checked as recently as last night on this general situation, I really cannot agree with the premise of the hon. member's question. I would ask him, as I have repeatedly, to give me specific cases and not generalize because I think it is not accurate.


TRANSPORT
Donald Frank Mazankowski: Mr. Speaker, I have a supplementary to my previous question. The response of the minister indicated that the undue delay in the return of boxcars from the United States was specifically the responsibility of the lumber companies themselves. May I ask the minister if he recommended any specific action to the railways to overcome this situation, such as increased demurrage charges, so that the boxcars could be returned sooner to Canada and used for further shipments of lumber and grain?


Jean Marchand: Mr. Speaker, I specifically asked the railways to see about that and to determine what steps they are going to take to reduce this delay cycle which is now 45 days. It could be 20 days very easily. They are going to look into that and report to me some time next week.


Mr. Speaker:: Order, please. Again I seek the co-operation of all hon. members. As I have often suggested, if there are two, three or four supplementaries by each member we get into difficulty and the 40 minutes goes rather quickly. Perhaps the hon. member for St. John's East might be recognized for a supplementary.


MOVEMENT OF FREIGHT TO NEWFOUNDLAND-FUTURE PLANS
James Aloysius McGrath: Mr. Speaker, since it is evident that the planning and forecasting done by this government are inept, may I ask the Minister of

Transport whether his department plans to make any long-range forecast to take into account growth in the province of Newfoundland? It is obvious that the 35 per cent growth in freight was not foreseen by the department and has resulted in the backlog at North Sydney today. What is the minister doing about future plans to carry freight across the gulf?


Jean Marchand: Mr. Speaker, I hope the hon. gentleman knows how those forecasts are arrived at. As far as lumber is concerned, in British Columbia the railways go and ask the people in the lumber industry what they think their business will be in the following year. They themselves said there would be a 6 per cent increase but it was 18 per cent. This is where there are mistakes.


Mr. Speaker:: Order, please. I will recognize the hon. member for Annapolis Valley for a last supplementary but I suggest to hon. members that this is much more debate than a series of questions and answers. The hon. member for Annapolis Valley, after which I will recognize the hon. Leader of the Opposition.


DIGBY-SAINT JOHN FERRY SERVICE-POSTPONEMENT OF REDUCTION-STUDY OF POSSIBLE SUBSIDY OR TAKEOVER
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I was going to direct my question to the Minister of Communications but in view of the response of the Minister of Transport in that part of the answer dealing with the Digby-Saint John ferry I want to ask him for clarification. The curtailment that was going to take place on Sunday is not to take place. Is that correct? Secondly, has there now been a decision within the government that a cabinet committee or a committee within the Department of Transport will work with officers of the CPR to see how to cover the losses and/or take over the ferry?


Jean Marchand: Mr. Speaker, what I said or wanted to say was that the curtailment is not going to take place on Monday as foreseen and I think announced by the CPR. I asked them to postpone it for a few weeks. In that period I think we will have time to make a decision in cabinet.


Mr. Speaker:: The hon. member for Annapolis Valley on a further supplementary.


John Patrick (Pat) Nowlan: I appreciate your generosity, Mr. Speaker. As I understand it, for several months the CPR did not know whom to talk to and did not have a set committee within the cabinet or the Department of Transport-


Some hon. Members:: Order!


John Patrick (Pat) Nowlan: -with which to discuss proposals. Has there been an agreement with the Minister of Transport or his officials and are meetings to be held in the next two or three weeks to discuss the question of a subsidy or a takeover?


Jean Marchand: Mr. Speaker, the CPR knew very well what to do. They came here a few months ago
October 26, 1973

and met with me and discussed the matter. I said I have to discuss it with cabinet, and this is the way the decision should be taken.


EXTERNAL AFFAIRS
Robert Lorne Stanfield: Mr. Speaker, I would put my question to the Acting Prime Minister since the Secretary of State for External Affairs seems to be unable to make contact with Saudi Arabia to get an answer. Has the government of Canada received any information from the Canadian companies which are normally supplied by Aramco indicating that Aramco has received instructions from the government of Saudi Arabia to cut off oil supplies to Canada? If not, has the government of Canada taken the very simple procedure of asking these Canadian companies whether they have received any word from Aramco about supplies from Saudi Arabia being cut off?


Mitchell William Sharp: Mr. Speaker, it seems to me that the direct way of dealing with this matter is to have consultations now between the government of Canada and the governments of the countries concerned. This is the procedure we have taken and intend to follow. I do not believe that we had any reason to have done this in advance. As I said yesterday, we had no reason to think that Canada would be included in any restrictions. We have had the one instance which we are trying to get explained. I am sure the hon. gentleman would believe that the best way of getting answers is by direct contacts now with the governments concerned.


Robert Lorne Stanfield: If the Secretary of State for External Affairs really desires the members of this House to believe that the government of Canada wishes to get an answer to this question rather than avoid getting an answer, why will he not follow the very simple procedure of making inquiries in Canada where the information is surely readily available?


Mitchell William Sharp: Mr. Speaker, I would think that it is very desirable, and I would hope the Leader of the Opposition would agree, that we should make our case very forcefully to the governments of these countries before any decisions are made.


An hon. Member:: Start fighting.


OIL SUPPLIES FROM MIDDLE EAST-GROUNDS FOR BELIEVING CANADA WILL BE EXCLUDED FROM EMBARGO
Mr. John Harney (Scarborough West):: My question is for the Secretary of State for External Affairs. In view of the fact that the 5 per cent, now 10 per cent, reduction in oil production on the part of the organization of Arab oil producing and exporting countries was intended to apply to all importing countries except for such countries which,
Oral Questions
and here I quote from a document, "have or will come to the aid of the Arab cause in a concrete and effective manner", has the minister any concrete grounds for believing, or was he given such grounds in his meeting with the Arab representatives yesterday, that Canada is excluded from this general embargo?


Mitchell William Sharp: Mr. Speaker, the case I made to the ambassadors here and that is being made by our ambassadors abroad is that we do not allow politics to interfere in our commercial policy or our aid policy and that we hoped the Arab countries would follow the same rule in dealing with us. Surely this is a position the hon. member would support. He would not want us to invite the Arab countries to apply restrictions to Canada.


John Paul Harney: Mr. Speaker, my question was very specific. I asked whether the minister had any grounds for believing that Canada would be excluded from the general embargo applied by the Arab oil producing and exporting countries some time this month in a document which has been published around the world but is rarely seen in the newspapers of Canada? Has he any grounds for believing that Canada will be excluded?


Mitchell William Sharp: Mr. Speaker, the information we have is very contradictory on all of these points. I think it is very desirable that we should get the explanation from the governments themselves. I can assure the hon. gentleman that I have seen these reports and I have seen other reports that are quite different.


Mr. Speaker:: The Chair recognizes the hon. member for Scarborough West for a third question or a second supplementary to his original question. Then I will see the hon. member for Hastings.


John Paul Harney: Mr. Speaker, considering that we all have difficulty in obtaining adequate information and that this difficulty applies particularly to the government benches, and considering the fact that we have very little direct representation in the Arab countries that export oil to Canada, will the minister consider increasing our representation in this area in the very near future?


Mitchell William Sharp: Mr. Speaker, this has been under discussion. It was under discussion before this present situation arose. We have been gradually increasing our representation in various parts of the world and the Middle East is one we have under consideration.


AIR TRANSPORT
Mr. J. R. Ellis (Hastings):: Mr. Speaker, my question is for the Minister of Transport. In view of the fact air traffic control assistants walked off the job today in Moncton, Gander, Toronto and Montreal, and in view of the fact Canadian airline flight attendants are threatening to

October 26, 1973
Oral Questions
strike, has the minister looked into this and what action has he taken?


Jean Marchand: Yes, Mr. Speaker, I have looked into this. I am told they are supposed to go back after 24 hours so that means tonight or tomorrow. This group has chosen to fall under the arbitration part of the act, which means they do not have the right to strike. They are supposed to settle their grievances through arbitration.


John Raymond Ellis: Can the minister assure the House that there will be no cancellation of commercial flights due to these disruptions?


Jean Marchand: Mr. Speaker, I cannot give any such assurance.


Mr. Paproski:: Why not?


Jean Marchand: Because I am not a pilot.


TRANSPORT
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Water-loo):: Mr. Speaker, if the Minister of Transport is listening, my question is for him also. Perhaps the minister would come down to earth for a minute. Since a recent study suggests that the obsolescence of Canadian railways is mainly the consequence of existing regulatory legislation and its implementation by the Canadian Transport Commission, the CNR and CPR, will the minister conduct an inquiry into this matter?


Jean Marchand: Mr. Speaker, this is something that is constantly under review.


INTENTION OF WHEAT BOARD RESPECTING RESTORATION OF 250 MILLION BUSHEL INVENTORY
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is for the minister responsible for the Canadian Wheat Board. Has the Canadian Wheat Board informed the minister of its intention in the present crop year with regard to allocating enough grain to put its inventory back to the normal amount of 250 million bushels?


Otto Emil Lang: Mr. Speaker, there have been discussions with the Canadian Wheat Board about their intentions. After exporting three years in a row more grain than the country has produced over consumption needs, it is anticipated that we will be able to do so once again this year. The Canadian Wheat Board will be expecting to sell more wheat than was produced

this year by drawing down stocks still further, as it would also do in the case of barley. The exact extent of the draw-down to August 1 will be determined as that date approaches.


EXTERNAL AFFAIRS
Mr. Rod Blaker (Lachine):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Would the minister comment on and clear up stories indicating that a West German firm, Weser A.G., intends to construct-


Mr. Speaker:: Order, please. I wonder if the question might not be asked in other terms. The hon. member might start by resuming his seat. I suggest to the hon. member that a member cannot ask a minister to comment on a news story. I know that members very often ask a minister to confirm or deny a story. That is out of order. Perhaps the question might be asked directly without too obvious a reference to the story.


Roderick Blaker: Mr. Speaker, may I rephrase my question to the Secretary of State for External Affairs. Can he advise the House if it is the case that the West German firm, Weser, A.G., intends to construct icebreakers for use in the Canadian north, and whether or not the West German ambassador has had communications in that regard?


Mitchell William Sharp: Mr. Speaker, when the foreign minister of West Germany was here a few weeks ago, I had discussions with him about this subject and I told him that the Canadian government would be willing to have Canadian officials meet with their German counterparts for initial, exploratory talks on potential areas of co-operation regarding aspects of technology and research concerned with the development of multicargo ocean carriers with icebreaking capability, and if such areas of co-operation can be identified we will carry on these discussions. I want to make it quite clear-


Some hon. Members:: Oh, oh!


Mitchell William Sharp: -that there are no adverse implications for Canadian sovereignty.


TRANSPORT
Mr. Tom Bell (Saint John-Lancaster):: Mr. Speaker, I have a question for the Minister of Transport. As we are still confused about his reply regarding the Digby-Saint John ferry, and because we will be receiving protests this weekend, may I ask the minister if we are right in assuming, regardless of what the CPR is doing, that the cabinet now has this matter under study and that there will be an
October 26, 1973

announcement by the government within three weeks. Are we correct in assuming that?


Jean Marchand: Mr. Speaker, I think the hon. gentleman understood very well what I said, although I did not mention three weeks. I asked the CPR not to change the service for a couple of weeks because I think that during that period we can reach a decision on the different proposals we have submitted.


INCOME TAX
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, my question is for the Minister of Finance. As many livestock producers in the southwestern part of Saskatchewan and the southeastern part of Alberta will find it necessary to dispose of a large percentage of their herds due to the shortage of feed caused by drought, and as this will increase their incomes for the current taxation year and bring about large increases in their taxes, has the minister considered introducing legislation, even of a temporary nature, to permit livestock producers to defer cattle sales until 1974 in the same manner as grain producers will be able to do?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, I will take that as a representation by the hon. member.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, October 23, consideration of the motion of Mr. Turner (Ottawa-Carleton) that Bill C-164, to authorize the provision of moneys to meet certain capital expenditures of the Canadian National Railways system and Air Canada for the period from the 1st day of January, 1973 to the 30th day of June, 1974 , and securities to be issued by the Canadian National Railway Company and certain debentures to be issued by Air Canada, be read the second time and referred to the Standing Committee on Transport and Communications.
Stanley Howard Knowles: Mr. Speaker, I suspect that it will come as no surprise to the members of this House when I say that I intend to devote my remarks in this second reading debate on Bill C-164, having to do with the financing of Canadian National Railways and Air Canada, to one subject, pensions. Towards the end of my remarks, I shall make a few
Canadian National Railways and Air Canada comments about the pension package that has been agreed on in the collective bargaining process. That has now gone to arbitration. In the main, however, I want to concentrate on the position of retired railway workers; in other words, those out of service, those now on their pensions.
When we raise questions about retired railway workers, Canadian National and Canadian Pacific, we get certain stock answers. One of those answers is that the whole question of pensions has at long last been put on the collective bargaining table and that we should not, therefore, be discussing it on the floor of the House of Commons. I remind the Minister of Transport (Mr. Marchand), who is one of those who gives us this stock answer, that the retired railway workers were not represented at the collective bargaining table and that the arrangements arrived at in the process of collective bargaining relating to pensions did not provide anything at all for those already retired.
There is nothing new about this situation. A few years ago, when the question of Canadian National pensions was before the appropriate standing committee, many witnesses appeared before the committee. Some of them were retired railways workers who, in their working days, had been general chairmen of their unions. They admitted to us that when they were general chairmen and giving leadership to and working on behalf of their unions their main interest centered on those who were working. In those days they did not express any great concern, if, indeed, they expressed any concern at all, about those already retired.
When those same general chairmen joined the group of workers who are retired and tried to live on their pensions, their viewpoint was quite different. Clearly, the situation is not a new one. It is one that this House ought to face. The position of retired railway workers, those already on pension, does not get adequate consideration in the normal collective bargaining process, and thus it is our responsibility to speak on their behalf on the floor of the House of Commons.
I wish to point out also that the few times when we have secured something for the retired employees of Canadian National Railways, and in an ancillary way for employees of other railways, it has come about because of debate in parliament, either on the floor of the House or in the standing committee. Each time something has been done to improve the pensions of retired railway workers, the announcement has been made by the president of Canadian National Railways or in the case of Canadian Pacific, by the president of that organization, but the activity that brought about those changes took place on the floor of this House of Commons or in the Standing Committee on Transport and Communications. I feel it is our duty as members of parliament, and most of us in this House represent railway workers or retired railway workers, some a few and some of us many, to speak for those for whom the case is not made when the collective bargaining process takes place.
I know that in the revised setup of the board that administers Canadian National pensions, there is one representative of those who have retired, but that does not

October 26, 1973
Canadian National Railways and Air Canada seem to be the place where policy is made. That seems to be a place where administration is supervised. The fact is that in terms of the policy for those now working, it is a matter that is dealt with at the collective bargaining table. For those already retired, the only way their voice can be heard is by forming their own organizations, issuing press releases, writing members of parliament and so on, or by our stating their case on the floor of parliament. That is the reason I choose in this debate on Bill C-164 to direct all of my remarks to the question of pensions and, as I say, mainly to the position of those already retired.
It is sometimes suggested to us that one reason we should leave this subject alone is that the question of railway pensions has been given to Dr. John Deutsch, who was recently appointed as a commissioner by the Minister of Labour (Mr. Munro). May I remind hon. members of the limitations imposed on Dr. Deutsch. He has not been given a commission to study the whole question of railway pensions. His commission is only to assess the monetary value of the pension package agreed to at the bargaining table. The railway companies put a certain value on it in percentage terms. The unions put a lower percentage value on it. All that Dr. Deutsch is commissioned to do is arrive at a fair evaluation of the pension package and if it is different from what has been submitted by the companies, Mr. Justice Emmett Hall is to take that into consideration in the final award arising out of the rail dispute of last summer.
When the appointment of Dr. Deutsch was announced in this House by the Minister of Labour, some of us pleaded for his terms of reference to be enlarged to include an examination of the railway pension plans in their entirety or, alternatively, for another commissioner to be appointed to look into that broader question. The Minister of Labour expressed some interest. In fact, I think it is fair to say he agreed this should be done, but he pleaded that now was not the time to do it,-


Mr. Douglas:: It never is.


Stanley Howard Knowles: -that we should first wait for the job to be done by Dr. Deutsch. As my colleague, the hon. member for Nanaimo-Co wichan-The Islands (Mr. Douglas), interjected a moment ago, the time never is right to do something like this.
A commission similar to that given to Dr. Deutsch should be given to him or some other competent or impartial person to go into the whole question of the fairness of railway pension plans. In my view, such a commission should not only include the fairness or otherwise of the plan to which working railway employees are now contributing, but the fairness of the plan in the way it treats retired employees. In any event, I submit these two answers that are given to us, first that pensions are the subject of collective bargaining and, second, that Dr. Deutsch has been appointed as a commissioner, do not touch at all on the problem and the plight of retired railway workers who are already on pension, for whom there is nothing in the new pension package and whose case is not to be considered under Dr. Deutsch's commission.
With regard to railway workers already retired, the first thing that must be done, and frankly I think that any

delay on this is completely unforgiveable, is that the escalation of railway pensions should be put on a basis equal to that which has now been accorded to old age security, the guaranteed income supplement, the pensions of retired public servants and of armed forces and ROMP personnel, pensions and allowances awarded to veterans and soon, because the appropriate bill is now before the House, on pensions paid under the Canada Pension Plan. The day of a 2 per cent ceiling on the annual escalation of pensions should end. It is over for all those groups I have just named. It should be ended completely.
I submit the government does have responsibility for the Canadian National Railways. It should say right now that just as there is no longer a 2 per cent ceiling on the escalation of pensions for federal public employees and a whole host of other persons whose pensions come under the responsibility of the federal government, there should no longer be imposed a 2 per cent ceiling on the annual escalation of railway pensions, either Canadian National or Canadian Pacific.
One of the arguments the railways have advanced against an escalation of higher than 2 per cent is and has been for some time that they were not allowed to do so by the law. Unfortunately, that statement is correct. There was a section in the income tax regulations which denied registration for the purpose of income tax deductibility to any company whose private pension plan provided for an escalation greater than 2 per cent per year. However, that has been changed. Only a few days ago the Minister of National Revenue (Mr. Stanbury) circulated an information bulletin in which it is made clear that this ceiling no longer applies. The new regulation says a pension plan can be registered and can qualify for tax deductibility provided any escalation is not greater than the actual percentage increase in the cost of living. The door has been opened wide. Canadian National now faces no barrier whatever against escalating the pensions of its retired employees on the same basis as all government pensions. I urge and insist that this be done. I do not intend to be put down by the Minister of Transport (Mr. Marchand) or the Minister of Labour (Mr. Munro) saying this is not the place in which to discuss this matter. It does not get discussed anywhere else. In the past, efforts of ours in the House of Commons or in the standing committee have produced an effect. Our purpose in pressing this issue now is to make the government realize it must tell the CNR to match what the federal government has done in this area. I would point out that the escalation of all the pensions I listed a few moments ago, from old age security right down to the Canada Pensions Plan bill that is now on the order paper, whether annual or quarterly as in the case of the guaranteed income supplement and old age security payments, is provided for by law. It is automatic. It takes place without any question. Not so in the case of CNR pensions. The CNR has on three or four occasions made escalation benefits available at the rate of 2 per cent a year. But this was done out of the goodness of the company's heart. I suggest it should be automatic-it should be made part of the pension rules, part of the regulations, so that retired employees can count on an escalation every year without question. They ought not have to depend on a meeting of the pension board or of the directors of CN reaching a decision that this should be done. It should be automatic,
October 26, 1973

and the escalation should be made equal to the actual increase in the cost of living. I want to see this provision put into the plan for the future, for those who are presently working. They are pressing for it, and I support them in that effort. But as far as those who are already retired are concerned, nobody speaks for them unless we do so here. I am doing so today, as I have done so often, because I want to see action taken.
I argue, too, on behalf of those workers who are already retired, that they have a case for the recalculation of the basis of their pensions. It is certainly better to calculate the escalation on the basis of the actual cost of living increase rather than on a basis of 2 per cent but when one is dealing with pensions which start at very low levels, percentage increases often mean very little. Some change in the formula is coming about. The package worked out at the bargaining table includes a new formula but nothing in that formula applies to those already retired. A recalculation of the basis of the pension paid to all retired employees should underpin the amount of the escalation for which I have been arguing.
A third point I press is the unfairness of a pension system under which a widow's pension is only 50 per cent of what her husband would have received. I know this situation arises out of a deep, dark, mythological past when it seemed right to retire a man on a pension of 100 per cent even though his wife had predeceased him, but expect the widow to get by on 50 per cent. I think pensions should be paid on an equal basis across the board, though at the moment I am concentrating on the case of retired railway workers. I think the time has come to increase that figure of 50 per cent. In my view the pension should be the same for either spouse. I do not see why, when the man is the one who survives, he should get 100 per cent though the woman, if she survives, gets only 50 per cent. After all, they each helped to do the work and provide the pension. It is, really, their pension, not just his. This is a concept I have raised a number of times and I intend to continue to do so. The least we should insist on is that just as our widows, the widows of Members of Parliament, will get 60 per cent of our pensions the widows of railway workers should also get 60 per cent. I think it should be more than this. I think it should be at least 75 per cent. In any case, this is one of the things which in my view should be adjusted, and, to begin with it should be adjusted in the case of widows of those who have already retired.
Because Bill C-164 refers to Canadian National Railways I have, of course, talked mainly about CN pensions, as is necessary if I am to stay in order. But I have made the odd reference to the Canadian Pacific pension plan and I should like to point out now that if there are deficiencies in the Canadian National plan there are far worse deficiencies in the CP plan. I emphasize in particular that its escalation provisions do nothing at all for the old-timers who retired before 1956. Indeed, even for many of those who retired after 1956, no credit is given for escalation purposes for service prior to 1956, the result being that the escalation benefits some of these old-time employees get is in terms of dimes or quarters, not in dollars. I think it is scandalous that a company which has
Canadian National Railways and Air Canada received so much from the government and the people of Canada should be able to get away with this sort of thing.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: I said I would concentrate on the case of those who have already retired, and I have done so, partly, as I say, because there is no one to speak for them unless we do so, and partly because this is the place where we can put pressure on the government to put pressure on the railways. To summarize, I believe we should press for action on three main points: first, an escalation formula equal to the rise in the cost of living as is the case with federal pensions; second, that this should be provided in the rules or regulations instead of leaving it at the mercy of management; third, the percentage paid to the widows of retired railway employees should be increased.
I should now like to say a few words about the package which has been agreed to by management and the unions. I suppose I should choose my words carefully because these terms have been agreed upon at the collective bargaining table as part of the total deal which will come out of the arbitration being conducted by Mr. Justice Emmett Hall. However, I must say I hope this agreement is not the end of the story as far as railway pensions are concerned. I am talking, now, about those in the service. There is an improvement. They are to get a 2 per cent formula for some years of their service and a somewhat better deal in case of early retirement; in othe- words, workers can retire early without a severe penalty; those who have served for a time beyond what the new package allows for will be permitted to enjoy that extra credit. But it seems to me there are very real deficiencies in the plan which has been accepted.
For one thing, there is nothing at all in this package to benefit anyone who retired prior to January 1, 1973. Even those who retire after January 1, 1973, will find that that new pension package does not change by one cent the credit they get for their service prior to 1956. The idea was that the time had come for a 2 per cent pension, a 2 per cent credit for every year of service in the way the public service pension plan operates and also Air Canada's. Instead, we have a one per cent, a 1.5 or 2 per cent pension for a few years, or a 1.3 per cent scheme integrated with the Canada Pension Plan, and so on. But we do not have an across the board 2 per cent per year of service formula which I think must yet be incorporated into the pension plans of railway workers.
I do not like the way in which the integration between the railway pensions and the Canada Pension Plan has been built up. As a matter of act, I think it was a mistake right from the start that the Canada Pension Plan was not stacked or decked in the case of railway workers, and many railway workers feel that out of this deal they are not getting the kind of terms of benefits that they ought to get.
I said that there is nothing in the package to cover any service prior to 1956. That means that older workers in our railway systems who are still working and had a fair amount of service prior to 1956 will not get a pension that
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October 26, 1973
Canadian National Railways and Air Canada
is much better under this package than if the package had not been agreed to at all.
I am deliberately keeping my remarks with respect to that part of the deal brief because it is the subject of collective bargaining, as I say, and it is up to the parties to fight it out. But I make the suggestion that they should press hard for a 2 per cent formula across the board. I think they should press for absolutely no penalties on early retirement, they should press for the Canada Pension Plan to be stacked instead of integrated, and they should press for an equal pension for the widow as for the employee when either one of them is bereaved.
I feel very strongly that those who are still in service and are represented through their unions should press for improvements of that kind in their pension plan; and of course they should press for the full escalation of their pensions after they retire in accordance with the actual rise in the cost of living. I offer this advice to those in service who are still trying to build up their pensions to what they ought to be, and they know they have my full support.
I close by pleading with the House to tell this government to instruct the Canadian National Railways-and it can talk to the CPR too; after all, that railway owes a great deal to this place-that the time has come, so far as railway workers already retired are concerned, for their pensions to be escalated by the actual increase in the cost of living; that it is time for recalculation of their basic pensions in line with an improved formula; and that it is time for widows of these workers to get a much better deal than the 50 per cent pension now provided. I hope that our keeping this debate going a bit longer to press these points will have its effect and that the government will realize that members of all sides of the House want a fair deal for our retired railway workers, including those who worked for the Canadian National, the Canadian Pacific and all the rest of this country's railways.


Mr. David MacDonald (Egmont):: Mr. Speaker, I rise to make two or three, what I hope will be, relevant and pertinent remarks with respect to the current operations of Canadian National Railways. While I realize that this discussion has gone for some days, even for some months now, commencing as it did on Friday, April 13 of this year-I do not know whether there is any significance in its commencement on that date-one of the things that has made the debate not as useful as it might have been is the almost total lack of involvement of the government in the numerous questions, comments and criticisms that have been put forth about our national railroad system.


John Napier Turner: We can deal with all of that in the committee.


David Samuel Horne MacDonald: I am a little surprised that the minister has so little regard for the usefulness of debate in this place, Mr. Speaker. As the mover of the bill, I would have expected him to speak to it, but he did not even take the trouble to address the House at the opening of the debate on April 13. His parliamentary secretary was supposed to be piloting the bill through at that time and he made a few remarks, but he has since vanished. The Minister of Transport (Mr. Marchand) has told us that he

is not piloting the bill through. Perhaps both of them have gone out together to learn to be pilots, and hopefully they will be able to land something in the right spot. Certainly, it would be a mark in favour of the government if it were to take seriously the many legitimate comments that have been made in respect of this bill. Quite frankly, I think it is a bit of an affront to the House that during the time the debate has continued no minister has spoken, neither the Minister of Finance (Mr. Turner) who is in charge of piloting the bill through the House, nor the Minister of Transport, who perhaps has a more direct responsibility in relation to the CNR.


John Napier Turner: A point of order, Mr. Speaker.


The Acting Speaker (Mr. Laniel):: Order. The Minister of Finance is rising on a point of order.


John Napier Turner: Mr. Speaker, this bill has been before the House for a year or so now. When it was first introduced, ministers did address themselves to it. I would hope that hon. members, all of whose points have been very carefully noted by the government, would find the committee a very useful procedure not only for calling ministers to answer questions but also the executives of the railway.


David Samuel Horne MacDonald: Mr. Speaker, I had hoped that the minister would indicate on his point of order that he was in fact prepared to participate, but it seems he is not. I would remind him that, while there have been other bills relating to CNR financing in other years which were not completed, this particular bill was introduced in March and, as I say, was moved and debated on April 13.
The specific issues to which I want to address myself have relation to the recent railway strike which took place in the latter part of August of this year which had a very detrimental impact on two Canadian provinces in particular and, of course, on all provinces in general. During the course of the debate on the special legislation that was enacted to put the railroads back into service, namely on August 31, I raised the question of the increasing frequency of ferry tie-ups as a direct result of a national rail strike, the first in 1950, the second in 1966 and the third this year, 1973.
Tragically for the provinces of Prince Edward Island and Newfoundland, all of these strikes occurred at the peak travel and tourist time,-I think tourism in both provinces is now the second or third largest industry- tying up ferries for a considerable number of days during the month of August. I would, therefore, be remiss in my duty as one representative from Prince Edward Island if I did not continue to press, immediately following the resolution of the work stoppage that occurred in August, for a procedure that would be implemented by CNR, in concert with the government, that would insure against, or at least would give the strongest possible assurance against, such disruption in the future.
As I said during the debate on August 31 and in subsequent correspondence both with the Minister of Labour (Mr. Munro) and the Minister of Transport, ferry service to Prince Edward Island and Newfoundland can only be regarded as essential. Indeed, it has been regarded as
October 26, 1973

essential since confederation, both the confederation of a century ago in the case of Prince Edward Island and the confederation of one quarter of a century ago in the case of Newfoundland. Written into the terms of confederation in both instances is the iron-clad guarantee by the federal government that there shall be no interruption, no break whatsoever, in the kind of communication and transportation that is necessary for a province to function effectively within the Canadian framework. I think it is regrettable that this party presently in power, having experienced in three successive instances such a major dislocation of transportation facilities to and from our island provinces, should not have acted effectively to introduce measures either following the 1950 strike, the 1966 strike or the 1973 strike to insure the people of our island provinces against any further disastrous disruptions.
At the time of the debate on the legislation to end the rail strike, I asked the Minister of Labour (Mr. Munro), particularly because he was at that time piloting the special legislation, whether he would take firm action following the immediate crisis to convene a meeting at the highest level. Perhaps I may read again the comment I made on August 31 to be found at page 6143 of Hansard:
All I am saying to the Minister of Labour at this point is that now we have to realize, having gone through this situation three times since 1950, that we must not put these two provinces in the same jeopardy again. In order to achieve that purpose I think the minister must give an undertaking that in the course of the next few months we will work out a new structure which will prevent the same situation from occurring again, not in total terms because we know we cannot prevent it in total terms, but to go a good deal beyond the present situation which is merely a bandaid approach.
The Minister of Labour, if I may quote him, responded to me at that point and is recorded here as having said:
I hope to achieve that.
Following that verbal commitment in the House on that date, I wrote a more detailed letter to the Minister of Labour, copies of which I sent to a number of people mentioned in the letter, particularly those directly responsible such as the Minister of Transport (Mr. Marchand), the premiers of both Newfoundland and Prince Edward Island, the executive of the Canadian National Railways and the representatives of the various union brotherhoods directly affected. I asked the Minister of Labour, again because he had taken the primary role in piloting the legislation related to the immediate strike difficulties, whether he would convene a meeting to be held with the Minister of Labour, the Minister of Transport, the Hon. Jean Marchand, Premier Frank Moores of Newfoundland, Premier Alexander Campbell of Prince Edward Island, plus representatives of the appropriate unions and the Canadian National Railway.
As I said in the letter:
I believe that you are amenable to this suggestion. I am hopeful, therefore, that plans for such a meeting are going ahead.
I received an acknowledgment of that letter some weeks following indicating that the minister felt that primarily it was not his reponsibility but that of his colleague the Minister of Transport. I sent a copy of that letter to the Minister of Transport, and subsequently wrote the Minis-
Canadian National Railways and Air Canada ter of Transport directly, as well as the Premier of my own province of Prince Edward Island in which letter I again advanced the importance of a high-level meeting to resolve this recurring difficulty. In addition, I put on the table one specific proposal whereby the situation might be resolved. I am going to mention that proposal in a moment so it can be on the record of this House and, hopefully, so there can be some comment not only from the Minister of Transport but perhaps from other members either in this House or on the committee in respect of some workable formula.
We are in a difficult situation. We have increasingly enacted legislation in this country to provide free collective bargaining for almost every employee in every industry, except those in the very few services thought to be so essential to the public interest it is not considered wise or fair to the general public to grant such rights. In the course of developing our transportation system, certain collective bargaining arrangements which have been achieved by railway employees have affected directly the operations of our car-ferry system, and this has resulted in the loss of an essential service three times in the last two decades.
We are now faced with having to try to reconcile what, at the outset, seems irreconcilable: How can we operate a modern essential car-ferry link between the two island provinces, assuring that service through all kinds of various labour disputes and disruptions, without either taking some chance with the general public welfare and interest or adopting restrictive measures in respect of the car-ferry employees? This is not an easy problem to resolve and if anyone suggests it is he would, I think, be extremely superficial about the nature of the difficulties.
In recent days the premier of Prince Edward Island has advanced the proposition that what we now need is a Crown corporation. He has been somewhat unclear as to whether this would simply be a provincial Crown corporation or a federal one, but he suggests that such a Crown corporation would be mandated to operate the car-ferry services and its employees would essentially be prohibited from having the right to strike. This would be for many a reversal of the current development of labour relations within governmental departments, agencies and Crown corporations. While such action may be popularly received by a large segment of the general public, it would not be considered to be a very progressive approach toward those who would be employed by such a Crown corporation.
If such legislation came before us in the House of Commons, we would certainly be faced with passing legislation that would, in a sense, be a backward step from the direction in which we have been moving, in addition to which it is not entirely clear that in establishing a separate entity we would in fact be providing better or improved transportation services to the island provinces. Nor is it clear that to those directly employed we would be providing them with the most fair and just employee framework possible. Until we know a great deal more about this proposal, I think at the outset it would seem to have a considerable number of difficulties related to it. Other questions have been raised about the possibility of the ministry of transport directly operating a car-ferry
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October 26, 1973
Canadian National Railways and Air Canada system, but until we solve these rights of the employees we really have not in any way escaped the essential issues.
On March 9 I wrote a letter both to the Minister of Transport and to the Premier of Prince Edward Island, again suggesting that a meeting should be convened at the earliest possible moment in respect of this problem, but more than that suggesting that I should like to put on the table for serious consideration one possibility of overcoming the increasing frequency of these disastrous car-ferry tie-ups.
What I suggested, and I will quote largely from the correspondence, is that a contingency plan be prepared within the next few months jointly by the Canadian National Railways, the Department of Transport and the Department of National Defence, and that this contingency plan would provide for a special operation procedure to be instituted by the Canadian armed forces in the event of a labour walkout that would tie up the car-ferry system. I suggested that this plan should be capable of being instituted in a very short time period, within 24 to 48 hours, that the obvious seafaring capabilities within the armed forces be made use of and that the men and other resources necessary to effect this alternate operation would be adjacent to the ferry system so that problems of transportation and the allocating of a number of employees would not be all that difficult.
This would satisfy the first and perhaps most major concern, that is of providing continuous ferry service. It would also allow employees to use their full rights in a bargaining sense and, if the whole process of negotiation broke down, to in fact have a walkout. They would, of course, in any walkout be penalized in the sense they would no longer be drawing their regular rates of pay. Such strike pay as would be available to them would be of some assistance, but they would suffer the usual penalties on a personal basis from going out on strike.
The essential difficulty in this proposal would be the fact that with car-ferries continuing in operation there would be no great direct pressure on the railway company itself to achieve a speedy settlement to the dispute. Therefore, I also suggested that when a work stoppage occurred, and the Canadian armed forces were called in, the Canadian National Railways would experience two direct penalties. The first would be that the normal day-to-day revenues they would receive during the period that the ferries would be operated by this alternate manpower would not go to the CNR but would return to the federal treasury. This would mean a deprivation to the extent of some thousands of dollars, depending on the length of time the strike was in effect.
Second, and perhaps most importantly in terms of the economic pressure on the CNR, I suggested that the annual subsidy which now runs into millions of dollars would be pro-rated during the strike period, and that that amount of money would be withdrawn as an additional penalty thus providing a stronger economic pressure on the railway to effect a speedy settlement of the dispute. I realize that this is a somewhat different approach to the problem and one which requires the assistance of other departments. It would set in play a different kind of

operation. However, I have been intrigued to note to date that there has been no extensive criticism, no suggestion that there is a fundamental weakness in the proposition, although I am quite prepared to consider such fundamental objections and, indeed, would not want such a plan to be implemented until it had the most thorough kind of scrutiny.
It would seem to me this, at least, is one possibility for ensuring the continuation of service between the province of Prince Edward Island and the mainland, as well as continuing basic employee rights within the framework of the present car-ferry operation as operated by the Canadian National Railways. If we are to have some proposal in which all interested parties are included, the employer, the employees and the two levels of government, I believe now is the time for the officials in the railway company, along with governmental representatives, to get together in an effort to directly face some of these problems.
We have been told there has been some form of communication between some of the people directly involved, but it is quite obvious to us that there has been no serious meeting of minds between the federal officials responsible and the government of the province of Prince Edward Island. I would say, and I hope this is not an indication of the current state of the CNR, that the Canadian National is about the only interested party which has not yet replied to either of my two letters concerning this major difficulty. Since this company has a basic responsibility to operate the ferry service on a day-to-day basis it would seem that this should be a fundamental concern to it. Certainly, the suggestions I have advanced, with the penalty which would be involved should another car-ferry tie-up occur in the near future, could involve an amount of some tens of hundreds or thousands of dollars. If the Canadian National should have a modification of the proposal I have produced, I would hope they would place it on the table fairly quickly.
I believe the citizens of our country in the two island provinces will not accept again the kind of difficulties from which they have not yet even now, two months after the strike, fully recovered. It is not possible to say either in economic or human terms the difficulty created for those two provinces. There is a responsibility upon the CN and the two levels of government to work out an acceptable procedure to prevent this happening again.
I wish to make one or two further comments because I think they are important in respect of the transportation problems of Prince Edward Island. In particular, I wish to speak about the ferry system that is operating there which resumed operation following this recent strike. I think we are rapidly approaching another time of great difficulty in respect of the continuous transportation of both passengers, goods and heavy equipment to and from the province. It is a well known fact that since roughly the Second World War we have had only two car ferries capable of handling the freight and traffic to and from the province, the Abegweit, which is now 25 years of age, and until recently the John Hamilton Gray.
We know that the Abegweit, which has been a very efficient railway car ferry, is coming to the point of needing a major refit in the very near future. We have been told for the past two or three years that it has been
October 26, 1973

operating at slower than normal speed. We know it would not take too much to put it out of service for a considerable length of time. For the total kind of refit and overhaul required, it would need to be out of service for at least a year. That would be an impossible situation because the other car ferry, while built originally for Prince Edward Island, has operated on a half-year basis serving the province of Newfoundland.
We islanders are patient and understanding people, and know that our fellow islanders in Newfoundland have similar and sometimes greater transportation difficulties. However, we think it inconceivable that we should be faced in the next year or so with a situation in which our basic ferry should finally go out of service, and that the other car ferry might be off some hundred miles away serving the province of Newfoundland. This government must make a commitment now with the Canadian National Railways and with the Department of Transport to provide a car-rail carrying ferry service that can, in effect, ensure that the basic goods, particularly the most basic commodity of all in terms of the agricultural industry, potatoes, are transported on a regular basis.
I was impressed by a recent report of the Canadian Chamber of Commerce which met in Prince Edward Island this past June. It recommended that the Maritime Provinces Chamber of Commerce continue to prevail upon the Government of Canada the urgent need for a new, modern ice-breaking ferry to serve between Prince Edward Island and New Brunswick as soon as possible. I shall not read the preamble because of the shortness of time, but I think it is incumbent on the government with the CNR to make, within the next few months, a definite commitment so that Prince Edward Island will not find itself again in a situation of totally inadequate transportation facilities for the movement of its basic goods and services.


The Acting Speaker (Mr. Laniel):: Order, please. It might be important for the Chair to know whether the hon. member is calling it one o'clock or whether another member is to take the floor.
It being one o'clock, I do now leave the chair until 2 p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
John Patrick (Pat) Nowlan: Mr. Speaker, in rising to participate in this endless debate on the CNR-Air Canada financing bill C-164, I would like to speak in a very general way about something that is obviously basic to a country such as Canada. The paradox in the development of Canada was that, in spite of the problem which transportation presented, it was transportation through the CPR which finally welded us together from coast to coast. In that very paradox, we are brought face to face with the problems of present day Canada for it is the lack of transportation in this modern day of technology, of computers and of science which we have at our disposal,
Canadian National Railways and Air Canada that is creating some of the fundamental problems in this country. I wonder, as we deliberate on the CNR-Air Canada financing bill which gives hon. members a chance to speak in both a general and a specific way about transportation and about Air Canada and CNR in particular, whether anyone in positions of authority in CNR, Air Canada or the CTC will be listening and, I hope, reacting to some of the concrete proposals that have been put forward during this debate.
I, personally, believe that what the western premiers tried to do last July at the western economic conference, which now is more or less forgotten because of the other problems that have flowed swiftly thereafter-as my friend, the hon. member for Vancouver South (Mr. Fraser) says, there has been much flowing but there have been a few bumps along the way and in the result we are all shaken up a little-was to convince Ottawa that transportation should become an instrument of the national development policy for the regions of Canada. This would seem to me to be almost axiomatic in a place like Canada and something with which a federal government exercising federal leadership should agree. To put it in another way, a provision should be included in the National Transportation Act that transportation should become the instrument for development for the regions. Of course, if you develop the regions and give them strength, you will have a stronger country.
I really could not understand the reluctance of the Minister of Transport (Mr. Marchand)-who unfortunately is away this afternoon, but I gather he has been absent for the greater part of this debate-to accept this fundamental principle. After all, it was a man called Macdonald, who is popularly called the father of this country, who developed the national policy on various tariffs and rates which helped in building the central core of this country and helped to define the boundaries of the country above the 49th parallel. We had a policy that developed this country, and now all that the west and the east, and I think even some people in the central part of Canada, are asking for is that an attempt be made to redress the balance that is somewhat out of kilter because of the over concentration and development of the industry in the central core of Canada, by including the principle in the National Transportation Act that transportation should be a tool of national development. The fact that the federal government could not go along with that very basic premise concerns me.
The National Transportation Act was only passed in 1967 and it is based on compensatory rates. You are supposed to get from the shipper only what he is willing to pay, or in other words, you are supposed to do away with subsidies over a long period of time. I will have more to say about subsidies in a minute. Can you have transportation as a tool for regional or national economic development, and on the other hand, as is presently written in the National Transportation Act, agree with the principle that transportation should be based on compensatory rates? I think that in many parts of this country, in so far as the passenger service is concerned but even more with regard to the freight service, rail transportation is fundamental to the growth of the region. It may be that the compensatory rate that the railway would like to charge is going to be too high, and almost too confiscatory for that industry or

October 26, 1973
Canadian National Railways and Air Canada that part of the country to grow. I think there has to be a review of the Transportation Act to try to balance transportation as a tool of economic development against the present section in the act which provides that transportation must only flow on the basis of compensatory rates.
Here, we have the irony of debating the CN financing bill with all the mythology of rates that was built into the infrastructure of CN financing, especially in the forties and fifties, and the refinancing of their capitalization which was supposed to do away with subsidies or grants from the government. We have this paradox. There was a great teacher around the Sea of Galilee many, many years ago who taught in parables. I think the political scene in Canada can almost be taught in paradoxes. You can see the political fabric of our country and coming to transportation there is a paradox that we all know. The strike last summer brought it home again. It is that although rail may not be the most popular mode of transportation for passengers service, railroads are fundamental to growth. Balanced against that is the compensatory rate structure that is built into the national transportation system, and which I say is not helping to develop the economy of the country.
In trying to revise the principle of the Transportation Act to make it a tool of economic development, I do not suggest that the taxpayer of Canada should be asked to subsidize inefficient forms of transportation. As members of parliament and the transportation committee, whether the CN, the CP or any other group came before the Transport and Communications Committee, we should be looking for ways to make the railway system more efficient rather than doing what is so easily done, and that is letting the taxpayer pay because in the end the money comes out of the Consolidated Revenue Fund. This is what other governments have done, and it is just subsidizing the inefficiencies of the system. We should be looking at transportation as a tool of economic development, and not using the criteria that the railways can charge what the shipper can bear. Let us change the system and make it more efficient rather than perpetuating its distortions, inadequacies and inefficiencies.
I will give some precise example of the inadequacies of the present system, Mr. Speaker. On the east coast, as Your Honour and other members from the east coast and central Canada are aware, we have a container port where the ships of the world bring their container traffic. There they are supposed to be loaded on to unit trains which, in theory and to a degree in practice, flow through the heartland of the United States and Canada. You would think that this would have brought unremitting loud hosannas from all Canadians, let alone those in Atlantic Canada.
But, Mr. Speaker, while the container facilities have been of value to the export shipper or the import shipper and of some benefit to Atlantic Canada, they have not necessarily been of benefit to the domestic shipper. For instance, the shipper in the Annapolis Valley who uses the Canadian National to send goods to Toronto finds that it costs him more to do that than it costs his competitor to ship from Hamburg, Germany to Toronto. That is a fact, Mr. Speaker. As my poor frustrated shipper says, "Mr. member, we are supposed to be the wharf for the Atlan-

tic." We are told that we are lucky to live by the sea, smell the fresh air and watch Johnathon Livingstone Seagull go up and down and philosophize about his rhapsody as he soars down to try to catch a fish. Yes, it is a great place to live, but when it comes to hard economic facts there is geographic discrimination; we are far from the markets of the world and of central Canada. We understand that and we like to live there, but we cannot understand why the discrimination of geographic distance has to be compounded by the rate structure of the national railway system. It is strange that a Hamburg shipper can land his goods in Toronto cheaper than a producer in Atlantic Canada. We have the largest wharf in the world, Mr. Speaker; it stretches from Toronto to Halifax.
I will give another illustration of why we are frustrated with this system of transportation, and why members take the opportunity during the debate on the CN financing bill to try to point out that something has to be done. Let us talk about rates and not just the anomaly of Hamburg versus the Annapolis Valley. You can turn that around. My shipper cannot ship cheaper from the Annapolis Valley to Hamburg than the shipper in Toronto. I can prove that point by bills of lading.
I should like to read from the newsletter put out by the Atlantic Provinces Economic Council, a non-government agency of interested businessmen and, boards of trade with support from the four Atlantic provinces which deals with Atlantic problems. I do not think I could do it justice by paraphrasing, so I will read it as I want to give a little more detail than that of the Annapolis Valley-Hamburg situation to show what confronts us in Atlantic Canada when we talk about rates.
I might say that we are glad that at least the west had a conference about transportation. We are as convinced as they that provincial governments will finally have to look at the cost structure of railway operations. During the debates on the transportation bill in this House, many members spoke of the problems the bill was going to create unless we could see what the variable costs were. What does the railway charge against fixed or variable costs? This type of information is difficult for members of parliament or provincial governments to obtain, but I believe that in future provincial governments will be able to get some insight into the costing structure of the railways on a confidential basis. Of course, the CTC is going to study freight rate anomalies which prejudice the west; perhaps it could also study the freight rate anomalies that prejudice us in the east.
I should like to read from the APEC newsletter of August, 1973, which, among other things, says this:
As an example of the lack of alternatives and competition in the Atlantic region, due to the lack of volume there is no pool car service for less-than-car load traffic from Halifax to central Canada. But daily pool cars operate from Toronto to the Maritimes.
We are small down there. We cannot get the railways to get together to collect small shipments from small shippers into a pool car so that we can get a preferred charge for sending goods to central Canada. Every day pool cars come to the east under preferred charges, because the volume of traffic that can be picked up from central Canada warrants that arrangement. So, we cannot get pool
October 26, 1973

cars going west, but they do come east, and we must compete in that situation.
I do not blame this government for this state of affairs. All governments are to blame. Let me say that there is much talk about alienation, dissatisfaction and frustration in my part of Canada. Do not think that we, who come from the east, the cradle of this land, are all that happy about our transportation system. I well remember, when I was just knee-high to a grasshopper, that two places close to my home-and this was not Quebec-used to raise the black flag on July 1. I am not speaking of 1867, 1907 or 1927. I am talking about 1947 and 1957. The black flag ran up because some people thought that their prosperity had gone when we entered confederation. They have reason to wonder. I continue quoting:
The pool car alternative would introduce additional and desirable competition. Government should therefore consider partial sponsorship for the initial operation of a consolidation warehouse-
Could not the railways or the government consider establishing consolidation warehouses, so that we could have the benefit of the sort of pool car service that is available to central Canada for shipments to eastern Canada? I continue quoting:
-and regular pool car service from the Atlantic region to Central Canada.
Other anomalies and problems abound in the Atlantic region. In Eastern Canada the railways are capable of profitably shipping a minimum of twenty 20-foot containers a week, in any one direction, carrying exports or imports between Halifax and Toronto for $207 each. For a minimum annual contract of 18,000 export and import containers shipped between Central Canada and the Mari-times the rate falls to $132 each.
Let me make clear those figures. If you do not handle any great volume of containers, you will pay $207 for each one, but if you are a large conglomerate, or tied in with the trans-Atlantic shippers, or with CN at Halifax, you are going to pay only $132 for the same container. 1 continue quoting:
Present volume rates for import-export containers cover variable costs and make a net contribution to railway fixed costs; otherwise there would be no point in the railways offering special rates designed to attract container traffic carrying exports or imports which might otherwise be shipped through Montreal, the Seaway or an American port. In any case, as CTC President E. J. Benson stated on July 19:
'Section 23 of the National Transportation Act refers to Section 276, 277 and 278 of the Railway Act, and those sections require that the fixing of freight rates have regard to minimum and maximum levels:
(a)	No rate can be below the compensatory level-it must exceed the variable cost of the movement of the traffic concerned as determined by the Commission; and
(b)	A captive shipper who qualifies for a fixed rate is entitled to a rate which does not exceed variable cost by more than one hundred and fifty per cent.'
Thus it becomes difficult to understand why it costs $335 to send a domestically originated 20-foot container carrying only one-quarter of its maximum load, when it costs only $132 to send a comparable import container, carrying the maximum load, from Halifax to Toronto. It is even more difficult to accept a charge of $1,340 for a maximum load domestic container. That is a rate ten times as high as the minimum import container rate-import containers average about three-quarters of maximum load-despite the assistance received by the railway under the Maritimes Freight Rates Act.
Canadian National Railways and Air Canada
For a fully loaded 20-foot container carrying 40,000 lbs. of
domestic dry goods, the rail charge may rise to $1,656. This
exceeds the minimum rate for a comparable loaded export container by 1,155 per cent.
I know that when you quote figures you can become completely bulldozed, so to speak, and lose the attention of the audience. But we are not speaking for the audience; we are speaking for the record, in the hope that some of those who read these debates will wonder, as we wonder, why the east cannot compete with central Canada. We are far removed from the markets of central Canada and our container volume is not high. Our containers start their journey in Halifax, Annapolis Valley, Pictou and other regions. The rates given to our shippers are higher than the preferred export rates given to larger shippers who ship in large volume.
That brings me to my second point. I can understand that the railways will give preferential treatment to exporters who may export something like 18,000 containers per year. Obviously, the greater your volume is, the better is the rate you can command. Once that volume of traffic has been established flowing east and west, once you have containers going from Halifax to Toronto, why could you not give the Atlantic shipper a rate that is not the same, perhaps, but very close to that given to the importer or shipper who ships in large volume? That is the question we are asking, and we want some answers. The volume of traffic is there; large shippers are given preferred rates, but domestic shippers are discriminated against. That is not fair. Certainly, in view of the volume of traffic that the railways handle, there should be no discrimination against domestic shippers. They ought not to be discriminated against by an unreasonable rate.
On or about October 11, there was a transportation seminar in the Maritimes, when the Roads and Transportation Association of Canada met in Halifax. An interesting speech was made at that association meeting by a fellow called Robert Manuge who is executive vice-president and general manager of Anil Canada Ltd. of East River. He said, among other things:
The facts indicated that the railways may be deliberately discouraging the use of containers by domestic shippers in order to bolster box car traffic and rail revenues and prevent the circumvention of high commodity rail rates by captive Atlantic region rail shippers, ...
He went on to say:
It costs Anil, for example, $468 to send 40,000 pounds of its products from Nova Scotia to Toronto by rail. It costs $132 to send a comparable import container, carrying the maximum load, from Halifax to Toronto.
'Why must a local firm accept a charge that is 164 per cent to 255 per cent higher than the rate available to imported containers, perhaps carrying the same products from an overseas competitor, despite the assistance under the Maritime Freight Rates Act?'...
Earlier, he had said that the east coast is really the gateway to Canada. I suggest that we are just a pipeline. Goods are piped from Halifax to Toronto and, under present rate structures, the benefit does not accrue to us.
The next question is this. Why should we continue the present rate structure which encourages the development of the inner core of the country and the development of secondary industries which do the processing and develop-

October 26, 1973
Canadian National Railways and Air Canada
ing in central Canada. Again, with a little imagination, effort-


An hon. Member:: And common sense.


John Patrick (Pat) Nowlan: -and common sense, it should be possible to help the Maritimes in this regard. We do not want big cities like Toronto springing up on the east coast; on the other hand, we would not mind a few little Oakvilles, Port Credits or similar areas. We do not want the megalopolises and metropolises which are causing so many problems in other parts of Canada. I do not want to overstress that. I know other hon. members want to speak and will limit my remarks.
The point is that the federal government should consider a transportation policy of the kind that was envisaged in 1867 when all parts of the country were considered equal. That is how they should be now. Transportation policy is a tool for national economic development of the regions. If the regions are strong, the whole country will be strong. This applies to apples, to life, and to transportation.
Further, the system should be changed so that it is more efficient than the one we have now. Now, we take the taxpayers' money to subsidize inefficiency.
My third point is that the domestic shipper should not be discriminated against merely because he does not send out the volume of container traffic that the importer or exporter sends. He should be given a fair rate, so that he can compete with that type of shipper. There are many other areas one could mention and about which one could ask questions. When talking about efficiency, why does it take 35 hours for the so-called unit train out of Halifax to reach Montreal? It is only 780 miles, so that must be one of the slowest rates of progress anywhere in Canada.


Mr. Baker:: Almost as slow as the government.


John Patrick (Pat) Nowlan: I do not know whether you can say that. You cannot compare doughnuts with zeros. Sometimes there is a real difficulty in seeing any forward motion in this government. It is more of a backward motion. However, I do not want to get political. I am trying to be objective. Some day the Minister of Transport will face members on this side of the House who are a little more enraged. We are getting short of fuse because we are not getting answers to the questions we are asking.
As I already mentioned, the transportation act set up compensatory rates between competing modes of transport. Why in this bill are CNR and Air Canada lumped together, let alone the fleet of trucks CN uses to carry its goods? Where do you have the competing mode of transport between the hierarchy running Air Canada and CNR, which has as many trucks on the road as Smith Transport, the trucking firm of CP. Where is the competing mode? Perhaps one of the reasons the railways are not interested in passenger service between Halifax and Montreal is that they do not feel they should build up the service. Anyone who does not want the service can fly CN or Air Canada.


Some hon. Members:: Oh, oh!


An hon. Member:: Fly CN?


John Patrick (Pat) Nowlan: Air Canada service is definitely much better than when I first came to this House. It used to take between six and eight hours to travel from Ottawa to Halifax. You had to transfer in Montreal and there was a wait of from two to four hours. Fortunately, there is now one plane a day that flies directly to Halifax from Ottawa. It takes one and a quarter hours or one hour and 20 minutes. My point is, how can there be competition between different modes of transportation that are owned by the same company. Nevertheless, we still work under this mythology of compensatory rates when it helps others, but forget about it when it hurts us.
I know there are other members who want to speak on this bill. I just want to mention that the railways are as much a part of this country as the tides in the Bay of Fundy. Those tides are the highest in the world. We on the shores of the Bay of Fundy wonder which will change first, the tides that flow in and out or the transportation system. If we can be assured that when this bill is referred to the committee, officials of CNR, CPR and Air Canada will appear before the committee to give more detailed answers to some of the questions we have been asking, this might help the Minister of Transport in trying to work out some of the fundamental problems of this country.
We talk about regional disparity, the problems of bilingualism and the sincere efforts of the Department of Regional Economic Expansion to develop those areas in Canada which do not receive the benefits of other areas. However, I say in all seriousness there will never be an effective policy of regional economic expansion in the hinterland and periphery of this country until we have a transportation system that will develop in a more meaningful way the very areas that DREE is supposed to help. I can give examples of this in my own constituency. Companies are receiving DREE grants to cover customers west of the Lakehead. Because of the successive freight rate increases in the past two or three years, they received DREE grants to expand their facilities to serve the market west of the Lakehead. However, because of the seven, eight or nine freight rate increases in the past year and a half or two years, they can hardly service the customers they have east of the Lakehead.
I plead with the Minister of Transport to accept what was requested by the western premiers. I know the Atlantic premiers would ask for the same. Frankly, any Canadian would ask that transportation be a fundamental tool of economic development, no matter where he lives. In this way, all Canadians would benefit.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I want to use this opportunity to reiterate a plea I made ever since coming here. That is that the government of Canada, the Department of Transport and other agencies which deal with the various aspects of transportation should begin to look at the whole question of transportation needs in this country in its entirety rather than in separate compartments, as has been done over the years. It seems that at present the one objective of each agency and department is to not let the other know what it is doing. In no other country can that kind of attitude have such a detrimental effect as it does in Canada. There are 22 million people in this country who inhabit some three
October 26, 1973

million or four million square miles of land, yet we use our transportation facilities on the most illogical wasteful manner that can be imagined. I wish to give an illustration of what I mean.
When I was first elected to this House 12 years ago, there were six or seven trains a day between Ottawa and Montreal, and the same number between Montreal and Ottawa. They departed at various times during the day. They moved quickly and provided an easy and comfortable method of travelling between Ottawa and Montreal and return. What has been done? We, the government of Canada-


Walter David Baker: You are right this time; we, the government of Canada.


David Orlikow: We, the parliament of Canada, allowed the railways, with the blessings of the Canadian Transport Commission and before that the Board of Transport Commissioners, to cut back on the number of trains per day and the meal service. We allowed them to change the times to the point where it now seems they do not want people to travel on their trains. What we found, of course, was that more people used their cars. There was an expansion of bus service-buses left every hour on the hour. What could be more stupid at a time when we are concerned about the fuel shortage and the befouling of the environment than to cut back on railways which can carry people in large numbers quickly and relatively cheaply?
But that was not enough. Though we apparently have no money to subsidize rail transport from Ottawa to Montreal, another branch of the government is proposing to invest $200 million or $300 million in a STOL aircraft system which instead of taking two hours from downtown Ottawa as the train does to downtown Montreal will take half an hour by air, but passengers will have to spend half an hour getting to the airport and another half an hour getting from the airport at the other end to downtown Montreal.


An hon. Member:: And for double the price.


David Orlikow: That is just one instance of the failure of the government, and of the Department of Transport in particular, to provide the kind of overall efficient service which the people need.
I want to talk for a few minutes about Air Canada and the CN. I do not think I need explain to members of parliament that I am a supporter of Air Canada and of the principle that air transport should be operated mainly, if not exclusively, by a publicly-owned corporation or under its jurisdiction. If I express criticism of Air Canada, as I intend to do, I do so with a great deal of regret; I wish I could spend my time complimenting Air Canada on the work it is doing. It did a magnificent job for many years. The decline began during the period when a Conservative government was in power, and the so-called regional carriers were given the short runs while Canadian Pacific was permitted and encouraged to get into the trans-Canadian and international air transport business in competition with Air Canada. Air Canada is not performing well at the present time.
Canadian National Railways and Air Canada


Some hon. Members:: Hear, hear!


David Orlikow: The relationship between the company and its employees is poor. The morale of the employees at all levels is bad. Air Canada's relationship with its customers leaves a great deal to be desired. I want to document what I say because I think the Minister of Transport (Mr. Marchand) has the responsibility to take whatever steps may be necessary to change this situation. I intend to put forward one or two suggestions as to ways in which this ought to be done.
A few years ago, Air Canada, or Air Canada in consultation with the government, arranged for a study of its organization to be carried out in depth. This study was undertaken by a United States company-why a United States company was chosen, I do not know. But as a result of that study, and the recommendations forthcoming from it, a large number of changes were made in senior personnel. Many of the senior staff from Vice-Presidents down were retired. I know that many of them really did not want to retire. New people were brought in to take over their jobs. The number of vice-presidents was increased; today, I understand, there are some 19 vice-presidents.
I can see no improvement, Mr. Speaker, as a result of the wholesale changes which were made. It is fairly obvious there is a great deal of discontent among those who have remained and evidence of this is the fact that Mr. Baldwin, who was the number two man in Air Canada, has announced his retirement before reaching the retirement age. Then again, there have been a whole series of disputes between the management of Air Canada and its employees. There was the strike of machinists which tied up operations completely some time ago and, more recently, there was a strike of employees working in the finance department in Winnipeg.
The issues which led to the strike, and which made it necessary for the employees to withdraw their labour for a long period, were not particularly difficult to solve had there been understanding and goodwill on the part of management. The employees were afraid that following the development of a computer centre in Montreal the work they were doing in Winnipeg would be transferred to Montreal. They were afraid they would be obliged to move to Montreal if they wished to keep their jobs. It is true that the management of Air Canada assured them this would not happen. But we in Manitoba, regardless of whether we live in Winnipeg or in rural areas, regardless of whether we are members of a chamber of commerce or of a labour union, and regardless of the political party to which we may belong, cannot help but remember what happened a number of years ago when, despite denials by Air Canada management that the overhaul base in Winnipeg would be, first cut back, and then eliminated altogether and moved to Montreal, such a move did, in fact, take place. The overhaul base in Winnipeg, which at one time employed 2,000 workers is now a thing of the past and all that work is being done in Montreal, despite denials by the company, denials persisting for years, that such a step would be taken. It is not surprising, in these circumstances, that the workers to whom I have referred, along with others, are suspicious of Air Canada management, and this atmosphere of suspicion does not lend itself
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October 26, 1973
Canadian National Railways and Air Canada
to efficient work and the provision of satisfactory service to customers.
As one who travels frequently on Air Canada I want to say that I consider the food which is served to passengers to be, on occasion, of a very inferior nature. In fact, on occasion it is a disaster. I have discussed this matter both publicly and privately with representatives of Air Canada with absolutely no success. When I raise the matter I am told I am the only person who does so. But when I asked certain questions in parliament about that aspect of the matter, the answer I received was framed in such a way that it was virtually impossible to know how many people had complained. I am sure I did not get this indirect, roundabout answer by accident. I am sure they did not want to tell me how frequently complaints are made. I wonder how much monitoring of the quality of the food provided is carried out by Air Canada personnel. I wonder whether Air Canada has looked into the advisability of preparing its own meals. I am told that CP Air prepares its own meals. I do not like giving a private carrier credit, but on the few occasions I have travelled CP Air I found the food superior to that served by Air Canada.
I should like to give a third illustration-and these illustrations come to mind without my doing an in-depth study of Air Canada. Let me talk about timetabling. Ordinarily, I go to Winnipeg on Friday, leaving Ottawa at five o'clock. During the supper hour, which I suppose is a period lasting about an hour and a half, the situation at the Winnipeg airport is such that the following Air Canada planes arrive. There is one 1011 which has a capacity of about 300 passengers; there is one DC-8 stretched which has a capacity of about 200 passengers; there are two DC-9's each with a capacity of about 100 passengers. At this time of year those planes are travelling almost at capacity, if they are not overbooked. At the same time one plane arrives in Winnipeg from the United States, a Northwest Airlines plane, and so does one CP Air plane.
Air Canada says that this is not their responsibility, that they did not build the airport facilities. However, they are responsible for their own timetabling. They could stretch their air arrivals at this time so that four aircraft did not arrive at virtually the same time. At the present time you wait for your Air Canada baggage for up to an hour or more at this particular period of the day. I wish the Minister of Transport would go to Winnipeg and examine this situation, because it means there are literally hundreds of cars which have to park in areas where no parking is allowed. You cannot blame people who come to meet their friends or relatives, because there just is no other place to park; parking areas are fully occupied. Then when someone gets a ticket and pays a fine for over-parking because the person he met had to wait for his baggage, his thoughts about Air Canada are not very complimentary.
Let me now mention a situation which does not affect me personally all that much since I am one of those fortunate people who fly from Ottawa to Winnipeg direct, which accounts for about 95 per cent of the flights that I make during the course of a year. I do not have to travel via Toronto, but if there ever was a monstrosity which

seems to be have been designed with the express purpose of making things difficult, uncomfortable and unpleasant for passengers, it is terminal 2 in Toronto. I realize this is not Air Canada's fault either. I know this because on one occasion when I did have to spend a little time at Toronto airport I wrote to Mr. Baldwin, and he told me the truth in his reply that it was not Air Canada's fault. The Department of Transport had designed terminal 2 and had it constructed. But, as I say, if there ever was a monstrosity, an abortion, a total disaster area, it is that terminal.


An hon. Member:: Constructed by a Liberal
government.


David Orlikow: Somebody interjects that it was built under a Liberal government. It was completed under a Liberal government, but it may well have been planned in the days when we had a Conservative government.


Mr. Dick:: That is speculation.


David Orlikow: It is speculation, but whoever was responsible should certainly have his head examined by a psychiatrist. One has to walk miles at terminal two. In the Montreal Star for yesterday or the day before, I noticed a short letter, which I should have clipped and read to the House today, written by someone who was reporting that his sister needed a wheelchair when she arrived at the Toronto airport. However, even though notification had been given in advance, no wheelchair was waiting and she had to walk miles on her crutches to get from where she deplaned to the taxi or bus. I hear there are motorized carts, but the number of times I have seen passengers riding from one part of the terminal to another are few and far between. There are no comfortable chairs or couches on which to sit if one has to wait. I could go on and on, but I am sure hon. members who use Toronto airport more frequently than I can wax much more eloquent about the terminal's shortcomings.
I should like to give another illustration before leaving the Toronto airport terminal. The department seems to feel that the present situation is not bad enough and it is going to extend the terminal, doubling its size so people have to walk five miles instead of two. I suggest that the minister make sure that his department knows what it is doing and uses some common sense before he permits any extension of that facility.
Let me make one further personal observation. Several years ago, supposedly because it was more efficient and would save money to do so, the reservations office in the Ottawa area, which used to be reached by dialing the phone and speaking to someone in Ottawa, was moved to Montreal. I am not criticizing Montreal for this; we were told it would be more efficient to make this move. Last Thursday, at about 11.30 in the evening, I wanted to check whether the flight I was taking on Friday morning had in fact been confirmed. I dialed the reservations number for Air Canada repeatedly for two hours, and each time my call was answered I heard a recording which told me that the lines were busy and I should hold. I held the line on a number of occasions for up to ten minutes but no one came on the line to answer my call. Eventually I gave up. Fortunately for me the next morning I was able to confirm my flight and I was able to travel. This kind of service is
October 26, 1973

intolerable and inexcusable. If this is what efficiency means, then I think Air Canada should return to its old system which it said was less efficient. It was probably a little more costly, but at least you could find out whether or not you would get a seat.
One last word about air travel. I suppose I shall be told this is not Air Canada's fault either but the fault of the Department of Transport. People in Winnipeg and Manitoba have been making a case for a number of years that they are entitled to a Canadian route from Winnipeg to Minneapolis and Chicago. At present we are served by only one carrier, a United States carrier, Northwest Airlines. This carrier has a record of poor relationships with its employees. Several strikes have shut down its operations over the past number of years, strikes lasting, in one case at least, for substantially more than one month. So in fact there was no direct service from Winnipeg to the midwestern United States. Winnipeg has been pleading for a Canadian line and I should have hoped it would be operated by Air Canada, but I would settle for one of the other airlines.
A few weeks ago the minister announced they were close to an agreement after long negotiation with representatives of the United States on the extension of air routes to the United States by Canadian carriers and to Canada by United States carriers. The minister announced there would be 18 new routes for Canadian carriers. That announcement was welcomed by all Canadians. Let me tell the minister that western Canadians, Manitobans in particular, were unhappy, to say the least, to find out that the agreement negotiated on behalf of all Canadians did not provide for a direct Canadian route from Manitoba to the midwestern United States until at least 1978. If I were to use the language I have heard about this, Mr. Speaker, you would immediately suggest that I was using unparliamentary language.
This means we will have to wait five more years before we have a direct Canadian route. This is the kind of treatment western Canadians have been receiving for generations. This is the kind of treatment that has led to the alienation, which is increasing, I am sorry to say, in western Canada and the kind of treatment that leads to a situation in which the Liberal Party has been almost eliminated in terms of members of parliament from the three prairie provinces. Let me say to the Minister of Transport and to the Prime Minister (Mr. Trudeau) that if they wish to change what has happened during recent elections in western Canada, they should take another look at the kind of treatment they have permitted-I do not use the word "encouraged"

to take place in western Canada.
I think I have said as much as I want to on this occasion about Air Canada and I hope some of the people who have responsibility in this airline will pay attention to my criticisms. I do not want to be only critical of Air Canada, because criticism alone does not help to improve conditions which have led to the kind of problems I have illustrated. Let me say to the Minister of Transport and to the government that the situation which has developed in respect of Air Canada will continue at least until the government does several things.
Canadian National Railways and Air Canada
First of all, the government ought to take a very hard look at the membership of the board of directors who supposedly run Air Canada. The situation in respect of Air Canada is so serious that the time has long passed when people should be appointed to the board of directors simply because they belong to the right political party or because they come from a geographic area that should have representation. If Air Canada is to be drastically changed, as I believe I have illustrated it must be changed, it needs a new, vigorous and competent board of directors. I would not presume to suggest who should replace those now on the board but I urge the minister to completely change the composition of the present board.
Second, I suggest to the minister that the performance of the senior management of Air Canada must be examined thoroughly. I do not believe they are doing the job that ought to be done, and a great deal needs to be done. I think the illustrations I have given of the incompetence of Air Canada bear that out. I was not the greatest admirer of Mr. Baldwin when he was deputy minister of transport, but when I read that he was retiring several years early I could not help asking myself-I hope the minister will give this some thought-whether in fact the wrong man was retiring. To put it mildly, I would say I am disillusioned with the job being done by Mr. Pratte, president of Air Canada, and the kind of people who have been appointed, I presume on his recommendation, as vice-presidents.
I urge the minister to give serious consideration to the kind of people leading Air Canada, particularly those in the upper echelons. Until the employees of Air Canada have the feeling that the company is operating efficiently and in a way which gives them fair treatment, and that the company cares about what is happening to its customers and its services, nothing will improve.
Let me say one more thing about terminal 2 to demonstrate that what I have suggested is not exaggerated. The management of Air Canada arranged for a survey of customer services and customer feelings about Air Canada particularly in relation to the proposed movement to the new terminal in Toronto. That survey was carried out by a Miss Farnen. I will not take the time to put on the record what she said, although I can and will do so probably at a future meeting of the transport committee. A more damning indictment of Air Canada and its operations could not be found.
As things now exist, it is as though that report prepared at the request of Air Canada management was never made. The report has disappeared, and as far as I can tell very few employees at the senior, middle or lower levels of Air Canada have ever seen it. From my reading of the report and its recommendations, it would seem that virtually none of the problems have been corrected and none of the recommendations have been implemented. I suggest that not all of the recommendations would be difficult to implement and many would not have cost much money. One recommendation in the report was for the employment of more staff. This recommendation was ignored until the management of Air Canada saw how bad the situation was and decided a move had to be made. This is being carried out to at least a partial degree. I would urge
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October 26, 1973
Canadian National Railways and Air Canada the minister to take a serious look at the operations of Air Canada.
Let me say a few words about the entire operations of our railways. I do not fault the CNR exclusively, although I do fault what seems to be the attitude of CNR management. That attitude seems to be that the CN can only do those things the CPR is prepared to do. It seems they feel they cannot compete with the CPR in order to give cheaper, better and faster service, but that they should do everything possible along with the CPR to provide worse service than was provided before.
I give a small illustration of what I mean. If a person in Ottawa wished to take a train to Toronto, Montreal, Winnipeg or somewhere else and wanted to know the time of arrival or departure of a train, he would pick up the Ottawa telephone book and look under the listing for CPR or CNR. Until a year or two ago the first number listed under the CPR or the CNR heading was "train information." Now one would have to have a better pair of glasses than I have in order to look down the page about a column and a half in order to find the "train information" listing.
In my view, this has not occurred as a result of an accident; I suggest it is a deliberate attempt to discourage people asking questions and indeed to travel as passengers on either railway. This has been done jointly, rather than separately. I could not begin to make the case for improvements in rail service as a whole and particularly for improvements in rail service in respect of freight as well as was done by the four western premiers at the Western Economic Opportunities conference in July of this year. I think it is significant that the proposals on what should be done, and the criticism of existing practices that was made at that conference were made by the four premiers, three of whom lead NDP governments and the fourth of whom is the Conservative Premier of Alberta.
It was interesting and important to me as a westerner to read the report which appeared in all the newspapers. They all reported the same fact, to the effect that the spokesman on the question of transportation for the four premiers was the Conservative Premier of Alberta. It is not my intention to place on the record everything they said, but what they said was so convincing that I am certain no one in western Canada, regardless of political affiliation or social or economic background-and, indeed, no fair-minded thinking person in central Canada or in the maritime provinces-could disagree, because they said essentially that the railway systems of this country were established primarily because without them there would have been no country.
They were established at a time when the manufactured goods which were being produced or processed in central Canada had to be shipped to the Maritimes and to western Canada, and the raw materials, the products of our forests, the minerals, the fish and everything else which was produced in western Canada and in the maritime provinces, had to be moved by rail to central Canada. The whole system of freight rates was established with that in mind.
One hundred years have now gone by. Situations have changed, and now we have resources in the prairie prov-

inces, in British Columbia and in the maritime provinces which can be processed and manufactured as cheaply and as efficiently near the source of growth, near the source from which they are brought out of the ground, as they can in central Canada. This was not the case until now, to large extent because the whole system of freight rates is designed to guarantee the situation we had in the first 75 years of the history of this country.
The people of western Canada and the maritime provinces are not content to let that situation continue. They are not content to see the job-creating manufacturing industries, to a large extent because of discriminatory freight rates, be expanded in central Canada so that people from the Maritimes, the Prairies and British Columbia are virtually forced to move to Ontario or to the Montreal area of Quebec. They want, and are entitled to have, their fair share. We are not asking that the manufacturing industries or the processing of our minerals, our forests or our fisheries, be carried out in our own areas regardless of cost. We are asking, as indeed the prairie premiers were demanding on behalf of the people of their regions, that the discrimination which has existed should be eliminated and that a new system of transportation with a new system of calculating freight rates be established.
I shall give a few illustrations of the type of discrimination which exists. My colleague, the hon. member for Yorkton-Melville (Mr. Nystrom) listed some of them in an article he wrote in the Toronto Globe and Mail. I could do the same thing by quoting from the briefs which the prairie premiers presented to the Prime Minister (Mr. Trudeau) at that conference. It costs $2.90 a hundredweight to ship livestock from Prince Albert, Saskatchewan, to Toronto. If the livestock were slaughtered and dressed in Prince Albert, thus providing jobs to the people of Saskatchewan, it would cost $3.37 a hundredweight to ship the meat to Toronto.
Unprocessed rapeseed shipped from Saskatchewan to Vancouver costs 35 cents per 100 pounds, but if it were processed into oil before shipment it would cost $1.21 per 100 pounds to ship it from Saskatchewan to Vancouver. It costs $38 to ship a ton of Manitoba nickel to eastern factories, but $138 a ton to ship the product of the processed nickel from eastern factories back to Manitoba. It costs $2.01 per 100 pounds to ship a 60,000 pound minimum carload of canned foodstuff from Portage la Prairie, Manitoba, to Vancouver, while the rate to ship the same item from Toronto to Vancouver is $2.08; yet the distance from Toronto to Vancouver is about twice that from Portage la Prairie to Vancouver. Why does this type of situation develop?


Mr. Speaker:: Order, please. I regret to interrupt the hon. member for Winnipeg North (Mr. Orlikow), but this time has expired. The hon. member may continue with the unanimous consent of the House.


Some hon. Members:: Continue.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.
October 26, 1973


Mr. John A. Fraser (Vancouver South):: Mr. Speaker, may I say, first of all, that I shall be as brief as possible. I recognize that many members wish to speak in this important debate. First I should like to pay tribute to the hon. member for Winnipeg North Centre (Mr. Knowles) for once again having raised in this chamber a matter which I think is of very great importance, the pension question in respect of retired railway workers. Of course, this is not the first time the matter has been raised, but I think it is time it was raised again and I am grateful to my hon. friend for having raised it in the debate earlier today.
During the unhappy debate on the "back to work" bill of nearly two months ago, the hon. member for Winnipeg North Centre, myself and the hon. member for Saskatoon-Biggar (Mr. Gleave) touched on this problem. Since that time, despite the fact that the Minister of Labour (Mr. Munro) suggested that some action would be taken to study the situation of the railway pensioners, nothing has happened. I am not directing my remarks especially to colleagues on the government side but to other members in the chamber and I ask them to use what influence they have to approach the Minister of Labour and the Minister of Transport (Mr. Marchand) and encourage them to bring about a study of railway pensions, especially those of retired railway workers.
I would remind hon. members that when this matter came up-it is reported in Hansard of August 31, 1973, at page 6135-I put the following question to the Minister of Labour:
So my question to the minister is, can he give us some assurance that this whole question will be gone into? If the minister does not want to go that far at this time, can he give us the assurance that he will meet as soon as possible, which means almost immediately-and I recognize the demands on his time at the moment-with representatives of this pension group so that immediate negotiations can take place with a view to setting up an inquiry to send once and for all this running sore . . .
The Minister of Labour replied as follows and I ask members on the government side to pay attention to these words:
Yes, with reference to those already retired. I think this is quite a legitimate position, but I do not think it can be accomplished relative to the bill before us today.
He was referring to the fact that he had announced the appointment of Mr. John Deutsch to look into certain aspects of the pension plan. Myself and other hon. members whom I mentioned wanted him to appoint a committee to look into all aspects of the pension plan, especially from the point of view of retired railway workers. The minister said that there were certain options, as follows:
There is the question of whether it could be done through a joint committee, something similar to what was done before with assistance from governmental officials, if you like, from my department and the Department of Transport.
He then went on:
. . . perhaps an industrial commissioner should look into the whole broad question. So, as I assured the hon. member for Winnipeg North Centre I am now assuring the hon. member for Vancouver South that I would be prepared, as would the Minister of Transport, to bring the parties together to see what further significant changes can be made to improve these pensions.
Canadian National Railways and Air Canada
This is the commitment from the government. That is why I again ask government members to remember that this commitment has been made, and in the next few days to take the time and trouble to speak to their ministers, because I know the concern for retired railway workers is not confined to one side of the House. I know there are hon. members on the government side, as there are in the Social Credit party and in the NDP, as well as in my own party, who are equally concerned. This is part of the whole problem within the railways. The hon. member for Sas-katoon-Biggar pointed out the following in the debate a month and a half ago:
If the minister or this government think that they can divorce the matter of pensions from the over-all settlement of this rail dispute, then let me tell them that they are wrong.
I am in complete agreement with the hon. member for Saskatoon-Biggar in that statement and I ask hon. members to remember that the problems which lie within the railway trades at the moment will not go away. There is every expectation that they will be recurring, and I say to all hon. members that the question of pensions is one of them. The matter was raised again on September 14, 1973, as recorded at page 6597 of Hansard, again by the hon. member for Winnipeg North Centre when he asked the Minister of Labour what was being done about the commitment he had given. The Minister of Labour replied:
I did say that a supplemental study of the benefit structure of the pensions as opposed to the costing was under consideration, and I advise the hon. member that it is still under consideration. Discussions will have to be held with the railways concerned, the Minister of Transport and the union leadership, and we will get these discussions under way as soon as we can.
That is all very well, but again I ask hon. members to take note that these discussions must take place. It is not enough to tell us that the matter is continually under study. In the minister's remarks, may I point out with respect, there is a very important omission, that is, there was indication that the minister or his officials would speak to the Association of Railway Pensioners of Canada which, as some hon. members know, numbers some 20,000 people. These people have their own organization and they must be brought into these discussions. I point out to government members, to the Minister of Labour and to the Minister of Transport, that the commitment is there and we expect them to fulfil it. We say earnestly and sincerely that this is a serious matter and should not be left too long.
I want to mention another matter, that is, the continuing serious difficulty regarding the morale of the Brotherhood of Locomotive Engineers in my own city. During the committee stage of this bill I asked that the representatives of these workmen be brought before the standing committee to explain to hon. members just what is the problem as they see it, because once again this problem will not go away and it ill behooves us to pretend that this is just a union dispute or just a disagreement between some of the workers and the companies.
This is a matter that is striking right at the heart of the efficiency of the transportation system of Canada, and in the process is causing a great deal of hardship and anguish to the railwaymen involved. I say, and it is important that it be remembered, that we are not dealing here with a group of people who are in any way irresponsible. I have

October 26, 1973
Canadian National Railways and Air Canada met with some of them. At a meeting I attended some time ago with about eight or nine of them, not one of them had less than 19 years' service with the CNR. These men are not irresponsible, and because they are making as much of their grievance as they are I say that as parliamentarians we must listen to them and give them a proper forum in which they can be heard.
There will be time to further discuss the general matter of CNR financing. I would say one thing about airport terminal No. 2 at Toronto. There is no changing it because it is there now. But I would ask the Minister of Transport to do one simple thing-go down there during a weekend and find out how many times he does not know in which direction he is going because there are no signs.


Walter David Baker: He does not even have to go there to run into that difficulty.


John Allen Fraser: The minister will realize, then, that a good part of the problem could be solved immediately if proper signs were erected there. I recognize that other members wish to take part in this debate and I urge all members, especially those on the government side, to remember that there is a commitment made to the railway pensioners by the government and that it must be honoured.


Sinclair McKnight Stevens: Mr. Speaker, in dealing with the bill before us today I should like to touch upon what I feel is the unfortunate failure of the CNR and the government to supply commuter service in our urban centres. My area of York-Simcoe is particularly hard hit by this neglect. For many years residents have asked for the re-establishment of the passenger service that once existed between the Aurora-Newmarket area and Toronto. The present lack of such a service is due, in the main, to unfortunate jurisdictional confusion and indifference on the part of many, including this government. In my opinion, this neglect must end.
It was not enough for this Liberal government simply to provide an experimental train that commenced to run in my riding on November 1, only two or three days after the last election, but which was discontinued eight weeks later. A commuter train service is urgently needed by the residents of York-Simcoe which has grown greatly in the past 12 years. In 1961 the riding had a population of 72,000; in 1971 it was 99,000 people, and today it is estimated to be over 102,000. In April last year I surveyed the residents and found that 94 per cent wished to have a commuter service. Of the number answering the inquiry, many indicated that they would use the service if it were available.
The GO transit Gray Coach service between Newmarket and Toronto has been well received and is now running at near break-even point. I understand from the GO transit officials that a commuter train would be complementary rather than compete with the present GO transit system. It was the original intention of the province of Ontario that the service be an integrated one between the railroad and the bus line, namely, Gray Coach. Unfortunately, when the province of Ontario attempted to negotiate a satisfactory running contract with the CNR they were

unable to do so because of the high costing methods instituted by the CNR with respect to this line.
I would suggest that accounting procedures and conflicting philosophies add to the confusion when attempts are made to cost-out a commuter train service in Canada, and certainly in my riding. For example, in the 1971 annual report of the CNR it is stated that CN policy is as follows:
to make the provision of passenger services as far as possible a paying proposition for the railway within the framework of the National Transportation Act of 1967.
As part of that policy the company is pursuing vigorously all the advantages available to it under sections of the act which provide that passenger services uneconomic to the railways but needed by the public may receive federal government subsidies of up to 80 per cent of the losses on such services. Accordingly, during 1971 CN submitted to the Canadian Transport Commission applications for discontinuance of all intercity railway passenger services including its transcontinental service. This move was dictated by a provision in the act which stipulated that a railway must apply for discontinuance in order to qualify for subsidy payments.
Legislation provides for different procedures in the case of commuter service. In accordance with these procedures the company also applied to the commission to have the actual losses declared for its Montreal commuting services and for a recommendation to the governor in council for assistance in respect of such losses.
I found that statement most interesting, Mr. Speaker. Although the CNR and the government have denied that the government has covered deficits in connection with urban commuter services across Canada, for some time it has been suspected that the commuter train service in Montreal has been running at a deficit and that the federal government has been picking up that deficit directly or indirectly. In this connection I would draw the attention of the House to a statement by the Minister of Transport (Mr. Marchand), who is not in the House today to listen to the debate I am extremely disappointed about that. In answer to a written question which appears at page 5863 of Hansard for July 23, 1973, the minister said:
The management of Canadian National Railways advises CNR incurred a deficit of $2.1 million in 1970, $2.2 million in 1971 and estimates of a deficit of $2.4 million for 1972.
That refers to the operation of the Montreal commuter train service in those years. I think this is particularly significant, Mr. Speaker, because I can show to any member who is interested letters and representations indicating that the government in no way was picking up the deficit on the Montreal commuter service operated by CNR. Yet we have on record an admission by the minister that something like $2 million is being absorbed in losses by the CN to provide those services in Montreal, which in turn is a loss to the people of Canada.
Turning again to the annual report of the CNR, I would point out that the balance sheet as at December 31, 1972, reflects property investment of $3,476 billion after depreciation of $1,392 billion. Government of Canada loans are shown at over $1 billion and Canada's shareholder equity in Canadian National Railways was set at $2 billion. In that year the railways net interest paid on debt was $66 million which, by coincidence, was equal to the entire revenue received by the railway for their passenger services. In short, Mr. Speaker, the entire revenue that the CNR earned in that year from supplying passenger service
October 26, 1973

was diverted into an interest charge which was mainly a payment back to the government.
In addition, the road property was depreciated in the amount of $62.9 million, and the CN paid $62.7 million in various forms of taxes to various governments. These three items, totalling $191.6 million, represented over 15 per cent of Canadian National Railways total railway revenues in 1972. In reporting on the 1972 financial statements of the CN, the company's new auditors-I emphasize "new auditors"-pointed out that in January 1, 1923, all properties and equipment brought into the system at that date were included in the CN values and since that date all additions have been recorded at cost and depreciated thereafter. One wonders who is the net loser in this practice of so capitalizing, depreciating the items and in the meantime carrying interest-bearing debt mainly in the name of the federal government. Surely it works to the detriment of the persons who wish to use the railway as a public service.
Certainly if our highway system in Ontario were handled in a similar way, it would result in greatly higher annual costs which would have to be borne by the general taxpayers or by the users of our highways. In this connection it is interesting to note that on March 31, 1967, the province of Ontario wrote down to $1 approximately $3 billion worth of highways and thus ended the earlier practice of depreciating such highways on a 30-year basis. Since that write-off the province has spent almost $200 million per year for railway construction, but each year the amount is written off and paid out of general taxation in the province. In addition, the province has extended municipal grants for roadway construction totalling approximately $150 million a year, which again are written off each year. As a result, Ontario has a relatively good highway system which is used by motorists at relatively low cost.
It can be seen that the province could place a $4 billion value on our road system, which at 6 per cent would result in an annual charge to somebody of $240 million per year; and if the capitalized road system was depreciated on a 30-year basis it would require a further $130 million per year. Partly due to an historical quirk and partly due to different philosophies, our highway system has been structured to give the user a break while our railway system is structured to give the passenger an unduly heavy load.
I also wish to point out that, offsetting a low-cost road system, we have high-cost automobiles in this country. The financial cost to the average passenger car commuter is prohibitive. Take, as an example, my riding of York-Simcoe. The average person who commutes to Toronto has to travel 80 miles per day. It is generally accepted that a person's cost of driving an automobile is 12 cents per mile, or $9.60 per day. Assuming that there are IV2 passengers per motor car, it can be seen that the average commuter spends $6.40 per day travelling to and from work if he lives in my riding and works in downtown Toronto. Putting this another way, he would spend $30 per week, or $1,500 per year. That is what the commuter must spend. Before taxes, such a worker has to earn over $2,000 per year in order to pay his way by car to and from work.
Canadian National Railways and Air Canada
It is often forgotten that any subsidy at the municipal, provincial or federal level which would assist the commuter to get to and from work at the lowest cost is really a saving, not a subsidy, for the general community. I emphasize that it is the federal government's wrong philosophy that has allowed the present situation to arise. Let me also stress that highways are dangerous; travelling on those highways in a motor vehicle is particularly dangerous. In the York region, 66 people were killed in highway traffic accidents in 1972, compared with 59 the year before. Every year the number of accidents on our highways increases.
Of course, the increasing volume of traffic merely highlights the congestion of our roads. Let me give some examples of what I mean, Mr. Speaker. Highway 400, for example, carried 67 per cent more people in 1972 then it carried in 1968. In 1972, the average daily traffic on that road was 34,900, compared with 23,476 in 1968. I point out, also, that pollution is a natural by-product of automobile usage. The report of the Ontario Advisory Committee on Energy, dated March, 1973, reads as follows;
.. . transportation accounts for over half of the man-made pollutants emitted to the air in metropolitan Toronto.
The report says, as well, that the automobile is "by far the largest contributor in this category." It goes on to say:
. . . the automobile is the main, man-made source of pollutants such as carbon monoxide, nitrogen oxide, hydrocarbons and lead.
Dealing specifically with carbon monoxide, the report states:
In high-density population areas with a high concentration of motor cars, the burden of carbon monoxide in the air can be an increasingly serious hazard to health.
At page 62 of the same volume, the report states:
Public transit contributes on the average much less pollution per passenger mile than does the private automobile.
In addition, the report points out that transportation is probably one of the most serious social and aesthetic problems associated with land use. It says:
High concentrations of automobiles in large urban areas have resulted in the development of massive expressways which are exceedingly costly, use large amounts of land needed for housing and other purposes, departmentalize cities, increase congestion, and generally lower the quality of life in their immediate vicinity.
Again I say that the government has been completely negligent in this area.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Let us consider the question of energy. When we debated the question of energy yesterday, I think it was well demonstrated that the government has no energy policy; there is a total lack of energy policy.


Steve Eugene Paproski: What's more, the government doesn't care.


Sinclair McKnight Stevens: I again point out that energy is not available in unlimited quantities in Canada or in the world. Certainly, it should not be squandered and unnecessarily used for commuter travel. In 1970, 17 per cent of the total energy consumed in Ontario was used in the transportation sector. As I said yesterday, 80 per cent of the energy used in Ontario has to be imported into the province. The

October 26, 1973
Canadian National Railways and Air Canada fuel consumption of motor vehicles accounted for about four-fifths of this energy consumption.
The transportation sector in Ontario utilized, in 1970, 394 trillion BTU's of energy. By 1990, if present trends continue, the transportation sector will utilize 1,100 trillion BTU's. The utilization of commuter train services would help to minimize this large consumption of nonrenewable resources. Already there is gasoline rationing in the United States. The authorities in that country are considering the imposition of a 50 mile per hour speed limit and other ways in which to conserve fuel. It is only prudent for Canadians to minimize the needless use of the automobile, especially when commuter train facilities are so readily available. We can use trackage and railway stock that is already available in this country.
Historically, the residents of my area have fought for passenger train service for over 120 years. In 1849, 1,100 residents petitioned the federal government as it was then constituted to incorporate a railroad company which would serve the area with passenger and freight facilities. As a result, the Toronto, Simcoe and Lake Huron Union Railroad Company was incorporated and subsequently financed through lottery tickets which were sold throughout the district.
On May 16, 1853, the first steam train in Canada West ran from Toronto to Aurora carrying passengers and freight. Today, the powers conferred in 1849 to build and operate this railway are vested in the CNR, a federal Crown corporation. Those in control of the operation have chosen, however, to discontinue the passenger service but to keep the line for freight service. CNR officials have stated they make money on freight but passengers are trouble. Commuters may be more trouble than freight, but I believe we have now gone full circle. Rail systems were needed when the country was being developed, to carry both people and freight. That is why the railways received their franchises. Today, railways are needed for the same two purposes but of the two, people must come first.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: To hold otherwise would be to allow the railway system to enjoy the more profitable side of its concession and to ignore the less profitable. It would be like the Liquor Control Board of Ontario telling a tavern keeper that he may discontinue his food sales if, according to his figures, he finds those sales unprofitable, so that he may concentrate on retailing liquor which he claims is more profitable.


Some hon. Members:: Shame.


Sinclair McKnight Stevens: In short, that is what the government has allowed the CNR to do in this country by accepting that railway's accounting philosophy which I have tried to demonstrate this afternoon.


Steve Eugene Paproski: It is shameful.


Sinclair McKnight Stevens: Commuter train services are needed in our urban centres, particularly in areas such as Toronto and the one I have the honour to represent. Such a service has been promised by many governments. Certainly, the provincial government of Ontario has indicated repeatedly

that, given the proper working relationship with the CNR, it will be more than willing to institute commuter train services in the Toronto area and other parts of Ontario where they are required. That co-operation has not been forthcoming up to the present time.
We want to know why the government sees fit to subsidize the Montreal area, with respect to commuter service, to the extent of over $2 million per year, but will not even meet with the appropriate Ontario authorities in order to try to arrive at a working relationship regarding the institution of a commuter' train service in Toronto. In this connection I would emphasize, as most members are probably aware, the GO transit service that the government of Ontario is now running in the Toronto area is completely paid for by the provincial government. They have a net running cost arrangement with the CNR where the CNR, in spite of their method of costing, is paid 100 per cent of what they say is the cost of running that service.
The province of Ontario is picking up any deficit between the revenues they are able to earn and the actual running cost charged by the CNR. Even at that, I think it is wise to note that most of that service is now running at a breakeven point as far as the province is concerned, and on average it is resulting in a net loss of about 40 cents per person per day. The province has acted, but not the federal government.
I suggest that if a rail commuter service were instituted in my area, it would be successful and any loss would be an accounting loss, not an actual loss on the service. Such a service would be cheaper for commuters. It would certainly be safer. Pollution from automobile usage would be lessened and energy would be conserved.
May I conclude by saying that I sincerely hope the government will give to my area in 1973, or certainly in 1974, a passenger train service and in so doing at least restore us to the position we had in 1853.


Lorne Edmund Nystrom: Mr. Speaker, I have only four or five minutes before private members' hour at four o'clock. I begin by saying that the CNR financing bill before us is important to all members of this House for many and various reasons. In a constituency such as mine it is very important because there is a large area of the city of Melville in which about 600 people work. It is also important in a constituency such as mine that is basically rural, because of the farming population and problems associated with rural Canada.
This debate provides members with an opportunity to talk about the problems of transportation and rural Canadian life. The transportation system is vital and central to most of us who come from the so-called hinterland areas of this country. All you have to do is look at the freight rate structure in places like the Prairies, most of Quebec outside the Montreal area, the Atlantic provinces, northern Ontario and other parts of northern Canada to know what I mean. The transportation system, the freight rate structure and the anomalies in it are a large part of the reason for the rapid shift of population from rural Canada to urban centres. This can easily be seen by looking at events in the provinces of Manitoba and Sas-

katchewan in the past few years. There is lack of development because of the freight rate structure, a structure which provides lower freight rates for shipping raw materials out of the Prairies than finished goods or products.
I will give only one example of this because I think it will demonstrate what I am talking about. In the city of Prince Albert, which the right hon. member for Prince Albert (Mr. Diefenbaker) represents, it costs $2.90 per hundredweight to ship livestock to Toronto. If the livestock are slaughtered and processed, it costs $3.37 per hundredweight. That means only one thing: we are exporting jobs from Saskatchewan and other parts of rural Canada to places such as Toronto. The freight rate structure is organized in such a way that it is more profitable to do the processing in the golden horseshoe area of southern Ontario or in the city of Montreal. We must get rid of that type of system if we are to develop this country in an economically planned fashion where the younger citizens of rural Canada have job opportunities in their own locals. A transportation system is vital to that end.
The problem is not only freight rates. It is also the abandonment of rail lines which serve small areas of Saskatchewan. Plans are for the abandonment of about
3,000	miles of rail lines in my province by Canadian National and Canadian Pacific. What will happen when that is done? Many little villages and hamlets exist only because they are service centres for the farmers. They have grain elevators to which farmers deliver their grain. If they are abandoned, these small communities will lose one of their focal points and will have little reason for being. It will be more expensive for the farmer who will have to transport his grain a greater distance.
There is also the question of station agents. This, again, takes away from the service that is being provided to people in rural communities. It makes things more difficult and costly for them. When we talk about the transportation system we are talking about something that is absolutely fundamental to the way of life of a great many people whether they live in the Prairies, in Quebec, in eastern Canada or in the northern parts of this country.
I see it is four o'clock, Mr. Speaker. Perhaps I could call it four o'clock at this time and continue at a later date.


Mr. Speaker:: It being four o'clock-


Steve Eugene Paproski: Carried.


Mr. Speaker:: Because of the interjection I have cause to wonder whether there is a desire by hon. members to pursue this very interesting debate until five o'clock. Is this the wish of the House? I am inquiring whether it is the wish of the House that we pursue this debate and suspend private members' hour.


Walter David Baker: Mr. Speaker, we will not be considering a motion by a member of this party. I think it is a Social Credit motion. I wonder whether Your Honour was heard at the far end of the chamber.


Mr. Speaker:: I will try to speak louder.
Income Tax Rebate

I wonder if the House would be willing to suspend private members' hour to carry on the debate on the bill now under consideration. To that effect, we would need the unanimous consent of the House. The hon. member for Portneuf (Mr. Godin), I think, could perhaps indicate whether it is his wish-


Roland Godin: Mr. Speaker, I remember that I was asked that some time ago. I accepted and today I would accept again. I wonder if we should not stick to the regular agenda in order to give other members next week the opportunity to discuss again the bill on the CNR financing.


Mr. Speaker:: The hon. member suggests that the debate should be suspended as provided and that we should pass to the consideration of the items standing in the name of hon. members. We will in a moment be dealing with a motion.
It being four o'clock, the House will now proceed to the consideration of private member's business as listed on today's order paper, namely notices of motions (documents), public bills and private bills. I recognize the hon. member for Portneuf.
The hon. member might perhaps indicate who seconds his motion.


Roland Godin: Yes, Mr. Speaker. I think that it is the hon. member for Louis-Hebert (Mrs. Morin).


Mrs. Morin:: Who, me?


Mr. Speaker:: There is obviously a practical difficulty. The hon. member must find somebody to second his motion.
It may be that the hon. member for Grenville-Carleton would wish to second the motion.


Walter David Baker: For the purpose of permitting the hon. member for Portneuf (Mr. Godin) to proceed, I would be very glad to second his motion.


Mr. Speaker:: I am sure it is a motion which the hon. member for Grenville-Carleton will be proud to second.



PRIVATE MEMBERS' MOTIONS


Roland Godin: That, in the opinion of this House, the government should consider the advisability of granting an income tax rebate equal to the amount paid in mortgage interest on a family home and in municipal taxes, the whole not to exceed $1,000 per year.
He said: Mr. Speaker, may I first thank the hon. member for Grenville-Carleton (Mr. Baker) who graciously seconded the motion.

October 26, 1973
Income Tax Rebate
I am pleased to have the opportunity to discuss the famous motion I submitted last January and which has been on the order paper under number 38 since then.
Since the purpose of this motion is for the benefit of all Canadians who own single family houses, I obviously hope to have the support of all memebers, all the more so because we can discuss this motion while dealing first with its application concerning our country's resources.
On the material side, this country is obviously one of the wealthiest in the world.
And although our trade always favoured England and our natural resources were generally developped for the Americans, we are nevertheless citizens of a country where the standard of living is rather high. Our young country having been generously endowed by nature, they have not succeeded in exploiting us completely. However, exploiting was felt chiefly at the housing level and as a result our country is suffering from a lack of decent housing for poor and low income people.
Inquiries made by the government have shown that it was impossible for a couple earning under $8,000 a year to consider buying a house. On the other hand, the government introduces local initiatives programs under which the salary is $100 a week for three or four months. Among those earning only $7,000 to $8,000 a year, Mr. Speaker, it is needless to say there are many government employees at the Federal, provincial and municipal levels. There are more than just a few people with annual earnings from $5,000 to $6,000 and unfortunately that kind of money is also too often the wages of a great number of trade or industry employees.
In short, all those people are not earning an income that would enable them to make a down payment on a house with high mortgage payments, to pay insurance and municipal and school taxes. In spite of all the measures introduced by the government, one realizes that not only has the problem not been solved but the situation is getting worse every day. As a matter of fact, in 1969, a three-bedroom single family house cost about $18,000 in the Quebec City area. In 1970, the cost of the same house, in the same area, had gone up to $20,000 and this year a three-bedroom single family house, or a 1,000 square-foot house, goes for $23,000 while it seems that houses of that kind in the Toronto area would sell for about $28,000.
It is also obvious that those who purchase a house are faced with interest rates much higher than in 1970.
I remember that during the election campaign Liberal candidates made some commitments in this connection. And yet interest rates keep on increasing. Because municipal and school taxes have been raised we have reached the point where some government programs and mainly those of the Central Mortgage and Housing Corporation are out of reach for most people. Some programs are even out of reach to the very people they were supposed to help.
The fact that family heads cannot afford a house even though they earn $6,000 or $7,000 a year is a tragedy. This is due to the fact that the down payment, monthly mortgage payments, maintenance costs, service costs and taxes never stop increasing.
As for those who qualify for loans from caisses populates and CMHC we know how much they must pay. For

instance, a $30,000 loan at 9 per cent, which is the current interest rate of the CMHC, means that monthly payments of $248 will be required for 25 years. Therefore, after those 25 years, the owner will have paid $74,520, namely $30,000 for the repayment of his loan and $44,520 in interest charges and this does not take into account the municipal and school taxes and service costs. As I said, this is in the case of people who qualify for the CMHC program which we know well or who applied to a caisse populaire.
Besides if we know what happens to those who qualify this does not apply to everyone. As a former carpenter I am always most interested in visiting housing projects in my constituency.
About two months ago, during one of those visits, I met a young couple who had requested their mortgage company to review their payments. They were paying $189 a month. After two and a half years of this, they had paid back only $112 of the capital, with the rest of the payments going for expenses, insurance and interests. Obviously, you cannot pay for a house in such a situation. While there may be many who cannot afford to become owners, I think that we should not forget the category of people which I have just mentioned.
The case of the young couple which I gave as an example a moment ago is not unique. Many owners who succeeded in obtaining financial means a few years ago now face serious problems. And these problems have become so difficult to solve that many people ask themselves: How long shall we be able to keep our house?
Middle income families, and even what were once considered well-off people, are affected. They find out that after they have bought a house, they will have to pay for it three times. They will have to pay for it once to the contractor and twice to the finance company.
This situation is really unacceptable and I think that as far as interest is concerned, the problem cannot be solved today. The government, however, must bring forward a program designed to improve living conditions of Canadians who own single family dwellings.
Among improvements that would have both essential and efficient results, there is the implementation of the motion before us, that I introduced early in this session. I suggest that this motion can easily be carried out and meets the wishes of all Canadians.
All the people who have access to Hansard have seen as well, I guess, that during the previous years, our party emphasized on many occasions in this chamber the importance and urgency of carrying out measures to relieve Canadian homeowners. When asking that municipal and school taxes be deductible for income tax purposes, I feel this is not a special favour but rather a sort of justice, since municipal and school taxes are already deductible in the case of "big wheels" or companies that own apartment bouses.
You will all recall, I think, a letter received early in September, that was directed to every member of Parliament by the Chairman of the Canadian School Trustees Association, Mr. Walter W. Robson. The latter referred to a meeting of the School Trustees Association of all the
October 26, 1973

provinces, that was held in Quebec City, in May 1973. The following resolution had then been passed:
"It is therefore agreed that the Canadians School Trustees Association file a petition with the Minister of Finance of the government of Canada and the ministers of Finance of all the provinces so that they take financial steps that will enable homeowners and tenants to deduct the amount of their school taxes from their taxable income."
The letter goes on to say that the resolution had been sent to the Minister of Finance in Ottawa (Mr. Turner) and that copies were being prepared to be sent to his provincial counterparts.
These school trustees from a great many Canadian communities, urban as well as rural, state that they are speaking on behalf of a majority of men and women who have responsibilities in respect of Canadian taxpayers.
Because hon. members of this House also have responsibilities in respect of taxpayers, those of the Social Credit Party of Canada are pleased to join with the school trustees to claim for all taxpayers the right to deduct from their individual income tax returns the amounts paid as school taxes to the various school boards.
The position of the Social Credit Party of Canada is that ownership of his home by the head of the family contributes to the development of individuals, the welfare of their families and the health of society. If the platform of the party, as far as housing is concerned, is widely publicized during election periods, it is also true that, between general elections, we continue to call for various means of action on the part of this government.
To improve the well-being of Canadians, we propose various means. First, the incentive for building single family dwellings by guaranteeing long term loans at an interest rate which should not exceed 3 per cent. Second, the abolition of impediments to building constituted by present taxes and especially by the sales tax of 12 per cent on building materials. Third, the owners of single family dwellings should also benefit from an income tax exemption on their mortgage interest payments as well as on municipal and school taxes; however, this exemption should not exceed $1,000 a year.
The program of our party in the area of housing reflects the needs of the Canadian people, which were expressed and proved publicly during Creditist conventions held each year in different parts of the country. The hon. members of our party having been elected without the election fund of big finance, it is easy for us to fulfill our role honestly and to be the spokesmen for our electors in order to claim in this House the measures which are urgently needed to safeguard the freedom of families and assure them utmost security in a rich country like ours.
Creditist members have always been ahead and we are pleased today to note that we are not the only ones who request efficient social measures. Several groups, several associations and intermediary bodies have exposed their views on this subject.
In Le Soleil of September 17, for example, we can read, and I quote:
The Saint-Jean-Baptiste Society (SSJB) of the Chaudiere area, in order to promote residential construction, invites all governments to favour income tax deduction of mortgage interest payincome Tax Rebate
ments on a new property for a period of three years and to grant a deduction of municipal and school taxes on a residential property.
That is what stands out in the main resolution passed by the membership of SSJB Chaudiere at the annual convention that was held last week in Ville Saint-Georges de Bauce under the chairmanship of Mr. Andre Breton . . .
People are generally aware of the benefits that would flow from the implementation of that motion to make property taxes deductible for tax purposes. Mr. Speaker, even Liberal supporters are in favour; all newspapers in the country mentioned that Liberal supporters gathered at the convention around mid-September in the federal capital passed a resolution asking that interest rates be reduced and even that amounts paid as interests on mortgage loans be made deductible for tax purposes.
Mr. Speaker, I earnestly hope that all members, Liberal members included, will have the courage to forget about bagmen for a moment and vote in favour of my motion.


Roderick Blaker: Mr. Speaker, it gives me pleasure to discuss this very important subject. That concept is well known in the United States, for example, and in Canada, Manitoba and Ontario.
The only question that could perhaps be asked now is, is it worth it for the citizens of St. Catherine or Lac-Saint-Joseph, for example, or would that not rather help the residents of Westmount or Forest Hill?
[ English]
Before I discuss the idea further for a few moments I should like to permit myself a spot of Friday afternoon humour by indicating that I am delighted to see that the hon. member for Grenville-Carleton (Mr. Baker), a member of the Official Opposition, has supported a motion which seems to favour the wealthier taxpayer to a greater degree than it does the poorer taxpayer.


Walter David Baker: That is because you have one eye closed.


Roderick Blaker: Mr. Speaker, I wonder whether I should resume my seat and allow the hon. member to comment on the bill.


Walter David Baker: Go ahead.


Roderick Blaker: I think I should continue. The question posed by motion No. 38 is whether or not it will truly benefit those citizens who must need such benefit. The motion provides, not for a tax deduction but for a tax credit which is applied against income tax owing by a citizen. If this concept were presented to the House as a bill it would permit an individual to deduct from his taxes owing an amount equal, apparently, to the combination of the interest payable on his mortgage in a given year and his municipal taxes payable in the same year.
I think it follows, very obviously, that to the extent that an individual pays more income taxes, to the extent that he pays more mortgage interest, to the extent that he pays more municipal taxes-all of which are indicators of the wealthier individual-he would receive greater benefit under this proposal. I would go further and say that in general terms this motion is contrary to the provisions and the spirit of our tax law.

October 26, 1973
Income Tax Rebate
[ Translation]
The Income Tax Act now grants abatements or, to use a more common expression, tax credits, only when it is established that the income received by the taxpayer has already been taxed. It is called the Foreign Tax Credit and it applies when the taxpayer gets from abroad an income that was taxed in the other country. The Income Tax Act then provides for a credit to be applied against Canadian taxes for an amount not exceeding that paid to the foreign country.

That is one of the few exceptions under the foreign tax credit where we do permit one area of taxation to be credited against another area of tax payable. The proposal in the motion of the hon. member for Portneuf (Mr. Godin) goes even further. Essentially it argues that although an individual has not spent money pursuant to a business, or an adventure in the nature of trade, if I recall the expression used in the Income Tax Act, he will none the less be entitled to deduct from his income tax that amount of money which he has spent for his comfort.
While it is understood that a home is essential, it is an essential that does not have to be purchased. So the result of the motion would be very considerably to favour the individual who has adequate funds to buy a home and to leave out in the cold, so to speak, those individuals who choose not to buy or cannot afford a home in that they would not receive an equal or similar advantage in regard to their own income tax which is payable.
The question I might turn to next is that of specific examples within the income tax system itself as to how such a motion might apply to various individuals paying income tax. I know other members of the House wish to speak on this motion and I think it would be better to restrict my comments to the more general aspects of this question, as I have been doing up to now. I should like to mention one or two areas which I think are of interest. This motion would very substantially run counter, in its present form, to a similar idea which has been found workable in the provinces of Manitoba and Ontario. [Translation]
Incidentally, I wish to note that, in co-operation with the federal government, the two provinces I mentioned, Manitoba and Ontario, have established a tax-credit program in order to ease the local taxpayer's burden. But as for its big four original features, the program was first conceived so as to bring as much relief as possible to people on low income.
[ English]
That is in considerable contraction with the present motion which does not seem to assist those in the lower revenue brackets but, rather, those in the higher revenue brackets.
[ Translation]
Then, the provincial tax is reduced rather than the federal tax, so that provinces subsidize their own municipalities. Furthermore, provincial programs help both tenants and owners.

The present motion does not go to the question of what taxation aid might be given.

Finally, we pay money directly to the people involved when the credit is greater than the amount of income tax to be paid.

Therefore, for the general reasons I have mentioned- and I am led to believe that other speakers may wish to go into specific details in terms of actual taxation concepts-I would be opposed to the hon. member's motion.


Walter David Baker: Mr. Speaker, I know it is rather strange that I should rise to support the hon. member for Portneuf (Mr. Godin) on this motion. However, I do so for two purposes. The first is so he can have the motion brought on and, second, because I think he has introduced into this House today a concept which is not new but which would, if adopted, provide a new form of relief and incentive to those in our society who to a greater and greater extent are concerned about housing. I think this is perhaps an even more important reason than the first one.
I am not terribly shocked to learn that the hon. member for Lachine-Lakeshore (Mr. Blaker) takes exception to what I might describe as a progressive proposal in respect of housing, because in dealing with housing the government he supports is notorious for its dinosaur attitude in respect of new innovations in this field. When we are speaking about a conference to which the minister can go and talk about new methods of bringing forth better housing for more Canadians, then of course the minister and members of his party are great at talking. When they have the instruments of power in their hands to provide some relief from this dreadful shortage in a land of plenty, there is a superabundance of talk and a poverty of progressive action in housing.
I rise today to support this motion as I think, contrary to what the hon. member for Lachine-Lakeshore says, it will not provide relief for the very limited wealthy class in Canada but as wage rates increase it will provide a measure of relief, incentive and hope in Canada for those who find themselves in the middle income group which has been burdened to a greater extent by the tax load of modern society. This is not a new concept. On April 9, 1973, on motion of the hon. member for Regina East (Mr. Balfour), a Progressive Conservative member, and later on May 14, 1973, on motion of the hon. member for St. Catharines (Mr. Morgan) this matter, in terms somewhat different though nonetheless consistent with the motion of the hon. member for Portneuf, was discussed by members of this party in the House.
I say as a matter of faith in this party that we are dedicated to the first principle that housing is a universal need; and the fact that homeownership is too expensive in Canada, a land of plenty in the 1970s, makes it a matter for government action and government priority. It is significant, in terms of considering the extent to which housing is a priority to this government, to realize that even at this late date, in spite of all the urging upon the government, it has refused to take off the 11 per cent sales tax on building

October 26, 1973

materials. This is a most regressive tax. This government has also refused to follow the lead of the province of Ontario in establishing a ministry of housing as a regular government department reporting to its own standing committee of this House.
I do not have to convince hon. members of the House who want to see that there is a problem, and I do not have to convince members of the House who care to see that this government has not really progressed very far in spite of its talk, its press releases and its propaganda regarding the position it takes on housing. It has been established that 80 per cent of Canadian families want to live in single-family dwellings. If 80 per cent want to do that, it is the duty of this government to provide the opportunity. The proposal of the hon. member for Portneuf would effect a dramatic reduction in the cost of housing for Canadian families, perhaps to the extent of almost $1 billion per year. The deductibility of mortgage interest rates would reduce the impact of inflation, of land and construction costs and of interest rates which over the past ten years, partly through errors of omission and partly through errors of commission by this government, have been far out of proportion to the general increase in the cost of living, but all of which have increased the cost of housing.
Let me refer as one example to the recent report on housing in the Toronto area. Housing in that area now costs 11 per cent more than it did one year ago. While food costs rise, people still eat; while clothing costs rise, people are still clothed. But an increase in housing costs deprives many Canadians of the prospect of home ownership and commits them to a life of paying rent.
I had the privilege of going through a number of high-rise buildings in my area during the course of the last election campaign. I have told this story on the floor of the House before. I met a young couple one night in the course of campaigning who told me they were saving money. The young fellow had a position in an institution here, a position of trust, and was managing to save money. But to use his words, he felt imprisoned in that apartment building. He was one of those who wanted to get into a home of his own and to bring his family up in that atmosphere.
There are others who do not, and I respect their wishes in that regard. However, the overwhelming number of Canadians wish to have a home of their own. Under the present situation, with inflation which is running rampant without control in this country, with the regressive taxes on building materials, and with a government which refuses to tackle the number one social problem in this country, thousands of Canadians will find themselves continually imprisoned in apartment buildings. I have never forgotten what that young person told me. We all know the main components in the cost of a house are the land upon which the house is built, the construction of the dwelling and the cost of the money. I believe it is fair to say the largest single cost contributor in recent years has been the cost of money in respect of the building and ownership of a home. It is primarily to that I understand the motion of the hon. member is directed, namely, the cost of financing a home.
Income Tax Rebate
I should like to give an example to illustrate how expensive this cost is. The rise in the interest rate from about 6 per cent to about 9 per cent, and now even higher, has added more to the monthly payment of an average mortgage loan than the average $5,000 increase in the price of a building lot would have added without a change in the interest rate. For example, a mortgage with a principal amount of $16,500 payable over a period of 25 years at 6 per cent would have a total interest cost of $15,200. The same mortgage, with principal of $16,500, carrying interest at the rate of 9 per cent, would have a total interest cost of $24,500, a difference in interest cost of $9,300 on a mortgage loan of $16,500. Furthermore, high interest rates may be substantially raising the level of annual income needed to secure a mortgage, compared with previous years. It is to that phenomenon that the motion of the hon. member is directed.
The hon. member for Lachine-Lakeshore seemed to say that this motion, worded as it was, could apply only to a single-family home. I have read the motion and am afraid I cannot apply to it that very restrictive interpretation; but I am not surprised that the hon. member has been able to do so, because he belongs to a very restrictive party. However, I have read the motion and it is possible under it to grant an income tax rebate equal to the amount paid in the form of mortgage interest on a family home. I think in our society it is possible, with the development of condominiums-some condominiums such as high-rise buildings and other condominiums of perhaps lower rise-for people to have a family home of this type.
The motion also deals with the provision of a reduction or rebate in respect of municipal taxes which a condominium owner would have to pay. Surely the motion is not so restrictive that it could not apply also to that proportion of the rent. It represents an increase in the rent paid by a renter of an apartment building as opposed to a condominium where the municipal taxes become part of the monthly payments in respect of that building. It would seem to me that such a provision would be of great advantage to people who rent. This is a unique attack and I know this government is not prepared particularly to accept a unique attack on anything, even on itself. However, it is an attack on one part of the spectrum, the difficulty that faces Canadians in all parts of this country. This will continue to be a problem facing Canadians to a greater and greater degree as they become more urbanized. This is part, not all, of the attack which must be made on what I believe is Canada's number one social problem.
I, for one, believe that how we solve the housing problems of Canadians, which have reached astronomical proportions, will be reflected in how this and other governments in Canada generally meet the social problems that will affect us as our society changes. We talk about many things, such as crimes in the streets, respect by children for their families and the breakdown of the family. I say to you, Mr. Speaker, I believe with great conviction that at the root of many of those problems is the inadequacy of housing and the variety of housing available for Canadian needs.
I shudder, frankly, to think of the communities we will be developing as we move into the latter part of the 1970s. In a few years, 85 per cent of all Canadians will live in an

October 26, 1973
Income Tax Rebate
area along the St. Lawrence River and in the major cities generally between Windsor and Montreal. I shudder to think of the problems that will develop when we continue to pack more and more people into fewer and fewer acres. I shudder to think what will happen in respect of our educational system which will suffer as a result of this development, with teachers teaching larger and larger classes. The burdens which are being placed on the municipalities in respect of recreation are horrendous, in my view, and I have had some experience in another capacity with regard to municipalities.
The problems generated by not attacking the housing problem are things I do not look forward to seeing. These are the things that are at the root of a national housing policy. The hon. member for Portneuf is not saying his motion is the be-all and end-all of a national housing policy. But I think he is saying, and I agree with him, that it is the beginning of a concrete plan for a real attack on this problem. Of course, it will cost the treasury money. I tend to think rather progressively, however, in respect to the future of Canada, and I believe that despite the inability of this government, notwithstanding its backwardlooking attitude and notwithstanding that it would rather restrict than give incentive, this country is capable of moving ahead and providing this kind of incentive to Canadians to own their own homes.
In the debate of April 9, 1973, myriad reasons were given by the hon. member for Laurier (Mr. Leblanc), speaking for the government, concerning why we should not venture into this kind of thing. I read that speech with absolute dismay. But having sat in this House since April 9 and having watched the government in action when dealing with other matters, I am not surprised as I read the speech again. This government has tended to put thumbs down on every practical idea that has come forward except those it can steal for its own advantage.


Some hon. Members:: Hear, hear!


Walter David Baker: I suggest that in the atmosphere of harmony that exists in the House at this time, as you can see, Mr. Speaker, perhaps this is another idea that they may steal, and this would not surprise me at all. I say to the hon. member for Portneuf that he may be very proud to see this motion making part of the Liberal platform in the next election.
In spite of all the reasons in the world that can be advanced against it, there is one overwhelming reason why this House should approve the motion, that is, that it is part of the attack on a national problem. This government had better listen to the wisdom of the hon. member for Bruce (Mr. Whicher) who a few days ago chastised the government for its neglect of transportation problems. I want members over there who are jeering at me to stand up, look the problem in the eye and chastise the Minister of State for Urban Affairs (Mr. Basford) for taking the attitude he has with respect to a serious Canadian problem. They would show more courage by doing that than by skulking near the curtain and jeering in the face of Canadians who suffer from neglect and who are asking this parliament, as the hon. member for Portneuf did, to begin at least in this small way an attack on what has

become a national problem and, may I point out with great respect, a national scandal.
[ Translation]


Mr. Yves Demers (Duvernay):: Mr. Speaker, I shall be brief: nevertheless I would like to make a few comments on the motion before us.
People are now talking about an income tax rebate of $1,000. I often heard that some were considering reducing the income tax by the amount paid in taxes and interest. Now, I think this is going beyond all bounds: it is no longer a question of a rebate but of a tax reduction of $1,000.
I believe this policy would favour the wealthier people, those who own houses worth $50,000, $60,000, $75,000 or even $100,000, while we, in the Liberal party, are working very hard to try to help the Canadian worker who, through his labour, contributes to the development of Canada. Often, this Canadian worker who earns maybe only $8,000 a year owns a small and very modest house for which taxes and interests amount to only $500. In other words, this worker would be unable to save $500 contrarily to much richer people.
There are also the tenants who pay rent and cannot benefit from this tax deduction because they do not own the house. I know several people who are tenants in Montreal or Toronto but who own a $100,000 cottage in the north. And we would like to grant them a $1,000 tax deduction? I fail to see the rationale of this policy.
Furthermore, the people who own properties in Canada have an advantage that I would like to point out. They can make capital gains. Such gains are not taxable, not even at 50 per cent because there is an exemption for the main residence. This is in itself an advantage and we would like the federal government to give them $1,000 more. Finally, if that policy were implemented for income tax returns we would have to hire a few more civil servants as it would be necessary to increase control over income tax returns.
I think we should concentrate on the creation of productive employment so that our national gross product continue to grow and that would increase our exportations since our Canadian dollar is high on the international market.
But the more we create-what I call non-productive jobs-I would not say unnecessary-we weaken our Canadian dollar. In his motion, the hon. member for Portneuf (Mr. Godin) compares this deduction with the income deductions for foreigners. I wish to point out to my colleague that these same deductions are also applied in other countries and that after all we do not lose a cent. He also compares these deductions with the deductions on dividends. These deductions on dividends, Mr. Speaker, are only intended to avoid double taxation, because the company before paying a dividend has already paid taxes. If that amount became taxable a second time, the taxpayer would be subject to double taxation. Therefore, I do not see any relation.
It has often been stated, in support of that measure, that the owners of income-producing properties are entitled to deduct their taxes, their heating costs and their insurance. But we must understand something: Before being entitled to deduct those expenses, the taxpayer must firstly state
October 26, 1973

his income in his return and then he can deduct his expenses. Normally, someone who buys an income-producing property does so to realize profits. The taxpayer must finally pay more taxes. Moreover, if he could reduce his income to a depreciation expenditure, it would be useless because since January 1, 1972, depreciation expenditures can no longer be claimed as a loss.
One last point I would like to make is that I have some feeling that this policy would also run counter to provincial laws. We often hear about autonomy, that the federal government interferes with provincial and even municipal policies. I think this is a case where we would really interfere with municipal administration.
Finally, I would like to suggest that direct taxes, sales taxes and municipal levies are one of the most equitable means of taxation because we know that in Canada today, even though we have an excellent Income Tax Branch, many people manage to evade taxes. And one thing is certain, it is that direct taxes have to be paid even by tax evaders and this is at least one aspect of justice from which Canadians benefit.


Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I had no intention of speaking on this matter. However, in view of the irresponsible statements made by the hon. member for Grenville-Carleton (Mr. Baker) I feel obliged to bring forward facts which are indisputable. What I find most regrettable in the remarks of the hon. member is that he said this government has not advanced in the matter of housing.
I wish to inform the hon. member that in my latest discussions with the manager of CMHC in the city of North Bay I have found that the response from the public in my riding to the recent amendments to the NHA, including the home assistance plan, has contributed to making that office the busiest it has been for years. It is helping to increase the number of construction starts of homes and apartments in my riding so that we expect there will be an approximate increase of 20 per cent over the housing starts of the past year. I want, further, to indicate that according to the latest estimate there will be up to 250,000 housing starts in the next four years. This is contemplated as continuing because of the encouragement given to the housing market by the progressive policies adopted by this government. The new housing starts that will take place in the next few years and that have taken place since 1968 also point out the untenable position adopted by the mover and seconder of this motion.
If we envisage an increase in housing starts of 250,000 in the next four years, it means that for every four years we will be losing $1 billion in tax revenue, as we have indeed since 1969. When we consider that housing starts since that time have gone up by nearly 10 per cent, we see that in the past four years we have suffered a loss of $1 billion in revenue. When we consider that the total federal budget this year is $18 billion, we see quite clearly the percentage of income and revenue which would be lost as a result of this suggested measure being adopted.
Income Tax Rebate
I would suggest that such absence of extra revenue would mean the government would be looking for additional funds in order to assist people who do not have adequate housing. It would not have been able to implement those programs which are now receiving such popular acclaim, and indeed it would have depressed the labour market in the construction field and the construction industry itself, which could have had very serious results.
Mr. Speaker, I wished to say only a few words to set the record straight on those particular issues. I thank you for your attention.


Mr. Judd Buchanan (London West):: Mr. Speaker, it is interesting to note that this suggestion recurs frequently. I was at the United Nations in New York last week and discussed this very subject with a friend down there. As hon. members may know, in the United States they are permitted to extend the interest costs on mortgages. He said, "I will trade you. You let me have the $4,000 deduction that you permit people in Canada for the contributions they make to registered retirement savings plans or the $2,500 to registered pension plans. That would do more for me. It would save me taxes in the long run and provide more for retirement." We should not lose sight of that fact, Mr. Speaker. We have that benefit, and our colleagues-


John Allen Fraser: May I ask the hon. member a question?


Mr. Deputy Speaker:: Would the hon. member permit a question from the hon. member for Vancouver South (Mr. Fraser)?


J. Judd Buchanan: It would be a pleasure, Mr. Speaker.


John Allen Fraser: It is always a pleasure to ask the hon. member a question, and always a pleasure to receive his reply. Would he tell the House the level of income enjoyed by his friend?


J. Judd Buchanan: This particular individual was in a substantial income bracket, Mr. Speaker.


John Allen Fraser: That is why the retirement plan would be so good for him.


J. Judd Buchanan: That is true, but anyone in Canada receiving an income of $10,000 a year can take up the $1,600 or $1,800 which is more than is proposed in the motion before us. So in Canada a large income is not needed in order to take advantage of the saving in income tax through a registered savings plan. If we look at the over-all perspective, it is apparent that Canadians enjoy a substantial benefit through their contributions to pension plans even though they are not allowed to extend these savings to mortgage interest.
When the Royal Commission on Taxation thoroughly reviewed the income tax system several years ago, it recommended that the principle of not allowing a deduction for personal or living expenses be retained. It did not recommend a deduction for municipal taxes or mortgage interest. When tax reform was introduced, it was recognized that the encouragement of home ownership was desirable. On the other hand, it was thought best not to deviate from the basic rule regarding deductibility of personal expenses.

October 26, 1973
Income Tax Rebate
The Income Tax Act, therefore, provided two major incentives to home ownership. The first incentive was to allow a taxpayer to make a capital gain on the sale of his home without incurring tax liability. This is something, of course, that is not available to the person who rents an apartment. The second was to continue the practice of not including in the taxpayer's income the economic benefit which he receives from home ownership. This benefit, which is the value of his accommodation, may be looked upon as the return he has received on the capital he has invested. It is interesting to note in passing that other countries, including Great Britain, have added this imputed income to the taxpayer's income for tax purposes in years gone by.
I should like to look at two or three examples of how the hon. member's proposal would work. Let us look, first, at the taxpayer who has an income of $5,000. His federal taxes in 1972 would be $85, and his provincial taxes if he lived in Ontario would be about $26, totalling $111. If he had municipal taxes of $200 and interest payments of $800, it would appear that he would be entitled to a rebate of $1,000. However, the hon. member's motion speaks of a rebate against income tax. The federal government would
give him a credit of $85 and his tax bill would be nil. At the same time, because provincial taxes are calculated as a percentage of federal taxes, his provincial tax rate would be nil. The total benefit which the taxpayer received would be only $111, or just over 11 per cent of the expenses in connection with his house, and of this amount $26 would have been contributed by the province in which he lived.
Now let us look at a taxpayer in a higher income bracket who owns his home and has no mortgage. He lives in a very expensive home and the municipal taxes are $1,000 per year. He gets the benefit of a tax deduction of $1,000 from the federal government, and $305 from the provincial government. In effect, he has made a tax-free profit of $305, or 30.5 per cent simply by paying his municipal taxes. These examples demonstrate some key propositions. The rebate would favour the higher income taxpayer over the lower income taxpayer.


Mr. Deputy Speaker:: Order, please. The hour provided for the consideration of private members' business has now expired.
At five o'clock the House adjourned, without question put, pursuant to Standing Order.

Monday, October 29, 1973