1973-11-13

PRESENCE IN GALLERIES OF PROVINCIAL PARLIAMENTARIANS

Mr. Speaker:: May I be allowed to bring to the attention of hon. members the presence in the Speaker's gallery and the Senate gallery of a very distinguished group of fellow parliamentarians from all parts of Canada. These parliamentary colleagues have come to Ottawa to attend during the week the first seminar on parliamentary procedure and practice organized by the Canadian branch of the Commonwealth Parliamentary Association. The participants include the Speakers from British Columbia, Saskatchewan, Manitoba, New Brunswick, Nova Scotia and Newfoundland and they are representative of the provincial legislative assemblies and the legislative councils of the two territories.
On behalf of hon. members I extend a very warm welcome to our distinguished visitors and fellow parliamentarians, and express the wish that their attendance at this seminar will be useful for them and for us and also for the institution of parliament.


Some hon. Members:: Hear, hear!



ROUTINE PROCEEDINGS

[Stage Direction]
[ English]

Mr. Jack Murta (Lisgar):: Mr. Speaker, I rise to propose a motion under Standing Order 43. This matter is of urgent and pressing necessity and has to do with the delivery hold-up in getting western grain off the farms and into the export markets. As a result, Canada's export trade commitments to foreign buyers are endangered while some grain farmers may suffer financial losses because they are prevented from delivering their grain for sale at present higher prices. With consent I would move, seconded by the hon. member for Battleford-Kindersley (Mr. Horner):
That this House recommends that the subject matter of this motion be forthwith referred to the Standing Committee on Agriculture and that the appropriate officials of the Canadian National Railways, the Canadian Pacific Railways, the Wheat Board and the Canada Grains Commission appear before the committee and that, as soon as possible after investigation, the committee report its findings and recommendations to this House.


Mr. Speaker:: The motion is proposed under the terms of Standing Order 43 and requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


MANPOWER
Mr. Bill Knight (Assiniboia):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact local initiatives projects applications are now in the process of being approved, and in view of the fact there are widespread complaints concerning the allocation of funds for such projects per constituency, I move, seconded by the hon. member for Saskatoon-Biggar (Mr. Gleave):
That the House of Commons instruct the Standing Committee on Labour, Manpower and Immigration to immediately review the allocation of funds to the constituencies and the criteria used for disbursement of these funds.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


TRANSPORT
Mr. Frank Howard (Skeena):: Mr. Speaker, I rise pursuant to the provisions of Standing Order 43 on a question of urgent and pressing necessity, namely the continuing shortage of boxcars for the loading and trans-shipment of lumber from British Columbia. Therefore I should like to move, seconded by the hon. member for Nanaimo-Cowi-chan-The Islands (Mr. Douglas):
That this House expresses the opinion that the Canadian National Railways should forthwith take steps to meet the request of the British Columbia Railway for railway cars to be used to

November 13, 1973
Immigration
load and ship lumber for sawmills served by the British Columbia Railway in order that the economy and people should no longer be disadvantaged by the inability of the Canadian National Railways.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.


IMMIGRATION
Mr. Duncan M. Beattie (Hamilton Mountain):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion on a matter of urgent and pressing necessity, namely, that immigration officers across the country are granting landed immigrant status to certain applicants before clearance by the RCMP under Stage B of the 60-day amnesty period. I move, seconded by the hon. member for High Park-Humber Valley (Mr. Jelinek):
That the granting of landed immigrant status to certain applicants without clearance by the RCMP be referred to the Standing Committee on Labour, Manpower and Immigration and that an order be issued to call as witness the Minister of Manpower and Immigration to explain to the committee why the Stage B directive is not necessary in all cases.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: There is not unanimity.

e (1410)
[ Translation]


EXTERNAL AFFAIRS
[Stage Direction]
On the order: Government Notices of Motions: October 31, 1973-The Secretary of State for External Affairs:
That it be resolved by the... House of Commons:
That it is expedient that the Houses of Parliament do approve the Government's decision that Canadian Forces participate in the United Nations Emergency Force in the Middle East, and that this House do approve the same.
And that a Message be sent to the Senate informing Their Honours that this House has adopted a resolution approving of the participation of Canadian Forces in the United Nations Emergency Force in the Middle East, and requesting Their Honours to unite with this House in the approval of the same by filling up the blanks in the resolution with the words "Senate and".
Mr. Speaker:: This notice of motion is transferred to and ordered for consideration under Government Orders at the

next sitting of the House, pursuant to subsection (2) of Standing Order 21.



ORAL QUESTION PERIOD


Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I have a question for the Minister of Finance. Since the seasonally adjusted unemployment rate is high and we have recently been told by the appropriate minister that unemployment insurance costs will continue to run over $2 billion a year, yet the Minister of Finance says the economy is running at or near capacity, can he give us any reason for this situation and, specifically, has his department identified any disincentives to employment or any particular reason for these anomalies?


Hon. John N. Turner (Minister of Finance):: Mr. Speaker, an analysis of the labour force statistics in current terms is being undertaken by the Economic Council of Canada. The current state of the economy is, as the hon. gentleman has said and I have said on several occasions, at or near capacity. Any limitation on growth at the moment is not caused by want on the demand side but by restriction on the supply side. The increase in the strength of the economy indicated by the statistics to which the hon. gentleman has referred I think derives from the fact that the October year over year growth in employment is 487,000 new jobs or 5.8 per cent.


Robert Lorne Stanfield: Mr. Speaker, I have a supplementary question, but I should like to make it very clear to the minister that I was simply referring to his statement that the economy is operating at or near full employment; I was not expressing that opinion myself.


An hon. Member:: Full capacity.


Robert Lorne Stanfield: Full capacity.


Mr. Guay (St. Boniface):: Tell us what you think.


An hon. Member:: Go back to sleep, Joe.


Robert Lorne Stanfield: In view of the minister's indication that one of the things holding back further growth of the economy at the present time is a lack of both skilled and unskilled labour-he said this a few days ago-can he tell us anything his department is doing about this? He has referred to a study being done by the Economic Council of Canada, but is the minister or any branch of the government to his knowledge doing anything to reduce this problem resulting from a shortage particularly of unskilled labour?


John Napier Turner: Mr. Speaker, my colleague, the Minister of Manpower and Immigration, has
November 13, 1973

already indicated to the House that particularly in respect of young workers, both men and women, the problem is matching the available labour supply to the jobs available for both skilled and unskilled labour, and he intends to accelerate the efforts of his department in that respect.


UNEMPLOYMENT INSURANCE
Robert Lorne Stanfield: Mr. Speaker, I should like to direct this question to the Minister of Manpower and Immigration. Specifically, is the rate of unemployment indicated today for October consistent with the minister's forecast of unemployment insurance costs for the year 1973, and will he advise the House what rate of unemployment for November and December would be consistent with the forecast of costs he presented to the House last week?


Hon. Robert K. Andreis (Minister of Manpower and Immigration):: Mr. Speaker, the forecast of costs of unemployment insurance benefit pay-out for 1973 was made on the basis of 10 months of experience and on the assumption that the economy would be performing in the last two months of the year generally at the same rate it had been up to that time.


POSITION OF 1973 ADMINISTRATIVE BUDGET AND COMPUTER INSTALLATION
Mr. J. R. Ellis (Hastings):: Mr. Speaker, my question is also for the Minister of Manpower and Immigration. On November 1 the minister indicated in answer to questions by myself and by the hon. member for High Park-Humber Valley that the administrative budget for 1973 will be met and that the computer installation is complete, indicating that there are no further additions under way. Having had time to investigate and consider his answer, does the minister still stand by those statements?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: Mr. Speaker, my firm expectation is that the administrative budget of the Unemployment Insurance Commission as forecast earlier this year and as approved in the estimates will be met. In so far as computer installation is concerned, I believe I answered a question with regard to the possibility of further major installations and said they were constantly upgrading and improving that operation but that I did not anticipate major installations of the nature that were innovated a year or two ago.


John Raymond Ellis: Mr. Speaker, I ask for your indulgence. I am not sure whether I have a supplementary, a point of order or a point of privilege. I am aware from documents I have in my possession that not only is the administrative budget for 1973 in very serious trouble but that major computer installations are even now being installed in both Ontario and Quebec. I want to know how we can get an honest answer from the minister, Mr. Speaker.
Oral Questions


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


William George Knight: Thank you, Mr. Speaker.


Mr. Speaker:: Order, please. I believe the minister is rising on a question of privilege.


Robert Knight Andras: As is customary, Mr. Speaker, with references to documents, I wonder whether the hon. member would be prepared to table the documents he has referred to as being in his possession.


Mr. Speaker:: Order, please. The hon. member now rises on a question of privilege. I think this might be a good occasion at the beginning of the question period to remind hon. members that if we continue on the road on which we started last week and spend most of the question period on points of order and questions of privilege it is the members themselves who suffer. I would hope we could solve our problems without resorting to points of order or questions of privilege. It seems to me that essentially this is a question of debate between the minister and the hon. member. Perhaps they might have an opportunity to debate the point on another occasion rather than during the question period.


MANPOWER
William George Knight: Mr. Speaker, my question is not about computers but about people. In view of the fact the unemployment rate is running in the neighbourhood of 5.8 per cent as projected today, I should like to ask the Minister of Manpower and Immigration whether he can inform the House, since the amount of money allocated for local initiatives programs is half of what it was last year, if consideration is being given by his department to an increase in the total allocation of funds available so as to ensure that some of these unemployed people will have work this winter?


Robert Knight Andras: Mr. Speaker, I note, first, that the unemployment rate has considerably improved over the position at this time last year. I also believe I have answered the question on two or three occasions recently by saying that if such a decision is made it will be announced in the normal manner in the House.


OIL EXPORTS TO UNITED STATES-GOVERNMENT POLICY IN LIGHT OF STATEMENTS BY MINISTER AND SECRETARY OF STATE FOR EXTERNAL AFFAIRS
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Prime Minister. I should like to ask if the Minister of Energy, Mines and Resources was stating government policy in his com-

November 13, 1973
Oral Questions
ment made to the press as reported on November 6 that "Canada would cut off the export of refined petroleum products to the United States if Arab countries made it a condition for continuing crude oil shipments". May I ask the Prime Minister also if the Secretary of State for External Affairs was stating government policy when he said, according to today's press reports, that "there has been no cabinet decision to freeze consignments refined at Come-by-Chance, Newfoundland, and pre-sold to the United States". Can the Prime Minister tell us whether these two statements represent government policy, or what is government policy?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I understand that the Minister of Energy, Mines and Resources was referring to a particular case in a particular circumstance. The Secretary of State for External Affairs was referring to the general government policy which is one that-


Some hon. Members:: Oh, oh!


An hon. Member:: What is it?


Mr. Hees:: This is doubletalk de luxe.


Pierre Elliott Trudeau: If I get a second question I will answer it, Mr. Speaker.


Thomas Clement (Tommy) Douglas: I hesitate having to use my second question to get an answer to my first question. I would like to ask the Prime Minister if he would care to reconcile these two apparently divergent points of view and tell us what the government's policy is with respect to oil which is being presold to the United States and refined in Canadian refineries such as at Come-By-Chance, Newfoundland?


Pierre Elliott Trudeau: The general policy is that we will not-


An hon. Member:: Make up your mind what you want.


An hon. Member:: The right hand does not know what the left hand is doing.


George Harris Hees: Get back to square one.


An hon. Member:: Start again.


Pierre Elliott Trudeau: -alter our foreign policy or our good relationships with the Americans under any pressure from outside.


Some hon. Members:: Hear, hear!


George Harris Hees: Why are all your members laughing?


An hon. Member:: We are looking at you.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I am sure hon. members are enjoying themselves at present. Perhaps I should not interrupt at this point but allow hon. members to continue to enjoy themselves. However, it seems to me we are not making as much progress as we would have if we were not

quite as noisy as we have been during the last few minutes.


AVAILABILITY OF PRODUCTS REFINED AT COME-BY-CHANCE TO MEET POSSIBLE OIL SHORTAGE IN EASTERN CANADA
Thomas Clement (Tommy) Douglas: Mr. Speaker, perhaps I could try pumping another well that I hope it will be less dry. I have a supplementary question for the Minister of Energy, Mines and Resources.


An hon. Member:: Another dry well.


Thomas Clement (Tommy) Douglas: I should like to ask him whether any of the petroleum products refined at Come-By-Chance, Newfoundland, would be available this winter to meet the needs of the Atlantic provinces in the event there is an oil shortage in eastern Canada?


Hon. Donald S. Macdonald (Minister of Energy, Mines and Resources):: I would remind the hon. gentleman that the refinery is not yet in operation.


Some hon. Members:: Oh, oh!


Donald Stovel Macdonald: If it does go into operation this winter, it will be covered by the export control regime we now have in effect with regard to refined products.


Mr. Speaker:: Order, please. The Chair will recognize the hon. member for Nanaimo-Cowichan-The Islands for one supplementary, the hon. member for Calgary North, and then attempt to complete the first round of questioning by recognizing the hon. member for Shefford.


ARRANGEMENTS FOR TRANSPORTING TO QUEBEC OIL OFFERED BY ALBERTA
Thomas Clement (Tommy) Douglas: In view of the offer by Mr. Getty, the Alberta Minister of Intergovernmental Affairs, to make available to the province of Quebec 100,000 barrels of oil a day, may I ask the minister what arrangements have been made for delivering that quantity of oil to Quebec? Have any tankers been chartered to move oil from Vancouver to eastern Canada, and what capacity will there be in the Trans Mountain pipeline in view of the minister's statement on November 5 that it has a 50,000 barrel spare capacity while Mr. Getty says there is no spare capacity? How does the government propose to deliver these 100,000 barrels a day?


Donald Stovel Macdonald: During the period of time navigation will be open it is anticipated that up to 100,000 barrels a day can be achieved through the Interprovincial Pipeline system and by Great Lakes shipping. At the moment the achieved level is around 55,000 barrels. There is some hope this can be increased subject to the availability of loading facilities. My information from the National Energy Board is that there will be an excess capacity of between 35,000 and 55,000 barrels per day through the Trans Mountain pipeline system for shipment via the Panama Canal to the Portland pipeline or to Atlantic ports, and that a number of companies which are in the position of using feed stock
November 13, 1973

in the Atlantic market are now considering the international charter market for the purpose of obtaining the necessary tankerage for moving it around.


TAR SANDS OIL AND SYNCRUDE PROJECT-POSSIBILITY OF TAKEOVER BY FEDERAL GOVERNMENT UNDER BRITISH NORTH AMERICA ACT
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker,
I would like to ask the Minister of Energy, Mines and Resources a question arising from a news story which has broken just this afternoon. Is consideration being given by the federal government to taking over the Syncrude project and the tar sands under the provisions of section 92(10) (c) of the British North America Act?


Donald Stovel Macdonald: No, Sir.


Eldon Mattison Woolliams: Then I ask the Prime Minister; he has heard my question to the minister. Is any consideration being given to using section (92(10) (c) to take over either the Syncrude project or the tar sands in Alberta and declaring it to be for the good of all Canada?


Pierre Elliott Trudeau: The question has just been answered, Mr. Speaker.


AIRPORTS
Mr. Real Caouette (Temiscamingue):: Mr. Speaker, I should like to ask a question of the hon. Minister of Public Works, or of the hon. Minister of Transport. I understand that they both received a very warm welcome in Sainte-Scholastique last week.
Has the government reached a decision regarding Sainte-Scholastique expropriated owners? Has an agreement been reached with each of them and is the government planning to make final offers to them?


Hon. Jean-Eudes Dube (Minister of Public Works):: Mr. Speaker, nearly 90 per cent of the Mirabel expropriated owners have accepted the government offers. During the weekend, the Minister of Transport and myself proposed five very generous adjustments. They involved an additional $3,000 for removal expenses to all those who have had to move, the interests from 1969, the notary charges for the purchase of new properties, an indemnity to those who lost preferential interest rates and an additional indemnity of 10 per cent for those who had to move within 90 days. These adjustments are very generous and were not stipulated by the previous legislation.


David Réal Caouette: Mr. Speaker, I should like to ask a supplementary. The minister has just said that 90 per cent of the expropriated owners have accepted the government offers. In view of what was offered to them last week, does this mean that this additional $3,000 will be paid to 90 per cent of those who were expropriated?
Oral Questions


Jean-Eudes Dubé: Yes, Mr. Speaker, providing they were owners and resided in their homes.


David Réal Caouette: Then it is not over.


Mr. Grafftey:: It has just begun.


David Réal Caouette: Yes, it has just begun.


THE CANADIAN ECONOMY
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, I wish to direct a question to the Minister of Finance. Since regional unemployment in the Atlantic region has risen 1 per cent as of the October 20 statistics, and since the New Brunswick rate on a seasonally adjusted basis has risen from 7.4 per cent to 10.2 per cent, and the Newfoundland rate has risen from 12.1 per cent to 13.6 per cent, does the Minister of Finance plan to introduce any specific measures to alleviate this serious situation?


John Napier Turner: Mr. Speaker, the winter capital works projects and the LIP projects introduced by my colleague, the Minister of Manpower and Immigration, are directed toward the higher unemployment areas. I should draw the attention of the House to the fact that on a seasonally adjusted basis employment in the Atlantic provinces during the first ten months of this year was up 6.5 per cent over the same period last year, which is higher than in any other area of the country.


Fred Alward McCain: Mr. Speaker, if the hon. gentleman wishes to quote figures we might take a look at the New Brunswick figures as a basis for a further question.


Mr. Speaker:: Order, please. The hon. member will be recognized for his supplementary question, of course, but the hon. member appreciates that the purpose of a question is to seek information, not to convey information to the House. The hon. member is recognized for a supplementary.


Fred Alward McCain: Since this is to be a partisan situation, Mr. Speaker, by all hands on your right, would the minister state why it has been the policy of the government to reduce the allocation for LIP projects in the Atlantic area in view of increasing unemployment?


John Napier Turner: Mr. Speaker, that is not so in relation to the total allocation across the country.

November 13, 1973
Oral Questions FISHERIES


RESPONSE TO MINISTER'S REQUEST THAT RUSSIANS CEASE HERRING FISHERY OFF GEORGES BANK
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is for the Minister of Fisheries. Last month the minister indicated in a release that he was asking Russia to stop fishing for herring off Georges Bank. Has the minister had a reply and, if so, what was it?


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, the Russian fishing vessels in question immediately departed and we have not seen them since. I am still awaiting an official reply from the Soviet government.


Fred Alward McCain: On a point of order-


Mr. Speaker:: Order, please. The hon. member for Carle-ton-Charlotte rises on a point of order.


Fred Alward McCain: Mr. Speaker, last week a representative of the department in charge of LIP was in my office to advise me that the allocation for the constituency had been cut by almost 50 per cent. In view of this, I should like to ask the minister what possible justification there is for his remark in respect of the Atlantic region?


Mr. Speaker:: The hon. member will, I am sure, agree that this may be argument or debate but it is hardly a point of order. The hon. member for Humber-St. George's-St. Barbe on a supplementary.


PROGRAM FOR DEVELOPMENT OF CAPLIN RESOURCES
Jack Marshall: Mr. Speaker, my supplementary is for the Minister of Fisheries. In another release the minister indicated that he is spending $2.3 million on the development of caplin. In view of the fact that the Norwegians are overexploiting the caplin resources on the Grand Banks, what action is the minister going to take to make sure that the money spent on the program to develop caplin will not be lost and of no use?


John (Jack) Davis: Mr. Speaker, the caplin resources, like the other fisheries resources in the North Atlantic, will be managed by the 16 nations who are members of the International North Atlantic Fisheries Commission. The caplin is not overexploited and Canada expects to take advantage of the opportunity.


POSSIBLE USE OF NAVY VESSELS TO PROTECT FISHERY WITHIN TERRITORIAL WATERS
George Harris Hees: Mr. Speaker, I have a supplementary question for the Minister of National Defence. Because of the great need to protect the fishing rights of our fishermen within our territorial waters and the proven inability of our aircraft to do this job in a satisfactory manner, is the minister considering or will he consider the use of our naval destroyer escorts to carry out this task because of their ability to do the job?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, we are not giving consideration to the use of warships in our fishing fleets. I think the hon. member will know that fisheries protection is the responsibility of the Department of the Environment and Fisheries. We support them with aircraft, as the hon. member has indicated, but we know of no situation or emergency that requires the use or even the presence of warships with the fishing fleets.


George Harris Hees: Because of the fact that foreign fishing fleets are invading our territorial waters in large numbers every day and obviously-


Mr. Speaker:: Order, please. That is argument. The Chair will recognize the hon. member for St. John's West on a supplementary question, after which I will see the hon. member for Saskatoon-Biggar.


POSSIBILITY OF INCREASED SURVEILLANCE IN LIGHT OF PRESENCE OF FOREIGN SHIPS CLOSE TO NORTHEAST COAST OF NEWFOUNDLAND
Mr. Walter C. Carter (St. John's West):: Mr. Speaker, my supplementary question is for the Minister of Fisheries. Has the minister caused an investigation to be undertaken into the presence of a large number of foreign ships fishing very close to the northeast coast of Newfoundland, and does he intend to step up surveillance with respect to those ships fishing within the 12-mile limit?


John (Jack) Davis: Mr. Speaker, the answer to both questions is yes.


Mr. Speaker:: Order, please. I indicated a moment ago that perhaps we should go next to the hon. member for Saskatoon-Biggar. I will return to the hon. member for St. John's West later.


COMMITMENT BY RAILWAYS TO PROVIDE CARS FOR MOVEMENT
Mr. A. P. Gleave (Saskatoon-Biggar):: Mr. Speaker, my question is for the minister in charge of the Wheat Board. In view of the serious problem existing with regard to the movement of grain I should like to ask the minister whether he has been able to obtain any commitment from Canadian National Railways or the Canadian Pacific Railway to initiate a crash program for grain movement so they can catch up on the 75 million bushel shortfall which now exists in the transportation of grain, according to one of the commissioners of the Canadian Wheat Board, Mr. Esdale?


Hon. Otto E. Lang (Minister of Justice):: Mr. Speaker, first of all I think I should make it clear that any reference to a shortfall of that magnitude is a comparison of our exports this year with our new record of exports last year. We do not anticipate during the course of this year to export as much grain as last year. The railways have discussed with the Canadian Wheat Board and ourselves
November 13, 1973

the question of the number of cars they can put into the movement. We have been carefully watching their adherence to that commitment. It is a matter of concern, but so is the movement of all products of Canada because of the booming economy.


Alfred Pullen Gleave: A year ago, at the time the purchase was made of some 2,000 hopper cars, the minister in charge of the Wheat Board assured the House that the two railroads had given a guarantee that they would maintain their usual number of boxcars and keep in service for the movement of grain the amount of rolling stock which was customary. Since they have failed to live up to this commitment, can the minister tell the House what discussions he is going to undertake so that they will live up to it?


Otto Emil Lang: Mr. Speaker, the specific understanding which was contained at the time of the purchase of the hopper cars was that the removal of equipment from the fleet would not change in its speed; there would be no acceleration in the movement. That is an aspect of the discussion we are having with the railways, drawing their attention to the fact that they have a commitment to the movement of grain. They recognize this of course and are trying to meet it with the cars they have available while at the same time trying to move in an adequate fashion unusually large amounts of potash in hopper cars normally available for grain, large quantities of lumber and so on, with almost every product you could mention.


Alfred Pullen Gleave: Mr. Speaker, I have a further supplementary question. I directed a question to the Minister of Transport on this matter last week and he informed me as follows: "I, personally, have a commitment from CNR and CPR that they will meet their commitment. If they did not, that means I was misled." Has the minister in charge of the Canadian Wheat Board also been misled?


Mr. Speaker:: Order, please.

[ Translation]


QUEBEC-MEASURES TO DEAL WITH OIL SHORTAGE-DISCUSSION WITH PROVINCIAL MINISTER
Mr. Rene Matte (Champlain):: Mr. Speaker, I should like to put a question to the Minister of Energy, Mines and Resources.
At his meeting next Thursday with the Quebec Minister of Natural Resources will he be making his colleague some realistic proposals concerning the general problem of energy and more particularly the eventual oil crisis in Quebec?


Donald Stovel Macdonald: Mr. Speaker, I think that the member is mistaken about such a meeting. I will meet my Quebec counterpart on November 23 and federal officials will meet officials of every province next Thursday, but there has been no meeting with my counterpart since September.
Oral Questions
We are obviously prepared, through officials as well as ministers, to send to provincial authorities the report concerning oil supplies, international as well as Canadian, and also to discuss measures aimed at keeping our supply.


CENTRAL MORTGAGE AND HOUSING CORPORATION
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, in the absence of the Minister of State for Urban Affairs I should like to ask the Prime Minister if Mr. Teron, the new president or CMHC, acted under a directive from the minister or any other member of the cabinet when he issued an ultimatum to the president of the Native Council of Canada not to get involved in the Walter Rudnicki affair or else?


Robert Knight Andras: Mr. Speaker, acting for my colleague who is away on government business, I must say that I have no knowledge of such an instruction by the Minister of State for Urban Affairs to the Native Council. I doubt very much that such an instruction was issued because I know that the minister in particular is keen about consultation and has carried on many consultations with Mr. Belcourt and others of the native people.


Frank Oberle: It appears that Mr. Teron, who is a new man in the corporation, has acted on his own. In light of the seriousness of the result of his action, is the Prime Minister considering launching a parliamentary investigation into this very serious matter?


Pierre Elliott Trudeau: Mr. Speaker, a committee of parliament will have the opportunity to ask questions of Mr. Teron when he appears before it.


OIL-INQUIRY AS TO INSTITUTION OF COURT ACTION BY FEDERAL GOVERNMENT AGAINST ALBERTA
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Justice. It is authoritatively reported in the press that the government of Canada is taking action against the government of Alberta in respect of the Alberta government's Canada first oil policy. Is action being taken, and on what constitutional principle, allegedly thwarted or altered by the government of Alberta, is the Canadian government proceeding?

November 13, 1973
Oral Questions


Otto Emil Lang: Mr. Speaker, that question is obviously a sweeping one in terms of legal opinion. I know of no action having been commenced. Naturally, the federal government in relation to any aspect of trade and commerce is always extremely conscious of its responsibility to ensure that this nation remains a one-market nation and not a divided nation.


John George Diefenbaker: That is an admirable principle, but it does not answer the question. Is the government of Canada through the Department of Justice today having consideration given to the drafting of an action against the government of Alberta? A simple yes or no will be sufficient without the superfluous words the minister has just used.


Otto Emil Lang: Mr. Speaker, I do not know what the right hon. member is talking about.


John George Diefenbaker: That answer is either contempt of the House or a revelation of the ignorance of the minister.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: The Chair will recognize the hon. member for Dartmouth-Halifax East and then the hon. member for St. John's East who has a supplementary to a previous question.


SHIPPING
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is for the Minister of Transport. In view of the great importance to the people of Atlantic Canada, will the minister enlighten the House with regard to his intentions respecting legislation to implement some of the basic provisions of the Darling report? Pursuant to the minister's announcement he would go ahead with implementation of that report, can he now tell us when we may expect legislation?


Hon. Jean Marchand (Minister of Transport):: Mr. Speaker, I think I announced that a new bill will be introduced in the House, a new maritime code. The Darling report will be translated into that legislation.


J. Michael Forrestall: I am sure we are all aware the minister will at some point present legislation. However, can he now indicate some timetable such as this session, next session or the next parliament?


Jean Marchand: Mr. Speaker, I will consult with the government House leader who will have to consult with the other House leaders. Following that, I will give an answer.


FISHERIES
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is for the Minister of Fisheries. In view of the fact the Russians seem to be ignoring their ICNAF quotas with impunity, has the minister made any formal protest to the Soviet Union? Second, has he requested from his colleague, the Minister of National Defence, extra surveillance aircraft?


John (Jack) Davis: Mr. Speaker, we made a vehement protest to the Soviet Union. Soviet vessels do not move about with impunity. Recently the U.S.S.R. agreed to inspection of all its vessels, not only above deck but below deck, whenever we approach them.


James Aloysius McGrath: What steps is the minister taking to enforce the ICNAF quota system in view of the evidence that the Soviet Union is ignoring it in our fishing area?


John (Jack) Davis: As the hon. member knows, we are building new vessels. Also, all other nations fishing in the North Atlantic have similar powers to our own. They can board vessels of other nations and report the results.


METHOD USED TO DETERMINE NUMBER OF FOREIGN VESSELS FISHING OFF NORTHEAST COAST OF NEWFOUNDLAND
Mr. John Lundrigan (Gander-Twillingate):: Mr. Speaker, I wish to ask the Minister of Fisheries what capability was used in the past few days to determine the number of fishing vessels that were fishing off the northeast coast of Newfoundland? In view of the fact the local people reported 40 vessels, eight factory ships and one supply ship and a southbound CNR boat had to alter its course and take shelter because of the presence of those ships, and yet the department reports sighting only two vessels, what capability was used to make this observation?


John (Jack) Davis: Mr. Speaker, we co-ordinate counts. A count is made not only by our protective officers on service vessels but by military aircraft flying for Canada and other nations.


Mr. Speaker:: The hon. member will be recognized for a supplementary and then the hon. member for Winnipeg North Centre.


John Howard Lundrigan: Is the minister prepared to table in the House evidence to substantiate the use of the aircraft, the number of hours flown and the number of boats used, the number of man-hours and the like so that we can have some understanding of what type of intensive investigation was carried out? We will then be able to figure out who is telling lies. Is the minister telling lies or the people? We believe the people.


Mr. Speaker:: Order, please. We have had difficulty before and I hope we do not get involved in the same difficulty again.
November 13, 1973


CONFLICT OF INTEREST
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Prime Minister. In view of the fact the many corporate directorships held by members of the other place include directorships in a number of oil companies with which the government is having to deal in a special way because of the current crisis, companies which the government might even have to take over, will the Prime Minister seek to find ways in which to expedite either the enacting of legislation or the declaration of government policy in this important field of conflict of interest?


Pierre Elliott Trudeau: Mr. Speaker, with respect, it seems to me that the member is several months late. We enunciated our policy several months ago. We presented it in the form of a paper to the House. We indicated this would be dealt with by a standing committee of the House as soon as it had dealt with the problem of election expenses. We are waiting on that committee to study this matter. The government's recommendations are clear. They affect not only the House of Commons but the other place. We are waiting for the action of the members of this House.


Stanley Howard Knowles: In view of the fact the answer the Prime Minister has now given is the same answer that was given last week, namely, that the Standing Committee on Privileges and Elections is occupied with another piece of legislation, would it not be possible to refer the appropriate documents or papers to another standing committee so that the House of Commons can express itself on this matter right away rather than after something serious develops?


Pierre Elliott Trudeau: Certainly, Mr. Speaker, the government has no objection to that. The House leaders of the various parties should discuss this possibility. It is a matter of giving priority to this over other work which may be in front of members of the House. We have no objection if such an arrangement can be worked out among the House leaders of the various parties. I repeat, the government has come forward with its suggestions and we are attendant now upon the will of the House.


ALLEGATION THAT JUSTICE DEPARTMENT LAWYER ACTING AS PAID OFFICER OF CROWN CORPORATION
Mr. Donald Maclnnis (Cape Breton-East Richmond):: I wish to direct a supplementary question on the subject of conflict of interest to the Minister of Justice. Does the minister consider it proper for a lawyer employed by the Department of Justice to act at the same time in the capacity of a paid officer of a Crown corporation?


Otto Emil Lang: Mr. Speaker, I will be glad to look into the specific case to which the hon. member is referring.


Donald MacInnis: Mr. Speaker, I rise on a point of order. The minister is always
Oral Questions
looking into things and coming up with the wrong answers. The minister knows the situation full well. Does he consider it proper that a lawyer employed by the Department of Justice should act at the same time as a paid officer of a Crown corporation?


Mr. Speaker:: Order, please. The hon. member will appreciate he is repeating the question he asked in the first instance.


GOVERNMENT ACTION TO ALLEVIATE SHORTAGE OF RAILWAY CARS
Jack Burnett Murta: Mr. Speaker, I should like to address a question to the minister responsible for the Canadian Wheat Board. It has to do with the slow movement of grain referred to by the hon. member for Sas-katoon-Biggar. Specifically, what is the minister's department, together with the Department of Transport, doing to alleviate the shortage of cars for grain transportation in western Canada?


Otto Emil Lang: Both the Minister of Transport and officials working with the grains group have been in touch with the railroads a number of times in recent days and weeks to emphasize to them the importance of moving grain, particularly in this immediate period, and to urge them to examine the priority attached to this movement compared to the requirements of other movements which might be more readily postponed. The result has been some specific commitments by the railways as to the number of cars they would assign to the movement-still not as many as we would have liked. We are now watching very closely to see whether this stated commitment is, indeed, being fulfilled by the railways.


Jack Burnett Murta: In view of the fact that in 1963 the two railroads combined had somewhere in the neighbourhood of 88,000 cars available for general purpose transportation, including grain, and that in 1973 the number is down to approximately 48,000 cars, what is being done other than these general statements? Is consideration being given at the present time by the government to building more rolling stock or urging the railways to build more rolling stock for the purpose of transporting grain?


Otto Emil Lang: The over-all deterioration of the boxcar fleet, which is so carefully documented in the study done for the grains group and for the Canada Grains Council in the report on the state of the industry, indicates a clear need for additional equipment, preferably of a specialized kind such as we purchased last year in the form of 2,000 hopper cars. We are now holding discussions with both the industry and the railroads about the way in which this need should be met; there are some necessary moves to be made by the industry relating to the manner in which these cars should be handled in the interest of efficiency, and by the railroads respecting the upgrading of trackage. This has to

November 13, 1973
Oral Questions
be taken into consideration as well as the actual decision concerning the ordering and purchase of additional cars.


Mr. Norval Horner (Battleford-Kindersley):: Mr. Speaker, my supplementary is directed to the minister who manipulates the Canadian Wheat Board.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member should ask his question in a straightforward manner. I hope he will not mind my bringing it to his attention that when a question is asked in this way he risks not having it answered at all and perhaps risks not having the opportunity to ask the question at all.


Norval Alic Horner: Thank you, Mr. Speaker, I apologize for placing an interpretation on the responsibility of the minister who answers for the Wheat Board. As most of the grain which is moving on the Prairies is moving by truck-this may well be by the minister's design-is the minister aware that ships are waiting at Vancouver and Thunder Bay to be loaded with grain and that our position as a supplier of grain to the world is in serious danger?


Otto Emil Lang: The only comment I have about the grain moving by trucks is that a lot of it moves by truck on its way into the elevator system. Last week about 30 million bushels left the elevators. In fact, the volume of grain at Thunder Bay and at Vancouver is slowly but gradually increasing. There are one, two, three or four ships waiting in Vancouver according to the daily reports I receive. The turnaround at the Lakehead is improving. This is simply another way of saying that as a result of the shortage of cars grain is delayed in reaching the terminals, and we are directing-


Mr. Speaker:: Order, please.


POST OFFICE
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is directed to the Postmaster General. In view of increased costs incurred by rural mail carriers as a result of increases in the price of gasoline and other items, and bearing in mind the minister's reply to the question I asked on October 30, can the hon. gentleman now say when action will be taken by his department to compensate the rural mail carriers for these additional costs?


Hon. Andre Ouellet (Postmaster General):: Mr. Speaker, an amount to cover increased costs incurred by rural mail carriers has been submitted for approval by the House in supplementary estimates. As soon as this has been accepted, I will then be in a position to give details, on motions, concerning a new formula which from now on will apply to all rural carriers in Canada.


Mr. Speaker:: Is the hon. member for Regina-Lake Centre rising on a point of order?


Mr. Benjamin:: No, Mr. Speaker. I was hoping to ask a supplementary to the previous question.


Mr. Speaker:: Obviously we have not been able to settle the very important question which was raised by a number of hon. members and about which the hon. member for Regina-Lake Centre wishes to ask a supplementary. Perhaps we might resume the debate tomorrow. I will, of course, remember tomorrow that the hon. member was waiting for an opportunity to ask a supplementary. I will recognize the hon. member for Dauphin before calling orders of the day.


OIL EXPORTS TO UNITED STATES
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. In view of the minister's statement that Canadian oil supplies to the United States would not be cut off in the present situation, has the government made any official commitment as to the minimum amount of crude oil which may be exported during this winter season?


Hon. Mitchell Sharp (Secretary of State for External Affairs):: The hon. member did not quote what I said. I said that oil supplies to the United States would not be reduced in order to appease the Arabs.


Mr. Speaker:: Orders of the day.


John Raymond Ellis: I rise on a question of privilege, Mr. Speaker. A while ago Your Honour recognized the Minister of Manpower and Immigration on a question of privilege. I merely wish to have it on record that I am quite prepared to table any documents in my possession at a public inquiry.


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


Mr. Drury:: Contempt of parliament!


Mr. Speaker:: Orders of the day.


Mr. Dinsdale:: Mr. Speaker, I rise on a point of order. I have been endeavouring for a week to direct a question to the Minister of National Health and Welfare, of which I have given him notice. It has life and death implications and perhaps the Chair would be willing to allow me to put the question.


Mr. Speaker:: As the hon. member knows, the Chair has no objection whatsoever, but I wonder whether this life and death question might not wait until tomorrow. However, I certainly would not wish to take such a responsibility upon my shoulders. The hon. member will have to examine his conscience on that score, and if he still wishes to ask a question after the question period has ended I
November 13, 1973

have no objection. The hon. member is recognized for that purpose.


AVAILABILITY OF DRUG, ISOPRENALINE, WITHOUT PRESCRIPTION
Walter Gilbert Dinsdale: Thank you, Mr. Speaker. Is the drug Isoprenaline, used in the treatment of asthma and regarded by medical authorities as a cause of death through heart failure, available without prescription in Canada?


Hon. Marc Lalonde (Minister of National Health and Welfare):: I think, indeed, that the answer may have to wait until tomorrow until I have checked all the facts. In the meantime, I suggest that people suffering from asthma should abstain from this drug for a day.


William George Knight: I rise on a point of order, Mr. Speaker. It arises from the fact that both the Minister of Agriculture and his parliamentary secretary have gone to Rome for a month. Would the government House leader tell us which minister will be responsible for their duties?


Mr. MacEachen:: Mr. Speaker, the Acting Minister of Agriculture is the gallant Minister of Veterans Affairs.


Some hon. Members:: Hear, hear!


Marc Lalonde: Mr. Speaker, perhaps it would save time tomorrow if I were to give the hon. member for Brandon-Souris his answer today. I have just noticed that it is in my briefing book. On July 19, 1973, manufacturers of the product were advised of our intent to recommend that it be available only on prescription. Steps in this connection are under way and I expect that regulations to this effect will be passed very soon.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, November 9, consideration of Bill C-132, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, as reported, (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and Nos. 2, 3, 4, 5 and 6.
Foreign Investment Review Act
Mr. James Gillies (Don Valley):: Mr. Speaker, I rise to participate in what I think ought to be one of the most important debates that has ever occurred in this House of Commons, namely the debate on Bill C-132. During the few moments at my disposal I do not propose to discuss some of the items examined so eloquently by other members of my party, such as the fact that the bill is entirely negative, that the bill is for the first time, as far as I know, introducing legislation where to a high degree we are to be governed in this country by men instead of by law, or the fact that there is no positive introduction of measures to encourage ownership by Canadians of the resources of this country. Rather I want to direct the attention of the House for a few moments to the general nature of the bill, particularly to the importance of the amendments introduced by the hon. member for Central Nova (Mr. MacKay).
The fact of the matter is that this bill, cannot be given proper consideration because we must consider it outside the framework of any definition on the part of the government of what economic policy this country is going to follow in the future, indeed even outside the framework of a policy for the present time. This makes an assessment of the bill almost impossible.
I am not suggesting that the bill should be debated in terms of the traditional goals of economic policymaking we know so well, namely the goal of full employment, relative price stability, less regional disparity of income and more equitable distribution of income among all Canadians.
The question raised, but not examined by the legislation, a question that is so important, is what direction are we going to take in our general philosophy with respect to economic policymaking in the Canadian economy? I was distressed to hear the Minister of Finance (Mr. Turner) say in response to a question today that the economy is now operating at close to its full capacity, and this at the same time as we have a 5.8 per cent unemployment rate in this nation; indeed, in some parts of the country the rate is
10	per cent. I do not know whether or not the Minister of Finance suggests that the structure of the Canadian economy has changed so much that we must now accept the proposition that if we are to have the economy operating at the government's definition of full capacity we shall have to accept an unemployment rate of 5V4 per cent or some figure of this sort, a totally unacceptable rate. It seems to have escaped the notice of the minister that this is the highest unemployment rate of any industrialized country in the world at the present time. However, it does illustrate the need to examine whether the foundations of current economic policymaking are appropriate. Where is this country going to go during the next quarter of a century? Do we have to have high unemployment, inflation, regional disparities as a continuous situation?
During the course of this century we have had two basic patterns of development in Canada. First, until world war
11	we had the triangular trade pattern with which we are all familiar. We shipped our raw materials and other products to the British Empire and used our surplus exchange to buy manufactured goods from the United States. Then, after world war II there was a basic shift in

November 13, 1973
Foreign Investment Review Act philosophy concerning the management of the Canadian economy, and our policy moved to what I would call in shorthand terms "continentalism". This continentalism was not unusual given the fact that we are so close to the United States, and that there were changes in the rest of the world which made it difficult for the Canadian economy to develop through dependence on Imperial preferences. Moreover, we needed capital to develop the economy.
During this "continentalist" period there has been growth in the Canadian economy, but it has been very uneven and erratic. We have had high unemployment and deep recessions during much of the period, and we are now experiencing a rapid increase in the rate of inflation, one of the most rapid rates of any country in the world. Has our performance been the result of this basic philosophy? The question is worth examining because one result of our policy of continentalism has been that our policymaking has been inextricably linked to policymaking in the United States. Indeed, one could argue that we in this country today are not able to have an independent economic policy.
The degree of inter-relationship with the United States at the present time is clear to all. When that country had a balance of payments crisis and introduced measures to solve it, their decision to devalue caused a devaluation of the Canadian dollar which contributed to the high rate of inflation in this country. When the United States decided to introduce an interest equalization tax, what was our response? To rush down to Washington to try to be exempted from that interest equalization tax. When the DISC program was introduced in the United States, what was our response? To rush down to Washington to see whether we could be exempted from that. The reason I mention these examples is to indicate that the net result of the policy we have followed since the end of world war II has culminated in the result that we are now restricted in making decisions respecting economic policymaking in this country which are independent of decisions that are made in the United States.
I suggest that the debate that we have had on this issue in the last week or so should really revolve around this fundamental question: Are we going to have a change in our attitude toward continentalism? We have now reached a period in the history of Canada when we have to assess this question very carefully and effectively, because the premises on which Canada entered into this kind of policymaking have changed. When the Canadian government decided after world war II that this was the policy in the best interests of the country, the decision was based on the assumption that the U.S. dollar would be a strong currency on international exchanges, that the United States economy would remain strong in the world throughout the 20th century, and that there would be continuing surplus of raw materials throughout the world.
These assumptions may no longer be valid, Mr. Speaker. The United States dollar is no longer a strong world currency. Indeed, it is a currency that has enormous problems associated with it. The U.S. economy has had an endless amount of trouble. So as far as Canada is concerned, basing economic policy on what is done in the

United States may not necessarily lead to the best development of the Canadian economy in the future.
The difficulty about this bill is that it does not provide any indication of what the government's position is on this issue. It does not indicate whether or not the government realizes that the net result of the policy that we have followed for the last 25 years may have caused us to lose a great deal of sovereignty in the field of economic policymaking something which is fundamental to any country that wants to pursue its own goals and to develop its own destiny.
The bill does not deal with investments in unrelated enterprises or with the problem of using retained earnings for investment in other enterprises in tbe Canadian economy. In fact, the bill deals only with new capital investment, something which I am sure the minister will agree has been anything but significant during the last two or three years. In many ways the bill is, in a sense-and I use the word with care-a somewhat fraudulent piece of legislation because it implies that it is dealing with a problem with which it does not deal at all. It does not deal with the question of the takeover of firms by existing subsidiaries operating in the Canadian economy at the present time which has been the major cause of the increase in foreign investment in Canada today.


Mr. Gillespie:: It does not do what?


James McPhail Gillies: It does not look at the problem of the takeover of firms by existing subsidiaries in related areas and the use of retained earnings in this country today.


Alastair William Gillespie: Have you read the bill?


James McPhail Gillies: Yes, very carefully.


Alastair William Gillespie: You will find that all takeovers are covered.


James McPhail Gillies: Not in related areas.


Alastair William Gillespie: They are in later. You will see it is with related areas too, and you will find that in the bill if you read it. You just have not read the bill.


James McPhail Gillies: I certainly have. Similarly, it is hard to assess the intention of the framers of the bill because the bill is not placed in the framework of some type of industrial strategy for the nation as a whole. Is the reason for the bill to strengthen the industrial sector so there will be more employment brought about in manufacturing? If the bill is designed to increase manufacturing employment in Canada, and if that is what it is designed to do, how will it accomplish this? If it is designed to bring about more independence in economic policy making in Canada, in formulation of tax policy and monetary policy as well as exchange rate policy, the bill will have no effect.
This bill will do absolutely nothing about the fundamental problems in the Canadian economy or the critical question of economic sovereignty in Canada at the present time. To suggest that it will is misleading. This bill does not tell us anything about the basic belief of this government as to how the Canadian economy must be developed
November 13, 1973

in the rest of the century. It is simply another ad hoc measure, because it is not set within the framework of an industrial strategy for Canada.
One cannot be astonished that many provinces are upset over a bill which is so vague that they cannot be sure of its intentions. That is why the amendment brought forward by the hon. member for Central Nova (Mr. MacKay) is so important.


Alastair William Gillespie: Which one?


James McPhail Gillies: The amendment calling for consultation with the provinces as put forward by the hon. member for Central Nova should seriously be considered by the minister.


Alastair William Gillespie: He has put forward several.


James McPhail Gillies: Let me say why it is so important and so worthy of consideration. The amendment provides the minister with a great opportunity to make a major breakthrough in economic policy-making for better operation of the economy. The fact is that we have not been able to reduce substantially regional disparities in Canada. If one looks at the statistics he will see that even with the large operations under DREE our regional disparities are great. Surely, it cannot be surprising that people in the Atlantic provinces, and some of the other areas, are distressed at a bill of this kind. The nature of this bill suggests that one of the important things for them, namely new investment, may well be limited.
Given the unemployment rates in these areas, an unemployment rate today in the Atlantic provinces of approximately 10 per cent, how can the minister tolerate such a situation? How can he tolerate the highest unemployment rate of any industrial country in the world? How can the minister bring in a piece of legislation when the people of these areas are so concerned about this bill they are afraid it will make their problems even worse? The amendment which was introduced provides an opportunity to bring the provinces into the making of decisions which affect them so much?
One has to admit that broad-gauged economic policy making in Canada, using a broad brush in fiscal and monetary policy, has not solved our regional problem. So what we should be talking about in terms of economic policy making, is the whole question of how we are going to bring in and use the input of the provinces in developing national economic policy.
I am suggesting to the minister that, by accepting this amendment, he has a tremendous opportunity to make a first step in a positive direction. There is no question that in the future we will have to change the way in which monetary policy operates, that we will have to interrelate the making of fiscal policies by the provincial and federal governments, if we are going to achieve Canada's potential. We have to consider such issues because the way we have been doing things in the past has not worked.
We cannot ask a part of Canada to live with 10 per cent unemployment. This is immoral, it is improper and certainly an ineffective use of our resources. We must try to do something different, and I am pleading with the minister to take a hard, long look at this possibility. If he can
Foreign Investment Review Act develop, through the use of this bill, a vehicle by which we can really create input by the slow-growth provinces in the development and formulation of policy so that we really have federalism working, and the provinces feel they have an input which is being considered by the federal government in the development of policy, then we will have moved a considerable degree in the direction of the way in which economic policy must be made in Canada in the future. Our methods in the past have not worked. Surely, what we want to do now is find a new mechanism for solving regional problems, and the minister has a vehicle if he accepts the amendment. It is not my suggestion that provinces opt out. It is not in any way weakening the bill. In fact, I suggest the amendment is making it stronger, and is making it more effective.
What the bill does now in terms of the over-all problem of foreign investment in Canada is not very significant. By accepting this amendment this minister will have the opportunity of working out administrative procedures and setting a whole new direction in economic policy making in this country which will effectively relate the work of the central government with the work of the provinces, and this is essential if we are to find solutions to the economic problems of the nation.
I see my time is nearly up, Mr. Speaker, but we must recognize that the Canadian economy has been operating far below its potential. There are probably many reasons for this that one can put forth, including the truncation of our manufacturing segment because of a high degree of foreign ownership and the fact it has been developed in such a way that Canadian firms are not involved to the degree they might be in research, development and so forth. These reasons have all been brought up in the debate. But surely another reason Canada's economy is operating below potential is that we are not organized or structured to make effective policy.
I want to leave this one suggestion with the minister, and I make it with the greatest respect and with all the emphasis I can. By accepting the amendment and bringing the provinces into the discussions in an effective fashion he can lay a foundation which can be a guide for the development of other economic policy in Canada in the future. If we fail to adopt that course, we will not do anything about the question of foreign investment and we will have discontented provinces. The bill will have missed a great opportunity. I really urge the minister to accept the amendment. He must want it. He cannot possibly be content with the way things have happened in the past. I do not think we should miss the opportunity provided by the amendment of the hon. member for Central Nova (Mr. MacKay) to provide provincial participation. I say through you, Mr. Speaker, to the minister that this would be really a start, a new direction, in economic policy making in this country which must come because the past broad gauged policies have not worked. Now is the time for a new start in economic policy making.


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

November 13, 1973
Foreign Investment Review Act


Mr.   J.-J. Blais@Nipissing: Mr. Speaker, I am pleased to speak after the hon. member for Don Valley (Mr. Gillies) whom I want to congratulate for taking a somewhat belated interest in the passing of this bill, but he does seem to show some knowledge of it.

I should like to indicate that the hon. member, indeed, is not contemplating the bill in its full force and effect, because surely most of the points he brought to the attention of the minister have been brought to the minister's attention on previous occasions by members of his own party even before the preparation of this particular legislation. I suggest that the aims the hon. member for Don Valley (Mr. Gillies) is seeking would be best given effect by the provisions in the bill as it stands. I would refer to clause 2, subclause (2)(e) which contains an express provision for discussion of the items that are given importance by the provinces. This subclause reads as follows:
In assessing, for the purposes of this Act, whether any acquisition of control of a Canadian business enterprise or the establishment of any new business in Canada is or is likely to be of significant benefit to Canada, the factors to be taken into account are as follows:
Then, they are enumerated. Paragraph (e) reads as follows:
the compatibility of the acquisition or establishment with national industrial and economic policies, taking into consideration industrial and economic policy objectives enunciated by the government or legislature of any province likely to be significantly affected by the acquisition or establishment.
There is no doubt that of the five considerations that are to be taken into account by the minister and by the cabinet one of the five-and there are only five-is the question of policy suggestions enunciated by the provinces. I suggest to you, Mr. Speaker, that these provisions will be effective but that proposals contained in the amendment would bring about the development of an auction system regarding foreign investment in Canada. Surely Nova Scotia, the province from which the mover of the amendment comes, is interested in new investment regardless of its origin. Surely, Nova Scotia government would be approached by the applicant or potential investor in order determine whether or not that particular province would support an application to the federal government and what its specific contribution would be relating to that particular investment.
In this way we would avoid the necessity of every province in the Maritimes having to be advised of this particular potential investment which cause them to start saying, "me first". One province would offer better terms than another and so on. The investor would be placed in the position where his intentions were no longer confidential. He would be involved in the political arena at the outset in respect of which province would get that investment. I believe this is where the real danger lies. The applicant would not benefit from the advice of one area in which he wished to place his investment; indeed, he would be faced with competition between several areas.

I suggest that the amendment is quite explicit in some respects and very vague in others. It reads in part as follows:
A copy of the notice-
That includes the whole kit and kaboodle.
-shall be sent by the Agency forthwith by registered mail to the province or provinces likely to be significantly affected ...
I repeat "significantly". Mr. Speaker, we know the nature of investment in Canada and the nature of the corporate entities in Canada. I defy any member here to indicate an interest which is likely to be purchased by a foreign investor which is not operative in the majority of the provinces of Canada. If someone is interested in purchasing that particular interest, the government would have to notify each province which would be significantly affected by that purchase. I suggest to the hon. member for Don Valley, through you, Mr. Speaker, that by advising each and every province we would find ourselves involved in a multi-faceted discussion and auction between these various provinces. That is the point which creates the greatest difficulty for me in the proposal made in this particular amendment.
The other matter which gives me some concern is that there some areas of Canada which need the protection of the federal government in respect of the provincial government.


An hon. Member:: Like Alberta.


Mr. Blais:: Alberta has its own government and I am sure it will protect the interests of all Albertans. My problem, however, is that I come from an area of Canada which is indeed a disadvantaged area, and one which does not receive the protection of the Ontario government. I suggest that if the Ontario government, which has manifested its intention to strictly limit foreign investment, should consider it necessary to restrict foreign investment in respect of the southern portion of the province, the same restriction would apply to the northern part of the province. Undoubtedly, such a restriction would be detrimental to my area which is very concerned about the need for additional investment. If there should be further investment in that part of the province, I suggest it would come primarily from outside our national boundaries.


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


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


Kenneth Earl Hurlburt: Mr. Speaker, I should like to draw to the attention of the hon. member for Nipissing (Mr. Blais) that I object to his use of the word "auction" which he has used twice during his comments this afternoon. I take offence because the auction method of selling goods goes back to Biblical days. I wish he would use some other term, because this is the manner in which a deal is consummated in front of God and is a method in which there is no chance of any underhanded bargaining.


Jean-Jacques Blais: Mr. Speaker, the hon. gentleman who just intervened knows something about the auction. I congratulate him for protecting that particular mode of sale. I respect the auctioneering process. Although it is as he
November 13, 1973

states a God-like process, I suggest that in this particular instance it would not work. I regret the aspersions I may have cast. I merely suggest that the auction system, although valid, does not apply in a situation or in a confederation where we wish to nurture co-operation between individual provinces. It is important that individual provinces recognize each other's rights, and also recognize the right of the central government to protect the interests of the whole Confederation rather than only one section.
As I was saying, we still need the protection of the federal government for certain areas of Canada which have been neglected by their provincial governments. I suggest that the bill in its present form will protect northern Ontario, and we will find that the practices of the past will not apply if some company should wish to locate in that area.
I feel it is very difficult to comprehend the attitude taken by the Conservative party in this instance. They have been chastising the government, and the thrust of their contributions has been that the government should not protect its jurisdictional responsibilities. Evidently they support the position of the province of Alberta in the matter of supplying energy to the whole of Canada. They espouse the attitude taken by that particular province in confronting the federal government. Their position is that there should be a confrontation between the provinces which might want to have investment within their own boundaries and the federal government which is attempting to make a just distribution of industry throughout Canada. They take issue with that idea and say the federal government should not consider what the provinces want and should not protect its jurisdictional responsibilities, but rather should throw the ball into the provincial park so that the provinces can confront each other and confront the federal government in attempting to arrive at a decision.
I find it very difficult to understand why a federal party such as the Conservative party should support the idea of the decentralization of the federal power to such an extent. I find it most unjustifiable, especially when about two months ago they were saying that the federal government should impose wage and price controls, knowing that this would necessitate consultation with the provinces because the federal government does not have jurisdiction to impose wage and price controls without the consent of the provinces. No mention was ever made of any consultation with the provinces on that subject.
Again, with reference to the energy situation, when the Conservative party was espousing a national energy policy and telling the government that it does not have a national energy policy, which they wanted forthwith, no indication was made of any necessity for consultation with the provinces. They did not consider, of course, that there was a national energy policy. Perhaps it was not satisfactory to the opposition, but it was there. Therefore, we have a considerable amount of difficulty in accepting the sincerity of the opposition. The Progressive Conservative party is now indicating that there should be confrontation with reference to foreign ownership at the time when there is some indication that they do not favour the
Foreign Investment Review Act limitation of foreign investment in Canada. We see quite clearly from the speeches of members of that party that they are not really interested in the control of foreign ownership. I am suggesting that they are using this amendment to create some sort of dissension within the House so that the bill might be defeated.


Kenneth Earl Hurlburt: Mr. Speaker, today, in discussing the foreign investment review bill, I want to talk about love and hate, fact and fiction, common sense and foolishness. During the past week or so in this House all these factors have come into play. If I may be a little partisan for a moment, perhaps I should say that the love, the facts and the common sense in relation to foreign investment in Canada have been displayed by members of the Progressive Conservative party-the only political party in Canada with elected members from all ten provinces-and the negative aspects I have mentioned have come from either the members across the floor or to my extreme left.
As my good friend from Crowfoot, Alberta, mentioned a day or so ago, Canadian ownership in business and industry is like motherhood; it is desired and it is respected. In a perfectly balanced world, if Canada had a much larger population, if geographical factors had been different, perhaps even if history had been different, foreign ownership in Canada might not be the controversial subject it is today. Then again, perhaps if geography had been different, if history had been different, if our population had been much larger, perhaps Canada would not be the great and marvellous country it is today. You cannot have everything, Mr. Speaker. You can try to have the best of both worlds, but you do not always get it. Actually, I think Canada has come closer than any other country to having the best of both worlds, and I think that with a little common sense we just might achieve it.
I say "common sense" because I recognize that, rightly or wrongly, foreign ownership in Canada has become both a controversial and a pressing subject. The New Democrats to my left, the party in Canada which is not happy unless it is kicking our closest neighbour south of the border, favour the ending of all foreign investment in Canada right now. Well, if we did that, many other countries would be very happy because it would mean that the United States would have to look elsewhere to invest its money. With investment you get jobs, lots of jobs. Most countries want to increase employment. They hate to see their citizens out of work. So, they welcome more foreign investment.
Some people in Canada still welcome foreign investment. In fact, Nova Scotia premier Gerald Regan, a Liberal, becomes upset when we talk about restricting investment in this country. He has good reason to be. The Maritimes are a have-not group of provinces with high unemployment rates, and Premier Regan knows he cannot say no to investment that will give more jobs to the residents of his province. Even though I am not a Liberal, I would like to see Mr. Regan in this House of Commons now giving his views on foreign investment. It might interest the government and it might interest the New Democrats who have failed to elect even one federal member of parliament from the Maritimes. They do not have even one from an area which, with its economic

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Foreign Investment Review Act problems, you would think would be a natural hunting ground for them.
Now, I have mentioned the foolishness of a small but highly vocal group which says: Let us end all foreign investment, let us throw out all the Yanks. That is foolishness, and I am sure that the premiers of Manitoba, British Columbia and Saskatchewan-all NDP premiers who have gone to the United States and spoken about the need for investment in their provinces-know how foolish it is to want to turn away that money and to let investors and jobs go elsewhere.
What I think is needed when it comes to discussing foreign investment and guidelines for foreign investment is common sense. I understand that 100 years or more ago there were people in the United States who worried about British investment in their country. Time has shown them to have been wrong. I guess it has also shown them that without that initial amount of foreign investment, the U.S. economy could never have expanded at the rate it has.
I think perhaps if we imagined a Canada in which not one U.S. cent, one English pound or one West German mark had been invested over the past 100 years, we would see that we would have a pretty sad country. Canadians did not have the money. We needed outside help, and we got it. We took that help for 100 years. Now, we start to say, "Go away; we don't want you any more." That is a strange attitude, Mr. Speaker. It is a strange attitude because if a foreign corporation wants to build an industry in one country, and that country says no, then it will simply build the plant in another country that says, "Yes, we need the jobs you can give us. We need them for our young people. We need your industry because it will contribute to our tax base and perhaps even build up our export trade."
I realize there are some problems with foreign investment. I realize that profits from some foreign-owned industries, not only U.S. but Japanese, British and West German, flow out of this country at an alarming rate. And so I think we have to have some regulations, some guidelines, and some rules, but not rules so tough that no one will locate here. Let us have some common sense. In fact, I think we have some common sense in the bill before the House. I will be interested to see it go through the committee stage and get some input from outside, some refining. But I do not think the bill as such, or the government as such, is tackling the problem in a realistic way. It seems to me that instead of restricting, instead of taking negative attitudes, we should encourage and take positive measures to deal with our foreign ownership problem. We should try to have the best of two worlds.
As I said before, Mr. Speaker, I do not believe we are in a position to turn down employment creating opportunities. At the same time, I realize that a country on the move has to guide its own destiny. I think we can have the jobs and also guide our own destiny if we approach the matter properly. Suppose that foreign investment in this country continued to grow at the rate that it has over the past decade or so, but that Canadian investment and ownership grew at a rate perhaps 5 per cent to 10 per cent higher than of investment by United States investors. It seems to me

that in this case, as U.S. and other foreign investment continued to grow, because Canadian investment and ownership would be growing at a rate 5 per cent to 10 per cent higher, then in a certain period of time Canadian ownership in the various industries would match foreign ownership. Then, if we could maintain the relative rates of growth, it would far surpass outside ownership. We would still get the foreign investment, still get the new jobs for our young people, but as Canadian ownership grew at a greater clip, the actual percentage of foreign ownership would slowly fall. And I stress slowly. We would have the best of two worlds. We would still get the investment and the jobs, but over a period of time we would gain the upper hand. I repeat that we would have the best of two worlds.
How can this be done? The weapon, if I can call it that, seems to me to be taxation. We should change our taxation policies so that they offer more incentives to Canadians- just enough to give Canadian businessmen and entrepreneurs an edge without scaring away outside investors. This certainly is not the case now. In the oil and gas industry, for instance, foreign investors putting their money into high-risk oil and gas exploration in Canada get more incentives and more taxation writeoffs than Canadians receive. It is a strange situation. And I note that the NDP, which only managed to gather some 17 per cent of the vote in the 1972 federal election and elected only 31 out of 264 members, but which is now the power behind the throne, views with alarm foreign domination of the Canadian oil and gas industry.
Why doesn't it do something about it? Why doesn't the NDP force the Liberal government to give Canadians the same taxation advantages that Canada gives to foreign investors? Because, as usual, the NDP can't see the forest for the trees, and competition scares the NDP. It does not feel it is equal to the task so it avoids the fight, and avoids innovation. The NDP and, I am afraid the Liberal government, avoid giving Canadian businessmen and entrepreneurs the encouragement and inventives they need to give them that little spurt which will put Canadians ahead just enough to control their own destiny without scaring off anyone else.
I remember that during the 1972 election campaign our leader proposed a revolutionary plan that would allow Canadians to invest up to $5,000 a year in a small Canadian-owned business and, at the same time, get an equivalent amount of deferred income for tax purposes. It was quite a plan. It was designed to allow the average Canadian, whether he had $500 or $5,000 to invest each year, to put it in a small Canadian-owned business and so help it expand. The government, under the Progressive Conservatives, would then allow him to defer paying income tax on that investment until he sold out his holding. That is what I call one positive step to increase Canadian ownership in this country, a positive not a negative step, a method by which more, not fewer, jobs would be created, and a measure, I might note, that would give more Canadian wage earners the opportunity to enjoy the fruits of the free enterprise system.
Is that idea lost, Mr. Speaker? I do not think so. I do not think so because I believe that sooner or later, perhaps sooner than most people realize, the Progressive Conserva-
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tives will form a government in this country and will institute such realistic and advanced ideas. We have to, Mr. Speaker, because if we do not we are going to be in a terrible mess.
I was reading in the Financial Post on the weekend, the issue dated November 10, about a small Canadian-owned manufacturing company, Husky Manufacturing and Tools Works Ltd., of Bolton, Ontario. This company wanted to expand its manufacturing operation. What did it find? If found that every major cost and tax involved in the expansion would be higher in Canada than if the company located in the United States. It seems that after the company president, Robert Schad, looked into the matter, he found that his company's after-tax profits from a new manufacturing plant located south of the border rather than in Ontario would be more than double. The figures showed that the Canadian operations would yield an estimated pre-tax profit of $1.2 million, whereas his company would make a profit of almost $2.3 million before tax if the new plant were located just a couple of hundred miles away. So, we have a case of good-bye profits, goodbye jobs. We even force our own entrepreneurs and businessmen to expand their operations outside the country. It seems to me, looking at this particular case, that something is very, very wrong. Common sense tells me that. Let us give our own people the encouragement and incentives they need to invest in Canada. Let us give them all the help they need, because new jobs are too important to throw across the border.
A month or so ago the Prime Minister (Mr. Trudeau), who incidentally has alienated the entire province of Alberta and almost all of western Canada and the Mari-times with his strange attitudes and policies, went tripping off to Red China. My comment on that meeting would have been simple. His time would have been better spent in Washington. I cannot help but wonder why the Prime Minister was not trying to make Canadians better liked closer to home. I would have thought there was a more important job to do fixing up relations with our closest neighbour and biggest trading partner, the United States. I submit that instead of visiting Communist China the Prime Minister should have been in Washington, London, Japan and Europe patching up relationships which his government has destroyed. Ask the average Canadian who is his closest friend, and he is not likely to say Red China. He can see things clearer closer to home. It is a pity the right hon. Prime Minister cannot.
So, Mr. Speaker, let us stop kicking our neighbours. Let us stop ignoring our friends. Let us stop creating animosity with those who want to be our friends, and with our own Canadian businessmen. Let us help them create new industries. Let us help them create new jobs. Let us give them the encouragement and incentives they need to make Canadian-owned industries grow, without scaring off people outside our borders who want to invest in our future. I ask the House, where would we be today if we were not rich in resources, and no one wanted to invest in Canada? Let us thank God we have the resources, we have the people wanting to invest in our future. Now, all we need is the same quality to guide these investments that the Canadian businessman exercises in his own day to day operation-common sense. Let us be rational. Let us be
Foreign Investment Review Act fair. Let us be realistic. Let us help Canada grow, not hamper it.


Mr. Barnett J. Danson (York North):: Mr. Speaker, I really did not intend to participate at this stage of the debate until I listened to some of my friends across the way. They made me wonder if they really want the bill, particularly the hon. member for Lethbridge (Mr. Hurl-burt). He spoke about things that are not about to happen, such as the possibility of a Progressive Conservative government! What caught my ear and caused me to rise was his reference to the article which appeared in the Financial Post about Husky Manufacturing and Tool Works Limited. Mr. Schad is an entrepreneur. I knew him when he came to this country, a toolmaker from Baden-Baden, Germany. As a matter of fact, I knew his wife before he did but nothing can be read into that!
One should understand the nature of this operation, Mr. Speaker. It is a brilliant operation and Mr. Schad has done a brilliant job. The success which he has enjoyed has been largely the result of his own ingenuity and energy, and I think it is presumptious to say that Canada has made it so difficult for him to operate here that he would be better off if he were to go to the United States. I spoke to him last week about these same tax considerations. Of course, these considerations include DISC and we do not approve of that; it is not in keeping with the international atmosphere that should exist. I do not think we should just lie down to the United States dictates in this respect. We should not forget that many of these companies were built up largely with research and development funds supplied by the government of Canada, and with a great deal of assistance in displaying at exhibitions in Japan, Germany, the United States and other countries.
I think the case that Mr. Schad makes has some merit, but I do not think it is a classic example of the factors that should be considered in deciding our foreign investment policy. One of the interesting facets of our relationship with the United States is that it is taken so much for granted. The fact is that our trade continues to grow and the manufacturing segment of our exports to the United States continues to increase. We do some $30 billion per year of trade with the United States, so I would hardly think that relations with them are being destroyed. Visits to China, the Soviet Union, Asia and other areas of the world where we will find future markets are not counterproductive nor mutually exhaustive. Someone had to take the initiative in establishing the contacts and that was done very well by our Prime Minister (Mr. Trudeau) who was followed by leaders of nations greater in size than ours.
When this bill was studied in committee, Mr. Speaker, some members of the Conservative Party talked like nationalists. They know very well that the majority of Canadians support this bill, so while they talked like nationalists they amended like continentalists. I cannot help but feel that their amendments are designed to emasculate the bill.


Mr. Hellyer:: On the contrary, to strengthen it.
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Barnett Jerome Danson: To strengthen it by further prescribing procedures that must be followed is a rather negative approach, I think. The hon. member for Don Valley (Mr. Gillies) is trying to make this a debate on industrial strategy and the hon. member for Edmonton West (Mr. Lambert) talks about Toronto tunnelvision. Well, Mr. Speaker, perhaps the people from Toronto are in the best position to speak about this. They, and the people of southern Ontario, are well aware of the consequences of foreign investment in an unrestricted fashion. The hon. member for Lethbridge (Mr. Hurlburt) has suggested that we are going to scare foreign investment away. Mr. Speaker, that is not the intention of the bill; it is the nature and quality of investment that is important.


Kenneth Earl Hurlburt: A point of order, Mr. Speaker. The hon. member for York North (Mr. Danson) keeps referring to me and to my statement about scaring foreign investment away. I would like him to know that I am speaking from 25 years practical experience. The only reason I am here fighting this bill is because of this government.


Mr. Deputy Speaker:: That is not really a point of order but rather a point of debate.


Barnett Jerome Danson: It is an interesting point of debate, Mr. Speaker. I speak from experience of doing business with many countries in the world, but mostly in the United States and Canada, as well as having a company in the United States.
The point is when you have a rule that the investment be of significant benefit to Canada, you can make a much better deal. You have a bargaining strength there that has a special value because the government has an opportunity to show potential investors how much greater the benefit to Canada will be if they invest in a different way. If there is no such agency investors go wherever they want, of course. If we are able to consult with the provinces, as a screening agency must, the benefits to other parts of Canada can be shown. Those of us from the so-called golden horseshoe are well aware that growth for its own sake is not the answer to everything. Votes are not won in that area by telling people how much bigger the area is to become and how the population is to be increased. If you want to win their votes you tell them how they can enjoy the good life in Edmonton or other places! The fact is that we deal from day to day with the dimensions of investment in matters over which we have very little control. Here we are trying to give the federal government an instrument to encourage investment in the best interests of Canada. But, Mr. Speaker, if I read the amendment correctly, it would give the provinces the power of veto in some cases, and I think this would be extremely unwise.
The industrial strategy to which the hon. member for Don Valley referred does not come by divine revelation, not like tax reform; it comes about by a series of policies in key areas. I suggest that these policies are developing at a rate at which they can be absorbed and discussed with a degree of intelligence in committee and in the House. That could not be done if you tried to impose some master plan from above. Think of what this government has done under regional economic expansion. Of course, it is not perfect but it is the first significant move of any government in our history. This bill will help improve and

strengthen regional expansion and will expand research and development programs. The growth of the Industrial Development Bank, and the restructuring which is about to take place, will be of tremendous value. The establishment of the Canada Development Corporation is another important factor. These are the things that are the matrix of industrial strategy.
As I said, I was constrained to enter this debate because I found my hon. friends opposite straddling the fence, trying to show the nationalist people that they are nationalists but at the same time showing their other friends that they really do not mean it. They do not want this measure to be effective. They do not want to see things changed. That is traditional. That is what we expect. Effectively, the amendment would give veto power to the provinces in many cases and emasculate the bill. The federal government should be in the position to act in the over-all interests of the entire country.
The hon. member for Nipissing (Mr. Blais) referred to auctions. I do not want to get into an auction with the hon. member for Lethbridge (Mr. Hurlburt). The fact remains that the provinces, particularly those which are not industrialized, perhaps in anxiety or over anxiety, might make or accept deals which are less favourable. In a recent private arrangement that I had, I found that by simply quoting from the intent of the bill, and some of the amendments to the corporation act, I could make a much more realistic arrangement, and one which certainly was in the best interests of Canada.
I was in New York a week or two ago where I met the head of a multinational corporation. I discussed the arrangements which they accepted, not anxiously but without reluctance, in other countries of the world. I was absolutely astounded. This company does business in virtually every country of the world. Whatever rules there are, they go along with them. They say they cannot afford to do otherwise because if they do not, their competitors will.
What we are proposing is certainly mild compared to countries less buoyant and with less stable governments. We are particularly favoured with a stable government. The opportunities, skills, educational level and resources that exist in this country count very much when investments are made here. If we have some restrictions and provide guidelines in some cases and incentives in others, we can develop greater industry. This will be of great value to Canada and all Canadians. What is important is the nature and quality of these investments and the distribution of them. I do not accept the fact that we should be ungrateful for all the investment we have had in the past. It has been good. However, we are seeing what effect it can have on us.
Many of our major decisions have been distorted by the decision-making location of multinational corporations. We must keep in mind that a lot of these decisions are made by Canadians who are employed by these companies. They think in a head office context which ultimately is not really in our best interest. We must have this opportunity to review these decisions. One example of this is the current oil situation. Had the major oil companies
November 13, 1973

been Canadian owned, the decisions would have been much different. It is true the investment for exploration and development came from multinational corporations. To say we would not have had this industry without that initial foreign investment is a bit of conjecture. I am sure other investors would have been found. However, if we had had regulations, rules and some guidelines for these companies to follow when they started in this country, we would not be boxed in as we are now. This is the time to do something. We cannot do it any sooner.
This is reasonable and fair legislation. It must go through to give us some degree of control over our own destiny. It is going to be of particular value to those parts of the country which in the past have been less favoured economically and, speaking selfishly as a Torontonian, in our best interests because we will see the rest of Canada flourish as well. We flourish only to the extent the rest of Canada flourishes. This is of real importance in the long run. One of our greatest problems in this country is economic disparity. This bill, certainly in concert with regional economic legislation and incentives, will do more for regional economic expansion, bringing industry to parts of Canada that do not have active industry, than anything else we have done.
If we fool around with this bill too much and put too many hedges in it, we will be in danger of limiting its food effects considerably. We must give the screening agency the opportunity to work, to consult with the provinces and work with them. This is an essential part of their job. It is an essential part of the bill. Amendments must not restrict their freedom to operate. If we are going to have a bill and a policy for which the provinces in the long run will thank us, the people who elect us will thank us and, perhaps even more important, our children will thank us.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I have known the hon. member for York North (Mr. Danson) since he first came to this House. Perhaps I have a more retentive memory of the speeches he made when he was a new man in this House. He tried to win his spurs on the finance committee. At that time he made speeches on changes to the Canada Corporations Act, the changes made when the Liberal majority swung over to taking a more realistic view of the white paper on taxation. The hon. member should blush after making us listen to what was downright arrant nonsense this afternoon.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: Did you say Arab nonsense?


Marcel Joseph Aimé Lambert: I would not suggest the hon. member would use any Arab thinking. However, the points that he made demonstrate an attitude and a frame of mind which suggest that we poor individuals who live in the boondocks, in other words outside of metro Toronto, need the big brotherism of enlightened people like the hon. member for York North who suddenly has discovered that what is good for them is necessarily good for the rest of the country. I must say that Saul on the road to Damascus was no newer convert than the hon. member who just finished speaking.
I would say that it is great to be told by a member from a constituency like York North that what this country
Foreign Investment Review Act requires is some central reviewing agency which will tell any part of the country whether or not it should have an expansion of industry or a new investment with a modicum of foreign investment. We are to be told, not consulted. This amendment talks about consultation.
The hon. member for York North dared to talk about the oil industry. As a result of the tunnel vision prevalent in the area from which he comes he thinks that if the oil had been developed in a different way, we would not have the problems of today. Let him talk to his financial friends in Toronto. For example, would they have approved or even thought of a pipeline into Montreal three years ago when offshore crude was much cheaper to produce than domestic crude? Is it suggested that the Energy Conservation Board of the Province of Alberta knows not of what it speaks or that all the experience it has collected since 1947 is not worth one tittle by comparison with the newly acquired, unproven judgment of an agency making a recommendation without consultation? There is no word about consultation in this bill. All it says is that the minister, when making his recommendation to the Governor in Council, shall at the same time submit any representations which may have been made by the provinces. In fact, the bill does not require that a notice of an application be sent to a province which has not, in the language of the measure, stated its economic policies. I know this bill, and perhaps that is more than can be said for some of the other hon. members who have sought to support it on this question of consultation.
I want to make it clear that when it comes to the question of being Canadian, I defy anyone on the other side of the House to show that any of us on this side who may be critical of this measure are any less Canadian than they. But they have wrapped around themselves a toga of nationalism and virtue which ill becomes them because of the manner in which they have acted in the past. They remind me of one of my opponents in the last election. He had a Winnebago caravan with half a dozen Canadian flags on the back of it and, on the sides, the famous Liberal slogan "I care". What humbug! What hypocricy! What pretentiousness! Many of the speeches in support of this bill fall into the same category. Of course, we are all concerned.
Does the hon. member for York North pretend that no account is to be taken of decisions of the Alberta Energy Conservation Board, formerly the Energy and Gas Conservation Board, with regard to the quantities of oil to be exported from that province to the rest of Canada, or to the United States? Does he mean that those two bodies have been guilty of faulty judgment, judgment which could have been corrected by some old-fashioned Canadian company based in Toronto or Montreal? Did he not attend the committee hearings at the time the tax bill was under discussion and listen to representatives from New Brunswick and Nova Scotia saying that the fear among businessmen in those areas was not so much of a takeover by a Boston corporation as by a Toronto or Montreal corporation? It was the central Canada investors they feared, rather than the outsiders. This is all documented, and the hon. member for North York knows it, because he participated in those hearings.
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Barnett Jerome Danson: But it was not true.


Marcel Joseph Aimé Lambert: Does the hon. member suggest the witnesses from Nova Scotia and New Brunswick were lying? Because if they were making incorrect statements consciously, they were uttering falsehoods. Has the hon. member read the brief from Quebec with regard to this bill? Hon. members opposite sat here the other day and sought to draw about them garments of righteousness and honour because the administration in Quebec had secured a victory. This same administration has stated in a brief which can be found at the back of the proceedings before the Finance Committee considering this bill, that there must be prior consultation.


Mr. Breau:: They ask for a veto. That is what they ask for. Parallel power.


Marcel Joseph Aimé Lambert: They said consultation.


Herb Breau: Parallel power.


Marcel Joseph Aimé Lambert: I gather that in some parts they went further. But because a couple of commas have been misplaced, because they have gone further in one part than I would agree to-


An hon. Member:: Oh!


Marcel Joseph Aimé Lambert: I do not ask for a
provincial veto over this bill but I do ask for consultation. I do not mean the kind of consultation the Minister of Energy, Mines and Resources evidently considers appropriate. He gave Alberta ministers a copy of a declaration by the National Energy Board two hours before its publication and then had the gall to say that the government of Alberta had been consulted before publication of the decision. The claim was totally false, almost to the point of being mendacious were it not for the obscurity of a definition of the word "consultation".
What my colleagues and I are seeking is this: if notice is received of a pending investment of a nature which would be subject to the terms of this bill, a copy of that notice should go immediately to the province concerned. At the moment there is no such requirement. Does the hon. member for York North suggest that in the event, for example, of an application in connection with a joint venture, say, Canadian and foreign companies, in connection with the development of the tar sands, which are a wholly Albertan resource, a decision should be made on that application by a screening agency here in Ottawa totally unrelated to any input of information or opinion form the Province of Alberta, although that province has a body of expertise in this field which cannot be matched by the federal government? The bill provides that there is that power.
Does the hon. gentleman suggest for one moment, since he is at least on the fringes, well exposed to the investment field, that there will be sufficient confidence to venture an investment not of $1 million, not $5 million but $1,000 million at today's prices for a 1,000 barrel a day oil well and refining complex? Or does he suggest that the

province of British Columbia, having entered into an agreement for the development of, say, a copper-zinc refinery on the basis of a mixture of domestic and foreign capital, and having been satisfied that the project was wanted for the development of the resources of B.C. by the people of the province, should have that decision reviewed by a board appointed by the federal government under an act that requires that there be no consultation with the province of British Columbia?
I am amazed at the members of the New Democratic Party accepting this kind of bill.


Mr. Rodriguez:: You are always amazed.


Marcel Joseph Aimé Lambert: The hon. member for Sault Ste. Marie-


John R. Rodriguez: Nickel Belt.


Marcel Joseph Aimé Lambert: Nickel Belt; I apologize to the hon. member for Sault Ste. Marie. Having seen him perform in committee, only one course is open, and that is under his personal ukase. Everything must go as he says; nobody else is right.


John R. Rodriguez: Not a Tory anyway.


Stanley Howard Knowles: With him and you on the same committee, it must have been quite a show.


Marcel Joseph Aimé Lambert: The only thing we missed were these gentle, empty offerings of the hon. member for Winnipeg North Centre. Let me refer to the brief of the province of Ontario. Although it approved the principle of the bill, in its brief it said this:
The government of Ontario places strong emphasis on the development of close consultation between the federal government and the provinces in the review process. Neither section 2(2) (e) nor section 14(2) (b) -
Nor, may I say in parenthesis, section 11(2) or section 9. -provide assurance of consultation, although the establishment of a consultative process has been indicated by the federal minister.
The minister's indication has been not that there will be consultation but rather a permissive, informative process. There is no consultation provided for in this bill. The Ontario government brief continues:
It is therefore important that the proposed arrangements for consultation be clarified. In particular, we urge that the federal government provide the province in which the foreign investment is proposed with a copy of the notification and any additional information submitted by the foreign investor; the provinces be provided with full opportunity to submit their views on proposed investments; the federal government inform the provinces of any additional details concerning the criteria which will be used in the review process.
In addition, Ontario attaches importance to continuing consultation with the provinces with respect to subsequent policy review and future policy development.
The DREE program of the federal government is not the only one that must apply. Many of the provinces have an industrial development program, whether it has to do with native peoples or is a decentralization of industry from major cities into rural areas. But the hon. member for York North stated that it will be this agency and the
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recommendation made to the Governor in Council that will determine the nature of any investment.


Herb Breau: The provinces are informed.


Marcel Joseph Aimé Lambert: I defy the parliamentary secretary to tell me where in this bill it is provided that a copy of the notice concerning the investment shall be sent to the provinces.


Herb Breau: No, I did not say that.


Marcel Joseph Aimé Lambert: No. Therefore, there is no obligation to have consultations. I am not saying that a province must consent, otherwise there would be an absolute veto. What I am saying is that the provinces must be consulted, and there is nothing about consultation in this bill. Information given after the event is not consultation. This is what I call this administration's tunnelvision with regard to consultation. You tell them what you think and they must conform.


Herb Breau: There is consultation every day with the provinces.


Marcel Joseph Aimé Lambert: But it is not provided for in this bill.


Herb Breau: It is not provided for in any act.


Marcel Joseph Aimé Lambert: The hon. member says that it is not provided for in any act. Of course it is. It is provided for in many acts.


Herb Breau: Which ones?


Marcel Joseph Aimé Lambert: There is provision that the minister, after discussion or consultation with the provinces, may do a certain thing. That is provided for all along. Or there is a general agreement reached by the federal government and the provinces that they are talking about a certain thing. This is why I contend this point is one of the chief weaknesses of this bill.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member for Edmonton West but the time allotted to him has expired. He could, however, continue if there was unanimous consent.


Some hon. Members:: Agreed.


Stanley Howard Knowles: Another two or three minutes.


Marcel Joseph Aimé Lambert: I thank hon. members. My throat will not last as long as their ears, so I shall only be about one minute. However, in all earnestness I must come back to my point. I say that needless confrontation now exists between the people of this country and the province of Alberta in regard to oil development in that province. Any assertion that the development of the resources of that province are going to be interfered with will certainly put Canada on a terribly rough course. The danger of confrontation between the federal government and the provinces will be rife. Although I have not argued this here, I suggest there are many people who maintain there is a very serious constitutional question about the
Foreign Investment Review Act propriety of the action that is being taken by the government under this legislation. I am not the only one to say that. Many of the provinces have said there is no constitutional difficulty, just as the province of Quebec has, in its brief. I am not going to suggest, as the parliamentary secretary is saying, that we should dismiss the Quebec brief and dismiss the view of the Quebec government in this regard.


Herb Breau: I did not say that.


Marcel Joseph Aimé Lambert: In his previous remarks he said they wanted the right of veto, parallel development and this and that. He said that their brief was far and away from being acceptable. That is fine if the parliamentary secretary, coming from New Brunswick, wants to say the views of the government of the province of Quebec should not be accepted, but let us put it on the record.


Herb Breau: I did not say that.


Marcel Joseph Aimé Lambert: I should like the hon. member to say whether he is prepared to accept the reservation as to consultation. I am talking about the amendment regarding consultation. Let us look at the views expressed by the various provinces. I think this amendment hits at one of the weakest parts of the bill if it is to be made to function as a useful tool with a view to achieving some of the hoped for benefits asked for by that government in its proposal.
Let me suggest that we will have some real quarrels over the first decision under this bill, and we will really have some trouble. We will see another situation such as that created in respect of the development and marketing of oil in the province of Alberta. I think that could have been avoided if there had been proper consultation, and I think we could avoid a lot more trouble in the future if the government will amend the act in the appropriate way.


Fred Alward McCain: Mr. Speaker, perhaps it is my background before I arrived at this House which makes me view Bill C-132 with a great deal of doubt. Throughout the years I spent in the provincial legislature of New Brunswick it seemed as though federal policy made one incursion after another into the rights of the provinces. To me, this bill is equal to any in its imposition of federal government position upon the provincial domain.
While this principle may apply in an important way to that area of Canada which is well developed, where income is above average, where employment opportunities, as has been shown by the figures released on October 20, would very well indicate that the unemployment problem there is by no means as serious as it is in the periphery of Canada, particularly in the provinces of New Brunswick and Newfoundland, and while these areas from Quebec City to Windsor may be able to withstand a lot of unemployment, particularly if investment control is imposed by Ottawa, I submit that there has to be some discretionary power and some provincial input in order that we shall not find ourselves even worse off than at present in under-developed areas of Canada.

November 13, 1973
Foreign Investment Review Act
It is with this in mind that I fully support all those amendments which pertain to input by the provinces and guidelines by the provinces regarding investment within their domain. I am not one who is absolutely against the control of foreign investment in Canada. I recognize fully that it is necessary for Canada to have a policy, but this particular policy, as introduced to the House of Commons by the government on your right, Sir, is such that once again it is a patchwork policy which applies only to certain portions of Canada. It bodes very serious hardships for other areas if it is not administered in a very lenient fashion, indeed.
It is never good that a government should be vested with the power by its own legislation to create policy at the whim and pleasure of the government of the day and apply it in locations which it may choose for one reason or another. It is quite possible that reason could pertain to the politics of the government of the day. I say this with no particular accusation against those on your right; I say it as it applies to all governments. There is an inclination by governments to be a little more lenient in areas where the people have been much more favourably impressed by their policies and candidates.
It is with this in mind that I do not like enabling legislation by this or any other government, but suggest that legislation should spell out in detail the policy the government has in mind rather than enabling it to create regulations, to make decisions ad hoc in respect of a particular situation and adjust policy under it on a momentary basis. This is the primary danger of this bill and it is in this field that it infringes mostly on provincial rights.
I think the bill overlooks the relationship of the economy of Canada to the economies of the various regions of Canada. Again, I am going to cite the example I feel is basically the best example. The net income which the agriculture industry of Canada may experience from time to time reflects itself upon the total income of Canada by virtue of the demands of the agricultural community as it expands its plant and spends its money for improvement in its operations and thus makes demands upon the national income in an expansive sort of way. What applies to agriculture, which is today a small percentage of our total economy, will apply equally to developments on the periphery as well as developments in the centre.
If it is possible to create a financial climate in which development will take place in the Atlantic area, as an example, it will most certainly be reflected in a very important way in the more highly industrialized areas of the rest of Canada. It seems to me that the policy of the government should be that where it is possible investment shall be directed to those areas of Canada where the economic structure is the weakest. I do not say this should happen on the basis of, let us do something for New Brunswick, Newfoundland, Saskatchewan and so forth, but rather that there are products and commodities which lend themselves to economic production outside the basically industrialized areas of Canada.
Perhaps the Minister of National Defence (Mr. Richardson) epitomized best the feeling I have when he expressed himself as feeling there might be cause for resignation from Cabinet if heavy water was not produced in his

province. It was amazing that the Minister of Public Works (Mr. Dube) from New Brunswick did not join him in chorus because certainly heavy water is a commodity on which transportation costs have very little influence in respect of the total cost at the point of use. It is, therefore, a product which could and should be developed by Canada in areas where economic expansion is required. This is a case for the development of a national economic policy, not for the development of a patchwork quilt, and not for the allocation of a heavy water plant to an area of Canada which is already more industrialized than many others. It is in this field that the government could play an important part.
It has recently been announced that there are no additional plans for a heavy water plant in New Brunswick. This takes away the economic base and employment opportunity, as well as a tax base, for both Canada and New Brunswick which would be most favourable in that area. It would provide for energy requirements which, in turn, would create further employment and perhaps further subsidiary development around the heavy water plant. It was with deep regret that I read the news report this morning that it has been pretty well finalized that New Brunswick shall not receive the initial allocation of a heavy water plant.
Let me repeat that it is not my feeling that we should be without a policy in respect of Canadian ownership of Canadian resources and Canadian industry. I feel very strongly on this, and have felt that way for a good many years. Perhaps in my initial year at college during the study of economics it became a matter of some serious concern to me that the flow of cash from Canada in respect of dividends, interest charges and so on as a result of our dependence upon foreign currencies for our civic, provincial and federal development as well as our industrial development was draining away Canadian opportunity. This is no new, snap decision that there should be a national policy for us to obtain owernship or our own community.
However, it is my opinion that this cannot be done with drastic enabling legislation of this type, a type which enables the government to make a decision on a political basis rather than on the basis of the economic necessities of the area concerned. It is very interesting to note that virtually the whole of the first part of the last issue of the Financial Post carries several items to indicate that Canada has not created a climate in which Canadian money is particularly interested in development and expansion within our borders. It pointed out three specific additional cost factors for one concern, which exceeded the cost factors in respect of this plant if it were to expand outside our border. The first of the additional costs was the sales tax. The second was the very substantial differential between the income tax structure in Canada and the income tax structure in the United States. The third was the fact that the Government of Canada has not to date been able to negotiate a trade situation in which our products could go to the United States without duties which prohibit their production in Canada.
It is important that we develop the economic climate in Canada whereby Canadian money will reinvest in Canada
November 13, 1973

rather than seek opportunity abroad in more attractive economic climates. We have heard several companies in Canada criticized because of their increased charges to the consumers for goods and services. Among these companies, for instance, is the Bell system. I have no quarrel with the Bell system and do not wish to interfere with those who oppose its rates. But it is significant that in the first three-quarters of this year that system has had a tax demand of $33 million higher than the tax demand of one year ago and that this tax demand comes from all levels of government, municipal, provincial and federal. The accumulated increase to date is $33 million for a single corporation in Canada. It is no wonder that subscribers scream when there are applications for rate increases, but if the taxes are to be increased at this rate then I submit to you, Mr. Speaker, there is little recourse to industry but to ask the consumers of these various goods and services to pay more.
This is not the fault of the producer, the service industries or the manufacturers. It is caused by the lack of an economic policy in Canada which would recognize for Canada the need of an internationally competitive economic climate which we lack. It seems to me that the bulk of those who have spoken in strong support of this bill are those who come from the industrialized areas of Canada. Those of us who have the misfortune to live in areas of Canada which are not industrial, those of us who live in the area of Canada where unemployment went up by 2.8 per cent in the last month, those of us who have seen the unemployment rolls increased by 7,000 within one province, those of us in another province who have watched unemployment rise by 1.5 per cent in the last month's statistics are the people who are concerned about the fact that we are about to control investment without any suggestion that there should be special consideration, special input and special participation by the areas which need this.
Let me quote from page 7638 of Hansard from the remarks of the Minister responsible for DREE. He said:
The implication of this are-
He is referring to the economic expansion program, the control and so on.
-first, that it is a commitment on our part to reinforce provincial priorities;
If it is the intention of the government to reinforce provincial priorities, then it should incorporate them in one of the amendments in respect of provincial participation in the decision-making process. Let us go on.
... that is, how a province uses its resources or, in the general scheme of things, how those resources are to be developed is something that the province will need to decide in the first instance. Second, once we have identified a major developmental opportunity on which we are prepared-
Please note that word "prepared".
-to work, the very fact that the federal and provincial governments agree on that and sign an agreement to that effect will, of course, be as strong an assurance as you can get that that enterprise is going to be acceptable within the criteria set down in this bill.
The real problem is that the government of Canada shall make the final decision in respect of priorities within the boundaries of a province concerning what is developed,
Foreign Investment Review Act how it is developed and where the money will come from. This is made very clear by the minister's remarks. Let us take another look. In respect of the provinces and regions of Canada, as recorded again at page 7638, he said:
. . . the provinces are given strong assurance that provincial interests and provincial rights will be taken into account.
If these assurances are, in fact, acceptable to the provinces, then I say incorporate them in an amended bill so that the provinces will in fact see that they have an element of authority in the decision-making process in respect of their own economic development. I might add that the minister took unto himself the opportunity to deny statements he made in the past in respect of the rights of his own province, a province of comparable economic development. There is the implication in his speech that he is very unhappy with the premier of his own province in respect of development in that province. It is implied that he is critical of his political patron who put him where he is today, and it is very doubtful if that political patron were able to speak out in his own defence that this gentleman would be returned to this House of Commons. In his remarks he certainly has abdicated the position which any member from the Atlantic area should take in support of the requirements of that area.
He went on to imply in his speech again that the provinces would come to the lap of the federal government because of the goodies the federal government had to deliver. There is the suggestion that only if the provinces comply with the wishes of the federal government will they have their wishes met in respect of development. This bill puts in the hands of the government of Canada discriminatory powers. It must be recognized that in the Atlantic area, if there is a takeover by a Canadian firm, the process of the removal of employment and earning opportunities begins forthwith. The accounting, the invoicing, the high salaried individuals associated with a firm taken over in the Atlantic area by a central Canadian firm creates additional job opportunities in the high salaried class in that area which I mentioned from Windsor to Quebec city and withdraws from the Atlantic area the executive opportunity which the business would present, very often under foreign management.
It is significant, I think, that the bulk of the industries which have been taken over by Canadian capital have, as a result of these policies, contracted employment opportunities rather than expanded them. It is dangerous for a business to be taken over in any area, but its hope for expansion in the Atlantic area is amplified when the source of funds does not come from central Canadian industry. This is not a condemnation of central Canadian industry; it is merely a recognition of the economic facts of life, such as, that you should have centralized administration, you should expand as best you can within sight of your head office, and you should get the economic structure of your firm as centralized as possible to exercice mass economies for national distribution. This practice has been followed.
The prime example that we can cite, of course, is the takeover by a Canadian firm some years ago of a soap

November 13, 1973
Foreign Investment Review Act factory in the town of St. Stephen in my constituency. They took away every single job that was in that industry to central Canada and left the town holding the bag. We can go to the same town where a Canadian operated branch closed. It is Milltown, adjacent to St. Stephen and now incorporated with it. The Canadian corporation in the textile industry was closed down. We can also take a look at the town of Marysville where a similar occurrence took place. These companies closed down after a takeover with central Canadian money; they closed their doors and several hundred jobs were lost to the province.


Mr. Deputy Speaker:: I hesitate to interrupt the hon. member, but the time allotted to him has expired. He can continue with unanimous consent.


Some hon. Members:: Agreed.


Fred Alward McCain: Nobody wanted to start at three minutes to five, any more than I did. However, I will not take much more of your time.


Stanley Howard Knowles: There is no private members' hour.


Fred Alward McCain: The business world in Canada has found, for instance, as I have mentioned earlier, that no competitive situation is created in Canada when interest rates are as high as they are and when taxes are as high as they are, for Canadian money spent in this country. The outflow of Canadian currency to foreign fields is something which should be discouraged by government policy and not by government regulation. It should be encouraged by our efforts to negotiate a reasonable tariff structure with many of our world partners. It should be created by an analysis of our income tax structure in Canada, our depreciation structure versus that offered in the competitive field in the world market.
If this bill gave any indication whatsoever that the government of Canada, as it is today, had a program for the development of opportunities for Canadian taxpayers to buy shares or for the creation of an atmosphere in which the international world would be prepared to sell its shares to Canadian participants, this would be a step in the right direction. But no such program has been suggested. The speeches in support of this bill have not been in condemnation of those who have spent money on Canadian development. However, they have in no way encouraged further development. It is quite proper to say that the red tape which has existed in the Ottawa structure has made it most discouraging for any individual to try to undertake such a development, with the assistance of DREE or any other department of government.
It is significant to note that several applicants who were desirous of spending money in Canada for development of Canadian industry decided that this bill was the last blow to their application and, as a result, tens of millions of dollars of potential investment, some in secondary industry, some in the processing industry, have been withdrawn from the Atlantic area. They are not interested in investing in Canada. These instances did not involve processing or manufacturing which exploit our natural resources only but rather relate to secondary manufacturing.

I will not impose upon the privilege extended to me. Let me only say that I deplore the fact that the government has chosen not to assist New Brunswick in the opportunity it had for a heavy water plant. I deplore the fact that it has not recognized and taken advantage of the opportunity to scatter some items of high cost-low weight high value items-throughout Canada so that we could develop them. It is then, and only then, that an act such as this can be productive in Canada for our ownership and at the same time for development. In no way can the Atlantic area share or look forward to sharing equal opportunity in employment or standards of living at its present rate of development. There is great fear and mistrust in respect of the way in which this bill may be administered, and in respect of the potential opportunity which may develop, if judgment is not made with great discretion and in recognition of the employment and development requirements of our area.



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 Northwest Territories (Mr. Firth)-Northern	Affairs-Northwest	Territories-
Alleged letting of contracts by Hire North without tenders; the hon. member for Grenville-Carleton (Mr. Baker)-Public Service-Alleged rug-ranking system of promoting secretaries-Request for substitution of point rating system and tabling of relative Treasury Board minutes.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of Bill C-132, to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motions Nos. 2, 3, 4, 5, and 6.
Mr. Charles H. Thomas (Moncton):: Mr. Speaker, a stranger who reads the many speeches made today on Bill C-132 might be pardoned were he to wonder just which
November 13, 1973

party in the House was sponsoring this legislation-surely not the junior partners in this unholy alliance of unhappy bedfellows. The NDP has done nothing but criticize the bill. They say it is too weak; it will not do the job, but it is better than nothing. The Liberals have been distinguished mainly by their silence. Until today, I believe only three Liberals rose to speak on this bill, although they have been somewhat more vocal this afternoon. However, they all have one thing in common. They continually and consistently accuse the Official Opposition of being opposed to any control of foreign investment, which is a deliberate distortion of the facts. Why do they adopt these tactics? It reminds me very very much of the old debating ploy in school circles. When you had a very weak argument which you could not support with facts, the usual tactic was to confuse the issue and ridicule the stand taken by your opponent. This debating ploy seldom worked in school circles, and I suggest it will not fool anyone in this debate,
On the other hand, the position of the Official Opposition has been stated over and over again. It was stated very clearly by the hon. member for Central Nova (Mr. MacKay), in whose name stand two of the amendments on which I wish to speak later. It was stated most eloquently again this afternoon by the hon. member for Don Valley (Mr. Gillies). Certainly, we want to retain control over our natural resources. Certainly, we recognize the political implications of foreign economic domination. After all this is the party of Macdonald, and we were the first proponents of economic nationalism. We still believe in economic nationalism but in its proper perspective. It is fine to encourage Canadian ownership, but only if it is done within the framework of a broad national industrial policy. But in encouraging economic nationalism let us be very careful that we do not drive away foreign capital from those areas of the country which still need massive infusions of capital, unless we make sure that we replace that foreign capital with Canadian capital, or with some other form of capital investment.
Recently, I read a paper put out by the C.D. Howe Research Institute, prepared by Dr. David Springate, dealing with regional incentives and private investment, in which he gave an assessment of regional incentives offered by DREE. I think it is appropriate at this time to quote briefly from Dr. Springate's paper. It outlines our position very well. It outlines what should be Canada's national industrial policy. He refers to the fact the RDIA program has two subsidiary goals, and then writes;
The final goal is that of encouraging international investment in Canada. The pursuit of this objective confronts two opposing constraints and trends. One is the country's apparent need for such investment. The other is a growing sense of economic nationalism.
Canada traditionally has been a heavy user of foreign capital in the form of both portfolio investment and, more significantly for our purposes, direct investment. The familiar arguments relating to capital need and the extent of foreign ownership will not be repeated here. It is enough to state that one implication of a situation where over half a country's manufacturing capacity is foreign owned is that attraction of foreign investment must continue to take place if a steady expansion in the economy and in the number of jobs is to occur. If foreign owners do not find Canada an attractive place in which to invest (or re-invest), they can withdraw funds and invest elsewhere. Given Canada's need for
Foreign Investment Review Act economic expansion and job creation, the possibility of reduced foreign investment is a prospect that many Canadians find undesirable.
Dr. Springate is not the only one to state this point of view. It was stated clearly by the Premier of Quebec back in January, 1972, when he said in effect that we absolutely need foreign investment. He added:
Since we don't have any alternative, at least in the short term, we can't have too restrictive a (national) policy on foreign investment.
This is an attitude that is quite prevalent among the less fortunate and less developed regions of the country. Officials of DREE were quoted by Dr. Springate in his paper.
In the presence of such an emotional issue, DREE has proceeded with this aim of attracting foreign investment to Canada. "We just keep a low profile in trying to attract multinational firms," said one official of the department who is active in investment promotion.
The premiers of the four Atlantic provinces have stated publicly that their provinces still require foreign investment if they are to make progress and reach the levels attained by the rest of Canada. Many of the witnesses appearing before the committee studying this bill made the same point.
But the point that stood out in my mind after reading the committee evidence and other articles is the fact that not only are many people in these various areas afraid that the government will legislate foreign capital out of the country but are also worried about this bill, because its implications are so- uncertain. The bill is so badly written that many people fear foreign investors will not even take initial steps to invest here because they do not know the ground rules that will be applied under the provisions of this bill. This is the danger that I see. This is the danger that my party has stressed. The regulations may be so uncertain, and give so much discretionary authority to the federal government that they will discourage foreign investment in those areas of the country where it is still needed, and yet there is nothing in the bill to encourage Canadians to move in and take up the slack.
This is why two amendments have been proposed by my colleague from Central Nova, because if the effort to regulate foreign control is to succeed without destroying our whole national industrial policy, there must be consultation, realistic consultation, true consultation between the federal government and the provinces. At this stage of the game when so many people agree that foreign capital is still essential to the development of the country, we should be careful not to do anything that will discourage such investment from coming in, unless we can guarantee that it will be replaced from other sources.
My hon. friends in the NDP say, "There is no need to worry if you drive out U.S. or other foreign capital. There is lots of money here in Canada to take up the slack." They point to the fact that there was an outflow of capital from Canada last year. They say it is a simple matter to replace what is cut off by using available Canadian funds. Many hon. members of this House realize it is not as simple as that. Traditionally Canadians do not invest in Canada unless they are given some encouragement. Certainly, the present government has done nothing to encourage Canadians to invest in their own country.
7754

November 13, 1973
Foreign Investment Review Act
I have said that not too many members on the government side of the House spoke, but there was one speech from there that did make sense. In fact, if one did not know who made it one could almost take it as a criticism of this bill. It underlined many of the things that we on this side of the House have been saying. I refer to the speech that my colleague from Carleton-Charlotte (Mr. McCain) has already quoted from, the speech made one day last week by the Minister of Regional Economic Expansion (Mr. Jamieson) who, if not one of the better ministers, is certainly a minister who has intimate knowledge of the problems of the regionally depressed areas of the country.


Paul Theodore Hellyer: He is at least one of the most eloquent.


Charles Humbert Thomas: I will agree with that, and the most sensible. Here is the minister who has been given the task of making DREE work, who has continually told us of the problems he has met in the interference and inconsistencies offered by other government programs, which destroy the efforts of DREE. He has talked about government interference in regional problems, and certainly he is one minister who recognizes the problems. Like my colleague, I should like to quote a remark made by the minister. When we talk about this business of Canadian capital, and say we do not need to worry about foreign capital because Canadian capital will replace it. At page 7637 of the Hansard report of that same speech, still speaking of the need for foreign capital in the Atlantic region, the minister said:
... the biggest failing, in terms of Canadian control of the Canadian economy, over the past 50 years or so has been the lack of initiative and entrepreneurship and the timidity of a great deal of Canadian capital.
He went on to talk about the fact that Canadians did not take the opportunity to invest in the Atlantic region, and so it was left to foreign capital to come in and develop the fishing, lumber and mining industries. In fact, practically all the development that took place in the four provinces was due to the initiative of foreign capital. The minister spoke of the pitfalls that occur when foreign capital gets control of the resources. He referred to several big fish plants that had closed and someone mentioned Devco and several other enterprises.
This happens, of course, but I would also point out to the House something that the hon. member for Carleton-Charlotte (Mr. McCain) referred to; that the record of the Canadian corporations is no better in this respect. Canadian corporations, too, have moved in and bought small locally owned plants and then, within two or three years when the operation was not viable, have moved out. I could name a dozen instances, Mr. Speaker, and my colleague the hon. member for Central Nova (Mr. MacKay) referred to a plant which was taken over a few years ago by a Canadian corporation and which now is just a warehouse. This happens all the time, so it is not just the foreign corporations that are at fault. It does not matter whether the money is international or Canadian, naturally the investors are going to make their decisions on an economic basis, and if they have to close the plant they do so. The argument that international corporations have no

heart and do not consider the interest of the regions is not valid; it applies regardless of the ownership of capital.
If one read that speech without realizing that the minister had made it, one would almost think he was attacking the principles of the bill. He mentioned all the things that should happen, and the fact that it is very important that there be meaningful co-operation between the provinces and the federal government as well as with the industry in the area, but he also admits that many of the problems are due to the fact that there has not been consultation and co-operation between the governments involved. Industries have been established or assisted when it has been obvious that they could not succeed. Had there been local consultation the grants would not have been recommended.
All through his speech the minister pointed out the dangers of attempting to restrict foreign capital unless something can be done to encourage Canadian capital to take up the slack. While our postulations are the same, Mr. Speaker, our conclusions are the opposite. The minister takes the position that these departments have been set up and, therefore, in some cases when foreign capital begins to investigate the possibility of establishing in an area they have to go to the federal government for some type of assistance. He says, therefore, that there are plenty of safeguards in his department to ensure provincial input and provincial co-operation. This is only partly true, Mr. Speaker. The type of consultation and co-operation that the minister mentions usually comes after many months of negotiation when the program is pretty well set up. At that time the company or the province usually comes to the federal government. That is not the type of meaningful co-operation that is needed if we are to establish viable ownership in these areas.
What we are talking about, and what the premiers of the provinces are talking about, is prior consultation and prior knowledge of what is going on. We have heard apologists for the bill on the government side say that this is provided in the bill. Mr. Speaker, there is nothing in the bill to establish prior consultation. The only stipulation in the bill, and it appears more than once, is that the minister "may" consult the provinces; after proceedings have gone so far he may hear provincial representations. How can representations be made on something about which you have no knowledge? If you do not know that there is an application, how can you make representations? This may be the government's definition of co-operation, and possibly that is why we have seen the confrontation between this government and Alberta or Quebec or various other provinces. We on this side do not consider it to be either consultation or co-operation.
In order to meet all the requirements of the foreign ownership program which the Minister of Regional Economic Expansion outlined so eloquently, there must be prior meaningful consultation and co-operation between the federal government and the provincial governments involved. That is why my colleague has introduced this amendment; that is why I say that this bill can be immeasurably strengthened by the government showing good faith. Let them show they really mean to follow a policy of consultation and co-operation by adopting these amendments and making the bill workable.
November 13, 1973


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, perhaps at this late hour, it would be worth while to pause in this debate and review historically why the ownership of our industry is in its present state. Let us hear what some of the people in the business community are saying about Bill C-132 and ask why this legislation is before this parliament at this time.
It is obvious to anyone remotely connected with business that a great deal of rationalization is afoot in certain nations and groups of nations. Many tariff walls are falling, a few are being raised. Considerable scientific research and industrial research is being carried out on a joint or on a multinational basis. Coupled with this, we have an alignment, or perhaps we should call it a realignment, of several European states into a common market with other smaller nations who are classed as associated states. Canada is not part of this alignment. In fact, it is a matter of embarrassment to this government that the European Economic Community has not responded in kind to the overtures made to it by this government.
The November 7 issue of the Montreal Gazette featured an editorial entitled "The Euro-Canadian Doldrums". It tells of the "brushoff" Canada has received from the European Economic Community. While Canada has appointed a senior ambassador to the EEC, that community has not established parallel representation in Ottawa. It is obvious to trading groups that specific spheres of influence in our industry are going to establish trade patterns that will last for many years. Many people in industry and many people throughout this country are asking where Canada fits into this picture. More pointedly, where does our industry fit into this picture?
From the turn of the century to 1973, all we have really done, in so far as industry ownership is concerned, is to have the largest percentage of ownership change from British to American. This is an historical fact. Bill C-132 will do little to change that course, but it is a first step, albeit a weak and faltering one, to attempt to change the thrust of the ownership of Canadian industry. Many people are concerned that we may be left out of industrial alignments or trading alignments and our trading position will be considered secondary to that of the United States. Their concern is justified, but this bill is not going to change that possibility.
There is a wave of nationalism in Canada at present. Much of it is well founded. We should have national aspirations and goals, but they should be realistic and attainable. We should be realistic enough in our outlook to be sure our national zeal does not move us into a position of isolation. If we move in that direction, then we will surely be left out of the market groups and trading blocs that are being formed.
It is proper at this point to note our Prime Minister (Mr. Trudeau) has been quick to accept invitations to visit Russia and China and had one scheduled for Chile until that country had some internal problems. However, we could not convince the Prime Minister to travel to Washington to talk trade with the Americans, or to Britain to discuss our falling trade balances with that country. He
Foreign Investment Review Act apparently cannot get an invitation to Europe to visit the EEC.
The thrust of Bill C-132 has caused much concern to segments of Canadian business. Let us hear what some of them have to say. The Calgary Chamber of Commerce says it is for the bill, with reservations, but points out that the bill deals with property and civil rights which are provincial matters. The Canadian Bankers Association is against the bill. They state that provisions of the Bank Act already limit foreign participation. I have yet to hear the Canadian Bankers Association or any Canadian bank come forward with a suggestion or recommendation to government as to what it could do to help develop Canadian business.
I have numerous letters from small and medium sized business complaining about the rates of interest charged by our banks. We have not heard from them how they will deal with government loans to small business, farmers and fishermen. They say they cannot make a profit at the rates set by government. But what about the large sums of money the government leaves on deposit in the various banks in Canada? Let the Canadian Bankers Association tell us the rate of interest they pay the government for the average of those deposits. Maybe we could play one off against the other.
The Canadian Bar Association sees problems with ministerial discretion, as do several others who submitted briefs. All agree it should be limited. They also see an infringement on the rights of Canadians to dispose of their business holdings as they see fit. The Canadian Chamber of Commerce is for the bill with reservations. Like many others who submitted briefs, they comment on the intrusion of government into the economic process of the private sector. They further contend that the bill is strongly biased against foreign investment and they state it creates a conflict between the provincial and federal governments.
The Canadian Chemical Producers Association are against the bill and state it is negative and discriminatory. The Canadian Federation of Agriculture is for the bill with reservations, but feels the bill is not specific enough regarding its effect on farm industry. The Canadian Manufacturers Association is against the bill saying, among other things, that it will have a detrimental effect on small business in Canada.
We received something like 50 or 60 submissions. The minister of finance of the province of Saskatchewan expressed his approval of the actions proposed in Bill C-132 in so far as they represent a step forward in dealing with problems of foreign ownership. He questioned the discretionary powers of the minister. In spite of the criteria set out in the legislation for making assessments, recommendations will still be arbitrary and judgemental. This is of concern to Saskatchewan.
George Wimpey Canada Limited, a large building and engineering contractor, is for the bill with some amendments. They say that the definition of "Canadian business" is general and would include land acquisitions which would result in classification as "non-eligible". That the concept of "unrelated business" requires clarification. That is the thrust of many of the briefs presented. The companies do not feel the language is clearcut.
26635-60J

November 13, 1973
Foreign Investment Review Act
W. Darcy McKeough said the province of Ontario is generally for the bill with reservations. He said this bill is only considered as a first step. More effective control of foreign investment should follow within a specified time period. A more detailed list of factors should be considered in the review process, including cultural criteria. The federal government should provide the province in which the foreign investment is proposed with a copy of the notification and any additional information submitted by the foreign investor. There were many submissions by business and provinces along this line. Mr. McKeough concluded by saying the bill should provide a statutory right of appeal to the courts in the case of any rulings or decisions under it, including the minister's rulings.
Richard Hatfield, the premier of New Brunswick, is against the bill. He feels it would be harmful to New Brunswick's attempts to attract and to accelerate industrial developments. National policy on foreign investments is of varying applicability to regions. It would adversely affect the Maritimes. For example, the New Brunswick Development Corporation helped launch 76 projects since 1970, for which half the total investment came from foreign sources. Previous speakers expanded on that view of Mr. Hatfield. It is very valid and we should listen to it.
Investment Dealers' Association of Canada are for the bill with reservations. They say there is a lack of provision for a formal summary procedure for determining whether a transaction is, in fact, an acquisition of control. The Mining Association of Canada is against the bill. They say that provincial and federal governments, with present legislation, have enough power to safeguard the ownership and control of Canada's mineral resources. Monarch Construction Limited, a firm similar to Wimpey, is against the bill but agrees with the principle. Their major objection is that having to submit bids on land to clearance by review agency would reduce Monarch's competitive position because of the delay factor.
Reichhold Chemicals Limited of Weston, Ontario, a 60 per cent Canadian held corporation, say there are more effective ways to control economic environment than by stifling foreign investment. In other words, they are saying what I said previously that we should encourage more investment in Canada by Canadians. Stelco, one of the largest Canadian corporations, is for the bill, with reservations. It says the regulations and prohibitions should be restricted to cases where there would be a clear injury to society, and should not unnecessarily interfere with freedom of action by individuals. It says the onus should be on the Crown to prove all aspects of its case, including whether the legislation applies to any particular person.
The Toronto Stock Exchange is for the bill, with reservations. It states that foreign portfolio investors who do not represent any threat to Canadian control are not able to ascertain quickly, in present circumstances, whether they are free to invest. Foreign investment should not be entirely discouraged. So the submissions go on. There are some 50 or 60 of them and a similar thread runs through them all. What Bill C-132 lacks, in my view, is supporting legislation or government policy to create and foster growth of small and medium sized businesses in Canada.

There has been some talk about the reorganization of the Industrial Development Bank, but what is required are amendments to the Bank Act and to the Income Tax Act which will create an atmosphere in which business can grow and develop and look outward beyond our shores into Europe and Asia. We need a government in office which will come to grips with our trading partners to the south and improve relations with them to the point at which we can attain the special status we have always enjoyed.
The success of Bill C-132 will not be determined by the bill itself. The measure before us is a weak, ineffective, faltering first step. But success will come if the appropriate supporting legislation is brought forth. It will come when the government realizes that regardless of the trade opportunities available to us in Russia and China, we shall always be tied to the United States in economic matters. I do not find this to be any great problem. I am aware that some of the people in the New Democratic Party are so anti-American they would build a Berlin wall on our borders; I know they cannot share my view. But most Canadian businessmen believe they can compete in the United States market on equal terms, and they say to us: Don't legislate us into a corner.
The success of the bill depends on whether or not the federal government is able to see the provincial point of view. As long as the provinces must go outside Canada to get loans at reasonable rates of interest, and as long as they must sell the bulk of their bonds and debentures outside the country, we shall not find a financial atmosphere in Canada which is conducive to the development and realization of industrial aspirations.
The hon. member for Oshawa-Whitby (Mr. Broadbent), whose constituency is the farthest east of any member of the New Democratic Party, has expressed his view by-


Mr. Alexander:: Blowing his tongue.


An hon. Member:: Spell it.


William James Kempling: The position taken by the NDP in this area, as in many others, is very interesting. They represent the views of four provinces out of ten in Canada. They represent the views of 17 per cent of the people.


Mr. Broadbent:: The sensible portion.


William James Kempling: They have no representation in this chamber east of Oshawa. What a great record! The Minister of Justice (Mr. Lang) talks about tunnel-vision. These guys are all in the tunnel at the same time. They hold and represent a very narrow view. I have been provoked into saying this by the comment of the hon. member for Oshawa-Whitby.


An hon. Member:: Comment?


William James Kempling: I would recommend that while driving his foreign car-


John Edward Broadbent: Retract.


Some hon. Members:: Order.
November 13, 1973


John Edward Broadbent: I rise on a point of order, Mr. Speaker. I am sure the hon. member who is speaking would not wish to leave on the record his gross mistake in suggesting that I drive a foreign car. He knows very well that I have a car assembled in Oshawa by the fine, hard working people in my community.


Some hon. Members:: Hear, hear!


William James Kempling: I could be mistaken. I thought the car he was driving was assembled in the United States. That is why 1 called it a foreign-built car. I cannot find fault with nationals of other countries who see a void in Canadian legislation and take advantage of it. By putting a few logjams in the way we shall certainly not alter the ownership pattern of Canadian industry. This will only be done when the government is prepared to come to grips with the total issue of trade, industrial development and adequate financial facilities so as to give Canadians an incentive to reach out into the world and thus provide the fullest possible employment in all parts of the country.


Lincoln MacCauley Alexander: That is so right.


William James Kempling: The success of this bill will depend upon how well the government handles inflation. One of the most perplexing difficulties facing industry at the present time is the increasing cost of some of the materials they use, coupled with shortgages of materials in certain sectors. The success of the bill will depend, too, upon whether or not the government can reach agreement with the provinces on tax-sharing arrangements. Each province has its development programs affecting industry and natural resources. We see the federal government trading off one part of the country against another, while at the same time talking about federalism. This is hardly the way to encourage agreement on industrial development.
Thus, as hon. members will appreciate, there are many factors outside this bill which will determine its successful operation, or the reverse. I am not convinced that hon. gentlemen on the treasury benches are capable of bringing forth the necessary supporting legislation to create the right atmosphere. It is a dismal picture when one contemplates the government's lack of direction in trade matters, particularly when they must depend upon the NDP for support. The NDP, with its well known anti-American stand, is hardly the party to encourage legislation which is broad, mature and outward-looking in temper and thrust.
Nevertheless, we will pass this bill along the third reading, with the reservations I have noted. I say again, as I have before, that if the government is not up to the task before it, it should, in the interest of Canada, step aside and let those who see the picture more clearly come to grips with the problem.


Some hon. Members:: Question.


Mr. Jake Epp (Provencher):: Mr. Speaker, I should like to take this opportunity to present my views on foreign investment specifically as it relates to areas which have been designated by the Department of Regional Economic Expansion as areas eligible for special government programs for the encouragement of industry, specifically manufacturing and processing operations. I wish, also, to
Foreign Investment Review Act explain why I believe the amendments presented by my colleagues are essential for the strengthening of Bill C-132.
I firmly believe that any legislation can be improved, and I suggest the amendments presented by my hon. friends are designed to do exactly this; in other words, to strengthen the legislation and make it more meaningful.
For the last decade at least, many Canadians, I would think especially those who are somewhat younger than the average age of members of this House of Commons, have been concerned with having a distinct Canadian nationality and with the very attributes of what Canadian nationalism should really be. A distinct facet of this search has been the question of, to what extent should we have foreign investment in this country and to what extent should we control foreign investment? By "foreign investment" I mean the type of foreign investment for which we are looking, be it from American, German, Japanese or other sources.
While the question of buying Canada back, or making Canada uniquely Canadian, whatever these cliches mean, has a lot of appeal today, not only to Canadians generally but especially to younger Canadians, in coming to grips with the matter I think it behooves all members to examine the central question, and in doing so not to go overboard on one side of the question, as members are so often in the habit of doing, and say that in order to create a unique Canadianism we are going to control foreign investment right down the line. In taking this approach, often we do not look to the end of the road and examine the damaging effects on the economy and on job creation in Canada. Therefore, we must have some form of balance between these two positions.
Since the days of confederation the CPR has been a prime example of foreign investment that has been used for the development of Canada. While this investment brought much benefit to Canada, it was often regarded by many people, especially those in western Canada, as a controlling factor in the development of the western Canadian economy rather than an encouragement to new growth. Although new growth was developed, it was always felt that the capital generated by that particular company often went out of the area in which it was most needed.


Mr. Peters:: So did the resources.


Arthur Jacob (Jake) Epp: In creating the Department of Regional Economic Expansion, the government recognized the fact that foreign or non-Canadian investment to create manufacturing and processing industries in regionally depressed areas can be of great benefit. During some questions which I asked the Minister of Regional Economic Expansion (Mr. Jamieson) in the committee a while ago an exchange developed in regard to where the best record of DREE has b.een when the investment picture is looked at.
At that time I criticized the department for what I said was investing money in industries where very often I felt market research had been limited. Investments had been made in companies 40 miles away from where the same type of company had gone broke. I had examples of this in my own riding. The minister indicated that he felt that up

November 13, 1973
Foreign Investment Review Act to the moment DREE's best success record had been where DREE had gotten together with established companies, be they Canadian or foreign-owned, which were willing to invest in regionally economically depressed areas jointly with DREE, and often with local investors, in order to create new industries. I think the track record of DREE is much better in the area of joint development with existing companies than it has been in cases where funds are provided to people who might just have had a dream at best.
While I personally accept the proposition that we want a truly Canadian identity, and with it investment on a controlled basis in Canada, those of us who come from regionally depressed areas are not anti foreign investment. We need that investment. But in saying that, we are also saying we would like to see incentives given, through a system of tax credits, to Canadians to invest in the expansion of Canadian industry within those regionally depressed areas.
We all know that the largest amount of foreign investment in Canada has gone into our resource industries. Nowhere are we more aware of this than in western Canada. It finds expression in the petroleum industry, in the gas industry and in the mining industry. We are all familiar with the fact that 99 per cent of the petroleum industry is foreign-owned.


William Arnold Peters: And look at the disaster we have had.


Arthur Jacob (Jake) Epp: I will get to the disaster in a minute.


Mr. MacKay:: They are living disasters.


Arthur Jacob (Jake) Epp: If a Canadian identity is to be developed, and if control of foreign investment is the way to do it, then I submit to the government that it should strengthen Bill C-132 in such a way that the aspirations of the regionally depressed areas are not thwarted as they attempt to engender investment that will create jobs and develop resource industries. I make that submission to the government in the hope that it will review once again its stance on consultation. Consultation can take place at any time, but consultation in a crisis situation, which comes about only after the crisis has developed and the premier of the province rears up and defies the federal government, is not the type of thing that we are looking for.
I find it very interesting that my NDP colleagues to my left feel that foreign investment can best be controlled by nationalization. They feel that this is the panacea. Nationalize everything, they say, and this will solve all our problems. Let me point out to those hon. friends to my left that the province of Manitoba has a socialist premier, even though some people question whether he is a socialist. When asked whether he was a socialist, he said, "Yes, I am a socialist, but firstly I am a pragmatist". His pragmatic approach to government led him to go to such foreign capitalist areas as New York City to find out whether or not capital could actually be obtained by the province of Manitoba for the development of the Manitoban economy, and I would say he was somewhat successful.
Let me also point out that the government of Manitoba has a tremendous record of failure in its Manitoba Development Corporation. I should like to give an example of 
this. That corporation helped to build the Lord Selkirk II, a ship plying Lake Winnipeg that has been used for many conferences held by the NDP government in Manitoba. It has a strange reputation, Mr. Speaker. It has the only bar in Manitoba which is losing money. So I question whether nationalization is really the panacea it is said to be.
Seriously, what bothers me most about the NDP approach is that they seem to be willing to expand our energy resources to buy back Canada, whatever that means. Rather, let us use the investment capital that we can generate as Canadians to develop new industries. Let us use that capital to develop our resource industries.


William George Knight: You just do not like our methods, that is all.


Arthur Jacob (Jake) Epp: No, I do not. I submit to the government that we should use this Canadian money to develop our resources in order to provide more labour-intensive industrial areas.


An hon. Member:: That's a socialist approach.


Arthur Jacob (Jake) Epp: I do not think it is a socialist approach. It is a common sense approach, without nationalization. It is rather interesting to hear that the NDP somewhat agrees with one plank in an economic policy that has already come full circle. I point out that fundamentally this is nationalism, and I am in no way a proponent of this policy because I have seen its failure in areas even within Manitoba.


An hon. Member:: We are just glad to know that Manitoba people always agree.


Arthur Jacob (Jake) Epp: Mr. Speaker, I would like to speak specifically about the amendments proposed, and clearly give my views to the government as to why they are essential to the strengthening of Bill C-132. As I have already pointed out, there are certain merits to this bill and there is a desire to have some control over foreign investment. This desire is not unique in Canada. Every western industrialized nation has some form of control over foreign investment. This is nothing out of the ordinary. But what we must keep in mind is that Canada is a federalist state having ten provinces and a central government, and in no way in respect of future economic development should the central government unilaterally declare this is the way things are to be done, because this affects the provincial governments and the economic lifeblood of each.
It is staggering to the imagination that the federal government would be willing to pass a bill in which it has the option to consult. At some future time the government may say it intends to consult with a province, but there might be an industry which is willing to come to Manitoba to invest, thus creating jobs, and it would be up to the federal government to decide whether that would be good for Manitoba. Surely the Manitoba government, representing the people of that province, should have some voice as to whether such an industry should locate there.
This matter of consultation has become abundantly clear to us. Within recent days, with the energy crisis, the federal government, in what I would call a very naked
November 13, 1973

political approach to the problem, has come out with a policy-supposedly to be changed whenever it is politically expedient-which, in its hope, will ease this crisis. Producing provinces have always had the right to a return on the resources which exist in the province. The federal government now simply goes ahead without consultation, and in fact with confrontation, and says it is going to establish an energy policy without even asking the provinces whether they agree. Surely the least the government could do when it comes to foreign investment is to avoid this type of confrontation.
It is the very nature of a federalist system to consult. This is not a legislative union, this is a federalist state. I submit that Bill C-132, without the amendments proposed by my colleagues, is a bill which is much weaker and will lead to very serious confrontation between the provinces and the federal government if this government is willing to exercise the jurisdiction it will receive through passage of the bill.
I would like to see foreign and Canadian investment encouraged in Canada. Western Canada needs foreign investment, we need better tax credit programs and incentives which will encourage confidence on the part of holders of small portfolios to invest in Canadian industry. This is essential.
A Science Council study pointed out that Canada has one of the lowest percentages of workers employed in the manufacturing sector of any industrialized country. If we are to approach anywhere near full employment, let us not say that foreign investment is to be discouraged. We should not cut it back, because certain areas in Canada require foreign investment while in other areas perhaps it has gone far enough. In this area we must take into account growth factors, how far growth should be allowed and how fast it should be allowed. But because of regional differences, our growth factors are not similar or parallel. Some of our areas need the foreign investment which I am afraid Bill C-132 would thwart.
May I call it six o'clock, Mr. Speaker?
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Arthur Jacob (Jake) Epp: Mr. Speaker, in summarizing some of the thoughts I expressed prior to the six o'clock recess, I should like to refer to three points. The first is that nationalization of industries is not the manner by which Canadian content or the amount of Canadian investment in industries in Canada should be increased. The answer is not suggested so often by members of the New Democratic Party. I categorically reject it.
Second, whatever foreign review we might engage in so far as foreign investment is concerned, let us not make the review in such a manner that it becomes a disincentive for foreign investment, especially in depressed areas and areas of regional economic disparity where foreign investment is desperately needed. Third, as Canadian leaders we should encourage Canadian investment in Canadian
Foreign Investment Review Act industry, especially in manufacturing and secondary processing, in order that a balance might again be established between foreign investment and Canadian ownership.
I feel one method by which we could obtain this balance would be by offering incentives through which we could encourage employee participation in the ownership of companies. A number of industrialized countries have been successful in this type of approach. Second, we should make incentives available, especially for small businesses. We should encourage greater investment in such businesses so that jobs are created. Tax credits should be granted so that more people would be willing to invest risk capital, especially in smaller Canadian businesses.
In many areas of western Canada, to a great degree jobs are created by small industries. If we could provide benefits through tax incentives for companies to invest in Canada, not only would we have a broader balance but we would create the jobs which are desperately needed. A change should be brought about in succession duties so that when death occurs the beneficiaries of a small business are not forced to sell out very often to a foreign-financed company because of the ready availability of cash. Rather, some kind of tax credit should be provided whereby succession duties will not be so prohibitive as to force beneficiaries to sell Canadian companies.


Mr. Joe Hueglin (Niagara Falls):: Mr. Speaker, all persons seeking public office have reason for so doing. The lack of effective action by the present government in protecting and developing Canadian control of our economic destiny was one of the three prime concerns which motivated my quest for this office.
During the years from 1968 to 1972 there were three takeover attempts which the government was called upon to deal with in the energy field. Each was a matter of "significant benefit" to Canada. Each was dealt with separately. Dennison Mines was refused permission to sell. Home Oil was placed in a situation of remaining Canadian. However, the third, Supertest Petroleum, was allowed to fall under foreign ownership and control.
I have no argument with the first two decisions. The third, however, is of great concern because the outlets of Supertest are spread throughout my section of Canada. It was the slogan of Supertest that it was an "all-Canadian company". Indeed, these words still remain on some gas stations though the company is clearly no longer allCanadian. Clearly, it could have remained so since it was a profitable Canadian-owned company, and a home with a Canadian- owned firm could surely have been found if there had been concern by the government that this be done.
It is true that the terms of this bill set up a system other than that which existed under the government's arbitrary decision-making, but clearly the government's will will continue to play a part in decision-making since law is always open to varied interpretations. I suggest it was public pressure that saved Home Oil, not government direction. I suggest it was lack of public pressure that saw Supertest slip away.
Under this bill there is no definite, positive direction; there is merely a more formalized screening that would

November 13, 1973
Foreign Investment Review Act
not necessarily save those Canadian companies that remain from being absorbed. This is an indictment of the government, an indictment which proves that it still has no firm commitment to anything that will in substance assist us in controlling our own destiny but, rather, a commitment to pass into law a bill which can be used as window-dressing in an effort to convince Canadian voters that action is being taken.
Style, not substance, has been the technique of this government in its five years of life-style in holding conferences and ignoring the promises made, style in appointing commissions and never forcing them to report, style in hurriedly implementing programs and then having moneys wasted on jerry-built schemes. The Canadian people need more than style, they want more than style, and they deserve more than style.
Perhaps the most unfortunate aspect of the bill is that when it becomes law people will perceive that something has been done, when in fact it has not, and the pressure for real and meaningful steps to be taken will abate for a time. The pressure will abate and this will make the job all the more difficult in the future. That there is a real concern by Canadians, and a real need to develop and implement positive programs, cannot be doubted.
Fifteen years of dealing daily with the youth of our country-as a student at university and as a teacher of history in the high schools of Ontario-has convinced me that there is an ever-growing concern in this respect. This concern has not been allayed during these years, nor will it be allayed by this bill.
There is, in fact, a real danger that the polarization represented by the Prime Minister (Mr. Trudeau) on the one hand and the New Democratic Party on the other will leave those of us who believe in positive, responsible government action at a disadvantage. The Prime Minister time and time again has compared government action in Canada to the Cuban revolution. He has held up the spectre of radically decreased living standards if steps are taken to control the effects of foreign investment. He gives only two alternatives: do nothing, or suffer greatly. We have done nothing, and we have suffered greatly in any case through unemployment and inflation running unabated at high levels.
If my information coming from the Niagara peninsula is correct, the shortages which are occurring in Bell Canada cable, in hydro cable, in insulation, brick and aluminum siding, will bring the construction industry to a halt. We are short of even such things as tires and anti-freeze at the distribution level. If such shortages, some of which apparently have lasted since last June, are not corrected we will suffer greatly again, not because of lack of effective control of foreign investment but because of general economic mismanagement. The Prime Minister's gross distortion of the choices that face Canada, and his inaction, have spurred the NDP to hold out the need for state intervention on a massive scale as the only means and as the dogmatic truth.
Our youth are responsible citizens, and they are desirous of seeing Canada controlled by Canadians. But because the loud trumpet notes carry farthest, the respon-

sible middle ground is often lost to their ears. In years gone by I have attempted to seek the opinion of the youth in my area. I have participated in the deliberations of the Young Progressive Conservative Association of Ontario as it surveyed the opinion of our youth in the wider area. The conclusions reached by these soundings have been that the young people want the government to provide leadership, that they are willing to accept sacrifice and to play whatever role they can in bringing about the desired result.
The onus that falls upor. us as members of parliament is to provide constructive leadership. The present government has not done this. The NDP is blatantly emotional and anti-American in its mouthings, and thus cannot be constructive. Therefore, the burden must fall upon the Conservative Party to provide the constructive Canadian-ism that our youth seek and that our country so badly needs. I will have more to say about this later.
Is there a need for expanded Canadian ownership and control and for positive measures to assist in bringing these about? In my experience, there is no doubt at all that there is. Last week, acquaintances of mine from Denmark arrived in Canada after a week's visit in the United States. They came to look for products that could be purchased in Canada and merchandised in Denmark and, through their connections, in six other countries in Europe both within and without the European Common Market.
To their satisfaction-and these are men with buying experience in all parts of the world-certain of our products were of a higher quality than those produced in the United States and were capable of competing successfully in European markets. When they asked about these Canadian-produced goods, when they talked about exporting, they were told there would have to be consultation with home offices to see if these Canadian firms could export. How will this bill remedy such a situation? Surely it cannot and will not-and Canadian jobs based on export will not develop.
In Niagara Falls, as well, orders went to U.S. plants when work was slack in a Canadian company because of management decisions, even though the Canadian plant was more efficient. This firm has since changed ownership and aggressive Canadian control has led to expansion of the work force and of the plant. There is also a foreign-owned but Canadian-operated firm which could be Canadian-owned if money were available for the management to buy it out. It has the potential to penetrate the U.S. market if it could obtain capital to expand the production of its excellent product.
Case after case can be cited where Canadian interests are not best served, and this bill does nothing to correct that situation. Case after case can be cited where Canadian-owned or operated firms are unable to expand because capital sources are not available to them on terms they are capable of handling. It is certain that unless positive steps are taken, this bill will solve none of the problems I have mentioned and in fact may cause harm by preventing expansion unless other capital sources are available. Also, it may create a false sense of security which can lead to our economy coming even more under foreign domination.
At this point may I state that it is control, more than ownership, that concerns me. Ownership implies a reasonable return for investment. This is right and just for
November 13, 1973

anyone who believes in capitalism, in someone other than the state undertaking business enterprises. It is the direction that a business takes that is the real concern. If it is, as in some cases, a direction that maximizes output for sale in Canada and abroad-with attendant increases in Canadian labour and resource input-then it is a fair bargain. If it is a direction which seeks raw materials from Canada and components from other Canadian-based operations, then it is a fair bargain. But if it is a direction restricting competition to the Canadian market, regardless of ability to compete, and if it is a direction maximizing the use of foreign-produced goods, then it is not a fair bargain and action must be taken. The bill before us provides no steps in this direction.
Is the state the only mechanism through which we can regain Canadian control? Must there be massive state intervention and nationalization before something can be done? Is outright socialism the only way? Personally, I believe there is a better way. But no other way has been tried, so the socialists can point to continuing failure and beat their drums of nationalization. Perhaps the socialists are right. Perhaps Canadians are not capable of reaching out to control their own destiny with government assistance. But this is questionable, because Canadians have never been asked or given the opportunity by this government to share in obtaining this control. It may be that Canadians are not willing or capable of doing so. It may be that only the government can change the direction in which we are proceeding. But I do not believe so and I will bend every effort to see that Canadians are given a chance to participate before the heavy and inefficient hand of state ownership comes to this country.
Lest our socialist friends jump to the conclusion that I am a classical Liberal calling for no action by the state, or a complete "free enterpriser" unwilling to see the government intervene in the economy, may I make these points of clarification. The first duty of a government, in my view, is to assess the needs of its people; the second is to set objectives to satisfy these needs; the third is to assist and encourage private citizens in their striving to reach these objectives.
Clearly, the need of the Canadian people is to control their own destiny. The objective is to make this country as productive as possible and to provide all of us with a good and continually improving life. The means, just as clearly, must be to have the government provide whatever assistance is needed for Canadians to increase their productivity and to control our economy if it is agreed that Canadians will work more for themselves than will foreigners. The role of the state is not to provide for the well-being of individuals, but to produce circumstances whereby they can best provide for themselves-where through their energy and initiative a better life can be developed.
The government of the day has not set down clearly defined objectives. Indeed, through its various ministers it has tried at one time or another to grasp all sides of the spectrum. The government has not provided the means whereby individuals can, acting alone or together with state agencies, participate in maintaining or regaining control of our economic destiny on any regular basis. The positive steps that have been taken, such as interest being written off, have come only after provincial initiative has
Foreign Investment Review Act made it necessary to act. True, the CDC has been established with the promise of participation, but without the substance of involvement. Indeed, the use of tax laws to provide incentive has been suggested, but not adopted as yet. The designating of key sector in the economy has been suggested, but not followed up. The provision of low interest capital equal to foreign loans has been suggested, but not acted upon.
Surely these and other alternatives could be brought into effect by a government concerned about setting positive directions and assisting with positive programs. We are a people who, through our history, have had confidence in our government, as witnessed by lack of civil strife compared with other states. We are a people who have been provided with leadership and assistance from governments in the past. Today we are a people who will respond to constructive Canadianism. I wonder how much further we would be on the path of grasping firmly the reigns of our own destiny if some of the positive programs put forward by the PC party had been implemented years ago?
Opportunities for Youth and LIP grants do not provide permanent jobs. If the money spent on these programs had been put into capital assistance, jobs would have been provided. The advertising moneys spent on telling our senior citizens that they would get $2.88 more, displaying flower-pots and saying, "It is up to us," and encouraging us to use a zip code have long gone, with no real lasting effect although they totalled hundreds of thousands of dollars. How much greater and longer lasting would have been the results of these advertising campaigns if they had been aimed at encouraging Canadians to participate in an effective Canadian Development Corporation, or advertised the fact that Canadian entrepreneurs would be assisted in their efforts to share in directing Canada's economy for the benefit of Canadians?
Instead today we are faced with the reality of a bill that will do little but which I am certain, come the next election, will be called a great leap forward by every Liberal candidate in the land. Fortunately, the Canadian people have had enough of style and subterfuge and will recognize the substance of the Conservative policies and the opportunities that these will present to them when implemented. Among them will be a policy of encouraging the incentive that exists in our people, marshalling our resources to the task of obtaining as much independence as possible in economic decision-making.


William Arnold Peters: Mr. Speaker, I have listened with much attention to a number of hon. members who have spoken on these amendments. I am surprised at the lack of sympathy for the federal system shown by some of my colleagues and their lack of appreciation of the obligations which must be met by the federal government in designing a program covering foreign investment and implementing it in the national interest.
I have heard much comment from some of my colleagues in the House on the amount of influence they feel the provinces should have in deciding the degree of permissible foreign control. I am in complete disagreement with those who believe that the provinces should decide, sepa-

Foreign Investment Review Act rately in their own interests, what should be the interest and obligation of the federal government. Later on I intend to move an amending motion that I am sure will add to the position taken by some of my colleagues in this House. If they want all the provinces to make this decision simply because they have friends in certain provinces, it seems to me to be a grave oversight to omit the executive councils of the territories that are not yet provinces but which possess great potential in terms of natural resources.
I have always believed that a Canadian in one part of Canada should be equal to a Canadian in another part of Canada. For a long time I have lived in northern Ontario, an area rich in resources but where this has not been a fact. This is an area which has supported southern Ontario, in particular Toronto and Montreal, and the financial institutions of the country. It did so initially at a time when other parts of the country were producing very little to contribute to national income and national productivity. And in that area we have never received our fair share from either the federal government or the provincial government.
I suggest that some hon. members of this House should look at some of the disadvantaged areas of Canada. They should look at the Maritimes which have contributed a great deal of industrial input to Canadian society over the years. The Maritimes have provided the resource base for other sectors of Canada. Some of that contribution came to my area because maritimers also came there to help develop our resources.
The people of Great Britain did not bring about the industrial revolution there all on their own. Certainly initiative was shown in the invention of the cotton-jenny and in developments in the mining industry at the beginning of the industrial age. But one of the main contributions came in the form of capital supplied from Switzerland, by the people of Germany, by Dutch people, as well as by some of the landed gentry in Britain. That sparked the industrial revolution and produced a great nation that eventually was able to establish the Commonwealth of Nations which in turn has really been responsible for the development of half the world as we know it today.
Years later, when the industrial revolution began in the United States, again capital was needed. This has always been the case and always will be the case. Capital came from countries such as Switzerland, Holland and Great Britain, but it was supplied to the United States in the form of loans. It took 100 years to develop the industrial revolution in England. It took probably 30 to 40 years to do the same in the United States. Both were financed with imported capital, but in both cases that imported capital represented borrowings by the particular country or by the particular industries in that country.
In Canada, our industrial revolution was late in starting. We are one of the richest natural resource countries in the world, and our development was begun by the use of our pioneering spirit in conjunction with the use of outside capital. But the difference between our industrial revolution and those of Great Britain and the United States is that in Canada we sold our resources to other countries. We sold our resources to the people who had the

capital. The people who came in did not lend Canadians capital; instead, they bought the resources.
At present, a great controversy is taking place in my area. In it we have probably the highest hill in Ontario. It is about 1700 feet high. In effect, it is a resource that cannot be duplicated anywhere else in Ontario. At present, the provincial Conservative government is talking about spending $82 million in my area. I certainly have no objection to that if it will do anything for the people of Timiskaming.
What are we talking about really, Mr. Speaker? We are again talking about selling our resources-selling a piece of land to Holiday Inns and a number of other American companies. Tourists will come to the area for $100 a day or $200 a day and take advantage of whatever resources are there. We will have bellboys and waiters, but certainly we will not have cooks because for $100 a day they will want cooks from Paris. But we will have sold our resources, and $20 million or $30 million of that amount will have come from the people of Ontario.
It would seem to me, Mr. Speaker, that it is time we made a decision. We are God-blessed with resources, but we are certainly not God-blessed with the ability to develop them. We sell everything that is not nailed down, and we are willing to sell some things that are nailed down as well. I have heard some of my colleagues in the Conservative Party speak today about the desire of the provinces to have an input. Provinces be damned!


Some hon. Members:: Oh, oh!


William Arnold Peters: They want the development for their own benefit. That also goes for the provinces with NDP governments in western Canada. In my opinion we have developed an attitude in this country that is not to our advantage. We hear about separatism in Quebec. What is the difference between separatism in Quebec and separatism in northern Ontario where we give away the resources, whether they be iron, gold, silver or the tourist industry? There is no difference, Mr. Speaker, as long as we are willing to give resources away.
We may talk about separatism because of linguistic differences or because a province is willing to give away its resources, but it is all the same. I think my colleagues in the Conservative Party had better look at some of the resources that they are going to defend on behalf of the provincial governments. One of the Conservative governments owns most of the oil potential in Canada at the present time, and I live in a province with a Conservative government that needs the major portion of that oil.


William James Kempling: Now you know how lucky you are.


William Arnold Peters: I will not know that until I know how much electricity and oil I am going to get this winter. That is true of all Canadians. One of our major problems is the oil industry, which is 99 per cent foreign-controlled. I think it is a disgrace to allow one of our major resources to be controlled 99 per cent by American interests. We have been willing to sell these resources, Mr. Speaker. I do not suggest that we buy them back, but I do suggest that they
November 13, 1973

are still Canadian resources which belong to the Canadian people. Every member of parliament is going to find it very difficult to persuade a constituent who complains that he does not have enough oil for his furnace that it is all right for most of it to go south of the border. I suggest that it is time we controlled our economy and our destiny.
I was shocked to learn recently that our troops were not acceptable as members of the peacekeeping force in the Middle East. It turned out that we were acceptable in the end because, as a member of the NATO forces, we were balanced by Poland as a member of the Warsaw Pact. If we are to maintain our reputation in matters like peacekeeping, it seems to me we must establish control at home. We are no poorer than countries such as Mexico and others which have decided it may be necessary to tighten the belt. It may be necessary to establish our Canadian independence and our ability to play a role as an independent nation industrially, commercially, philosophically, and politically if necessary.
If my colleagues believe that the provinces have a role, I am not sure what it should be, but they should have some input into the question of federal control of the Canadian economy. The provinces should not have a veto. If my colleagues in the Conservative Party believe in the veto, then it should also be extended to the territories of Canada which have uncontrolled resources. I therefore move, seconded by the hon. member for Comox-Alberni (Mr. Barnett):
That motion numbered 2 be amended by inserting in line 7 thereof, following the words "a province" the words, "or a territorial council".
I move this motion, Mr. Speaker, because I believe that what is fair to the ten provinces is also fair for the territories which have not yet been raped but obviously will be raped if we do not provide a national philosophy that will give full play to the development of Canada rather than to the development of veto power.
This is an important bill, but it is a lousy bill. The Liberal Party never had a philosophy that would take them far enough toward solving a problem. This bill is part of a solution. If anybody asks why we did not support the Conservative Party and so call an election right away, it was the fear that the Conservatives would form the government of Canada.


Some hon. Members:: Hear, hear!


An hon. Member:: Don't worry about a thing.


An hon. Member:: Just give us a chance.


William Arnold Peters: Judging by the wording of the clauses that it is sought to amend, Mr. Speaker, we would have no one Canada; we would have ten states. That would "make it" for Alberta because they have the oil to sell, and it would "make it" for Ontario because they have to buy the oil and they also have other resources.


An hon. Member:: What about British Columbia?


William Arnold Peters: British Columbia would have its own inclination, under a Conservative government, and the Mari-times would have theirs. They might even establish northern Ontario as a separate province, and then we could
Foreign Investment Review Act fight more effectively for our needs. I was elected to this House as a Canadian.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: Right on.


William Arnold Peters: I believe that most of the amendments introduced by the Conservative Party are divisive. I understand the Liberal Party will be supported by the Conservatives on this bill. Therefore, I suggest that they do something about the bill, strengthen it as much as possible, so that we can develop a strong, independent nation. In that way we will no longer be the nominee of the United Nations for a peacekeeping force. Canadians are independent enough in industrial development, resource development and international relations to be looked upon by the rest of the world not as an industrial satellite of the United States but as people willing to spend money to develop our resources and make whatever sacrifices are necessary.
I move this amendment in the hope that my proposal for unity will be accepted by the Liberals and Conservatives so that those people in the Northwest Territories and the Yukon will be able to play an equal role with the provinces in dividing the spoils of Canada.


Lincoln MacCauley Alexander: I wonder if the hon. member would allow a question.


Elmer MacIntosh MacKay: Mr. Speaker, I rise on a point of order.


Mr. Deputy Speaker:: Before listening to the point of order, may I ask the hon. member for Timiskaming (Mr. Peters) who is seconding his motion. Is it the hon. member for Comox-Alberni (Mr. Barnett)?


William Arnold Peters: Yes, Mr. Speaker.


Elmer MacIntosh MacKay: Mr. Speaker, perhaps I should not have risen on a point of order. I really want to ask the hon. member for Timiskaming (Mr. Peters) whether he will accept a question.


William Arnold Peters: Go ahead.


Elmer MacIntosh MacKay: First, may I say that I think the hon. member's amendment is very useful. However, I want to ask the hon. member whether, when doing his research for this amendment, he formed the opinion that the definition section includes in the definition of a province the same purpose in so far as a territory is concerned. Other than that, I think it is a good amendment.


Mr. Deputy Speaker:: Before the hon. member answers I would ask the indulgence of the House. The hon. member's time has expired. Therefore, it would require unanimous consent for the question to be put and answered. Is this agreed?


Some hon. Members:: Agreed.


William Arnold Peters: Mr. Speaker, I am inclined to believe that the hon. member is probably right in regard to the definition. However, the fact remains that the hon. member for

November 13, 1973
Foreign Investment Review Act Northwest Territories (Mr. Firth) and the hon. member for Yukon (Mr. Nielsen) have both stated on a number of occasions that because of the territorial status the Councils representing the Yukon and the Northwest Territories are not clear as to identity; they are still dominated to some degree by decisions made by the Department of Indian Affairs and Northern Development and other federal government agencies.
I point out to the hon. member that in the case of PanArctic and one of the known resources in the Northwest Territories, the federal government entered into that agreement not as a participant in the area, because of the Northwest Territories Council, but as their right under the Department of Indian Affairs and Northern Development. This was not at the request of the Council, but independently. For this reason, by adding this wording to the clause we will be establishing something that at the moment is not very clear. I am referring to the boundaries of the authority of the Northwest Territories Council and the Yukon Council in making decisions that sometimes have a countereffect regarding the wishes of the federal government.


Lincoln MacCauley Alexander: Mr. Speaker, I do not believe you caught my eye before the hon. member for Timiskaming (Mr. Peters) sat down. I was up like a flash-but things happen. I wonder if I could have the same consent in order to clarify a position that the hon. member has put before us. It is for the edification of all members.
I am trying to rationalize the position which the hon. member took. He said in no uncertain terms, in fact almost vehemently, that he was against the motion placed on the order paper by the Conservative Party. Then something strange happened. He brought in a motion. This is where I became a little confused. His motion does not try to wipe out or to reduce the Conservative motion, but extends the motion of the Conservative Party. This is where I find some difficulty in trying to rationalize the hon. member's argument.
If the hon. member is against something so violently, how can he move an amendment which enlarges upon that which he is so violently against? If he could help me on that I would possibly give his motion further consideration. That is my confusion and that is my question.


William Arnold Peters: Mr. Speaker, I apologize for confusing the hon. member. I belong to a minority party and therefore do not have the say. I cannot prejudge the vote that will take place on this motion, for several reasons. However, I am not sure whether they will support the government's bill. However, I am not sure whether they will support it with or without this amendment. That is important. The government may vote for this amendment. Coming from a minority area of a very large and wealthy province, we do not have many of the advantages of the rest of the province.


An hon. Member:: Thanks to Bill Davis.


William Arnold Peters: Thanks to Bill Davis and his predecessors. I do not know what the outcome of this vote will be. if it passes, I, as a member of parliament representing a minority resource area in a large province, would be remiss if I did not ensure that the people of the Northwest

Territories had the same kind of control that is being asked for the ten provinces.
I may say to the hon. member for Hamilton West (Mr. Alexander) that I certainly do not want this to happen to the Northwest Territories and the Yukon, since the members from those areas are not here I feel obliged to protect their interests as far as I can. I hope sincerely that everyone will vote for the amendment because I certainly believe they can all do so. Whether or not they all vote to support the motion is another story.


Mr. Deputy Speaker:: I think the Chair should reserve the right to make a ruling on a future occasion should an amendment of this nature be proposed at the report stage. However, the matter has not been raised by way of a point of order this evening and I do not intend to raise it myself except by way of entering a caveat.


Alastair William Gillespie: Mr. Speaker, I wish to seek guidance on precisely the point of order to which you have alluded. It seems to me this is an important point and one which needs clarification, and I would very much welcome a ruling as to whether or not the amendment is in order.


Mr. Deputy Speaker:: In that case, the Chair will be grateful to hear the views of hon. members. I did reserve judgment, but the minister has raised the matter fairly and squarely. It is a moot question and one for the Chair to determine. Perhaps I can look to the hon. member for Winnipeg North Centre (Mr. Knowles) for assistance; he is always a source of sustenance and guidance in these matters.


Stanley Howard Knowles: My hon. friend and affectionate colleague, the hon. member for Timiskaming (Mr. Peters), tells me I may say publicly that I did not encourage him to make this amendment. That is putting it mildly.


Lincoln MacCauley Alexander: Oh, oh!


Stanley Howard Knowles: Now that he has done so and now that the minister has called upon the Chair to make a ruling, it looks as though I shall have to say something.


Alastair William Gillespie: On a point of order, Mr. Speaker-


Stanley Howard Knowles: I thought I was already speaking on the point of order, Mr. Speaker.


Mr. Deputy Speaker:: All members who wish to do so will have an opportunity to say something on the point of order, but at the moment the hon. member for Winnipeg North Centre has the floor.


Stanley Howard Knowles: Whatever any of us might think of the purpose of the amendment, it is clear from our Standing Orders that the amendment as it reads is in order. I draw Your Honour's attention to Standing Order 75(8) which reads as follows:
When the order of the day for the consideration of a report stage is called, any amendment of which notice has been given in
November 13, 1973

accordance with section 5 of this order, shall be open to debate and amendment.
So there you are, Mr. Speaker. Notice of the motion being debated was properly filed under Standing Order 75(5). Therefore, it is before us and it is open to amendment. Your Honour would not be obliged to accept the amendment if it were completely removed from the subject matter of the question being debated; it has to be relevant to what we are discussing. But whatever my own views might be about the tactic followed, since we are discussing a motion which calls for reference to the ten provinces it is perfectly proper to move that there be reference to the Yukon and the Northwest Territories as well. It appears to me, therefore, that you and the House are stuck with this amendment.


Mr. Deputy Speaker:: Maybe stuck, but I shall recognize the Minister of Industry, Trade and Commerce (Mr. Gillespie) who may unstick us.


Alastair William Gillespie: The last thing I would wish to do would be to make Your Honour's job more difficult or to complicate an already complicated situation. I would have no objection to the Chair reserving its opinion on this issue, if that were Your Honour's wish. However, it seems to me that if the amendment is allowed we should be given an opportunity to debate it on its merits. I am afraid that this provision, if accepted, would weaken the bill and I wish to serve notice that I would wish to argue the merits of the case in that light.


William Arnold Peters: If the minister wishes to argue the merits of the case, he should do so during the debate and not on a point of order.


Mr. Baker:: I, too, have read the rule to which my neighbour and very distinguished constituent, the hon. member for Winnipeg North Centre (Mr. Knowles), has referred and I believe it embodies the extension of a reasonable principle. For such an amendment to be out of order it must involve something completely new, and it is clear to me, as I hope it will be clear to Your Honour, that it involves nothing more than the extension of a principle already implicit in the motion under discussion. It does not depart from the spirit of that motion.
I agree with the hon. member for Timiskaming (Mr. Peters) that the minister ought not to seek to debate it on a point of order. He is taking a narrow view-so narrow that he can look down the neck of a milk bottle with both eyes at the same time. I am very pleased to support, with more enthusiasm than the hon. member for Winnipeg North Centre has shown, the amendment moved by his hon. friend, the hon. member from Timiskaming.


Mr. Deputy Speaker:: I think the amendment is clearly in order, and I suggest to the minister that he will have a chance to express his views in the debate which will follow.
[ Translation]


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I thank you for having allowed my to express my opinion concerning Bill C-132.
Foreign Investment Review Act
As we all know, this bill provides for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons.


Mr. Deputy Speaker:: I must apologize to the hon. member for Lotbiniere (Mr. Fortin). I gather the hon. member for Sarnia-Lambton (Mr. Cullen) rises on a point of order.


Mr. Jack Cullen (Sarnia-Lambton):: Mr. Speaker, I beg the indulgence of the hon. member for Lotbiniere (Mr. Fortin).
Mr. Speaker, I beg the indulgence of the hon. member for Lotbiniere and I also ask the indulgence of the House. I endeavoured to get Beauchesne's but it was not easy to get it from the library quickly. In considering the admissibility of this subamendment, I suggest reference must be had to citation 406 of Beauchesne's. I refer specifically to the section that says that amendments are out of order if they are irrelevant to the bill and-I stress this point- beyond its scope.


Walter David Baker: The ruling has been made. This is not a court of appeal.


Mr. Deputy Speaker:: I apologize to the hon. member for Sarnia-Lambton (Mr. Cullen). He was on his feet when the debate on the point of order was begun, and I apologize to him. I cannot see that the point raised by the hon. member really changes the opinion of the Chair. To me, the amendment proffered by the hon. member for Timiskaming is by way of detail, adding something to a matter already before the House, rather than being something that is entirely new or different. However, I do regret that I did not give the hon. member for Sarnia-Lambton his moment in the sun on this particular point. The hon. member for Lotbiniere.


André-Gilles Fortin: Mr. Speaker, the House of Commons is studying Bill C-132, entitled an Act to provide for the review and assessment of acquisitions of control of Canadian business enterprises by certain persons and of the establishment of new businesses in Canada by certain persons.
Since the beginning of this debate, Mr. Speaker, Progressive Conservatives and New Democrats have proposed a number of amendments which I have read without seeing how they can really change the spirit of this bill. Generally speaking, they seem to simply play around in this bill which, itself, solves nothing much. This may be a harsh judgment, but let me read the very beginning of this bill.


PURPOSE OF ACT
[Stage Direction]
2. (1) This Act is enacted by the Parliament of Canada in recognition by Parliament that the extent to which control of Canadian industry, trade and commerce has become acquired by
[Stage Direction]
November 13, 1973
Foreign Investment Review Act
persons other than Canadians and the effect thereof on the ability of Canadians to maintain effective control over their economic environment is a matter of national concern, and that it is therefore expedient to establish a means by which measures may be taken under the authority of Parliament to ensure that, in so far as is practicable after the enactment of this Act...
Mr. Speaker, if you read the preambule of this legislation you find that as far as possible the government will try to implement Bill C-132 to achieve a certain degree of control over foreign corporations or foreign investment in Canada.
But such a control can be implemented financially only. I remember a report that was tabled in the House, a report which had been prepared for the Privy Council Office and was entitled "Foreign Ownership and the Structure of Canadian industry", Report of the Task Force on the Structure of Canadian Industry.
A Crown minister was the sponsor of this study and under the responsibility of the then President of the Privy Council this task force carried out this study and took rather radical positions requesting the government to take energetic measures. Of course, the government did not agree with the conclusions of this study. Later on, further studies were prepared with a view to demonstrating to parliamentarians and Canadians in general that Canada did not belong to us anymore or only a very small part of it.
I will quote only one excerpt from this study. It is taken from page 87 and I quote:
35. An alternative means of Canadian participation in the profits of direct investment firms is minority Canadian ownership. The extent of such participation by Canadians is at present relatively limited, reflecting the strong preference of foreign corporations for operating abroad through wholly-owned subsidiaries.
Those are statistics which rebut anything the minister responsible for this legislation told us as well as the spokesmen for the Progressive Conservative and the NDP parties.
For 375 of the largest non-financial Canadian corporate complexes in Canada (for a detailed discussion of these and other data on this topic,...), 162 or 43 per cent are private companies with no publicly traded shares, and about 75 per cent of these private companies are controlled by non-residents. It has been estimated that approximately 18 per cent of the total corporate taxable income in Canada in 1965 was earned by about 130 of the largest private corporations, most of which were foreign-owned.
Mr. Speaker, that is one problem. The second is the approach to or the participation of Canadian provinces in the protection of our economy and the ensurance of a steady development of our economy in the interest of, by and for all Canadians.
Mr. Speaker, one finds that once more such is not the case. At federal-provincial meetings, we witness lengthy discussions that end up in smoke or lead to practically nothing or big statements of intent. But in the end, Mr. Speaker, what tools are available to the provinces to really protect their own regional or local economy in the Canadian or North American context so the Canadian entity will be preserved? I must say, Mr. Speaker, that those means are more means in principle than effective financial means.

How did foreigners chiefly acquire control over our economy? With money. And what will be the way for all Canadians to regain the economy of their country? Again, with money.
Mr. Speaker, with respect to the James Bay development project, or the need for nuclear, electrical or petrochemical energy in Quebec and other provinces, what means are available to the provinces or to the federal government to provide for the protection of the Canadian control over such projects or such new essential and vital developments?
What do our governments do, whether they are Progressive Conservative or Liberal, provincial or federal? Once they have prepared a plan, once they have given it sufficient publicity to sell the idea to the public and do some window-dressing, then, Mr. Speaker, the little procession begins: the Minister of Finance, the Prime Minister, officials, the Minister of Natural Ressources, the Minister of Energy, the ambassador and all the others are going where? They are not asking the Canadian people to get in, in order to develop the country. They go abroad. They go to the United States, to other countries. On the pretence that they will create employment-poppycock again on the part of this government-they go to France where they try to convince the Michelin or Renault companies to settle in Canada to create employment in this country. Those firms are granted subsidies and the first thing we know, Mr. Speaker, is that it does not work, for all kinds of reasons.
I do not wish to weigh the situation to know whether they should be granted a subsidy or not, but I want to say that every time there is a desire to create employment, economic or financial, gigantic or fantastic projects, like James Bay, Hydro-Quebec or Ontario-Hydro projects or any other similar venture, they go begging, they negotiate with American people or foreigners, but especially with Americans. Then, they invite and help them invest in our own country. In return, the Prime Minister, the minister, or the government representative, whether on the federal or provincial level, may come forward, under the cover of a press conference with cocktails and all, rise and state in the faces of Canadians or Quebecers: "I am happy to announce that foreigners trust in the future of Quebec, in the future of Canada, and that thanks to that trust, we shall be able, from such or such date, to proceed with the development of the James Bay project or some other project".
Well, Mr. Speaker, that is a shame. I have nothing against foreigners eager to come and invest in our country; I suggest however that if foreigners trust in our future and see in our province or country a potential for economic development, if they have found resources worthy of being developed in a profitable way for Canadians, if they trust in the economy of Canada, why is it then that Canadians, and Quebecers in particular, should not have also the opportunity and the same trust to invest in our own country?
Mr. Speaker, I will give you just one concrete example on this subject. We know that under the new tax system implemented by this government, the savings of Canadians are taxable. The worker, the farmer or the day labourer cannot invest several hundred thousand dollars but
November 13, 1973
[Stage Direction]
they could invest in Canadian businesses not only their work, the fruits of their labour but also their small savings. Even if he is poor, if he has plenty of guts the average citizen could invest but he cannot because the tax legislation discourages his willingness to save money. To invest he has to save money first.
Mr. Speaker, when the time comes to complete his income tax return, the average citizen receives from his bank a note telling him he has to pay taxes on his savings. Mr. Speaker, this system is all wrong. Then the government will tell us, referring to political principles in order to obtain votes, that it defends an economic nationalism policy and that it presented a bill that is honest and well-intentioned; it will tell us that it wants to give back Canada to Canadians through Bill C-132 or any other inquiry or brief.
Mr. Speaker, how far will Bill C-132 go? It will create another gizmo of civil servants which will be called the Foreign Investment Review Agency and will provide for the appointment of a commissioner. This bill also states, Mr. Speaker, that we shall pay the expenses of the large corporation representatives that we shall call before us.
Mr. Speaker, this indicates the intention of the government. Even if I read it in the newspapers or even if they repeated here ten or twenty times that this government is well intentioned in wishing to control Canadian business instead of nationalizing it as the New Democratic Party would want it, or to "play" with their profit as the Conservatives would want, I would not believe it. But if the government were well intentioned, Mr. Speaker, it would begin by allowing the provinces the financial possibility of ensuring the development of their own resources through financial means belonging to Canadians and Quebecers, that is the use of the Bank of Canada.
Mr. Speaker, if the Canadian government and the provinces trust American funds invested in our country and guaranteed by our values, I do not see why this same government, if it is really Canadian, if it is really elected to serve the interests of Canadians, would not use the Bank of Canada to invest in our own resources, since it is the same mortgage. Mr. Speaker, the government could then prove that it believes in Canada and I have no doubt that Canadians would follow its example.
I do not want to hear that Canadians do not control anything or that they are not interested in their country when their own government never gives them a good example and when it is crawling in front of foreign businesses, in front of foreign capital to develop our country.
Mr. Speaker, it is easy to preach in favour of Canadian unity. The other day, I heard a rather interesting remark. The Conservatives in western Canada say that the Liberal Party is a French-Canadian party and consequently that it is not a good party. Therefore they invite these people to vote Conservative.
At the same time, Liberals in eastern Canada say to the people that the Progressive Conservative party is an English-speaking party and, therefore, they should vote Liberal, for it is not a "representative" party.
Foreign Investment Review Act
Finally, both these so-called great national parties attempt to build up their political prestige, for this is what counts in the end, in order to prevent the division of the country.
However, the price for national unity is to be paid financially. We have here a Minister of Finance, as in each provincial legislature. If these people are honest and not puppets of high finance, but are there to serve the interests of the Canadian people, for which they have been elected, they will stop to think instead of flippantly rejecting solutions enabling the government and the Canadian people to regain control over the economy.
Mr. Speaker, I believe-and I think that the other hon. members of my party agree-in private enterprise and in individual initiative.
We are against economic nationalism whereby we must nationalize to be at home. We feel, Mr. Speaker, that in the system of free enterprise, the human being finds his strength, his vigour and his wish to better himself. We firmly believe that if a person is to live decently in free enterprise, earn his living and support his family, he must have the ambition to better himself.
It is the same for a country. If we want the provinces to wish to improve themselves and to grow together in this confederation, the federal government, which is here to harmonize relations, must provide them with the financial means necessary for their development, for instance by creating subsidiaries of the Bank of Canada in each province^
Mr. Speaker, this solution is rediculed, but it remains that the abject position of our Prime Minister when dealing with foreigners to develop James Bay is much sadder.
Mr. Speaker, I would have something else to say about that. Even if we believe in private enterprise, it does not mean that we are idiots. It is essential that private enterprise be supported. This government, through its own measures, had made private entreprise practically dependent on a new kind of social welfare.
We have been left with the impression that the government is responsible for the creation of employment, but this is an entirely wrong concept. The government alone could not create a single job. It was private enterprise that created those jobs in this country.
A problem that this bill tries to deal with is the control over investments in this country so that companies should be Canadian. But what steps can the government take in this regard? All it thought about was to create an agency.
Mr. Speaker, when I said at the outset of my comments that unless it is materially possible to have statistics available and to know who controls such and such company, we shall awaken in five or ten years with another so-called Gordon or Watkins report or another Bill C-132 and we will be no better for it. On the contrary, foreign capital will have continued to pour into our country.
If Canada is to develop, Mr. Speaker, it is not a question of doing what some members would like, that is send foreigners back to their country. There is so much room in Canada to develop and live. Those people have a right to live in our country. But, Mr. Speaker, if the government
[Stage Direction]
November 13, 1973
Foreign Investment Review Act really is Canadian, if it is not paid by foreigners, let it make use of the present financial means to develop our country without going to war against foreigners.
Mr. Speaker, this is exactly the same thing as when we say that English-speaking people are to blame when separatism is mentioned and when things are going bad in Quebec. In the Social Credit party, we say that the English-speaking people are not to blame, but that Quebecers are because they never gave themselves real representatives to lead them.
Let us stop saying that the English or the foreigners are to blame if we do not live suitably in Canada. It is our fault if we fail to give ourselves a truly Canadian government and if we keep on having governments paid, elected and controlled by high finance.
Would this government, which was elected by finance, be able through a bill to control its investments? This is totally ridiculous, Mr. Speaker. They are bluffing in an attempt to silence the nationalists who believe in Canada and, at the same time, leaders keep on currying favours with large companies. What is the difference between Progressive Conservatives and Liberals? Absolutely none: both are courting the same corporations and the same corporations contribute to replenish the electoral funds of these two parties. They in turns come into power without changing the situation at all.
Mr. Speaker, the NDP claims that the only way to solve the problem is to nationalize companies so as to make them companies of the state in order to see what is going to happen. They still believe in the CBC and in all these gimmicks. As for us, though small in number, we are sincere and we are Canadians. We believe in free enterprise, in the value of the person and his right to develop in free enterprise.
We are Canadians and we say that neither the English, nor the French Canadians nor the Americans are to be held responsible because Canada does not belong to Canadians any more; those responsible are the political maneuverers who get elected through finance, stay there with a title and serve financiers. As long as we have to bear with such politicians, the House waste its time on tame bills and Canada will still be sold to foreigners for a mess of pottage.
Alastair William Gillespie: Mr. Speaker, I should like to speak to the subamendment offered by the hon. member for Timiskam-ing (Mr. Peters) with regard to motion No. 2 which is before us. When motion No. 2 in its original form was first debated, I made it clear that I thought the amendment would do nothing to strengthen the bill and that in fact it would have the effect of weakening the bill.
I should like briefly to review two points. The first is that as the bill now stands, it provides for the government to take into account provincial industrial and economic policies in respect of any province likely to be significantly affected. The amendment standing on the order paper, not the subamendment, focuses only on provinces in which the enterprise or the business is carried on or proposed to be carried on. The subamendment offered this evening is limited in exactly the same way. It would limit consideration with regard to provinces or territories only

to those provinces or territories in which the enterprise is carried on or in which the new business is proposed to be carried on.
Clearly, this would have the effect of narrowing the intent of the bill. It would have the effect of making it more inflexible than would the present wording. It would exclude, as I have mentioned already, provinces which were significantly affected. It would include only those provinces in which the enterprise is carried on or in which the proposed enterprise is to be carried on. Provinces significantly affected by the enterprise would be excluded from any consideration. That is the first point.
I should like to give an example of how this might work. For instance, it is quite conceivable that a province might be affected in a very substantial way by the existence of a new investment to be made or a new firm to be acquired in a province. One might visualize-I believe I used this example before-the case of a major tire manufacturing operation. A tire manufacturing operation which might be located, let us say, in Quebec could affect a major tire factory operating in the Maritimes. This could have an effect not only on the neighbouring province or provinces, but the new or proposed investment could equally have an effect upon existing tire manufacturing firms in other provinces including, for example, Ontario.
The subamendment offered to the original amendment would exclude any consideration of those provinces which would be significantly affected, because it limits the consideration to the province in which the enterprise, takeover or proposed investment would be carried on. A province may have a very large interest in a takeover or investment because of its position as a consuming province, or because of plants in that province that would be in a competitive position with the firm to be taken over or established.
I submit that the first amendment, No. 2, would weaken the bill because it introduces this degree of inflexibility, and I submit that the subamendment offered this evening does nothing to strengthen the first amendment offered. I would argue that flexibility is an essential element in the operation of the bill and that its removal would have a serious effect on the effectiveness of the bill.
I would hope that on reflection the House would decide to reject the subamendment offered this evening because it does nothing to strengthen an amendment which already, in my view, would weaken the effectiveness of the bill.


Walter David Baker: That is a fatuous argument.


Mr. Reg Stackhouse (Scarborough East):: Mr. Speaker, at the outset I wish to say I share the objective of this bill, which is to realize the ambition of a growing number of Canadians at last to live our own life. But we cannot achieve this objective unless to a much larger degree than Bill C-132 proposes we repatriate our economy and replace our branch plant status, a status which a generation ago replaced the old colonial way of life but replaced it with something not much better.
One of the tragedies of Canadian history has been the way in which Canadians have never been just Canadians. We began as a colony of France and so some of us were
November 13, 1973

French Canadians. Then we became a colony of Britain and some of us were British Canadians. A generation ago, at the end of World War II, we became increasingly a subsidiary of the United States economically, culturally and in our life style, and so we became American Canadians. But at last there is a significant movement across this country to become a true nation of our own and to be simply Canadian Canadians.
We cannot achieve this objective, however, unless we can demythologize the kind of myths that almost lulled our people to sleep. One example has been the myth that foreign investment equals capital inflow, that we must have great capital investment so that necessary foreign capital will come into this country. The reality is that according to a report of the Department of Industry, Trade and Commerce, two-thirds of the money used in the transactions of foreign-owned companies comes from Canadian banks rather than from sources outside the country. For example, McGraw-Hill bought the Ryerson Publishing Company for $2 million with a Canadian bank loan; ITT bought AIMCO with a Canadian bank loan; the Export Development Corporation gives most of its loans to eight corporations, five of which are foreign-owned.
The second myth we must demythologize is that foreign investment means jobs, that we must have more and more foreign investment so that Canadians can gain employment. But we are now realizing that foreign investment can mean unemployment through foreign-dominated companies and unions often giving priority to production in other countries. We know, also, that it can mean a concentration in the development of natural resource industries and a lower priority to secondary industries where most of the jobs are to be found. It is a tragic fact that of all the industrialized countries of the world, Canada has the smallest percentage of its investment in secondary manufacturing.
The third myth that we must demythologize is that Canadians need foreign management and foreign technology in order to develop their industry. I think there was a certain validity in this claim at one time, a validity in that at one time Canadian companies required the kind of expertise and know-how that had to be imported, just as at one time I think it was necessary for the Canadian labour movement to have international unions for precisely the same reason. But we have moved beyond that need, I hope, in both instances, both in terms of industrial and commercial management and in terms of the direction of our union movement. Given the opportunity, surely this country now has the mental equipment and the practical experience to develop its own resources and to manage its own affairs.
It seems to me that we should be able to go beyond the limitations of Bill C-132, we should be able to demythologize the notions that have so gripped the thinking of many Canadians throughout this country and have too long made us accept a branch plant mentality. If we look at the Toronto Star of January 12, 1973, we find that 68 per cent of the people of this country, according to the survey published in that newspaper, believed that the government's foreign ownership policy was inadequate or very inadequate. Two-thirds of the people surveyed were dis-
Foreign Investment Review Act satisfied with the kind of direction they were receiving from this government, the direction presented in the legislation we are debating tonight.
According to the International Review of March, 1973, in reply to the question, "Is foreign ownership good or bad?", we find that those who believe it is bad rose from just 33 per cent in 1969 to 47 per cent in 1972; that is, just a third of the Canadians surveyed four years ago were discontented with foreign investment, but now the fraction is almost one-half. Se we have to be conscious of the fact that a growing number of Canadians want the goal which is surely the objective of this bill, but an objective that is realized only to a very limited degree by this legislation. I would hope that we would all see Bill C-132 as simply the beginning, the first step down a road that we hope will lead us to an objective which surely we should all share and support, the kind of objective that Canadians have now delayed too long in seeking.
For those reasons, it is possible for all of us to support the principle and the objective of this bill; but there are some points upon which I think criticism needs to be directed against it. The first of these is the assumption of the government that you can achieve this goal by passing a law which generally approves Canadian ownership, when what we need is not just legislation along this line but an economic policy that will give some assistance to Canadian business and industry striving to uphold Canadian ownership. It would be much more inspiring to parliament and to the public if this legislation could be accompanied by that kind of economic policy.
Tonight I would like to ask that the attention of the House be directed toward the need of Canadian business for much more assistance than it is now receiving from this government. I refer in particular to small business, the kind of business that generates jobs, the kind of business that is surely the backbone of the Canadian economy. The sad fact is that Canadian small business is now suffering as never before. According to the Toronto Star of February 13, 1973, 2,848 businesses that could be described as small businesses went into bankruptcy in the previous year. It was the worst record since 1942.
The reasons so many small businesses, those companies that have assets under $1 million, are having such a difficult time are such facts of life in Canada today as the exorbitant taxation imposed on business by the government, the unfair and unreasonable interference with business by the government, the shortage of capital under which so many small businesses suffer. For example, the small business loans administration of this country reports that under the Small Businesses Loans Act, in 1972 only $28,328,126 were advanced in such loans compared with $25,582,269 in 1961. There has been almost no advance in ten years in actual dollars, let alone in purchasing power.
The fact is that this government is simply not getting behind small businesses in Canada. No wonder so many of them found it impossible to survive. I stress this point for this reason, that it is not enough for us as legislators simply to say that business shall be Canadian. What we must do is to initiate and support policies that will make it more and more possible for Canadians to go into business and to stay in business. It is so often a sad fact that a

November 13, 1973
Foreign Investment Review Act businessman today finds it too attractive to sell out, faced as he is by the many problems of keeping a company going: there are the problems of taxation, government interference, shortage of capital, labour difficulties, and the like. It is often much easier simply to look in the mirror one morning and say, "Why should I go on this way?" It is easier to pick up the telephone, call New York, Chicago or Detroit and say, "If you still want this business, come and get it." What we need, therefore, is to bring about an economic policy that will make Canada a much more attractive country in which to do business; and the great failure of this government is not simply in initiating inadequate legislation but, much more seriously, in bringing about inadequate policies.
Much has been said in this debate on the amendments proposed by the hon. member for Central Nova (Mr. MacKay). In the interests of federalism there has been a denigration of the rights of the provinces to participate in the repatriation of our economy, to have some voice in the decisions that are made, decisions affecting their lives. I find it very interesting that so many members, particularly those to my left, who have been so articulate in speaking about participatory democracy and the rights of individuals to participate in decisions that affect them, in this instance turn away from that principle and seem to be opposed to the provinces having some say in that which affects them.
I have been particularly intrigued by the reasoning of the hon. member for Timiskaming (Mr. Peters), who spoke with his usual power in criticism of this amendment, speaking in favour of federalism-I must say a federalism without precedent in the history of Canada, that is, a federalism that would ignore the rights of the provinces- but then going on to move his curious subamendment that would give the same rights to territories. It would seem that he reasoned that what was wrong for ten should suddenly be right for 12, and that something which was to be rejected when applied to the provinces should be accepted if applied to provinces plus territories. We welcome the subamendment and I would hope that, if it passes, its mover would be prepared to support the amendment as modified by it.
The Minister of Industry, Trade and Commerce (Mr. Gillespie) has criticized the subamendment and the amendment proposed by the hon. member for Central Nova on the grounds that they do not do justice to the needs and desires of all provinces concerned. It would seem to me, on reading the amendment as proposed, that there is nothing in it which would prevent the federal government from consulting with any province and eliciting from any provincial government a report on how a proposed takeover would affect its economy and its life.
The amendment requires that the province in which a business is being carried on shall be consulted. It requires that the compatability with that province be considered. But it certainly does not prevent the federal government from carrying on consultation with any other province. It seems to me that the intention of this amendment is not in any way to minimize the leadership of the federal government but, rather, to assert what is a basic principle of

Canadian confederation, that the federal government and the provincial governments shall work together.
We look at Bill C-132 with some gratitude in so far as we all recognize the need for the Canadian Parliament to enact legislation that will put us on the road toward the repatriation of our economy. We can regret that it does not go further. We can regret that there is an inadequate economic policy accompanying it, making its objective that much more unrealizable. But we can still support it, I think perhaps because of the philosophy expressed in a certain saloon sign in the Klondike many years ago which said, "Don't shoot the piano player-he's doing the best he can." Neither should we shoot down this bill, in so far as it is going to achieve something and the minister, we think, is doing the best he can. Maybe he is doing the best he can in that this is the best bill he can get through his own caucus and cabinet, and we welcome it to that extent and support it to that extent.
But I want to say, in closing, that I would hope and earnestly plead that this legislation be not the last step this parliament is asked to take. May it be but the first, not the last step that we will take down the road we hope will lead us to an objective that a growing number of Canadians seek. And if we are to follow that road, surely the government must be prepared to give leadership- greater leadership than it has given in the past. In this regard, the government has been content simply to follow public opinion rather than to give it direction. Its record to a great extent has been an acceptance of the willingness to have this country sold out.
Our memories go back to the 1956 pipeline debate when we recognized the attitude of the Liberal government of that time putting resources into the hands of foreign investors, resources that certainly should have had Canadian ownership and control. Perhaps at one time this might have been justified. I would have to admit that probably nobody is innocent enough to be justified in throwing the first stone. But we cannot justify it any longer. No party, no government can justify continuing Canada in the direction it has been going since the end of the Second World War. Therefore I would hope that Bill C-132 would be supported generally, at least as a symbol of the way in which Canadian parliamentarians and the Canadian government are going to turn this trend around and to move in another direction.
So very frequently it has been the case that our leaders in government have wanted to say to the people, "Tell us where you want to go and let us lead you there." But we would hope that for once the government would be willing to point this country in the direction it should follow; that for once we could at least gain a fraction of the kind of faith, conviction and vision that made the founding of this country possible.
Just the other night I read this statement by A. R. M. Lower, an historian who surely should be respected by members on the other side of this House, commenting on historic developments just a few years after the beginning of confederation: "Confederation was kept alive only by the faith of its founders and the vision they had of a country yet to be developed." I think that across this country tonight there are millions of Canadians, especially young people, who have that kind of faith and that kind of
November 13, 1973

vision and who are looking to us to give them that kind of leadership.
Just a century ago Thomas D'Arcy McGee could speak of a new nationality. At the end of 100 years and more of confederation we can see that a new nationality has come into being. Yet it has not taken the full form that all of us could wish it might take. What we are seeking is a new sense of that nationality, a new awareness that we are neither colony nor subsidiary nor branch plant, but a nation whose people are masters of their fate and captains of their soul. And to achieve that we can look forward to a time when in the economy, as in the political and cultural life of this country, we will truly be living our own life.


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, the subject of foreign ownership has been foremost in the minds of Canadians for the past several years, although in most people's minds, encouraged by the members of the NDP, it is American ownership rather than foreign ownership that concerns them. This concept is, of course, wrong and as Canadians we should be concerned about the inflow of any capital into our country whether it be from the United States of America, Germany, Britain, France, Japan or other country.
There is no question that foreign investment in our country has been increasing at a fairly rapid rate over the years. It is the effect that foreign investment has on our economy that is of concern to the public. We cannot really blame the foreign investors; we must blame ourselves. When the minister of finance for the province of Saskatchewan appeared before the Standing Committee of Finance, Trade and Economic Affairs on June 19, he said that foreign investors operating in Canada have until now simply operated by the rules of the game, and there is no reason why they should operate differently in the absence of adequate guidelines and controls by Canada.
As the problem is a national one, it is the responsibility of the federal government to enact the legislation necessary to minimize the effect of foreign ownership on our economy, and I emphasize the word "minimize". There is no question that foreign investment is necessary if Canada is to continue to develop as an industrial nation, but I believe it is the responsibility of parliament, as was said by a spokesman for the government of Ontario, "to ensure that future investments by foreign corporations make an effective contribution to the achievement of national economic and social objectives."
Quite frankly, Mr. Speaker, I was disappointed with this bill. All it does is allow a group of bureaucrats in Ottawa to make decisions with respect to foreign investment which affect every region and province of Canada, and this without consultation or input by the region or province. This bill is another example of the arrogance of the government in presenting legislation which affects every region and province in the dominion, without first having met with the provinces and come to a consensus. It is a bill which is politically motivated, a vote-catcher, because the subject of foreign ownership is on the lips of almost every concerned Canadian today.
Foreign Investment Review Act
That Canada is a country made up of economic and physical regions is a fact of life and has been since confederation. Every region, in fact every province, has its own problems and there is a great deal of regional disparity. Because of this we have a program such as DREE and, of course, we have equalization payments which are worked out every year to help the have-not provinces. Industrial development has been concentrated in central Canada over the years because the wealth of the country has been siphoned into the financial circles of Toronto and Montreal, there to be utilized in industrial development in the area immediately surrounding the cities.
It is granted that industry tends to concentrate where the markets are, in the areas of greatest density of population; but inequities in freight rates over the years, particularly between central Canada and the west, have tended to discourage industrial development even of a secondary nature. Only in recent years has there been any move toward developing industry on the Prairies, and this has primarily been due to foreign capital. As I said, Mr. Speaker, foreign capital is necessary, but there must be some means of controlling its use in a way that will effectively benefit Canada. I am very disappointed with this bill, and one of the reasons for that disappointment is lack of participation by the provinces or regions concerned in the decision-making.
When I attended the Western Economic Opportunities Conference in Calgary in July as an observer, I was told that the conference was the first occasion on which some of our top civil servants had visited western Canada and that they were amazed to find such a large and attractive city as Calgary out on the Prairies. I do not know how true that statement was, but it concerned me a great deal. What concerns me even more is that, if it is true, it is this type of person or possibly persons without any intimate knowledge of the economic and social needs of the area who will be sitting on the screening agency making recommendations on whether foreign capital should be allowed to come into the Prairies. The analogy applies equally to the Maritimes.
Notwithstanding what the hon. member for Timiskam-ing (Mr. Peters) said, Mr. Speaker, each province must have input with respect to applications by individuals or corporations who plan on making an investment in that province or region. In addition, a majority of the persons in the agency considering the application must represent the province or region where the applicant intends making the investment. Without this type of input and representation, the province will be at the mercy of Ottawa-and I feel that will tend to further the alienation which appears to be building between the outlying regions and central Canada.
We in this party believe in one Canada. In order to keep going ahead, it is important that major pieces of legislation such as this bill be acceptable to all provinces.
I see it is ten o'clock, Mr. Speaker.

November 13, 1973
Adjournment Debate



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I rise again on this occasion to bring up the matter of apparent conflict of interest in the awarding of contracts for the Hire North program in the Northwest Territories. I very much like the concept of this program under which northern natives are hired to clear land for the Mackenzie Highway right-of-way and are trained to operate heavy equipment. This program, funded by the government of Canada and carried out by the government of the Northwest Territories, has provided native people with some of the direct economic benefit of the highway construction and with training and experience which may prove useful in future projects.
This program also has its dark side and it is of this side which, unfortunately, I feel I must speak tonight. It appears that the man hired to supervise and manage this project, Mr. Rudy Steiner, has awarded contracts of substantial value to firms, in which there is evidence to indicate he has an interest, without calling tenders. I have demanded that an appropriate committee of the House investigate this matter, and I asked the Prime Minister (Mr. Trudeau) on Monday, November 5, in the absence of the Minister of Indian Affairs and Northern Development (Mr. Chretien), whether he would agree to refer it. The Prime Minister answered that he had not understood my question and that he would read it when it appeared in Hansard. Mr. Speaker, I have submitted written questions on this matter because I want to see what information the government has in its possession, that it can treat this affair so flippantly.
I have information in my possession which warrants serious investigation, as do many thousands of newspaper readers across the country. I should like at this juncture to commend the reporters of the Edmonton Journal who have pursued this matter and who have delved alittlemore deeply into it than many reporters in this country are prone to delve. Let me share some of this information with the House. As the election approached last fall, the government was anxious to push ahead with land clearing for the Mackenzie highway. The Hire North program was to be a vehicle for this, and someone had to be found to manage the project who could get things done in a hurry. Accordingly, senior territorial officials approached Mr. Steiner who had a reputation for getting things done with a minimum of bureaucratic delay. He did away with a lot of bureaucratic delay all right; before he had even signed his own employment contract he had committed the government to expenses in excess of half a million dollars.

He was also responsible for awarding contracts in the amount of $227,110 without tender calls, and $46,700 with questionable tender calls, to two companies-Great Bear Industries Ltd. and Homes North. It was alleged that these were the only companies that could provide the equipment required in these contracts. But there are others who would like to have had a crack at them. Mr. Steiner co-signed a loan for Great Bear from the Canadian Acceptance Corporation on August 31, 1972, just two days after the firm was legally incorporated as a Northwest Territories company. This company received $124,560 in contracts.
Mr. Steiner was also at the time a director of Berg Insurance Agencies Ltd., of which Homes North is a division. Homes North received $154,920 in contracts, all without tenders. A number of contracts were also awarded to Cross Arctic Transport Ltd., of which Mr. Steiner is a director and major shareholder. At least he got the job done with a minimum of bureaucratic delay.
The Minister of Indian Affairs and Northern Development knew about this, because he received a letter dated October 12, 1972, from Mr. Andre Carrell, office manager of Hire North at Fort Simpson, who felt he could not remain silent. His letter was sent back north to Stuart Hodgson, commissioner of the Northwest Territories, who asked deputy commissioner John Parker to investigate. Mr. Carrell, incidentally, is no longer employed in the Northwest Territories. In spite of these and other irregularities, of which the minister and top territorial officials are aware, Mr. Steiner is back on the job with Hire North.
I repeat my demand to the government, Mr. Speaker, that this matter be submitted to the Standing Committee on Public Accounts or to whatever committee is deemed appropriate. I am not after anyone's head and I do not wish to delay the Hire North project: I hope it is clear that this is not my intention. What is important, though, is that the people of the north be protected from this phony frontierism, from this disregard for the fundamental rules of fairness and honesty in awarding contracts. I respectfully await the response of the government.


Mr. Len Marchand (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I wish to make a few points in response to the hon. member. I assure him the government has nothing to hide in this regard. At some later point I would be happy to discuss this matter with the hon. member very fully, as would the minister at an appropriate time before the committee.
When this subject was first raised in the fall of 1972, it was investigated by the deputy commissioner of the Northwest Territories. The report supplied by the commissioner indicated the following points. First, although Mr. Steiner was a director of Berg Insurance, a parent of Homes North which company rented portable homes to Hire North, he had no financial interest in the company. He later resigned his directorship. Second, there appeared to be no connection between Mr. Steiner and Great Bear Industries Ltd. and no evidence of impropriety in Mr. Steiner's dealings with any of the companies supplying goods or equipment to the Hire North project.
November 13, 1973

Third, Mr. Steiner was authorized by the Northwest Territories government to rent portable camp buildings and other pieces of mobile equipment. Since companies normally supplying portable camp buildings could not meet the requirement in time, a purchase was negotiated. The total amount involved in these arrangements for portable camp buildings and mobile equipment amounted to $219,100. After the initial camps and equipment had been assembled late in August and early September, 1972, all further equipment required has been obtained through tendering procedures.


PUBLIC SERVICE-ALLEGED RUG-RANKING SYSTEM OF PROMOTING SECRETARIES-REQUEST FOR SUBSTITUTION OF POINT RATING SYSTEM AND TABLING OF RELATIVE TREASURY BOARD MINUTES
Walter David Baker: Mr. Speaker, on July 23, 1973, as recorded at page 5870 of Hansard, I directed a question to the President of the Treasury Board (Mr. Drury) with regard to a problem that has been rampant in the Public Service of Canada, namely, the practice of what is commonly called rug-ranking. I asked the minister whether he would consider replacing that unfair and discriminatory practice with a system which would provide for promotion by way of merit for secretaries in the public service. I asked this question particularly in view of the fact that other professional groups in the public service have enjoyed such assistance for more than a decade.
In his answer, the minister did not respond to the question put to him. I think what he said could properly be described as an impressive defence of the status quo. The purpose of the question was to secure recognition of the duties actually performed by secretaries in the public service. I want to point out that secretarial work was not always considered to be women's work. Despite opposition to women in the labour force, many women continued to seek and find employment in government service and elsewhere almost a century ago. In 1885, only 23 of more than 4,000 civil servants were women and one-third of these were third-class clerks-the lowest level-in the Post Office Department. But times have changed and women now make up an important part of the public service.
In 1970, the Royal Commission on the Status of Women made a special recommendation to the federal government with regard to the ST occupational group. In the chapter headed "Women in the Canadian economy," the commission stated that the present system of classifying STs, referred to as rug-ranking, seriously infringed on the rights of individuals to equitable treatment and placed secretaries in a position in which their pay was dependent on the pay received by others. The Royal Commission on the Status of Women echoed some earlier findings in a study made for the Public Service Commission. It went on to say:
The career structure of STs looks more like a steeple than a pyramid. This is attributable to rug-ranking which not only curtails opportunities for STs but means that lower level officers whose work requires a very good secretary either cannot get one, or, should they succeed in getting an exceptional stenographer, cannot treat her fairly, or increase the chances of her staying by
Adjournment Debate
rewarding her adequately. This form of linking of the fate of secretaries to the fate of their bosses has another interesting "hooker" in it; a woman of ST-6 level or higher may well find herself in a state of suspended animation should the boss leave the public service since the incoming boss will be inclined to promote his own secretary.
Lately, with full implementation of the Public Service Commission's bilingualism program and the realization that bilingual secretaries' quotas which once seemed safely far away are already looming on the horizon, the ST classification system has acquired still another "hooker". A number of recommendations have been made, and in my view they should be taken up by the government. First, with respect to the language question, there ought to be a standard testing system uniformly administered. A second language training course for secretaries should be developed and instituted by the language bureau. Increased access to French language training in all aspects, reading, writing and comprehension should be made possible.
These are not the end of the recommendations which have been made on the matter. I commend this brief to the government. With respect to the revision of the ST classification standard, may I say that approximately 15,000 employees are classified as STs in the administrative support category of the public service. The STs have the specialized skills of typing, working with dictaphones or taking shorthand dictation and transcribing it. Many of them have the added and demonstrated ability to perform as executive assistants to management executives. If the present system of rug-ranking is not curtailed, these latter abilities will not be allowed to flower.
A further recommendation which I pass on to the government is that as an alternative to rug-ranking, a point rating system be developed, that there be an immediate revaluation of the ST group and of ST positions, and that a full examination of promotion, training, career development and mobility opportunities be made. Another recommendation is as follows:
That the administrative and attitude barriers be removed that prevent STs from entering competitions for other categories.
The objective of the Public Service of Canada and all of those who perform services on behalf of the people of Canada for the Government of Canada and those of us that work in this chamber ought to be that the best and fairest system possible be applied; that a person be permitted to advance on his or her own merits. With respect to those in the ST categories, that facility and avenue is sadly lacking. I hope that as a result of this debate and the questions which preceded it, the government will take a long, serious and hard look at the problem of those who are caught in this dilemma.


Hon. Gerard Pelletier (Minister of Communications):: Mr. Speaker, I have heard the representations of the hon. member. Some of the questions to which he has referred are already being studied by the Public Service Commission. I shall be happy to refer his arguments to the public service commissioners and to the Treasury Board authorities.
Motion agreed to and the House adjourned at 10.14 p.m.

Wednesday, November 14, 1973