1973-03-13

ROUTINE PROCEEDINGS


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, on Friday, March 9, I attended in Paris a meeting of finance ministers of the Group of Ten countries and of all members of the European Economic Community. The question before us was how best to relieve the speculative pressures affecting currency values which had led to the withdrawal of European and Japanese authorities from their exchange markets on March 2.
The meeting on Friday last permitted a useful exchange of views but could not arrive at any definite conclusions until the European countries had decided themselves whether to define fixed rates of exchange or to float and, if the latter, whether to float in unison or separately.
The Europeans made their own decisions Sunday night and, as is now known, beginning next Monday six countries will float jointly against the U.S. dollar; three others, the United Kingdom, Ireland and Italy, will for the time being float separately. Until next Monday, the European and Japanese markets will remain closed as they have been since March 2.
At a further meeting on Friday next which I shall be attending, there will be discussion of certain possibilities of co-operation between the European countries and others and we will no doubt discuss plans for expediting work now in train on the over-all reform of the monetary system.
Although the decisions taken last weekend do not have any direct, immediate consequences for Canada, I believe they will be helpful in reducing the speculative pressures that have been affecting certain exchange rates. By permitting the exchange rate system to react more directly to fundamental market forces, the decisions will set the stage for the basic reforms that are required.
Given Canada's great stake in foreign trade, we feel it is urgent to re-establish a calm, orderly international monetary regime and we shall participate actively in the international discussions and decisions directed to this vital objective.
This is a difficult time with respect to international trade and payments and much work lies ahead. While contributing all we can to the international discussions, we must make every effort to maintain the strength of our
industries so that they will be able to meet competition and provide jobs for Canadians.
I am tabling with your permission, Mr. Speaker, copies of the communique issued in Paris, Friday, March 9, by our Group of Ten meeting and of the communique issued by the meeting of finance ministers of the European Economic Community in Brussels, Sunday, March 11.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, we are glad to see the minister with us today, knowing that he is making an interim report to cabinet. I would have hoped he would prepare a rather more informative statement for the House because, with all due respect, in many ways this statement is about as empty of real information as a good deal of the budget speech the minister made to the House some nights ago. Be that as it may, this conference, this meeting will perhaps mean in days to come that after some 25 years the principles of the Bret-ton Woods Agreement will be not only obsolescent in its present form but probably obsolete in that we have so many currencies now floating subject no doubt, as in Canada's case, to massive central bank intervention. We know that some 15 months ago the Bank of Canada did intervene massively when there was the prior crisis with regard to the United States dollar. It would be interesting to know how much intervention there is at the present time.
In the minister's statement we find the following:
By permitting the exchange rate system to react more directly to fundamental market forces, the decisions will set the stage for the basic reforms that are required.
I simply enter the following caveat in that regard: Subject to the degree of central bank intervention which may totally distort the operations of the true market forces. In the press release tabled by the minister there is one sentence in paragraph four which leaves me wondering a little whether the ministers who met during this past weekend have not tried to find some convenient excuse by saying that the crisis was due to the speculative movement of funds. That in itself is an oversimplification. It may well reflect an inability to resolve the massive trade imbalances that have existed in respect of the grouping of problems within the Common Market.
The minister has indicated that the ministers unanimously expressed a determination to ensure jointly an orderly exchange rate system. Surely to goodness this does not even set the stage for the opening of multilateral trade talks this fall when a good many of the problems that underlie the speculative shifts where there is a surplus of a certain kind of currency floating about will be dealt with. Hopefully, this coming weekend we will get better reasoning than that expressed in paragraph four of the minister's press release.
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International Monetary Crisis


Mr. Max Saltsman (Waterloo):: Mr. Speaker, I should like to express my appreciation to the Minister of Finance for giving us an advance copy of his statement. I hope he enjoyed his trip to Paris because it does not seem that there was any other reason for it except enjoyment. There does not seem to be much of a contribution that Canada has either made or could have made. I do not see that much has been accomplished by the meeting. Six countries have agreed to tie their currencies together and to allow them to float together. This still does not eliminate the speculation that will take place against those currencies in the future unless those six countries think that their currencies are strong enough that they can keep this kind of a tie while at the same time keeping the speculators off.
I do not think there has been much improvement or that we can have much optimism about the future of currency movements in the world. It seems to me that the real problem of speculation is not being faced by the Group of Ten and the Common Market group, and certainly it does not seem to have been faced by the Canadian government. One of the very real problems that exists is the action of the multinational corporations and their role in international speculation. To that extent we would like to get some information about what the Canadian banks are doing in this speculative fever that exists in the world. We can talk about the gnomes of Zurich, but there are some very respectable gnomes running around with all kinds of hot money disrupting international markets.
I think it is important that at some point the Minister of Finance give us some indication on the matter of policing and monitoring Canadian-based multinational corporations such as Inco and Brascan. For instance, did he raise this question at the meeting, or was the question raised at all by the other countries? Is there any movement in the direction of doing something to control the multinational corporations throughout the world that seem to act as independent agents contrary to the interests of the governments of the countries themselves? Unless the minister tells us that he is dealing with these matters, we can only hope, as I said earlier, that he had a very nice time and a nice trip to Paris.


Mr. Rene Matte (Champlain):: Mr. Speaker, all the problems arising today in the western world's different monetary systems almost make us, of the Social Credit Party, smile, because for many years we have precisely been denouncing such a system.
All currency fluctuations and related problems prove the impossibility of maintaining sound monetary balance within the present financial system. Each country, and that is the cause of the problem, wants to have a favourable commercial balance, which is materially impossible and leads to speculation on various currencies.
Mr. Speaker, all this happens because it is overlooked that money has no value except what it represents in goods or services. Canada should give the whole world a concrete example by establishing a monetary system truly based on the balance which should exist between currency on the one hand and production on the other. We would thus return to sound commercial transactions, by way of
exchanging goods rather than by meaningless currency fluctuations.


UNEMPLOYMENT INSURANCE
Hon. Robert K. Andras (Minister oi Manpower and Immigration):: Mr. Speaker, last week I undertook to make a statement to the House on the benefit control program being applied to prevent payments of unemployment insurance benefits to persons not entitled under the act to receive them, and on the methods used by the Unemployment Insurance Commission to establish such errors and identify individual claimants who have been receiving such benefits.
Let me start by saying categorically that I am firmly convinced that the vast majority of Canadians now drawing unemployment insurance benefits are fully entitled to receive them by right of legislation enacted by parliament and by its true intent. I am equally determined that this majority of rightful claimants not be badgered or humiliated as a result of the commission's efforts to weed out the minority who, knowingly or unknowingly, are abusing the program.
Before outlining the ground rules by which unemployed Canadians are entitled to draw benefits, under the program described by the Canadian Labour Congress in its recent brief to the cabinet as "one of the best in the world," and the procedures now applied to ensure that this program and its reputation are not damaged by abuse, I can first report to hon. members two or three immediate steps that have been taken to protect rightful claimants against harassment.
At my request the Unemployment Insurance Advisory Committee, a nine-member body composed of four representatives of organized labour, four representatives of business, and Chairman Anatole Lesyk, Q.C., of Montreal, met this morning to undertake its own thorough study of the current benefit control operation, and other matters related to proposed amendments to the current act.
I can further report that all benefit control officers have been instructed that the need for thoroughness in their work does not and must not justify an overzealous approach or underhanded methods.


Some hon. Members:: Hear, hear!


Robert Knight Andras: 3. The benefit control officer must recognize the particular circumstances of a claimant, and be prepared to assist those in need of help by referring them to the claimant assistance program.
If any hon. member of the House, on either side, knows of any specific instance in which these guidelines have been abused by officials of the commission, I would be grateful to receive any information that would help rectify any injustice.
But in fairness to the Unemployment Insurance Commission officials who have been under long and heavy pressure, first in the effort to design and put into operation a sweeping transformation and improvement of the unemployment insurance system and, second, to iron out the kinks that were unavoidable when changes so radical were made at the pace at which the new program was implemented, I must emphasize that my own investigation in the week since I committed myself to make this report to the House has not turned up any volume of specific instances of overzealousness.
Another measure I would like to say will come into being is the distribution of a pamphlet to all people drawing unemployment insurance benefits clearly setting forth their rights and obligations under the act and under the appeal system.
The duty of the benefit control officers is to detect violation of the law, and the law is quite clear. Section 25 of the Unemployment Insurance Act, 1971, reads as follows:
A claimant is not entitled to be paid benefit for any working day in an initial benefit period for which he fails to prove that he was either
(a)	capable of and available for work and unable to obtain suitable employment on that day, or
(b)	incapable of work by reason of any prescribed illness, injury or quarantine on that day.
Further, under Regulation 145 passed in July, 1972, all unemployment insurance claimants are specifically notified in writing, when they receive their first benefit payment, that they may be required to prove that they are actively seeking work. Registration with their local Canada Manpower Centre, or with their union hiring hall if this is the custom in their occupation, is required of all claimants. But this is not in itself in all cases sufficient proof of active search for a job, particularly in localities where suitable jobs are available but are not being filled.
With your indulgence, Mr. Speaker, I will digress here to urge all Canadian employers, and particularly those who have complained that the present unemployment insurance system has hampered their efforts to fill jobs, to register their vacancies with the Canada Manpower Centre. I cannot overemphasize the importance of this step in helping ensure that unemployed persons and unfilled jobs are quickly brought together.
Guided by information on job vacancies listed at Canada Manpower Centres, by the "help wanted" columns of newspapers and other local labour market information, offices of the Unemployment Insurance Commission implement Regulation 145 by sending job search statement forms to claimants whose occupational
Unemployment Insurance Benefit Control
skills are known to be in demand in the locality in which they live. These forms ask the claimant to list the dates and details of efforts made to find work since filing claim for benefits, the persons contacted, the location at which the application was made, the type of work sought, and the results of the effort.
I repeat, these forms are to be sent only to claimants whose skills are known to be in demand in the area in which they live. This more sophisticated method of sorting out, by region and occupation, those claimants whose job skills are in local demand went into full operation at the beginning of this year. Its development began in mid-1972.
It relies on two basic tools. The first is an exhaustive classification of occupations of claimants. Second, special computer programs based on this classification make it possible to check the number of unfilled job openings in any area against the number of unemployment insurance claimants in that area who could fill those specific vacancies.
This does not mean that unemployment insurance claimants are disqualified by a computer. The computer programming is only a tool that guides benefit control officers to individuals who are drawing unemployment insurance benefits while living in an area where their occupational skills are in high demand.
These individuals are then interviewed, as a rule at home, by a benefit control officer, to determine whether they have been actively seeking work and are genuinely available for work. A report of the interview is written, to be signed by the claimant. Most commonly the report is written by the benefit control officer but the claimant is free to make changes or additions before signing it, and is free to refuse to sign. The report is made in two copies, with one kept by the claimant.
In some cases the accuracy of the answers given by the claimant is checked out discreetly by the benefit control officer.
The statement of the benefit control officer, and his report of the results of any subsequent investigation, are turned over to an insurance officer who decides, according to the act and the regulations, whether the claimant is entitled to continue drawing benefits. If the decision is that disentitlement is warranted, the claimant has the right, and is so informed, to appeal to a board of referees. These boards are independent bodies. Each includes a representative of the labour movement, a representative of the employers, and a chairman appointed by the government. The claimant has the right to present new evidence, not given to the benefit control officer in the original interview, to the board. Proof of search for work since the interview may lead to re-entitlement.
The investigations undertaken under this system have been described as "blitzes". In fact, in the large urban centres they are part of a continuing process. Only in the smaller communities do teams of benefit control interviewers move in for short periods, each officer interviewing an average of six claimants a day.
The rate of disqualifications resulting from the benefit control process has been startling. In the first nine weeks
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Unemployment Insurance Benefit Control of 1973, of 62,879 claimants whose investigation was completed, 40,846, or 65 per cent, were disqualified.
It must be borne in mind that the number of completed investigations is only slightly more than 10 per cent of the total number of Canadians drawing unemployment insurance. Those investigated were pre-selected by the computer and classification system I have described. In areas where there are no jobs available, there are no investigations.
I take no satisfaction from this high rate of disqualification.
Few hon. members would quarrel with the results of an investigation in which it was learned that 32 claimants, normally residents of Calgary and Edmonton, had asked the commission during the height of the skiing season to mail their unemployment insurance cheques to a post office box which proved to be the address of the Banff Springs Hotel. Twenty-nine of them were disqualified.
But in the more common cases this process of investigation and disqualification when it is warranted is an unpleasant necessity. The existing Unemployment Insurance Commission was established to help Canadians afflicted by unemployment, not to hound or harass them. The benefit of any doubt must still go to the individual.
The program cannot, however, fulfil its goal of helping the genuinely unemployed maintain a decent life unless it is both fair and seen to be fair. It must be fair to the unemployed who are sincere in wanting work, to the employees and employers who pay premiums, and to the Canadian taxpayers, who pay a substantial share of its cost in times of high unemployment.
It is to protect this essential condition of the program's survival, and guard its acceptability in the eyes of the majority of Canadians, who will support a generous program if they are assured that it is not being abused and exploited, that these new and more effective benefit control procedures have been developed and put into effect.


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I thank the minister for giving me ample time to at least peruse the statement he has made in order for me to be able to make some comments. I certainly welcome the statement, subject to certain matters which I will bring to the minister's attention.
I am pleased to note the minister has indicated there will be no badgering or unnecessary harassment of those who are entitled to claims. I was pleased to hear the minister state that the program "must be fair to the unemployed who are sincere in wanting work, to the employees and employers who pay premiums, and to the Canadian taxpayers, who pay a substantial share of its cost in times of high unemployment." Another paragraph in the minister's statement is even more significant: "It is to protect this essential condition of the program's survival and guard its acceptability in the eyes of the majority of Canadians, who will support a generous program if they are assured that it is not being abused and exploited, that these new and more effective benefit control procedures have been developed and put into effect."
As I listened to the minister trying to justify the unjustifiable, it took me back to the days when this act was first

brought before the House of Commons. At that time, we on this side indicated to the minister that there was something wrong with the act in view of the fact it amalgamated or integrated insurance and welfare. We stated that as a result there would be significant problems, the likes of which we did not know. Now we do know what it is all about.
I was not only surprised but flabbergasted when I read of the investigation that took place in the Hamilton-Toron-to area where some 20,000 out of 28,000 investigated were either disqualified or threatened with disqualification. I am not a mathematician, but that seems to be approximately 70 per cent. That is a far cry from the 3 per cent or 4 per cent we have been told were cheating. I do not have any qualms about the type of language I use. Cheaters and chisellers must go. This is the cry of all members of the House and the Canadian people.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: My friends to the left may say that is a right wing philosophy, but we are talking about tax dollars and trying to make a very difficult act work. When we were on the hustings during the election campaign, we stated we would like to bring in the Auditor General in order to ascertain how much the Unemployment Insurance Act is costing the people. We have since heard it is some $2 billion. We also indicated that abuses should be cut down. In this regard I am pleased to see we are moving in that direction. We also stated we would tighten up the administration. All these things are now coming into focus.
I do not want it left that, through overzealousness on the part of benefit control officers, those who are rightfully entitled will be cut off to their detriment. It seems to me that the way in which we are now approaching this matter is a proper way as long as we understand it should be done with compassion and understanding for those rightfully in need.
There is also the problem of the appeal board. I respectfully suggest that the minister must direct his attention to this area because I heard him say there has not been a significant number of appeals since the investigations began. However, I can vouch for the fact there will be appeals for the simple reason the act allows for appeals. There will be those who, through some quirk of fate, overzealousness or for some other reason are denied benefits and when they are denied they will take advantage of the appeal procedures under the act.
I note that the minister, as promised, has referred this question to the advisory committee. I understand, also, that he has referred other matters to that committee in connection with proposed amendments to the existing act. I hope that in due course the minister will enlighten the House as to these other matters, related to the Unemployment Insurance Act, which he has directed to the committee's attention in order that we may know just what is being studied.
Of equal concern to me is the fact that the minister, in order to show some awareness of the problem, did introduce Bill C-125 but has not referred it to the standing
March 13, 1973

committee to provide Members of Parliament as well as representatives of labour, employers and other concerned people with an opportunity to become involved in discussion of this legislation. It now seems to me, from the announcements I have heard, that the minister is attempting to amend the act by way of administrative or ministerial directive rather than giving representatives of labour, management and other groups, as well as Members of Parliament, the opportunity to delve into the subject matter of this bill.
I notice, also, that a report is still awaited from the advisory committee. The minister did not tell us whether this report was needed before he would introduce a modified or amended Bill C-125. I wish he had cleared up this point, because I should like to see a bill of some kind introduced rather than action be taken by way of administrative direction. The former course would allow hon. members to give the minister the benefit of their expertise.
In giving direction to the benefit control officers the minister indicated that these officers must recognize the particular situation in which claimants find themselves and assist those in need of help. Many people in Canada fall into this latter category; because of difficulty in adjusting to language or culture they are left at some disadvantage. I hope the minister realizes that in certain areas, particularly in our larger urban areas, this can be a serious problem. A great many people really do not know what is going on, and because of harassment in the past they are often afraid of the type of person who is involved in carrying out these inquiries. I hope that in our major urban centres, to which most of our immigrants are attracted, this situation will be kept carefully in mind and that those concerned will be treated with understanding.
The minister talked about availability for work and suitability for employment. I hope he realizes that in many instances people go across this land looking for work in all sincerity, but because of gentlemen's agreements, shall we say, based on attitudes toward sex, race or colour, they are denied employment. I see the minister shaking his head. This is something else we have to be extremely careful about; I hope the benefit control officers are aware that such a situation does exist in Canada. Mr. Speaker, I see I am running out of time.


An hon. Member:: You already have.


Lincoln MacCauley Alexander: I hear a smart-aleck on the other side saying I already have. I want to let you know, Mr. Speaker, that you are the only one in this House who can chastise me in the sense of putting me down. Until that happens, I shall continue.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: I do not care what the Minister of Manpower and Immigration does with respect to this act until such time as the government realizes that the only solution to this dilemma is a full employment policy. If it so chooses, the government can even steal some of the policies we have outlined-


An hon. Member:: You would not vote for them if we did.
Unemployment Insurance Benefit Control


Lincoln MacCauley Alexander: -in terms of an expansionary budget and measures to stimulate the economy from which employment would be derived. It is time the government took an attitude similar to that adopted by the United States where unemployment has now fallen to something like 5 per cent. In West Germany and Japan, unemployment is just about negligible. Until the government changes its course, we shall always experience problems in connection with the Unemployment Insurance Act.
In closing, I should like to say I welcome the minister's statement. I hope, though, that the advice which will be offered to him both by members of my party and by hon. members in the party to my left will be sympathetically received, because he has entered a very dangerous area. The cheats and chisellers should go. We should take action in this direction without hesitation. But in doing so we must take care that those who are entitled to benefits, and who are paying for the scheme, are not unduly harassed or cut off without good reason.


Some hon. Members:: Hear, hear!


Robert Knight Andras: On a point of order, Mr. Speaker. I am sure the hon. member for Hamilton West would wish to join me in correcting any possible erroneous impression that might have been left inadvertently by one comment he made. I think it extremely important that the facts be put clearly before the people. He quoted a statistic to the effect that 28,000 claimants had been examined and 20,000 had been disqualified, or 70 per cent of those examined. The total number of claimants in that area was 120,000. That is bad enough, but the number disqualified did not amount to 70 per cent of the claimants.


Mr. Stanfield:: On the point of order, Mr. Speaker, I did not object to the length of the minister's statement because this is an important subject, but I do not think that after making such a lengthy statement the minister should raise a phony point of order.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: The minister's intervention is, of course, highly unusual. I thought I said that of 28,000 claimants investigated 20,000 had either been disqualified or threatened with disqualification, out of a total number of some 100,000-odd claimants. But let me add this-


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: The minister raised the point of order. I shall continue to speak on the point of order. I wish to repeat one sentence in the minister's statement. He said: "In the first nine weeks of 1973, of 62,879 claimants whose cases were investigated, 40,846, or 65 per cent, were disqualified." I now sit down.


Some hon. Members:: Read the next paragraph.


Mr. Speaker:: Order, please. If I were to make a ruling I would have to say, of course, that the point of order was not well taken in that it was a matter of debate. The minister sought to correct what he thought was a misstatement and the hon. member for Hamilton West did

March 13, 1973
Unemployment Insurance Benefit Control the same thing in respect of the minister. I think we should get on now and hear the hon. member for Nickel Belt.


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, as a newcomer to this House I believe I bring some kind of unbiased view to this whole situation.


Some hon. Members:: Oh, oh!


John R. Rodriguez: It waxes strange that this government, which created high unemployment in order to fight inflation, which was responsible for this monster that it let loose among the Canadian people, had to do something about the large numbers who became unemployed and brought the new Unemployment Insurance Act into being. We in this party applauded that act because it took care of and looked after the interests of those who had become the victims of the massive war against inflation that created unemployment.
We in this party have never condoned the actions of those who cheat in any social or corporate program. We fully realize, as studies will verify, that about 2 per cent of the people affected cheat in any social program. The minister himself, in his statement, said he is firmly convinced that the vast majority of Canadians now drawing unemployment insurance benefits are fully entitled to receive those payments as of right according to law. Having said that, he went on to pick out one small example among the minority of claimants and referred to people in Calgary or Edmonton who went skiing and had their unemployment insurance cheques mailed to them. If he is so concerned about the rights of those who have an entitlement to unemployment insurance being criticized in the press, why has he lampooned a small number of those who are collecting unemployment insurance incorrectly? We suggest that this statement will only serve to reinforce the reactionary thinking of those who are against the vast numbers of people legally collecting unemployment insurance.
This party has never faulted the act and what it seeks to do, nor the broadening of the act which is necessary to cover those who are the victims in this war. Yet we do criticize the administration of the act. We feel that the act is administered in a very inhumane fashion.
May I speak briefly about the benefit control officers. Apparently the minister has instructed them to follow three particular aspects of a certain code of ethics. The minister may not be aware of some of the questions that are being asked. As recently as last week I learned of a fellow who had been a university lecturer and had earned $10,000 a year for two years. He became unemployed following a cutback in university spending. He was laid off and collected unemployment insurance. Then he was visited by a benefit control officer who asked him what salary he would accept. The man answered, "$10,000 a year", because that was the salary he had earned for the past two years. One week later he received notification from the commission saying that he was limiting his opportunities for employment by saying he would accept only $10,000 a year and his unemployment insurance benefits were cut off. That is only one example. I could list many such examples. I deal with 52 unemployment

insurance cases a week involving my local office. I will gladly give the minister several examples showing that the administration of the act is at fault.
This party has always held that social programs such as unemployment insurance exist to help people. The Unemployment Insurance Act is supposed to help them over the rough stages until they can again obtain employment. Instead, we find, that they are being used to feed reactionary thinking across the country. What the government ought to do to solve this problem is expand the economy so that jobs will be created and there will be an opportunity for anyone wanting work to obtain a job.
The only thing we applaud in the statement of the minister is his intention to have the advisory committee of the UIC take a look at the whole matter of benefit control and the way in which it is implemented across the country. We support that aspect of the program. The rest of the statement, I repeat, concerns a small number of claimants and that part of it merely feeds the fires of reactionary thinking among members to my right.


Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, I cannot help mentioning first that we have received the statement in English. I accept the apologies of the minister, but I would point out to him that one way of reducing unemployment would be to hire more translators.
I also wish to say that temporary amendments such as those suggested will not solve the problem. The legislation is too complicated and is difficult to put into effect. The Canadian people do not understand legislation which is too complicated. Mistakes have increased last winter and it was worse this winter. Some workers waited three months before being paid; I met some during the weekend who filed claims at the end of November and who have not yet been paid.
I do not necessarily criticize the public servants, because I admit that some are good; they are not all good but several are conscious of their responsibilities. However they are administering an almost unworkable piece of legislation due to all kinds of administrative complexities which the workers cannot easily understand.
I have already mentioned this in committee but not too often, because I do not monopolize the time allotted to others. However, I would like legislation prepared for workers to be drawn up in terms clear enough to enable them to understand it.
I will not dwell on this matter now; I suppose that an amendment to the legislation will be introduced. I feel that another bill should be brought in to clear up the situation.
One important point that must be borne in mind is decentralization. Centralization of benefit payments in one regional office has resulted in the installation of com-
March 13, 1973

puters which should hasten the solution to late payments. Thousands of unemployed go through an unfortunate experience in this field. They must wait for months, as I said earlier, before getting their first benefit cheque. This situation is inconceivable not to say revolting.
I suggest here that payments ought to be made in district offices and if the government really wants to improve the fate of thousands of unemployed, it must take some practical means, including decentralization. This is why I insist that they ought to introduce clearly written legislation and prepare regulations enabling understanding officials-and I know that some of them are-to truly assist the unemployed by administering in a humane way social legislation. Public servants would do well to remember that they are the servants of the people not despots, that a nation is made up of individuals not robots. The unemployed may be without work but not necessarily without sense. They see what is happening. Public servants and technocrats who draft legislation should also bear in mind that they are paid by the people who in return expect services and not troubles.


THE CANADIAN ECONOMY
Mr. lames A. McGrath (St. lohn's East):: Mr. Speaker, I rise under the provisions of Standing Order 43, and I do so because of the unemployment figures released today. Some 87,000 Canadians cannot find employment in the Atlantic provinces. The rate of unemployment in my own province of Newfoundland is almost three times the national average. In light of the obvious failure of Department of Regional Economic Expansion programs to achieve any substantial or decent increase in employment opportunities in the Atlantic region-I suggest that this motion is similar to a motion I moved when the figures were issued last month, and I commend it to the government House leader who is a distinguished minister from the Atlantic provinces-I move, seconded by the hon. member for Gander-Twillingate (Mr. Lundrigan):
That in the opinion of this House the Prime Minister should immediately arrange a conference between the Atlantic provinces and the federal government on alternative economic opportunities for the region, and that the federal government outline its short and medium term targets to reduce unemployment and to ameliorate the present disastrous situation in the Atlantic provinces.


Mr. Speaker:: The motion proposed by the hon. member for St. John's East under the terms of Standing Order 43 requires unanimous consent. Is there unanimity?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent. The motion cannot be put at this time.
Charter Air Fares
lTranslation]


UNEMPLOYMENT INSURANCE
Mr. Roland Godin (Portneuf):: Mr. Speaker, under Standing Order 43, I request the unanimous consent of the House to discuss a matter of the utmost importance for some Canadians.
My motion concerns employees of various federal and provincial government departments who are dismissed due to a lack of funds, and most road construction and maintenance workers. I move, seconded by the hon. member for Lotbiniere (Mr. Fortin):
That this House require that any Canadian worker who is laid-off on a temporary basis for a period not exceeding six months be exempted from applying to other employers in order to prove that he is not working and thus eligible for unemployment insurance benefits; this would be a recognition that our economic system and our climate make such temporary lay-offs inevitable, affecting thousands of Canadians every year.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimous consent, and the motion cannot be put.


AIR TRANSPORT
Mr. Reg Stackhouse (Scarborough East):: Mr. Speaker, pursuant to Standing Order 43 I rise on a matter of urgent and pressing necessity, namely, the fact that under the new advance booking charter regulations Canadians flying to the United Kingdom will pay higher fares than passengers on charter flights from the United Kingdom to Canada. I move, seconded by the hon. member for Vegre-ville (Mr. Mazankowski):
That the House advise the Minister of Transport (Mr. Marchand) that he urge the Canadian Transport Commission to revise its A.B.C. regulations so that they will permit a more equitable air fare schedule commensurate with the fares being charged by carriers operating out of European points.


Mr. Speaker:: The House has heard the motion proposed by the hon. member for Scarborough East. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity. The motion cannot be put at this time.
Oral Questions



ORAL QUESTION PERIOD

[Stage Direction]
March 13, 1973

Lincoln MacCauley Alexander: Mr. Speaker, I should like to direct a question to the Minister of Manpower and Immigration arising from an alleged directive to manpower offices which seems to me to represent a significant change of policy. Has the minister instructed his department to give absolute priority in referrals for all jobs, including on the job training, to unemployment insurance claimants in the first instance, welfare recipients in the second instance, and other unemployed persons in the third instance? If so, does this mean that the policy of the department is now one of high selectivity, seemingly ignoring suitability of skills and the needs of employers as well as of other Canadians?


Robert Knight Andras: Mr. Speaker, the deputy minister sent a dispatch to director generals of the department last Friday, I believe it was. I think the words quoted by the hon. member are accurate, but they should be taken in context with other regulations and other manuals of instruction. Unquestionably in every case suitability for work is the supreme criterion that is used and after that the priorities as indicated would follow.


Lincoln MacCauley Alexander: I take it, in light of the minister's answer, that this directive was sent with the consent and knowledge of the minister. In light of the fact that the decision taken by the minister seems to contradict flagrantly the Unemployment Insurance Act, as it would appear that amendments are being made by administrative procedure and regulation, can the minister advise whether he has abandoned the introduction of a modified or amended Bill C-125 in order to deal with the problems in the act, or does he intend to continue bringing about regulations without seeking the advice of parliament, labour and management?


Robert Knight Andras: Mr. Speaker, it is, of course, a legal opinion, but I would think that the hon. member's question is based on a wrong premise when he says that this in fact contradicts the terms of the Unemployment Insurance Act. As I said in my earlier answer, the question of suitability for work and capability of handling a job is paramount in referring people to employers to fill job vacancies.


Lincoln MacCauley Alexander: Mr. Speaker, I wonder whether the minister would answer the question and advise whether he is going to continue modifying the act by way of regulations and ministerial direction, or is he going to bring in a modified or amended Bill C-125 to deal with this situation?


Robert Knight Andras: Mr. Speaker, I do not think we are attempting to modify the act by administrative change or by regulation. The answer is that Bill C-125 is on the order

paper and will be brought forward in the House in due course.


DIRECTIVE ESTABLISHING PRIORITY IN JOB REFERRALS-POSITION OF HOUSEWIVES, DISABLED VETERANS AND STUDENTS
Mr. I. R. Ellis (Hastings):: Mr. Speaker, I have a supplementary question for the Minister of Manpower and Immigration. We feel that there is a change in policy here. In view of this shift in policy, would the minister advise the House what priority people such as housewives, disabled veterans and students who are seeking to enter the labour force will now have? Does the minister not believe that the manpower services should be for the benefit of all who desire those services on a first come, first served basis?


Mr. Speaker:: Order, please. There are procedural difficulties in the hon. member's question. The question was preceded by a statement or allegation, which is not in order, but I am willing to overlook this. The second part of the question appeared to be an argument more than a question. However, perhaps the minister might be allowed to reply briefly.


Robert Knight Andras: Mr. Speaker, I do not think this is proposing any discrimination. I think it simply makes good sense to establish some order of priority. Veterans and students within the unemployment insurance claimant rolls, veterans and students within social welfare rolls, veterans, students and straight unemployed, will be given priority within those particular categories over others. We are simply saying that in that very broad general categorization there is a sequence of choices. I think that makes ordinary common sense.


DIRECTIVE ESTABLISHING PRIORITY IN JOB
John R. Rodriguez: Mr. Speaker, I have a supplementary question for the Minister of Manpower and Immigration. In view of the second-class rating of welfare recipients in job placement and job retraining programs through the manpower offices, did the minister consult with the provinces before instituting such policy?


Robert Knight Andras: Mr. Speaker, we are not going to permit any such thing as second-class citizens in this situation. I explained last night at some considerable length, though perhaps not very ably, that we are preparing and launching special programs for people of the sort described by the hon. member.


Mr. Don Blenkarn (Peel South):: I have a supplementary question, Mr. Speaker. Would the minister tell the House whether the change in priority for those who receive retraining will improve the unemployment statistics?


Robert Knight Andras: Mr. Speaker, I would hope that everything we do is bent that way.
March 13, 1973


Donald Alex Blenkarn: Would the minister advise the House whether this is just another method of cooking the books at the expense of those on welfare or chronically unemployed?


Mr. Speaker:: Order, please. That question, of course, is out of order.


Mr. Heward Grafftey (Brome-Missisquoi):: I have a supplementary question, Mr. Speaker. Is the minister aware of what this directive does to non-unionized labour in rural areas across the country?


Robert Knight Andras: Quite frankly, no, Mr. Speaker. I would be very interested in the hon. member's thinking on that one.


Some hon. Members:: Oh, oh!


Mr. Speaker:: The hon. member for Brant on a supplementary. May we have order, please. The hon. member for Brant has been recognized for a supplementary.


UNEMPLOYMENT INSURANCE
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. I have been told on good authority that benefit control officers are being forced to work on a quota system. Would the minister responsible for the Unemployment Insurance Commission issue orders immediately to rescind these instructions?


Robert Knight Andras: Mr. Speaker, I just cannot believe that is the case, but if there is any possibility of that taking place I will search for it and take action forthwith.


Mr. Speaker:: Order, please. There are supplementaries on this matter. Before pursuing the subject the Chair recognizes the hon. member for Lotbiniere.


MANPOWER
Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I have a question for the hon. Minister of Manpower and Immigration who is at the same time accountable to the House for the Local Initiatives Program.
Is he aware that the Minister of Transport announces to the sponsors of the projects, to some of them at least, that their project has been accepted by the government and, if so, is it pursuant to a cabinet decision?
Oral Questions


Robert Knight Andras: Mr. Speaker, the final authority for rejection or acceptance of local initiative projects is, fortunately or unfortunately, totally mine.


André-Gilles Fortin: Mr. Speaker, I have a supplementary. I would like to ask the hon. Minister of Manpower and Immigration if he has had discussions with the hon. Minister of Transport asking him to announce to project sponsors the acceptance of some projects? Has such a discussion or agreement taken place between both ministers?


Robert Knight Andras: Mr. Speaker, I do not remember any precise discussion between the Minister of Transport and myself. I might say I think I have had discussions about local initiative projects with almost every member of the House at one stage or another.


André-Gilles Fortin: Mr. Speaker, I wish to put another supplementary.
Could the Minister of Manpower and Immigration tell us then how is it that the Minister of Transport sent the following letter to a citizen in Victoriaville and I quote:
I am pleased to advise you that the project you have submitted under the Program-


Mr. Speaker:: Order. The hon. member should put his question. I do not think it is possible to quote letters or telegrams in support of questions. The hon. member should ask his question directly without reading the text of the letter to which he wants to refer.


André-Gilles Fortin: Mr. Speaker, I rise on a question of privilege.
On answering my first question, the minister said there was no such undertaking. He then said he was fully responsible for the administration of his department. I think this is a question of privilege since he has misinformed the House. In fact, there was indeed a letter that was sent out into my constituency. I will indicate that there is indeed a matter of personal privilege and I quote this letter:
I am pleased to announce that the project you have presented under the Local Initiatives Program has been accepted-
-"has been accepted-"
-and the necessary funds for its completion will be granted.
Mr. Speaker, it is a very serious matter when the Minister of Transport says: Your project has been accepted and the necessary funds for its completion will be granted. That means that the Minister of Transport in that letter signed by himself was committing amounts of money from the Department of Manpower and Immigration.
One week later, an official of the Department of Manpower and Immigration sent a letter to the effect-


Mr. Speaker:: Order. May I say to the hon. member that we are losing rather precious time. In the past I have suggested to hon. members-and I think I have had the support of the hon. member for Lotbiniere in that regard-that we loose precious time during the question

March 13, 1973
Oral Questions
period by raising questions of privilege and points of order. I think the hon. member will co-operate with the Chair and other hon. members by indicating as quickly as possible what his question of privilege is and how his rights have been encroached upon.


André-Gilles Fortin: With pleasure, Mr. Speaker. I believe my rights have been encroached upon for the following reasons. First, according to the agreement announced by the minister hon. members were to be informed of those projects, and that was not done in that case; second, the Minister of Manpower and Immigration said a moment ago that there had been no agreement with any other minister to announce the project, and that is wrong according to the letter I have just read; third, the people in my riding who submitted this project were misled because one week after they received a letter from the Department of Manpower and Immigration to the effect that their project had been refused; fourth, I would like to say with respect that hon. members cannot get an honest, straight and clear answer from the Department of Manpower and Immigration in that regard while at the same time the Minister of Transport is playing politics in our ridings instead of dealing with the department for which he is responsible.


Hon. Jean Marchand (Minister of Transport):: I should like to say a word about the question of privilege. I happened by chance to visit the constituency of Lotbiniere during the last election campaign, and heard the hon. member boasting that he had managed to get at least 15 projects approved by the department as part of the Local Initiative and Opportunities for Youth program. So I am congratulating him.


Mr. Speaker:: Order, please. Would the hon. member kindly be seated. I do not see why the question period should be taken up with arguing out the matter raised by the hon. member for Lotbiniere. He is obviously at disagreement with the Minister of Transport over what may or may not have been told to one or more voters in the constituency of Lotbiniere. I seriously doubt if we should spend very much more time on this matter.


André-Gilles Fortin: Thank you, Mr. Speaker.
The hon. Minister of Transport has just misled the House once again, and seriously so, since I never claimed to have obtained approval for a local initiative project for my constituency; I have never announced one. If I did announce or say during the election campaign that several projects had been adopted, it was to show how false was the Liberals' theory that one had to be in power in a constituency for it to be eligible. And I would like to point out that the minister's visit helped me a great deal, since I had a majority of 11,000.


Mr. Speaker:: Order, please. If the hon. member for Lotbiniere will let us, we will now return to the oral question period. I trust that we shall now be able to hear some questions and answers rather than questions of privilege.


DIRECTIVE ESTABLISHING PRIORITY IN JOB REFERRALS-EFFECT ON YOUNG PEOPLE SEEKING FIRST EMPLOYMENT
Robert Lorne Stanfield: Mr. Speaker, I wish to direct a question to the Minister of Manpower and Immigration. In view of the high level of unemployment among Canadians under age 25 I should like to ask the minister whether, in authorizing this directive with regard to beneficial treatment related to job vacancies in terms of length of time on unemployment insurance, the minister has considered the effect of the directive on the employment opportunities for young Canadians seeking employment for the first time? If so, has he made any calculation as to how much longer young Canadians will have to wait to get jobs in view of the directive he has issued?


Robert Knight Andras: Mr. Speaker, I outlined again at some length last night, perhaps not clearly but it is on the record, many programs that we direct to people under age 24 or age 25. We are very concerned about this. It represents a high rate of unemployment because they form the largest single group of the unemployed among our labour force. We are taking a great many measures to alleviate their distress due to unemployment. I do not think this establishment of priorities, however, would inhibit their possibility of obtaining employment, but I am quite willing to review it. I will take advice from hon. members opposite and look over the situation.


THE CANADIAN ECONOMY
Robert Lorne Stanfield: Mr. Speaker, I have a supplementary which I will address to the Prime Minister. I should like to ask him whether his government intends to announce, with the coming of spring and summer, programs in addition to those announced a while ago by the Secretary of State with regard to the creation of employment. I ask this in view of the fact that, comparing February of this year with February of last year, or January of this year with January of last year, the percentage of those under age 25 out of work seems to have remained constant although the actual number has increased.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, as the question relates to events which might happen later in the spring and summer, perhaps the Leader of the Opposition would like to put it on the order paper.


Some hon. Members:: Oh, oh!


An hon. Member:: There is sympathy for the
unemployed.


An hon. Member:: The same old arrogance.


Robert Lorne Stanfield: Mr. Speaker, I am quite prepared to let young Canadians assess that response themselves.
March 13, 1973


Some hon. Members:: Hear, hear!


UNEMPLOYMENT AMONG YOUTH-REQUEST FOR FORECAST AND PROJECTED TARGET FOR 1973
Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Minister of Finance a question. In view of the projection made by the minister or his officials that the seasonally adjusted rate of unemployment is expected to drop to approximately 5.2 per cent, has he any forecast as to the drop, if any, in the rate of unemployment among those under the age of 25 and, therefore, what the projected target is for 1973 in light of the 5.2 per cent over-all figure.


John Napier Turner: Mr. Speaker, with regard to the preamble to the hon. member's question, the forecast of the drop in the rate which may or may not have been made by my officials was based, as was indicated at that briefing session, on a number of interrelated assumptions. As to the current situation, although it is no comfort to those men and women still out of work, particularly young men and women, I think the House can take some satisfaction from the fact that the seasonally adjusted rate has dropped again this month.


Some hon. Members:: Answer the question.


John Napier Turner: As to a forecast regarding how many men and women under the age of 25 will be out of work, I cannot give that to the House. As to my target, the hon. member knows it; I have given it on several occasions.


An hon. Member:: What is it?


UNEMPLOYMENT-POSSIBILITY OF CONTINUING DROP IN ACCORDANCE WITH GOVERNMENT FORECAST
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Minister of Finance. Given the fact that the unemployment rate in January and February of 1973 was precisely the same as that in 1972, has the Department of Finance found any indication in the structure of unemployment we now have to suggest that the unemployment rate will continue to drop in the way they have forecast?


John Napier Turner: The hon. gentleman knows the basis of the inter-relationship between growth of the labour force and growth in jobs. I would refer him to the statement of Statistics Canada today that we registered an increase in the actual employment of 90,000 in February, which is the largest gain on record for this month in the history of this country.


Some hon. Members:: Hear, hear!


James McPhail Gillies: Given the fact that the rate of unemployment is not reducing in the country, will the minister give further consideration to introducing supplementary budgetary proposals which would expand the economy further?


John Napier Turner: The fact that the hon. gentleman wants to give me is not a fact.
Oral Questions


UNEMPLOYMENT IN ATLANTIC PROVINCES-INQUIRY AS TO GOVERNMENT POLICIES TO ALLEVIATE
Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker,
I should like to put a question to the right hon. Prime Minister.


An hon. Member:: Better be careful; he's touchy today.


John Howard Lundrigan: In view of the very disturbing news today, which is a matter of concern to all Canadians, about the further increase in the unemployment insurance rate in the Atlantic provinces, coinciding with the prediction of OECD, and specifically with New Brunswick rising from 19,000 to 31,000 and Newfoundland from 23,000 to 28,000, in other words, a 1.5 per cent increase in these provinces, would the right hon. Prime Minister tell the House now what he is going to do about it?


Pierre Elliott Trudeau: Mr. Speaker, I am sure the hon. member was not referring to the unemployment insurance rate but to the unemployment rate. I will consider the question and if we have any announcements to make I will make them in due course.


John Howard Lundrigan: In view of the fact that we have had this situation now almost since the time this government was formed in 1968, despite the existence of the Department of Regional Economic Expansion, and in view of the fact that a number of government policies are running completely counter to the efforts of the Department of Regional Economic Expansion, can the Prime Minister say whether his government has the courage to take issue with the transportation policies? Is it willing to review the tariff policies? Is it willing to review the inflexibility of the incentive policies-


Mr. Speaker:: Order, please. The hon. member will appreciate that his question is certainly more a speech than a question. It sounds like four questions.


John Howard Lundrigan: Mr. Speaker, I am asking the Prime Minister a question regarding tariffs, transportation, costsharing and banking policies. Is the government willing to make a major review of the policies of the government that are running completely counter to the efforts and aims of the Department of Regional Economic Expansion, which might be the biggest influence and be the most important reason why, despite the efforts of that department-


Mr. Speaker:: Order, please. That, of course, is not a question.


John Howard Lundrigan: On a point of order, Mr. Speaker, at least I have made some kind of representation to the Prime Minister which has to do with the fundamental policies of the government. I am asking the Prime Minister, as he keeps on writing away after having returned from his Caribbean holiday, whether he will give these matters the serious consideration they deserve?


Mr. Speaker:: Order, please. The hon. member for Scarborough West.


John Howard Lundrigan: Mr. Speaker, I am not going to give up unless the Prime Minister-

March 13, 1973
Oral Questions


Mr. Speaker:: Order, please. The hon. member should resume his seat. He has said himself that he was not asking a question but making a representation, which is his right. But I suggest to the hon. member that the way the question was put it was not really a question but a representation, as he himself has said. He has to assume that notice has been taken of his representation.


John Howard Lundrigan: May I say, with the greatest respect, Your Honour, that we have been waiting for five years to have this representation acknowledged.


Some hon. Members:: Order!


Mr. Speaker:: Order, please. The hon. member for Scarborough West.


John Howard Lundrigan: All I am saying to the right hon. Prime Minister, through you, Sir, is that we expect the Prime Minister to acknowledge the representation, and to indicate whether or not he is willing to look at these policies. It is no good for us in the Atlantic provinces to know only that we have made a representation. We want to know whether the Prime Minister is going to consider the matters that we have placed before him today.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The Chair has recognized the hon. member for Scarborough West. If there are supplementary questions, I will return to hon. members who have them in a moment.


HOUSING
Mr. John Harney (Scarborough West):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. Considering that the fourth quarter figures for 1972 indicate a considerable drop in private investment in residential construction compared with the third quarter of 1972-the first drop, by the way, in more than two years- and that this drop in spending, in all likelihood, resulted in the decline in housing starts reported by Statistics Canada, is the minister prepared to take meaningful steps to increase investment in residential construction to bring about a much needed increase in the supply of that scarce commodity, housing?


Hon. Ron Basford (Minister of State for Urban Affairs):: Mr. Speaker, we have Bill C-135 in front of parliament which provides a new financial mechanisms bill, the purpose of which is to draw private capital into the residential mortgage business. To answer precisely the remarks of the hon. member, I point out that 1972 was a record year in this country in terms of construction and that the first two months of this year exceeded the first two months of 1972.


John Paul Harney: I have a supplementary question for the Minister of State for Urban Affairs. Considering that the

proposals in Bill C-135 will in effect do nothing to change the present pattern of mortgage lending in this country in any significant way, is the minister willing to consider withdrawing this bill and its pollyanna proposals to bring in something significant which would draw or direct private lending money into the private residential construction sector?


Stanley Ronald Basford: I am not prepared to accept the premise of the question and I am not prepared to withdraw the legislation. I hope it will be passed at the earliest possible opportunity.


Some hon. Members:: Oh, oh!


THE CANADIAN ECONOMY
James Aloysius McGrath: Mr. Speaker, I have a supplementary question for the Prime Minister to that of the hon. member for Gander-Twillingate. In view of the fact that 87,000 people are unemployed in a region which is continually plagued by high unemployment, high food costs, low incomes and rising transportation costs, will the Prime Minister undertake to meet the premiers of the four Atlantic provinces to discuss ways of improving the economic climate similar to the conference he has planned with the four western provinces?


Pierre Elliott Trudeau: Certainly, Mr. Speaker. If the premiers of those provinces want to meet with me, I will be very happy to do so.


TRANSPORT
Mr. Charles H. Thomas (Moncton):: Mr. Speaker, I wish to direct a supplementary question to the right hon. Prime Minister. Since the Premiers of New Brunswick and Nova Scotia have recognized the importance of transportation costs to that area and have stated that the federal government must make changes, will the Prime Minister immediately convene a meeting with these premiers to discuss the impact of freight rates and other specific transportation problems on the economy of New Brunswick and the entire Maritimes, in line with the promise contained in the Speech from the Throne?


Pierre Elliott Trudeau: Mr. Speaker, I am informed by the Minister of Transport that he is indeed meeting with the premiers of those provinces on the ninth of next month.
March 13, 1973


MANPOWER
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration. In view of the fact that American pipe testers are coming across our border at Niagara Falls to work in Canada without having work permits, and in view of the fact that the Stelco mill in Welland is allowing these pipe inspectors to enter its plant and work in contradiction of the visa regulations, would the minister report to the House why Messrs. K. E. Karako, L. E. Shipley, G. Bruce, and D. J. Pinkerton, who work for Moody International out of Pittsburgh, a non-registered company in Ontario, are allowed to work in Canada while four Canadian inspectors of the same calibre must register with Canada Manpower as unemployed to be eligible for UIC benefits?


Mr. Speaker:: Order. I would think that a question in those terms should normally be placed on the order paper. If there is some urgency to the matter, perhaps it could be considered at the time of adjournment.


Steve Eugene Paproski: On a point of order, Mr. Speaker, there is urgency to the matter. We are allowing these people to cross our border without work permits, and the same regulations should be applied as apply to Canadians who visit the United States. What is good for the goose is good for the gander.


Mr. Speaker:: Order, please.


Mr. Railton:: Mr. Speaker, I rise on a point of order. My constituency has been mentioned in this question. I was speaking to the head of the union there yesterday, and I did not hear anything about this. I will be calling him later this afternoon and I might be able to get the necessary information.


ROYAL CANADIAN MOUNTED POLICE
Right Hon. I. G. Diefenbaker (Prince Albert):: Mr. Speaker, I wish to direct a question to the Solicitor General. Having for a period of ten months pressed for the restoration of "RCMP" to the automobiles and other vehicles, as well as to the detachment buildings, I wish the minister would tell the House exactly what has been done in order to bring about this restoration, and in particular whether what has been done is the result of the experience of October 30 last and the tremendous pressure in the prairie provinces for the preservation of the words "Royal Canadian"?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, as I stated yesterday, we approved new building signs and automobile decals last week. Today, we issued a press release with pictures of those new signs and new decals.
Oral Questions
As the House will recall, Mr. Speaker, the Prime Minister made a speech in Edson, Alberta, last year, in which he stated that this matter would be examined. It was examined and re-examined with the provinces, and we finally developed a new sign that met the conditions of the Official Languages Act and still retained the names "Royal Canadian Mounted Police" and "RCMP."


John George Diefenbaker: Mr. Speaker, I have before me the picture that was issued to the press showing the coat of arms and "RCMP GRC." Does the minister think there is any danger that Canadians, seeing such a car passing by, might not realize that it was a police car?


Some hon. Members:: Oh, oh!


William Warren Allmand: Mr. Speaker, the RCMP cars have white doors, with the crest and with "RCMP" and "GRC" on them. They also have a red light on top-


Some hon. Members:: Oh, oh!


William Warren Allmand: -and a siren. I doubt that anyone would mistake them for anything else but RCMP cars.


John George Diefenbaker: Does the minister realize, having quoted the Prime Minister, that the Prime Minister said the reason the "RCM" was removed was that people would not know it was a police car, and he was afraid guilty criminals would get away? Does he recall that?


Some hon. Members:: Oh, oh!


TRANSPORT
Mr.   J.-I. Blais@Nipissing: Mr. Speaker, my question is directed to the Minister of State for Urban Affairs. In view of the statement in the Speech from the Throne on the government's intention to implement a railway relocation program, and in view of the increasing interest of some northern Ontario communities in salvaging their downtown cores, is the minister planning to introduce legislation relating to implementation of the government program and, if so, when is such legislation to be introduced?


Stanley Ronald Basford: Mr. Speaker, the drafting is proceeding on an urgent basis. The Minister of Transport and I would hope to introduce the legislation soon and have it passed with the co-operation of hon. gentlemen opposite so that the municipalities of this country could take advantage of this very important proposal.

March 13, 1973
Oral Questions PENITENTIARIES


WILLIAM HEAD-POSSIBLE CONVERSION TO MEDIUM SECURITY INSTITUTION-REQUEST FOR CONSULTATION
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is directed to the Solicitor General. His written reply to my oral question of March 5 concerning William Head prison confirms that at present it is a minimum security institution but "it is proposed to convert William Head institution from a minimum to a medium security penitentiary." Will the Solicitor General assure the House that he will not convert William Head to a medium security penitentiary except with the concurrence of the people of that area?


William Warren Allmand: Mr. Speaker, I doubt that I can give that commitment to the hon. member, but I would be willing to look into his representation.


PROPOSAL TO USE RAIL TRANSPORTATION FOR ALASKAN OIL-POSSIBLE CONSULTATION WITH UNITED STATES
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I wish to direct a question to the Minister of Energy, Mines and Resources. It is prompted by the brief that I understand was presented to him just recently, in fact possibly yesterday, by the government of British Columbia concerning its proposal that rail transportation be used for the shipment of Alaskan oil to the southern markets in the hope of avoiding both a west coast tanker route and a Mackenzie Valley pipeline. Is it now the minister's intention to meet with his United States counterpart, the Secretary of the Interior, with regard to this proposal?


Hon. Donald S. Macdonald (Minister of Energy. Mines and Resources):: Mr. Speaker, I think that the appropriate thing would be, first, to examine the proposal, which, as the hon. member said, was first made to me yesterday morning by a British Columbia minister, from the standpoint of engineering feasibility, the effect on the ecology, and also the route choice. It seems to me we should first find out whether the proposal makes any sense before we talk to anybody outside our country.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member on a supplementary and then try to see two or three other hon. members who have not yet been recognized before calling orders of the day. The hon. member may ask a supplementary but there will be no further supplementaries.


Stuart Malcolm Leggatt: I will certainly keep that stricture in mind, Mr. Speaker. This proposal raises the question of rail transportation for oil, and the Queen's University study on rail transport out of the Mackenzie Valley has been in the minister's hands for a good part of 1972. I should like to ask the minister what specific assessment has been made by his department in regard to rail transportation in

view of the length of time his department has had that study?


Donald Stovel Macdonald: Mr. Speaker, I would point out to the hon. member that the Queen's University study was with regard to the Mackenzie Valley route, while the British Columbia government study is with regard to the Yukon route which is quite different terrain, as he knows.


INQUIRY OF THE MINISTRY
René Matte: Mr. Speaker, I wish to put a question to the right hon. Prime Minister.
In order to avoid the problems which might result from an increase in the price of silver when commemorative coins for the 1976 Olympics are minted, could the Prime Minister tell us if he intends to suggest to the mayor of Montreal the striking of commemorative coins in a less expensive metal like nickel or copper, or even the printing of paper currency?


Mr. Speaker:: I think that the hon. member's question is some kind of representation.


PENITENTIARIES
Mr.   Sean@: Mr. Speaker, my question is directed to the Solicitor General and arises from the statement made yesterday by Paul Gascon, executive secretary in the Solicitor General's section of the Public Service Alliance. Has the minister ordered an investigation into the allegations made by this spokesman on behalf of penitentiary guards, including his description of present rehabilitation policies as a monumental farce and his charge that prison-


Mr. Speaker:: Order, please. The question should be asked directly and perhaps the minister could reply briefly. The hon. member knows that questions asked in relation to statements made outside the House should normally not be asked except when directed to the Prime Minister. For the moment, the minister might be allowed to reply quickly.


William Warren Allmand: Mr. Speaker, these allegations have not yet been investigated. I only read them about an hour before I came into the House. However, I can promise the hon. member that they will be investigated and I will give him a report.
March 13, 1973


REGIONAL ECONOMIC EXPANSION
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, may I direct a question to the Minister of Regional Economic Expansion in relation to the building of a deep water port in Quebec for large tankers.
Has the minister received any representations in this respect from Mayor Galienne of Sept-iles or from any other person or organization of the Port-Cartier and Sept-iles area?


Mr. Speaker:: Again, such a question should normally be put on the order paper and if there is any urgency, it could be debated like other questions at adjournment.


INDIAN AFFAIRS
Mr. John M. Reid (Kenora-Rainy River):: Mr. Speaker, my question is for the Minister of National Health and Welfare. What action has his department taken to deal with the revelation that Indians on the Grassy Narrows and White Dog Reserves apparently have levels of mercury in their blood higher than that which killed 35 fishermen in Japan in 1963?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, the department has been made aware of this situation and doctors in the area working for the department have investigated the facts, together with doctors representing the provincial government. There is a task force from the department that will go into the reservations very shortly to investigate the matter further and see what additional measures, if any, have to be taken.


Mr. Speaker:: Before calling orders of the day, the Chair will allow one last question. The hon. member for Crowfoot.


Some hon. Members:: Hear, hear!


QUESTIONNAIRE TO FARMERS ON FORM OF PAYMENT PREFERRED FOR WHEAT USED DOMESTICALLY-USE OF PERMIT NUMBER TO IDENTIFY REPLIES
Mr. I. H. Horner (Crowfoot):: Mr. Speaker, I should like to direct a question to the Minister of Justice who is in charge of the Canadian Wheat Board. Is the minister going to make public the results of the balloting that he is conducting among the prairie grain producers concerning the two-price wheat system? If he is, does he feel it neces-
Oral Questions
sary to have the voter's name and delivery permit number on the ballot?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, as I indicated to the House about a week or ten days ago, and I am sure the hon. member can refer to Hansard, I do intend to inform the House of the results of the questionnaires after they are completed. The decision to include the request for the name and permit number on the questionnaire was made in the belief that farmers would generally not mind including that information, and to avoid any suggestion that might have come from hon. members that there was any danger of a number of questionnaires being returned by the same person or organization.


John (Jack) Henry Horner: This is a very important supplementary, Mr. Speaker. I would not abuse your instruction or the privileges of this House, but certainly we believe in democracy and in the principle of the secret ballot. This is not a secret ballot. There could be no duplication of it because each producer has his own specific delivery permit number. He could not have a duplicate and send in more than one ballot. This is very unnecessary and I urge all farmers not to participate in this type of balloting.


Some hon. Members:: Oh, oh!


John (Jack) Henry Horner: This is simply going to be used for political purposes by the Liberal party.


Mr. Speaker:: Order, please. The hon. member for Regi-na-Lake Centre may ask a supplementary after which I shall definitely call orders of the day.


QUESTIONNAIRE TO FARMERS ON FORM OF PAYMENT PREFERRED FOR WHEAT USED DOMESTICALLY- REQUEST FOR REVISION
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, a supplementary to the minister in charge of the Wheat Board. In view of the fact that this can in no way be called a ballot, in view of the fact that the president of the Saskatchewan Wheat Pool has said the questionnaire is slanted, and in view of the fact that there is an alleged discrepancy in the figures used by the minister, will he advise the House if consideration will be given to a revised and more complete informational questionnaire being sent out, and will he advise the House who wrote this one? Was it anybody in the Wheat Board or was it a member of his staff?


Otto Emil Lang: Mr. Speaker, I am happy to inform the hon. member for Regina-Lake Centre and the hon. member for Crowfoot that the 50,000 farmers who so far have returned the questionnaire have not seemed to object to the nature of it or to the inclusion of the permit number. The president of the Saskatchewan Wheat Pool, who has a different view from some people about the manner in which the payments should be made, did take issue with a number of statements contained in the questionnaire but he did not say that they were wrong.

March 13, 1973
Canada-United States Auto Pact


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


Mr. Nowlan:: Mr. Speaker, I did not want to interfere with the question period but I wanted to draw Your Honour's attention to the fact that the Parliamentary Secretary to the President of the Privy Council, who also happens to be the House leader, did ask a question during the question period. I would hope, Mr. Speaker, that the President of the Privy Council, as House leader, would convene the Committee on Procedure and Organization even earlier than he had anticipated if his own parliamentary secretary is going to keep asking questions, so that we can clarify this matter along with a good many others.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I do not know whether there is any point in pursuing this point of order. It was made before and I indicated my feelings to hon. members on the objection which has been taken. It was agreed that the matter would be looked into by the Committee on Procedure and Organization. I assume that the committee will be convened very soon as suggested by the hon. member for Annapolis Valley. Orders of the day.



GOVERNMENT ORDERS


Mr. Edward Broadbent (Oshawa-Whitby) moved:: That this House deplores the failure of the government to develop beyond the 1965 Canada-United States Automotive Agreement a policy which would benefit Canadians and which would contribute to resolving Canada-United States conflict in this area to the mutual benefit of both countries; and this House, therefore, urges the government to take certain immediate steps to lower the prices of automobiles to Canadian consumers and to protect the jobs of Canadian auto workers.
He said: Mr. Speaker, two weeks ago today the Minister of Industry, Trade and Commerce (Mr. Gillespie) sparked a two day flurry of controversy on the meaning and importance of the Canada-U.S. Automotive Agreement.
At the heart of the controversy three related items are to be found, each of which emerged during the two day debate or discussion but which were unresolved. First, there was the interest of Canadian consumers who have paid, cumulatively, hundreds of millions of dollars more than they should for North American automobiles since 1965. Second, there was the concern of thousands of Canadian auto workers who for approximately three years have been left by a vacillating government in a state of uncertainty about the future of their jobs. Third, there was and is the crucial matter of United States government dissatisfaction with the results of the automotive agreement. This dissatisfaction was formally conveyed just a few days ago in a television interview by Senator Hartke 
of Indiana. Surrounding these three areas of concern, indeed, making them inextricably bound one to the other, is the nature, meaning and relevance of what are known as the safeguards in the Canada-U.S. Automotive Agreement.
There can be no doubt that the two Liberal governments elected in January, 1968 and again last October 30 must bear the major share of the blame for the apprehension which exists among many of our workers in this industry, for the gouging of Canadian consumers and, to a much lesser but real extent, for the dissatisfaction of the Americans.
For over three years now the government, for political reasons, has deliberately involved itself in a contradictory approach, as evidenced by statements, to the Canada-U.S. Automotive Agreement. On the one hand, it has not yielded to United States pressure to remove the safeguards from the Agreement; yet, at the same time, it has tacitly accepted the American view by implying in its public statements that the safeguards built into the pact were either transitional from the outset or, in any case, were no longer required. Neither Canadians nor Americans know the real policy of this government on this industry.
The former minister of industry, trade and commerce took great care never to say in public that he regarded the safeguards as being transitional, although in private he frankly said that his commitment to this view was somewhat less than 100 per cent. However, the present minister blew the whistle, I think, on what I consider to have been the real government policy for the past two years when he said in the House two weeks ago that the safeguards were transitional. During the subsequent two days of exchanges in this House, the minister was forced to correct his earlier assertion and admit on March 1 that he had been in error when he said that it was stated in the auto pact that the safeguards were transitional. It is good that the minister corrected the public record. It is even more important, however, for the government to tell the people of Canada what its automotive policy is. What are its plans for Canadian consumers and Canadian auto workers? What is it presenting in the ongoing negotiations to the Americans for discussion? Is it presenting anything, or is it simply, as I suspect, reacting to American initiatives?
The auto pact came into being in 1965 following years of deficits amounting to hundreds of millions of dollars annually on Canada's part in Canada-United States automotive trade. Prior to its signing, the Canadian government had decided to embark on an export subsidy plan, to correct this major trade balance problem. Understandably, at that time the American government did not favour this kind of unilateral action aimed in its direction. That program, incidentally, was exactly equivalent to the United States DISC program, which the United States has imposed on the rest of the world in the past year.
At that time, instead of accepting Canadian proposals to go ahead with this unilateral trade action, the United States agreed to hold talks with Canada. Those talks centred on the need to improve Canada's balance of trade position. That improvement would provide for the
March 13, 1973

future growth of the North American automobile industry in this country and in the United States. The result of those discussions was the auto pact. The intent of the pact was to liberalize automotive trade between Canada and the United States by removing most tariff barriers and ensuring that the industry in both countries would be able "to participate on a fair and equitable basis in the expanding total market of the two countries", as provided in Article 1(b) of the Canada-U.S. Automotive Agreement.
In exchange for two basic commitments, the government of Canada agreed to permit automotive companies located in our country to import cars and parts from the United States. The commitments or, as they are now known, the safeguards, were: First, United States auto makers were obliged to continue, as a minimum, to produce the number of vehicles in Canada bearing the same ratio to their sales in Canada as in the base year 1964; second, in addition each company was required to provide an increasing amount of what is now known as Canadian value added. This consists of the dollar value of labour and parts produced on the Canadian side of the border. The amount of increase was to grow proportionately for each year in the future.
Both countries hoped to gain from this arrangement. The Americans would gain tariff free access to a very lucrative Canadian market. This would enable the car companies to rationalize their production runs on a continental basis and thus put them in a more competitive position in both countries vis-a-vis cars produced outside our continental North America. Canada gained by having in the second safeguard an assurance that our trade balance in automotive products with the United States would no longer be in permanent deficit, and we would be sure of our share of any growth in jobs in the industry in this country. The third beneficiary would have been the Canadian consumer, who was to get a substantial reduction in automotive prices as a result of the removal of tariffs to the companies. These tariff concessions were to be given on the condition the companies met certain conditions to which I just referred. The companies, however, made the individual consumer pay an extra duty.
What have been the results of the pact since 1965, Mr. Speaker? Canada's position in the North American automotive trade has certainly improved. We have moved from a chronic deficit position to one of having a slight surplus last year of $5.8 million. Cumulatively-I stress this-for the period 1965-1972, we experienced, nevertheless, a net deficit in North American automotive trade of about $2 billion. One can hardly say that the pact has brought miraculous benefits to Canada. If the present trend in the trade graph continues, next year will almost certainly show another deficit.
Employment in the industry has also grown. In 1964, there were about 70,000 employees in Canada. In this industry about 97,000 are now employed. Similar growth in employment has taken place in the United States. The Canadian consumer, however, has not obtained his fair share of the intended benefits of the pact. After allowing for differences in tax structures between the two countries, Canadians pay between $200 and $300 more for a car produced in Canada than do their American neighbours for the same car after it crosses the border and is
Canada-United. States Auto Pact
purchased in Buffalo, Boston, San Francisco or any other American city.
According to a systematic study carried out recently, the four major automotive companies, General Motors, Ford, Chrysler and American Motors, charge their dealers in Canada about $250 more for a standard car produced in Canada than they charge their dealers for an identical car produced in the United States. This difference, understandably, is not absorbed by the dealers but is passed on to the Canadian consumer. After seven years of innovative restructuring of the Canadian side of the automotive industry, and I stress this, there is no excuse for this price difference.
The Canadian part of the industry is the most efficient on the North American continent. There is all kinds of evidence to show that Canadian productivity is higher than American productivity in this industry. Despite this real improvement that has occurred in our productive capacity, the Canadian consumer is not getting his due in terms of prices. Therefore, Mr. Speaker, we are witnessing sheer profiteering on the part of the large companies, at the expense of the Canadian public.
I now want to talk about the safeguards and deal with them in terms of whether they are essential. The American government, a number of Canadian economists and, I suspect, even the government of Canada believe that the safeguards in the pact are no longer required. Those who take this position contend that the safeguards were merely transitional requirements needed only until parts and assembly plants in Canada could adjust to the new continental market situation. If maintained, it is said, they are simply unjust, protectionist devices which violate the intent of the pact.
The "free trade" interpreters of th e pact I suggest are simply and categorically wrong. Prior to the drafting of the pact Toronto economist, Professor V. Bladen, former head of the political economy department of the University of Toronto, had served as a one-man royal commission on the automotive industry. When so serving he cogently argued that it would be suicidal for Canada not to have safeguards in the automotive trade agreement with the United States. He said so for the obvious reason that if we give tariff free access to our market to an industry which is almost 100 per cent American owned, there would be no guarantee that Canada would get its share of future growth in the automotive industry or indeed that present Canadian production levels would be maintained. It is for this reason that the production safeguard principle was imbedded in the pact.
It is essential that we retain some such requirements in the pact, however they are formulated, which will ensure that Canada share, as the pact states, "on a fair and equitable basis in the expanding total market of the two countries", or that principle is contradictory to a free trade assumption. Given the protectionist policies currently being pursued in the United States, DISC, the Burke-Hartke bill, etc., due to their own high level of unemployment, there is every reason to assume that without job-protecting safeguards in the auto pact, we would see not only a restriction in our share of the growth of the total

March 13, 1973
Canada-United States Auto Pact North American market to which we are entitled, but also a diminution of our present levies of production. In short, thousands of Canadian jobs are at stake.
In their discussions with Canada, the Americans have been justifiably critical of our government's failure to get automotive companies to bring their prices in Canada into line with those in the United States. One of their chief reasons for agreeing to the pact was an anticipated growth rate of 8 per cent in the Canadian automotive market for North American cars and trucks. For this to have taken place, automotive companies would have had to lower their Canadian prices. If they had done so, Canadian consumers would not be purchasing at about twice the rate of their American counterparts foreign produced automobiles and trucks.
In 1965, non-North American sales accounted for 11 per cent of the Canadian market. After six years, instead of declining, this percentage increased to 25.9 per cent for 1971, the last year for which statistics are available. In British Columbia, about 50 per cent of the cars sold are made outside North America. The percentage of such vehicles sold in the United States in 1971 was 15.8 per cent, approximately three-fifths of the Canadian level. There can be no doubt that the major reason for the significant and growing market for non-North American cars in Canada compared with that which prevails in the United States is the unwarranted overpricing which takes place in Canada.
The price gap for identical cars, after allowance was made for taxes and differing dollar value, between Canada and the United States in 1964 was approximately 9 per cent. In 1971, although there had been progress up to then, the difference was still 9 per cent. In fact, for 1972, according to one study, the price differential between cars sold in Canada and the United States, after making allowances for taxes, had increased to 10 per cent, one per cent more than it was in 1964, the year the auto pact came into being.
The four major automotive companies in Canada reap excessive profits, excessive even for an oligopoly controlled industry. According to an article published in the Globe & Mail last April 26, the per unit profit of Ford of Canada was $222 higher than the per unit profit of its United States parent. The differences for the other companies are virtually certain to be identical. The per unit profit for Ford of Canada increased in each of the four most recent years for which statistics are available. I urge the minister to note these facts. In 1968, the per unit profit was $117. That is the profit after considering all factors when the car is released through the dealer. The per unit profit for 1969 was $164; 1970, $153, and 1971, $228. I am certain the per unit profit of Chrysler and General Motors was similar.
It is interesting to note that between 1966 and 1972, the duty remissions which the companies got from the Canadian taxpayer as a result of the pact were as follows: Ford, $176,614,083; American Motors, $3,135,075; Chrysler, $1,992,607 and General Motors, $1,388,150.
It is clear that in addition to making clear the future security of Canadian automotive workers, we also need an immediate policy which will stop the gouging of Canadian consumers.


Some hon. Members:: Hear, hear!


John Edward Broadbent: There is, I believe, a course of action which will meet the needs of both consumers and autoworkers in Canada and, incidentally, might be appealing to American opponents of the pact, whether or not they are in congress. What we propose is to remove the prohibition which compels Canadians to pay a 15 per cent duty on new cars purchased in the United States. The effect of this will be to cause the North American automotive companies to reduce the price of their cars to Canadian dealers to the level which prevails in the United States. The prospect of dealer competition in the United States will cause this reduction to be passed on to the Canadian consumer by dealers in this country. My point is if we remove the 15 per cent duty for individual consumers crossing the border, the companies in Canada will not permit their dealer systems to go under. They will stop the gouging of their own dealers which has gone on up to this point and ensure that the duty saving is transmitted into price reductions to their dealers. To stop Canadians from crossing the border into the United States to purchase their cars, the dealers in Canada will reduce their prices and the Canadian consumer will get the benefit.
However, and this is important, to ensure the preservation and growth of Canadian employment in the auto industry, production level safeguards must be maintained. Instead of basing them on consumption levels in Canada, however, changes in the automotive agreement should be proposed and negotiated by the Canadian government which would make Canadian production and CVA requirements dependent upon Canadian purchases anywhere in continental North America. A new Canadian minimum production floor level needs to be introduced for negotiation, and it should be based on 1972 levels instead of 1964 levels of production as is now the case. This approach would provide a measure of justice, long overdue, to Canadian consumers. It would also create more jobs for Canadian workers precisely because an average price reduction of $250 per car would inevitably mean that Canadians would buy more vehicles manufactured in North America and fewer imports.
To conclude, this proposal, if adopted, would mean more jobs for Canadian workers. It would also mean lower prices for Canadians. It is, then, the kind of proposal which deserves, and, I hope, will receive, the support of the party to my right and of the government which sits opposite.


Mr.   Terry@: I rise to speak on this motion with some degree of admiration for the drafter; he has managed succinctly to cover the two chief areas of concern now surrounding the Canada-United States automotive trade agreement. First, he mentioned the necessity for progress under the agreement leading to the tangible mutual benefit of both countries. The key word, here, is "mutual". Second, he spoke of the continuing and worsening problem of the widening price differential between the two countries. We have little confidence in the remedy proposed by the previous speaker as solutions of these trade problems. In particular, the events of the past two weeks have shaken our confidence-and certain-

March 13, 1973

ly have shaken the confidence of the Canadian business community-in the Minister of Industry, Trade and Commerce (Mr. Gillespie).
Consider the confusing and, often, inconsistent positions and statements adopted by the government on this issue. The matter arose two weeks ago with the announcement in the United States that the Canadian automotive trade deficit with the United States was $100 million as opposed to a surplus of almost $200 million in 1971. The minister told us not to worry. Statistics Canada, he said, has set the deficit at $41 million. He said-and I am quoting: "I do not see that there is any emergency or any reason to push any panic buttons at this time." This statement is reported at page 1751 of Hansard. We agree. Nothing to panic about; there are bound to be fluctuations in our trade positions. We enjoyed surpluses in two preceding years. Now, we are faced with a relatively-and I stress the word "relatively"-small deficit by comparison with the total automobile and parts movement of nearly $7 billion annually.
Then, the minister dropped his bombshell. He referred to the paragraphs in the agreement which had traditionally been known as the Canadian safeguards as being of a transitional nature-the first time they had been described as such, to my knowledge, by a Canadian minister. Further, he said the agreement itself provided that these safeguards were transitional. The clear meaning of this statement was that the government, in a major policy shift, had adopted the United States contention that the provisions for Canadian protection in the agreement were of a short-term nature designed to get Canada over a temporary trade deficit. The implication was that they could be removed, since, as the minister further noted, they had been overfulfilled to the extent of $1 billion. We in the opposition urge that the safeguards should be maintained and, indeed, improved. If we can experience a reversal in our trading position from a surplus of $200 million to a deficit of $100 million, or whatever the correct figure is, perhaps the safeguards are inadequate.
The next day the government changed its position. The minister said he had been mistaken, that there was no mention in the agreement of the safeguards being transitional. The words were, in fact, only the words of the negotiators. That is fine. I am sure, however, that the negotiators said many things about many subjects-about free trade in used cars, about free trade at the consumer level, even about who would go out for coffee that morning. The fact remains that the agreement is a legal document with all its terms contained inside the four corners of the document itself. To accept the implications of the minister's suggestion that the words of the negotiators carry any force or effect would be totally ridiculous.
The hon. gentleman went on to assure the House that the safeguards would not be removed, but they would be improved. As reported at page 1784 of Hansard, he said, in this context:
I am certainly interested in seeing them improved, and that will be the position of the government. If there is any change with respect to these provisions it will be to improve them so as to make them more workable.
Thus, he completed the transition, if I may use that term, from implying that the safeguards might be
Canada-United States Auto Pact
dropped, to the position urged on him by members of this party that they should be improved. Then, Mr. Speaker, he had the unmitigated gall to tell the House that there is confusion in the minds of opposition questioners over this point. This was after he had gone through the process of reversing his own position twice in two days.
Again, the minister is ill-informed as to the actual terms of the agreement. The production to sales in Canada ratio, one of the protections set out in the pact, is an annual target, one which must be met each year. It is simply not open to the interpretation that it has, at some time in the past, been far exceeded and is therefore no longer a protection. The minister, as I reminded hon. members, supported the position that the safeguards were transitional by telling us that they had been over-fulfilled to the extent of $1 billion. Mr. Speaker, inasmuch as it hangs over the heads of automobile manufacturers annually to meet a certain production to sales ratio, this particular provision continues to provide protection for Canadien production and for the Canadian automobile worker.
Everyone agrees that the auto pact has been a great boon to the Canadian auto and parts manufacturing industry. We must ensure that it continues to be so. The government now admits we must attempt to improve the safeguards. Some may suggest there is little chance of our maintaining what is in the agreement now, let alone improving on it. There is no doubt the bargaining sessions are going to be tough, and it may well be that in order to gain trading concessions or improvements we shall have to give ground in other areas. It may well be that the auto pact requires some amendment.
Obviously, the Americans think the safeguards are an extremely important factor in the reversal of their trade fortunes in this area. They have been pressing strongly for changes during the last four or five years. This being the case, we have a strong bargaining lever at our disposal, one which could well be used to bring us better safeguards. Surely, though, it is a fundamental bargaining principle not to show one's hand or reveal what one is prepared to give up prior to the commencement of the bargaining sessions. In other words, one should not give away gratis in the House of Commons what is a significant bargaining lever which could be used to gain other concessions at the bargaining table. The stumbling and fumbling of the minister on the whole matter over the past few weeks inspires little confidence in us, and, more importantly, little confidence in the Canadian manufacturing sector of our economy.
As I said at the start, the words "mutual benefit of both countries" in this motion are the key. We feel that the future negotiations with the United States should be directed towards working out a set of mutual safeguards which will protect automobile production and jobs in both countries.
The point that perhaps most raises the hackles of the United States is the fact that the present safeguards are designed chiefly to ensure a fair share of auto production and jobs to Canada. I hold no brief for the United States. They are certainly able to take care of themselves at the bargaining table. But if the present protections continue

March 13, 1973
Canada-United States Auto Pact to result in a widening balance in favour of Canada, we cannot complain too vociferously about some means of controlling such a situation. In this respect, let us keep in mind that this was not the case during this past year. Canada suffered a setback in her over-all trade balance of nearly $200 million, but the prior two years had resulted in automobile trade surpluses in our favour of a substantial amount in each case.
Measures of mutual benefit could include-and I say could-an agreement, for example, or a term in an amended auto pact agreement, to relate employment in the industry to the consumption of cars and parts in both countries. For instance, if Canada consumes 13 per cent of the North American market, we should reasonably expect to enjoy 13 per cent of the production facilities, capital expenditures and, of course, jobs.
Alternatively, as another example of the type of term that might well provide mutual protection for both Canada and the United States, the agreement could be amended to provide a floor and a ceiling for the Canadian value added requirements; or, upper and lower surplus and deficit limits which in both cases, if reached, would trigger penalty mechanisms and the imposition of duties to encourage companies to reverse the undesirable trend.
I am being deliberately vague, Mr. Speaker, because I subscribe to the view of the minister-I know we do not agree on too many things, but on this point I do agree- that bargaining in public is not a desirable or profitable practice. Perhaps the minister should have followed his own advice when he suggested two weeks ago that the safeguards were of a transitional nature. Suffice it to say that there are very positive steps that can be taken in the interests of both countries to overcome these irritants which have grown up and now exist between us with respect to this agreement.
The motion before the House urges the government to take certain steps to lower the prices of automobiles to Canadian consumers and to protect the jobs of Canadian auto workers. The agreement itself has adequately, even admirably, protected jobs in Canada over the course of its duration. The agreement, however, does not specifically dictate the price of cars or require any type of movement toward parity of prices between the two countries. Presumably it was thought that with a free market at the manufacturing level there would be a gradual movement toward price parity; and in fact this has been the case, or was the case for the first few years of the agreement. However, as the hon. member for Oshawa-Whitby (Mr. Broadbent) has pointed out, this is not the case at present. In fact, in the past year the situation has worsened and this is an area of major concern. The price gap in 1972 actually widened from what it was in 1971.
I would refer you, Mr. Speaker, to the sixth annual report of the President of the United States to Congress on the operation of the auto pact. This report, not yet available to the public, will be released shortly and contains some disturbing facts and figures. The document, albeit a United States-biased review of the situation, contains figures that show that both the wholesale and retail price differentials on selected, typical cars widened instead of narrowed in 1972. For instance, on a typical 4-door, 6-cylinder sedan with comparable equipment, the

wholesale price was 10.8 per cent higher in Canada than in the U.S. in 1972. This is an icnrease from 10.6 per cent in 1971, but more significantly the 1971 figure was down from a 14.2 per cent difference in 1970, and an 18.5 per cent difference in 1965. As a second example, on a typical 4-door, 8-cylinder sedan with standard equipment, the wholesale price difference jumped in 1972 to 10.9 per cent, up from 9.9 per cent in 1971, but again down from the 1970 figure of 13.9 per cent and the 1965 figure of 18.5 per cent.
As I said, Mr. Speaker, the disturbing element of these figures is the fact that the trend from 1965, which continued through the end of 1971, reversed itself in 1972. The reversals and differences are marginal, but the interruption of the trend is significant and unfortunate to the Canadian position. On some more expensive models the trend has not been interrupted, but the facts very clearly show that on the lower and medium priced cars, the models which the average consumers in Canada purchase, there exists a continuing high difference in car prices between our two countries. And, more significantly, this differential is not narrowing. This in spite of the fact that it has been this government's stated aim over a number of years to narrow this difference.
Despite this policy and these pessimistic figures, this government failed to dissuade the automobile manufacturers from increasing prices in 1973. Again, the government knows the tools and persuasive devices available to it to put some muscle into its requests of the companies that they reduce or limit further increases in prices. However, it simply lacks the resolve or the ability to do other than pay lip service to the narrowing of the price gap.
A further significant, and again upsetting, feature of this report of this very concise analysis of the auto pact agreement is the number of references to the safeguards as being of a transitional nature. This may be a sidelight or tip-off, but it is interesting to note that the word "transitional" is used in this report prepared for the President of the United States-it is a very short report consisting of some 26 pages-a total of eight times, almost to the point of it being taken for granted, at least by United States officials, that the safeguards were in fact transitional.
However, Mr. Speaker, the hon. member's motion is correct. The government has failed to develop a policy that would benefit Canadians and resolve the conflicts concerning the Canada-United States automotive agreement. It is also obvious that the government cannot be relied upon to come up with solutions, despite the proposals included in this motion. The Minister of Industry, Trade and Commerce (Mr. Gillespie) yesterday refused to review the government's long-term objectives under the auto pact, if indeed they have long-term or even shortterm objectives at all. At least to date, they have failed to make any comments in this respect.
What is more important, however, is that this motion will permit the government to continue on this path. The government have proved that they will not or cannot solve the problem. For this reason we feel the motion should have been one of non-confidence. If the motion is an accurate expression of the NDP attitude toward the government's position on this matter I fail to see, and our party fails to see, how they could harbour any confidence in the government whatsoever in this respect. It is unfor-
March 13, 1973

tunate that the hon. member for Oshawa-Whitby and his NDP caucus did not make this a vote confidence.


An hon. Member:: It is forbidden.


Mr. O'Connor:: It is not forbidden. It is unfortunate that they have sacrificed one more issue for the survival of this government. It is unfortunate that they did not think to move to censure the Minister of Industry, Trade and Commerce (Mr. Gillespie), since that would have allowed them to remain true to their convictions rather than the government as a whole as they have been for the past three months.


Mr. Gilles Caouette (Charlevoix):: Mr. Speaker, I should like first to congratulate hon. members of the New Democratic Party on a motion that reads in part as follows:
... to lower the prices of automobiles to Canadian consumers and to protect the jobs of Canadian autoworkers.
All sorts of arguments are put forward on this subject, to prove that the auto pact is to the advantage of Canadians or to that of the Americans.
One hears discussion about profits, and unfortunately, each of the countries in turn seems to justify its position with regard to the pact by saying that it has made a profit and that the agreement has been to its advantage.
And so, if both countries have built up surpluses, one wonders what changes can be made, since that would seem to be the real solution to both countries' problems.
However, even if Canada declares a surplus of $5,800,000, and at the same time the United States declares a surplus of $38 million, there is no changing the fact that the auto pact is still no more than a way of promoting American products, whether or not some of them are made in Canada. It still remains that we are working to benefit American companies such as Chrysler, GM, Ford and American Motors, because their Canadian branches are still integral parts of the parent establishments, which are American companies.
I cannot find in the Canada-U.S.A. auto pact or in the current debate-whether it be the arguments put forward by the NDP, the Progressive Conservative party or the past achievements of the Liberal party-not one suggestion as to how to create an essentially Canadian car industry.
In Quebec we have had the experience of a corporation which tried to manufacture a Canadian car. We have had the example of the Manic corporation which went bankrupt for lack of assistance or interest from the provincial or federal governments. In the meantime, we are still trying to negotiate agreements between American and Canadians for manufacturing American cars.
Canadians should not be sold a bill of goods: Canadian cars and parts will be made by subsidiaries of American companies which in most cases market only one model of the American series. Let us take for instance the Biscayne of the General Motors of Canada which is the only American model manufactured in Canada. But what is done to manufacture a typically Canadian vehicle?
Canada-United States Auto Pact
I will go even further than that. When it comes to the manufacturing standards of those companies serious problems arise. For instance, it can be seen that the Americans do not care about the Canadian market when they turn out windshield wipers designed to slip under the hood; this may be quite convenient in the United States but not at all in Canada because of our climate.
The United States control both manufacturing and standards so that we have little elbow room and accept that control and those standards, thereby creating problems for ourselves as we do not manufacture a typically Canadian product made expressly for the [DOT] Canadian climate.
We have discussed and are still discussing those problems without ever really encouraging the creation of a typically Canadian industry. I suppose the Canada-United States auto pact was beneficial to Canada, but we notice that when American companies wished to start production in Canada, it was because they wanted to get cheap labour although Canadians realized every year that through pressure or union militancy we could get salaries comparable with those of the Americans.
But although we manage to achieve near wage partity and a balance in the exchange of automobile parts with the United States, we realize that it is always to the detriment of the creation of a typically Canadian industry.
For instance since 1965, it is true that we gained some advantage from that agreement. As a matter of fact, it is said that the pact created 100,000 new jobs. But if the government in 1965 had promoted the creation of a typically Canadian industry, those 100,000 jobs would have been created just the same, but the industry would have been under Canadian and not American control.
That is what should be done; it is not a matter of protectionist measures, of some anti-American attitude, but of a pro-Canadian attitude in the industrial field. The Canada-United States auto pact is but one example of it.
One realizes that snowmobiles are also involved. The Bombardier Company Limited has laid off 125 employees because 50,000 of its snowmobiles remained unsold. One realizes also that importing those snowmobiles, as the U.S. Trade Department puts it, causes some problem:
Snowmobile imports from Canada, according to the Department, rose from $22 million in 1971 to $33 million last year, whereas snowmobile imports from the U.S. fell from $124 million to $104 million.
There again, comparisons can be made concerning a really beneficial production for Canadians. Of course, the idea is to lessen the cost of automobiles for the Canadian people, but, then again, I do not believe that we may reach that goal through bargaining with the United States or through administrative measures laid down by the federal government.
Therefore, why not subsidize the purchase of those cars or provide assistance to consumers themselves in Canada? What is the purpose of the government trying to enter into agreements with the large corporations? Why not create a compensated discount system applying to products made in Canada. Such a compensated discount system would bring about a solution allowing reduction of

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the cost of cars, and the creation of a Canadian auto industry whose production would be protected.
This point is not brought forward in the Canada-United States auto pact as there is no intention of touching upon that point, though it would represent a valuable protectionist solution applying to the jobs and markets in Canada.
There again, it is noted that the United States speak out. In fact,the Washington Post states plainly that Canada, on account of those consultations or phony talks, if I may say so, between corporations and the government, we are increasingly importing unemployment from the United States to Canada because the United States want to protect their market, their production. Then, we get involved in their arguments and let ourselves be dragged hither and thither and-I always come back to that-without trying to set up our own automobile industry.
They say:
... many Canadians are afraid that the United States government is determined to intensify the employment rate in American plants, even at the cost of corresponding unemployment in Canadian plants . ..
And that is what we are now facing because the industries involved in the automobile pact we are discussing, from which we are seeking to obtain some benefits are American industries and we have no control over them. The day it does not answer their purpose anymore, it is not paying anymore for them to produce in Canada, they will stop producing. The only way for them to go on producing will be through the direct granting of Canadian subsidies.
I come back again to the following suggestion: why should we not have a production which would be really Canadian in the automotive industry?
These are essentially the remarks I had to make on this problem.
I want to add that we do not seem to realize that a Canada-U.S. agreement on automotive production is not only discriminatory for Canadian production, but also does not seems to take into account European imports. Whereas in 1970, 25 per cent of imported cars come from Europe, today it is perhaps 28 and even 30 per cent. It is understood that we do not incur losses with Europe in this area but this is another valuable argument in favour of the creation of a typically Canadian automotive industry. We go on discussing, investigating and developing various methods which could justify government action. As to Canadians, the only justification they are waiting for is necessarily the establishment of preferential costs for the production made in Canada and the method liable to meet the needs of Canadians is the compensated discount system.
Mr. Speaker, in conclusion I again say to the minister that any protectionist measure which is still attempted under the auto pact is in fact nothing but a mere palliative to the lack of leadership, of decision to create an industry really and typically Canadian as well as plain favoritism towards American companies.
[Mr. Caouette (CharlevoiXj.J



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for St. John's West (Mr. Carter)-Fisheries-Request for statement on position to be taken by Canada at Law of the Sea Conference; the hon. member for New Westminster (Mr. Leggatt)-Administration of Justice-Killing of policemen-Inquiry as to legislation to restrict further sale and distribution of firearms; the hon. member for Lotbiniere (Mr. Fortin)-Manpower-Local Initiatives Program-Request for better information on projects.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Broadbent:
That this House deplores the failure of the government to develop beyond the 1965 Canadian-United States Automotive Agreement a policy which would benefit Canadians and which would contribute to resolving Canada-United States conflict in this area to the mutual benefit of both countries; and this House, therefore, urges the government to take certain immediate steps to lower the prices of automobiles to Canadian consumers and to protect the jobs of Canadian auto workers.
Hon. Alastair Gillespie (Minister of Industry. Trade and Commerce):: Mr. Speaker, I should like to start off by saying that I listened very closely to the comments of the hon. member for Charlevoix (Mr. Caouette) with respect to the automobile industry in Canada, as well as some of his suggestions with respect to how we might go about developing a distinctive Canadian automobile industry in Canada. I noted as well the fact that he spoke about the snowmobile as a peculiarly successful Canadian invention, something which, incidentally-and perhaps not all members are aware of it-enters into the United States duty free under the provisions of the automotive pact.
During the course of my remarks I hope to be able to comment on some of the criticisms and suggestions of the mover of the motion, the hon. member for Oshawa-Whit-by (Mr. Broadbent) and of the hon. member for Halton (Mr. O'Connor). But first, I think it might be profitable, because this is an important occasion when we are dealing with the auto pact, to review some of the circumstances which gave birth to the auto pact and to trace its history, and then move into the situation which we are at present considering.
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I think it might be worthwhile to remember that in the early 1960's there was considerable concern in Canada about the substantial current account trade deficit with respect to automobiles and with respect to the efficiency of our Canadian automobile industry. Higher costs were associated with short-run assembly and manufacturing operations. There was duty payable on imported parts, and the costs of writing-off tooling and facilities was on a much smaller volume. All of this added to the higher unit cost in Canada. The proliferation of styles, because each automobile manufacturer was tending to produce the full stable of cars on both sides of the border, again added to the unit costs and to prices in Canada. Considering all these factors-the balance of payments factor, the unit cost factor, and the need to develop a new strategy for the automobile industry-the government put together a plan which it put to the United States government. This plan was based on rationalizing the North American market and was designed to provide for the mutual benefit of both countries in the sense of increasing the size of the market for the North American made vehicle, a plan which would provide for a more efficient Canadian manufacturing industry and lower costs to the Canadian consumer.
These particular objectives are reflected in the automotive agreement. I think one can say that without doubt the agreement is one of the most imaginative, and certainly one of the most important trading arrangements ever made between our two countries. The agreement recognized, and I quote:
The important place that the automotive industry occupies in the industrial economy of the two countries and the interests of industry, labour and consumers in sustaining high levels of efficient production and continued growth in the automotive industry.
It is designed to achieve a substantial expansion in production and employment, and to promote improved competitive efficiency in the automotive industries in both countries. Three fundamental objectives are set out in Article I of the agreement. The first is the creation of a broader market for automotive products within which full benefits of specialization and large scale production can be achieved. The second is the liberalization of the U.S.A. and Canadian automotive trade in respect of trade barriers and other factors tending to impede it, with a view to enabling industries of both countries to participate on a fair and equitable basis in the expanding total markets in both countries. The third is the development of conditions in which market forces may operate effectively to obtain the most economic pattern of investment, production and trade.
The hon. member for Halton challenged me to say what are the long-term objectives of the auto pact. From the point of view of this government they are the same as they were when the agreement was first signed. They are those which I have put forward again just within the last few minutes. They are the expansion of the market for the North American made vehicle, the participation in that expanded market by Canadian producers and employees generally, and thirdly an efficient Canadian manufacturing industry because, and I think this is worth underlining, only through a highly efficient, highly competitive
Canada-United. States Auto Pact
Canadian manufacturing industry in the automotive area are we going to obtain the real assurances that we seek of being able to share in the benefits of the automotive agreement.
May I now turn to the question of how do we stack up in meeting these objectives. What has the government done to meet these objectives? In recognition of the differences in size, financial strength, and the relative development of our industries, special provisions were established to ensure that Canada, in fact as well as in theory, would derive real and reciprocal benefits on a fair and equitable basis. Moreover, it was recognized that it is necessary to take into account the institutional barriers to trade, arising out of the corporate structure of the industry, as well as the formal governmental barriers, if Canadian industries are to be able to participate effectively in the United States market.
Another important feature, and here I quote from the then Minister of Industry's statement to the House on May 5, 1966, was "the acceptance of the principle that Canadian industry is entitled to a reasonable transitional period to facilitate its adaptation to production for the larger international market." Furthermore, the agreement placed the automotive program on an agreed basis, thereby giving companies in both countries reasonable assurance about its permanence and status.
To take advantage of the new market opportunities provided by the program, the government instituted financial assistance to companies to expand and modernize their facilities and to assist workers. I will deal with those particular programs in a moment, but first I would like to review in statistical terms the indication of success for the pact. Some of these figures have already been given by the hon. member for Oshawa-Whitby. He has referred to the quite striking development, the advance in direct employment.
I emphasize that total direct employment in Canada's automotive industry has risen by 41 per cent, from just under 70,000 employees employed directly in automotive plants and by component manufacturers, to just under 100,000 in 1972 which, as I say, is an increase of 41 per cent from 1964 to 1972. This does not include all the indirect employment that has been associated with that type of activity. You can choose your own multiplier, Mr. Speaker. That multiplier may go from one to three, but the fact is that some multiplier of that 28,000 to 30,000 direct employee increase has resulted from the success of the automotive agreement.
I think that we should also emphasize the basic parity, the income factor, in addition to the number of jobs that have resulted from the automotive agreement. I think it is worth underlining that during the period of the agreement from 1964 to 1972 there has been a very significant increase in the wage levels of Canadian employees in these factories, up to a point of basic parity. This does not mean that in every instance Canadian automobile workers are paid the same as United States automobile workers, but the wages are very close. I am told that in some Canadian plants the workers are now being paid more, so that the total income increase for employees has been very much larger than the 41 per cent I indicated a moment ago. On the production side, because of the

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rationalization of the industry, there has been a very marked increase, from something like 671,000 vehicles in this country in 1964 to 1.5 million vehicles this past year. And our increase in trade with the United States in automotive products, as a result of the agreement, has been tremendous.
The hon. member for Halton noted our balance of trade. I do not think that we should judge the success of the agreement in terms of the trade balance between our two countries. I think we should look at it in terms of the total increase in trade. When the automotive agreement was started in 1964 the total two-way trade was of the order of about $800 million, made up of something under $100 million of exports from Canada to the United States, and close to $700 million from the United States to Canada. What was it last year? Last year the total trade, two way trade between our two nations, was $9.2 billion an increase of over ten times in that period of eight years.
Mr. Speaker, with respect to the trade balance figures that I alluded to a moment ago, I think that the trade balance, in terms of surplus or deficit between our two nations, will fluctuate from time to time. The important point to underline is that we were in a significant deficit position in 1964, a $600 million deficit position. As a result of the automotive agreement, we have increased our sales and reduced that deficit so that we are now in a very small surplus position on trade account. If we include the invisible items, the non-merchandise items, you would find that Canada is still in deficit on a bilateral basis with the United States.
I think I should also point out that we are in deficit as a nation, in imports over exports, with the rest of the trading world in automobiles. This is one reason that I, for one, am anxious to see the agreement work in Canada so that we can expand the market for the North American made vehicle, which is something that I believe all hon. members would like to see.
Let me now touch on some of the measures to which reference has been made. I mentioned earlier production and employment which have substantially increased in Canada since the agreement was signed. Indeed, the value of production has increased by more than one billion dollars over the minimum production requirement in the agreement-the Canadian value added so-called safeguard. These requirements therefore, because they are one billion dollars over the level prescribed in the agreement, have no real or safeguarding relevance to present levels of production and employment in Canada. That was the point I was trying to make the other day, Mr. Speaker, when I was questioned on this in this House.
The growth in the industry in Canada has been assisted by three programs, as I have mentioned. The first, the adjustment assistance program, was designed to assist Canadian parts manufacturers through this transitional period that I have referred to earlier. To date, it has made 114 loans amounting to approximately $100 million and additional applications are being processed. Second, a transitional financial assistance program for workers was also established to assist in the adjustment process. Only a relatively small number of workers found it necessary 
to take part in this program because of the relative buoyancy of the automotive market. Third, the government introduced a special remission program on production machinery required by the industry to take full advantage of the expanding opportunities. This program was designed to ensure that vehicle and parts manufacturers obtained machinery and equipment on a competitive basis with the industry in the United States.
At the time of the agreement the then minister of industry, Mr. Drury, stated:
In line with the attainment of lower costs of production, it is anticipated, as the program develops, that the forces of competition will gradually result in savings to the Canadian consumer in the form of a narrowing differential between the Canadian and United States prices for motor vehicles and components.
I should like now to touch on that important question of prices and I wonder, Mr. Speaker, if you could indicate to me how much time I have left.


Mr. Deputy Speaker:: The hon. minister has 30 minutes under the Provisions of the Standing Order which govern him in replying to the hon. member who moved the motion. His time commenced at 21 minutes to five o'clock.


Alastair William Gillespie: Thank you, Mr. Speaker. I have another ten minutes, so I shall talk about prices. There has been much discussion regarding car prices in Canada and the differential that exists between the factory price of a vehicle delivered to a Canadian dealer and the factory price of a vehicle delivered to a United States dealer. This, I believe, is the important level at which we should assess the price because this is the level where the differential can be controlled.
Hon. members are aware that there are other levels, particularly the dealer level at which the consumer buys the automobile. I think comparisons are difficult because in Canada we have a federal sales tax of 12 per cent and there is no such sales tax in the United States. Also, whenever the comparison is made the provincial sales tax must be added to the end price and compared with whatever sales tax there might be in the United States. For these reasons, Mr. Speaker, the comparison should be made at the factory level and I believe hon. members would agree with that.
When the automotive agreement was signed, the differential between factory level prices in Canada and the United States was of the order of 17 per cent. Regardless of the fluctuations and the effect of the exchange rate between then and now the differential is of the order of 8.5 per cent to 9 per cent. In other words, the price differential during the course of the agreement has declined by one half between '64 and '72. You can also put it the other way around: Canadian car prices over this period have risen only half as fast as car prices in the United States. This price gap varies from company to company and model to model. What we are talking about here are weighted averages of the whole piece.
The hon. member for Halton read some information into the record which I gather he regards as private or confidential or not accessible to the general public. To me, it seemed to be based on a model to model comparison rather than a weighted average of all models in all parts of the country. But the comparison, for purposes of rating
March 13, 1973

the differential, has to be on an average across the piece on a company by company basis. Hon. members from the west coast may know that some Canadian automobiles are priced so competitively that they are even less expensive than similar models across the border in the Pacific coast market. Most, however, are more expensive by varying amounts.


John Edward Broadbent: Which are they?


Alastair William Gillespie: I would be pleased to give that information to the hon. member after I have finished my speech. I do not want to be accused of promoting a particular model.
The question is whether a differential of 81 per cent or 9 per cent, on average at the wholesale level, is warranted under a continuation of virtually free trade in vehicles and parts with the United States. Clearly, there has been progress in narrowing this differential since the agreement was signed and to that extent the Canadian consumer has benefitted.
I am, however, not satisfied that the present differential can be justified, and in my discussions with the car manufacturers I have made this point abundantly clear. Following these discussions the major car companies agreed that there would be no increase in the wholesale prices for the 1973 model year above their current levels. It must be remembered, Mr. Speaker, that this has to be seen against the background of rising costs and rising wages in Canada. The hon. member knows that wages and material costs have been going up and prices must be seen against this background.
At the same time that the Canadian automobile companies agreed to this price freeze on the 1973 model year, they had an application before the prices commission of the United States for a 3 per cent increase. If that increase goes forward and is granted during the course of the 1973 model year, it will reduce the price differential by a further one-third. This, Mr. Speaker, would be the largest annual reduction in the price differential since the agreement was signed.
The second commitment that the automobile companies have given to me with respect to price is that in the pricing of their 1974 model year they will pursue the government's intention of further narrowing of the price differential. I expect that there will be a significant reduction in that price differential in the pricing of the 1974 model year, which prices should be announced according to regular practices early in September or the fall. Mr. Speaker, one of the reasons-


John Edward Broadbent: Mr. Speaker, would the minister permit a question?


Alastair William Gillespie: Mr. Speaker, I wonder if I might deal with the hon. member's question at the end of my remarks.


John Edward Broadbent: Mr. Speaker, then I wonder if the minister will consider my proposals in the context of his remarks.
Canada-United States Auto Pact


Alastair William Gillespie: Mr. Speaker, I assure the hon. member that I have not overlooked his interesting suggestions. I will comment on them in my concluding remarks, soon to be made.
I emphasize that not only from the point of view of fairness to the consumer is the lowering of the price differential important; it is important, as well, from the point of view of the security and growth of the pact itself, because the lower the Canadian car price is relative to the price of the foreign imported or foreign made car, the greater will be the market for the North American made vehicle in North America and the greater will be the participation of Canadians in that market. That is why, within days of being appointed Minister of Industry, Trade and Commerce, I moved directly to deal with this question. I talked to the automobile manufacturers. Within a week of my appointment, I took action, and as I said the result of that action was that which I have already announced to the House, namely, the price freeze with respect to the 1973 model year. This will be imposed here regardless of any increase that may be imposed in the United States. There is a further undertaking on the part of the companies with respect to narrowing the price differential in the present and in the 1974 model year.
Some hon. members have alluded to various voices in the United States indicating that the agreement should be changed in some particular. I listened carefully to the hon. member for Oshawa-Whitby and the hon. member for Charlevoix. I wanted to hear their suggestions and hear any guidance they might offer with respect to what changes, if any, might, in their view, be beneficial for this country. I have indicated in my remarks in the House during the question period that we have taken no decision to change the agreement. There has been no change in the agreement. I repeat, we have taken no decision to change it, for one good reason: in our view, the agreement is working to the mutual benefit of both countries and it is working very well.
It may be that we should consider changes in the agreement. It may be that we might be able to contemplate changes which would be to the mutual benefit of both parties to the agreement. I should like to reassure the House about the statement I made on March 1. If there is any change in the provisions of the automotive agreement, it should be to improve them so as to make them more workable. Although I do not foresee any imminent changes in the present agreement, I want to assure the House again that if changes are made, they will be made in accordance with the objectives of that agreement, and with the proviso that they are to the mutual benefit of both countries. That means that they could not be to the disadvantage of Canada and still be acceptable to this government.
In conclusion, Mr. Speaker, I wish to assure the House once more that the effort of this government will be to continue to provide for the future expansion of automobile production and to secure future job opportunities for Canadians in our automotive industry. While I can appreciate to some extent the concern that motivated the bringing of the motion now before us, I suggest that it should be readily apparent to members of all parties that no Canadian government, of whatever stripe, could con-

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sent to changes in this agreement that would prejudice the jobs of Canadian workers or the level of production in Canada.


John Edward Broadbent: Mr. Speaker, would the minister permit a question? Now that he has finished reading the script produced by succeeding ministers who preceded him in his portfolio, I wonder if he would be so kind as to deal with the suggestions I made and the specific proposals contained in this motion?


Alastair William Gillespie: Mr. Speaker, in my remarks I alluded to the proposals of the hon. member for Oshawa-Whitby. I think they are to be considered as serious proposals. I think they are imaginative. At present, I do not think I can do more than say that I consider them an interesting contribution and a constructive one at this time.


Mr. Orlikow:: Mr. Speaker, could I ask the minister a question? Could he explain to the members of the House and to the Canadian public why cars made in Canada, for example at St. Thomas, of which more than 50 per cent are exported to the United States, are sold more cheaply in the United States than in Canada where they are produced?


Alastair William Gillespie: Mr. Speaker, the answer, as I suspect the hon. member may already know, is that the Canadian automobile manufacturer, who is selling them to dealers, has decided that that is what he is going to do.


David Orlikow: Mr. Speaker, may I ask a supplementary question. Would the minister tell us whether his department has looked into the question of whether (a) automobile manufacturers are selling their cars for less in the United States and (b) whether they are getting too large a profit on their sales in Canada?


Alastair William Gillespie: Mr. Speaker, I do not think they are selling their automobiles at a low enough price in Canada.


Mr. Mark Rose (Fraser Valley West):: Mr. Speaker, there was a certain Colonel Blimpism to a reply the minister made towards the end of his speech. I am glad my colleagues asked him certain questions, because for the first time we heard direct and explicit replies from the minister.
The logic of some parts of the minister's remarks however bothers me. I cannot understand how a price increase in the United States can be considered as being a great benefit to Canadian automobile purchasers. The minister waxed fairly long on that subject. However, the logic behind his reasoning escapes me completely. Except for the dealers, I doubt whether the majority of people in my province, British Columbia, know or care very much about the Canada-United States Auto Pact. Certainly, you never see any Member of Parliament from British Columbia asking questions-


Mr. Danson:: On a point of order, Mr. Speaker; not that it matters very much, but the public address system does not seem to be working and I cannot hear the hon. member.


The Acting Speaker (Mr. Laniel):: The Chair is aware of the difficulty. We are trying to solve it.


An hon. Member:: The older members cannot hear very well.


Mr. Knowles (Winnipeg North Centre):: The older members were here before we had any public address system.


Mr. Guay (St. Boniface):: I can hear the hon. member.


An hon. Member:: Speak up.


Mark Willson Rose: I hope all hon. members opposite are afraid they will miss something.


Joseph-Phillippe Guay: That is right. We want to hear the hon. member.


Mark Willson Rose: As I was saying, you hardly ever see a member from British Columbia asking questions about the auto pact. On the other hand, you see members representing constituencies in central Canada jumping up and down during the question period if the word "safeguard" is so much as whispered in the House. What the people of my riding do know, however, is that they pay approximately $300 more for their cars and trucks than do the people living in Seattle, across the border from where I live. I suppose some of the people in my riding can dimly recall the signing of the auto pact in 1965 and remember vaguely that the Canada-U.S. Auto Pact was supposed to do something to make a car sold in Canada cost about the same as that same car sold in the United States, regardless of on which side of the border it was built.
I hope I am being heard by hon. members. Is my microphone working now?


Joseph-Phillippe Guay: No, but I can hear the hon. member.


Alastair William Gillespie: I can hear him.


Mark Willson Rose: I can hear the hon. member for St. Boniface (Mr. Guay) without the aid of a microphone.


Joseph-Phillippe Guay: I don't need one.


Mark Willson Rose: I can hear him directly from St. Boniface.


Joseph-Phillippe Guay: At least you hear something when I talk.


Mark Willson Rose: I will not be deflected. I am having trouble enough. It is working now?


Some hon. Members:: Hear, hear!


Mark Willson Rose: What we need is an assurance that the minister has no influence over the public address system. I was talking about the possible lack of interest in British Columbia because the automobile manufacturing business is not part of our provincial scene. It should be part of the British Columbia scene.
If any British Columbian wonders why he is asked to pay $300 more for his car, the usual answer he gets is

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some kind of confused mumble-jumble in which the only recognizable word is taxes, Canadian taxes. I know there exists a 12 per cent excise tax on Canadian cars and similar American taxes have been removed, but I do not think we should deal with that today because it is not the central issue in this debate. The auto purchaser in my part of the country is seldom told that he is currently paying to the hilt for his car because our friendly American subsidiaries which build his Canadian automobile are pocketing over $150 million of his hard earned money each year. They are charging him 10 per cent extra because he is a Canadian and his government lets them get away with it. That is what I would like the people of British Columbia to know and the people in the rest of Canada as well.
When I mentioned to some of my B.C. friends that I intended to speak in this debate today, they just smiled and said for all the interest I would create in my riding, I might as well make a speech about wheat. I will leave that for the hon. member for Assiniboia (Mr. Knight). It is assumed that most people do not really care about the end price of a car. All that really interests the average guy is whether he can scrape up the downpayment and hack the carrying charges of $95 a month or so. I am not persuaded, however, that this simplistic notion is accurate. If it were so, why would half the people in British Columbia be buying the offshore imports such as Datsun, Toyota, Volkswagens and Renaults? I think that B.C. people buy these cars because they are cheaper. It is as simple as that. They buy Datsuns, Toyotas, Volkswagens and Renaults in a greater proportion than they buy Gremlins, Vegas and Pintos because offshore imports are cheaper. However, these offshore car manufacturers do not employ a single Canadian worker while American subsidiaries operating in Canada, according to the minister's figures, employ nearly 100,000.
The debate today does not really have anything to do with the car culture of North America. We could say a great deal about the problems of disruption and changes over 50 years of North American automania. We are not going to discuss the land-gobbling freeways, carnage on the highways, the pollution befouled cities or the urban sprawl created by any combination of these things. However, all these in themselves are worthy of serious debate at another time.
We must remind ourselves today in dealing with the motion put forward by the hon. member for Oshawa-Whitby (Mr. Broadbent), and the new suggestions that flow from it, that Canadians consume or are consumed by a certain number of cars per year. Despite the auto pact, these built-in-Canada cars are vastly overpriced. Because of the overpricing, foreign imports are stealing an ever-increasing share of the Canadian market, thus reducing or not expanding job opportunities proportionately for Canadian workers. These concerns are legitimate enough at any time, but in the current unemployment-inflation environment in which we now find ourselves today, to continue blindly along the same old paths is not only unacceptable but intolerable.
In case the proposals of my colleague have not been made clear to the minister, members opposite or any other member who might have tuned in late, let me repeat them. The hon. member for Oshawa-Whitby suggested
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first, the removal of the 15 per cent duty on North American cars purchased in the United States to, in effect, push the Canadian subsidiaries into lowering their prices to United States levels in order to protect their dealers in Canada. The second point was to maintain the principle of safeguards, but to change their content so that Canadian purchases of North American automobiles anywhere in North America would be counted in the production-consumption figures. The third point was to amend the floor level below which Canadian production could not fall from the base output in 1964 to a new base of 1972 production-consumption.
I shall not attempt to expand on the reasons for these proposals in any great detail because I think the hon. member has ably done that. What I intend to do in the time remaining to me is to examine the verbalized, if not sincere concern for the consumer in this day of consumerism and how the price differential of about $300 is a felony compounded by a spin-off of added costs far greater than the $300 differential.
As an example, I will use an intermediate sized car, the Chevelle Malibu 8, two door, with a 307-v8 engine aboard. The 1973 list price or windshield sticker for this car f.o.b. Oshawa, using rounded figures for clarity, with no attempt at obscurity or obfuscation, is $3,300. On a clean deal, with no trade in, this car would probably be sold to a customer for about $3,000. Again using the ball park figure, its price in Seattle would be roughly $2,700, the dealer mark up being about the same in percentage terms. The $300 price differential is punitive enough, but let us consider what the extra $300 over the American price does in car financing.
Assuming that a customer pays $1,000 down and proposes to finance the remaining $2,000 through GMAC at roughly 16 per cent, the finance charges are approximately $409. The same plan to finance a car $300 less expensive would provide a $150 saving on financing, a considerable saving to anyone. We all know that the poor seldom have $1,000 to put down on a car and, therefore, the financing is usually carried on a larger amount, say $2,500, and over a longer period of time, say 36 months. I have these figures, but I think the figures which are quoted in any speech will show similar dramatic differences. Of course, more affluent Canadians can usually avoid finance companies and seek much lower interest rates through banks or credit unions, but those with poor credit often have no alternative but to go for higher interest rates. The less affluent pay much more for their financing for cars or anything else.
Let us add the cost of insuring the automobile with the $300 larger price. I do not say larger value because value is not always reflected in the price charged. I was reliably informed this morning that the difference in the competitive Ontario insurance market, we anticipate public auto insurance in British Columbia, is $15 per year or $30 over the two year financing period I am using in my example. Auto parts, new fenders and auto glass are similarly going to be 10 per cent higher, but I cannot include these in the extra burden of the $300 overcharge because I have no way to estimate their influence. I do not know whether the car will run into difficulty or whether it will be involved in

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an accident. These extra costs nevertheless cannot help but be a burden on the consumer.
Let us add the 24 month package of extra costs associated with car purchasing in Canada under fairly common financing terms. The extra cost to the Canadian car purchaser is $300. The extra financing of the $300 is $150. The extra insurance cost is $30. This adds up to $480. This is the extra penalty against the Canadian car purchaser which I insist is unjust, unreasonable and unacceptable. Perhaps Mr. Speaker, I have made the point that the difference is not just $300, but the financing, the insurance and the cost of parts magnify and distort the real differences which perhaps are hidden. These costs are directed to the Canadian consumer, not to this benefit but for the sole purpose of giving a $150 million bonanza each year to our friendly American subsidiaries.
Before I sit down I should like to touch upon a couple of other points. First, I think in addition to the three proposals articulated earlier by my hon. friend, we should consider the implications of dutyless access to used cars as well as new ones. To avoid the shock which would occur to Canadian retailers who might suffer because western Canadians at least might seek year-old cars in the say, California market, perhaps we could phase in the used car policy gradually over, a five-year period. We should, I repeat, study access to used cars and do our best to mitigate any injury which Canadian dealers might face. I am asking hon. members to consider the implications. That is all I am going to do at the moment. But isn't the point here that lower prices would come to the consumer? If we are interested in the cost of living problem, that is one thing we should consider.
The second point I should like to mention is that, as a British Columbian, I see no reason why all Canadian car plants, except for the one in Halifax, are located in central Canada. Everyone knows that there is a sizeable automobile industry in California and there could be an auto assembly plant in B.C. as well.


Mr. Breau:: There is one in the Maritimes.


Mark Willson Rose: I mentioned the distressed area, from which you emanate.


An hon. Member:: "Emanate" is right.


Mark Willson Rose: In western Canada we are far too dependent on the primary industries, capital intensive ones, and we do not nearly approach a balance of the secondary, labour-intensive industries of which the auto industry is a part. It should be pointed out that White Trucks, for instance, through a DREE grant, I think, located an assembly plant in Kelowna, British Columbia, and similar auto assembly plants, regardless of country of origin would be welcome in British Columbia.
Finally, Mr. Speaker, in pre-auto pact days, a fairly large segment of the population which was interested in such things, looked at the little country of Sweden and said, how can the Swedes produce the Volvo and yet Canada has no truly Canadian car? Should we be manufacturing an all-Canadian car? There was a suggestion

that this car should be called the Beaver, or something like that. A lot of people had some gnawing doubts about the Beaver, but I predict that if we do not resolve our present difficulties to the mutual benefit of the two countries involved in this auto pact there will be a hue and cry for reconsideration of the Beaver. An indigenous Canadian car is, perhaps, an unrealistic and presumably unnecessary concept provided we can negotiate in good faith, basing our negotiations-and I like the suggestion of the hon. member for Halton-on a policy in which we can have confidence. I suggest the three proposals of my hon. friend from Oshawa-Whitby might provide a very good basis from which to begin.
The purchase of an automobile is the most important and largest purchase the Canadian family makes. But people don't make it once or twice or three times in a lifetime, like their homes; they make these purchases every three or four years. So, I am urging the minister, and suggesting to him for the sake of nearly every Canadian family, for the sake of the cost of living, for the sake of the spin-off of the differential and the added financial burden because of this spin-off of the added cost he has to face, that the average Canadian consumer of automobiles would be most grateful to the minister if he used one of his great assets, his great persuasive ability. When next he goes, into the negotiations, the minister should go with determination to end this price differential, and the best way to do that in my opinion is get rid of the protective 15 percent tariff. If this were done, the Canadian consumer, not just the Canadian producer, could benefit by applying continentalism to the automobile market in North America.


Barnett Jerome Danson: It is always a pleasure to follow the hon. member for Fraser Valley West (Mr. Rose), even if his tale about the Beaver went flat. He always puts us in a somewhat relaxed mood but I would prefer he spoke about wheat. Being an old musician, he knows how to fill in time. That is part of the game.
It is interesting that the hon. member for Oshawa-Whitby (Mr. Broadbent) in his motion should have laid the blame for the auto pact on the Liberal government. Yet here is a pact which he is trying to preserve, and rightly so. I do not really understand why he suggests there should be blame. Of course, there should be a great deal of credit, and a great deal of credit goes to men like the Minister of Industry, Trade and Commerce (Mr. Gillespie) who is with us here, now.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: There is nobody in this House who consistently, in or out of politics, has taken a firmer position for Canada. He has been a credit to Canada. He knows how to deal toughly, also fairly, and has always consistently sought to do those things which would be best for this country economically, culturally and even spiritually. I say this without being facetious. I remember one of his early speeches in the House of Commons when he came here as a new member. He spoke about maintaining and preserving the spirit of Canada, the culture of Canada, the whole flavour of our Canadian mosaic. So no one else could better bargain on our behalf. He will do it seriously, he will do it toughly, he will do it practically and he will do
March 13, 1973

it fairly. Being fair is half the battle. He, like myself, came here from the private sector of business and there is nothing that works in the long run if it is not fair and to the advantage of both parties involved. Political posturing is unproductive. Showing how tough we can be may get us shorter term gains but over-toughness or unfairness or unreasonableness or stupidity is long remembered. We could win battles and we could lose wars.
What are our objectives under the automotive trade agreement? I look back on those years. I remember them well. In 1964, when this pact was negotiated, the Canadian car market accounted for 7.5 per cent of the North American market and we only produced some 4 per cent. We ran a $600 million deficit annually. There were two general objectives. One was to correct this imbalance and the other was to correct the price differential. The latter has yet to be achieved. The differential at that time was some 17 per cent, if I recall correctly and today it is something like 8.5 per cent; it is coming down. The minister has fought hard for this since the day he took over his present portfolio. I think we all stand firmly behind him.
The hon. member for Oshawa-Whitby and the hon. member for Fraser Valley West, on the suggestion regarding allowing United States vehicles into Canada duty free, made a very helpful and interesting contribution, one that I looked at with interest and which I discussed with the Americans in the last Canada-U.S. interparliamentary group meeting. However, I hope it does not come to using blackmail against Canadian automobile manufacturers. I think that if Canadian manufacturers and parent companies are made aware that we are prepared to be tough and that any measures put through the House by the minister to make certain that prices are brought down to a more reasonable level will be backed not only by members on this side but, I am certain, by members on the other side of the House, I am sure we shall achieve our objective.
After all these years we now have roughly $9 billion worth of trade in automotive products. I believe the minister said this was split about 50-50 each way. How close it is to 50 is sometimes a difficult matter for us to determine since our statistics are different. We have the vice-president of General Motors in the States talking on February 28 about a surplus of $100 million; then on March 5 the Globe and Mail speaks of a $35 million surplus, both of these figures in favour of the United States; then the next day the Canadian Press reports a $38 million surplus.
As far as Statistics Canada is concerned, they have three sets of figures: firstly, a $100 million deficit in favour of the United States; then a $41 million deficit; and finally there is a $5.8 million surplus in Canada's favour. Surely there is something wrong here that needs to be corrected. When we are talking about a subject as massive and important as the auto pact we ought to have our arithmetic right.
I suggest that an important part of any renegotiation with the United States would be the development of a statistical centre so that we would be able to compare apples with apples. If we could devise some such system of reporting and maintaining statistics in a computerized fashion, where we would both have the same figures, then
Canada-United States Auto Pact
even if we differed at least we would know why we differed. Certainly that is not the case now.
What has happened during the period between 1964 and today? We produced 671,018 vehicles in Canada in 1964. By 1972, the latest figures I have, we were producing 1,472,547 vehicles, an increase of 120 per cent. The employment statistics are rather interesting. My figures only go to 1971, but in 1964 some 69,000 people were employed in the automotive industry. By 1971 this number had risen to 91,900, an increase of 32 per cent. I think the most recent figure is 97,000 for 1972, but I am a little behind in my research here. The point is that we are talking of an increase in employment in the 32 to 35 per cent range, and an increase in production of 120 per cent.
We would like to know what accounts for this. It may be greater Canadian productivity. I am sure part of it is that we have become more efficient. How much of it is due to economies of scale? In my personal dealings with the automotive industry I have seen plants which were on short runs bringing in automotive parts from the United States at high cost or from other Canadian plants at uneconomic cost. These plants were working below optimum efficiency. As hon. members know, optimum efficiency is one of the objectives of the automotive trade agreement. How much is lack of labour intensity? How much is due to sophisticated methods that require labour to be siphoned off, with an equivalent increase in the U.S. labour market?
These are the kind of matters we must look at, Mr. Speaker. I hope it is all a question of increased efficiency, economies of scale and better Canadian productivity. I think we should look at the mix of the figures of 120 per cent increased productivity and 32 to 35 per cent increased employment. In any event, it demonstrates through the great eloquence of statistics that the agreement is not stealing jobs from American workers, certainly not in proportion to the benefit that each country derives from the automotive agreement.
We talk of safegurards in the agreement and it has almost become a bad word to use. It is a sort of four-letter word in this context. The word "transitional" has also become a little distorted. Hon. members will recall that the initial safeguards were a dollar figure of $780 million in Canadian value added, a figure passed long ago and which is now up to $2 billion. The only safeguard here is the health of the industry and the achievement of our objectives. These safeguards were minimums, and mini-mums must still apply. But the word itself has become symbolic and we are hung up about it. It is highly sensitive, politically, in both countries. The real safeguard, however, must be that of balanced production, of equivalent production for equivalent markets in both countries.
When we come to negotiate with our friends to the south, we may get into difficulty because they will tell us that this year we have had a surplus. For the first six or seven years we had a deficit; then for two years we had a surplus, and we might have another this year. Surely to goodness they ought to realize that in a scheme of this magnitude fluctuations must take place which can distort very considerably the picture in a market as small as Canada's, even more than is the case in the United States.

March 13, 1973
Canada-United States Auto Pact
For example, there was the market decision taken by Ford to produce a small, compact car called the Maverick, built at Talbotville, near St. Thomas, Ontario. Because of that market decision, a production decision followed. Due to the fact that the plant in Canada was on stream, producing well and accepted that market decision, we made tremendous sales through that plant and thus a distortion in that year was created. I remember speaking to our American counterparts about this matter when we were discussing this agreement in Ottawa in 1970.
Even in the sale of snowmobiles distortions arise. If you lumped the sales of snowmobiles together and made them a separate item, you would find that the exports of snowmobiles in 1971 amounted to the total surplus in Canada's favour. In 1971, exports of snowmobiles amounted to $138.9 million. But what happened this year? Sales are down to $116.1 million. What has happened is that the marketing pipeline for snowmobiles has been filled. People have a first and a second snowmobile now, so are not buying them so quickly.
In addition to this, due to the success of the Bombardier snowmobile, built at Valcourt in Quebec, which really gave these sales impetus, United States manufacturers followed suit and now have their own snowmobile industry which is creating competition for Canadian snowmobiles. They exported snowmobiles to Canada in 1971 to the tune of $33.9 million, and in 1972 to the amount of $52.2 million. So, again, distortions are appearing. I think it is terribly unfair of good trading partners to take a one or two year period out of context. That is extremely important.
There have been other benefits to United States industry, the United States economy and the U.S. government. I speak of the balance of payments picture, to which the minister referred. From my own private experience in the machinery business I know one plant in Richmond, Indiana, which Senator Hartke represents, from which we imported several million dollars worth of machinery for the production of automotive parts. A lot of these machines went to the General Motors plant in Oshawa which is in the constituency of the hon. member for Oshawa-Whitby.
There are also management fees which go back to the United States. Not all of them are subject to withholding tax, either. I know of one plant that paid management fees and head office administration expenses in excess of $50,000 a month, and this plant is not a huge one. These were administrative charges paid to head office. So there are also some great benefits our United States friends receive which are not all on the table.
Then we have a man like Senator Hartke from Indiana who made the statement he did on television last week. This is shocking. He must know that we have effective parity of wages with the UAW in equivalent operations in Canada and the United States, and that cars do in fact come into Canada today duty free from the United States. He also said that we are opening up doors and letting foreign imports flood us. We have a 12 per cent duty in comparison to their 3 per cent duty; this is hardly opening the door in comparison with what they are doing.

I think it is important that we make these points, because Senator Hartke is a parliamentarian as are we. From April 4 to April 8 a number of us will be in Washington with the Canada-United States parliamentary group. I believe we must make these points very clearly and watch the little distortions in regional areas such as a plant in Anderson, Indiana, or Evansville, Indiana being closed down or because a huge facility is being built in Saline, Michigan, which creates immense employment there.
There are distortions. There was the sad situation in respect of Philips of Canada which was supplying, I believe, a third of all the automotive radios for Chrysler. Then Chrysler decided to consolidate with Motorola, and Philips immediately had an immense lay-off. Parliamentarians in both the United States and Canada will be terribly sensitive about such things happening in their constituencies. Therefore, I think we must sit down and look at this matter in total. I am suggesting that we have an independent committee to look at this situation, see what the distortions are and bring them to light. Perhaps the data centre could be associated with it.
We have the International Joint Commission which deals with waterways. Maybe we could have an AJC, an automotive joint committee to help monitor these situations so that they are not distorted and so we can maintain harmony in this agreement. Such a committee cohid be comprised of labour and management as well as government representatives. I would say it should have monitoring powers. I do not think it should have executive powers. However, this would be an important element so that we would all be comparing the same things and would see our problems in proper perspective.
I believe two hon. members referred to the idea of building our own type of car in Canada. This raises a very important point about the automotive trade agreement. I have always felt that our great weakness under this agreement is the fact that we did not have the leverage of one domestically-owned automotive company. If we did, we could say to the United States that if it did not make a fair deal we would make our own automobiles and put up tariff barriers. We do not have such a company and this is not the way we operate.
We made this agreement. We said we would give it a chance. We have done so and it has worked out well. However, just because it is working well for both sides now does not mean that we want them breaking it up. We have other options, but we need leverage. One option is to build our own cars. That is a possibility. It is not beyond our technical or productive capacity. I think it would be difficult and it would take a long time. I would hope Canadians would back us up, but they do not always do that: if the car was not as good as a competitive one, they would not buy it. However, this is an option we might think about.
The other option is perhaps a joint venture with one of the foreign automotive manufacturers. This is done in other countries. Fiat and Volvo have joint ventures in other parts of the world. This might be a possibility for Canada. A model might be designed in Canada for the Canadian and American market of the type, size and style which is acceptable here and for which there is a fair market. Another option to consider is that perhaps we
March 13, 1973

could buy a position in one of the United States major companies.
When I heard last night that this debate was coming on, I did a little calculating. In our foreign exchange reserves we have $4 billion to $7 billion. I believe officially it is $4.5 billion, U.S. As I understand the balance of payments situation, we can get by with $1 billion to $li billion. Let us even say it is $2i billion-we need to keep our float orderly-and that officially we have $4.5 billion. That still leaves $2 billion. These $2 billion could be invested in the United States. The Minister of Finance could direct the Canada Development Corporation or another body to invest this money. It would still be an asset so far as the balance of payments was concerned and a loan to the CDC. We could then purchase a leverage position in a United States company.
I have just received a report from my friendly broker. Let us see what $2 billion would buy in terms of an American automobile company. General Motors has 287,604,280 shares outstanding with a price on today's market of $73 7/8 per share, for a total value of $21,245,328,163. An amount of $2 billion would buy almost 10 per cent of that. If we had a little more, we could buy 20 per cent. One could buy 25 per cent, at today's market price, for $5.34 billion.
Chrysler has 52,489,823 shares outstanding at $341 on today's market, for a total value of $1,811,243,893. We could buy the whole thing. We could go out after recessing for dinner to-night and buy it. I am not sure about the figures in respect of Chrysler because I see their assets are almost $5 billion and the shareholders' equity is $2,268 billion. However, it does seem to me that this is one type of leverage. The Ford situation is quite different because it is only worth about $7 billion. Most of that is controlled by the Ford Foundation and the Ford family. I do not think they would be willing to give up control to those of us who are here tonight.
Before sitting down I should like to say I think the following points are important. There must be co-ordination of our monitoring of this situation, as well as articulation and re-articulation of the objectives of both countries. We must reach the achievement of mutual objectives, a consultative process, a constant review of statistics including balance of payments, an arbitration function on specific short-range distortions, monitoring of the program and a report to both governments. Only in a spirit of mutual consideration for self-interest on both sides can we maintain harmony and make progress in respect of a very worth-while agreement so that both countries may benefit from it in the years ahead.


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I shall not take long. I may complete my remarks by six o'clock; at least, I shall try my best. I wondered, as did many hon. members, what would be the subject of debate to be put forth by the New Democratic Party on its allotted opposition day. They have agreed on so many points with the government and voted with them so many times that they were indeed hard pressed to find a theme for today's debate. With their well known stand on accelerated write-offs and corporate tax cuts, one would have thought they would have chosen that theme to retread the
Canada-United States Auto Pact
rip-off. After, I am sure, a very diligent search they have chosen to spend their day on the auto pack.
It is well known that the automotive agreement was whipped together in considerable haste in 1965 and was written in vague and ambiguous language. The temper of the times was different then: we had a serious trade deficit with the United States and the automotive deficit was the largest portion of our over-all trade deficit. No one can deny the auto pack has worked well and has produced an over-ali trade surplus in the automotive section of our trading account with the United States.
It is eight years or so since the agreement was signed, and we have been reappraising its effects. We have considerable difficulty in securing information on the auto pact negotiations. I think it was rather facetious of the minister to look for suggestions from this side of the House, since we are not privy to the negotiations and the points on which they are negotiating. However, on a matter as delicate as this one, I must say that I agree with the minister that it would not be wise to negotiate in public. We have, I believe, a group of highly skilled negotiators in the Department of Industry, Trade and Commerce who we understand keep in close touch with their U.S. counterparts.
When all the formulas are digested, the ratios and percentages calculated, we come back to two main points. The first is jobs and job security, and the second is where the philosophy of the auto pact fits into our over-all trade objectives on a long-term basis. Certainly it is understood that until we have an amicable settlement of the auto pact we cannot explore in any detail our over-all trade relations with the United States. In the balance is the future of secondary industry in Canada.
While we would like to develop secondary markets in other parts of the world for our manufactured goods, one would have to be blind to not realize that in the immediate future our trade with the United States is the keystone in our industrial development. The markets are there and we must find a way to keep the door open to Canadian products. So in our view the auto pact is vital to our future development as an industrialized nation and it is also the key to the development of secondary industry in Canada.
We are concerned about jobs and job security. Any move to lessen the number of jobs in Canada at this time would, of course, be disastrous. I am sure our negotiators would have agreed upon an acceptable package if in fact the level of unemployment in Canada had been much lower than it is. I believe it would be fair to say that the single most important factor in the auto pact discussions has been the government's preoccupation with inflation since 1968 and their acceptance of a high level of unemployment. The problem is not really an arithmetical one of ratios, percentages or even balance of trade. The real problem is that some adjustments have to be made, and while we have a high level of unemployment we cannot tolerate any change in the terms of the auto pact which would aggravate that position.
It is significant, I believe, to note at this point that the policies put forth by the Leader of the Opposition (Mr. COMMONS DEBATES
March 13, 1973
Canada-United States Auto Pact Stanfield) would in effect allow us to adjust more readily to changes in unemployment levels due to auto pact negotiations than does the cautious and ad hoc economic patchwork approach of this government. Our party's policy of running the economy at full throttle to take a large bite out of the unemployment and simultaneously impose temporary price, wage and profit controls would allow us to negotiate with much more confidence than does the economic and fiscal policy of the present government.
The hon. member for Halton (Mr. O'Connor) has detailed the minister's lack of knowledge of the auto pact, as recorded in Hansard. Hon. members will also note the numerous references to government-to-government negotiations. They will note the number of times the hon. member for Prince Edward-Hastings (Mr. Hees) has asked about minister-to-minister negotiations. It is evident the minister is not equipped to negotiate the auto pact agreement.
There is no one on the government side with enough political clout to negotiate with people of the calibre of John Connally. The right hon. Prime Minister (Mr. Trudeau) made his pilgrimage to Washington some months ago and announced a "fantastic breakthrough" in negotiations with the United States. We have not learned to this day the details of this breakthrough, but we do know that a short time later surcharges were imposed and a protectionist attitude was evident in the U.S.A. However, nowhere did we see any evidence of the fantastic breakthrough or of any special consideration for our trading position with the U.S.
There were suggestions in the Washington press recently that the U.S. position and attitude toward Canada is hardening due to the continuous critical attitude of the government toward the United States involvement in the Viet Nam war. The wisdom of the well orchestrated resolution on this grievous war during the throne speech may well haunt the trade negotiation tables for months to come.
At a time when the world is divided into rival trading blocs, the wisdom, or perhaps the lack of wisdom, on the part of the government must be questioned. At a time when we have a high level of unemployment and when the creation of new jobs and industries must be the main immediate thrust of the economic policy, we find ourselves in a serious trade negotiation with our largest customer-and we are not talking at the ministerial level. It shows how completely bankrupt this government is in the field of economic policy and planning.
We are not in a position at this time to tolerate the loss of jobs due to renegotiation of the auto pact's terms. The danger we face is twofold. The government lacks any long-term economic plan and therefore it is difficult to point to a time or period when we will be able to negotiate the auto pact so that adjustments in employment could be tolerated. We also must face up to the facts of life of secondary industry in Canada. The development of this sector of our economy must be pushed with all possible speed to aid in lowering high-level unemployment in Canada. While the trade irritants remain between our two nations, we will be hard pressed to find the additional markets we will require.

It is evident that we are facing very serious negotiations in the months ahead. I believe that our negotiators are knowledgeable persons who are capable of handling these matters, and are dedicated to their task of protecting Canada's position. It is unfortunate that our negotiators cannot bargain from the strength of an economic policy that is expansionist and designed to cope with the economic problems that face us. With such policies, they could feel reasonably assured that we could adjust to any disruption caused by changes in the terms of the auto pact and take up any unemployment slack elsewhere in our economy. In the long run, the big losers are our secondary industries, not only those presently operating who would expand but the new ones we so desperately need to employ our ever expanding labour force.
There is no doubt that we face hard times ahead in our trade negotiations with the United States. I am not concerned about the negotiations themselves; I am concerned about those at the cabinet level charged with responsibility to direct and carry out this delicate task. In my view, they are leading from weakness as a government lacking in sound economic programs, as they have so amply demonstrated over the past four years.
Let me say in closing that I can only wish the negotiators well. The government has indeed failed to develop a policy that would benefit Canadians and resolve the conflict concerning the Canada-U.S. automotive agreement, as stated in the motion of the hon. member for Oshawa-Whitby (Mr. Broadbent). This makes the task of the negotiators extremely difficult. If the government is not capable of preparing economic programs that will allow us to negotiate from strength, then they should move over and let those on this side of the House, who have a clear picture of what is required, get on with the job.


Some hon. Members:: Hear, hear!


Mr. Speaker:: It being six o'clock, I do now leave the chair.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Mr. Mark MacGuigan (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, as a representative of an automotive community I am pleased to have the opportunity to participate in this debate on the Canada-U.S. auto pact. Windsor accounts for approximately 25 per cent of the total Canadian output of automotive products and has benefited more than any other Canadian centre from the auto pact. Production of motor vehicles increased in Windsor by 112 per cent from 1964 to 1971, as opposed to 105 per cent for the whole country, and in the same period employment in the "Big Three" in Windsor jumped by 41 per cent, as opposed to 33 per cent for the whole country including Windsor.
Since Windsor has much to lose from any unfavourable change in the auto pact, my colleagues the Minister of Agriculture (Mr. Whelan), the Minister of Consumer and
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Corporate Affairs (Mr. Gray) and I have been vigilant in our concern about the future of the pact. Were it not for their cabinet responsibilities I know that they, too, would be speaking in this debate.
Like every other bargain, the pact has its advantages and its disadvantages. To assess its value on an over-all basis we need some kind of balance sheet. Let us first look at it from the viewpoint of employment, Mr. Speaker. Employment in Canada in the automotive industry rose from 68,400 in November, 1964, through 81,400 in November, 1970, to 91,600 in November 1971, to 97,100 in November, 1972. This is an increase of 28,700, or close to 30,000 in the eight-year span from 1964 to 1972.
As the Minister of Industry, Trade and Commerce (Mr. Gillespie) mentioned this afternoon, there is a multiplier effect for these figures. Whether you take the multiplier as one, two or three, as he pointed out the number of additional jobs created in our country by this great advance under the auto pact is considerable indeed. Incidentally, Mr. Speaker, employment under the pact, is about equally divided between those involved in the production of parts and accessories, on the one hand, and those involved in assembly on the other hand.
Looking at the same balance sheet from the point of view of trade, we find that in 1964 Canada had a deficit of $602 million with the United States. In 1971 there was a $197 million surplus in our favour; and in 1972, if this is the final figure, it was $5.8 million in our favour. So, Mr. Speaker, we can see that our annual trade under the auto pact with the United States is now roughly in balance. But this of course means that there has been a spectacular gain on Canada's part. We are about $1 billion ahead in vehicle assembly and about $1 billion behind in parts, so that together we come out roughly even across the whole spectrum.
Another way of looking at our progress under the auto pact is this. It used to be said that Canadians bought about 7.5 per cent of the total North American auto market but produced only about 4 per cent. Actually, these figures were totally misleading because the former included profits and the latter did not. For this reason these figures are not used any more. The accurate way of looking at it is by considering our trade balance. We now produce approximately what we consume in the auto market.
Looking at the situation from the point of view of the so-called safeguards, we are spectacularly ahead of where we were in 1964. With regard to the first safeguard concerning vehicle production, the ratio of vehicles produced in Canada to vehicles sold in Canada was in the area of 90 per cent to 100 per cent in 1964, and in 1972 it had climbed to the area of 130 per cent to 140 per cent. With respect to the Canadian value added safeguard, we are about $1 billion ahead of where we were in 1964.
Turning, in our balance sheet, to the question of prices we find a more marginal advantage. As the minister pointed out this afternoon, there has been progress in narrowing the price differential; it has decreased by about one half since 1964. This means that Canadian automotive prices have risen only about half as fast as those in the United States.
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There are also certain disadvantages as there would be in any agreement. Among the disadvantages under the auto pact are the control of purchasing in the United States, except for General Motors in Oshawa, and the fact that there is very little design or engineering done in Canada. So that we have a gain in the assembly of automobiles rather than in parts, and we have gained many unskilled jobs but have lost some skilled employment.
In summary, I should like to see the marginal advance with respect to prices increased, and the disadvantages reversed, in any renegotiation, but in my view and that of my colleagues, we have on balance gained very substantially under the pact. The question with regard to the renegotiation of the pact is that of where our priorities are. Canada's original objectives with respect to the auto pact were an increase in production, efficiency and employment in the Canadian automotive industry and a better break for the Canadian consumer. My first priority is Canadian jobs, protection of our gains and the continuance of our advance with respect to jobs for Canadians in the automotive industry. I would put in a lower place the reducing of prices for Canadian consumers. Here I detect a certain waffling, if I may use that word, in the resolution as phrased. If I may draw the attention of the House to this, the hon. member for Oshawa-Whitby (Mr. Broad-bent) moved:
That this House deplores the failure of the government to develop beyond the 1965 Canada-United States automotive agreement a policy which would benefit Canadians and which would contribute to resolving Canada-United States conflict in this area to the mutual benefit of both countries; and this House, therefore, urges the government to take certain immediate steps to lower the prices of automobiles to Canadian consumers and to protect the jobs of Canadian autoworkers.
This resolution apparently accords equal priority to lowering prices and to protecting the jobs of Canadians. I do not think that this is a tenable position, Mr. Speaker, and I think it is crucial that we have our priorities straight before we talk, as did the hon. member for Oshawa-Whit-by and his colleagues, about renegotiating the pact with the United States.
The problem with the position of the NDP is even more fundamental when we consider the proposals which the hon. member for Oshawa-Whitby and the hon. member for Fraser Valley West (Mr. Rose) made this afternoon. The auto pact is a free trade pact on the United States side, but it is not on the Canadian side. On our side it is, rather, a duty-remission plan. I should like to direct your attention, Mr. Speaker, to the words of the pact itself. Article I reads:
The governments of Canada and the United States, pursuant to the above principles, shall seek the early achievement of the following objectives:
(a)	The creation of a broader market for automotive products within which the full benefits of specialization and large-scale production can be achieved:
(b)	The liberalization of Canadian and United States automotive trade in respect of tariff barriers and other factors tending to impede it, with a view to enabling the industries of both countries to participate on a fair and equitable basis in the expanding total market of the two countries;
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(c)	The development of conditions in which market forces may
operate effectively to attain the most economic pattern of investment, production and trade.
I believe that the most relevant of these objectives for the present discussion is (b) which is stated to be, most particularly:
The liberalization of Canadian and United States automotive trade in respect of tariff barriers-
But we have to advert immediately to the qualification which follows the initial statement of the principle, which would otherwise suggest a free trade position. But the clause goes on to point out:
-with a view to enabling the industries of both countries to participate on a fair and equitable basis in the expanding total market of the two countries;
It is my contention, Mr. Speaker, that a fair and equitable basis for Canadian participation and for the participation of Canadian industry in the automotive market does not mean free trade. It may always be necessary- not just for a transitional period-if there is to be participation by Canadian industries on a fair and equitable basis, there should be limitation on the free trade principle on our side. In taking such a position, we should not be contravening the auto pact; we should rather be following it because we should be conforming to the objective of liberalization of trade on the conditions imposed by the agreement itself.
There are under the pact two so-called safeguards, but one of the other protections which exists on our side is a tariff according to which recognized Canadian manufacturers are allowed to import duty free into Canada provided certain conditions are observed. The hon. member for Oshawa-Whitby agrees that we should not attempt to reach complete free trade with the United States, but he proposes the abandonment of the duty-remission plan. On the one hand, he says let us retain the production safeguard and the Canadian added value safeguard although both are admittedly inoperative because our industry has done extremely well under the pact. On the other hand, he argues that we should abandon the one protection that is operative. But, if we remove the duty, we remove the duty-remission feature with it. We cannot very well retain the duty protection for ensuring Canadian objectives if there is no duty there.
I realize that in order to lower car prices in Canada the hon. member has proposed removing the 15 per cent Canadian duty only for individuals who wish to purchase cars in the United States and not necessarily, he might argue, for automotive companies. That would be as impossible in practice as it is simple in theory. Companies can hardly be denied what is legitimate for individuals- importing cars from the United States without duty and without limitation. If they were, they could retaliate by refraining from further investment in Canada. Worse still, we would be playing into the hands of the American government, whose principal policy objective this removal of duty has been.
This was quite plainly stated by Mr. Philip Tresize when he was in Canada in October. This gentleman was, until he resigned, one of the leading American officials of the United States concerned with the auto pact. Speaking on the pact in Toronto, he publicly advocated not only scrap-

ping the two so-called safeguards, but also the removal of the tariff arrangement that is presently in effect.


An hon. Member:: Just another sell-out.


Mark R. MacGuigan: The sell-out is what I am talking about. It is what you are proposing. Although the hon. member for Oshawa-Whitby did not say so clearly, what he probably had in mind was not unilateral Canadian action to cut out the tariff, but a new auto pact in which we would give up the tariff in return for new safeguards at the 1972 level of production rather than at the 1964 level. If this is his proposal it is a major policy proposal on behalf of the NDP calling for renegotiation of the auto pact. Such a proposal obviously needs to be thoroughly worked through by experts before a definitive answer can be given.
However, my initial reaction to it is twofold. First, if it were to have any further advantage for Canada it is unrealistic to think that the United States would agree. The United States' desire to renegotiate the pact now is based on the feeling that it is already too favourable to Canada. It has been described by one United States senator as foreign aid to Canada. Secondly, it would seem to me to have a short-term advantage for Canada, but longterm disadvantages. In the short run, the 1972 base would obviously be advantageous, given a slight recession in the immediately following years. In a few years, however, it would become inoperative, just as the 1964 figures have become inoperative, by reason of the progress of our industry. Then we would have nothing left to bargain with in future because we would have given up our main bargaining tool, the tariff, in 1973.
My feeling that the NDP proposal is working in the direction of free trade is strengthened by the remarks the hon. member for Fraser Valley West made subsequent to those of the hon. member for Oshawa-Whitby in which I believe he was supporting free trade in the used car market. I would not want to be unduly harsh on the proposal of the hon. member for Oshawa-Whitby. I appreciate the thought he has given to it and the fact that he has put it forward in good faith, but I wish he had put it forward more unambiguously and had faced the consequences more squarely. Still it is a proposal to which serious thought must be given by the government. However, I believe it is to some extent the product of a mentality which is trying at the same time to please everybody, in this case both workers and consumers, with more jobs and lower prices. In such an equation I know on which side I belong. I stand with the automotive workers and their jobs. I will continue to press the government for policies which will maintain and increase employment in the automotive industry in Canada. I hope other hon. members will be equally forthright in facing the choices that have to be made on this issue.


Mr. Joe Hueglin (Niagara Falls):: Mr. Speaker, it may seem strange that a member representing Niagara Falls should speak in this debate. However, although the peninsula is noted more for its tourism and agriculture than for its involvement in this particular industry, the workers in the auto industry form a large part of our total labour
March 13, 1973

force. In Thorold there is the Hayes-Dana plant, in Niagara Falls there is the Ford Glass plant, and in St. Catharines there are GM subsidiaries known as MacKinnon's and Thompson Products.
Without doubt, all these industries have benefited from this pact. More recently, however, 120 jobs have been lost to the area following the transfer of production of the Maverick brake-drum to the United States. The labour force at MacKinnon's has been reduced to around the 6,400 mark, having been at 7,200 in 1966. I was speaking today to the head of the union at MacKinnon's, who is greatly concerned about these movements in production. What has happened will affect the rest of the workers who live in the peninsula, particularly those who use Niagara Falls, my riding, as a dormitory area.
One year ago last December, when Mr. Pepin went south and when the Prime Minister (Mr. Trudeau) also went south at about the time my party's annual meeting was being held in Ottawa, we heard that all was well with the auto pact. It now appears that all was not well. Despite what the minister has said, I suggest we have reached the point of stalemate. A new beginning must be made. New initiatives must be undertaken because, as the last speaker suggested, Senator Hartke has been saying that the automotive agreement was granted as a boon from the American government. He said that the pact is foreign aid.
Although I do not read as many newspapers as I should like to read, I have not heard statements advanced on this question by the minister. I suggest that we must review the whole situation and come to some commonly accepted agreement as to figures that ought to be used. The American government uses one set of figures and we use another. We must redefine what each is to obtain from this automotive pact now and in the future.
I submit that this pact ought to bring about stability in the area of automotive production. That is important. In addition, not only the governments are involved in this area. We must be certain for whom governments speak. If they speak for the companies, I submit they should also speak on behalf of the workers and for the consumers in our communities. It is in the interest of the governments on both sides of the border to argue on behalf of their respective citizens.
Certainly, in my estimation, the companies are placed in a most difficult position. The reason is that the automobile manufacturers are international companies and subject to pressures from both governments. The automobile manufacturing companies are probably more affected by pressure from the U.S. government than by pressure from the Canadian government. Therefore, one is led to wonder whether the drop in Canada's trade position has been the result of the play of "free market forces" or the result of company reaction to United States government pressures of both the stick and carrot variety, that is, of pressures to move successful production lines southward, as happened for example in the case of the Ste. Therese plant in which production of the successful Pontiac model was shipped south. The less successful Vega model was produced in place of that model, the result being that the work force of some 2,300 has been reduced to 1,100. One can imagine the impact of that reduction on the community. Or one can
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mention pressures being exerted under the DISC program which makes it more profitable for a company to produce cars in the United States than in Canada.
The companies are in a difficult position. It may well be that to guarantee long-range Canadian growth the Canadian government, in view of the experience we have obtained with this industry, must for the sake of the workers and consumers of this country give the companies what may be termed a positive arguing point; that is, those companies must be able to say to the United States government that they have entered into contractual relationships with the Canadian government which they must honour. They must be able to say this to the American government.
Certainly experience in free trade, especially in the farm machinery industry, has clearly shown that new production facilities do not develop in Canada but develop in the United States. This experience certainly goes back to 1949. For that reason it is my opinion that in no circumstances can we accept a completely uncontrolled situation. There must be guarantees somewhere along the line. Equality of production must be guaranteed for our workers and consumers. The Canadian subsidiaries of American automotive companies cannot be placed in the position of having to stand alone against United States government pressure.
The affected workers, their families and the communities in which they live and of which they form the economic base are very much affected by the pact. Although the automative workers, as workers in any industry, must accept the vagaries of the market it is unreasonable to expect them to be subjected to pressures which can quickly disrupt the life of an entire community. Once again I refer to the example of Ste. Therese. There a whole community was built around a certain automotive producing facility. There, after a certain number of jobs had been built up, the labour force was suddenly reduced. This could also happen in Talbotville or our own area.
Stability in the industry must be achieved so far as possible. Only new initiatives, only a review from the bottom up can achieve this. Canadian workers recognize, I believe, that although solidarity with their American brothers may be a desirable theme, certain of their American brothers put their own jobs first and cannot be relied on to protect Canadian workers' interests.


Lincoln MacCauley Alexander: I hope the minister is listening.


Joseph Fred Hueglin: Here I am referring to the support given to the Hartke-Burke bill by certain elements in the American labour force. Indeed, Mr. Speaker, only the Canadian
government can protect our workers, in conjunction with the workers themselves. It is on our government that our workers must rely. The auto pact has been instrumental in the building of new communities and has increased the prosperity of older ones. The interests of those communities must be protected. For that reason stability must be introduced.
Before leaving the subject of workers may I say that it is my understanding, on the basis of many sources of information, that the Canadian worker has certainly done his share in making this pact successful. In MacKinnon's plant in St. Catharines, and in other plants, the quality of
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Canada-United States Auto Pact production has been higher than in corresponding parent plants in the United States. There has been less loss of time for various causes. There has been less pilfering and less absenteeism due to alcohol or drug use. So our Canadian workers are every bit as good as American workers, if not better. Actually, our productivity has reached the point at which possible disparities due to our northern clime can be ignored. Market forces, along with increased productivity, have made our production facilities in Canada the equal of United States facilities.
If Canadian production is competitive with that in the United States the consumer may well ask, why are automobiles, both cars and trucks, more expensive in Canada and why has the differential in price, which had been dropping, risen recently? There must be three reasons for this differential: natural forces such as weather and the smaller number of units being serviced, government tax structures or company pricing policies. To my mind those are the only possibilities we ought to consider. I suggest that they must be clearly identified in the public mind so that people may either accept the need for the differential, if it is the result of natural forces, or bring pressure to bear on their government if it is not.
Canadians have always paid a price for being Canadian. We have accepted this in all generations to this point and I believe we will now. But that price must be fairly put before Canadians and these costs must be legitimate. The governments of the two countries must recognize that this auto pact has been of benefit to both countries. It has been somewhat less so than anticipated because of the high rate of imported cars being sold in Canada. Here, again, a clear and comprehensive study starting from square one must be undertaken to clearly point out how this hurts us, if it does, and what alternative actions exist.
In summation, it is in the interests of all concerned, governments, producers, workers, communities and consumers, to have a clear picture of what has been a mutually beneficial relationship. It is in the interests of all to redefine the aims and arrive at stable patterns in so far as this can be done.
That a thorough review is necessary can be proven, not only by the lack of any movement for a long period but by the inane ravings of Senator Hartke that this pact came about as a form of foreign aid, when in fact it came about as the result of pressures to build Canadian industry, initiated by the Conservative government in the early sixties-


Some hon. Members:: Oh, oh!


Joseph Fred Hueglin: -pressures to which the Americans responded, finally, in a positive manner. The waters have been muddied so much now that a thorough review is necessary so that the positive interests of both countries can be identified and protected and, not least of all, so that stability in the many communities dependent on this industry can be strengthened.


Some hon. Members:: Hear, hear!


David Orlikow: Mr. Speaker, when the hon. member for Windsor-Walkerville (Mr. Mac-Guigan) spoke a few minutes ago he criticized the hon. member for Oshawa-Whitby (Mr. Broadbent) for bringing forward this proposal today. The hon. member for Windsor-Walkerville suggested that he was speaking for the auto workers and, by obvious implication, suggested that the hon. member for Oshawa-Whitby was opposed to the interests of the auto workers. I listened to the hon. member for Windsor-Walkerville: it was obvious that he was not speaking in the interest of the auto workers of Canada but in the interest of the "Big Three" auto makers who are making exorbitant profits at the expense of Canadian consumers.
I wish to say a word to the hon. member for Niagara Falls (Mr. Hueglin). When he talks about American labour not being interested in the welfare of the Canadian worker, he ought to look at the record. It is clear. The United Autoworkers Union, which represents automobile workers in both Canada and the United States, has spoken out as vigorously in the United States against the proposed Burke-Hartke bill as the Canadian section of that union.
When we were discussing the auto pact in 1966, a number of reasons were put forward by the government for proposing this pact. It was said that if we entered into this agreement with the United States it would increase employment. That, of course, has happened. We were told that it would cut down on the deficit in the trade balance between Canada and the United States. While that has happened, the hon. member for Windsor-Walkerville was very careful how he quoted those figures. He skated over the record of the past year. The trade surplus in our favour which was apparent in the early seventies virtually disappeared last year. Instead of a trade surplus this year and next, we will probably again have a trade deficit with the United States.
There is a third important point which the hon. member for Windsor-Walkerville does not understand. Until the hon. member and the government understand this point the Liberal party will not win seats outside the golden triangle in Ontario. We were told that the auto pact would result in a price reduction for Canadian consumers. I wish to quote from two editorials which appeared in 1965 in newspapers which support the Liberal government. They were discussing the auto pact. I do this to show the minister and the hon. member for Windsor-Walkerville what the people outside of Windsor expect from the auto pact. I quote from the Vancouver Sun, which as far as I know has always supported the Liberal party, of April 14, 1965:
Among other things, Mr. Walter Gordon's forthcoming budget will have to defend the Canadian-American free trade deal in automotive products.
It can be easily defended if it means that automobile prices will soon fall. If they don't, the deal is quite indefensible.
The Winnipeg Free Press, a newspaper in my city-and there is no more partisan supporter of Liberal government in Canada-when discussing the auto pact wrote on April 17, 1965:
A much larger question now faces the Canadian government as a result of the free trade deal. It is whether this ostensibly constructive agreement will do any good for the Canadian consumer
March 13, 1973

or whether it will benefit only a few rich automobile manufacturers.
The Free Press asked the question. The answer is now very clear. We are in fact subsidizing and benefiting the large automobile manufacturers.


Some hon. Members:: Hear, hear!


David Orlikow: To my knowledge, there is no department of government in Ottawa which has more high-priced, supposed expert civil servants than the Department of Industry, Trade and Commerce. To try to find out from that department whether it has made any studies with regard to the relative cost of producing cars in Canada compared to the cost of producing cars in the United States, or the relative profits of Canadian automobile companies compared to the profits of their United States parent corporations, is an impossibility. The minister will not tell Members of Parliament and the public whether such studies have been made. They certainly ought to have been made. If they have, their results are being hidden. If not, the minister and the government should be condemned, because that would be a dereliction of duty. If studies have been made, the results must be so bad that the government is afraid to let the Canadian people know the facts.
Fortunately, there are people in Canada who are not civil servants. There are some journalists. I suggest to the minister that in all likelihood their salaries are substantially less than the salaries of the officials in his department who should be making this kind of study.
I do not have time to put on record all the facts in the articles written by Mr. Thomas Claridge and Mr. John Rolfe in March and April of 1972, but let me summarize as briefly as I can some of the statements contained in these articles. I quote, for example, from the article of April 20, 1972, by Mr. Claridge:
The typical Canadian new car buyer is paying an extra $300 for a North American built automobile because of a manufacturers' pricing policy now under investigation by the federal government.
Under the policies being followed by all four Canadian car manufacturers, Canadian car dealers are being charged about 10 per cent more than U.S. dealers for cars built in Canada.
They made an investigation, and they sure as hell gave the results. The old excuses, the old rationalization given for higher prices in Canada disappears. The old rationalization was that the production runs in Canada were so much shorter that we could not turn out cars here as cheaply as in the United States.
As I have said, I do not have time to put forward all the facts that Mr. Claridge and Mr. Rolfe have embodied in these articles; but we find that cars built in Canadian plants in Ontario, cars built in St. Thomas, are being exported to the United States and sold for $250 to $300 less in Buffalo than in Toronto.


Some hon. Members:: Shame.


David Orlikow: I repeat the question I put to the minister this afternoon. Does he believe that cars produced in Canada are being sold in the United States at a loss? If the manufacturers can sell a Torino, or a Chevelle or an
Canada-United States Auto Pact
American Motors car in Buffalo or in upstate New York for $300 less than they can in Hamilton or Toronto, and they are not losing money, there is only one conclusion you can draw. This is the conclusion the writers in the Globe and Mail have come to. It is that Canadian consumers are being overcharged between $250 and $300 per car.
The writers I have named analysed the profit per unit made by automobile companies in Canada compared with the profit per unit made by the same companies in the United States. What did they find? They found that for the last year for which figures are available the per unit profit in Canada was between $225 to $250 more than it was in the United States.
Who was making that possible? The Canadian consumer. He was paying in two ways. He was paying up to $300 more for the car, and he was also paying in another way. Before the auto pact was concluded, the Canadian government was getting, in the form of excise duties on cars and car parts imported into Canada from the United States, in the neighbourhood of $50 million. The Canadian taxpayer does not get the benefit of that $50 million any more. Thanks to the generosity of the Liberal government, it goes to increase the profits of General Motors, Chrysler, Ford and American Motors. This is the government which represent the ordinary taxpayers of this country.
The record as to what has happened is clear. We have not just criticized the government because the Canadian consumer is paying more; we have outlined a method by which the Canadian consumer would benefit from lower car prices. What my hon. friend from Oshawa-Whitby has proposed is that we give to the individual Canadian consumer the same right as we have given to the "Big Three" automobile companies. We permit them to manufacture cars in the United States and bring them into Canada without paying excise duty of 15 per cent.
The fact is that the Canadian subsidiaries of these multinational automobile corporations have been overcharging Canadian consumers. They have been making exorbitant profits. We are saying that if the Canadian consumer can go to the United States and purchase a car without paying the duty, the Canadian subsidiaries of the big automobile companies should be obliged to reduce the price they charge the Canadian consumer by the amount they overcharge, which is demonstrated to be between $250 and $300 per car.
The hon. member for Windsor-Walkerville has trotted out the bogey that if you do that, United States manufacturers will simply cut out production in Canada. I suggest that no corporation, having invested billions of dollars in plant and equipment in this country, will stop production. They want a return on their investment and they are entitled to a legitimate return. We are objecting to the exorbitant profits they are making.
There is, I realize, a problem. We have the nonsense of Senator Hartke to deal with, and the protectionist sentiment which is growing in the United States. So what my hon. friend suggests is that we protect the Canadian auto industry by renegotiating the automobile agreement in such a way that Canadian production and the Canadian value added requirement would be dependent, not upon production in Canada, not upon the consumption of cars

March 13, 1973
Canada-United States Auto Pact
built in Canada but on the consumption by Canadians of cars purchased anywhere in North America. If this were done and the minimum production floor were based on 1972 rather than 1965 levels, we could reduce the price of cars to Canadian consumers and protect the jobs of Canadian workers.
I do not believe the United States government would object too strenuously to this kind of negotiation, because it is not that government which would be hurt; it is, rather, the Canadian subsidiaries of the United States corporations-and I do not think that even President Nixon worries too much about them.
There is one more thing which this proposal would do. According to statistics given us by the minister's department, somewhere between 20 and 25 per cent of all new cars purchased in Canada are imported from countries such as Japan, Sweden, Germany and Italy. That is almost twice as high as the percentage of new cars this country imports from the United States. I suggest the reason for this disparity is the exorbitant and excessive price charged the Canadian consumer for these new cars. I suggest that if we forced these companies to cut back on the price, Canadian consumers would in increasing numbers buy Canadian-built cars. I suggest this would be good for the companies, good for the consumers and good for Canadian automotive workers.
The hon. member for Windsor-Walkerville said one correct thing when he suggested that this proposal was worthy of study. I suggest to the minister that he give it a great deal more study than the non-studies we have had from him up to now.


Hon. Herb Gray (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I want to make a few brief comments about the motion before the House. In listening to the hon. member for Oshawa-Whitby (Mr. Broadbent) it was interesting to note his support for the auto pact and his recognition of the benefits it has brought Canada and the United States as well. This was a pleasant contrast to the scepticism and doubt about the auto pact which characterized NDP remarks about it in this House in 1965, after the Liberal government had taken the initiative to negotiate the pact with the United States and announce it earlier that year. Now even the NDP has been forced to admit that on balance the pact has worked well for Canadians generally and for cities like my own city of Windsor particularly.
The hon. member for Windsor-Walkerville has put on the record some of the good results in terms of production and jobs the auto pact has brought to the Windsor area. We have had information provided by the distinguished predecessor to the Minister of Industry, Trade and Commerce. We learned that from 1964 to 1971 there were 20 new automotive parts manufacturing plants established in the Windsor area and almost 50 expansions of existing plants, which created some 5,000 new jobs.


An hon. Member:: What about your constituency?


Herbert Eser (Herb) Gray: The hon. member for Winnipeg North (Mr. Orlikow) seems unhappy about all these changes and

improvements as a result of the auto pact, which he seems to question now as he did back in 1965. He spoke again about duties not collected, forgetting that new investments over the years since 1965 on the part of automobile companies and parts plants have far exceeded any possible amount of duties not collected.
I might say, as one of the Members of Parliament for the Windsor area like my colleague the hon. member for Windsor-Walkerville, and as a member of the government that it has been and continues to be my aim to work for the protection and advancement of the interests of the workers in my community and their families, and the workers and their families in similar communities across this country. This is the aim of the government as well.
As the Minister of Industry, Trade and Commerce (Mr. Gillespie) has pointed out, it is also the aim of the government to work continuously to bring Canadian automobile prices closer to automobile prices in the United States. And as he has said, there has been progress in this area. I am encouraging and supporting the efforts of the minister to bring about further progress in getting prices of cars to Canadians much closer to those of the United States.
The Minister of Industry, Trade and Commerce has confirmed the position of the government not to agree to changes in the pact adverse to the interests of Canadian workers and in fact to strive for improvements in it in the interests of auto workers and all Canadians. In connection with the auto industry, therefore, the government has been working continuously to protect and advance the interests of Canadians generally as workers and as consumers. I therefore ask this House to give the government its support in these efforts.


John Edward Broadbent: Mr. Speaker, before the minister sits down I wonder whether he would care to comment on the specific proposals before the House? Some hon. members of his party have expressed interest and agreement in them, and others have raised questions. I would be very interested to hear what the minister has to say.


Herbert Eser (Herb) Gray: Mr. Speaker, I think the proposals the hon. member for Oshawa-Whitby has brought forward are worthy of consideration. I am very glad to see his support, unlike some of the people in his party, for the efforts of Liberal governments working in the interest of auto workers and Canadians generally, whether they be workers or consumers, to improve the automobile industry in this country.


Derek Nigel Ernest Blackburn: Mr. Speaker, we have heard a lot of speeches today about the auto pact agreement which goes back to 1965. We have heard those who spoke for it, those who spoke against it and those who are waffling in between. If we listened intently to speakers on the government side we would be under the impression that this was the greatest thing that ever happened to Canada. The important thing is that this is one of the most vital manufacturing industries in this country, which produces a tremendous number of jobs. If the safeguards are taken out of the agreement as far as production levels are concerned, this industry will suffer terribly and we will be forced to go back and hammer at the minister responsible for the Unemployment Insurance Commission.
March 13, 1973

Because we have heard a lot of speeches this afternoon and this evening, I do not intend to prolong this debate. I will not speak at length on this motion as many hon. members from all parties have done so already. I do wish to speak about one or two related issues which I feel are of prime importance to Canada as a whole and to consumers and auto workers in particular.
It seems to me that in general economic and industrial matters we in Canada are always taking a back seat to our United States neighbours, and perhaps I should say our United States entrepreneurs to the south. Whenever there is a crisis in trade or monetary matters, it is we who go cap in hand to Washington to come to some agreement in these areas. I certainly hope the Minister of Inudstry, Trade and Commerce (Mr. Gillespie) will not bow to United States pressure over the automotive agreement signed in 1965. If he does, Canadian consumers of automobiles, and auto workers in Canada will suffer. As I said earlier, if this does happen many more workers will be added to the unemployment insurance rolls.
It appears to me that if the so-called safeguards in the auto pact are abolished, Canadians will continue to pay from $200 to $300 more for a car purchased in Canada than our United States friends pay for the same type of car when it crosses the border and is sold in the United States. I find this situation deplorable. I do not know why this government in the past eight years could not have renegotiated the agreement and avoided that kind of travesty.
When one considers that an academic study carried out last year revealed that the four major automotive companies, Ford Motor Company, Chrysler, General Motors and American Motors charged their dealers in Canada about $250 more for a standard, identical car produced in Canada than is charged in the United States, one wonders what advantages accrue to the Canadian consumer or the Canadian car buyer even with the present safeguards. This is totally unfair and I suggest many people in Canada are becoming completely fed up with the unfair situation. I should like to ask a simple question: Why does the federal government allow this travesty to exist when involved are the same parts, the same materials and the same or even slightly lower wages in Canada? Even with this situation, we in Canada pay substantially more under this supposedly free trade agreement. I mentioned a short while ago the $100 tax credit. If a person purchases a small American car made in this country, the extra money he would pay would wipe out that $100 tax credit which is mentioned in the budget.
If I might refer to the remarks made earlier today made by the hon. member for Oshawa-Whitby (Mr. Broadbent), he said there is no economic justification for this pricing policy. In point of fact it is sheer corporate profiteering at the expense of the Canadian public. Several years ago a one-man royal commission on the automotive industry said that it would be disastrous for Canada not to have safeguards in the automotive trade agreement with the United States. When we deal with such large job-creating industries as General Motors, Ford, Chrysler and American Motors which are almost 100 per cent American owned, there would be no guarantee that Canada would
Canada-United States Auto Pact
get her share of future growth in the automotive industry or that current production levels would be maintained; hence the production safeguard principle in the pact.
When looking at the excessive profits reaped by just one of these oligopoly-controlled industries, Ford, one finds that the unit profit of that industry in Canada was $222 higher than the per unit profit of the American parent. The other companies would be similar, in my opinion. The per unit profit for Ford of Canada increased in each of the four most recent years for which figures are available: in 1968 it was $117; in 1969 it was $164; in 1970 it was $153; in 1971 it was $228. The figures are obviously approximately the same for Chrysler and General Motors.
On the other hand, the duty remissions which the companies got from the Canadian taxpayer as a result of the pact were as follows: Ford, $176,614,083; American Motors, $3,135,075; Chrysler, $1,992,602; General Motors, $1,388,150. I am wondering whether any of these corporations are on the list of 95 corporations from which the Liberal Party receives its political slush funds, and the Tories too; let us not forget them.
Let us look at the situation in Talbotville where Ford of Canada has been manufacturing for some years a small compact car, I believe called the Pinto. The men who produce this automobile in Canada have to pay $200 to $300 more than the same car manufactured in Canada sells for in Detroit; and that car has to be transported some 125 miles from the production plant in Talbotville to the car lot in Detroit. Is this economic justice? The Liberals have allowed this situation to exist year after year. I have yet to find a reasonable explanation for this anomaly and for this travesty.
The budget gave taxpayers a $100 tax credit and all the people of Canada thought it was great. We thought it was good, too, considering the fact that we had finally convinced the Liberal government that tax credits were far superior to regressive basic tax reductions. But those who purchase a Pinto in Canada lose that tax credit and more because of the present ridiculous pricing of Canadian-built cars vis-a-vis the United States.
This may be the right time to begin producing an allCanadian car, not just for nationalistic reasons-indeed, I hope not-but a family car designed and engineered in Canada and built by Canadian workers. When I refer to workers I am not referring merely to those who work on the assembly line; I am referring also to the designers of cars, the engineers and the technical people involved. Must we continue to be the child of our great United States "big daddy"? If Sweden, approximately one-third the size of Canada, can do it and become world renowned for so doing-not only for building cars but for building engines, including marine engines-what is the matter with us?


Stanley Ronald Basford: Mr. Speaker, I wonder whether the hon. member would permit a question? The hon. member is castigating Canadians for not being innovative in this area. I wonder whether he is familiar with the urban car developed by the engineers at the University of British Columbia, in Vancouver, a car which in terms of performance could set the pattern in North America in respect of

March 13, 1973
Canada-United States Auto Pact
what a modern urban vehicle should be? This is what we in British Columbia are doing, Mr. Speaker.


Derek Nigel Ernest Blackburn: I will reply to that, Mr. Speaker. I was not aware of the particular automobile. However, I do not see it on the streets of my city of Brampton, I do not see it on Bloor Street in Toronto and I do not see it in Winnipeg. Where is it? Is it in a museum? Why has it not been produced?


Stanley Ronald Basford: When the west takes over, you will see it.


Derek Nigel Ernest Blackburn: We are still waiting. I would like to know when that car was first invented. Was it five years ago, ten years ago or two years ago? That is a great question. Mr. Speaker, the minister is asking us to accept nothing, because it is in a museum right now. Our own entrepreneurs and engineering people apparently cannot find the ingenuity and the money in order to go ahead and produce that car.
I would also like to comment on the extra cost that Canadians face when buying an automobile in the west. Why should westerners pay more-simply because they are Canadians living farther away from the automobile manufacturers in central Canada? Cannot we adjust freight rates to accommodate our fellow citizens who happen to live in the west or in the Maritimes? What is wrong with the proposal to set up different freight rates?
Another concern of mine relates to the farm implement industry. This concern is very close to me because my home town of Brantford is a major manufacturer of farm implements. If the safeguards in the auto pact go down the drain, will the U.S.-Canada agreement on the manufacturing of farm implements follow? It may not follow overnight but it may follow within five or ten years. If the auto pact safeguards are eliminated under U.S. pressure, will the old agreement regarding the farm implement manufacturing industry be next? I believe that this would have very grave implications for the employees of White-Cockshutt and Massey Ferguson industries in Brantford, the latter being a Canadian-owned corporation. In fact, it would turn Brantford into a ghost-town.
May I say in conclusion that I feel that at present we are ready to sell out to the United States certain safeguards in the auto pact, which will eventually have a detrimental effect both on our consumers and our auto workers. I sincerely hope that the government will keep Canada in mind as the negotiations continue. It seems to me that in all fields of manufacturing, particularly so far as natural resources are concerned, we are constantly selling out to the much more powerful nation to the south. A good time to stop this is right now when the auto pact safeguards are up for grabs-for American grabs!
Let us not become angry and irritated, or in fact irrational. Let us all begin to think in terms of economic and monetary justice in an objective, mature and realistic manner. We do not hate the Americans, but we will be damned if we will continue to live every day under this threat of American domination when I am convinced that we have the manpower, the ingenuity and the will in this country, and indeed we have the capital, to go ahead and

make something for ourselves in this world, not in a chauvinistic way but in a creative and competitive way. This is what we need, and we have not been getting it from this government for the past ten years.


Mr. A. D. Hales (Wellington):: Mr. Speaker, I am very happy to be taking part in this debate on the supply motion introduced by the hon. member for Oshawa-Whit-by (Mr. Broadbent) and his party. However, I am at a loss to understand, in the knowledge that we could vote for such a motion, why the hon. member did not introduce it as a non-confidence motion. Let him not say that he could not do it because of the rules, because the rules do not prohibit his party from introducing a non-confidence motion if they wish. Their House leader had only to make arrangements with the other House leaders that they be granted one confidence vote; they would have had to give 24 hours written notice, after which they could have presented a non-confidence motion here today. However, they did not see fit to do that. They continue to talk and condemn the government but they do not speak in accordance with the way in which they vote.
However, we have had a good discussion here tonight on the Canada-U.S. auto pact. I think it is one of the best opportunities we have had to discuss this important subject matter. Everybody seems to be pretty well in accord regarding the Canada-U.S. auto pact, not necessarily so far as all its features are concerned, but in agreement with most of them. But if it is so good, may I remind the House that it was the late Mr. Nowlan, then minister of national revenue, who realized the seriousness of the situation in the car industry in Canada and the great imbalance of trade which we had at that time. Therefore he appointed a one-man commission composed of Professor Blake. Those were the days when we did not hear about white papers, task forces and all those things which we hear about so much today.
Professor Blake of the University of Toronto conceived a very interesting idea which he presented to the manufacturers of auto parts in Canada, that the duty on every car engine that was imported to Canada, assembled and then exported be remitted. This plan proved to be very successful. Then the Liberal party came to power and we had what we called the "Drury Mach I" version of the auto pact. This Mach I version was simply an extension of the Blake formula. It was very successful until one of the companies manufacturing radiators in the United States objected and took their case to the U.S. Supreme Court. Rather than lose the case, Canada withdrew and sat down to negotiate the Canada-U.S. auto pact. That is, in brief, the history of this pact.
When I say we have had a good discussion of this matter today, I must point out that we certainly did not have an opportunity to discuss the subject when the Canada-U.S. auto pact was first introduced by order in council. The late Mr. Pearson and some officials of the Department of Industry, Trade and Commerce flew to President Johnson's ranch, and after being wined and dined they signed the treaty. I suppose they were first told that it was a good thing for the "Big Three" car manufacturers. So the treaty was signed and brought back to Canada but we, the elected representatives of the Canadian people, never had an opportunity to debate the treaty.
March 13, 1973

It is interesting to refej~ to history once in a while when you speak of such things as treaties. I was interested to learn that Mr. Mackenzie King, in June of 1926, had the following to say:
-before His Majesty's Canadian ministers advise ratification of a treaty or convention affecting Canada, or signify acceptance of any treaty, convention or agreement involving military or economic sanctions, the approval of the parliament of Canada should be secured.
My, how things have changed since the present government has taken over! On April 12, 1928, in the course of a debate on the international sanitary convention, the same right hon. gentleman said this:
I submit that the day has passed when any government or executive should feel that they should take it upon themselves without the approval of parliament, to commit a country to obligations involving any considerable financial outlays or active undertakings. In all cases where obligations of such a character are being assumed internationally, parliament itself should be assured of having the full right of approving what is done before binding commitments are made. I would not confine parliamentary approval only to those matters which involve military sanctions and the like. I feel parliamentary approval should apply where there are involved matters of large expenditure or political considerations of a far-reaching character.
Those were the words the late Mackenzie King used. I hope you will pardon me if I wander a little off this subject, Mr. Speaker, but recently the government decided that a peace corps should go to Viet Nam. That was a treaty or arrangement-I don't know which-that was never discussed in this House. But after our troops were sent over there the government invited us to go along and see how things were making out. I repeat that we never had a chance to discuss it. My, how things have changed! Is that how the Canada-U.S. auto pact was brought about?
The auto pact has had a stormy passage. It has had its ups and downs, its arounds and abouts. It has had its good points and its bad points. It has been called a free trade treaty. I ask, free trade for whom? It is free trade for the car manufacturers, but not for Canadian citizens who subsidize the program. They are not getting the benefit of the free trade operations. It is certainly free trade when an American can come over to Canada, buy a car here and take it back duty free. But no American would be foolish enough to do that because he would have to pay more for his car here than he would pay in the United States. But if Canadians go to the United States and buy cars there, they have to pay 15 per cent duty when they bring those cars back to Canada.
The auto treaty will never be successful until there is at least parity of price between what the Canadian has to pay for a car manufactured in Canada and what the American has to pay for the same type of car when he buys it in Detroit. Why should we have to pay $300 or $400 more for a car made here in our own backyard when, after transporting it 300 miles across the border, Americans can buy it there for $300 less?
When this car treaty was introduced, Canadians agreed to cut tariffs by $50 million a year. Each and every year the car treaty has been in effect we have forgone that $50 million in tariffs. On top of that we give the car manufac-
Canada-United States Auto Pact
turers a considerable remission in duties. I am not going to belabour the House with all the details, but $80 million was given to one car manufacturer. This was brought to the attention of the House by the Auditor General. When the public accounts committee looked into the matter it uncovered a lot of interesting information, part of which has not been reported back to the House even to this day. The Auditor General said on that occasion that he does not audit the books of Canada except according to the legislation laid down by parliament. He does not audit those books according to notes, memoranda or letters written by people in high places.
This was the method by which the car manufacturers obtained their remission of duty. A letter was written by one of the companies and it was responded to by the then minister of industry. The government should have amended the treaty in such a way that the Auditor General could look on the transaction as straightforward, but there was an oversight on the part of the government. The pact was not amended and those remissions of millions of dollars were still given to the car manufacturers.
Along with that little bonanza, plus the $50 million tariff cut, there is now the DISC program. On March 17, 1972, the then minister of industry, trade and commerce was asked if the American car manufacturers were using the DISC program and he advised this House that they were not. But a week later he advised the House that he had misinformed it and that the American car manufacturers were using the DISC program. No apology was forthcoming from either the car manufacturers or the minister. The DISC program gives American car manufacturers a tremendous advantage. I maintain that they have no right to use it when they still operate under the Canada-U.S. car pact. Now they are getting things both ways, using DISC and the auto pact. To the best of my knowledge, they are still using DISC. I would like the minister to correct me if that is not the case.
But despite the advantages and the subsidies which the car manufacturers are getting, Canadians still have to pay more for a car made in Canada than Americans pay for the same car in their country. You cannot blame the Canadian people for being annoyed at this. People talk about the great advantages of the car pact. I realize that we have corrected our imbalance in trade, in dollars and cents, but when we ask whether we have improved our trade balance so far as manpower is concerned, a big question mark remains.
Everybody realizes that the major components of cars, such as differentials, transmissions and carburetors- those parts which require a lot of man-hours to manufacture-are made in the United States, brought into Canada duty free and here assembled in cars. We are nothing more than a bunch of "puter-oners" of nuts and bolts. This is a disgraceful situation. We are entitled to a higher ranking in the technological field than that of "puter-oner" of nuts and bolts. We should be making these parts in Canada.
The latest figures I have show that from January to June, 1971, we imported $1,208,540,000 worth of automotive parts from the United States and we exported automotive part to the United States worth only $660,385,000. In other words, we import about 200 times more value

March 13, 1973
Canada-United States Auto Pact in parts than we export. That proves beyond a shadow of doubt that we are importing the major components of cars and that we are purely and simply assembly-line operators. I am sure this situation can be remedied.
I see that my time is almost up, Mr. Speaker. There are other matters I should have liked to have gone into, but I will simply say that I hope the minister will not weaken one bit on the stand he takes with his American counterparts when negotiating this treaty. Goodness knows, it is two years overdue now: it was a five-year pact, due to be renegotiated in 1970. The minister must be firm in these deliberations; he must not give an inch on the safety factors involved nor the Canadian content. I know we are well over the market now, but the time will come when we will not have the great surplus we have had in the past, and those safety features must be retained. When it comes to trade, I hope the minister remembers that we are the proud possessors of a great wealth of natural resources and that he has one of the best bargaining clubs held by any Canadian minister.


Herb Breau: Mr. Speaker, the government welcomes the motion before the House, for it gives us the opportunity to talk about the auto pact and to tell the House and the general public how this agreement, which was proposed by a Liberal government, has been to the advantage of Canadians and how we expect it to continue being so.
Although the motion itself is somewhat lacking in coherence, the subject is definitely welcome.
The hon. member for Charlevoix (Mr. Caouette) spoke this afternoon about the problem of the snowmobile industry. It is clear that the industry is experiencing growing pains at the moment, but I think that was to be expected because there is less consumer demand, for several reasons. The sport has spread tremendously, for one thing, and also people are now worried about the ecology and about the environment in general, which means that the industry is going to have difficulties, not too serious ones I hope, and will have to adapt to the change in consumer attitudes.
However I should like to remind the hon. member for Charlevoix that there is a considerable export surplus of Canadian snowmobiles, amounting to over $50 million in 1972.
It is true that, as some hon. members have said recently, snowmobile imports have risen, but exports have also risen. The main reason for the rise in imports is consumer preferences.

Mr. Speaker, as I said a while ago, it is nice to speak on this motion and to see that all parties in the House agree that it was a good agreement that Canada entered into in 1965. It is also nice to see that once again the Liberal party at that time fulfilled its role as the party of the sixties.


An hon. Member:: That is what you are-the party of the sixties.


Mr. Baker:: The 1860s.


Herb Breau: It is nice to remind hon. members that the Liberal Party brought this agreement about and is still very proud of it. I am glad that members on all sides of the House agree with the agreement.
Mr. Speaker, the Liberal party was the party of the sixties for the automobile industry and from the point of view of industrial policy for Canada and good social policies. All that we discuss in this House lately is reaction to what the Liberals have done in the past and what they are doing now. Once again, we have political parties not coming out with new programs but just responding or reacting to what the Liberals do. This is very significant in Canadian politics-in the sixties as in the seventies- because when we speak about social policy, industrial policy, all the other political parties have to do is react or respond to what we propose. We are very happy to be in that role because we believe it is the real role of the political party.
Some hon. members have tried to make the case that the auto pact was not a success or should have been more of a success because there is a price differential between cars bought in the United States and cars bought in Canada. Some members of the Conservative party have brought up that point, as have members of the NDP. The response to them would not be the same-


An hon. Member:: After all, they are your friends.


Herb Breau: No. the Conservative party, with the influence of the same people on the front bench, happened to be in power from 1958 to 1962 and they were kicked out in 1963. Mr. Speaker, when the Tories were in power the price differential was not of the order of $200; it was of the order of $500 or $600!


Some hon. Members:: Hear, hear!


Herb Breau: Now I come to the other response that the new members of the Conservative party also make because they come out with the price differential at the retail level. That is pretty smart, Mr. Speaker, but it is a distortion. The hon. member for Wellington (Mr. Hales) spoke about the retail level when he talked about a Canadian buying a car from a dealer. Then the hon. member for Fraser Valley West (Mr. Rose) tried to make a case about consumers on the west coast. He did not speak about the factory level; he spoke about wholesalers.
He went even further in trying to distort the facts or confuse the issue and brought in the fact that Canadian consumers have to pay higher interest rates for financing. I suggest to him that he should have a little discussion with the premier of his province who is responsible for this. Interest rates and insurance costs in this country are provincial responsibilities and a lot of the provincial governments are of the same political colour as the parties opposite. Therefore I suggest he should make that argument to them.


John Edward Broadbent: A question of privilege, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Oshawa-Whitby (Mr. Broadbent) has a question of privilege.

March 13, 1973


John Edward Broadbent: Mr. Speaker, I am sure the hon. member for Gloucester (Mr. Breau) would not willingly misinterpret the points made by the hon. member for Fraser Valley West (Mr. Rose), who was not talking about the general problem of interest rates but was saying that low-income Canadians who had to pay excessive amounts for cars because of this government's policy were forced to do so because of the high interest rates.


Mr. Deputy Speaker:: Order, please. It seems that this occurs quite frequently; hon. members use alleged questions of privilege and alleged points of order to deal with what is substantially a question of debate. The hon. parliamentary secretary to the Minister of Industry, Trade and Commerce (Mr. Breau).


Herb Breau: If the hon. member had been patient, Mr. Speaker, I was going to come to that question. We admit that there is a price differential at the factory level.


An hon. Member:: That is what he is talking about.


Herb Breau: No. The hon. member for Fraser Valley West (Mr. Rose) and the hon. member for Oshawa-Whitby should check the record. The hon. member for Fraser Valley West asked why the Canadian consumer had to pay so much at the dealer level-


John Edward Broadbent: He was referring to the price differential the consumer has to pay.


Herb Breau: -for a Canadian-produced automobile. Then he said that over and above the price differential which the Canadian consumer must pay for the car, he must pay another differential in finance charges and insurance. That, I submit, was distorting this debate. He was confusing the issue since many of the areas he mentioned are matters of provincial and not federal responsibility. The dealer's price has nothing to do with the price at the factory level. The hon. member for Oshawa-Whitby suggested that if the federal government has responsibility for pricing, it is for pricing at the factory level-


An hon. Member:: Why do you say that?


Herb Breau: -because the price at the factory level is a matter of federal responsibility. The hon. member for Brant (Mr. Blackburn) talked about the poor Canadian consumer having to pay so much for a car. Yet not one member of his party, so far as I can recall, even mentioned the 12 per cent federal sales tax.


David Orlikow: We talked about that.


Herb Breau: No, Mr. Speaker, I submit that not one member of the NDP mentioned that this afternoon; and not one member of the Conservative party mentioned it.


Donald Alex Blenkarn: I think they did.


An hon. Member:: Why don't you check the record?


Herb Breau: We will check the record.
Canada-United, States Auto Pact


An hon. Member:: You were talking about the manufacturer's price.


Herb Breau: Mr. Speaker, the price at the factory level does not include federal sales tax. I will speak about the price differential that existed between 1964 and 1972.


An hon. Member:: Well, get on with it.


Herb Breau: There was a big difference. We should not try to confuse and distort the facts-


John Edward Broadbent: That is what you are doing.


Herb Breau: -by talking about the price of cars and-


Mr. Deputy Speaker:: Order, please. I have heard what the parliamentary secretary has said so far, but I think I would be somewhat lucky if I had heard all his words spoken recently. I ask hon. members of the House not to respond to everything that the hon. gentleman says.


Herb Breau: Mr. Speaker, I am happy that hon. members are listening. Sometimes it becomes monotonous when hon. members will not listen.


David Orlikow: We are listening right now.


Herb Breau: I am very glad.


John Edward Broadbent: Please stick to facts.


Herb Breau: The fact is that there is a gap at the factory level-


Some hon. Members:: Hear, hear!


Herb Breau: There is a difference of 8.5 per cent. I emphasize, it is not at the retail level; it is at the factory level.


David Orlikow: We said that.


Herb Breau: All right; but the hon. member should make sure that the next time he speaks about the price of cars he mentions that this differential exists at the factory level.


Donald Alex Blenkarn: So what are you going to do about it?


Herb Breau: In 1964, when the hon. member's friends were in power, the price differential at the factory level was 17 per cent. That is what it was just before 1964. The Liberal party came to power in 1963 and within a few months it said, "We must do something about this problem." We did something, Mr. Speaker, because now the price gap has shrunk from 17 per cent to 8.5 per cent.


John Edward Broadbent: That is fine, but remember the gap is still 8.5 per cent.


Herb Breau: And the gap will shrink even more.


David Orlikow: Not under this minister.


Herb Breau: The Minister of Industry, Trade and Commerce (Mr. Gillespie), immediately after being sworn in said he would deal with this problem.


David Orlikow: And what did he do?

March 13, 1973
Canada-United States Auto Pact


Herb Breau: Within weeks of his appointment he obtained a public commitment-


An hon. Member:: Don't blush when you say that.


Herb Breau: -from the automobile manufacturers that they would not increase the price, for economic reasons. That commitment did not include extra money that would be charged for emission controls, anti-pollution devices and safety devices. It covered economic reasons.


David Orlikow: That is why you pay more than $200 more for a car in Canada.


Herb Breau: The hon. member does not support emission controls and anti-pollution devices?


David Orlikow: Yes.


Herb Breau: Well, you people should make up your minds; either you agree with these devices or you do not. Even though they have asked in their testimony given before the United States prices commission for a 3 per cent increase, the automobile manufacturers gave a public commitment in this country not to increase the price of 1973 models in Canada. They gave this commitment even though they wanted to increase the price of 1973 models by 3 per cent.


An hon. Member:: The companies have lied before and they may continue to lie.


Herb Breau: One can assume that if they had wanted to increase the price by only 3 per cent the price differential would have shrunk. If they can increase the price on one side of the border by 3 per cent, it means that the price differential here has shrunk by 3 per cent.
The other commitment the automobile manufacturers gave to the Minister of Industry, Trade and Commerce was that in subsequent years they would take into consideration the intention of this government to reduce the price differential. In other words, they have given a commitment that they will work toward shrinking the price differential between United States and Canadian cars. So, Mr. Speaker, that famous price gap has been reduced from 17 per cent to 8.5 per cent and because of the actions of the Minister of Industry, Trade and Commerce the price spread will be reduced further. The Minister of Industry, Trade and Commerce obtained those commitments immediately after his appointment. I think it is important to remember that.


John Edward Broadbent: Don't blush.


Herb Breau: I notice that the members of the Conservative party did not have much to say in this debate.


Some hon. Members:: Oh, oh!


Herb Breau: The hon. member for Halton-Wentworth (Mr. Kempling) said that the government employs skilled negotiators but that the Tories should be in power. Let us remember that when they were in power before 1964 the gap was 17 per cent. All the Conservatives did in this debate was compliment the Liberal Party for the good auto pact and for having such skilled negotiators. I was
(Mr. Orlikow.]
happy to hear Conservative members say that. Some said that the pact is of vital importance to our secondary manufacturing industries. We agree, and we are happy that they agree with us.
I now come to the proposal made by the hon. member for Oshawa-Whitby. I find it interesting. If I understood him correctly, he is all for abandoning the safeguard provisions of 1964. As I understand it, he proposed other safeguards. Jean-Luc Pepin said for two or three years, as others have said, that they are not important and they were not a significant factor in the negotiations. It is clear that the hon. member for Oshawa-Whitby retracted the comments he made in the last two or three years. He suggested that the safeguards are not good any more and that we need new safeguards.


John Edward Broadbent: On a point of order, Mr. Speaker, I think I am on solid ground in saying that the hon. member is attributing words to me that I did not utter. The point I made was not that we should abandon the 1964 safeguards; it was, and I hope the hon. member was listening, that instead of abandoning them we should raise the level of safeguards from the 1964 level to one applicable in 1973. Even for a Liberal member that should be reasonably easy to grasp.


Herb Breau: The hon. member should have made that clear in his speech, because that is not what I understood him to say. I contend that the hon. member is no longer saying what he has said for two years. He has changed. We are happy to see it because we hope that all parties will follow the Liberal party in its thinking. We are happy to see this development. The hon. member said that we should abandon the tariff protection affecting consumers-I am trying to remember what I heard the hon. member say. He said we should include those cars that are bought by Canadians in the United States as consumption from the point of view of calculating the production and consumption safeguards. The hon. member went on to another safeguard which would raise the value of the Canadian content from the 1964 level to the 1972 level. I listened to the hon. member.


Some hon. Members:: Hear, hear!


Herb Breau: The hon. member said that he was not in favour of abandoning any safeguards. He certainly abandoned his insistence that the 1964 safeguards be kept. He now wants to have another level of production for 1972. I just want to make sure that the hon. member is adopting a more realistic and practical policy on this question. What happens if we reduce or abandon the tariffs and do not get to the safeguards? Is this a packet? The hon. member said it was a packet.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the parliamentary secretary, but the time allotted to him has expired.


Donald Alex Blenkarn: Mr. Speaker, my remarks this evening will be rather brief as my time is very limited. I wish to correct a few remarks made by the hon. member for Brant (Mr. Blackburn). My understand-
March 13, 1973

ing is that the cost of automobiles throughout Canada is the same and that delivery charges in Canada from the plant to the various outlets are prorated across the total production costs. There may be some differences with respect to the price that individual dealers pay for cars, but that is largely a question of volume. The difference really amounts to a question of competition and volume in the area; it has nothing to do with the price at the plant.


Derek Nigel Ernest Blackburn: Mr. Speaker, I rise on a question of privilege.


The Acting Speaker (Mr. Boulanger):: Is the hon. member rising on a point of order?


Derek Nigel Ernest Blackburn: No, Mr. Speaker, I rise on a question of privilege. This is very important. I made a statement to the effect that car buyers in British Columbia and car buyers in Nova Scotia, generally speaking, have to pay more for automobiles. The hon. member for Peel South (Mr. Blenkarn) just said that this in fact is not true. I wish to have some facts and figures to back up his argument.


The Acting Speaker (Mr. Boulanger):: Order, please. That is more a question of debate than a question of privilege.


Donald Alex Blenkarn: One of the other matters that affects the price in Canada is the fact that distribution, in terms of advertising material, is required in both English and French. From the point of view of this party, that is a proper charge against the price of distribution of cars and should continue. It has something to do with the difference in cost.
These two matters, prorating the delivery cost throughout Canada and the cost of sales material in English and French, cannot in any way explain an 8.5 per cent difference in the cost of automobiles to Canadian consumers. We might talk about a point or a point and a half, but certainly not 8.5 per cent. There is no question, from the information given to us by dealers in Buffalo and other points in the United States who receive cars manufactured in Canada, that cars manufactured here are put together better and are wanted by their customers in greater number than cars manufactured in the United States. Our information is that cars produced in Canada are, in fact, better automobiles.
The minister should have interfered in this matter long ago. He should have got together with automobile companies, which are really a massive oligopoly, and clearly stated that Canadians are not going to be ripped-off any longer by this government or by them.


John Edward Broadbent: It is a corporate rip-off.


Donald Alex Blenkarn: In the long run, in terms of trade, the auto pact with the United States has been of great advantage to Canada. This afternoon and this evening the matter of trade in snowmobiles was mentioned. There is no question that that trade has produced advantages to Canada. However, when we deal with these automobile companies it disturbs me greatly to see the prices of the parts used to put a car together.
Adjournment Debate
The last time I looked at the cost of putting an ordinary automobile together by buying parts from distributors of the three large automobile manufacturers, I found that it would cost between $50,000 and $60,000 to manufacture a car. If the minister and this government had any concern about the cost to the Canadian consumer, they would direct their attention to the rip-off that Canadians are receiving in terms of the activity of the three or perhaps four large automobile manufacturers.
When talking to the leader of one of the automobile companies he mentioned the cost that Canadian production must face with respect to imports from foreign countries. He pointed out that when companies in Japan deliver cars to Canada, the excise of tariff charges are determined on the manufacturing costs, whereas the sales cost or sales tax paid by the manufacturer in Canada not only includes the manufacturing cost but also the cost of the distribution system, auvertising and transportation.
It is clear that this government should listen to the representations of the companies and organize excise charges so that Canadian manufacturers are not discriminated against compared with foreign manufacturers. When the minister is dealing with the automobile companies and forcing them to control their prices, I suggest that he look closely at the excise tax arrangements in connection with charges made on the importation of automobiles.
I note the time is ten o'clock, Mr. Speaker.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Walter C. Carter (St. John's West):: Mr. Speaker, on January 15 I put a question to the Minister of Fisheries (Mr. Davis) in connection with the Law of the Sea Conference to be held in Chile, I believe, in 1974. The question arose out of my conviction-I think it is one which is shared by most Canadians, certainly by those living in the eastern provinces-that this conference is likely to be the most important ever held from the point of view of the Atlantic region and, in particular, the province of N ewf oundland.
The issue of conservation, which will certainly be one of the subjects under discussion, affects directly or indirectly the lives of almost all Canadians living on our east coast. The fishing industry affects, directly and indirectly, virtually every living soul in Newfoundland and Labrador. The fishing industry is the largest single employer in Newfoundland. Of a total work force numbering slightly over 150,000, 20,000 people are engaged in the fishing

March 13, 1973
Adjournment Debate
industry. With this in mind, Mr. Speaker, you will appreciate my concern as to the position to be taken by the government at the forthcoming conference.
I believe we must take a strong and definite position, because unless we can induce other fishing nations to agree to some form of management control and conservation the fishing industry off our east coast will be seriously endangered. If this were to happen, the livelihood of a large segment of our population would be affected and the economy of the region would suffer a serious decline.
As a Newfoundlander, I am especially concerned about this conference for another reason. As we all know, the continental shelf equals about 40 per cent of the land mass of Canada. This is a valuable piece of real estate. For Newfoundland it is particularly important since a large chunk of that continental shelf is on the doorstep, as it were, of my province. I refer to the Grand Banks. In Newfoundland-and I presume a similar situation exists in other eastern provinces-we have seen a very serious decline in total fish landings. The situation has grown progressively worse since 1968. In 1972, the catch showed a sharp decline amounting to approximately 26 per cent compared with 1971. In 1971, landings in Newfoundland were down by 12 per cent compared with 1970. In 1968, the total was 950 million pounds of fish compared with 650 million pounds in 1972. It is therefore not hard to understand why we are so uptight with respect to the forthcoming Law of the Sea Conference.
We want to be sure that Canada's case is well prepared, that our Minister of Fisheries and his officials develop a dialogue with people of the fishing industry. We want to be sure that he will draw upon the most qualified people in Canada in respect of fisheries, and that the expertise of fish merchants in eastern and western Canada is available in order to make sure we present the most solid case imaginable in dealing with foreign nations in an effort to bring about a sane approach to the fishing industry. In that way we could head off what we think, and what scientists tell us, will eventually be the depletion of our sea resources unless the wholesale raiding now taking place by foreign countries off our Grand Banks and continental shelf is stopped.
I realize that the minister has only three minutes in which to reply, but I hope he will give us some idea of what our position will be at the conference. I hope he will tell us whether an agenda has been agreed upon and whether Canada's representatives to the conference have been appointed. I hope he will indicate whether he has sought the advice of the fishing industry-


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


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, the next Law of the Sea Conference is going to be very important for Canada. The main reason is that we have the second longest coastline in the world and the world's largest continental shelf. Much of the world's shipping passes close to our shores. We have a very important fishing industry on both coasts which can also be affected by pollution. Canada's attitude at the next Law of the Sea Conference, therefore, must be that of a nation which is

concerned about the protection of its long shoreline and its large and productive continental shelf area.
This concern can be listed under two headings. The first is protection from pollution, and the other is the wise management and conservation of its fishing resource. Canada co-sponsored the resolution in the United Nations last fall setting up the next Law of the Sea Conference, its organization meeting in New York in November, 1973, and its first substantial meeting dealing with policy to be held in Santiago, Chile, beginning in April, 1974. Canada's position is, and must be, that of a coastal state. This is being re-enforced in two preparatory meetings to be held during the course of this spring and summer, one dealing with marine pollution and the other with fisheries.
In respect of marine pollution, we will be pursuing the principles which Canada sponsored and which were successfully adopted at the United Nations' Conference on the Human Environment, in Stockholm. Essentially, Canada's position was that the interest of a coastal state must not only be protected, but the coastal nation must have certain powers to reach out and, if necessary, to apprehend vessels in trouble, like oil tankers, etc. This is a new power and one that would not have been tolerated by maritime nations a decade or so ago. In any event, that principle is gaining recognition. We hope it will become well established in international law as a result of the next Law of the Sea Conference.
In respect of fisheries, our basic approach is that coastal states should have jurisdiction out to the edge of their continental shelf, and indeed down the slope of those shelves, over all living resources of the sea as well as the mineral resources. That has been our approach and it is the approach we put forward at the FAO conference recently in Vancouver which was attended by all of the fishing nations of the world.
Certain trends are now apparent in preparatory discussions. I will mention only one. It favours the coastal state, and the concept is beginning to be that of an ecological zone about 200 miles seaward from-


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


ADMINISTRATION OF JUSTICE-KILLING OF POLICEMEN-INQUIRY AS TO LEGISLATION TO RESTRICT FURTHER SALE AND DISTRIBUTION OF FIREARMS
Stuart Malcolm Leggatt: Mr. Speaker, on January 17 this year I directed a question to the Minister of Justice (Mr. Lang) which I felt was vital and important, particularly in view of the public concern about safety. This question dealt with the possibility of the regulation of firearms in this country. The question is as follows:
Mr. Speaker, my supplementary question is directed to the Minister of Justice. It is also prompted by the incident-
I was referring to the incident in Toronto of the most recent death of a police officer.
-in Toronto. In view of the increasing homicides occurring as a result of the use of rifles in this country, is the minister considering legislation to restrict further the sale and distribution of firearms?
The minister's answer at that time was:
Mr. Speaker, that question is one which is under constant consid-
March 13, 1973

eration and review. The House had an opportunity to address itself to it not long ago, and the government will be addressing itself further to that question.
I was very pleased, after that question was asked, that on February 22 the hon. member for Calgary North (Mr. Woolliams) asked a similar question of the Solicitor General (Mr. Allmand) whose answer at that time was that this is being considered; in other words, the further control of weapons is being considered. I say this is an important issue because of the volume of mail which I believe all members have been receiving about the concern of the public for the increasing crime rate and the murder rate, which has increased 53 per cent over a period of ten years.
I would particularly refer the minister to the Dominion Bureau of Statistics study for the period 1960 to 1969 which deals with the use of firearms and the number of murders which took place in that period. It is interesting to note that in that period 1,174 people were murdered, with firearms being the weapon. That represented 44 per cent of all murders in that period. Of those murders in which firearms were involved, some 72 per cent involved the use of rifles. The main point I want to bring home to the minister is, as the minister well knows, that the rifle is a completely unrestricted weapon at this time.
I remember having had occasion to defend a young man in British Columbia who attempted to murder his fiancee. He missed her by a very small margin. After investigation it was found that this man had attempted suicide on several occasions. In his home he had at least four rifles, and so far as I know, after having served his sentence he still has complete access to weapons. I believe this represents a serious defect in our laws.
When a person, for example, who has been committed voluntarily to a mental hospital and is released, there is nothing to restrict him from purchasing a weapon should any of his paranoic delusions overcome him and his mental disorder get the better of him from time to time. This happens. There is no law at present which restricts any man from purchasing a rifle. I shall not bore the minister too much longer with statistics.
Needless to say, there is overwhelming evidence that the United Kingdom, which has good, firm weapon control legislation, has a lower murder rate generally in connection with firearms. It is interesting, for example, to compare the cities in the United States. New york, which has a fairly respectable Sullivan law, has a 25 per cent murder rate by firearms, whereas Dallas, where unrestricted use of firearms is allowed, has a rate of 72 per cent of murders by firearms.
Those who oppose the further restriction of weapons usually use the argument that it is people who are responsible for the murders, not guns. This is a fallacious argument because what gun control legislation, in effect, does is to license people. It is almost a euphemism to say that one is licensing guns. The permit to carry a weapon goes to the person. I would think that in any sane, sensible and civilized society a person with a serious history of mental illness, a previous criminal record or a history of domestic instability should be denied access to weapons.
In the city that I represent, the coroner over the past three years investigated 24 homicides, 20 of which were caused by firearms. Some of them were accidental. Never-
Adjoumment Debate
theless, the problem is not insignificant-it is overwhelming. It is estimated that we have six million weapons in this country and about 600,000 registered handguns. Quite frankly, I am tired of the gun lobby.


The Acting Speaker (Mr. Boulanger):: Order, please. I regret to interrupt the hon. member, but his time has expired.


Otto Emil Lang: Mr. Speaker, I appreciate the fact that the hon. member is raising this question again so that I can make our position quite clear in the House-which I certainly made quite clear outside the House and which did not appear in Hansard-that I would not support changes in the law which simply add a tremendous amount of red tape without doing anything to keep guns from people who are dangerous. The hon. member made an interesting case which, if read carefully, shows that murder by knife is a nicer game than murder by gun. I cannot quite see the point of that. The point I am making is that people who are unbalanced may well find another weapon than a gun, and the hon. member has to prove why it is important to go through the whole restriction process and what good it will do us.
There are honourable and honest uses of weapons for hunting, for target practice and in sport. If you want to begin to license everybody and to impose a licensing system, you have to ask what good you are going to do. Are you going to have a situation where people will inevitably, quite innocently, be in possession of guns contrary to the rules? The hon. member proposed Bill C-138, so he turned his mind to the question. In it I see, among other things, that he would make it an offence to even lend a gun to another person without a permit, so that if two of my friends are in the same duck blind together and want to exchange shotguns for one or two moments, they are contravening his rules. Obviously you have to examine and change that. Surely he would admit that thousands of people would be in contravention of this kind of law quite innocently and be good citizens at the same time.
The point I am making is that we are quite prepared to examine this law in order to see whether we could stiffen the penalty in relation to the misuse of weapons. That is the important point. Until it is proven to me that the rules and regulations will in fact do the job, I will not see them in place to hamper and harass innocent citizens. It is of course quite typical of the party which the hon. member represents-I see it in the province of British Columbia and in the province of Saskatchewan-to introduce laws which ban everything and then by permit or special dispensation to someone whom they like we get back a little bit of what has been banned. This kind of rule by decree, by some kind of divine ordinance of some expert, imposed upon the people by an NDP government is seen in B.C. in regard to land, in regard to every new venture. I am not surprised to see it in the hon. member's bill.
I say to him that if he can show me at any time a rule or a change which, without creating a lot of red tape, a lot of harassment, will produce a good result, I will support him on it. We will introduce changes which will improve the protection of our citizens, but not changes which will

March 13, 1973
Adjournment Debate
harass ordinary citizens and force them into a lot of red tape for any apparent purpose which will not be served thereby.


MANPOWER-LOCAL INITIATIVES PROGRAM-REQUEST THAT MEMBERS BE BETTER INFORMED CONCERNING PROJECTS
André-Gilles Fortin: Mr. Speaker, on January 13, 1973, I asked a question concerning the Local Initiatives Program, as can be read on page 771 of Hansard. I then asked that hon. members be better acquainted with the procedure relating to local initiative projects.
Mr. Speaker, in this regard, I will quote some precise facts. On February 16, I wrote to the Minister of Manpower and Immigration (Mr. Andras), responsible before the House for the LIP program, in order to ask him what stage some forty projects had reached. I did not get any answer.
On February 19, I put on the order paper questions Nos. 1010, 1011 and 1016 concerning the development of extremely important projects in my area. I did not get any answer either. However, there seems to be no more money available. According to the minister's statement, the approval period is over and he can give overall statistics to the House.
Moreover, while one hon. member does not know what happened to some projects within his own riding, the hon. Minister of Transport (Mr. Marchand), who has nothing to do with it, is so much aware of what is going on that he can readily write to people and tell them, which is very serious, that the project has been accepted and that it will obtain the funds required for implementation. A few days later the project sponsors receive another letter from the co-ordinator of the Local Initiative Program to the effect that the projects are rejected.
I wish to draw the attention of the hon. Parliamentary Secretary to the Minister of Manpower and Immigration (Mr. MacGuigan) to the fact that it is illogical to give wrong information on the development of a project to hon. members. Whoever we are we have to come up with answers for the project directors. We support the principle of local initiatives and I want this to be clear: We agree to this kind of program. Consequently, it would be normal for the department involved to inform us as to the progress of each project about which citizens inquire. Also we would like to know why certain projects have been rejected and others accepted because, after all, they involve the expenditure of tax money.
We would like to know whether it would be possible to review the local initiative projects. No satisfactory reply can be obtained from the department on this subject. Some say yes, some say no and finally we do not know where we stand. The Minister of Transport could probably obtain this information but hon. members are unable to get it.
I want to protest strongly against this situation. We are not here to play politics, to announce that projects have been accepted or for political gain; we leave this to the government and in particular to the Minister of Transport who is quite successful at it.
We have been elected to serve as a link between our constituents and the department and the government, and, along that line, I intend to act equitably and honestly to the end. This is the reason why I should like to dwell on that point tonight. I can anticipate already the reply of the parliamentary secretary to the Minister of Manpower and Immigration. He will tell me that a special service, a departmental section has been established in order to supply answers to hon. members, that such a service is very good, that the officials are writing hon. members to find out what they think. Mr. Speaker, I swear that we will let him know what we think, for we intend to get replies, not of a political character but of an administrative character, that is to say honest replies, allowing us as members to efficiently serve our people. In that respect, I again offer my co-operation to that department. On the other hand, I expect as much from it.


Mark R. MacGuigan: Mr. Speaker, there seems to be some confusion about the procedure which is followed in letting hon. members know about LIP applications. I regret that I perhaps contributed to this confusion by an answer I gave to the House in the minister's absence on January 30 in which I suggested that members were not being informed. What I had in mind was that they are not informed before the announcement is made, and I think perhaps this confused the issue.
Let me therefore review the procedure, which is as follows. All members of parliament were consulted at an early stage of consideration of LIP projects and then, after the official decision had been made by the department, the members were advised by the special information group of the department of projects approved for their constituencies.
Whenever a project was approved in the constituency of the hon. member for Lotbiniere (Mr. Fortin), he received a letter from the special information group informing him of it. If an hon. member wished to know the status of a LIP application before a decision was made, he had the right to call the special information group. I think the telephone number and address of this group was made available to all members.
When a project was approved, I do not think there was any problem. The difficulty seemed to arise in those cases where the application was not approved as members were not notified of this fact. The extra personnel required to carry out this service would have doubled the staff of the special information group, but personally I believe that members should be so notified in any future program of this kind, even at extra cost. The onus to find out the reasons why projects were not approved was put on members. Within the limitations imposed by the budget for this year, the fact is that every attempt was made to keep members informed on an objective basis of programs which were approved, and in those cases where they were not, members had the right to inquire and be given the fullest information.
Motion agreed to and the House adjourned at 10.29 p.m.

Wednesday. March 14. 1973