1973-09-13

ROUTINE PROCEEDINGS

[Stage Direction]
[ English]

Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, hon. members will recall that on September 4 the Prime Minister announced that a consumer subsidy would be paid on fluid milk in' those provinces where it was possible to obtain an agreement which would contain and roll back prices to consumers.
I am pleased to be able to announce that negotiations have been completed with the province of Quebec. As a result, the price of fluid milk in the province of Quebec will be reduced by four cents effective Monday, September 17, from the previously announced level which would have been in effect on that date had this agreement not been reached. This means that in the absence of the federal subsidy the base price per quart for fluid milk to the consumer in the province of Quebec would have been 38 cents per quart effective September 17. However, as a result of the agreement the base price will be 34 cents per quart.
It will be appreciated that prices will vary from the base price of 34 cents due to container size, fat content, etc., but irrespective of this the four cents per quart roll-back will apply.
The difference between the five cents per quart federal subsidy and the four cent roll-back in price will be used by the provincial authorities to cover, in part at least, cost increases for the next year.
The agreement further provides that this price will remain in effect for a period of 12 months subject only to the reopening of discussions between ourselves and the Quebec authorities should unforeseen or extraordinary cost changes take place.


Mr. H. W. Danforth (Kent-Essex):: Mr. Speaker, although this announcement will be good news for consumers in the province of Quebec, it has some rather interesting implications and establishes some principles. In spite of the government's protestations that it is totally against price controls on wages, food or incomes, the action of the government amounts to selective price control, freezing the price of milk to consumers for a 12-month period. It can be considered in no other light than absolute price control. Listening to the announcement
made by the minister today, one can only assume that this is one more panic action on the part of the government in the face of the high price of food.
The weaknesses in the policy announced by the minister are twofold. First, the consumer price is fixed with the result that the price the producer will receive is locked in regardless of input costs. The very fact that this agreement covers a 12-month period shows there is no room left for the farmer or primary producer with regard to costs. What this country needs today are incentives to produce. There can be no incentive in a policy that locks the price of the primary consumer-


Some hon. Members:: Oh, oh!


An hon. Member:: Do you want higher prices?


Harold Warren Danforth: -which locks the price to the consumer at the expense of the producer.


Mr. Sharp:: What is a freeze?


Mr. Bell:: You don't understand it.


Harold Warren Danforth: The other primary weakness my colleagues see in the program is that it is not applicable to any province that does not have a board or marketing scheme or milk committee, since it has to be administered at this level. Second, some provinces have already established a milk policy for a 12-month period, and again this program will not be applicable.
4 (1410)
So we not only have the fact that price control has been initiated, but today various provinces in the country will be receiving different rates of subsidy and different amounts of money for the production of the same commodity. I think the agricultural community and the farm organizations are right in their absolute rejection of such a policy.


Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, we spent some considerable time in deliberations in the committee on trends in food prices which was set up by the House and as a result of those deliberations we then set up the Food Prices Review Board. Any member of the House who sat on that committee, as I did, must surely realize that the consumer must be given some protection in regard to food prices. I have argued within my own party-and I am a farmer-that in regard to basic foods on which families depend, such as milk, bread and the essential proteins, it is part of the responsibility of this parliament to see that children and families are adequately cared for.
The government has moved, however belatedly, to try to stabilize the price of milk so it will not rise above its

September 13, 1973
Milk Price Reduction in Quebec present level. Anyone familiar with the farming scene knows that in order to do that the government must reach agreements with the provinces that have milk marketing boards, since fluid milk is controlled by those boards. How good these arrangements are is going to depend to a very great degree on the types of agreements the Minister of Agriculture (Mr. Whelan) makes with the various provinces. We suggest that as a minimum these agreements must include a provision making them valid for at least one year and they must take into account the increasing cost of production that every milk producer in the provinces of Canada is facing.
In this regard the minister says that the difference between the five cents per quart federal subsidy and the four cents per quart roll-back in price will be used by the provincial authorities to cover, in part at least, cost increases for the next year. I think the question arises, who is going to carry the rest of the cost?
In the agreements that the minister negotiates with other provinces it had better be made clear that the federal government will carry those increased costs. It would be absolutely unfair if the Minister of Agriculture, in attempting to ensure to the Canadian consumer a reasonable price for milk, in any way unloaded some of the cost of subsidization on provincial administrations. That is not and should not be their responsibility. In all future negotiations this should be a prime responsibility of the federal government.
I say again that my party believes this kind of approach must be taken in respect of essential foods. We believe the prime responsibility of the Food Prices Review Board must be to make recommendations to the House and the government regarding the means by which we can protect the consumer against unreasonable price increases.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I want to thank the Minister of Agriculture (Mr. Whelan) for having sent us a copy of his statement in French and in English and I commend him for this. What I recognize as not so valuable is the fact of going through it after the opening of this sitting. This did not leave me enough time to consider its content.
However, Mr. Speaker, I want to say that, at the Department of Agriculture, they are more conscious of the fact that the rights of dairy producers must be recognized, that some production costs are increasing and that if we want enough dairy producers to remain in business in order to supply all people, it is time to ensure that they may get an income enabling them to stay in business.
I welcome the fact that the new policy coincides precisely with the philosophy which we have often propounded in this House, that on the one hand producers should be assured of prices related to the cost of production, plus a profit margin allowing them to live decently, and that on the other hand the paying capacity of consumers has to be taken into account. We were advocating a compensated discount on Canadian products to enable consumers to buy them at a lower price and producers to make a greater profit.
Now on August 22, 1973, the Quebec producers of whole milk presented a petition to the Quebec Agricultural Mar-

keting Board requesting an increase of $1.25 per hundredweight in the price of whole milk. The board gave a decision, an order was published, and producers benefited from an increase of $1.05 per hundredweight, but consumers, due to the present system, had to pay three cents more. As everyone must know that there are 40 quarts of milk in 100 pounds, this would mean an increase of $1.20 per hundredweight for the consumer. The distributor of whole milk therefore automatically gets an increase of 15 cents per hundredweight without any effort on his part. He receives this increase thanks to the work of milk producers.
Last week, the Prime Minister (Mr. Trudeau) announced a new policy stipulating payment of a discount of five cents per quart of milk, in order to grant a price reduction to the consumer while recognizing that the producer needs more. If my figures are correct, this means that from now on milk will cost Quebec consumers 34 cents a quart. This means that in addition to the 15 cents that the milk distributors will receive according to the order issued by the Agricultural Marketing Board, they will get another one cent a quart, which surplus should normally go directly to the consumer so that he may benefit from the five-cent increase.
And so, I must say to the Minister of Agriculture that with this new policy we are embarking on a new course. Milk was a start; I trust this will continue with other foods. I merely wish to add this: The situation must be watched closely to see that the consumer is really protected, that he really benefits from the efforts the federal government is now making to reduce food prices. If this is not done, and if no one is specially assigned to this task, we will discover, at some point or other, that there are still "bloodsuckers" who take advantage of those subsidies intended for the consumers and who will rob them of that help.
I congratulate the minister on his statement. He is on the right track, and I hope we will continue in that direction to finally solve the problem of food prices. I hope the Food Prices Review Board will follow the example of that policy and do its duty, so that in the case of all food products we can at long last be assured there will not be thieves who speculate on food prices to the detriment of the consumers and primary producers.


FOOD PRICES
Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, pursuant to Standing Order 43 I wish to propose a motion of urgent and pressing necessity arising from the publication this morning by Statistics Canada of the consumer price index for the month of August-


Some hon. Members:: Oh, oh!
September 13, 1973


B. Keith Penner: -which shows an over-all increase of 1.3 per cent for that month, including an increase in the total food index of 3.2 per cent.
Since the hon. member for St. John's East (Mr. McGrath) has not proceeded with a similar motion, notice of which has stood in his name for some time, I ask the unanimous consent of the House to move, seconded by the hon. member for Nipissing (Mr. Blais):
That the second report of the Special Committee on Trends in Food Prices, presented to the House on July 25, 1973, be concurred in.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The motion proposed by the hon. member requires the unanimous consent of the House.


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


An hon. Member:: It was over there.


Mr. McGrath:: I rise on a point of order, Mr. Speaker. I refused unanimous consent to proceed with this motion because we intend to proceed with it in due course. In the meantime we did not want to proceed with the motion today so that the country would know that this government is bankrupt of ideas to deal with inflation.


Mr. Nielsen:: Mr. Speaker, I rise on a question of privilege affecting the privileges of all members of the House.


Some hon. Members:: Oh, oh!


Erik Nielsen: They do not care about that judging from the derision over there. It is an abuse of the rules and procedures of the House for an hon. member on the other side of the House to get up and propose a motion which he knows is clearly out of order by reason of the fact that there is another motion in precisely the same terms on the order paper now.


EXTERNAL AFFAIRS
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the tragic and deplorable suspension of the democratic process as a result of military terrorist activities in Chile I move, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom):
That the Canadian government refuse recognition of the Chilean military junta and forthwith withdraw any financial or other support which this government presently provides.


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


Some hon. Members:: Agreed.
Family Allowances Act


Some hon. Members:: No.


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


UNEMPLOYMENT INSURANCE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, in the hope that the law of averages is in my favour I present the following motion under the terms of Standing Order 43. I move, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas):
That the Minister of Manpower and Immigration be asked to table as soon as he receives it the report of the Unemployment Insurance Advisory Committee on its study of the benefit control operations of the Unemployment Insurance Commission from the viewpoint of unemployment insurance recipients.


Mr. Speaker:: The motion proposed by the hon. member for Winnipeg North Centre also requires the unanimous consent of the House as it is proposed under Standing Order 43. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent.


Mr. Andras:: Mr. Speaker, I rise on a point of order. As the minister responsible I would be perfectly agreeable, but in any case I would assure the hon. member that it is my intention to table this report as soon as I receive it.


Mr. Speaker:: Order, please. That is hardly a point of order. What is required is not the consent of the minister but the unanimous consent of the House.


FAMILY ALLOWANCES ACT
[Stage Direction]
On the order: Introduction of Bills:
July 19, 1973-Mr. Stackhouse-Bill intituled: "An Act to amend the Family Allowances Act".
Mr. Speaker:: When the notice of introduction of the bill proposed by the hon. member for Scarborough East first came up last July 23, the Chair expressed some concern about the regularity of the bill. Yesterday it seemed that the hon. member concurred in my suggestion that this bill touched upon the prerogative of the Crown in relation to expenditure from the Consolidated Revenue Fund.
The purpose of the bill, as indicated in the explanatory note, is to provide for the payment of family allowance benefits to a group or class of children not covered at present under the terms of the Family Allowances Act. A bill, or an amendment to a bill, cannot propose the expenditure of funds without a recommendation of the Crown. Since the hon. member's bill is not accompanied by a

September 13, 1973
Inflation
recommendation of the Crown, it cannot be put to the House at this time.
I refer the hon. member to Citation 249(1) of Beau-chesne's Fourth Edition. The principle explained there is further confirmed by Citation 250 as follows:
"If any motion, or bill, or proceeding is offered to be moved, whether in the House or in a committee, which requires, but fails to receive, the recommendation of the Crown, it is the duty of the Chair to announce that no question can be proposed upon the motion, or to direct the withdrawal of the bill."
Judging from the comments made yesterday by the hon. member for Scarborough East, including his reference to discussions which he has had with the Minister of National Health and Welfare, I take it he is in agreement that the bill should be removed from the order paper.


MOTION TO ADJOURN UNDER S.O. 26   THE CANADIAN ECONOMY INCREASES IN COST OF LIVING AND INTEREST RATES
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I ask leave under Standing Order 26 to move the adjournment of the House for the purpose of discussing the uncontrolled inflationary pressures exemplified by the cost of living figures released by Statistics Canada this morning, combined with the increase in interest rates announced yesterday. I make this motion as the most appropriate way in which to get these emergencies before the House.


Mr. Speaker:: The hon. Leader of the Opposition has given the Chair the notice required under Standing Order 26. I have also received a notice from the hon. member for Oshawa-Whitby (Mr. Broadbent), which reads as follows:
Mr. Speaker, I ask leave, seconded by the hon. member for Toronto-Lakeshore, to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely the record level of Canadian interest rates, particularly in mortgages, which will be seriously aggravated by the announcement that, effective today, the Bank of Canada's prime rate will be increased by a further one half of one per cent, and the urgent need for the government to take corrective action.
Obviously there cannot be two motions before the House at the same time. Since the motion sponsored by the hon. Leader of the Opposition is proposed in broader terms and includes specifically the matter suggested for discussion by the hon. member for Oshawa-Whitby, and taking into account also the special position in the House of the hon. Leader of the Opposition, I would propose that if one of these two motions is to be put and debated preference should go to the motion proposed by the hon. Leader of the Opposition.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Of course, at this point I am only referring to the priority of the motions if one were accepted.
The conditions and circumstances which have to be taken into account by the Chair are set out in section 16 of Standing Order 26. It has often been said that the matter proposed for debate under Standing Order 26 must be in the nature of a genuine emergency or a sudden emergency. This is why, on a number of occasions, the Chair has hesitated to put a motion founded primarily on the regular monthly reports of Statistics Canada. I am sure hon. members are in agreement with this general interpretation of the Standing Order. At the same time, I recognize that there are in this instance special circumstances to justify an emergency debate which would take into account the statistical report on which the hon. Leader of the Opposition has based his motion.
I am therefore disposed to put the motion which stands in the name of the hon. Leader of the Opposition on the understanding that the scope of the debate will encompass the subject matter proposed by the hon. member for Oshawa-Whitby who would in this way have a special position in the debate. If the hon. member for Oshawa-Whitby sees no procedural objection to this-I would assume there is not very much he can do about the situation-with leave of the House I would suggest that the motion be set down for consideration at eight o'clock this evening, pursuant to section 9 of Standing Order 26.



ORAL QUESTION PERIOD


Robert Lorne Stanfield: Mr. Speaker, I would like to ask the Minister of Finance-


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: Hon. members opposite can make a racket in the House, Mr. Speaker, but it is too bad they cannot do something about inflation.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I would like to ask the Minister of Finance whether, in view of the increase in the monthly cost of living index at the rate of about 15 per cent on an annual basis and ranging right across the spectrum, including the rise in interest rates, he proposes to put any new measures before the House today to bring this situation under some control?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, the figures that were published today reflect the situation in the reference week, the first week in August, a situation that became very apparent to the public, to parliament and to the government. As a result of the rise in the cost of living, particularly the rise in food prices,
September 13, 1973

two announcements were made by the government, one on August 13 and one on September 4, involving public expenditures of the nature of $320 million and requiring the legislation enacted this week in the House. Therefore I want to say to the hon. gentleman that the government has already responded to the factual situation reflected in this report by Statistics Canada a month after the fact.


Some hon. Members:: Hear, hear!


John Napier Turner: We have presented measures to the House that get to the essential problem of inflation, which is the world-wide imbalance between the forces of demand and supply.


Mr. Speaker:: Order, please. The minister may wish to keep some of his ammunition for some of the supplementaries.


Robert Lorne Stanfield: The trouble, Mr. Speaker, is that he has no ammunition.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Drury:: Come on, Bob: we want more of these questions.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Listen to them howl, Mr. Speaker. Now that the minister has indicated that he has no new proposals to present to the House today I would like to ask him whether, in view of the increase in the bank rate and the very alarming figures on the cost of living, he is reviewing his announced decision that he has no intention of introducing an early budget? Will he now bring a budget before the House with a full review of the situation, or are we to assume that the current rate of inflation and the current level of bank interest rates were foreseen by the minister at the time of his February budget and everything is going according to what was predicted by him?


John Napier Turner: Mr. Speaker, the hon. gentleman may express himself to be surprised by the figures published today.


An hon. Member:: You are not?


John Napier Turner: No, the government is not surprised.


Mr. Crouse:: Then tell us about next month.


John Napier Turner: Those facts which are crystallized in statistics today were evident to the Canadian people anu the government early in August. We reacted on August 13 and September 4. As a matter of fact, the government had already launched its counter-attack a month or so ago against the inflation represented by the figures released today.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!
Oral Questions


Robert Lorne Stanfield: Mr. Speaker, since everyone agrees that the measures announced by the government constitute nothing more than a popgun approach, I would like to ask the Minister of Finance whether, in view of the outlook for wage negotiations based upon the expectation of continuing rises in prices and reflected now in rising prices and the continuing spiral, he has any measures to announce today other than the increase in the rate of interest designed obviously to produce slack in the economy?


John Napier Turner: Mr. Speaker, there is no slack in the economy, an economy that has been growing for the first six months of this year at an annual rate of 9.4 per cent. Further, I want to say to the hon. gentleman that his questions reflecting the publication of statistics today, are about four weeks out of date. The government has already reacted.


FOOD PRICE INCREASES-SUGGESTED IMPOSITION OF EXCESS PROFITS TAX ON CORPORATIONS
Mr. David Lewis (York South):: Mr. Speaker, I want to address a supplementary question to the Minister of Finance and another one, if you will give me the chance, to the Prime Minister. In view of the fact there is an immense increase in profits particularly in the area of the food industries, increases of 200 per cent and over 100 per cent in many cases, is he giving consideration to imposing an excess profits tax to make it unpalatable for corporations to gouge Canadian consumers?


John Napier Turner: Mr. Speaker, I want to say to the hon. member that we are analysing the profit margins of the food industry. I want to say to him also that I recall his own words in the debate in the House last week that an excess profits tax, while it might give some satisfaction in terms of equity and justice, will not solve the problem of inflation. I am looking very seriously at all the options available to the government.


FOOD PRICES REVIEW BOARD-SUGGESTED EXTENSION OF JURISDICTION TO COVER ALL PRICES WITH POWER TO ROLL BACK UNJUSTIFIED INCREASES
David Lewis: Mr. Speaker, I hope that the serious study by the Minister of Finance-and I accept his word that he is doing it-will induce the Prime Minister to answer my question affirmatively. In view of the fact that the very huge increase in profits in many areas, not only in food but in other areas, indicates clearly a deliberate situation where corporations are taking advantage of the present crisis which they have themselves partly produced at the expense of the consumer, is the Prime Minister now prepared to introduce legislation to give the Prices Review Board jurisdiction over all prices instead of merely food prices and also authority to roll back unjustifiable price increases?

September 13, 1973
Oral Questions


Right Hon. P. E. Trudeau (Prime Minister):: At this time, Mr. Speaker, I have no announcement to make in this regard.
[ Translation]


Mr. Speaker:: Does the hon. member for Portneuf wish to put a supplementary?


Mr. Roland Godin (Portneuf):: No, Mr. Speaker.


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


INCREASE IN BANK INTEREST RATES-REQUEST FOR GOVERNMENT INTERVENTION
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I should like to direct a further supplementary to the Minister of Finance.
Can he tell us to what level he intends to let the bank interest rate rise before taking steps to be implemented by the Bank of Canada?


John Napier Turner: Mr. Speaker, I cannot answer the question of the hon. member asked in these terms.


INFLATION-POSSIBILITY OF IMPLEMENTATION OF GOVERNMENT CONTINGENCY PLAN-STEPS TO STIMULATE PRODUCTION
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the right hon. Prime Minister. As the program which the right hon. gentleman introduced last week contained no provisions for dealing with the basic causes of inflation but simply introduced measures to allow certain Canadians more easily to pay the higher prices brought about by inflation, does the government consider now that inflation has reached a sufficiently high point to justify bringing in the contingency plan which for many, many months the government has announced to the House it has ready for dealing with inflation when it reaches a sufficiently high point?


Pierre Elliott Trudeau: Mr. Speaker, because I cannot agree with the premises of the question, the short answer is no. The hon. member should realize that, contrary to what he stated in the premise, we are dealing with the causes of inflation-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -when we are dealing with the question of supply. The cause of inflation, in the view of the government and in the view of analysts, is shortage of supply. For that reason the measures we have announced in July, August and September are meant to deal with this aspect of the problem.


George Harris Hees: As the Prime Minister has announced that the basic cause of inflation is shortage of supply, would he advise the House now what steps the government has taken to stimulate production in many or in all of the lines where production is short and prices have been rising very

rapidly, as all prices in Canada recently have been rising very rapidly indeed?


Mr. Speaker:: Order, please. I wonder if the hon. member would not agree with me that the question he is asking now is very wide in scope and that he is inviting either the Prime Minister or the minister to make a statement which normally ought to be made on motions.


George Harris Hees: Would the Prime Minister take the first opportunity on motions to advise the House what steps the government has taken to stimulate production in the lines where prices have been rising at exorbitant rates in the past few weeks and months?


Pierre Elliott Trudeau: Mr. Speaker, I think it would be sufficient if I were to send the hon. member a copy of my statements of August and September. He would then see that an important aspect of those announcements is the aspect of supply. I am not surprised that it has escaped the hon. member's attention, Mr. Speaker, when a spokesman for the Conservative party has just rejected a moment ago our approach of subsidizing the milk consumer at the same time as we are permitting the producer through the marketing board in his province to settle the problem of supply to his satisfaction.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


George Harris Hees: I have read all your statements very carefully and there is nothing in them indicating that the government intends to stimulate production in any of the fields seriously affected by inflation.


Mr. Speaker:: Order, please.


INFLATION-INCREASE IN MONEY SUPPLY AS FACTOR
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Minister of Finance. Would the minister please explain to the House why the government is continuing to increase the money supply while it increases the rate of interest seeing that no one anywhere, except apparently the government, thinks it is a positive anti-inflation measure?


John Napier Turner: Mr. Speaker, the interest rates changes, the raising of the prime rate of the banks and the bank rate by the Bank of Canada reflect two phenomena. The first is an extremely strong expansion of credit in the country resulting from expansion in the economy and the second is a widening of the gap between interest rates in Canada and those in the United States and Europe. Because of those two forces, short-term rates in Canada could not be restrained because money was flowing out of the country seeking a better return elsewhere and restricting the capital market in the country, and of course there was pressure on the exchange.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Don Valley on a supplementary followed by the hon. member for Oshawa-Whitby.
September 13, 1973


James McPhail Gillies: Is it the position of the Minister of Finance that the 50 per cent increase in the money supply in the last three years has not been a major factor in the inflation that has taken place in this country?


Some hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, the monetary supply has been expanding only at a rate to accommodate the expansion in the economy-


Some hon. Members:: Oh, oh!


John Napier Turner: -and certainly the hon. gentleman's question is not consistent with his earlier-


Some hon. Members:: Oh, oh!


An hon. Member:: Sit down!


Mr. Speaker:: Order, please. The minister is having some difficulty-


Some hon. Members:: Hear, hear!


Mr. Speaker:: -in being heard in the House because of the noise coming from different parts of the chamber. I would remind hon. members that there are only 40 minutes for the question period and if 20 are taken up with shouting and applause and cheers and jeers that will considerably reduce-I estimate by approximately 50 per cent-the length of the actual question period. Perhaps the minister might be allowed to reply briefly to the question, after which I shall recognize the hon. member for Oshawa-Whitby.


John Napier Turner: Mr. Speaker, I was saying that certainly the hon. gentleman's question is not consistent with his earlier remarks that there was tight money in the country. I wish he and members of his party, including his leader, could determine whether they want a tight money policy or an expansionary money policy.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Would the hon. member resume his seat. I appreciate that the hon. member is anxious to continue the interesting debate he is having with the minister, but I would remind hon. members that a motion under Standing Order 26 has been accepted by the Chair for the purpose of having a debate this evening. I know that all hon. members are anxious that we proceed with this debate at eight o'clock this evening and would not want all the questions asked and all the answers given during the question period.


INFLATION-SUGGESTED SEPARATION OF MORTGAGE INTEREST RATES FROM OTHER INTEREST RATES
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is for the Minister of Finance. While it may make sense to have a tight money policy to deal with inflation in general, it makes no sense to keep mortgage rates as part of that interest rate market situation because they affect housing primarily. May I ask the minister if he
Oral Questions
and his officials have given any consideration to changing the Bank Act or taking some other course of action which would separate mortgage interest rates from other interest rates in Canada?


John Napier Turner: Mr. Speaker, I may be able to deal with that more fully this evening. But in answer to the hon. gentleman I want to say specifically that yesterday the rate for certificates of deposit, that is to say, the rate which banks pay for money in order to obtain money to lend in turn, increased by one per cent. Against that, the bank rate increased by three-auarters of one per cent and the bank rate for loans under $200,000, namely, loans for small businesses in particular, increased by only one-quarter of one per cent. The banks have given me an undertaking that the mortgage rate will not be raised and that a reasonable flow of money will continue to obtain in the mortgage market. In other words, the banks have recognized, in reply to a request from the Minister of Finance, recognizing the healthy profits of the banks at the moment-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The hon. member for Oshawa-Whitby will be recognized for a supplementary. In fairness, following that I think the hon. member for Portneuf should be recognized, and I will recognize later the hon. member for St. John's East and the hon. member for Calgary North.


John Edward Broadbent: I accept that a guaranteed 10 per cent mortgage rate is not much help to Canadian home purchasers. In view of the rest of the minister's answer about guarantees from the chartered banks to provide loans for small businessmen and so on, will he advise whether he has obtained from the chartered banks a statement outlining in percentage terms the allocation of funds they intend to make to small businesses and so on? If so, will he present that to the House?


John Napier Turner: Mr. Speaker, I just want to say, if I might, by way of preamble-


Some hon. Members:: Oh, oh!


John Napier Turner: -that it is one thing for Your Honour to allow a very wide-ranging question. It is another thing for Your Honour to allow me to reply distinctly and specifically to that question.


Some hon. Members:: Hear, hear!


John Napier Turner: I was saying that in view of the healthy state of bank profits the banks have agreed to narrow their margin on loans from one per cent to three-quarters of one per cent and to narrow their margin on small business loans under $200,000 from one per cent to one-quarter of one per cent.


Mr. Speaker:: Order, please. In spite of the comment or admonition of the Minister of Finance, I still feel his answer is in the form of a statement that ought to be made

September 13, 1973
Oral Questions
on motions. I appreciate fully his point that if a general question is asked it is very difficult to be brief in attempting to reply. Hon. members should bear in mind that when they ask questions that are general in terms it invites the kind of reply the minister has attempted to give. Hon. members might reserve these long questions and debating points until the debate which is to take place this evening. Perhaps at that time the minister might make whatever comments he is trying to make now. The hon. member for Oshawa-Whitby rises on a point of order.


John Edward Broadbent: Mr. Speaker, my point of order concerns the statement made by the minister. The information I asked for did not require a general statement. I asked whether the minister had obtained certain information from the banks and, if so, whether he would table that information in the House. Surely that requires only a simple yes or no answer.


Mr. Speaker:: That is hardly a point of order. I think it would be the consensus of hon. members that we try to go on to the next question. I indicated a while ago that the Chair would recognize the hon. member for Portneuf on a question that is not supplementary. He will be recognized, following which I will return to the hon. members I referred to a moment ago.

[ Translation]


ALLEGED RESALE OF CANADIAN WHEAT BY RUSSIA TO EUROPEAN COUNTRIES-REQUEST FOR INVESTIGATION
Roland Godin: Mr. Speaker, I should like to put a question to the minister responsible for the Canadian Wheat Board.
Since the USSR is reselling to European countries the wheat purchased in Canada, can the minister inform this House what is the resale price of this wheat?
[ English]


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, there have been press reports of sales of wheat by Russia, but I have no knowledge of them. There has been no identification of the source of that wheat. It could very well be American wheat.


Roland Godin: Mr. Speaker, I have a supplementary question.
Can the minister give us the assurance that he will take the necessary steps to ascertain the extent of this traffic?
[ English]


Otto Emil Lang: Mr. Speaker, as information becomes available I will be glad to make it available to the hon. member.


THE CANADIAN ECONOMY
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, having listened to the answers of the Minister of Finance may I ask him whether he is in agreement and accord with the Bank of Canada increasing the bank rate by a whopping half of one per cent to 7'A per cent, the fifth increase in the lending rate since April, putting mortgage rates now between 10 and 12 per cent and making rents impossible to pay for the average man and houses impossible to buy?


John Napier Turner: Mr. Speaker, the hon. member is just not correct. In their announcements the banks said they had no present intention of raising the mortgage rate. Therefore the spread between what the banks pay for money and the interest rate they are charging on mortgages has diminished in terms of spread by one per cent. The banks have given me an undertaking there will be no rise in the mortgage rate.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: In view of the fact the minister is on record as saying when the monetary policy of the Bank of Canada is in conflict with the monetary policy of the government the government will intervene, does he endorse, as I take it from his answer today, the tight money policy of the Bank of Canada?


John Napier Turner: Mr. Speaker, I wish the hon. member would get together with his colleague, the hon. member for Don Valley.


Some hon. Members:: Hear, hear!


John Napier Turner: If an expansion of the money supply by 15 per cent and an expansion of bank loans by 24 per cent is tight money, I wish they would reconcile the two definitions.


Some hon. Members:: Hear, hear!


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


James McPhail Gillies: As usual, the Minister of Finance has completely misinterpreted our position.


Some hon. Members:: Hear, hear!


James McPhail Gillies: The point I made, and this was quite clear in my first question, is that a policy of raising interest rates and increasing the money supply at the same time is highly inflationary and will not work to solve the inflation problems in this country.


Some hon. Members:: Hear, hear!


Mr. Speaker:: That is debate rather than a point of order. The hon. member for Calgary North has a supplementary.
September 13, 1973


Eldon Mattison Woolliams: The hon. member for Don Valley answered my question, Mr. Speaker.


Some hon. Members:: Oh, oh!


FOOD PRICE INCREASES-SUGGESTED IMPLEMENTATION OF GOVERNMENT CONTINGENCY PLAN
James Aloysius McGrath: Mr. Speaker, I suggest to the Minister of Finance that he and the government should get together with the people of Canada.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: My question is for the Prime Minister. In view of the fact the 3.2 per cent increase in the cost of food, representing a 16.2 per cent increase over a year, exercises its greatest hardship on low-income Canadians, and in view of the fact high interest rates hurt low-income Canadians most, does the government still have a contingency plan? If so, will the government now proceed with implementation of that plan?


Pierre Elliott Trudeau: Yes, Mr. Speaker. I certainly share the concern of the hon. member for people on low incomes. However, it is still a source of puzzlement to me that the hon. member's party, through its official spokesman, rejected the subsidy on milk for consumers to help people on low incomes.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Thomas Miller Bell: That is not true.


James Aloysius McGrath: On a point of order, Mr. Speaker, the Prime Minister has completely misrepresented the stand taken by this party.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: In light of the substantial increase in the cost of living, I can only suggest to the Prime Minister and his colleagues that their conduct is shameful.


Mr. Speaker:: Order. I am not sure whether hon. members expect the Chair to rule on all these points of order which I suggest are not points of order at all. Hon. members are obviously anxious to have a budget debate or a debate on the general issue during the question period. Our rules are not attuned to this kind of confrontation. I would invite hon. members to try to respect the rules and the generally accepted procedure during the question period. I am sure this would facilitate matters for all members who wish to participate in the question period.


James Aloysius McGrath: May I ask the Prime Minister, by way of a supplementary, whether, in light of the figures released today by Statistics Canada, he is now prepared to reconsider the decision he made yesterday and appear before the Special Committee on Trends in Food Prices so that its members might have an opportunity to examine the right
Oral Questions
hon. gentleman on the policy he has put forward to deal with inflation?


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I have already written a letter in reply to the chairman of that committee. I hope it has been received by now and I hope he will find it a satisfactory reply in view of the precedents in Canada.


OIL-REQUEST FOR DETERMINATION OF JUSTIFICATION OF PRICE INCREASE-POSSIBLE GOVERNMENT ACTION TO ROLL BACK
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Energy, Mines and Resources. In view of the fact that one of the items contributing to the increased cost of living during the month of August was fuel for home heating, and in view of the fact that this probably related to the increase of 40 cents a barrel for oil commencing August 1,1 want to ask the minister whether his department has made any study to determine whether that increase, the fourth in the last nine months, was justified? If not, has the government taken any steps to roll back the price to what it was at the end of July?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: Mr. Speaker, the increase in August was justified at the time on the ground that we were on a one-price basis with the United States and in light of the increase in price in the United States. On this basis, the restraint announced by the Prime Minister last week will prevent the necessity for a further 40-cent increase which the National Energy Board has now found would have occurred but for the decision of last week.


Thomas Clement (Tommy) Douglas: In view of the minister's statement which implies that the 40-cent increase on August 1 was not required in order to meet increased costs, is this factor being taken into account by the government in the preparation of legislation to establish a two-price system, and can we hope that the domestic price for oil will reflect this fact and not be set at the present figure at which it is frozen?


Donald Stovel Macdonald: I would not expect it would be possible to reverse decisions which have been based upon earlier price increases. I would expect, however, that such a system would make it possible to restrain the acceleration of price increases in Canada as related to the price of American crude.
Oral Questions GRAIN

September 13, 1973


WHEAT-ALLEGED RESALE BY RUSSIA AT MORE THAN PRICES PAID CANADA AND UNITED STATES
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question arises from an answer given by the Minister of Justice to the hon. member for Portneuf. Generally it is agreed that the U.S.S.R., because it was able to purchase wheat at a price not higher than the cost of production from Canada and the United States, has been disposing of wheat at a price much higher than the price it paid. The minister brushed the question aside and said that no doubt the wheat involved was American wheat. That was the answer as I understood it. I ask him, first, what basis he has for his suggestion that the wheat sold was American wheat rather than Canadian wheat?


Otto Emil Lang: I am sure the right hon. gentleman will see what my answer really was when he is able to read it in Hansard. I indicated at the beginning of my answer that I had no firm indication, only rumours, which the right hon. gentleman ordinarily operates on, that any sales had taken place. I am glad the right hon. gentleman has at last recognized that the United States sold more wheat at lower prices than Canada ever did.


John George Diefenbaker: When it comes to recognition of imagination as a basis for answers, I take second place to the hon. gentleman.


Pierre Elliott Trudeau: He was talking about questions, not answers.


John George Diefenbaker: No, I come in third place, with the Prime Minister as number two.


Some hon. Members:: Oh, oh!


John George Diefenbaker: This is not a rumour. It is a fact that sales of wheat purchased below the cost of production under long-term agreements have been made by the U.S.S.R. The minister says it is only rumour. I ask him whether he has been in touch with the U.S.S.R. to ascertain what sales, if any, were made of Canadian wheat. Has the hon. gentleman made inquiries through the embassy in Moscow? Has he requested the embassy to communicate with the grain group in the U.S.S.R. in this regard? Brushing aside answers important to the western farmer will not get by me.


Otto Emil Lang: I am sure the Canadian Wheat Board, alert as ever to any possible problem which might arise for the Canadian farmer, is fully in touch to its own satisfaction with each of its customers. Of course, some of the wheat which has been sold to the U.S.S.R. for a number of years has always been intended for alternative destinations, for example, the extremely valued flour business with Cuba.


John George Diefenbaker: That is another of those smart-aleck answers.


Some hon. Members:: Order!


Mr. Speaker:: Order, please. The Chair will recognize the right hon. member for a further supplementary, but I would draw the attention of the House to the fact that there is not much more than five minutes left before we call orders of the day.


John George Diefenbaker: Usually, the minister takes over the Wheat Board when it is to his advantage to do so. I ask him whether he has been in touch with the board to ascertain whether or not it has made any investigation into this allegation, which is more than fiction-it is fact.


Otto Emil Lang: I am not sure I understand the nature of the right hon. gentleman's concern. I have not discussed this matter with the Wheat Board because, as I have just said, I have no knowledge of anything but rumour and I am completely confident that the Canadian Wheat Board knows enough to bring any such problem to my attention if it considers any action is needed.


John George Diefenbaker: Only alibis!


THE CANADIAN ECONOMY
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is directed to the Prime Minister, bearing in mind he did not answer the question directed to him by my hon. friend from St. John's East. In June the Minister of Labour promised his constituents by news letter that if the Food Prices Review Board failed in its efforts to control prices the government had a contingency plan establishing a form of wage and price controls. In light of that promise and in light of unabated rising prices which have reached crisis proportions, will the government now introduce and establish a form of wage and price controls as promised by the Minister of Labour?


Pierre Elliott Trudeau: No, Mr. Speaker.


Lincoln MacCauley Alexander: On a point of order, Mr. Speaker. I am sure the Prime Minister is most anxious either to contradict the Minister of Labour or to put the House straight. I noticed he was on the point of answering the question. I am sure he would like to put the position before the House.


An hon. Member:: He said no.


INCREASED INTEREST RATES-EFFECT ON COST OF TELEPHONE SERVICE AND ELECTRICITY
Hon. Paul Hellyer (Trinity):: Mr. Speaker, my question is to the Prime Minister. Has the government undertaken studies to determine the effect of higher interest rates on the cost of future telephone service to Canadians and if so, would he be prepared to make the results of those studies available to the House?
September 13, 1973


Pierre Elliott Trudeau: I will inquire of the Minister of Communications.


Paul Theodore Hellyer: Could the Prime Minister also tell us whether the government has undertaken any studies as to the effect of higher interest rates on the cost of electricity and power development in Canada and would he also make the results of such studies available to the House at the same time?


CAPE BRETON DEVELOPMENT CORPORATION
Mr. Donald Maclnnis (Cape Breton-East Richmond):: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion. In view of the fact that after six years the Cape Breton Development Corporation has failed to comply with legislation passed by this House and supported unanimously by two parliamentary committees, would the minister take steps to instruct Tom Kent, president of that corporation, to comply with the legislation immediately as laid down in section 18(a)(2) of the act?


Hon. Donald C. Jamieson (Minister of Regional Economic Expansion):: Mr. Speaker, as the hon. member and others know, I have consistently over the past several months done everything I possibly could to redress what the hon. member regards as certain legitimate grievances, and I think considerable progress has been made. If the hon. member has some alternative means that might be employed to pursue this matter further, as he knows I will be glad to consider them with him or with any other member.


Donald MacInnis: A supplementary question. I know that the minister has shown great concern and has made the only advance that has been made, but Tom Kent has restricted advancement. The minister has overcome some of it, but does the minister intend to stand pat and allow Tom Kent to deny widows covered under section 18(a)(2) what has been rightly voted to them by the parliament of Canada in 1967? Six years is too long to wait. As I have said in the House, Tom Kent can be charged under the Criminal Code for not complying with the legislation passed by the House. The minister can take action with respect to Kent or action with respect to the legislation; either will satisfy me up to a point.


Mr. Speaker:: Order, please.
Oral Questions EXHIBITIONS


EXPO '74, SPOKANE, WASHINGTON-EXTENT OF FEDERAL PARTICIPATION-CONSULTATION ON POSSIBLE PROVINCIAL PARTICIPATION
Mr. Randolph Harding (Kootenay East):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In view of the government's announcement at the end of July that Canada was withdrawing from any participation in Expo '74 in Spokane, and in view of the welcome news today that the federal government has reversed its position and will now participate in Expo '74, I would ask the minister on what basis and to what extent the federal government's participation in Expo '74 will be made?


Mitchell William Sharp: Mr. Speaker, when the government made its original decision not to build a pavilion, one of the reasons was lack of interest on the part of British Columbia and Alberta. The British Columbia government has changed its position and the Canadian government is going to build a park. I am hopeful that the government of British Columbia will build a pavilion within the park, thus I think fulfilling what is desirable from all points of view.


Randolph Harding: Has the federal government retained the site originally set aside for the Canadian exhibit, and has the government held talks with any of the provinces regarding the sharing of this site with them for the purpose of provincial exhibits? If so, with what provinces have discussions been held?


Mitchell William Sharp: As I said in my original answer, Mr. Speaker, the province of British Columbia reversed its positon on participation as a result of which the government wanted to facilitate some Canadian and British Columbia participation. We have extended a similar invitation to Alberta, Saskatchewan and Manitoba to participate if they would like to come on the same site. I might add that I understand the authorities in Spokane may create a permanent park, which would be a great credit for Canada.


AGRICULTURE
Joseph Adrien Henri Lambert: Mr. Speaker, I wish to put a question to the Minister of Agriculture.
Owing to the serious conditions in the food production field and the urgency of using all our arable land, could the minister tell us what progress is being made in the negotiations with the Quebec government concerning the small farm development program and will he soon be making a statement in the House in this connection?
[ English]


Eugene Whelan: Mr. Speaker, we have had an exchange of correspondence on negotiations in the last week. I think the earlier announce-

September 13, 1973
Oral Questions
ment I made in the House proves that Quebec and this government are co-operating very closely,


Mr. Speaker:: The hon. member for Annapolis Valley.


Mr. J. P. Nowlan (Annapolis Valley):: I have a question for the Prime Minister.


Mr. Speaker:: Order. Perhaps the hon. member will allow me to recognize the hon. member for Bellechasse. I was not looking in his direction and I believe he has a supplementary.

The hon. member for Bellechasse has the floor and I will recognize afterwards the hon. member for Annapolis Valley.


Joseph Adrien Henri Lambert: Mr. Speaker, I thank the minister for his answer but I would like to ask him a supplementary question. Since there is urgency in that field, I would like him to specify, if possible, what progress has been made in the negotiations and if we can expect a statement in that connection in the days or weeks to come?


Eugene Whelan: I am hopeful, Mr. Speaker, but I would tell the hon. member that we are discussing with the province of Quebec and the other provinces many other ways of doing the very same thing.


THE CANADIAN ECONOMY
John Patrick (Pat) Nowlan: Mr. Speaker, my question is for the Prime Minister. In view of the fact that the problem of inflation affects all departments of all governments, and since the Prime Minister commented on December 23, 1969, in regard to inflation that "We can only get tougher, we can't get weaker", and a year later, on December 24, said "Inflation no longer exists in Canada; we've come around the corner", I would ask the Prime Minister whether he intends to participate in the debate tonight so that we can find out what we have in Canada and what happened when we went around that corner?


Pierre Elliott Trudeau: Mr. Speaker, if I had occasion to participate in the debate tonight I would indicate that in economic policy you are never dealing with an immobile economy, that you can at one point in time bring inflation down to zero or near zero as inflation was when I made that statement. The whole purpose of economic policy is to react instantly to changing economic reality and this is exactly what we did, as the Minister of Finance has indicated in his answers. Instead of reacting a month later, as the Leader of the Opposition has done, as soon as the facts about the economy were known we did not wait for the statistics but brought in this series of legislative items.


John Patrick (Pat) Nowlan: I appreciate that the Prime Minister may have some conflicts ahead of him this weekend, but if he is not going to participate in the debate tonight and give some leadership to this land, rather than talking about a month or six months ago, does he intend to make a statement either in the House or on the national media outlining the government measures that have been and will be taken, or does he intend to let the Minister of Finance strangle slowly with the albatross of inflation around his neck?


Pierre Elliott Trudeau: Mr. Speaker, I did not rule out the possibility of my participating in the debate. However, I feel it is wise to wait and see which of the many spokesmen on finance in the Conservative party will take the floor tonight so I can see whether, indeed, I need answer them.


Mr. Speaker:: Order, please. We have reached the end of the question period and there are a number of members who unfortunately did not have the opportunity to be recognized.
As this is a special day, I think the Chair might take this occasion to mention to hon. members that discussions might be held between the party representatives with a view to not waiting until eight o'clock this evening to have the debate. The Chair has no alternative under Standing Order 26 but to say that the debate is put over to eight o'clock in the evening, but hon. members might well consider the possibility of having the debate start at four or five o'clock this afternoon, which might mean that the debate would finish a little earlier and we might have a brighter participation in the latter part of the debate. Orders of the day.


BUSINESS OF THE HOUSE
Thomas Miller Bell: Mr. Speaker, may I ask the Acting House Leader in these days of national emergency what the business will be for next week? I ask this on behalf of the opposition parties in the House.


Otto Emil Lang: 
James Aloysius McGrath: On the same point of order, Mr. Speaker, I would ask the Minister of Justice (Mr. Lang), in his capacity as acting government House leader, whether the government intends to bring forward measures to deal with the real problems facing this country such as rising food costs, rising shelter costs and rising transportation costs?


Mr. Speaker:: Order, please.


Stanley Howard Knowles: On the same point of order, Mr. Speaker, if it is not possible to reach agreement right now to start this evening's debate at four or five o'clock, I wonder if it might be understood that if the House leaders reach such an agreement we can intervene in the debate this afternoon and start this evening's debate that much earlier. As far as we are concerned, we would be prepared to agree right now to start the debate at four or five o'clock.


An hon. Member:: How about right now?


Otto Emil Lang: On that same point of order, Mr. Speaker, there may be some disposition to begin right now.


Some hon. Members:: No.


Otto Emil Lang: I see there is not disposition to begin right now, but we are ready to start at this time.


Thomas Miller Bell: Let us start at four o'clock with time off for supper.


Some hon. Members:: Right now.


Mr. Speaker:: Order, please.


An hon. Member:: We are ready.


Mr. Speaker:: Order, please.


An hon. Member:: Come on, let's start now.


Mr. Speaker:: Could we have order, please.


Some hon. Members:: Right now.


Mr. Speaker:: I respectfully suggest to hon. members that it is very difficult to agree on this kind of an arrangement by way of interruptions from across the floor. I think there should be consultation, as I have suggested to hon. members. Obviously there is not unanimous agreement at the moment as to the time the debate might commence. I suggest there be the usual discussions, and I will call orders of the day.


Mr. Peters:: Mr. Speaker, I should like to ask whether there has been any agreement to the effect that if the matter that is to be called now receives only an hour or two consideration the debate will be continued on a later date, since the debate is normally terminated at the completion of one day's discussion.


Mr. Speaker:: I would again suggest to the hon. member that this might be another subject matter for the type of discussion I proposed a moment ago.
Canada Pension Plan



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Friday, July 20, consideration of the motion of Mr. Lalonde for the second reading and reference to the Standing Committee on Health, Welfare and Social Affairs of Bill C-190, to amend the Canada Pension Plan.
Mr. Speaker:: My understanding is that we are resuming the debate on the motion now before the House, and that if the minister speaks now he will be closing the debate. I gather there are other hon. members who want to take part in the discussion. That being the case, the Chair will recognize the hon. member for Crowfoot (Mr. Horner). [DOT]


Mr. J. H. Horner (Crowfoot):: Having regard to Bill C-190, Mr. Speaker, after a cursory look at it one feels there is not really much at stake and that it should receive ready passage. Perhaps a number of members of this House have adopted that view.
The Canada Pension Plan was created in essence for two basic reasons, the first of which was to create a universal plan which would be portable so that upon retirement a person would have something set aside. The bill before us deliberately exempts certain religious groups which had been formed prior to 1966. It is a well-known fact that people have various faiths, and that many cherish in their hearts their own religious beliefs. I would ask the minister why these religious organizations, in order to be exempt, must have been formed prior to 1966? Why is that the condition before they have the privilege of opting out of participation in the Canada Pension Plan? Why should we allow anyone to opt out?
It is also well known that many religious organizations do not retain all their following on a rigid basis, and that from time to time people do break with their church and choose another. What happens to a person who belongs to a religious faith which is exempt from contributions to the Canada Pension Plan, then breaks away from that organization and, at age 50 or 60, finds that no one has made any contribution to the Canada Pension Plan on his behalf? Such an individual would reach retirement age and have nothing. He would be solely dependent upon the old age security system, which is merely a base for retirement today as it is coupled with the Canada Pension Plan. For those reasons, I urge that this bill be not passed without a great deal of study.
Let me deal specifically with the Canada Pension Plan and why I do not think this bill should receive acceptance by this House. In 1966, the Canada Pension Plan was brought into being. The minister who piloted it through the House said it amounted to a tax levied by the government to bring about security for the people when they reached retirement age, and that the tax amounted to about a 23 per cent increase in the existing income tax rate. In other words, there was a choice of levying a premium solely for the purposes of the Canada Pension

September 13, 1973
Canada Pension Plan
Plan or of increasing the existing income tax rate by 23 per cent. The latter course would provide an equivalent amount to be set aside in a retirement fund. The minister used another equation at the time. He said it was equal to a general sales tax of about 4 per cent or 5 per cent, and that this would give the government the same amount as a 3.6 per cent tax on salaries over and above $600. Those were the figures the minister used.
The Canada Pension Plan accomplishes one other thing. It sets up an investment fund from which the provinces can borrow money from time to time. Reading from a publication put out by the minister in 1972 to explain the Canada Pension Plan, we find the following statement, among a number of others, which outline the purpose:
Every contributor to the Plan should have a Social Insurance Number so that his pensionable earnings may be accurately recorded for benefit purposes.
Many people in Canada do not have a social insurance number, whether or not they belong to a religious organization. Certainly, the Hutterites on the Prairies do not want social insurance numbers. They believe all things are common and that no person really acquires any personal assets. For that reason, they do not want to look upon their group as individual with numbers.
Many people other than those of the Hutterite belief do not have social security numbers. Some have been threatened with court action, but at no time has the government proceeded with a prosecution of anyone on the basis of not having a social security number. It has been suggested at times that prosecutions will be commenced, but this has not been the case. I suggest no prosecutions have taken place because of the ticklish question of what to do about those who belong to a religious order. The government knows it would be in very bad straits if it forced members of religious orders to accept social security numbers, therefore it has not proceeded with any court action against those persons unwilling to accept a social security number. A number of people do not have these numbers.
The same publication put out by the minister in 1972 explaining the Canada Pension Plan states:
Every month, the Department of National Revenue estimates the amount of contributions that have been received and credited to the Plan's operating balance. The Department of National Health and Welfare then indicates to the Department of Finance the amount by which the operating balance is in excess of the amount required to meet all payments in the immediately following period ending three months after the end of that month. The Department of National Revenue will also indicate to the Department of Finance the proportion in which contributions are estimated to have been received from each province during a prescribed period preceding that month.
Each month, then, the Department of Finance will indicate to each province the amount of excess moneys in the Canada Pension Plan which is available to advance to that province within the first ten days of the following month in exchange for a security of that province having a term to maturity of 20 years.
That implies that the excess in the fund can be lent to the provinces at a rate comparable to the government borrowing rate on 20-year bonds. So, this becomes an investment fund from which the provinces may borrow for the purpose of developing their provinces. I am a firm believer that everybody within Canada should share part

of the load involved in building a province so that it may be a better place in which people may live.
It may be of interest to note that on July 11 in answer to a question placed on the order paper by the hon. member for Brandon-Souris (Mr. Dinsdale) concerning how much money each province borrowed from the Canada Pension Plan it is shown that the province of Alberta, which many think is a wealthy province, since the inception of the Canada Pension Plan has borrowed from that investment fund $525 million, starting with a low borrowing of $3 million in 1966 to a high last year of $96 million. The provinces of Saskatchewan and Manitoba have both been heavy borrowers from the Canada Pension Plan. Why? Because they receive a good rate of interest. It is Canadian money. It is not necessary for them to go to New York in order to borrow money to build hospitals, roads, and other developments in their provinces. Religious sects such as the Hutterites, for example, use those hospitals and roads. Why should they not contribute to that investment fund? Many people who invest in an insurance scheme do not even break even.
If a person started contributing to the Canada Pension Plan at age 18 and died at age 65, the amount received from the Canada Pension Plan would probably be enough for a very meagre burial; that is all. This is what insurance is all about. We all pool our funds in order to provide some security at a later date. I cannot say that everyone who belongs to the Mennonite or Hutterite sect will, from this date forward, remain members of those sects. They may some day break away and need the security offered by the Canada Pension Plan. Also, I cannot say that at some future date the sects themselves may not change their mind and wish to enjoy the security of the Canada Pension Plan.
Certainly, it has never been the belief of the Hutterites that they should be exempt from the payment of taxes or from the authority of governments. One of the teachers of the Hutterite religion, a Mr. Rideman, in respect of the payment of taxes to government funds said:
Since governmental authority is ordained by God and hath its office from him, the payment of taxes for this purpose is likewise ordained and commanded, as Paul saith, 'Thus ye must also pay tribute.' For this reason we likewise, willingly pay taxes, tribute or whatever men may term it, and in no way oppose it, for we have learned this from our master, Christ, who not only paid it himself, but also commanded others to do so, saying, 'Render unto Caesar what is Caesar's, and to God what is God's.' Therefore we, as his disciples, desire with all diligence to follow and perform his command, and not to oppose the government in this.
He refers to tribute. They are willing to pay their tribute as requested by governments. They do not like the Canada Pension Plan because of the social security number which is nearly a "must" if one is to have an individual pension plan and not a mass pension plan. The Canada Pension Plan is an individual pension plan because the more one pays into it the more one may receive from it. Many people have said that the Hutterites are a religious group and really are not engaged in business. On that ground, it is suggested that they should be exempt from many things such as income tax, the Canada Pension Plan and so on.
Again, I wish to point out that the contributions to the Canada Pension Plan build an investment fund from which the provinces borrow money for the purpose of
September 13, 1973

building hospitals, schools and roads. These people use these facilities. These people also carry on extensive business. If one group engaged in business is to be exempt from a levy of taxes, then people engaged in similar business in competition with that group should also be exempt. Are the Hutterites, who have gathered in the provinces of Alberta, Saskatchewan and Manitoba, carrying on business? As long ago as 1939 the Supreme Court of Canada ruled they were. I wish to refer briefly to that ruling.
There was a case concerning whether or not the Hutterites were farmers under the Farmers' Creditors Arrangement Act of 1934. The Supreme Court of Canada held that they were farmers within the meaning of the Farmers' Creditors Arrangement Act of Manitoba, 1934, and the amendment in 1953, and were entitled to the advantages under that act. This was a case in which the Hutterites themselves wished to take advantage of the act and set out to prove they were, in fact, farmers. They did prove this before the Supreme Court of Canada.
It is also interesting to note a recent judgment in a taxation case before the Tax Appeal Board. In this case five Hutterite colonies were involved. The judgment found, as a fact, they were farmers. The judgment goes on to state:
It must also be noted that if the Articles of Association rather than the teachings and theories of the Hutterian Church are examined, it becomes apparent that two distinct purposes are enumerated in art. 2: religion and industry, the industrial purpose being described in the following way:
This is taken from the charter of the Hutterite Association:
To engage in and carry on farming, stock-raising, milling and all branches of these industries, and to manufacture and deal in such products and by-products as may be considered by the Directors to be in the best interest of the Colony.
So, the wording of their charter leaves no doubt that they are engaged in an industry. The judgment ended with the following words:
In view of the foregoing, I have reached the conclusion that the appellants were farmers in the full sense of the word.
What I am saying is that if the minister finds the act to be a difficult piece of legislation to administer and that it would be far easier for him to let them out, I still find that that is no excuse because that would only encourage other groups to rise up and cause trouble. If the government does not have sufficient intestinal fortitude to make the act work, then this bill should not be passed. It should be required that everybody comply with the act and pay into the fund, including those religious groups that were formed before 1966 and desire to opt out. On the one hand, there is the religious aspect of these groups, but on the other there is the farming operation, which is a completely different thing.
Much has been said about being good corporate citizens, about foreign investment in Canada and about these multinational corporations, and whether they are good corporate citizens. We should lay down a guideline so that everyone could see whether or not they are good corporate citizens. I am certain that deep within their hearts these
Canada Pension Plan
religious groups want to be good Canadian citizens, as Rideman says in his teachings. They want to obey the government for in their eyes the government is God's servant. But in this act we seem to say that we will force the big corporations to be good corporate citizens, and yet we will let many people come into Canada without requiring them to contribute.
Who are these people whom we allow not to be good citizens? There was a study carried out in Alberta in 1959 by what was, in essence a royal commission composed of some respected and honourable men, such as James Bentley, who was at one time president of the National Federation of Agriculture, C. P. Hayes and W. Lodd. I do not know who those two gentlemen are, but I do know Mr. Bentley to be a fair and honest man. On page 27 of the report of that group we find the following statement:
No loyalty to the country in which they live is acknowledged by the Hutterites, as responsibilities of citizenship are not accepted even by those born in the country.
I cannot underline this statement enough because we all believe that loyalty to the country is the supreme test for everyone. We in this parliament work for those who are most loyal to this country, not necessarily for those who acknowledge no loyalty to the country. Yet, this report states that the Hutterites acknowledge no loyalty to the country. That is what those to whom I referred found to be the case in the province of Alberta. Even those born in the country do not accept the responsibilities of citizenship.
The minister said when this bill was first introduced that this was one of his great problems and headaches, that he did not know what to do about these groups. His headache would be cured, the thorny problem of how to make these people pay into the Canada Pension Plan would be solved, if no exceptions were made. We would in fact be curing the minor headaches of other people, particularly farmers who are in competition with the Hutterites. When the Canada Pension Plan was first introduced in 1966, many farmers said that they did not want any part of it. Mass meetings were held throughout the province of Alberta. I was asked to attend a number of them and, strange as it might seem, I found myself defending the government at the time-it was a Liberal government then also. Many farmers did not want to pay into the Canada Pension Plan. They wanted the choice of opting out because the cash income of farmers is often not very great. They invest their profits in their farmsteads. The old adage that farmers live poor and die rich is nearly as true today as it was then.


Mr. Gilbert:: Now they live rich and die rich.


John (Jack) Henry Horner: No, many of them die poor because some lawyers and trading companies take their profits. In fact, that it true now more than ever before. In any case, we cannot easily cure the minister's headache in this way. It is not living up to the obligation of governing the people well when you say: I do not know what to do about this problem so let us sweep it out the door and forget about it. Members of parliament cannot say: we accept the minister's headache; it is bothering him so we will help him get rid of it. That would not be living up to the obligation which I assumed when I ran for office. I acknowledged that the problems were difficult, but, I
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Canada Pension Plan
thought I could contribute towards solving them. If I had thought that solving problems meant sweeping them out the door, I should not have come here and the people should not have sent me here because those problems could have been swept out the door without my help. It is parliament and the House of Commons which should settle the problems of these people.
These people are engaged in farming but they are not good Canadian citizens because they acknowledge no loyalty to the country, even those who are born in Canada. This is hard to understand. That is why I took out of the library a copy of this study carried out by a group of respected men. The Hutterites themselves acknowledge that the government is a servant of God and that they will obey the wishes of government. The government has spoken and said that everybody in Canada should contribute to the Canada Pension Plan. The plan is portable. You may never collect from it, but if you need to, it will be there. If we are going to allow one group the choice of opting out, then I say we should give other groups the same right. I say: do not bring in a bill which allows a couple of groups not to take part if they were incorporated before 1966. Many churches have been formed since then.
If we are to allow churches a choice-and this includes strict religious sects-then we should allow them to opt out in the future as well as now, whether they were formed before 1966 or after. It seems to me that if we are to have good roads over which to bring our produce to market and if we are to have a good hospital with many doctors and nurses and all the necessary modern technology at our disposal to protect our families, then we should all without exception contribute to that investment fund. Then, the provinces would not be forced to go to New York forever to borrow. The investment fund idea is sound, but everybody should contribute to it, everybody who is prepared to use it and reap the benefits from it. That is the basis for it.
I have figures here for the province of Alberta. I have not totalled them up precisely, but $525 million has been borrowed by Alberta since 1966, and it is supposed to be a wealthy province. The province of Ontario, last year alone, borrowed $544 million from this fund.
I know that the Amish people of Mennonite people in some parts of Ontario also want to be exempted from contributing to this fund. They are not as businesslike people as the Hutterites. They still do their farming in what might be called an outmoded manner. But they use the roads, their children go to schools, and in cases of severe sickness they use the hospitals.
In 1971-72 Ontario borrowed $498 million, in the year before that $476 million, and in 1969-70 $412 million. We can see that there have been huge borrowings from the fund by the richest province of all. It has borrowed an average of $450 million per year since the inception of the Canada Pension Plan in order to build a better province, to build better roads, better hospitals and better schools. I believe that all citizens, whether or not they acknowledge their citizenship, should be forced to contribute to the building of a province. We ask corporations, whether they be international corporations, American corporations or

Japanese corporations, to pay taxes to help build the facilities we desire.
It may be said that there are only a few of these people, that they are nice people, and they do not mean anybody any harm. That is all very true. But I point out that in the province of Alberta the Hutterite sect owns as much land as would encompass all of Prince Edward Island. So, while we might be talking about only a few individuals, collectively they own a large area of Canada. I say that we are exempting too large a proportion of the population from the provisions of the plan. We are exempting the owners of a huge land tract in Alberta, a huge land tract in Saskatchewan, and another huge land tract in Manitoba. I do not know how large a tract is involved in Ontario.


Mr. Reid:: On a point of order, Mr. Speaker, may I intervene to say that there have been discussions among the parties on how to deal with the debate this evening. My understanding is that we will begin at four o'clock, bypass private members' hour, rise for supper at the normal hour, resume at eight o'clock, and then conclude as specified under the terms of Standing Order 26.


Thomas Miller Bell: We agree.


The Acting Speaker (Mr. Laniel):: Is there unanimous agreement to this procedure?


Some hon. Members:: Agreed.


John (Jack) Henry Horner: Mr. Speaker, the time allotted to me will now expire at four o'clock. I have dealt at length with this subject matter because here we are dealing with a principle. Either the plan is compulsory and includes everybody, or it is not. The Conservative party at one time was a great party for principle. It believed in sticking up and standing up for principle.


Mr. Dinsdale:: It still is.


John (Jack) Henry Horner: Some say it still is. I do not like to think that it does not, but we should treat all people equally. If we want to mention religious people, that is fine, even though I do not like that attitude because it narrows the scope. I notice some members of the NDP nodding their heads. They are Unitarians, and maybe there would be some difficulty in interpreting that as religion. However, everybody should have a choice. I say we should not stipulate the year 1966. Some great religious sects may still spring up in Canada that may wish to guard zealously their communal being. Their members may not want to acquire social security numbers. They should be entitled to the same privilege.
Before closing I wish to say that if I am present in the House I will not grant unanimous consent for this bill to be dealt with in slipshod fashion. I want it to go tq a committee, so that these groups can appear before it and defend their position that they should be let out of the plan. Can they tell us that what I have said about their possessions is all wrong, that what I have said about their land holdings in Alberta is all wrong?
I don't care if the Minister of National Health and Welfare has a headache. He has plenty of doctors in that department to give him pills for it. I am not shrinking
September 13, 1973

from the job of being a responsible member of parliament, trying to solve the problems fairly as they confront parliament. That is the duty of us all. Just because a problem appears insoluble is no reason to throw it out the door. I know the Minister of Finance (Mr. Turner) finds inflation insoluble, and would like to get it thrown out the door. But we, as responsible members of parliament, will not let him sweep it out the door. Just because this matter involves two religious sects, and discussion of religion is taboo, we are supposed to let the Minister of National Health and Welfare sweep it out the door. That is wrong in principle, Mr. Speaker. Giving everybody equal treatment is what democracy is all about, not the granting of privileges to some and the withholding of privileges from others.
We all cherish our freedom. We know that in introducing any insurance plan, unemployment insurance, Canada Pension Plan or what-have-you, we foresake a little freedom for the security we get in return. But I know that some people value their freedom more than others. Many people have not taken out social security numbers. A very good friend of mine who contributes to the Canada Pension Plan has not taken out a social security number, and knows he will not be able to get one cent from the Canada Pension Plan when he retires. That is his choice. I notice it is four o'clock, Mr. Speaker.


Mr. Speaker:: I will now put the motion for the adjournment of the debate.
[ Translation]


Mrs. Albanie Morin (Louis-Hebert):: Mr. Speaker, I move, seconded by the member for Shefford (Mr. Rondeau), that the debate be now adjourned.


Mr. Speaker:: Is the House ready to carry the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Speaker:: Pursuant to special order made this day the Hon. Leader of the Opposition (Mr. Stanfield), seconded by hon. member for Don Valley (Mr. Gillies), moves: That this House do now adjourn.


Robert Lorne Stanfield: Mr. Speaker, the Clerk of the House has just reminded me that under the rules I have 20 minutes. It has often been said that if you cannot say what you want to say in 20 minutes you cannot say it at all, and so I will do my best within that period. I suppose the Minister of Finance (Mr. Turner) and perhaps even the Prime Minister (Mr. Trudeau) will do me the courtesy of hearing what I have to say in due course.
Cost of Living
One of the factors that is causing us such concern today is the further rise in interest rates that has been announced and the indication that this is a return to a traditional approach. This approach, of course, involves higher costs for borrowers, higher costs for those who are doing business and has traditionally led to a slowdown in our economy, particularly in the slow growth areas of the country. What worries us all so much is that we feel we have been all through this before. The increase in the bank rate will work its way through the system, that is the various structures of interest rates, up into the long-term mortgage rates of interest.
The Minister of Finance earlier this afternoon made a great deal of the fact that the banks have given an assurance, for the time being at least, that they will not increase their mortgage interest rates. But ranks provide only part of the mortgage funds in this country, Mr. Speaker. There are other institutions, too, and this increase will work its way into the longer-term rates and will be reflected in the mortgage interest rates charged to many home owners as well as others who wish to borrow money in future. This will lead not only to a vast increase in cost to home owners, but if it continues will eventually reach a point where there will be a slowdown in construction. This has happened frequently before as a result of this kind of policy and will, of course, exacerbate the housing problem. I recognize that the government is quite proud of the housing starts this year, but a continuation of the escalation in the rates of mortgage interest will produce, as it always has in the past, a slowdown in construction. The same applies in the case of business.
Earlier this week we had a warning of the increase in the seasonally adjusted rate of unemployment to 5.5 per cent, the same as it was last March. Earlier today the Minister of Finance said that he had foreseen the figures yesterday and today when the program was developed that was announced by the Prime Minister. I do not know whether he also claims to have foreseen the increased rate of unemployment, seasonally adjusted or not. Surely, these figures are a warning to all of us of what has happened as a result of higher interest rates, what has happened in slow growth areas and what has happened particularly to the fight against regional disparity. The effects of the fight against regional disparity which was launched a few years ago by this government were negated by the slowdown in the economy of the nation. This was deliberately brought about by the minister of finance of that day and the prime minister in order, as the Prime Minister has said, "to lick inflation".
If we hope to make any real dent in the extent of regional disparity we must have an expanding national economy to serve as a basis. If the minister foresaw all this, what new measures have been announced by him, by the Prime Minister or by the Minister of Regional Economic Expansion (Mr. Jamieson) to offset the effect of higher interest rates on areas of slow growth? What new measures has the minister announced to ensure a solid base for the reduction of regional disparity if he foresaw all these increases?
I would not want to question the word of the minister, but I find it difficult to believe that when these policies
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Cost of Living
were developed he actually foresaw the jump in the bank rate that has taken place this day. If he did, he must have seen the disadvantages that would be created for the slow growth areas of the country and homeowners, and should have taken steps to offset them. Higher interest rates have never been effective in containing inflation. This has been recognized by the International Monetary Fund which just last weekend recommended that governments should consider additional incomes policy measures to supplement the measures traditionally used because the traditional measures have not worked.
I agree that if you create enough employment you can very simply eliminate inflation. But, Sir, our labour force is increasing rapidly and we need rapid growth in the economy to create new jobs for people entering the work force. Surely, we are not going to go through the experience of recent years again when a large rate of unemployment was created through 1969, 1970 and 1971 in order to fight inflation. Since then, we have lived with a high rate of unemployment which has never been overcome despite the boast of successive ministers of finance, particularly with regard to the young and particularly in the disadvantaged parts of the country.
The Minister of Finance is not even prepared to bring in a budget in view of the conditions that now exist. Unemployment stands at 5.5 per cent seasonally adjusted, and it is my recollection that at the time of his budget the minister said that he anticipated unemployment, seasonally adjusted, would fall below 5 per cent by the end of the year. Here it is, Mr. Speaker, at the same rate as it was at the end of March with inflation at a rate well in excess of 8 per cent per year and, in terms of the past months, over 15 per cent. And the minister is saying that he has foreseen all of this.
How long ago did the minister foresee it? Was it at the time of his budget in February? Did he foresee then that inflation was going to reach an annual rate of well over 8 per cent in a year? That budget in any event was a failure as regards inflation. Did he present that foreseeing the conditions that now exist, the present rate of unemployment associated with the current rate of inflation? I find that very difficult to believe. That budget was not effective to deal with conditions as they existed in February, and it certainly is not appropriate to cope with the very different circumstances that exist today.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I give the minister sufficient credit as a humanitarian not to have foreseen those circumstances. I ask the minister why he comes before this House today, after that budget of February, after an increasing rate of inflation month after month after month and increase after increase in the bank rate, saying that he foresaw it all the time.


John Napier Turner: Mr. Speaker, a point of order. I think the hon. gentleman wants to quote me correctly. In answer to questions he put to me today, I said that the government foresaw the effect of statistics published today on the cost of living because they showed what had been happening in August. That is all I said.


Robert Lorne Stanfield: Mr. Speaker, I have no inclination to exaggerate what the hon. member said.


Mr. Speaker:: Order, please. I apologize to the hon. Leader of the Opposition (Mr. Stanfield) and to the Minister of Finance (Mr. Turner). I hope we will not get to the position we were in during the question period when we had interruptions and calls. I suggest to hon. members that perhaps whoever has the floor from time to time should be allowed to make his contribution to the debate to be followed by whoever might want to reply.


Robert Lorne Stanfield: Yes, Mr. Speaker, I will give the minister an opportunity to reply to anything I say from time to time. I simply say the minister is now confirming my point. At the time of the budget he did not foresee these conditions. The budget of February and the budget we are now living with are not appropriate to the conditions that exist. It is not for the Minister of Finance to pretend that he has no obligation to come before this House with measures that are appropriate rather than the hodgepodge that he and the Prime Minister produced last week.
There is no greater evidence of the government's lack of concern and lack of understanding of policies than that which is found in the statement which the Prime Minister (Mr. Trudeau) made to a panel of journalists interviewing him on a weekend television program during the election campaign last fall. At that time, the Prime Minister said he did not think it was shocking to see food prices go up. He thought it was good for the farmers. As a matter of fact, as the record shows, the Canadian farmer is just as much a victim of inflation as the retail consumer, the Canadian wage earner, the pensioner or anyone else.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: With regard to the milk arrangement announced by the Minister of Agriculture (Mr. Whelan) today, my party certainly approves of any effort such as this to reduce and hold down the cost of milk. We approve of the use of government funds for this purpose. We made it very clear that we approve of this, but we do not approve of the farmer being stuck with making up the difference, operating under a fixed price and having to absorb the extra costs. We believe it is unfair to apply a price freeze on a particular product without at the same time limiting in any way the farmers' costs. That is what is unfair. The record shows the Canadian farmer as being the prime victim of the policies of this government.
This government talks about the importance of expanding production. Who brought in the Lift Program? Who implemented this disincentive? Who dumped the reserves at firesale prices? Who today cynically bemoans the world situation as a problem of someone else's making? In October 1972, who but the Prime Minister could say that rising food prices were good for the farmer and in September, 1973, announce a policy involving farmers subsidizing other Canadian consumers?
The government is back on the supply kick. The cry is, grow all you can. Has the Canadian farmer been given the advantage of fast write-offs? I direct this question to the Minister of Finance (Mr. Turner). He provided fast write-
September 13, 1973

offs for manufacturers to encourage production and employment. Has the Canadian agricultural producer been given similar treatment with regard to his equipment? Of course not! Has anything been done by way of an over-all policy to stabilize the farmer's input cost? Has anything been done to ensure that farming will be attractive to our young people? The government's credibility is not high anywhere in this country. It deserves to be low in the agricultural community.
This is the same government using the same discredited methods of high interest rates that were used in 1969 and 1970. When unemployment was running at about 7 per cent, the Prime Minister said he would not hesitate to again use the same methods to deal with any renewed inflation. We see the government today again using the same methods. It is the same Prime Minister who said earlier he would not lose his nerve if unemployment rates went over 6 per cent. This is the same pattern all over again with the same disastrous results becoming evident day by day.
There are two distinct differences in the circumstances this time. In 1969, the government launched its battle against inflation at a time when the rate of unemployment was below 5 per cent. It is making this mistake all over again in 1973 with a floor level of unemployment in excess of 5 per cent. We know the way unemployment climbed the last time. What are Canadians to look for now in this re-enactment when unemployment rates are much higher at the outset?
In 1973, this parliament should do more than talk as it sees history repeating itself. We know the consequences of such a repetition. This parliament can act. As we see this confused government again resorting to outdated, inhumane knee-jerk economic policies, we should act and remove this government from office. This country cannot afford a government flying by the seat of its pants. I say it is time for a good swift kick in its pants.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister said today that he anticipated these figures. The policy announced by himself and the Prime Minister was not greeted with any great applause, even by fans of shrewd political tactics. There are too many serious consequences involved in this kind of makeshift effort. There is a move to more selective controls in a most distorted fashion. There is a shift toward a kind of isolationism when we should be joining with our partners in an approach. Confusion and contradiction is being placed before a country which is looking for confidence and leadership. In June, the Minister of Labour (Mr. Munro) told his constituents, and I quote:
-we found it necessary to establish a prices review board.
He did not say it was a toothless kind of food prices review board. He went on to say:
We are hoping that this will have a strong effect in limiting prices. The government also has a contingency plan if for some reason this board fails in its effort to control prices. The contingency plan would involve the establishment of a form of wage and price control, which you have shown your concern for in the last questionnaire which was returned to me.
I cannot begin to say all I would like to say. However, a year ago when the cost of living was showing a year-to-
Cost of Living
year increase of 4.7 per cent, I expressed concern about the danger of a full-blown inflation psychology taking hold in Canada. That concern is vindicated again in today's cost of living statistics and the announced increases in interest rates.
I hope no one in this government tries to pretend this is simply a question or rising food costs. The rise in food costs is very serious and most shameful, but the increase in the cost of living index on items other than food is now very rapid. It is at the rate of 6 per cent a year. Further advances in interest rates, housing costs and clothing costs once again show the government's fixation on an ineffective review board dealing solely with food prices to be shameful negligence. It is surely an unprecedented shame to have the cost of living climbing 8.3 per cent over the past year, over 15 per cent this month, while unemployment stands at 5.5 per cent. It is an unprecedented shame for that to have happened.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The Prime Minister and the Minister of Finance said they foresaw this. Having foreseen it, they produced this tawdry package of measures which are inadequate to provide some stability in this country or deal with the malignant problem facing Canada today, a terrible rate of inflation associated with an unacceptable rate of unemployment.


An hon. Member:: What do you have to offer?


Robert Lorne Stanfield: The hon. member knows perfectly well what I have to offer.


Some hon. Members:: Hear, hear!


John Napier Turner: Mr. Speaker, after listening to the Leader of the Opposition (Mr. Stanfield) one can understand why he was satisfied with a limit of 20 minutes. He reminded me very much of somebody trying to kill a penalty, looking up at the clock hoping he could survive that period of time.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: On a point of order, Mr. Speaker. For the second time the Minister of Finance (Mr. Turner) has made something of the point that I have not asked for extra time. I wish to say simply that I do not presume upon the rules of the House, and I hope the Minister of Finance will not do so either.


Mr. Speaker:: Order. Before the minister resumes, I think I should again remind the House that hon. members who have been given the floor should have the opportunity to complete what they have to say without too many points of order and interruptions.


Some hon. Members:: Hear, hear!


John Napier Turner: I recall that the House used to extend its indulgence by allowing speakers who led off debate for all parties to complete their speeches.

September 13, 1973
Cost of Living
However, I can understand the hon. gentleman not wishing to continue that tradition.
What this debate is again about is a difference in analysis as to the cause of the rise in the cost of living in this country. Although, as the Prime Minister (Mr. Trudeau) said again today, the government has undertaken contingency plans for price and incomes control we have concluded, and repeatedly said to the House, that in the circumstances which have existed in this country and in the world up to the present, controls would bring about no lasting improvement in our price performance and that they could, indeed, do considerably more harm than good, a danger which has been borne out by the experience of the United States.


An hon. Member:: I think not.


John Napier Turner: The basic cause of the inflationary pressures which have faced sus up to now has been the world imbalance between demand and supply in relation to a large number of agricultural and industrial commodities. This is a problem which could not possibly be resolved in an effective way by the imposition of price and wage controls. If the cause, as we analyse it, is insufficient supply and overwhelming demand, the imposition of controls imposed against that supply would not increase the supply but discourage it.


Some hon. Members:: Hear, hear!


John Napier Turner: The experience of controls both in the United States and the United Kingdom has made it conclusively clear that in a situation where supply fails to meet demand controls are no solution to inflation. I have always recognized that if it became evident that the fundamental nature of the problem had changed, that the main source of inflationary pressure was arising not from a shortage of world commodities or not from an imbalance between world supply and demand but primarily from a domestic spiral of cost and prices, to policy response of the government might well be different. But on the basis of the facts as we see them we do not believe the solution is that suggested by the Leader of the Opposition (Mr. Stanfield).
The major aim of a long series of government policies has been to encourage an increase in supply through the expansion of our productive facilities, an increase in supply so as to get to the root of inflation and ease the pressure of rising prices on the budgets of Canadian families, particularly those on low and fixed incomes and the prevention of any attempt to exploit inflation by profiteering. These policies are not band-aids as suggested by the Conservative leader. They represent carefully selected, carefully coordinated measures, more comprehensive than anything the hon. gentleman has put forward even within the terms of the hon. member for Temiscamingue (Mr. Caouette). The Leader of the Opposition made much of the forecasting. But any reasonable Canadian could have arrived at what was happening to meat prices, what was happening to food prices generally, what was happening to world commodity prices.
Any reasonable Canadian, Mr. Speaker, would have known that the statistics reflecting the situation in the first week of August and published today would show an

inordinate increase in the cost of food and in the cost of living. No magic ball was needed to make such a forecast. No superhuman gifts were required to make such a forecast. For the hon. gentleman to express surprise at those statistics today, knowing that parliament and the country were dealing with these issues both this week and last week, knowing the government announced its program on August 13 and again on September 4 in recognition of those very facts, is phoney and just doesn't stand up to examination.


Some hon. Members:: Oh, oh!


George Harris Hees: What are we going to see a month from now?


Mr. Cafik:: On a point of order, Mr. Speaker. With all respect to the hon. members of the House, may I say I listened with attention to the Leader of the Opposition and I should like to hear what the Minister of Finance has to say. I ask members opposite to allow the rest of us to listen.


Some hon. Members:: Hear, hear!


George Harris Hees: Tell us what we are going to see next month!


An hon. Member:: Why don't you shut up?


Mr. Speaker:: On the point of order raised by the hon. member for Ontario, I would refer hon. members to Standing Order 12 to the effect that when a member is speaking no member shall interrupt him, etc. All members should read that standing order sometime. I believe that when a member has the floor he can, perhaps, expect some degree of good-natured interruption, but I really feel we are not achieving very much for the decorum of the House and the orderly conduct of our business if, when a member is speaking, there are shouts, interruptions and catcalls which contribute nothing to the debate and which make it very difficult for the Chair to hear the member who has the floor.


Some hon. Members:: Hear, hear!


John Napier Turner: I want to thank the hon. member for Ontario (Mr. Cafik) for his intervention but I assure him that, for the moment, I do not think we are in any trouble here. I would hope that as the clock ticks on Your Honour will take into consideration, with your usual generosity and impartiality, an extension of the time available to me.
In furtherance of these objectives, in order to increase supply, which is the only really effective antidote to the imbalance of world supply and demand affecting Canada and as a means of protecting Canadians, particularly those on fixed and low incomes, against the erosion of the dollar, the government has consistently, in both budgets, and again in the measures announced on August 13 and September 4, followed and implemented the following policies: the budget measures reduced personal taxation by $1,300,000,000, putting that money back into the pockets of taxpayers for a maximum of $500 and a minimum of $100.


Some hon. Members:: Hear, hear!
September 13, 1973


John Napier Turner: We abolished the sales tax on all children's clothing and on all food and drink except alcohol. We reduced tariffs in a temporary way on $1,400 million worth of goods to increase supply and encourage the competitive factors in the economy. We increased equalization payments by $190 million to allow the so-called have-not provinces to redistribute a greater amount in property taxes for school purposes back to their own citizens.


Some hon. Members:: Hear, hear!


John Napier Turner: We implemented full indexing of old age security payments and guaranteed income supplement to compensate pensioners and those on fixed incomes against the rise in the cost of living. We escalated that index. We liberated the Canada Pension Plan from the 2 per cent limit and we are proposing that this, too, be indexed. A number of provinces are considering increasing social assistance payments which are shared 50-50 with the federal government under the Canada Assistance Plan to offset the impact of inflation. We reduced the tax burden on manufacturers and processors and tried to help them modify prices. We set up the Food Prices Review Board.


Some hon. Members:: Oh!


John Napier Turner: We imposed temporary export controls on cattle, hogs, beef, pork and a number of feed grains to prevent world-wide export demand causing shortages and sharp rises in prices in Canada. We proposed an increase in family allowances to $20 a month, beginning in 1974, and we have just instituted on a temporary basis for three months, non-taxable interim payments of $12 per child. We instituted a policy of subsidies to militate against the rise in the price of bread and, with the co-operation of the provinces, against the rise in the price of milk. We eliminated capital gains tax from the family farm to ensure that people remain on the farm and that we encourage agriculture.
I could go on with this catalogue, and I understand how unpallatable it is for members of the opposition; but when the reckoning is made the Canadian people will consider each one of these items as a legitimate step in the fight against inflation. I submit to Your Honour that, taken together, all these several measures adopted over the past several months, and I have not been able to list them all, add up to one of the most intensive and far-ranging programs-I was going to say "comprehensive", but the hon. gentleman has diluted the significance of that term beyond recognition-to deal in a workable and realistic way with the kind of inflation we are now experiencing and in moderating its effects upon Canadians.
The hon. gentleman brought into the terms of his motion the rise in the bank rate and the rise in the prime rate by the chartered banks of this country. I believe that most members have a copy of the release of the governor of the bank published last night in which he said that the action was made necessary by the pressure of financial markets, which has led to further increases in short-term interest rates, including those which were announced yesterday by
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the chartered banks. In his release he says that the upward pressure on short-term interest rates came not only, as I said earlier in the House, from the strong demand for credit in Canada, but also from the much higher levels of short-term interest rates in many other countries. This meant that this differential in rates, particularly in the short term, tended to generate international flows of funds which were adding to the pressure of demand on domestic markets and in the foreign exchange markets. The Governor emphasized, and I repeat, that the policy of the Bank of Canada continues to be directed toward moderating the unusually rapid growth in bank credit and money in Canada while still leaving scope for money growth adequate for continued expansion of employment and output. Those words are his.
The hon. gentleman again says that this is a program of tight money, and his colleague from Calgary North (Mr. Woolliams) suggests the same thing. I do not know what the hon. member for Don Valley (Mr. Gillies) is currently thinking about this subject. When the monetary supply is expanding at an annual rate of 15 per cent, and when chartered bank loans are expanding at an annual rate of 24 per cent, I say that is not restricting the money supply. Indeed, the money supply may well be expanding too rapidly.
I agreed to allow the banks to raise jointly their rates on certificates of deposit. Certificates of deposit are the instruments against which banks borrow money on terms up to one year. I allowed that rate to go from n'A per cent to 8I/2 per cent. I did that because short-term rates had outrun them. The shortage of funds that I have described, because of the disparity in short-term interest rates between Canada and the United States, the three point differential with the United States, and the four to five point differential with Europe, had put restraints on our money markets and on our ability to accommodate an expansion of the economy.
In return for that, I asked the banks to take a look at their profit picture and to ask themselves whether these spreads between what they pay for money and what they charge for money which they lend could not be narrowed. The certificate of deposit rate was raised one per cent and the prime rate was raised three-quarters of one per cent, so we narrowed the spread from one per cent to three-quarters per cent.
With regard to loans under $200,000 for small businesses, they raised the prime rate only one-quarter. In other words, the differential was narrowed from one to one-quarter of one per cent. They gave me an undertaking that as far as mortgages were concerned they had no present intention of raising the rates and that they would continue to inject a reasonable amount of funds into the mortgage market. In any event, the banks have narrowed their spread.
May I tell the hon. member for Oshawa-Whitby (Mr. Broadbent) that, in terms of the amount of money that the banks are now putting into the mortgage market, when my predecessor the present Secretary of State for External Affairs (Mr. Sharp) released the 6 per cent limit on bank rates in order to allow the banks into the mortgage market to compete, the banks were not participating in mortgages significantly at all. In fact, their participation was virtual-

September 13, 1973
Cost of Living
ly zero. Since 1967 the banks have entered the mortgage market. Last year the annual rate was $3 billion. This year the amount of funds put into the residential mortgage market is $4,100 million, an increase of $1,100 million in a single year.
I now want to deal briefly with the comments of the Leader of the Opposition about unemployment. I have said in the House that I am not satisfied with the seasonally adjusted unemployment rate any more than he is. But to attribute that, as he attempted to do, to weakness in the economy is just not consistent with the facts. I think we are entitled to look at the number of new jobs that the economy has created. I have told the House, and I now repeat, that comparing August 1973 with August 1972 the number of new jobs in this country is 464,000. That is an extraordinarily high increase in the employment rate.
If 1 can take the first quarter with the second quarter, I have said in the House before that when you take the rate of growth in real terms over the last quarter of 1972 and the first quarter of 1973, discounting inflation of 12 per cent, that rate of growth could not possibly be sustained without damaging the economy. The second quarter taken together with the first quarter-


Robert Lorne Stanfield: Take it by itself.


John Napier Turner: Very well; taken by itself it is an inevitable result of the shortages of materials, bottlenecks in production, of a necessary levelling off of the economy. Taking the first two quarters of this year, the economy has been growing in real terms, discounting inflation, of 9.4 per cent seasonally adjusted. I stick to the prediction that I made in this House on February 19 when I brought down my budget that the real growth in this country for the year will be 7 per cent. I still hold to that.
The Leader of the Opposition has fun saying that we should blame the weather, blame strikes and so on. I also said in my budget that when you try to attempt to predict what the economy is going to do you are dealing with human affairs, not dry statistics. The problems in this country are not simply statistical; any economist must learn that. The problems of this country are human problems. When you look at what the economy can do, you have to judge on the basis of reasonable management-labour peace; you have to judge on the basis of reasonably good crops; and you have to judge on the basis of reasonable international stability. As the Prime Minister pointed out earlier this afternoon, the economy is not static, it is continually responding to human affairs, both domestically and internationally. Therefore, if any of those bases to which I have referred are interrupted or interfered with, then that affects one's forecast and that forecast has to be adjusted.
In summarizing, Mr. Speaker, may I say that the type of inflation that is facing us the present time is caused by the simultaneously strong demand everywhere in the world for a limited supply of goods. No one country alone can stem that tide. While the Conservative leader may want to pose in cosmetically political terms as a King Canute commanding the world-wide inflationary waters to recede from Canada, 'when we are one of the great traders of the world involved with world prices, if he thinks that that is going to command the support of the sensible majority of

the Canadian people at this time, then I do not believe he is thinking in politically realistic terms.
The government is doing everything reasonably possible to maximize our own supplies, in the process increasing national output and incomes and employment, while at the same time minimizing the erosion of the incomes of those who stand to be most hurt by inflation. It is important that we ensure that our rate of inflation in Canada does not significantly exceed that of our leading industrial competitors. That puts a heavy responsibility on all Canadians. It puts a responsibility on business not to seek to raise prices in order to meet every rise in costs. But their profit picture is improving. It puts a responsibility on labour to ensure that, although they get a just return, they do not try to escalate that return. It puts a responsibility on governments, federal and provincial, not to aggravate inflationary pressures. If this is not done, the result of such a course could only be an accelerating spiral of costs and prices that would intensify inflation, jeopardize Canada's international competitive position and impede the growth in future of production and employment. We have been down that rocky road before and I do not believe many Canadians want to travel it again. I hope and I believe that we Canadians have enough plain, ordinary commonsense to avoid that destructive course, and instead that we are going to work together under realistic policies to meet the world as we find it and achieve the goal of steadily improving a standard of living that all Canadians can share.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, the debate on the cost of living in Canada has unfortunately taken on an aura of windy familiarity; a windy and unsubstantial familiarity, I might say. Nothing new has been added during the debate on this subject which actually began last Monday. On the one hand, the Leader of the Opposition (Mr. Stanfield) has reiterated Conservative policy of systematic controls on everything in the country, systematically disregarding all the available evidence as to the utter disaster resulting from such controls in the United States and in Great Britain, and thus totally ignoring relevant evidence which it seems to me any responsible political party should be considering before offering a convenient political gimmick that may or may not be appealing to some sections of the population of Canada. On the other hand, we have heard the Minister of Finance (Mr. Turner) in reply deal with nothing new, except to point out in reference to interest rates what his government did a few years ago in allowing the banks to get into the mortgage market. I want to deal with that point at some length in a moment.
We watched the Minister of Finance provide great emotional blather for his Liberal troops by referring to the contradictions offered by the Leader of the Opposition,.1 without announcing anything new in the way of policy. The Minister of Finance has correctly reasserted that his government has taken steps to ease part of the problem of inflation in terms of the incomes of our senior citizens, the incomes of our veterans and the incomes of Canadian families by way of family allowance increases, and so on.
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The government has taken some steps, and in any honest appraisal of what this government has done compared with other governments elsewhere, certainly in terms of comparison with the kind of massive controls proposed by the Conservative party, these have to be acknowledged and some credit has to be given.
I remind the Minister of Finance, however, that when he denigrates the Conservatives and then talks about imposing selective controls, in which we believe, it is his government that has refused to put teeth into the Prices Review Board, one creation he cited as one of the government's courses of action. His government refuses to put teeth into that board, giving it the authority to roll back prices where profiteering or price gouging can be shown to exist. Where this government has failed to act it must be held responsible. Of course, the Conservative party, when it had the opportunity to put its vote where its mouth has been recently, refused last week in the Food Prices Committee to support an NDP motion which would have had the effect of putting teeth in the Prices Review Board.


Some hon. Members:: Hear, hear!


John Edward Broadbent: In the time I am allowed today I want to say something in concrete terms, for a change in this debate, and put forward some specific proposals to deal with a major aspect of the cost of living, namely housing.
In spite of all the talk, understandable and acceptable talk we have heard about food costs, which have been increasing, particularly in the past month, I would remind the Minister of Finance and other members of this House that according to the monthly breakdown of the consumer price index by Statistics Canada, which shows how the average family spends its money, housing is a much more important item. The report indicates that 31 per cent of those points allocated to the cost of living by Statitics Canada are related to housing. Only 25 per cent of the average family's typical budget goes toward food. That was the reason for my motion today under Standing Order 26 on behalf of the NDP. I suggest we should zero in on the important question of housing costs, and that we should deal with interest rates, particularly mortgage interest rates, because these affect every Canadian whether he lives in rural or urban Canada.
It is in this precise area, no matter what else the government has done in other areas, that the present government has demonstrated a clear bankruptcy of policy. In passing, I would suggest that the Conservative party has not offered one shred of evidence that its alternative policy would result in any improvement over the government's policy.


John Patrick (Pat) Nowlan: Why don't you go to the conference this weekend and give them some ideas?


John Edward Broadbent: Listen, my friend; I will try to do precisely that in the next few minutes. The present government in terms of its housing policy, and I should say that the Conservative party when it was in office from 1958 to 1962 followed exactly the same policy, has really determined a national housing policy in Canada by acting wrongly on the basis of two combined principles. First, the government has used housing, and we see this in the interest rate situation that exists today, as an instrument
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for stabilizing the Canadian economy. Second, the government has relied on incentives as the key to the financing of housing in Canada. The combination of these two approaches is exactly what has put housing in this country out of the reach of the vast majority of our families.
The grotesque, and I use that word with care, injustice of using housing policy as one instrument in monetary and fiscal policy should be clear to all Canadians. When we think of housing in comparison with schools, would any government in Canada think of tightening or loosening the screws on the building of schools as a response to an inflationary or deflationary situation in the economy? I hope no government would do so, and I expect none would as the population of Canada would not accept that kind of policy. People in Canada have come to expect that schooling is a basic right of everyone, and they would throw out of office any government which decided to build or not to build schools on the basis of an inflated or deflated economy.
I suggest that this government and its Conservative predecessor still maintain that approach to housing. If this is the time to deflate the economy, as obviously it is according to the understanding of the Minister of Finance, instead of separating mortgage interest rates, for example, from the rest of the interest rate structure, and I will come to that in a moment and show how it could be done, he leaves mortgage interest rates as part of the general interest situation.
The Minister of Finance rather proudly suggested a few minutes ago that the banks in Canada, those noble institutions, were going to guarantee that mortgage money would continue to be available. What he neglected to mention, of course, is that they will guarantee the availability of that money at 10 per cent, which is just short of the highest mortgage interest level in Canadian history. If the interest rate increases announced yesterday by the banks are allowed to take their course, I predict on the basis of a small "c" conservative estimate that within a month the NHA mortgage rate will hit 11 per cent in Canada which will be the highest level in respect of NHA rates in the history of the country.
This government should not take any pride at all in such a course. The Minister of Finance alluded with some pride to the fact that a few years ago the banks were encouraged to enter into the mortgage market. He was quite right. They were encouraged by this government. That is only one part of the whole series of profit-based methods which this Minister of Finance and his predecessor used to deal with housing. I should like to show how that led to the very high cost of housing we have in Canada today. It is typical of this government and its Conservative predecessor that instead of dealing with housing in the way in which we deal with schools, on the basis of need, they try to generate housing on the basis of profit incentives. This has not worked.
First, in 1967 the Liberals freed the bank rate for mortgages which had been fixed at 6 per cent. They thought this would bring down the price and increase the supply. In 1969, on the recommendation of the then Liberal cabinet minister responsible for housing, the hon. member for
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Trinity, (Mr. Hellyer)-he is perhaps as comfortable in the Conservative party as in the Liberal cabinet-the NHA lending rate which had been fixed at 6V2 per cent was released and permitted to be established by market forces. Again in 1969, and again on the advice of the hon. member for Trinity, the roll-over principle was added to mortgage financing. This enabled a renegotiation of the interest rate on a mortgage every five years. At that time he said that if interest rates went down people would be able to get a lower interest rate on their mortgage after five years. Of course, interest rates have have never gone down but have gone up constantly. Finally, in the spring of this year, Bill C-135 was introduced as a new and exciting measure intended to bring millions of dollars into the mortgage market! Once again, in the words of the present minister in charge of housing, the basic principle involved in the bill was "enhancing the attractiveness of mortgage investment". What that means, of course, is to provide more profits to induce more capital.
What has this series of four steps over the past six or seven years of the Liberal government, incidentally supported by the Conservative party, led to? First of all, the most important and negative effect of these profit-oriented initiatives was to destroy the moderate and low-income housing market in Canada. By generating a significant increase in mortgage funds at unrestricted rates of interest, builders and land speculators in Canada were encouraged to concentrate on high-priced housing where profit margins are greater as everyone knows. This meant that during the Trudeau years, 1968, to 1973, moderately priced housing almost disappeared from the private market. So far in this year, the national average price for housing has gone up by a further 18 per cent. The sole beneficiaries of this kind of policy are the wealthy, either as consumers of expensive housing or as controllers of the building industry.
Like previous tinkering with the mortgage market the minister's new bill, which we have been told will be brought back to the House next week, will be great for investors but will not be helpful to the average Canadian. The minister expressly stated that his proposal entailed no direct market intervention by the government either to stabilize the price of mortgage funds or to ensure an adequate supply. In other words, the government will not ensure that mortgages will be available to those who need them at rates they can afford. Conservatives, I might add, support that bill completely. Under the government's proposal, housing investment would be permitted to seek its maximum profit level without any consideration of social need. From the point of view of investment, housing will remain essentially a commodity like soap, beer or deodorant. If it pays, money will come in and the consumer will be charged what the traffic will bear.
It is no wonder that the financial community in Toronto and elsewhere expresses support for the legislation and urges members to give it speedy passage. It is no wonder also that the Conservative party has added its support. The simple fact is that the market method of dealing with mortgages has not worked. As I said a minute ago, with the interest rate announced yesterday by the Bank of Canada I predict that we will have an NHA mortgage rate of 11 per cent within a month. What this policy has meant is not more housing for the average Canadian but rather

the highest profits for the banks and financial institutions in the history of Canada. Bank profits between 1967 and 1971 increased-at an annual average rate of 19 per cent. Between 1971 and 1972 bank profits increased by 20.4 per cent. The Toronto-Dominion Bank, the Bank of Montreal and Royal Bank showed mid-summer increases of 50 per cent, 46 per cent and 37 per cent respectively.
During the period betwen 1966 and 1971, the profits of the banks in Canada increased by 85.3 per cent compared to other sectors of the economy, such as industry, where profits increased by 14.3 per cent, manufacturing where profits increased by 11 per cent and mining where profits increased by 10.2 per cent. Because I wish to make a specific proposal, I shall omit further documentation of the fantastic rip-off that has been accomplished by our financial institutions. I say with all seriousness to the Minister of Finance and to the Conservative Party of Canada that far from leading to the production of more houses which the average person in Canada could buy, the whole reliance on the profit incentive, the whole basic decision to leave mortgages within the market system has simply led to the highest profits in the history of this country for our financial institutions.
I wish to make a specific proposal now. It should be clear, if the government wishes to act in order to provide housing, that it could take the following four steps and in that way do something in the days ahead to provide the necessary housing for those who need it. First, the federal government should establish a central mortgage fund section within a newly constituted ministry of housing and urban affairs. This section would direct banks and other federally-chartered financial institutions to allocate a substantial portion of their annual investment to residential mortgages at a rate not exceeding 6 per cent. Second, the mortgage allocation requirement for each lending institution would be related to the level of its own annual investment, to its liquidity needs, and to the national housing needs for a given period. Third, the regional and income distribution of mortgage funds would be determined by the minister responsible for housing. All Canadians would be eligible for the 6 per cent mortgages but priority in allocation would go to those of average and below average family income. Fourth, if the approved lenders, such as the banks and trust companies, do not allocate their housing mortgage quotas, they will be required to transfer the unfulfilled portion of the 6 per cent interest rate to the central mortgage fund which will lend the funds directly to implement the established housing priorities.
If this four-point program were implemented by this government or by any other government it would save the average family about $1,000 a year in mortage payments alone. This approach must be considered along with other steps which must be taken in respect of housing, but if implemented it would begin to establish housing policy on the basis of social need and social priority on a parallel with medicine, which we have taken out of the market, and on a parallel with schools which we took out of the market sometime ago. I say that this kind of action is long overdue. The present policy of the government, which refuses to extricate mortgage money from other interest rate considerations, will serve only to perpetuate profits by our banks and will not provide homes for people who
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need them. If the government wants to take a step now to deal with inflation, a step that would be relevant to most Canadians, it should accept a number of the suggestions I have just made and bring in legislation in the next few weeks. We would guarantee speedy passage, and I am sure that Canadians from coast to coast would be pleased.
[ Translation]


Roland Godin: Mr. Speaker, we have before us a motion enabling us to discuss the uncontrolled and inflationary thrusts, as shown by the figures on the cost of living.
Mr. Speaker, as most people do we are wondering if the government can do something. It is obvious that the government could act and if no efficient step has been taken up to now it is not, in my opinion, due to a lack of authority or information, but it is rather a form of inaction bordering on complicity and, in the present system, I suppose, similar conditions must be expected.
In short, this government having been elected by financial magnates, it is clear that they must be reimbursed now and they must even make reserves in anticipation of the next election.
It is true that the government has recently adopted legislation to fight inflation. However, we can rightfully be in doubt about the outcome of these measures. The proposed aim may appear honest, but the expected outcome may not only take long to materialize but fail completely because some of these steps seem to me to be based on wrong assumptions. And among those which are offered now, I take the liberty of singling out some reports published by Statistics Canada, including last spring's edition which argued that the cost of living had increased by 41 per cent since 1961.
Together with the majority of the people, I claim that the published figures are completely wrong, ridiculous and unrealistic. We know quite well that in 1973, we cannot buy with $100 what we could obtain for $50 in 1961. On the other hand, a survey made recently by an independent firm, still honest apparently, claims that in 1949, for instance, it cost a family of four $47 a week to live whereas today the same family spends $147.
However, to come back to Statistics Canada, I take my hat off to the officials who amuse themselves juggling around consumer price figures. The reports and figures of those civil servants prove that they are real acrobats. They adjust figures, start their calculations over again on the basis of that ingenious device called the "consumer price index" which dates back to 1939, that is, the year where economists playing heads or tails decided it would serve as basis for graduating the economic thermometer. The scale was based not on the sea level, nor did it start at zero, but on the figure 100. That had been selected as a basis from which they would play at adding or subtracting, according to any decrease or increase in prices.
In 1949, the indicator had already gone up to 169 compared with 1939. The government of the time then wisely took the decision of bringing the indicator back to 100, that is without taking into account increases registered between 1939 and 1949.
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In 1961, the thermometer was already up to 129. The government therefore plucked up courage and, facing its responsibilities, took a decision heavy with consequences, that is to base again the scale on the figure 100.
Since then, about fifty investigations have been launched by the government to study all kinds of things, including poverty and all the other problems which could be of interest to the population. Eventually, in July 1973, the index, which had come down to 100 in 1961, had gone up to 151 already, which amounts to 193 as compared with the figure of 100 selected for 1949.
Mr. Speaker, if I allow myself to question those figures, it is because the events are offering me the opportunity. Since then, those belonging to mighty unions, for instance, besides asking for increased salaries, are now adding another parameter, namely the cost of living. A union leader was saying a few days ago that the increase in salaries obtained by united workers with great difficulty for a period of three years had been completely nullified. However, those working for big companies, or who are members of big unions, succeed in negotiating, and will be able for some time still to cope with the rise in the cost of living. However, we should seriously think about the nonorganized, about those whose salary has been frozen for years and also about the pensioners whose income has been frozen for years even though they must pay for a loaf of bread the same price as those earning over $200 a week. Thousands of average salary earners are today poverty striken.
In my opinion, one of the reasons for this inflation is because we are still living under a monetary system which was tried 100 years ago and received no improvement while, in the meantime, everything was modernized. Everything is going fast whether it be in the field of trade, industry or any other area. But thanks to all kind of innovations, thanks to science, the average citizens should expect their working hours to be reduced and to enjoy longer vacations. The worker is no longer alone; he is assisted by all kind of machines. From the most modern computer to the heaviest machines, the white collar, the worker and all classes of society should benefit from marvelous inventions.
Unfortunately, the contrary is happening. The man replaced by a machine becomes unemployed. The man who sees all kind of new methods used finds himself without work and, unfortunately, those lucky enough to be on a pay list have to pick up the tab. This money used to pay for social welfare benefits, unemployment insurance benefits, pensions of all kinds, is taken from the wallet of those who are working. Financiers and big companies have been exempted from taxes at the expense of the worker. In 1940, the tax percentage paid by the worker was 40 per cent; it is now over 80 per cent. This is one more reason for inflation.
Finally, we also know that the worker who had to borrow to build his house has to pay for it three times over. He will pay the actual price to the builder of the house and twice as much to the finance company. So, in addition to paying his house three times, the man who has a job must pay for everything given to his neighbours. It is to break that vicious circle that we Creditistes propose that the amounts paid out in the form of pensions of all kinds in Canada be taken out of new credit.
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There was talk about freezing prices and salaries. Mr. Speaker, if interest rates on bank loans are not to be frozen, if taxes are not to be frozen, why pick on salaries which represent a very small percentage in comparison with sale prices on finished products. We know that in the United States, for example, in the heavy industries the percentage of salaries represents only about 3 Vi per cent and in Canada, we also know that in the heavy industries the percentage of salaries included in finished products represents only about 4 per cent, whereas, for example, the cost of salaries in comparison with the cost of producing food for major industries represents only 8.8 per cent of the value of those products sold on the market, the profit on the other hand being 25 per cent, and it is 66 per cent ssn the cost of raw materials.
Mr. Speaker, in view of those facts, it would actually be criminal and inequitable to consider imposing a ceiling on salaries, since the sore is not there.
Since according to the present pricing system, the public must assume all the production costs for a given period when it should only be paying for the total consumption during this period, the purchasing power/production cost-s/sales price ratio would be better balanced if current wholesale prices were modified by means of subsidies like those that the right hon. Prime Minister (Mr. Trudeau) has already started to suggest, so that the relation between modified and current wholesale prices be the same as that between total production and consumption.
Therefore, Mr. Speaker, we Creditistes recommend that this adjustment to the economy be made along these lines: First, wholesalers could be asked to register at their bank to obtain the subsidies related to wholesale prices. Second, registered retailers would commit themselves, according to the registration, to maintain all their gross profits at a rate not exceeding the rate agreed to, after consultation, as being the equitable rate of profits within their respective group.
They would also be required, as an evidence that they complied with their commitments, to submit twice a year a duly audited financial statement.
Third, these retailers would in turn be allowed to sell their goods at a discount price, according to the above mentioned formula, at a rate that would be regularly announced by the Bank of Canada.
Let us assume, for instance, that this rate is set at 25 per cent; retailers would get 75 per cent of the price of their goods from the public at large and 25 per cent from their bank, that would be reimbursed in turn under an agreement with the Bank of Canada.
Fourth, together with the passage of the above mentioned measures, all rents, wages and salaries could be reduced by, say, 10 per cent, which would reverse the inflationary trend that results from increasing costs of production. Needless to say that before reaching that point, the corporate income tax and the sales tax would have to be reviewed. And as far as the sales tax is concerned, it would even be desirable to abolish it.

Mr. Speaker, this price adjustment I have underlined cannot be implemented before a change is previously made in the financial system.
We Canadians remember the commitments of the right hon. Mackenzie King in 1935. And if a change was necessary at that time, tbis measure has obviously become a national emergency; therefore, this is the aim that all Social Credit party members who want to deal efficiently with an expensive social life, have been trying to reach, and we will continue in our effort, Mr. Speaker, because I think that it is important. We will have to reach our goal.


Eugene Whelan: Mr. Speaker, some comments have been made by members opposite concerning the number of members present on this side of the chamber. They know that a most important function is being held at this time in this city, the capital of Canada, and that some of our people have a legitimate excuse for being out of the House. However, I thought that if members of the official opposition had been serious about the motion they moved, their benches would be filled. As you will have noticed, Mr. Speaker, those benches have been rarely full on any of the motions they put forward.


George Harris Hees: It isn't quantity but quality that counts.


Eugene Whelan: The hon. member is talking about quality. That reminds me of a letter that appeared in one of the local newspapers. I am sure the Leader of the Opposition (Mr. Stanfield) would be interested in it. The letter read in part:
On September 8 I visited Simpsons Sears store on St. Laurent Boulevard. I selected four pairs of men's underwear. Each package showed signs of recent removal of the price stickers. A salesman told me the price was $1.75 each. Then, I noticed another identical package with a price sticker of $1.50. Questioned about this, the salesman said the price had just been increased, and the stickers were being changed for this reason.
I suggest that since the Leader of the Opposition knows so much about this product the letter writer should contact him immediately.
When we introduce programs to aid people, criticism is made loud and clear in the House to the effect that we are freezing people into fixed prices. That was done today. Here, I refer to the program I announced providing 5 cents a quart aid to consumers of milk in those provinces entering into the agreement. Nothing could be further from the truth than that we are freezing them into set prices. It is clearly stated in the agreement that either party can re-enter negotiations if things change drastically one way or another, and I point out that the province of Quebec has agreed to that. We are not freezing prices at any level. We are aiding the consumers and the producers at the same time.
The Leader of the Official Opposition talks about a 90 day freeze, and I have heard the hon. member for St. John's East (Mr. McGrath) make glowing speeches about it. Mr. Speaker, I have here the price index for fish and a comparison with other foods. I wonder if the hon. member for St. John's East would have the guts to go down to his own constituency and tell the people there, "My leader wants to freeze you people at your present level of wages,
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you who have not reached the same level of wages as people in other parts of the motion. He wants you to remain at two bucks an hour, $2.25, or whatever the wage is, and leave people in other parts of the nation earning $5, $7 or $10, because he thinks you fishermen are getting too much."
Is that what the Leader of the Opposition is talking about when he mentions a freeze? He has never explained it in this House in a way that makes sense to any fisherman or farmer. Actually, it does not make sense to some of his own members because they are not here to support him.


Robert Lorne Stanfield: There are a lot more of them here than Liberals.


Eugene Whelan: Has he anything to offer to guarantee production in this country? Members of the official opposition talk about instability, but when they urge a 90 day freeze they are causing instability because then people do not want to invest in livestock or other production. I blame them as much as anybody else. I blame the whole program that they have been bombarding the country with, and I say that all they have to do is look south and see what happened with a freeze there.


Eldon Mattison Woolliams: They are looking north and seeing what is happening here.


Eugene Whelan: And I can tell you they are really interested in what has been happening here. They only wish they could be about 50 per cent as successful as we have been.
There is a strong relationship between high food prices around the world and inflation around the world. No one will deny that relationship. There is a completely false rumour that high food prices are causing inflation. I am no economist, Mr. Speaker, and thank God for that, but even I can see that this is putting the cart before the horse. Inflation ha^caused higher food prices and it was the last area to move up, in all nations. Indeed, in many cases it was high time that the primary food producer got higher prices. The failing confidence of people in the various monetary systems of the world caused them to buy commodities, including agricultural commodities, that they never bought before rather than hang on to currencies that they considered unreliable.
People in North America have been buying food like never before. I have said it before and I will say it again: inflation is partly the fault of politicians and the people in the media who create a fear of food shortage by using headlines such as "Food Will Be Rationed", Food Will Be Scarce", "Prices Will Skyrocket" and so on. It is well known that the sale of home freezers has never been as high in the history of North America. There is more food stored in basements and utility rooms of homes than ever before. In some cases, people have not one or two but three freezers full of food, and they are still buying on the fresh market.


An hon. Member:: How many freezers have you got?
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Eugene Whelan: I have always had a freezer, Mr. Speaker. Recently I sent out a newsletter in my constituency telling people that they should conserve food when it is abundant rather than let it go to waste. It may shock some people but in the part of Canada where I live, tons and tons of food go to waste. I do not see the hon. members from the Hamilton area in the House, but there is a big problem now in Hamilton with the food that people throw away. It is estimated that our affluent society throws away from 10 per cent to 25 per cent of the food it buys. Some nations would be envious of the food discarded by our posh restaurants, even those in this city today.
I have before me a cartoon or a picture which appeared in one of our newspapers today. The wording under the picture indicates that the world knows Canadians can afford steak only once a week, and the picture shows a starving African eating the newspaper. We are amongst the luckiest people in the world, Mr. Speaker, there is no denying that. In an article in one of our daily newspapers recently the reporter compared the food he bought for his family on August 27, 1963 with what he bought on August 27, 1973 and compared his present earning power with that of ten years ago. He proved that he can buy more food now than he could ten years ago. I think there have been some instances where food prices have been too high, but I do ask people to be honest and factual.
Financiers have hedged or sought security in buying commodities and it is at this point that speculators have had a field day. This has caused chaos in the livestock and poultry feed area in our nation. Because of the protein shortage in the world there has been speculation in soybeans. We are expediting all kinds of programs to produce protein but climatic conditions, etc. allow us to do only so much. Soybean speculators all around the world increased the price of soybean protein to livestock and poultry producers from $109 per ton a year ago to over $500 this year. Nothing much could be done about that because it was a world problem but the price has recently dropped from $360 a ton to $202 a ton.
Farmers do not like to be treated like a yoyo, Mr. Speaker. We hear some economists or professors say that we could get rid of half the farmers and put them on welfare. I say let us put half the professors on welfare because I do not think we need them.


Some hon. Members:: Hear, hear!


Mr. Paproski:: Your whole staff.


Eugene Whelan: There is a surplus of professors, but they get nice jobs in universities and are not subjected to every whim or fancy of our society. Our farmers do not want to be indentured, they want the stability that the professors have but which the professors would deny the farmers. My economist friends-and it may surprise some people that I have friends who are economists, Mr. Speaker-tell me that agriculture is a pretty important sector of our economy. They recognize that more now than they ever did before, not only because of the actual production, but also because of its job and wealth creation, helping to improve the standard of living of all Canadians.
The Agricultural Economic Research Council calculates that agriculture influences 42 per cent of our economy.

September 13, 1973
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When agricultural output increases by $1,000, total economic output rises by $3,000. When you calculate new income and new output on top of that, the total economic impact is $5,000. The healthier, stronger and more competitive the agricultural economy gets, the better it is for the nation. But it must be realized that when production costs go up by 13 per cent over the previous year, then the farmer is not to blame when the prices of the products he sells increase.
This government has, therefore, taken steps to assist farmers and help consumers at the same time. The opposition asks what we have done. Last night, Mr. Speaker, the crop insurance bill went through this House. That was just a small thing to help stabilize the income of farmers and provide some extra protection, working closely with the provinces. The opposition asks why we do not bring in more legislation. Well, that bill, with the explanatory notes, was only two pages long but look at the time it took to get it through. By means of the bill we pay half the premiums, which amounted to nearly $15 million this year because many farmers did buy the extra crop insurance. Members opposite were not interested in crop insurance last night when the bill was before us; they were only interested in trying to downgrade the Minister of Agriculture. But, Mr. Speaker, a lot of farmers think he is trying to do a good job.


Some hon. Members:: Hear, hear!


An hon. Member:: Just keep blowing your own horn!


Eugene Whelan: Some of them did not even talk about crop insurance but talked about the Minister of Agriculture. If they wanted to show their sincerity, why did they not pass the bill quickly and say "Mr. Minister, bring in all kinds of legislation and we will pass it right away"?
The record shows what this government has done. The Minister of Finance (Mr. Turner) stated how we had reduced income taxes as a way of stopping inflation. We have wiped out the capital gains tax on family farms passed on from one generation to the next. No other nation in the world has done that. There may be some members on the opposite side who honestly and sincerely supported that measure. However, they knew it would have been very bad politics not to have supported it. This Minister of Agriculture can take a little credit for that.


Some hon. Members:: Hear, hear!


Eugene Whelan: For many years before coming here I worked with farmers for no pay whatever. I sacrificed my farm to come here and work for them. Canada is one of the greatest countries in the world. It lets a peasant come here to work for his fellow peasants.


Some hon. Members:: Hear, hear!


Eugene Whelan: If we had full co-operation from the opposition we could do an even better job for the producers of this country than we are doing at the present time. We have increased the old age pension and veterans allowances. We have proposed a complete overhaul of our social
(Mr. Whelan ]
security system, including major increases in the family allowance.
We can compare time limits. Members know how quickly they acted on veterans affairs legislation. They realized this group was more powerful and more organized. When it came to the farm bill, they said they did not care, it was not important. The hon. member for Annapolis Valley (Mr. Nowlan) said it was not an important bill. He criticized the minister in charge of the Wheat Board (Mr. Lang) because he did not know Annapolis is a great agriculture area. Last night the hon. member did not even know how to pick mushrooms.


John Patrick (Pat) Nowlan: Mr. Speaker, I rise on a point of order. I am certainly not going to repeat the interesting debate of yesterday. I confess I do not know how to pick mushrooms, but I certainly know a ripe tomato that is ready to fall, and I think the Minister of Agriculture (Mr. Whelan) fits into that category.


Eugene Whelan: All I can say is that I know you can make good cider when there is a windfall of apples. However, the hon. member said he does not know about the production of mushrooms. But what he has said here tonight grows mushrooms. It is called biomass material.
We have enabled this country to set three grain export records in a row and are shooting for another this year. We have been able to introduce quota freedoms of the kind that allow a farmer to grow what he wants, and sell it.


Some hon. Members:: Hear, hear!


Eugene Whelan: We reduced freight rates on rapeseed. We bought 2,000 hopper cars. This has helped us set one transportation record after another at Vancouver and Thunder Bay. We have assisted the provinces in crop disaster areas. We raised the compensation for diseased cattle in this country. That was done before any representations were made.


Some hon. Members:: Hear, hear!


Eugene Whelan: We are in the midst of one of the most thorough and open examinations we have ever had in Canada of our entire grain handling and transportation system. I do not think any other nation in the world has done this. We are implementing an interim feed grains policy and have put forward proposals for a permanent one to be effective August 1, 1974. This is a completely revamped national feed grains policy, one that will open new opportunities for farmers in the east and in the west. It will allow meat production to develop in areas of natural advantage which in turn will increase production on a competitive basis.
We have introduced a small farm development program and eight out of the ten provinces now have operational programs under agreement with us. When we first brought out this plan, there was a lot of political noise and flak from the provincial leaders, but they have since seen the wisdom of our policy and have teamed up with the federal government to help us develop profitable family farms from coast to coast. We have called one of the most advanced meetings ever and I will be making a presentation to the provincial ministers of agriculture.
September 13, 1973

When we introduced stability programs into this House the opposition raised hell. They said they were not any good. However, when I was in Charlottetown the provincial ministers asked for stability. At the economic conference in Calgary they wanted stability. What do the farm leaders say in their letters to the minister in charge of the Wheat Board and to myself? They want stability. The opposition are still critical of that. We have the most revolutionary program for beef grading and beef production that any nation ever had.


The Acting Speaker (Mr. Laniel):: Order, please. I
regret to interrupt the minister, but his time has expired, although I did allow an extra minute because of remarks made by other members.


James McPhail Gillies: Mr. Speaker, I listened with great interest to the remarks of the Minister of Agriculture (Mr. Whelan) and the Minister of Finance (Mr. Turner). The Minister of Agriculture catalogued events that have taken place which have nothing to do with the problems we are debating today, problems which I hoped would be debated seriously. I do agree with one thing he said. The high cost of food is not the cause of inflation but is a result of inflationary forces and also of the high cost of production which the farmer has to bear today.
The Minister of Finance made remarks that kept his record clear. He made a speech on inflation without mentioning what the monetary and fiscal policy of this country is; without discussing any of those matters which all agree are the most dramatic and important reasons for the inflation we have in this country today.
The minister said the difference between our two parties is the interpretation of how important the demand factors in the world are versus the cost-push factors in the Canadian economy. I assure him that the difference between the parties is much more different that that suggestion implies. We have a totally different understanding and feeling for the needs of the Canadian economy at this time.
I speak in this debate with a very heavy heart, because it is clear from the speech of the Minister of Finance that absolutely no new ideas for controlling inflation are being considered. There is no recognition or understanding of the changes that have occurred in the national economy, and there is no recognition of the changes that have occurred in the international economy over the past couple of years.
We are going backward to the terrible policies of the past by saying that we can solve the inflation problem in this country only by causing another recession. This seems to be the position of the government. Surely we do not have to go through that again. Surely we can manage our economy better than going from a 7.2 per cent rate of unemployment two or three years ago to our present rate of inflation of 8 per cent plus.
The Minister of Agriculture referred to the experience in the United States with its control problems. They have problems indeed. However, the fact is that the inflation rate in the United States is substantially less than that of Canada at the present time. The rate of increase in inflation in Canada has been greater than the rate of increase
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in the United States. In 1970, the inflation rate in Canada was in the neighbourhood of 2.2 per cent. Today it is over 8 per cent. Why did we have a 400 per cent increase in the rate of inflation in that period of time? No other country in the world experienced a rate of inflation of that dimension. Why did it happen?
The minister says it is because of worldwide problems. Why are worldwide problems hitting Canada so much more severly than other countries? I can imagine a reporter going around the world and asking ministers of finance in various countries what they are doing about this inflation problem that is worldwide. I get the impression that because it is a "worldwide problem"-I put those last few words in quotation marks-the Minister of Finance washes his hands of it in Canada. But surely Canada has a major responsibility to do something about inflation, just like every other country in the world.
If you went to Australia, the minister of finance there would say, "We have looked at this problem, we have adopted an incomes policy and we have reduced the inflation rate." If you went to Israel-I am picking countries at random-you would find the government had instituted a 90-day freeze. If you went to England you would find they were trying out an incomes policy. In the United States, too, they have adopted an incomes policy. Every country in the world is trying to do something, except Canada. We seem to be content to say that this is a worldwide problem, we have no responsibility for it and there is nothing we can do about it.
There is no question that there has been an increase in world demand. I apologize, Mr. Speaker, for appearing to be professorial and intense about this, but I feel strongly that we are on the road to disaster unless we do something to correct the situation. Of course there is a worldwide demand. But why has the demand been so heavy in Canada? What has happened is that there has been a devaluation of the American dollar of immense proportions. That devaluation has affected prices as far as foreign buyers are concerned and the enormous impact on America is being felt here in Canada. There is no way in which the economy in Canada can be moved forward again unless we are willing to face the fact that we can no longer accept what is going on on a continental basis as automatically good for Canada if we with to ensure a high standard living and a reasonable price stability in the Canadian economy. The evidence is absolutely clear on this particular point.
The situation we see today, the measures the Minister of Finance has brought in, seem to me to represent a contradiction in objectives. He says on the one hand that what we are going to do is increase interest rates and on the other increase the money supply. There are real differences of opinion as to what the result of raising interest rates will be. The evidence now seems reasonably clear that in a high inflation situation an increase in interest rates is not anti-inflationary. Rates are looked at as costs and they are passed on. There is certainly no question that this is the situation in the housing market, as was pointed out by the hon. member for Oshawa-Whitby (Mr. Broad-bent). There is also no question that we have always used a housing cycle as a way in which to try to stabilize the

September 13, 1973
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economy, an inefficient and inhumane method which will not work any more.
A major reason for the inflation facing this nation at the present time may be found in our monetary policy. The rate of increase in the money supply in this country between 1970 and 1973 has been roughly in the neighbourhood of 50 per cent, whereas the real increase in our gross national product over the same period of time is probably somewhere between 9 and 11 per cent. Now, Mr. Speaker, to increase the supply of anything by that dimension will cause its value to go down. Of course the purchasing power of the Canadian dollar has gone down. It is because we have practised no restraint whatever on the money supply. The Minister of Finance, now, I grant, has recognized this, but he is afraid to lower the boom on it. He says instead, "We'll put interest rates up, but we won't reduce the money supply." The only thing that happens in such a situation is that you get expensive money. What we find, therefore, in the Canadian economy today is not only the beginning of a tight money policy, but an expensive money policy.
What good does it do to try to counteract inflation by throwing interest rates up? It does not do any good at all. It seems to me that for the minister to announce today, through the Bank of Canada, an increase in the prime rate while at the same time there has been an increase in the money supply during the first six months of this year of approximately $6 billion, is a totally self-defeating proposition. It will only lead to more inflation. It is bound to. And there is no question in my mind but that the old cost-push element in inflation is going to come back. There is just no question about that.
Certainly one of the functions of the Department of Finance and of a government is to try to recognize what is going on and what is clearly on the horizon, and to try to do something about it. It seems to me, looking at the situation, particularly with regard to the labour market and the profits being earned by many corporations, it is self-evident that the cost-push inflationary element in the economy has not gone away. It is blindness to the point of tragedy not to support a monetary, fiscal and exchange rate policy with an incomes policy.
We in our party have tried very hard to get the Minister of Finance to tell us what the government's position is with regard to its international exchange rate policy. Three times we have asked him to speak on motions and tell us what position Canada intends to take at the meetings of the International Monetary Fund. We have asked this simply because no country in the world will be so affected as Canada by what happens at those meetings in Nairobi. We are one of the world's great traders and much of our future is riding on these fast approaching meetings.
Why is the Minister of Finance unwilling to make a statement about this most important matter, Mr. Speaker? If we accept blindly a proposition involving some sort of continental North American exchange rate, the consequences could be just disastrous. If, out of the operations in Nairobi, nothing emerges to solve, for example, the energy shortage facing the United States, or the U.S. balance of payments problem, and the United States dollar floats to, say, 40 cents on world markets, just think what

this will mean in terms of its effect upon Canada, and what it will do to our domestic economy.
For the Minister of Finance, especially today, to get up in the House at a time like the present, when we are concerned about high inflation, when unemployment is increasing, when the rate of increase in the GNP in the second quarter has fallen short of expectations, and fail to tell us what the government thinks about the changing structure of world trade in relation to Canada, what it thinks about exchange rate policy, what it thinks about interest rate policy, why it is disinclined to use new methods in an effort to get inflation under control, is the height of irresponsibility.


Some hon. Members:: Hear, hear!


John Mercer Reid: Those are not the questions your leader asked, and those are not the terms of the resolution.


Some hon. Members:: Quiet!


James McPhail Gillies: I do not care about the particular nature of the speech made by the Minister of Finance, but I really care about what is happening to this country and I am concerned because there is more uncertainty, more unease about what is happening in the world economy than at any time since the 1930s. I ask members to read the 1927-28 editions of the Manchester Guardian. They would think they were reading today's edition of the Toronto Daily Star. Why? Now, as then, international exchange rates have broken down, there is high inflation, and ministers of finance are saying nothing can be done.
I think that can be done. That is why I am arguing so strenuously. It is a tremendous disservice to Canada for anyone to say there is high inflation in Canada but you cannot do anything about it; monetary and fiscal policies don't work and exchange rates don't matter. This is doing a great disservice to Canada. As I said last Monday when I alluded to this topic, it is exactly the same as people in the thirties saying it was impossible to do anything about the depression. These problems can be solved, but we cannot come to grips with them in the House of Commons until the Minister of Finance is willing to tell us what is the basic philosophy of the government with regard to exchange rate policy, what its basic philosophy is with regard to fiscal policy, what its feelings are about interest rates as cost-push factors, what it intends to do about monetary policy, and why it allows the money supply to increase while it raises interest rates.
In the situation we are in today, which has all the seeds for rising unemployment, it is totally unacceptable, in a debate of this dimension, for the Minister of Finance to make the speech he made today without explaining what is the policy of the government on these important issues. I agree with what was said by the Minister of Agriculture. What a great country this is, with vast assets and resources. But it is being mismanaged so badly. How is it possible to go from a 7.2 per cent unemployment rate to an inflation rate that is hurting so many Canadians in such a short time. No Canadian should have to worry whether he has enough income to get enough to eat or to get proper housing.
September 13, 1973

The Minister of Finance talks of supply policies. None of the things he mentioned in his speech were supply policies; they were income supplement policies, and I applaud them. But if we in this House think that we are going to come to grips with economic management through that sort of approach, then the Canadian people are going to have a terrible shock.


John Napier Turner: Mr. Speaker, would the hon. gentleman entertain a question?


James McPhail Gillies: Yes, Mr. Speaker, reluctantly.


John Napier Turner: I listened to the hon. gentleman's speeches both today and last Monday and his theme that there has to be a better way. I listened to his general criticisms of fiscal policy, monetary policy and exchange policy. Next time, would he put on the record in a positive fashion what his and his party's policies are with respect to fiscal, monetary and exchange policy?


James McPhail Gillies: Mr. Speaker, if the hon. member's question is that he is asking for the advice of our party on how to better run the country, then I think we are quite willing to give it to him, and when the opportunity arises I will tell him more about it. But I should like to say that I have never felt that people who really do not believe in innovation and change can run such policies properly. I think a better solution is to go to the people of Canada so that we may form a new government.


Mr. Ed Nelson (Burnaby-Seymour):: Mr. Speaker, I listened with great interest to the admission of defeat made by the Minister of Finance (Mr. Turner) when he described the measures that his government is taking to combat inflation in the face of this morning's headlines which indicate that those measures have obviously failed. I can accept to some extent his premise that inflation is due to world trends, shortages and supply problems with the money market, without accepting the inevitability of such forces any more than the hon. member for Don Valley (Mr. Gillies) in his obviously sincere comments was willing to accept the inevitability of those forces. After all, an economy is a man-made thing, and to accept the premise that we are in the grip of forces beyond our control seems to me to be nonsense. There are from within the borders of this country restraints that can be placed on the flow of money, restraints that can be placed on exports and imports, production can be increased, and the like.
In the minister's machine gun-like delivery the word "profiteering" early in his speech ricocheted off my ears. But the minister completely omitted this factor even as a spent bullet in the summary of his speech. In Canada we have a special problem. Certainly the forces alluded to in previous speeches are a factor, but we also have the factor of profiteering and profit taking and I should like to draw a distinction between those two terms.
Profiteering connotes the cynical profit-taking of businessmen who take advantage of inflation as a cover through which they charge all that the traffic will bear. We saw an example of this recently in Vancouver where prices were changed several times on articles. Were these store owners prosecuted? Were their licences to operate lifted? Were the customers ever repaid? No. Yet they were
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robbing the people of Canada as surely as the bandit who escapes from a store carrying a loaf of bread. A lady who stole a loaf of bread in Vancouver several years ago was jailed for one year. The judge told her that she need not have stolen a loaf of bread, that she could have got something from the garbage tin. I do not know how one draws a distinction between the two types of banditry.
I am not saying all businessmen are dishonest, heaven forbid. It is the hallmark of a laissez-faire economy that free enterprise connotes freedom to charge what the traffic will bear. The philosophy is summed up by the saying that honesty is the best policy, but business is business.
Where do abuses occur? According to the parade of witnesses who appeared before the trends in food prices committee, abuses occurred everywhere but in the witnesses' own areas of profit-taking. Witness after witness produced carefully documented briefs to show that their industry was not responsible. The poor food prices committee members, limited to about 12 minutes for cfoss-examination and questioning, could not break down the expert testimony of witnesses backed up by impeccable briefs to show their purity; and that is no reflection upon the members of the committee because certainly they were sincere in their efforts.
The result was-and I was on the fringes of the committee for some time-that we discovered that advertising did not ultimately add to the price of food but actually decreased it. I am not sure how that works; one would think that costs would increase in such a situation, but figures supported the idea and figures do not lie. Or do they? Even more enlightening was the brief of the Packaging Association of Canada. Here again we would all save money by using more packaging. But wait a minute. There was an article last March in the trade journal of the Packaging Association in which members of that association were warned in advance what would happen to them if they indulged in unrestricted profit-taking. I quote from that article:
We believe, after reviewing the transcripts of the hearings and talking to some committee members, that the food industry in Canada will slowly by degrees be declared in the public interest.
Here is another quote:
Further, we feel that eventually restraints on ROI-
Return on investment.
-will be placed, perhaps in the 30 per cent range, as the food industry is eventually declared to be in the public interest.
Further-


The Acting Speaker (Mr. Laniel):: Order, please. I regret I must interrupt the hon. member. It being six o'clock, I do now leave the chair till eight o'clock tonight.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
John Mercer Reid: Mr. Speaker, before six o'clock there were discussions among the House leaders as to what might be

September 13, 1973
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an appropriate length of time for speeches, and the suggestion was made that they should be of about 15 minutes duration. If there is unanimous agreement, perhaps that could be made an order of the House, excepting the hon. member who will be continuing the speech he began just before six o'clock.


Mr. Deputy Speaker:: Is it agreed that speeches, after the hon. member who is to be recognized now, shall be 15 minutes in length?


Some hon. Members:: Agreed.


An hon. Member:: No.


Mr. Deputy Speaker:: It is not agreed.


An hon. Member:: Who said no?


Donald MacInnis: Mr. Speaker, I draw to the attention of the House that when the hon. member rose on his point of order there was not a quorum present; therefore he is out of order on his point of order.


Mr. Deputy Speaker:: I think probably we should proceed with the debate. As far as the Chair could see, there was indeed a quorum present, otherwise the Chair itself might have been out of order.


Donald MacInnis: I can
count.


Mr. Deputy Speaker:: The Chair can count, too.


Nels Edwin Nelson: Mr. Speaker, before the dinner break I was in the midst of a quotation to illustrate the variance between the attitude expressed in the Packaging Association's brief to the trends in food prices committee and the attitude expressed in their own trade journal. Let me conclude that point with this brief quotation:
The packaging industry's previous practice of charging what the traffic would bear or basing your price against competition is no longer valid.
That is a virtual admission it had been the practice to charge what the traffic would bear. I have been trying to distinguish between profit-taking and profiteering. Profiteering is the practice of changing labels to deliberately misrepresent prices in order to gain more profits. Profittaking is the taking of profits beyond what might be considered reasonable. The hon. member for York South (Mr. Lewis), our leader, is recorded in Hansard as having given many examples of profiteering, including the B.C. Packers with an increase of 125 per cent in profits and a sales increase of only 25 per cent, the Silverwood Industry with a second quarter increase of 107 per cent in profits and an increase in sales of only 10 per cent. There is in Hansard about half a page of similar examples.
I do not think we can attribute the causes of inflation merely to factors such as short supply, monetary difficulties and things of that nature. We must also consider profit-taking and profiteering. What is the solution? Let us look at the Conservative party's solution.


An hon. Member:: Why don't you offer one of your own.


Some hon. Members:: Hear, hear!


An hon. Member:: They don't have any; they have to look at ours.


Some hon. Members:: Oh, oh!


An hon. Member:: After all, he is part of the government. Aren't you guys proud of him?


Nels Edwin Nelson: Now that we have finished with the Conservative party's solution, let us look at the government's solution. What is the solution of the bigwigs?


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: It wasn't worth all the time we gave it.


Nels Edwin Nelson: All right, back to the Conservatives. Who knows what the policy of the sorry Tories is in this House of Commons.


An hon. Member:: We do.


Some hon. Members:: Hear, hear!


An hon. Member:: What about the sick socialists?


Nels Edwin Nelson: Let me quote from their leader's policies. Certainly they do not include wage and price controls or a freeze, as the newspapers would have us believe, because we find these words of the Leader of the Opposition (Mr. Stanfield) in Hansard for September 10, at page 6378:
First, let there be no misunderstanding. We have never represented a so-called freeze as the be-all and end-all, no more than a dentist would represent the freezing of a tooth as the treatment. Those who suggest we are presenting a freeze as a policy to combat inflation are misrepresenting our position.
Then if you read on you will find that he said:
Our position is to put into place an economic stabilization plan incorporating for a temporary period strict mandatory controls of prices and incomes. The time we envisage for such strict temporary controls is in the order of 18 months to two years.
Then if you turn the page you will see that he uses the word "freeze" and says:
In order to put such a program into effect, a short-term freeze on prices and all forms of income is needed at the outset.
He continues:
The freeze period should be as short as possible.
So they either advocate a freeze or they do not advocate it. The policy that was enunciated in that statement was referred to in this morning's Globe and Mail, while another policy advocating more teeth in the Food Prices and Review Board appeared on another page. I am bewildered. I think the Tories are bewildered, and I think the House is bewildered.


Some hon. Members:: Hear, hear!


Nels Edwin Nelson: I will wait for the applause to die down. Wage and price controls have long since been discredited. In this morning's Globe and Mail there is a long article in which it is reported that two economists of the Royal Bank
September 13, 1973

of Canada have rejected price and wage controls as a solution. They say:
"It has been repeatedly demonstrated that controls are ineffective in an overheated economy and the recent American experience with the price freeze, especially in so far as it applies to food prices, has shown the futility of such attempts".
But the Conservatives are so tied to United States policies than when the Americans run out phases the Tories will run out of policies. They have no real policy. It has been rejected by economists; it has been rejected by all other parties. Yet the Tories insist on adhering to this policy. They must know that it will not work. One of their financial critics wrote a book in which he set forth why it will not work. I cannot understand why they persist in adhering to it. Perhaps it is for no other reason than that it might win them some votes. But they are gradually coming around to recognition of the value of a prices review board.
We look at the government's policy and we see a party which was triumphant in 1968 doing nothing. This government does things only on the basis of crisis. Then it does something only if it is pushed. Everything that is done is done on the basis of "ad hockery." We have as examples LIP, OFY and DREE. These programs were all brought in to solve a situation which arose in a crisis. They did not work. Any policy with any solidity to it was forced upon them by you know who-us. From the start the Prices Review Board was asked for by our party. It was the brainchild of our party; it was our idea. What did we get? We got Mrs. Plumptre. We got evasion and crocodile tears from a government which is frightened of its own shadow and refuses to heed the warning of the people that it received last October 30.
While this government vacillates, the rising cost of living is eating up the meagre pensions and wages of millions of concerned Canadians. I think it is significant that in the speeches of the financial critics of both major parties there is always a token mention of pensioners and people on fixed incomes. The government ought to be aware, if it is not aware, that the privation which has heretofore been confined pretty well to people on low incomes is now creeping upward to the higher wage brackets, and when that happens the people of Canada will come to know which is the only party in this House that has any kind of a policy to alleviate the distress of inflation.
But I am afraid that until the Canadian people are ready to recognize that fact we can only hope, by continued pressure, to get some kind of action from this government. I think this House can be assured that that pressure will be exerted unremittingly by this party.


Thomas Miller Bell: Mr. Speaker, I rise on a point of order. There has been further discussion and I think there is a desire now that we reduce the length of speeches to 15 minutes. I also express the hope that at around ten o'clock, due to the great number of members who wish to take part in this national emergency debate, we will be able to reduce the time to about ten minutes.


Mr. Deputy Speaker:: Is it agreed that at least until 10 p.m. speeches be limited to 15 minutes?


Some hon. Members:: Agreed.
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James Aloysius McGrath: Mr. Speaker, we meet here in emergency debate, but one would never believe it from the attendance on the treasury benches.


An hon. Member:: Why don't you look at your own benches?


James Aloysius McGrath: We can only conclude that the Prime Minister (Mr. Trudeau), the Minister of Consumer and Corporate Affairs (Mr. Gray), the Minister of Agriculture (Mr. Whelan), the Minister of Finance (Mr. Turner) and all the other ministers responsible for various areas of the subject matter under debate must be down at the Chateau Laurier wining and dining with the partisans of the Liberal party from across the country, at a time when Canada has experienced the highest increase in the cost of living in 22 years. Food prices increased during the past year by
16.2	per cent. In this month food prices have increased by
3.2	per cent.
Notwithstanding the announcement made in the House on September 4 by the Prime Minister, and the measures debated and adopted by this House in the last few days, the fact is that the government has not presented to this parliament any program, any policy to deal with the most serious problem facing this country today, runaway inflation.
When this parliament opened on January 4 there was an announcement in the Speech from the Throne that the government would take measures to reduce inflation, to reduce unemployment and to set up a special committee on food prices. Well, we have the special committee on food prices-and we have high unemployment and runaway inflation. The only answer the government has had, apart from the stopgap measures announced by the Prime Minister in the House on September 4, to the whole problem of rising prices and runaway inflation is the establishment of the Special Committee on Trends in Food Prices. What is the record of that committee? Its recommendations have been largely ignored by this government.
Today, the greatest indignity of all in respect of that committee was the refusal of the Prime Minister to accept an invitation, passed by the majority of the committee, to appear before it to explain the statement he made to the House on September 4 and to submit himself to questioning by members of the committee. This is a special committee of the House, not a standing committee. It is a special committee created by the government as the government's answer to inflation.
The Prime Minister, in his letter to the chairman of the committee, referred to the fact that the Prime Minister obviously cannot be concerned with appearing before all the committees of the House of Commons. That is understandable because there are many committees of the House which are involved in various areas ranging all the way from estimates to special references from the House. But this is a special committee with a special mandate. It is the government's answer to rising food prices. It is charged with the responsibility of studying trends in food prices. It has the power to call for persons and papers.
The first report of the committee contained recommendations that special legislation be brought in to establish a

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food prices review board. The government ignored that recommendation and did not bring in special legislation. Instead, they used an existing statute, the Inquiries Act, which conveniently circumvented parliament; they did not have to come before parliament with a special act. Many of the recommendations in the first report of the committee have been largely ignored by the government. Let me give an example. Recommendation No. 5 in the first report recommended that the federal government, in co-operation with various provincial governments, consider the feasibility of co-sponsored programs to get proper food on the tables of people with low incomes.


Mr. Lalonde:: What about the first four recommendations?


James Aloysius McGrath: A 3.2 per cent increase in the cost of food in one month, or 16.2 per cent in one year, particularly affects families with lower incomes. Most of the other recommendations of the committee-and I can announce them one by one-have been ignored by the government, so much so that the second report of the committee called upon the government to proceed immediately with the implementation of the recommendations in the first report. That has been largely ignored. We can only come to the conclusion that this government is not serious about food prices. It refuses to present to the House and to the country a program that would deal seriously with this very critical problem.
Today we have high unemployment, high inflation and rising food prices, and the best that the government can do is the ad hoc, piecemeal program which it presented to the House on September 4. Nobody quarrels with these measures. As a matter of fact, they received the unanimous support of the House. Certainly it is desirable to do something to hold the price of milk in Canada. We hope and pray that this measure will be effective, although it is questionable whether it will have the desired results. Certainly it is difficult to understand how the government can implement the program in certain areas of the country, including my own province, where there are no milk marketing boards.
So far as the other approach of the government to this problem is concerned, namely, the subsidy for miller's wheat, we know what happened to that. That has gone the same way as the budget brought down in the House by the Minister of Finance on February 19, when he said:
I want to relieve the Canadian taxpayer of as much of this burden of rising prices as I can. And, in particular, I want to provide relief to that group of our citizens who are least equipped to fight rising prices-our lowest income earners.
I submit that the figures released today by Statistics Canada are alarming to the point where the situation requires extraordinary measures on the part of the government. Food for the home in one month increased by 3.2 per cent, or a yearly increase of 16.2 per cent. Dairy products are up .5 per cent, for a yearly increase of 8.5 per cent. Meat is up 8.2 per cent in one month, or a yearly increase of 27.9 per cent. Prices have reached such critical proportions that many of the people of this country cannot even afford to buy hamburger. Poultry products have increased in one month by 7.6 per cent, or an increase of

39.9 per cent for the year. Eggs have gone up by 13.4 per cent, for a yearly increase of 46.3 per cent.
It is just a short while ago that the government introduced a program in the house, a million dollar program whereby they were going to pay poultry farmers to kill their egg-producing hens so as to reduce the egg-producing capability of this country. What is the result of that program? The result is that we have had in one month a 13.4 per cent increase in the price of eggs.


An hon. Member:: What about fish?


James Aloysius McGrath: I am glad the hon. member mentioned fish, because among the lowest income earners in this country are the fishermen in eastern Canada. They are the ones who are really suffering from these rising prices.


Marc Lalonde: And you want to freeze them.


James Aloysius McGrath: The world price of fish has gone up so that today the Americans are paying 70 cents a pound for our fish, but the price to our fishermen has hardly moved-they are getting 9 cents a pound for their fish. These are the fishermen who have to pay inflated prices for eggs. They have to pay inflated prices for beef and inflated prices for poultry products. The low income earners of this country, of whom the fishermen of eastern Canada are the most prominent, are the ones who are suffering most-but this government does nothing about it.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: Somebody asked, "What about freezing prices?" This party has never advocated freezing prices for the low income earners in this country.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: If the government had accepted the policy advocated by this party in February of this year, we would not have these inflated prices for food. We would not have a 16.2 per cent increase in food in one year. We would not have a 3.2 per cent increase in one month.
I hope that the hon. members who have made the supreme sacrifice of staying away from the Chateau Laurier to sit in the House for this emergency debate will participate on their feet, instead of making stupid interjections from their seats.


Some hon. Members:: Order.


James Aloysius McGrath: The trouble is that this government has failed to bring before the House policies that would adequately deal with runaway prices and with unemployment. That is why Your Honour granted the Leader of the Opposition (Mr. Stanfield) this emergency debate tonight, and that is why parliament has set aside its regular business to debate this most serious crisis facing the country. I submit that while the Special Committee on Trends in Food Prices has done very good work and has heard many witnesses, it cannot be the answer because, as we made plain in the House at the time of the setting up of the committee, we objected to its setting up because the terms of reference were too narrow.
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We felt then-and our opinion has been reinforced by subsequent events-that you cannot examine food prices in isolation. I say this with special regard for my friends to my left: you must examine all of the component features of the cost of living and what contributes to food prices. We have high interest rates in Canada, which contribute substantially to the cost of building, and shelters. More particularly we have a high cost of labour, which is a very important component of food prices. We have high incomes and profits. All these things have to be examined in the over-all context of the consumer price index. For a committee of this House to be charged with the responsibility of examining food prices in isolation, I submit is a serious waste of the time of the House, notwithstanding the fact that the food prices committee has worked hard. I say this as a member of that committee.
So far as the Food Prices Review Board is concerned, the order in council setting up the board on May 25 said it was "to inquire into the causes of particular food price increases in any class of food products, and to issue reports thereon, with all dispatch, including recommendations where the board considers it appropriate to do so." Those were its terms of reference laid down by order in council on May 25. What, then, was the Prime Minister trying to prove in his statement of August 13 when he announced various programs that were designed to deal with the consumer price index for the month of July, which showed unprecedentedly high increases? At that time he said:
-the terms of reference of the Food Prices Review Board will be extended to provide for investigation of price increases on individual food items.
That was cruel deception. It was deception of the first order, because those were precisely the terms of reference given to the board on May 25. This was the announcement of the Prime Minister on August 13 to try to deceive the Canadian people into thinking that Mrs. Plumptre and her board, which was inactive up to that time because, on her own charge, she had not received the co-operation of the government and more particularly of the Minister of Consumer and Corporate Affairs, were being given additional authority. The board already had those terms of reference; they had already been given authority by order in council to look into specific food price increases.
Now we have hon. members saying that the Food Prices Review Board will be the answer, that it will see to it that the policy of applying subsidies to liquid milk will be implemented. I submit that the government already has that authority. The Minister of Consumer and Corporate Affairs already has that authority under the Packaging and Labelling Act. He has the authority to carry out the same kind of examinations as the Food Prices Review Board is involved in at the present time. But, for reasons known only to the government, the minister refuses to promulgate and implement the regulations under the Packaging and Labelling Act notwithstanding repeated urgings from members of this House that he do so.
Parliament passed the Packaging and Labelling Act more than two years ago. It was supposed to be important consumer legislation at that time, and it is still the major consumer legislation presented by the government. Yet it
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remains inoperative because of the failure of the government to formulate and promulgate regulations which would be the operative part of the act. Such regulations would enable the government to do precisely what Mrs. Plumptre and her Food Prices Review Board are attempting to do at the present time.
So, Mr. Speaker, we do not need a Food Prices Review Board. What we need is an agency that will examine not only food prices but all the component parts of the consumer price index. And I suggest to you, sir, that what this country needs more than anything else is a new government.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: I submit that if the government were to go to the country today it would get the message, loud and clear, that the people of the country no longer want a government that ignores inflation, that ignores rising food prices, that ignores rising unemployment. I submit that the people of the country want rid of this government.


Mr. Deputy Speaker:: The hon. member for Verdun (Mr. Mackasey).


An hon. Member:: This going to be great.


Hon. Bryce Mackasey (Verdun):: Mr. Speaker, before I even got to my feet I heard the hon. member from Alberta say that this was going to be great. I wonder, would he advocate rolling back fuel oil prices?


Eldon Mattison Woolliams: I did not say that. On a point of privilege, Mr. Speaker, it was a friend of mine behind me. I have not said a word all night.


Bryce Stuart Mackasey: Mr. Speaker, that is such an unusual occurrence that I must apologize to the hon. gentleman. It is the first time in 12 years that he has been silent.
I do not pretend, and I do not think anyone else pretends, to have the answer to the problem of inflation. The hon. gentleman who preceded me mentioned that extraordinary measures are required. That was about his most useful statement. But he did not tell us what they are. Of course, he knows that such measures must not affect the cost of fish because fish is an important product in his riding. And the hon. member from Alberta knows that we should not roll back the price of fuel oil and natural gas because those products are important to his riding. "


John Patrick (Pat) Nowlan: Roll back the government.


Bryce Stuart Mackasey: The hon. member says, "Roll back the government." I wonder how many people in the hon. gentleman's party would say, "Let us roll back the price of wheat." As a city slicker, frankly I am surprised that the whole attack I have heard today has been on the farmers of the country. I represent a city riding and I cannot get overexcited at the fact that the farmers in the west are for the first time earning a decent income, that farmers elsewhere are getting a decent price for their eggs and poultry, and that fishermen are getting a decent price for their fish.

September 13, 1973
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We are talking about the high cost of food. We have concentrated on the question of the high cost of food ever since the debate began.


James McPhail Gillies: No.


Bryce Stuart Mackasey: The hon. member for Don Valley (Mr. Gillies), who is a very serious member, says no. But the fact of the matter is yes. Is someone from the opposite side of the House now going to get up and advocate tight money? If that is the case, we will be right back to 7.2 per cent unemployment. The Minister of Finance (Mr. Turner) made it clear today-


John Patrick (Pat) Nowlan: To whom?


Bryce Stuart Mackasey: To you people who asked the question- that there was not a tight money policy in this country. Somebody may have pointed out the inconsistency between a high interest rate and a non-tight money policy. Although it may be contradictory, at least we know this much, that if we introduced a tight money policy at this stage in our development, at this stage in our recovery, once again we would be fighting the battle on the backs of the working poor of Canada.
I should like to ask those hon. members who were attacking unemployment insurance last October, saying that $66 was too much, if they still feel they were right. If I were a farmer I would say the chickens have come home to roost on that one. I do not hear anybody now saying that we have to roll back the cost of unemployment insurance.


An hon. Member:: You sure have to.


Bryce Stuart Mackasey: The hon. member is honest, but let him tell the unemployed person who gets $66 a week that he is getting too much. At least he is honest; he is reflecting true Tory policy, and honesty is a good thing.


Mr. Deputy Speaker:: The hon. member for Peel South (Mr. Blenkarn) on a point of order.


Mr. Blenkarn:: Mr. Speaker, I was wondering whether the hon. member for Verdun (Mr. Mackasey) is satisfied with 5.5 per cent inflation. We on this side are not.


An hon. Member:: Unemployment.


An hon. Member:: You are all mixed up.


Mr. Deputy Speaker:: Order, please. I think I should remind hon. members that this is an open-ended debate and points can be made at three o'clock in the morning if somehow the hon. member is not recognized earlier than that. This is really not a point of order and, if I may, I restore the floor to the hon. member for Verdun.


Bryce Stuart Mackasey: Mr. Speaker, for the record, I think the hon. member was asking whether I was satisfied with 5.5 per cent unemployment, rather than inflation. Of course I am not. That is why I am scared that some would-be economist who thinks he has the answer might come along and say that now we have 5.5 per cent unemployment and

high interest rates, all we need is a tight money policy as further restraint on the wages of the working classes, and then we will all be happy and inflation will disappear. That is what is going to happen if we are not careful.
I am not happy with 5.5 per cent unemployment. But at least for once in our lives we put the priority where it should be until we solve inflation, that is, looking after the people who are unfortunate, looking after the people who cannot afford food of any kind, rolling back the price of milk, holding the price of bread and at the same time looking after the western farmer who for the first time in a decade is getting paid a proper return.
The hon. member for Don Valley is a serious economist. He knows that inflation cannot be settled overnight, that part of it is imported. It is a worldwide problem and people will have to wake up and attack it on a worldwide basis. I have to be honest, Mr. Speaker. I would rather have a little inflation than the type of unemployment that permeated this country last year and the year before and the years from 1956 to 1962 when the Leader of the Opposition (Mr. Stanfield) was premier of Nova Scotia. Unemployment predominated in those days. I think hon. members opposite would admit this if they were not too interested in making political points on the backs of the unemployed and the working poor of this country. Mr. Speaker, the answer is not tight money.


An hon. Member:: Is it expensive money?


An hon. Member:: If you say it often enough you will believe it.


Bryce Stuart Mackasey: One thing I do believe, Mr. Speaker, is that the solution does not lie in driving people out of work. That is what tight money would do. The Minister of Finance has resisted the temptation to revert to a tight money policy and obviously is hoping that high interest rates will introduce the right degree of restraint into the economy to give us the best of both worlds.
When we play around, as the hon. gentleman just did, talking about extraordinary measures but "don't worry about fish," then we are being political with the lives of the underemployed and the unemployed and the working poor of this country. They are the innocent victims of fiscal and monetary policies not only in this country but in all industrialized states. One of the other fallacies that I have heard repeated all week is that inflation is caused by underproduction. There is all kinds of unused capacity in this country.
The hon. Leader of the Opposition (Mr. Stanfield) points in the direction of the Minister of Finance. Mr. Speaker, it was not the Minister of Finance who said that unemployment insurance was too costly and "if I ever form a government I will reverse the trend".


An hon. Member:: Who, John or you?


Bryce Stuart Mackasey: Don't divert me from my point. By the same token, I am very tired of my friends in the corner who think the word "profit" is a dirty word and that companies have no right to make a profit. They think that because a company makes 34.8 per cent profit over last year, without telling us whether last year was a losing year or a good year, it should be censored. They are being
September 13, 1973

unintentionally dishonest in this respect. I have noticed in the statements of the New Democratic Party that they now link the percentage of profit to the increased percentage of sales. The leader of the New Democratic Party (Mr. Lewis) is more knowledgeable than I am in these matters and he knows that profits escalate as you progress beyond the break even point. That is logical. By linking the two you are unintentionally inferring that people are being gouged in this country.
The shortage in this country is not in the manufacturing sector. We need to stimulate secondary industry. Our shortage lies in our primary products, which means that this country is rapidly reaching the point when we have to decide where our priorities lie. Are we to sell everything to other countries because the price is better, or do we have to adopt more two-price policies for our primary products? I cannot answer that, but one day we will have to sit down and debate this problem as true Canadians. That is where the shortage lies, and we know it. Can anybody tell me of shortages of secondary goods on Bank Street, if people have the money? Can anybody tell me that our factories are producing to capacity other than pulp and paper, which is very cyclical?
This is a very serious subject, Mr. Speaker. As the hon. member for St. John's East (Mr. McGrath) said, quite validly, the innocent victims are always the same people- the poor, the defenceless, the people who cannot defend themselves. Yet when the Prime Minister (Mr. Trudeau) tries to defend them by social policies, by increasing the family allowance, subsidizing milk, rolling back the price of bread and doing the things he did, he is accused of putting the wrong problem first. Which way would you rather have it until the economists have an answer to it? At least you can make inflation bearable for the people whose incomes are substandard.
Mr. Speaker, I have been around this place for a long time and I can play politics with the best of members. I know this is not a subject to play with because inflation cuts into the income of every Canadian. There is no argument about that. But most Canadians can look after themselves because inflation is a relative thing and everybody knows, deep in their hearts, that the average worker is protected by a good trade union. That includes doctors, who have their own trade union, and lawyers who set their own fees, and all the rest of the trade unions that parade under other names. Once you pay your taxes and buy the luxuries that have become necessities in this country, you still have a greater net income today than ever in the history of Canada.


Some hon. Members:: Hear, hear!


Bryce Stuart Mackasey: What we have to be careful about, particularly in my province, is that we do not widen the gap between the "haves" and the "have-nots". This is a bigger danger to the federal system than all the problems, save language, that we have heard. The poor of Canada are tired of being poor. They have a voice. They are articulate. They are intelligent. They speak out. A man of 52 who is out of work wants someone to look after his income. He needs that. He should not be made to feel like a second class citizen because somewhere along the line the state provides him with an income because no one else will.
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At the same time, private industry should not be burdened with the problem of featherbedding. By the same token, it should be made to pay for the social policies that we in this government and this parliament have a responsibility to introduce periodically. I have criticized the Prime Minister (Mr. Trudeau) openly as much as anyone else in the House of Commons, but I at least congratulate him for establishing the priorities he did a few weeks ago to help the victims of inflation first.


Some hon. Members:: Hear, hear!


Bryce Stuart Mackasey: There is a lot I would have liked to say but I will respect the time limit and not make the role of the Speaker any more difficult. The Minister of Finance (Mr. Turner) speaks for himself, which he properly has done. However, I know the Bank of Canada does not advocate a tight money policy, perhaps one of moderate restraint, but you are not going to restrain people by higher interest rates.
The Bank of Canada sets the prime rate. A small businessman who comes into a bank on a Friday for the payroll will take it at any interest rate because it is the difference between continuing for another week or bankruptcy. A developer does not mind paying a 15 per cent interest rate if he can recoup 30 per cent. I remember fighting price and wage controls a couple of years ago. Why? Because of the inequity with which it was being administered. Wages were to be controlled. Prices were to be controlled. In the meantime, interest was to go sky high, rents were to go as high as anyone wanted and all other sources of income were to be free from any type of restriction.
If you advocate wage and price controls for 90 days or 120 days, as Galbraith suggested, the problem will be what you do when they are removed. You do what they did in the United States. You pay double for the price and wage control. That is not the answer. The answer is selective wage and price controls, if any at all.


Mr. Deputy Speaker:: Order, please. I deeply regret interrupting the hon. member, but the time allotted to him under the rule adopted earlier by the House has expired. He can continue with unanimous consent.


Bryce Stuart Mackasey: I prefer not to, Mr. Speaker.


Eldon Mattison Woolliams: Mr. Speaker, I always like to follow the hon. member for Verdun (Mr. Mackasey). Over the years in this institution we have been friends. I recall when our party was in power and we had a minority situation. I had a problem in the family and I called him. He agreed to pair with me on that occasion although we had instructions from our leaders there would be no pairing. For years we have enjoyed each other's company.
Tonight I want to deal particularly with what I consider, outside of the cost of food, one of the most serious crises in our nation, namely, national housing. This problem has been brought about and aggravated, not only by the policies of this government but by high interest rates

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which have now reached the level of 9 per cent to 11 per cent or 12 per cent on mortgages.
Inflation, as it has been described, is the greatest thief of all. From whom does it steal? It steals from those on fixed incomes, on fixed pensions, the young and the aged. In fact, inflation today is such a national crisis that we now see, as described by the hon. member for Verdun, the average Canadian shackled to poverty because of the policies of this government. Of course, increasing pensions for the aged and increasing the baby bonus helps for a time those who suffer from inflation. However, it is like a person in hospital suffering from an incurable disease-an oxygen tent may keep the patient alive for a time, but eventually he will die. That is exactly like the policies of this government.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: All this government has done is patchwork which has been of no assistance in controlling inflation. The hon. member for Verdun took great exception to someone using the expression "tight money". Well, if we do not have tight money we certainly have expensive money, because interest rates in Canada are the highest they have been since the last war.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: I wonder what kind of policy has led to these high interest rates. I think the questions asked today by the hon. member for Don Valley (Mr. Gillies) and myself flushed out the government with regard to their policies in so far as interest rates are concerned. I refer to this question asked by my leader on April 9, 1973, recorded at page 3087 of Hansard:
Mr. Speaker, I wish to direct a supplementary question to the Minister of Finance. In view of the very short, terse statement given by the governor of the Bank of Canada in making his announcement of the increase in the bank rate, would the minister make a statement on motions within the next day or so setting forth what the monetary stance is now-
The Minister of Finance (Mr. Turner) replied:
Mr. Speaker, I will be appearing again before the standing committee-
This is the significant part of his answer:
I just want to remind the Leader of the Opposition that the primary day to day responsibility for monetary policy rests with the governor of the Bank of Canada, unless there is a conflict between the thrust of monetary policy and that of fiscal policy or governmental policy. That is not so as long as the monetary policy remains expansionary, which it does.
In other words, he said monetary policy lies with the Bank of Canada and unless there is conflict with government policy the government goes along with the increased rate of the Bank of Canada, which today is 714 per cent and brings mortgages up to 10, 11 or 12 per cent. The Minister of Finance and the Prime Minister (Mr. Trudeau) say they endorse the bank's policy of increasing the rate to 7 Vi per cent, according to the financial pages of the Globe and Mail, is a result of the bank's policy. There is no conflict; they endorse the bank's policy.
I want to read what the minister said on May 14, 1973, to prove my case that the government cannot slough it off on the Bank of Canada, because this government is aquies-

cent and approves in every regard the high interest rate of the Bank of Canada which means expensive money for this nation. This, of course, is bringing about a national housing crisis. In reply to a question asked by the hon. member for Winnipeg North Centre (Mr. Knowles) on May 14, 1973, as recorded at page 3713 of Hansard, the Minister of Finance said:
Mr. Speaker, I will take the general tenor of the hon. gentleman's remarks into consideration. Obviously, the day to day responsibility for the monetary policy of the country rests with the Bank of Canada. It is only when the general thrust of that policy comes into conflict with that of the government that the Minister of Finance has to intervene.
As the government has not intervened, and as there is no conflict between the Bank of Canada and the government's policy, this government is endorsing high interest rates.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: It is the beginning of the same policy it adopted between 1968 and 1972 which brought about the unemployment the hon. member for Verdun spoke about. It is the same beginning, the same policies, the same nineteenth century economics of the Liberal party. Let us look at what happened today. In an editorial on the financial page of today's Globe and Mail, headed "Ottawa raises bank rate by half a point to 714 per cent", it is stated:
In a move aimed at controlling inflation, the Bank of Canada has increased its bank rate by half a percentage point to 7!4 per cent, effective today.
The article says the prime rate to large borrowers has been raised to 9 per cent from 8.25 per cent, and mortgages will increase to 10 per cent or 10.5 per cent. That is the government's policy, because they acquiesce and approve the Bank of Canada interest rate. This is the beginning of a tight money policy which will bring about more unemployment this winter, more suffering for those Canadians referred to by previous speakers. I wish to refer briefly again to the report on business which appeared in the Globe and Mail today. It reads:
Most Canadian chartered banks have announced that prime loan rates will rise three-quarters of percentage point to a record 9 per cent effective September 17. The move raises the prime rate by 50 per cent since April.
The 9 per cent prime rate surpasses the former record 8.5 per cent which was in force from July, 1969, to July, 1970.
So interest rates tonight in Canada are higher than they have been at any time since the second world war. That is the policy of the government. That is the policy they are using against inflation.


Steve Eugene Paproski: Where is the Minister of Finance? Why isn't he here?


Mr. Stanbury:: Where is your leader? It is his motion. He has lost interest.


Steve Eugene Paproski: Where is the Minister of Finance?


An hon. Member:: Where is the Prime Minister?


Richard J. Stanbury: You are desperate.
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Eldon Mattison Woolliams: That is the policy of the government, and the minister must be prepared to accept it as his responsibility. What do we need? The government should intervene immediately to deal with this question of interest rates. The Minister of Finance has said that where there is a conflict of policy, the government should intervene. It is high time, now, the government did so, in light of the rate set by the Bank of Canada, if we are to prevent the highest rate of unemployment of any winter since the last war.
Today inflation is posing a severe problem. It was brought about partially, or aggravated at least, by high interest rates. According to a report which has just come out in Ontario, between 500,000 and 400,000 Ontario families need housing help. I would predict tonight, and I am sure my estimate would be confirmed by a computer operating across this nation, that 800,000 Canadian families need help from the government to buy houses or to cope with increased rents.
I want to give just one example of what happens when interest rates increase. A house with two bedrooms, occupying 800 or 900 square feet, whose price would be $35,000, to a person having $10,000 for a down payment would cost $58,000 over a 25-year period with an interest rate of 6 per cent. Incidentally, one cannot buy such a house in Canada today. But increase the rate of interest to 9 per cent, as it is today-


Marc Lalonde: Louder.


Eldon Mattison Woolliams: The Minister of National Health and Welfare (Mr. Lalonde) says, "Louder". He was assistant to the minister of justice in the Diefenbaker government, and acquiesced and sold out that leadership for a pot of gold.


An hon. Member:: You mean a mess of potage.


Eldon Mattison Woolliams: I hope I can speak loud enough for the Canadian people to hear me. At 9 per cent, the cost increases to $72,100. That house, at 10 per cent, would cost a Canadian family $77,125. Now, let us take the cost spread over a 40-year period. At 6 per cent, that $35,000 house, with $10,000 down, would cost $75,520. At 9 per cent, it would cost $100,080. At 10 per cent, the rate of many conventional mortgages, it would cost $110,080. This is what high interest rates are doing to the average Canadian.
What action should we be taking? The first thing the government should do is to set a ceiling on interest rates. Surely there is a conflict between what the Bank of Canada is doing today and the best interests of the Canadian people. So bearing in mind what the Minister of Finance said, it is time the government intervened to roll back interest rate to enable the average man across this nation to afford to buy a home or pay rent. Second- though we have said this many times before, it bears repeating-we should repeal immediately the building tax, which should never have been imposed.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: It was put on by Walter Gordon and is still in existence although statistics show that back in 1959
Cost of Living
it cost about $8 a square foot to build a house while today, under the government's inflationary policies, it costs $17.30. That is what inflation is. Repeal of this tax would ease the burden to some extent. We must be prepared to deal directly with the cities, if necessary, and offer money as an inducement to housing development.
Who do high interest rates on home loans affect most? Middle-class people and those who have reached middle-age probably own homes which have been partly paid for, but young people starting out in life and wishing to buy a home cannot afford to do so with interest rates at 9 per cent or 10 per cent. This is why only 6 per cent of those with incomes of average size in the city of Toronto can afford to buy a home.


Paul Theodore Hellyer: Young people haven't got a chance.


Eldon Mattison Woolliams: They have no chance at all. Those are three concrete proposals. The Minister of Finance asked today; "What is your policy?" I would say the main policy of the opposition, and there is only one party which is in opposition in this parliament-


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: The minister should remember the words the late Lester B. Pearson threw across the House when he felt the then government should go down to defeat. He quoted the words of Cromwell: "For God's sake, go." That is my message to the government; it is the only solution for the Canadian people: "For God's sake, go."


Richard J. Stanbury: The total of Tory policy.


Eldon Mattison Woolliams: The minister of health laughs. Of course he laughs now. He is drawing a fat salary as a cabinet minister as a result of being an executive assistant under one of the ministers in the Diefenbaker government.


An hon. Member:: Don't get personal.


Eldon Mattison Woolliams: Let me say one last thing and I will sit down. The government has a fine record! It has the highest interest rates of any time, the highest cost of food, the highest cost of housing, the highest unemployment and the highest degree of arrogance of any government who ever sat on the treasury benches.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, there is one important aspect of the cost of living which has not, in my judgment, received sufficient attention. Much has been said, and justifiably so, about the rising cost of food. But there is another aspect of the increase in the cost of living which is particularly disastrous for sections of the community on small and fixed incomes who live in rented premises. As a matter of fact, the majority of people in urban areas such as the one I represent fall within this category. I refer to the uncontrolled increase in rents.
The hon. member for Oshawa-Whitby (Mr. Broadbent) dealt in this debate with the failure of governments of Canada to provide a plan for homeowners other than a few in the top brackets of the income scale. The same failure has put such pressure on the limited stock of rental hous-

September 13, 1973
Cost of Living
ing that rents have skyrocketed to an astronomical extent.
I know of nothing that causes more heartaches in my riding than evictions and the unbearable burden of soaring rents, even in some cases causing the break-up of homes.
I had a particularly vivid experience of this in my consticuency last Friday when I was visited by a constituent who was living with her husband, an old age pensioner, in rented but modest premises. Also living with them was a daughter who was a high school student. They have lived in the same premises for ten years, paying a rental of $130 a month. They provided the furnishings and looked after the repairs. At the end of last month the tenant received a notice that the property had been sold and that she and her husband and daughter must vacate the premises by September 30. A day later she received a lawyer's letter saying that she could disregard this notice of eviction if she and her husband were ready to pay a rental of $300 a month, an increase of $170 a month, or more than double.
As the husband's total income, including old age pension and a pension from his previous employment, amounted to $380 a month, it is quite obvious that they could not afford to pay such a rental. They are desperately trying to get on an already overcrowded list of those seeking to rent premises from the Ontario Housing Corporation.
May I pause to pay tribute to the Ontario Housing Corporation. It may not be perfect, but every week people ask me to assist in getting housing from the Ontario Housing Corporation that is geared to their income. The corporation is financed largely by federal funds. If it had not been for that public housing, many tragedies would have occurred.
No attempt was made by the new owner-indeed, there is no obligation on his part at all-to explain why in one fell swoop he was raising the rent by more than double, and there was no discussion with the tenant as to what he could pay. No figures were offered to justify the increase; there was just the cold, hard legal language of the eviction notice. This sort of situation, though not always so extreme, has been duplicated to my knowledge all over Canada. The amount of increased rent demanded would certainly pay for a very substantial amount of foodstuffs.
What, Mr. Speaker, is the solution? Obviously, one part of the solution is the construction of more public housing and low-rental housing so that supply can balance demand. In the present emergency another method is also required. I submit the time has arrived for rental review and rental controls. The solution is part of what this party has consistently stated, and that is the need for selective controls.
The essentials of life should be controlled, and surely shelter is one of the main essentials of life. It is necessary that we establish, now, some form of rent review or control whereby those who wish to increase rent must justify it by showing that they have increased costs or interest to pay. It is no longer tolerable that rentals can be set unilaterally at the whim of the owner with unlimited power to gouge out what the traffic will bear, which is the situation at the present time.

It was, of course, found possible during the last world war to establish rent controls. The hon. member for Nanai-mo-Cowichan-The Islands (Mr. Douglas) reminded me the other day that after the war, when he was premier of Saskatchewan, rental controls were continued for five to six years following relaxation of the wartime regulations. And rental control worked well. As I say, rent control has its problems but they are not insuperable.
I am, of course, aware that there may be constitutional difficulties in respect of rent control which would normally be a matter for provincial legislation. But if there is doubt as to the federal power to impose rent controls at the present time-I must say that I think in light of the present emergency such doubts could be dispelled-the provincial governments, at the recent conference of premiers, made it clear that all of them were willing to co-operate with the federal government in dealing with the problem of controlling inflation.
Therefore, I would strongly urge upon the federal government that in their battle against inflation they deal with this question of rentals by calling a federal-provincial conference on an urgent basis in the very near future to work out a plan for rent controls which would be nationwide in scope. If the provinces agreed, well and good; if they did not agree, the federal government must consider whether it must take the lead in this field.
If measures to halt soaring rentals were taken under the leadership of the government, the people of Canada might be persuaded that the government was serious in its battle against inflation. I believe they would secure public support. In my own city of Toronto, the Toronto Labour Council has urged upon metro council that they ask for provincial legislation permitting rent controls. But this is not the problem of Toronto or of Ontario; it is a national problem and should be dealt with on a national scale.
There are two other aspects of the battle against inflation that I want to raise. The first is that it seems to be absolutely essential that if prices are to be controlled, the government must take the power to enforce the findings of the Prices Review Board. At present the Prices Review Board is patterned on the theory embodied in the Combines Investigation Act, which is that in normal times publicity is an effective method of preventing the fixing of prices by monopolies and the gouging of the consumer. But even in normal times the Combines Investigation Act has proved a very inadequate weapon. Lengthy prosecutions have taken place, fines have been levied and then firms combining together to maintain high prices work out a new, legal, law-proof method of price fixing of their own. However, these are not normal times, and if the government does not recognize the emergency in regard to rentals I suspect they will not be the government for very much longer.
If the Prices Review Board is to be more than mere window-dressing, it must have the power at least to makje recommendations for freezing and rolling back prices where it finds there is a threat of unjustified price increases or the fact of unjustified price increases. I think the time has been reached when common sense judgments can be applied.
While it may not be easy in theory to define an unjustifiable price increase or to define what is gouging the
September 13, 1973

public, references to undue increases, and so on, have been used for years in our statute books. After a detailed look at the facts it is possible to define whether the public is being gouged, and then there would be an obligation on the person who was raising prices, rents, or whatever it is, to explain and to justify the raise. Then if there was no clear justification for the increase that had been imposed, I suggest it would be possible to make an assessment and to do something about it. For example, in the case I mentioned in my constituency of an increase in rent in one month of from $130 to $300, such increase could not be imagined to be justifiable. If the battle against inflation is to be real and not just window-dressing, then better measures are required. The government must seek from parliament the teeth necessary to enforce stabilization of prices.
One other matter I want to mention is this. I find in the service centre which I operate, and to which many of my constituents come for advice, one of the major complaints of the older people, the senior citizens, about the present increased cost of living relates to the cost of prescription drugs. They point out that they have an increase, and it is welcomed, of $5 and a few cents in their basic pensions, or a little more than that in the case of those who receive the guaranteed income supplement, but they often have to pay $20 for prescription drugs, the price of which is not controlled.
I understand that three provincial governments in Canada are providing prescription drugs free, and I am pleased to say they are British Columbia, Manitoba and Saskatchewan. I recommend to the federal government that it look into this matter, and if it is concerned about the impact of the cost of living on elderly people it will do something about providing prescription drugs free to old age pensioners.
My last point, Mr. Speaker, is this. As an anti-inflation measure the government should again take a leaf out of the New Democratic Party's program. At its convention last July in Vancouver-


John Napier Turner: Why don't you come to our convention, Andy, and really learn where it's at?


Francis Andrew Brewin: If you take up this suggestion, I may even come to your convention.


Some hon. Members:: Hear, hear!


Francis Andrew Brewin: At that convention the NDP undertook to provide shelter allowances to make up the difference between a family's rental cost and what it can reasonably afford. Shelter allowances would be paid to people over 60, to the disabled and to families on moderate income with a large number of children. After all, housing is a basic human right, like food, and if the community can accept the principle of subsidizing essential foods it can accept the principle of subsidizing equally important shelter in this relatively affluent age.
I commend to this government the proposition that the time has come for rent controls, the time has come to take the high cost of prescription drugs off the backs of old age pensioners, and the time has come for some sort of shelter
Cost of Living
allowance. I am glad that the government has moved toward consideration of these victims of inflation, and if it will take seriously the proposals I have made it will be doing even better.
[ Translation]


Mr. Rene Matte (Champlain):: Mr. Speaker, the motion under consideration tonight is obviously of the utmost importance since the whole of Canada is facing today the many problems of increases in prices, costs and wages. In fact, we are in such a position that we must find adequate solutions.
Now, if we look into such problems and if we try to find out the real reasons which have brought about the present situation, we shall probably discover many other factors liable to figure out in what way could abuses be redressed and a positive solution be brought up.
Among these real reasons, Mr. Speaker, there is one that could embody all others, that is, we keep on trying to administer while being satisfied with an inadequate system. We would never have to talk about inflation or uncontrolled increase in the cost of living if the present financial system did not create or encourage abuses.
While the motion under consideration states that according to Statistics Canada figures reveal a disastrous situation, and points out interest rate increases, we hit one of the main causes of today's problems. As a matter of fact, the increase in interest rates that we always denounced is one of the main causes of all the others. At a time when production of the consumer goods we need is encouraged, we have to resort to credits, to borrowing. Of course the rates of interest will be reflected in the cost of producing consumer goods and that is, I believe, the source of all the other difficulties that are linked to one another.
Now, if we had an effective means of controlling the increase in the rate of interest, we could solve, at least partially, a good number of those problems.
Here are the other main causes of the present situation: We unfortunately let monopolies do as they please; we accept too easily that some individuals or some companies bring about such an increase in prices. And if I may quote one example from the constituency I have the honour to represent, namely that of Champlain, let me say that there are a good many potato producers who could sell their product at a very reasonable price to the consumer, while getting also a reasonable income out of it.
But what happens in the distribution of those goods and, as in the present instance, in the distribution of those potatoes? Who looks after that distribution? Therefore what happens is simply this: only one dealer will buy in advance the whole potato crop from certain producers and will then impose the selling price he wants and that at the expense of the consumer as well as of the producer. And that is why we pay $5, $6 or even $7 for a 75-pound potato bag, while the producer would have received only 60 cents, 75 cents or a $1 at the most.
One of the main reasons is that we allow some individuals to control, small, average or large monopolies and afterwards to dictate their price to consumers.
If we are looking for real solutions following an analysis of the causes of those inflationary thrust, we obviously

September 13, 1973
Cost of Living
must be led to ask: How could we prevent such conditions? Now, we have been suggesting it for years and I take the liberty of repeating it this evening: We should accept some basic and elementary economic principles. For example, we manufacture some products because we need them and they are meant for consumption. Under such an elementary principle, there should always be some balance-


Joseph Adrien Henri Lambert: I rise on a point of order, Mr. Speaker.


The Acting Speaker (Mr. Laniel):: The hon. member for Bellechasse on a point of order.


Joseph Adrien Henri Lambert: Mr. Speaker, it is extremely unpleasant-and I should not want to displease any of my colleagues in this House-to see that when the member for Champlain (Mr. Matte) tries to make himself heard in this honourable assembly, some hon. members exchange rather highly pitched conversations. This disturbs the orator considerably and I merely with to suggest that the Chair ask hon. members to listen to the pertinent observations of the representative for Champlain. If they wish to talk, they can withdraw behind the curtains.
My remarks, Mr. Speaker, is not intended to hurt our Anglophone friends, but as we are in a minority in the House, I feel that when a Francophone has the floor, he should be listened to, as well as any other parliamentarian. Then, democracy would be a fact in Parliament, and we could in that way set an example for the whole nation.


The Acting Speaker (Mr. Laniel):: Order. I do believe the point raised by the hon. member is pertinent and I take this opportunity-
[ English]
I take this opportunity to invite hon. members who wish to carry on conversations to either leave the chamber or to speak more quietly, so that hon. members who have the floor will at least gain the impression that they are being listened to. At the same time, this will permit other members to listen to the member who has the floor if they are interested.
[ Transla tion]
I would invite hon. members to follow the debate or at least not to prevent the hon. member who has the floor from proceeding with his remarks.
The hon. member for Champlain.


René Matte: Thank you, Mr. Speaker. I thank my colleague from Bellechasse for helping me make myself heard.
I was saying that if we were to proceed from a basic principle such as that of the products we are manufacturing, it would be found that they are being made for consumption. Consequently, the normal tendency would be to work towards balancing production and consumption; this is obvious. If the question were asked to any individual of any age he would also understand that if products are manufactured it is for consumption purposes and if we want them to be consummed one must have the necessary purchasing power.
But today we are faced with such a complex situation that we sometimes take action which interferes with pro-

duction, which does not afford the consumer the purchasing power which he requires to buy those products. Then, from both sides, we give rise to ridiculous situations because it is unthinkable in a country such as ours which can produce about all kind of products, where we enjoy all we need for food, clothing and lodging, that we can even think of a shortage of products.
I think we all agree on this principle. Surely in such a rich country as ours we have all we need. As happened last year, when we were short of dairy products, of milk powder for instance-which could have been sold easily had it been available-because of a government which did its utmost to prevent milk producers from producing more, we were faced with a ridiculous situation.
We voluntarily impede or paralyse production in a field, and that is followed by a shortage; then, imports are even vindicated in a field where we can produce as much as we want not only for our own purposes, but for other countries as well.
Those ridiculous situations, we have had several of, and still continue to have. It was decided once again to pay not to have people sow feed grains out west when it was known quite well that eastern producers, particularly in Quebec, were in need of it. That is again another intolerable situation; on the one hand, we pay not to sow and, on the other, we sell at excessive prices products we would need for other related productions.
Mr. Speaker, we are always faced with such irrational situations. Why? Because we do not accept the basic, elementary, economic principles as the one I mentioned earlier, that products are made to be consumed. If they are to be consumed, let us give people the necessary purchasing power with which to buy them. If that principle were accepted, would it be possible to talk about inflation? Never since then prices do not matter, and the whole thing becomes a secondary issue. If products cost so much and consumers are given so much with which to buy them, prices do not matter, what is important is to have the power with which to buy them.
In a system where money is used to promote exchange and distribution, when a means becomes an end, the result is situations such as the one we have.
That is why, Mr. Speaker, we will never be able to right the situation and find adequate solutions to those problems of inflationary pressure and price escalation until we think about solving at the root level the economic problems that creep in and perturb the whole financial system, the whole system of production and the whole system of consumption. One day, we shall have to wake up and try and find the only real solutions which are those we are advocating and shall continue to advocate. Then Canadian consumers, treated more equitably, would find it easier to gain their freedom and prosper.


Mr. Elmer MacKay (Central Nova):: Mr. Speaker, before intervening in this very important debate on the motion before the House I would like to assure my friends in the Creditiste party that we on this side are very interested in what our French-speaking colleagues have to say.
September 13, 1973

Although we are not as great linguists as is our leader, I want to assure them that we are very interested and attentive, and we wish we were as proficient in their language as they are in ours.
I would like to do tonight what I would hope the government would do in combating the economic ills that beset this country, that is, get straight to the point. I would like to ask the Prime Minister (Mr. Trudeau), if he were here-I suppose he has Hobson's choice tonight, which is either to go down to the Chateau Laurier and tell the people down there what is wrong, or come to the House of Commons and tell hon. members what is wrong, and perhaps he has taken the easier choice-whether he could reconcile his present fiscal and economic policies with a meaningful and serious commitment to fight regional disparities. That is what concerns me tonight.
Does the Prime Minister have any such policy? Does he have any studies which would indicate the extent to which inflation and high interest rates are impeding regional development projects and exacerbating price inequalities across this nation? If he has, I wish he would bring them forward because .this is no imaginary problem, as is illustrated in a recent article prominently displayed in one of the major newspapers in Canada; incidentally, one from a province with which the Minister of Regional Economic Expansion (Mr. Jamieson) is familiar, namely, the province of Newfoundland. The Newfoundland minister of development is quoted as saying that some DREE projects are running between 30 per cent and 40 per cent over what was allocated for them. It is apparent that escalating costs may delay DREE projects, as this article points out. These words can be found, for those who are interested, in the Evening Telegram, one of Newfoundland's major newspapers.
Would the Prime Minister, or someone in the government, tell us how much higher the price of food has to go before the Prime Minister will introduce substantial measures to deal with rising food prices, interest rates and economic problems, and what it will take before the right hon. gentleman will appear before the Special Committee on Trends in Food Prices to explain his government's policies? It has been alleged here tonight that there has been no precedent for this. That may be so, but I have the distinct understanding that a previous prime minister, R. B. Bennett, did in fact appear before the finance committee in times past to explain the government's policies to be dealt with by the committee. I would recommend this course of action most heartily to the Prime Minister.
In view of the fact that the price of food items such as bacon varies from $1.99 in St. John's, Newfoundland, to $1.29 in Ottawa, can the Minister of Transport (Mr. Mar-chand) or any of his colleagues tell us if there are any plans to change the present freight rate structure to alleviate the substantial price disparities which are so painful to the outlying parts of Canada, where people are suffering from slow growth problems and a depressed economy?
Will the Minister of Regional Economic Expansion tell the House what efforts he has been making to counter this government's fiscal policies in order to further his own responsibilities to attack regional disparities? Living costs are higher in slow growth areas-this is the cruel paradox-and wages are lower, as the minister should well
Cost of Living
know. If this government is really serious about alleviating regional disparities, why will it not at least consider equal pay for those under the jurisdiction of the Treasury Board across this nation?
Why does the government permit the Minister of the Environment (Mr. Davis) to freeze shipbuilding subsidies? He is freezing the wrong thing, Mr. Speaker, and his action has put men out of work without compensatory measures being taken. This is a direct attack, in most cases, on the slow growth regions of Canada. This action has put hundreds of men out of work without other measures being taken to counter it.
Why has the government not adopted the report of the Standing Committee on Regional Development? That committee, although hamstrung to some extent by being convened late, has functioned reasonably well in a fairly bipartisan manner. One of its recommendations was the creation of a joint task force made up of key personnel from the Department of Regional Economic Expansion and the Department of Transport to address itself to problems of common concern to both these departments, and to co-ordinate and integrate the development of a national transportation policy with that of a policy to alleviate regional disparities. This would make life easier and would make the task of this government easier in combatting the real problems at which it should be looking if it is serious about attacking the inequalities that exist in Canada.
We watched with interest what became of the motion which was moved by myself and seconded by none other than the Parliamentary Secretary to the Minister of Regional Economic Expansion (Mr. Prud'homme). There has been no action. I ask again; When will the government take its responsibilities seriously?
It is interesting to note that the government became aware of the western problems when its position in the west was being further eroded. The hon. member for Crowfoot (Mr. Horner) pointed out shortly after the beginning of the session, in his usual forthright but always kindly fashion, why the government lost the west. Well, they are hardly number one in the east either. If it were not for the program called LIP and the judicious use of the same, this government would have lost more than the east; they would have lost what some columnists say is the Prime Minister's sole salvation-the artful dodger, the President of the Privy Council (Mr. MacEachen), to whom the Prime Minister has given full credit for keeping this vacillating, weary and unimaginative group of cynical opportunists in power. That, Sir, is an awful lot of responsibility for anyone to bear.


John Napier Turner: Who has the copyright on that?


Elmer MacIntosh MacKay: If the Minister of Finance (Mr. Turner) wants to know, let me tell him that there is no copyright. What it requires is just good common sense, something he could use.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: As I was saying, it is an awful lot of responsibility for anyone to bear, even for the President of

September 13, 1973
Cost of Living
the Privy Council, to keep this government in power. It must be a heavy load on his conscience if it is true, particularly for a minister from Nova Scotia because we in Nova Scotia pride ourselves on our clear consciences; that is why so few Nova Scotians voted for this government.
In any event, the Prime Minister's tribute was very interesting. If he has really kept his leaky ship of state afloat, it certainly relates directly to the priorities of this government and it shows that his priorities are indeed terribly mixed up so far as the welfare of Canada is concerned. Rather than dealing with the really pressing issues that beset this nation and formulating a prices and incomes policy to combat inflation, to deal with fiscal and monetary reform, regional development or federal-provincial relations, this government is obviously only preoccupied with its own survival. So I plead with the Prime Minister and with the Minister of Regional Economic Expansion to formulate some constructive policies, and to act instead of always reacting. Sometimes it is just as difficult to get something constructive past this government as it is to sneak sunrise past a rooster, as they say.
The Minister of Finance said this afternoon that this was a mobile economy-I hope I am quoting him correctly-and the government has to be flexible to deal with it. It is one thing to be flexible; it is another thing to be loose and aimless-and this government has been about as loose and aimless as it is possible for any government to be. The fantastic breakthrough with the United States that the Prime Minister spoke about some months ago has hardly materialized. The war on inflation which he said was won, judging by the latest figures has not even been slowed down. As the hon. member for Annapolis Valley (Mr. Nowlan) said, if we have turned the corner on inflation then it looks as though the government has gone around the bend after turning the corner. The Prime Minister's assessment of our economic problems fully justifies the regard in which he is held by those who understand the realities of economics-a big, fat zero.
What is really the government's policy on regional development is hard to discover. We know the policy is multifaceted; the minister has told us this. We know it is multidimensional; he has said so. We know it is decentralization. But the important thing is: does it work? It appears that that is open to question. Many people say it does not work. The minister of development for the province of Nova Scotia said it does not work, and he resigned from his post. He was development minister for a Liberal administration in a needy province.
An interesting statement was recently made by a prominent adviser to the Liberal Party, Cam. F. Osier, who is the son of E. B. Osier, a former Liberal member of this House, in a position paper entitled "A New National Development Policy for Canada," presented to the Liberal Conference on Western Objectives, commonly referred to now as the Liberals' western wake. This new national development policy for Canada presented by this man, who is an economic consultant with Headland Menzies in Winnipeg, who has a Master of Economics Degree from Simon Fraser University and who has a solid affiliation with the government party, says on page 13:

This paper has emphasized the need for a new national development policy.
What has happened to the current multifaceted, multidimensional, high-powered decentralization policy which was supposed to be the greatest thing since subsidies to solve this country's regional development problems, if already we need a new one before the current one is implemented? According to the press, personnel who are supposed to be decentralized and moved out to the disadvantaged areas are refusing to go. What chaos!
In closing, Mr. Speaker, may I say that the government in all decency should remember that people in the slow growth areas of Canada do not have the savings and the resources, on average, that many Canadians have. Their wages are lower and their savings are less. Their positions are being eroded further and faster by runaway inflation and high unemployment.
In fact, despite the high-flown statements of the Minister of National Health and Welfare (Mr. Lalonde) about his pension improvements, which we of course support, the people of Canada have less purchasing power for their dollar than ten years ago, and we have seen that pension increases have not even kept pace with inflation, which presently is four times what it was during the previous Conservative administration.
The government should raise wages of employees under federal jurisdiction. It should promote the fishing industry, not sabotage it, and eliminate discrimination against fishermen regarding UIC. It should attempt to receive advice and to listen to people in the private sector, to organizations that have constructive suggestions to make, the ADC, the Atlantic Provinces Economic Development Council, the Northern Ontario Development Corporation, and so on.
The government should bring in regional banking policies to take into greater account special needs of slow growth areas for credit. It should act now to provide a domestic funding agency to counter the possible effects, particularly on the Atlantic region, of legislation to deal with foreign investment, namely, Bill C-132.
We in the Atlantic region are conscious that in the national interest it is a good idea to control foreign takeovers and foreign domination of our economy. But we are also mindful that we do not want it done solely at our expense. The minister in charge of the Department of Regional Economic Expansion is very well aware of this potential problem. He recognizes the need for some domestic funding agency, perhaps a Canadian equivalent of the Export Development Corporation, to provide the funds which may be cut off if such measures are adopted, funds which are essential for regional development. As I say, the minister is aware of this problem, and of the apprehension of governments in the Atlantic region.
Most of all, until it has the courage to go to the people with its coalition partners on the extreme left, the government should try to overcome its built-in obsolescence and incompetence. These qualities, together with its association with the NDP, are fast leading it down the road to oblivion. But for the brief period that this administration has left, I suggest it make every effort to cease fouling-up the stewardship that the people of Canada so reluctantly gave it to manage the affairs of the nation.
September 13, 1973


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, every so often each of us in the House of Commons feels a special sense of responsibility to this institution and to the country. I want to make my opening words tonight ones of appreciation to the hon. member for Don Valley (Mr. Gillies) who in his quiet, sincere way and with that deep knowledge he has of these matters presented a case in the form of a series of questions to the government that I think moved us all. I think the Minister of Finance (Mr. Turner) and the Minister of Agriculture (Mr. Whelan) should be congratulated for listening carefully. I know that the remarks of the hon. member for Don Valley did make an impact.
I do not believe there is anyone in this House, or for that matter in any country in the world, who can claim to have a sure-fire answer to what ails western economies. All we do know is that the music is the same as it has been for two decades. I want to put on the record tonight the fact that the subject we are debating, in the serious mood that the House is in, is not new. The administration to which I belonged from 1957 to 1963 was just as deeply concerned about nagging unemployment as the present government should be, and as I am sure it is. We were so disturbed with the type of advice we were getting that we set up a royal commission now known as the Porter Royal Commission on Finance. That commission reported to the Government of Canada in the year 1964.
The message contained in the royal commission report- and in particular I commend chapter 20 to the Minister of Finance-is probably the worst indictment that a public investigating committee has ever laid at the door of public servants in any country. The indictment it laid at the door of the advisers to ministers of finance and government is that they ignored the knowledge that was available to advisers of government in the modern day. Yet since that report came down in 1964 I have been in this House and witnessed several ministers of finance destroyed because they took this same advice from these same advisers. In the speech on the baby budget of September, 1966, I said to the then minister of finance, "You have taken the advice of the same people who got us, and Walter Harris ahead of us." And I saw that minister destroyed. He now sits in the House as the Secretary of State for External Affairs (Mr. Sharp).
So in looking at the Minister of Finance tonight I do not do it with any type of personal animosity; I do it in this sense, that I see him sitting in a position where many a good man, many a great Canadian has been destroyed because of the inability of those who advise governments in Canada, and in other countries as well, to change the doctrine they learned many years ago and which is now obsolete.
I do not quarrel with the earnestness and sincerity of these people. I simply say that the evidence has been here for 25 years that this type of stop-go, stop-go monetary and fiscal policy is not only destroying this country's chance to grow and benefit from all we have got here, but is destroying other countries' chances as well. The Minister of Finance rose in this House today and asked these questions of the hon. member for Don Valley: What is the policy of the Progressive Conservative party? What is the alternative?
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I am just going to suggest, Mr. Speaker, that since January on several occasions I have heard our leader, the Leader of the Official Opposition (Mr. Stanfield), lay down his principles, his philosophy, in favour of potential budgeting. I would point out to the Minister of Finance (Mr. Turner) that this philosophy of potential budgeting has been ignored, laughed at and scoffed by every adviser to every minister of finance that we have had in this country for the last 20 years. The predecessor to the present minister, Mr. Benson, saw fit to scoff at it on national television, just mouthing the words of his advisers.
In simple English, the theory of potential budgeting is to give every man who wants to work a chance to work and every factory that has the capacity, the chance to produce. Because of the failure of the advisers to the government to look at this theory, Canadians have not had a fair shake in getting the advantage of its potential. I am not here to try to enunciate the details of the various theories available to the government but I want to cover some of the salient points.
First of all, there is a precedent for the use of potential budgeting and that is the budget of the United States in 1964. The story of the successes and failures of the policy is available in written form, but no serious effort has been made in Canada to study this approach or try it because those who run this country do not sit in this House. They sit in the advisory seats in the Department of Finance and the Bank of Canada. Until the minister acts with the power that the people of this country gave him to speak for them and give leadership, we will never have a chance to look at that theory.
The second point I want to make, Mr. Speaker, is that over the last seven or eight years in this and other countries a tremendous pressure has been building up from a type of inflation that was not even heard of in the days of Lord Keynes, he who guides the minds of those who guide the minister. I am referring to what is technically called cost-push, the cost-push of ever-rising government taxes. Just a decade ago the cost of running the federal government borne by the people of Canada was $5 billion per year and now it is $20 billion, increased four times in less than a decade. Interest rates have been discussed enough and are a cost-push. In our day we had a money supply of about $11 billion to $13 billion that our masters allowed us; now we have $48 billion, again over four times as much. I could go through all those cost-push forces leading to big unions, leading big business to join with big industry to get their share. As every member of every party in this House knows, the burden of this has fallen on those who do not belong to big government, big business or big labour.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: I think everyone agrees with the remarks made today by the hon. member for Oshawa-Whitby (Mr. Broadbent) and the hon. member for Greenwood (Mr. Brewin). Every member of the House can support those views. Housing has been made the tool of policy in the Department of Finance in the last 20 years, a stop and go policy. All the young

September 13, 1973
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couples who wanted a home, all the old people who wanted to maintain the home they had, have had to pay the price of this narrow, obsolete economic doctrine of the 1930's.
I have heard the hon. member for Calgary North (Mr. Woolliams), and I have heard many members of our party in this House and across the country, say that we accept housing as a necessity that ought not to be used by a group of financial advisers as a way of juggling control. I make this suggestion to the Minister of Finance with deep sincerity, and I think every member of his party supports it, that he take a look at this advice proffered not only by our party but other parties as well. It is not partisan advice. The suggestion is made on behalf of the 800,000 people to whom the hon. member for Calgary North referred. Every year, 4 per cent or 5 per cent more people want to have a new home instead of crowding into the ant heaps in the cities. Give Canadians a chance to have a little bit of soil and a house of their own which is the Canadian way.
The third point is that along with this new phenomenon of cost-push, pushing up prices, we had a group of government advisers applying to it an obsolete method of controlling inflation. Cost-push is not controlled by money, by adding more taxes because that is what cost-push is. That is what this government did in 1969. Then they were so horrified by the results that they turned around and poured money into circulation like mad. Today, we have the phenomenon of expensive money, unemployment and high prices, in a package. I do not blame the Minister of Finance; he is just a chip on a river hoping some day to touch shore. All I am asking of the Minister of Finance and his colleagues is to challenge this control of ministers of finance by their advisers. They have a record for 25 years of being consistently wrong. In our day we may not have been very good, but at least we challenged them.
During the past ten years I have put a number of speeches on the record. Time does not allow me to read them, but I will give the minister the dates if he wants to read some of them. They were made on April 1, 1966; September 8, 1966, and October 10, 1967. In the time allotted to me on those occasions, I seriously tried to put forward some short-term and long-term proposals, principles of selectivity, timing, selectivity by region, selectivity by industry, selectivity by purpose. All those things can be covered in what has been said on this subject in the last two or three months in this House. I have not met any group of economists in any university in this or any other country who have been able to challenge the logic and coherence of those proposals, but there is no evidence yet that they have even been looked at by the advisers to the minister. This is what I want to say, this is the type of thing I would like them to look at and these are the types of policies to which our party is pledged.
In the last few months, we have had the old-fashioned phenomenon of old-fashioned shortages arising. We will soon have shortages of fuel, food and steel and, of course, a shortage of fibre is on the horizon. As one hon. member from the Social Credit party asked tonight, why should Canada, why should the United States, why should Australia, why should Western Europe all be short of these things? My God, the productive potential of the United States and Canada for food has been barely scratched. Why is there a shortage in this country? The shortage

results from the decisions of the advisers to the government who made the decision in the fall of 1969, and implemented it in the spring of 1970 to deliberately have a shortage of production as a way of getting prices high- the Lift program, the national products marketing bill, the Stabilization Act, the small farms program, the objective of which was to get two of every three farmers off the land and keep prices down long enough to force them off the land. I do not have to go into all that. The governments of the United States and Canada are equally guilty, along with the governments of Australia and Western Europe, of making food short in their own areas. This winter, ten million out of 30 million people who are now suffering from famine are expected to die. We have forgotten the problems of others in looking at our own navels.
Finally, Mr. Speaker, our problem is not insoluble. What is of more concern to me is that we have never been closer than we were in 1924-29 to a breakdown in world moife-tary affairs. The government knows this, the NDP know it and we certainly know it. The meeting in Nairobi, referred to by the hon. member for Don Valley (Mr. Gillies), will deal with this problem. In essence, it is that trade between nations is increasing at such a rate that we do not have the monetary media to handle it. Just as in 1924-29 gold and English sterling would not do it, so in 1973 neither American dollars nor the SDR's are sufficient, yet we cannot get out of this government any indication from their philosophy or policy that this is the problem.
If the world machinery of trade breaks down, what country will suffer the worst? We will. This has a tie-up with our domestic policy. That is why the hon. member for Don Valley asked simple, elementary questions. We Conservatives know what we would like to do. Where is the policy, if you have a philosophy that deals with things like the value of our dollar in relation to the American dollar, Swiss francs, German Deutschmarks and the Japanese yen. These are all tied up with this domestic situation. We know what we want to do. We have held meeting after meeting to discuss what we want to do, but we have to get stability before we can do these things.
It is not any accident that the Conservative party, surely the last party that would ever go for controls, should come out and say we see no recourse but for a 90 day freeze, then one and a half or two years for controls to ensure stability so we can move forward with our long and short range policies. Whenever the Conservative party accepts that position, great is the danger to the nation because in the long run, controls are inflationary. You have to get out of them as fast as you can. However, you cannot put in these policies and make these changes unless there is that economic stability. That is what I am asking this House to consider.
We moved this motion because, under the rules, we do not have any opportunity to use in the old fashioned method of considering the estimates to put a minister oij a griddle for days until we get some answers. Under the new rules, we cannot question him in committee and we cannot question him in the House and get answers. We are asking the government to accept the fact that there is sincerity in all parties with regard to this problem of inflation that is affecting all our people, to take a look at it in a non-parti-
September 13, 1973

san way and believe there is one party in this House that is willing to try new ways to tackle new problems.
We say with complete assurance that there is no hope in the policies followed for the past 25 years. Just as other ministers have been destroyed, so is this minister being destroyed by giving the same answers that have been given in this House for the past 25 years by every Minister of Finance when these crises occur. I warn this House this is not just a Canadian or western world crisis. The whole international picture is at stake. The OECD is pleading with us to get our own houses in order, to go to Nairobi, put forward proposals and get at this problem domestically and internationally.
I assure the minister we do not say for certain we have the final answer, but we are seriously and sincerely disturbed over the answers or lack of answers we are getting from this government. We ask that very serious consideration be given to the fact there are alternatives for Canada other than those suggested by the advisers to the minister.


Some hon. Members:: Hear, hear!


Thomas Miller Bell: Mr. Speaker, I rise on a point of order. A suggestion was made some time ago that we might further reduce the time of our speeches to 10 minutes. I realize this would be a hardship for some members, but for the sake of the staff, who will be here many hours in view of the lists that are available, at least from this party, it might be in order if Your Honour would try to seek consent for a 10 minute limit.


Mr. Deputy Speaker:: I will put the question to the House. Is there agreement there should be a 10 minute limit?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: There is not agreement.


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I know if we gave you enough time, it would come out all right. It is understandable, considering the lateness of tne hour. 1 understand the official opposition was entitled to precedence today in order to introduce their motion dealing with prices. However, one wonders why they bothered since they have so little to contribute to the debate.


Some hon. Members:: Hear, hear!


Max Saltsman: It may be that the role of the official opposition is not only to numb everyone in this House into acquiescence, Dut to attempt the same thing with the nation. There does not seem to have been anything in the speeches of members of the official opposition to give any indication they have any idea of how to deal with this serious problem of inflation.
I listened to the hon. member for Don Valley (Mr. Gillies) for whom I have the highest regard. I say that sincerely. I could not understand whether his logic had left him or mine had left me. I listened to him recite all the countries that had imposed wage and price controls and then suggest that we do the same. When he recited the
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lists of countries, many of which have higher levels of inflation than Canada, I noted that all were countries where program has admittedly failed. After the recital of disasters with wage and price controls in other countries, one would have thought he would have come to the conclusion we should not repeat the errors of others. Instead, he said that since all of them have tried it, and the record shows all have failed, Canada should not be left behind in this record of failure; we should try it. After all, we are a great nation. If everyone else has failed, we have an obligation to fail with this particular mechanism as well.
I also tried to understand the hon. member's reasoning with regard to the level of the Canadian dollar. Does he want the Canadian dollar to go higher? I am not sure what he wants. That probably merits the suggestion that if the Canadian dollar were higher than the American dollar, there would be some diminution of inflation in Canada.


An hon. Member:: He wants it higher and lower.


Max Saltsman: Possibly he, does. I think it is only fair to point out that the effect of such a move would be to create massive unemployment in Canada. This is particularly sad when one considers that today one of the chief concerns of the official opposition seems to be with the high level of unemployment. A move in the direction suggested by the hon. member for Don Valley would simply increase the level of unemployment.
I did not think the Minister of Finance (Mr. Turner) was particularly brilliant when he asked the hon. member for Don Valley what the Conservative party would do about inflation if it were in office, but neither was the reply. It is not good enough to say: We are not the government; we do not have to provide the answers; the answer is: You guys get out and let us in, and everything will be taken care of. I have some doubts about that approach. From time to time there is a question in my mind. I take a look at the government benches and I sometimes wonder whether we should be harder on their occupants than we usually are. The only thing that restrains me from taking precipitate action is the unlikely possibility that we might replace what we have over there with what we can see over here.


Some hon. Members:: Oh, oh!


Max Saltsman: One must admit it is a Procrustean choice. Whatever the faults of the New Democratic Party might be, and, like some people, I do think there are faults in the NDP from time to time-


Some hon. Members:: Oh!


Max Saltsman: -I agree it is not very often but one must be fair in these matters-at least when we criticize, and we criticize fairly often and quite strongly, we do at least offer alternative proposals to what the government is doing. The evidence in support of this assertion is that from time to time some of our proposals are accepted by the government, or stolen, depending on which way you look at it.
I want to deal with this question of wage and price control. It did not figure too prominently in the debate
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September 13, 1973
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today, and it may be the Conservative party is backing away from that proposition. I am not sure of the state of loyalty in that party toward price controls at the moment.
I sometimes think that if, in consequence of the wisdom of the Canadian electorate, the NDP were forming a government, wage and price controls might be one of the things it would consider. The question I ask of the official opposition is this: would they be as enthusiastic over wage and price controls if the New Democratic Party were in power as they are now when they see a prospect of forming the government themselves? I do not think they would.
I say this because wage and price control is not a neutral matter which some board or other is going to impose. Wage and price control is a political matter and the decisions which are made-who shall benefit and who shall suffer-depend to a large extent upon the sympathies of the government in power. I am not prepared to trust wage and price control to either the Conservatives or the Liberals. Wage and price control is as much an instrument of rewarding and punishing in a society as is our tax system, and we have all seen what the government and the opposition have done with the tax system. It is important to remind the people of Canada that the opposition is extremely critical of the government except when it comes to such issues as the corporate tax benefits which have been given to industry. Then, the mask comes off and you see the debate as a non-debate. They are in the same game.
The official opposition had the chance of an election. We gave them that chance a little while ago. All they had to do was vote against the government when these corporate tax changes were introduced.


Mr. Kempling:: Tell us about the Polymer vote.


William Arnold Peters: Why don't you listen to the argument instead of making one?


Max Saltsman: You will have a chance to reply. They talk about inflation and what it is doing to the country. But when there was an opportunity to do something about inflation, like refusing to give this money to the corporations by way of tax benefits and increased depreciation allowances, they declined to take it. It was absolutely the wrong policy for anyone worried about inflation to endorse, because it is extremely stimulating. It is the kind of thing which should be done, perhaps, when there is a depression. If you do it in a period of inflation when you are worried about prices, the only conclusion is that you are doing somebody a hell of a big favour and you don't care about the inflationary consequences.
First of all, the purpose was obviously expansionary, if it had any purpose at all. It would pump more money into the economy. It would certainly not lower prices; there is no evidence that the $500 million which the government so generously dispensed to the corporations of Canada has led to any change in prices. Prices have not changed one iota. The Minister of Finance is winding up with egg all over his face. The people to whom he has been generous are shafting him right and left. Even before the promised report comes in, they are saying there has not been enough time to assess the situation, that the questionnaire has been improperly worded, and so on.

If the minister had wanted to reduce prices he would have reduced tariff concessions because prices in the manufacturing industry depend entirely on import prices plus the level of tariff. As long as tariffs are not changed, a low rate of taxation simply increases the profit levels of corporations. This is equally true of the improved depreciation allowances. They are obviously inflationary and designed to stimulate purchases of machinery in the hope of producing an upsurge in the economy. We know what position the government has taken. That is clear. We have all heard what a terrible bunch they are over there, and we acknowledge this, because, after all, we did fight an election upon these issues. But where was the Conservative party when the government was being so generous to the corporations? Where were the great defenders of the people and those who are so terribly concerned about inflation? Did they speak up on this issue?


An hon. Member:: Where were you during the Polymer debate?


Max Saltsman: I can understand that the Conservative party would like to form the government. Then, if they introduced a wage and price policy, they could be even more generous to the corporations. One has to remember that as industry functions now there is at least some rationale attached to the marketing system, whether just or unjust. If we were to move into a system of wage and price controls we would have the government playing God with people's incomes, and I am not prepared to see the Conservatives or the Liberals play that kind of heavenly role. I have no faith that they would favour the working man over those who derive money from interest or dividends. I am not persuaded that they would be all that sympathetic to the wage earner. Although it is easy to appraise wages, how do you appraise profits, interest, dividends, rents, and where would you stop?


An hon. Member:: Why weren't you the lead speaker?


Max Saltsman: We have so many members that it is always a problem for us to decide who is going to get up. I realize the hon. member does not have that kind of difficulty. I realize the hour is late, Mr. Speaker, and that there is some rowdiness, which is understandable, but apart from a few throwaway lines I have not yet got to the meat of what I wanted to say. This is due to the harassment I have had from that side which has diverted me from the more serious aspects of my remarks.
We have talked about the cause of inflation. One speaker said it is cost-push, another has said it is a demand-pull, and a third offered what seemed to me the more common explanation that it is totally due to the iniquity of the Liberal party. That is a reasonable explanation. However, if we look at those items that have escalated most in price, we find almost invariably that they are items that we are exporting around the world. The point is that there is no shortage of anything in Canada. There is some inflation that originates outside this country but there is nothing we can do about that.
Really there are two aspects to inflation. First of all, you can deal with problems in which we have some say. But
September 13, 1973

we cannot control the price of coffee in Brazil or determine what grapefruit is going to cost.


An hon. Member:: Or bananas for that matter.


Max Saltsman: No, nor bananas. But what we can do is to insulate ourselves from price increases that have nothing to do with any increase in the cost of production in Canada but arise from the cupidity of the owners of resources. What happened in this country is that those resources of which we pride ourselves on having a surplus are increasing in price. Oil is a perfect example. We have been exporting oil. The Americans are willing to pay more for oil, therefore Canadians must pay the same amount. Fortunately, the government has stepped into this situation, though not adequately or fast enough, but they may in fact have stumbled upon a policy without knowing anything about it.
As I say, the price of oil increases outside Canada. Canadians, therefore have to pay more. It is not a question of the cost of producing oil having gone up. To produce a barrel of crude in Canada costs less than $2, including provincial taxes, yet it sells for $4.50. So who gets the balance? That is the result after the government has been exceptionally generous. Both Liberals and Conservatives, the Conservatives more so than the Liberals, have said that it is iniquitous to tax the oil industry, that these companies cannot afford it, that we should not take away their special benefits. So, we had a white paper and the oil companies were left intact to profiteer in this country. But they do not have any commonsense. It is one thing to profiteer abroad; maybe you can get away with that. But if you do it in Canada, that is going too far.


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member but I must inform him that, despite a certain indulgence by the Chair, the time allotted to him has expired. He may, however, continue with unanimous consent.


Some hon. Members:: Agreed.


Max Saltsman: In deference to the many members who wish to speak, I shall now take my seat.


Mr. Deputy Speaker:: I hear a no, so I regret to inform the hon. member he cannot continue.


John Mercer Reid: Mr. Speaker, I do not think I shall ever live to see the day in this House when anything proposed from the government benches is accepted with enthusiasm by members of the opposition. One of the great tragedies of the parliamentary system is that there are probably a great many sincere people on both sides of the fence who, owing to the operations of the parliamentary system, are dedicated to oppose each other. I do not for one moment denigrate the sincerity of hon. members on the other side, but I do feel it is extremely frustrating, in trying to make heads or tails of the debate on this subject, to try to put together the very sensible and interesting speeches by the hon. member for Don Valley (Mr. Gillies) and the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), I think it was, and compare them with speeches that have been made by their leader and other
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hon. members. What those two members did was to try to focus on the underlying nature of the difficulties that we face, while the others who have spoken for the official opposition have seemed to focus almost solely on the froth, on the surface of the debate, and on the political propositions they might be able to find.
One of the things I have been reading the past little while has been the study prepared by the Food Prices Review Board. I realize that to some people that is a dirty word, but this is a study entitled "Wage and Price Controls in Britain". This study is an attempt by the board to find out the real effect of direct controls by governments in other countries which have experimented with them. We all know, because of our close association, the disaster that controls have been in the United States and the way they were operated in order not to put controls on at the farm gate. However, the effect was to put controls on at the farm gate anyway because the farmers were unable to sell their produce at cost or at cost plus a profit to them.
To deal with the situation in Britain, I should like to quote a number of statements from Dr. Smith's study. Before doing so may I point out that one of the difficulties with economics is to find an economist you can trust and follow. There is an old saying: Where there are three economists meeting you have at least six opinions. The problem is that you cannot find any group of economists who agree from day to day, the only exception perhaps being the hon. member for Don Valley.
I want to quote an economist who hopefully will provide us with some long-term advice. In a study of the impact of wage and price controls in Great Britain this is what he had to say;
The frequency with which the British have resorted to an incomes policy over the past 25 years cannot be explained in terms of economic success of this type of policy. Many statistical studies have been made which have sought to estimate the divergence between actual wage and price movements and those which would have occurred in the absence of the policy. The results-though differing somewhat depending on statistical techniques used- suggest at times a short-run small positive effect, at times a short-run small perverse effect, and at other times no discernible effect; over the longer-run the studies have not found any lasting effect.
The conclusion reached after some 25 years of experiments with wage and price controls in Britain is that they have had no effect at all. And that is the policy that Her Majesty's official opposition wants us to follow in Canada, a policy that will have no effect at all. I am one of those who assumes that the Leader of the Opposition (Mr. Stanfield) is not a stupid man, that there must be some logical argument that he can advance in favour of using a policy that has been demonstrated to be bankrupt in Great Britain and just recently in the United States.
Professor Smith goes on to indicate exactly what the reason is.


An hon. Member:: Is that Adam Smith?


Some hon. Members:: Oh, oh!


An hon. Member:: How did you ever hear about that?
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John Mercer Reid: I think hon. members would be interested to know the logic behind the official opposition's strategy.


An hon. Member:: Sure, tell us.


Mr. Speaker:: Order, please. Perhaps the hon. member might be allowed to make his speech.


John Mercer Reid: Mr. Speaker, I am going to quote from the bottom of page 3 of this study. Dr. Smith goes on to say the following:
An occasional use of incomes policy has been a politically attractive way of demonstrating that the government is trying to do something about inflation as well as about an advancement in standards of living and a fairer distribution of income. A cycle of popular support for incomes policy can be observed with pressures mounting for it, a reaction against it after it has been in force for a while, a lull as memories dim of the last experiment, and then a phase of renewed enthusiasm for a new form of the policy.
The Leader of the Opposition (Mr. Stanfield) sees that we have a problem in Canada and he wants to find a solution to it. What he suggests as a solution is that we do something that is not going to do anything, because it looks politically attractive. That is the economic policy of the Leader of the Opposition and his followers. If that leader could impose that policy upon his followers he would have a point, but today when the Minister of Agriculture (Mr. Whelan) announced a subsidy on milk and gave the amounts, an official spokesman for that party got up and said, "No good. We don't want it; we are against it".
Shortly after that statement, another member of that party got up and asked; "Why don't you give more?" Who really speaks for that party over there? Is it the hon. member for Don Valley (Mr. Gillies); is it the hon. member for Calgary North (Mr. Woolliams); is it the Leader of the Opposition; or is it the hon. member for Edmonton West (Mr. Lambert)? Who speaks for the opposition on financial policy?


John Napier Turner: Will the real financial critic stand up?


John Mercer Reid: In most other areas one can say who speaks for the opposition. One knows that the member who speaks on transportation is the hon. member for Vegreville (Mr. Mazankowski). We all know this. We know that the member who speaks on regional economic expansion is the hon. member for Central Nova (Mr. MacKay). But when it comes to financial matters we have a whole host of members who speak for the Conservative Party, all of whom make such a confused mess of it that nobody can understand, not even members on that side, exactly what is their policy.
I do not like to use outside examples to show the effects which a wage and price control program would have in Canada, but we know from experience what has happened in the United States. Dr. Smith has done an excellent job of showing what the results have been in Great Britain. I should now like to draw the attention of hon. members to an article which appeared in today's Globe and Mail, headed "Economists reject commission suggestion, claim wage, price controls serious mistake". This is the result of a study by two senior economists of the Royal Bank of Canada who in turn studied the official report of the
[Mr. Reid.)
prices and incomes commission. I want to emphasize to hon. members, particularly those in the official opposition, that no economist who comes from an organization that has the word "Royal" in its title could possibly be a friend of ours; therefore this is a neutral opinion. They said this:
"It has been repeatedly demonstrated that controls are ineffective in an over-heated economy and the recent American experience with the price freeze, especially insofar as it applies to food prices, has shown the futility of such attempts.
"With regard to the job of restraining demand, fiscal monetary policy still remains the best bet, whereas with the problem of supply shortages, a general price freeze is ineffective."
We heard the impassioned appeal by the hon. member for Don Valley in which he said there must be a better way. I really think he must have seen the movie called "The Candidate", because that is the scenario he was following. I suggest the hon. member is importing his political philosophy from the United States.


An hon. Member:: Yes, and that candidate won.


John Mercer Reid: In economic matters, the real problem lies in deciding which economist you want to believe. It seems to me that the economists the Conservative party have trained and trotted out once in a while, have run the full cycle of economic policy. These policies can be answered by any other economist in Canada.
My suggestion to hon. members is that the solutions advanced by the Conservative party, that is having a freeze or price and wage controls of some kind in co-operation with the provinces is completely unrealistic. I would refer hon. members to the experience of a former Minister of Finance, Mr. Benson, who attempted at one time to impose a voluntary wage restraint of 6 per cent. He went to a conference with the provincial premiers in Manitoba at which they all agreed to do everything they possibly could to restrain wage increases to 6 per cent. The business community was going to put the lid on price increases. What actually happened? When the crunch came the provincial premiers scattered like quail. They were not prepared to face the requirements and put up a tough front. The whole policy disintegrated and dissolved because the provincial premiers were not prepared to play their role. It seems to me that anyone who makes a suggestion that provincial premiers will allow themselves to be sucked in by members of the official opposition, putting their political lives in their hands, is completely out of his mind and is not aware of the situation in Canada.
The western industrialized world went through an unfortunate recession in the period 1969-70.


An hon. Member:: Oh, come off it.


John Mercer Reid: As the hon. member for Verdun (Mr. Mack-asey) has indicated, the people who suffered from that were the working poor and those who did not have enough fiscal strength to protect themselves. The position the government has taken at this time is that most people are in a position to protect themselves from the worst of inflation, and, therefore, it is going to provide a series of measures to protect those who cannot protect themselves.


An hon. Member:: You don't believe that.
September 13, 1973


John Mercer Reid: The idea is that because the problems of inflation being faced by Canada today are those caused by shortages of supply, keeping in mind those who would be hurt by a wage and price freeze, the government is trying to provide subsidies for those who require them and assistance for those who are too weak to defend themselves. That is a policy I think is reasonable under the circumstances. It is also a policy that deals with an operation we used to call, when I came to the House of Commons first, the Phillips curve; the trade-off between full employment and inflation. In other words, there are two sides to the same coin.
The economist I quoted before made the point that:
-in Canada to conclude that there is a normal unemployment rate of slightly less than 5 per cent, below which the economy cannot operate for long without setting inflation in motion.
"One can move a little bit below this in the short run, but then wage rates and prices will rise and the attempt to restore price stability will eventually lead to higher-than-normal unemployment.
I think there is some truth in that, and that as we reach a state of full employment there will be additional inflationary pressures. These pressures will be increased by what the hon. member for Central Nova indicated as being a fact; regional disparity in this country. Our economic growth and our requirements for labour are not in the same places at the same time.
It seems to me under these circumstances that the policies which the official opposition has attempted to advocate, from which they are running away or hiding or for which they are losing enthusiasm, are those policies which are designed to cause the problem to get much worse, and cause an awful lot more difficulty.
In my opinion the government is trying to walk an extremely narrow line. The position is delicate, but it seems to me that the position the government is trying to follow to protect those who cannot protect themselves is a lot more preferable than the policy of blind disaster which the Leader of the Opposition and some of those who follow him have adopted. I think this debate has been useful in exposing the lack of initiative and the lack of ideas of the official opposition.
[DOT] (Z250)


Joseph Adrien Henri Lambert: Mr. Speaker, as the old saying goes: "Who knows what tomorrow holds?" It is absolutely true. There is however an exception. Canada's Progressive Conservative governments and Liberal governments follow each other and, strangely enough, they are alike.
In 1973, the main subject of discussion is inflation. In 1957 an 1958, the main subject of discussion was inflation. Then those who want to go back a little can easily be convinced that this statement is absolutely true.
I have an article published in 1958 which explained the political program of the Conservative party which wanted to succeed the Liberal party. I shall quote it without partisanship but simply in order that we realize that regardless of the government in office, in the present financial system, we always have the same problems. It is a cycle which repeats itself every 10, 15 or 20 years and we
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have again the same problems because we have always the same things.
Mr. Speaker, I want to quote an extract from the statements of the time so that we realize that we are still in a similar situation today. The Minister of Finance (Mr. Turner) seems to think: How true what he is going to say seems! It is true. I invent nothing. This is written in a political document published at the time which could still apply in 1973 if elections were announced tomorrow.


John Napier Turner: Let us forget the party!


Joseph Adrien Henri Lambert: I shall forget the party, but quote the remarks, the comments and the suggestions made at the time.
Here is what we read in this document:
Inflationary forces are destroying the purchasing power of the dollar, which is prejudicial to the interests of those who receive old age pension, family allowances and veterans' pensions, as well as those who have fixed incomes. Today, the purchasing power is 53'/2C. compared with what it was in 1939.
In 1973, we are making comparisons with what it was in 1957, then we find ourselves at grips with the same problem.
And I go on quoting:
Inflation is the main national problem that Canada must face today. Everyday Canadians are at grips with this problem as a result of ever increasing prices. All that is done is to curb credit and increase interest rates.
As the Minister of Finance said this afternoon during the oral question period, and I quote:
Such a policy cannot possibly deal with inflation unless the federal government stops wasting money.
At that time, the government was accused of being a waster. Today, nothing is said about it but it happens however that a few departments make unconsidered spendings. No one considers things in depth because this is not the main point of interest today, but if one wanted to make an effort, for instance, and read carefully the report of the Auditor General of Canada, one could find out that in a few departments, credits allotted for such or such purpose in the budget have been missappropriated and that the money was wasted.
And later on, they speak about a fair share for farmers. Now, it is the same today. And I go on quoting:
We will guarantee the farmer a fair share of the national income by maintaining a flexible program of support prices to ensure the parity of farm products, parity founded on an equitable relation between sale prices and cost prices.
Now, wanting to guarantee such parity is absolutely logical, but the necessary means must be taken to achieve it. Let's be frank: are we really?
Yesterday, we passed laws intended to increase certain pensions. Last week, we passed a bill to increase the old age security pension. Yesterday, we also adopted a law to up family allowances. Each time we did so to increase the purchasing power in the lower income brackets, to fight inflation.
Mr. Speaker, if we take the trouble to refer to the Larousse dictionary and analyze the word "inflation", we

September 13, 1973
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discover that it is excess money in the hands of consumers, while there is a shortage of products to meet consumer demand. Now that is not the case at the present time. There is production in every shape or form, which really corresponds to the wishes of the people. Perhaps we could do more.
But what I find exasperating in all that, Mr. Speaker- and I should like here to be the spokesman for all those agricultural primary product producers-is that they always let people and consumers believe that it is the producers who are really responsible for the increase in food prices while that is absolutely untrue.
A casual glance at statistics will confirm that about 20 years ago, farm producers earned only 28<f out of each dollar spent for food by consumers. And in 1973, to look at more recent times, we find that only 10 per cent of each dollar spent for food by consumers goes to farm producers. Which means the Canadian consumer spends less for food than any other consumer in any other country. It also means that if prices increase, it is on account of the voraciousness of some people somewhere and that is what we must find out.
That is why, Mr. Speaker, during the month of August, at a press conference-and I wish to repeat it tonight in this House-I had asked that the Food Prices Review Board do its duty, carry out its work and that if it did not have the power to exercise an effective control and show Canadians the real cause of the price increase in food products, the president should resign. I had also asked that the hon. members be recalled immediately to resume this session in order to deal with such a problem and bring in a solution.
Since then, Mr. Speaker, official statistics were published in newspapers. Following thorough research it was proven that the real culprits for the price increases in food as well as in many other fields are the combines, the large limited companies which are unknown to consumers but which fatten themselves up at the expense of the public by demanding inflated prices, thus making profits possible for themselves.
I have on hand a table published by an economist, Mr. Francois Dagenais who is working for the Quebec Agricultural Producers' Union; I do not mind giving his name because he is a responsible man who goes to the bottom of things. In that table, Mr. Speaker, we note that in 1972 and 1973, Dominion Stores Limited have increased their sales by 24.1 per cent, their income by 188.2 per cent. Let us ask our agricultural producers, our milk and egg producers, our poultrymen, etc. whether they have succeeded in increasing their income by 188.2 per cent!
Steinberg Foods Ltd. has reported a sale increase of 11.2 per cent and a profit increase of 58.2 per cent. As for the top profits, Harvey's Food Ltd. has reached it. Indeed, that company has increased its sales by 30.6 per cent and its profits by 646.5 per cent.
Table No. 2 shows the increase in sales, profits and taxes in the processing industries and indicates that Dominion Dairies Company Ltd. has upped its sales by 10.6 per cent and its profits by 3.7 per cent only.
Mr. Speaker, it is certainly in the field of dairy products that processors and distributors are least hungry. Figures

prove it. And I know a little about this area for having spent a good part of my life in it.
Further, in the table, it is reported that Canadian Can-ners Ltd. has boosted its volume of processed products by 9.3 per cent and its profits by 56.1 per cent.
Having said this, Mr. Speaker, I should like to get this straight: I stand among those who believe in private enterprise, because I consider that it is in that area that we can more effectively-


Mr. Benjamin:: You cannot have it both ways.


Joseph Adrien Henri Lambert: Mr. Speaker, I would ask the hon. member to let me finish my remarks and he shall see what I am driving at.
It is because this situation is best suited to allow for maximum output. However, I cannot accept that these corporations, on the pretence that the system works well should take advantage of the population and use the resources at their disposal to unduly increase their prices and their profits.
That is why I am against these trusts carrying on with their business without any control imposed on the prices of food.


The Acting Speaker (Mr. Laniel):: Order, please. I am sorry to interrupt the hon. member, but the time allocated to him has now expired.
[ English]


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, I welcome the opportunity to make my contribution to the debate this evening because I, as well as many members of this House in all parties, deplore the situation prevalent in our country today in that we are suffering from the worst case of that virulent disease, inflation, in all the history of Canada. This House has seen some strange anomalies, as shown in the speeches just made by the hon. member for Waterloo (Mr. Saltsman) and the hon. member for Kenora-Rainy River (Mr. Reid). As a result, it is only fitting to quote a well known columnist who recently wrote the following:
The more trouble the government gets in, the more they and the NDP castigate the official opposition.


Leslie Gordon Benjamin: That's Charles Lynch.


Almonte Douglas Alkenbrack: The government makes the excuse that because inflation is worldwide at this time, they can do nothing about it. This is a fallacy. Everyone knows that in an epidemic of a disease, as is the case with the economic epidemic of inflation, one can protect oneself against its onslaught by adopting habits and policies that work against this enemy of society.
This Liberal government and other Liberal governments for the past seven years have been steady partners and contributors to the grave economic condition in which we now find ourselves. The heavy and unreasonable taxation load placed upon the people by the former minister of finance, Mr. Benson, and now the same policy being applied by the present Minister of Finance (Mr. Turner), has aided and abetted this pernicious case of acute inflation now rampant in our economy. Surely the Prime Minister (Mr. Trudeau) and his cabinet have lived long
September 13, 1973

enough to recall the case of Germany after the first world war when inflation ruined that country's economy, and the time in the early twenties when a German housewife had to take a suitcase full of money with her to buy a loaf of bread.
The Canadian people are very apprehensive and they are sensitive to the increasing cost of living. I said that the government has been a partner to this for the past seven years. As a result of the many letters I received from my constituents in 1966, I raised this matter on May 27 of that year. Inflationary tendencies were then taking hold in our economy. I remember that the morning after Mr. Benson had moved that approximately $450 million be voted out of the consolidated revenue fund for the government's use, I rose in my place and made a lone protest regarding the rise in the cost of living. It is recorded at page 5609 of Hansard of May 27, 1966. Although I do not like to quote myself, I beg leave to put on the record a couple of paragraphs from my speech of seven years ago. I said:
First of all, Mr. Chairman, each of us in this country is a consumer. Present-day government policy and the consequent high cost of consumer goods is storming the last bastion of individual hope and the individual right to live within one's means. It is now practically impossible for the head of a family, father or mother, individual or married couple, to make their modest salaries support their families from one pay day to the next.
Prices have skyrocketed all along the line in food, rent, clothing, fuel, transportation, medical bills, insurance, taxes and capital cost of housing both new and used. In this rapid and cruel escalation of costs, this government has been a steady partner. Even its policies glaringly point to that fact. It is readily apparent that its policies support the super corporations which profit from and control our buyers' and consumers' economy.
The picture has steadily worsened following what seems now to be that far-off day in May, 1966. What is the case today? Inflation's trot is now a gallop. Two ensuing governments have done nothing, and the latest Statistics Canada figures show what every Canadian already knows, that inflation is getting out of hand. If the government does not do something about it soon, it will get completely out of hand. The cost of living rose by 1.3 per cent in one month, the highest monthly increase since March, 1951. This is damning evidence of the results of the government's do-nothing policy; and I place equal blame on its partner in what I call this clandestine coalition that governs Canada, the New Democratic Party.
Last month food again led the way with an increase of 3.2 per cent, and the increase in bread prices has yet to be felt. Food costs alone have increased 16 per cent over the past year. Housing went up 5 per cent and transportation went up 1.5 per cent. Increases in home heating oil and gasoline played a significant part in the rise in both these items of family expenditure, housing and transportation.
The patchwork of temporary relief measures will have virtually no effect on the increase in the cost of living. The Trudeau government, coalesced with and kept in power by the NDP, is providing no leadership to Canadians in the fight against inflation. The fight that the fathers and mothers of Canadian families are putting up is further impeded by the bank interest rate increase, the fifth increase since April, announced yesterday by the Bank of
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Canada. And the Trudeau government acquiesces and approves.
I was proud to see my leader bring about and lead this debate today, fighting to provide the kind of leadership that Canada needs by advocating the introduction of a sensible, comprehensive stabilization policy. The question in the minds of the average Canadian family today is: How are we going to bear our load of responsibilities and expense-the federal, provincial and municipal taxes, the cost of food, clothing and housing, and all the necessary expense that goes with making a living to raise and educate a family?
Inflation has also been the ruination of much of our primary industry. Since we are a country of vast natural resources, I say that the government must do something to protect the economy and our primary industries-agriculture, mining, lumbering, the tourist industry and others. The Prime Minister says that he has pegged the price of milk, that is, the retail price of milk through a system of subsidy. But that is only half a measure, because at the same time he should have frozen the price of livestock feed bought by farmers to feed the cows of Canada.
I was proud today to hear my colleague, the hon. member for Kent-Essex (Mr. Danforth), reply to the statement by the Minister of Agriculture (Mr. Whelan) on this matter. The hon. member for Kent-Essex spoke out on behalf of the dairy farmers of Canada. I made a similar protest in this House on June 6 and I quote my protest of that date:
The price of soybeans and feeds containing this commodity used by farmers for feeding livestock has recently risen faster than the price of gold and beyond any reasonable level. Will the minister please take action to reduce and control the price of this product?
I asked that question of the Minister of Consumer and Corporate Affairs (Mr. Gray). He replied:
Mr. Speaker, parliament has not given me that authority, but 1 will be happy to discuss the issue with my colleague, the Minister of Agriculture.
I did not get much of an answer to such a pressing and important question. At the present time, members of the government are only interested in sloughing off their responsibilities so they can concentrate on their annual party convention and conference now being held in this capital. They say they are having a policy workshop.
Mr. Speaker, I had an oral question ready for today but because of this more important question of inflation I did not ask it. I will ask it now of the Prime Minister: Will there not be representation at this policy conference from the other wing of their coalition, namely, the New Democratic Party? Since they are dictating the policy of the government here in the House, they might just as well be down at the Liberal convention contributing further to current chaotic conditions under the new Liberalism.
I ask again: Will the Prime Minister not listen? He is always talking about consensus emanating from changing conditions, to which we should respond. I agree with him on the importance of that. Here I wish to quote the Ottawa Citizen of Tuesday, which published the results of a poll taken in a neighbouring constituency to mine. The people of that constituency, like the people of my riding of Fron-tenac-Lennox and Addington, are people of good judgment; they are cautious and circumspect. Out of 5,425

September 13, 1973
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replies received to the questionnaire, when asked, "Would you accept the imposition of some form of wage and price controls to combat inflation?" they answered as follows: yes, 3,934; no, 496; undecided, 319.
When asked, "Do you favour wage controls?" the replies were: yes, 2,830; no, 1,195; undecided, 473. When asked, "Do you favour a freeze on rent and food prices?" the replies were: yes, 3,697; no, 565; undecided, 240. When asked, "Should pensions be increased to counteract inflation?" the replies were: yes, 4,095; no, 350; undecided, 238.
There were other views sought and given along social lines of crime and capital punishment with which I agree, but I will not raise them here because they are not relevant to this debate. But what better evidence and consensus does the Prime Minister want regarding controls? If he is embarrassed lest he might be accused of theft and plagiarism of Progressive Conservative policies, he need have no qualms since these are the opinions of an honest and impartial cross-section of Canadian public opinion.
We refer to inflation as being the ruination of the economy of many countries. We are currently informed that rampant inflation helped spark the recent sad happenings in the Republic of Chile, and that is true. Today's headlines presage the relentless advance of prices and of all other costs and factors that compose our economy. The Montreal Star has a headline, "Increase in prices highest since 1951;" the Ottawa Journal, "Living costs zoom- worst in 22 years;" the Ottawa Citizen, "Living costs leap-steepest in 22 years;" and Le Droit, "Bond prodi-gieux des aliments". That is why my leader was the prime mover in this debate today. That is why our party said we would stay here and fight the problems besetting the Canadian people, instead of adjourning which I understand was advocated by those on the government benches and by their partners the NDP.
I have one more point of argument to make and it concerns housing. I think I am fairly well qualified to make this point regarding housing and its high cost. I am a lumberman by trade and was in that business for 25 years before being elected to this House. Members of my family are still carrying on in that business.
The exorbitant cost of building has reached the point where people who need housing are unable to finance construction. This afternoon, in trying to answer one of the questions put to him, the Prime Minister said that the greatest factor in the inflationary crisis was supply, and of course he meant the cost and relative plentitude of supply. Using his own agrument, I therefore call upon him to abolish the 11 per cent sales tax on building materials which is creating a major cost in the price of lumber and building materials supply.
Again, Mr. Speaker, I want to point out I protested this on that same day, May 27, 1966 in this House and have done so since, as have many other members on all sides of the House. I say to the Prime Minister that if he will take off the 11 per cent tax on lumber and building supplies at the manufacturers' level, he will be reducing the price of this material by almost 20 per cent of the retail level. Will the Prime Minister not now respond?

Mr. Speaker, as a result of inflation and the high cost of living, the Canadian people are fast losing whatever confidence they may have had in Liberalism and in this Trudeau government so precariously elected last October. I would think that if this government expected to survive much longer, they would heed the opinions of the people and those of a responsible official opposition and do something, even as a parting gesture, to help the economy and the well-being of the people of Canada.


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I listened to the debate with great interest this afternoon when government spokesmen, particularly the Minister of Agriculture (Mr. Whelan) and the Minister of Finance (Mr. Turner) attempted to explain the inexplicable actions of this government and to defend the indefensible.
The chickens have come home to roost, Mr. Speaker. We are now witnessing the effects of five years of Trudeau administration, five years of economic bungling and certainly five years of the implementation of ill-conceived agricultural policies which have struck at the heart and soul of our agricultural industry. The implementation of these policies over the past five years has left thousands of farmers in economic ruin. During the last five years the government has stated, even as it does now, that the problems in agriculture are largely of an international nature and they cannot do anything to relieve these conditions. Today we got the same explanation from the Minister of Finance.
The problems of inflation and the economic chaos that exists in this country have been perpetuated by this government and it will not be easy to relieve them. Every day more and more Canadians of every political stripe are becoming convinced that this government cannot and will not reverse the inflationary cycle. Nor will my friends to the left, the New Democratic Party, help the situation by their marriage of convenience. The Liberals are totally preoccupied with their lust for power, and the New Democratic Party is solely preoccupied with its lust for life.
This government must change its attitude or it must be turfed out, Mr. Speaker. These are the options open to this parliament and to the people of Canada. Notwithstanding anything that the New Democratic Party might say, it is as responsible for the chaotic economic conditions that we are now living under as is the Liberal government. Many of their thoughts, ideals and philosophies have been thrust upon this weak-kneed government which has gone along with them simply to cling to power.


An hon. Member:: There is not a minister in the House who cares, either.


An hon. Member:: There is not one here at all.


Donald Frank Mazankowski: The result of this alliance, Mr. Speaker, is a government which is on a spending spree unprecedented in our country. This afternoon the Minister of Finance pointed out that the reason for the rising cost of living is a shortage of basic commodities coupled with overwhelming demand. He pointed out, as well, that the main thrust of this government is to increase the supply of those basic commodities.
September 13, 1973

Perhaps this is a logical statement, but in a country with the agricultural producing potential of Canada surely we could have been insulated from the effects of this so-called international shortage. We have tremendous agricultural productive capacity in this country, but in the past five years there has been a planned and deliberate reduction of agricultural production which is part and parcel of the total philosophy of this government. They embarked upon a deliberate program of destruction of the small family farm; they embarked upon a program which discouraged production, which imposed controls and which left the agricultural economy in a confused and unstable state.
The Minister of Finance said today that this parliament had moved to save the family farm by removing the capital gains tax on interfamily transactions. But who instituted the capital gains tax, Mr. Speaker? Who imposed it upon the farmers of this country in the first place? Which political party in the last election proposed that the capital gains tax on family farm transactions should be abolished? It certainly was not those birds over there. The only reason they removed the capital gains tax on family farm transactions was the political revelation that occurred after the last election. But what have they done to help the small farmer during their tenure of office? We all remember what they did in 1968 when the then minister of agriculture removed the ceiling on the Farm Credit Corporation interest rate which was pegged at 5 per cent. It immediately shot up to 8 per cent and 83A per cent.
What have they done to encourage young farmers to engage or remain in agriculture? Their programs have discouraged, rather than encouraged. We hear now that there is to be a conference of the agricultural ministers of all the provinces in order to consider ways and means to encourage production. I submit to you, Mr. Speaker, that had it not been for this Liberal government, with its idiotic agricultural policies, we would not need this conference. Theirs was a policy of destruction; it destroyed the heart and soul of the family farm. They were dedicated to a program of production controls and supply management, and controls upon controls.
We heard the Minister of Agriculture say this afternoon that we are in a period of instability and uncertainty. You bet we are. We have been in that state since the Trudeau administration took office in 1968. From the days when this government instituted its proposals on tax reform there has been instability and uncertainty not only in agriculture but in all industry across the country. There has been instability in agriculture since Lift, Bill C-176 and the stabilization bill were brought forth.
This government is now coming around to realizing the importance of the agricultural industry because food prices have risen very sharply. Where were they when the price of hogs was around $29. What did they do then when farmers went bankrupt because of the low price? They came out a year later with a subsidy on a certain grade of hogs. Where were they when eggs were selling at 12 cents a dozen?
I have before me a grading statement from a farmer who sold 240 dozen eggs to Cal-Ed Poultry Farms Limited. His
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total receipts were $44.82. He received 12 cents a dozen for grade B eggs. Where were government members when there was talk about increasing and encouraging production? That was the time the government could have moved in with reasonable support programs to keep the farmers in production. Today, production does not exist because, by the deliberate actions and policies of this government, the farmers have been forced off the land.
Where were they when the Canadian Dairy Commission was allowed to discriminate and deliberately take away the quotas from our small dairy farmers? Where are they now? Where were they when we had stockpiles of wheat and it was selling at 90 cents a bushel? What was the government doing then? It was not doing anything. The last report of the Canadian Wheat Board will indicate that farmers realized the lowest price in 12 years for the grain they sold. It was something like $1.59 a bushel. We all know the government is trying to impose a freeze on agricultural products that are being sold. They have manipulated the domestic price of wheat.


An hon. Member:: You asked for a freeze.


Donald Frank Mazankowski: We asked for a complete freeze, right across the board. You are embarking on a program of selective controls aimed at the defenceless farmer. You are imposing a freeze on the domestic price of wheat. You have manipulated the beef and hog industry by your silly export restrictions.


Mr. Speaker:: Order, please. The hon. member has about two minutes left. He should use this time to address the Chair.


Donald Frank Mazankowski: Thank you, Mr. Speaker. I wish to refer to a statement made today by the Minister of Agriculture (Mr. Whelan) in which he slammed the professors and economists of this country. Where was the Minister of Agriculture when his government was adopting the policies of the task force report on agriculture which was written by no less than five professors and economists, none of whom was a farmer, and which forms the Liberal bible on agricultural policy? This minister has taken a lot of credit for the increase in price of agricultur-al'products. However, he should not be too glowing about the way his predecessor, who was defeated by the hon. member for Medicine Hat (Mr. Hargrave), took the heart and soul out of the farmer in all parts of this country. The minister should be grateful to the Conservative party because if it were not for this party, he would not be occupying that position today.
Inflation is one of the major issues threatening our economic and social fabric. Inflation has eroded our dollar by more than one third since 1961. We must consider the fact that the chairman of the Economic Council of Canada has suggested we will probably be going through a period when inflation will be of the order of 5 to 6 per cent. This means the dollar will be worth something in the area of 75 cents; in 5 years, 56 cents; in 10 years, 42 cents and in 15 years, 31 cents. This is a terrorizing thought. What does this government intend to do about it?
This government has suggested that one of its major priorities is the pursuit of reasonable price stability. We must question the sincerity of that statement because this
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September 13, 1973
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government and this Minister of Finance (Mr. Turner) to date have done nothing to mitigate the inflationary spiral.


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: Mr. Speaker, I am pleased to take part in this debate because a number of my good friends and colleagues in all parties have been anxiously waiting for me to speak.


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: I have sat in this chamber most days since January 4. I have heard the Leader of the Opposition (Mr. Stanfield) and a number of his colleagues recite on numerous occasions the requirement for a 90-day freeze on wages and prices ad nauseam. When I first began to be active in politics, these were the people who said it would be terrible to have a socialist, NDP or CCF government because they would be in favour of state control. The people who led in those kinds of arguments were many of my friends in my province, members and supporters of the Conservative party. I find that particularly ironic in this day a'nd age. They were the ones who held up their hands in horror at the very thought of controls on prices, profits and wages. What is equally ironic, and I admit this quite readily, is that some years ago I also thought that was some kind of solution.
Having read and heard of the bitter experience of parties of all political stripes, from communist to fascist, free enterprise to democratic socialist, every one you can imagine in all parts of this globe, I find it ironic when listening to the Leader of the Opposition and his colleagues who have been talking about controls since January 4. I intend to send to the office of the Leader of the Opposition pages from issues of a very radical publication over a period of some eight weeks this past summer. I am being facetious when I say it is radical. For many years, this magazine has been a supporter of, in the best sense of the word, "free enterprise and the capital system". It is a supporter of conservatives in North America, a supporter of the republican party and President Nixon. Tomorrow or Monday I will send to the Leader of the Opposition all the Xerox copies I have of what this radical publication called Time magazine says about 90-day freezes, price controls and phases one, two, three and four implemented by a republican conservative government headed by Richard Nixon. This magazine is noted for its refusal to recognize any kind of operation other than that endorsed by conservatives, small and large "c", both north and south of the 49th parallel for the past several decades.
I heard the hon. member for Calgary North (Mr. Wool-liams) say to members opposite, "For God's sake, go." I will buy that, provided you go with them.


An hon. Member:: Let's all go.


Leslie Gordon Benjamin: I heard the Leader of the Opposition say it was time to remove this government from office.


Some hon. Members:: Amen!


Leslie Gordon Benjamin: I will say not only "amen" but "hallelujah, brother!"


Mr. Baker:: I had a tom cat who was as consistent as you.


Leslie Gordon Benjamin: I have been working against the Grits for almost as many years as all those fellows opposite me are younger than I am. I can say "hallelujah", except when I look to my right and see the Leader of the Opposition presenting himself to me as an alternative. When he talks about a 90-day freeze and about controls, he also says he intends to perpetuate the present economic system. For an ordinary stubble-jumper like me it is an awful choice to have to make. It is not really a choice. To choose between the Grits over there and these Tories over here is enough to give a coyote the heartburn. I am trying to put this in as polite language as I can.


Donald Frank Mazankowski: Think of the coyotes.


Leslie Gordon Benjamin: I say that because I am in full sympathy with the coyotes when it comes to considering these alternatives.


William James Kempling: They voted for you last time.


Leslie Gordon Benjamin: I have coyotes in my constituency who are far smarter than Grits or Tories.


An hon. Member:: Or you.


Leslie Gordon Benjamin: The Leader of the Opposition and his colleagues have talked about controls and a 90-day freeze. If they would like to entice me, and possibly my hon. friends, to support their position they might elucidate precisely what they mean by freezes and controls. Earlier today the hon. member for Don Valley (Mr. Gillies) made a slip of the tongue and spoke of wage and price controls. I should like to ask him and others in the official opposition: On what wages, and why wages?


Steve Eugene Paproski: That is about the dumbest thing you have said yet.


Leslie Gordon Benjamin: Would they also tell me what farmers are to be subject to controls, and why farmers? I will appreciate it if the hon. member for Crowfoot (Mr. Horner) would explain this to me satisfactorily.


John (Jack) Henry Horner: I sure will.


Stanley Howard Knowles: He was not
going to speak.


An hon. Member:: He is talking but he is not saying anything.


Leslie Gordon Benjamin: We have experienced controls and wage freezes before, during wartime, and under the price and wage board in 1941 or 1942. We can learn from the experience of governments in other countries, too. On every occasion when this kind of economic procedure has been followed, the first people to get kicked in the face were the farmers and wage-earners. If the Leader of the Opposition would provide the House with a specific commitment that his version of controls and freezes means he would start at the top and work down, he would get my support.
September 13, 1973


John Patrick (Pat) Nowlan: That is worthy of Kreskin. Show some humility.


Leslie Gordon Benjamin: I say this with a reasonable degree of safety because I am a most cautious fellow.


An hon. Member:: We don't want you at any price.


Leslie Gordon Benjamin: But I would find the bed about equally uncomfortable if I had to get into bed with either one of those two parties. If the official opposition would, first of all, drop the word "wage" from the phrase "price and wage policy" and substitute therefore the word "incomes", and, second, if they would undertake that the profits of financial institutions and corporations, and the incomes of professional people, including members of parliament-


Mr. Hurlburt:: Lawyers and undertakers.


Mr. Andre:: Preachers, too.


Leslie Gordon Benjamin: -and if they will specify that the people who are the first victims of inflation-and as far as I am concerned they are persons earning less than $10,000 a year-will not be subject to compulsion, I might be prepared to get rid of "them" in favour of "those".


Max Saltsman: This is degenerating into a debate.


Leslie Gordon Benjamin: I feel reasonably sure that no Tory will offer any such thing, because the difference between the two parties when it comes down to the crunch is nil.


Steve Eugene Paproski: You simply don't understand us, Ben.


Leslie Gordon Benjamin: The hon. member for Calgary North (Mr. Woolliams) talked about lowering interest rates and removing the tax on building materials. I have heard Tories talk ad nauseam for the last five years-in fact, I have heard members of my own party talk ad nauseam about the removal of sales tax from building materials. I have yet to hear a single member of the official opposition say that the sales tax on building materials should be removed only if and when the advantage was passed on to the consumer. That is the essential difference.
I recall the years when the CCF and, later, the NDP were clamouring, together with the Tories, for the removal of the sales tax from drugs. Finally, the Liberal government did remove it. But no reduction in the price of drugs to the consumer followed: the benefit of the removal of that 11 per cent tax went to increase the profits of the drug manufacturing companies. And there was not a word of complaint from the Tories. So, again, if the official opposition would take the stand that the removal of the sales tax from building materials should not serve to profit the manufacturers and builders of houses, I will believe what they say.
The Minister of Agriculture (Mr. Whelan) spoke today. I hoped he would give us some idea of what the policy being followed by the minister in charge of the Wheat Board really meant. Instead, he gave us a lecture about not wasting food. He was critical of professors, and I agree with that. I hope he agrees that the number one professor in this House is the Minister in charge of the Wheat Board. Then, we might add the hon. member for Don Valley (Mr. Cost of Living
Gillies) and the hon. member for Oshawa-Whitby (Mr. Broadbent).


An hon. Member:: You must be kidding.


Leslie Gordon Benjamin: I am only two-thirds kidding. I did not mean that about the hon. member for Oshawa-Whitby because he is a half-decent fellow.
The Minister of Agriculture talked about his expert friends who are professors and economists putting half the farmers on welfare. As the hon. member for Vegreville (Mr. Mazankowski) quite rightly pointed out, it was five experts, economists with the task force on agriculture, none of whom had grown a bushel of wheat in his life, who recommended that at least one-third of the farmers of this country had to go.
I wish the Minister of Agriculture had told us more about his feed grains policy, particularly since he comes from Ontario. I would have appreciated his explanation of how the western feed grain producers would be happy to help out eastern livestock feeders to the tune of a buck a bushel. These are people who talk of national unity yet continue to impose policies that divide the people of this country. The Minister of Agriculture should not have risen this afternoon. If he had to rise, then all he should have said was: "Mr. Kierans, where are you now that we need you?" I hope that as this session progresses all parties in this House will agree that we must strengthen the Prices Review Board to include all commodities, and that we will give the board power to investigate and to roll back unjustified price increases.


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


John (Jack) Henry Horner: Mr. Speaker, much has been said and many good speeches have been made. There appears to be an agreement on the part of the Liberal party and New Democratic Party to attack us in this debate since they are fearful of the approach of the Conservative party which may have the answer, or part of the answer, to the inflation that has been confronting Canada.
People have been wondering how long this supposed marriage is going to continue. They should read about federalism in Canada as written by the Prime Minister (Mr. Trudeau), before he was Prime Minister and when he was a socialist, as he is today. He is quite happy with the marriage and has no trouble with the NDP as bed partners. As someone said in this House earlier, there are no cabinet ministers in the House. Certainly, there are; the hon. member for Winnipeg North Centre (Mr. Knowles) is here.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: He is head of treasury board and deputy House leader-


Mr. Speaker:: Order, please. The hon. member for Water-loo-Cambridge is rising on a point of order.


Max Saltsman: Mr. Speaker, I must rise to protest. If the hon. member for Crowfoot is determined to have his say,
26454-50J

September 13, 1973
Cost of Living
then surely the hon. member for Winnipeg North Centre at least deserves to be prime minister.


John (Jack) Henry Horner: One thing I have not noticed in the hon. member for Winnipeg North Centre is his desire to be prime minister. Certainly, he desires to be House leader, head of treasury board and to hold a number of other offical positions, which he occupies rather well from his present seat in the House. So the marriage is accepted. The two parties have joined together in this debate to attack the Conservative party position, which as I have said is not an absolute answer. Inflation is very difficut to cure, particularly when a country is gripped by fear as this country is today. We have a psychological belief that inflation is here to stay and will continue.
If you talk to any housebuilder, farmer, person who lends money or worker, they will say they have to have more money because inflation is here to stay and prices will continue to go up and up. I suppose to some extent the Minister of Finance (Mr. Turner) deliberately printed money and caused a great increase in the money supply because he wanted the country to have a feeling of ebullience so that people would be happy and contented. He wanted good times for the people in preparation for an election so perhaps his party would be returned with a bigger majority than ever.
However, this ebullience has got out of hand and has led to a psychological fear about inflation. The Conservatives have put forward a policy, and it is being attacked because it is right. The hon. member for Vegreville (Mr. Mazan-kowski) has dealt with agriculture and with the philosophy of the Liberals over the past few years, which was completely wrong. He has quoted from the task force report on agriculture and quoted the most important part of the report spelling out the agricultural policy. This report has been commonly referred to as the bible of the Liberal party.
Prior to the last election the former minister of agriculture, when campaigning in Peace River, shuddered and shook and said that the one great mistake he had made as minister of agriculture was that he did not see the folly of the task force report on agriculture and did not condemn it but accepted it. He said that was his biggest mistake, but he was too late. The Minister of Finance has suddenly realized that the Conservative party has some good policies and those he has accepted. But I fear he will recognize the remaining ones too late.
What does the task force report on agriculture say? The recommendations commence at page 431, and on the next page appears the following:
The main principles of our recommendations, spelled out in detail in later chapters, are as follows:
1. The surpluses must be controlled and reduced to manageable proportions by reducing production drastically, if necessary.
We know what the minister in charge of the Wheat Board did. He dumped barley on the market at 48 or 50 cents a bushel and sold it to Japan and to everybody else. He got it out of the country at a low, giveaway price and then tried to boast during the last election campaign that he had moved all that grain and should be re-elected. He then came back to Ottawa and wondered why more prairie members of the Liberal party were not returned. Anyone

can give away wheat, but he had become obsessed with this idea in the Liberal bible that we must control and reduce surpluses by reducing production.
The fourth recommendation is this:
Younger non-viable farmers should be moved out of farming through temporary programs of welfare, education and provision of jobs in other sectors of the economy. Older farmers should be given assistance to ensure that they have at least a "livable" standard of living.
That was the design, and now they wonder why there is a scarcity of food and why we have inflation. As many people have said, inflation comes about from too much money chasing too few goods. One other reason inflation comes about-and the government has done a great job promoting it-is that we get less work done for the same amount of money. In other words, they have destroyed the work ethic in society today. Can you find a better example of the destruction of the work ethic than the sentence I have just read, that:
[DOT] (Midnight)
Younger non-viable farmers should be moved out of farming through temporary programs of welfare, education and provision of jobs in other sectors of the economy.
In other words: We will give them money. We won't encourage them to do anything useful or productive. We will sit them on pedestals somewhere, and somehow or another we will eventually try to work them into society.
I suggest that excessive waste will always contribute to inflation. One has only to look at the expenditures of this government for 1967-68 when budgetary estimates were $9.9 billion. Some five years later this had doubled to $18.3 billion, and the true expenditures for that year amounted to $19.2 billion. Certainly one can see a too rapid growth in federal government expenditure. We have too many bureaucrats and this increases the costs of production. This is the expenditure of only one government, and we have ten others in this country all of which contribute to the overhead which in turn contributes to the increased cost of goods and production. This government wonders why we have inflation today. I suggest the government is the designer of today's inflation.
On July 19 the minister announced government assistance in respect of the price of bread. He admitted that bread would go up in price, but somehow or another he did not think it would go up as much as it did. He should have known that a 15 per cent increase in the price of wheat would cause the price of a loaf of bread to be increased by at least one cent. Since that time wheat has gone up approximately 77 cents a bushel and we have seen a six-cent per loaf increase in the price of bread to the consumer. The Minister of Agriculture can go on television and suggest there are rip-offs and gouges in our society; it is very easy to say that but very hard to substantiate it.
The NDP are always advocating some kind of control on production. That has been their theme for years. They suggest the Conservatives want wage and price controls but never mention profit controls. It is pretty difficult to have profit controls, because in order to have them you must have volume controls. I suppose they would like volume controls as well, because they too would limit
September 13, 1973

production. With the profit and volume controls suggested by the NDP we would wake up one day and find an even more accelerated inflation spiral.
Let me refer to agricultural production, especially to the fifth report of the Economic council of Canada in which it dealt at length with this matter. It pointed out quite clearly that in respect of research and financing, the Canadian farmer was undercapitalized in comparison with the U.S. farmer. The report suggests that the Canadian farmer has never had the necessary scientific tools working for him and that he has not had enough capital to allow him to successfully compete with his counterpart to the south. That report came out in 1969. What has this government done since that time? I suggest it has drastically reduced financing in agriculture.
Since 1969 this government has been obsessed with the idea that the number of farmers must be reduced, preferably those with small operations. Now we hear the minister in charge of the Canadian Wheat Board (Mr. Lang) suggesting that we must have a feed grain storage bank. What did we have when our elevators were full of barley? I suggest we then had a feed grain storage bank. But the minister dumped this grain on the world market at 48 cents to 50 cents a bushel. We took a loss and allowed the grain buyers in Italy to resell our barley, making 50 cents a bushel on it. In any event, this grain was out of our bins and off the minister's mind-out of sight, out of mind.
We have seen in the past year our cost of living climb by about 8.3 per cent and we have seen food prices increase by over 12 per cent. What did the minister do in his budget to counteract this situation? He very generously reduced the tariffs on fruits and vegetables. On August 13 this government put an embargo on the export of cattle, thinking this would somehow appease the consumer and bring about a reduction in the price by keeping more beef at home. I suggest this control was effective to the extent of perhaps 1 per cent on the shipment of beef. It had a drastic effect on the price of beef as compared to the advantages that were gained.


An hon. Member:: Are you for a freeze on the price of food?


John (Jack) Henry Horner: I am not for a freeze on the price of food, and I do not think the Conservative party is in favour of such a freeze. My feeling in respect of food production is that me must give the farmer more capital and more scientific tools in order that he can produce more efficiently, thereby keeping up to production demands in this country and the demands of other countries to which we sell goods.


An hon. Member:: Is that what your leader is
suggesting?


John (Jack) Henry Horner: I firmly believe that is what my leader is suggesting. In this country we have allowed ourselves to adopt three policies. The first was the Lift program to get rid of production and surpluses. The second was the concept that wherever possible we should have cheap food, and on many occasions it has been said that we should have a cheap food policy. Now, when food prices are up, we find that the consumers are not happy and the government has to bring in some kind of subsidy.
Cost of Living
I suggest that in the past month three ministers of this government have contributed to increased food prices. The Minister of Finance has adopted policies which have resulted in an increase in the price of bread. The adjustment in respect of the cost of milk announced by the Minister of Agriculture has resulted in increased milk prices. Today the minister brought in a measure to subsidize the price of milk to the extent of five cents a quart in one province of Canada. I ask why this should apply to only one province, because the price of milk has gone up in other provinces as well.
The Minister of Finance had done nothing to curtail or manage the supply of money in Canada. He and the President of the Treasury Board (Mr. Drury) have done nothing to control the expenditures of this government. They believe they must divide up the pie and keep doling it out. They believe in increasing the size of government, and somehow or another things will work out. This government thinks that the inflationary spiral we are experiencing is a world condition. If that is so, why is our inflation higher than the inflation of other countries? The United States has a lower rate of inflation this year than ours, and the Japanese, one of our major traders, also has a lower rate of inflation.
Certainly there are and have been shortages of food in some countries, but we in Canada are not in any way in the grip of a food shortage. We may have some difficulties in respect of distribution of food, brought about partially by the rail dispute and partially-


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member, but his allotted time has expired. However, he may continue with unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I had not planned to participate in this glorious debate.


An hon. Member:: Then sit down.


Mr. Blais:: As you may recognize, as a new member, I am rather intimidated to join the battle in this honourable chamber, but in view of the drivel to which I have listened from members on the other side I felt that intimidation lift suddenly. I felt that nothing I could do at my worst could fail to make any contribution from the other side seem less.
I should like simply to mention that one point made by the hon. member for Crowfoot (Mr. Horner) needs immediate rebuttal. He said that the province of Quebec was the only province which has benefited from the federal largesse in the matter of the milk subsidy. He failed to point out that the same largesse is available to all other provinces, and that it is up to the provinces to use their initiative to enter into agreements which will make the subsidies available. Perhaps my friends on the other side, both NDP and Conservative, should advise their friends in the provincial governments of the fact that the money is available. I am not an economist.


Some hon. Members:: Hear, hear!

September 13, 1973
Cost of Living


Jean-Jacques Blais: I do not pretend to be an economist. I should like to indicate that most of the people I represent are not economists and therefore need some enlightenment concerning what the position is. I might indicate that that enlightenment is not coming from the opposition benches. One has only to recognize that economics is a great, complex science. Although it includes a very pure science, namely mathematics, it also includes the human element. Judging from the rowdiness and the gargantuan proportions of the "monkey-business" being performed by the members of the opposition benches, it would appear that economics is a very wonderful science indeed, for one can never tell what folly next shall befall humanity. There is some silence at the other end. I suppose they are waiting for another gem. We are dealing with the human element and the human psychology. The Liberal government has recognized that it must tread a very fine course. We must maintain an equilibrium and really walk on a tightrope.


An hon. Member:: You sure do.


Jean-Jacques Blais: That has been recognized because the maintenance of economic equilibrium is a very difficult feat. I avoided the depression. I was lucky. I was born after the depression. I see some older gentlemen on the other side who have lived through it. Surely, they ought to know that the economy of Canada has been a sequence of booms and busts. They also must recognize that the causes of these booms and busts have not been determined. Surely, we would have avoided them had we known the exact causes. It has been recognized that the particular economic condition we face now is a completely novel situation. The face of the earth on which we live is changing with the increase in the facility of communication and therefore the whole phenomena is a brand new one. Surely, we will not attempt to use time-worn measures by which we might become involved in a situation which could result in considerable difficulty. I would suggest that if we are to adopt or espouse radical measures we might very well aggravate the problem rather than lessen it. Therefore, the government has learned from past experience. It has carefully reviewed the measures taken last year. It has adopted a course which seems to be the reasonable one, notwithstanding the views of gentlemen on the other side.


An hon. Member:: And you are no economist.


Jean-Jacques Blais: Mr. Speaker, it has been indicated that this course is not popular because, indeed, there is a cry for wage and price controls which has been fanned I might indicate by statements made by my friends opposite. There has been a fanning of this panic which is developing in the country. It would be very possible for the Liberal government to adopt wage and price controls, but this would be fatal. I suggest it would be fatal because this is a very radical measure; there is no doubt about that. It would hurt the economy and hurt directly the principle the Conservative party has always espoused.


An hon. Member:: You v jrry about your own
principles.


Jean-Jacques Blais: I have sincere principles, which is much more than I can say for members on the opposite side. Mr. Speaker, I receive letters and phone calls from thinking

Conservatives and, thank God, there are still some left in this world. They remind me in my riding that they will no longer support the Conservatives because the Tory party has abandoned its principles. The Tory party has entrenched in the constitution of Canada property and civil rights. It has entrenched in the constitution of Canada the doctrine of laissez-faire, Adam Smith, and the whole kit and kaboodle. These are the principles they have always spoken of and, in the same breath, after they have spoken for generations about free enterprise, they turn around and espouse those policies which are the most radical and the most control-oriented of all policies which might be devised. Those are the people-


Mr. Deputy Speaker:: Order, please. The hon. member obviously is enjoying himself, but I think perhaps from the standpoint of completing the record of the House through Hansard some of the excitement might go down about ten decibels.


Jean-Jacques Blais: Mr. Speaker, I was just suggesting to gentlemen on the other side that they may be laughing now, but they might have some second thoughts. A considerable number of comments have been made lately concerning the fact that according to the public polls, the Conservative Party has reached the lowest point it has reached in many years. They may wonder why they are being criticized by the other parties in this House. I would point out to them that the reason they are criticized is that their views are shallow, devoid of worth and I suggest will bring their downfall.


An hon. Member:: Go to the country.


Jean-Jacques Blais: On that point, let us go to the country. May I say that is what the gentlemen opposite have been advocating. They ask that practical measures be taken by this government and in the same breath say, "Let us have an election and let this country have no government for 60 days".


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: First they say, "Let us have a freeze for 90 days." Then in the same breath they say, "Let us have no government for 60 days". That is Tory logic. I suggest they should think more, and review the position they have taken; then perhaps they will survive the next election.


Donald Alex Blenkarn: Mr. Speaker, I was very amused by the speech of the hon. member for Nipiss-ing (Mr. Blais). I remind him that it was this party which suggested the indexing of personal income tax. We were laughed at, but it was accepted. And it was this party which suggested limiting corporate tax reductions for one year. It was laughed at, but the suggestion was accepted. It was this party which for a long time advocated tying pensions to the cost of living, and we have just accepted that. I hope the hon. member does not get himself into a fixed position, because pretty soon we will have an incomes policy in this country and he will have to explain to his constituents, whom he has mentioned, why it could not happen today but it will happen tomorrow for pretty darn sure.
September 13, 1973

This evening we had a fairly good explanation of the incomes policy from the hon. member for Regina-Lake Centre (Mr. Benjamin). I want to impress upon him that that policy is designed to make sure that big business, big government and big labour keep their demands within the limits of productivity.


John Gilbert: Is that your policy?


Donald Alex Blenkarn: Before I go on to discuss an incomes policy, may I point out that this debate has a great deal to do with interest rates, with the cost of money and with monetary policies and I want to make two or three observations with respect to monetary policy which I think need to be made. Over the past three years the money supply in this country has increased at an unbelievable rate. Just last spring the government, rather than refinance its loans in the conventional way had the Bank of Canada print the whole amount. The money supply in one day was increased by $500 million.
The Americans had some financial problems with their trade and their dollar on world markets has slipped this year, on an exchange rate basis, by some 30 per cent; and so has our dollar. That is not so bad so far as the U.S.A. is concerned, because they rely on foreign trade only to the extent of about 4 per cent. But this country is a world supplier of basic commodities. This country supplies to the world 90 per cent of the grain that it grows. This country has the ability to export, and does export, a great number of primary products such as lumber, fish, wheat and oil. These are international products.
It has been said by this government that because international prices are rising, we in Canada must pay more and the government can do nothing about it. But what has really happened? We have $6 wheat, but we have had a 30 per cent devaluation of our currency so our farmers are not getting $6 for their wheat; they are getting $4.20 in relation to German marks and Japanese yen.
That kind of thing is affecting very seriously the cost of living in Canada. The debauching and the pollution of our money supply has been one of the key causes of the inflation cycle in this country, in particular with reference to those products that are determined in price on the international market. It is about time we had a monetary policy explained to this country, one that set out the growth limits of money supply so that to some extent the money supply would bear some relation to the increase in the gross national product and is not increased willy-nilly to meet government expenses.
I want to go on to another matter that I think is perhaps more important, namely, the matter of analysing the kind of inflation with which we seem to be faced today. One of the things that concerns us especially with respect to the price of bread, the price of steel, the price of oil, lumber, etc.-these being commodity prices-is the fact that there is a huge world demand.
The hon. member for Crowfoot (Mr. Horner) spoke about the problems of agriculture and said that we have not done anything to encourage production. For a long time our party has had pretty solid policy objectives in connection with the production of basic commodities. For a long time we have had an incentive policy and we have talked about an incentive society. We have said; "Look,
Cost of Living
you have to give the producers tax breaks and some encouragement to produce". How could you ever start a farm today at an interest rate of 9 per cent, 10 per cent or 11 per cent and hope to produce beef economically? Indeed, if you had the money to buy a place and get organized, you would probably lend it out at a mortgage rate of 10V4 per cent, 11 per cent or 12 per cent.
This government gives no encouragement to our producers of basic products. Is it any encouragement to say to oil producers, "I am sorry, your price is frozen but your costs are not frozen"? Is it any encouragement to say to our oil producers, "I am sorry, but you cannot export and we will not help you produce or discover any more oil"? That is the attitude of this government. They are unwilling to supply real incentives to producers. What they are saying is that they will subsidize consumption. This afternoon we heard that the consumption of milk will be subsidized at 5 cents a quart. They hope to keep the price down in this way, but they will not do a darn thing for the feed costs of the farmer, nor a darn thing about increasing the supply of milk in general or making it cheaper to produce. All they can do is give a consumer subsidy.
What I will say now I think should be on the record, and I think it is only fair to say it. This is a debate that you, Mr. Speaker, have allowed tonight on a matter of serious national urgency. For at least an hour and a half to two hours tonight not a single member of the cabinet, the advisers to Her Majesty's representative, has been present in the House. This demonstrates how much the government is concerned about this issue. It does not give a darn about inflation, high interest rates and the ordinary Canadian. Perhaps this government should get out of the House permanently and onto the streets and knock on the doors, when the people of Canada would tell them what they think of them. Members of this government cannot be bothered to participate in the debates of this House; they would rather be somewhere else. Maybe they are lapping up some gin somewhere.


An hon. Member:: The fleshpots of Ottawa.


Donald Alex Blenkarn: I should like to go on to another question which goes beyond the matter of incentives to production, and say a few words on what is called the problem of cost-push inflation. It is at this point that we in this party have suggested that we have a total incomes policy, and people have been misled into saying, "You are going to have a 90-day freeze." If you are to have an incomes policy that will be a start. That incomes policy has to be one that ties the costs of labour, of profits and wages to the productivity of society because, Mr. Speaker, you and I know we cannot spend more than we earn, unless we borrow from a bank and in that case eventually we have to pay the piper.
That is what has been happening in this country. We have been spending more than we create, and we try to validate our expense by printing more money and fooling ourselves. This attitude hr.s to stop right now. We must get an incomes policy which makes sure there is enough credit to carry on the expansion of the country, but not enough credit to pollute and destroy currency values and the savings of Canadians. When we look at the inflation rate

September 13, 1973
Cost of Living
and ask investors what kind of return do they need to break even, they may say that, based on a rate of 8.3 per cent, they may have enough a year from now to break even. But to get that they have to invest money at 13 per cent or 14 per cent, pay income tax on their return, and then maybe they will break even. That is the kind of society in which we live.
We must have a government that is prepared to look the problem squarely in the eye, that is prepared to say, "You cannot eat more than you produce. You cannot get paid more than you create." Price rises, income rises and wage rises must be tied to national productivity. That is what an incomes policy is all about.
Finally, I wish to say a few things about the cost of government. Just look at this Blue Book and the pamphlet, "Where Does Your Dollar Go?" There is a lovely little chart in it. But you see that chart going straight up every year since the government took power. The government has doubled national expenditure, from $6 billion to $20 billion in a little over a decade. Has national productivity increased that much? Has the population increased that much? No, Mr. Speaker, but the cost of government has, and we cannot ask business to reduce its profits, we cannot ask the store manager not to raise the price of bacon, while the government of Canada increases its take from national productivity by great amounts every year.
It is about time we had a new government in this country. It has been suggested that we have an election. But, Mr. Speaker, look at the fellows on the backbenches opposite. They are not bad fellows. It is just their leadership that is bad. I say we could do something for Canada. We could build Canada. We could develop an incomes policy. We could encourage production. We could cut the cost of government and make a better Canada. If you fellows want to join us, come on over here and put your leaders out because they really don't care.
[ Translation]


Mr. Roch La Salle (Joliette):: Mr. Speaker, I am aware that some members have more patience than others.
As usual, Mr. Speaker, I wish to contribute to that quite special debate on a motion to discuss uncontrolled inflationary pressures. Certainly, I do not hesitate to take part in this discussion since this is an issue which is of interest to the entire Canadian population.
Still, I regret that in this debate, there are hon. members from all sides of this House who try to prove that the government or some other party could be more competent than the others. I am hoping, as I have always been that Parliament will be most unbiased if we are to adequately serve the community.
We have heard all sorts of comments during this debate. Some members have called for elections and it would perhaps be unfortunate for them if such elections were held. But I think, just the same, that Canadians are very much concerned about price increases, and I believe that it is on that point that we must above all try and discuss in a very objective manner.
The opposition is adamant and I think that they have the right and even the obligation to be. To suggest that

this government has well managed the business ot this nation during the past six years would be to consider the situation with one's eyes closed. To say that this government has made no efforts whatsoever would be just as unfair. I believe, however, that Parliament as a whole must operate objectively if we are to lead the government into approving certain proposals, because members of the opposition, to whatever party they belong, do come up now and then with some excellent suggestions. It is also obvious that the government has not found the solutions to all our problems.
It is unfair to say that any party or any group of hon. members are less concerned than others with enhancing the well-being of this nation. At least, I do hope that hon. members are all anxious to serve better and find solutions.
We must indeed be realistic enough to admit that these problems do exist and that the kind of inflation which we are experiencing nowadays is very annoying to the Canadian public. Our people are worried, with good reason; tonight, like all other hon. members, I had a number of telephone conversations with people from my riding who were already aware that we were having a debate that would probably extend late in the night. I was asked squarely whether Parliament will announce anything that will be an encouragement to them. Will Parliament finally make up their minds or find a means to stop this price escalation which has become a major problem in Canada?
Such is the role of the true legislator and I appeal to the objectivity of all the hon. members. Of course, Mr. Speaker, I am in the best position to do so because I do not necessarily have to worry about any potential election. But I have a duty to perform during my mandate and it behoves me, in the first instance, to appeal to that objectivity, because people often lose confidence in the attitude of some parties or some hon. members, because the interests or the profitability of a political party have often seemed to override the interests of the community. To my mind, the people are right in being concerned about that. It is one reason why people have less confidence in Parliament. By his attitude, every member can win back the confidence of the people and prove that parliament is seriously working on devising solutions.
Of course, this afternoon, the Minister of Agriculture (Mr. Whelan) announced a measure which seems to be a true control on products. It will be difficult for the producers who will be imposed price controls and who will have no assurance of possible increases in production costs. In my opinion, the government should seriously think it over when it comes to imposing controls on given products.
I take this opportunity because the government seems to think it has found a solution as regards the dairy products, thanks to an agreement with the province of Quebec. I welcome, of course, the fact that the government has reached an agreement with Quebec in this connection; the minister stated that further steps will be taken to enter into further agreements with the other provinces, but I am quite concerned about the producers because as recently as tonight, I again heard a comment by a producer from my constituency who is quite worried about increasing production costs. Therefore, how is it possible to freeze a
September 13, 1973

product without the assurance that the producer will still be able to make a reasonable profit? If production costs keep increasing, there will be no way of adopting the measure announced by the minister.
Therefore, since there is a control on sales prices it is urgent, mainly for the producer-and this will involve all kinds of production-that the government take immediate action to enable the producer to make reasonable profits.
I know that the Progressive Conservative party is often bringing us back to a policy of a price freeze of 90 days. I would have reason to believe, Mr. Speaker, that this 90-day period, ordered in the United States, did not have any extraordinary or very profitable effects.
On the other hand, it is clear that people are waiting for a positive reaction on the part of the government. It is obvious that Parliament will have to find a solution, consideration being taken of the concern and difficulties this is causing. To what extent will the government be able to consider ordering a price freeze without necessarily having to set limits because the U.S. experience has made us understand that some producers were storing goods or delaying the shipment of their herds to slaughter houses and that after 90 days they could make even bigger profits?
I therefore wonder if the government might not consider imposing simply a price freeze without.necessarily setting time limits, but deciding that it will end the freeze whenever it may judge it necessary and appropriate.
Now, can we consider a price freeze, especially a long one, without necessarily freezing wages? I should say right now that I will oppose any general wage freeze. In view of the cost of living, can we consider today freezing the minimum wages for instance as easily as we would freeze the wages of the professional classes? Therefore I believe that we should establish some standards to impose a fixed hourly rate. Would it be fair for example to freeze some hourly wages at $7 and at the same time freeze the minimum wages at $1.75 or $1.90 an hour? We must therefore establish standards and decide that a general wage freeze is impossible; personally, I would object to it. But we are perfectly aware that, in the long term, you cannot have one without the other. I believe the government should apply itself more to the analysis and consideration of this possibility.
But one thing is certain, Mr. Speaker, as long as the government refuses to stop price increases, we will see prices rise every day. Recently, the government announced some steps to refrain these increases, but it is clear they are political measures set up from day to day. Far from me to blame the government for announcing these measures last week. Of course, they were necessary, warranted, but there again, nothing assures us that we will not see more price rises and will the government be compelled day after day or week after week to introduce new measures to ward off these new increases?
Therefore, if the government thought that the legislation announced would be adequate for the next 12 months, or the next five or six years, I think it is making a big mistake. That legislation is acceptable considering the needs, but it is inadequate as a guarantee.
Cost of Living
That is why I believe the debate we are having tonight should enlighten us and prompt the government to take a very concrete measure. Would it be so embarrassing to accept a valuable proposal from the opposition? The system under which we live disappoints me to a certain extent. It is by tradition, of course, Mr. Speaker, and that is how the people are often disappointed. By tradition, the government should not accept, at least not readily, a proposal from the opposition and by tradition, the opposition must always blame the government, even if the government is right. Therefore, with such a practice or such traditions, we finally lose the confidence of the people and make the people pay for a system that will not change, that members of this House refuse to change.
Therefore, it is imperative that this government receive, accept and consider a proposal that would be fair and that would be a solution to the problems we face at the present time, and it is as important for opposition members to support the government and to force it to act quickly when it is right and when it solves a problem or a difficulty. Therefore, one must of course show some objectivity and lay aside a partisanship which definitely harms the people and for which people must pay. Personally, Mr. Speaker, I don't give a hoot whether a Liberal or a Progressive Conservative government is at the head of this country; what is important is that the people obtain solutions to their problems, and it is up to Parliament, up to each member to see to it.
I am repeating opinions that I have already expressed in this House and that is the way I think I should continue to perform in the sense that I seek above all the better being of each individual in this country. And in order to do that, I must not ask myself if I should favour one party rather than another; I must look for the better legislation and support it; that is the role of every member of Parliament.
And to the extent that we try and pass the legislation most likely to serve the interests of a society, we will succeed in improving the plight of our constituents and allowing them to feel much happier and in greater security.
I would also like as a last point to raise the extremely serious problems relating to housing.
There is talk about suppressing the sales tax of 11 per cent on building materials as a solution to the problem.
Personally, I thought the abolition of that tax could encourage young couples or individuals to become home owners because we know that an individual acquiring ownership becomes more interested, more motivated in his interest in his municipality, his province, and industry.
And I do not think I am wrong in saying that the housing industry affects 33 per cent of the labour force. So, I think that this government has all the reasons in the world to take particular interest in the promotion of the residential housing industry.
We are aware also that the interest rates of the Central Mortgage and Housing Corporation are now unreasonably high. And I wonder if it is not appropriate to ask the government to consider the possibility of giving a 5 per cent subsidy, for instance, to roll back the interest rates of the CMHC to an acceptable level.

September 13, 1973
Cost of Living
I think that these are measures that we should consider seriously if we really want to correct the problems we are all facing and to alleviate the discouragement of Canadians.
Everyday, some views are conveyed to us that it is now very onerous if not impossible for a young married couple to be able to buy a house. I believe we should give serious consideration to those possibilities.
Of course, I would accept other such valuable alternatives maybe more than those I am now suggesting. For a long time we have asking for the abolition of the 11 per cent tax on building materials-it is not a new idea-as well as lower interest rates to encourage all Canadians and we would demonstrate that we have moved in the right direction in the battle against inflation.


Mr. William C. Frank (Middlesex):: Mr. Speaker, I rise as yet another member of this House who is concerned about where this country is heading with the government we find attempting to lead us today. Perhaps the best way to explain what this debate is all about would be to quote from the Financial Times editorial of this week. I quote:
The new bundle of anti-inflation measures which Prime Minister Trudeau presented to Parliament and the country last week has a make-shift, grab-bag feel to it. The commodities Mr. Trudeau chose for specific action-wheat, milk and petroleum products- have little in common except that they may be the targets of consumer complaint. The increase to $12 a month in the monthly family allowance seems to have been selected because it could be done quickly and was likely to be popular.
In no way are these measures in themselves, or in conjunction with the measures announced three weeks before, a coherent program for fighting inflation. They seem to be aimed more at soothing the consumers and placating the New Democratic Party in the hope that inflation will eventually cure itself.
If we are setting out on a course of economic isolation, the strategy should be debated as such and its implications should be carefully considered. It should not be casually adopted in the course of a short-term and piecemeal fight against some of the symptoms of inflation.
It should be clearly realized that the benefits tc Canadian consumers in the form of lower prices than world prices are at the expense, not of foreigners, but of other Canadians who are the producers of the commodities in question.
The government does not give the impression that it knows what it is doing. This would be bad enough even if the policies were only short-term expedients. It is much worse if a new long-term strategy is being slapped together without counting the cost or making a sensible estimate of the chances of success.
I do not want to leave the impression my whole speech is made up of quotations, but I feel yet another comment of a famous columnist in the Ottawa Citizen of September 12 sums up a practical solution to this dilemma. I quote:
To my mind, the best speech in the inflation debate was made by the Conservative member for Don Valley, James Gillies, the man who would be finance minister should Stanfield form a cabinet.
Gillies is one of the most competent men to come to parliament in recent times, and there seems no reason to doubt he would be a competent minister of finance.
The writer finishes by saying, and I quote:
Mr. Gillies did not need to point out that the government may recognize the need for such a policy before long-it has had just such a contingency plan ready for almost a year, and if inflation continues to mount it may well be brought into effect.
(Mr. La Salle.]
If it is, it will not matter that the other parties said the Conservatives were crazy-the Liberals will put it forward as though it were the most sensible plan in the world, and doubtless they will have the support of the New Democrats and Social Crediters in the process.
If only the Conservatives were being robbed, it might not be so bad. Trouble is, I get the feeling we're all being robbed.
Nothing could exemplify the trend of this debate tonight better than what I have just cited. What puzzles me is that every time members of the party to my left speak, they go to great lengths in trying to criticize us. If we do not have any plans that are worth anything, why do they spend so much time criticizing us? It is obvious that they and the government know full well who is the threat and who will be forming the next government.
I want to dwell for a few minutes on some points members of the other opposition parties may not know and government members will not want to hear. As members know, the committee on trends in food prices met many days and heard many witnesses. I wish to commend the chairman of that committee, the hon. member for Sarnia-Lambton (Mr. Cullen), on the fair way in which he chaired that committee. After meeting for many weeks and listening to witness after witness, the committee did not seem to be making much progress. Pressure was on the government to do something. The government set up the infamous prices review board chaired by Mrs. Plumptre. History will refer to this committee as the Plumptre committee. Judging from the performance of that board, it will probably go down in history as having been grafted with lemon branches.
Instead of looking at the positive side, the committee on food prices looks at the negative side. A good example of that was the presentation which the hon. member for Kenora-Rainy River (Mr. Reid) spent a great deal of time in making. I am sorry he is not in the House. I would like to compliment him on a very good speech. New members have not heard him speak up to this point. His speaking reminds me of the adage that when the cat is away, the mouse will play. The trends in food prices committee cost the taxpayers the minimum. It was composed of members of parliament who found time in their busy schedule to attend the committee meetings. There was virtually no extra cost to the country.
The food prices review board was established at a considerable cost, not to mention the army of price tag analysts going around the country at a cost of $6,000 to $10,000 a day. In her frustration, the chairman of that board said "write your MP". In committee last week, I stated she had said "pester the MP's". I will check the newspaper clipping to clarify that, at least for my part. I will give her the benefit of the doubt since she claims she did not say "pester", but "write" your MP. This is an example of how irresponsible she can be. It remains to be seen whether she consulted the rest of the members of the board. Mrs. Plumptre and the other board members receive almost $1,000 a day to sit, even though up to that point there had only been three meetings. They are the ones who were appointed by the government to try to solve the problem.
My comments were interpreted in a newspaper article which states "MP says he is pestered over food costs". It further states that I do not appreciate being called by my constituents and makes other nonsensical statements.
September 13, 1973

With all due respect to the press, they misinterpreted what I said. Possibly I misinterpreted what Mrs. Plumptre said.
In our committee meeting, there were a lot of critical comments. Naturally, these came from opposition members. I think they were invited because this board, under the chairmanship of Mrs. Plumptre, has aggravated and antagonized. This board is satisfied that marketing boards are not in the best interest of the country. I admit that marketing boards are not adaptable to every product, but they serve well the needs of the producers they presently serve. The opinion of the Prices Board was probably derived from the fact the Minister of Consumer and Corporate Affairs (Mr. Gray) saw fit to give the Canadian Consumer Association an additional $100,000 to fight the marketing boards. There seems to have been some prejudice again shown here against marketing boards. It was suggested that marketing boards were the culprits in forcing food prices up. I would refer now to the example of eggs. Some two years ago the egg market in Canada was in a poor position and producers right across the country were facing bankruptcy. The marketing boards had been established in the provinces and had the national marketing board not been established we would have seen large companies picking up farm mortgages. The effect this would likely have had upon consumers would have led to even higher prices than they are paying today.
I think the Minister of Agriculture (Mr. Whelan) must bear some responsibility in this connection, and I would point out that there' is still one province which hasn't signed up and agreed to co-operate with the other provinces in Canada. I think the National Egg Marketing Board, if it is to have a fair chance of success, needs the help of the Minister of Agriculture to ensure that the one province to which I made reference co-operates in the program.
The Minister of Agriculture also has a responsibility to see that since feed costs are on their way down in all areas, to make sure that the boards do not exploit the consumers in a way which may have caused concern before. It is his responsibility to monitor the situation in Canada. At the present time feed costs in the production of eggs has dropped in the neighbourhood of between 5 cents and 8 cents a dozen. I think the minister has a responsibility to keep on top of the situation and see that the provincial boards toe the mark and do nothing to lose the credibility which they have built up to the present time.
It seems to me, Mr. Speaker, that farmers have for too long been in the position where they have been the first to go down and the last to come up. They only want a fair market, as they will be the first to admit, and are only too willing to do their part to produce. They need to have confidence in the future and are more than willing to invest their money in advance if they can see fair market opportunities in the future.
In conclusion, Mr. Speaker, I would like to make brief reference to a newspaper report of the results of a questionnaire sent out by the hon. member for Stormont-Dun-das (Mr. Lamoureux). This matter was referred to in an earlier speech by one of my hon. friends, but I think it is a
Cost of Living
point which is worth repetition. The summary of the questionnaire results referred to in the press are as follows:
Do you favour wage controls? yes, 2,830; no, 1,195; undecided, 473. Would you accept the imposition of some form of wage-price controls to combat inflation? Yes, 3,934; no, 496; undecided 319.
These questions were answered by some 5,425 people. I think that results such as these tell their own story, that the people of Canada in general are not satisfied with what they are getting right now. They don't want the type of hit and miss programs they are receiving.


Mr. David MacDonald (Egmont):: Mr. Speaker, like many hon. members on both sides of the House, I think we are engaging this morning in a debate of some importance, not only to members of this chamber but to the general public. I doubt whether anyone needs to be reminded of the purpose of this debate but it is useful to recall at the outset the initial statement of the Leader of the Opposition (Mr. Stanfield) in asking for this debate. He approached the subject by stating a debate was necessary because of the "uncontrolled inflationary pressures exemplified by the report earlier today of Statistics Canada". That is what the debate is all about, the fact that the country is governed by an administration which in effect has taken the view there is nothing it can do to deal with the rapid rise in the cost of living.
The Minister of Finance (Mr. Turner) when he spoke earlier today, said the government already knew what was taking place. My answer to him is that if such was the case the government was guilty of one or other of two things: it was either callous for failing to come forward with a substantial program to deal with the rising cost of living or it was stupid in believing that the measures it has taken to date could be of any real help in dealing with the serious inflationary situation which faces the country.
Quite frankly, I have been not only mystified but amazed by the degree of detachment and lack of sensitivity the government has shown in the face of this threat hanging over the Canadian people. Indeed, I was more than mystified and amazed. I was shocked by the statement of the Prime Minister (Mr. Trudeau). In attempting to deal with this issue little more than a week ago, he suggested, in effect, that what could be done amounted merely to efforts to alleviate the effects of inflation without dealing with the underlying causes of inflation itself. Any government which reaches the point of believing it has lost control of the economy, as this government now admits, should, if it has any honesty and integrity left at all, consider the only sensible path open to them, and that is, depart the scene so that a government and a party could attempt to do those things which could set the economy back on a safer road. There can be no confidence in a government which says, on one hand, that we ought to limit production while, on the other hand, without embarrassment, the Minister of Finance is telling us, as he did this afternoon, that the overriding cause of inflation is a shortage of supply.
Many of my hon. friends have pointed out that we have experienced the injurious effects of the Lift program. The initial letters stand, I believe, for "Lower Inventories for Tomorrow". I certainly have not heard any member of the government proclaiming the virtues of that particular

September 13, 1973
Cost of Living
program in recent days. Perhaps the government now intends to introduce a new form of Lift, whose initials will spell "Lower Incomes for Tomorrow". In any event, the government has admitted it is not able or prepared to deal with the underlying causes of inflation. This was obvious from the lengthy announcement made by the Prime Minister (Mr. Trudeau) a week ago. He was not even willing to talk about the root causes of inflation. I think his speech will be regarded as one of the more incredible documents in Canadian history. To think that a prime minister of Canada would make a lengthy speech addressed to the issue of inflation which did not contain one word dealing with either monetary or fiscal policy! For students of political science, it will be a classical document in the context of the Prime Minister's detachment from these over-riding considerations.


An hon. Member:: Did you read it?


David Samuel Horne MacDonald: I read it not only once but many times, and the more I read it the more amazed I was. I could scarcely believe that a document of that kind could represent the attitude of a responsible government in the face of the economic disruption which inflation is now causing. Any government member who has read it must be more than a little embarrassed. It is quite obviously not an adequate response. It amounts to the application of band-aids when the circumstances call for comprehensive remedies. While it is very easy for members opposite to criticize the kind of program that this party has put forward, we have attempted to treat the problem with the seriousness it deserves. What we are suggesting is that it is high time, in fact past time, the government approached the problem with some kind of seriousness.
I want to mention a couple of matters which may not have been touched on in the course of this lengthy debate. For instance, I want to talk about the extent to which our increasing cost of living is having an effect on young Canadians. I do not think we have had the opportunity- though I hope there are a sufficient number of independent social scientists who are doing this-to examine the kind of blighted and distorted lives being lived today by young people under the age of 25 because they have been both direct and indirect victims of inflation and unemployment.
This debate primarily centres upon the increased cost of living and the increase in the bank rate, but both of these are additional factors in what I think has been a very difficult time for the young people in this country from coast to coast. For the past, I do not know how many number of months but stretching back at least three years, almost half the number of those who have been unemployed month by month-almost one-quarter of a million this past month-have been 24 years of age or under.
The Prime Minister (Mr. Trudeau) and his government have been quite satisfied to deal with this problem purely on the basis of whether or not a certain make-work program, whether Opportunities for Youth or some form of government intervention in the summer, or the Local Initiatives Program in the winter, is sufficient to reduce to

some degree the amount of social turmoil existing among young people in Canada.
No amount of window-dressing or breast-beating on the part of government representatives can avoid the fact that there are, and have been for more than 30 months, hundreds and thousands of young people in this country who have been very badly dealt with. One has only to move about the larger urban centres to see in and out of manpower offices and other employment agencies the number of disappointed, depressed and disillusioned young people who have found that, in spite of training and preparation to be productive in society, they have not been given a useful role because this government has not been willing to take seriously its responsibilities of economic management.
We in this chamber are attempting in this debate to tell these young people that there is a better way, that there is an effective alternative to the kind of mismanagement and blundering that they have been witnessing in the past few years. A government that attacks merely the effects of inflation is no longer good enough. What we must have, and I feel must have very shortly, is a government that is prepared to examine the real causes of inflation in this country and, even extending beyond that, in the international community.
I do not think any of us would for one moment say that shortage of supply is not part of the problem of inflation today. It is obvious that in certain goods and commodities there is a shortage of supply, some of these shortages being directly created by earlier government policy. We could also go on to say that a good deal of our problem is compounded by successive devaluations of the U.S. dollar in the international money markets, and the ride-down in which our dollar has participated along with the U.S. currency. We could also say that there is abroad, because of the continuing situation, an inflationary psychology very difficult to deal with, very complex and pervasive.
We could even talk about the alarming rise in consumer demand not only in this country but in a number of increasingly developing countries. Some of this has been triggered by the increasing ability to consume as a result of greater productivity in a number of countries. I can think of two countries that not many years ago were not even mentioned when it came to highly developed economies-Japan and Germany. We could also talk of the way we have inflated demand through the excessive promotion of goods and services by the mass media.
All speakers today could have spent hours and hours listing the causes of inflationary pressure. What we do not need is someone like the Minister of Finance (Mr. Turner) or the Prime Minister to lecture us on what the causes are. What we need is a government willing to take its responsibilities seriously, to believe that while it may not have the whole answer to the problem it is willing to tackle the problem directly and to do more than simply make additional payments through welfare or old age programs, no matter now beneficial each may be in turn.
The government should have a monetary and fiscal policy and be prepared to deal in some kind of over-all and comprehensive way with an incomes policy. It should be prepared to co-ordinate its own expenditure and revenue programs with those of other levels of government and
September 13, 1973

with major industries, both goods-producing and service industries, within this country.
What we have had, instead, is a government which has operated as some kind of remote island, knowing its programs and policies only unto itself. We have a government that talks of mysterious contingency plans that somehow never seem to exist except in the minds of an occasional minister who dares to talk about them. When conferences are held between federal and provincial governments, the federal government seems either afraid to discuss or is incapable of discussing realistically some of the basic problems of inflation today.
This is not giving leadership. One might even say it is not even the effect of following a good idea. It seems to me we are faced with a government that is committed to only one principle, one purpose, one path, and that is survival. Not survival, I might say, for the benefit of the Canadian people but primarily survival for itself. That surely must be to a great extent an indication of the poverty of political action and philosophy of this government.
It is ironic that we are having this debate on the eve of the national policy conference of the Liberal party. I do not see how there can be any sensible discussion of policy when the government refuses to deal with any policy matters in a way that makes them at least seem to be concerned about, interested in and able to deal with satisfactorily the cost of living today. How can there be consultation with its own members on matters of policy when this government fails to consult with any responsible sector of the economy, whether it be in the area of management, labour or governmental activity? How can they discuss policy when they continue with a group of advisers who have given the government one set of disastrous ideas after another?
How can they talk about policy when they are still committed to pursuing the same policies introduced earlier this year so disastrously in the budget of February, and the government still indicate no willingness or desire to move to a new budgetary recognition of the problems we are now facing? The time has now come for action, and this is the reason for this prolonged debate. If this prolonged debate, no matter how much longer it lasts, produces nothing else than having the government finally take this problem seriously, then we will have achieved a great deal for the Canadian people.


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I welcome the opportunity to speak in this emergency debate on the cost of living, although I do not relish speaking at 1.20 in the morning.
The situation in the country as far as the cost of living is concerned has reached a crisis stage. We now have the highest recorded rise in the consumer price index since the Korean war. Food prices have gone up 14.7 per cent in the last 12 months, the mortgage rate is up to 10 per cent, and the price of the average house has gone up 14 per cent in the last six months. If this upward trend continues in the consumer price index, by the end of the year a Canadian family will have lost about $400 in purchasing power, which will only be partially offset by recent government measures.
Cost of Living
The situation in my constituency of Sault Ste. Marie is not very bright. Last month Sault Ste. Marie was the second most expensive city in Canada in which to buy food. A basket of food that cost $16.14 in St. John's, Newfoundland, cost $15.69 in Sault Ste. Marie and $13.57 in Toronto. Basic foods in northern Ontario traditionally cost more than in the southern part of the province, and as the cost of living increases we in the north suffer more. Milk in my constituency is now selling at 49 cents a quart.
When we look at price patterns over the past few months we see alarming examples of increases in the cost of basic foods, foods that children and adults need for an essential and proper diet. For example, last May a dozen eggs cost 77 cents, by August the price had risen to 83 cents and this month eggs are selling for 97 cents a dozen in my constituency. The price of bread has risen from 35 cents a loaf in May to 38 cents a loaf, although the cost was down a bit in August to 32 cents a loaf. The cost of a pound of hamburger rose from 92 cents to $1.15 and is now down to $1.12. A three-pound rump roast in May cost $4.74, in August $5.34 and in September $5.26. The same applies to bacon, the cost of which has gone up from $1.17 to $1.68. We have indeed reached a crisis situation. Not only has the cost of basic foods gone up but the cost of fuel has gone up five cents a gallon in Sault Ste. Marie in the past two years. Housing costs are also up and it is now predicted that the cost of a house will increase by $2,000 to $3,000 in the next two years in my constituency.
Why are prices increasing? First of all, we know there is a basic increase in world demand, especially for food. This increase in demand has forced up the price in Canada. We are also told by so-called experts that poor weather has affected certain crops, especially the soybean crop in the United States upon which our farmers depend for cattle feed. This in turn has forced up the price of meat.
We also know that the cost of production has risen, as has the cost of labour, processing, handling and advertising. I suspect there is another reason for the dramatic increase in prices, and that is profiteering. When we look at some of the profits of major food processing, manufacturing and retail companies we begin to see some alarming statistics. The Weston food company in a six-month period ending August 3 showed increased profits of 63 per cent, with sales up only 17 per cent. Silverwood Industries in the second quarter had the amazing increase in profits of 107 per cent, while sales were up only 10 per cent over the same period. That great giant, Dominion Stores, had an increase in profits of 93 per cent, with an increase in sales of only 13 per cent.
It is not only the food companies that are taking advantage of the inflationary psychology. Oil companies as well are taking advantage of rising prices of international oil and oil from the mid-East. As a result, Canadians are suffering from an increase in the cost of oil and gasoline. We see companies like Gulf Oil showing an increase in revenue in the second quarter of this year of 16 per cent, with profits up 67 per cent.
The cost of land has increased astronomically, resulting in an increase in the cost of housing. A Toronto developer bought a house for $22,000 and sold it less than two months later for $28,000. Banks now involved in lending mortgage money have shown tremendous increases in profits. The

Cost of Living
profits of the Toronto-Dominion Bank are up 50 per cent before taxes. The Canadian consumer has the right to know whether these increases in profits are legitimate or whether profiteering is taking place. I personally believe it is the latter. But the consumer has the right to know and the right to be protected.
What is the solution to this problem of the increased cost of living in Canada? The one solution I am convinced will not work is the Conservative party's solution of a wage and price freeze. One example has been recited again and again this evening and I suggest it has to be repeated because it has not sunk into those thick Tory skulls; that is the example of the complete failure of the wage and price freeze policy of the United States. Even President Nixon has admitted that his policies have failed. The consumer knows this because the price of beef in the United States has gone up, and because there have been intensified shortages there has been a stimulated demand by consumers who want to purchase items while prices are frozen.
How could a Canadian price freeze control the price of imported foods? How are we going to control the cost of imported citrus fruits, vegetables, coffee, sugar and oil? We now have to import 50 per cent of our oil because this government has not seen fit to authorize the construction of a pipeline to Montreal. I should like members of the Conservative party to tell me what guarantee we would have that once the temporary price freeze was lifted, prices would not skyrocket as they have in the United States. Moreover, a wage and price freeze is completely unfair. A price freeze encourages many people to increase prices in anticipation of such a freeze and it penalizes those who have their low wages frozen or locked in.
Members of the Conservative party suggest that this is only to be a temporary 90-day freeze to give them time to develop a control program. I ask those hon. members why that policy was not developed during the summer months. While Conservative members were vacationing, the NDP called a special caucus to consider its policy.


Some hon. Members:: Oh, oh!


Mr.   La Salle@Acting Speaker: Order.


An hon. Member:: Order. Sit down when the Speaker rises.


Reginald Cyril Symes: I would like to say this: if they have a policy, they should bring it forv/ard for public scrutiny. I wonder why they say they need another 90 days to formulate it. I suspect that the Conservative policy would not work and that they know it would not work. However, the Liberal government is not much better. It has drifted along. The Minister of Finance (Mr. Turner) while on vacation in Kenora said there was a problem in respect of prices, but that it was not of sufficient severity to warrant recalling parliament.


An hon. Member:: Don't apologize for him.


Reginald Cyril Symes: Unfortunately, we had to come back to settle the rail strike.


An hon. Member:: Unfortunately?


Reginald Cyril Symes: The men went back to work on a very poor basis: they received an unfair settlement. Parliament continued to meet, and therefore we are now discussing the consumer price index. Parliament would not have been sitting were it not for the fact that there was an emergency situation in respect of the rail strike, and the government would not have acted unless pressure had been put on it. When our party met for a special food price caucus we made four recommendations to the government which partially have been implemented. We wanted a prices review board that would not be limited to examining merely food prices but would have the authority to examine all prices. We will continue to urge the government to move in that direction. We want the Food Prices Review Board to have power to roll back prices. I noticed the Conservative party opposed this in the committee on food prices. Members of that party refused to give the board that power. I cannot understand how members of the Conservative Party can profess to be on the side of the consumer and yet could vote against such a progressive piece of legislation.
We wanted pensions increased to at least help those on fixed incomes. We wanted a cost of living escalation that would be reviewed every three months instead of once a year. This was granted. We said also, as an interim measure, that family allowances should be increased to $12 in order to help Canadians. This was granted. We asked the government to give subsidies in respect of basic foods such as bread and milk so that the consumers could at least meet the predicted rise in these areas. We also asked for mortgage interest rates to come down to 6 per cent. It is typical of the government that it has not moved against the great financial institutions of this country although it has the power to do so.
There is also need for an excess profits tax to be levied against companies which, as I described earlier, have been taking advantage of the citizens of Canada. This summer, the New Democratic Party held a national convention in Vancouver and produced an 11-point program to help fight inflation. I have described some of these points. There are other points in respect of this program which, if implemented, would go a long way to reducing the cost of living in this country. We want to see an increase in food production, and this can only take place in our country if we guarantee the farmer a fair price for his efforts. We want to see a two-price system in respect of oil and gasoline so that Canadians will not continue to be ripped off by the oil companies of this country. We want to see a food support program so there will be adequate food on the tables of the poor people of this country.
Our party has a sound and reasonable program to help meet the cost of living in this country. We have urged the Liberal government to move in this direction. We will continue to fight in this House and throughout the country so that the consumers may have fair prices.


Mr.   La Salle@Acting Speaker: Would hon. members kindly resume their seats. I would like first to thank them for cheering me warmly when I was called to the Chair. Now, I recognize the hon. member for Elgin.
September 13, 1973


Mr. John Wise (Elgin):: Mr. Speaker, as I rise in my place to participate in this emergency debate this morning I wish to commend all the members of this House who have had the interest and enthusiasm and the concern to remain in their places, if not to participate at least to listen. I cannot help being reminded of a situation which I am sure hon. members have experienced from time to time. I refer to the situation where a person has a car, a truck, a tractor or some other commodity which turns out to be a lemon. In such a case he disposes of it at the earliest possible opportunity. Now an increasingly greater number of Canadians are discovering that the government is the lemon I mentioned previously and that it is high time it be discarded.
The consumer price index figures released this morning and the unemployment figures released on Tuesday, combined with the ever-increasing inflation we are experiencing, indicate that not only is the economy of this country being mismanaged but it is being mismanaged by a group of incompetent politicians. The feelings of the people of Canada would indeed be truly felt if a general election were called today, tomorrow or perhaps a week hence. We all know that the "Liberal-Democrat" party is afraid to face the electorate at this time. They know that the smaller portion of the coalition will disappear and that the larger part will be virtually thrown out of office.
No longer can we be content to accept the government's wait-and-see philosophy. No longer can Canadians be expected to be hypnotized with meaningless assurances by the Minister of Finance (Mr. Turner). We need action rather than part-time remedies or temporary measures. It is not the effect that needs to be cured-which is what the government in its blindness is attempting-but it is the cause. The cost of living figures released by Statistics Canada this morning show what Canadians have known for months: inflation is getting out of hand and we are being thrown back into the dark days of the twenties and the thirties.
God help us, especially since this situation could have been prevented. We have experienced the biggest monthly increase in the cost of living for 22 years, yet the government indicates that because this is a world wide pehnome-non there is not too much they can do. It is as bad as the Prime Minister (Mr. Trudeau) saying; "As the world turns, so does the universe unfold". It all means one thing-that the government is powerless to do anything and is quite prepared to sit and try to weather out the storm, holding hands with its partner in coalition. The patchwork of temporary relief measures introduced by the government will have virtually no effect on the increase in the cost of living.
I have been most disappointed up to this point. There has been no move to introduce legislation to help a group of people within our society who are being affected adversely by the spiralling rate of inflation and cost of living, that is citizens between 60 and 65 years of age. The Minister of Finance (Mr. Turner) said on September 10 that he thought it strange that the Progressive Conservative party should support the government's so-called infla-
Cost of Living
tionary measures that were introduced last week and then be opposed to the way in which the government is approaching the whole situation. We will be the last to deny aid to those who need it, and since the government has given no leadership in the fight against inflation, the Canadian people need the help and support of the PC party more than ever.
If the government of this country thinks that a cure for inflation, for rising costs, and for unemployment can be found in temporary, patchwork policy, then we are in for a lot of trouble and hard and difficult times. No doubt it will take a Conservative government to put the country on its feet again. As my colleague, the hon. member for York-Simcoe (Mr. Stevens) said in the House yesterday, the increases that have been granted to the needy by the House do not even restore the buying power of family allowances to what they were in the years of the last Conservative government.
It worries me, as it worries hundreds of thousands of Canadians, when the government takes the attitude that nothing can be done about the serious economic difficulties facing us today. This assinine attitude adopted by the government toward the economy is being reflected in other areas of responsibility. The reason this country moved so rapidly into the challenges of the 1960's and 1970's was the strong sense of responsibility shown by the Conservatives in the late 1950's .and early 1960's. What we need is more of the same type of leadership. What this country does not need is the arrogance and the could-not-care-less attitude of the government today.
Gradually the government has been coming around to our way of thinking. Bit by bit they have been taking parts of our economic platform and incorporating them in their own. We in this party are glad to be of service, not only to the people across this country but also to members of the party on the other side of the House. But what is not wanted is the jeering and abuse that has met our suggestions of price and wage controls. The total ignorance of many hon. members on the other side always comes to light when they start using such irresponsible arguments as comparing Canada with the United States and Great Britain. The hon. member for Don Valley (Mr. Gillies) gave an excellent speech on this subject last Monday. It was probably one of the most logical and rational speeches given in the House on the matter before us.
The economic proposals of the Trudeau administration back in 1968 and 1969 have failed. This is obvious from the high rate of inflation that we have today. It was thought then that to fight inflation one should slow down the economy. The result of course was massive unemployment the like of which this country has seldom seen before. Then, as a result of the attempt to fight rising unemployment, inflation bounded back. Rather than wait and try to ride out the storm, there are constructive steps which this government could be taking to deal with inflation. Time and time again these steps have been pointed out, but time and time again the government laughed and said no. Then, last week, the Prime Minister (Mr. Trudeau) announced certain selective controls, some of which I am sure will be financed from the pockets of the producers in this country.
It is not about time the government realized that something is wrong with the way in which they have been

September 13, 1973
Cost of Living
managing the economy of this country, not only during the present crisis but since 1965 and 1968? Is it not about time the government realized that we can use monetary and fiscal policies, supplemented by an incomes policy, to bring about the type of economic conditions that would be beneficial to all Canadians?
There is no way that the people of Canada would be prepared to sit back and accept the Liberal party's excuse that nothing can be done about inflation. To take this attitude is wrong by any standard. It has been clearly demonstrated that the Liberal party lacks the ability to lead Canadians in the fight against inflation, and that the Liberal party lacks the ability to lead Canadians in the fight against the high cost of living.


Walter David Baker: Mr. Speaker-


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: Mr. Speaker, I rise on a point of order. I hope you will not take the 15 minutes of applause which greeted the hon. member for Grenville-Carleton (Mr. Baker) from the time allotted to him.


Mr.   La Salle@Acting Speaker: Order. The hon. member for Annapolis Valley (Mr. Nowlan) on a point of order.


John Patrick (Pat) Nowlan: Thank you, Mr. Speaker.
(English J
I forgot to mention in my point of order that I wish to compliment you on the decorum you have maintained since you assumed that high position.


Mr. Poulin:: Mr. Speaker, I wish to rise on a point of order.


Walter David Baker: Mr. Speaker, that is probably the best speech that the hon. member for Ottawa Centre (Mr. Poulin) has ever made.


Mr. Knight:: Mr. Speaker, on the same point of order, may I point out to the hon. member for Grenville-Carleton that it is probably the only speech which the hon. member has made.


Walter David Baker: I should like, first, to rise to the defence of the hon. member for Ottawa Centre with respect to the comment that it was his only speech. I think he made two others. However, considering the remarks which he made at the opening of the speech-


Mr.   La Salle@Acting Speaker: The hon. member for Ottawa-Centre on a point of order.


Fabian Hugh Poulin: Mr. Speaker, I rise on the same point of order. Although the hon. member for Grenville-Carleton has learned much, obviously he does not know everything. I have made more than two or three speeches or the
number he has mentioned. However, the point of order on which I rose this evening was in reference to the colour of the tie of the hon. member for Annapolis Valley (Mr. Nowlan), which is red. His speech made it obvious that he really supports our policy. The fact is that there is not one member on the other side who during this whole day's debate, has been able to offer-


Some hon. Members:: Order.


Walter David Baker: Mr. Speaker, I do not want to make any comments on the interjection that has just been made beyond saying that I ask the hon. member for Regina-Lake Centre (Mr. Benjamin) to be careful from now on into whose bed he crawls. This afternoon we heard a speech by the Minister of Finance (Mr. Turner) following ten days or so upon a speech made by the Prime Minister (Mr. Trudeau) which was alleged to outline a program to fight inflation. I think it has been generally held by economists, regardless of their political stripe, that the speech of the Prime Minister on September 4 was barely above the quality of the speech given a few moments ago by the hon. member for Ottawa Centre (Mr. Poulin), and was certainly no answer to the critical question of the rising cost of living and the inflation crisis in this country which caused the Speaker of this House-


Fabian Hugh Poulin: On a point of order, Mr. Speaker, the hon. member for Grenville-Carleton (Mr. Baker) has referred to a speech I made. I did not make any speech. If there is any question of debate, be it here or any other place, there has never been any problem between myself and the hon. member for Grenville-Carleton: I have always won out and will continue to do so.


Walter David Baker: Mr. Speaker, I see that the voice of sweet reason is now sitting beside the hon. member for Ottawa Centre. As I was saying, this crisis of inflation is so bad that the Speaker of this House deemed it advisable, considering all the circumstances, to permit an emergency debate dealing with the cost of living.
The point some of us tend to forget was mentioned by the hon. member for Egmont (Mr. MacDonald) in his eloquent remarks a few moments ago when he spoke about the people who are behind the statistics released yesterday morning at eight o'clock. He was referring to the people who are really suffering as a result of the ineffectiveness, the ineptitude and the political expediency of the government. The hon. member for Egmont spoke eloquently of young people who are bearing the burden of this situation because they do not have opportunities for work.


Fabian Hugh Poulin: Give us your views, Walter.


Walter David Baker: Judging by the interjections from the other side, members on this side are more conscious of the unprotected people in this country, those who do not have economic bargaining power, the disadvantaged and the infirm. They are the people who are behind these statistics. They are the mothers and the fathers who are trying to raise children at a time when their dollar is diminishing in purchasing value.

September 13, 1973

Look at the percentage change over the previous 12 months in the price of food-a 15.8 per cent increase. Housing shows a 5.4 per cent increase, clothing a 5.4 per cent increase, transportation 3.3 per cent, health and personal care 5.5 per cent, rent and recreation 4.6 per cent, tobacco and alcohol-in which some members of the House overindulge-2.7 per cent. If there was ever a testament of ineptitude, it is present in these figures.
I say to you this morning, Mr. Speaker, in the late hours of this debate, that this is not just a testament of failure. It is the last will and testament of the government. On September 4 the people of Canada waited, expecting something better than this testament of ineptitude that came from the Prime Minister. They waited for the government to introduce a comprehensive and direct program to fight inflation. But what did they get? They got a palliative.
They asked the government to implement the contingency plan it had talked about so long, a plan for direct economic controls. But what did they get? Nothing. Yesterday we asked whether a new budget would be introduced to meet these economic problems which have been brought on by the ineptitude of the government, by the fear of the government which has had one eye on the NDP and the other eye on God knows where.


Fabian Hugh Poulin: What would you do, Walter?


Walter David Baker: We have asked the government to forecast how rising interest rates will be reflected in the mortgage rate. We have asked what the government is going to guarantee that mortgage money will not go higher. And the government talks about some mystical undertaking with the chartered banks. What it forgets to point out is that the chartered banks are not greatly involved in lending in this country, and that the government, because of its ineptitude, has no control over private lenders and other lenders.
There has been no answer on why prices have been forced up by the government. We have had poultry and meat price increases almost beyond measure. What is the cost of buying a home as a result of government ineptitude? What is the level of rents paid by people in the constituency of the hon. member for Ottawa-Carleton?


Fabian Hugh Poulin: On a point of order, Mr. Speaker, I am not from Ottawa-Carleton.


Walter David Baker: They are sober and upright people in Ottawa-Carleton, but a little foolish politically. What about the increased costs of fuel and transportation borne by the people who are behind the statistics? They are the people who matter, but they are the people the government has forgotten.
Earlier in this debate I heard the hon. member for Verdun (Mr. Mackasey) admit he was a city member and knew nothing at all about agriculture, but he spoke about farmers at last getting a decent income. What he forgot, in terms of gross income, was the more expensive input costs of production the likes of which farmers never say before.


Fabian Hugh Poulin: And what would you do, Walter?


Walter David Baker: As a result of this, farmers are faced with startling increases in costs. If the hon. member for Ottawa
Cost of Living
Centre is capable of reading a newspaper, I ask him to look at the weekly newspapers and note the auction sales. Thousands of farms are going out of production because of the restrictive policies of the government.
The fact is that the government failed farmers. It has failed Canadians. It has failed to contain the high input costs of farming. Where the people of this country asked for action, they got indecisiveness. Where they asked for competence, they got incompetence. Where they asked for openness, they got deceit. And where they asked for honesty, they got the hon. member for Ottawa Centre.


Fabian Hugh Poulin: What would you do, Walter?


Walter David Baker: If the hon. member for Ottawa Centre is in possession of his senses-which I doubt very much-I would ask him to read the speech made by the Leader of the Opposition (Mr. Stanfield) on September 4, 1973. I do not know what his condition is, but it is not normal.


An hon. Member:: Oh, yes, it is normal.


Walter David Baker: Then I think perhaps he ought to enter this debate tonight, instead of skulking in the back benches of the chamber where he is wont to be.
Mr. Speaker, there is a challenge to be made by all Canadians. I challenge that hon. member to stand tonight and to make a speech. I challenge him to defend the cost of living. I challenge him to defend the increased cost of rents. I challenge him to defend the rising cost of hydro. I challenge him to defend the cost of fuel. I challenge him to stand on his feet and do the job he was elected to do, rather than sit and shout insults from the back of the chamber. If he can stand, I say he dare not stand. If he defends this government in its ineptitude, then he himself is inept.
Some time ago in this House we debated increases for pensioners of the public service, increases in youth allowances and increases in old age pensions. They were heralded by the Minister of National Health and Welfare (Mr. Lalonde) as the great cure-all. We voted for those things as a temporary relief, Mr. Speaker. But let the hon. member for Ottawa Centre, all the other callous members on the treasury benches and the claque behind them, understand that they are not relief and, except in the temporary sense, they are not solutions to the problems which face this country.
The solution to the problem lies in the program announced by the Leader of the Opposition, a program he has put before this country since February, 1973. It is a program which this government for its own reasons, good or bad, has sought to ignore, thus leading us to the present situation of crisis.
I challenge that hon. member to get up and defend the economic tomfoolery that we have seen. I challenge him to dispute the eloquent testimony, the righteous and proper economic thought that was brought forth by the hon. member for Don Valley (Mr. Gillies). I should like to hear the hon. member speak on the question of economics. All he has done tonight is shout, and I should like to see him get up and defend the speech made today by the Minister of Finance; that is, if he was present to hear it.

September 13, 1973
Cost of Living
[ Translation]


Mr.   La Salle@Acting Speaker: Order. I am sorry to have to interrupt the hon. member but the time allotted him has expired.
The hon. member for Assiniboia (Mr. Knight).


Fabian Hugh Poulin: On a point of order, Mr. Speaker, I would be most happy at any time to debate with the hon. member for Grenville-Carleton (Mr. Baker) as I have in the past. I have asked him time after time, "What would you do," and never at any time has he been able to offer a solution or indicate that he has any idea-


Mr.   La Salle@Acting Speaker: Order. I would ask the hon. member to resume his seat and, once again, I shall give him the floor in due course if he wishes to take part in the debate. For the time being, I call upon the hon. member for Assiniboia.


William George Knight: Mr. Speaker, I begin by saying that there are many hazards to many professions: miners fear cave-ins, farmers fear drought-but politicians are the only group of people who can sit up all night debating a set of figures. The figures came out on the basis of a month ago. While we sat in the House tonight, supposedly debating that important issue, in a television program it was announced that in the area of food costs there was a drop in every major city, save one, in Canada in the price of beef and there was also a drop in the cost of other foods. But, Mr. Speaker, no member has taken the opportunity to point that out.
In this debate I listened to the hon. member for Don Valley (Mr. Gillies) for whom I have a great deal of respect. I hoped to hear him offer some kind of program related to inflation and the cost of living. When it was proposed in February that there should be a 90-day freeze, I listened to a program that I thought might have some merit and I reviewed it, as I am sure all hon. members did. Now I hear it being presented again.
Mr. Speaker, I ask, what would have been the result of a 90-day freeze imposed in February on the people in my riding? The hon. member for Crowfoot (Mr. Horner) gets up in this House and talks about grain and cattle and is critical of an export control that affected 2 per cent of the beef production. Such a freeze would have meant that producers in my area would have been frozen at last spring's prices, when they should have been much higher. It would have meant that the producer of Assiniboia would have had his wheat prices frozen far lower than they are today. It would have meant that the price of oats would have been far less than the price today on the market. It would have meant that the working man who negotiated a contract with the co-op this summer would have had his wages frozen at a lower level than he deserved. This is the kind of situation that would have faced the people of Assiniboia.
I ask those Conservatives from western Canada who are enunciating that position what justice there would have been to these farmers who two years ago were receiving prices below the cost of production. What justice would

there have been for them, in view of the way the Conservative campaigned last fall, promising to get a good deal for the farmers? Some Conservative candidates spoke of guaranteed prices and some spoke of getting a good return and net income; but now, when the producers of western Canada have finally got something from the market, they speak of across the board freezes for 90 days. What would have happened to the mixed farmers of Assiniboia if the price of beef had been frozen in February? The hon. member for Crowfoot says, "Look at what export control did to the free market? Look at what it did to prices." We know what it did to prices.
What would have happened to the producers in my area who were moving cattle this year, maybe 50 or 75 in a herd, if they had faced a 90-day freeze? There would have been the same kind of absolute disaster as that which hit the American beef market. I plead with the Conservative members, for whom I have respect, to oppose that kind of measure.


An hon. Member:: Where are all the Grits?


William George Knight: I don't know where the Grits are, and I don't worry about the Grits. Mr. Speaker, this debate was initiated by the Conservative party. Out of roughly 107 Tories, there are nine in the House. Where are they? One is hiding behind the curtain. This emergency debate of theirs has been blown up like a balloon. They huffed and puffed all day, and now they are gone. It is their debate, but only nine of them are left.


An hon. Member:: But there is quality.


William George Knight: There is some quality. On Monday some people said that parliament ought to come to an end. The hon. member for Don Valley (Mr. Gillies) said, let the people decide. There is no question but that in our parliamentary democracy, and thank God we are not like Chile and still have one, the people will eventually make the choice. When that choice is made, we will accept it. However, there is no excuse for a member of parliament saying on a Monday, bring this parliament to an end. We cannot disregard our responsibilities as members of parliament and throw this country into a general election. Absolutely nothing would be done about the cost of living for 60 days prior to the election and three months after that.
Let us say that by some quirk, there was a Tory government. They said they would institute a 90-day freeze. There would be a rise in prices by the large corporations the likes of which we have never seen. I admire a party that talks about moving into the market place. Welcome aboard! However, let us not get into the singsong and say we will determine a course in 90 days. It will not work. If you move into the market place, you move in for good. If you move into the market place with the large corporations, you had better be prepared to do it on a long-term basis.
Should a socialist government have the opportunity to govern, we will move into the market place. The Tories will then stand up in this House and cry foul. They will say we are destroying free enterprise. We would establish national marketing and a two-price system for oil and gas.
September 13, 1973

The Tories will say those creeping socialists are again moving into the market place. The Tories are playing a dangerous game. If we move into the market place, it will be in a positive direction. We would establish a powerful prices review board.
I wish to deal with the wheat market. I receive $1.76 a bushel for my wheat and my cost of production is $2.58. In spite of this, the Tories want to freeze the price for 90 days, with no recourse to those who are hurt. I want to express some personal opinions on what I think should be considered. Canada has traditionally been one of the main exporting countries of the world. We have a very sparse population. We do not have a volume of internal or domestic consumption related to the total of what we produce as do the United States and other major countries. We have 22 million people scattered from coast to coast.
In terms of what is exported, we should decide what commodities affect the cost of living and can be controlled. I am not talking about 90 days. I am talking about a long-term basis. When a farmer in Assiniboia complains about the price of lumber, I agree it is too high. If we want to start a program in this country, we will need government control over the market place. That is not the Tory policy. That is the policy of the social democratic party. If the Tories want to move in that direction, welcome aboard.
There are certain commodities for which we can have a two-price system. I have listened to hon. members, including some from my party, talk about the inequities of this system enunciated by the Minister of Justice (Mr. Lang). Following the election, I rose in this House last January to tell this government that the wheat farmer in western Canada was getting an awful rooking because the two-price system was geared in such a way that every producer was losing at least 55 cents a bushel on the basis of the international price. I considered that to be an important issue.
When I returned to my constituency, some producers told me they would accept the idea of a two-price system if it were paid out differently. We are the greatest wheat producing country in the world. Canadians can buy bread at a reduced price. However, when there is a two-price system for his commodity, the farmer would like to see the government have the guts to introduce the same system for the oil and gas industry, not a wishywashy proposal such as that presented by the Minister of Energy, Mines and Resources (Mr. Macdonald). A powerful national marketing board should be established. The domestic price should be fixed and the corporations should have to live with it. The export price can go where it likes. I remind hon. members that farmers are the greatest users of fuel products in this country.
Nickel is produced in Sudbury. Lumber is produced in British Columbia. Hon. members know the large conglomerates in the lumber industry are selling lumber on the international markets at extremely high prices. They are selling the best quality and the rest of us get what is left. Lumber should come under a national marketing board. The same could be done with regard to fish, but not for 90 days. If we move in the direction of a federal socialist economy with marketing boards and domestic prices set for Canadian consumers, urban and rural, we cannot do this in 90 days. It must be done on a long-term basis.
Cost of Living


Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, it is now 2:20 a.m. One has to realistically consider whether debating inflation at this hour is doing any good. The members of the government are not here to either listen or speak. A lone sentry represents the press. The galleries are empty. Canada sleeps. Yet we go on. Why? We go on because we must.
If all the opposition can do is protest the mismanagement of this country and say over and over again what we would do to bring stability back to the economy, then that is what we must do. We must go on exposing the bankruptcy of ideas of this government. We must go on exposing the hypocrisy of the New Democratic Party in keeping the Liberals in office. We must go on providing some hope for the millions of Canadians who are frustrated, bewildered and disillusioned at what they see happening in their lives.
Speaking personally, I do not have any great pretense that my words at this hour will produce instant results. Perhaps my words in the black of night are symbolic. Certainly, they are representative of the feelings of my constituents in Edmonton-Strathcona. Last week I conducted interviews with 159 people on a door-to-door basis, and I found that 64 per cent were convinced the governe-ment was failing to control inflation. The majority of them are simply not satisfied with a government which tolerates 8 per cent inflation and 5.5 per cent unemployment.
But it is more than statistics based on my interviews that I bring to the House at this hour. I wish to record the feelings of people as they expressed them openly to me. If the government will not listen to me, if the government will not pay attention to my statistics, will the government at least have some regard for the basic feelings of people? Here are isolated "quotes" from Canadians I represent. I ask you to remember, Mr. Speaker, as I read them, that these are opinions gathered from a wide crosssection of the Strathcona constituency. These are the statements made:
I am afraid to go to the grocery store.
This, from a widow who is a nurse with two sons, 18 and 16 years old.
I am against a minority government because it does things only reluctantly and needs to be pushed.
Trudeau doesn't care about high food prices.
Trudeau continues to play politics.
I am on welfare and I am very much for Stanfield because I think he will help us more than Trudeau.


Some hon. Members:: Hear, hear!


Thomas Miller Bell: Will you read that one again?


Douglas Roche: Stanfield is the best of the lot.


Some hon. Members:: Hear, hear!

September 13, 1973
Cost of Living


Douglas Roche: There are still too many people on welfare. We should make it easier for those who need help to get money and harder for those who can work.
The government is hurting the little businessman most and soon there will only be big business in Canada.
The middle class is being squeezed the most.
I have just spent $60 on groceries. I don't know how the government is running the country.
I think David Lewis is the big king.
Pierre Elliott is not the man. We need a change.
There is disillusion in the air. Something must be done.
With the high cost of living all we are doing is fighting for existence. That is a heck of a way to live in a marvellous country in a great province.
I don't know what the new generation will do. It is scary when you think of it.
In a minority government they play both ends against the middle.
We can't afford to go on doing bits and pieces of policies. We've got to plan for the future of Canada.
Those are the voices of Canada today. What is it that these and other Canadians want most? They want a government to take firm and comprehensive action to stabilize the economy. They will accept wage and price controls because they recognize this medicine is necessary to cure the ailing Canadian economy. The government responds to the crisis in which we find ourselves by proposing bits and pieces of solutions. It is now clear that only a change in government will provide a fresh view, the new philosophy which is needed at this moment in our history.
It is this realization that makes so bitter-tasting the desperate antics of the leader of the NDP whose vote of confidence in the government last Monday amounted to one of the greatest rip-offs ever perpetuated on the Canadian people. Never again will I sit silent as the NDP champions the cause of justice, especially for the little man. All the members of the NDP are interested in is protecting their skins and surviving as long as possible because they know they will be wiped out in the next election.


Some hon. Members:: Hear, hear!


Douglas Roche: Imagine the gall of that self-serving politician from York-South who went on the CBC news last week and proclaimed that the Tories were filled with glee at the figures in the latest consumer price index. That is an unmitigated falsehood and if he had any shame at all, the leader of the NDP would never dare show his face in this chamber again. The Canadian people know who their real champion is in their fight for stable prices and sufficient jobs. They know he is that man called Stanfield, a leader of integrity, vision and guts. It is this leader who will save the country from the incompetence of the Liberals and the hypocrisy of the NDP.


Some hon. Members:: Hear, hear!


Douglas Roche: This is the message which should carry across Canada in these early hours to keep alive among Canadians the hope for a better tomorrow.


Some hon. Members:: Hear, hear!


William Arnold Peters: Mr. Speaker, I was interested in the remarks made by the last speaker. He has obviously elevated the NDP into a position I have long looked forward to seeing this party occupy. I noticed in the speeches made today that a great many references have been made to proposals put forward in the last few months by the New Democratic Party, and rightly so. It seems to me that a small group in this House has been pioneering in a number of directions, making recommendations for legislation to solve some of the difficulties facing us. This is probably not the way in which things should be done. I am sure, though, that many of the suggestions which have been made in the course of this debate are worthy of consideration after all the politics have been scraped off them. If we have done nothing else, we have convinced all the thinking members of the House that it is time we adjourned for three or four weeks to provide an opportunity for the civil service to think about some of the proposals which have been made and prepare legislation for the rest of the session.


Donald Alex Blenkarn: The government has a contingency plan.


William Arnold Peters: The government may have such a plan and the opposition parties may have plans, too. But after looking at some of the legislation which has been introduced in the last few days, I think the civil service has no contingency plan. Unless we give them the opportunity of thinking out some of the recommendations that have been made to them, we will get the kind of legislation we have had in the last few weeks. When suggestions are made by the NDP, after a short caucus meeting the government in a backhanded sort of way implements these pieces of legislation. If this debate has done anything it is to show that we should all go home, listen to the views of our constituents and come back here with fresh ideas not from our own mill.
In my opinion, there is not a great desire on the part of the country for an election. Despite what has been said today, the Conservatives have many opinions about what Mr. Stanfield has suggested they do over the next 90 days.


Mr. Speaker:: Order. The hon. member for Timiskaming (Mr. Peters) is a member of long experience in this House and knows he should refer to a member by his constituency or his official capacity in the House, not by his name.


William Arnold Peters: Mr. Speaker, I got carried away with the debate that took place a few minutes ago and the reference to underwear. I refer, of course, to the Leader of the Opposition (Mr. Stanfield) who instituted this debate, and to the fact that he has been followed by members of his party. I think it is safe to say that none echoed the sentiments that he expressed, and this indicates to me that hon. members should listen to the views of their constituents.
There are things the government can do and should do. Few people in this country would disagree that we must do something about the housing situation and about the fact that no young couple should pay an interest rate of 10 per cent on a 40-year mortgage. Young people in the city of Ottawa buy houses in the $70,000 range on a 10 per cent
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mortgage over 40 years. This is a field in which the government can do something to reduce interest rates if it wishes. All would agree this matter must be attended to immediately because we are arriving at a situation where housing for young people with a view to ownership in their lifetime is almost an impossibility.
When we talk about food we are really talking about a limited number of basic foods. Few people in Canada would not agree that the public is being gouged by the food chains and processors in the price of basic food, and that action must be taken to stop this. There has been a great deal of argument about what that action should be. I suggest that nationalizing the food chains in this country may not be a bad idea. It may be much more sensible for the CDC to put its money into Dominion Stores, Safeways, Loblaws and other chains making as much as 200 per cent profit compared with six months ago, than to put its money into Texasgulf, where to my knowledge that kind of profit is not being made.
It must be apparent to most hon. members that the discussion today indicates there is no consensus regarding what must be done. We have had a collection of ideas about the problems facing us today. Most hon. members would agree there should be a budget very shortly and that the Minister of Finance (Mr. Turner) must solve some of these problems. There are few who would not agree with the former minister of northern affairs, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), who said that one solution would be to eliminate the advisers who have held their positions for 20 years and have given bad advice during that time. To replace them would take some time.
Therefore, I strongly urge that if this debate has taught us anything, it has taught us that we are contemplating our navels in this place. We are not really speaking for those we represent when we say that now is the time for an election, that now is the time to roll back prices and to do this or that. Now is the time for us to go home, meet our constituents and give the civil service time to put into legislative form some of the proposals made in this debate which warrant consideration. Then in two or three weeks we can-


The Acting Speaker (Mr. Laniel):: Order, please. Is the hon. member for Peel South (Mr. Blenkarn) rising on a point of order?


Donald Alex Blenkarn: Would the hon. member permit a question, Mr. Speaker?


William Arnold Peters: Sure.


Donald Alex Blenkarn: Is it the opinion of the NDP that we serve no purpose in this House and should adjourn so the NDP can have a holiday, or will the NDP stay and demand that this government produce some legislation?


William Arnold Peters: The answer should be very clear. I am prepared to stay here till whatever time the House adjourns. Others in my party feel the same way. Many suggestions have been made in this debate. I think the hon. member would agree that if the Leader of the Opposition were to form the government tomorrow, he would not be so foolish as to suggest that the very next day he would
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be able to implement legislation. There would be a time lag before legislation was available.
The hon. member heard the acting House leader read off a list of legislative items that have been kicking around for a long time, and if he thinks we should spend the next two or three weeks dealing with them, plus capital punishment, then I am prepared to be here. But I suggest there must be a better way of doing business in this House. We have made a number of suggestions to the country which we put forward as solutions to the problems facing us.
If these suggestions are accepted by the government, the civil service will need some time to draft the appropriate legislation. If the government feels it has legislation in the fields we have been discussing, including the cost of living, interest rates and other areas of increasing costs which are spiralling in Canada today, we are prepared to deal with it. If it is felt that the civil servants are prepared to draft that legislation immediately, by all means I suggest that we get on with that legislation. If that is not the case, I think it would be to the advantage of all hon. members and the government to have legislation in these fields prepared. This will not be possible if we sit here and continue to outline our solutions to these problems. I strongly urge hon. members to forget this business of calling an election. Our real interest lies in solving our problems of today.
This government was elected by the people. They have made a choice. In the 16 years I have been here, they have not made the choice that I would like, but I want to see that those people in my constituency who elected me get the best legislation possible. This has been a long session and we have yet to see adequate legislation in those fields covered by our debate tonight. We have heard suggestions made from all corners of the House. I think hon. members should take a sober second look at what they are asking, and make a clear decision as to whether they want legislation to solve our problems, or whether they want an election. If we want an election, reason will not prevail and conditions will not improve. There are many members of this House who sincerely believe legislation can be drafted which will go a long way toward solving some of our problems. These problems are not insurmountable. Some members believe they may be doing our civil servants a favour by giving them two or three weeks within which they may be able to bring forth the type of legislation needed.


Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, as I rise to take part in this emergency debate, I see that the time is getting on toward three o'clock in the morning. I am pleased to note there are still some interested and charming spectators in the gallery.
I listened very carefully to the Minister of Finance (Mr. Turner) contribute to this debate, and I have come to the conclusion that the language he has used is incomprehensible to the ordinary citizen. It is time to demystify some of his high-sounding financial phrases, as they mean nothing to the ordinary, honest, dedicated person in this country. The minister's proposals are calculated to sweeten the mood of the people, but it is doubtful if they will do this, let alone do what is really needed.

September 13, 1973
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The people of western Canada know that in 1963 big sales of wheat were made to Russia and China which was paid for in gold and silver. The Russians paid for that grain in gold at the rate of $35 to $37 an ounce. They are now buying grain with gold at a value of $100 an ounce. This grain can be paid for with three plane loads of gold bullion shipped from Russia to London. The price of our commodity has not gone up that much, but the value of our dollar has gone down. The farmers and ranchers in western Canada know that our dollar has been devalued 40 per cent in relation to the yen and 30 per cent in relation to the Deutschmark. When they realize that we have devalued up to 40 per cent in terms of the currency of our trading partners, is it any wonder that our feed grains and beef prices have gone up?
Currency values play as important a role in respect of farm prices as does supply and demand, but they represent a longer term price stimulus. The minister made much about encouraging an increase in the supply of agricultural products, but it is well known in western Canada that forces have been used to stop farm production. The extent of production is much less than the farmers are capable of producing. Let me refer to the Montreal Gazette of August 11 which states:
In the mid 60's the federal government pushed dairy farming as the specialization. Within 10 years, all but a couple of dairy farmers in the Hudson area, 30 miles west of Montreal, were closed down by the cost of equipment health inspectors forced them to buy.
"I gave up" said Davidson.
We have seen the federal government put export controls on our rapeseed crop, a crop which receives absolutely no competition from the United States. We ended up this crop year with a carry-over of some 25 million bushels of rapeseed, yet many feed lots in my area are empty. Cattlemen are confused and disillusioned at a time when they should be going for broke with every possible assistance from the government. It is time the government woke up to the potential of our agricultural industry. This should be one of our nation's major growth industries in this decade, the largest sectors being livestock and grain.
This government receives over $1 per bushel on the effort that goes into the production, harvesting and marketing of wheat. This government is giving $4 million to the province of Saskatchewan under a crop insurance plan, and the Minister of Agriculture (Mr. Whelan) has criticized us for holding up this measure. He claims it is a big deal, but the federal contribution is less than one per cent of what it receives from the industry.
The agricultural proposals made by this government are about as imaginative, exciting and dramatic as watching the grass grow. As the Canadian farm population declines, the political force in this government against higher farm prices grows. This government wants to reform our basic system and turn the Canadian agricultural industry into a public utility controlled by bureaucrats. We are seeing policies imposed by stealth, when what we need is more discussion on options available to producers. We are not taking advantage of the technology available to the agricultural industry, and there is no incentive to do so. Our policies are short-range with little or no long-term thinking.

The greatest problem, I suspect, in respect of wheat in particular is that it has been responding to short-term pressures. It is not a matter of hindsight that we face but a serious food shortage around the world in 1973. This was predicted in 1967 by concerned and very knowledgeable people. There must be a complete turn-around in our federal agricultural policy.
We need a new program, a rebuilding, and possibly a new homesteading act. 1 think most of the problems of the big cities could be solved through better use of our rural areas. With regard to inflation and the rising cost of living, we have arrived at a situation where the government is just standing still.


Kenneth Earl Hurlburt: Mr. Speaker, it is a pleasure to enter this debate. I think it is only fair to notify my colleagues of the reason I am here, and the only reason: it is because concerned people in my constituency, free enterprising people, have become fed-up with the bureaucracy that has been running our country for the past 10 years. They feel that governments should advise, administer and direct, and not take on the managerial role. I think it would be only fair to advise my colleagues of the practical experience I have had in the livestock and in the auction business. I wish some of my colleagues on the other side of the House would come into our country and familiarize themselves with our type of operation. If they did so, they might have a better understanding of the situation.


An hon. Member:: Perhaps we would not be very welcome out there.


Kenneth Earl Hurlburt: You would be welcome. I recognize there are two official languages, but in our business we have a language of our own. In our business, if some of the cows in a cow herd are not producing, we get rid of them for whatever can be obtained for them. I think that has been one of the contributing factors in respect of the high cost of living today-we cannot get rid of the non-producers.
With your permission, Mr. Speaker, perhaps I might tell you what would happen in our country. If after a study of the Prime Minister (Mr. Trudeau) we found that his father was a very great man and that his mother was a fabulous lady, but that for some reason or other the progeny of these two great people had not produced, we would get rid of them at any cost, that is, the progeny of this great sire and dam who did not produce and attracted other people who did not produce who, in the interim period, attracted the members of the New Democratic-Party. We would take any price. The auctioneer would say, "I'm bid $20 for 109 Liberal non-producers. Will anyone bid me $25? I'm bid $25 with 31 NDP thrown in. Do I hear $30? Sold, 140 non-producers for $25."
Mr. Speaker, during my first year in the House of Commons, representing the constituency of Lethbridge, I have found it sad to see our party's attempts to give the Canadian people a better deal frustrated at every move by the NDP leader and his party. It is no wonder that our leader contends today that there are not three opposition parties opposing the government as they are supposed to
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do but, rather, a government and two opposition parties opposing the Progressive Conservatives.
Why does the NDP insist on supporting the Liberal government and neglecting its role as an opposition party? Quite a few western NDP members do not try to hide the reason. They frankly point out that so far as western Canada is concerned, the opposition comes from the revitalized Conservatives. With only seven out of the 68 western seats being held by the Liberals, the NDP feel threatened by the Conservatives and hope to stall off an election as long as possible.
My good friend Jed Baldwin, the MP for Peace River, has pointed out that Mr. Lewis and his men will huff and puff but will never bring the House down.


The Acting Speaker (Mr. Laniel):: Order, please. Perhaps it is late, but I think I should remind the hon. member that it is not permitted in this House to identify hon. members by other than their constituency or their function in this House. I think we should follow, although it is a late hour, the rules and procedures that have been followed in past years in this House.


Kenneth Earl Hurlburt: Thank you, Mr. Speaker. I assure you it will never happen again. The hon. member for York South (Mr. Lewis) may join the Liberals, but other NDP members, most of them from Alberta, are starting to feel the heat. The Prime Minister announced a so-called three-prong attack on inflation which turned out to be a threepronged attack on the west. He placed controls on beef exports. He placed a ceiling on wheat prices, and the incentive to explore for oil by our entrepreneurs has come under heavy criticism. The Progressive Conservatives, with whom I am proud to be associated, have a policy which would attack inflation but which would not backfire on western Canada. As NDP members feel the criticism coming on stronger, perhaps they too will start thinking about the people who elected them.
So far as I am concerned, the largest contributing factor so far as inflation is concerned has been the government and its administration. As I look back, I recall that the sheepmen in western Canada were selling lambs for 18 cents a pound. There was no subsidy on wool, but the government at that time would not step in and place a floor on prices. Instead, the government allowed New Zealand and Australian lamb to come in until all the sheepmen had to disperse their herds, with the consequence that the price of imported lamb continued to rise and is still rising.
As I look back at the livestock industry, I recall that the previous minister of agriculture spent time trying to sell the Prime Minister to the west when he should have been trying to sell the west to the Prime Minister. Time was wasted in the fight on Bill C-176. However, the people of western Canada are very thankful for the few strong Conservative members who were here at that time to see that the bill did not go through.
The same applies to the hog business. When the prices of hogs were low, no floor prices were established. The western farmer feels it would have been far more economical for the Canadian government to have supported a few producers, because there are far more consumers than producers in this country.
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Another reason for the inflation we have today, in the opinion of people in the west, is that this country is in need of salemen to beat the bushes of the world and sell our produce. In 1970 we had the Lift program and much of our land was taken out of production. Had we had a government which was in tune with the rest of the world-they could see what was happening in Russia, the drought conditions that prevailed; they could watch other nations becoming more affluent and they could see that our agricultural products would be in demand all over the world-and looked into the future with a long-range plan, we would not be in the position in which we find ourselves today.
The first speech which I made in the House concerned trucking. I think our transportation system has contributed to the rise in prices because we have not allowed any competition for the railways. Hon. members know as well as I do that the railway cars travelling to eastern Canada with livestock go back empty, and the grain cars travelling to eastern Canada also go back empty. If trucks were allowed to compete with the railways, you can rest assured that individual operators would be hauling produce both ways, and as a result the price would go down.
Another factor contributing to inflation is the fact that the government does not recognize agriculture as an industry. In my constituency, private enterprisers have established large plants and have financed them. This government has made large loans to American-owned firms under the DREE program, thus creating competition for our companies. The same is true in respect of another manufacturing firm: a $640,000 grant under the DREE program was provided, $440,000 from the IDB, $200,000 from another department-and 30 days after this deal was made, the firm was sold to an American company. I believe that this type of thing has definitely contributed to the inflation we are experiencing today.
So far as oil is concerned, the members of the party to my left have been criticizing large corporations, but I am afraid of what will happen if we do not allow such corporations to continue developing our natural resources, opportunity only knocks once. I also feel that another factor contributing to inflation is the absolute lack of long-term financing for the farmer. If we are to produce food cheaper, we must give him the same type of financing that we give to people in other industries.
When I say that people on the land have experienced two wars, you might say, "So did many of us." But in many cases the women were left at home on the farms. The went through the depression, plus the inflation we have today. At that time there were no work stoppages and no strikes; only a determined effort to win. All they ask for is the right to fail or the right to succeed. I think they deserve this right. If we want our food costs reduced, I beg this House to be ever mindful of the importance of agriculture. As our urban centres grow and we have representation according to population, we will find that the majority of votes will be centered in the urban communities. But I feel we should always remember that agriculture is the "number one" industry in this nation and our farmers deserve every consideration we can give them.

September 13, 1973
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Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, yesterday afternoon I listened with a great deal of interest to the contribution of the Minister of Agriculture (Mr. Whelan) to this debate. While it is difficult at this hour of three o'clock in the morning to make a fresh or wide awake contribution, I appreciate having had the opportunity and the time, since the speech of the minsiter, to sort out and categorize some of the individuals and groups whom the minister yesterday afternoon, as indeed he has on previous occasions, blamed for the uncontrolled inflation in Canada.
I hasten to add that the list is by no means exhaustive and is in no particular order of priority, which is of course entirely in keeping with the policy of this minister and this government of having no priorities whatsoever. This is the list of people whom the minister blames for inflation: first are the people who throw away food; second, restaurants which throw away food; third, newspapers which create an atmosphere of inflation; fourth, rip-offs by unscrupulous packers, millers and bread manufacturers; fifth, people who buy freezers, especially those who have three or four freezers; six, unwarranted gangsters. I am not sure what is the difference between unwarranted gangsters and any other type of gangsters, but I am only using the minister's words. This is the minister's description, and this is how he described this group on the CTV "Question Period" of August 4, and I quote him very carefully:
The bastards that are raising the price (of beef) 40 cents and 50 cents a pound.
The seventh group is speculators who are having a field day. The eighth group-and again I will quote the minister on the CTV "Question Period"-he described as follows:
Weston's or those big companies that have got control of manufacturing, processing and bakeries in Canada that can just about damn well do what they want.
The ninth group is unions who shut down the railways. The tenth group is hog producers who accept $64 per hundredweight for their product. The eleventh is the United States of America. The twelfth is Japan. The thirteenth is Argentina. The fourteenth is the economists and professors who should be on welfare. The fifteenth group is the minister's own advisers. On the previously mentioned CTV national program he described his advisers in the following way:
They don't know a damn thing about consumers and they don't know a damn thing about farmers.
The sixteenth group is the marketing boards which take unwarranted rip-offs, and the final, seventeenth group-I presume the last, but by no means the least in the minister's opinion-is the opposition parties in this House.
The Minister of Agriculture (Mr. Whelan) speaks often, and we always receive from his department transcripts of or notes for his speeches. He often speaks in a humorous vein, which we all enjoy, but the humour becomes somewhat galling and the laughter hollow. There may be some substance or some reason to blame, to some degree or another, any or all of these 17 groups I have listed and others I have failed to list. But the tragedy is this, Mr. Speaker-and the humour and the laughter stop at this

point-that once the minister casts the blame, he stops. There is no follow-up; there is no action; there are no recommendations; there are no priorities; there is no thrust; there is no interest.
What, if anything, does the Minister of Agriculture propose to do about his "unwarranted gangsters"? What, if anything, does he propose to do about Weston's or other big companies? What, if anything, does he propose to do about unscrupulous packers, millers and bread manufacturers? What, if anything, does he propose to do about speculators having a field day? What, if anything, does he propose to do about his own advisers who, in his own words, "don't know a damn thing about consumers and don't know a damn thing about farmers"?
There is one particular matter about which it is impossible for me and others to remain silent. This afternoon both the Minister of Finance (Mr. Turner) and the Minister of Agriculture pointed with great pride to their legislation dealing with capital gains tax and the family farm. This is not only humorless; it is sheer hypocrisy. In his original budget the Minister of Finance sold the Canadian farmer down the river, and the Minister of Agriculture went right down the same river but, sadly enough, didn't know he was on a trip. I challenge either one or both of these ministers to deny that had it not been for speaker after speaker from the opposition parties, the necessary admendments to cure this folly would never have been made.
The Minister of Finance did not know what he was doing. The Minister of Agriculture did not know he was doing it. The entire Liberal caucus, with the possible exception of the hon. member for Bruce (Mr. Whicher), did not care. And exactly the same thing happened with the retroactive capital gains taxation of farm marketing quotas. The Minister of Agriculture, instead of blaming opposition members for delaying, obstructing or filibustering, should thank his lucky stars that we bailed him out of these mistakes. This afternoon he said that the government could do better for the farmers if the opposition parties would help. Heaven would have to help the farmers if it were not for the opposition parties, Mr. Speaker.
Does the Minister of Agriculture think for one minute that we in the opposition are not alarmed by the cabinet's indifference to agricultural problems? Over and over again we hear from the minister that our problem is related to farm productivity, but at the same time he was strangely silent when imports of hatching eggs from the United States increased 30 per cent to 40 per cent this year at prices well below our farmers' costs of production. What has the minister said to or on behalf of hog breeders whose input costs are leading them to slaughter their breeding stock?
In fact I have yet to hear of one statement of the minister's that would give one glimmer of hope to the farmers as the biggest single consumer group in Canada. He has said nothing about energy costs, transportation costs, fuel costs, labour costs, or indeed about the whole range of input costs. It would seem to me, Mr. Speaker, singularly inappropriate in these times for the Minster of Agriculture to cast the blame for inflation wildly in all directions but at the same time to remain mute when
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positive action and positive proposals are his responsibility as a trustee for Canadian farmers.


Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, at this early hour of 3.15 a.m. the time for partisan politics should come to an end. We have gone far enough. We cannot afford the luxury of party lines on an issue adversely affecting every Canadian. At this time I personally do not care who is in power. What I do care about is that the government in power, whichever it may be, take effective action in curbing this unacceptable and drastic inflationary trend.
However, it is clear that the Liberal government, which happens to be the government at this time even though the average Canadian may rightly think there is no government at all in Canada, is not able to make decisions for the long-term good of the country and is ruling from crisis to crisis, ever fearful of recrimination from the NDP. It is in fact, Mr. Speaker, a government afraid to take a stand, afraid to offer constructive suggestions lest they offend members of the NDP. Even according to the words of a former Liberal finance minister, Walter Gordon:
The role of the Liberal party should be, not just to go along with the New Democratic Party to ensure its temporary support, but to supplant it as a practical progressive alternative to the status quo.
If the country is to survive the present economic crisis which faces it, it must be led by a man who is not afraid to take bold new steps in an all-out war against inflation. It must be led by a man who recognizes that the bankrupt policies of the Minister of Finance (Mr. Turner), which sunk the country into an economic abyss in 1969-70, are no longer acceptable to the Canadian people.
Just as the government was unable to settle the rail strike which it had been given at least seven months to do, once again it has become more than obvious that it is unable to control the cost of living. It is not difficult to criticize the record of the Liberal administration. Nor is it difficult to observe the problems we are facing today. They are both painfully obvious to every Canadian.
As in 1969, interest rates began to rise, as did unemployment. The latest increase in the prime lending rate, the fifth this year, is a classic example of the first steps toward massive unemployment. With the prime lending rate increased, it is only a matter of time for this to be reflected in higher interest rates on consumer loans, higher rates on mortgages and higher costs in housing. The steps which will follow are ones with which we are well familiar and yet go unheeded by the Minister of Finance who insists on taking this course which can only lead to further economic problems compounding the already critical situation.
In the past we have witnessed an attempt to fight inflation with mass unemployment. The hardships that were encountered by hundreds of thousands of Canadians made this price unacceptable. Yet we stand here watching the same government making the same mistake. Housing is already priced beyond the means of nearly every Canadian. The current increase in interest rates will only make mortgages more expensive and will further tax the ability of Canadians to pay the already staggering usury rates.
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Can the government not see that when the demand for housing decreases, thousands and thousands of contractors across the country are affected? Can the government not see that the suppliers of the materials used in housing will be affected right across the country? Can it not see that the effect in this one area alone will result in a widespread reduction in the sales of every commodity in this country? Here I am taking only one small area of the economy, the area of housing.
What about the resulting effect on our automobile makers who will not have the market to sell their new cars? What about the service industries tha will not have the customers to maintain their businesses? There is no area of business nor is there any Canadian who can escape the penalty which will be imposed by this one move alone. Can the government be so blind as not to be able to look ahead at this one problem, or is its memory so short that it has failed to consider what happened in 1969-70? The Liberal government tried to deal with this problem in those years by the traditional, classic methods of high interest rates, tight money and restrictions on expenditures. As we can remember, these policies were to bring on a recession and high levels of unemployment.
Mr. Speaker, the Conservative party has been under continued criticism from both the Liberals and the New Democrats since this government was elected in October of last year. The reason for this is obvious. We have been the only party to offer constructive alternatives to deal with this problem, while the "crisis" Liberals and the "We'll go along with it" New Democrats have hidden their heads in the sand or have offered pious platitudes to the people of this country.
Well, Mr. Speaker, people of this country are fed-up with inaction, they are fed-up with lack of leadership and they are fed-up with two-faced, double-talk from the leader of the New Democratic Party (Mr. Lewis). The hon. member for York South cries at the injustices, shouts at tne shortcomings, threatens to the press, excites the people- and then bows humbly to the whim of the Liberal government.


Stanley Howard Knowles: If this is a Conservative non-partisan speaker, I wonder what a partisan speaker would say.


Otto John Jelinek: I see the hon. member for Winnipeg North Centre (Mr. Knowles) is getting a little anxious about some of my remarks, but I shall continue because my time is limited.
Mr. Speaker, let us examine briefly how the Liberal administration has constantly laughed and shrugged off the suggestions by the hon. Leader of the Opposition (Mr. Stanfield). In May of 1972, the government refused this party's suggestion to raise the old age security payments to compensate pensioners for the already rising cost of living. Last February, the same government repented and raised the old age security payments by roughly the amount implied in our leader's suggestions. Again last summer, the Minister of Finance (Mr. Turner) ridiculed this party's proposal that income tax be indexed to the cost of living. The minister replied that it would be unique
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in all the world, it would add immense complexities to the income tax and it would render federal-provincial fiscal arrangements chaotic. Last February the same minister adopted this very proposal with the audacity of making it appear as though it were his own proposal, claiming it to be a bold and sensitive response to a rather fundamental tax problem.
Again, Mr. Speaker, during the last election campaign the same Minister of Finance branded this party's proposals to reduce tax and increase expenditures as a prescription for putting Canada into bankruptcy. Last February, in his budget, the same minister brought forward substantial increases in government expenditures with the promise of tax cuts in the order of 12 to 13 per cent. And again last summer, the government was warned of high unemployment during the winter months and suggested an immediate consultation with the provinces in setting up winter works programs. Lost in the magic fairy tales and the glowing predictions of the Minister of Finance, the Liberal government is waiting until December to initiate this program. Needless to say, because of the last minute desperation, the program did little to alleviate the critical unemployment situation, and vast amounts of moneys were wasted.
In addition, manufacturing firms were promised income tax reductions which took 13 months to legislate into legality. We waited two years for the competition act scheduled to replace the Combines Investigation Act. This is hardly a glowing example of Liberal leadership. Again, Mr. Speaker, the government's Unemployment Insurance Act ran $1.5 billion in debt and was claimed by this government to be the most enlightened unemployment insurance legislation on the face of the earth. Then, following its near defeat at the polls, this enlightened legislation was withdrawn indefinitely and the Minister of Manpower and Immigration (Mr. Andras) was sacrificed as a scapegoat.
Mr. Speaker, obviously the Liberal government has time after time accepted the policies of the Progressive Conservative party. As I stated at the outset, it is time to put partisan politics aside and for the government now in power to accept the concept of wage and price controls for the benefit of all Canadians and to forget about appeasing the New Democratic Party.
Liberal policies are riddled with inconsistency upon inconsistency. While voicing concern for the small businessman, the government increases the tax on 90 per cent of them by 7 per cent. While the government urges all sectors of the economy to curb inflationary spending, it continues to disregard its own advice by embarking upon a program of government expenditure unparalleled in the history of any country in the world. In the area of government salary administration alone, in the last 10 years the number of people making the equivalent of $20,000 a year has doubled. Quite simply, if the government itself is not able to control spending effectively in its own department, it certainly cannot be expected to control spending in other sectors of the economy.
Mr. Speaker, while the Prime Minister (Mr. Trudeau) and the Minister of Finance, with the approval of the leader of the New Democratic Party (Mr. Lewis), scorn controls of the economy, they actually introduced controls on gas, milk and bread. Selective controls simply do not

work. What is good for one industry must be good for all industries. It is inconceivable that the administration expects the Canadian people to follow the double-talk and double standards of the Liberal government.
The wage and price control program placed before the Canadian people by this party warrants more than a shrug of the shoulders by the Prime Minister and a declaration by the Minister of Finance that it is a world problem and there is nothing we can do about it. Constant reference is made by critics of the Conservative program by reference to phase 3 of the United States economic program. What is given little consideration is that during phase 1 and phase 2 of that program, inflation in the United States had been reduced to an annual rate of 3.7 per cent, and the accelerating trend in wage increases was not only arrested but was slightly reversed. In addition, unemployment decreased from 6.1 per cent in August of 1971 to 5 per cent in January of 1973. All in all, a most enviable record considering our own cost of living and unemployment record.
Mr. Speaker, it is not sufficient, in the wake of this most serious problem of runaway inflation, for any government to sit back and abdicate authority for action. It is particularly indefensible for the Liberal government to do so when so many Canadians favour controls to stabilize the economy. For too long we have faced incredible rises in the cost of food. We have watched housing climb out of reach for most Canadians. We are facing a dramatic increase in clothing prices. We have seen transportation costs rise, with predictions from the chief executive officer of Air Canada of more to follow.
We have watched virtually every commodity reach record highs, and we have watched it happen in a relatively short period of time. We have seen the government attempt makeshift policies. We have seen a band-aid approach when major surgery is required. For months this party has done everything possible to encourage the government to act effectively in implementing any program that might curb this cancerous infection of our economy. The Food Prices Review Board has been a farce from the outset and has been used by the government as a smokescreen and a cover-up for its own ineffectiveness and its own fear of upsetting its thin balance of power. Even the chairman of the Food Prices Review Board has been critical of the government's action in the handling of spiralling food costs. Mr. Speaker, the latest increase in family allowance has already been more than eaten up by the pressures of inflation, and by the time the projected increase for January of next year becomes a reality, not only will it represent less purchasing power but it will also be subject to taxation.
In a search for money for giveaway programs, in a search for funds for make-work projects and in a search for new sources of revenue, the Minister of Finance has left no stone unturned and has virtually succeeded in reducing Canadian initiative to an all-time low.
Mr. Speaker, the government can no longer afford to ignore the statistics pointing to an even greater increase in the cost of living. It can afford, however, to ignore the whimpering and whining of the New Democrats and to heed the cries of the nation for action now.


Some hon. Members:: Hear, hear!
September 13, 1973


Mr. Speaker:: Order, please. There are a number of hon. members seeking the floor and they will be recognized, of course. Would the hon. member kindly resume his seat? I think I owe it to hon. members to indicate that the Chair has felt it incumbent to bring to the attention of the Sergeant-at-Arms and the Clerk of the House that the staff of the House which has been here since nine o'clock yesterday morning should be given an opportunity to go home because they will be called upon to return here at nine o'clock this morning. The restaurant has been closed as of 3.30 this morning, and the reading room has been closed.
From now, hon. members are on their own. I bring this to the attention of the handful of members still here.


Stanley Howard Knowles: How about sending the Hansard staff home, too?


Mr. Speaker:: Of course, the Chair is here to listen to hon. members who want to continue without the staff of the House of Commons.


Mr. Reg Stackhouse (Scarborough East):: Mr. Speaker, despite the critical nature of the topic we are debating, one has to feel that this debate could be described as a form of mental masturbation; that is, satisfying but fruitless. Regardless of what is said in this debate, the result is going to be nil. The government is not going to do anything about inflation beyond the package of palliatives it has offered the country as a means of at least dulling the pain of inflation it is enduring. One of the reasons is not simply the intransigence of the government in its thinking, but also the fact that ironically the government cannot eliminate inflation because it needs inflation. Strangely, the government has a necessity for that which it professes to be counter-attacking. It needs inflation in the economy because it needs inflation in its revenue, and its revenue feeds upon an inflationary economy.
One of the strange facts of the government today is that it has built up such an inflated bureaucracy that it has a vested interest in inflation. When we speak of the cost of living, we are inclined to speak of rises in the prices of food, housing and the like. However, one of the major increases in the cost of living is the cost of government. The cost of the federal government has doubled since the year 1968 when the present administration took office. This growth has to continue. It is not something that has persisted just since 1968 and might very well stop now. It has to continue because of the built-in thrust and force that are part of the bureaucratic structure. This body the government has created is almost like a Frankensteinian monster.
The Minister of Finance (Mr. Turner) can say as he did in his budget speech of February 19 this year, that the government is determined to impose restraints on its own spending to avoid aggravating inflation. The fact is that the very nature of the government's program as developed over the years requires it to continue growing because of the built-in increments in salary scales, especially at the top level, that of themselves are forces for government growth and budgetary growth. For example, in the bureaucracy the government has developed in Canada we
Cost of Living
have the impressive and sad fact that the number of public servants in the scientific, executive and professional categories has increased by 23 per cent in the past three years.
Consequently, we have a sort of top-heavy structure by which thousands of public servants are earning $20,000 a year or more.
In the Treasury Board Department in 1963 there were 150 public servants earning that salary. Today there are 319. In the Department of Finance ten years ago there was one. Now there are 80. In the Department of National Health and Welfare in 1963, 282 public servants were earning that salary. Today there are 508. In the Post Office 10 years ago, there were none. Now there are 146. In the Department of Agriculture there were none. Now there are 360.
In the armed forces, with a total strength of 82,000 at the start of this year, there were 110 generals. Canada had more generals than Kentucky had colonels. Indeed, we are the most "general-ized" armed force in the world. When you look over the rank structure of the armed forced you find that almost no one has the rank of private. It is a real distinction to be a private in the Canadian armed forces. It is for these reasons that Senator Arthur Laing, formerly of this government, said the senior civil service is overpaid and underworked. If people knew of the wild extravagances in the government and in the senior public service, there would be a hanging on Parliament Hill. Of course, capital punishment has been abolished-perhaps for that good reason.
We have a government built-in force for inflation. Just as the proverb states the appetite increases with eating, so the government's dependency upon inflation will increase. The serious side of this is that it prevents the government from doing anything for the people. For example, the government ought to move in the direction of helping people who are finding it difficult to obtain houses, or to carry the houses they have purchased. One reason the government cannot and will not do that is because of its great hunger for more and more revenue to feed this extraordinary bureaucracy which it has built up.
The government ougnt to eliminate the sales tax on building materials. The 11 per cent sales tax now adds something in the neighbourhood of $2,000 to the cost of an ordinary urban home. The fact is the governnent has a vested interest in this inflation. The more the cost of building materials increases, the more the government's revenue from this tax source increases.
The government ought to help the income tax payer who is striving to have a home of his own by recognizing the interest on his house mortgage as a deductible item from his taxable income. In the past few months interest rates have gone up two points. I called three mortgage companies in Toronto in the last two days and found that one cannot get a mortgage in Toronto under 10 Vi per cent. In only March of this year 8% per cent was considered in the housing industry to be a high rate-but not now.
Therefore, on an ordinary mortgage such as $35,000, increases in the interest rate mean you have to add a carrying cost in the first year of something like $700. That kind of burden has been put upon the shoulders of the ordinary people trying to buy family homes. It has been
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September 13, 1973
Cost of Living
tolerated by this government. In fact, it has been encouraged by this government through its co-operation with the fiscal policies of the Bank of Canada.
The least the government could do would be to help these people to allow all or part of the interest to be deducted from taxable income. The government will not do that. The government has no intention of helping the taxpayer in that way because it needs this increased revenue: it has its own vested interest in inflation. The government is guilty of that which it is supposed to be opposing. It is one of the inflationary forces in this country. The people of this country must be conscious of the fact that inflation is something imposed upon them, not only by the big corporations or this or that interest but by a government that is supposed to be looking after the interests of the people.
It is for this reason an increasing number of Canadians are conscious that they need a change in government, that nothing else will do if the major difficulties facing them are to be solved. The Gallup poll has shown that a majority of Canadians favour Progressive Conservative policy on economic stabilization. We have heard from such a riding as Stormont-Dundas that over 80 per cent of the people there favour price and wage controls. In a survey I undertook in Scarborough East, I found that 81 per cent favoured the program for which my party stands. The majority of Canadians, according to the Gallup poll, are not satisfied with the way in which the government is handling the economic situation.
It is clear to the people that they need a new government and that they need a party such as the Progressive Conservative party with a positive and constructive program. It has been clear throughout this debate that the real leadership in economic thinking and policy is coming from the party on this side of the House. Already what purports to be the government party is acting and speaking like an opposition party.
Throughout the debate, which has now persisted for more than eight hours, spokesmen for the government, such as they have been, have not advocated their policies or advanced any proposals; they have acted like an opposition party, attacking the policies we have put forward. So it is clear that economic leadership and constructive social thinking is coming from the Conservative party, and it is equally clear that as soon as the people have an opportunity to make a decision at the polls, government will be entrusted to the party to which I belong.


Mr. Harry Olaussen (Coast Chilcotin):: Mr. Speaker, I have been sitting here for a couple of hours listening to the speeches made on this subject, and it occurs to me that each and every one of those taking part in the debate has a solution to the dilemma the country is facing. The fact remains that the Canadian people want action. It is action they want. It is action they must get. It is about time we began to implement some of the suggestions which have been made here tonight. We would like to see the government do something about them and see that vigorous measures are taken to cope with the high cost of living.

Back in 1970, the president of the Toronto-Dominion Bank said comprehensive wage and price controls had no proven value in reducing or eliminating inflation and would be impossible to impose effectively. Experience in the United States and Great Britain has shown that wage and price controls are no answer to inflation. In spite of this fact, we find the Conservatives still proposing a bankrupt policy.
For years we in this party have been asking for the establishment of a prices review board which would be empowered to investigate questionable price increases and which would call manufacturers before it to justify price boosts, particularly those applying to household necessities. Prior to the last election such an appeal was rebuffed by both Liberal and Tory parties.
The economics of food are most vague and complicated. They start with the people who supply the farmers, and end with the consumer. A calculation of how the system works is an exercise in hocus-pocus because the essential figures are simply not available. There are reams of statistics on the farmer as a collective entity, and even a few on the give and take of the chain stores, but what the middle stretch is between the farmer and the consumer is curiously absent from official records. The fundamental question which must be asked in relation to the economics of food prices is: Who controls food prices, and how?
This is where the review board could enter the picture, if we had a prices review board which would do the job effectively. What amazes me is that under our free enterprise system we should encounter so much talk about comprehensive controls, especially from those who believe so strongly in the free enterprise system. The New Democratic Party has long contended that the country must have a planned economy as well as greater Canadian control over that economy in order to achieve economic stability. We cannot operate wage and price controls under the system which prevails right now. It would not be feasible.
We find ourselves victims of a world wide economic imbalance and our concern is to find the best way of dealing with it. According to many economists, inflation is a permanent part of our economic future. It is for us to deal with it as best we can, and it is for this reason we want the government to take the kind of action which will benefit all those Canadians who are anxiously waiting for firm and constructive measures to be produced.


The Acting Speaker (Mr. Laniel):: Order. I regret I must interrupt the hon. member but the time allotted to him has just expired.


Mr. Trevor Morgan (St. Catharines):: Mr. Speaker, I have listened with interest all this long evening to what I would call a diatribe. With all respect to what has been said, we are here at a late hour to attempt to deal with inflation within this country. What I have heard so far has not, really, contributed very much to that end, and I include what has been said by two or three members opposite. The paucity of their numbers is an indication of the seriousness with which they regard what is going on in the country. They just don't give a damn, if I may use unparliamentary language. They do not know what we really mean by price and wage controls or the stabilization
September 13, 1973

we wish to bring about so that equilibrium can be reestablished. This is what our party is trying to say, but members opposite just ignore it, and do so most successfully, in their own minds, at least.
I am reminded of some words by H. G. Wells which have always impressed me.


Leslie Gordon Benjamin: Another socialist.


J. Trevor Morgan: I do not know whether they will impress hon. members to my left or across the way. I would remind them that the true strength of rulers and empires depends not on their armies but on the belief held by all men that they are equal when it comes to their truthfullness and their position before the law. As soon as the government disregards this standard they are as nothing, as a gang with no response and their days are truly numbered. I suggest this is happening to the government now, and its days are truly numbered.
Where is the equality today? There is no equality between the rich and the poor; they are separated more ar..i more. With high interest rates, the poor get poorer and the rich get richer. There is no truthfulness in what the government says because they are bankrupt of ideas. The hon. member for Verdun (Mr. Mackasey) asked, where are our ideas? Had he deigned to sit here and listen tonight he would have heard many ideas that he could have taken back to the Prime Minister (Mr. Trudeau) that he chooses to criticize.
Hon. members talk about legality. They do things that are not in the interests of the public; therefore I say that is illegal and dishonest. The hon. member for Kenora-Rainy River (Mr. Reid), had he sat here tonight would have heard new ideas; but he is not here now. He said we had no new ideas to offer. He could not have heard the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) or, if he did, he did not listen. He could not have listened to the hon. member for Don Valley (Mr. Gillies) who had some new ideas and approaches.
I will tell hon. members what can be done, and I will name them 1, 2, 3, 4 and 5. First, the Canadian dollar must be put up. If you float it down with the U.S. dollar it causes more inflation; there is no way around that. We cannot compete with West Germany and Japan with our dollar floating downward by 40 per cent as it did in the last year. What does putting our Canadian dollar up do?


Leslie Gordon Benjamin: It will make it go down.


J. Trevor Morgan: Let me tell my economic expert down on the left what will happen. You will then be able to buy more cheaply from other countries in the world. We import most of our manufactured goods and a lot of foods. What we pay for food in this country is where the crunch comes, because most of our food is imported. Put up the price of the Canadian and U.S. dollar and those foodstuffs come down in relative terms.
What is the price we pay on the other side? If my hon. friend down the way wants to ask me something, he can ask me a question in a moment. The price is that it costs us more to export. But what are our exports? We export
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extractive goods basically, and they come back to us as manufactured goods. That is the simple truth of our economy.


Leslie Gordon Benjamin: Who made it that way?


J. Trevor Morgan: Neither the hon. member nor I was here, so I do not know why he is asking me the question.


Leslie Gordon Benjamin: Well, what are you going to do about it?


J. Trevor Morgan: I will tell the hon. member, if he chooses to listen. The point is that if your extractive goods are exported at a little higher price, so what? The world needs them. We can use the extra dollars we earn by exporting more of our materials at a higher price on other things. Then when we import these materials back, they will cost us less.
If you ask me how we correct the situation, I will tell you. Do not just give a 9 per cent blanket, off the top corporate tax reduction; you do it on a percentage basis. The more goods you export from secondary industry, the more your taxes come down on a percentage basis. The more you export, the less corporate tax will be paid. This will make the extractive industries set up secondary manufacturing industries in this country and we will gain both ways. Goods will be manufactured here, we will not have to export at high prices and we will have given secondary industry an incentive to manufacture in Canada.


Mr. Foster:: What is your second point?


J. Trevor Morgan: It is the third one, if you do not mind my arithmetic. The second shot from the same bow is that you do the same thing for employment. You do not do what the people across the way have done, and that is to hope-and it is wishful thinking which has not been realized-that by recapitalizing you cut down employment and therefore reduce the corporate tax structure. I am suggesting that the proper approach should be that by increasing employment, corporate taxation is reduced and you give them incentive to increase not only their exports but employment opportunities. We will then see the economy of this country expanding and we will not have to worry about foreign takeovers.
Some hon. members are always talking about foreign takeovers. I remind hon. members to my left that when they talk about foreign takeovers they are talking about a Canadian sell-out. This is what we have to stop. A foreigner cannot take over unless a Canadian sells out. Fundamentally, this is what we are talking about. What makes a Canadian sell out to a foreigner? It is because the tax structure of this country is so stupid, awkward and ridiculous.


Leslie Gordon Benjamin: They are out to make a fast buck.


J. Trevor Morgan: The hon. member may think so, but unless we want to nationalize every industry and corporation in this country, this is what we are faced with. I suggest it is impossible to do this. You have to make the economy of the country work in such a way that you encourage Canadians to invest in Canada. Our ratio of savings to

September 13, 1973
Cost of L,iving
credit is 49.2 per cent, the highest of any industrial nation of the western world.
What does this fact say about Canadians? That we are scared? That we will not invest in ourselves? It is time we began to have confidence and courage. But we cannot so long as people across the way will not give encouragement but keep inflation at so high a level that it does not pay anybody to invest in this country. The thing to do is to make our taxation policy such that there is some raison d'etre for a Canadian to invest in Canada. We also need a complete review of our taxation policies so there is no division between the upper and lower income groups.
When we consider the fact that we provide welfare for people with incomes of less than $4,000, with the income tax rate being about $350, how silly can we be as legislators? This really does not make sense. We know what it costs to feed a family but our income tax system is not related to that in any way.
For those who are asking for numbers, the fourth thing a government must do in order to survive-and I am sure this one will not-is revise our taxation policy. The housing situation was described adequately by the hon. member for Calgary North (Mr. Woolliams) and I need not remind hon. members about it. In the province of Ontario alone we are going to require one million housing units in the next ten years. At this time, one family in six has inadequate housing as a result of this government raising the interest rates to such a level that the average person cannot buy a home. This government must do two things: it must provide funds for land banks so that building lots will be cheaper and it must provide the money required to put in the services to those building lots. I suggest this is the way to solve the housing problem and the way to bring down interest rates.
In closing, let me just say that while I was on a plane coming from Toronto to Ottawa I amused myself by making up a little limerick which suits this occasion quite adequately. The limerick is this:
The Prime Minister must be put aside,
Like the man who fell down a backhouse and died,
And with Lewis as a lover,
They can follow one another,
And they can both be interred side by side.


William James Kempling: Mr. Speaker, when I put my name up for nomination they did not tell me things would be like this, or that I might be speaking at four o'clock in the morning. Be that as it may, there has been much said today on the subject of inflation; we have heard a great deal from all sides. I must explain that I am in a rather odd position in that the chief heckler of the NDP sits very close to me. I expect he will continue to heckle me, and I accept that.


An hon. Member:: We are going to support you.


William James Kempling: I see that the hon. member for Sarnia-Lambton (Mr. Cullen) has returned and I appreciate seeing him here. We have heard the Leader of the Opposition (Mr. Stanfield) set forth the position of our party, and others have expanded on our wage and price control

policy. The Minister of Finance (Mr. Turner) gave us his usual statistical reply, most of which we have heard previously.
One of the ridiculous aspects of this debate is the position of the NDP. As one of their members said to me, the NDP is in the best position in that it has power without responsibility. What a statement that is, particularly when they stand before the national press and in this parliament and take credit for any popular position the government adopts, saying they are responsible for this, that and the other policy. Then they admit that they have the best of two worlds, they have power without responsibility. That is the most irresponsible statement I have heard from anyone since coming to this House a short while ago.
We have heard the NDP criticize our incomes policy but we have heard very little from that party except the same old socialist gush they have pumped out over the years.


An hon. Member:: Swill.


William James Kempling: Yes, whatever you want to call it. Members of the NDP scream, yell and jump up and down in their customary orgy of self-righteousness about the economic management of Canada. The fact is that the policies the NDP recommend would bankrupt this country and cripple the industrial potential of Canada-and they know it. We are in the claws of the Liberals, and the NDP support them. That is where we find ourselves now. Any party that accepts the philosophy that it has power without responsibility is not capable of putting forth any economic plan which would allow Canada to reach its potential.
The NDP represents 16 per cent of the voters of this country, and they have no representation from anywhere east of the Ontario border. They have no representative in parliament from Quebec, no one from New Brunswick, Nova Scotia, Prince Edward Island or Newfoundland, and they have no representative from Alberta. That party represents only four of the ten provinces of Canada. It is a most ridiculous situation in Canada when a handful of members who represent 16 per cent of the people who voted in the last election find themselves in the position of propping up the government which clearly, by example, is incapable of managing the economy of this country. Clearly, the only way to resolve this situation is to dissolve parliament and let the only real judges we have, the people of Canada, decide the issue before us tonight.
The hon. member for Assiniboia (Mr. Knight) made reference to what he felt would be dire results if an election were called. He felt inflation would get out of hand. We have had all kinds of elections in this country in previous years when prices and conditions were something other than favourable. The election last year was held at a time of very high unemployment. If we followed the hon. member's logic, we would never change the government. I suggest that each government changes as a result of some kind of price situation. So much for the NDP. The members of that party exist in a desert, they are all dried up, they are wandering leaderless. They have so little in the way of policy that they must tag along with the government and take credit for whatever government policy they can hang on to, particularly those they think

will attract public attention. They are intellectually dishonest as a political party.
My main concern, Mr. Speaker, is for the small businessmen of this country and the increasing cost of money available to them. It is not enough to say that those borrowing less than $200,000 will get a preferred interest rate at the bank. This is part of the problem which small businessmen face. Another problem faced by these people since 1969, at least for five years, is the stop-and-go policy of the government as far as monetary and fiscal policy is concerned. I can understand the government's lack of concern in respect of this matter. I think there are only two or three businessmen sitting on the government benches who understand the position of the small businessman.
How can the government continue to talk about expanding the economy while frustrating the small businessman year after year? Surely the government must realize that the average small businessman does not want grants, gifts or managerial aid from the government. He wants to be able to go to his bank and borrow money at a reasonable rate. He wants to be able to plan for expansion with money at a cost that is equitable, just and reasonable. The small businessman wants to fulfil his expectations. He wants to develop his business on the basis of his own judgment, not on the basis of stop-and-go policies of this government.
Why is the bank rate at the present level? The government has said it has not adopted a tight money policy, yet we see the rate of inflation increasing at the same time as the money supply is decreasing. The government has indicated that it allowed the bank rate to increase in order to keep some relationship between the Canadian and the United States rate. What the government did not say is that a handful of large multinational corporations elected to utilize fully their lines of credit and transferred the funds to the United States. This government's answer was to raise the bank rate to deter this transfer of funds at a lower rate to the United States. Of course, this had the desired result but it also raised the bank rate for all Canadians.
The hon. member for Don Valley (Mr. Gillies) asked the Minister of Finance if he would consider an interest equalization tax rather than raise the bank rate. Of course, the minister answered that no such consideration was part of the government's economic plan. We are now locked into this policy and as the bank rate in the United States goes up, our rate marches up with it.


An hon. Member:: What else is new?


William James Kempling: Well, I just said that we suggested, through the hon. member for Don Valley, that the government institute an interest equalization tax. The idea, of course, would be that there would be a differential between the rate in the two countries. Why should we have a high rate and they have a high rate? We are not saying that a freeze or wage and price controls is a panacea for inflation.


Some hon. Members:: Hear, hear!
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William James Kempling: There are certain things which always attract attention. If one mentions the word "pensions," hon. gentlemen come alive. If one mentions wage and price controls, they also come alive.


An hon. Member:: What about panacea?


William James Kempling: I do not even know if I have spelled it correctly in my notes: it looks like "pancreas". We hear from the government and the NDP that wage and price controls did not work, but privately the heads of our chartered banks admit that phase one and phase two of the United States program worked well, and they know that eventually we will come to wage and price controls in Canada.
The stop-and-go policy toward our industrial development is so damaging to our small and secondary industries that they will never expand or reach the potential they are entitled to achieve. I have been in management positions with several small companies and have gone through the disheartening exercise of planning an expansion of a business only to find we could not obtain money at a reasonable rate because of the monetary and fiscal policies of this government.
But aside from the frustration of not being able to fulfil the potential of various endeavours, we have seen prices escalate beyond all reason. We now see the beginning of a picture that we hope is false. We see the beginning of rising unemployment and an accelerated inflationary spiral. This frightens me. I think the present government has had a fair chance to take the situation in hand. Since 1968 it has moved from one crisis to another, and I believe we should now move to bring this matter before the bar of the people of Canada. Let the people of Canada decide. We are sure they will decide wisely. We are sure they will choose a new government formed by the Progressive Conservative party.


Mr. Jake Epp (Provencher):: Mr. Speaker, there are a few thoughts I wish to place on the record in respect of the question of inflation. Before I start on the specifics, however, I think it behooves all members of the House to clearly look at the position of their party as well as their individual position in relation to the economic situation that is coming about. They should do so, not as members of parliament but to some extent as citizens of Canada. This is a matter which, regardless of our political stripe, we must tackle collectively.
As I look at the operation of the government and the opposition parties, I notice that the government has gone through various stages-a stage, first of all, in which the minister in charge of the Canadian Wheat Board (Mr. Lang) announced the program. Since that time I have detected an air of desperation and possibly signs of a government struggling to once again regain initiative. It is a very simple fact that a government struggling to regain the initiative is reacting in a defensive way and is not in an offensive position in bringing in legislation and being in the forefront. In that case it should take a keen look at itself to see whether it is doing the job it should be doing and fulfilling its responsibility. So at this point we must look at the government's policy in respect of inflation and what positive effect that policy will have in the long term.

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I should like to deal with some of the specifics of the Prime Minister's statement. One concerns the matter of the subsidy on milling wheat for domestic purposes. The Prime Minister (Mr. Trudeau) stated that the floor price would be $3.25. He stated that the price to the Canadian wheat producer for the roughly 10 per cent of our wheat production which goes into domestic milling would be $3.25 plus $1.25, or a total of $4.50. Then, when the minister in charge of the Wheat Board arrived in Winnipeg, he added another 50 cents to bring it to $5. On September 11 the minister made an effort to clarify that statement. I am attempting to show that the government, in attempting to regain the initiative, actually lost it. It made the statement and then added confusion to confusion. The government, as the right hon. gentleman for Prince Albert (Mr. Diefen-baker) said, tried to explain the unexplainable.
On September 11 the minister circulated a statement to all members of the House outlining the program. In this statement it was mentioned that under the new two-price program, which is to be effective immediately, the government's contribution would be paid directly to the Canadian Wheat Board, the producers, and so on. The next day, September 12, I phoned the Canadian Wheat Board. The reason I did so is that in my constituency there is a relatively small milling concern which is important to the area. I was asked by representatives of that firm what price they would have to pay for Canadian milling wheat. They did not know because they had phoned the Canadian Wheat Board and were told that the board did not know. They were asked to phone again the next day. This is the result of the confusion and the loss of initiative by this government. This government should not attempt, by ad hoc statements, to fill in the gap and shore up the dike. It should come up with a policy that is clear and workable, and defend it. That is the role of the government.
On September 12 I phoned the Canadian Wheat Board and they gave me the international price for No. 1 Canadian red spring wheat and the different protein percentages, as well as the domestic price, which was $1 less. This was a day after the minister had made a statement to explain the unexplainable. But the Canadian Wheat Board still was not selling at that price. In fact, it was not even selling at the increase of 25 cents, much less at the increase of 50 cents.
This is what I mean by confusion. At that time the Canadian Wheat Board said the price was $3.25. There is a minister in the House who is responsible for the Canadian Wheat Board, and yet there is such confusion. What happened beyond that point? I telephoned the Canadian Wheat Board today and asked them today's price for domestic milling wheat and for Canadian No. 1 red spring wheat, generally the most common milling wheat. It was $3.25 to the domestic miller. However, I was left with the impression, and I am sure so was the press and most hon. members, that that was the top price. But no, 14 V4 per cent wheat was selling today at $3.33 to the Canadian miller. What policy are we following? To what are we reacting?


An hon. Member:: What are you complaining about?

Mr, P.->n: I am complaining not only about the fact that the Canadian wheat farmer has to subsidize the Canadian consumer, but also-here I am coming back to my basic premise-that the government has mismanaged its affairs to such a degree that it has multiplied this confusion. Today, in an editorial in the Winnipeg Free Press, which I understand was started by Sir Clifford Sifton who was minister of the interior some time back at the time when Prime Minister Laurier was in office, this fine Grit paper stated that the government has put its head in the sand hoping that the storm will pass before they know what is happening. That is the reaction today. I submit that the government has lost its will to govern. They enjoy being where they are, but they do not want to take the responsibility of governing, and that means working out policies.
What is needed to fight inflation in so far as the farming economy is concerned is one of my principal concerns tonight. What I would like to point out is this. I believe that a number of members of the House have the impression that farmers are now getting the highest price they have ever received in the history of this country, and that therefore they must be making a lot of money. It is true that prices for farm products are at an all-time high. But today, if you go into ridings in western Canada, you find that due to the spiralling costs of production, and despite the high prices of products, many farmers are no better off than they were when their products were selling at a more reasonable price and their cost of production was at a more reasonable level.
They are now taking a much larger risk and they are worried that the price of their product will drop suddenly while the cost of production will not drop as rapidly. They will then be in trouble. Not only that, but capitalization on farming today is at an all-time high, such as we have never seen before. Many farmers have to capitalize at 10 per cent. We talk about inflation and about the high cost of food, but let us look at it realistically. The reason for the high cost of production is inflation, and there are no benefactors. It is true that many farmers today are in a better cash position than they were a few years back, from 1969 to 1971, but in the long run they are not in a much better financial position despite what people may say. We hear a lot about the rising cost of food, but unfortunately we hear nothing about the other costs that go into the production of food.


Mr. Caccia:: That is what the Minister of Agriculture (Mr. Whelan) has been telling you all the time.


John Patrick (Pat) Nowlan: What he is telling us depends on the phases of the moon.


Arthur Jacob (Jake) Epp: I do not mind hon. members opposite interjecting and saying tnat the Minister of Agriculture has been saying this, because in my previous remark I said that farmers are receiving the highest prices ever. But you cannot look at prices alone; you have to look at the profit margin. You could be paying $10 for a dozen eggs, but if the cost of production is $9.99 all you are doing is fooling yourself.
It is interesting to note-going back to the statement made by the Prime Minister-that the NDP support this farming policy. In fact, they almost act as if they had come
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up with a four-point program, as was mentioned by a member of their party today, that the government had adopted two of the points already and that if they keep on pushing the government will adopt more so it is really an NDP program. The minister of agriculture of Manitoba said about this program:
The federal government did absolutely nothing when farmers went through a depression in 1967 to 1971 but now it is jumping to respond to consumer complaints about high food prices.
Now that the farmers, for the first time in five years, see a little bit of daylight in catching up in the payment of their bills, hoping to get their feet on the ground again, we seem to be responding to another pressure group that suggests that something should be done about food prices.
I suggest to members of the NDP that they had better get back home to find out what their supporters are saying. They are condemning the agricultural program that was announced by the Prime Minister for not being sufficient. Members of the NDP should check whether or not the rank and file in their party are agreeing with what they are doing.
Obviously, inflation is hitting many groups. We have talked about old age pensioners in relation to the indexing of the old age pension plan. The fact remains that inflation is affecting old age pensioners most because they have a meagre nest-egg-some capital that they were able to scrounge together during the period when they worked. To them that was security. Today that security is gone, or is worth very little as compared with its value at the time that money was earned and put away in savings. This is the cruelty of inflation.
With regard to regional disparity, I believe the Prime Minister's statement and the so-called attack on inflation was largely directed at attempting to obtain raw materials from western Canada at a price which the consumer would feel did not reflect an increase. I do not believe people in any one area of Canada or any one economic sector of Canada should be asked to bear the brunt of inflation.
Just as is the case with the farmer right now, with regard to milling wheat we are talking about 10 per cent-


The Acting Speaker (Mr. Laniel):: Order. I regret to interrupt the hon. member, but the time allotted to him has expired.


Mr. Kenneth J. Higson (Lincoln):: Mr. Speaker, the reason for the continuation of the debate at this hour of 4.30 in the morning is that this country is in a critical situation and the government, with its supporters to the left, is in a state of political prostration, unable or unwilling to cope with the economic problems that beset us or even to try to cope with the crisis in which we find ourselves.
Last January and during the few months thereafter the Leader of the Opposition (Mr. Stanfield) was accused of being too thirsty for power and the opposition was considered to be too anxious to take over the reins of government. Mr. Speaker, if ever there was a thirst for power or a desperate hunger for control of government, it is that
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which we see manifested by the present government and its New Democratic Party supporters.
It was once said that war was too serious a business to be left to the generals. I suggest that the economic destiny of this nation is too serious a business to be left to this Liberal-Socialist coalition of politicians. It is incredible that a minority party, having only one-ninth or one-eighth of the total seats in the House and only 17 per cent or 18 per cent of the popular vote in the election last October, should be in a position to perpetuate the life of an incompetent government by receiving tidbits of legislation in return for its support, thus compromising the principles of two political parties. I am happy that the opposition party of which I am a member is not a party to this type of activity.
This morning the nation is faced with a further increase in the cost of living of 1.3 per cent for the month of August, which is the highest monthly increase since March of 1951. Food is up by 3.2 per cent, for a total cumulative increase of almost 16 per cent during the last 12-month period. And the Prime Minister (Mr. Trudeau) has the audacity to tell us that it was, in effect, in anticipation of the increased consumer price index that this announcement was made to this House last September 4. That type of political fancy footwork might be swallowed by the government supporters but it will not be accepted or believed by the people from where I come.
The real motivation and purpose of that announcement was an attempt to make it appear to the Canadian people that the government, really bereft of original thought, was doing something to solve the economic mess that has been allowed to continue too long, and at the same time throw crumbs to the New Democratic Party in order to maintain itself as the government. I am not saying that the steps announced by the Prime Minister were wrong, although some-like the subsidy to wheat, and the oil pipeline to Montreal-in the light of subsequent announcements have proven somewhat confusing, which only manifests once again the ad hoc and butterfly-thinking of the government.
To be sure, legislation to increase pensions and family allowance assistance to those Canadians on fixed or low incomes and thus feel the real brunt of the government's ineptitude are steps in the right direction, as are subsidies to the milk and wheat producers, although subsidies do not control prices but merely spread the burden. And I, for one, would like to see all of Canada's social assistance legislation reviewed, in genuine co-operation with the provinces and the municipalities, so that effective and curative programs could be brought down to assist effectively Canada's economically deprived, instead of perpetuating a system that for too long has been overlooked.
But the announcement of the Prime Minister to which I referred a moment ago really does nothing to solve the real problem. To our already inflation-prone economy has been added a powerful catalyst with the inflationary expectations of our people. Prices have been rising for so long that people expect they will continue to rise, and thus act accordingly. Unions demand raises above increases in productivity in order to compensate their members for expected price increases. They are able to receive these increases, firstly because they hold monopolistic power,
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and, secondly because management, also suffering under similar inflationary expectations, is not too unwilling to accommodate the unions in their demands. Thus, costs and consequently prices do increase, and these expectations are vindicated in a perpetual motion forever upward.
At some time, Mr. Speaker, someone has to come to grips with this scramble where everyone is trying to stay ahead or just to keep up with the ever-spiralling rate of inflation. Our party has proposed an economic stabilization program as an attempt to contain inflation and at the same time to not jeopardize economic growth. Such a proposal is met with jeers, derision and taunts from the government and its supporters who say it won't work and suggest it has not worked in the United States or Great Britain. On that last point I suggest that hon. members should look again at the experience of our sister nations. Although, certainly, perfection has not been achieved in those two countries, they have been able to control food costs in the last 12-month period better than we have done in Canada, as well as the over-all inflationary rate in the United States. We have not said that this is the cure-all or great panacea for Canada's economic ills. Such a program must be accompanied by sound fiscal policy and would incorporate policies relating to mortgages rates, food prices, old age pensions and labour-management bargaining. And most important of all, we must control government spending.
It is incredible that the government should have increased expenditures from some $1014 billion for the year 1967-68 to an estimated $1914 billion for the current fiscal year, an average increase of 7 per cent during the last seven years. The other day the hon. member for York South (Mr. Lewis) commented that it was interesting to note that small "c" conservative governments had implemented price and wage controls in the United Kingdom and the United States. Naturally, I attach a different connotation to this from that of the hon. member for York South. I, as a Conservative, do not look forward with anticipation to a further intrusion by government into the private sector of the economy. Nor did Mr. Heath. Nor did President Nixon. But, Mr. Speaker, our nation's economy is in a desperate situation and we in this party alone have the courage and the conviction to do something about the situation here in Canada.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. Standing Order 2(1) reads:
The House shall meet on Mondays, Tuesdays, Wednesdays and Thursdays at 2.00 o'clock p.m. and on Fridays at 11 o'clock a.m. unless otherwise provided by standing or special order of this House.
Standing Order 42(1) reads:
Forty-eight hours' notice shall be given of a motion for leave to present a bill, resolution or address, for the appointment of any committee, or for placing a question on the order paper; but this rule shall not apply to bills after their introduction, or to private bills, or to the times of meeting or adjournment of the House.
Mr. Speaker, in view of the hour, and in particular in view of what these hours mean to the staff-not to the members, because there are not many members here-I wonder if it would not be possible, under the two Standing Orders I have just cited, to ask the House for an order,

with unanimous consent, that the sitting of this House for Friday, September 14, commence at two o'clock.
I am not trying to cut off tonight's debate. I do not know any way to do that, or I would try. It seems to me, for the reasons I have given, that the House might be doing the decent thing not to sit until two o'clock this afternoon. Though Standing Order 2(1) requires you to take the chair at eleven o'clock on Friday mornings, it seems to me this could be set aside by special order of the House.
I suggest that under Standing Order 42(1) a motion having to do with the time of meeting of the House does not require 48 hours' notice. I would be prepared to write out a motion, but if there is unanimous consent perhaps there could be a House order.


Some hon. Members:: Agreed.


Thomas Miller Bell: Mr. Speaker, we saw the hon. member for Winnipeg North Centre (Mr. Knowles) fingering his Standing Orders, and wondered what he was about. To us this seems a very good idea. It seems to be in order, and we support it wholeheartedly. We feel very guilty as far as the staff is concerned, although we feel we are carrying out our duty as far as the debate is concerned. If there could be some agreement for a two o'clock sitting, it would certainly meet with our approval.


Mr. Speaker:: I appreciate the point which has been made by the hon. member for Winnipeg North Centre (Mr. Knowles) and the point made by the hon. member who has just spoken, but the difficulty which the Chair faces at the moment is that there is not a quorum in the House. I wonder whether the Chair should feel authorized to accept an order which is offered at 4.45 in the morning without a quorum.
Perhaps earlier this evening some hon. members should have pointed to the fact that there was not a quorum and there should have been an adjournment then. That is my difficulty. Perhaps hon. members might comment on this point, that is, whether it is in order for a House that sits at 4.45 in the morning without a quorum to decide whether we ought to sit at eleven o'clock on Friday morning, according to Standing Orders.


Stanley Howard Knowles: Mr. Speaker, I do not want to be difficult, but it seems to me if there is not a quorum then the House should adjourn. However, I sense that even while you have been making this comment a few members have come in and there may now be 20 of us.


An hon. Member:: Twenty-one.


Stanley Howard Knowles: Well, we have grown up. I believe the number now exceeds 20, which is a quorum. Perhaps in those circumstances-


Roch La Salle: Because you have an independent.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Perhaps in the circumstances Your Honour would accept my proposal.
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Mr. Speaker:: Order, please. At 4.45 in the morning it seems to me, speaking as a humble individual, that a more rational proposition would have been that we adjourn. The hon. member's proposition is that we assume we are continuing with the debate and that we resume our sitting at two o'clock this afternoon. Do I understand this to be the hon. member's proposition?


Stanley Howard Knowles: It is, Mr. Speaker. It would be my preference that we adjourn, but I know of no way that we can do it unless there is not a quorum. I hope that if we do accept the proposition to start Friday's sitting at two o'clock in the afternoon, even so we will bring this sitting to a close as soon as we can.


Thomas Miller Bell: In expressing agreement with the two o'clock sitting I might say that we have two speeches to hear. As far as we are concerned, this would be the extent of our participation in the remaining part of the debate.


Joseph Adrien Henri Lambert: Mr. Speaker, to my mind, all parliamentarians, the staff of the House of Commons, as well as the Chair have shown much good will and energy by working till 4.45 a.m.
In any event, I would not like to object to our pursuing our work, but I would like us to respect the schedule established for Friday when we normally sit at 11 o'clock. I would very much like us to respect it so that no one is forced to work at night, under the pretext that we can start later.
For my part, all my life, when I have had to work late at night, it did not keep me from rising early in the morning.
I acquired that habit. I am quite willing to continue to do so, even as a parliamentarian. I am ready to continue our sitting and would very much appreciate it if our schedule for Friday were not altered, when we normally sit at 11 a.m.


Roch La Salle: Mr. Speaker, I rise on a point of order.


Mr. Speaker:: I would be happy to hear the hon. member for Joliette (Mr. La Salle) who, in view of the responsibilities he has assumed tonight, has acquired a very special wisdom.


Roch La Salle: Mr. Speaker, I imagine that, with the co-operation of all hon. members, I should thank the Chair for having invited me to sit as Acting Speaker for an hour.
This was a great honour for me and I think that my constituents will greatly appreciate it.
Now I would like to co-operate will all the party representatives so that the House may sit tomorrow at 11 a.m. or 2 p.m. as tne case may be, but I shall certainly be in my usual place to see to the interests of my constituents, Mr. Speaker.


Mr. Speaker:: I must consider the views expressed by the hon. members who took part in the discussion concerning the point of order raised by the hon. member for Winnipeg North Centre (Mr. Knowles). The hon. member for Bellechasse has suggested that the House should sit at 11 a.m. as provided by our Standing Orders-
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I doubt very much that without unanimous consent it would be within the power of the Chair to determine that we would meet at two o'clock in the afternoon rather than eleven in the morning. I would assume that a motion to that effect would have to be made, seconded, the question put and perhaps the bells rung. I am not sure whether we would not wake the rest of the citizenry if we rang the bells at five o'clock in the morning.
In view of the comments submitted by the hon. member for Bellechasse (Mr. Lambert) I wonder if we could not agree that we will continue this very interesting debate in the very Tew minutes that are left of it, as I understand from what was said by the hon. member for Saint John-Lancaster (Mr. Bell), and meet at eleven o'clock in the forenoon. Again, I am in the hands of the House.


John Patrick (Pat) Nowlan: On the same point of order, Mr. Speaker, the hon. member for Bellechasse (Mr. Lambert) could fit the act of the possible with that which should be practical. In this sense he could still conform to his natural habit of rising early and carrying on his duties as a member of parliament, attending at his office and doing those duties that a member does, while we give the staff a much needed break. It is a break which they deserve, because while members have been coming and going to this chamber, the staff has been here constantly.
In that way there would be no conflict with anybody's discipline or duties. I, too, rise early and will be doing something early this morning besides participating in this debate. I hope the hon. member will consider that suggestion.


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


Stanley Howard Knowles: Mr. Speaker, under the terms of Standing Order 42(1), I believe I can move a motion that the sitting of this House on Friday, September 14, 1973, commence at two o'clock p.m. I would be prepared to do so. I gather the hon. member for Saint John-Lancaster (Mr. Bell) will second the motion. However, there is not much point in doing that if it is going to be debated and results in calling in the members for a vote.
I wonder if I can join the hon. member for Annapolis Valley (Mr. Nowlan) and simply appeal to my good friend, the hon. member for Bellechasse (Mr. Lambert) to make it unanimous. The point is well taken that we should be on the job in the morning, but can we not make it unanimous, for the sake of the staff, and agree that we meet tomorrow afternoon at two o'clock, rather than making a motion and going through the formality I have mentioned?
[ Translation]


Joseph Adrien Henri Lambert: Mr. Speaker, as a result of the representations which have just been made by my colleagues of the Progressive Conservative party and the New Democratic Party and considering the work and the burden laid down on the staff of the House as well as on the Chair, I am quite ready to reconsider my position and to accede to the request which has just Deen made to alter
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our agenda. As usual, I like to co-operate with all my colleagues. As for the proposal, I find it logical and valid. Owing to the hour-it is five o'clock in the morning-1 think that I should accede to that request and readily accept a change in our agenda so that we would sit at 2 p.m. T agree and accept that proposal.
[ English]


Stanley Howard Knowles: In light of that, Mr. Speaker, perhaps the simplest thing for me to do is present the motion I suggested a moment ago. I therefore move the following, seconded by the hon. member for Saint John-Lancaster (Mr. Bell) and supported by the hon. member for Algoma (Mr. Foster), the hon. member for Joliette (Mr. La Salle) and the hon. member for Belle-chasse (Mr. Lambert):
That the sitting of this House on Friday, September 14, 1973, commence at two o'clock p.m.


Mr. Speaker:: Order, please. I have some doubt as to whether the Chair is in a position to accept the motion presented by the hon. member for Winnipeg North Centre (Mr. Knowles). There is a motion now before the House that we adjourn. I gather there are a number of hon. members who want to speak to this motion. The hon. member rose, took the floor and intervened on a point of order. It does not give him the right to propose a motion such as this.
Even if it is five o'clock in the morning, the Chair has the responsibility to be very close to Beauchesne, Bouri-not, May and other authorities, to be mindful of the Standing Orders and to remind the hon. member for Winnipeg North Centre that a motion cannot be proposed such as this one, on a point of order. I gather from what the hon. member for Saint John-Lancaster (Mr. Bell) indicated a moment ago, there are other speakers on the motion. I have to recognize them at the present time.


Stanley Howard Knowles: Mr. Speaker, is it not possible for the House to do things by unanimous consent? The proposal I make is, not that we adjourn now until two o'clock but that when we adjourn the next session will not start until two. If it is unanimous, is Your Honour not protected?


Mr. Speaker:: We would first have to agree that the hon. member for Winnipeg North Centre is allowed, by unanimous consent, to make a motion on a point of order. I will inquire whether there is unanimous consent on this.


Some hon. Members:: Agreed.


Mr. Speaker:: By consent, Mr. Knowles, seconded by Mr. Bell, moves:
That the sitting of this House on Friday, September 14, 1973, commence at two o'clock p.m.
Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion (Mr. Knowles, Winnipeg North Centre) agreed to.


Mr. Speaker:: Perhaps on my own point of order I might suggest that whips and representatives in the House might advise hon. members who are not here. A few of their

colleagues are not in the House at the present time, and they should be advised they are not expected to be here at eleven in the forenoon. I am suspicious that some of our distinguished colleagues, such as the right hon. member for Prince Albert (Mr. Diefenbaker) and others, will be here at eleven in the morning. The hon. member for Winnipeg North Centre will be here unless otherwise advised.


Mr.   Sean@: Mr. Speaker, I do not know whether to take it as a compliment or not, but it strikes me as somewhat ominous that just before I should be given the opportunity to speak there should be the sudden outburst of unanimity among all parties that the House is going to require a rest following the debate this morning.
We are now approaching the hour of 5 a,m. and I rise with a mixture of feelings, as I am sure other hon. members have in this debate. First, I have the very natural feeling of being tired, as this debate has been prolonged long into the night. At the same time, I have a sense of exhilaration in being able to participate in this debate and to listen to the speeches of my colleagues. I have a sense of honour that every member feels in having the opportunity of addressing the House of Commons. Balanced with that feeling I have a sense of disappointment that there may be some futility to the debate in which we are participating.
That sense of honour is supplemented by the fact I have been able to join with my colleagues in the Progressive Conservative party, which provided the impetus for this debate and followed through with the majority of speeches, while on the government side we have seen lackluster representation and minimal participation. Toward this debate there was almost total ignorance and apathy on the part of ministers of the Crown. Those feelings extend further to the entire purpose of this debate and perhaps beyond that to the entire purpose of why we are assembled in this chamber, what it is we are attempting to do and are summoned here to do.
We all know that if we take it on the surface, this House is meeting tonight because Mr. Speaker accepted the emergency debate proposal put forward yesterday afternoon by the Leader of the Opposition (Mr. Stanfield) in view of the very serious circumstances facing this nation. We are also aware this House would not be sitting if it were the choice of the government. However, circumstances intervened to force the recall of this House when the Minister of Labour (Mr. Munro) and others in the government failed to settle the railway strike. Once the government was forced to recall parliament, we on this side made it very clear that in discharging our responsibility to the people of Canada we had no intention of leaving here before pressing the government with every means at our disposal to at long last take some action with regard to inflation or, the term which I prefer, to the rising cost of living.
If I might continue to deal further with these feelings, any member of the House who is aware of the commitment he holds, not only to the constituency he represents but tc the nation as a whole, is constantly reminded that we in Canada are many times kept together not so much by the positive things we share but by the common difficulties
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say to my colleagues in the NDP that they had better prepare themselves to be judged as accessories to the crime and accomplices to this incompetent government. For the simple fact is that when you review the economic situation of this country and hold it in sharp contrast with what the economic situation should be, you come to the very distinct and inevitable conclusion that the government opposite has had their chance and they have failed. Their failure in the last election will be reflected in the next; and it will also affect the outcome in so far as the NDP is concerned.
A number of statistics have been quoted in this debate. One of them which has been used most often, particularly by the media, is that this country has had the highest monthly jump in the cost of living since the Korean war of 22 years ago. It means-


The Acting Speaker (Mr. Laniel):: Order. I must interrupt the hon. member, but the time allotted to him has expired.


John Patrick (Pat) Nowlan: Mr. Speaker, it was 13 hours ago that this debate on the cost of living and change in the interest rates began. Historically, and perhaps politically, 13 has been known to be an unlucky number. As people in the east are starting to rise and people in the far west are finding a deep sleep, and as we in this chamber in the centre of Canada sit in a sort of semi-stunned state at a quarter after five, I wonder what the soothsayer will say about this debate and what it will do, not for the fortunes of political parties in this House but for the people rising in the east and those in deep sleep in the west.
Although we do not know, what I think we have shown is that those who have participated in this 13-hour period in the 15 minutes allotted to them folowing the lead-off speakers have maintained a good debate. No matter how cynical and critical one can be, and often is, about the parliamentary process and/or members of parliament, no matter the expected interjections and at times frivolous comments which often stimulate debate, the tone, calibre and content of the speeches of all members has been such as to zone-in on this most serious topic that affects Canada. That is a credit to this institution and a reflection of the seriousness members of Her Majesty's Loyal Opposition feel about this subject.
Before I go further, as I wind up this debate I want to congratulate those who have participated. Many of us have sat here the full 13 hours. I also want to pay my respects and give thanks to those on the staff of the House who have been inconvenienced, who have obviously been a little upset and are tired, perhaps more tired than many members. I know many of them have been here longer than I and longer than I ever will be here, but going into long hours and calling elections at the wrong time-if there ever is a right time-does create personal inconvenience which, however, must take second place to the concern of members which they reflect here on behalf of Canadians from coast to coast.
The hon. member for Winnipeg North Centre (Mr. Knowles) raised a point of order a few minutes ago and mentioned that there was not a quorum. The number of members here consistently during these 13 hours has been

as good as that of any Friday afternoon when debate terminates at five o'clock, which again is a reflection of how serious we view this subject. We thank the staff, but we also know the staff appreciates that all of us, either individually or collectively through our parties, try to do what we think is best for the general good, even if this causes personal inconvenience.
My time is limited, and after the harmony that brought us an adjournment till two o'clock on Friday, and having listened to all that has been said, I am not going to make a tub-thumping speech. But I should like to say that when I listened earlier in the day to the Minister of Finance (Mr. Turner) and the Minister of Agriculture (Mr. Whelan) I started to think that if I were up above and knew as little about the mythology of the land, how would I describe what has gone on in this chamber? I think I would say it must be the three brass monkeys' debate. We used to have a prince. We now seem to have chaos. The brass monkey is the government, and there he sits with his hands over his ears. He hears no evil, sees no evil, and he is so darned afraid to do anything that he does no evil except perpetuate the chaotic economic conditions we are facing today. I say that is not good enough.
Where was the brass monkey tonight, the former prince? Was he getting reannointed in the great chateau down below. Did he have his hands over his ears, not listening to the acclaim that might have been his had he carried out his mandate of May, 1968, which the people finally took away from him in a qualified fashion in 1972? No, Mr. Speaker, that brass monkey, the Prime Minister of this land, has maintained his consistent stance on economic policies. Given the constitution and given the culture he will wax philosophical, but given the cold economic facts he will sit uninvolved, unheard and he will become unconcerned. That is not good government, Mr. Speaker.
I could say more about that, but let us turn to our friends and colleagues to the far, far left. Many years ago when I was knee high to a grasshopper I was first exposed to a great gentleman named M. J. Coldwell. He spoke at my alma mater, Acadia University. At that time George Drew tried to rip the microphone out of his hand and suggested that because he belonged to a socialist party he had to belong to a national party, therefore he belonged to the national democratic socialist party, which happened to be the party in Germany at the time of Hitler. That caused a little scuffle on the platform, but M. J. Coldwell handled the situation well: he was a gentleman and a man of principle.
It is terribly sad that we are experiencing the uneconomic conditions which will cause those problems to which the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) referred earlier. The hon. member for don Valley (Mr. Gillies), in his enlightened address, suggested honestly that we are getting close to the brink. Where is that principle in that party which used to be the conscience of the land before it sold its conscience for a mess of pottage? It used to be the New Democratic Party but now "NDP" means "no damn principle party".
The leader of that party used to make fun during election campaigns about Tweedledum and Tweedledee, refer-
September 13, 1973

ring to the Conservatives and the Liberals. He would ask: Who is Tweedledum and who is Tweedledee? What do we have today? I suggest we still have Tweedledum, but now we just have "ho-hum" from that man who just huffs and puffs away.
We heard all about the corporate rip-off, and the leader of the NDP, (Mr. Lewis) did well in a public way. He did not do too well at the polls, and I was not too displeased about that; but he is starting to raise this matter again. He cannot raise it again with the same credibility as before. With no concerted action from coast to coast, that party does not necessarily represent an attack against corporate rip-off that is being perpetrated as a result of this unholy alliance between two groups, neither of which received a majority, neither of which has a mandate and neither of which has a message for the people from coast to coast or a message for this House during this debate on economic policy.
We have heard many speeches during this debate. The two that stand out most in my mind are those of the hon. member for Don Valley and the hon. member for Qu'Ap-pelle-Moose Mountain. I have heard the latter member speaking privately from behind the curtain and over coffee, when he sometimes can wax eloquently, bringing forth ideas like water flowing over a falls. Today, in respect of one of the most complicated subjects, I can say without equivocation that he spoke extremely eloquently. We know that no party has the full answer, but when the hon. member for Qu'Appelle-Moose Mountain spoke I know that members on the government benches listened to his views. Five of the ministers who were then present applauded that hon. member.
What can I say about the other speeches in the few minutes I have left at my disposal? The hon. member for Verdun (Mr. Mackasey) and the Minister of Finance (Mr. Turner) suggested that we should not wage this war on the backs of the poor. They said that was what happened in respect of unemployment, and they were not going to do that at this time. What is just as bad as unemployment? Let us consider the erosion of the frozen dollar of the pensioner, the dollar of the working poor, and inflation itself which eats away at these funds. Is that not just as bad a social disease as unemployment? I have in mind that euphemistic phrase, "You cannot wage war on the backs of the poor".
Hon. members on the government side suggest this is an international problem. Why does Sweden have interest rates of 4 per cent and 5 per cent, with deposit interest rates of 3 per cent and 4 per cent? I suggest it is because Sweden has given stable government and leadership in economic, fiscal and monetary matters. We in Canada have more natural resources than Sweden ever thought of having, yet we continually respond as do our friends to the
Cost of Living
south. We have not developed an independent stance and we have not attempted to develop independent policy.
The Minister of Finance talked about world shortages and the lack of production. He listed a host of palliatives used in an attempt to pump a little money into the economy, but he did not once mention the Lift program or the quota on eggs and milk which curtails production. These things have now come back home to haunt the government. With that host of palliatives and pills, with no prescription to cure the ills, one cannot help but wonder if that is not what the government should be doing to help the needy and aid the dispossessed and those who have been cut off from the mainstream of life.
Is it not the function of government to assist these needy people? Why should this government take false pride in what is a normal government function? This government suggests that its normal function of providing the pill or palliative is designed to arrest the disease. I suggest to you that the money we voted in respect of certain measures in the last week or so will amount to nothing more than wooden nickels or Monopoly money if the cancer of inflation is not arrested and cured within the next six months or a year. Anything we give these needy people will be eaten away in six months or a year, the way things are now going.
I could say much more on this subject, but in conclusion let me refer to the eloquent address of the hon. member for Hamilton-Wentworth (Mr. O'Sullivan). I could not begin to match his remarks. However, it does seem to me that the situation comes down to what he suggested. I wish some of the ministers who sit on the treasury benches were present, but it is kind of late and it is time to go home.
If this government has the will to govern, and that is a trite phrase or cliche, I suggest there is a fundamental difference between clinging to office and exercising power. There is nothing wrong with exercising power. The responsibility of a government is to exercise power on behalf of the people. Unfortunately, at this time in Canada we have a government headed by a Prime Minister (Mr. Trudeau) who has an instinct for survival in office but who has defaulted in the exercise of power. As the hon. member for Hamilton-Wentworth said, this is a government of react, recant and retreat-which is no substitute for initiative, imagination, energy and the exercise of power.


The Acting Speaker (Mr. Laniel):: Order, please. Pursuant to section 13 of Standing Order 26, I am satisfied that the debate has now concluded. Perhaps we should say an evening or a morning prayer. I therefore declare the motion carried.
This House stands adjourned until two o'clock p.m. this date, pursuant to special order adopted earlier.
At 5.31 a.m. the House adjourned, until 2 p.m., pursuant to special order made this day.

Friday, September 14, 1973